Saturday, August 12, 2017

In Australia: "Zero Coal" = "Zero Heavy Manufacturing" -- August 12, 2017

Over at "The Big Stories" there is a link to "Renewables and a Dose of Reality." Today, we have another dose of reality regarding renewable energy. The overall theme: countries around the world and regions in the US that succumb to the fallacy of free energy will lose their manufacturing base. Period. Dot.

Let's start with Australia. From a reader earlier today, a link to JoanneNova, aluminum smelters cannot exist where grid electricity if based on wind/solar.
1. Aluminium smelters gobble electrons for breakfast. [The Tomago Aluminum] smelter uses 10% of the entire electricity supply of the most populous state in Australia (New South Wales).

2. If power goes out without warning for more than three hours, the smelter pot lines freeze, permanently. The company goes to the wall.

3. The largest battery in the world would keep their smelter going for all of 8 minutes. There is a good reason there are no solar or wind powered aluminium smelters anywhere in the world.

4. The government can ‘t let the market solve anything whilst it is simultaneously destroying the free market by propping up the market failures at the same time.

5. Electricity pricing has suddenly got very ugly. Their electricity bill may now be subject to price spikes where it could cost them $4 million just to keep one pot line running during that spike. It is as if suddenly gas stations only sold $400 per Litre petrol. (Which would be $1800/per gallon). What he doesn’t say, but which logically follows from that, is that heavy industry in most of Australia can no longer get reliable electricity at an affordable price, even with forward contracts. Cry, scream, run with your factory.

6. In Australia, if we achieve “zero coal” we will also achieve “zero heavy manufacturing”.

7. If we want heavy industry, we need a HELE Coal plant. There are hundreds being built around the world, and we are selling our coal to them. How crazy are we?
On another note, Boeing Corporation had an incredible month on the US stock market recently.

Back To Australia

Down Under, Men At Work

Waiting For Godot -- August 12, 2017

From the November 16, 2016, hearing dockets, case #25419: BR, Charlson-Bakken, 8 wells on a 640-acre spacing unit, 34-153-95.

No new permits yet; no sign of activity yet. Current status of section 34-153-95:

The production profiles are unremarkable for two of the three horizontals. However, for:
  • 20635, 2,477, BR, Frio 24-34H, Charlson, t6/12; cum 226K 6/17;
Absolutely nothing in the file report to explain the production data.

Monthly Production Data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Watch For Increased Activity Targeting The Madison Formation -- August 12, 2017

Agenda from recent NDIC hearing dockets and e-mails from a reader suggest that interest might be picking up in the Madison. From an earlier post: The Madison Group was the primary oil-producing interval in the Williston Basin prior to the Bakken. I track the Madison here.

See stratigraphy here. The Madison is shallower than the Bakken; it overlies the Bakken; it is just above the Bakken in the Williston Basin. I would say that for the most part it is a "conventional" formation and has been targeted with conventional drilling strategies. If I'm wrong, I would welcome corrections.

Successful wells targeting the Madison in North Dakota, from my perspective, are long-lasting wells that have a very flat decline rate. I haven't looked at Madison wells in a long time, so I could be wrong. I will be looking at them again this week.

There are some very, very successful Madison wells including many "monster wells." Petro-Hunt (not to be confused with Petro Harvester, to be mentioned later) and Whiting have a fair number of these Madison wells:
  • 6399, PA/1,360, Petro-Hunt, Lillian Glovatsky 1-19-1A, Madison, Little Knife, t5/78; cum 1.14 million bbls 5/16 (none in 2/16); off-line as of 8/16;
  • 6165, 772, Petro-Hunt, Klatt 2-19-3D, Madison, Little Knife, 160-acre spacing, t7/77; cum 1.51794 million bbls 6/17;
  • 6225, 1,392, Petro-Hunt/Gulf Oil, Zabolotny 2-3-3-C, Little Knife field, Madison Pool, t12/77; cum 3.0321 million bbls 6/17 and still producing 1,000 bbls/month; 6/17
  • 6082, 470, Petro-Hunt, Martin Weber 1-18-1C, Madison, Little Knife, t5/77; cum 945K 6/17;
  • 6118, 597/PNA, Petro-Hunt, Martin  Weber 2-18-4D, Madison, Little Knife; t5/77; cum 1.12 million bbls 3/13
  • 6212, 926, Petro-Hunt, Tachenko 1-15-1B, Madison, Little Knife, t3/78; cum 880K 6/17;
  • 6421, PA/731, Petro-Hunt, Rose Glovatsky 1-20-1A, Madison, Little Knife; t10/78; cum 1.3681 million bbls7/16;
  • 7123, 450, Whiting, Big Stick (Madison) Unit 9550, t4/80; cum 1.8473 million bbs 6/17;
  • 7274, 1,100/PA, Whiting, Big Stick (Madison) Unit 2502, t5/80; cum 2.05 million 11/94
  • 7447, 932, Whiting, Big Stick (Madison) Unit 3002, t10/80 cum 1.088 million bbls 6/17; was inactive for a couple of months in 2013;
  • 7485, 702, Whiting, Big Stick (Madison) Unit 1302, t5/81; cum 2.32887 million bbls 6/17;
  • 9295, 1,324, Whiting, North Elkhorn Ranch Unit 2001 a Madison well, t9/82; cum 1.24888 million bbls 6/17; this well has produced for about 35 years;
  • 9772, 1,128/PNA, Whiting, North Elkhorn Ranch Unit 2101 a Madison well, t10/82; cum 1.2 million bbls 10/13; this well is still active and producing 1,000 bo per month;
  • 12487, 272, Petro-Hunt, Texaco Otto Boss 18-1, Stockyard Creek, Madison; s8/88; t9/88; cum 703K 6/17;
I started noticing more interest in the Madison in the NDIC hearing dockets over the past few months, mostly by Petro Harvester.

In the June and August (2017) hearing dockets:
  • Case 26021, Petro Harvester, Short Creek-Madison pool, four sections, 26/27/34/35-164-93, establish four standup 400-acre units; 2 horizontal wells in each; Burke County
  • Case 26022, Petro Harvester, Woburn-Madison pool, establish two 1280-acre units, one hz well on each
  • 25844, Petro Harvester Operating, Portal-Madison, establish three 640-acre units; two horizontal wells each; Burke County
BUT NOTE: A reader corroborates my "feeling" that interest in the Madison is picking up ... but not as conventional vertical wells, but as horizontal wells. 

Based on the reader's comments and the NDIC hearing dockets, one might want to watch for increased drilling in the Portal/Lignite area targeting the Madison later this fall, perhaps just before winter sets in, in October.

Apparently  Petro Harvester recently acquired two Hess Bakken wells west of their current field which greatly increased their acreage near Columbus. Preparing to start drilling horizontal wells in their leasehold areas would explain why older (and still producing Madison wells) are being abandoned.

Currently, there are no rigs in the area. I will be watching for a couple of rigs in this area if our hunch is correct.

The area under discussion:

The area under discussion would be north of the region marked "10" in the map at this post.

It's hard to tell, but it appears from the "heat map of the Bakken" that this is also a good area for the Bakken.

Saturday Morning -- August 12, 2017; $10,000 Bonus For Bakken Mineral Acre?

Active rigs:

Active Rigs573372194184

ND State lease auction, August, 2017: results have been released. I will post summary later. This one was certainly an outlier:
  • OG1700657, Williams County: 154-101-23, Lot 10, BK1 of Ledosquet addition to the city of Williston, Lynx Oil Company; 0.16 acre (no typo); $10,030 / acre (no typo)
  • 0.16 * $10,000 = $1,600 for the parcel?
  • 0.16 acre. Imagine how many similarly-sized parcels exist in the better Bakken?
Flaring On The Reservation

Flaring: apparently it's okay to flare on land owned by Native Americans. I posted this yesterday after the Director's Cut was released:
Natural gas capture:
  • statewide: 88%
  • FBIR: 79%
  • goal: 88% through October 31, 2020; then 91%
  • comment: the trend continues -- large amount of flaring on BLM land
Today The Bismarck Tribune reports that "state officials are concerned." The article begins:
Flaring on Fort Berthold Indian Reservation increased for the third month in a row, raising concern with state officials.
“You see a real problem developing on Fort Berthold,” said North Dakota Department of Mineral Resources Director Lynn Helms during the department’s monthly report on oil production data Friday.
While the capture, rather than burning off, of natural gas at well sites statewide was at 91 percent, it was only at 79 percent on trust lands and 81 percent on fee lands, Helms said.
“Up until three months ago, it was matching the statewide numbers but, beginning in March or April, you started to see them fall seriously behind,” he said. “It’s pulling the statewide average down quite a bit.”
This becomes a problem as caps on statewide flaring go into effect Nov. 1, and, at the current rate, it will be bumping up against those maximums allowed.
The native Americans say that figures are misleading.

State says this:
Helms said the tribe has been really good with its own pipeline permitting process but blames the issue on difficulty getting federal approval for construction of gas transmission pipelines.
He said there are two significant gathering lines that were held up by the U.S. Bureau of Indian Affairs approval process. After three years, one was just recently approved for a right of way this year. The other remains in the lurch.
One bright spot is a proposed new gas processing plant southeast of Watford City to be built by Arrow Field Services, according to Helms. The company gave notice of plans for a 200 million per day facility to the DMR but it still has to file for a permit from the North Dakota Public Service Commission.
The company hopes to start construction next spring, Helms said. When complete, it will take in gas from the western third of Fort Berthold.
Fox said he has no doubt there are delays at the federal level and the tribe is doing its best to work through the federal rules. He suggested one way to speed up the process of development in Indian country is to give the tribe more control over its lands, creating both improvements to pipeline permitting and flaring numbers.
“This would really relieve stress in the Mandaree district,” Helms said.