Saturday, July 11, 2015

Random Update On Two Wildcat Wells -- July 11, 2015

28388, dry, Welter Consulting, Miller 31-3, Wildcat, far northeast of the core Bakken; on a line directly from Kenmare to Minot, the well is about 2/3rds of the way from Minot to Kenmare (closer to Kenmare than Minot); Madison well; a vertical well, not a Bakken

28350, 2, Anschutz, Jacobson 1-29-134-104, wildcat, punch the coordinates into Google maps; at the south end of Little Missouri National Grassland, about 30 miles by road northwest of Bowman; this is not Bakken country; a Red River well; Also, note no "H" designation; the scout ticket says the Deadwood; according to the well file, the targets are the Red River, the Tyler, The Lodgepole on 160-acre spacing. Estimated total depth: 11,408 (deep). Slope County. Vertical; t1/15; cum 35 bbls; pretty much off-line since completed; top form says "see plug and abandon procedures"

Random, Abbreviated Note On Global Refining -- July 11, 2015

Some nice data points regarding global refineries. Apparently a lot of capacity has come on-line this past and more to come. is reporting:
"In 2015-2016, net capacity additions will be more than needed, which will cause the global utilization rate to decline, and casts a doubt on the continuation of current unusually high refining margins,” the IEA said in its monthly report.
The bulk of the new capacity is coming in the United States, where refineries are adding pieces of equipment to enable them to process more oil from the shale boom, and also from China.
In the Middle East, ADNOC’s Ruwais refinery in Abu Dhabi is set to join two 400,000 barrels per day (bpd) mega units that officially launched in Saudi Arabia in 2014.
The IEA estimates that global refining capacity will rise by 1.1 million bpd per year in 2015 and 2016, bringing worldwide capacity to just over 97 million bpd – a 2 percent increase.
While some closures are already planned in Europe and Asia, the agency no longer thinks these will be enough to balance the new additions.
By the way, did you catch that part about Saudi's two new 400,000 bopd megaunits? That's another reason Saudi needs to increase production. I think some analysts are forgetting that. 

And the Ruwais refinery: From TradeArabia:
State-owned Abu Dhabi National Oil Co (Adnoc) is expected to ramp up run rates and have all of the units at its newly expanded Ruwais refinery operating by June (2015), industry sources said.
The expanded refinery, which is currently running at close to 60 per cent of capacity, aims to start up a residual fluid catalytic cracking (RFCC) unit and a hydrocracker unit by the end of April, one of the sources familiar with the matter said.
Once the units start up, Adnoc will ramp up its operating rate to near 100 per cent by processing more crude oil at the end of April before scaling back to about 80 to 90 per cent of its capacity by June, the source added.
The expanded refinery will more than double the capacity from 415,000 barrels-per-day (bpd) and process the flagship Murban crude oil grade.
More than double 415,000 bopd sounds an awful lot like one million bopd.

Every time you read about Saudi et al increasing production, remember, a lot of this oil is for its own refineries.  

By the way, once gasoline production from the RFCC unit is stable, Adnoc will no longer need to import gasoline and the country will be well-balanced. It might even have about 845,000 to 1.69 million barrels a year to export.

Planning Ahead

Our two oldest granddaughters are 12 and 9 years old. The nine-year-old, all of a sudden it seems, has taken an interest in putting together a killer wardrobe. She is quite artistic, knows what she is doing, and plans well ahead.

Today, while out shopping with their grandmother, the nine-year-old told her older sister that from now on, she (the nine-year-old) needs to be involved in all clothing purchases by her 12 year-old-sister since she will eventually get them as hand-me-downs.

Staggering: All Four Top Bakken Counties Now In The Top Ten Oil Producing Counties In The US -- July 11, 2015

A huge "thank you" to a reader for sending me this.

I posted the May data which the reader sent me just a few days ago; today the reader sends me the June data. We assume the data was released based on the release of the Director's Cut as well as other sources, and sources from Texas.

Here it is, a dynamic link:

All four top North Dakota Bakken counties are now in the top ten of all oil-producing counties in the entire United States:

Note: McKenzie County slipped to #2 simply because operators voluntarily cut production; Williams dropped to #9 after being at #7, but look at this: Mountrail entered the list at #7. Wow.

This comes despite an all-out effort to dial-back production in Texas and North Dakota. In North Dakota, the number of active rigs hit a new post-boom low this past week; the majority of wells coming off the confidential list are not being completed and are being shut in (SI/NC); and, the wells that are still producing are being choked back.

The NDIC director alluded to one reason why  IPs (30-day, 60-day, 90-day production numbers) are improving:
  • The number of well completions rose slightly from 102 (final) in April to 114 (preliminary) in May but initial production rates are increasing 10 - 20% per month as drilling and completions focus more and more on the best portion of the core Bakken and Three Forks area.
That's just one of the reasons. There are many, many more.

I think the most important reason is "attention to detail." With prices so low, oil company officers are watching with eagle eyes what is going on out in the field. I bet the field managers are noticing an increased amount of "micro-managing."

So, what do we mean by "attention to detail"?

The most important thing is the quality of the work force. With cutbacks, the best people are going to be kept on.

One key to a good well is keeping the lateral in the 40-foot middle Bakken seam or the 10-foot Three Forks seam. As the Bakken has matured, there is more and more information about the time/distance the horizontal stays in the seam. My gut feeling is that anything less than 98% gets the CEO's attention. To stay in the seam requires the best geologists and the best roughnecks, and I assume a bit of luck. But they say folks make they own luck.

The second thing: after seven years in the Bakken, operators are learning the best ways to complete a well. There are many solutions, most of which I don't understand, and I really don't track it.

However, two variables are easy to track: number of frack stages and the amount of proppant. And it is clear that operators are pushing toward well over 36 stages and 10 million lbs proppant for the best wells. There's still an argument regarding sand and ceramic; it appears most operators use a combination of sand and ceramic, but EOG uses sand only in the Bakken.

Another reason: North Dakota has the largest microseismic array in the world. Do microseimic arrays help? Yes -- see this post.

By the way, I have no idea but I would suspect that with a lot of geologists on contract but not needed in the field (only 73 active rigs vs 200 rigs) that guys like Harold Hamm has his geologists poring over coring samples at the University of North Dakota and poring over geologists' reports of producing wells -- finding the best of the best areas, and putting  together a list of wells just begging to be re-fracked.

With the decreased activity, my hunch is most operators can drill and complete a well the way they had planned, not having to settle for "second best." When a problem develops in the field, and there's a shortage of personnel or spare parts, sometimes, the only solution is to abandon the well or just press on with what one has, perhaps cutting corners and hoping for the best. With such decreased activity as we have now, I assume there is more than adequate support services ready to assist 24/7. Maybe a minor point, but if helps keep the bit in the seam 98% of the time vs 92% of the time, it will make a huge difference.

Ah, The Joys Of Summer

May reminded us at 7:15 p.m. that 7-11 stores offered FREE Slurpees on July 11. We walked down to the 7-11 in our neighborhood only to find that the offer ended at 7:00 p.m. I bought Olivia a Slurpee for $1.73. The cashier threw in two bags of Doritos for free and one pair of really cool sunglasses, also for free, which Olivia forbade me to wear on the walk home. 

Definition of a California summer: sunglasses, Doritos, and a Slurpee.

Week 27: July 5, 2015 -- July 11, 2015

There were so many huge stories this past week, for the Bakken and from around the world. Without question, the big story was the fact that crude oil production increased month-over-month in both Texas and North Dakota despite all the efforts to cut back. The second big story was a story we did not see: we have not yet seen any major oil companies in severe distress (although that is in the eye of the beholder and subject to opinion).

The other big story was posted by DrillingInfo: North Dakota has three counties in the list of the top ten US oil-producing counties: Williams, McKenzie, and Dunn.

There is so much oil on the market, and the trend is not likely to change, that Ford is moving its small-car operations out of the US.

BP's annual statistical review of world energy, 2015, was also linked this week. The outlook in brief was notable in what it did not say.

Despite falling crude oil prices, California, at least temporarily, is looking at $5-gasoline. Californians have petitioned the governor for relief but it is unlikely he's listening. Let them eat cake. By the way, it appears California policy makers have pretty much started down the road of closing down the state's oil and gas industry. California's attitude toward oil and gas is starting to remind me of Brazil.

The Director's Cut for May, 2015, data was released. Think about that. Data for the summer is yet to come.

I haven't done this before but I think it's becoming too big to ignore. I have always "limited" the big stories of the week to the Bakken, but this is an exception: writers at The Los Angeles Times, a huge supporter of ObamaCare, concede that health care premiums in 2016 "won't simply rise, they will skyrocket." This has huge implications for the US economy, including the oil and gas industry as they start to downsize in the face of an oil glut.

It looks like folks are coming around on a newly accepted definition for full employment: about 6% unemployment. I think it's 8%.

Another huge international story: the Boston Consulting Group reports that US manufacturing costs on par with those of China due to very, very low energy prices, due to ... fracking.

The number of active rigs in North Dakota hit a new post-boom low (73) this past week, well below the high of over 200 two years ago.

RBN Energy started a nice series on refining operations in the US. A must-read.

Perhaps my favorite story this past week:
  • for the past several years we've been told how inexpensive renewable energy is getting
  • Minnesota is mandating ever-increasing use of renewable energy
  • Minnesota's public electricity provider has requested (and was approved) it's seven electric rate hike since 2006 and more such hikes could be down the road
  • ither the owners of the utility (stockholders) are getting very, very rich, or renewable energy is not as cheap as we're being told
North Dakota maintains its #1 standing as top state in beer drinking, per capita

Crude oil
Production increases 16% month-over-month in Texas; 3% in North Dakota
Despite slump in oil prices, fourteen new permits in one day, multiple operators including small ones like Thunderbird
Random update on the Hess Lodgepole well northeast of Tioga

The octofrac
UNP sets frack sand shipment record
Random update of a re-fracked well, BR's #17118, the Remington 14-11H

Natural gas
A re-look at Bakken's natural gas production 
Soaring demand for LNG

Bakken economy
Update on EPD bid to buy WMB
The Williston Wire: Williston has North Dakota's largest walk-in humidor; new restaurant in Wildrose (only restaurant in 30-mile radius; construction on Williston's new airport to begin next spring
Taxable sales, first quarter for the past six years

Bakken 101
Random example of NDIC oversight, siting of pumps

Whitten Log

BP's Annual Statistical Review Of World Energy, 2015 -- July 11, 2015

This is really cool. From last year, almost this same date, the world had 53.3 years of oil left at current rates of consumption -- BP. One year later: 52.5 years of oil left at current rates of consumption -- BP.

On a straight line of decline, there should have been 52.3 years of oil left at this point, but at 52.5 years, we have a bit longer before we run out. Prognostication: when the 2016 report comes out, the time left should be better than expected with a) poor economy (less energy use); and, b) all that Bakken oil that's been left in the ground waiting for higher prices. Just a little levity on a Saturday morning.

I can't recall if I've linked the BP's 2015 Statistical Review of World Energy. A reader sent me the link. I always enjoy the BP annual review. It appears to report the data with no hidden agenda. Over the years it's been one of the resources that has keep me bullish on fossil fuel.

Among the many, many pages and many, many PDFs that can be viewed and/or downloaded from the 2015 annual assessment, the "outlook in brief" might be as good as any spot to start. I've only read the report on that page; I have not watched/listened to the video, but there is glaring "omission" in the "outlook in brief."

  • outlook in brief
  • 2014 in review
  • renewable power
  • solar power
  • wind power
  • electricity, pdf : this spreadsheet is most interesting; it shows exactly when China overtook the US in electricity consumption (2010) and the change between the two countries is startling. India still represents a very small percent (especially when considered per capita, but having said that India doubled electricity consumption between 2004 an 2014


To help me keep track:

Wind: maintaining rapid growth, wind power generating capacity grew by 16.2% in 2014, with capacity increasing by 52GW to reach 373GW by the end of 2014.

Solar: new installations totaling 40.2 GW in 2014 took global solar power generating capacity to 180 GW by year-end, a 28.7% increase versus the end of 2013. Capacity has more than quadrupled in the past four years

Electricity, a bit surprising, reflects current economic conditions:  Growth was down on 2013 (2.7%) and remained well below the ten year trend (3.0%). OECD electricity declined by -0.8%, falling for the second year in a row. Non-OECD electricity grew by 3.6%, slower than 2013 (5.5%) and well below the ten year trend (5.9%). Electricity generation grew in all regions except Europe & Eurasia, where it declined by 1.6%. China (+4.0%) and the US (+0.7%) remain the largest and second largest electricity generators, India (+9.6%) is third while Russia (+0.5) overtook Japan (-2.4%) in 2014 to take fourth place. Global electricity generation: 23,636.52 terrawatt hours.

Coal, read this one closely, lots of hidden data in this one 30-second soundbite:  Consumption outside the OECD grew by 1.1%, the weakest growth since 1998, driven by a flattening of Chinese consumption (+0.1%). Ukraine (-20.2%) and the UK (-20.3%) posted significant declines. India (+11.1%) experienced its largest volumetric increase on record and the world’s largest volumetric increase. Consumption fell in all regions except Africa (+2.0%) and North America.

Oil: in last year's 2014 report, BP raised its reserve estimate by 1.1% to 1,687.9 billion barrels, which is enough oil to last the world 53.3 years at the current production rates. In this year's 2015 report:
Total world proved oil reserves reached 1700.1 billion barrels at the end of 2014 sufficient to meet 52.5 years of global production The largest additions to reserves came from Saudi Arabia, adding 1.1 billion barrels. The largest decline came from Russia, where reserves fell by 1.9 billion barrels. OPEC countries continue to hold the majority of the world’s reserves, accounting for 71.6% of the global total. South Central America continues to hold the highest (R/P) ratio, more than 100 years. Over the past decade, global proved reserves have increased by 24%, or over 330 billion barrels.
The math:
  • this year: 1,700.1
  • last year: 1,687.9
  • (1700.1-1687.9)/1687.9 = 0.7% increase in reserves. Not very much. Peak oil?
Other Sites; Many Undated; Old Data

Installed capacity of world's power plants (electricity) (some numbers rounded, raised a bit for my purposes):
  • US: 1,000 GW
  • China: 750 GW
  • Russia; 250 GW
  • India: 175 GW
  • Germany: 135 GW
  • Brazil: 100 GW
  • UK: 85 GW

However, this site shows significantly different numbers, and the site shows that, as of 2012, China had more capacity than the US.

Data for 2012: global total capacity = 5492 GW

July Snowstorm In Tioga? -- July 11, 2015

ABC30Fresno (California) is reporting:
Caltrans District 9 says Tioga Pass was closed for several hours on Wednesday due to Snow. It has since re-opened.
The pass is east of Yosemite National Park.

This is in California, not North Dakota. 

had a longer, better story:
.... however, since the Tioga Pass, which is most definitely within California's borders, is enjoying a surprise snowfall as of this July 9 typing. True, the high-through-the-Sierra road is generally closed for much of the year, with a springtime opening and a fall closure, but people who want to get from Highway 395 in the Eastern Sierra into Yosemite Valley, or onto Sacramento or San Francisco, can typically count on the Tioga Pass to be meadow-beautiful, sunny-flowery, and snowfall-free come early July.
Or are July 8 and 9, the dates thus far of the snow, almost mid-July? Is it snowing in the Sierra in mid-July, then? And we thought "Christmas in July" was reserved for store sales and movie theater promotions.
Surprise snowfall? Global warming? 

Meanwhile, back in Texas. About the time it was snowing in California, it was raining in Texas. On July 7, the same days as the Tioga Pass snowstorm, Abilene, in west Texas, had its rainiest day in 129 years
A West Texas city has had its wettest day since forecasters began keeping rainfall records for the area in 1886.
The National Weather Service says Abilene on Tuesday received 8.26 inches of rain, leading to street flooding and high-water rescues. Abilene remained under a flash flood watch until Wednesday afternoon, with a 50 percent chance of showers.
the previous daily rainfall record for Abilene was set on May 11, 1928, with 6.54 inches. The prior record rainfall for July 7 in Abilene happened in 1905, with 2.47 inches of rain.
I don't know about the rest of the world, but this certainly doesn't feel like gloom and doom due to anthropogenic global warming.

Here We Go Again -- Mini Ice Age, 2030 -- Global Termperatures Could Plummet -- July 11, 2015

The Daily Mail reports:
The Earth could be headed for a 'mini ice age' researchers have warned.
A new study claims to have cracked predicting solar cycles - and says that between 2020 and 2030 solar cycles will cancel each other out.
This, they say, will lead to a phenomenon known as the 'Maunder minimum' - which has previously been known as a mini ice age when it hit between 1646 and 1715, even causing London's River Thames to freeze over.

Staggering, A Re-Look At The NatGas Refill Rate And The Bakken -- July 11, 2015

I saw this earlier; was surprised, but forgot to post it.

Before reading this, remember: the Bakken is an oil field, not a natural gas field. Unlike almost any other oil field in the US, the Bakken produces nearly 100% oil, about 93 to 97% depending on the location in the Bakken. The Bakken does not produce natural gas. Except ...

... from today's Director Cut with the May, 2015, North Dakota data, natural gas production:
  • April, natural gas: 1,527,141 MCF/day
  • May, natural gas: 1,625,625 MCF/day (preliminary -- a new all-time high)
I don't know about you, but this completely blows me away.  It's not the "raw number" but the fact that the production number hit a new all-time high despite the active rig count dropping from 200 to 73; and wells being choked back.

Maybe it's no big deal; I don't know but it certainly caught my eye.

Putting Some Numbers In Perspective

Again, my comments and interpretations may be suspect, but perhaps a re-look at the Bakken natural gas numbers to help put things in perspective.

Before looking at the Bakken numbers again, look at the most recent EIA post on NG fill rate.  Also, note the three regions, East, West, and Producing. Now the verbiage (these are weekly figures):
  • stocks in the Producing Region were 98 Bcf above the 5-year average of 952 Bcf after a net injection of 23 Bcf.
  • stocks in the West Region were 24 Bcf above the 5-year average after a net drawdown of 1 Bcf. 
Now, back to the Bakken numbers: 1.625,625 billion cf/day = 11.4 bcf / week (same time unit as the EIA weekly figures.

  • producing region, Texas, OK, etc., with a net injection of 23 Bcf
  • the west region, which includes ND and California, with a net drawdown fo 1 Bcf
  • and the tiny little area known as the Bakken:  11 Bcf produced last month on a weekly basis
A reader pointed out (see first comment) that this is a pretty significant figure for the Bakken. It really is, considering that:
  • the Bakken is an oil field, not a natural gas field; 93% to 97% of hydrocarbon production in the Bakken is crude oil
  • activity in the Bakken has decreased remarkably; from 200 rigs in the boom to 73 rigs now
  • wells in the Bakken are being choked back
  • geographically, the Bakken is a very, very small area, and the thickness of the seam is very, very thin (which takes us back to TOC and recovery rate)
  • not only is the Bakken geographically a very, very small area, due to the slump in prices, the active area has contracted significantly to a small area around Williston and Watford City, Williams County and McKenzie County respectively
  • and, especially considering that both Jane Nielson and think the Bakken is over-hyped
Fidelity Natural Gas Numbers

Courtesy of Don.

Fidelity wells in North Dakota.

May, 2015:
  • 63 natural gas wells in Cedar Creek field, southwest North Dakota; no change from January, 2015
  • 101 total oil wells
  • 224,410 bbls of oil (25% decrease since January, 2015)
  • 225,574 Mcft of natural gas (12.2% decrease since January, 2015)
January, 2015:
  • 63 natural gas wells 
  • 99 total oil wells
  • 299,526 bbls of oil
  • 263,702 Mcft of natural gas

Weather In The Far West Pacific -- July 11, 2015

Typhoon(s) bearing down on China.

See the winds / wind patterns here.

Looks like a one-two punch.

A Note To The Granddaughters

We visited the Getty Museum in Malibu this week. We visit it every time we come out to California. If folks visiting Los Angeles have time for only one fine arts museum it has to be the Getty. Not the Getty Villa along the coast in Pacific Palisades, but the Getty Museum, high on the hill, in west Los Angeles, along the Sepulveda.

As usual, there were several temporary exhibitions. I really enjoyed the Andrea del Sarto exhibition. Del Sarto is apparently not as well known or as well studied as his peers until recently. With new information, it appears that del Sarto may have been the "engine" of  the Renaissance and "the transformer of draftsmanship."

His peers, all (?) Florentine: Leonardo da Vinci, Michelangelo, Raphael, Correggio, Parmigianino, Titian.
Del Sarto: 1486 - 1530
Da Vinci: 1452 - 1519
Michelangelo: 1475 - 1564
Rapheael: 1483 - 1520
Correggio: 1489 - 1534
Parmigianino: 1503 - 1524
Titian: 1488 - 1527
Today del Sarto is probably overlooked because of his focus on religious subjects, particularly the holy family.

It turns out there are 180 surviving works of del Sarto. The Getty owned four (4) of them; the most of any North American collection.

Of the 180 surviving works, the Getty in partnership with the Frick museum in NYC, exhibited 50 of the works, including the Medici Holy Family and Sacrifice of Isaac. Eighteen (18) works from Uffizi, Florence; the bulk of the rest from Palazzo Piti, Florence, including The Holy Family and Saint John the Baptist.

The exhibit will be shown only in the US: at the Frick Collection, NY; and, J Paul Getty, LA.

In the painting, The Holy Family, these were my thoughts before I confirmed them at wiki:
  • Elizabeth, about 35 y/o
  • Mary, about 19 y/o
  • Jesus, about 18 months
  • St John the Baptist, about 4 years old
I also noted the color of Elizabeth's robe and Mary's robe. Mary's: blue; Elizabeth's: red. And then I learned from May that Mary is always shown in blue.  From
The Madonna and Child pairing appealed greatly to Renaissance artists, writers, and preachers. Mary was increasingly portrayed as the compassionate, protective mother of a gifted, precocious child. Though the Madonna retained her customary red dress and blue mantle (red symbolizing passion and true love, blue heaven and spiritual love), her son was now shown naked or scantily clothed, fully revealing his male genitalia. Leo Steinberg, in his influential book The Sexuality of Christ in Renaissance Art and in Modern Oblivion, argues against the tendency to dismiss this as a natural display of maternal pride or casual reflection of contemporary child-care. He links the frequently exposed infant genitalia to the Renaissance emphasis on the doctrine of the incarnation– God's presence on earth in human form–translated artistically into a young boy who embodied the Gospel phrase, "the Word made Flesh."
Most interesting to me was the head coverings for Elizabeth and Mary in The Holy Family. Elizabeth wore a head covering / a scarf / a hijab; Mary did not. Any number of sites, including this one, suggest that Mary always wore a scarf / head covering:
Many Catholic women choose to cover their heads to emulate the Virgin Mary.  Mary the mother of Jesus covered her head and hair according to Jewish customs of the time and we will explore these and later Judaic hijab customs in the next article.
But in del Sarto's The Holy Family Mary was not wearing a head covering. The most often cited distinction for wearing / not wearing a head covering / scarf had to do with marriage. In Rome at the time of the birth of Jesus or during the Renaissance it was common practice that married women, but not single women, wore a head coverying. Elizabeth was, of course, married; Mary was not (though she was betrothed).

Del Sarto was noted for his use of red chalk.

The exhibition was excellent. For the first time, I had a new understanding of the holy family. The two saints, Mary and Elizabeth, were cousins (first? fourth? who knows, but they were "kin," but from different tribes or families).

Elizabeth was much the older, and pregnant with the future John the Baptist, at same time as Mary was pregnant with Jesus. Elizabeth, of course, was married; Mary, not. Elizabeth went to visit Mary, perhaps protect her, comforted her, and Mary is said to have responded with the Magnificat.

Other notes from the exhibit, regarding del Sarto:
rendering reality
cartoons: full-scale drawings


My Dear BB, letters of Bernard Berenson and Kenneth Clark, edited by Robert Cumming,
Eloquent Nude, DVD, early landscape photography
Norton's Anthology of World's Religions, two volume, $100 at the museum; $52 at Amazon
1491, Charles C. Mann -- based on reviews at Amazon, will not get

Staggering -- July 10, 2015

This is really quite staggering. Earlier the North Dakota Director's Cut was posted showing that despite all the activity slowdown, crude oil production in North Dakota increased almost 3% over the previous month.

Now, Rigzone is reporting that Texas has increased its oil production by 16% month-over-month:
While crude oil production in the U.S. seems to have leveled off, oil production in Texas continues to move forward at a brisk pace.
The Energy Information Administration (EIA) said that US oil production declined slightly by 0.5 percent or 50,000 barrels per day (bpd) in May from the prior month to an average of 9.7 million bpd.
In Texas, however, crude oil production increased 16 percent in May to 107 million barrels (3.6 million bpd) from 92 million barrels (3.1 million bpd) in May 2014, according the Texas Petro Index.
The surplus of oil in Texas and worldwide has created a softening of price. Prices declined on the New York Mercantile Exchange (NYMEX) on July 7 to $51.98 the lowest price since April 13 and a 17 percent drop since its 2015 high of $62.58 in May. The six-year low was set on March 18 at $42.03.
The recently release Texas Petro Index shows that crude oil prices averaged a decline of 43 percent in May compared to the same month last year. Crude oil prices averaged $55.95 in May and $98.32 in May 2014.
With the decline in price come the decline in the rig count, drilling permits, oil completions and even employment. The rig count is down 58 percent with just 375 rigs running in Texas in May. Drilling permits were off 61 percent, oil well completions were down 36 percent, and employment declined 3 percent.
Imagine what crude oil production could be -- if the price was right?

Pioneer Isn't Waiting For A Better Price

Reuters over at Rigzone is reporting:
U.S. shale exploration and production company Pioneer Natural Resources Co said on Wednesday it is increasing drilling activity in Texas following the sale of its stake in an Eagle Ford shale pipeline and processing business.
The Dallas company's optimism stands out in a market unnerved by a 15 percent drop in crude prices since late June. Pioneer Chief Executive Scott Sheffield told Reuters in April that his company would start adding rigs this month if market conditions warranted more drilling.

North Dakota oil producer WPX Energy Inc said last month it would add two drilling rigs later this year, a decision that is unchanged despite the recent crude oil price drop.
Half a dozen or so other companies in the crowded U.S. shale industry have indicated they may add rigs but have so far not made definite moves as they wait to see where crude prices settle.
Pioneer said it has already added two drilling rigs in the Permian Basin this month and plans to add an average of two per month during the balance of the year as long as the crude oil price "remains constructive."
The increased drilling is not expected to have a big impact on 2015 production, which had been forecast to grow more than 10 percent, but it will push capital spending up $350 million to $2.2 billion, the company said. More rigs are planned for early next year.
Pioneer said it plans to add eight horizontal rigs in Texas shale basins, bringing the total rig count to 36, or the same number it had before the price of oil collapsed by more than half.
Pioneer, which owned 50.1 percent of the Eagle Ford pipeline and processing business before the sale, said its share of the proceeds from Enterprise Product Partners LP is $530 million at closing and about $500 million a year after closing.
Also Staggering: Petrobras Announces $58 Billion Asset Sale

Bloomberg at Rigzone is reporting:
Petroleo Brasileiro SA’s $58 billion asset sale proposal would be unprecedented for the oil industry -- and for good reason. It may be impossible to pull off.
The plan, released last week by the Brazilian state-run oil company known as Petrobras, calls for $15.1 billion in divestments by the end of 2016 and an additional $42.6 billion by 2018, part of which will come from restructuring.
The last company to come close to Petrobras’s target was BP Plc, when it sold more than $30 billion in a downsizing strategy after the Deepwater Horizon oil spill.
Chief Executive Officer Aldemir Bendine’s strategy is to cut debt without abandoning plans to develop oil discoveries 200 miles off the coast of Rio de Janeiro. Selling assets would help Petrobras avoid an alternate debt-reduction strategy that frightens shareholders -- a dilutive share offering while the stock is near its lowest in a decade.
But the assets are coming to market as a collapse in oil prices weighs on asset values and the financial wherewithal of would-be buyers.
Where Are The Chinese?

Rigzone explains the recent "absence" of the Chinese in North American energy arena, but the tea leaves suggest they are coming back ... and it could be big.

Approaching $5 Gasoline In Southern California -- July 10, 2015

In today's Orange County Register (southern California): Orange County wakes up to shock of $4.35 and climbing: Gas prices soar at independent stations.
Orange County motorists blinked Friday and saw gas prices top $4 a gallon at some of their neighborhood gas stations.
At OC Gas on Grand Avenue in Santa Ana, prices shot up to $4.35 from $3.27 on Wednesday. 
So,what's the story? The article continues:
Low inventory across the West Coast, a lack of imported gas for California and rising wholesale prices all have contributed to sporadic price hikes around the county.
“We are in a high-driving, high-consumption time of the year,” said Tupper Hull, the vice president of strategic communications for the Western States Petroleum Association. “I don’t know what occurred this week to change the wholesale prices. I don’t have an answer for that.”
GasBuddy, a website that collects gas price reports from its app users, saw wild price changes all day Friday across Orange County. A Dana Point Chevron took the top spot at $4.61 for a gallon of regular, followed by $4.59 a gallon at a 76 station in Seal Beach. Both stations had reported prices closer to $3.45 in recent days.
Will Governor Brown respond?
GasBuddy on Thursday petitioned Gov. Jerry Brown to temporarily waive California’s fuel requirements because of the shortage. A reprieve would mean the state could import gas from other states with different blends to hold off even higher price hikes.

The Red Queen Is Still On The Treadmill; She Has Not Fallen Off; North Dakota Oil Production Increases Month-Over-Month, May, 2015, Data

Director's Cut is out. This is May, 2015, data. 

The Bismarck Tribune has the story here but nothing in the story that wasn't in the data below.

I track the "cuts" here

Disclaimer: this update is always done in haste; typographical and factual errors are likely. This is for my use only. If this is important to you, you should go to the source

Note: facts and opinions are interspersed in the note below. Do not make any investment or financial decisions based on what is posted below; there will be factual and typographical errors. If this information is important to you, go to the source. 

The May data is posted at this link:

Important data points:
  • Bakken price in June: $47.73
  • Fracklog: 925 (no change); I had thought it would have been closer to 1,000
  • Completions: 114 (up slightly from 102 in April) -- a very, very low number; many wells going to SI/NC status
  • To maintain production near 1.2 million bopd: 110 - 120 completions needed each month
  • Statewide flaring: 18% 
Delta, crude oil production:
  • 1,201,159 - 1,169,045 = 32,114 bopd
  • 21,866 / 1,168,636 = 2.7% increase month-over-month
  • May, 2015: 1,201,159 (preliminary)
  • April, 2015: 1,169,045 (final)
  • March, 2015: 1,190,502 (final); 1,190,582 bopd (preliminary)
  • February, 2015: 1,178,082 bopd (revised, final); 1,177,094 (preliminary)
  • January, 2015: 1,191,198 bopd (all time high was last month)
  • December, 2014: revised, 1,227,483 bopd (preliminary - 1,227,344 bopd - preliminary, new all-time high)
  • delta: see above
Producing wells: 
  • May, 2015: 12,659 (preliminary -- new all-time high)
  • April, 2015: 12,545 (final revised -- new all-time high)
  • March, 2015: 12,443 (final revised -- new all-time high)
  • February, 2015: 12,199 (final revised -- new all-time high)
  • January, 2015: 12,181 (preliminary -- new all-time high)
  • December, 2014: 12,134 (preliminary, new all-time high)
  • November, 2014: 11,951 (revised); 11,942 (preliminary, new all-time high)
  • October, 2014: 11,892; revised 11,942 (preliminary, new all-time high)
  • September, 2014: 11,758 (revised); 11,741 (preliminary; new all-time high)
  • August, 2014: 11,565
Permitting: drilling permit activity decreased slightly from April to May and then increased back to February-March levels in June as as operators positioned themselves for low 2015 price scenarios and a significant inventory should a return to drilling price point occur in the next 6 - 12 months.
  • June, 2015: 168
  • May, 2015: 150
  • April, 2015: 168
  • March, 2015: 190
  • February, 2015: 197
  • January, 2015: 246
  • December, 2014: 251
  • November, 2014: 235
  • October, 2014: 328
  • September, 2014: 261
  • August, 2014: 273
  • All-time high was 370 in 10/2012
  • Today, 2015: $40.75 
  • June, 2015: 47.73
  • May, 2015: $44.70
  • April, 2015: $38.33; $36.25 (lowest since February, 2009, and January, 2015) (all-time high was $136.29 7/3/2008)
  • March, 2015: $31.47
  • February, 2015: $34.11
  • January, 2015: $31.41
  • December, 2014: $40.74
  • November, 2014: $60.61
  • October, 2014: $68.94
  • Sept, 2014: $74.85
  • August, 2014: $78.46
Rig count:
  • Today: 73 - lowest since November, 2009, when it was 63 (all time high was 218 on 5/29/2012)
  • June: 78
  • May: 83
  • April: 91 (lowest since January 2010)
  • March: 108
  • February: 133
  • January: 160
  • December, 2014: 181
  • November, 2014: 188
  • October, 2014: 191
  • Sept, 2014: 193
  • August, 2014: 193
  • July, 2014:  192
Director's comments:
Operators continue to experiment with running 1 to 2 fewer rigs than their planned 2015 minimum to see if drill times and efficiencies will continue to improve. This has resulted in a current fig count that is 5 to 8 rigs below what operators indicated would be their 2015 average if oil price remained below $65/bbl. The number of well completions dropped sharply from 244 (final) in March to 102 (final) in April. The number of completions rose slightly to 114 (preliminary) in May.
Even with the decrease in drilling activity, initial production rates are increasing 10 - 20% per month as drilling and completions focus more and more on the best ortion of the core Bakken and Three Forks area.
Drilling rig count:
  • has since dropped another 5 from June to today
  • dropped 5 more from May to June
  • dropped 8 from April to May
  • dropped 17 from March to April 8
  • dropped 25 February to March
  • dropped 27 from January to February
  • dropped 7 from November to December
  • dropped 21 from December to January
  • dropped 23 from January to date of previous month's Director's Cut
Rig utilization:
  • no change
  • 20,000+ feet rigs: 45% 
  • shallow well rigs: 25% 
Well completions:
  • May: 114 (preliminary)
  • April: 102 (final -- astounding drop)
  • March: an astounding 194 (final)
  • February: 42
  • January: 63
  • December: 173 (preliminary)
  • November: 48
  • one significant precipitation event in Dickinson and Williston
  • 7 days with wind speeds in excess of 35 mph (too high for completion work)
  • no days with temperatures below -10F
Wells waiting to be completed:
  • At end of May, an estimated 925 wells were waiting to be completed, no change
  • At end of April, an estimated 925 wells were waiting to be completed, an increase of 45
  • At end of March, an estimated 880 wells were waiting to be completed, a decrease of 20
  • At end of February, an estimated 900 wells waiting to be completed, an increase of 75
  • March, 2015, Director's Cut -- 825 wells -- an increase of 75-- January data
  • Previous Director's Cut -- 750, a decrease of 25
  • Red Queen: 110 - 120 completions per month to maintain 1.2 million bopd
  • unchanged at 18%
  • finally, the Tioga gas plant was up significatnly to 93% of capacity
  • expansion of gas gathering from south of Lake Sakakawea is still delayed
Gas capture statistics:
  • statewide: 83% (October 2014 target was 74%; January 2015 capture target is 77%)
  • FBIR Bakken: 88% (88% previous month; 83% last month; 79% before that; 77% the month before)
  • percent of flaring was unchanged; the volume of flaring increased 23.5 MMCFD (a reversal from last month when flaring had decreased month-over-month)
Fracking policies/regulations:
BLM revised final regulations for hydraulic fracturing on federal and Indian lands were published in the CFR on 3/26/15 so they will go into effect 6/26/15. North Dakota and Colorado have intervened in the Wyoming legal challenge of the rules a nd plan to seek an injunction or temporary restraining order to prevent the rules going into effect until the case is settled.
Natural gas exploration in Emmons County:
The exploration well is no longer on confidential status as of 12/23/14; the well has not been completed yet, but appears to contain 2 pay sections totaling about 80 feet thick with very good gas shows