Monday, March 26, 2018

It Never Quits -- Now, Look At This - March 26, 2018

What do you think of this production profile?

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Pretty cool, huh? Production jumps 20-fold? [20 x 130 = 2,600].

From the sundry form received September 11, 2017:
Move in workover rig and pull rods and tubing. Nipple up frac tree and treesaver to isolate wellhead. Move in and rig up the frac fleet and frac well with approximately 14,000 bbls of gelled fluids containing approximately 400,000 lbs of the frack sand. Well will be frac'd pursuant ot NDAC 43-02-03-27.1. Nipple down frac tree and tree saver and run production equipment back into well. Return well to production.
But this isn't so great, really, is it? We see it all the time when a well is re-fracked.

And here's the graphic:

The well:
  • 19551, 215, Challenger Point Energy, LLC, Olney 2-25H, Flaxton, t5/11; cum 51K 1/18
But here's the kicker: it's NOT a Bakken. It's a Madison well. 

Don't believe me? Here's a screen shot of the scout ticket:

By the way, what's the best this well has ever done? From the very beginning:


The sundry form / completion form with the completion data says the well:
  • had five laterals
  • was completed March 30, 2011
  • was tested May 6, 2011
  • there is no evidence this well was fracked at this time; first frack was apparently in 2017
Yes, it's the Madison -- and we saw it first in North Dakota -- LOL --

From Hairspray

Random Update Of CLR's Bud Wells In Crazy Man Creek -- March 26, 2018

Disclaimer: in a long note like this there will be factual and typographical errors. In addition, I could have mixed up some of the data (production data, frack data, etc) but I doubt it. When I see a jump in production in a horizontal well 1,320 feet away it makes me think I recorded something incorrectly, but I think it's all correct. I certainly appreciate any feedback if any of the data is incorrect.

At this post, I posted the production data for #19424 -- but looking at it now, not quite sure why I posted it. Whatever.

With updated production, it's time to look at it again.

There is no evidence that any of the wells below have been re-fracked. FracFocus has no data for a re-fracks; and, there are no sundry forms suggesting the three older wells were recently re-fracked. But the production has jumped so much it's hard to believe these wells have not been re-fracked.

In addition, note the distance between the wells. Pay attention to which wells are middle Bakken (MB) and which are Three Forks (TF).

The graphics:

The first well of interest:
  • 19424, 662, CLR, Bud 1-19H, Crazy Man Creek, API - 33-105-01935, t3/11; cum 381K 1/18;
Recent production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Original production after initial completion:

Recent neighboring fracks:
  • 30239, middle Bakken, fracked 3/25/17 - 4/7/17, frack data: 9,927,082 gallons, 88.97% water; 10.9% sand;
  • 30240, Three Forks, 1st bench, fracked 3/26/17 and 7/4/17 - 7/12/17; frack data: 7,026,667 gallons, 88.7% water; 10.9% sand;
  • note: 10 million gallons of water in one well, a big frack but not "out of bounds"; 7 million gallons of water in the other well, a moderate frack
What about the other two wells of interest, #28937 and #28938? Frack data:
  • 28937, fracked once, back in 2014
  • 28938, fracked once, back in 2014
Recent production data for these two wells.
#28937 TF (huge jump in production, but delayed a month or two compared to wells above):
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

#28938 MB (minimal, if any, jump in production):
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Bottom line:
  • no evidence that three wells of interest were re-fracked, but production in one of them (#19424) is so high, it's  hard to believe it was not re-fracked; a second well had a large jump but not as big; the third well had minimal (if any) jump in production
  • the oldest well was 633 feet away from the new (2017) fracks
  • #28937  - a Three Forks well -- had a huge jump in production; it was about 1,320 feet from a middle Bakken well and about 1,380 feet from another Three Forks well (#30240)
  • 1,320 feet / 1,380 feet is about twice what I normally seen between older fracked wells and newer fracked wells with bump in production after newer wells fracked
Disclaimer: in a long note like this there will be factual and typographical errors. In addition, I could have mixed up some of the data (production data, frack data, etc) but I doubt it. When I see a jump in production in a horizontal well 1,320 feet away it makes me think I recorded something incorrectly, but I think it's all correct. I certainly appreciate any feedback if any of the data is incorrect.'

Note: if what I have posted is correct, and if what I see is correct, this has huge implications for the Bakken and the Three Forks.

Random Note Regarding Global Crude Oil Supplies -- March 26, 2018

I have a pretty good "feel" for US crude oil production, inventories, supply and demand, etc., after blogging for the past eleven years on the Bakken. I have almost no "feel" for the same metrics globally. It seems "everyone" is writing that global inventories of crude oil are well below their five-year average, including this from
A year and a half on from OPEC’s original deal to limit output, the surplus oil stashed in storage tanks around the world are nearly back to average levels. However, by all indications, OPEC is not ready to ease up on the production caps, with top officials signaling a desire to keep the cuts in place into 2019.
But that might require changing of the definition of a “balanced” oil market. OPEC has consistently held up OECD inventories as the metric upon which it was basing its calculations. The goal was to drain inventories back down to the five-year average. With OECD inventories about 44 million barrels above that threshold in February – down from a roughly 300-million-barrel surplus at the start of 2017 – the goal will likely be achieved at some point this year, perhaps in the second or third quarter.
So, let's see if we can find a graphic of the historical global crude oil inventory.

From the EIA:

This is what I see in that graph:
  • inventories are right in the "middle" with data going back to 2013
  • something no one talks about: inventories were at historic lows (2013 - 2019) in late 2014 just before the Saudi Surge (announced November, 2014) and did not drop again until Saudi ended the surge (announced November, 2016) -- it makes me wonder about the Saudi Surge all over again -- why and what it really meant
  • once the Saudi Surge ended, OECD inventories dropped but, shoot, they are still right in the middle of the range, and projections by the EIA suggests inventories will rise, not fall
  • many feel the EIA is too conservative with shale estimates; if so, their projections may be low
  • the graphic is pretty impressive -- but something I never seem to hear anyone talking about: days of inventory -- look at that x-axis -- two things are noted
    • the range is very narrow -- fifty-five to sixty-five days (2013 - 2019)
    • EIA estimates that by January, 2019, less than a year from now, days of supply will actually increase

Statoil Knoshaug Wells In Avoca Oil Field

An old Knoshaug well has come off-line (March 26, 2018). When I see that, my first thought: neighboring wells soon to be fracked.

The Knoshaug wells:
  • 19406, AB/IA/3,761, Statoil, Knoshaug 14-11 1H, Avoca, t1/11; cum 310K 1/17; came off-line 11/17; remains off-line, 11/18;
  • 32866, 877, Statoil, Knoshaug 14-11 2TFH, Avoca, t6/18; cum 201K 9/19;
  • 32867, 769, Statoil, Knoshaug 14-11 3TFH, Avoca, t6/18; cum 198K 9/19;
  • 32868, 1,975, Statoil, Knoshaug 14-11 4H, Avoca, t6/18; cum 206K 9/19;
  • 32869, 744, Statoil, Knoshaug 14 11 5TFH, Avoca, t6/18; cum 145K 9/19;
  • 32870, 2,394, Statoil, Knoshaug 14 11 6H, Avoca, t8/18; cum 209K 9/19;
  • 32871, 2,043, Statoil, Knoshaug 14-11 7TFH, Avoca, t7/18; cum 131K 9/19;
  • 32872, 1,584, Statoil, Knoshaug 14-11 XE 1H, Avoca, t7/18; cum 188K 9/19;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

ICYMI: A CLR Buelingo Well -- March 26, 2018

See production update here.

The most important story line here: Elm Tree oil field. Although not updated, the Elm Tree is followed here.

Four New Permits; Eight (8) DUCs Reported As Completed -- March 26, 2018

Active rigs:

Active Rigs59493299198

Four new permits:
  • Operator: Hess
  • Field: Blue Buttes (McKenzie)Comments: Hess has permits for a 4-23ll BB-
  • Federal pad in SENE 20-151-95
Six permits canceled:
  • Resource Energy Can-Am (4): a Marlys permit; an Arnette permit, a Castle State permit; and, a Gary permit, all in Divide County
  • Whiting (2): two P Ellis permits in Williams County
Eight producing wells (DUCs) reported as completed:
  • 25844, 754, Slawson, Periscope Federal 7-10-11-12TH, Big Bend, t2/18; cum --
  • 31439, 754, Slawson, Periscope Federal 6-10-11-12TFH, Big Bend, t2/18; cum --
  • 33210, 1,102, XTO, Lundin Federal 11X-4B, North Fork, t3/18; cum --
  • 33367, 1,547, Whiting, Cavalli State 34-9-5HU, East Fork, t3/18; cum --
  • 33368, 3,131, Whiting, Cavalli State 34-9-4H, East Fork, t3/18; cum --
  • 33553, 480, BR, Gladstone 3-1-25 MBH A, Sand Creek, t2/18; cum --
  • 33554, 224,  BR, Gladstone 2-1-25TFH A, Sand Creek, t2/18; cum --
  • 33555, 782, BR, Gladstone, 1-1-25MBH A, Sand Creek, t2/18; cum -- 
CLR with three dry holes:
  • Pasadena wells in McKenzie County, #34547, #34548, and #34549

Royalties And Stripper Wells -- March 26, 2018


Later, 9:39 p.m. Central time: the third answer provides the tax differential when a well goes to stripper status:
When a well is declared a “stripper” by the ND Oil and Gas Division the state
tax is lowered from 10% to 5%.  At a given volume and price, the net royalty is
5% higher on a stripper well.  
Later, 5:44 p.m. Central Time: the second answer I got:
a) stripper wells have no impact on the royalty payments of mineral owners
b) monthly minimums may have to be met to "cut" a check
Later, 5:43 p.m. Central Time: the first answer I got, from Phil McPherson, a CFO in Newport Beach, CA:
Though each lease varies, I have never seen a clause in the 100's of leases that I reviewed as having something for stripper wells that is different than an "economic" well.
Original Post

I've long forgotten -- if I ever knew -- does anyone know how royalties are affected when a well goes to "stripper" status?

A reader wants to know and I'm hesitant to answer.  E-mail responses are kept confidential; comments can be made anonymously. If you have a great answer and want credit for the answer, let me know. Thank you, on behalf of the reader who is curious.

FWIW -- On A Day The Market Soars -- March 26, 2018

Maybe more later, I'm going biking.

Oh, one last political observation. In foreign affairs, every president has a gazillion irons in the fire. For Trump, just a few of the top ten: Russia, China, Iran, NAFTA, the wall, the Korean peninsula, Saudi Arabia.

It's interesting to rank those on the foreign-affair list based on media coverage. It appears to me that Russia has fallen to the bottom of the top-ten list even with the president expelling 60 Russian spies and "shuddering" (as the AP calls it) the Seattle consulate? Rising to the top of the list: China. I think the focus on Asia by Trump has really, really gotten Kim Jung Un's attention.

Okay, one more observation. I realized this past weekend, it's impossible for folks like me to hold a "political conversation" with others. Why? Because no one knows what "fake news" each has been reading. As an example, I have no idea where my wife gets her "sources." She assumes she knows where I get my "sources," but I suspect she is really, really wrong. Mostly because I keep changing my top ten news "sources."

Right now, the best political analyst on radio: Rush Limbaugh. Everyone agrees (based on mainstream media outslets), whether one agrees with him or not.

The best social media commentator: Scott Adams (twitter).

By the way, my son-in-law and I agreed that of the three (Bernie, Hillary and Trump), Bernie was the most dangerous (had he been elected). Two hours after noting that, I realized I was wrong. Counter-intuitive, and my son-in-law (nor my wife) would agree with my reasoning.

Okay, not I'm going biking.

Notes to the Granddaughters

One book today: The Most Dangerous Book: The Battle for James Joyce's Ulysses, Kevin Birmingham, c. 2014

First "home" after leaving Ireland with Nora: Pula, a small outpost on the Istrian peninsula.

Trieste, Italy: much like Dublin when Nora and James moved there. Trieste's predominantly Italian population had been under Austrian rule for hundreds of years, long after the unification of Italy in 1861. Trieste Italians demanded to be part of the new Italian state.

Back in 1801, a new law from London simply dissolved the Irish assembly to create the United Kingdom of Great Britain and Ireland. From then on, a continued fight between Irish and the English.

From page 54:
Ulysses began as a whim. It was originally an idea for a short story to tag along in Dubliners. Alfred H. Hunter -- the lonely, benevolent Jew in Dublin who had lifted Joyce from the dirt in St Stephen's Green -- was a hero of the Trojan War, the protagonist of Homer's greatest epic, the king of Ithaca, Ulysses. The Hunter-as-Ulysses equation was well suited for a short story but the concept had undergone some unforeseeable growth in Joyce's mind. In 1914, he began gathering ideas. Joyce mapped the events of hte ancient tale of the Odyssey unto Dublin: a funeral in Glasnevin cemetery was a descent into Hades. His friend Byrne's little flat on Eccles Street was Ulysses' palace in Ithaca, and the barmaids at the Ormond Hotel were the Sirens. He had a name for his Ulysses: Leopold Bloom. Stephen Dedalus was Telemachus, Ulysses' son. Stephen was a son whose father lost, and Bloom was a father finding his way back to his son. His wife Molly, was Penelope patiently waiting for her husband's return from the Trojan War.
From page 56:
Joyce wanted Stephen's thoughts to be clipped and prismatic. He wanted to strip thoughts and emotions down to their essentials (no stream of consciousness; the very opposite of Henry James). He wanted density, the bones of communication, the sharp utterance, the urgent telegram, the MOTHER DYING COME HOME FATHER (think Hemingway).

Chapter 5: Smithy of Souls -- 
the story of Miss Harriet Weaver -- 
this chapter worth the price of the book.

Ezra Pound, Harriet Weaver, and Dora Marsden were only marginal figures in a world preoccupied by war -- but a supportive coterie was enough to encourage Joyce to venture much further out ito this writing than he ever had before.

Chapter 6: Little Modernisms


Magazines (at that time) were modernism's blogosphere.

The Little Review, founding editor, Margaret Anderson -- the woman destined to bring Ulysses to the public, no matter how controversial it was. In the March 1915 issue, Anderson became possibly the first woman to advocate gay rights in print ...

Anderson grew up in Indiana and attended Ohio's Western College for Women, an offshoot of Mount Holyoke.

Jane Heap.
Chapter 7: The Medici of Modernism -- 
the story of Ezra Pound in 1915

Ezra Pound wanted The Little Review to be his "official organ" in the United States; it had 2,000 subscribers, exactly what he wanted.

Pound became The Little Review's foreign editor in May, 1917 -- think Hunter S Thompson and The Rolling Stone.

Press advertising, virtually nonexistent before the Civil War, became a billion-dollar industry by WWI -- think the Internet and social media.

Chapter 8: Zurich

1915; escapes to Switzerland from Trieste, Austrian zone.

From page 96:
Whatever else happened, the Joyces always ate dinner as a family. Mother (Nora) and father (James) spoke Triestino with Giorgio (older sib, first and only son) and Lucia at various restaurants as if sharing a secret argot, a verbal performance of a shared life from from Zurich.
February, 1917: severe iritis. Became glaucomatic.

Somehow, p. 99, despite war, pain, atropine hallucinations and his inability to earn an income - Joyce found ways to write Ulysses.

Part II

And this is where I will quit for today.

153-97-8, Banks Oil Field, Whiting, Hellandsaas And Frick

Wells in the graphics not elsewhere on this page:
  • 19533, 1,342, Whiting, Hellandsaas 16-8H, Banks, t7/11; cum 335K 5/20; was off line 9/19 to 4/20; production stayed up, but no jump in production;
  • 25803, 1,573, Whiting, Koala Wold 153-97-1-5-8-15H3, Banks, t3/14; cum 138K 3/20; off line 4/20; remains off line 5/20;
Coming off confidential list this week, the Hellandsaas wells, including:
  • 32995, 2,341, Whiting, Hellandsaas 44-8-1H, Banks, 30 stages; 6.2 million lbs, medium/small; a very, very nice well; 80K+ in first four full months; (#19533 with nice jump in production); t10/17; cum 185K 5/20;
The graphics:

Production data for #19533:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Production data back in when #25803 was completed, #19533:

The Frick Wells

The Frick wells are still on the confidential list (SI/NC). Early production data suggests great wells:
  • 32982, 1,730, Whiting, Frick 24-8-1HU, t10/17; cum 264K 5/20;
  • 32983, 1,734, Whiting, Frick 24-8-1TFH, t10/17; cum 191K 3/20; off line 4/20; remains off line 5/20;
  • 32984, 1,094, Whiting, Frick 24-8-2TFH, t10/17; cum 120K 3/20; off line 4/20; remains off line 5/20;
32984, see above, Whiting, Frick 24-8-2TFH:

DateOil RunsMCF Sold

32983, see above, Whiting, Frick 24-8-1TFH:

DateOil RunsMCF Sold

32982, see above, Whiting, Frick 24-8-1HU:

DateOil RunsMCF Sold