And For Those Who Missed It Earlier Today -- My Favorite Video Of The Day -- Don't Mess With Alberta! -- April 10, 2018

Updates

April 11, 2018: oilprice.com calls it a disaster.

Kinder Morgan’s Trans Mountain Expansion is the largest, and one of the very few, pipeline projects that has a chance of reaching completion. Alberta’s oil sands producers have been desperate for new outlets to take their oil out of the country, and the decade-plus Keystone XL saga is the perfect illustration of the industry’s woes.

Keystone XL is still facing an uncertain future, and with several other major oil pipeline projects already shelved, there has been extra emphasis on the successful outcome of the Trans Mountain Expansion. That is exactly why Canada’s federal government, including Prime Minister Justin Trudeau, has gone to bat for the project.

The pipeline is "crucial to the entire Canadian oil sands industry [and oil from WCS is already selling at a $30-discount to WTI]-

And,

• Kinder Morgan just said it was suspending all work on the pipeline; and, 
• Canada's Prime Minister Trudeau just left for a trip to Peru [I have no idea why]

Yeah, it's a disaster.

Original Post 

Notley to Horgan: read my lips!

Alberta calls out BC after pipeline expansion suspension
Hell hath no fury like a woman scorned.

And she has several arrows in her quiver.  Like a wine ban that apparently worked ... except she lifted the ban prematurely.

For those looking for something different than what's coming out of Washington, DC, this is a worthy alternative.

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An Opinion 

- from a reader, from an un-sourced document -

posted: April 11, 2018

Bottom Line: PM Trudeau has a problem.

The news is full of the “Alberta/BC war."

The Vancouver Sun and the local radio station covers the situation inside and out.

The Prime Minister declared,  “the pipeline will go through” and then he left on a trip to Peru.

[A] trial was held in Vancouver for four people who ignored the court order to not go near the Kinder Morgan site.

One of the people is an NDP MP.

Remember that the election was so close that the NDP had to get three Green Party members to join them in order to form the government.

If they put [this individual] in jail, the NDP government cannot pass any bills because if they introduce one and don’t get a majority vote, the government will fall.

So we’re waiting to see what the sentence will be.

One of the four people was Elizabeth May who is an MP in the federal government Green Party member.

The Liberals have a good majority so nobody cares how long she sits in jail.

The population seems split between those who want the pipeline and those who don’t.

Those who don’t [want the pipeline] have willing protesters and contributors.

Those who do [want the pipeline] are yelling for the federal government to take action. 

• The crude oil coming through the pipeline goes straight into ships headed to Asia, mainly China.
• More pipelines, more crude going to China. 
• It has nothing to do with oil or gas supply to BC.  
• It increases the possibility of tanker accidents and oil spills that affect our beaches and fish and sea life, etc. 
• It will bring profit to Alberta and money from taxes to the federal government.  
• A lot of the people wanting it to go ahead think it will supply a lot of jobs.  Right now nobody needs a job. 
• Everyone is already working because the construction is booming.  
• There are signs on every store door “now hiring."
• The only jobs will be while the pipeline is being built.  
• BC’s major industry is tourism. 
• All those involved in tourism are against the pipelines, fearing oil spills will affect the beaches and sport fishing and whale watching, etc.  
• People inland don’t care unless they are interested in the environment and disapprove of the tar sands and understand the volume of carbon output by an additional 4or 5 tankers a day going out of the harbour. 

I don’t know which side will win.  Obviously Justin Trudeau doesn’t know either.  He’s gone to Peru and hopes it will get solved while he’s away.

EIA's Short Term Energy Outlook Vs Others -- April 10, 2018

The EIA says:

The short-term outlook continues to forecast that Brent crude oil spot prices will average $63 per barrel in both 2018 and 2019, while West Texas Intermediate will remain below $60 per barrel, averaging about $4 per barrel less than Brent in both years. 

Mike Filloon suggests we will see $70 $75/bbl WTI by July 4, 2018. Posted earlier.

If the EIA is correct, Saudi Arabia is in deep, deep trouble. They "used" to need $100-oil to meet national budgetary needs. Then they "settled" for $80-oil but were forced to live with $60-oil. Oilprice.com had a headline suggesting Saudi Arabia was "secretly" targeting $80 oil. I did not read the article. But if the EIA is correct, it's not going to be a pretty picture for the kingdom.

Short Term Energy Outlook -- EIA -- April 10, 2018

Summer Fuels Outlook:

• EIA is forecasting retail prices for regular-grade gasoline to average $2.74 during the summer of 2018, which tops last summer’s average by 32 cents. The forecast attributes this increase, in large part, to higher Brent crude oil prices, which are reaching average spot prices not approached since 2014.
• Increased prices throughout 2018 will likely increase annual U.S. household spending on motor gasoline by about $190, approximately 9% higher when compared with 2017. This increase would mark the second consecutive year that consumers experience higher motor fuel-related expenses, following annual declines from 2014 to 2016.
• Despite higher prices, EIA’s forecast expects gasoline consumption to increase in 2018. Americans are set to consume roughly 9.6 million barrels per day throughout the summer of 2018, which would be an increase of about 20,000 barrels per day from last summer’s record average.
• Consumers could see higher electricity bills this summer because temperatures are forecast to be a bit hotter than last summer. The short-term outlook expects residential electricity bills to average $142 per month, which would be up from last summer’s average by 3.4%. However, forecasts of summer expenditures are highly dependent on weather, which is unpredictable. [Hmmmm ... I did not know that. But we do know the exact temperature the earth will be 100 years from now.]
• The short-term outlook continues to see natural gas gaining in its share of electric power generation. With a warmer summer expected in 2018, EIA expects electric generation from June through August to top last year’s levels by more than 2%. Of total electrical generation over the summer, natural gas will account for 36%, 2% higher than last year, while coal’s share will drop by 2% to 30%.

Oil Markets:

• The short-term outlook continues to forecast that Brent crude oil spot prices will average $63 per barrel in both 2018 and 2019, while West Texas Intermediate will remain below $60 per barrel, averaging about $4 per barrel less than Brent in both years.
• EIA continues to forecast record crude oil production in the United States for both 2018 and 2019, largely as a result of horizontal drilling and hydraulic fracturing in tight rock formations, especially in the Permian region. 
• April’s short-term outlook expects U.S. production to average 10.7 million barrels per day in 2018, which would be a new record and represent an increase of nearly 15% from 2017 to 2018.

Natural Gas:

• U.S. dry natural gas production also remains on pace for record levels in both 2018 and 2019, according to the forecast. This year’s production is poised to increase by 7.5 billion cubic feet per day over 2017 levels to an average just above 81 billion cubic feet per day.
• The April short-term outlook maintains the forecast for U.S. natural gas net exports increasing to historic levels in both 2018 and 2019. 
• U.S. natural gas trade was almost balanced between exports and imports in 2017, but, in this forecast, EIA expects that the United States will see net natural gas exports climb above 4 billion cubic feet per day by 2019 as LNG terminals continue to come online. 

Coal:

• EIA’s April short-term outlook forecasts a 5% decline in coal production in 2018, following last year’s production increase. 
• Coal’s reduced share of electricity generation is largely behind the decline, but lower demand for U.S. coal exports is also a contributing factor. 

Renewables:

• EIA continues to forecast that electricity generation from wind will grow in 2018 and 2019. Assuming that precipitation and snowpack levels are consistent with forecasts, wind will—for the first time—overtake hydropower generation in 2019. 
• As greater capacity comes online, wind has the potential to become the nation’s largest renewable source.

Back To Man-Camps In Boomtown, USA? -- And East Coast Folks Said The Boom Was Over -- April 10, 2018

This link sent to me by a reader; quite a story.  Completely unexpected. My headline is a bit of hyperbole; the housing shortage this time around is a lot different than the kind of housing shortage Williston had in the early years of the boom. 

From nationalmortgagenews.com: Williston housing shortage could have regional repercussions, by Jessica Holdman, The Bismarck Tribune, April 10, 2018 --

Williston Realtors sold more homes in the first quarter of the year than in any other previously — even outselling 2012 and 2014 boom levels.

Homes that changed hands in the quarter numbered 110 — about 30 a month — said Williston's Development Services Director Mark Schneider.

The North Dakota city is in the midst of a single-family housing shortage that promises only to get worse as oil and gas activity picks up for the season. And while Williston area homebuilders are encouraged by city response to local affordable housing needs, officials are still unsure how incoming workers might be housed through the summer.

Apartments and hotels are at 90% to 95% occupancy already, Schneider said. Williston Area Builders Association President Mike Dolbec, of Windsong Custom Homes, expects those units will be full within a couple months.

Twenty-five single-family homes are listed for sale in the $250,000 to $330,000 range and 24 in the $330,000 to $400,000 range, according to the Multiple Listing Service.
It takes three to four months to build a new home but the current inventory could be gone in two months.

A "task force" has formed to look for solutions. More from the article:

He said this is particularly important with high lot prices — about $65,000 on average in the city and about $70,000 for larger county lots — and higher costs for materials, such as the 40 percent increase for lumber over the past year.

North Dakota Job Service's Williston office has 2,000 job openings advertised. Each week of this school year, the Williston School District saw, on average, 19 new students. And a 2016 North Dakota State University study predicts 60 percent population growth in Williams County by 2029.

That's about 1,600 new people per year, meaning more than 500 homes needed annually if the prediction holds, according to Schneider. The city has 732 buildable lots, complete with sewer and water available, but that won't hold them through even next building season.

Of the homes in the $250,000 to $330,000 range, a price range Gorder said is most attainable for the majority of the young families who are looking, 15 are more than 50 years old and four have been on the market more than 50 days. Only eight are less than 50 years old. In the $330,000 to $400,000 range, six are older than 50 years, one has been on the market more than 100 days, six are still being constructed and 11 are less than 50 years old.

The End of the Line, The Traveling Wilburys

Nothing About The Bakken -- Just Having Fun -- April 10, 2018

EPS, history, Yahoo!Finance:

Tesla: debt, CNN. 

Tesla: then and now, Goldman Sachs estimates --

• Tesla: 170 million outstanding shares
• a loss of $7.65 / share = 1,300 million or $1.3 billion
• that's for the year
• we'll get the first quarter's results next week

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Global warming: it took President Trump about a year to turn things around --

Another Example Of Headlines / Stories Being Written Ahead Of Actual News -- April 10, 2018

Updates

Later, 6:58 p.m. Central Time: apparently a US destroyer with 60+ Tomahawk missiles is not off-shore Libya. It is being reported that Russian jets are buzzing our destroyer. It is now being rumored that if North Korea actually agrees to denuclearize and join the "world community," for all practical purposes there will only be two rogue nations left: Russia and Iran.


Later, 6:57 p.m. Central Time: I don't know too much that is going on in that part of the world right now, but my simple mind suggests there are only two or three ways to accomplish the May-Trump objective:

Original Story

The story in the screen shot was posted at 3:44 p.m. CDT. The data was released by the API at 3:30 p.m. CDT. The last time-stamp in the article was 3:36 p.m. CDT.

So, Ms Julianne Geiger read the API release at 3:30 p.m; analyzed the data; confirmed the data; wrote the story; reviewed the story; edited the story; sent it to the editor; the editor posted it; with an obviously incorrect headline (not once in the story is there any evidence that the price of oil "slipped"); and then linked it to other pages at the website. The last time-stamp in the article was 3:36 p.m. so Ms Geiger could not have sent the article up to her editor until at least after 3:36 p.m and yet by 3:44 p.m. a fairly long article was written, revised, edited, sent, posted, and linked -- all in eight minutes.

The headline writer probably had two headlines ready to go; the headline writer was simply waiting for the API number. With an "unexpected" increase in both crude oil and gasoline inventories, the headline writer assumed the price of WTI and Brent would "slip" and that's the headline that was selected.

Here is the screenshot of the article. Because it was a long article, it took three screen shots and did not include irrelevant parts of the story:

This was the API data:

Here is the "price chart" for oil taken from the same site at the same time.

The good news: a great day for oil bulls and there is a suggestion the price will continue.

There are a number of factors pushing the price of oil up, but one wonders if the likelihood that there will be some kind of "allied"  military response to the recent gas attack is not the main driver. 

US Crude Oil Inventories Essentialyl Flat -- API -- April 10, 2018; Seven DUCs Reported As Completed

US crude oil inventories: ho-hum; flat; API data -- an increase of 1.758 million bbls

• EIA data comes out tomorrow
• WTI: closes up almost 3.5%; up $2.16; closed at $65.58

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Active rigs:

$65.58↑↑	4/10/2018	04/10/2017	04/10/2016	04/10/2015	04/10/2014
Active Rigs	59	52	31	93	190

Only one new permit:

• Operator: CLR
• Fields: Brooklyn (Williams)
• Comments:

One permit canceled:

• QEP: a Tipi V permit in McKenzie County

Four permits renewed:

• Thunderbird (3): three Watson B permits in McKenzie County
• BR: a Gudcadia permit in McKenzie County

Seven producing wells (DUCs) reported as completed:

• 29556, 330, Statoil, Patent Gate 7-6 3H,  Sakakawea, 11 million gallons of water, 89% water, t1/18; cum --
• 31317, 157, BR, Midnight Run 2-8-12MTFH, Union Center, t3/18; cum --
• 31318, 133, BR, Midnight Run 3-8-12MBH, Union Center, t3/18; cum --
• 31319, 448, BR, Midnight Run 4-8-12MTFH, Union Center, t3/18; cum --
• 32712, 2,167, Statoil, Heinz 18-19 5H, Patent Gate, t2/18; cum 15K after 26 days;
• 32713, 3,527, Statoil, Heinz 18-19 XE 1H, Patent Gate, t1/18; cum --
• 32714, 2,878, Statoil, Patent Gate 7-6 XE 1H, Poe; 11.4 million gallons of water; 89% water, t2/18; cum --

The Market, Energy, And Political Page, Part 4, T+41 -- April 10, 2018

Mood. Wow, I'm in a great mood. I can't wait to see the next presidential approval poll. The ACLU is hypocritically quiet over yesterday's events. For archival purposes: the FBI, using the SDPD fig leaf, raided the offices and the home of Trump's long-time personal lawyer. Any thinking person who carries a copy of the US Constitution in her pocket needs to be duly alarmed. And this, by the way, is why some folks are very concerned about the First and Second amendments now that the Fourth Amendment has been rescinded (?) by the Deep State.

I Won't Back Down, Tom Petty

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New NYSE Ticker Symbol

GE's new ticker symbol: FF -- for flip-flopping. Ever since Jack "the great one" Welch departed, GE has been struggling to figure out what business it was in. Elizabeth Warren's attack on big banks drove GE out of the financial sector; global warming group think pushed/pulled GE into renewable energy; and, now with crude oil surging, FF appears to be getting back into energy.

First, a re-thinking of selling BHGE. Then, the biggest flip-flop: re-thinking about selling its brand-new Burlington Northern railroad diesel locomotive manufacturing plant in Ft Worth (previously posted). Now, today, this from Morningstar:

The Ugandan government has signed an investment agreement with a consortium led by U.S.-based General Electric Co. (GE), clearing the way for the long delayed construction for the east African nation's [$4-billion] maiden oil refinery, officials said Tuesday. 

The 60,000 barrels-a-day plant will be built along Uganda's western border with Congo, where France's oil giant Total SA and China's CNOOC Ltd.  are currently developing oil fields estimated to contain 6.5 billion barrels of oil.

The deal, signed between government and the consortium known as the Albertine Graben Refinery Consortium clears way for the development, design and financing of the plant, which is expected to come on stream by 2020.

The development caps more than a year-long selection process which is critical for the commercialization of Uganda's vast oil fields. 

Landlocked Uganda has already agreed terms with Tanzania over the construction of an 800-mile oil-export pipeline to the port of Tanga. Oil production could peak at as much as 230,000 barrels-a-day of crude by 2023.

Let's do the data points:

• peak oil? what peak oil?
• Uganda
• vast oil fields
• $4 billion refinery
• consortium led by FF
• FF will partner with France and China
• on stream by 2020
• more headaches for Saudi Arabia
• wouldn't solar energy make more sense in Uganda now that Tesla's world dominance in EVs means the end of the Fossil Fuel age

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Validation

Way too expensive: some time ago I blogged that Exxon Mobil over-paid to get into the Permian. If I find the post, I will link it. But, yes, I was very, very clear on that: Exxon Mobil over-paid to get into the Permian. Exxon paid about $24,000/acre to get into the unproved, undeveloped west side of the Permian. Now we have validation. From Reuters (so you know it has to be true):

Exxon Mobil Corp is in talks with Qatar over a possible deal that could see the country investing in the company's U.S. shale gas resources, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.

The deal could take the shape of a joint venture in which Qatar, through state-owned Qatar Petroleum, could partner or invest in future wells with Exxon's XTO Energy subsidiary.

The newspaper said no deal had been finalized yet and talks could collapse. The newspaper did not say how much Qatar was planning to invest in XTO Energy.
If the deal takes shape as described, it would be the first time a Middle Eastern country invested significantly in a U.S. shale-related project.

Cattle Cow, Eddy Arnold and LeAnn Rimes

The Market, Energy, And Political Page, Part 3, T+41 -- April 10, 2018 -- Margaret Thatcher Re-Incarnated

China Syndrome: WTI is surging, up 2.6% right now; trading over $65. Lots of reasons. Inflation data this morning possibly driving it. Perhaps. Perhaps, the China syndrome. Xi says he will "relax" tariffs on US automobiles. Energy sector surging. And, of course, that drives the overall market. Xi says he will "relax" tariffs on US automobiles -- how many days has it been since Trump declared a trade war? Forty-one days. How long did God let the rain fall when Noah built the ark? Yeah, there it is: forty days and 40 nights. Yeah, the trade war is over. There are two processes but the outcome is the same. See next data point.

Trade wars: the trade wars are over. There are two process but the outcome is the same. First process: China blinks; those who understood the situation were correct; there was no way China could win a trade war between plastic toy exports and technology, manufacturing, and energy imports; and the war is over because China blinked. Second process: both sides knew this was not going to end well, and Trump was looking for a way out (the Kudlow effect): Xi's speech yesterday i is enough for Trump/Kudlow to move to quiet behind-the-scene negotiations and publicly speechifying that the trade war is over. Note: technically there has never been a trade war. More fake news. The tariffs are not even in place yet; the timeline was at least 90 days into the future. And so, again, the theme song for the "fake" trade war, and Trump's words to his chief of staff (LOL):

You Don't Own Me, Lesley Gore
Panic: Ottawa in meeting over Trans Mountain pipeline project. This is huge. Canada is being balkanized -- just like the US: Alberta calls out BC after pipeline expansion suspension. It would be great to see the transcript of Rachel Notley's speech. Pretty strong words. The "mess with Texas" quote was priceless. It will be most sad when this video is lost / removed from the ethernet. Maybe one of the best videos ever. Whoever does not believe in reincarnation will have to re-think their belief: it appears that Rachel Notley, the 17th and current premier of Alberta is clearly Margaret Thatcher reincarnated. LOL.

"Investors in Houston may or may not ultimately have the stomach for this fight and maybe the government of BC feels they can mess with Texas, and who knows, maybe they can. But let me absolutely clear, they cannot mess with Alberta."

Louis Rukeyser: I have often said that in times like these I wish we still had Louis Rukeyser around. Well, it turns out we do. In fact, we have at least two: Rachel Notley and Scott Adams. This is going to be fun. And it's going to be real. It's going to be real fun.

Bad news: the bad news. I will be on the road later this week -- a bit of a cross-country trip -- I plan to explore a bit of Route 66. Blogging will be significantly compromised.

Midnight in Paris

STACK/SCOOP Production Doubles -- Filloon -- April 10, 2018

Huge news for Harold Hamm.

Over at SeekingAlpha.

• production per well almost doubled from 2016 to 2017
• lateral lengths have increased slightly, but most of the increase is on a production per foot basis
• there are wide differences in productive by operator, indicating either a small core sweet spot, or a relatively large difference in well design

Well design continues to improve across the unconventional US. We have analyzed this across the Permian, Eagle Ford and Bakken confirming the presupposition as true. Enhanced completions work was implemented by EOG Resources  in the Eagle Ford. It moved sand heavy fracs to the Bakken's Parshall Field next. Both were unbelievably successful.

The implementation meant operators would need to use massive volumes of sand. This was cost effective, and frac sand is cheaper than ceramics. Other operators have started using this design, and implemented to a large degree. This isn't the case for all operators, but all are using more than 50% of the time. This is why production per foot should improve in 2018. This is without further stimulation improvements.

We don't know if operators can improve stimulation from here, but recent EOG completions in New Mexico are showing promise. We have also seen some excellent work by Concho across the Delaware Basin. There is upside to implementing design this year, with the possibility of further stimulation improvements as a variable difficult to assess.

Mike Filloon predicted this (massive amounts of sand to be used) several years ago but he was a bit early. Perhaps it was only because the Saudi Surge and the subsequent plummet in oil prices slowed things down -- temporarily. I don't know. Regardless, but we are now seeing at least one operator in the Bakken move to massive amounts of sand as routine (or at least it appears). See the Monroe wells with commentary here.

More from Mike at the link above:

Well design improvements have improved economics and decreased payback times. This should put a ceiling on oil prices, but not in a bearish fashion. The reasons for this is the decrease in world inventories. The removal of the glut has allowed prices to move higher, but more importantly stabilized downside. We should see a gradual increase in oil prices long term as better geology is completed. Shorter term we see WTI hitting a high between $70/bbl to $75/bbl. We may see this before the 4th of July holiday. This could push the US Oil ETF to $15/share in that time frame. Demand seems to be the catalyst, and could surprise to the upside.

Compare to the Bakken, the laterals in Oklahoma are short: only about a mile long compared to 2-mile laterals in the Bakken.

Bakken 2.5: Evolution Of Completion Strategies -- April 10, 2018

I just posted this earlier, but it is important enough, for archival purposes, to get its own stand-alone post.

This data will not be updated. I track the Monroe wells elsewhere. This is huge, huge news. Look at these wells (commentary follows):

• 22891, IA/947, CLR, Monroe 1-2H, 35 stages,  3.3 million lbs, t8/12; cum 296K 10/16;
• 30253, 3,225, CLR, Monroe 6-2H, Banks, 4 sections, a huge well; first two full months, 50K+; 150K in first three months; from a November 4, 2016, sundry form -- "CLR .... requests a waiver to plug and reclaim an abandoned well ... the well will be completed once commodity prices improve ..." Spud August 15, 2015; reached KOP on August 18, 2015; KOP curve drilled in 36 hours; wellbore landed 18' into the middle Bakken; the rig was then skid over to the Monroe 7-2H; background gas averaged 600 units; a high formation gas of 1106 units was observed when traversing the upper Bakken shale; the 13,537' long lateral began drilling on October 17, 2015; reached TD on October 23, 2015; 78 stages; 11 million lbs; "... plug & perf completion; 15% 100-mesh & 85% (40/70) natural white sand; t10/17; cum 243K 2/18;
• 30251, 2,313, CLR, Monroe 7-2H, Banks, 4 sections, 78 stages; 16.6 million lbs, unspecified mix of mesh and 40/70, a huge well; two of first three months, close to 50K+/month; about 130K first three months; t10/17; cum 200K 2/18;
• 30254, 1,302, CLR, Monroe 8-2H, Banks, 4 sections, 53 stages; 10.7 million lbs, 28% mesh/72% 40/70; t1/18; cum 15K 2/18;
• 30252, 1,823, CLR, Monroe 9-2H, Banks, 4 sections, 53 stages; 16.2 million lbs; 19% mesh & 81% 40/70; t1/18; cum 30K 2/18;
• 33098, SI/NC, -->1,858, CLR, Monroe 10-2H1, Banks, 4 sections, Three Forks B1, 82 stages; 10.6 million lbs; "plug and perf completion; pump 25% 100-mesh & 75% (40/70) natural white sand, started off slow, but 45K in fifth month; t10/17; cum 101K 2/18;
• 33097, 1,594, CLR, Monroe 11-2H1, Banks, 4 sections, Three Forks B1; 82 stages; 16.5 million lbs; "... 12 toe stages with ball & sleeve then 70 stages utilizing plug & perf with unspecified mix of mesh and 40/70 sand, t10/17; cum 72K 2/18;

Commentary, for newbies:

• Bakken 1.0: began in the summer of 2007; it was originally tagged "Bakken101" and I continue to use the "Bakken101" tag 
• Bakken 2.0: October 19, 2016
• Bakken 2.5: April 10, 2018 -- correlates/corresponds with CLR's new completion strategies; North Dakota crude oil production to set new records; increased focus on the Permian vs the Bakken
• CLR's new completion strategies:
• still being worked out
• the amount of sand/number of stages individualized not only for a specific formation (middle Bakken, Three Forks B1, Three Forks B2) but also for each individual well
• my hunch is that the amount of sand -- not necessarily the number of stages -- also factors in "halo" effect of neighboring wells
• note reference to "toe stages" in #33097 above; wow, we must have talked about "toe stages" six years ago in the blog; now we're seeing operators talk about it in their completion strategies; interesting
• CLR is also helping readers like me out by breaking down the percentage of mesh/type of sand/ceramic used in each frack; this is much appreciated; it's a big help for their geologists and for the CEO and board of directors; Mike Filloon should love it
• if others see something else in CLR's completion strategies, please let me know

The Market, Energy, And Political Page, Part 2, T+41 -- April 10, 2018

Super-big news: China - North Korea - US have moved past the conversation whether North Korea should denuclearize. The parties have now moved to how to denuclearize North Korea. The negotiations / bargaining has begun. What will North Korea say it wants in exchange for denuking? North Korea will want unification of the Korean peninsula. All will agree that will be the goal. But it may take centuries. But that will be unsaid. In the meantime, negotiations for aid for North Korea will take priority.

WTI: I'm in a great mood. Sometime within the last five days -- I already forget the exact day -- I sold a  lot of losers to buy something else. My decision came down to AAPL vs RDS-B. I won't go through all the pros and cons now, but I ended up going with RDS-B. I love Royal Dutch Shell's strategic plan to become a wind/solar energy company. LOL.

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

Politics: Trump continues to win. His polls will likely improve this week or next.

#BlackLivesMatter is gradually morphing into #BlackLiesMatter.

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Back to the Bakken

This data will not be updated. I track the Monroe wells elsewhere. This is huge, huge news. Look at these wells (commentary follows):

• 22891, IA/947, CLR, Monroe 1-2H, 35 stages,  3.3 million lbs, t8/12; cum 296K 10/16;
• 30253, 3,225, CLR, Monroe 6-2H, Banks, 4 sections, a huge well; first two full months, 50K+; 150K in first three months; from a November 4, 2016, sundry form -- "CLR .... requests a waiver to plug and reclaim an abandoned well ... the well will be completed once commodity prices improve ..." Spud August 15, 2015; reached KOP on August 18, 2015; KOP curve drilled in 36 hours; wellbore landed 18' into the middle Bakken; the rig was then skid over to the Monroe 7-2H; background gas averaged 600 units; a high formation gas of 1106 units was observed when traversing the upper Bakken shale; the 13,537' long lateral began drilling on October 17, 2015; reached TD on October 23, 2015; 78 stages; 11 million lbs; "... plug & perf completion; 15% 100-mesh & 85% (40/70) natural white sand; t10/17; cum 243K 2/18;
• 30251, 2,313, CLR, Monroe 7-2H, Banks, 4 sections, 78 stages; 16.6 million lbs, unspecified mix of mesh and 40/70, a huge well; two of first three months, close to 50K+/month; about 130K first three months; t10/17; cum 200K 2/18;
• 30254, 1,302, CLR, Monroe 8-2H, Banks, 4 sections, 53 stages; 10.7 million lbs, 28% mesh/72% 40/70; t1/18; cum 15K 2/18;
• 30252, 1,823, CLR, Monroe 9-2H, Banks, 4 sections, 53 stages; 16.2 million lbs; 19% mesh & 81% 40/70; t1/18; cum 30K 2/18;
• 33098, SI/NC, -->1,858, CLR, Monroe 10-2H1, Banks, 4 sections, Three Forks B1, 82 stages; 10.6 million lbs; "plug and perf completion; pump 25% 100-mesh & 75% (40/70) natural white sand, started off slow, but 45K in fifth month; t10/17; cum 101K 2/18;
• 33097, 1,594, CLR, Monroe 11-2H1, Banks, 4 sections, Three Forks B1; 82 stages; 16.5 million lbs; "... 12 toe stages with ball & sleeve then 70 stages utilizing plug & perf with unspecified mix of mesh and 40/70 sand, t10/17; cum 72K 2/18;

Commentary, for newbies:

• Bakken 1.0: began in the summer of 2007; it was originally tagged "Bakken101" and I continue to use the "Bakken101" tag 
• Bakken 2.0: October 19, 2016
• Bakken 2.5: April 10, 2018 -- correlates/corresponds with CLR's new completion strategies; North Dakota crude oil production to set new records; increased focus on the Permian vs the Bakken
• CLR's new completion strategies:
• still being worked out
• the amount of sand/number of stages individualized not only for a specific formation (middle Bakken, Three Forks B1, Three Forks B2) but also for each individual well
• my hunch is that the amount of sand -- not necessarily the number of stages -- also factors in "halo" effect of neighboring wells
• note reference to "toe stages" in #33097 above; wow, we must have talked about "toe stages" six years ago in the blog; now we're seeing operators talk about it in their completion strategies; interesting
• CLR is also helping readers like me out by breaking down the percentage of mesh/type of sand/ceramic used in each frack; this is much appreciated; it's a big help for their geologists and for the CEO and board of directors; Mike Filloon should love it
• if others see something else in CLR's completion strategies, please let me know

The Market, Energy, And Political Page, Part 1, T+41 -- April 10, 2018

Legal stuff, part 1: this will be interesting. Everyone agrees: if a person commits a crime, and then hires a lawyer or has a lawyer appointed for him/her, the client-attorney communications are private, confidential, and privileged. However, if a person talks (conspires) with a lawyer to commit a crime, are those same client-attorney communications private, confidential, privileged? That may be settled law. I don't know. If it is not settled law, I have a hunch how the average American thinks about this, and I have a hunch how American lawyers think about this.

Legal stuff, part 2: I have a hunch that time-lines for political crimes are different than the time-lines of sexual peccadilloes. I am referring to the time-lines when lawyers are consulted.

WTI pricing: the tea leaves suggest that the price of oil is headed higher. I was surprised by the price of oil yesterday. Today, market opening: $64.75, up 2.10%. Quiet surprised. It's only April.

Tesla: still another week of waiting for the earnings call. Another Tesla recall: this time in China. Tesla's 5.3%/2025 uncallable bonds plunged the other day; recovering a bit today. [Later: looks like the bonds are surging.]

Weather: this spring is certainly dragging out -- but we will be complaining about the hot Texas summer soon enough.

Obamacare: Trump administration allows states to "narrow" Obamacare -- WSJ. Obamacare will die on the vine; simply fade away. Sort of like "New Coke," which lasted from 1985 to 2002. And that will be it. No sane president will ever tackle US health care again.

Syria: the talk here at local Starbucks jibes with what Scott Adams said yesterday, and my hunch is that those talking about Syria in Starbucks this morning have not read or listened to Scott Adams in the past 48 hours. 

CLR Completes A Monroe Well In Banks Oil Field With An 82-Stage Frack -- April 10, 2018

The well:

• 33098, 1,858, CLR, Monroe 10-2H1, Banks, 4 sections, Three Forks B1, 82 stages; 10.6 million lbs; "plug and perf completion; pump 25% 100-mesh & 75% (40/70) natural white sand, started off slow, but 45K in fifth month; t10/17; cum 101K 2/18; 

The Monroe wells are tracked here. 

I will come back to this later. Too much news again.

The Bakken's Still-Growing Water Midstream Sector -- RBN Energy -- April 10, 2018

China: blinked. Xi says he will reduce auto tariffs. And that was after one Trump tweet. No links; easily found.

WTI pricing: it's a fool's errand to predict oil prices, but Mike Filloon is no fool and I follow him closely. I don't know if folks saw this. Mike probably posts over at SeekingAlpha averaging about one article very seven to fourteen days; sometimes more frequently; sometimes less.

In his second to last contribution he suggested oil would get to $70 this summer, but "pushing above $75 will be difficult." I suggested that I saw $68, but $70 would be a struggle (except for maybe a short period during the peak driving season).

In his most recent post, Mike suggested, very clearly, he expected $70- or $75-oil this driving season (2018).

One could argue he has not changed his position on pricing, but being an inveterate optimist, I like to think that Mike was slightly -- very slightly -- more bullish in his most recent post with regard to the price of oil. 

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Back to the Bakken

Active rigs:

$64.60↑↑	4/10/2018	04/10/2017	04/10/2016	04/10/2015	04/10/2014
Active Rigs	58	52	31	93	190

RBN Energy: the Bakken's still-growing water midstream sector.

The Permian is a beehive of activity on the burgeoning water midstream front — the pipelines, saltwater disposal wells and other assets being built to facilitate the delivery of water to new wells for hydraulic fracturing and the transport of “produced water” from the lease to disposal or treatment sites. But the Bakken — arguably the birthplace of the water midstream sector nearly a decade ago — is no slouch, and a model of sorts for the infrastructure build-out now under way in the Permian. The volume of water needed for Bakken well completions is up sharply in recent years; more important still, the region is generating more than 1 MMb/d of produced water, and producers and water midstreamers alike are building new takeaway pipelines and drilling new SWDs to more efficiently deal with it. Today, we discuss water- and produced-water-related infrastructure in one of the U.S.’s largest production regions.

The trends toward longer horizontal wells and more intense well completions have resulted in the need for sharply higher volumes of fresh, treated or recycled water (and frac sand) in U.S. shale plays. Our understanding is that the completion of a typical horizontal well in the Bakken today requires 200 Mbbl or more of water — eight to 10 times as much as was needed to complete the much shorter laterals that were common in the early years of the Shale Era. All of that water needs to be delivered to the well site during the completion process — not an easy task in relatively dry western North Dakota.