MRO Re-Frack -- June 7, 2017

17097, 421, MRO, Ladonna Klatt 24-22H, Chimney Butte, t6/08; cum 362K 4/17; re-fracked late 2014;

Production profile around that time:

BAKKEN	6-2015	30	3109	3161	1650	2966	2188	266
BAKKEN	5-2015	31	4374	4330	2200	4322	3240	430
BAKKEN	4-2015	30	4646	4668	2387	3926	2906	346
BAKKEN	3-2015	31	6115	6101	3384	5028	3959	230
BAKKEN	2-2015	28	5086	5178	3249	4745	3711	342
BAKKEN	1-2015	31	10063	10600	6202	9609	8089	262
BAKKEN	12-2014	29	15414	14706	10749	15019	12707	501
BAKKEN	11-2014	7	1147	1379	1337	1252	1018	72
BAKKEN	10-2014	31	9961	10245	11791	10339	8690	397
BAKKEN	9-2014	9	4181	3590	0	3868	3190	177
BAKKEN	8-2014	0	0	0	0	0	0	0
BAKKEN	7-2014	1	9	122	80	56	0	55
BAKKEN	6-2014	0	0	0	0	0	0	0
BAKKEN	5-2014	27	1513	1840	261	1763	1377	68
BAKKEN	4-2014	30	1815	1606	490	2156	1644	138
BAKKEN	3-2014	31	1912	1862	395	2258	1763	104

Case Study -- Jump In Production After Neighboring Wells Were Fracked -- June 7, 2017

Updates

September 7, 2019: was off line for15 months; has now just come back on line. 

June 9, 2017: see first comment. This is incredibly important. Apparently the first well was a Three Forks well, not a middle Bakken well. This really makes sense trying to explain the production profile: the comment --

Very interesting! I did some research too, Way back in the well file (I have the premium subscription with NDIC) it shows that this is a Three Forks well. Back before Continental did the tests which showed there were two separate zones, all the wells were called Bakken... so this makes sense that this well showed these results with the nearby Three Forks wells being fracked....

Original Post

Disclaimer: in a long note like this, there will be typographical and factual errors. In addition, I may have missed something important, and/or there may things I am mis-reading. If this is important to you, go to the source.

This is being posted for an individual interested in "re-fracks" in the Bakken. 

For reasons I discussed with that individual, it is very tedious to research data on "re-fracked" wells in the Bakken.

This is how I do it:

1) I go back to "Retrieve Well Production History" at the NDIC site
2) I then go through the scout tickets/file reports one-by-one. This is incredibly tedious. This would be a good summer job for a high school student; and/or better yet, someone should be able to write an "app" that would do this
3) instruct the high school student or the "app" to a) go through the scout tickets chronologically; b) identify any wells with "unusual" (set your own parameters) production patterns
4) try to explain any jump in production using a) the file report; b) FracFocus; c) other sources

In this particular case, I started with file #17000 and worked chronologically to the first well a) with an unusual production profile; and, b) one that I had not identified before.

In just a matter of minutes I came across this one, #17086 and noted the unusual jump in production back in June, 2016.

I pulled that one aside, and then:

a) checked the file report for sundry forms that might explain the jump in production
b) retrieved the API number from the scout ticket and check FracFocus

These are the results.

The index well:

•  17086, 560, Newfield, Jorgenson 1-15H, Lost Bridge, t11/08; cum 276K 4/17; the production profile showed a huge jump in production in June, 2016

Looking at the GIS map at the NDIC site, I noted the graphic that is depicted below the spreadsheet. Note the four horizontals that "cross" the index well.

Of those wells, interestingly only one was a middle Bakken, and all were fracked shortly before June, 2016, when it was noted that production for #17086 jumped:

• 32581,  Three Forks, t6/16; 50 stages, 5.6 million lbs;
• 29856, Three Forks t6/16; 50 stages, 3.5 million lbs;
• 32092, Three Forks, t/16; 50 stages, 5.6 million lbs;
• 29857, middle Bakken, t6/16; 50 stages, 5.6 million lbs;

Production profile for #17086 after neighboring wells were fracked:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	5-2018	0	0	0	0	0	0	0
BAKKEN	4-2018	1	0	0	0	0	0	0
BAKKEN	3-2018	22	957	1422	343	1293	0	1110
BAKKEN	2-2018	28	4687	5082	2203	4329	110	3967
BAKKEN	1-2018	31	4556	4290	2567	4119	2742	1098
BAKKEN	12-2017	31	5094	5340	2890	6073	5161	633
BAKKEN	11-2017	30	6370	6159	3975	6458	1030	5158
BAKKEN	10-2017	24	5405	5190	3143	5589	41	5348
BAKKEN	9-2017	28	4386	4530	1937	4865	1879	2734
BAKKEN	8-2017	28	5624	4980	2472	5796	0	5544
BAKKEN	7-2017	0	0	0	0	0	0	0
BAKKEN	6-2017	10	2829	3317	2827	3605	0	3532
BAKKEN	5-2017	29	18481	18143	18614	21621	2807	18564
BAKKEN	4-2017	5	33	226	192	21	0	18
BAKKEN	3-2017	12	345	463	334	238	0	203
BAKKEN	2-2017	28	7088	6914	2563	8927	6652	2030
BAKKEN	1-2017	31	8087	8637	2965	9039	8698	62
BAKKEN	12-2016	31	8573	8363	2318	8803	6508	2032
BAKKEN	11-2016	30	7792	7660	2735	5874	829	4775
BAKKEN	10-2016	31	7520	7860	2688	6571	183	6109
BAKKEN	9-2016	30	9074	8958	3078	9829	7388	2171
BAKKEN	8-2016	31	15396	15098	5634	17597	14164	3154
BAKKEN	7-2016	31	17370	17744	9627	19641	3876	15486
BAKKEN	6-2016	14	7376	6688	8014	6095	278	5699
BAKKEN	5-2016	7	143	0	465	31	11	0
BAKKEN	4-2016	0	0	0	0	0	0	0
BAKKEN	3-2016	0	0	0	0	0	0	0
BAKKEN	2-2016	22	0	0	0	472	0	464
BAKKEN	1-2016	31	1179	1360	125	2104	1089	741

When I see a jump in production of this magnitude, I assume the well was re-fracked. And in this case, it is very possible the well was re-fracked but there is no evidence that it was:

• no sundry form
• no FracFocus data: (API: 33-025-00729)
• on a completely different pad than where neighboring wells were fracked 

The graphic:

Ten New Permits; Sixteen Permits Renewed; And, 21 Wells Approved For "Tight Hole" Status -- June 7, 2017

Active rigs:

$45.87	6/7/2017	06/07/2016	06/07/2015	06/07/2014	06/07/2013
Active Rigs	52	26	82	194	189

Ten (10) new permits:

• Operators: CLR (8), WPX, Sinclair
• Fields: Elidah (McKenzie); Reunion Bay (Mountrail); Lone Butte (McKenzie)
• Comments: all eight of CLR's permits are in NWNE/NENE 30-151-97; although two will be separated from the other six (see graphic below)

Sixteen permits renewed:

• CLR (10): three Flint Chips permits (Dunn County); two Dennis permits (Dunn County); two Berlain permits (McKenzie County); two Charleston permits (Williams County)
• BR (6): three Midnight Run permits in McKenzie County; three Patton permits in Dunn County

Twenty-one (21) wells approved for "tight hole" status:

• CLR: 10
• BR: 6
• Whiting: 5

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

Atmospheric CO2 -- May, 2017

Source here.

Essentially no change month-over-month.

Insignificant change year-over-year.

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

For AGW Deniers

I post these monthly "atmospheric CO2" updates because I'm truly curious to see how this plays out over the next three decades.

I'm pretty convinced that no one can predict that the earth's average global temperature will be 2 degrees warmer one hundred years from now.

This is pretty timely:why you should be skeptical of global warming alarmists. From lifezette:

When it comes to the global warming debate, both alarmists and critics agree on one thing: The earth has warmed by roughly 0.8 degrees Celsius over the past 150 years. It’s the cause of this warming, however, that remains in dispute. And while the public is constantly bombarded with messages about the evils of carbon dioxide emissions, there are actually compelling reasons to believe that contemporary global warming has been driven by rising solar output, not carbon dioxide.

"Holy Nightmare, Batman, What Do We Do Now?" -- Saudi Cash Reserves -- As Of April, 2017

Most recent data (April, 2017):

It appears the March to April (2017) decrease was greater than the February to March (2017) decrease. One would expect that all things being equal, it will only get worse for Saudi Arabia with summer approaching. Remember: Saudi says they are talking about total production cuts (not just export cuts, but total production cuts) and going into the summer months, Saudi Arabia exports less oil (thus less revenue) because they need their own oil to run their air conditioners. Yes, they use oil to make electricity. 

Source: https://tradingeconomics.com/saudi-arabia/foreign-exchange-reserves.

For past posts on Saudi's cash situation, click on the "Saudi_Cash" tag.

"Holy, nightmare, Batman! What do we do now?"

US Crude Oil Inventories "Unexpectedly" Increase -- June 7, 2107

WTI drawdown: forecast: a 4-million bbl drawdown; actual: a 3.3 million build. Wow. From CNBC. Weekly reports are here (dynamic link). I can hardly wait to see the John Kemp graphs over at Twitter.

• crude oil inventories: up 3.3 million bbls; now stand at 513.2 million bbls; at this rate (since it's an increase in build, and not a drawdown) the amount of US crude oil inventories will never decrease -- LOL -- see graph below
• gasoline inventories: increased by 3.3 million bbls
• refinery inputs: 17.2 million bopd; down 283,000 bopd
• crude oil imports: 8.3 million bopd; up by 356,000 bopd
• crude oil imports: over the past four weeks, up almost 10% above the same four-week period last year

WTI drops below $46. Now at $46.44. Next support, $45. If breaks through $45, watch for $42 WTI.

It looks like WTI is dragging down the overall market. WTI now at $46.16 (9:43 a.m. Central Time).

Then look at this:

Maybe I'm mis-reading something, but on a day that WTI drops to $46/bbl, the above graph does not look particularly reassuring for oil bulls.

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

Weeks to Re-Balance

Prior to the Saudi Surge, the US had 350 million bbls of crude oil in inventory (not including SPR) and 21 days of supply. Folks are talking about re-balancing to the historical 5-year average, which, of course, makes no sense, since the 5-year average was greatly "inflated" by the two-year Saudi surge (2014 - 2016). Granted, US demand is increasing; US is exporting crude oil; and US refineries are exporting refined products, so perhaps one can argue the "350-million" basis is a bit low, but at most, I would assume, 360. So, I'm leaving it at "350" for now.

Just for the fun of it, I was tracking, based on the weekly drawdown how long it would take to "re-balance" -- back to 350 million bbls in US crude oil inventory (see graph below). The numbers don't quite work in some cases, but the raw data is from the EIA. Drawdown (column 3 in millions of bbls is shown as a positive number; any increase in inventory is shown as a negative -- that may be confusing and I may change that in the future).

For example, last week, based on a drawdown of 6.4 million bbls / week, it would have taken about 25 weeks to re-balance. Using an average up to that time of 3.9 million bbls/week over the five-week period, and an inventory of 509.9 million bbls, it would have taken 41 weeks to "re-balance" to 350 million bbls. Whew. 

To "re-balance":

• with today's increase, the average over six weeks of drawdown: 2.7 million bbls/week on average over the past six weeks
• with today's inventory number of 513.2 million bbls, it would take 60 weeks to "re-balance" to 350 million bbls.  (Update: methodology was wrong in some parts of this table; it has been updated and corrected at this post):

Week	Date	Drawdown	Storage	Weeks to RB
Week 0	Apr 26, 2017		529	180
Week 1	May 3, 2017	0.9	528	178
Week 2	May 10, 2017	6	522	50
Week 3	May 17, 2017	1.8	520.2	59
Week 4	May 24, 2017	4.4	515.8	51
Week 5	May 31, 2017	6.4	509.9	41
Week 6	June 7, 2017	-3.3	513.2	60

Disclaimer: I make a lot of simple arithmetic errors. 

Miscellaneous Notes -- T+138 -- June 7, 2017

Presidential tracking poll shows Trump's approval rating exceeds Bill Clinton's at same point in presidency.

Paris Agreement? Good riddance says op-ed in LA Times. One of the best op-eds I've seen on this issue, and to see it in the LA Times speaks volumes.

We would be the ones making real efforts and incurring real costs, yet we would be the ones chastised for failing to deliver.

This dynamic is already playing out. Pundits are lauding China for achieving peak emissions far sooner than they pledged, without interrogating whether this says more about the country’s progress or its pledge. Meanwhile, EU leaders look down their noses at the United States, even as their emissions rise and U.S. emissions fall.

Why would the United States remain party to such an agreement? We shouldn’t have accepted its terms in the first place, and in an important sense, we didn’t. The U.S. Constitution requires the Senate to approve any treaty by a two-thirds supermajority, in part to prevent a president from making rash, politically motivated promises on the international stage that lack consensus support back home. Obama, knowing he did not have the Senate’s consent, chose to push ahead anyway. If reversing that mistake enrages some foreign diplomats, they have only themselves and their former negotiating partners in the Obama administration to blame.

Oil, what bulls need: Cramer notes -

"Now, the one thing that's in the oil bulls' favor, and Schlumberger has been telling people this, is that most new deep-water projects around the world have stopped" since 2015, Cramer said. "That's a chief reason why Schlumberger's earnings have been so, I'd say, sub-par versus, say, Halliburton, which gets much more of its business from servicing on-shore drilling." 

Insanity: Tesla is spending billions for one gigafactory. Now it says it will scale to 10 - 20 gigafactories.

Assuming Tesla can sell its cars, the full manufacturing capacity of those Gigafactories will come straight out of the market share of existing automotive companies. If they do not respond to the inevitable shift of consumers to electric vehicles in time, Tesla will have more time to eat up their market share.

That clearly includes the market share of BMW, Audi, Mercedes, and Lexus, among others. Tesla estimating that it will build 10 to 20 Gigafactories is a statement that Tesla believes it will have to build at least 10 Gigafactories at the current pace before other manufacturers catch up.

If they respond slower, which seems to be the case with every automotive manufacturer today with the exception of perhaps Chevrolet and its Bolt, Tesla would have an even larger head start in the transition to electric vehicles and would be able to build more factories before there were enough competition to saturate the market. 

Say what? The head of the US patent office has abruptly resigned.

Appalachia Natural Gas Production Outlook -- RBN Energy -- June 7, 2017

Oil. Weekly data today. Drawdown of US crude oil forecast to be 4 million bbls (good) but reined products build (bad). OPEC production creeping up; doubts increase that OPEC / non-OPEC can hold the line for 15 months. WTI below $48.

RBN Energy: Appalachia natural gas production outlook.

Active rigs:

$47.66	6/7/2017	06/07/2016	06/07/2015	06/07/2014	06/07/2013
Active Rigs	52	26	82	194	189

 US production:

OPEC stumped: global oil market trends, US production stump OPEC strategy. This is the lede but much more at the link:

Despite six months of lauded compliance with its own production quotas, OPEC’s effort to accelerate a global oil market rebalancing moves at a dawdling pace.

Global oil prices hover nearer the November 2016 price when the cuts were announced than a $60-plus per barrel target. Meanwhile, crude and product stocks among OECD (Organization for Economic Cooperation and Development) countries ended April roughly 56 million barrels higher than the December total. Annual non-OPEC output is expected to gain 1 million barrels per day (MMbpd) in 2017 and 1.5 MMbpd in 2018, according to Societe Generale (SG) estimates.

The United States is the key driver behind growing non-OPEC supply. In Texas, where the Permian Basin production rate is relentless, the Texas Petro Index (TPI) improved to 164.3 – its first year-over-year increase in 27 months – according to the Texas Alliance of Energy Producers in a June 5 statement.

 Mideast tiff? Saudi dispute with Qatar has 22-year history rooted in gas. Nice historical review of Iran - Qatar relationship.