Six XTO Wells Come Off Confidential List Monday; Back To A Post-Boom Low: 25 Active Rigs -- May 21, 2016

Running for the past few days:

	5/21/2016	05/21/2015	05/21/2014	05/21/2013	05/21/2012
Active Rigs	25	82	188	188	209

I track active rigs here.

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Wells Coming Off Confidential List Over The Weekend, Monday

Monday, May 23, 2016

• 31224, SI/NC, XTO, Harley Federal 24-15B, Sand Creek, no production data,
• 31785, SI/NC, XTO, Lund 21X-17E, Siverston, no production data,

Sunday, May 22, 2016

• 31199, SI/NC, XTO, Kaye Federal 13X-3H, Lost Bridge, no production data,
• 31786, SI/NC, XTO, Lund 21X-17A, Siverston, no production data,

Saturday, May 21, 2016 

• 31200, SI/NC, XTO, Kaye Federal 13X-3D, Lost Bridge, no production data,
• 31225, SI/NC, XTO, Harley Federal 24x-15E, Sand Creek, no production data,

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Getting News From The Oil Patch More Quickly

Sophia loves anything with buttons to push: car key fobs (especially the car alarm/panic button); cell phones (her favorite); and, remote controls for televisions and Bose radios, for which she has reset all our alarms.

I love getting news from the oil patch in real time.

Putting the two together, we got Sophia a pair of walkie talkies. She can now touch base with roughnecks here in the DFW area to find out what's going on locally, perhaps getting an occasional inside tip on the Bakken.

These are some really good walkie talkies. When turned on, they default to National Weather Service. They have 22 channels (2,662 channel combinations) to include secure communications. The range is up to 37 miles and in urban areas, three miles, maybe more, depending on buildings. The batteries are rechargeable; the walkie talkies simply sit in the recharger, one does not need to take the batteries out to recharge. Three AA batteries are required for each w/t and came with the purchase. The brand: Cobra.

She uses tractor/trailor (seen behind here, in the photo above) for her budding "hotshot" oil services company.

Yes, I know, she still needs steel toe work boots.

Packers Plus On High-Intensity Wells In The Bakken -- May 21, 2016

Updates

Later, 9:12; p.m. Central Time: see first comment -- reposted here so it is searchable:

Although the referenced article describing Packers Plus activities seems a little 'infomercially', the fact that Schlumberger, no less, has joined in a collaborative arrangement with this much smaller company is a ringing endorsement of their technology.

Although there still seems a lot of back and forth on the merits of plug and perf versus sliding sleeve, the time savings of the latter is beyond question. 

Additionally, open hole is significantly less expensive (and faster) as well as exposing much more of the fofmation's natural fractures to the wellbore. 

"Thief" fissures, i.e., bigger fissures, would tend to take all the frac fluid in the past. With the use of diverters in the proppant mix, this problem may be largely overcome. 

If Packers Plus can consistently deliver high stage count, open hole completions that offer high EURs, they may alter the future direction - and economics - of unconventional development. 

Apparently, Schlumberger thinks so.

(Re multi laterals ... Big offshore operators have effectively been using this stuff for years. If BP's experience and expertise can be successfully transferred to land based operations, a whole new dimension of development may open up. Early times in this regard).  

Original Post

 

Before getting to the linked article below (sent to me by a reader, thank you), a reminder of one of my more popular "top ten" lists -- frackers in the Bakken. That list was compiled several years ago; updated occasionally, but is no longer current.

From The Bakken Magazine -- high-frack intensity, multilateral drilling could help the Bakken.

Data points:

• Calgary-based Packers Plus Energy Services, Inc
• last month announced it completed multiple wells in ND's Bakken formation
• recently closed their Estevan (Saskatewan) office, but bullish on the ND Bakken

The Combo:

• high-frack intensity
• multilateral wells
• zonal isolation 

The Process:

• first step: 50-stage wells
• second step: 60- to 70- stage wells, uninterrupted with no intervention
• third step: 100-stage wells with two- to three-mile laterals

Packers Plus Energy:

• do not think future is plug and perf
• company feels open hole has some distinct advantages
• other technologies may be tried in the Bakken
• five years of data suggests that just by getting effective isolation one can change EURs by roughly 50%
• Packers Plus technology should work in the Bakken's second tier areas at $45 to $50 oil
• third tier: economic at $60 or $65 oil, but the right technology is critical

Multilateral drilling

• from a BP study of multilateral wells in Colorado and New Mexico
• one vertical section followed by multiple laterals from the single vertical well bore
• Packers Plus says they have completed "a thousand wells" using multilateral drilling
• their activity in the Bakken has been slower because operators have been reluctant to switch to different ways of drilling/completion

For more on "zonal isolation":

• Halliburton, 2009
• Halliburton website
• Schlumbeger, 2008
• Deepwater, 2004 

My 2 cents worth: it seems a number of operators tried multilateral drilling in the Bakken early on. it seemed to have not worked out all that well. The cost of the vertical well has come way down but yes, if one could economically get four horizontals out of one vertical, the cost savings would be significant. On another note, EOG has said that even when discussing re-fracking, it's just "cheaper" to drill a new well (said some time ago; I don't know the current philosophy on re-fracks).

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

Trout

A bit of flour, pepper

Stovetop: until brown, a couple of minutes

Oven: 400 degrees, 8 minutes planned
Thicker trout than expected: 10 minutes in oven

Voilà 

South Ridge Apartments Celebrate Grand Opening -- May 21, 2016

Records: record paddlefish snagged, data points:

• Grant Werkmeister, Williston
• 131-pound paddlefish; 71 inches
• May 7, 2016
• 20 miles southwest of Williston near the confluence
• heaviest paddlefish caught in ND; previous record: 130 pounds set in 2010
• snagging season is over; ran from May 1 - 13, 2016, this year
• 2015 paddlefish story here; and here; 
• some of the world's best caviar is North Dakota caviar

Grand opening: data points for South Ridge Apartments:

• 3709 7th Street West, Williston
• behind Menards west of Williston

Expansion: Meg-A-Latte opens third location in Williston:

• in the Harvest Plaza
• at the intersection of 32nd Avenue West and 27th Street West
• third site owned by Megan and Eddie Wold
• near the new high school

Transitions: after seven years of perhaps the most turbulent one could expect, Williston School Superintendent says "goodbye" -- Dr Viola LaFontaine. According to The Williston Herald:

LaFontaine streamlined the curriculum, which has drastically improved students’ academic success in reading and mathematics, and helped develop creative use of limited facility space to help offset the student growth. 

The unique circumstance of an oil boom gave rise to a student population classified as homeless due to living out of RV campers, a common remedy to the housing market during that time.  English Language Learner (ELL) students added a new a new dynamic as introduction to English partnered with academic studies, as well.

Foreseeing new schools would be needed as the hustling boomtown began to quiet into a family-oriented city and student enrollment continued to climb, she helped push for a bond referendum that would build a new $68 million high school.

After the bond was passed, plans were quickly underway to have the school built and the former high school modified into a 5th and 6th grade elementary, granting the other schools room for the K through 4 children and alleviating educators of mounting class sizes.

She will be the new school superintendent at Mott, ND. Don't tell her that they just discovered gold in an old mine just outside of town. LOL.

Transitions: also, Williston State College president for the past seven years is stepping down.

Population growth> Minot grew by 2.9% for the fiscal year ended July 1, 2015, and is now near 50,000 (49,450). Minot's population has grown nearly 21 percent since the official 2010 census.

Flashback: from the  April 26, 2013 Williston Wire (it's hard to believe this was only three years ago; some WHS graduates this year saw more in three years than many former alumni had seen in their entire 12 years of school in Williston):

• Job seekers continue to flock to Williston.
• ND oil production still on the rise.
• USDA to make it easier to qualify for home in the oil patch.
• Williston implement dealer to close after 23 years; can't find workers to staff his business.
• Editorial: the oil patch in the west also greatly (positively) impacts the Red River Valley on the east.
• New book: Northern Utopia: Rebirth of American Dream, Mat Chaudry -- a must-have guide book for folks moving to North Dakota.  
• Tesoro and Savage announce joint venture to construct/operate a CBR terminal at Port of Vancouver.
• Williston Basin exports by rail surpass 70%.
• Evolution continues: densities could reach 24 wells/pad; 6,000 wells over next three years.
• Continental Resources' Three Forks Third Bench is a significant development in the Bakken [Comment: until I see more, I equate this with the enthusiasm  we saw for the Tyler.]
• ND state auction: May 7. 14,808 acres; 195 separate tracts; 13 counties; average tract: 76 acres.
• Paddlefish season to open May 1 (2013)

US Senate Approves Funds For New Williston Airport Relocation Project -- May 21, 2016

Data points:

• Senate Appropriates Committee passed the appropriation, May 20, 2016
• $56.5 million
• track activity at the MDW post, the Williston Basin International Airport web page; or go direct at: http://xwaproject.com/

Random Update Of Some Early EOG Austin Wells In The Bakken - May 21, 2016

Random cumulative production updates of some very, very early EOG Austin wells. The test dates are provided but the IPs are not.

Note how good these wells are; all of them are one single section wells (short laterals) Some folks suggest that the cumulative production would be double had these wells been long laterals. In addition most of theses wells have been taken off-line during the past year due to low prices / the Saudi Surge. From EOG's Austin wells in the Parshall:

16713, EOG, Austin 1-02H; t12/07; 591K 7/18;
16768, EOG, Austin 2-03H; t12/07; 655K 7/18;
17177, EOG, Austin 3-04H; t6/09; 465K 7/18;
16795, EOG, Austin 4-09H, t12/07; 704K 7/18;
16990, EOG, Austin 5-14H, t5/08; 689K 7/18;
16954, EOG, Austin 6-15H; t4/08; 833K 7/18;
16972, EOG, Austin 7-23H, t7/08; 688K 7/18;
16885, EOG, Austin 8-26H, t2/08; 790K 7/18;
17075, EOG, Austin 9-11H, t6/08; 718K 7/18;
17120, EOG, Austin 10-34H; t8/08; 1.002679 million bbls 7/18;
17475, EOG, Asutin 11-01H; t7/09; 493K 7/18;
17262, EOG, Austin 12-05H; t8/08; 635K 7/18;
17346, EOG, Austin 13-08H; t10/08; 660K 7/18;
17539, EOG, Austin 14-18H; t11/08; 620K 7/18;
17386, EOG, Austin 15-17H; t11/08; 725K 7/18;
17416, EOG, Austin 16-19H; t12/08; 859K 7/18;
17470, EOG, Austin 17-20H, t6/09; 723K 7/18;
17222, EOG, Austin 18-21H, t9/08; 954K 7/18;
17500, EOG, Austin 19-30H, t11/08; 897K 7/18;
17614, EOG, Austin 20-29H, t9/09; 785K 7/18;
17227, EOG, Austin 21-28H, t8/08; 1.067662 million bbls 7/18;
17287, EOG, Austin 22-31H, t10/08; 903K 7/18;
17122, EOG, Austin 23-32H, t8/09; 659K 7/18;
17111, EOG, Austin 24-33H, t6/08; 861K 7/18;
17078, EOG, Austin 25-35H, t10/08; 495K 7/18;
17040, EOG, Austin 26-36H, t11/08; 537K 7/18;
17215, EOG, Austin 27-10H, t12/08; 660K 7/18;
18010, EOG, Austin 30-13H, t5/10; 362K 7/18; offline as of 5/18;

EOG With Three New Permits In The Parshall -- Snapshot -- May 21, 2016

EOG has new permits for a 3-well pad in the Parshall per the May 20, 2016, daily activity report, as seen below:

Production data regarding the single well in that section:

• 17075, 2,310, EOG, Austin 9-11H, Parshall, a single section lateral, 640-acre spacing, t6/08; cum 680K 3/16; only 9 days in 3/16; 

Austin wells are tracked here:

• EOG's Austin wells in the Parshall (this page  has not been updated in a long time)

Significant events for #17075:

• ESP placed June, 2014
• connected to the LACT meter, January, 2009
• flowing to pump in December, 2008
• open hole frack, 2 million lbs sand
• spud: 1:00 a.m., 04/12/08
• cease drilling at 14,506 feet: 05/04/08; looks like about 16 days of actual drilling

Some things to consider:

• this was a short lateral; some folks suggest that IPs and EURs should double with a 2-section horizontal compared to a short lateral; I do not know how accurate that assumption is
• note: this short lateral has produced 680,000 bbls to date and has periods where it has produced much less than capable (see selected production intervals below).
• this was an open hole frack using 2008 technology; only 2 million lbs sand
• EOG is now using upwards of 10 million lbs of sand (and sometimes much more) in long laterals

Selected production intervals (oldest to most recent):

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare

First full year:

BAKKEN	5-2009	31	25318	25190	619	9407	9257	0
BAKKEN	4-2009	29	20834	20834	498	6707	6554	14
BAKKEN	3-2009	31	26456	26459	683	8781	8601	25
BAKKEN	2-2009	28	24767	24787	597	8117	7917	60
BAKKEN	1-2009	31	29407	31632	842	4526	3445	930
BAKKEN	12-2008	18	17796	17185	558	4874	4623	163
BAKKEN	11-2008	19	13914	14376	677	2104	1380	631
BAKKEN	10-2008	31	25217	24840	537	6352	2619	3578
BAKKEN	9-2008	30	28280	28576	676	10803	25	10629
BAKKEN	8-2008	31	36329	35763	898	13816	0	13661
BAKKEN	7-2008	31	44593	45558	1572	16810	0	16657
BAKKEN	6-2008	10	27151	24538	6804	10216	0	10166

Three years later, calendar year 2011:

BAKKEN	12-2011	29	5370	5412	159	5170	5025	0
BAKKEN	11-2011	30	5356	5353	154	4874	4724	0
BAKKEN	10-2011	31	5722	5725	150	4711	4414	143
BAKKEN	9-2011	30	5824	5824	154	4914	4765	0
BAKKEN	8-2011	31	6260	6391	162	5146	4991	0
BAKKEN	7-2011	31	6364	6236	162	4812	4526	132
BAKKEN	6-2011	30	6205	6205	155	4353	4132	71
BAKKEN	5-2011	31	6513	6517	197	4185	3958	72
BAKKEN	4-2011	30	6019	6015	127	3447	3196	108
BAKKEN	3-2011	31	6581	7009	142	3070	2923	0
BAKKEN	2-2011	19	4036	3558	137	1543	1453	0
BAKKEN	1-2011	15	2916	3034	146	1520	1451	0

Full 12 months after Saudi Arabia announces surge: 

BAKKEN	9-2015	30	1463	1464	57	1251	1007	0
BAKKEN	8-2015	31	1464	1469	50	1270	689	329
BAKKEN	7-2015	31	1562	1576	65	1272	983	37
BAKKEN	6-2015	30	1455	1438	153	1242	954	44
BAKKEN	5-2015	31	1820	1811	56	1505	1253	0
BAKKEN	4-2015	30	1577	1596	174	1337	1057	36
BAKKEN	3-2015	31	1973	1946	80	1483	1231	0
BAKKEN	2-2015	28	2067	2071	122	1413	1185	0
BAKKEN	1-2015	15	1084	1104	396	752	506	127
BAKKEN	12-2014	0	0	0	0	0	0	0
BAKKEN	11-2014	20	539	525	484	529	371	4
BAKKEN	10-2014	31	1022	1002	40	1005	746	9

 
Last three months:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2016	9	563	540	166	521	453	0
BAKKEN	2-2016	25	1472	1490	85	1278	1043	38
BAKKEN	1-2016	31	1733	1771	70	1568	1294	22

Back To The Water Issue In The Bakken -- It's Still Not An Issue -- Those Working Outdoors In The Mud Tend To Use More Water Than Office Workers -- DOE's Argonne National Laboratory -- May 21, 2016

Somehow this research doesn't quite measure up to what I would expect to come out of the Argonne National Laboratory. The laboratory has an incredibly rich nuclear energy history.

Maybe not so much any more if measured by this article in which the laboratory noted that blue collar workers, working in the outdoors, in the mud, tend to use more water on a daily basis than office workers.

The article also fails to note that these workers are not paying for their water on a usage basis; it comes as part of the "hotel" daily or weekly or monthly charge. The study also does not note that even if they did pay by usage, these guys would well afford it, being paid 1.5x, 2x, maybe as much as 5x what an office worker would get paid.

Before you get to deep into the article, this buried deep in the story:

Most of the water used in the North Dakota Bakken comes from Lake Sakakawea. Recent increases in the lake's water use due to population growth and oil development are not currently an issue in terms of continued availability.

Yes, that is correct: water remains a non-issue in the Bakken, and especially now that all the temporary workers have left and fracking has come to a standstill.

But this does take me back to my numerous posts early on with the data showing that water use in the Bakken was negligible compared to the amount released daily by the US Army Corps of Engineers.

It took me about 15 minutes to do that "research," and it cost the taxpayer nothing for my services.

Back to the linked article. The writer talks about three issues:

• water used in initial fracking (the writer doesn't mention that ND is advocating "produced water" for fracking
• freshwater for well maintenance (required for the life of the well)
• personal freshwater use by temporary oil workers

I can't make this stuff up.

This is an incredibly important piece of research however:

• it becomes a footnote in the history of the Bakken; and,
• it pretty much ensures that the Argonne folks won't come back to re-visit this story any time soon.

Hey, by the way, I posted a note on "freshwater for well maintenance" back in 2013. I'll be contacting Argonne to see if I was cited in their research. I don't expect to hear back.

Argonne Laboratory: a 2016 Geico Rock Award nominee?

I still get a kick out of learning that folks working in the mud tend to use more water than office workers.

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Water May Not Be An Issue In The Bakken, But ...

Lake Mead is setting new records -- but records we don't want to see.  The lake has declined to lowest levels in history.

As of Thursday afternoon, the lake’s level stood at an elevation of about 1,074.6 feet. The federal Bureau of Reclamation, which manages the reservoir and Hoover Dam, projects the level to decline a few feet more to an elevation of about 1,071 feet by the end of June, before the level begins to rise again with releases of water from Lake Powell.

Under the federal guidelines that govern reservoir operations, the Interior Department would declare a shortage if Lake Mead’s level is projected to be below 1,075 feet as of the start of the following year. In its most recent projections, the Bureau of Reclamation calculated the odds of a shortage at 10 percent in 2017, while a higher likelihood – 59 percent – at the start of 2018.

But those estimates will likely change when the bureau releases a new study in August. Rose Davis, a public affairs officer for the Bureau of Reclamation, said if that study indicates the lake’s level is going to be below the threshold as of Dec. 31, a shortage would be declared for 2017.

California has nothing to worry about:

That would lead to significant cutbacks for Arizona and Nevada. California, which holds the most privileged rights to water from the Colorado River, would not face reductions until the reservoir hits a lower trigger point.

Actually my hunch is that if there are significant cutbacks for Phoenix, Tucson, and Las Vegas but not for California, the cities and the states will sue. It would likely end up at the US Supreme Court but based on recent history, if the court remains at 4 - 4 split, it's unlikely to take the case.

The 4 - 4 court has ruled that contracts can be broken by midstream operators/MLPs in bankruptcy proceedings, or something to that effect -- I saw the headline about two weeks ago, but did not read the article. Nothing surprises me any more. Laws and contracts were meant to be broken, I guess.

CNBC Reporting On Tesla This Past Week -- May 21, 2016

This is the type of reporting I've come to expect from CNBC.

This past week when Tesla announced a plan to raise $2 billion in cash by issuing more shares, CNBC had a huge headline: Tesla shares skid.

Yup. all the way from $210 to $204 (or maybe from $214 to $204) which works out to about $10/$214 = 5%.

That's some skid.

By the end of the week, Tesla was back up to $218, finishing higher than earlier in the week.

For day traders, yes, quite a skid. For the rest of us, hardly a blip.

This is a trader's stock, not an investor's stock.

Just my opinion. This is not an investment site, yada, yada, yada. See disclaimer, welcome, and a gazillion previous posts.

Week 20: May 15, 2016 -- May 21, 2016

Operations
WSJ: shale survivors in the Bakken
Kaiser-Francis continues to renew permits obtained from MDU deal 
Random update of increased Statoil activity northeast of Alexander 
Random update of two high-proppant EOG wells in Clarks Creek
Oasis reports three nice Tyrone wells
Enerplus reports a nice Bakken well
The Halcon bankruptcy
Sandridge files for bankruptcy
Slawson takes a huge Big Bend well off-line 
Interim production update of an SHD Three Forks well with high-proppant frack 
Interim production update of a QEP failed frack
EIA's monthly drilling report -- May data -- posted

DUCs
Update on completed DUCs (this post needs to be completed)
Analyst's estimate of DUCs in the US

Natural gas
EIA update on natural gas-fired power plants under construction in the US

Pipelines
Looks like Iowa will keystone the Dakota Access Pipeline
TransCanada will acquire Columbia Pipeline 

EOR
EOG getting ready for EOR in the Bakken; looking at the tea leaves

Bakken economy
Williston Basin International Airport web page goes live
First International Bank breaks ground in Bismarck; Cornerstone breaks ground in Watford City

Presentations
Halcon 1Q16 presentation; and here 

Regional photo
Dakota Access Pipeline or something else 

Commentary
War on wind, solar 
Closer and closer to 10 million bopd
OXY may acquire Apache
The "trillion-dollar-mistake": it may be worse than we think 
US energy production - consumption through 2040
GS "talking up" oil now that the Saudi Aramco IPO is being finalized