Four (4) New Permits; Fourteen (14) Producing Wells Completed -- January 6, 2016

Taken off-line 11/15:

• 19296, 2,388, SHD, Golden 22-31H, Deep Water Creek Bay, t3/15; cum 233K 10/15; off-line as of 11/15; most likely this is in preparation for / as part of the plan to build a central tank battery on the 4-well Golden pad (see graphic below the production profile), or even more likely, they are getting ready to frack the other 3 wells on this pad:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2015	0	0	0	0	0	0	0
BAKKEN	10-2015	31	21570	21420	30901	16005	0	16005
BAKKEN	9-2015	29	13597	13731	27738	10789	0	10789
BAKKEN	8-2015	31	17615	17237	12474	35799	0	35799
BAKKEN	7-2015	31	18846	18416	29250	13299	0	13299
BAKKEN	6-2015	30	21452	20597	29348	14637	76	12971
BAKKEN	5-2015	31	27545	27019	40307	17610	15838	129
BAKKEN	4-2015	30	30953	29896	46226	21505	16776	3139
BAKKEN	3-2015	31	50914	48348	68728	39880	2189	36048
BAKKEN	2-2015	23	30105	29502	70346	23000	0	23000

The other three wells:

• 31109, conf, SHD, Charging Wildcat 22-31H, API: 33-055-00182, not fracked acc. to FracFocus;
• 31110, conf, SHD, War Eagle 22-31H, API: 33-055-00183, not fracked acc. to FracFocus;
• 31111, conf, SHD, Luke Neset 22-31H, API: 33-055-00184, not fracked acc. to FracFocus;

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

Active rigs:

	1/6/2016	01/06/2015	01/06/2014	01/06/2013	01/06/2012
Active Rigs	57	169	186	179	198

Wells coming off the confidential list Thursday:

• 28966, 947, Hess, LK-Quilliam-147-97-1423H-3, Little Knife, t12/15; cum --
• 30287, 951, QEP, Dailey 6-12-13BH, Spotted Horn, t7/15; cum 86K 11/15; only 10 days in 11/15;
• 30288, 2,067, QEP, Dailey 4-12-13T2H, Spotted Horn, t7/15; cum 16K 11/15; on-line only 11 days for past four months;
• 30289, 2,197, QEP, Dailey 7-12-13BH, Spotted Horn, t7/15; cum 61K 11/15; on-line only 37 days last three months;
• 30290, 1,888, QEP, Dailey 4-12-13TH, Spotted Horn, t7/15; cum 34K 11/15; on-line only 52 days last four months;
• 30291, 2,463, QEP, Dailey 12-11LL, Spotted Horn, t7/15; cum 85K 11/15;
• 31165, SI/NC, Abraxas, Stenehjem 13H, North Fork, no production data,
• 31372, SI/NC, XTO, Sara 41X-13D, Grinnell, no production data,

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30291, see above, QEP, Dailey 12-11LL, Spotted Horn:

Date	Oil Runs	MCF Sold
11-2015	10778	7442
10-2015	14226	9086
9-2015	20272	17111
8-2015	32096	39223
7-2015	6974	8213

30290, see above, QEP, Dailey 4-12-13TH, Spotted Horn:

Date	Oil Runs	MCF Sold
11-2015	2265	2335
10-2015	4770	2373
9-2015	7798	5583
8-2015	12744	31164
7-2015	5798	16710

30289, see above, QEP, Dailey 7-12-13BH, Spotted Horn:

Date	Oil Runs	MCF Sold
11-2015	2097	2073
10-2015	8892	4420
9-2015	5880	3926
8-2015	26134	23027
7-2015	17713	11509

30288, see above, QEP, Dailey 4-12-13T2H, Spotted Horn:

Date	Oil Runs	MCF Sold
11-2015	1225	1033
9-2015	16	0
8-2015	1735	1029
7-2015	13138	8801

30287, see above, QEP, Dailey 6-12-13BH, Spotted Horn:

Date	Oil Runs	MCF Sold
11-2015	4412	4214
10-2015	20376	9942
9-2015	30367	21042
8-2015	29143	19643
7-2015	1335	408

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

Four (4) new permits --

• Operators: SM (2), MRO, HRC,
• Fields: Skabo (Divide), Moraine (Divide), Lost Bridge (Dunn), Antelope (McKenzie)
• Comments:

Five (5) permits renewed --

• Triangle, 3, for three Lee wells in McKenzie County
• MRO, 2, for a Mathias and for a Coan well, both in Dunn County

Fourteen (14) producing wells completed:

• 29390, 1,067, XTO, Johnsrud Federal 34x-14C, Bear Den, t10/15; cum 8K 11/15 after 13 days;
• 29389, 1,045, XTO,  Johnsrud Federal 34X-14G, Bear Den, t10/15; cum 3K 11/15 after 4 days;
• 29392, 614, XTO, Johnsrud Federal 34X-14D, Bear Den, t11/15; cum 2K 11/15 after 5 days;
• 30041, 2,240, XTO, Deep Creek Federal 43X-5G, Lost Bridge, t11/15; cum 8K after 5 days;
• 30043, 2,238, XTO, Deep Creek Federal 43X-5H, Lost Bridge, t12/15; cum --
• 27628, 701, Hess, EN-Farhart-156-93-0409H-1, Baskin, t12/15;  cum -
• 30166, 1,134, Hess, AN-Prosser-152-95-1102H-9, Antelope, Sanish pool, t12/15; cum --
• 30672, 565, Hess, BL-Odebaard-156-95-2116H-6, Beaver Lodge, t12/15; cum --
• 28967, 834, Hess, LK-Quilliam-147-97-1423H-2, Little Knife, t12/15; cum --
• 30057, 499, SM Energy, Whitney 3-26HN, West Ambrose, t12/15; cum --
• 30056, 357, SM Energy, Jessica 3B-26HN, West Ambrose, t12/15; cum --
• 30055, 508, SM Energy, Ashley 3-26HS, West Ambrose, t12/15; cum 4K after 9 days;
• 30054, 281, SM Energy, Rilye 3B-26HS, West Ambrose, t12/15; cum --
• 30066, 477, SM Energy, Norma 1B-26HS, West Ambrose, t12/15; cum 5K after 18 days;

Ford EV Sales Are Posted -- January 6, 2016; EV Buyers Are Paying Up For Luxury

Link here. The original December car sales blog was posted here.

It appears folks are "paying up" for luxury when buying EVs. Compare two numbers:

• the jump in sales month-over-month for BMW, December-over-November, 2015
• the numbers for the first half of the year with the numbers for the second half of the year for the Chevy Volt

I'm not impressed with Tesla, for any number of reasons. For one thing, these are "deliveries," not sales, as far as I know. I could be wrong on that -- but the "rounded numbers" certainly support the feeling that these are "fed" numbers and not actual sales. For example, the Nissan Leaf reports 17,269 EVs for the year, a pretty exact number. Meanwhile, Tesla reports 25,700 vehicles.

EV buyers are "paying up" for luxury:

• Note Chevrolet Volt: a huge increase in sales in December compared to January, but over the most recent three months, fairly flat.
• On the other hand, BMW sales surged in December, month-over-month, and it was really evident in the high end BMW i8, from 118 in November, to 656 in December. Lots of Christmas gifts. 
• Cadillac EV sales more than double (not in graph above; see link to source).
• Ford was the last to post their EV sales for December. Very, very nice numbers, but essentially flat over the year. Yes, there is an increase, but for the 30-second sound bit, "about flat."
• One last thought: the 13,000 BMW's reported were actually "sold," compared to the much more talked-about Tesla at 25,000 which were "delivered."

Hit A Wall -- January 6, 2016

It happens periodically, probably about every ten to twenty days when I literally hit a wall. There is so much information coming out today that needs commentary and I cannot keep up. I may or may not post much of substance the rest of today. At a minimum, I will post the usual data but I may not get to commentaries and more in-depth posts until late tonight or maybe even later this week.

Posts may be short with plans to come back to them later.

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Not Ready For Prime Time

Idle Chatter

This and $1.98 will get you a cup of coffee at Starbucks. No, not true. Starbucks would require the full $2.00. 

Based on several observations over the past year regarding fire sales in the Bakken, buyers are getting Bakken acreage for about 10% of what that acreage sold for during the boom. In other words, during the peak of the Bakken boom (2010 - 2013, maybe even going into mid-2014), a Bakken mineral acre changed hands for 10x what it is changing hands for in the past year.  For example, a Bakken acre that sold for $4,000 acre in 2012 is now going for $400/acre.

A Bakken acre that sold for $40,000 in 2012 is now going for $4,000/acre.

Before 2007, there really wasn't much known about the Bakken by the layperson. By 2012, anyone paying attention should have had a pretty good idea what the Bakken was able to produce. However, it appears that what the layperson knew about Bakken potential in 2012 was significantly lower than what the Bakken potential now appears to be, based on the results of some recent wells. Back in 2007, a lot of Bakken wells were drilled as wildcats. Today, there are "no" wildcats in the Bakken. 

This is just my two cents worth. It's based on minimal information. I have no background in finance or the oil and gas industry. Do not make any investment or financial decisions based on these comments. If this information is important to you, go to the source.  

Samson Oil & Gas Acquires Property In The Bakken -- January 6, 2016

Link here.

I'll let others do the math first but I will come back to this later. I will have two more examples.

John Kemp's Weekly Energy Tweets -- January 6, 2016

US total crude and product stocks rose 7.3 million bbls last week and is now 164 million bbls above prior-year level; the graph is absolutely incredible:

US commercial crude stocks fell 5.1 million bbls last week and are now 100 million bbls above prior-year level; the graph is almost identical:

US gasoline stocks jump 10.6 million bbls last week but still 5.2 million bbls below prior-year level; comment: this is actually "bad news" as a tea leaf for reading the health of the economy

US gasoline consumption averaged just 9.0 million bopd over the last four weeks; much weaker than corresponding period prior-year; comment: this is actually "bad news" as a tea leaf for reading the health of the economy

US distillate consumption remained at lowest seasonal level for more than 10 years last week; comment: this is actually "bad news" as a tea leaf for reading the health of the economy (see first comment):

US distillate stocks rose 6.3 million bbls last week and are now 22.5 million (+16.4%) bbls over prior-year level

US refineries processed a seasonal record 16.6 million bopd of crude last week up almost 200,000 bopd on prior year

WSJ's Jenkins Says Record Low Oil Prices Due To Global Instabiltiy; Doesn't Mention The Bakken -- January 6, 2016

Here we go again.

I think this is the third time I've posted the graphic above.

I thought of this graph after reading this op-ed in today's WSJ. I like Holman Jenkins. He is definitely smarter than I on these things, so I have to assume he is correct on this issue and I am wrong.

I may have misread his op-ed but I understand him to be saying that the rivalry between Saudi Arabia and Russia is the reason the price of oil is plummeting, rather than the oft-stated reason that it's the other way around, that the low price of oil has brought on the rivalry between Saudi Arabia and Russia. I may have that wrong, but the story is at the link.

The article started off nicely:

Since 1918 and the full flowering of the automobile age, the average U.S. domestic price of gasoline has rarely fallen below $2 or risen above $4 as measured in 2015 dollars. At today’s price of $1.99, gasoline is approaching its all-time low in inflation-adjusted terms.

In 1965, gasoline sold for 30 cents. In 1965 dollars, today’s price is 26 cents. So, yes, the current oil price depression is not ordinary.

Those who see a price recovery coming soon note that expensive projects to wring oil from Arctic waters or Canadian oil sands or the deepest Gulf of Mexico are being halted. Once halted, they won’t easily be restarted, so oil in the future will be undersupplied once today’s excess inventories are burned off and producers are done eking out revenue based on capital they’ve already spent.

This:

Saudi Arabia, which peak oil theorists insisted was on the verge of exhausting its major fields, recently tweaked production to a record-beating 10.5 million barrels a day, low prices be damned. The motive: Riyadh’s undeclared war against Iran and Iran’s ally-of-the-moment, Russia.

Then this:

Russia, whose energy development was expected to decline once sanctions cut it off from Western capital, surprised many by setting a post-Soviet record of 10.8 million barrels a day in December.

Jenkins conveniently forgets to mention that North Dakota oil production increased more than one-half percent month-over-month in October, 2015 (most recent data available) despite:

• huge cutbacks in well completions
• huge drop in the number of rigs
• huge drop in new wells being spud

Jenkins may be correct; that the low price of oil is due to Russia's record-setting production and Saudi Arabia's production. Something tells me Saudi Arabia sees it differently.

By the way, Russia may have set a record, but annual production barely budged. The same goes for Saudi Arabia.

Jenkins mentions "shale" once in passing, but not in the sense that shale had anything to do with low oil prices.

Active Rig Watch -- January 6, 2016

Down another rig:

	1/6/2016	01/06/2015	01/06/2014	01/06/2013	01/06/2012
Active Rigs	57	169	186	179	198

3Q15 Taxable Sales Plummet 25% -- January 6, 2016

Full report here:

• https://www.nd.gov/tax/data/upfiles/media/2015-3-stat-report.pdf?20160106113456

The Dickinson Press story here:

• http://www.thedickinsonpress.com/news/north-dakota/3918295-nd-taxable-sales-and-purchases-drop-25-percent-oil-price-slump-continues

Counties:

• Cass County back on top at $853 million.
• Williams County down to $663 million.
• Next closest is Burleigh County at $479 million.

Cities:

• Fargo: $723 million
• Williston: $529 million
• Bismarck: $472 million
• Dickinson: $256 million
• West Fargo: $102 million

Dickinson Press Suggests Active Rigs Will Soon Drop To About 55 -- January 6, 2016

Updates

January 7, 2016: that didn't take long. Active rig count dropped to 54 today. 
 

Original Post

 

I guess we can close this poll, whether we will see less than 55 active rigs by the end of the week. The Dickinson Press is reporting:

The state’s rig count fell to 58 on Monday, with three more rigs scheduled to become idle after crews complete drilling the current well.

The last time North Dakota’s rig count was below 60 was in October 2009 when the state had 55 rigs, said Alison Ritter, spokeswoman for the Department of Mineral Resources.

The results of the poll which was placed just a couple of weeks ago, in which we asked whether we we would see less than 55 rigs by the end of the first full week in 2016 (January 8, 2016):

• Yes: 41%
• No: 59%

It's gonna be real, real close.

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Any Number Will Work

I guess you can get any number you want. BusinessInsider is reporting:

The latest private payroll report from ADP showed a larger-than-expected increase in jobs during the month of December. 

Private payrolls jumped by 257,000, way more than the 198,000 that was expected by economists. 

Job gains were evenly spread across small, medium, and large businesses in December.
By industry, the largest number of jobs were added in the professional/business services sector and trade/transportation/utilities work. 

Mark Zandi, chief economist of Moody’s Analytics, said, "Strong job growth shows no signs of abating. The only industry shedding jobs is energy.

"If this pace of job growth is sustained, which seems likely, the economy will be back to full employment by mid-year. This is a significant achievement, given that the last time the economy was at full employment was nearly a decade ago."

Full employment? It all depends what the definition of "full employment" is.

Americans Spending Big Bucks On SUVs, High-End EVs -- January 6, 2016; Book On Shale Revolution Is Now Amazon's #1 Bestselling Book In Four (4) Categories

Active rigs:

	1/6/2016	01/06/2015	01/06/2014	01/06/2013	01/06/2012
Active Rigs	58	169	186	179	198

RBN Energy:

Energy market volatility in 2015 was neither the result of random market fluctuations nor geopolitical orchestration.  The market pressures had been building for years, as one market event triggered another, leading inexorably to the carnage of Q4 2015.  

In fact, there were thirty such market events, which are represented by dominos in the new book by Rusty Braziel, titled The Domino Effect now Amazon’s #1 bestselling book in four categories. 

More dominoes will topple in 2016 and the years beyond.  This book is about understanding how and why the dominos have and will continue to fall based on an analysis of energy market fundamentals: prices, flows, infrastructure, value, and economics.  Today’s blog, an advertorial for the book, highlights some of the key aspects of The Domino Effect.

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SUVs and EVs

Two articles.

First, from The Wall Street Journal:

Three years ago, Lili Rodriguez gambled when she transferred from General Motors Co. ’s small-car factory in Lordstown, Ohio, to GM’s plant in north Texas making full-size sport-utility vehicles.

As the U.S. auto industry was on the mend after a near-financial collapse in 2009, low-cost passenger cars like Lordstown’s compact Chevrolet Cruze were driving its recovery. With the national average for a gallon of gasoline costing about $3.50 at the time of Mr. Rodriguez’s move, sales of Arlington’s full-size SUVs were declining.

The tables have turned for the U.S. auto industry and Arlington is among the biggest winners. GM is committing $1.4 billion to upgrade the factory, part of tens of billions in U.S. capacity investments planned for the next several years by Volvo Car Corp., Ford Motor Co. , Daimler AG and other car makers.

Light-vehicle sales are on track to hit a record in 2015, and an increasing bulk of those units are hulking highly-profitable models like the Chevrolet Suburbans, Tahoes, Cadillac Escalades and GMC Yukons that roll off an Arlington assembly line running six days a week, building 16.5% more vehicles through the first 11 months in 2015 than in the same period a year ago. GM posted record profit in the third quarter; with its SUV plant—one of the most profitable auto factories in the world—contributing much of the earnings.

Second, the scorecard on EVs. The numbers are incredibly small, but the trend is quite clear. Note the surge in BMW EVs that are being sold, month-over-month at this link.  BMW i3 sales doubled and BWM i8 went from around 100 vehicles to well over 600 vehicles sold.