The Million Dollar Way (The Bakken Oil Blog): 10/05/15

Monday, October 5, 2015

XTO With Eight (8) New Permits; HRC, Oasis,Whiting Will Each Report A Nice Well Tuesday -- October 5, 2015

Active rigs:

	10/5/2015	10/05/2014	10/05/2013	10/05/2012	10/05/2011
Active Rigs	67	190	183	190	195

Wells coming off the confidential list Tuesday:

28303, 451, Oasis, Wade Federal 5300 31-30 11T, Baker, t5/15; cum 55K 8/15;
29097, 2,504, Whiting, P Vance 154-97-16-9-21-16H3, Truax, 26 stages, 3.4 million lbs, t4/15; cum 35K 8/15;
29240, 1,827, HRC, Borrud 156-101-2B-11-5H, Tyrone, 34 stages, 4.1 million lbs, t4/15; cum 59K 8/15;
29586, SI/NC, Hess, EN-Kiesel-155-94-1918H-4, Manitou, no production data,
30777, SI/NC, BR, CCU Red River 7-2-15TFH, Corral Creek, no production data,

Eight (8) new permits:

Operator: XTO
Field: North Fork (McKenzie)
Comments: all 8 permits are for wells in SESW 34-150-97; this area has numerous XTO and Abraxas Stenehjem wells.

Among the seven (7) permits that were renewed, Emerald Oil renewed five (5) permits -- two Arsenal Federal permits and three Mongoose permits in McKenzie County.

Three permits were canceled: two EOG Austin permits and one Hess BW-Johnson permit.

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29240, see above, HRC, Borrud 156-101-2B-11-5H, Tyrone:

Date	Oil Runs	MCF Sold
8-2015	7035	3382
7-2015	15015	8408
6-2015	8460	5695
5-2015	9027	1958
4-2015	19236	9900

28303, see above, Oasis, Wade Federal 5300 31-30 11T, Baker:

Date	Oil Runs	MCF Sold
8-2015	13895	23
7-2015	17985	2190
6-2015	14591	0
5-2015	7888	14768

29097, see above, Whiting, P Vance 154-97-16-9-21-16H3, Truax:

Date	Oil Runs	MCF Sold
8-2015	4178	9501
7-2015	4610	14166
6-2015	5764	7688
5-2015	11014	3183
4-2015	9608	0

Prescient Projections -- CNBC -- October 5, 2015

Screen shot taken at 1:43 p.m., October 4, 2015, for the archives:

Well, that's reassuring, now that we're in to the month of October, 2015.

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Back To The Bakken

Four incredible Zavanna Simmental wells have been updated.

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A Trifecta

The Mistaken Extinction: Dinosaur Evolution and the Origin of Birds, Lowell Dingus and Timothy Rowe, c. 1998
The Princeton Field Guide to Dinosaurs, Gregory S. Paul, c. 2010
Evolution: The Whole Story, Steve Parker, General Editor; and, forward Alice Roberts, c. 2015

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Reality

Lotsa talk recently about US having too many people locked up in prisons. Something tells me that the same people saying there are too many men locked up in US prisons would want the Oregon shooter who killed 9 people sent to prison for life, had he lived. You know, folks, most of the men in prison are there for a reason.

Random Update Of A Well Showing Significant Jump In Production -- Simply Magic? -- October 5, 2015

Updates

March 27, 2016: these wells have now been updated, and are now tracked here.

November 8, 2015: production profiles have been updated; now includes another month (August, 2015) of production.

Original Post

I'm just throwing this out there. I am doing it quickly. There may be other explanations. I may be misreading something. In short, there may be all kinds of errors on this page. I will come back to it later if necessary. If this information is important to you, go to the source. I would be interested in comments from folks with knowledge of these CLR Bridger wells.

A reader alerted me to this well about one month ago before the data was available (see below). Look at the production profile for the past year. Note the jump in production in August, 2015, after it came back on line. Nothing was done directly to this well to explain this jump in production. There was no work-over rig, for example on this pad during the month of July, 2015:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	8-2015	26	13306	13330	16161	15741	9783	5958
BAKKEN	7-2015	9	231	225	222	443	443	0
BAKKEN	6-2015	30	1276	1333	460	1925	1817	108
BAKKEN	5-2015	31	1390	1335	468	1786	1631	155
BAKKEN	4-2015	30	1395	1336	527	1892	1569	323
BAKKEN	3-2015	31	1639	1795	585	2142	2090	52
BAKKEN	2-2015	28	2021	2067	683	1993	1761	232
BAKKEN	1-2015	9	368	240	258	348	348	0
BAKKEN	12-2014	31	1524	1788	632	2142	2142	0
BAKKEN	11-2014	30	1606	1597	612	2110	2087	23
BAKKEN	10-2014	31	1562	1382	542	1882	1882	0
BAKKEN	9-2014	30	1481	1815	502	1836	1658	178
BAKKEN	8-2014	31	1579	1355	567	2022	1935	87

The production profile above is from this well:

19013, 399, CLR, Bridger 2-14H, Rattlesnake, t12/10; cum 172K 8/15; this well is a THREE FORKS well.

Okay, so you've seen the production profile of that well for the past few months.

Now the next thing.

On 7/11/15, a "neighboring" well was fracked: 30 stages; 6 million lbs;

29554, 290, CLR, Bridger 4-14H2, Rattlesnake, t7/15; cum -- ; this well is also a THREE FORKS well (B1 in the permit application).

Note where these two horizontals are in the graphic below. Note the three horizontals under discussion. There is a middle Bakken horizontal running between the two THREE FORKS horizontals.

The Three Forks horizontals are 950' apart once the horizontals "straighten out" and run directly to the north.

Production in the middle Bakken did not show any appreciable jump in production.

So here we have an old well, #19013, that sees a jump in production from about 1,300 bbls/month to 13,000 bbls/month (10x increase in production) and it seems to have just happened magically.

Again, a reader (thank you, very much) alerted me to this possibility a month ago.

Also, some other information about Rattlesnake Point.

By the way, I have another example of where the halo effect might have been in play with other Three Forks wells, as far as 2,000 feet apart, the Stroh wells that are among the "things that need to be followed up."

European Immigration Crisis Has Fallen Off The Front Page, But It's Just The Beginning; Monday, October 5, Part V

NDIC starting to release August, 2015, production data.

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Whoo-Hoo!

Huge financial windfall for the Gulf states -- mostly Louisiana, I assume -- will get $8 billion to "reclaim" the coast.

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Tip Of The Iceberg

European "migrant" crisis just beginning, no end in sight. The AP is reporting:

... the migrant crisis has largely fallen off the front pages and reporters are going home.
But the human tide keeps rolling northward and westward, and aid agencies are preparing for it to continue through the winter, when temperatures along the migrant trail will drop below freezing. They fear the crisis may get worse.

"One thing is clear, the movement is not going to die down," said Babar Baloch, the U.N. refugee agency's representative in the Balkans. "What we are seeing right now ... it's just the tip of the iceberg."

While over a half million people have crossed the Mediterranean to Europe this year, more than double the figure for all of 2014, that is only a fraction of the people who are on the move. Some 4 million have fled Syria after more than four years of civil war, and 8 million have been displaced inside the country. And it's not just Syrians. It's Iraqis and Iranians, Afghans and Eritreans.

I had forgotten about the Eritreans.

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Overwhelmed And Awesomely Surprised

I bought this book sight unseen, as they say in the midwest. I forget the cost, but it must have been expensive. I assumed it was being shipped from somewhere in the US. Imagine my surprise then when it originated in London and was shipped by "Royal Mail." I believe I first saw the book review in The New York Review of Books. If you are all interested in this subject, I highly recommend it. If not for yourself, then order a copy for your grandchildren.

The book: Evolution: The Whole Story, Steve Parker, General Editor; and, foreward Alice Roberts. I had just completed Vital Question: Energy, Evolution, and the Origins of Complex Life, Nick Lane, c. 2015, and realized I was falling a bit behind in most recent theories of evolution.

As soon as I saw the branching "tree of life" in Evolution: The Whole Story, I knew we were all on the same page.

Monday, October 5, 2015 -- Part IV; Was It The Volkswagen Janitorial Staff?

Memo to self: come back to this one later. This is interesting This well was taken off-line while EOG "executed a downspacing and infill drilling program." The well was placed on inactive status, and I had expected such a good well to come back on-line when the other neighboring wells were completed. But I see now that the well is on AB (abandoned) status:

17011, AB/1,663, EOG, Parshall 4-20H, t7/08; cum 415K 6/14; IA as of 5/14; shut in while EOG executes a downspacing and infill drilling program; dated August 19, 2014;

No sundry form with explanation. The sundry form dated August 19, 2014, does foreshadow possible explanations.

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Blame It On The Boss

Volkswagen wouldn't be first company to go belly up. Enron did. GM almost did; their financial "arm" relabeled. But top exec says Volkswagen's emissions scandal could kill the company.

The crisis, which has wiped out $34 billion in the company's value as shares have fallen, stems from the disclosure by the U.S. Environmental Protection Agency last month that VW had rigged nearly 5 million diesel cars in the U.S. to pass emissions tests even though they spewed far greater emissions on the highway.

VW admitted to the fraud and said 11 million vehicles are affected worldwide.
The New York Times reported Sunday that the cheating began in 2008 after Volkswagen's engineers figured out that the new diesel engines they had developed at great expense would not meet emissions standards in the U.S. and other countries. So they installed software to beat the tests, the Times reported based on unnamed sources with knowledge of the inquiry.

The cheating resulted from not wanting scrap the years of effort they had put into developing the engine. The report says VW is yet to pinpoint who was responsible for the cheating. Several engineers have admitted to creating the software aimed at cheating the tests.

The software may have been contained in parts from a big auto industry supplier, Continental. But a Continental spokesman denied that the company knew of any contaminated software and wasn't in a position to measure emissions.

Blame it on the boss:

Blame It On The Bossa Nova, Eydie Gorme Later: we now "know" that this was not the work of the top three engineers at Volkswagen.

Let the jokes begin: Well if the boss (CEO) didn't know about it, and three top engineers didn't know about it, it pretty much means the janitorial staff was responsible.

Monday, October 5, 2015 -- Part II; Russia's Aim -- Bring Down OPEC?

Pentagon concedes they screwed up due to pressure "from higher up":

To build a rebel army, the Pentagon asked Syrian commanders last winter to nominate their best fighters. U.S. military officers spent more than a month checking each one for criminal or terrorist connections. Those who made the cut were sent to screening centers where they were questioned by American, Jordanian and Turkish officers. Then they waited, sometimes for days.

Fighters who made it to the screening centers were confused about the mission. When they learned what it was, many left. Others were found unfit, including one who showed up with open gunshot wounds. Under pressure to show operational success, the Pentagon started in July to field smaller groups than it wanted and watched from the sidelines as fighters fought the wrong enemy, or handed over equipment to al Qaeda or melted into Syria’s chaos.

The Pentagon’s effort to stand up a moderate rebel army, which would give the U.S. ground forces to fight Islamic State, has struggled since its inception to meet even its own modest goals, according to an account based on interviews with current and former U.S. officials as well as rebels who were part of the effort.

Officials now acknowledge they underestimated the complexities on the ground.

Volkswagen focusing on two scapegoats, including Audi's chief engineer:

Two top Volkswagen engineers who found they couldn’t deliver as promised a clean diesel engine for the U.S. market are at the center of a company probe into the installation of engine software designed to fool regulators, according to people familiar with the matter.

The two men, Ulrich Hackenberg, Audi ’s chief engineer, and Wolfgang Hatz, developer of Porsche’s winning Le Mans racing engines, were among the engineers suspended in the investigation of the emissions cheating scandal that sank the company’s market value by 43% since Sept. 18 and triggered a world-wide recall to refit the engines to meet clear-air standards, these people said.

Nobel Prizes in Medicine not particularly noteworthy:

Maybe it's must me, but awarding Nobel Prizes for "discovering" two new antibiotics, no matter how important, doesn't seem particularly noteworthy. Something else seems afoot.

Elizabeth Warren should like this, and so should the rest of us -- the banks are getting 6% dividends with absolutely no risk:

Lawmakers are looking to extract more than a billion dollars a year in fresh funds from banks in the U.S.

The proposal, already approved by the Senate, would cut the annual dividend payments banks receive for holding shares in the Federal Reserve System and use the savings for highway construction.

The payments under that obscure, century-old program totaled $1.69 billion last year, including roughly $310 million for Bank of America Corp. and $250 million for Citigroup Inc., according to the Fed and a Wall Street Journal analysis of regulatory filings.

The proposal surfaced this past summer in a highway-funding bill backed by Senate Majority Leader Mitch McConnell (R., Ky.) and was passed by the Senate in July. House GOP leaders haven’t moved on the Senate bill and haven’t taken a position on the bank-payments issue. Some Democrats in the House, however, have said they would support it. The House is expected to decide its approach on the highway bill before month’s end.

The photos look every bit as bad as New Orleans/Katrina and the president has not yet flown over or visited the area, as far as I know. Something tells me Syria has him worried.

I'm not sure I can go with the thesis -- that Russia's aims in the Mideast is to "bring down OPEC," but there are some interesting points being made in that article. I wonder if it's too much of a stretch to boil it down to this:

After WWI, Britain re-drew the map of the Mideast.
After WWII, although it took a few decades, the Soviet Union / Warsaw Pact map was re-drawn.
Now, after the Cold War, it appears that Russia is ready to re-draw the map in eastern Europe and the Mideast. And President Obama is providing the pencils and paper.

Monday, October 5, 2015 -- Part III; Everyone Is Buying Big Vehicles

Jack Kemp:

The average fuel economy for vehicles sold in the United States in September was 25.2 miles per gallon, down by 0.6 mpg since August 2014, according to the University of Michigan Transportation Research Institute.

Fuel economy, using window-sticker values, has increased by 5.1 mpg, about 25 percent, since October 2007, when the institute began monitoring, thanks to higher fuel prices and tougher government standards.

But the improvement has stalled as the reduction in fuel prices has encouraged buyers to trade efficiency for increased size and power (www.umich.edu/~umtriswt/img/EDI_mpg_September-2015.png).

In the first nine months of 2015, sales of light trucks, a category that includes SUVs and pickups, surged more than 11 percent compared with the same period in 2014. Car sales dropped nearly 2 percent.

But this is huge:

According to OPEC, the same trend is evident in China: lower prices are encouraging consumers to purchase larger and more fuel-hungry vehicles.

I did not find the graph particularly interesting.

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A Video On The Bakken

A reader sent me this video taken of Williston on/about September 19, 2015.

Monday, October 5, 2015; Number Of North Dakota Active Rigs Ties Post-Boom Record Low At 67

Active rigs:

	10/5/2015	10/05/2014	10/05/2013	10/05/2012	10/05/2011
Active Rigs	66	190	183	190	195

RBN energy: part 8 on propane.

With increasing production near demand regions, better connectivity from both pipeline and rail, and export volumes that can be bid away from global markets, the U.S. propane industry is in a much better position to handle a “Perfect Storm” of extreme demand events than it was in the winter of 2013-14. Nevertheless, today’s propane market brings with it a number of challenges, including greater exposure of domestic propane to global markets, more complex inter-regional supply dynamics, a more diverse supply chain, all in the context of limited domestic demand growth. In today’s blog we conclude our analysis of the U.S. propane market.

This blog and others in the series are based on an analysis recently completed by RBN for the Propane Education and Research Council (PERC). PERC engaged RBN to assess market developments that could impact the prospects of disruptions similar to the one that occurred in the Perfect Storm winter of 2013-14, and to suggest actions that could alleviate the risk of such market turmoil. The project was completed in August and with the permission of PERC, this blog series summarizes some of RBN’s analysis and conclusions.

This is episode eight in the series. Episode 1 provides an overview and introduction to the analysis – beginning with the dramatic increase in propane production over the past 7 years. Total U.S. propane output has increased by nearly 70% from an average of 0.8 MMb/d in 2008 to 1.4 MMb/d during the 1^st half of 2015. Most of that growth has been driven by production from gas processing plants that has more than doubled from 0.5 MMb/d in 2008 to 1.1 MMb/d in 2015. The overall growth in propane has outpaced domestic demand such that as much as 50% of the total is now exported to balance the market – even as inventories are at all time high levels. RBN’s analysis for PERC sought to understand changes to the propane market since the disruptive winter of 2013-14 as well as how susceptible today’s market is to similar events and what actions should be taken to reduce the risk of it happening again. Our approach to the analysis involved developing a monthly model of U.S. propane supply, demand, logistics and pricing at the PADD (Petroleum Administration District for Defense) level using historic propane market data and then integrating that model with RBN’s forecasts of supply and demand.

In Episode 2 we outlined supply and demand scenarios for the model based on oil price “Growth” and “Contraction” Scenarios as well as “Normal” and “Severe” weather patterns.

Episode 3 took a closer look at propane production by PADD region – noting the dramatic growth in the Northeast as well as the Midwest.

Episode 4 detailed regional historic and future projected propane demand by PADD and Episode 5 looked at the main domestic propane demand sectors.

Episode 6 highlighted how new infrastructure improved propane market interregional connectivity. Episode 7 showed how that better connectivity from both pipeline and rail, in conjunction with export volumes that can be bid away from global markets, has significantly improved the U.S. propane industry’s ability to respond to severe weather events. This time we conclude our analysis by looking at the implications of all these market changes for propane market participants, particularly retail propane distributors and marketers.

The culmination of advances in propane infrastructure that we discussed in Episode 6 is that the U.S. propane market is much more interconnected that it was just a few years ago. New processing plants and fractionators provide propane supplies closer to some of the largest demand regions of the country. New pipelines better connect different regions of the nation, so shortages in one region can be more easily alleviated by other regions. In cases where pipeline capacity is unavailable or inadequate to handle new production, rail provides additional flexibility of moving supplies to areas where demand is peaking. In the same way, new storage and terminal facilities improve flexibility and increase local capacity in key demand regions.

Although all of these changes significantly improve the industry’s ability to respond to disruptions, the market is also becoming more complex, and subject to new forces that will shape the relationship of supply and demand. One such source of complexity is that same improved interconnectivity that make’s today’s propane market more responsive across regions. That is because difficulties in one region will now more quickly impact other regions. For example, a shortage in the Midwest may be solved by sourcing more barrels from the Northeast. That solves a supply problem in one region while directly impacting the supply in another region. Thus it is critically important that propane marketers carefully monitor the supply and demand conditions in all regions that could influence their local market.

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Monday, October 5, 2015