The Million Dollar Way (The Bakken Oil Blog): 10/21/16

Friday, October 21, 2016

Wow, I Wish Aubrey Was Still With Us -- October 21, 2016

From Bloomberg/Rigzone: Chesapeake Energy declares "Propageddon" with record frack. Data points:

first it was the single stage frack; then the multi-stage frack; then, the mega-frack; now it's the monster frack
the era of the monster frack has arrived in North America -- Chesapeake singing its praises
25,000 tons of sand down one Louisiana natural gas well -- "propageddon"
Black 2 & 11-15-11 1H: 50.185 million lbs of sand in the Haynesville shale region of Louisiana; the well's lateral length = 9,764 feet (typical for a Bakken well)
the most used in the North Dakota Bakken has been 20 million tons by EOG, and that was a rare event
output increased 70% over traditional fracking techniques
"we're unleashing hell on every gas molecule downhole" -- VP of operations
average amount of sand used for each well in North American shale fields has doubled since 2014
in addition, the laterals have grown by 50%; and, the number of stages are also up by half
Southwestern Energy Co is testing frack jobs with as much as 5,000 lbs per lateral foot (a 10,000-ft Bakken lateral = 50 million lbs

I assume Mike Filloon will mention this in an upcoming Bakken update.

Just One Random Example Of Bakken 2.0 -- From The November, 2016, Hearing Docket Agenda

Case No. 25459:

Application of Continental Resources, Inc. for an order authorizing the following for the Dimmick Lake-Bakken Pool, McKenzie County, ND: (i) the drilling, completing and producing of a total not to exceed twelve wells on an existing 1280-acre spacing unit described as Sections 1 and 12, T.150N., R.97W.; and (ii) the drilling, completing and producing of a total not to exceed twenty-four wells on an existing overlapping 2560-acre spacing unit described as Sections 30 and 31, T.151N., R.96W. and Sections 6 and 7, T.150N., R.96W., eliminating any tool error requirements and such other relief as is appropriate.

From the very beginning, the MillionDollarWay suggested that if "you" had one well, you would eventually have four wells, probably eight wells, and possibly, many more than that. In this case, some folks with mineral rights in the area described above might have 24 wells plus 8 existing wells = 32 wells (so far). That's a lot of mailbox money.

And remember, operators are not drilling wells if the EURs are not at least 500,000 bbls; some operators require more.

The eight wells in the two current 1280-acre drilling units are the Kennedy-Miles wells, which I track here.

The eight Kennedy-Miles wells as of this date which are updated elsewhere, not here:

Nothing About The Bakken -- October 21, 2016

This is why there was so little blogging today. Sophia and I went out to explore the local creeks. We had planned to feed the turtles, but it appears the turtles are already hibernating. We did not find any. That's why Sophia is munching on the white bread that we had brought for the turtles. Thank goodness for good ol' American white bread preservatives: this bread was at least three weeks old and it was as good as new -- at least in terms of no mold. LOL.

Sophia is in her new "Wellies" -- short for Wellingtons -- the classic "mudders" used in England and Scotland.

Sophia and I are clearly best friends. The bank down to the creek is incredibly steep. It is amazing how well she and I worked together to get down the embankment, carrying our picnic lunch, our change of clothing (assuming one of us would fall into the creek), the camera, etc. In fact, as we slid down the embankment, with Sophia in my arms, she grabbed our bag -- something I would have missed. (I think she was worried about losing the picnic lunch.) She is so incredibly observant; she's an extra set of eyes for me.

I will really miss these days years from now.

I"m watching an old "Bourne" movie. It is interesting that right now there is a scene in which Jason is running/jogging in an effort to forget the past. I remember doing the same thing some years ago in Florida. I would run miles trying to forget old memories. Some memories just won't die.

Some Memories Just Won't Die, Marty Robbins
In addition to singing, Marty Robbins loved to race automobiles. This Sunday, an elimination race in Talladega, Alabama -- the field will go from twelve drivers to eight, I will be watching.

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The "Jason Bourne" Movies

These movies really bring back memories of my eight years with Air Intelligence Agency (AIA) and our interaction with NSA, CIA, FBI, etc. In hindsight, it is amazing how many folks gave up their entire lives / their personal lives for something much bigger. It is impossible to explain -- I never understood it -- why there are guys are like "Jason Bourne" but there really are. I spent very little time with "special forces" when I was overseas -- flying covertly into foreign bases under darkness, landing at foreign air bases, dropping off "special forces" personnel and then departing on the C-130 without the host nation even knowing we had landed on their runway and departed.

There is so much that needs blogging; I don't know, emotionally, if I can get to it tonight.

Speaking of which, I asked my wife if she had read Dante's Inferno in high school or college; she is better read than I am. I assume she had; I was wrong. She has not read Dante's Inferno.

I have finally gotten around to reading Dante's Inferno. I am blown away. It is quite incredible. Again, this is another piece of literature that should not be assigned to students in high school or college. It only "hits home" when one has come of age, has real-life experiences that can be related to such great works.

The November, 2016, NDIC Hearing Dockets Agenda Has Been Posted -- October 21, 2016

The November, 2016, NDIC hearing dockets agenda is posted:

Active rigs:

	10/21/2016	10/21/2015	10/21/2014	10/21/2013	10/21/2012
Active Rigs	34	68	191	182	186

Four new permits:

Operators: CLR (3), St Croix Operating
Fields: Elm Tree (McKenzie), North Haas (Bottineau)
Comments: Previous posts mentioning St Croix Operating:

update on their second permit, April 10, 2016
this (#31816) is St Croix's second permit in North Dakota; their first well (#29075, 28-158-82) was dry; the permit issued today is for 29-157-81, 7 miles to the southeast; these are south of the Glenburn oil field, about 12 miles northeast of Minot; August 12, 2015
St Croix has a wildcat in Renville; this is the first permit for this company in North Dakota, August 6, 2014
new operator in the Bakken, August 5, 2014

Operator Transfer:

EOG transferred two older Bakken wells in Mountrail County to Hunt Oil Company
Arsenal Energy transferred approximately 58 wells to Rampart Energy Company; most of them were older wells; most in Burke and Renville counties, though more recent ones in Williams and Mountrail counties.

No DUCs were reported as being completed.

Update On Moscow's Club Med -- October 21, 2016

Updates

Later 9:13 p.m. Central Time: see first comment. The US has ten (10) a/c carrier groups and only two are deployed overseas; neither are deployed in the Mediterranean. This is really quite incredible. It appears that President Obama has asked the US Navy to "stand down"; he does not want to confront the Russians and risk a miscalculation between Russia and the US.

Later, 12:05 p.m. Central Time: from Russia Beyond the Headlines -- Russia to establish a permanent naval base in Syria, posted October 11, 2016, that's like ten days ago --

The Russian naval facility in the city of Tartus will be upgraded into a permanent naval base. Military experts believe that the Russian Defense Ministry may set up a detachment of ships in the Mediterranean armed with Kalibr-NK cruise missiles and headed by the Admiral Kuznetsov aircraft carrier.

“The first purpose of the future base that comes to mind is the deployment in the Mediterranean of the Admiral Kuznetsov aircraft carrier with Su-33 and MiG-29K/KUB fighter jets as well as Ka-52K attack helicopters,” said Dmitry Litovkin, a military observer for the Izvestiya daily newspaper.

Without a base like this, deploying a full-fledged naval detachment in the Mediterranean could take weeks, he added.

“However, now ships with Kalibr-NK cruise missiles can be permanently based on the Syrian shores. And the deployment of a naval detachment at sea will take several hours rather than weeks,” said Litovkin.

Much, much more at the link.

As one regular reader noted, the "sledgehammer" that Putin is sending to the eastern Mediterranean is not going there simply to "take out" Aleppo. An incredibly prescient reader, I might add.

Not in my house!

Original Post

With the largest Russian naval operation since the Cold War headed towards the eastern Mediterranean, it was only appropriate to ask if Russia has an eastern Mediterranean port to accept their ships.

I've blogged about this story at various posts (including this one) but I provide updates and track it here.

Back to the original question: does Russia have an eastern Mediterranean port to accept their ships. Well, let's look. From The Moscow Times, almost exactly one year ago, why Russia is expanding its naval base in Syria:

The Russian military is expanding its tiny naval facility at Tartus on the Syrian coast to handle bigger warships and transport vessels amid a general buildup of Russian forces in territory controlled by Syrian President Bashar Assad, the Kommersant newspaper reported Monday, citing military sources.

The news broke as Israeli Prime Minister Benjamin Netanyahu flew with his military and intelligence chiefs to Moscow on Monday to meet with President Vladimir Putin and discuss ways to prevent accidental clashes of Russian and Israeli forces operating in Syria.

Russia in recent weeks has wrong-footed Israel, the U.S. and Europe by beefing up its supply of military hardware to the Syrian government. News reports have alleged that Russia has deployed forces such as Su-30 fighter jets, tanks, armored vehicles and troops to a government-controlled airfield in Latakia.

To better sustain and supply both its own forces and the Syrian government’s, Russia has deployed some 1,700 military specialists to its small naval repair station at Tartus, 90 kilometers to the south of Latakia — a dramatic increase in personnel at a facility that until recently was staffed by a handful of military men and civilian contractors, Kommersant reported.

“They are outfitting and guarding the facility, and are restructuring the dock,” an unidentified soldier stationed at Tartus told Kommersant, adding that the specialists should be rotated out of Syria in three months.

This was confirmed by an unidentified source in Russia’s General Staff, the military’s highest command authority, Kommersant reported. The General Staff source said that the expansion of Tartus into a full-scale naval base was not connected with any imminent Russian intervention in Syria’s civil war.

Instead, after its expansion, “[Tartus] will simply be able to accommodate first- and second-rank ships from the Russian Mediterranean flotilla,” the source said, referring to the Russian designation for ships ranging in size from large cruisers to destroyers and large landing ships and transports.

This points to a two-pronged vision for the future of Russia’s Syrian naval outpost — currently Russia’s only pit-stop in the Mediterranean, said Dr. Theodore Karasik, a UAE-based military and geopolitical expert.

“The Russian port in Tartus, although small, is a main entry point for Russian equipment to support the Syrian government,” Karasik said. “[However], Russia seeks to expand Tartus not only because of the required throughput necessary to help the Syrian government, but also to increase Moscow’s presence in the eastern Mediterranean.”

So, now we know why Russia's Northern Fleet is headed for Syria. Some rest and relaxation at Moscow's Club Med.

Much more at the link.

Nothing like a war (or an impending war) to renew one's interest in geography.

Shell To Sell $1 Billion Of Western Canadian Assets -- October 21, 2016

Rasmussen's daily poll:

A new high of 88% of voters now say they are certain how they will vote in this election. Among these voters, it’s Trump 48%, Clinton 47%, Johnson three percent (3%) and Stein two percent (2%). Among voters who say they still could change their minds between now and Election Day, it’s Trump 38%, Clinton 25%, Johnson 21% and Stein 16%.

Unemployment rose in 3 of 8 swing states last month: US News. Employers cut jobs in four swing states and added them in three, with job totals flat in New Hampshire.

Tesla's self-driving software (see below): I assume that once the car becomes available you can give the "keys" to your 12-year-old kids when they need to go to soccer or water polo. Wow, what a great country.

Shell to sell $1 billion of west Canadian assets: story here.

Shell said Thursday it would sell developed and undeveloped acreage in the Canadian provinces of Alberta and British Columbia to Calgary-based Tourmaline Oil Corp. Those assets currently produce dry gas and natural-gas liquids equivalent to 24,850 barrels a day of oil.

The deal comes as Shell seeks to shed $30 billion assets world-wide after its $50 billion acquisition of BG Group PLC in February. It represents a further retrenchment for Shell in Canada, where a year ago it shelved plans for a major new oil-sands project and took a $2 billion write-down.

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Back to the Bakken

Active rigs:

	10/21/2016	10/21/2015	10/21/2014	10/21/2013	10/21/2012
Active Rigs	33	68	191	182	186

RBN Energy: new crude oil pipelines and new diluent pipelines and storage capacity in Alberta. The series continues.

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Some Things Never Cease To Amaze Me

Some months ago, maybe it's been a year now, I decided to "figure out" Scotch. Except on very, very rare occasions -- in fact, I remember only once, and that was when I was in northern England, near Scotland -- do I recall tasting/comparing Scotch whisky before this past year.

After a year of reading several books on the subject, and tasting about 15 different "brands," I have a pretty good idea of what Scotch is all about. I probably know as much about Scotch as I know about the Bakken, that is to say, about 1% of all there is to know, and that may be a stretch.

Having said that, in today's Wall Street Journal: Irish whiskey barrels ahead -- rising demand has turned Irish whiskey into the world's fastest-growing major spirit. [Note: Scottish whisky -- without the "e" and Irish whiskey with the "e" is generally the correct spelling.]

The curiosity surrounding the Teeling Whiskey Co., which opened last year, is part of a larger wave of interest in Irish whiskey that has new ventures mushrooming across the Emerald Isle. There are now 16 distilleries in Ireland and Northern Ireland, up from four just three years ago, according to the Irish Whiskey Association. Eleven more are planned.

The spirit—which must be made only in the Republic of Ireland or Northern Ireland—jumped 131% by volume globally during the past decade, easily trumping rises of 13% for Scotch whisky and 56% for bourbon during the same period.

I had read earlier that whisky/whiskey/bourbon were making a comeback but I was amazed to see these figures:

for Irish whiskey: up 113% over the past decade
for Scotch whisky: up 13% over the past decade
for bourbon: up 56% over the past decade

Much of the Irish whiskey growth is driven by Jameson which accounts for 67% of global volumes. In the US Jameson holds 785 of the Irish whiskey market.

The "percent increases" can be taken out of context; one also needs to know the denominator, and in this case, worldwide sales:

for Irish whiskey: less than 8 million cases
for Scotch whisky: almost 100 million cases
for bourbon: 20 million cases

As for me, my "Scotch" phase has pretty much ended. I have now found the "brand" I prefer, and I occasionally have an ounce of Scotch with two ice cubes with herring or sushi, but that's about it. I don't recall every having tasted Jameson; I may have to taste it to compare to the others I've tasted. I'll see. Probably not, at least not any time soon.

My "martini" phase is also over but I still enjoy an occasional martini at home. I haven't had a martini with sushi since our favorite waitress left our favorite sushi restaurant about six months ago to get married in Louisiana.

I went through a very, very short period when I was trying to figure out mezcal and tequila. Neither impressed me.

But I digress. Time to move on.

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The Market

Mid-day trading: some recovery; the market is only down about 40 points. NYSE:

new highs: 46 -- Arch Coal (of all things); SandRidge Energy (wow);
new lows: 23

Open: another miserable day -- the Dow 30 opens almost 100 points in the red. Lead story over at Yahoo!Finance -- another story about "pain" for restaurants -- low grocery prices and changing consumer habits are slowing sales (McDonald's, apparently, did not get the menu -- see below). The story is hardly worth reading; not much there. Tesla remains under pressure and under $200 after it announced that it will place self-driving hardware (something like one radar unit; one sonar unit; and eight cameras) on every new vehicle for free. But to turn on the software -- when it becomes available -- will cost .... $8,000. Musk Melon says that one can offset the cost of the software by "allowing" the car to be used as a "ride-hailing service" while you work at the office or watch television at night, or something to that effect.

Tesla Motors Inc. said it plans to charge buyers of its newest cars $8,000 to activate autonomous-driving technology, hinting those who do would be able to offset the cost through a ride-hailing network similar to Uber Technologies Inc. and Lyft Inc.

McDonald's earnings top expectations. Story here.

better than expected
shares up 3.5% in pre-market trading but had been down 13% over past three months
sales rose 3.5% in existing restaurants, handily beating the 1.5% growth expected

GE reports EPS in-line; misses on revenue.

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Connecting The Dots

Tinker, Tailor, Soldier, Spy remains one of my favorite movies. I have always been intrigued by the names chosen by the author, e.g., Toby Esterhase. I've read thoughts from various bloggers about the "meaning" or origin of that name.

Then, out of the blue, reading something about the Dreyfus affair the other day, I was reminded again that Dreyfus had been wrongly accused; the real spy had been Ferdinand Walsin Esterhazy.

There may be no connection whatsoever between the John le Carré character but the names certainly pique one's interest. Both spies. Both self-serving. Both eastern European. I love it.

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Valiant Ambition: George Washington, Benedict Arnold, and the Fate of the American Revolution

Nathaniel Philbrick

c. 2016

DDS: 973.4 PHI

Chapter 10

The Chasm

Begins in NYC: after three years of British occupation, a hellhole.

Arnold meets with Joseph Stansbury, a British loyalist. Will begin work with the Brits.

Arnold, meanwhile, prepares for his court-martial at the Continental army's headquarters in Middlebrook, NJ.

Nathaniel Greene invites Arnold to visit. Benedict Arnold not only turned on his country; he turned on his very close friend Greene.

Arnold gets off with a "rebuke," a term used by Geo Washington, but the court martial was yet to proceed.

Now, the spring of 1779. Henry Clinton still stuck in NYC; looking toward West Point, about 60 miles up the Hudson. If he could control West Point, he could control the Hudson and that might win him the war.

Arnold had told Clinton that Geo Washington was also planning to move to West Point -- enough intel to help Clinton move. Unfortunately for Arnold, Washington learned of Clinton's move (6,000 troops and a fleet of more than 200 ships on the Hudson) and postponed his plans for West Point, instead, moving his army into the region between the newly taken British positions and West Point.

Instead of returning to Philadelphia (where he had been governor), he moved to nearby Morristown, NJ, to "wait events."

Arnold, deeper into treasonous plans, egged on by his wife.

Colonists with two minor victories but enough to show that rebels were still a force to be reckoned with.

Washington stymied in plans to take NYC because French not able to support at that time.

October 4, 1779: hostilities come to a head in Philadelphia between radical Constitutionalists and the conservative Republicans. Exploded into violence. Reed brings it to an end; Arnold shows up but is inconsequential.

But now with Philadelphia Continental soldiers and Pennsylvania militiamen killing each other, Arnold felt it was time to "join" the Brits.

December 3, 1779: Arnold provides Stansbury with a long list of information. Benedict Arnold's court martial still pending. It was scheduled to be held one month later, so Benedict Arnold had to act fast.

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A Note to the Granddaughters

Alliteration

The Princeton Dante Project.

From the introduction, page xvii, Robert Hollander & Jean Hollander's verse translation of Dante's The Inferno, c. 2000, DDS 851.1 DAN:

Dante seems completely aware of the radical newness of a lady loaded with such lofty theological meaning in the tradition of vernacular poetry of love.

From wiki:

In Greco-Roman mythology, Aeneas (possibly derived from Greek αἰνή meaning "praised") was a Trojan hero, the son of the prince Anchises and the goddess Venus (Aphrodite).

His father was a first cousin of King Priam of Troy (both being grandsons of Ilus, founder of Troy), making Aeneas a second cousin to Priam's children (such as Hector and Paris).

He is a character in Greek mythology and is mentioned in Homer's Iliad.
Aeneas receives full treatment in Roman mythology, most extensively in Virgil's Aeneid where he is an ancestor of Romulus and Remus. He became the first true hero of Rome.

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