The Oasis Lite Wells In The Sanish; It Never Quits -- One Thing Leads To Another -- June 22, 2017

Disclaimer: in a long note like this, there will be typographical and factual errors. In addition, it was done quickly when I was watching some golf on television. I may be seeing things that do not exist. Do not quote me on any of this. I do this for my own interests to help me understand the Bakken better. If this is important to you, go to the source.

Updates

October 1, 2018: Oasis Lite wells were updated here.

Original Post

Oasis has permits for ten more wells in the Sanish, section 11-153-93, see diagram below.

• 33699, 1,118, t5/18; cum 151K 6/19;
• 33698, 381, t5/18; cum 137K 6/19;
• 33697, 1,470, t6/18; cum 159K 6/19;
• 33696, 657, t6/18; cum 139K 6/19;
• 33695, 759, t6/18; cum 160K 6/19;
• 33694, 456, Oasis, Lite 5393 31-11 10T, Sanish, t6/18; cum 147K 6/19;

• 33690, 984, t7/18; cum 166K 6/19;
• 33691, 1,011, t7/18; cum 160K 6/19;
• 33692, 955, t7/18; cum 167K 6/19;
• 33693, 814,  t7/18; cum 145K 6/19;

The other horizontals in that graphic:

• 17582, 1,019, Oasis, Mimir Uran 11-11H, Sanish, t11/09; cum 212K 6/19; struggling in 6/18; doing well in 2019;
  
• 24194, 3,518, Oasis, Lite 5393 11-11B, Sanish, t6/13; cum 286K 6/19; huge jump 6/18;
  
• 24166, 3,188, Oasis, Travel 5393 14-12T, Sanish, Three Forks, t5/13; cum 292K 6/19; struggling in 6/18; doing well in 2019;

Completion data:

• 17582, cased hole, 1.6 million lbs sand/ceramic; test, 10/27/09
• 24194, 36 stages, 4.2 million lbs; FracFocus: 5/22/2013 - 5/22/2013 (no typo; a one-day frack); 3.2 million gallons of water;
• 24166, a Three Forks well; wellbore in the TF target porosity zone for 78% of the lateral. FracFocus: fracked 5/21/2013 - 5/21/2013 (no typo; a one-day frack); 2.9 million gallons of water;

Note, for newbies: in the target zone for 78% of the time is not a good number at all; 95%+ is expected.

Production profile of the older well, #17582: just out of curiosity I checked the production profile for #17582 and a most interesting observation.

BAKKEN	10-2013	31	3002	2884	1449	2560	2560	0
BAKKEN	9-2013	30	4493	4420	1848	3910	2888	1022
BAKKEN	8-2013	31	6223	6570	2727	2617	2617	0
BAKKEN	7-2013	29	5708	5593	3350	433	433	0
BAKKEN	6-2013	30	7016	6756	7587	0	0	0
BAKKEN	5-2013	16	1449	1599	1738	1125	1125	0
BAKKEN	4-2013	5	606	433	478	0	0	0
BAKKEN	3-2013	8	250	228	392	61	61	0
BAKKEN	2-2013	14	1798	1804	624	1729	1729	0
BAKKEN	1-2013	0	0	0	0	0	0	0
BAKKEN	12-2012	16	702	948	187	538	538	0
BAKKEN	11-2012	30	1320	1196	420	1187	1187	0
BAKKEN	10-2012	21	885	838	448	557	557	0
BAKKEN	9-2012	30	1165	1134	1041	882	882	0
BAKKEN	8-2012	30	1492	1809	605	1661	1661	0

It's not dramatic, but some observations:

• leading up to the summer of 2013, this well's production had declined to about 1,500 bbls/month; a typical Bakken decline
• then the well was taken off-line in January, 2013, but then back on line in February; there was a jump in production but not particularly noteworthy (but note, only 14 days in February, 2013)
• then, taken off-line, off and on for the next three months
• then in May, 2013, two horizontals in the same section were fracked; one was a middle Bakken (like #17582) and one was a Three Forks well
• note how far away these two newly fracked wells were, and how little they actually "overlapped" with #17582
• note: it was actually a Three Forks well that "intersected" with the index well, a middle Bakken well
• then, note the jump to over 7,000 bbls/month after the neighboring wells were fracked
• the jump in production lasted several months, but did decline as would be expected
• the jump is not enough to move the needle for an operator, but for one who has minerals, this is not trivial

There can be many explanations for the jump in production. This note does not address that; simply an observation.

I can't wait to see the production profiles of all three wells in this section when Oasis completes ten more Lite wells -- most of which, I assume, will be fracked at the same time.

Whiting With A Permit For A Madison Well In East Fork Oil Field -- June 22, 2017

Active rigs:

$42.84	6/22/2017	06/22/2016	06/22/2015	06/22/2014	06/22/2013
Active Rigs	59	29	75	189	189

Four new permits:

• Operators: Whiting (3), EOG
• Fields: Sanish (Mountrail); Truax (Williams); East Fork (Williams); Painted Woods (Williams)
• Comments: I've always thought of Painted Woods as a CLR field; the Whiting permit for East Fork is a Madison horizontal; short; 320-acre spacing; note the designation for the Whiting Madison well: Jackman 11-11-1HM, where the "H" obviously stands for "horizontal" and the "M" stands for Madison formation. As far as I know, "monitoring" wells (also designated with an "M" by some operators, are all vertical wells, not horizontal wells)

Two producing wells (DUCs) reported as completed:

• 30348, 1,821, CLR, Holstein Federal 8-25H, Elm Tree, t6/17; cum --
• 31578, 2,398, EOG, Van Hook 22-3606H, Parshall, t4/17; cum 13K 4/17;

Note: CLR's Holstein Federal wells are tracked here.

The Literature Page -- Nothing About The Bakken -- June 22, 2017

ObamaCare

The three-legged stool: As the health care debate picks up again, keep this in mind: ObamaCare has only three legs:

• employer mandates
• individual mandates
• medical device taxes

My betting:

• elimination of the medical device tax: 99% likelihood these taxes will be eliminated
• individual mandates: 95% likelihood these taxes will be eliminated; if not eliminated, by executive order President Trump will direct Treasury (IRS) to not take action against any individual who does not comply
• employer mandates: 95% likelihood the employer mandates will not be eliminated, but a) the mandates will be "watered down"; and, b) penalties for not complying will be lessened

Other issues:

• Medicare: absolutely nothing in any current health care debate about Medicare (seniors have a huge voting bloc)
• Medicaid: states will be given relief -- a compromise to get the bill passed

Political note:

• there will no "repeal" of ObamaCare -- this is the gift that keeps on giving
• this will simply be a continuation of the process

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MSG

From Super Sushi Ramen Express: One Family's Journey Through the Belly of Japan, Michael Booth, c. 2009, 2016, chapter 9: "MSG: An Apology"

• "Chinese Restaurant Syndrome": phrase coined in a 1968 letter to The New England Journal of Medicine
• world's largest producer of MSG: Ajinomoto, a Japanese company; "ajinomoto" - "essence of taste"
• company founded by Professor Kikunae Ikeda; discovered MSG in 1908
• konbu seaweed: natural source of the particularly delicious amino acid called glutamate
• glutamate - nature - seaweed - MSG - umami
• MSG played an important role in adding flavor and mouth-feel to processed foods when these were lost during their industrial preservation
• critics allege: a few years ago Ajinomoto made the hole in the top of the MSG shaker larger so that people would use more
• from transcript of interview recorded with the company's scientific affairs spokeswoman
• MSG: no more processed than salt or sugar; comes from konbu, seaweed
• umami receptor discovered in 2000 (joined the other four taste receptors)
• made the hole in the shaker larger about 30 years ago; reason? steam from the soup was clogging up the smaller hole
• now the rest of the story
• US FDA, UN, and EU: have all given MSG the "all clear"
• merely a man-made glutamic acid produced by fermenting carbohydrates and sugars
• umami and MSG are inextricably linked but are by no means the same thing
• umami: usually referred to as the fifth taste, after salty, sweet, bitter, and sour
• some neurologists now claim there are fifty or more tastes
• Ikeda: noted something common in the complicated taste of asparagus, tomatoes, cheese, and meat; this taste is quite peculiar and cannot be classed under any of the other well-defined four taste qualities
• cheese -- parmesan in particular -- and tomatoes have a powerful umami flavor (quick, name the primary components of pizza; yes, cheese and tomatoes, LOL)
• other foods with strong umami component: air-dried ham, veal stock and Worcestershire sauce
• mother's milk is far richer in umami than cow's milk
• the crust on grilled meat: high in umami flavor
• savory and meaty: words most often used to describe umami
• Japanese most often use words delicious and tasty for umami
• evolutionary explanations
• sweet: tells you sugar is present; therefore an energy-giver
• salt: a bodily requirement
• bitter and sour: useful as warnings of toxins or unripeness (or spoilage)
• so why umami? lets you know the food contains glutamic acid
• glutamine indicates that protein is in the food; protein is essential to our survival, and so it makes sense that we identify something as food
• unlike salt or sugar, there are no obvious go-to foods to get your hit
• glutamine: supports other flavors; add body; enhances other flavors
• umami is an indicator of ripeness and therefore tells us when vegetables and fruits are at their most nutritious
• tomatoes are at their most umami-ish when they are at the peak of ripeness
• konbu (seaweed) has more glutamate than any other foodstuff on earth
• #1 food associated with Japanese umami: miso soup
• katsuobushi, the other main base ingredient of the dashi used to make miso soup (along with water)
• shiitake mushrooms: also extremely rich in guanylate and are often added to miso soup as well
• miso soup: a triple whammy -- konbu, katsuobushi, shiitake
• the Italians were particularly good at generating this synergistic umami effect (think pizza)
• parmesan: second-highest amount of glutamate of all common foodstuffs
• French: veal stock
• British: Marmite, or yeast extract
• health benefits to umami -- you will have to get the book to learn about that; I need to move on

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

The Literary Page

One of my favorite posts this past year was not about the Bakken (say what?). It was about color.

Crayola will be phasing out "dandelion yellow" this year. I bought several 24-count Crayola boxes as an investment since these will probably become priceless once "dandelion yellow" is completely phased out.

At the time of the announcement, Crayola did not say what color was going to replace "dandelion yellow." They have now made the announcement that it will be shade of blue but the actual color has not yet been named.

There were a flurry of stories yesterday about this new blue crayon. From USA Today: Crayola's newest crayon color is a shade of blue that was just discovered.

A brilliant blue color, discovered accidentally by Oregon State University chemists, will soon be the newest addition to Crayola’s box.

The crayon color, inspired by the blue pigment known as “YInMn” blue," is the replacement for the recently retired Dandelion crayon. The vibrant blue was discovered by Oregon State University chemists who were heating up chemicals in hopes of finding new materials that could be used in electronics. In what the university calls a "serendipitous discovery," one of the chemical mixes came out of the furnace a striking blue. The "YInMn” moniker comes from the elements that comprise it: yttrium, indium, manganese and oxygen.

“With the discovery of YInMn brand new pigment, who other than Crayola would be best to bring it to life?” said Leena Vadaketh, Crayola’s VP of Research & Development, North America.

Possibly / probably because of that story, I was attracted to this book at the Grapevine library today: Color: A Natural History of the Palette, Victoria Finlay, c. 2002. Again, a British author; I've always argued that writers from the UK (to include Ireland and Scotland) are consistently very, very good.

Perhaps more later, but I have to get back on my bike to get home in time to take Sophia swimming.

Good luck to all.

Gasoline Prices Falling? Depends On Source, I Guess -- June 22, 2017

CNN headline: we CAN drill our way to cheaper gasoline prices. A screenshot from today's CNN Money, on-line:

Just kidding, that was a fake headline. This was the real headline: Gasoline prices are falling fast.

That may be so, but the graph released today by The Wall Street Journal doesn't particularly support this factoid.

In fact, gasoline prices have barely budged for several months now, and gasoline is incredibly more expensive than what is was in February, 2016 ($2.28 / gallon today vs $1.69 then).

Propane And Butane -- LPG -- Bakken 101 -- June 22, 2017

I track the US LPG export story here. This is truly an incredible story. I remember posting stories about the "great propane shortage" some years ago which was a huge problem for North Dakota farmers who were at risk of losing their crop because they could not dry what they had harvested. That was back in 2013 - 2014, and it was such a big story, it got its own tag. In less than five years, an incredible difference, all due to the Bakken.

From today's RBN post:

Propane and butane — the two natural gas liquids (NGL) products generally referenced as LPG — are produced by the processing of natural gas yielding mixed NGLs and the fractionation of those NGLs into purity products.

Refineries also produce LPG.

U.S. production of propane and butane has skyrocketed during the Shale Era, largely because of rising production of wet natural gas, which contains significant volumes of NGLs.

As result, the U.S. five years ago flipped from its long-time status as a net LPG importer to a net exporter.

By 2016, net U.S. exports had risen to an average of 855 Mb/d, more than 15 times the exporting pace in 2012, and in the first six months of this year, LPG exports averaged just above 1.0 MMb/d.

Where is all this LPG headed?

A lot of it is headed for Asia. In 2016, Asian markets were the destination for 372 Mb/d (or 44%) of the 855 Mb/d exported from the U.S., and so far in 2017 Asia’s share has risen to 50%; Latin America (excluding Caribbean) is second (22% of total exports in 2017 year-to-date), Europe is third (14%), and exports to the Caribbean (receiving 9% of the U.S. exports) account for most of the rest.

The flourishing Gulf Coast-to-Asia LPG trade — 484 Mb/d (51%) of the approximately 950 Mb/d of the propane/butane exported from Texas terminals so far this year went to Asia — was made possible in part by the perfectly timed expansion of the Panama Canal, which with its new, more commodious locks, can now accommodate each and every one of the world’s more than 200 Very Large Gas Carriers (VLGCs), which can carry up to 550 Mbbl of LPG and which because of their size and economies of scale are the LPG-movers of choice, especially for serving mega-markets like Japan. Before the expanded canal opened in June 2016, four-fifths of the world’s VLGCs were too big to squeeze through.

By the way, just like The New York Times hoax story on the US natural gas revolution, The New York Times was convinced that the Panama Canal expansion would fail. By the way, my posts on The New York hoax story was one of the top stories I ever posted, based on number of hits and google searches. Whatever.

But what about LPG exports and the Panama Canal?

But transiting the Panama Canal doesn’t come cheap — tolls, tug fees and other charges can top $200,000 per VLGC, and that's just for the one-way trip from Houston to Asia — and it takes about 25 days to make that journey, and time is money.

Which brings us to Petrogas’s Ferndale, WA, export terminal, which thanks to its West Coast location can reach Japanese and other Asian ports in 10 to 12 days — less than half the time it takes to sail from Texas ports, through the canal and across the Pacific.

For most of its 41-year history, Ferndale — located in the northwestern corner of Washington State, an hour’s drive south of Vancouver, BC — was a minor player in the NGL universe, handling small volumes of seasonal refinery butane storage and occasional exports of butane to Latin America and Asia.

Interest in Ferndale grew, though, as U.S. and western Canadian NGL production increased, as the U.S. flipped from being a net LPG importer to a net exporter, and — for Alberta producers in particular — when a portion of Kinder Morgan’s Cochin Pipeline (which moved up to 95 Mb/d of propane and other NGLs southeast from Fort Saskatchewan, AB, to the U.S. Midwest and Ontario) was repurposed to move diluent northwest from Illinois to the oil sands (for blending with bitumen to make dilbit, a diluent/bitumen combo that can flow through pipelines). Without Cochin, western Canadian propane and butane has to be transported by rail or truck into the Midwest or Northeast and, with U.S. NGL production rising fast, it made more and more sense for LPG producers and marketers to pursue export opportunities.

Much, much more at the linked RBN story. Archived.

Worth Reposting -- Building An "Oil Factory" In The Bakken -- June 22, 2017

From a special report on energy, in The Wall Street Journal, back in 2015.

Liberty Resources, Page R6

What the future of oil drilling will look like -- case study: Liberty Resources, the Bakken. Regular readers already know about this; we've been talking about the "manufacturing stage" in the Bakken for the past several years.

Here's the graphic:

Note the graphic above: 12 wells per pad. In the graphic above, there are six 1280-acre drilling units. That's 72 wells. In fact, that's just the start. Others may have seen this coming long ago, but it was Harold Hamm who espoused it publicly over and over. And over. There will be enough wells in this one "manufacturing unit" to support a salt water disposal well, eliminating the need for trucking water to an off-site SWD well.

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Solar Shenanigans

Update from New York. 

The Energy And Market Page, T+153 -- June 22, 2017

The Opening: This is simply bizarre. The markets continue to climb the wall of worry; this is the 9th year of the second or third longest expansion in US history. And yet, today, the market continues to climb (barely) despite the energy sector pulling the indices down. Really quite remarkable.

The buzz is that 2Q17 GDP will come very, very close to 3%.

This could all work out very well for President Trump. The Obama recovery was the weakest recovery in history (that's not an opinion). Whatever Obama recovery there was, it dragged out of six years, allowing it to continue into the new administration.

Oil. Most interesting factoid that was reported yesterday -- most oil companies -- at least the majors and the larger independents have met their full-year commitments. They could all quit drilling today and still report meeting production forecasts.

Oil. It is hard to believe that this was posted in 2014 --

And technology improves so fast on U.S. fields that what looked uneconomical two years ago looks economical today, even with lower prices. According to an analysis from Barclays, 90 percent of production from the U.S. Bakken province will still be profitable even if oil prices fall to $60 per barrel.

Deep doo-doo. For the Saudis. Jim Cramer says he doesn't see oil getting back to $50. Ever. ("Ever," of course, it not "forever.") Yesterday, there was a short conversation among talking heads suggesting it would require a major geo-political event in the Mideast to get oil back to $50.

Navajo Nation: not looking good. From PennEnergy:

The Navajo Nation Council has tabled legislation seeking to extend the lease on a coal-fired power plant in northern Arizona.

Council members say they'll wait for a special session on the issue Monday in Window Rock. The current lease for the Navajo Generating Station in Page is scheduled to expire in December 2019.

If the tribe doesn't approve a lease extension by July 1, the plant will have to close at the end of this year to be torn down by 2020.

Better Late Than Never -- June 22, 2017 -- The Political Page, T+153

New Democratic theme song (hat tip to a reader) in light of recent elections, particularly the Georgia election, the most expensive US House election in history, with huge attempt by California to interfere with the outcome, and yet the GOP won with an incredibly weak, twice-loser nominee:

Georgia's Democratic Leadership

Better late than never. My editor tells me I was remiss not getting this posted yesterday:

In The Summertime, Mungo Jerry
ObamaCare: watching CNBC this morning, one gets the feeling that some people think something is happening with ObamaCare. Unless I'm missing something, ObamaCare has not been repealed, replaced, or even re-formed. I'm starting to get the feeling that US senators have as much interest in addressing national health care (other than giving interviews) as Illinois pols have in submitting a state budget. By the way, I bet there is huge correlation between full employment which we now have and health insurer fleeing the individual insurers' market. The only way 99% of Americans can afford health insurance these days is through their employer. But on an individual basis, impossible to find or afford health care. Hey, maybe that's not bad. Maybe we've found a way to move folks back into the workplace.

ObamaCare: worth re-posting -- from the Washington, DC, ObamaCare website exchange --

Great article on the DC ObamaCare exchange --  

But it’s not all bad. What I like is that I can access the D.C. exchange in twenty different languages, including Apache, Navajo, and Irish. Which is great because I see so many Irish here who have a heck of a time assimilating, what with the fact that they only speak Irish and not the King's English. (You can also receive notices in American Sign Language—l'd make a joke here but I might offend the deaf. But I guess since they can't read and need American Sign Language I might as well let one rip. But I'll refrain nevertheless.)

Maybe we should blame the federal government for this, but last time I looked (and at one point it was my job to do so) a government entity was only responsible for providing assistance in a foreign language if there was a significant number of people who spoke that language and had no facility with English. Of course, we can all quibble about what "significant" means in this context, but does anyone believe that it is at all conceivable that there are even ten people in the District who speak only Apache and need to buy their own health insurance? I would bet my entire net wealth that the number is, in fact, lower than that, if not zero. Ditto for Navajo and Irish. If there's anyone in D.C. shopping for health insurance who speaks only German or French and no English I'd be shocked as well. 

But while the exchange doesn't work, at least we can get our messages telling us our application has been "disposed of" in the language of our choice, although to be honest I do not know at all what this message means and English is my mother tongue. Does it mean that I have insurance? I doubt that since I never got to select a plan. Or that I've been approved to buy a plan? if so why won't it let me do so.

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Twitter

Due to the 140-character limit, President Trump had to use two tweets for the following:

"With all of the recently reported electronic surveillance, intercepts, unmasking and illegal leaking of information, I have no idea...whether there are "tapes" or recordings of my conversations with James Comey, but I did not make, and do not have, any such recordings." -- @realDonaldTrump. 

After the tweet was tweeted, CNBC had an on-air interview with its White House reporter who then spent an interminable amount of time trying to explain what that meant. Seriously. And that's the problem: 

• reporters seem incredibly dense; and, 
• reporters are bending over backwards to spin a presidential tweet

For the record, I understood exactly what Trump was saying. But again, I benefit from white privilege.

US Shale Oil Output To Hit Record High In July; The Bakken Is Back -- WSJ -- June 22, 2017

From The WSJ, if you like graphs, you will love this link. I did not see the graphic that goes with the "US Shale" headline.

The Bakken is back, but with oil trending toward $43 and the DAPL still in question, one wonders how long this will last.

Two graphs that did catch my eye:

ND Active Rigs Hold At 59 -- June 22, 2017

North Dakota's oil and natural gas production "up": Zacks. For the archives. Variations of this story reported many different places. I think the more interesting story is the graph of Bakken activity at this link.

Norwegian production: dropping; down about 128,000 bopd.

Active rigs:

$42.79	6/22/2017	06/22/2016	06/22/2015	06/22/2014	06/22/2013
Active Rigs	59	29	75	189	189

RBN Energy: West Coast alternatives for exporting LPG to Asian markets.

The Pacific Northwest will never be a Houston or even a Marcus Hook when it comes to liquefied petroleum gas (LPG) export volumes, but the region — British Columbia, Washington State and Oregon — is finally poised to get a second marine terminal dedicated to loading propane and butane, the two LPG family members.

When AltaGas and Royal Vopak’s planned 40-Mb/d LPG export terminal on BC’s Ridley Island comes online in the first quarter of 2019, it will join Petrogas’s 30-Mb/d terminal in Ferndale, WA, in offering time-saving, straight-shot LPG deliveries to Asia, which has emerged as a leading destination for North American-sourced propane and butane.

Other LPG export terminals in the Pacific Northwest have been proposed. Today we begin a blog series on propane and butane exports from Ferndale and the prospects for regional export growth.

Jobs:

• first time claims, forecast: 240K
• actual: 241,000 against revised 238,000 (from previously reported 237,000) -- so up 3,000
• four-week moving average, prior: 243,000