Thursday, September 3, 2015

Federal Fracking Rules Implementation Delayed -- September 3, 2015

From Platts:
New federal fracking rules, originally set to take effect in June, will be delayed until at least mid-October after both sides in a federal case challenging the rules requested more time this week to submit arguments.
"Given the voluminous nature of the record, the parties agree that additional time is necessary to complete a preliminary review of the record and identify additional citations pertinent to the pending motions for a preliminary injunction," attorneys wrote in joint motion Wednesday.
US District Court of Wyoming Judge Scott Skavdahl approved the motion Thursday, setting up an expected decision in the case by mid-October.
The fracking rules at the center of the case include new chemical disclosure, well construction and fluid disclosure requirements finalized by the US Department of the Interior's Bureau of Land Management in June. The rules were not expected to have an immediate impact due to the limited amount of oil and natural gas production that takes place on federal lands, but are seen as a significant hurdle to drilling on roughly 700 million acres of federal land and could stymie future fossil fuel development, four states and two industry groups have argued in lawsuits.
In lawsuits, the Independent Petroleum Association of America and the Western Energy Alliance, both industry groups, along with the attorneys general from Wyoming, North Dakota, Utah and Colorado, have sought to overturn the rules.
For Friday

ObamaCare, WSJ.
Hillsboro, ND -- Agriculture Drones
Texas oil -- profitable at $15 / bbl
Private equity firms plunge back into oil and gas sector, WSJ
iPhone continues to increase lead in US smartphone market

Jerry Brown, California Proposes Increasing Gasoline, Diesel Taxes; Californians Apparently Undertaxed -- September 3, 2015

Apparently for Governor Jerry Brown, gasoline is not expensive enough for Californians. He will increase diesel tax by a whopping 11 cents/gallon and gasoline tax by 6 cents/gallon. It doesn't add all that much to a single fill-up, but it certainly sends an interesting message to a state where almost 25% live in poverty. No link; easy to find everywhere.

More walking, less driving?

Sophia Walking

Sophia Walking

Zavanna Gas Lift -- September 3, 2015

I was in a rush to do this -- going off to soccer; there will be factual and typographical errors in a long note like this. If this is important to you, go to the source. A huge "thank you" to a reader for alerting me to this well, another great example of ... well, you will see. 

First, as a reminder, look at this earlier post.

Now, on to this well:
  • 24543, 1,086, Zavanna, Bear Cat 33-28 1H, Williston, t4/13; cum 259K 7/15; unfortunately with current slump in oil prices and restrictions on flaring, we do not know to what extent this well might be choked back at the present time; unfettered, one can only imagine what this well could produce.
First, the production profile:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

So, let's see if the file report shows what was going in last summer / autumn / winter (2014).

The well was returned to production on/about February 16, 2015, when the work was completed: workover rig to place/set gas lift packer assembly.

Shortly before that, a request to commingle: #24543, #25553, and #25552. (I will look at those again later.)

From a sundry form dated on/about November 3, 2014:  "Zavanna will install a gas lift on the Bear Cat multi-well pad location. Estimated January, 2015. With gas lift, we no longer use sucker rods. The tubing has been run with a packer on bottom to prevent flow up the casing annulus and gas lift mandrels/valves at specific depths in the tubing. A high pressure gas line has been run to the wellhead to inject gas down the casing annulus. Gas will go from casing to tubing through the gas lift mandrels/valves and will use gas as the drive for fluid lift. A pumping unit will no longer be required  while on gas lift."

Prior to that, well taken off-line for fracking other wells in the area.

QEP With Seven (7) New Permits For Grail Oil Field; BR Reports Three High-IP Wells -- North Dakota, September 3, 2015

Active rigs:

Active Rigs75193186192198

Seven (7) new permits --
  • Operator: QEP (7)
  • Field: Grail
  • Comments: 23-149-95 in Grail oil field (see below)
One well coming off the confidential list Friday:
  • 30176, drl, XTO, Stenehjem 31X-28H, Siverston, no production data,
Three (3) producing wells completed:
  • 29424, 1,200, BR, Kings Canyon 4-8-34MBH, Camel Butte, 4 sections, t8/15; cum --
  • 29467, 1,566, BR, Kings Canyon 6-8-34UTFH, Camel Butte, 4 sections, t8/15; cum -- 
  • 29517, 2,669, BR, LaCanyon 8-8-34MBH ULW, Blue Buttes, 4 sections, t8/15; cum --
QEP renewed seven (7) permits, MHA permits in Dunn County.

Slawson renewed two (2) Moleback permits in Mountrail County.

Grail oil field today:

QEP propose 7-well pad in section 23-149-95, Grail oil field:

My maps can be wrong. If this information is important to you, go to the source, either NDIC or QEP.

Random Update Of A Few Monster Wells -- North Dakota, September 3, 2015

A random look at a few "monster wells." I track monster wells here

Long Lives

There are a few wells that are still active and have been producing longer than these two wells, but not many:
  • 3580, 480, Enduro, Rusch B 1, Sherwood, t6/64; cum 2.38 million 7/15 (that's 51 years of production) 
  • 1246, 161, Hess, Hawkeye-Madison Unit G-603HR, Madison, Hawkeye, s9/56; re7/05; t10/56; cum 474K 7/15; spudded 1956 (producing for 59 years); was inactive early in 2015; now active again; for an in-depth look at this well, click here
Lotsa Water

This well is now abandoned but it was producing as recently as 2013. A reader recently pointed out to me all the water some oil wells produce. They are not so much "oil wells with water" as they are "water wells with a little bit of oil." Common in the South Red River formation.
  • 15786, AB/1,119, Denbury Onshore, CHUSE 24A-18SH 15, Cedar Hills, a South Red River well, t9/05; cum 658K 11/13; 
Look at the production profile of this well near the end of its life:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
SOUTH RED RIVER B6-20130030000
SOUTH RED RIVER B5-201317471144027270
SOUTH RED RIVER B4-201300540000
SOUTH RED RIVER B3-2013312239224639994769506112
SOUTH RED RIVER B2-20132820602095383736414964
SOUTH RED RIVER B1-201331218021654484874650589
SOUTH RED RIVER B12-201231210620863818664142971
SOUTH RED RIVER B11-2012302199219443146831433265
SOUTH RED RIVER B10-2012312146213837797746484142
SOUTH RED RIVER B9-20123024542412400011020605300
SOUTH RED RIVER B8-201221741692858623817

A Monster Well Still Not On A Pump

"What happens in the field, stays in the field." It's possible this one has a pump and the paperwork simply hasn't caught up with scout ticket, but NDIC still has this well as "F" -- flowing, no artificial life:
  • 20210, 803, CLR, Whitman 2-34H, Oakdale, Bakken, s1/11; t9/11; F; cum 1.31 million bbls 7/15; 24 stages; 2.4 million lbs; middle Bakken; runs south; 4 section spacing; this is an incredible well; still 19,000 bbls in July, 2015;

Lesser Prairie Chicken Decision "Vacated"; Tea Leaves Suggest Bakken Fracklog To Go Over 1,000 -- September 3, 2015

Oil & Gas Journal reports:
A federal district judge in Texas vacated the US Fish & Wildlife Service’s listing of the lesser prairie chicken as a threatened species after finding that the US Department of the Interior agency failed to follow its own evaluation procedures for conservation efforts that already were under way.
The decision potentially could affect FWS’s long-anticipated decision whether to list the greater sage grouse as a threatened or endangered species, which is expected by the end of this month. Both birds dwell in oil and gas producing areas, so listing either or both species as threatened would have a profound effect on operations.
Robert Junell, senior judge for US District Court for Western Texas’s Midland-Odessa Division, said in his Sept. 1 decision that FWS acted arbitrarily and capriciously in disregarding conservation efforts on millions of acres across five states to improve habitat and diminish threats to the bird. 
I assume the FWS, like the EPA, could ignore this judge and proceed as if the bird was still endangered and that inadequate steps were being taken to save it.

Or more easily, the President simply signs an executive order.


The tea leaves suggest the number of Bakken wells drilled and not completed will surge this winter. If I remember, I will post a poll, to see what readers think the fracklog will be each month for the next few months.

Today, well into fracking season, 3 of 4 Bakken wells coming off the confidential list were not completed. There is excess fracking capacity; the summer weather has been excellent; and the wells that are completed are generally very good. But, yet today, 3 of 4 Bakken wells coming off the confidential list today were not completed.

My hunch is the fracklog will go over 1,000 before the winter of 2015-2016 is over.

Weekly Petroleum Statistics

Gasoline demand continues to drop (a dynamic link) as driving season ends. Most recent weekly data shows this season's gasoline demand up almost exactly 500,000 bopd year-over-over. And this is with better mileage, more EVs, a recession in areas of the country. 

Natural gas fill rate, also a dynamic link: continues to rise; now slightly above the 5-year average, at 94. In the East Region, stocks were 38 Bcf below the 5-year average following net injections of 71 Bcf.

Britain: 2015 Was Among The Coldest Summers In Twenty Years

Ice Age Now is reporting:
The UK’s average temperature this summer was among the lowest in 20 years, the Met Office has revealed. It also admitted it failed to predict the wash-out over the last few months.

Cornwall and the south coast coped with up to three times the average rainfall for August, while Dorset, Hampshire and Guernsey endured the wettest end to the summer in 50 years, the Met Office said.
It is hoped the use of a new £97 million supercomputer, the first phase of which went live this week, will allow more accurate weather forecasts in future.
For The Granddaughters

I wrote the following some years ago after reading Harold Bloom's The Book of J. Harold Bloom introduces a fourth "definition" or example / type of irony.

First type of irony: Socratic irony. Irony as first used by Socrates. "A feigned ignorance and humility designed to expose the inadequate assumptions of others, by way of skilled dialectical questioning."

Second type of irony: common irony. "Use of language to express something other than supposedly literal meaning, particularly the opposite of such meaning, and also the contrast or gap between expectation and fulfillment."

Third type of irony, how J used irony: dramatic irony or tragic irony. "The incongruity between what develops on adjacent words and actions that are more fully apprehended by the audience or readers than by the characters." J was a master of such irony. I wonder if playwrights like Neil Simon or Oscar Wilde aren't good examples?

Fourth type of irony, invented by J: her irony was "the representation of what happens when altogether incommensurate realities juxtapose and clash." For example, a god wrestling with a human is J's type of irony (gross incommensurate beings, god vs mortal). How can Abram haggle with Yahweh? How can Jacob wrestle with a nameless one among the Elohim (angels)? How can we be persuaded that a masculine rough hunter like Esau would give away his birthright for a bowl of soup? I would think there are many, many examples of this type of irony in the Odyssey.

An aside: In the movie, “Once Upon a Time in Mexico,” the events between Johnny Depp and an unnamed boy may be examples of both the third and the fourth types of irony.  As an example of the third definition of irony: when Johnny Depp said he didn’t want to see the boy again. Later in the movie when they cross paths, Depp has been blinded and cannot see the boy.  The same event can represent the fourth definition of irony:  an unnamed, untrained boy saves the life of a trained killer.]

Of the four "types" of irony, Harold Bloom says J created her own form, the fourth form.

First Time Unemployment Claims Surge 12,000; Much Worse Than Forecast -- September 3, 2015

From trading
The number of Americans filling for unemployment benefits was 282,000 in the week ended August 29th, an increase of 12,000 from the previous week's downwardly revised level of 270,000 and beating market expectations of 275,000.
The 4-week moving average was 275,500, an increase of 3,250 from the previous week's revised average. The previous week's average was revised down by 250 from 272,500 to 272,250.
So far not being reported over at Yahoo!News. We'll see the spin later.

I think this data is correct; the date on the linked website was not easily visible but I do believe this is correct. It will be confirmed by Reuters or Bloomberg later. If this information is important to you, go to the source.

Later, 8:30 a.m.: Here it is, the Reuters spin -- "unemployment up, labor market remains strong."
The number of Americans filing new applications for unemployment benefits rose more than expected last week, but the underlying trend remained consistent with a strengthening labor market.
Initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 282,000 for the week ended August 29, 2015.
The jobs data will be released tomorrow; it is expected to show some job growth, but Reuters is preparing reading for a disappointing report:
Job gains could come in below expectations as the first reading of August payrolls has tended to be weaker in the last several years before being revised higher.

Intermittent Blogging This Morning -- September 3, 2015

Running some errands the morning; not sure where / when I will have wi-fi?

Active rigs:

Active Rigs75193186192198

RBN Energy: update on Houston crude oil storage.
Even as Houston area crude oil storage – at refineries and commercial terminals – remains just half utilized according to data from Genscape, midstream operators are busy building more tanks. About 7 MMBbl of storage is under construction now and plans have been announced this year to build another 11 MMBbl. Today we detail plans to expand crude storage in the Houston area.
The First Episode in this series reviewed the evolving crude supply demand balance into the Houston refining region that has 9 refineries and two new 50 Mb/d condensate splitters that are processing an estimated 2.4 MMb/d of crude between them. Since 2012 a flood of new crude has begun to arrive in the Houston area by pipeline – replacing overseas imports. At the moment incoming crude supplies arriving by pipeline and barge roughly balance with refinery demand. However - incoming pipeline capacity is less than 50% utilized today even as more than 1 MMb/d of new pipes are expected online by early 2016 - suggesting that a lot more incoming crude is expecting to navigate the Houston area in the future (or that the incoming infrastructure is being overbuilt).
Episode 2 reviewed logistic challenges in the Houston area arising from crude quality differences between traditional imports that are heavy and medium grades and new domestic production that has been predominantly light crude or ultra light condensate. Existing refineries were built to process heavier crudes and can only handle so much lighter crude without investment and reconfiguration. That means heavier waterborne imports are still needed – although they are being slowly replaced by heavy crude coming by pipeline from Western Canada. At the same time changing interpretations of Bureau of Industry and Security (BIS) regulations governing the export of crude now allow exports of lightly processed condensate that has to be segregated – complicating pipeline logistics.
Episode 3 looked at the limited ways that crude coming into Houston by pipeline can currently bypass area congestion to get to refineries in Port Arthur/Beaumont or further along the Gulf Coast in Lake Charles and St. James, LA. The new Enterprise Rancho II pipeline will relieve some of that congestion but there is still a constraint east of Port Arthur/Beaumont. In Episode 4 we took a closer look at Houston area crude storage – finding it only 52% utilized at present even as storage in the wider Gulf Coast region has been filling up in response to a contango market structure. This time we detail midstream plans to add even more crude storage in Houston.