Friday, January 22, 2016

Give Me Liberty Or Give Me Death --- Or Something Like That -- January 22, 2016

Headline over at The Boston Globe: Southeastern Massachusetts could see up to eight inches of snow. A blizzard warning has been issued for Martha's Vineyard, which could see 10 inches of snow. 

As another historic winter storm slams into Martha's Vineyard, let us remember these famous words: give me liberty or give me .... oh, wrong quote. This is the one I was looking for:
Snow is so scarce today that most Virginia children probably don’t own a sled.
-- Robert F. Kennedy, Jr., September 24, 2008

Update: the kids in Virginia might not have sleds, but the kids in Washington, DC, certainly do, and they all look new. No cardboard sleds, which most of us grew up with:

115 Wells Transferred From MDU (Fidelity) To Kaiser-Francis -- January 22, 2016

Active rigs:

Active Rigs47159187188203

Three (3) new permits --
  • Operator: XTO
  • Field: Bear Creek (Dunn)
  • Comments:
One (1) producing well completed:
  • 29990, 686, Abraxas, Stenehjem 5H, North Fork, t11/15; cum 12K 11/15 (28 days)
Transfer: ~ 115 wells from Fidelity to Kaiser-Francis Oil
  • wells in Mountrail County: about 65
  • wells in Stark County: about 50
  • wells with permit numbers 16XXX: 7 (Mountrail)
  • wells with permit numbers 17XXX: 11 (Mountrail)
  • wells with permit numbers 18XXX: 5 (Mountrail)
  • wells with permit numbers 19XXX: 7 (Mountrail/Stark)
  • wells with permit numbers 20XXX: 1 (Stark)
  • wells with permit numbers 21XXX: 9 (Mountrail)
  • wells with permit numbers 22XXX: 8 (Stark/Mountrail)
  • wells with permit numbers 23XXX: 19 (Mountrail/Stark)
  • wells with permit numbers 24XXX:14 Mountrail/Stark)
  • wells with permit numbers 25XXX: 11 (mostly Stark, one Mountrail)
  • wells with permit numbers 26XXX:2 (Stark)
  • wells with permit numbers 27XXX: 4 (Stark)
  • wells with permit numbers 28XXX: 9 (Stark/Mountrail)
  • wells with permit numbers 29XXX: 
  • wells with permit numbers 30XXX: 
  • wells with permit numbers 31XXX: 8 (Mountrail)
Long-term readers are familiar with Kaiser-Francis Oil. One of the first times I blogged about Kaiser-Francis -- maybe the first time -- was back on July 18, 2011. If you haven't read that post, you might find it interesting. The Bakken: winners and losers. New opportunities. A google search will reveal a few other Kaiser-Francis links on the blog.

As of 2014, Kaiser-Francis does not make the list of top 10 oil and/or natural gas producers in the US.

Not broken down by oil or natural gas, the top ten private producers by boe published as of January 2016:
  • Hilcorp Energy Co
  • Chief Oil & Gas LLC
    Samson Investment Co
  • LLOG Exploration Co
  • Merit Energy Co
  • Mewbourne Oil Co
  • Yates Petroleum Corp
  • Petro-Hunt Group
  • Endeavor Energy Resources LP
  • Sheridan Production Co LLC
On this list, near the end of 2014, Kaiser-Francis was ranked #20.

Back To Fidelity (MDU)

My data goes back to 2008:
  • 2008: 26 permits, all 17XXX series; mostly Mountrail, some Bowman, one Burke County
  • 2009: 9 permits, all 18XXX series; all Mountrail
  • 2010: 17 permits, 18XXX, 19XXX, and 20XXX permits; Mountrail and Stark counties
  • 2011: 16 permits, 21XXX, 22XXX permits; mostly Mountrail, some Stark county
  • 2012: 107 permits, 22XXX, 23XXX, 24XXX permits, mostly Mountrail, some Stark county
  • 2013: 42 permits, 27XXXX, 26XXX, 25XXX, 24XXX permits, about half/half, Mountrail/Stark
  • 2014: 44 permits, 28XXX, 27XXX permits, Mountrail, Stark counties
  • 2015: 8 permits, all Mountrail County
  • 2016: 0 permits
As of this date, January 22, 2016, it appears the wells that Kaiser-Francis has acquired from Fidelity, have been moved over to Kaiser-Francis, over at "Well Search" at the NDIC website.

Kaiser-Francis currently has 132 wells according to NDIC "well search." It appears about 115 of those wells were formerly Fidelity wells.

Fidelity still has 121 wells according to NDIC as of this date, January 22, 2016.  Of these 121 wells, eighty-six (86) of them are in the Cedar Hills oil field, Bowman County, far southwest corner of North Dakota. If my numbers are correct (and they could be way wrong), it looks like MDU sold almost its entire existing "Fidelity" inventory to one company.

If I recall correctly, Fidelity previously said they had divested Fidelity among four or five other companies but that the Cedar Hills wells might not be sold at this time (see comments below). If that is accurate, Fidelity sold 115 wells to Kaiser-Francis, and it is yet to be released who to whom the remaining 35 wells were sold.

Whatever, it looks like Kaiser-Francis could move to the list of top private oil producers in the US, unless, of course, they "flip" the sale.

Disclaimer: much of this is based on my own data base which is taken from daily activity reports, and will contain errors. I am doing this for my own interest. If this is important to you, go to the source. Do not use this blog as a source for any information when making financial, investment, or travel decisions. This blog will have typographical and factual errors. The blog is simply here for me to help understand the Bakken. I post it publicly for a number of reasons, mostly because I get great feedback from readers telling me where I am wrong, or giving me some great links. 

More data from the NDIC data base and looking at what might have been the Fidelity wells that were transferred to Kaiser-Francis:
  • total wells transferred: 115
  • inactive: 3
  • produced less than 30 days in November, 2015: 4 (one of those produced 28 days)
  • permits only (LOC): 8 permits
  • on CONF status: 8  
  • total production in November, 2015, from the 98 wells producing (including the four that produced less than a full 30 days; for those four wells I used the production from the last full month): 170,305 bbls
  • per day: 170,305/30 = 5,676 bopd from all active wells
  • per day, per well: 58 bopd per well (the Williston Basin averages about 94 bopd per well, right now)
  • range: best well produced 6,067 bbls of crude oil in November, 2015; the well producing the least amount of oil in November, 2015, produced 332 bbls in the full month of 30 days
Note: this is bbls of crude oil. This is not boe; natural gas probably makes up about 10% of total production. Disclaimer: again, the numbers above are subject to huge error; this is simply best-guess, back-of-the-envelope calculations. Do not make any financial, investment, or travel decisions based on these numbers; if this data is important to you, go to the source.

Assuming these wells require minimum maintenance, these wells at $20/bbl could be generating about $3 million / month. In an earlier post, I suggested what companies like Kaiser-Francis might be paying for these wells on a per-bbl basis. But it starts to get real complicated, real fast, so I won't go any farther.

Some Light Reading For Those Snowed In This Weekend -- January 22, 2016

I know Washington, DC, is being pummeled by global warming this weekend; I wonder how the Maldives are doing? Back to the Maldives later, but first this: 2015 was not the hottest year on record, regardless of what you may have read or heard. From the linked article:

The claim is meaningless anyway:
Here’s how Dr. Richard Lindzen, an emeritus Alfred P. Sloan Professor of Meteorology at the Department of Earth, Atmospheric and Planetary Sciences at MIT, puts it:
“I urge you when looking at a graph, check the scales! The uncertainty here is tenths of a degree.”
“When someone points to this and says this is the warmest temperature on record. What are they talking about? It’s just nonsense. This is a very tiny change period. And they are arguing over hundredths of a degree when it is uncertain in tenths of a degree.”
“And the proof that the uncertainty is tenths of a degree are the adjustments that are being made. If you can adjust temperatures to 2/10ths of a degree, it means it wasn’t certain to 2/10ths of a degree.
Yes, I had noticed that before. The lowest point on the graph is 8.25 degrees; the high point is 8.5 degrees, over 15 years.  0.25 degrees/15 years = 0. 0167 degrees/year. Is that even measurable? Repeatable? Significant? And that's the worst case scenario. Using the other line, the difference is even less. I find it amazing what "flat earthers" notice.

Ah, yes, Science. Math. Graphs. Arithmetic. Lines.

I find the subject interesting. For others, I guess, the science is settled. LOL.

By the way, is there an app to track sea level / beach erosion in the Maldives?


Now that we got that out of the way, for those snowed in Washington, DC, snowed in over the weekend, Ice Age Now (linked at the sidebar at the right) recaps current winter weather worldwide. It's not just Washington that's getting hammered this weekend; it's happening all over the world. Moscow? As of January 19, Moscow has already received double its "normal" amount of snow.

I was tempted to go through the list and highlight most of them here, but I decided on linking just one article, mostly for all the comments. The windmills in Sweden are frozen and helicopters, using fossil energy, are de-icing the windmills. Click on the photo at this link to see the de-icing. Be sure to read the comments. I particularly enjoyed the first one:
I live near a couple hundred + of these dumb things. In the hot dog days of summer when everyone has their air conditioners on, the windmills don’t turn much, because there is no wind. Then they kick up the co-gens-gas fired plants.
In winter after the cold blows in and everyone needs max heat the wind dies down, and again, they kick up the co-gens-gas fired plants.
I guess when they do work we throw our nuclear power away, but don’t worry it’s not much, I was told that these 270 windmills can’t even supply one small town in my county. If that’s not going ass backwards I don’t know what is.
Many people get $$$ because these things turn the sun into a slow strobe light at sunrise & sunset. I think all the people from town who come out and oooo & aahh at their stupid windmills should have their morning coffee with that damn light blinking in their eyes.

DOI Proposes Regulations Aimed At Reducing Methane Emissions From Oil And Gas Operations On Public / Tribal Lands -- January 22, 2016

Oil & Gas Journal is reporting:
The US Department of the Interior proposed regulations aimed at reducing methane emissions from oil and gas operations on public and tribal lands. Three leading industry associations immediately said the proposed rules are unnecessary because operators already are curbing methane releases voluntarily.

“We need to modernize decades-old standards to reflect existing technologies so that we can cut down on harmful methane emissions and use this captured natural gas to generate power and provide a return to taxpayers, tribes and states for this public resource,” US Interior Secretary Sally Jewell said as the proposal was announced on January 22, 2016.

The proposed rule would revise provisions related to venting, flaring, and royalty-free use of gas in a 1979 notice to lessees and operators of onshore oil and gas leases on federal and Indian lands. Comments will be accepted for 60 days ...

Developed by the US Bureau of Land Management, the proposed rule would require producers to adopt currently available technologies, processes, and equipment that would limit the rate of flaring at oil wells on public and tribal lands, make operators periodically inspect their operations for leaks, and replace outdated equipment that vents large quantities of gas into the air.

Operators also would be required to limit venting from storage tanks and use best practices to limit gas losses when removing liquids from wells. The new measures also would clarify when operators owe royalties on flared gas, and ensure that BLM’s regulations provide congressionally authorized flexibility to set royalty rates at or above 12.5% of the value of production.

Natural Gas Drillers -- Unlikely "Bright Spot" Among Publicly Traded Energy Companies -- January 22, 2016

Disclaimer: this is not an investment site. Do not make any investment, financial, or travel decisions based on anything you read here or think you may have read here. 

Reuters is reporting:
U.S. natural gas drillers are emerging as an unlikely bright spot in this week’s collapse of energy stocks.

Shale gas producer Southwestern Energy Co. was among leaders in the S&P 500 Index a second day as energy investors flocked to producers of the power plant fuel in the face of sliding oil prices. It led the index Wednesday and was among the top five performers Thursday.

Range Resources Corp., EQT Corp. and Cabot Oil & Gas Corp. were also up.
Gas-focused drillers are quickly emerging as a safe haven for investors wary of getting burned by the drop in oil prices, offering a reprieve to a group of companies that have been hammered by low natural gas prices.

Southwestern said Thursday it’s slashing 45 percent of its workforce as new drilling slows.

Natural gas-heavy drillers are already lean after two straight years of price declines, giving them a leg up on oil- focused producers now taking measures to stem a supply glut, Chandra said. That may sow the seeds of a recovery to begin in the second-half of the year as supply and demand start to balance.
From SeekingAlpha:
  • Both OKE and OKS maintain their dividends/distributions.
  • This is inline with the previously announced 2016 guidance.
  • At current prices, OKE yields ~11%, while OKS yields ~12.5%.

Closing Out The Poll -- Predicting Long Term Trend For Price Of Oil -- January 22, 2016

This worked out well. I wanted to close up at least one of the polls at the sidebar at the right but didn't know how/when to do it. But here's the opportunity. The Dickinson Press is reporting that NDIC Director Lynn Helms "predicts oil prices to rise again in foreseeable future." The article is a particularly good article for the archives.

So with that headline and that link, here are the results of the poll in which we asked readers their prediction for the long-term price for oil:
  • A - low prices and with little volatility: 6%
  • B - abrupt spike back to $100+ oil: 28%
  • C - remain a trading range between $20 and $60 but with significant volatility: 49%
Could I have made the graph or the poll any more difficult? 13%

Two comments:
  • it was suggested I was among the enthusiastic idiots that just got in (I assume the reader was suggesting that prices are as low as they're going to get, and the only direction is "up")
  • $60 - $80 
Bakken Birth Record: Almost 900 Babies Born In Williston In 2015 

From the Oil Patch Dispatch:
Hospitals in Williston and Minot each reported a record number of deliveries last year, and Dickinson had the most births in one year since the 1980s oil boom.
“We have not slowed down with the oil going down,” said Leona Lambert, who oversees OB services for Mercy Medical Center in Williston.
Williston had a record 882 births in 2015, up from 804 in 2014.
Vicky Wiebe, who became a new mom in Williston last year, said the numbers show that many workers who relocated their families to North Dakota have decided to stay despite the recent downturn.
  • Minot: 1,716 deliveries, up three from 2014
  • Dickinson: 682 births, up from 611 in 2014
  • Watford City's hospital does not deliver babies, so most of Watford's moms would have delivered in Williston.

Friday, January 22, 2016

Active rigs:

Active Rigs47159187188203

RBN Energy: Kero-Jet Prices Plummet Toward Earth.
Crude oil prices staged a recovery of sorts yesterday (January 21, 2016) after a crushing first two weeks of the year. But even if this proves to be the turning point, a lot of damage has been done to crude and refined product prices along the way.
Jet fuel is a case in point. The U.S. Gulf Coast spot price for kerosene-type jet fuel closed on Wednesday (January 20, 2016) at $0.78/Gal - the lowest it’s been since September 2003, and barring a dramatic recovery in crude oil prices, the refined petroleum product, that is mostly used for aviation and by the military, will remain cheap this year.
That’s good news for the airlines and, one would hope, for air travelers too. But it’s bad news for refiners because of narrowing jet margins over crude oil.  Today, we examine the global market for jet fuel, and how it’s affecting U.S. refiners.
Notes for the Granddaughters

My parents visited England in 1963. They brought home a vinyl record/album of the Beatles for me. I do not recall what songs were on it; I assume this song was on it.

All My Loving, Paul McCartney

It's a great song, a great video, but the reason I'm posting it is because of two comments:
  • Just think of all the people not yet born who someday will wish they lived in our time. Paul McCartney is one reason why.
  • Man! That's gotta be an awesome feeling to see children singing the lyrics to your songs that were written like 50 yrs ago.