Monday, December 7, 2015

Poll: Will North Dakota's October Daily Production Be More/Less Than The September Daily Production? -- December 7, 2015

North Dakota oil production was down from 1.188 million bopd in August, 2015, to 1.162 million bopd in September, 2015.  We have had at least two reports that suggest the October, 2015, North Dakota production will be about 1.2 million bopd when the December Director's Cut comes out next week.

Great time for a poll.

Will North Dakota oil production in October, 2015, be more or less than what it was in September, 2015? More or less than 1.162 million bopd?
  • More?
  • Less?
The Vital Question

I am not a fan of Bill Gates. But I was curious what his "favorite" seven books for 2015 were. I about fell off my chair. Number six on his list was The Vital Question: Energy, Evolution, and the Origins of Complex Life, by Nick Lane. It was also one of the best books I read in 2015. I don't read much contemporary stuff, preferring to stick to the classics or material related to the classics. But this one caught my attention. I've read it once. I am now going back and outlining it, and will end up reading it a third time. It's deceptively simple but very, very difficult to fully understand. Whether one can say it deals with metaphysics or not, I don't know, but I think it does, or comes very, very close. In the process, it is very, very difficult not to think of an intelligent designer.  For someone interested in eradicating diseases from the earth, it's an important book to read, and that's probably why it's on his list.
Many of his other picks reflect his longtime interest in science and the environment. Gates recommends Nancy Ley Stepan's "Eradication: Ridding the World of Diseases Forever?" but warns that it's "written in a very academic style."
I don't recall if I posted a note on Randall Munroe/xkcd:
Even Gates' pick for a "fun" book is an intelligent one. He praises Randall Munroe's "Thing Explainer: Complicated Stuff in Simple Words" for its "laugh-out-loud funny" jokes. Gates has been a fan of Munroe, the artist behind the webcomic xkcd, for a while; he recommended two of the writer's books in his list of summer recommendations this year.
The First Weekend of Leaves Is Complete


December 8, 2015: a reader noted that OSHA will get involved if I don't provide Sophia with ...
  • safety/reflective vest
  • steel-tipped boots
  • eye protection (glasses/goggles)
  • hard hat
  • hearing protection if she uses a leaf blower
She also needs proof of a safety training course. Not required, but highly recommended: sun screen. Nothing has been mentioned, yet, child labor laws, but those will be coming, I'm sure. 

Original Post
For background, see this post.

Twenty-one bags. Sophia did a great job. She is now checking each one for tears or damage to the bags -- she is also in charge of quality assurance.

Six (6) New Permits -- December 7, 2015

A reader just sent me a note telling me he received a very nice offer for his minerals up in the Bakken. He says a lot of landmen and others are trying to buy mineral acres "on the cheap" citing slump in oil prices, etc. Just a word of caution: apparently "good" Bakken is still going for nice rates; be very, very careful in this environment if you are a seller.

There are some interesting auction sites for selling minerals which, based on the reader's note, provide some insight into how much one's minerals might be worth. I assume blogs / sites for mineral owners would be a good place to start. If this is a significant financial endeavor, I think most would highly recommend professional advice.


Active rigs:

Active Rigs64188193181200

Six new permits --
  • Operator: EOG (3), XTO (2), Whiting
  • Field: Parshall (Mountrail), Bear Creek (Dunn), Truax (Williams)
  • Comments:
Wells coming off confidential list Tuesday:
  • 30675, dry, Hess, BL-Odegaard-156-95-2116H-9, Beaver Lodge, this well was to target the Three Forks; was to be 1280-acre spacing (change from original 4-section spacing); appears only to have drilled vertically; no KOP or horizontal drilled; no sundry form explanation; perhaps geologists were not impressed with core samples? 
  • 31230, SI/NC, Statoil, Charlie Sorenson 17-8E 1H, Alger, no production data,
Petro-Hunt and HRC each renewed a permit, a Sabrosky permit in Dunn County, and a Pasternak permit in Williams County, respectively.

Three (3) producing wells completed:
  • 28578, 1,929, Petro-Hunt, Dolezal 145-97-7D-6-2H, Little Knife, t10/15; cum 14K after 17 days;
  • 29488, 2,287, Statoil, Charlie Sorenson 17-8 7TFH, Alger, t11/15; cum --
  • 30232, 2,405, BR, Sun NOtch 43-32MBH, Sand Creek, pay zone 20-fee thick, in the target zone 95%; above the zone, 5%; vertical depth for the target zone, 10,573 feet; 4 sections, t11/15; cum --

I Knew The Bakken Roughnecks Were Good; I Did Not Know They Were This Good -- December 7, 2015

Rig productivity, yearly update, EIA:

Full report at this pdf.

US Shale Oil Output To Fall 116,000 BOPD In January 


December 8, 2015: Reuters also reports same story --
U.S. shale oil production is expected to fall by more than 600,000 barrels per day (bpd) in January from the March peak, according to a U.S. government forecast on Monday, on the back of a global glut that's slashed oil prices to a near seven-year low.
Total output is set to decline by just over 115,000 bpd to 4.86 million bpd in January compared with December, according to the U.S. Energy Information Administration's drilling productivity report. Bakken production from North Dakota is set to fall 27,000 bpd, while production from the Eagle Ford is expected to fall 77,000 bpd. In the Permian Basin in West Texas, production is forecasted to rise by 14,000 bpd, data show.
Original Post
The Oil & Gas Journal is reporting:
Crude oil production in January from seven major US shale plays is expected to drop 116,000 b/d to 4.86 million b/d, according to the US Energy Information Administration’s latest Drilling Productivity Report (DPR). The agency last month projected a 118,000-b/d decline for December.
The DPR focuses on the Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian, and Utica, which altogether accounted for 95% of US oil production increases and all US natural gas production increases during 2011-13.
I find that quite incredible. Even if the Bakken were to drop 100,000 bopd, the Bakken would still be producing in the neighborhood of one million bopd, and yet the total US shale output is expected to fall about 120,000 bopd, and most of that from the Eagle Ford.
Consistent with the trend since shale oil production began falling last spring, the Eagle Ford is expected to represent a bulk of the decline, down 77,000 b/d to 1.2 million b/d. EIA also projects the Bakken to drop 27,000 b/d to about 1.1 million b/d, and Niobrara to drop 24,000 b/d to 344,000 b/d.
Note: if the Eagle Ford falls as much as projected, and the Bakken holds its own, it's very possible the two fields could be about equal in production. It would be interesting to opine why that should be.

Really? That Was Easy!

The New York Times is reporting:
Industrial emissions of greenhouse gases rose only slightly in 2014 and appear to be on track to decline in 2015, according to new data that raise the possibility that a period of rapid global emissions growth may be coming to an end.
The decline of 0.6 percent projected for this year, should it come to pass, would be highly unusual at a time when the global economy is growing. The projection contrasts sharply with emissions growth that averaged 2.4 percent a year over the last decade, and sometimes topped 3 percent. 
The new figures were released at the climate conference here by the Global Carbon Project, a collaboration that studies emissions, and published simultaneously in the journal Nature Climate Change.
Past emissions declines have usually been linked to economic distress, such as the global financial panic of 2009 and the Russian economic meltdown of the late 1990s.
The new figures suggest that there is a chance that global emissions have already peaked and may be starting a long-term decline, experts said Monday, which would be an important inflection point for the international effort to limit the risks of global warming.

Some Housekeeping -- December 7, 2015

This is an old story but I can't remember if I posted it. I am posting it now for housekeeping and archival purposes.

Reuters is reporting that China signs off on $5 bln loan to boost Venezuela oil output, September 2, 2015:
Venezuela and China have signed a deal for a $5 billion loan designed to increase the OPEC country's oil production, Venezuelan President Nicolas Maduro said.

Maduro, speaking from China in a program broadcast on Venezuelan state television late on Tuesday, said the loan was destined "to increase oil production in a gradual way in coming months," without providing further details.

A source at Venezuelan state-run oil company PDVSA told Reuters in March that China was set to extend a "special" $5 billion loan that would likely stipulate hiring Chinese companies to boost output in the company's mature oil fields.

Venezuela has borrowed $50 billion from China through an oil-for-loans agreement created by late socialist leader Hugo Chavez in 2007, which has helped Chinese companies expand into Venezuelan markets amid chronic shortages of consumer goods there.

Another Example Of The Halo Effect Of Fracking? -- December 7, 2015

This is quite fascinating. I am waiting for Mike Filloon to address the subject. The other day I posted what appeared to be a halo effect of fracking. One can find examples throughout the Bakken and patterns are starting to develop.

Here's another example. This is a 5-well pad. There was an index well drilled/completed/tested back in 2009. Then in 2014, four new wells were drilled and completed off the same pad.

Here is the graphic:

The index well:
  • 18035, 598, XTO, Clarence Federal 34X-7, Haystack Butte, t11/09; cum 101K 10/15;
Here is the production data around the time the neighboring wells were fracked. Prior to the neighboring fracks, the index well was producing well below 1,000 bbls/month. After the neighboring fracks, the well jumped to 4,000 bbls in 16 days or about 8,000 bbls over a full month. Two months later it was still producing over 5,000 bbls per month. With the slump in oil prices, one does not know to what extent the flow was choked back, nor if the increased flaring had any effect on production. The cost to produce those extra bbls of crude oil? $0. I don't think Saudi Arabia can beat that for production costs.


Devon To Buy 80,000 Net Acres In STACK - Anadarko Basin -- December 7, 2015


December 7, 2015: a reader just sent me a note telling me he received a very nice offer for his minerals up in the Bakken. He says a lot of landmen and others are trying to buy mineral acres "on the cheap" citing slump in oil prices, etc. Just a word of caution: apparently "good" Bakken is still going for nice rates; be very, very careful in this environment if you are a seller.

Original Post 

Devon to buy Anadarko assets. Last night I gave sixteen reasons why Saudi Arabia won't win. Today it is announced that Devon is buying 80,000 acres in the STACK for $1.9 billion and

This was "predicted" on Saturday by Zacks.

Now, the announcement in Reuters: $1.9 billion / 80,000 acres, STACK in Anadarko Basin ($23,750 / acre).

Press release. To include 253,000 net acres in the Powder River Basin for $600 million ($2,400 / acre).

The press release also noted this transaction also announced today:
In a related transaction announced separately today, EnLink Midstream agreed to acquire Tall Oak Midstream, a portfolio company for EnCap Flatrock Midstream, for $1.55 billion. Tall Oak’s gathering and processing assets are strategically located in the core area of the STACK play and the vast majority of the Felix acreage position is dedicated to this midstream infrastructure.
Active rigs in North Dakota:

Active Rigs64188193181200

RBN Energy: very good operational look at the KMI - NGPL deal. Will be archived.

Tweeting now: November crude oil exports hit record 3.365 mil b/d, up 24% from October, 2015.

Solar Load Factor

Load factor: the ratio of the average or actual amount of some quantity and the maximum possible or permissible.

For solar, 9%:
December 7, 2015: From a reader who is researching solar to include the links above provided this assessment, all of which makes sense to me:
My curiosity is the long term abrasion and chemical attack caused by repeated cleaning of the panels due to dust, dirt, and bird excrement. I rather suspect that panels manufactured after 2010 have benefitted from the millions of panels manufactured before then that have pre-maturally failed. These new systems should be able to provide reliable service at an average of up to 40% of the 50% of their maximum output during the time the sun shines....if installed in a near ideal location.
My minimal early research indicates that for the latitude from about San Fransisco to San Diego and east to about Kansas City/ Dallas (lots of sun, good sun angle, few clouds, not an awful lot of lightning, except toward the east end of the "band") provides the least horrible sites.
The payback is reportedly about 17 years,assuming full capture of the 30% federal tax credit, and the reported 1%/yr efficiency loss at inflated PG&E rates. Also, I rather suspect China is selling these things for < than cost - they have a huge labor force to keep "busy."
Installing solar panels anywhere is stupid, the world would be a better place without them (except for the really handy < 1KW systems for select applications). Installing them in cold and or cloudy sites at high latitudes for heating and cooling (like Germany) is economically criminal.
I agree. As bad as wind is, solar is so much worse, except for niche locations/needs.