Monday, August 27, 2018

The Bakken, The Eagle Ford, The Permian .... Now It's The Powder River Basin -- Motley Fool -- Peak Oil? What Peak Oil?

Converse County / Powder River Basin is tracked here.

From Motley Fool via Yahoo!Finance:
The Permian Basin, which stretches across western Texas and the southeast corner of New Mexico, is the fastest-growing oil-producing region in the world. Output currently stands at around 3.3 million barrels per day (BPD) and has increased an astounding 800,000 BPD over the past year, which represents more than half of the worldwide production increase. That fast-paced growth, however, is about to come to a screeching halt because there is only enough pipeline capacity to move 3.6 million BPD. While the industry is building new pipelines as fast as it can, the current bottleneck could last until late next year.
Because the Permian expects to slow to a crawl in the next year, it's opening the door for the Powder River Basin (PRB) of Wyoming to emerge as the industry's new growth engine. That gives producers with land in the region a leg up on the competition, which is why investors should put this area on their radar.
A monster discovery:
Shale giant EOG Resources has been one of the leading developers of the PRB over the past few years. In May 2015, the company said that it discovered two formations in the PRB -- Turner and Parkman -- that contained high-return drilling locations. However, after increasing its return hurdle rate in 2016, only the Turner formation -- which holds an estimated 200 million barrels of oil equivalent (BOE) -- met its criteria to deliver a premium drilling return.
That didn't stop the company from continuing to explore its vast acreage position in the region. Because of that, the company was able to uncover two more formations that hold a treasure trove of oil resources. EOG announced these discoveries earlier this month, detailing that the Mowry and Niobrara shale plays held a stunning 1.9 billion BOE of recoverable resources, a more than tenfold increase. That put the PRB right behind the Permian Basin and Eagle Ford shale as the company's third-largest asset.
Much more at the link.

Only Two New Permits But 21 Permits Renewed; Zavanna Getting Active Again? -- August 27, 2018

Note: for those who have wells in Dimmick Lake or are interested in the effect of fracking on "parent wells," a reader was nice enough to send an update on the Miles-Kennedy wells in Dimmick Lake. The official NDIC data will lag by a month or two.

Active rigs:

Active Rigs61553076194

Two new permits:
  • Operator: Newfield
    Field: Pembroke (McKenzie)
    Comments: Newfield has permits for a 2-well Skipjack pad in SESW 11-149-98
Twenty-one permits renewed:
  • Zavanna (7): seven Hunter permits in McKenzie County
  • QEP (4): four MHA permits in Dunn County
  • Statoil (3): two Reitin permits and one Michael Owan permit, all in Williams County
  • Petro Harvester Operating Company (3): three PTL2 permits in Burke County
  • BR (3): three Three Rivers permits in McKenzie County
  • Oasis: one McCown permit in Burke County
Three permits canceled:
  • Slawson (2): two Moleback permits in Mountrail County
  • Oasis: one Kellogg Federal permit
Two producing wells completed:
  • 33756, 246 (no typo); 66 bbls water, Crescent Point Energy, CPEUSC Njos 4-26-35-157N-100W MBH, Marmson, t8/18; cum --
  • 33759, 246 (no typo); 66 bbls water, Crescent Point Energy, CPEUSC Njos 6-26-35-157N-100W TFH, Marmon, t8/18; cum --

Montana Bakken Activity -- August 27, 2018

A reader asked about Montana oil sector.

I replied that I don't follow Montana -- I have enough trouble just keeping up with North Dakota. Years ago I posted fairly regularly on Montana but at the time I was getting my links and reports from a reader who was following Montana (I assumed he/she became a multimillionaire on oil, moved to Phoenix and is happily retired).

The reader noted that Kraken Operating reported three nice wildcat Montana wells; surface locations, not bottom hole locations:
  • 083-23346, 1,007, Kraken Operating, Elroy 32-31 1H, section 31-26-59;  Richland County,
  • 083-23347, 1,210, Kraken Operating, Fletch 5-8 1H, section 33-26-59; Richland County,
  • 083-23345, 1,360, Kraken Operating, Eagle 4-9 2H, section 33-26-59; Richland County
A huge thank you to the reader for sending me this information. Kraken Operating is new to the Bakken (2016) and I'm just starting to learn more about them.

It's interesting that these wells were all considered "wildcats."

In the North Dakota Bakken we are starting to see increased interest in Tier 2 (and even Tier 3) locations, but much more interesting, are the number of wells targeting the lower benches of the Three Forks (the second bench and the third bench). It will be interesting if that interest spills over into Montana. But again, this reminder/caveat: the nature of the Williston Basin is such that most consider Montana on the western fringe of the Bakken. With that in mind, these appear to be very nice Kraken wells.

The Market, Energy, And Political Page, T+13 -- August 27, 2018

The market:
  • Dow: absolutely irrelevant, but the Dow hit 26,000 -- the first time since February 2, 2018; could the Dow go up 300 points today?
  • Nasdaq: hits 8,000
  • Russell: with a new record
  • S&P: the one that matters -- within two points of hitting 2,900
WTI: flat; but trading at a very, very nice level, almost $69

False story: CNBC political talking head says the "NAFTA" story / Mexico trade story is a fake story. The movers and shakers all know that. And yet the Dow jumps almost 300 points. And this is August. Should be the slowest month of the year.

Three global petrochemical hubs?
  • Texas - Louisiana
  • Saudi Aramco - Sabic
  • Alberta: see this story at oilprice --   
    • the only way Alberta will be able to compete with the Gulf coast is if natural gas truly is a third of what it costs those operating in Texas-Louisiana
    • I can see Alberta become a significant player, but equal to SAS or TX-LA -- probably not 

CLR Fracks Three Forks Jersey Well With 74 Stages; 13 Million Pounds Sand -- August 27, 2018

CLR reports a well coming off confidential list today, fracked with 74 stages:
  • 27881, 3,105, CLR, Jersey 19-6H1, Alkali Creek, Three Forks 1, 74 stages; 13.3 million lbs, t6/18; cum 36K 6/18; 
The Jersey wells are tracked here.

First Day of School

I don't think I've ever seen her so "proud." She was the last to be dropped off. She rode in the car with her older sisters who were dropped off at high school and middle school.

CLR Reports Two Huge Mountain Gap Wells; Only 37 Stages But Lots Of Sand; Production: 125K In Two Months -- August 27, 2018

Two Mountain Gap wells coming off the confidential list today: one was a middle Bakken well; one was a Three Forks well:

Coming off the confidential list today:
  • 33120, 3,510, CLR, Mountain Gap 7-10H, Rattlesnake Point, 37 stages; 15 million lbs, huge well; 84K in one month; t5/18; cum 125K in two months; 
  • 33121, 2,972, CLR, Mountain Gap 8-10H1, Rattlesnake Point, Three Forks 1; 37 stages; 15 million lbs; 70K in one month; t5/18; cum 97K 6/18; 
Note: the number of stages. But still a lot of sand.

The Mountain Gap wells are tracked here.

Monday, August 27, 2018 -- As The Summer Comes To An End

Global warming: passengers on grounded Arctic cruise ship to be flown back south. IceAgeNow "Ice-free by 2013" -- Algore. Now, the "drop-dead" date is 2050 -- USA Today. Mashable wavers: pushes the date out to 2100 and even then not sure the Arctic would be entirely ice-free. World Economic Forum says the Arctic is now expected to be ice-free by 2040. For a nice compilation of this inanity, see this link and scroll to the bottom.

Back to the Bakken

Wells coming off confidential list today --

Monday, August 27, 2018
  • 33927, SI/NC, MRO, Zelda USA 11-29H, Reunion Bay, no production data, 
  • 33121, 2,972, CLR, Mountain Gap 8-10H1, Rattlesnake Point, Three Forks 1; 37 stages; 15 million lbs; 70K in one month; the Mountain Gap wells are tracked here; t5/18; cum 97K 6/18;
  • 30523, 1,332, CLR, Burr Federal 16-26H, Sanish, 64 stages; 15 million lbs; t6/18; cum 16K after 12 days;
Sunday, August 26, 2018
  • 33928, SI/NC, MRO, Honaker USA 41-30TFH, Reunion Bay, no production data,
  • 27881, 3,105, CLR, Jersey 19-6H1, Alkali Creek, Three Forks 1, 74 stages; 13.3 million lbs, t6/18; cum 36K 6/18;
Saturday, August 25, 2018
  • 33120, 3,510, CLR, Mountain Gap 7-10H, Rattlesnake Point, 37 stages; 15 million lbs, huge well; 84K in one month; the Mountain Gap wells are tracked here; t5/18; cum 125K in two months;
  • 24621, SI/NC, MRO, Bobby Lee USA 41-30H, Reunion Bay, no production data,

Active rigs:

Active Rigs61553076194

RBN Energy: Hurricane Harvey and the importance of Gulf Coast refined products infrastructure.
On August 25, 2017, Hurricane Harvey made landfall as a Category 4 hurricane near the popular Gulf Coast vacation town of Rockport, TX, just east of Corpus Christi. Harvey was the first major hurricane (Category 3 or higher) to make landfall along the U.S. Gulf Coast since the devastating 2005 hurricane season that included hurricanes Katrina, Rita, and Wilma, and is tied with Hurricane Katrina as the most expensive storm ever to hit the country. Harvey also highlighted just how important the Gulf Coast refining and refined product pipeline infrastructure is to the rest of the U.S. Today, we mark the one-year anniversary of the devastating storm with a three-part series on Gulf Coast refining and pipeline infrastructure, and how a natural disaster along the coast can impact the rest of the country.
The U.S. Gulf Coast (USGC) is home to the largest centralized location of refineries in the U.S. with over 8.4 MMb/d of installed crude distillation capacity between Corpus Christi, TX, and southern Mississippi (Figure 1). To put that in context, the refineries along this 650-mile stretch of coast produce enough to meet about half of total U.S. petroleum product demand. These refineries convert domestic and imported crude oils into refined products that are used for a variety of purposes, including: (1) transportation fuel for personal passenger vehicles (i.e. gasoline and diesel); (2) transportation fuel for commercial purposes (i.e. jet fuel, diesel, and bunker/marine fuel); (3) fuel for home heating (i.e. heating oil); (4) intermediate products for a variety of other petrochemical industries that eventually turn into consumer goods (i.e. plastics, rubber, etc.); (5) asphalt; and (6) lubricants.