Update On The Bridger Wells In Rattlesnake Point Oil Field -- December 4, 2016

In a long note like this, there will be typographical and factual errors. The NDIC map server was a bit tough to sort out but I think I have it correct; but there could be errors. If this information is important to you go to the source.

In a long commentary, facts and opinions will be interspersed. It is often difficult to separate facts from opinions.

If something appears wrong, it probably is.

Finally, I did not proofread this page in its entirety. I consider the page to be a PAGE IN PROGRESS FOR AT LEAST A WEEK giving readers a chance to weigh in on the post.

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To bring yourself up to speed regarding with the Bridger wells, check out this post first, where I track the Bridger/Bonneville wells.

There appear to be eleven (11) CLR Bridger wells. The Bridger wells are on Bridger pads as well as Bridger-Bonneville pads, all in Rattlesnake Point oil field.

The Bridger wells run from the south to the north; the Bonneville wells run from the north to the south.

The eleven (11) Bridge wells are broken down as such:

Five "H" wells, MB: middle Bakken wells. Four of the five "H" wells have been completed and are producing.

Three "H1" wells, TF1: Three Forks, first bench. Only one H1 well has been completed.

Three "H2" wells, TF2: Three Forks, second bench. Only one H2 well has been completed.

Here are the Bridger wells. It's a busy slide. I've tried to line up the "H" wells across the top; the "H1" wells in the second line; and, the "H2" wells along a third line. The "t" date is the month/year the well was tested; generally a well is tested within two months after the well is completed. FracFocus will report exactly when wells are fracked.

SI/NC (DUCs): these wells have been drilled to total depth; they were not fracked at the time they were completed. It is possible they have been fracked; if so, their production reports will soon be available.

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Observations

#17089, middle Bakken well, was completed 4/08. The production profile is quite unusual. Notice the production profile from 7/14 to 4/16.

By 7/14 this well had plateaued at 350 bbls / month. Then taken off line, and production jumped to 3,000 bbls of oil per month. Some suggest this could be simply due to built up pressure while the well was taken off line but that pressure should have "exhausted" itself after a couple of months. Note that the increased production has lasted for many months. It's hard not to think that this increased prodution was due to two "neighboring wells" fracked at this time (8/15).

The problem is that the middle Bakken well that was fracked 8/15 is 1,320 feet away; and, the other "neighboinrg" well that was fracked was from a different formation, the TF1.

But, it's been talked about before the geologic relationship between TF1 and the middle Bakken.

Here's the production profile for #17089:

BAKKEN	6-2016	30	2106	2220	602	2532	159	2373
BAKKEN	5-2016	31	2319	2231	677	2778	34	2744
BAKKEN	4-2016	30	2141	2021	605	2542	247	2295
BAKKEN	3-2016	31	2076	2036	667	2494	16	2478
BAKKEN	2-2016	26	2085	2201	935	2472	34	2438
BAKKEN	1-2016	31	2849	2922	1090	3370	37	3333
BAKKEN	12-2015	27	2602	2678	1158	3065	0	3065
BAKKEN	11-2015	3	321	227	82	382	0	382
BAKKEN	10-2015	31	2198	2014	1407	2610	0	2610
BAKKEN	9-2015	30	2101	2227	2428	2513	0	2513
BAKKEN	8-2015	21	1219	911	2978	1364	0	1364
BAKKEN	7-2015	0	0	99	0	0	0	0
BAKKEN	6-2015	0	0	0	0	0	0	0
BAKKEN	5-2015	0	0	0	0	0	0	0
BAKKEN	4-2015	0	0	0	0	0	0	0
BAKKEN	3-2015	1	0	0	3	0	0	0
BAKKEN	2-2015	0	0	0	0	0	0	0
BAKKEN	1-2015	28	335	429	112	192	147	45
BAKKEN	12-2014	31	482	437	153	339	331	8
BAKKEN	11-2014	30	533	687	158	392	252	140
BAKKEN	10-2014	22	407	222	345	461	110	351
BAKKEN	9-2014	30	443	670	183	438	366	72
BAKKEN	8-2014	31	474	448	150	378	243	135
BAKKEN	7-2014	31	506	452	143	364	279	85

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Now, take a look at two middle Bakken wells that were fracked back in 2/10. What was the production profile at the time the middle Bakken well that was fracked 8/15?

First, #19013:

BAKKEN	1-2016	31	3036	3306	2380	3640	2381	1259
BAKKEN	12-2015	31	5649	5789	5098	6372	4417	1955
BAKKEN	11-2015	22	3537	3205	4020	2854	2043	811
BAKKEN	10-2015	23	7429	7771	7373	8736	5626	3110
BAKKEN	9-2015	30	13506	13079	14062	16404	6351	10053
BAKKEN	8-2015	26	13306	13330	16161	15741	9783	5958
BAKKEN	7-2015	9	231	225	222	443	443	0
BAKKEN	6-2015	30	1276	1333	460	1925	1817	108
BAKKEN	5-2015	31	1390	1335	468	1786	1631	155
BAKKEN	4-2015	30	1395	1336	527	1892	1569	323
BAKKEN	3-2015	31	1639	1795	585	2142	2090	52

It's hard to believe that taking a well off-line for less than a month resulted in a build-up in pressure to the extent that production went from 1300 bbls/month to 13,000 bbls/month.

Now, #19011:

BAKKEN	1-2016	12	688	1319	214	879	287	592
BAKKEN	12-2015	31	1787	1449	930	1917	674	1243
BAKKEN	11-2015	12	109	0	307	71	7	64
BAKKEN	10-2015	6	140	0	508	89	0	89
BAKKEN	9-2015	21	1001	1307	269	1033	58	975
BAKKEN	8-2015	26	2969	2840	1012	2903	1730	1173
BAKKEN	7-2015	12	647	670	219	621	621	0
BAKKEN	6-2015	30	2471	2687	608	3243	2921	322
BAKKEN	5-2015	31	2504	2242	675	2956	2270	686
BAKKEN	4-2015	30	2569	2727	707	2871	2192	679
BAKKEN	3-2015	31	2874	2931	712	3186	2981	205

I can't make any sense out of #19011. This well's production profile has been very erratic over varying periods. One can see the difficulty of figuring this well out when it was only on line for only 6 days in October, 2015, (producing a trivial 140 bbls) and on line for only 12 days in November, 2015, (producing a trivial 109 bbls).

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What I Will Be Watching For

With regard to the halo effect, the next data point to watch will be the production profile of #17089 when #31846 is fracked.

With regard to the halo effect, the next data point to watch will be the production profile of #29552 when #31847 is fracked.

With regard to the halo effect, the next data point to watch will be the production profile of #29554 when #31845 is fracked.

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Discussion to continue.

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Because this was a particularly long note, I had my assistant check the numbers:

Two XTO Wells Coming Off Confidential List Monday; Will Be DUCs -- December 4, 2016

Monday, December 5, 2016
None.
Sunday, December 4, 2016
32366, conf, XTO, Werre Trust Federal 21X-3B-N, Bear Creek, no production,
Saturday, December 3, 2016
32367, conf, XTO, Werre Trust Federal 21X-3F2-N, Bear Creek, no production,

Army Hands Victory To Protesters -- Won't Issue Easement -- December 4, 2016

Link here.

From Twitter: 

Joe McMonigle:  On very political DAPL permit denial: Courts will overturn and approve if not done before by Trump.

When a president in his last full month of presidency shuts down a $4 billion pipeline which is 99% complete and was approved by a gazillion government agencies as the necessary and as the best route option, it puts to rest all that media anxiety about an incoming president's conflicts of interest. Something tells me I have less to worry about the incoming president's "conflicts of interests" compared to the decisions made by a fathomless ignorant incumbent.

A huge "thank you" to a reader for providing the graphic.

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John Kemp On Twitter

 We don't need a new law. We need a new president.

The Bakken: How Things Stand Near The End Of The Year, 2016 -- December 4, 2016

Sometime in 2014, I started losing interest in reviewing the quarterly presentations of the operators in the Bakken. Perhaps I wasn't losing interest. Better said, it was simply overwhelming. And quarter-to-quarter, and covering a dozen operators in the Bakken, the changes were staggering, but at the same time incremental, if that makes sense.

Yesterday, after a long hiatus I went back and looked at the most recent presentations by Whiting and Oasis. I will look at CLR later today and then update this post.

Observations.

EURS. Staggering. See next "story" below the break, from Wood Mackenzie.

Both Whiting and Oasis consider 900,000 boe EURs the new norm, and are on track to go significantly higher, to 1.5 million boe EURs.

For newbies, this is a screen shot from an SM Energy presentation, five years ago. The Bear Den, in the Watford City area, is one of the best spots in the Bakken. At the end of 2011, EURs were 550,000 in the middle Bakken and 450,000 in the Three Forks (not otherwise specified; all assumed to be first bench). In five years, we've gone from 500,000 boe EURs to 1.5 million boe EURs:

Drilling times:

• two huge changes since the beginning of the boom
• the first change, of course, is the huge decrease in time it takes to drill a two-mile horizontal; at the beginning of the boom, 45 - 65 days. 
• the second change: the way some operators are measuring drilling times. Whiting tracks the time from spud-to-spud: the clock starts ticking when the first well is spud, and continues to tick, until the rig is moved to the next well, and the next well is spud. Whiting has that spud-to-spud time down to 14 days or so in the Bakken; in the Niobrara, Whiting has it down to 7 days. In the old days it could take a week or so just to "tear down" rig once a well had been completed, load it on a truck, move it to the next location, and then set it up again. During the muddy season -- spring thaw -- roads were closed and rigs did not move. Now, even in the spring thaw, rigs can continue pad drilling if the pad is dry; fracking can wait

Cost per completed well:

• costs have come way, way down, but there is a twist
• some operators are "advertising" the costs to complete a DUC, in effect not providing the sunk costs in drilling the well to TD; costs to complete a DUC are in the range of $3.8 million; total costs are in the range of $6.8 million
• I remember at the beginning of the boom, talking about $10 million wells -- and some of those were short laterals

Bragging rights, net acreage in the Williston Basin:

• CLR: 860,000 net acres
• Oasis: 540 net acres (once the SM Energy deal [55,000 acres] closes (scheduled to close December 1, 2016)
• XTO: 494,000 net acres (website, December, 2016); 531,000 net acres  (June, 2015)
• Whiting: 433,125 net acres

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"You Can Enter The Bakken A Lot Cheaper Than You Can Enter The Permian -- Wood Mackenzie

From The Bakken, October 12, 2016, before the OPEC meeting:

Jonathan Garrett, the Bakken expert for Houston-based Wood Mackenzie, has a message for those who think the Permian Basin in Texas is the place to be. 

"The Permian has a lot of upside and the economics to support the interest, but for investors looking from a full-cycle basis, you can enter the Bakken a lot cheaper than you can enter the Permian," he said. "Some of the best parts of the Bakken rival some of the best parts of the Permian. That should at least pique the interest of folks looking outside of west Texas. Developing a portfolio in some of those core areas of the Bakken might make a lot of sense."

And then this (I like it when I see the words "humongous" and "Bakken" in the same paragraph).

Although the number of well completions in the Bakken have been steadily declining, the types of wells being drilled and completed has prevented production from dropping sharply. 

"We track completions in North Dakota closely and while the completion count has been anemic, the wells that are getting completed are absolutely humongous," Garrett noted. "Operators are completing wells that will produce upwards of a million-plus barrels from an EUR standpoint. A few years back, wells were being completed that produced half that."

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COP Adding Rigs Sooner Than Expected In The Bakken

From The Bakken, November 2, 2016, before the OPEC meeting:

ConocoPhillips intends to add drilling rigs to the Bakken sooner than expected. Although the world’s large independent exploration and production company said earlier this year it planned to add rigs to its Bakken operations in 2017, the company unveiled plans this week to bring in three rigs before the end of the year. “We’ve already been able to secure drilling rigs and pressure pumping crews at attractive rates to maintain our low cost of supply, so we expect this incremental drilling work to start ramping in November,” said Al Hirshberg, executive vice president for drilling and projects.

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The Red Queen

I can't wait to check the North Dakota crude oil production numbers next July, which we won't know until September, 2017, about ten months from now. In October, 2016, Lynn Helms suggested that North Dakota's crude oil production will bottom out at 900,000 bopd in June or July next year.

That statement was made before OPEC announced plans to cut/freeze oil production. On the day the October, 2016, Director's Cut, was released, it was reported that there were 33 active rigs in North Dakota. Today there are 39:

	12/4/2016	12/04/2015	12/04/2014	12/04/2013	12/04/2012
Active Rigs	39	64	191	192	181

(39 - 33) / 33 = an 18% increase in the number of active rigs. (In July, 2016, there were 31 active rigs, and recently the number of active rigs has occasionally hit 40: (40 - 31) / 31 =  a 29% increase in active rigs.

If operators continue to add rigs -- perhaps another 10 by next summer, and if the DAPL is completed, my hunch is that North Dakota will be back above 1 million bopd by next summer. 

EV Sales For November, 2016 -- Another Good News Story For The Coal Industry -- December 4, 2016

Link here. If I recall correctly, someone said there were two additional sales days in November, 2016, compared with last November, 2015. I don't know.

Regardless.

EVs sold in the US in 2016: 13,337
EV's sold in the US in 2015: 10,070

For November, 2016, top sales:

• Chevrolet Volt: 2,531
• Ford Fusion Energi: 1,817
• Nissan Leaf: 1,457
• Tesla Model S: 1,400
• Tesla Model X: 900
• Toyota Prius Prime: 781 (arrived November, 2016)
• Ford C-Max Energi: 721
• BMW i3: 629
• BMW X5 xDrive40e: 437

Arriving next month: BMW 7403

• Chevrolet Bolt EV
• Kia Optima PHV
• Chrysler Pacifica Hybrid

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Good News for Coal Industry

EVs Sales To Surge By 2035 -- Wood Mackenzie

Link here.