Where We Stand On Permits For Oil And Gas Wells In North Dakota -- September 20, 2015

Where we stand on permits in North Dakota. On September 18th, for each of the following years, the number of oil and gas permits issued (does not include permits for salt water disposal wells). The numbers may be off, but not by much:

• 2015: 1647
• 2014: 2100
• 2013: 1819
• 2012: 1647 (coincidental, huh?)

Six (6) DUCs; Three (3) High-IP Wells Reported In The Bakken -- September 20, 2015

Monday, September 21, 2015

• 29797, conf, BR, Morgan 24-21MBH, Pershing, no production data,
• 30375, SI/NC, Statoil, East Fork 32-29 1H, East Fork, no production data,
• 30565, SI/NC, Statoil, Folvag 5-8 1H, Stony Creek, no production data,
• 30791, drl, SM Eenrgy, Ashley 13X-9H, Poe, no production data,

Sunday, September 20, 2015

• 26943, 3,038, Whiting, Smokey 4-15-22-14H3, Pembroke, t5/15; cum 45K 7/15;
• 29796, SI/NC, BR, Kirkland 24-21MBH, Pershing, no production data,
• 30376, SI/NC, Statoil, Folvag 5-8-2TFH, Stony Creek, no production data,
• 30651, SI/NC, XTO, Odegaard State 21X-16AXB, Midway, no production data,

Saturday, September 19, 2015

• 28254, 1,410, Emerald Oil, Excalibur 6-25-36H, Boxcar Butte, t3/15; cum 41K 7/15;
• 29510, SI/NC, Zavanna, Shepherd 3-11 4TFH, Stony Creek, no production data,
• 30101, 1,742, Hess, BB-Ole Anderson-151-95-3130H-8, Blue Buttes, t8/15; cum --

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26943, see above, Whiting, Smokey 4-15-22-14H3, Pembroke:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	7-2015	8	6248	5789	3524	15885	0	15869
BAKKEN	6-2015	23	22959	23703	6174	55139	0	55096
BAKKEN	5-2015	8	15798	14915	0	33235	0	33221

28254, see above, Emerald Oil, Excalibur 6-25-36H, Boxcar Butte:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	7-2015	31	5007	5064	10289	4312	3662	650
BAKKEN	6-2015	30	6274	5971	12557	5584	5132	452
BAKKEN	5-2015	26	6192	6628	13040	5661	2087	3574
BAKKEN	4-2015	30	13166	13219	25235	11657	0	11657
BAKKEN	3-2015	16	10392	9710	30330	9289	0	9289

And This Is Why Folks "Like" Wind Energy -- Texas Electricity 101 -- September 20, 2015

Updates

 

Later, 9:39 p.m. CT: this is kind of cool (from a reader). A rough rule of thumb: $1 million / mile for pipeline; $1 million / mile of new highway. So, how much does it cost for high-voltage, long-distance power transmission lines? $2 million / mile. FuelFix reports:

The installation of new transmission lines across Texas has reduced the amount of time wind generators aren’t able to transmit power across the state due to congestion, the U.S. Energy Information Administration wrote this week.

Through a $7 billion project completed last year, 3,500 miles of transmission lines were laid out across Texas, connecting rural regions — where there are wind farms are most prevalent — to the urban centers with high demand for electricity. The project was dubbed Competitive Renewable Energy Zones, or CREZ.

CREZ has reduced incidents of “curtailment,” in which wind generators can’t transmit power through the grid because there’s not enough free space on power lines. That amounts to wasted energy, since the power of wind that’s blowing can no longer be used.

And that's just "in-state." Wait until they have to cross state lines.

Original Post

 

Wind power in Texas. Business Insider is reporting:

A very strange thing happened here in Texas, early this morning: The so-called spot price of electricity in Texas fell toward zero, hit zero, and then went negative for several hours. As the Lone Star State slumbered, power producers were paying the state’s electricity system to take electricity off their hands. At one point, the negative price was $8.52 per megawatt hour.

(Perhaps this is what T. Boone Pickens saw coming, years ago when he failed in his attempt for a huge west Texas wind farm.)

Impossible, most economists would say. In any market — and especially in a state devoted to the free market, like Texas — makers won’t provide a product or service at a negative cost. Yet this could only have happened in Texas, which (not surprisingly) has carved out its own unique approach to electricity.

Consider these three unique factors about Texas.

First, Texas is an electricity island. The state often behaves as if it is its own sovereign nation, and indeed it was an independent republic for nearly 10 years. Alone among the 48 continental states, Texas runs an electricity grid that does not connect with those that serve other states. Texas, the state, needs to consume all the electricity it produces.

Second, Texas has way more wind power than any other state. In 2014, wind accounted for 4.4% of electricity produced in the US. Texas, which has more installed wind capacity (15,635 megawatts) than any other state and is home to nearly 10,000 turbines, got 9% of its electricity from wind in 2014.

Third, Texas has a unique market structure. It’s complicated, but ERCOT has set up the grid in such a way that it acquires a large amount of power through continuous auctions. Every five minutes, power generators in the state electronically bid into ERCOT’s real-time market, offering to provide chunks of energy at particular prices.

ERCOT fills the open needs by selecting the bids that are cheapest and that make the most sense from a grid-management perspective — i.e., the power is being fed into the grid at points where the distribution and transmission systems can handle it. Every 15 minutes, the bids settle — at the highest price paid for electricity accepted in the round.
So if 100 MW of electricity are needed, and some producers offer 60 MW at $50 per megawatt-hour, some offer 30 MW at $80 per megawatt-hour, and others offer 40 MW at $100 per megawatt-hour, all the bidders will receive the highest price of $100. (Note: The price ERCOT pays is the wholesale generation charge.)

(Interesting way to run an auction, to say the least.)

After midnight on Sunday, the combination of these three factors pushed the real-time price of electricity lower. Demand fell — at 4 a.m., the amount of electricity needed in the state was about 45% lower than the evening peak. The wind was blowing consistently — much later in the day Texas would establish a new instantaneous-wind-generation record.

(Winds.)

At 3 a.m., wind was supplying about 30% of the state’s electricity. And because the state is an electricity island, all the power produced by the state’s wind farms could only be sold to ERCOT, not grids elsewhere in the country.

That gave wind-farm owners a great incentive to lower their prices. The data show that the clearing price in the real-time market went from $17.40 per megawatt-hour for the interval ending 12:15 a.m., to zero for the interval ending 1:45 a.m. Then it went into negative territory and stayed at zero or less until about 8:15 a.m. For the interval ending 5:45 a.m., the real-time price of electricity in Texas was minus $8.52 per megawatt-hour.

How could this be? I mean, even the most efficient producer couldn’t afford to provide electricity for free or pay someone to take it.

Well, there’s one more wrinkle. Typically, wind is bid at the lowest prices — because you don’t need fuel, it doesn’t really cost that much money to keep wind turbines moving once they’ve been built. But wind operators have another advantage over generators that use coal or natural gas: A federal production tax credit of 2.3 cents per kilowatt-hour that applies to every kilowatt of power produced.

And that means that even if wind operators give the power away or offer the system money to take it, they still receive a tax credit equal to $23 per megawatt-hour. Those tax credits have a monetary value — either to the wind-farm owner or to a third party that might want to buy them.

Much, much more at the link.

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Clever. Why Didn't I Think Of This?

The New York Times is reporting:

Specialists in infectious disease are protesting a gigantic overnight increase in the price of a 62-year-old drug that is the standard of care for treating a life-threatening parasitic infection.

The drug, called Daraprim, was acquired in August by Turing Pharmaceuticals, a start-up run by a former hedge fund manager. Turing immediately raised the price to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.

There are many other examples of the same thing. Incredible. 

Wow, Wow, Wow -- Previously Discussed -- OXY USA And California Resources -- Monterey Shale A Scam -- Wolf Richter -- September 20, 2015

Updates

Later, 6:46 p.m. CT: see first comment below. 
 

Original Post

 

Business Insider is reporting:

Occidental Petroleum made a sweet deal on November 30, a masterpiece of Wall Street engineering. And just about every investor that touched it is now getting their hands burned off.

That day, Oxy spun off California Resources. It held Oxy’s oil-and-gas exploration-and-production assets in California. It’s the state’s largest natural gas producer and its largest oil-and-gas acreage holder with operations in the basins of Los Angeles, San Joaquin, Ventura, and Sacramento.

Oxy was the big player in the miraculous scam of the Monterey Shale formation in California, which had been hyped for years as the largest reserves of oil in the US. Any studies that showed that this oil wasn’t recoverable with [current] technologies due to the geological mess underground in earthquake land were shunted aside.

The EIA finally conceded that point in May 2014 and slashed the delusional estimates of the reserves by 96%. California isn’t exactly the easiest place for fracking in the US. When the EIA finally acknowledged reality, Oxy was the biggest loser.

Much, much more at the article.

I track the Monterey Shale here. 

New Player In The Neighborhood -- Marcus Hook Industrial Complex

The Marcus Hook makes the list of "Big Stories." First addition in quite some time.

Background: Marcus Hook Industrial Complex.

Update, September 20, 2015. TribLive is reporting:

At many shale-related events in Washington County, officials proclaim that region, with its abundant gas reserves and wells, is the “Energy Capital of the East.”

Hundreds of miles away in Philadelphia, where there is no shale drilling, leaders looking to tap into the gas boom are speaking of an energy hub that former Department of Environmental Protection Secretary Mike Krancer last week said would “rival and surpass Houston soon.”

The steps toward connecting both claims are taking place on 800 acres along the Delaware River south of the city in Marcus Hook, where rusty stacks and holding tanks are giving way to gleaming towers and pipes.

Nearly 1,000 contractors enter the site each day to convert the former Sunoco oil refinery into a terminal at which sister company Sunoco Logistics can receive and process hundreds of thousands of barrels of propane, ethane and other liquids pulled from Marcellus and Utica shale wells 300 miles to the west.

If Pennsylvania is to take full advantage of its shale boom, industry leaders and observers say it needs projects such as a revitalized Marcus Hook Industrial Complex to move products across state lines and overseas while attracting manufacturers to set up close by.

“Whether it's natural gas or other products, they need a final destination,” said Jonathan Hunt, senior director for terminal operations at Philadelphia-based Sunoco Logistics, which is spending at least $3 billion on the multi-phase Mariner East pipeline project to connect the shale fields of Western Pennsylvania, Ohio and West Virginia to the revamped terminal.

Tale of two states: Pennsylvania and New York.

Slawson Wells Being Choked Back Due To Flaring Penalties? -- September 20, 2015

I assume these Slawson wells are being choked back due to flaring penalties. These wells are inside Fort Berthold Indian Reservation, previously discussed.

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Biden's In

Tea leaf. 

Random Update On A CLR Holstein Well That Was Plugged Despite Great 30-Day IP -- September 20, 2015

Previous update:

February 17, 2015: this well was IA/SI (inactive/shut-in) the day it came off the confidential list; during the slump in oil prices:

• 27563, 420, CLR, Holstein Federal 1-25H, Elm Tree, when I checked May 5, 2015, the frack data showed only one frack stage; the well was shown as active, having produced nicely in February and March, 2015, but no test date; was it fracked? Update: test date 2/11/15; cum 32K 5/15; only 10 days in 6/15;

Update, September 20, 2015: this looked like a very good well; it was surprising to see it be abandoned but now we have the explanation (see below):

• 27563, PA/420, CLR, Holstein Federal 1-25H, Elm Tree, test date 2/11/15; cum 32K 5/15; only 10 days in 6/15;

The sundry form says the well was plugged and abandoned because a hole developed in the liner during stimulation operations. CLR says the plan is to come back to this well, "pull the remaining line or redrill a sidetrack."

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	7-2015	0	0	0	0	0	0	0
BAKKEN	6-2015	10	731	1118	142	840	0	803
BAKKEN	5-2015	31	4698	4391	1169	5567	4680	639
BAKKEN	4-2015	30	7504	7767	1397	7860	6687	941
BAKKEN	3-2015	31	8683	9082	1659	9212	8794	178
BAKKEN	2-2015	28	10026	9169	3223	10573	9524	82

Random Update On Hess Norman Well Back On-Line Aftter One Year Of Inactivity -- September 20, 2015

Update, September 11, 2016: still doing great; most recent production data:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	7-2016	31	3168	3202	1890	7973	6340	1416
BAKKEN	6-2016	30	2859	2822	1554	5726	2458	3131
BAKKEN	5-2016	25	3720	3623	2142	6888	2424	4328
BAKKEN	4-2016	7	462	461	342	721	615	60
BAKKEN	3-2016	31	3257	3048	1713	5371	4823	377
BAKKEN	2-2016	29	3391	3635	1744	7793	4085	3559
BAKKEN	1-2016	31	3683	3696	1825	7355	2603	4619
BAKKEN	12-2015	31	4139	3800	2097	8389	3197	5017
BAKKEN	11-2015	30	4287	4684	1993	7664	500	7129
BAKKEN	10-2015	23	4091	4073	2613	6187	6	6181
BAKKEN	9-2015	21	1587	1614	882	3645	1018	2524

Update, October 18, 2015: still doing great; most recent production data:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	8-2015	31	6556	6382	3334	13843	1	13842
BAKKEN	7-2015	28	6947	6807	3589	12333	83	12241
BAKKEN	6-2015	0	0	0	0	0	0	0

Previous update:

February 14, 2015: why is this one inactive?

• 20272, IA/800, Hess/Tracker, SC-Norman 154-98-3130H-1, 36 stages, 4.4 million lbs, t10/11; cum 166K 7/14; went inactive 6/14; 

Update, September 19, 2015: it looks like this well is back on active status. There is no information in file report (Basic Subscription) to explain the change in production.

• 20272, 800, Hess/Tracker, SC-Norman 154-98-3130H-1, 36 stages, 4.4 million lbs, t10/11; cum 173K 7/15; went inactive 6/14;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	7-2015	28	6947	6807	3589	12333	83	12241
BAKKEN	6-2015	0	0	0	0	0	0	0
BAKKEN	5-2015	0	0	0	0	0	0	0
BAKKEN	4-2015	0	0	0	0	0	0	0
BAKKEN	3-2015	0	0	0	0	0	0	0
BAKKEN	2-2015	0	0	0	0	0	0	0
BAKKEN	1-2015	0	0	0	0	0	0	0
BAKKEN	12-2014	0	0	0	0	0	0	0
BAKKEN	11-2014	0	0	0	0	0	0	0
BAKKEN	10-2014	0	0	0	0	0	0	0
BAKKEN	9-2014	0	0	0	0	0	0	0
BAKKEN	8-2014	0	0	0	0	0	0	0
BAKKEN	7-2014	0	0	0	0	0	0	0
BAKKEN	6-2014	0	0	0	0	0	0	0
BAKKEN	5-2014	23	437	480	2249	4126	4124	2
BAKKEN	4-2014	30	569	543	3199	4624	4547	77
BAKKEN	3-2014	31	1375	1263	3000	2209	1991	218

***************************

Down Memory Lane

A reader who has an interest in the Norman well sent me a number of photos including this well that was photographed in the same area back in 1961. Note the four (?) youngsters running around the well, something we probably don't see much of these days -- kids running around Bakken wells, though Girl Scouts could roast their S'mores on the flares.

Sunday Morning Rants And Raves -- September 20, 2015

How many remember this post from a month ago?

MichiganLive published an open letter from a solar-installation owner that "net metering would destroy solar investments:

I am writing in regard to [Michigan] Senate Bill 438. My interests are self-preservation, ensuring Michigan is looking to and working toward a sustainable energy plan, and reversing the effects of global warming.

So, how did that work out for the "rent-seekers"? The state legislature is still working this issue, but Midwest Energy News is reporting: 

As major investor-owned utilities push the Michigan Legislature to dismantle the state’s solar net-metering program, the state’s smallest electric cooperative is taking action on its own with a similar policy effective October 1,  2015.

Roughly 20 net-metering members of the Upper Peninsula’s Ontonagon County Rural Electrification Association were notified last month that the co-op would no longer purchase their excess electricity at retail prices.

Instead, the member-owned co-op will purchase excess electricity from its net-metering customers at wholesale rates “minus line loss” — a difference of nearly 10 cents per kilowatt hour (kWh).

****************************************

Environmentalists' Nightmare: Ethanol Derailment

I was behind in my blogging while traveling. I received this tweet from a couple of readers, about a derailment back on September 19, 2015:

Authorities say 6 ethanol tanker cars caught fire after Burlington Northern Santa Fe Railroad train derailed on a bridge southeast of Scotland, SD.

Environmentalists can't have it both ways: the desire to ban CBR while shipping ethanol by rail. The bad news for faux environmentalists: ethanol cannot be shipped by pipeline.

Maybe we need to ban EBR. The full story with a great photo at msn. Just think if this had happened in downtown Chicago, or Boston, or even NYC.

****************************************

Real Cost Of Filling Up By Country

Don sent me this link while I was traveling when I remarked to him how inexpensive gasoline was in America in the big scheme of things.

With high incomes and some of the cheapest gasoline around, Americans have little to complain about at the gas station. Imagine selling out $7.71/gallon (in Norway) or putting in a full day's work for a single gallon of gasoline (India, Pakistan).
No one can compete with the US when it comes to burning gasoline. Americans guzzle 1.2 gallons/person/day, more than any other country by a long shot. 

And then this:

Even with falling gas prices, America's thirst for the open road can take a toll on budget. [Really?]

Reality:

The average daily income in the US is $155. It takes just 1.8% of a day's wages to afford a gallon of gas, and remember, on average, each American "guzzle's" 1.2 gallons per day or about 2% of one wages. 

Compare that to what one spends at fast food restaurants. Compare that to what one spends at the local multiplex theater for popcorn. 

It cost me about $85 for gasoline from Grapevine, Texas (near DFW) to Williston. Had I brought a friend we would have split the cost, $45 each.

Travelocity, today, shows a roundtrip flight from DFW to Williston, two weeks advance, at around $500. Which, by the way, seems to be lot less expensive than it used to be.

The price for one night's lodging in a 1950's-vintage motel in Belle Fourche, SD, after the tourist season ended, cost me $78, almost exactly what the entire trip from Texas to Williston (1,500 miles) cost me in gasoline.

***********************************

What Passes For Science These Days

The Los Angeles Times is reporting, without questioning or critical analysis, that the Sierra Nevada snowpack may be the "thinnest" in over 500 years. The article notes that records of the Sierra Nevada snowpack have only been recorded since the 1930's.

I can't make this stuff up.  By the way, a day later, when this story was picked up by another outlet, the inconvenient truth that data had only been recorded since the 1930's was conveniently omitted.

No mention, of course, was ever made of the "last glacial period" -- something my granddaughters have never mentioned to me, suggesting they are not being taught the whole story of climate change.

********************************

Texas Economy

I really wish everyone had the chance to experience the economic activity in north Texas, specifically north of Dallas-Ft Worth, up through Grapevine, and on to Flower Mound and Denton to the northwest and / or Carrollton and Plano to the northeast. It is quite incredible. It is not an exaggeration to say there are pockets in this area larger than Williston/Watford city combined that show as much ground being broken for new commercial and residential projects as we saw during the height of the Bakken boom.

I saw that yesterday when I made a NASCAR dash from Bob Jones Park (Southlake, TX) the R. E. Good soccer complex in McInnish Park (Carrollton, TX), to get our granddaughter from one soccer game to the next. (We would have helicoptered had a) the weather cooperated; b) we had a helicopter; c) heliports existed; and, d) we had a bit more money.) There are a few roads in disrepair, notably 35E north of Dallas, but nothing compared to the state of roads in some parts of eastern Massachusetts and along the eastern section of the entire US (which I experienced in my drive from Boston to Dallas a couple of years ago). In general, the roads up here (or down here, depending on your perspective) are in incredibly good shape, and many of them relatively new; many are still under construction. Driving the elevated interstates, one can see the booming Texas economy below.

Carpe Diem validates what I am talking about:

By the way, the distance between the two soccer complexes yesterday was 23 miles. Highway driving, our minivan gets about 23 miles/gallon. There were five people in the van -- one driver and four passengers. At $2.09/gallon, the trip cost each of us about 84 cents round trip. Eighty-four cents each. And parking was free and readily available.

Speaking of which: our youngest granddaughter, age 15 months now, got her first experience with tailgate parties. Because of the light rain -- which later turned to pretty heavy rain -- we backed up the minivan, raised the "door," and sat protected while watching the game. She had a grand time.