Tuesday, August 23, 2016

Six New Permits -- August 23, 2016

Active rigs:

Active Rigs3176192182190

Wells coming off the confidential list Wednesday: None.

Six new permits:
  • Operators: Hess (4), Enerplus (2)
    Fields: Blue Buttes (McKenzie), Heart Butte (Dunn)
Wells coming off confidential status:
There were almost 30 wells that came off the confidential list. Other than the three reported earlier today, all the rest (excluding one SWD permit) were still listed as LOC. The state has given operators two years (instead of the usual one year) to spud/complete (I forget which) a well once a permit is granted.
Oasis renewed one permit, a Kapusta permit in Mountrail County.

Statoil canceled two permits, two Richard permits in McKenzie County. [Update: this was on the daily activity report, but was in fact wrong. These were two DUCs. Corrected report on the August 24, 2016, daily activity report.]

CLR: 2Q16 Presentation -- August 23, 2016

Technically, this is not the 2Q16 corporate presentation but it was a presentation for an investment conference based on 2Q16 data. At some point, this presentation will disappear from the CLR website.


Net acreage: 985,000 net acres

Average EUR:
  • 2015: 800,000 boe
  • 2016: 900,000 boe
Enhanced CWC: $6.2 million
  • Targeting $6.0 million by year-end 2016
  • Projecting 190 DUCs at year-end 2016
  • average EUR: 850,000 boe
  • $3.5 million incremental completion cost
  • over 100% ROR for incremental completion cost for DUCs a $45 WTI and $2.50 gas
Enhanced completions (30-stage wells in Williams and McKenzie counties)
  • 60% slickwater: 54 wells -- 100,000 boe at 180 days
  • 45% hybrid: 72 wells -- 90,000 boe at 180 days
  • Conventional completion in offsetting wells: 60,000 boe at 180 days
  • It appears that even without the Dakota Access Pipeline, 85% of CLR Bakken bbls are shipped by pipeline
  • $11.01 / bbl: production expense, cash G & A, tax, interest
  • $15.35 / bbl: cash margin
  • Total: $26.36 oil
Financial strength
  • No near-term debt maturities; earliest is $500 million in 11/2018
  • Average interest rate: 4.3%
  • Current liquidity at $2.75 billion; ability to upsize to $4.0 billion
  • $40 oil: pay down debt
  • $50 oil: DUC completions
  • $60 oil: add rigs
Breakeven for single wells in North American oil plays
  • 30 NA plays listed (independent agency source)
  • #1: SCOOP liquids ($35)
  • #2: Bakken - 800,000 boe EUR ($40)
  • #3:
  • #4:
  • #5:
  • #6: STACK ($40)
  • #7: SCOOP Springer ($40)
  • #12: Bakken - 600,000 boe EUR ($50)  
CLR production expense and cash G&A
  • Of 11 peers: CLR is #1 (lowest) in production cost, cash G&A
  • "Select" peers include: EOG, OAS, WLL, WPX
Oklahoma CLR net acreage:
  • STACK Meramec/Osage: 183,000 net acres
  • STACK Woodford: 168,000
  • SCOOP Woodford: 413,000
  • SCOOP Springer; 206,000 (EURs of 2 million boe)

CLR's Divestment Of 80,000 Net Acres In The Bakken -- Appears To Include Rainbow Oil Field -- August 23, 2016

It's pretty much impossible to tell exactly for sure, but it does appear that the Rainbow oil field is included in the $222 million sale of 80,000 non-core Bakken assets being sold by CLR. That question was asked by a reader a couple of days ago.

In the CLR presentation released today, slide 19 shows what areas were in the CLR sale. 

FAQ: How Much Oil Can One Reasonably Expect That A Bakken Well Will Produce Over The Lifetime Of That Well?

In shorthand, or in "oil jargon," one is asking what is the EUR of a typical Bakken well.

March 27, 2018: CLR presentation --

  • 2011: 430 mboe
  • 2014: 603 mboe
  • 2015: 800 mboe
  • 1H17: 980 mboe
  • 2018: 1,100 mboe; payout period down to ten months
August 23, 2016: from the Whiting presentation at the Enercom Conference --
  • Whiting's enhanced completions are tracking 900,000 boe EUR-type curves
  • non-enhanced completions are tracking 700,000 boe EUR-type curves
  • enhanced completions are defined as using over 5 million pounds of sand / well
  • the 900,000 boe EUR-type curves are for enhanced wells drilled since January 1, 2015, with 200 days of production
  • the data is from 48 enhanced wells across six counties: Billings, Dunn, McKenzie, Mountrail, Stark, and Williams
August 23, 2016: from CLR's corporate presentation released August 23, 2016 --
  • 2015 average EUR: 800,000 boe EUR (normalized to 9,800-foot lateral)
  • 2016 average EUR: 900,000 boe EUR(normalized to 9,800-foot lateral)
  • enhanced: 30 stages
  • 2016 DUCs: 850,000 boe EUR

Why Is This Not Surprising -- Vince Foster's Files Missing -- August 23, 2016

Reuters has this right: Saudi Arabia's "record production" is not about "flooding the market" in anticipation of "freeze" talks in September. This is all about seasonal, domestic consumption. Period. Dot.

Humans Of New York

Perhaps the best "find" of the month. Humans of New York

Vince Foster Goes Missing

From The [London] Daily Mail:

  • Missing: FBI files linking Hillary Clinton to the 'suicide' of White House counsel Vince Foster have vanished from the National Archives 
  • Documents describing Hillary Clinton's role in the death of White House counsel Vince Foster have vanished, Daily Mail Online has learned after an extensive investigation 
  • Foster is believed to have shot himself with a .38 caliber revolver at Fort Marcy Park along the Potomac River on July 20, 1993 
  • Two former FBI agents involved in the investigation tell Daily Mail Online they issued reports linking Hillary's tirade to Foster's suicide 
  •  Days before his death, then First Lady ridiculed him mercilessly in front of his peers, say former FBI agents and detailed it in their report 'You have failed us,' Hillary told Foster, former FBI Jim Clemente told Daily Mail Online 
  • Archived material related to the case, housed at National Archives in College Park, MD, were examined by the author to no avail 
  • After filing a Freedom of Information request, it was determined that the agents' reported have gone missing 
I'm sure Rush will talk about this today. I will miss it. I will be out biking.

California's EV Program Running Out Of Gas

Link here at cleantechnica.com and LA TimesI believe this story has been previously posted but it's currently trending in San Franscisco right now. 

Enercom Conference Presentations Are Now Posted -- August 23, 2016

The Enercom Conference was last week. I assume all the presentations have been posted. The presentations are listed at this link. It is very, very easy to go through and click on the presentation you want to see.

The link is also at the top of the sidebar at the right and will be there for a few more weeks.

Ones that caught my eye:
  • Crescent Point Energy
  • Whiting (two presentations linked; I have not yet checked to see if they are different)
  • SM Energy
  • QEP
I may have missed it, but I did not see Continental Resources on the agenda. However, CLR has just released a new corporate presentation at their website.

For me, it worked best to "download" the presentations, rather than tie up computer time refreshing the slides. I have a relatively fast processor but the spinning disc becomes tiresome. Downloading the Crescent Point Energy presentation for example, was really, really fast, and now very, very easy to review.

I imagine the presentations will only be up for another week or so, if that long.

The Sanchez presentation is nice for those interested in learning more about Eagle Ford and Tuscaloosa Marine Shale. 

New Tourist Attraction Planned For Northern Minnesota's Boundary Waters -- August 23, 2016

Regular readers will remember this story (I've re-posted it below the "jump").

Don sends me an update from today's StarTribune. Some data points:
  • Great North Transmission Line
  • $560 million to $710 million
  • three years to build
  • one of several that will cross the US-Canadian border
  • will help address the intermittent nature of wind power for the majority owner, Duluth-based Minnesota Power
  • with wind power on the increase, stable sources of electricity like hydro are needed to fill in production gaps
  • Manitoba Hydro is a partner with Great Northern  
  • earlier this year, Minnesota regulators approved a new route
  • 225-mile-long high-voltage line
  • will cross five northern counties through pristine 10,000 border lakes
Local note from International Falls:
The power line, announced publicly in February 2012, is a proposed 500 kV single-circuit transmission line, which will run approximately 220 miles depending on the final route selection. The line will be capable of transmitting at least 883 MW of clean, flexible hydropower and is a part of Minnesota Power’s Energy Forward initiative.
Minnesota Power would pay property taxes on the line, and payments would begin in 2018, with the full amount coming in 2021. The company is expecting to pay $40,000-$70,000 per mile annually on the line.
About $11 million / year "mailbox money" for this transmission line will be paid by the utility rate payers. 
 Original Post

This was the original post back in May, 2015 (link here).

SeeNews Renewables is reporting:
Minnesota Power has secured a key approval for its plan to build a 500-kV transmission line that will facilitate the delivery of renewable and carbon-free hydropower from the Canadian province of Manitoba to the US state of Minnesota.
The Minnesota Public Utilities Commission has cleared a request for a Certificate of Need for the Great Northern transmission line, according to Allete Inc.
The transmission project will require an investment of [about $750 million]. Minnesota Power will own a majority stake in the system, which will help it deliver at least 383 MW of energy to its clients by June 1, 2020 under power purchase agreements with Manitoba Hydro.
The planned transmission system will allow Minnesota Power to use Manitoba Hydro’s hydroelectric system to store electricity generated by the Bison wind power center in North Dakota. The company commissioned the 205-MW fourth phase of the particular wind project in January 2015, bringing the complex’s total capacity to nearly 500 MW.
As I wrote the reader who sent me the link:
This is really quite a story, thank you.
It is amazing how fast the Minnesota PUC can approve any project with the phrase "renewable energy" in it.
It's interesting that the transmission line is needed to provide back up power for the wind farm in North Dakota. If I read this correctly (and I know I am), Allete has a wind farm in North Dakota. We all know that a) wind doesn't blow at the right speeds all the time; b) the wind farm has a limited life span; and, c) one can't economically store electricity yet. So, the utility needed a back-up plan -- electricity from another source.
So, now, environmentalists can cut the ribbon on a new huge transmission line that will cut through the pristine land of 10,000 lakes.
Wind turbines are depreciated over 7 years; turbines have an expected lifespan of less than 12 years. It appears that the wind farm in North Dakota was used as a cover to get a 500-kV transmission line approved, something that would not have happened had it been for a coal plant out of South Dakota. I hate wind power, but when used as a cover for a huge transmission line, one can't but feel a bit of freudenshade for the Minnesotans.

Meanwhile, a pipeline that no one will see once it is buried, is sandbagged by "environmental groups."

Meanwhile, by law, the utility will be allowed to pass on costs of this new (unneeded) transmission line to its customers. All things being equal, electricity bills will increase in Minnesota once this transmission line is given the final go-ahead.

The likely route for this billion-dollar transmission line, simply required to back up a wind farm in North Dakota:

The Colonel's Secret Recipe Revealed; The Economics Of A Crude Oil Pipeline -- RBN Energy -- August 23, 2016

The Colonel's secret recipe; a link posted at The Washington Times which will take you to a photograph of the recipe at the Chicago Tribune For every two cups of flour:
  • 2/3 tsp salt
  • 1/2 tsp thyme
  • 1/2 tsp basil
  • 1/3 tsp oregano
  • 1 tsp celery salt
  • 1 tsp black pepper
  • 1 tsp dried mustard
  • 4 tsps paprika
  • 2 tsps garlic salt
  • 1 tsp ground ginger
  • 3 tsps white pepper
My hunch: we will see this as a "new mix" on the grocery shelves by the end of the year. If not, maybe something for a young entrepreneur to consider.

Note: I often make typographical and factual errors. Do not use the above recipe. If this is important to you, go to the source.
Back to the Bakken
Active rigs:

Active Rigs3276192182190

RBN Energy: the economics of a crude oil pipeline.

Drones: Israelis are testing a 20-foot drone that can cover 40,000 acres in an hour and fly up to 17 hours before refueling. Byline for story: Hillsboro, ND, which is located 40 miles south of Grand Forks, ND, on I-29.

Pricing: well-timed OPEC meeting forces oil bears into record reversal.
OPEC is on course to agree to a production freeze because its biggest members are pumping flat-out, said Chakib Khelil, the group’s former president. Saudi Energy Minister  Khalid Al-Falih said that the talks may lead to action to stabilize the market.
The Road To Minnesota
North Dakota, 1 - Minnesota, 0

This story goes back to April, 2011. The Minnesota state house and senate voted to allow electricity from North Dakota coal plants be sold in Minnesota, but the governor vetoes the bill. So, some five years later, the courts rule differently, and the Minnesota governor won't pursue. This truly sounds like something out of Charles Dickens' Bleak House

Minnesota calls it quits. Won't appeal this further. Agrees to take coal-generated electricity from North Dakota
Minnesota will not appeal a federal court ruling that called unconstitutional a law restricting importing electricity from coal-fired electric generating plants.
North Dakota filed the suit against the Minnesota Next Generation Energy Act and won in a federal district court. A federal appeals court panel in June agreed with the district court, leaving the U.S. Supreme Court the only opportunity for Minnesota to win.
But on Monday, the Minnesota Commerce Department and Public Utilities Commission announced the state will not appeal.
The decision means that Minnesota utilities may buy electricity produced in North Dakota plants, where they generate power with locally mined coal known as lignite.
Minnesota's law, designed to reduce carbon dioxide emissions, also bans new coal-fired power plants in the state. That part of the law remains on the books.
The Market

Best Buy shares jump as online sales climb. Best Buy reported an unexpected increase in profit for 2Q16 as it benefited from a jump in online growth.

VW and suppliers settle their dispute after "marathon" talks.

Goldman Sachs trying to talk the price of oil down; says recovery in oil prices is "fragile." I think we all know that; we don't need GS to tell us the obvious. Unless GS has an agenda. LOL. The WSJ reports that hopes fade on oil agreement: there is already reports of disagreement among OPEC producers. That's fine. Apparently Saudi Arabia likes giving its oil away at $40/bbl. In the big scheme of things, it's better that the market manage this, and not have the price of oil affected by artificial agreements in the Mideast.

MRO shares "take a hit" as CFO resigns. Company says CFO stepped down for personal reasons. Two executives have now left MRO in recent days.

ObamaCare. BusinessInsider confirms -- or at least appears to confirm -- that "for the first time, a county in America has lost all of its ObamaCare insurers (previously posted): Pinal County, Arizona. 400,000 people. South and southeast of Phoenix, Scottsdale.

New home sales jump to highest level since 2007.

Bill Gates' net worth crosses the $90 billion threshold.

Late afternoon trading: up about 22 points; oil back up over $48; NYSE
  • new highs: 219; CLR (a big whoop); Encana;
  • new lows: 6
Opening: surges almost 100 points. XLNX hits $54.00.
  • new highs: 180, Deere; Domino's Pizza;
  • new lows: 4
Futures: Dow up 46; oil down a bit, around $47.