Wednesday, November 15, 2017

Five New Permits; 33 Permits Come Off Confidential List; Five Producing Wells (DUCs) Reported As Completed; MRO Reports Four Nice DUCs; CLR Reports One Completed DUC -- November 15, 2017

Active rigs:

Active Rigs553964186183

Five new permits:
  • Operators: BR (3); Petro-Hunt (2)
  • Fields: Dimmick Lake (McKenzie); Charlson (McKenzie)
  • Comments: 
Thrity-three (33) wells came off the confidential list today:
  • most were PNC
  • a few were SI/NC
  • a couple were reported as completed and producing oil
Three permits were renewed:
  • Thunderbird (2): two Frank permits in Stark County
  • EOG: one Hawkeye permit in McKenzie County
Five producing wells (DUCs) were reported as completed:
  • 31400, 3,214, MRO, Stark 44-35TFH, Reunion Bay, t9/17; cum 20K in 11 days;
  • 33097, 1,594, CLR, Monroe 11-2H1, Banks, 4 sections, t1017; cum --
  • 33345, 3,774, MRO, Lund 44-35H, 4 sections, Reunion Bay, t10/17; cum 4K over 5 days;
  • 33346, 4,378, MRO, Harley 14-36TFH, Reunion Bay, t9/17; cum 15K over 8 days;
  • 33347, 3,530, MRO, Houser 14-36H, Reunion Bay, t10/17; cum 1K over 2 days;

 Preparation: checking out the mixer.


Stack of "Mickey Mouse" waffles
The Mickey Mouse waffle-maker, black, lower left-hand corner, 
blends into the blackness of the porcelain stove top.

Shooting Range Opens South Of Williston -- November 15, 2017

From The Bismarck Tribune:
North Dakota Game and Fish has completed work on a public shooting range near Williston.
The Lewis and Clark Wildlife Management Area shooting range is 6 miles southwest of Williston and opened Nov. 2 after full renovation.
It features 19 concrete shooting benches, including five at 200 yards, nine at 100 yards and five at 25 yards and for pistol/rimfire range. 
The shooting range is handicapped accessible and is one of five public shooting ranges on state WMAs.

September, 2017, Data Is Posted -- Director's Cut -- Total North Dakota Crude Oil Production Increased 1.6% Month-Over-Month -- Statewide, Breakeven Price = $21


November 19, 2017: Mark Perry's comments, with graphic.

November 17, 2017: see graphic at this post.

November 17, 2017: Lynn Helms talks about latest productivity --

From The Williston Herald: production cleared 1.1 million bopd and more increases may be ahead.
For the eighth consecutive month, oil production in North Dakota hovered over the 1 million barrel per day mark, and incrementally climbed its way back to another milestone.
September production was 1.107 million barrels per day, up from August’s 1.089 million. It is the first time since March 2016 that North Dakota oil production exceeded 1.1 million.
That,  and the production of natural gas:
These production numbers put state revenues at 17 percent above forecasts, despite prices being a little lower than forecast.
“We are still 2 percent low on that,” Department of MIneral Resources Director Lynn Helms said. “If we project that through the biennium, production numbers will make up for it, but we are still lagging in terms of prices on revenue forecast.”
What's going on in the Bakken?
Longer lateral lines are part of what’s driving increased production, along with more sand and larger, slickwater hydraulic fracturing techniques. 
One place that’s a standout is what Liberty is doing in northern Mountrail and southern Burke Counties,” Helms said. “I took a look at some of those extended lateral wells that are producing 2.5 to 3 times the initial production rate of the 2-mile laterals that were previously drilled in that area. That’s pretty encouraging, and it’s already affecting Mountrail numbers.”
Burke County numbers aren’t showing an effect yet, since some of the wells production statistics are still confidential.
These improvements are keeping the Bakken in the No. 1 and 2 place in terms of production per rig.
One reason why there is so much activity in the Permian vs the Bakken right now:
“We still have to compete with the fact that there’s a lot of leasehold to procure in the Permian and the Anadarko, but once those basins reach a similar level of maturity, you’d expect companies to bring their capital back here, where they make more money for every dollar invested.”
Long laterals:
  • more of them, mostly in non-core areas
  • NDIC has re-spaced some 1280-acre units to 1920-acre units to accomodate the need for longer laterals
  • only three wells meeting these new parameters are presently producing
  • a bump should occur when more of these long-lateral wells come on line
  • when looking at month-over-month production increases of almost 20,000 barrels, that represents about one-sixth, one-seventh of that increase; a significant increase
  • example: once Slawson is able to complete some of these in Van Hook, it looks like that one pad all by itself could potentially breach 20,000 barrels per day
Flaring problem? a one-time maintenance problem that has been fixed, according to the Director, NDIC.
Original Post

Before we get started, from CNBC, September 18, 2017: EIA expects North Dakota's Bakken shale output to rise by 8,000 barrels a day in October.

Director's Cut for September, 2017, data.

Link here.

The usual disclaimer applies. I do "this" quickly and there will be typographical and factual errors. If this is important to you, go to the source.

Summary: the number of producing wells has decreased about 0.7% and yet total production has increased by almost 2% (most likely the number of producing wells will be revised upward when the final count comes in next month). Total North Dakota crude oil production is still over 1 million bopd, increasing by almost 20,000 bopd, nearly three times what the EIA forecast (see above). Flaring has increased (more than expected from number of producing wells and daily production) and now exceeds the state's goal (this may be a headline on environmental blogs). Gas capture on the reservation is very, very troubling. The Native American held-in-trust portion of gas capture is a dismal 65%; private FBIR production reports an astounding 91% capture. The BLM appears to be doing a lousy job working the flaring issue; private wells are doing very, very well in comparison.

According to notes regarding flaring: the percentage of gas flared increased to 17% primarily due to six force majeure events. September 2017 is the first month that industry missed gas capture targets in 3 years of reporting. [Apparently the force majeure events affected the reservation more than the rest of the Bakken.] This is the first time I've seen a note by the Director explaining flaring disappointments to "force majeur" events.

Most interesting was the data on page 12 of the 12-page report. The Director provided "break-even price" by county. Currently, WTI was stated to be $55/bbl:
  • Billings: $47*
  • Bottineau-Renville: $78
  • Bowman-Slope: +$100*
  • Burke: +100*
  • Divide: +100*
  • Dunn: $18
  • Golden Valley: $49*
  • McKenzie: $18
  • McLean: $17
  • Mountrail: $17
  • Stark: $43
  • Williams: $21
  • Statewide: $21
*information from previous quarter; too little data to calculate new value.

Note: many, many pages devoted to BLM pending rules and regulations. I may come back to those later.

The Data

Oil production
  • September, 2017: 1,107,104 bopd
  • August, 2017: 1,089,318 bopd
  • July, 2017: 1,048,099 bopd
  • Delta: +17,786 bopd, +1.6%
  • compare with previous month -- last month (August, 2017), the delta: 36,591 bbl/day increase; +3.5%
Producing wells:
  • September, 2017: 14,089
  • August, 2017: 14,190 (preliminary, if it holds, new all-time high)
  • July, 2017:13,992
  • Delta: pending (previous: an increase of 88 wells; 0.4% increase)
  • compare with previous month --- last month (August, 2017), the delta: an increase of 88; 0.4%
  • October, 2017: 147 
  • September, 2017: 104
  • August, 2017: 101
  • July, 2017: 146 (huge jump)
Oil price (WTI), breakeven price statewide = $21
  • today: $48.75
  • October: $43.54
  • September: $39.56
  • August: $37.93
  • July: $35.83
  • June: $34.72
Rig count:
  • today: 55
  • October: 56
  • September: 56
  • August: 56
  • July: 58
  • June: 55
Wells not producing, total: about 2,300 wells not producing; that exceeds the number of wells completed in any year during the boom
  • waiting on completion: 853, down 10 from the end of August to the end of September; (previous -  863; down 26 from the end of July to the end of August)
  • estimated inactive well count: 1,444, down 54 from the end of August to the end of September (previous - 1,498; up 20 from the end of July to the end of August)
Takeaway capacity:
  • September data: including CBR to coastal refineries is more than adequate
  • August data: including CBR to coastal refineries is more than adequate
  • July data: including CBR to coastal refineries is more than adequate
  • June data: including CBR to coastal refineries is more than adequate
  • May data: including CBR to coastal refineries is more than adequate (major change in verbiage)
Natural gas capture, getting "worse" and FBIR is major issue:
  • statewide: 83% (previous -- 86% [trending down])
  • FBIR: 71% (previous -- 77% [huge disappointment; was 82% previous to that])
  • goal: 88% through October 31, 2020; then 91%
  • comment: pending (previous - the trend has worsened -- large amount of flaring on BLM land)

Going Biking Despite Chance Of Rain -- Off The Net For Awhile -- November 15, 2017

Comments will be moderated later.

Typographical and factual errors will be addressed later.

The usual disclaimer applies.

E-mail will be read later.

If the Director's Cut is released in the next couple of hours, I will catch up later. Here is the NDIC site.

From The Bismarck Tribune:
Kyle Hass of Bowbells harvested a monster of a non-typical white-tailed deer during the season opener last Friday. His dad was there too, and his best friend. The quality company made an exciting hunt even more memorable.
As for the deer, about as non-typical as you can get, Hass said, "It was kind of a freak of nature to even have that thing around."
Non-typical white-tailed deer, those that have antlers that differ from the traditional matching sets on the left and right sides, are not completely unusual. There's a few taken every year in North Dakota. What makes the Hass buck stand out is its large size and the fact that very few people, if any, had previously seen the deer in the area only about 12 miles south of the Canadian border and 52 miles northwest of Minot.
Much more at the link.

The Literature Page

Siegfried Sassoon, Soldier, Poet, Lover, Friend: A Life In One Volume, Jean Moorcroft Wilson, c. 2014.

From the inside back jacket:
Jean Moorcroft Wilson lectures in English Literature at Birkbeck College, University of London. She is married to Leonard and Virginia Woolf's nephew, with whom she runs a publishing house. Her previous books include two other biographies of First World War poets, Charles Hamilton Sorley and Isaac Rosenberg, and she is currently working on a biography of Edward Thomas. She is considered the foremost expert on Siegfried Sassoon.
  • More than any other figure from that period, with the possible exception of Rupert Brooke, however, Sassoon has become the prototype of the brave young soldier-poet, a serving officer who entered the war ready to lay down his life for his men and country. 
  • his courageous public protest about the handling of the conflict, once he encountered it at first hand, does not quite fit the stereotype, but his qualifications for the role in almost every other respect are impeccable:
    • he came from the right social background: though half-Jewish, his paternal relatives were wealthy merchant princes, who hobnobbed with Kind Edward VII
    • his maternal relatives were well-known sculptors, painters, and engineers
    • he had received the "correct" education at Marlborough and Cambridge, though he did poorly at both
    • he was an officer adored by his men
    • moreover, he was a conspicuously brave officer, awarded an M.C.for bringing in his wounded Corporal under intense fire in May, 1916, and
    • involved in several other daring raids
    • finally, like Brooke who died before he could qualify fully for the role, Sassoon was extremely handsome, and inestimable advantage for icondhood
  • the one condition Sassoon failed to satisfy was that he did not die in the war, though he told Charles Causeley as late as 1952 that "most people" thought he had
Yet his life after 1918 is as interesting, if not more so, than before it, and not just in personal terms.

Page 5: he threw his Military Cross into the River Mersey; must have been in 1918 before the war was over; frustrated that the war dragged on. Says the M. C. meant as much to him as his "point-to-point cups." "Point-to-point" is steeplechase horse racing. "Cup," of course, is the "trophy" as in "world cup."

Siegfried Sassoon
Family History

Paternal history: Jewish
  • his father's family, the Sassoons, often referred to as the Rothschilds of the East
  • almost completely Oriental in outlook, manners and dress until the arrival of Siegfried's grandfather in England in 1858
  • this made their rapid acclimatization to Europe within one generation all the more remarkable
  • they claimed to trace their ancestry back to King David himself, but it is not until the birth of Sason ben Saleh in 1750 that any reliable documentary evidence exists
  • by the time the family had settle in Baghdad, Mesopotamia (moder day Iraq), among the first Jews to do so
  • Sason ben Saleh was the last in line to serve as "Nasi" (prince of captivity) to the Caliph's court in Baghdad
  • his eldest surviving son, born in 1792, was forced to flee Baghdad (under siege by the Ottoman Empire) in 1817 (or thereabouts)
  • by 1830 David had started a small export trade from Basra to India an din 1832 settled in Bombay
  • the trading venture mushroomed, refounding the Sassoon dynasty
  • to his great-grandson Siegfried Sassoon the story of "old David's starting the enormous merchant business" from scratch was the main interest of his father's family
  • David's third son, Sassoon David ("S.D.") Sassoon, the first child of his second marriage was sent to London to open a small branch, 1858
  • [Siegfried, the grandson, inherited physical and emotional qualities from his grandfather and not from his father, Alfred Ezra
  • S.D. set out for London in 1858; his young wife Fahra (anglicized to Flora) and their two children, 3-y/o Joseph and baby Rachel, would follow
  • S.D.'s next to youngest child, Alfred (Siegfried's father) was the first Sassoon to be born in England, in 1861
  • the Sassoon family became increasingly bound up with England
  • with their wealth, eventually turned to the arts
Maternal history, quite the opposite, the Thornycrofts
  • this family had been dedicated to art, for three generations in some cases by the time Siegfried was born
  • his mother's maternal grandfather, John Francis (1780 - 1861) had begun life as a farmer at Thornham on the Norfolk coast but had become a sculptor
But it was not the art that separated the two families
  • Sassoon: urban
  • Thornycrofts: rural
To be continued at this blog.

The Market And Energy Page, Part 3, T+298 -- November 15, 2017


November 20, 2017: Russia confirms "extremely high" radiation readings; no source given for the radioactivity (Russia probably "getting its story correct."

Original Post

Nuclear is dead. Not getting much coverage in this country, but I bet it's a big story in Europe. From The New York Times, a radioactive cloud wafts over Europe, with Russia as chief suspect.
Scientists across Europe have been puzzling about a phenomenon that seemed laden with mystery and menace in somewhat uneven proportions — a concentration of radioactive pollution caused by a nuclide called ruthenium 106.
Official monitors in France and Germany concluded that, based on weather patterns, the contamination detected since late September had emanated from southern Russia or from Kazakhstan.
The most plausible zone of release lies between the Volga and the Urals.
One has to read to the very end of the story to find out that -- whatever it was -- it's over, and levels were never high enough to cause any risk to those in western Europe.
In a telephone interview, Mr. Gariel said French experts thought the two most likely explanations were that the ruthenium 106 originated in a facility treating used fuels, or that it came from a plant producing ruthenium exclusively.
In any event, the French agency said in a statement, ruthenium levels had been decreasing since Oct. 6 and the nuclide was “currently no longer detected in Europe.”
This story has no legs. And reading the entire story explains why this is getting very little coverage in the US.

Oh-Oh -- US Crude Oil Inventories Increased Moderately -- The Market And Energy Page, Part 2, T+298 -- November 15, 2017

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or what you think you may have read here.

Target: despite beating estimates, Target is getting slammed. Down 26% for the year, Target shares dropped a little over $5 this morning, after earnings came out (down 8.44%) and now trading at $55.04. The numbers were great; the guidance was awful: flat to maybe slightly improved. WMT in the same period has risen from $68 to $90, a gain of 32% over one year.

WTI: Yahoo!Finance top story -- market opens 150 points down, said to be due to slide in oil prices, exactly what I said two days ago. Talking heads say the slide in oil is due to a) declining Chinese demand; and b) continued "over" production in the states. I don't bu the "declining Chinese demand" story. We will see EIA's weekly report and US crude oil inventories for the past week later this morning.

I keep reading that oil supplies in the US are "tightening." I don't see it. Whoever is saying that must be "talking their book." I tend to follow the data. The price of WTI is going to have to drop below $50 for US shale production to decrease.

If you have not listened to the podcast at this post, I highly recommend it. By the way, for the record, I disagree with the interviewee's comments about "swing producers" and how quickly the Bakken can respond to price swings. It was interesting to hear that unconventional response to price is 9x the conventional oil response -- listen to the podcast to understand this. This is the quote from Platts via Twitter: "US drillers are now 9x more responsive to oil prices since adopting unconventional drilling. I understand that and agree with it. It's the "swing producer" stuff and the ability of the Bakken to respond to price changes that I disagree with. I think the phrase "excess capacity" is a misnomer these days, a carryover from a decade ago.

Before the weekly petroleum report: $55.08/bbl WTI; after the report, slightly below $55.
  • US crude oil inventories: increased by 1.9 million bbls; now at 459 million bbls
  • refinery operating at91% capacity; improving slightly
  • gasoline production decreased last week, now at 9.9 million b/d
  • distillate production increased last week, not at 5.2 million b/d
  • gasoline build: 0.9 million bbls
  • distillate drawdown: 0.8 million bbls
We'll see the "gasoline demand" graph tomorrow.

Re-balancing now estimated to take another 43 weeks, up from 42 weeks, and, of course, another week has gone by without making any new headway on re-balancing.

Weeks to RB
Week 0
Apr 26, 2017

Week 1
May 3, 2017
Week 2
May 10, 2017
Week 3
May 17, 2017
Week 4
May 24, 2017
Week 5
May 31, 2017
Week 6
June 7, 2017
Week 7
June 14, 2017
Week 8
June 21, 2017
Week 9
June 28, 2017
Week 10
July 6, 2017
Week 11
July 12, 2017
Week 12
July 19, 2017
Week 13
July 26, 2017
Week 14
August 2, 2017
Week 15
August 9, 2017
Week 16
August 16, 2017
Week 17
August 23, 2017
Week 18
August 30, 2017
Week 19
September 7, 2017
Week 20
September 13, 2017
Week 21
September 20, 2017
Week 22
September 27, 2017
Week 23
October 4, 2017
Week 24
October 12, 2017
Week 25
October 18, 2017
Week 26
October 25, 2017
Week 27
November 1, 2017
Week 28
November 8, 2017
Week 29
November 15, 2017

A Nice HRC Fort Berthold Well Comes Off The Confidential List Today -- November 15, 2017

Coming off confidential list today:
  • 31462, 2,748, HRC, Fort Berthold 148-94-36C-25-7H, McGregory Buttes, 33 stages; 4.9 million lbs, t5/17; cum 169K 9/17:
Monthly Production Data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

The graphics: