Random Look At An Old EOG Short Lateral -- Coming Up On 600,000 Cumulative Bbls -- March 18, 2018

This is for newbies and for me, just for the fun of it. Seriously, I am just passing some time -- no need to really spend any time on this well. Maybe this would be a great time for a music video:

When I Get Low, I Get High, The Speakeasy Three
This is just an interesting example of a Bakken well. As far as I can tell it was fracked only once, back in 2010 with 17 stages, and using slightly less than 2 million lbs of sand. It is a short lateral. Look at the production profile. Fracked once but probably a number of "work-overs," pumps, neighboring wells, etc., which all affected production. The jump in production in 2017 was probably due to a neighboring well (#31206) being fracked. The continued good production in 2013 was probably due to another neighboring well (#24855) being fracked. This tells me this well (#18825) is a great candidate for a re-frack.

The well:

• 18825, 951, EOG, Van Hook 8-36H, Van Hook, Bakken, 100K in 5 months -- whoo-hoo! t7/10; cum 577K 1/18;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2018	31	5218	5312	2158	4332	3868	212
BAKKEN	12-2017	31	5094	5110	1986	3645	3332	70
BAKKEN	11-2017	30	4932	4905	2258	3282	2832	206
BAKKEN	10-2017	31	5098	5057	2330	3353	3101	0
BAKKEN	9-2017	30	4746	4783	2377	2758	2514	0
BAKKEN	8-2017	31	5033	5067	2293	2520	2220	48
BAKKEN	7-2017	31	4705	4685	2451	2230	1572	407
BAKKEN	6-2017	30	3665	3573	2225	1711	1141	333
BAKKEN	5-2017	26	1937	2018	1982	866	514	165
BAKKEN	4-2017	0	0	0	0	0	0	0
BAKKEN	3-2017	4	55	349	57	1	0	0
BAKKEN	2-2017	27	1101	630	374	2198	1982	0
BAKKEN	1-2017	31	1636	1636	185	3224	2972	0
BAKKEN	12-2016	31	1909	1916	256	3793	3455	86
BAKKEN	11-2016	30	2127	2132	403	3913	3651	18
BAKKEN	10-2016	31	2244	2251	321	4258	1985	2022
BAKKEN	9-2016	30	2251	2252	425	4362	4029	89
BAKKEN	8-2016	31	2390	2558	496	4504	4253	0
BAKKEN	7-2016	31	2483	2454	433	4670	4418	0
BAKKEN	6-2016	21	1829	1827	433	2978	2826	0
BAKKEN	5-2016	31	2649	3087	319	4394	4144	0
BAKKEN	4-2016	30	2673	2143	475	4260	4017	0
BAKKEN	3-2016	31	2703	2724	459	4378	4126	0
BAKKEN	2-2016	29	2764	2775	336	4090	3794	60
BAKKEN	1-2016	31	3013	2984	496	4524	4264	8
BAKKEN	12-2015	31	3071	3130	398	4522	4252	33
BAKKEN	11-2015	30	2937	2947	335	4061	3755	78
BAKKEN	10-2015	31	3402	3364	457	4442	4174	17
BAKKEN	9-2015	30	3030	3074	415	4279	3982	63
BAKKEN	8-2015	31	3466	3468	407	4698	3569	877
BAKKEN	7-2015	31	3712	3721	480	5041	4789	0
BAKKEN	6-2015	29	3721	3724	449	4546	4319	0
BAKKEN	5-2015	31	4446	4463	574	4695	4443	0
BAKKEN	4-2015	14	2678	2578	530	2282	2168	0
BAKKEN	3-2015	23	2904	2898	364	2765	1334	1253
BAKKEN	2-2015	28	3512	3398	440	3611	3383	0
BAKKEN	1-2015	27	3311	3452	742	3398	3143	42
BAKKEN	12-2014	26	3419	3449	536	3311	3107	0
BAKKEN	11-2014	30	4421	4773	569	4032	3791	0
BAKKEN	10-2014	31	4754	4628	719	4518	4222	44
BAKKEN	9-2014	30	4836	4675	739	4547	3557	751
BAKKEN	8-2014	31	5187	5556	658	4299	3297	849
BAKKEN	7-2014	31	5857	5468	831	4033	3760	118
BAKKEN	6-2014	30	6352	7211	914	2873	1511	1213
BAKKEN	5-2014	31	6958	6151	960	3105	2133	819
BAKKEN	4-2014	30	7134	7017	830	3463	3147	167
BAKKEN	3-2014	31	7829	8160	974	4414	2919	1340
BAKKEN	2-2014	28	6956	6615	920	4962	3882	941
BAKKEN	1-2014	26	5879	5879	824	3398	2472	802
BAKKEN	12-2013	31	7939	7972	1203	4322	3261	911
BAKKEN	11-2013	30	7607	7751	1513	4081	1756	2179
BAKKEN	10-2013	30	7623	7589	1505	4150	1716	2286
BAKKEN	9-2013	30	7038	6868	2081	4105	82	3877
BAKKEN	8-2013	2	173	29	621	8	0	0
BAKKEN	7-2013	0	0	0	0	0	0	0
BAKKEN	6-2013	0	0	0	0	0	0	0
BAKKEN	5-2013	29	4511	4789	327	3636	3496	0
BAKKEN	4-2013	30	5335	5512	591	3463	3147	167
BAKKEN	3-2013	31	5300	5109	377	4039	3884	0
BAKKEN	2-2013	28	4706	4690	340	3651	3511	0
BAKKEN	1-2013	31	5549	5562	338	4275	4120	0
BAKKEN	12-2012	31	5721	5718	366	4375	4220	0
BAKKEN	11-2012	30	5817	5820	380	4430	4281	0
BAKKEN	10-2012	31	6286	6303	562	5265	4750	360
BAKKEN	9-2012	30	6319	6398	390	5240	5100	0
BAKKEN	8-2012	31	6626	6867	504	5398	5254	0
BAKKEN	7-2012	31	7019	6804	574	5857	5188	515
BAKKEN	6-2012	30	7199	7196	572	5463	5274	40
BAKKEN	5-2012	31	7507	7520	467	6048	5896	0
BAKKEN	4-2012	30	7803	7817	459	5528	5379	0
BAKKEN	3-2012	25	6515	6455	464	4374	4255	0
BAKKEN	2-2012	29	7152	7277	578	5374	5236	0
BAKKEN	1-2012	31	8568	8439	520	6503	6349	0
BAKKEN	12-2011	31	9286	9325	556	7038	6886	0
BAKKEN	11-2011	30	9838	10139	598	7645	7278	217
BAKKEN	10-2011	25	8776	8395	708	5316	4559	637
BAKKEN	9-2011	29	9348	9502	599	6682	5403	1139
BAKKEN	8-2011	31	10844	10870	661	8508	7702	653
BAKKEN	7-2011	31	12376	12390	810	10783	10232	403
BAKKEN	6-2011	30	12871	12857	803	9281	8406	727
BAKKEN	5-2011	31	14237	14177	910	9393	7755	1483
BAKKEN	4-2011	25	9830	9676	643	6435	4673	1643
BAKKEN	3-2011	31	16909	17257	1213	11273	10452	668
BAKKEN	2-2011	28	18108	17961	1357	9125	8338	647
BAKKEN	1-2011	31	20076	19996	1565	8944	8126	663
BAKKEN	12-2010	31	10618	10604	879	4869	4366	352
BAKKEN	11-2010	29	16605	16806	1472	8225	7957	133
BAKKEN	10-2010	25	13959	14754	2348	5090	2698	2286
BAKKEN	9-2010	30	24267	24162	2276	7543	0	7393
BAKKEN	8-2010	29	39210	37876	17488	12953	0	12808

By 2016 this well was down to 2,000 bbls/month -- still a nice well, but clearly declining. And then in 2017, back up to 5,000 bbls/month.

And the Bakken is filled with these kinds of wells, and that's why it's so difficult to predict how all this will play out.

Spend Some Time On This Graph -- Many, Many Story Lines -- Big Implications -- March 18, 2018

Two data points not seen in the graphic below:

• Mexico will elect a leftist/socialist for their next president this summer
• Trump has just named Larry "drill, baby, drill" Kudlow as his national economic advisor

But spend some time on the graphic.

There are many, many story lines and the implications are profound.

The graphic:

Some initial comments (beware: these are dollar amounts -- not volume):

• it is staggering to see how little oil the US actually imports from Mexico now, and how fast those imports have dropped in less than four years (measured in dollars); for volumes, see this link
• the US no longer imports any natural gas from Mexico; in fact, Mexico is importing ever more natural gas from the US -- that is really quite amazing when one thinks about that -- on so many levels; and,
• then, of course, look at the refined petroleum products exported/imported (again, measured in dollars)

Clearly, one of the big stories this decade will be Mexico, the US, and energy.

Steffes To Expand Dickinson Manufacturing Facility -- Dickinson Press -- March 18, 2018

The Dickinson Press is reporting:

Steffes, one of Dickinson's largest employers, will be expanding its manufacturing facility located four miles north of Dickinson on North Dakota Highway 22, the company announced in a recent press release.

From the press release:

The 36,000 square foot expansion will provide space for additional manufacturing, new product development and offices to allow Steffes to better serve growing customer needs," the company said in a statement. "Committed to creating jobs and positive local economic impacts, Steffes hired GT Architecture of Dickinson to design a state of the art facility."

The structure will have 42-foot sidewalls, high capacity crane hoists and incorporate a modern three story office, conference and employee breakroom structure, the release stated. Local contractors Tooz Construction and Winn Construction will participate in the project which is estimated to take eight months.

Steffes will be making investments in the building infrastructure, equipment and personnel with an estimated completion date of November 2018. The company said the expansion will create more than 30 new jobs over the next two years.

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

Bicycling In The WSJ

From this weekend's edition of The WSJ: David Byrne on traveling the world by bicycle -- and getting lost.  

The former Talking Heads frontman, who’s touring the world for his album ’American Utopia,’ on his penchant for two-wheeled exploration, losing his way in a Swedish forest and his devotion to leftovers.

This spring summer, you may notice a familiar-looking figure pedaling along your local cycling path, and you may ask yourself: “Is that David Byrne, the former frontman of Talking Heads?”

It could well be. Mr. Byrne has just embarked on a world tour—taking him to more than 90 cities, from Santiago, Chile, this Friday, to Brooklyn, N.Y., on Sept. 17—to promote his new album, “American Utopia,” and he’s bringing his bike.

Though this is his first solo record since 2004, these last 14 years haven’t been idle ones. Mr. Byrne has racked up countless miles, and he has the projects to show for it. His cycling habit led to his 2009 book “Bicycle Diaries,” a collection of essays drawn from his two-wheeled excursions in cities such as Istanbul, Buenos Aires, Pittsburgh and New York, where he lives, as well as Manila, in the Philippines, where he found inspiration for “Here Lies Love,” the 2010 disco-musical about Imelda Marcos he created in collaboration with Fatboy Slim.

Mr. Byrne’s worldly expeditions informed another recent project, called “Reasons to be Cheerful,” a collection of pioneering initiatives in wide-ranging fields, from transportation to energy production, all cataloged on a website of the same name. His observations on these initiatives gave rise to a TED Talk-like presentation, which he’s given recently in New York, London, Amsterdam and Berlin.

Bakken Reality Check -- 2015 -- March 18, 2018

Note: I'm not sure if this is ready for prime time. I will post it anyway. Don't quote me on any of this. I'm still working through it. The reason for doing this was the developing meme that North Dakota has to add 157 net new wells month-over-month to maintain production at 1.2 million bopd.  It was my impression that North Dakota has not come close to 157 wells/month (1,884 per year) and yet the state has increased production year-over-year in the past eight months.

Note: the spreadsheet below was created very, very quickly. There are likely to be typographical errors. The data was taken from the NDIC statistics site. I do not know why daily production data and number of producing wells at the NDIC statistics site varies slightly from the daily activity reports.

I was curious about comparing the change in the number of producing wells (third column), the annual change in the overall number of producing wells, and the change in production.

I was curious to see if comments/projections at "Bakken Reality Check" produced back in 2015 held true. Compare this table with the screenshot of Figure 5 from that linked "Bakken Reality Check" below the spreadsheet.

Month	# # of producing wells	Producing wells	Crude oil production (bopd)	Crude oil production (bopd)	Producing wells	Crude oil production (bopd)
		Change From Previous Month	BOPD	Change From Previous Month	Change from one year ago	Change from one year earlier
Jan 18	14,002	-7	1,175,638	-5,681	1,014	141,470
Dec 17	14,009	-14	1,181,319	-15,657	990	238,997
Nov 17	14,023	52	1,196,976	13,166	815	162,492
Oct 17	13,971	78	1,183,810	76,465	817	140,117
Sept 17	13,893	130	1,107,345	18,027	834	135,600
Aug 17	13,763	102	1,089,318	41,219	783	106,873
Jul 17	13,661	53	1,048,099	15,226	702	18,255
Jun 17	13,608	47	1,032,873	-8,122	678	5,507
May 17	13,561	118	1,040,995	-9,481	705	-6,153
Apr 17	13,443	129	1,050,476	-154	703	8,438
Mar 17	13,314	115	1,050,630	16,382	566	-61,157
Feb 17	13,199	211	1,034,248	80	484	-85,389
Jan 17	12,988	-31	1,034,168	91,846	162	-87,460
Dec 16	13,019	-189	942,322	-92,162	269	-209,598
Nov 16	13,208	54	1,034,484	-9,209	436	-147,540
Oct 16	13,154	95	1,043,693	71,948	330	-129,327
Sep 16	13,059	79	971,745	-10,700	459	-189,998
Aug 16	12,980	21	982,445	-47,399	324	-205,437
Jul 16	12,959	29	1,029,844	2,478	371	-178,085
Jun 16	12,930	74	1,027,366	-19,782	454	-184,628
May 16	12,856	116	1,047,148	5,110	588	-157,166
Apr 16	12,740	-8	1,042,038	-69,749
Mar 16	12,748	33	1,111,787	-7,850
Feb 16	12,715	-111	1,119,637	-1,991
Jan 16	12,826	76	1,121,628	-30,292
Dec 15	12,750	-22	1,151,920	-30,104
Nov 15	12,772	-52	1,182,024	9,004
Oct 15	12,824	224	1,173,020	11,277
Sept 15	12,600	-56	1,161,743	-26,139
Aug 15	12,656	68	1,187,882	-20,047
Jul 15	12,588	112	1,207,929	-4,065
Jun 15	12,476	208	1,211,994	7,680
May 15	12,268	143	1,204,314	32,498
Apr 15	12,125		1,171,816

The screenshot from the "Bakken Reality Check" linked above:

"Bakken Reality Check" suggests that operators need to add 157 wells each month (1,884 per year) to maintain peak production at 1.2 million.

Between the autumn of 2015, when the Bakken Reality Check was published, and January, 2018, the most recent month for which data has been released:

• due to the Saudi Surge (January 2015 - January 2017) and the severe decline in the price of WTI, North Dakota crude oil production dropped from 1,151,920 bopd (December, 2015) to a low of 942,322 bopd one year later (December, 2016)
• however, after things "started to return to normal," North Dakota crude oil production actually rose to 1,196,976 bopd by November, 2017
• from November, 2015, to November, 2016, there was an increase of 436 producing wells -- well below the 1,884 new wells / year that "Bakken Reality Check" suggested would be needed to "maintain" -- and one could argue, ND came close to "maintaining" production
• from November, 2016, to November, 2017, there were only 815 additional producing wells, again, well below the 1,884 threshhold suggested by "Bakken Reality Check"
• November, 2016 to November, 2017: production increased by 16% with number of additional producing wells well below the 1,884 threshhold
  

Again, I did this very quickly, and there are likely to be errors in my numbers, and my methodology, but I wanted to take a quick look at the "Bakken Reality Check" projections back in 2015 to what has happened since.

This is very much in line with an increasing number of analysts noting that there seems to be a "negative decline rate" developing in shale plays.

See the article by oilprice.com editor Nick Cunningham: "Can the oil industry continue to lower decline rates at mature fields?"

And this post from earlier this month:

“I cannot remember ever in my career having seen a negative decline rate,” the British oil-giant’s chief executive officer said in an interview on the sidelines of the CERAWeek by IHS Markit energy conference in Houston.