Wednesday, March 9, 2016

CLR To Report Huge Three Forks Second Bench Well; To Drill A Couple Of Extended Long Laterals To The Other Side Of The River -- March 9, 2016

In a long note like this, there are likely to be typographical and factual errors. If this information is important to you, go to the source. I am posting this for my own benefit to help me better understand the Bakken. No one else should use it for anything other than that purpose: an attempt to better understand the Bakken. 


May 15, 2019: my goodness, these are great wells. Production updates here: 32605 and 32606

April 4, 2017: wells completed; off confidential list; production updates. It appears #32606 was renamed. See below.

November 5, 2016: The following well is still on confidential status, but has this production profile -- note that this well targeted the second bench of the Three Forks -- this "three-run lateral well" was drilled in 19 days to include casing; the wellbore was in the target zone 94% of the time; horizontal was 9,852 feet long:
  • 32606, 2,305, CLR, Brangus North 1-2H2/Brangus Federal 1-2H1, SWNW 26-154-94, 2200' FNL and 537' FWL, Elm Tree, 24,628', 9-5/8 inch, 46 stages; 10 million lbs; 24,942 feet, API 33-061-03939; according to FracFocus, it was fracked 7/30/16 - 8/7/17, with 8.6 million gallons of water; water, 88% of proppant by mass; sand 11% of proppant by mass, the second bench of the Three Forks, t9/16; cum 532K 10/18.
Monthly Production Data:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

#32605 targeted the first bench of the Three Forks --
  • 32605, 1,995, CLR, Charolais North Federal 1-3H1, t9/16; cum 548K 10/18; SWNW 26-154-94, 2200' FNL and 492' FWL, Elm Tree, 24,741', 9-5/8 inch, 46 stages, 10 million lbs; 24,741 feet; surface hole in section 26-154-94; bottom hole in section 10-153-94; API: 33-061-03938, according to FracFocus, it was fracked 8/7/17 - 8/14/16, with 9.1 million gallons of water; water, 88% of proppant by mass; sand 11% of proppant by mass.
Monthly Production Data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

See graphic that accompanied the permit application:

I assume the vertical will be in section 26; a directional segment will be in sections 27 and 34; and the horizontal sections will be sections 3 and 10 in the township to the south.

Also, from the application:

Original Post
I have to be really careful on this. I've checked it a number of times so I think I'm correct, but if I've made an error, it will be a humdinger of an error.

This is going to be a complicated note, perhaps, so bear with me.

First, note these two permits today:
  • 32605, see above, CLR, Charolais North Federal 1-3H1, SWNW 26-154-94, 2200' FNL and 492' FWL, Elm Tree, 24,741', 9-5/8 inch, 
  • 32606, see above, CLR, Brangus Federal 1-2H1, SWNW 26-154-94, 2200' FNL and 537' FWL, Elm Tree, 24,628', 9-5/8 inch, a Three Forks well;
Note that the TD of these two wells are in excess of 24,000 feet. As a rule of thumb: 9,000 feet down, horizontally 5,000 feet per section = 19,000 - 20,000 feet for a 1280-acre unit. Most long laterals in the Bakken are in the 20,000-foot category for 1280-acre drilling units.

When one sees TD of 24,000, one thinks these will be 3-sections long: 9,000 feet down plus 3 sections x 5,000 feet each (15,000 feet total) for a TD of 24,000 feet.
Second: note that the wells will be sited in Alkali Creek (and again, I hope I didn't make a mistake with all this) but yet the permits show them to be Elm Tree wells.

Third: note that the existing wells in that area in Alkali Creek are Hess wells.

Fourth: to me it looks like the wells are being sited in Alkali Creek (owned by Hess in this area) but will run south and take oil from the 1280-acre unit, sections 2 and 11 in T153N-R94W, in Elm Tree.

Fifth: the horizontals will have to run all the way through 35-154-94 (still in Alkali Creek) before getting to sections 2/11-153-94.

Finally, and this is way beyond my comfort zone, the perforations in the horizontal will have to be placed distally far enough to avoid "perfing" into Hess acreage in section 35-154-94.

There was a case not too long ago when an operator had to abandon a well because perforations were done too soon and were taking oil from a section it did not "own."

Obviously this is required to reach the area under the water. One other minor point, there are no 3-section / 1920-acre drilling units here, so this is either a 1280- or a 2560-acre drilling unit. I can't imagine this being a pad for 2560-acre spaced wells.

Here is a graphic of the area.

Note: I have placed very, very thick black lines showing the boundaries of Alkali Creek, Elm Tree, and Robinson Lake in this area.

Note that the proposed CLR 2-well pad under discussion will be sited in Alkali Creek, but the horizontals will run south into Elm Tree oil field (consistent with the permits).

I have an arrow pointing out Elm Tree.

All those existing wells to the north in section 26 are Hess wells. 

Extended long laterals in the Bakken are rare; there is an "extended long lateral" tag. 

If this is correct, the credit goes to a reader who spotted this and alerted me to it.

If any of this is incorrect, it's all my fault.

Do not rely on what I post if this is important to you. I am doing this to help me understand the Bakken. This is my best guess on minimal permit information. If this is important to you, go to the source, probably starting with the NDIC.

Apple iCloud Back Up -- March 9, 2016

About two hours ago when I went to access Apple iCloud I was unable to log in. That is a very, very rare event and when it does happen, it generally does not last for more than a few minutes. But tonight it was down for quite some time.

There is a web site at which folks can find if a site like the Apple iCloud or Yahoo!Mail is up  down: downdetector.

The best way to access the site is through Google, by asking "Is .... down?"

When Apple iCloud went down, folks were reporting, but not using the dialogue box to say where they were located and whether the system was down. As soon as one person noted time, location, etc., others chimed in. It was quite spectacular: people from around the world, mostly the US, started reporting in. The farthest away, at least from Texas, was from Thailand.

Within minutes a new global community was forming defined by folks unable to access Apple iCloud.

And then the community faded back into global humanity as Apple iPhone came back up. But for a moment a "malfunction" united folks from around the world with a common problem. And then as quickly as it began, it was all over.

It's a strange new world we live in.

Weekly Energy Data Starting To Be Reported -- March 9, 2016; An Update On The Vaca Muerta

Tweeting earlier: US crude oil inventories gain 3.9 million bbl to 521.9 million bbl.

The Dead Cow

Many, many years ago when I first starting to blog about the Bakken I misunderstood the name and location of a new shale oil play. If nothing else, I won't ever forget Argentina's Vaca Muerta shale play. And, now, surprise, surprise, the "dead cow" is back in the news. The Wall Street Journal is reporting:
From North Dakota to Texas and beyond, oil and gas companies have sharply reined in drilling and thousands of workers are being laid off.
But here, where the oil and gas industry operates inside a government-made, subsidized bubble, taxpayers and drivers spend billions of dollars to try to keep that from happening. A barrel of oil fetches more than twice what it does in the U.S., and prices for natural gas can be nearly four times higher.
That is helping shield producers and their workers developing the vast shale oil-and-gas deposits buried under a desolate swath of western Patagonia called Vaca Muerta, or Dead Cow, from the vagaries of world markets.
Since taking office in December, Argentina’s president, Mauricio Macri, has been reversing the populist policies of his predecessor, Cristina Kirchner, undoing everything from currency controls to export taxes. But he is expanding the expensive programs she used to decouple energy prices from global markets.
“This is so important, strategically,” said Miguel Galuccio, chief executive of Argentina’s state-run oil company, YPF SA.
With the price of light crude set at $67 a barrel and natural gas at $7.50 per million British Thermal Units—compared with less than $2 in the U.S.—the policy has made Argentina one of the few places on Earth where energy companies are looking to expand their operations.
Some energy analysts say the country’s high production costs make the system sustainable. But proponents here note that since December, Dow Chemical Co. and American Energy Partners LP—which had been run by Aubrey McClendon, the shale-drilling pioneer who died earlier this month—have said they plan to invest in a partnership with YPF to develop shale oil and gas. YPF also has said it plans soon to form a joint venture with Russia’s PAO Gazprom.
Much, much more at the link.

I track the Vaca Muerta here.

Seven (7) New Permits -- March 9, 2016; XTO Reports Four Nice Producing Wells Completed

Active rigs:

Active Rigs33114191187206

One well coming off the confidential list Thursday:
  • 30946, 1,902, Whiting, P Bibler 155-99-15W-31-7-14H3, Stockyard Creek, a Three Forks well, a target window of 9 feet, total Three Forks member thickness of 25 feet, 35 stages, 4 million lbs, t9/15; cum 71K 1/16;
Four (4) producing wells completed:
  • 29761, 1,012, XTO, Homer 14X-32E, Grinnell, t1/16; cum 3K 3 days;
  • 30713, 1,823, XTO, State 11X-16MB5, Charlson, t2/16; cum --
  • 30715, 2,384, XTO, State 11X-16MB4, Charlson, t1/16; cum 21K 13 days;
  • 31045, 955, XTO, Homer Federal 14X-32F, Grinnell, t1/16; cum 2K 3 days;
Seven (7) new permits --
  • Operators: Hess (4), CLR (2), Whiting
  • Fields: Westberg (McKenzie), Elm Tree (Mountrail), Sanish (Mountrail)
  • Comments:
With these new CLR permits today, we have some new cattle names. One of the wells is a Charolais well and one is a Brangus well. So where do we stand with cattle breeds in the Elm Tree:

30946, see above, Whiting, P Bibler 155-99-15W-31-7-14H3, Stockyard Creek:

DateOil RunsMCF Sold

Another Top Energy Story Of The Week? Chevron Cuts CAPEX Another 36% -- March 9, 2016

I posted/linked this article earlier but really didn't stop to consider the implications. This is a big story that hardly got a footnote in the business pages today, it seems. From any number of sources, this one from oilprice:
The California-based multinational just announced that it would cut its capex in 2017 and 2018 by another 36 percent, bringing annual spending down to between $17 and $22 billion.
That is down from an October 2015 estimate, when Chevron said that it expected to spend $20 to $24 billion each year in 2017 and 2018. It is also sharply lower than the $26.6 billion Chevron is spending this year, which itself is a 25 percent reduction from last year’s levels.
The severe cuts come as Chevron has had to take on debt in order to afford shareholder dividends, as the company has not generated enough cash flow to cover the payouts with oil prices as low as they are. Dividends cost the company $8 billion in 2015 alone. Chevron would need oil trading at $50 in order to cover the dividend with cash flow.
So, to recap, CVX CAPEX:
  • 2015: $35.5 billion
  • 2016: $26.6 billion
  • 2017: first estimate -- $24 billion (max)
  • 2018: first estimate -- $24 billion (max)
  • 2017: new estimate -- $22 billion (max)
  • 2018: new estimate -- $22 billion (max) 
The cut in CAPEX in percent has a broad range because the estimates Chevron provides are quite broad.

CAPEX in 2017 and 2018 ranges as low as $17 billion to as high as $22 billion.

In a worse case situation, a cut from $35.5 billion (2015) to $17 billion (next year) would represent a 52% cut in two years. My arithmetic could be wrong. If the numbers are right, that's huge. A 50% cut in CAPEX in two years by a major.

I think 2017 will be a most interesting year for US consumers when it comes to the price of oil.

Nothing In This Article That Regular Readers Don't Already Know; How Drillers Protect Assets -- For The Archives -- March 9, 2016

Reuters is reporting (archived)
Something is awry in the beleaguered U.S. shale patch: older wells, which normally gush oil or natural gas in their first few months before rapidly depleting, are not petering out as quickly as they should.
When oil prices began falling a year and a half ago in the deepest rout in a generation, many analysts expected U.S. crude production, especially from fracking in the new shale plays that contributed to a global supply glut, to follow quickly.
Producers, such as Continental Resources Inc and Whiting Petroleum Corp, have slashed spending on almost everything, in some cases even leaving drilled wells unfinished to conserve cash and wait for a sustained turnaround in prices.
With oilfield activity suddenly contracting, production from a dwindling number of freshly fracked wells would be unable to compensate for the rapid depletion of older wells. Yet that long-anticipated turning point has only just begun to emerge - partly because producers had a couple more tricks in store.
There is nothing in this article that regular readers don't already know. The writers use some of the terms loosely, similarly to how I use them.

Le Burger

I've always wanted to post this clip but never had the reason/opportunity. That changed today. From The [London] Telegraph: 'Le burger' is now the top selling dish in French restaurants:
New figures suggest the decidedly un-French burger is served in 75 per cent of French eateries from the most humble fast food outlets to top-notch restaurant.
For the guardians of French gastronomy, the prospect of being served something as unsophisticated as a slab of mincemeat with a bap and slice of cheese would long have been considered sacrilegious.  
Today, however, the tables have turned. In a culinary revolution, three quarters of French restaurants now sell hamburgers and 80 per cent of these say it has become their top-selling dish, according to a new study.
"Le burger" Рas the French dub the quintessentially American invention to the despair of linguistic purists of the Acad̩mie Fran̤aise Рhas become a feature of even the most illustrious eateries.
Indeed, such is its success that sales are set to overtake those of the classic "jambon beurre" (ham and butter baguette), the nation's staple lunchtime sandwich.
Last year, the French chomped their way through 1.19 billion burgers, an 11 per cent rise on the previous year, while "le jambon beurre" fell to 1.23 billion. 
"Burger mania (in France) is unstoppable," declared Bernard Boutboul, head of Gira Conseil, the food consultancy behind the study.
"If it goes on like this, then one can assume that within two years sales of the jambon-beurre and burger will be neck and neck."
In truth, the French have long been lovers of burgers in fast-food outlets. France is McDonald's biggest market in the world outside of the US and was practically the only nation in the world where the chain posted a rise in sales last year.
However, Mr Boutboul said the reason for the burger's phenomenal success in France has been its spread from fast-food to more traditional sit-down restaurants, even top-tier ones. 
Did you note that the burger was not simply among the top dishes served in French restaurants, the burger is the #1 dish served in French restaurants. Along with Freedom Fries, no doubt. LOL.

Le Big Mac

Pulp Fiction

Worldwide, 550 Million "Missing Bbls" Of Crude Oil Unaccounted For -- March 9, 2016

This is also quite a story.

Missing barrels have been a feature of IEA statistics since the 1970s.
Over time, errors have occurred in both directions, and have ranged up to 1 million or even 2 million barrels per day.
Most of the time, the oil market ignores the miscellaneous to balance item, but it tends to become controversial when it becomes very large, either positive or negative.  
Reuters is reporting:
That leaves 550 million "missing barrels" unaccounted for, apparently produced but not consumed and not visible in the inventory statistics. 
IEA data currently shows a miscellaneous to balance item of 0.5 million barrels per day in 2014 and 1.0 million barrels per day in 2015.
As they say, all the gold in California is in a bank in the middle of Beverly Hills in somebody else's name.

Meanwhile, all the banked oil in North Dakota is sitting in a DUC in the middle of the Bakken in some hedge fund's name. The Bakken is a brand new game.

All The Gold In California, The Gatlin Brothers

The Amazon Page

This is fascinating. Reuters is reporting that Amazon is about to get into the air freight business: Inc will lease 20 Boeing 767 freighter aircraft, lessor Air Transport Services Group Inc said on Wednesday, as the online retailer moves closer to setting up its own air delivery network.
The deal comes at a time when Amazon, which offers fast and increasingly free deliveries for millions of online orders, has been trying to make shipments even faster as well as assume more control over its business and costs.
I pretty much do all my non-grocery shopping at Amazon. What little I don't do at Amazon, I do at Walmart, and even less at Barnes & Noble. 

I have found that Target tends not to have the things I need. For example, yesterday I needed lubricating oil and a degreaser for my bike. I was surprised when our local Target did not even carry WD-40. Walmart? So many different options, it was amazing. 

I needed photographic paper for my inkjet printer. I assume Target had some but perhaps not; I don't know, I didn't look. The Walmart price was incredible. At the same time I picked up a 94-cent frame. 

When we move into our new apartment next month, I'm going to surprise my wife (no, she never reads the blog) by throwing out all our old pots and pans (with some exceptions) and buy an entire new 18-piece T-fal set from Walmart. The prices truly are incredible.

We are very, very lucky here. The Walmart store in our area is "up-scale" compared to the ones I remember just a few years ago. Yes, the story is very, very crowded; it does not have the wide-open aisles that Target has. I've also been surprised that I generally stand in line to check-out at Target even on very slow days, while at Walmart there are more than enough cashiers. (I am careful not to go shopping during high-peak hours.)

At Barnes & Noble, hardcover books in the range of $29 are exactly $10 more than at Amazon which has them for $19; and I always order enough to get free shipping. 

On another note, as long as I'm rambling, the credit card I "always" use has a 5% cash rebate on many purchases throughout the year, and has accrued enough cash in the past year that my last two Amazon purchases were entirely free. Each of those purchases was under $100 but more than $75 which qualified for free delivery. 

The Go Pro Hero 3+ that I've been having some fun with -- the camera I bought a couple of years ago at Target -- all the accessories are at Walmart. There's a complete section devoted to Go Pro at Walmart. I didn't even see the Go Pro camera at Target any more. Having said that, if I was in the market for a new Canon camera, Target has an incredible sale on the Canon PowerShot SX530 for $249. It regularly sells for $399 at Target, or at least that's what the card said. I see this is the "regular price ($249)" at Amazon.

I would put on the Go Pro and go for a ride but it's raining today -- getting inches of rain yesterday and through the end of the week.

By leasing 20 Boeing 767 freighter aircraft, Amazon will have a tough time showing a profit next quarter, but it's all seed corn, as they say in Iowa, and the banks are giving away their money.

Top International Energy Story For The Week? Re-Posting -- March 9, 2016

Tweeting now:  China crude oil imports hit record 8 MMbopd in February. Quick: how much crude oil is the US importing each month according to latest figures? If you said 7 MMbopd you were right on target, and paying attention. Or a lucky guess. Reuters has the story.
China's February crude oil imports jumped 20 percent on year to their highest ever on a daily basis, as prices at their lowest in more than a decade drove buying from a group of new importers and state and commercial stockpiling. 
On a daily basis, February's imports also jumped roughly 27 percent from 6.29 million bpd in January.
Can you imagine if we woke up one day and learned Bakken crude oil production increased by almost 30% month-over-month. That's how I see a 27% month-over-month increase in crude oil by China. This is a huge story.

It will be interesting to see how soon (or if) the mainstream media reports this story in the business pages. It will be interesting to see how/if The Wall Street Journal covers this story.

More from the linked story:
China's imports reached a previous record of 7.81 million bpd in December, 2015, closing out 2015 with an average 6.71 million bpd.
The February volumes were more than a million bpd higher than the final estimate by Thomson Reuters Oil Research and Forecasts, which had expected more deliveries to spill over into March.
March imports are forecast by the Thomson Reuters analysts at under 7 million bpd.
A single swallow does not a spring make. 

Cuba: The "Big Money" Story Of 2016 - 2017

Cuba is going to be the "big money" story of 2016 - 2017. It will make the Bakken look like a high school science fair.

Third story: President Obama say Google has plan to greatly expand internet access in Cuba, March 21, 2016. 

Second story: Starwood signs first US-Cuba hotel deal since 1959 revolution. Reported by Reuters:
Such deals would normally be prohibited under the U.S. economic embargo of Cuba, but Starwood received special permission from the U.S. Treasury Department last week.
Jorge Giannattasio, chief of Latin American operations, said the deals included a "multimillion-dollar investment to bring the hotels up to our standards," making Starwood the first U.S. company to commit major money to Cuba since Fidel Castro and his bearded rebels overthrew a pro-American government on Jan. 1, 1959.
First story: President Obama announces visit to Cuba.

How Will We Fuel All Those EVs? -- Sunday, March 6, 2016


August 6, 2017: where will be charge all those EVs? -- WSJ

July 16, 2017: America's next energy crisis -- the electric grid, Forbes, July 10, 2017.

July 16, 2017: where we stand today with charging EVs -- 20 minutes of fast charging ("watching paint dry" will get you an additional 60 miles). And, with your conventional gasoline automobile you can stop at any branded gasoline station (Shell, Chevron, XOM, etc) but if you have a Tesla you have to use a Tesla charging station. No saying how the other EVs will "operate" their recharging system.

Source for the graphic:

Original Post

The "next big story": how will the growing number of EVs affect US economy? I doubt we will see many stories on this in the near future, but it will be interesting to see how this story develops. It will be filed on "the big stories" page, but not exactly sure where.

Some issues:
  • the source for electricity (coal, natural gas, nuclear)
  • amount of electricity required; regional differences
  • impact on the grid; transmission lines
  • nationwide corridors
  • charging units: compatibility; fees; locations
  • neighborhood transformers
From a contributor over at Seeking Alpha: how will we fuel all those EVs? 
Using a very conservative 3 miles/kWh, just the electricity used at refineries - 47,224 million kWh would be enough to propel EVs 142 billion miles.
According to EIA 1,000 cu ft of natural gas produces 99 kWh. So if the natural gas used at refineries was used to produce power, we would have 88.5 billion kWh, which represent another 265 billion miles.
In a year, US drivers drive 3.1 trillion miles. So just the purchased electricity and natural gas are enough to cover 13% of driving needs. If all the fuels used at refineries were used to propel EVs, it would be a lot more.
In fact, if petroleum is used to produce power, we get 13.6 kWh per gallon. The average US fleet economy is 25mpg.
But a pessimistic EV average is 3 miles/kWh.
So a gallon of petroleum can move the average gas vehicle 25 miles but it can move the largest EV 40 miles. If you compare the best gas vehicle - the Prius, a gallon can move it 50 miles which is roughly about as far as a gallon worth of electricity can propel the BMW i3.
So as we transition to EVs, the drop in refining oil can power at least 13% of the driving and the worst case is the oil being used to produce power to drive the EV with much better emissions controls at one central location as opposed to distributed uncontrolled emissions. But with the growth of renewables (See my 4 part series on renewable energy growth), EVs are only becoming cleaner by the day.
This seemed to be a very poorly written article. Folks pointed out that the contributor incorrectly stated the data he used was from 2015, but in fact was from 2014.

I am only posting/linking the article to get a start page on EVs impact on the US economy.

Is It All Over In The Bakken? RBN Energy Suggests "Pert Near" -- March 9, 2016; Drones! China Imports Record Amount Of Crude Oil

Tweeting now:  China crude oil imports hit record 8 MMbopd in February. Quick: how much crude oil is the US importing each month according to latest figures? If you said 7 MMbopd you were right on target, and paying attention. Or a lucky guess. Reuters has the story.
China's February crude oil imports jumped 20 percent on year to their highest ever on a daily basis, as prices at their lowest in more than a decade drove buying from a group of new importers and state and commercial stockpiling. 
On a daily basis, February's imports also jumped roughly 27 percent from 6.29 million bpd in January.
This is incredibly cool! From today's Boston Globe! Link here:
When Stuart Rudolph wanted to build software to help companies manage fleets of drones, he found plenty of engineering talent in the Boston area. But when it came time to set up headquarters for his startup, SmartC2 Inc., Rudolph chose . . . North Dakota.
“They gave us some money — several hundred thousand,” Rudolph said. So even though SmartC2’s engineers are staying put, the company headquarters office is located 1,700 miles away, in Grand Forks
SmartC2 is just one beneficiary of a relentless campaign by the state of North Dakota to dominate the commercial market for unmanned aerial vehicles. It is a major aviation center in its own right — the University of North Dakota hosts one of America’s leading aviation schools and the Grand Forks Air Force Base is home to some of the military’s top reconnaissance drone programs.
Meanwhile, Massachusetts can lay claim to being a leader in robotics, where the technology overlaps that of drones. The Massachusetts Institute of Technology, Worcester Polytechnic Institute, and the University of Massachusetts Lowell have top-tier academic programs and research operations, and the robotics industry claims more than 100 companies in the state.
Yet so far, the state government hasn’t sought to recruit drone companies with the same intensity or resources as North Dakota. If Massachusetts was offering financial incentives, Rudolph said, his company and others like it would set up shop in the state.
The payoff could be big. The Association for Unmanned Vehicle Systems International, predicted in 2013 that the drone industry could generate $82 billion in economic benefits for the nation by 2025 and 100,000 jobs.
Kyle Wanner, director of the North Dakota Aeronautics Commission, is determined his state will get its share. “We want people to know that North Dakota is very friendly toward this industry,” Wanner said.
he state has spent $13 million on drone-related infrastructure projects, including a recently opened business and technology park adjacent to Grand Forks Air Force Base, a major launching site for military reconnaissance drones. North Dakota has also paid $34 million in incentives and subsidies to attract companies.
Much more at the link.

The best news: Hillary has not yet said for a ban on drones.

I track "drones" at "the next big thing" at "the big stories."

Active rigs:

Active Rigs33114191187206

RBN Energy: Is is all over for the Bakken?
For the past, year many shale oil producers have defied the expectations of many and kept output at or near to record levels in the face of falling oil prices and much tougher economics. Improvements in productivity, cost cutting and a concentration on “sweet spot” wells that generate high initial production (IP) rates have all helped cash strapped producers survive. But with oil prices so far in 2016 stuck in the $35/Bbl and lower range and with the worldwide crude storage glut still weighing on the market – producers are finally pulling back. Today we look at how increased pressure on North Dakota producers is putting the brakes on Bakken crude production.
Man-camps in the Bakken. The Dickinson Press is reporting:
A proposal to keep some crew camps open in Williston for temporary oilfield workers failed 3-2 Tuesday night, but at least one camp operator said the issue isn’t over. Mayor Howard Klug was part of the majority.
Klug said after the meeting he meant that he was open to finding a compromise on the September deadline of requiring crew camps to be removed.
“And that may still happen,” Klug said.
The one camp operator who said the issue isn't over: Travis Kelley, regional vice president for Target Logistics, the largest worker housing provider in North Dakota.
For investors only: did Chevron just force XOM into dividend hikes no matter what? 24/7 Wall Street asks. OilPrice provides another look at the Chevron dividend.
But the strategies differ depending on the company. Chevron, for example, continues to cut spending in order to keep its dividend. The California-based multinational just announced that it would cut its capex in 2017 and 2018 by another 36 percent, bringing annual spending down to between $17 and $22 billion. That is down from an October 2015 estimate, when Chevron said that it expected to spend $20 to $24 billion each year in 2017 and 2018. It is also sharply lower than the $26.6 billion Chevron is spending this year, which itself is a 25 percent reduction from last year’s levels.
The severe cuts come as Chevron has had to take on debt in order to afford shareholder dividends, as the company has not generated enough cash flow to cover the payouts with oil prices as low as they are. Dividends cost the company $8 billion in 2015 alone. Chevron would need oil trading at $50 in order to cover the dividend with cash flow.
George Martin, Sir George, The Fifth Beatle joins Lucy in the sky with diamonds. No links; story everywhere.

Lockheed looks to cut 1,000 jobs -- a voluntary cut.
Lockheed Martin Corp. said it is launching a voluntary layoff program in its aeronautics business that aims to reduce 1,000 positions in the U.S., or about 0.8% of its total workforce.
The voluntary program announced Tuesday is available to midlevel employees in seven U.S. locations, including Edwards Air Force Base in California; Palmdale, CA; Fort Worth, TX; and Marietta, GA.
The Bethesda, MD, company said the cuts are needed “to position Lockheed Martin Aeronautics to be competitive in the future marketplace, secure future business opportunities, and keep an infrastructure appropriately aligned with customer demands.”
Did Hillary just jump the shark? The 68-year-old grandmother, expert in everything, made the announcement in Michigan that she will "ban" fracking through regulations. She tried to connect the lead-contaminated water problem in Flint, Michigan, with fracking. How dumb can you get? Of course, there's no way in the world that her comments on fracking cost her the election. But everyone in Detroit knows that the surge in Ford pickups and SUVs is due directly to the low price of oil, which, in turn, is due to the revolution in the oil and gas industry. Kill shale, and you kill the US oil and gas industry. Kill shale, and you start talking about $200 oil. Start talking about $200 oil and you get Detroit's attention. I can't wait until she campaigns in Pennsylvania and tells the folks there she plans to ban fracking. What a doofus.