Saturday, August 15, 2015

Portable Frack Sand Systems; The "Global Warming" Hiatus Continues -- Farmers Almanac -- August 15, 2015

Could these portable frack sand systems be coming to the Bakken? It seems they would make a lot of sense. The systems can store 5 million lbs of sand, which is about what is used in most wells in the Bakken, but the system can throughput a lot more than 5 million lbs:

San Antonio Business Journal is reporting:
Houston-based Solaris Oilfield Infrastructure has debuted a portable 12-silo frac sand system, which it says promises to drive down costs on the drilling pad.
The announcement comes amid six-year low crude oil prices and at a time when companies are looking at innovative technology to increase efficiency and reduce the production cost per barrel.
With a total storage capacity of 5 million pounds, the system can deliver sand at an average rate of nearly 23,000 pounds per minute into two blenders simultaneously.
The new 12-silo system was recently used to successfully complete a “zipper” frac of two wells on a drilling pad in the Permian Basin.Delivering sand at an average rate of nearly 23,000 pounds per minute into two blenders simultaneously, the new system was used to complete 34 frac stages and deliver 30 million pounds of sand during the four-day completion of both wells.
Company figures show that the 12-silo system was used to deliver nearly 9 million pounds of sand to the wells during one single 24-hour period alone.
The 12-silo system enabled 22 frac sand trucks to simultaneously unload sand at the well site, resulting in an effective truck offload rate of approximately 1.65 million pounds per hour and eliminating truck demurrage on site.
Global Warming
Climate Change
Extreme Weather
Falling Lakes
Rising Lakes

The AP is reporting:
Just when you thought you had gotten over last winter, be warned: The Old Farmer's Almanac predicts it will be super cold with a slew of snow for much of the country, even in places that don't usually see too much of it, like the Pacific Northwest.
If you don't want to read about those four-letter words, there's plenty more to peruse in the folksy, annual book of household tips, trends, recipes and articles, such as animal jealousy, the history of shoes and anticipation for the biggest Supermoon in decades in November 2016.
Global warming?
Otherwise, look for above-normal snow and below-normal temperatures for much of New England; icy conditions in parts of the South; and frigid weather in the Midwest. The snowiest periods in the Pacific Northwest will be in mid-December, early to mid-January and mid- to late February, the almanac predicts.
The Kennedys are already looking forward to their first ski trip in New Hampshire later this year. Perhaps as early as Halloween.

Thirteen (13) New Permits Issued In North Dakota -- August 15, 2015


August 27, 2015: there was an error with this by the NDIC; corrections were made on August 27, 2015; Corsican Federal wells have new permit numbers and are now followed here.
Original Post
Yesterday's NDIC daily activity report said there were no permits issued on Friday. A sharp-eyed, and, no doubt very curious, reader took a look and noted that, in fact, thirteen (13) new permits have been added to the list:
  • Operators: CLR (8), XTO (4), QEP
  • Fields: Sanish (Mountrail), Lindahl (Williams), McGregor, (Williams) Grail (McKenzie)
  • Comments: CLR's eight (8) permits are all Corsican Federal permits in the Sanish, 
The Corsican Federal permits; section NENE 15-153-93:

31874, 1,561, CLR Corsican Federal 1-15H, t8/16; cum 62K 12/16;
31875, SI/NC, Corsican Federal 2-15H1,
31876, SI/NC, Corsican Federal 3-15H,
31877, SI/NC, Corsican Federal 4-15H2,
31878, SI/NC, Corsican Federal 5-15H,
31879, SI/NC, Corsican Federal 6-15H1,
31880, SI/NC, Corsican Federal 7-15H,
31881, SI/NC, Corsican Federal 8-15H2,
Reading About The Bakken? 
Nope: Skippyjon Jones

The Bakken -- August 15, 2015

June's production in North Dakota was the second highest in the history for the state despite efforts to really, really, really cut back on production. Rigs are down to less than 75 (compared to 220 during the boom); the number of wells waiting to be fracked is almost at record highs (825; the record high is around 900); operators choking back because a) of NDIC flaring rules; b) low crude oil prices; c) refineries unable to take any more oil; d) refineries down for maintenance; e) inadequate pipelines; f) Tioga gas plant at less than capacity; and, there are probably some reasons I've forgotten or don't even know about.

But this is what really caught my attention today. The June production (most recent data available) showed there was an increase of 0.7% month-over-month. Two comments:
  • the Obama administration had predicted that the Bakken would show a decline of almost 30,000 bopd, when in fact, it was about 9,000 bopd increase
  • this follows the previous month when there was an astounding 2.7% increase month-over-month; after a 2.7% increase, I would have expected a decline in June
I think 750,000 bopd out of the Bakken would be just fine until the price gets back to something reasonable. I see no need to give Bakken oil away like the Saudis are giving their oil away.

One-Sixth Of The Bakken/Three Forks Have Been Drilled -- NDIC, August 15, 2015


August 16, 2015: I lose track of things in the Bakken. I vaguely remember blogging about a staggering number of wells that would be necessary to drill out the Bakken. When I wrote the original post (below) and then the update yesterday, I thought I was missing something. I knew I was one of the first to suggest 48,000 wells would be needed, but I also knew that I had posted a much bigger number, but just couldn't find it yesterday.

At the height of the boom, 2010 - 2014, things were moving so fast in the Bakken, it was hard to keep track of everything, but I knew I had blogged a number much bigger than 48,000 and a number much bigger than 60,000 -- the number of wells necessary to drill out the Bakken.

I stumbled across one such post (but there are others, and if I find those posts I will post them. Anyway, back on April 11, 2014, it was suggested that as many as 120,000 wells might be necessary to drill out the Bakken before it's all over.

August 15, 2015: the Bakken boom began in 2007. It's taken almost eight years to get to 10,000 wells, one-sixth of what is projected to drill out the Bakken. The early years did not see as many wells as in the 5th and 6th and 7th years, but now with the price of oil, the number of wells being drilled will also decrease. So, let's say it takes about five (5) years to drill 10,000 wells (2,000 wells/year -- which is about right). One-sixth of all wells takes five (5) years; that means about 25 more years of drilling, taking us out to 2040 of active drilling the Bakken / Three Forks. My hunch is that it will take a lot more than 60,000 wells and a lot longer than 25 years of drilling.
Original Post
If I ever run across my early posts suggesting that it would take upwards of 48,000 wells to drill out the Bakken I will link them again for archival purposes. I can't recall if I ever suggested more than 48,000 wells, but this was at a time when they were looking at significantly fewer, maybe 20,000 wells (which looking back is incredibly hard to believe).

Today there is an article in The Dickinson Press suggesting it will take 60,000 wells to drill out the Bakken/Three Forks and to date, 1/6th have been drilled.

I wrote Don:
I have a PowerPoint presentation from April, 2013, by Rollefstad (Williston's economic director at the time). If I remember correctly, this was one he posted and then quickly took down (I think there were some "borrowed" slides from corporate presentations he realized he could not use), but fortunately I saved it.
This was back in 2013, his projection, based on 4 middle Bakken wells in each 1280-acre unit; and, four TF wells in each 1280-acre unit, it would take 50,000 wells total.
This was before they even talked about a) lower TF benches; b) mega-fracks.
At the right price, most of the Bakken, even the outlying areas will have 4/4 (MB/TF) wells in each 1280 and in the sweet spots, way, way more.
This will be another good article for the archives.
At $15 oil, they've probably drilled every well they will drill in the Bakken.
At $150 oil, my hunch is they will drill a few more than 60,000 before it's all over.
At the linked article:
Oil companies have drilled one-sixth of the potential Bakken and Three Forks wells in North Dakota, exceeding 10,000 wells in the shale formations for the first time in June.
The state’s oil production rose slightly in June to more than 1.2 million barrels per day, the second-highest production month behind only last December, the Department of Mineral Resources said Friday. 
The nearly 1 percent increase in oil production was driven by companies that were aggressive in fracking and completing oil wells in June, Director Lynn Helms said.
Helms said the current number of active drilling rigs - 74 on Friday - and the inventory of wells that needs to be completed is sufficient to maintain production of 1.2 million barrels per day for 24 months. 
“We think that we’re in a period of sustained low prices. It could last two years,” Helms said. “The capacity is there to maintain North Dakota production for a full two years even at these sustained low prices. It’s going to be a long, difficult period.”In June and July, the department saw a surge in drilling permit applications with operators optimistic about oil prices, Helms said.
But "everyone" (I assume) expects things to get worse before they get better.

Everything else in the article can be found at the Director's Cut.

However, there is one huge data point in this month's Director's Cut (June, 2015 data) from previous data points.

Previously, Mr Helms said it would take 110 - 120 completions each month to maintain production near 1.2 million bopd. This month he did not say the number of completions required, but instead said that "the current rig count [around 72] plus NC [DUCs] well inventory is sufficient to maintain 1.2 million bopd for 24 months.

Samson Resources Seeks Bankruptcy Protection; Saturday, August 15, 2015

Unless there's some kind of miracle, it looks like Tiger Woods will miss the cut at the PGA Championship.


A reader reminds me about the "webinaires" posted by NDIC. In the July video, the reader notes:
  • Bakken production can maintain for a couple years using inventory of DUCs;
  • there is about a 1% drop in liquid oil volume is estimate from the new stabilization rules. Also, this is part of the reason why gas has grown. (Moving light ends out of the crude and into the gas plants.); and, 
  • a few other things like the Lake Sakakawea pipeline, etc.
A big "thank you" to the reader for reminding me. 

Samson Resources files for bankruptcy protection. The Wall Street Journal is reporting:
KKR & Co.’s Samson Resources Corp. plans to file for chapter 11 bankruptcy protection by mid-September after finalizing a restructuring plan with key lenders Friday.
The filing would represent the biggest corporate casualty yet of a slump in oil and gas prices and another black mark in energy for the private-equity pioneer.
The Tulsa, Okla.-based oil and gas producer agreed to hand ownership to a group of its lenders in bankruptcy, the company said in a statement Friday, confirming an earlier Wall Street Journal report. The move would wipe out the roughly $4.1 billion in cash KKR and its partners invested in the company. The private-equity firm led a $7.2 billion leveraged buyout of Samson in 2011, the biggest-ever such deal for an oil and gas producer.
Samson’s board approved the restructuring agreement Friday afternoon, according to a person familiar with the deal.
The energy producer intends to skip a bond payment due Monday and use a 30-day grace period to seek broader creditor support for its plan, the company’s statement said. Chapter 11 of the bankruptcy code allows companies to restructure debt and take other steps to improve their finances.
Back in April, 2015, FuelFix reported this was likely to occur.