Disclaimer -- December 21, 2015

This is simply a reminder that the disclaimer for this blog is at this post.

This post explains the background of the blog.

Nothing has changed, but I generally don't find factual and typographical errors for several days. I'm in a spot right now where I may be making more typographical and factual errors than before. I hope I eventually find most of those errors but not guaranteed. This blog is for my benefit only to help me better understand the Bakken and to put it into perspective with other regional, national, and global events. It is not an investment site. Do not make any financial, investment, or travel decisions based on what you read here.

As I've said many, many times, if something I post seems wrong, it probably is. I often make simple arithmetic mistakes. Opinions are often embedded with factual statements in this blog. If any of this information is important to you, go to the source.

I'm Just a Common Man, John Conlee

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Chipotle, North Dakota, And E. Coli

CNBC is reporting:

Five ill people were identified in Kansas, North Dakota and Oklahoma as part of the new [Chipotle] investigation, on dates ranging from November18 to November 26, 2015. The new Illnesses are not included in the current case count, which is now at 53, the CDC report said. 

On October 31, 2015, an outbreak of E. coli was first linked to the chain, mostly in Washington and Oregon. Illnesses started on dates ranging from October 19 to November 13. 

BP To Acquire All Of Devon's San Juan Basin Assets In New Mexico -- December 21, 2015

This is not a Bakken story, but my hunch is we are about to hear a similar deal coming out of the Bakken before mid-2016.  This deal was in New Mexico.

Rigzone is reporting that BP acquired all of Devon Energy Corp's oil and gas properties in the San Juan Basin in New Mexico.

BP Plc on Friday said its U.S. onshore unit has acquired all of Devon Energy Corp's oil and gas properties in the San Juan Basin in New Mexico for an undisclosed price.

BP expects to take over operation of the 480 wells spread across 33,000 acres in the first quarter of 2016 after receiving required government agency approvals, it said. Battered by a crude downturn that has stretched for more than a year, many independent oil and gas companies are selling assets or contemplating selling assets they no longer consider essential as a way to raise cash.

480 wells spread across 33,000 acres in New Mexico. Think about that when looking at the number of acres held by the four or five largest operators in the Bakken.

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Related

This story is related but I'm too tired to do much with this one. Maybe I will come back to it tomorrow.

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Is Chesapeake Next?

Also from Rigzone.

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Muscle Shoals, Again

Quite some time ago a reader introduced me to Muscle Shoals -- something I was not aware of until then. Now it seems like "Muscle Shoals" pops up everywhere.

Tonight, in an after-midnight fugue state, moving from song-to-song on YouTube I ended up on "Almost Persuaded." Curious about the song, I checked out wiki and and this was the first paragraph:

"Almost Persuaded" is a song written by Glenn Sutton and Muscle Shoals songwriter Billy Sherrill and first recorded by David Houston in 1966. 

I was unaware that Billy Sherill was a Muscle Shoals songwriter.  Hmm...

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And Muscle Shoal, Again

From a comment over at Narvel Felts, "Reconside Me": 

The MCI board had just been installed in the new studio in Muscle Shoals. When we finished with the Track and lead vocal by Narvel, another engineer sat in and I went on the studio floor and overdubed the organ.

Great Links From Mark Perry -- December 21, 2015; Huge Story -- Barnett Twice As Large As Originally Estimated -- USGS

Updates

December 22, 2015: let's run the numbers --

• that recent huge Mediterranean natural gas find: 30 trillion cubic feet
• Barnett, revised USGS figures: 53 trillion cubic feet
• Utica, newly revised figures: 782 trillion cubic feet
• Marcellus, EIA revised estimates: 64 trillion cubic feet, "proved" reserves
• Bakken/Three Forks, USGS estimate: 7 trillion cubic feet
• Qatar: 800 trillion cubic feet, wiki, conversion 

Original Post

For the archives, this 55-year-old well is back on-line after being off-line since 12/14:

• 2275, 160, Taqa North USA/Pan American, Clara Kostad #1/Rival-Madison Unit 14, t4/59; cum 658K 10/15; (last produced 12/14; 55 years old)  

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Huge, Huge Story

From Mark Perry:

• Shale Gale. The Barnett Shale formation in Texas contains 53 trillion cubic feet of natural gas, twice as much as previously estimated in 2003, according to a recent report from the U.S. Geological Survey.

That was only two years ago. Rigzone also reports:

A new assessment now estimates the size of the Barnett shale play’s undiscovered, technically recoverable resources to be twice as large as originally thought.

According to a recent U.S. Geological Survey Assessment (USGS), the Barnett shale contains estimated mean volumes of 53 trillion cubic feet (Tcf) of shale natural gas, 172 million barrels of shale oil and 176 million barrels of natural gas liquids.

The last time USGS released an assessment of the undiscovered, technically recoverable resources of the Barnett shale was in 2003. That assessment estimated a mean of 26.2 Tcf of undiscovered gas and 1 billion barrels of undiscovered gas liquids within the Barnett.

The 2003 assessment of the Barnett shale was released as part of an assessment of conventional and unconventional reservoirs of the Bend Arch-Fort Worth Basin province. The shale’s potential oil resources were not quantitatively assessed at that time. USGS decided to reassess the Barnett after horizontal drilling and hydraulic fracturing were successfully introduced, setting the stage for the current shale gas boom, said USGS scientist Kristen Marra, who led the assessment, in a December 17, 2015, press statement.

The substantial increase in the Barnett’s potential resources is largely due to the oil and gas industry’s switch to primarily horizontal drilling within the Barnett, paired with hydraulic fracturing. The 2003 assessment relied solely on vertical drilling.

Since 2003, over 16,000 horizontal wells have been drilled into the formation. The horizontal wells have helped produced over 15 Tcf of gas and 59 million barrels of oil in the Barnett.

 53 trillion cubic feet? How big is that? I don't know but the largest natural gas reservoir ever found in the Mediterranean might be a "paltry" 30 trillion.

My hunch is that when "they" re-assess the Bakken/Three Forks, they are going to find something similar.

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Also from Mark Perry: best comparison shopping sites.

Five (5) Wells Coming Off The Confidential List Tuesday; Three (3) New Permits -- December 21, 2015

Updates

Later, 10:11 p.m. Central Time: see first comment below. Another reader writes to tell me that this well (#29705, Armstrong, Dickinson City 1-16) "is a dry hole and the site has already been reclaimed."

Original Post

Active rigs:

	12/21/2015	12/21/2014	12/21/2013	12/21/2012	12/21/2011
Active Rigs	65	182	192	189	196

Three new permits --

• Operators: HRC (3)
• Fields: Eagle Nest (Dunn)
• Comments: five Halcon wells already sited in the section where the three new wells will be drilled

Six (6) permits renewed:

• BR, 3, two Merton permits and one Jerome permit, all in McKenzie County
• WPX, 2, both Joseph Eagle permits, all in Dunn County
• Petro-Hunt, a Setterlund permit, Burke County

Hess canceled 2 permits: BW-Wilson permits for wells in McKenzie County

One (1) producing well completed:

• 29954, 1,624, Statoil, Smith Farm 23-14 5H, Cow Creek, t11/15; cum --

Five (5) wells coming off the confidential list Tuesday:

• 29226, 1,817, Whiting, P Jackman 156-100-2-18-6-2H, East Fork, t7/15; cum 61K 10/15; 
• 29227, 1,492, Whiting, P Jackman 156-100-2-18-6-2H3, East Fork, t7/15; cum 55K 10/15;
• 29228, 2,333, Whiting, P Jackman 156-100-2-18-6-1H, East Fork, t6/15; cum 99K 10/15;
• 29705, dry, Armstrong Operating, Dickinson City 1-16, wildcat, looks like they simply missed hitting a Lodgepole mound; 160-acre drilling unit;
• 31405, 1,422, Hess, EN-KMJ Uran-LW-154-93-2734H-1, Robinson Lake, t11/5; cum --

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29705, see above, Armstrong Operating Dickinson City 1-16: it's interesting that this well is a wildcat; it is located in the Patterson Lake oil field, and is only three-quarters of a mile east of the phenomenal Laurine Engle 1 well (#18190). There are several great wells in the immediate area including the 1-million-bbl well Patterson Lake 41-13 in the Eland oil field (#13788). Both of these wells are followed on the "Monster Wells" page. So, we'll see.

29228, see above, Whiting, P Jackman 156-100-2-18-6-1H, East Fork:

Date	Oil Runs	MCF Sold
10-2015	22431	17260
9-2015	19410	9870
8-2015	18901	8602
7-2015	31964	12168
6-2015	5625	0

29227, see above, Whiting, P Jackman 156-100-2-18-6-2H3, East Fork:

Date	Oil Runs	MCF Sold
10-2015	12939	11098
9-2015	12681	7116
8-2015	5182	1755
7-2015	20205	7237
6-2015	3851	0

29226, see above, Whiting, P Jackman 156-100-2-18-6-2H, East Fork:

Date	Oil Runs	MCF Sold
10-2015	4416	2333
9-2015	13105	6183
8-2015	16028	7941
7-2015	24384	9732
6-2015	3250	0

Global Crude Oil Suppy And Demand -- Platts -- December 21, 2015

Several story lines in this graphic:

Note: by "Bakken" I mean tight oil exploration and production in the Lower 48 states.

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Greenergy To Open Diesel Storage Facility On The Thames

Platts is reporting:

The UK's new Thames Oilport terminal will open for diesel storage by mid-2016, Greenergy, the UK's biggest road fuel supplier, said Monday after acquiring the stake in the project owned by Dutch tank storage company Vopak. Greenergy said work is under way to complete engineering and commissioning needed to bring into use an initial 175,000 cu m of tankage at Thames Oilport -- to the east of London -- to be used for diesel storage from the second quarter of 2016.

Greenergy: provides about 1/6th of the UK's "petrol" and diesel.

Data points:

• $447 million
• following the deal, Greenergy will double its stage in the terminal to 67%; Shell holds the remaining third
• three additional terminals under control of Greenergy / Macquarie Capital (Australian)
• Vopak Terminal London
• Vopak Terminal Teeside
• Vopak Terminal Windmill 
• newly created "Navigator Terminals" will control the three largest Vopak terminals and Greenergy's North Tees storage terminal, creating UK's largest independent bulk liquid storage provider with an initial storage capacity of 1.5 million cubic meters (9.4 million US bbls)

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Disobeying The CINC's Intent

Seymour M. Hersh is a credible source. It will be interesting to see the fallout from this. The article is way too long to read on-line (at least for me). I will wait to read it when my issue of The London Review shows up in my mailbox. The article begins:

Barack Obama’s repeated insistence that Bashar al-Assad must leave office – and that there are ‘moderate’ rebel groups in Syria capable of defeating him – has in recent years provoked quiet dissent, and even overt opposition, among some of the most senior officers on the Pentagon’s Joint Staff.

Their criticism has focused on what they see as the administration’s fixation on Assad’s primary ally, Vladimir Putin.

In their view, Obama is captive to Cold War thinking about Russia and China, and hasn’t adjusted his stance on Syria to the fact both countries share Washington’s anxiety about the spread of terrorism in and beyond Syria; like Washington, they believe that Islamic State must be stopped.

The military’s resistance dates back to the summer of 2013, when a highly classified assessment, put together by the Defense Intelligence Agency (DIA) and the Joint Chiefs of Staff, then led by General Martin Dempsey, forecast that the fall of the Assad regime would lead to chaos and, potentially, to Syria’s takeover by jihadi extremists, much as was then happening in Libya.

A former senior adviser to the Joint Chiefs told me that the document was an ‘all-source’ appraisal, drawing on information from signals, satellite and human intelligence, and took a dim view of the Obama administration’s insistence on continuing to finance and arm the so-called moderate rebel groups.

By then, the CIA had been conspiring for more than a year with allies in the UK, Saudi Arabia and Qatar to ship guns and goods – to be used for the overthrow of Assad – from Libya, via Turkey, into Syria.

The new intelligence estimate singled out Turkey as a major impediment to Obama’s Syria policy. The document showed, the adviser said, ‘that what was started as a covert US programme to arm and support the moderate rebels fighting Assad had been co-opted by Turkey, and had morphed into an across-the-board technical, arms and logistical programme for all of the opposition, including Jabhat al-Nusra and Islamic State. The so-called moderates had evaporated and the Free Syrian Army was a rump group stationed at an airbase in Turkey.’ The assessment was bleak: there was no viable ‘moderate’ opposition to Assad, and the US was arming extremists.

Memo To The Kennedy Clan -- It's Gonna Be A White Christmas -- December 1, 2015

Updates

December 21, 2015: up to 3 feet of snow forecast for southern Washington / northern Oregon Cascades.
 

Original Post

 

The conference ended about two weeks; haven't heard a thing since then. This from an old post.

ClimateDepot is reporting on the second day of the Paris climate conference:

U.S. snow cover on the morning of December 1, 2015, is the highest on record for this day of the year. 38.7% of the U.S. (including a small part of southwestern Canada) is currently snow-covered.

Atmospheric CO2, November, 2015 -- official measuring station is in Hawaii: 400.16. I wish I had said this, a comment from The [London] Express:

Again--for the climate alarmists--400 ppm (0.0004) of the atmosphere is CO2. Of that, 4% (0.04) is manmade (0.00016). Of that, the US accounts for approx 15% (0.15) or 0.000024. Of that, energy generation accounts for approximately 1/3 (0.33) or 0.00000792. That's 792/100,000,000 or 792 parts per 100 million.

Any of you who think that our ecosystem is so fragile that percentages of 792 parts per 100 million can even been measured, much less somehow change our climate, are fools.

Forget the completely inaccurate temperature models and fudging of data--the math doesn't lie.

Hell--don't break out the US or energy generation figures--16 ppm (16/1,000,000) can't be measured, either. It's all based on assumptions, not measurements. But leave it up the alarmists to pull another flim-flam--"Yes, we've been wrong--but it's much worse that we thought!" When will people stop buying the snake oil?

See if you can separate fact from fiction in these ten college student demands. I bet you can't. I couldn't. I failed.  Meanwhile, Yale students want the First Amendment repealed. And so it goes.

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Note to the Granddaughters 

Last evening our two older granddaughters and their parents went to a "dinner theater" to watch Star Wars. Our older granddaughter dressed up just like Princess Leia (now, General Organo). So, I was left home alone to take care of 17-month-old Sophia.

Sophia's favorite items are anything with buttons: remote key fobs, smart phones, clam shell phones, iPads, computers, automatic timers inside the house, automatic timers outside the house, remote controls for televisions, remote controls for Bose radios, and I'm sure there are some I've forgotten.

We spent the evening upstairs where most of her toys are and where she can easily fall asleep if she gets tired (which she did not). There is a huge flat screen television upstairs as well as downstairs. Unfortunately, there was no remote anywhere to be found upstairs, and I had no idea how to set up the TV for television without a remote. I brought the TV remote from downstairs upstairs knowing that once I got the television set up, the remote would work for volume and changing channels.

I was unable to get the television to work. I tried everything, pushing every button on the remote and nothing happened. The remote simply did not work. I probably spent five minutes trying to get the remote to work. I managed to get some gadget sitting underneath the television turned on (which is integral to the whole set-up, but I could not get the television to work).

Figuring that I had nothing to lose, I gave the remote control to Sophia to keep her occupied while I got out a book to read.

Sophia took the remote control -- this is 100% true -- and walked up to the television. The television is a huge screen but it sits on a fairly low console so it's about eye-level for her when she is standing up.

Sophia took the remote control and walked up to the television. She pushed the on-off button which I had not seen (and did not even know existed) and the television monitor came to life. The monitor, unfortunately, defaults to "Roku" which I have no idea how to work and even if I did, I did not want to watch re-runs of shows in syndication or whatever "Roku" provides.

Sophia continued to randomly hit buttons on the remote control when suddenly the "set-up menu" appeared on the monitor -- I wasn't fast enough to grab the remote out of Sophia's hands before "Roku" was back up on the screen. But at least I now knew there was hope.

I took the remote but was unable to duplicate what Sophia had done. I was unable to get "Roku" off the screen. But then I got serious -- I started looking for a control panel on the television set. To make this long story short, using the control panel I finally got to "real" television.

At that point, the remote control worked fine for channel surfing, but not volume. But at least Sophia and I were now watching television.

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A Note to the Granddaughters

Last evening our two older granddaughters and their parents went to a "dinner theater" to watch Star Wars. Our older granddaughter dressed up just like Princess Leia (now, General Organo). So, I was left home alone to take care of 17-month-old Sophia.

Sophia and I spent the first part of the evening watching television (see story above). The first channel that popped up was showing "Miss Universe" live, hosted by Steve Harvey.  Sophia was mesmerized: the music and the colorful gowns really caught her attention. Normally, she is only interested in commercials, but for some reason the "Miss Universe" contest really interested her.

Steve Harvey was just ready to announce the five finalists, so I knew the show was nearly over, and worth watching, especially if it held Sophia's attention for awhile. I could also check in on the NFL football game during commercial breaks.

We watched the crowning of Miss Colombia and then I stepped out of the room for a moment. I forget why, probably to catch Sophia who loves to climb up and down the carpeted stairs. In her bare feet she does quite well, but in her "footed" pajamas she tends to slide about six steps before catching herself. Outside the room, I heard Steve Harvey make his -- now famous -- "I have to apologize ..."

I rushed back in and could not believe what I was seeing. The story is all over the net for those interested. Even Rolling Stone has a story on the debacle. It's just a matter of time before President Obama invites Steve to the White House for a beer.

I don't think I've ever seen something so incredible in all my life on a show of that nature, and it was all occurring in real time / live. I have heard that Harvey has trouble reading those little index cards he holds on "Family Feud," also.

One wonders.

All night long, not one glitch, and then, the last card with two names on it.

The producer forget the KISS principle.

[Later, December 22, 2015: during the telecast, Steve Harvey said the teleprompter had it wrong, and, in fact, there are now reports of SnapChat photos showing the teleprompter had it wrong. Those photos, if they existed, have been taken down.]

Monday, December 21, 2015

And then there with thirteen (or thereabouts): Lindsay Graham is "out" as a contender for the GOP nomination.

Active rigs:

	12/21/2015	12/21/2014	12/21/2013	12/21/2012	12/21/2011
Active Rigs	65	182	192	189	196

RBN Energy: concludes the series on natural gas supply, demand, and price in the US.

The U.S. natural gas market is facing an ultimatum. Natural gas storage inventories are carrying such a daunting surplus, that prices already at 21-year lows for December, seem primed to go even lower should supply or demand fail to cooperate and balance the market. A warm winter so far and the very real prospect of hitting a storage celling before next winter mean that something has to give.  Today we wrap up our series on the gas supply/demand balance with a look forward to how 2016 could pan out.

In Part 1, we showed how drilling productivity gains kept production volumes firm in 2015 in spite of substantial headwinds from lower oil and gas prices, drilling budget cuts and falling rig counts. Producers this year decreased drilling times and drilled more wells for every operating rig. Average initial production (IP – typically the output in the first 30 days) rates climbed, as did IP additions per rig per year. For instance, EOG Resources this year drilled wells in one-third the time it took in 2011, drilled three times more wells per rig each year, and produced double the volume from each well in its first 30 days. And all of that translated to five times more volume produced for every rig than in 2011. So while fewer rigs were operating, those that were operating were much more prolific than they were in 2011 or even a year ago. Using data from the Energy Information Administration’s Drilling Productivity Report, we then looked at average production per rig for entire basins, and found that EOG’s productivity gains are no exception. Productivity improvements have been occurring in varying degrees across all the major shale basins, and for both oil and gas rigs. 

In Part 2 we showed the impact these productivity gains have had on drilling costs and producers’ internal rates of return (IRR). For instance, a sampling of producers’ investor presentations showed that drilling and completion costs (D&C) had come down an average 25% versus 2014 across five major shale production regions (Anadarko, Permian, Eagle Ford, Bakken and Utica) as of 3Q2015. When we factored in that 25% reduction in D&C costs at early December prices ($40/Bbl oil and $2.10/MMBtu gas), our IRR model results for representative wells indicated that producers could eke out minimal but positive returns in some areas. We then considered the scenario that drilling costs continued falling since Q3 another 15%, down a total of 40% versus 2014 levels, and a remarkable thing happened:  IRRs, particularly in the Northeast dry gas plays, began to come close to 2014 levels when prices were much higher.  These types of productivity gains and drilling cost reductions are what have kept the production volumes resilient in 2015.

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Snow In California

I see they forecast another 36 inches of snow in the California mountains.

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If It's In The LA Times, It Must Be True

The Los Angeles Times headline:  Polls may actually underestimate Trump's support, study finds.

There is only one reason why The Los Angeles Times would publish this story. We saw similar stories and similar "timing" in the last two elections.

Meanwhile, The Los Angeles Times is also reporting a heroin epidemic in New Hampshire.  Really? It appears the New Hampshire folks are skipping the gateway drug and going straight to the good stuff. Colorado, et al, I suppose, figure the gateway drug will postpone the inevitable.