Tuesday, December 22, 2015

Update On The Oasis Johnsrud Wells North Of Watford City, Siverston Oil Field, The Bakken, North Dakota -- December 22, 2015

Take a look at the Oasis Johnsrud wells at the graphic posted June 25, 2015.

This is what the area looks like now:

Four rigs on site and several new locations, plus many completed wells since June 25, 2015.

This is the status of the wells in the graphic above. These were the wells at the time of the June 25, 2015, posting (IPs and production have been updated):

The 4-well pad:
  • 31327, 733, Oasis, Johnsrud 5198 12-18 4T2, Siverston, 36 stages; 4 million lbs, t6/16; cum 169K 10/17;
  • 31328, 714, Oasis, Johnsrud 5198 12-18 5B, Siverston, t6/16; cum 203K 10/17;
  • 31329, 628, Oasis, Johnsrud 5198 12-18 6T, Siverston, t6/16; cum 138K 10/17;
  • 31330, 527, Oasis, Johnsrud 5198 12-18 7B, Siverston, t6/16; cum 199K 10/17;
The 3-well pad:
  • 31331, 648, Oasis, Johnsrud 5198 12-18 8T2, Siverston, t6/16; cum 155K 10/17;
  • 31332, 235, Oasis, Johnsrud 5198 12-18 9B, Siverston, t6/16; cum 225K 10/17;
  • 31333, 247, Oasis, Johnsrud 5198 12-18 10T, Siverston, t7/16; cum 182K 10/17;
The 5-well pad:
  • 31338, 1,734, Oasis, Johnsrud 5198 14-18 11T, Siverston, t7/16; cum 240K 10/17;
  • 31337, 1,179, Oasis, Johnsrud 5198 14-18 12B, Siverston, t7/16; cum 195K 10/17;
  • 31336, 747, Oasis, Johnsrud 5198 14-18 13T, Siverston,t7/16; cum 144K 10/17;
  • 31335, 1,719, Oasis, Johnsrud 5198 14-18 14B, Siverston, t7/16; cum 234K 10/17;
  • 31334, 895, Oasis, Johnsrud 5198 14-18 15TX, Siverston, t7/16; cum 225K 10/17;
The singleton from the south, running north:
  • 22202, 2,104, Oasis Johnsrud 19-18H, Siverston, 28 stages, 3.3 million lbs, t5/12; cum 246K 10/17; off-line most of summer of 2015; bump in production in 8/16;
Wells in the above graphic that were not in the June 25, 2015, posting:

A singleton:
  • 31919, 1,413, Oasis, Johnsrud Federal 5198 11-18 3BX, North Tobacco Garden, 4 sections, 50 stages, 20 million lbs, t6/16; cum 354K 10/17;
A 3-well pad:
  • 31606, 1,722, Oasis, Rolfson N 5198 11-17 2B, Siverston, t8/16; cum 252K 10/17;
  • 31607, 1,289, Oasis, Rolfson N 5198 11-17 3T, Siverston, t8/16; cum 221K 10/17;
  • 31608, 1,799, Oasis, Rolfson N 5198 11-17 4B, Siverston, t9/16; cum 219K 10/17;
A 3-well pad:
  • 31480, 1,703, Oasis, Rolfson N 5198 12-17 5T, Siverston, t8/16; cum 210K 10/17;
  • 31481, 1,480, Oasis, Rolfson N 5198 12-17 6B, Siverston, t9/16; cum 226K 10/17;
  • 31482, 25 (no typo), Oasis, Rolfson N 5198 12-17 7T, Siverston, Three Forks, 36 stages 4 million lbs, t8/16; cum 198K 10/17;
A 2-well pad:
  • 31483, 958, Oasis, Rolfson N 5198 13-17 8T, Siverston, t9/16; cum 205K 10/17;
  • 31484, 1,660, Oasis, Rolfson N 5198 14-17 9B, Siverston, t9/16; cum 286K 10/17;
A 2-well pad:
  • 31485, 1,379, Oasis, Rolfson N 5198 14-17 10T, Siverston, t9/16; cum 238K 10/17;
  • 31486, 1,752, Oasis, Rolfson N 5198 14-17 11BX, Siverston, t9/16; cum 332K 10/17;

The Most Beautiful Girl, Charlie Rich

And a huge "thank you" to the reader who replied to my long digression on steak marinades, introducing me to using coffee in the marinade -- very, very interesting. I can't believe anyone waded through that long note on marinades, but it really made my evening for someone to write me regarding that. Much appreciated.

It is amazing how much I've learned from readers.

And when it comes to comments on the Bakken itself, I am always humbled, reminded of how little I really now about the oil and gas industry. 

Windy Mid-Continent Today; Five (5) New Permits; Several High-IP Wells Being Reported -- December 22, 2015

Wow, the winds are howling up the mid-continent today. I don't see this often. The link to "winds" is dynamic.

On another note, earlier I posted a story about the Christmas shipping records that appear to being shattered. Now, it is being reported that the US Postal Service website also "crashed" for a short period of time due to unprecedented volume. I was able to place my order for stamps yesterday and was notified today that they have been shipped. I continue to buy US stamps for my stamp collection which is incredibly extensive, though hardly worth more than the face value of the stamps, with some exceptions. I started collecting stamps at a pre-teen -- a great hobby for those long, dark, cold evenings in North Dakota. My grandmother in Storm Lake, IA, encouraged me to continue with my stamp collecting whenever I visited, so many years ago.

Active rigs:

Active Rigs65174191188196

Wells coming off the confidential list Wednesday:
  • 29445, Si/NC, WPX, Emma Owner 34-14HB, Spotted Horn, no production data,
  • 30667, conf, Hess, EN-L Cvancara-155-93-2627H-11, Robinson Lake, no production data,
  • 31404, 938, Hess, EN-KMJ Uran-154-93-2734H-11, Robinson Lake, t11/15; cum --
Five (5) new permits --
  • Operators: CLR (4), XTO
  • Fields: Banks (McKenzie), Siverston (McKenzie)
  • Comments:
Seven (7) permits renewed, including:
  • Hess, 5, all of them EN-Weyrauch C permits in Mountrail County
  • Hunt, 2, both Palermo MCNIC wells in Mountrail (I assume MCNIC = monitoring wells; not intended for production)
Catching up before winter? Nine (9) producing wells completed --
  • 29805, 802, BR, Morgan 14-21TFH ULW, Pershing, 4 sections, t11/15; cum -- 
  • 29873, 2,084, BR, Kirkland 41-28MBH, Pershing, 4 sections, t11/15; cum --
  • 30233, 1,363, BR,Old Hickory 43-32TFH, Sand Creek, 4 sections, t11/15; cum --
  • 30339, 1,147, XTO, Lundin 14X-33F, Siverston, t9/15; cum 8K 10/15; minimal days of production;
  • 30340, 1,677, XTO, Lundin 14X-33EXF, Siverston, t12/15; cum 3K 10/15; minimal days of production;
  • 30341, 1,742, XTO, Lundin 14X-33A, Siverston, t9/15; cum 16K 10/15; minimal days of production;
  • 30342, 1,536, Whiting, Obrigewitch 41-29PHU, Bell, 4 sections, t11/15; cum --
  • 30343, 985, Whiting, Obrigewitch 44-20PHU, Bell, 2 sections, t11/15; cum --
  • 30402, 1,557, XTO, Lundin 14X-33E, Siverston, t11/15; cum 1K 10/15; minimal days of production;
EOG abandons a Fertile well, #18412 in Mountrail County.

Brent-WTI Now At Parity -- December 22, 2015

Tweeting now: Brent-WTI now at parity in the front month.

Recently it was reported that WTI has to be near a $4-premium to Brent for US light oil exports to be economical. At the time, Brent had the advantage, about a $1.10 premium to WTI.

Just a bit over two years ago, this post:
March 14, 2013:  At Bloomberg energy, Brent - $111; WTI - $93. Spread: $18. At COB, interestingly enough, the CNBC crawler showed the Brent-WTI spread to be $16.26, one of the narrowest spreads in quite some time.
Amazing how things change. 

I track the spread occasionally at this post.

The definition of a "front month":
Used in futures trading to refer to the contract month with an expiration date closest to the current date, which is often in the same month. In other words, this would be the shortest duration contract that could be purchased in the futures market. Contracts that are a month or more behind the front month contracts are referred to as back month contracts.
A Note to the Granddaughters
Christmas Shipping

The Los Angeles Times is reporting:  High-volume online shopping is putting a strain on shipping firms and causing delay.

A version of this story has been reported earlier; not much new in this article, but it does bring us up to date. I would not have taken the time to post it, except I needed to take a break from reading Megan Marshall's The Peabody Sisters, c. 2005, a "finalist for the Pulitzer Prize." I bought the book when we were living in Boston some years ago. I can't recall how much of it I had previously read, but I'm in my "American Renaissance / American Bloomsbury / Concord" phase and was eager to re-read this book. I am not disappointed.

But again I digress.

The reason the LA Times story on Christmas shipping caught my attention was because I was surprised how quickly my orders of Omaha Steaks (as gifts for others) have been shipped and have arrived. Normally, it seems Omaha Steaks "regular" shipping takes 7 - 10 days but during this Christmas season, it's been about 4, maybe 5 days. One package will arrive Christmas Eve -- after being ordered yesterday, or maybe the day before. I forget specifics.

[Omaha Steaks is expensive but quality is guaranteed; one knows exactly what one is going to get. The portions I purchase are very, very small -- way too small for roughnecks and cowboys -- but at my age, perfect. Much more could be written on portion size, but I will leave it at that, for now.] 

As long as I've digressed, let me continue. I have been absolutely spoiled by the filet mignons sold by Omaha Steaks. I believe their next best cut is the top sirloin. I no longer care that much for top sirloin -- but then last week, at the Farmer's Market here in Grapevine, I talked with a vendor who sold balsamic vinegars and various "virgin" olive oils. She came from an "authentic" Texas ranch. We got into a fairly long discussion. I was surprised to hear that her family regularly marinades their steaks in blackberry balsamic vinegar / olive oil / pepper -- I always thought it was sacrilegious to marinade good Texas Angus but apparently I'm wrong. (Not the first time. LOL.)

So, now I marinade my Omaha Steak top sirloin in blackberry balsamic vinegar / olive oil / pepper.

I first learned how to marinade meat when marinading lamb. My rosemary / thyme / garlic / balsamic vinegar / olive oil / pepper marinade takes about 45 minutes to prepare -- all that chopping. In comparison, the beef steak marinade takes 20 seconds -- I simply pour an unmeasured amount of the vinegar and oil in a ziplock bag, add some pepper and throw in the steaks. Unlike lamb, which must be marinaded at least 12 hours (overnight; 18 hours or more is preferable), beef steak only has to be marinaded five or six hours, and in a pinch, could probably be marinaded in four hours.

I first learned how to marinade lamb from Weber's Big Book of Grilling. By the way, this is the only book one needs for grilling.

Marinade For Lamb
page 20 from Weber's

  • 2 T olive oil      
  • 1 T balsamic vinegar
  • 1 T whole-grain mustard
  • 2 T finely chopped rosemary
  • 1 T finely chopped thyme
  • 1 T minced shallot
  • 1 t minced garlic
  • 1 t kosher salt (I generally add a bit less)
  • 1 t black pepper (I always add a bit more)

The Last Cowboy Song, Ed Bruce
Note: this is not the "last" cowboy song. It's a song about the last cowboy, whom we have not yet seen. 
There are still a lot of cowboys and cowgirls in Montana, Wyoming, North Dakota, and South Dakota.
There will always be more songs about cowboys.

Tuesday, December 22, 2015

3Q15 GDP revised downward to 2.0%.  This got more headlines than it deserved; it was not news; widely "predicted." Not only that, but look at the WSJ lede:
The U.S. economy expanded at a slightly slower pace than initially estimated in the third quarter, as steady consumer spending was offset by a slowdown in inventory investment.
Gross domestic product, the broadest measure of goods and services produced across the economy, advanced at a 2.0% seasonally adjusted annual rate in the third quarter, the Commerce Department said Tuesday. The agency last month had estimated third-quarter GDP growth of 2.1%.
The report highlighted the relative strength of the U.S. economy compared with overseas economies (see graph at this link), as domestic demand remained firm but exports slowed, a trend economists expect to continue into next year.
Economists surveyed by The Wall Street Journal estimated the latest revision would show 1.9% growth. [Hardly bad news.]
US existing home sales plunge: new rules seen as drag.
U.S. home resales posted their sharpest drop in five years in November, a potential warning sign for the health of the U.S. economy although new regulations on paperwork for home purchases may have driven the decline.
The National Association of Realtors said on Tuesday existing home sales plunged 10.5 percent to an annual rate of4.76 million units. That was the sharpest decline since July 2010. October's sales pace was revised slightly lower to 5.32 million units.
NAR economist Lawrence Yun said most of November's decline was likely due to regulations that came into effect in October aimed at simplifying paperwork for home purchasing. Yun said it appeared lenders and closing companies were being cautious about using the new mandated paperwork. [Really?]
Also potentially weighing on home sales, the median price for a U.S. existing home rose to $220,300 in November, up 6.3 percent from the same month in 2014. Yun said the steep rise in prices and shrinking inventories could also be constraining home purchases. [That makes more sense.]
Energy jumps 1.5%. WTI and Brent now at parity in the "front month." The definition of a "front month":
Used in futures trading to refer to the contract month with an expiration date closest to the current date, which is often in the same month. In other words, this would be the shortest duration contract that could be purchased in the futures market. Contracts that are a month or more behind the front month contracts are referred to as back month contracts.
Cowboy in a Continental Suit, Marty Robbins

Tuesday, December 22, 2015

Active rigs:

Active Rigs65174191188196

RBN Energy: infrastructure build-out in Corpus Christi, the series continues.
Until last week (December 13, 2015), the infrastructure being built to handle crude and condensate in the South Texas Port of Corpus Christi was planned on the assumption that crude exports were restricted to specific locations like Canada and condensate exports required special processing in a stabilization unit.
Now that Congress has lifted restrictions on crude exports - the floodgates would appear to be open for surplus Eagle Ford and Permian crude to ship to overseas markets – provided the economics justify such movements (which they don’t at the moment).
In the longer term though, exports could be the key to Corpus’ future. Today we continue our look at Corpus’s emerging role as a crude oil/condensate hub in a new world without export regulations.
Before last week’s repeal of crude export restrictions, the build out of new infrastructure to process and/or distribute the very light crude or condensate now being delivered by pipeline to Corpus Christi from the Eagle Ford and Permian basins was shaped by 1970’s era Department of Commerce U.S. crude oil export regulations.
Up until 18 months ago, those regulations were interpreted by the industry to limit the export of crude (defined to include lease condensate) to specific countries or very narrow circumstances. For example, Eagle Ford shippers could relatively easily obtain a license from the Bureau of Industry and Security (BIS – the agency charged with administering the regulations) to export crude or condensate to Canada because that country was a recognized exception to the export restrictions.
So for example, this allowed companies like Valero to make regular shipments of Eagle Ford crude from Corpus to their refinery in Montreal, Canada. Other exports of crude or condensate were perceived unlikely to be approved by the BIS. That meant the majority of Eagle Ford production delivered to Corpus had either to be sent to local refineries or shipped up the Gulf Coast by barge or tanker to other refineries in Texas and Louisiana, with occasional shipments further afield to refiners, including a few in Pennsylvania or New Jersey. The one local processing alternative to refineries appeared to be a condensate splitter – a stand alone “mini-refinery” that can split condensate into component refined products using a distillation process.
As a result,, several midstream companies began to investigate building such condensate splitters while existing Corpus refiners such as Valero and Flint Hills planned investments to reconfigure their plants to increase capacity to process light Eagle Ford crude and condensate (instead of the heavier imported crudes that they were largely configured to process).

More Movement In The Global Oil And Gas Industry -- December 22, 2015

Yesterday it was announced that BP would buy all of Devon's assets in the San Juan Basin in New Mexico. Today is it being announced the COP is leaving Russia after 25 years. From Seeking Alpha:
  • ConocoPhillips is exiting Russia after more than 25 years as foreign investors are hit by Russian political tensions and the tumble in oil prices, Financial Times reports
  • COP confirms it sold its 50% stake in its Polar Lights JV with Rosneft, which also sold its stake in a deal that valued the business at $150M-$200M
  • Polar Lights, registered in 1992, made COP the largest foreign investor in the Russian energy sector in the early 1990s, but the venture became ensnared in domestic Russian politics, and its tax bill increased sharply; COP first announced it would seek a buyer for its stake last year
Only one reason COP did this, but I will let the readers speculate.

Meanwhile, Gazprom Neft is tweeting: 
Russia to stand by flat crude oil output strategy; 'ready for battle', according to Gazprom Neft CEO.
More and more pressure on President Putin, which takes us to this next article sent in by a reader.

I think I've seen this article before, or another iteration of it, somewhere else, and, in fact, I may have posted it somewhere. From oiljobsnd:
It won’t be long now, until the U.S. Shale Oil Industry will bankrupt Saudi Arabia, and claim victory against OPEC. The war isn’t over yet, but America has already won, it’s just a waiting game now.

On Friday, December 18th 2015, President Barack Obama officially signed off on ending the 40 year ban on the export of crude oil. President Obama basically signed the death certificate of OPEC. By passing this new law, the US Shale Oil Industry will crush OPEC in the long-term.

For years now Saudi Arabia has been a major powerhouse in the oil and gas industry. When you think Saudi Arabia, you think of oil. Most people assume OPEC is the one calling the shots and setting the oil prices, it’s not, it’s Saudi Arabia and it’s been them this whole time. Why do you think the Bush Administration was in bed with them?

For the last few decades Saudi Arabia has printed money faster than they can pump oil, and they pump a tremendous amount of oil. When the markets swung up and down, it was due to the Saudi’s actions. Saudi Arabia has been the muscle in the oil industry for the longest time, until US operators cracked the shale oil code.
Much, much more at the link.