Sunday, October 9, 2016

Atmospheric CO2 Decreases Month-Over-Month; Back To Baseline - October 9, 2015

Last month: August, 2016: 402.24.

This month:

Month-over-month, atmospheric CO2 has decreased. For all intents and purposes, we're back to 400.

At some point, this become a) trivial; b) tedious; c) meaningless.

MRO "Re-Covers" A Lousy Well -- October 9, 2016

I have no idea what was done to "bump up" this well. I could not find a sundry form that could explain the much better production starting one year ago.
  • 22342, 1,142, MRO, Lorene Stohler 11-3TFH, 30 stages; 2 million lbs; 39 feet; relatively high gas; ; t9/12; cum 48K 8/16 not sure why this is such a lousy well;
This was a lousy well from the very beginning, despite a great IP. Back in 2014 this well was producing less than 500 bbls/month, assuming that it was even on-line. The operator applied for stripper well status back in November, 2014.

It's very likely a work over rig went back in, found a correctable problem, and corrected it. I don't know.

For newbies, the fourth column is the number of bbls of crude oil produced in the month. For example, for 11/2015, 2,473 bbls of crude oil were produced compared to 338 bbls in the month of 6/2015

Production profile:

MRO and Re-Fracking 

Earlier posts on MRO and re-fracking:
A Little Humor

Flashback: "Bakken Well Efficienty Has Topped Out."

I Love My Kitchen

When we moved into a new apartment (in the same complex) we had a new stove, with one of those newfangled porcelain tops. I was always letting stuff boil over and the top of the porcelain stove became more and more difficult to clean. It seemed every time I cooked on the stove, May got angry at me for letting things boil over.

So, some months ago, I got out the portable grill and the "5th burner" which I bought at the local grocery store for a few bucks. I no longer use the stove for anything.

The 5th burner and the griddle are all I need. I currently have an indoor grill I got "free" from Amazon, but have since upgraded to a much nicer indoor grill made in Japan which I have not yet taken out of the box. When I do, I will post a photo.

Here's a photo of the 5th burner.

NFL: Without Question, The Early Season Story -- The Dallas Cowboys And Back-Up Quarterback -- October 9, 2016


Later, 7:50 p.m. Central Time: see first comment. The "question" is this: what is the bigger NFL story for me? The NDSU phenomenon, rookie quarterback for the Philadelphia Eagles, Carson Wentz, or the Dallas Cowboys playing so well with their second-string quarterback, who is playing like a first-string quarterback?

It was an impulsive, emotional "original post" in which I suggested the Dallas Cowboys were the story in this early NFL season. I have to think really, really deeply why my "mind" went that way. I think this is the reason. Carson Wentz has proved himself; there's not much too talk about; he's incredible, no controversy. However, the Dallas Cowboys story is yet to play out and there could be a lot of "controversy" / a lot of discussion before it's all over. Let's say the Dallas Cowboys are still doing well when Tony Romo is finally "healthy." Does the flamboyant Jerry Jones switches horses in mid-stream? If the Cowboys falter, it will be an easier decision, but then what happens if Romo is injured again? But, again, it was purely an impulsive/emotional original post which could have easily gone the other way. But I think while watching the Cowboys run all over the Bengals, the idea for the post simply hit me.
Original Post
Dallas Cowboys, 3 - 1, are running over the Cincinnati Bengals, 21 - 0, late in 2nd quarter.  Dallas was very close to being 4 - 0 at this point. They almost won the first game of the season -- their only loss so far -- mostly due to mistakes by receivers in the last 30 seconds of the game (not getting out of bounds to keep time on the clock). They lost that game by one point, if I recall correctly, and should have won with a field goal.

Nice commercial:

You Don't Own Me, Leslie Gore

I never tire of Leslie Gore's version. It's interesting how often "covers" are never better than the original. This is really true of this one. Look at the "emotion" Ms Gore puts into this version, and, yes, I assume it was "lip synced." But look at how expressive she is; and, listen to the lyrics. I love it. It makes me want to get back on the road again, go back up to the Bakken. Wow. Maybe at Christmas.

Bank Of The West

What a great country. I have a car loan with Bank of the West; the loan will be paid off soon, but I've never gotten around to updating our new address with the bank. That will become important once the final payment is made.

I stopped by our local Bank of the West here in Grapevine, Texas. It was then that I learned that there are two banks with that name. The Bank of the West here in Grapevine was not the Bank of the West with which I had an auto loan.

I went on-line and gave my Bank of the West my new address.

A day or two later I got a nice note from someone at the bank telling me that for security reasons they could not change my address on-line. To change my address I had to visit a branch of the bank. To the best of my knowledge there are no branch banks for my bank in Texas. The nearest was in Oklahoma.

Not a problem.

On my drive up to the Bakken a couple of weeks ago, I pulled into Chadron, NE, at 8:50 a.m. On the way into town I saw a billboard ad for the Bank of the West. Wow. I always stop in Chadron anyway -- the McDonald's is right at the intersection where I turn west when heading north.

I had to wait a few minutes -- the whole main street in Chadron was torn up -- utility / road infrastructure construction -- but at precisely 9:00 a.m. I walked into the Chadron, NE, branch of the Bank of the West.

I walked up to a teller -- the whole visit reminded me of this year's movie Hell or High Water -- and told her that I needed to update my address.

She pulled up my account and told me the address they had on file. It was our new address.

I then told her the story.

She laughed. She said that doesn't surprise me. It might be "a" policy not to update addresses via e-mail, but her hunch was that after I got the e-mail reply, a supervisor took a look, and say, "hey, this simply an auto loan. Let's just update the address."

I would have expected a short letter in the mail to confirm, but that's fine.

Or it's possible after driving all night, this was simply a dream. LOL.

Snow In North Dakota -- October 9, 2016


Later, 6:21 p.m. Central Time: for those who have not seen snow before, book a flight to Hettinger, ND, for Tuesday (October 11, 2016); not guaranteed, but as they say in Williston, "likely." Uffda.
Original Post
From Ice Age Now:
This is very, very early for snow, even in North Dakota.

Growing up in Williston, Halloween was generally the "cut-off" point for me -- frost/no frost. I remember that well because the weather often determined what I wore for a Halloween costume.

Random Update Of MRO's Juanita USA 13-35H, Antelope -- October 9, 2016


September 28, 2018: production profile here and update.  

Original Post 

Look at the production in the first full month of this well:
  • 31061, 2,942, MRO, Juanita USA 13-35H, 40 stages, 12 million lbs, t7/16; cum 115K 8/16;
This well was tested in July, 2016. By the end of 2.5 months it had produced almost 115,000 bbls. (I hope Saudi is watching. Completed well costs have come down -- significantly -- and production is moving up nicely. Mike Filloon talks about this often.)

Production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

HRC Will Report A Nice Well Monday; NASCAR - Charlotte, NC -- NBC -- Jimmie Johnson Wins -- October 9, 2016

 Wells coming off confidential list Monday -- Monday is a holiday for some folks, but apparently not for North Dakota state. If not a holiday, watch for these wells coming off the confidential list:

Monday, October 10, 2016:
  • 31188, 3,752, HRC, Fort Berthold 148-95-25B-36-8H, Eagle Nest, 56 stages, 6.7 million lbs, t4/16; cum 38K 8/16; no production since the first 18 days; last produced 5/16;
  • 31310, SI/NC, Hess, AN-Brenna-LW-153-94-1310H-1, Antelope, no production data,
Sunday, October 9, 2016:
  • None.
Saturday, October 8, 2016:
  • None.

31188, see above, HRC, Fort Berthold 148-95-25B-36-8H, Eagle Nest:

DateOil RunsMCF Sold



Later, 3:04 p.m. Central Time: a very nice race. Jimmie Johnson, #48, gets his 78th win, after oing winless for 24 races. Charlotte is his "home" race.
Original Post
I never got around to posting this last week, but last week I was ready to post a note saying that after all these years I was finally giving up on NASCAR.

I was tired of "chasing" a) the network NASCAR would be shown on (including some obscure high-number cable channels); b) the day the race would take place (Friday, Saturday, Sunday, or Monday); c) the time of day the race would take place (scheduled; rain delays; etc); and, then, of course, d) Danica Patrick, who never lived up to all the hype, becoming just another also-ran.

I knew the race was canceled last night due to the hurricane and never even bothered to see when it might be rescheduled.

Don just wrote to tell me the RACE IS ON RIGHT NOW! On a network that "everyone" actually gets: NBC.

I'm back. NASCAR is wonderful. Who would ever seriously think of abandoning NASCAR? (I'm disappointed with the announcers, though.)

Prime Real Estate Along Scenice North Dakota Badlands - Little Missouri Scenic River -- Theodore Roosevelt National Park Sells For Less Than $2,000 / Acre -- October 9, 2016

Don sent me the link to this story some time ago, but I was traveling and did not get to all the stories readers sent me.

This may have been one of the best stories I missed. But here it is. Sorry for the delay, Don.

From Watford City, Inforum is reporting, data points:
  • auction held September 28, 2016
  • historic ranch in southwestern North Dakota
  • 2,000 acres
  • $3.3 million
  • nine different buyers
So, now where we had nice open range land, and 2,000 acres of wide-open space, we are now going to have upwards of 8,000 homes -- quarter-acre lots. Actually that's not entirely accurate. This is what some will do, and hopefully many will do:
Steve Burian, CEO of AE2S in Grand Forks, purchased about 430 acres across the river from the parcel the Howes family bought. He plans to lease it for limited grazing and enjoy the land for hiking and hunting.
But had an oil company wanted to put in one well -- and once the rig was gone, it would have been almost impossible to see the pump -- all "environmental" hell would have broken out, despite the fact that the land would have had dual use as open range land and hiking, biking. Maybe even a wind tower or two.

Quarter-acre lots along some lakes in Montana are being appraised for $100,000, making an acre worth $400,000. I personally think folks got the deal of a lifetime buying an acre for as little as $825/acre.
The land, which was available as one large purchase or up to 13 smaller parcels, sold for an average of about $1,670 per acre. The prices ranged from $825 an acre for a 615-acre parcel in the Badlands to $4,700 an acre for the parcel that included the family's house and a historic barn where the Watsons once hosted popular dances. 

Natural Gas Utility Investors Use Wind To Their Advantage -- October 9, 2016

Utility investing in both wind and natural gas.

Buffett's wind investments generate more tax credits than electricity (although that's like comparing apples and aubergines.

It's too much trouble (and not worth the effort) to go over again why utility investors are investing in wind. But if one reads the two linked articles above, one can put "two and two together and get four." Or twenty-two.

In addition to the obvious financial reason, wind developers also know that each wind farm / solar farm needs fossil fuel "back-up."

Fracking Sand -- Rigzone -- October 9, 2016

This article was previously linked to highlight another aspect of the shale boom. This short post highlights fracking sand:
Many operators have optimized their completion designs using higher intensity fracs with longer laterals and higher proppant volumes.
Sand suppliers will continue to keep a close eye on the DUC inventory, especially with nearby transload and rail facilities in Permian, STACK, SCOOP and Williston.
The longer lateral trends are clear in the Eagle Ford, Permian and Williston. The average lateral length in each basin increased from 2014 to 2015.
The graph below is hard to read, but if you click on it and then zoom in, maybe you can make it out more easily. Spend some time on this graphic; lots of interesting items to note.

In other words:
  • more frack sand per stage
  • more stages per linear foot
  • longer horizontals; and, 
  • less ceramic?
This is not rocket science.

Also from the linked article:
Today, there are few operators continuing to drill and complete wells.
Most notably, Pioneer Natural Resources stated a “no backlog” stance in a recent investor call.
Several other operators, including Continental Resources, EOG Resources, Oasis Petroleum and Whiting Petroleum have started completing DUCs or expect to as oil returns to $50/bbl.
The increase in the number of DUCs is likely due to the increase in rig count along with the market volatility.
The horizontal rig count reached a low of 307 the week of May 20 this year (2016) and as of the latest Baker Hughes rig count, there are 396 active horizontal drilling rigs, a 29 percent increase.
The Permian Basin accounts for 50 of the 96 horizontal rigs added during this time.
Just as the Permian has led the drilling activity, expect the DUC inventory reductions to occur first in the Permian.
Whiting idled a lot of great producing wells in August, 2016. One wonders if they are idling some wells as they start completing DUCs.

US Crude Oil Storage -- October 9, 2016


October 10, 2016: I've always appreciated Art Berman. A reader had this to say:
The use of the word "swindle" in the headline was unfortunate, and I'm almost certain that click bait wasn't Berman's choice...there is no swindle here, just inaccurate reporting of data...the government certainly doesn't have the assets in place to produce exact data on production from every US oil well, exact amount of oil refined by every refinery, and the amount of oil stored in every tank across the entire country for every Friday by the Wednesday of the next week... more likely, the EIA is only giving an estimate in a range, like Census estimates of housing data (which also move markets) which is collected by canvassing Census agents who drive their districts and record observations on their laptops...monthly new home data typically comes up with a 90% confidence figure +/- 15%; oil stats are certainly better but not exact....I would attribute the deterioration of the data to budget cuts sooner than any purposeful fudge on anyone's part...

Berman's piece should be read carefully, as he is exposing a fudge factor that the EIA uses weekly that I've been checking every week for a year...there's no deceit about it, it's there every week on line 13 of the oil balance sheet:
Since the other numbers which have their accuracy determined by that fudge factor are those that move the markets, that weekly adjustment should be covered by the media, just like imports and inventory, so everyone knows how inaccurate those weekly numbers are...I had to discover it myself when iIcould see that the week to week numbers just didn't add up..
Two additional comments from me:
  • the EIA data is also reported almost two months late, including import data -- one would think import data should be "instantaneous" in this day and age; a two-month-delay allows insiders an incredible unfair advantage; and,
  • a reminder: the EIA recently made a reporting change. Starting with the Weekly Petroleum Status Report published on October 13, 2016, the U.S. total commercial crude oil inventory weekly data series will no longer include lease stocks.
Later, 9:17 p.m. Central Time: Art Berman has this story at Oilprice, also, with this "headline":
"the billion barrel oil swindle: 80% of US oil reserves are unaccounted for." This is Art's bottom line in this article:
There is a lot more oil in storage than the amount that can be accounted for by domestic production and imports.
In the Forbes article: 
The truth—however improbable—is that inventories are probably much lower than what is reported.
I must be missing something.
Original Post
Sometimes you just have to skip to the end of the story. I was aware of the "inventory" problem (and posted one story on it some weeks ago) and was wondering when some major business magazine would provide a more in-depth look. Art Berman has an article in Forbes, sent to me by a reader, thank you.

This is the headline: US (crude oil) storage filling up with unaccounted-for oil. Well, that doesn't sound good for oil bulls?

I started reading the article, and by page 4 or page 5 my mind started drifting. It would help if the article were one full page instead of divided over six pages with a gazillion ads. But by page 4 or page 5 my mind seemed to be filling up with unaccounted-for drivel.

So, I jumped to the last line in the article:
The truth—however improbable—is that inventories are probably much lower than what is reported.
There are two words in that last sentence to note: everyone catches the "lower," but the interesting word is "much."

I will have to go back and re-read the entire article.

The US Shale Cartel

The reader also sent another Forbes link. I have not read the story yet. But anyone calling the US shale industry a "cartel" is using the word loosely. And incorrectly. And it sends the wrong message.

Price Of Electricity Might Dip
First Time In 14 Years
Natural Gas

Those three phrases pretty much sum up the entire article. From Denver Business Journal.

That's the fourth or fifth story the same reader sent me over the past couple of days. Whew! Finally caught up.

From the article:
During the first six months of 2016, residential electricity prices nationwide averaged 12.4 cents per kilowatt-hour (kWh), or 0.7 percent less than the first half of 2015, the EIA said in its latest Today in Energy brief.
The article does not mention how wind and solar put upward pressure on prices. 

Williams County (Williston) High School Graduates Go To College For Free -- October 9, 2016

First things first: Crosby prepares for busy pheasant season:
Northwest North Dakota could attract a lot of attention from out-of-state hunters this year. "The Northwest has the largest increase in bird population of all our districts," says Aaron Robinson, Upland Game Supervisor with the state Game and Fish Department. And after years of being locked out of lodging due to an oil boom, regulars who haven't hunted in the area lately may be attracted once again.
Active rigs:

Active Rigs3368192185191

Williams County Graduate Scholarship extended for several years. Data points:
  • Alva J Field Trust
  • funds the Williams County Graduate Scholarshipo
  • graduates of a Williams County high school, regardless of the year, are eligible for free tuition and fees 
  • partnership between the Alva J Field Trust, the WSC Foundation, and the ND Higher Education Challenge Fund created in 2015
  • Alva J Field recent committed an additional $800,000 
  • donation matched by ND Challenge Fund: $400,000
  • in the first year: 344 students were awarded 
    • those 344 students composed 33% of WSC's total record breaking enrollment
  • in the second year: 428 student
    • $800,659
    • second consecutive record-breaking enrollment 
The Brooks hotel in Williston is now known as the Four Points by Sheraton Williston.
Williams County budget
  • trimmed down budget
  • $22.7 million 
  • no money in the budget for roads
  • no increased taxes
  • $686,800 less than last year
  • the Williams County Jail is the only department getting an increase; just slightly more than a half million dollars
Update on Western Area Water Supply Authority -- a huge "spin-off" from the oil boom
Rural customers between Ray and Tioga are still on track to get water service from the R&T Water Supply Association before the end of the year. The buildout will connect hundreds of rural residents to the Western Area Water Supply Authority. The project is divided into several sections, some of which won't begin construction until further funding is in place. The R&T North Tioga Rural Distribution will come online in another four to five weeks, and that will bring water to residents between Ray and Tioga