Hands Down, The Bakken Beats All Other Oily Plays -- Production / Rig -- But On BOE/Rig? The Eagle Ford

Updates

April 3, 2018: see this post for an update on this subject.  

Original Post 

From a May 17, 2014, post, production per rig:

It's been a long time since I've looked at this metric.

A huge thanks to a reader for a note that made me think of doing this.

So, in January, 2014, productivity per rig, based on the chart above:

• the Bakken: around 500 bbls/rig
• the Eagle Ford: about 475 bbls/rig
• the Niobrara: about 350 bbls/rig
• the Permian: not even 150 bbls/rig

So, how have things changed in four year? From the EIA (a dynamic link), the Bakken still leads all four major oily plays:

• the Bakken: around 1,450 bbls/rig -- almost 3x greater than 4 years ago
• the Eagle Ford: about 1,400 bbls/rig -- ditto, and very close to the Bakken (on a "boe" basis, the Eagle Ford would probably beat the Bakken -- but it would be close and might vary month-to-month)
• the Niobrara: about 1,200 bbls/rig -- about 3.5x better than 4 years ago
• the Permian: about 600 bbls/rig -- 4x better than 4 years ago -- but the Bakken is about 2.5x better than the Permian

Tesla Watch -- March 30, 2018 -- When It Rains, It Pours

Updates

March 31, 2018:

Later, 9:15 p.m. Central Time:

Later, 8:54 p.m. Central Time: it's being reported Friday night, just before a 3-day holiday weekend that:

Later, 8:27 p.m. Central Time: from ZeroHedge --

Original Post

Based on open sources from across the net, but mostly from "@TeslaCharts" over at twitter, this is my 30-second, elevator speech on Tesla's first quarter, 2018:

The "final" numbers are in because it's Easter Friday and no more deliveries for the month (March) will be made by Tesla.

Based on VIN registration numbers, Bloomberg and "Tesla Charts" (twitter) has the estimates for 1Q18.

It appears that Tesla "smashed" records for delivery in the last two weeks of the quarter, which will result in total numbers for first quarter 2018 being "respectable."  Those who love Tesla will say this proves Tesla is doing very, very well; those who hate Tesla will have the numbers to prove their point. The SEC filing only said they would "reach" 2,500/week by the end of the quarter, not "sustain 2,500" week after week after week. So, technically, it's possible Tesla will have reached 2,500/week by the end of the quarter because of the last two weeks of delivery but averaging over the entire 12 weeks, it will be far less.

This explains (at least for me) why Musk waited to announce a capital raise. If the numbers are as good as the estimates suggest, he will have more fire power going to the banks and the venture capitalists to get more cash or a better deal.

All eyes will be on deliveries to Norway.

From "@TeslaCharts," this chart is going to blow away Tesla bulls (and the rest of us). Nissan Leaf is clearly the global winner:

But there's an even bigger story here, actually two bigger stories here:

• Tesla does not have a moat when it comes to EVs; lots and lots of competition
• Nissan Leaf might not be seen as a Tesla competitor, but certainly VW and BMW are 

And see below, BMW has no plans to even ramp up until 2020 -- and they are still out-selling Tesla in Norway.  

From Reuters, March 22, 2018:

BMW will not mass produce electric cars until 2020 because its current technology is not profitable enough to scale up for volume production, the chief executive said on Thursday.  

It's hard for me to believe that a car company like BMW feels their EVs won't be profitable until 2020 and the impression I get from Elon Musk is that he feels his cars already are profitable (I'm probably wrong on that).

With regard to Model 3, from twitter:

Wasn't Model 3 the Tesla for the rest of us?

US Crude Oil Production -- Hubbert Peak Oil Theory Revisited -- March 30, 2018

US crude oil production. 

Link here.

I find it incredible such "authoritative" sources as Wikipedia have not updated their "Hubbert Peak Theory" post. Hubbert Peak Theory describes a bell-shaped curve, not "twin peaks."

US Saudi Crude Oil Imports Hit 32-Year Low For Month Of January -- Have To Go All The Way Back To 1986 -- March 30, 2018

Link here. And the difference between January, 2017, and January, 2018, is not subtle. Ouch.

Meanwhile, US crude oil exports hit an all-time high for the month of January, going back to when records were first kept. Link here.

"Drill, baby, drill." Making American great again.

Spot price of WTI (at Cushing), rounded, link here:

• end of March, 2018: a "solid" $65
• end of March, 2017 (one year ago): a "less than solid" $50; closer to $47 - $49 

That's really quite remarkable. 15/50 = a 30% jump. And many operators have been able to cut costs over the past year. If oil companies were "evaluated" like analysts "evaluate" Tesla, we would all be gazillionaires.

Random Update Of An Old EOG Short Lateral In Parshall Oil Field -- March 30, 2018

For newbies: Some folks keep talking about newer wells in the Bakken affecting older wells in a negative manner. That's possible. I don't know. I just see a lot of these examples, where there is a jump in production in an older well when neighboring wells are fracked.

In the production profile below, between early 2015 and early 2013, just two years:

• a jump in production from 2,000 bbls/month to 7,000 bbls/month, November, 2013
• a jump in production from 5,000 bbls/month to 8,000 bbls/month in October, 2014

Not only is there a jump in production for a month or two, but the affect lasts several months, extending the period in which there is higher production, affecting a) the decline rate; and, b) the EUR.

Note: prior to neighboring wells being fracked, this well (#16543) was down to 2,000 bbls/month, arguably a very mediocre well. That was back in March, 2013. After neighboring wells were completed, not only was there a significant jump in production on two occasions, but the baseline production was up to 4,000 bbls/month.

A Bakken trope/meme (I don't know if it's a myth): new wells will result in less production from older wells. Example after example proves this is not the case.

The well, a single section EOG well in Parshall oil field:

• 16543, 1,015, EOG, Florence 1-04H, Parshall, t7/07; cum 511K 1/18;

Earlier production:

BAKKEN	2-2015	28	3754	3763	693	1266	0	1038
BAKKEN	1-2015	31	4689	4700	814	1579	0	1327
BAKKEN	12-2014	31	5663	5686	1287	1830	0	1586
BAKKEN	11-2014	30	7025	7046	1697	2202	259	1699
BAKKEN	10-2014	31	8062	8061	2313	2535	0	2283
BAKKEN	9-2014	30	7789	7769	2719	2475	0	2231
BAKKEN	8-2014	4	290	184	720	51	0	35
BAKKEN	7-2014	1	5	0	23	3	0	0
BAKKEN	6-2014	0	0	0	0	0	0	0
BAKKEN	5-2014	0	0	0	0	0	0	0
BAKKEN	4-2014	0	0	0	0	0	0	0
BAKKEN	3-2014	13	2287	2297	352	735	0	670
BAKKEN	2-2014	28	4986	4986	1393	1666	12	1514
BAKKEN	1-2014	30	6501	6538	1448	2104	1176	778
BAKKEN	12-2013	23	5972	5955	1019	1918	1502	306
BAKKEN	11-2013	30	7232	7480	2177	3578	3428	0
BAKKEN	10-2013	4	492	234	650	231	211	0
BAKKEN	9-2013	0	0	0	0	0	0	0
BAKKEN	8-2013	19	1532	1506	470	870	778	0
BAKKEN	7-2013	28	2260	2270	572	1387	1247	0
BAKKEN	6-2013	26	1608	1735	484	1041	916	0
BAKKEN	5-2013	31	2180	2046	456	1221	1066	0
BAKKEN	4-2013	30	1997	1997	503	0	0	0
BAKKEN	3-2013	31	2081	2081	484	1209	1054	0
BAKKEN	2-2013	28	1769	1849	439	1194	1054	0

The neighboring wells and the test dates of those wells:

• 25254, EOG, t11/13;
• 27042, EOG, t8/14; 

Remember, the index well is a short lateral. Had this been a long lateral, one can argue that total production would have been double what we see here.

A Graphic Worth 10,000 Words -- March 30, 2018

It would be interesting to have a similar graph with two natural gas exporters superimposed / compared: the US and Qater. Or the US and Russia. Or the US and anyone else.

Update On Another Whiting Tri-Lateral Horizontal -- Maynard Uran #16781 -- March 30, 2018

This post with another Whiting tri-lateral horizontal.

This well:

• 16781, 1,923, Whiting, Maynard Uran Trust 11-24H, Sanish, t4/08; cum 624K 1/18;

Recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2018	30	1724	1979	311	3007	2861	0
BAKKEN	12-2017	31	1815	1443	348	3099	2944	0
BAKKEN	11-2017	30	1808	1830	429	3154	3004	0
BAKKEN	10-2017	31	1884	1859	607	3188	3033	0
BAKKEN	9-2017	30	1846	1843	679	3216	3066	0
BAKKEN	8-2017	31	1957	1976	699	3477	3323	0
BAKKEN	7-2017	31	1868	1852	630	3929	3774	0
BAKKEN	6-2017	30	1827	1957	753	3019	2869	0
BAKKEN	5-2017	31	1982	1977	806	3258	3103	0

Note jump in production in June, 2015. Also note that during this time, this well was taken off-lien for about 40 days:

BAKKEN	11-2015	30	5637	5246	2268	5639	5489	0
BAKKEN	10-2015	31	5836	5767	2362	5433	5278	0
BAKKEN	9-2015	30	5468	5650	2425	3808	3577	86
BAKKEN	8-2015	31	5981	5966	3757	4887	4732	0
BAKKEN	7-2015	31	6350	6222	3982	5170	5016	0
BAKKEN	6-2015	30	10085	10302	5824	8408	7666	593
BAKKEN	5-2015	16	5691	5458	6624	3311	3233	0
BAKKEN	4-2015	7	867	804	283	1028	995	0
BAKKEN	3-2015	31	4047	4038	1255	4840	4686	0
BAKKEN	2-2015	28	4021	4028	1338	3437	3300	0

During that period, two neighboring wells were fracked near the tri-lateral (#16781).

The graphic:;

Whiting Gets The Peery State (#16463) Back Into Production -- March 30, 2018

The well:

• 16463, 1,081, Whiting, Peery State 11-25H, Sanish, t5/0; 385K as of 9/15; now 397K 1/8; very little production after 2014; ... until mid-2017

I had not updated this well since September, 2015. That's about 2.5 years ago. I've gone through all the 16XXX wells, the 17XXX wells, the 18XXX wells, and am working through the 19XXX wells -- and there are thousands of Bakken wells drilled between 2007 and 2011 that are "lousy" wells.

So, going through all these thousands of wells, here's what can happen in the Bakken, something we don't see in conventional plays.

In October, 2013, for all practical purposes this well was taken off-line; occasionally there was some production.

Here's an example of the production in CY 2014:

BAKKEN	12-2014	1	3	3	1	21	19	0
BAKKEN	11-2014	4	2	3	2	8	0	0
BAKKEN	10-2014	31	78	86	42	66	4	0
BAKKEN	9-2014	30	713	711	142	450	260	131
BAKKEN	8-2014	4	258	251	55	237	129	101
BAKKEN	7-2014	0	0	0	0	0	0	0
BAKKEN	6-2014	0	0	0	0	0	0	0
BAKKEN	5-2014	0	0	0	0	0	0	0
BAKKEN	4-2014	0	0	0	0	0	0	0
BAKKEN	3-2014	0	0	0	0	0	0	0
BAKKEN	2-2014	0	0	0	0	0	0	0
BAKKEN	1-2014	0	0	0	0	0	0	0

Here's an example of the production from this well in CY 2016:

BAKKEN	12-2016	0	0	1	0	0	0	0
BAKKEN	11-2016	3	10	9	47	4	0	0
BAKKEN	10-2016	0	0	0	0	0	0	0
BAKKEN	9-2016	0	0	0	0	0	0	0
BAKKEN	8-2016	0	0	0	0	0	0	0
BAKKEN	7-2016	0	0	0	0	0	0	0
BAKKEN	6-2016	0	0	0	0	0	0	0
BAKKEN	5-2016	0	0	0	0	0	0	0
BAKKEN	4-2016	1	4	4	20	2	0	0
BAKKEN	3-2016	1	1	1	8	2	0	0
BAKKEN	2-2016	1	0	0	17	2	0	0
BAKKEN	1-2016	1	1	1	9	2	0	0

Maybe someone smarter than I can see the incredible difference in production between 2015 and 2016. I can't.

But prior to 2014, it was a pretty good well:

BAKKEN	9-2013	25	1143	1246	55	2242	2094	100
BAKKEN	8-2013	31	2466	2391	171	2782	2649	71
BAKKEN	7-2013	31	2576	2692	277	2980	2918	0
BAKKEN	6-2013	25	2830	2838	346	2053	2007	0
BAKKEN	5-2013	31	3480	3350	231	3353	3291	0
BAKKEN	4-2013	30	3637	3703	182	3418	3358	0

So, pretty much a dead well after 2015? Apparently not.

Look at the production starting in June, 2017:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2018	31	1502	1665	619	2127	2065	0
BAKKEN	12-2017	31	1504	1342	846	2747	2685	0
BAKKEN	11-2017	30	1440	1430	1048	2712	2652	0
BAKKEN	10-2017	31	1464	1461	1137	2745	2683	0
BAKKEN	9-2017	30	1473	1481	1681	2511	2451	0
BAKKEN	8-2017	31	1759	1786	1374	2159	2097	0
BAKKEN	7-2017	31	1626	1594	1354	1659	1597	0
BAKKEN	6-2017	27	1080	1066	2539	1162	1108	0

So, what happened?

FracFocus: no evidence that this well has been re-fracked. No evidence that this has anything to do with neighboring wells.

But, then there's a sundry formed received by the NDIC, June 2, 2017, for work completed May 23 2017: "Due to a tight spot found at ~8,180' in the HCL-80 casing, Whiting Petroleum set a 5.5" permanent packer at 8700' with 2500' of 5.5", 23 ppf scab liner above it with liner top packer."

An attached19-page diagram suggests work was begun April 11, 2017. The total AFE was $950,000. With the work-over, how is the well doing?

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2018	31	1502	1665	619	2127	2065	0
BAKKEN	12-2017	31	1504	1342	846	2747	2685	0
BAKKEN	11-2017	30	1440	1430	1048	2712	2652	0
BAKKEN	10-2017	31	1464	1461	1137	2745	2683	0
BAKKEN	9-2017	30	1473	1481	1681	2511	2451	0
BAKKEN	8-2017	31	1759	1786	1374	2159	2097	0
BAKKEN	7-2017	31	1626	1594	1354	1659	1597	0
BAKKEN	6-2017	27	1080	1066	2539	1162	1108	0
BAKKEN	5-2017	0	0	0	0	0	0	0
BAKKEN	4-2017	0	0	0	0	0	0	0

This well, #16463, was a tri-lateral horizontal. See graphic below. None of the neighboring wells were taken off-line while this well was being re-worked.

Random Note About Enerplus Wells in Spotted Horn -- March 30, 2018

Some Enerplus wells in Spotted Horn are coming back on line and neighboring wells are now showing production runs, but still on confidential list. This post will not be updated. The wells in question are posted at this site. That site is not updated; I am still waiting to see the IP and production data of the wells on SI/NC status -- they should be reporting soon.

Showing Some Life? Slawson's Matilda Bay, #27635 -- March 30, 2018

September 12, 2014: a failed frack; will it be re-fracked?

• 27635, IA/137, Slawson, Matilda Bay 1-15H, Stockyard Creek, 8 stages; planned for 24, mechanical problems; 600,000 pounds proppant; single section spacing, fracked May 22 -23, 2014, according to FracFocus; t6/14; cum 44K 11/16; went off-line middle of July, 2014; then began producing again 10/14; production up markedly, November, 2014 through January, 2015; as of 9/16, no new frack; API 33-105-03404; off-line as of 9/17; 

Update, March 30, 2018 -- nothing in the file report and nothing at FracFocus, but after being off-line for almost a year, this well was back on-line for 23 days in February, 2018:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	2-2018	23	396	335	322	849	643	34
BAKKEN	1-2018	0	0	0	0	0	0	0
BAKKEN	12-2017	0	0	0	0	0	0	0
BAKKEN	11-2017	0	0	0	0	0	0	0
BAKKEN	10-2017	0	0	0	0	0	0	0
BAKKEN	9-2017	0	0	0	0	0	0	0
BAKKEN	8-2017	0	0	0	0	0	0	0
BAKKEN	7-2017	0	0	0	0	0	0	0
BAKKEN	6-2017	0	0	0	0	0	0	0
BAKKEN	5-2017	0	0	0	0	0	0	0
BAKKEN	4-2017	0	0	0	0	0	0	0
BAKKEN	3-2017	31	214	282	183	989	834	0
BAKKEN	2-2017	28	381	676	276	1278	1138	0
BAKKEN	1-2017	31	517	336	289	1430	1275	0

How The DAPL Impacts Guernsey -- RBN -- March 30, 2018

Canadian blues: Canada's GDP contracted 0.1% in January The WSJ. 

The Canadian economy contracted slightly in January, falling short of expectations as tougher mortgage-lending rules contributed to the biggest decline in real-estate agents and brokers’ output in more than nine years.

Lower output of nonconventional oil extraction also contributed to the overall decline in January.

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

Back to the Bakken

Natural gas pipeline update, from The Bismarck Tribune:

Alliance Pipeline is seeking commitments to expand a natural gas transmission pipeline that runs through North Dakota.

The company's announcement this week comes as North Dakota oil and gas regulators are encouraging new infrastructure investment to handle growing volumes of natural gas production.

The Alliance Pipeline enters North Dakota in Renville County and travels southeast through the state to Richland County.

If the expansion receives regulatory approval, it would require an additional three compressor stations in North Dakota located near Maxbass, Munster and Lisbon, said Alan Roth, a spokesman for Alliance. The expansion is proposed to be in service by the end of 2021.

Active rigs:

$64.94↑	3/30/2018	03/30/2017	03/30/2016	03/30/2015	03/30/2014
Active Rigs	60	49	31	96	194

RBN Energy: what happened to crude oil flows and prices at Guernsey Hub?

With crude prices in the $60s, oil-producing basins other than the Permian are finally seeing signs of life, and that includes the Rockies. But volumes flowing through the most important Rockies crude oil hub — at Guernsey, WY — are down.

Moreover, the price of oil at Guernsey is up, trading at least flat and sometimes at a premium to the downstream market at Cushing, OK, suggesting that committed shippers are having to bid up the price at Guernsey to secure barrels for their downstream pipeline commitments.

What about production from the nearby Powder River Basin? Well, Powder River oil production is up, and the rig count there is double what it was this time last year, so you might think there would be more than enough barrels at Guernsey. But not so. Who’s to blame?

We need to look no further than the Bakken and the Dakota Access Pipeline (DAPL) to discover our culprits. Today, we check in on the market at Guernsey and consider the impact of DAPL, the implications for Rockies crude oil outflows, and what it all means for Guernsey price differentials.