The Million Dollar Way (The Bakken Oil Blog): 09/15/18

Saturday, September 15, 2018

Top Operator Of The Year: MRO -- 2018

The Bailey oil field is tracked here. Unless some other operator surprises me in the last three months of this year (2018) it's going to be hard to name some operator other than MRO "The Operator of the Year for 2018."

See this post, also.

Look at the run of incredible wells by MRO in Bailey oil field (below).

In addition, MRO appears to have the most aggressive re-frack program in the Bakken.

The wells (50K+ means the well had at least one month of 50,000 bbls of oil production or more):

33599, 5,000, MRO, Gravel Coulee 14-11TFH, Bailey, 45 stages; 7.9 million lbs, t6/18; cum 64K in 47 days;
33598, 3,473, MRO, Rita 41-3TFH, Bailey, t5/18; cum 85K 7/18;
33597, 3,514, MRO, Stanton 41-3H, Bailey, t5/18; cum 96K 7/18;
33583, 5,694, MRO, Sundby 24-11TFH, Bailey, 45 stages; 8.6 million lbs, t6/18; cum 78K 7/18; 50K+ well;
33582, 5,305, MRO, Morriston 24-11H, Bailey, t6/18; cum 68K 7/18;
33581, 6,573, MRO, Olea 24-11TFH, Bailey, 45 stages; 11.78 million lbs, t6/18; cum 75K 7/18; 50K+ well;
33580, 3,276, MRO, McFadden 14-11H, Bailey, t6/18; cum 50K 7/18;
33535, 6,204, MRO, Arkin 44-12TFH, Bailey, 45 stages; 6.0 million lbs, t1/18; cum 227K 7/18;
33534, 5,113, MRO, Bronett 14-7H, Bailey, t1/18 cum 203K 7/18;
33443, 4,152, MRO, Marlene 34-11TFH, Bailey, t6/18; cum 67K 7/18;
33437, 3,115, MRO, Tipton 34-11H, Bailey, t6/18; cum 47K 7/18;
33436, 4,491, MRO, Gifford 34-11TFH, t6/18; cum 65K 7/18;
33435, 4,538, MRO, Hugo 34-11H, Bailey, t6/18; cum 65K 7/18;
33403, 3,484, MRO, Stroup 34-7TFH, Bailey, t2/18; cum 175K 7/18;
33402, 3,040, MRO, Bethol 34-7H, Bailey, t2/18; cum 170K 7/18;
33401, 3,161, MRO, Kenneth 24-7TFH, Bailey, t1/18; cum 170K 7/18;
33400, 3,017, MRO, Ernst 14-7TFH, Bailey, t2/18; cum 178K 7/18;
33326, 1,814, MRO, Spring 21-15TFH, Bailey, t11/17; cum 73K 7/18;
33325, 5,072, MRO, Chapman 31-15H, Bailey, 45 stages; 8.6 million lbs; t10/17; cum 244K 7/18; 50K+ well;
30550, 4,516, MRO, Brush 24-8H, Bailey, 45 stages; 8.8 million lbs, t9/17; cum 227K 7/18; 50K+ well;
33324, 2,282, MRO, French 31-15TFH, Bailey, t10/17; cum 166K 7/18;
29630, 5,644, MRO, Clarice USA 14-9H, Bailey, 45 stages; 8.3 million lbs, t9/17; cum 299K 7/18; 73K in first month -- only 28 days;

Finally, The Buelingo Makes Sense -- September 15, 2018

This one has been driving me nuts. I've been following it for months (years, it seems) and could never explain the jump in production despite the fact that it had not been re-fracked. See production profile below. See this post; and, here.

Finally the answer -- in this graphic:

The well:

19397, 417, CLR, Buelingo 1-20H, Elm Tree, t3/11; cum 309K 7/18; production profile --

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	7-2018	31	3242	3110	3820	11748	11199	147
BAKKEN	6-2018	26	2332	2143	2353	9685	8569	788
BAKKEN	5-2018	29	4056	4336	3757	15629	15326	85
BAKKEN	4-2018	19	1654	1664	946	4504	4241	148
BAKKEN	3-2018	31	9140	9242	6564	25973	25118	641
BAKKEN	2-2018	28	14138	14172	11076	33829	29426	4179
BAKKEN	1-2018	31	20892	21118	15042	38788	36902	1638
BAKKEN	12-2017	31	26355	26214	23359	46285	44411	1627
BAKKEN	11-2017	3	2548	1923	1433	3207	2656	534
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	210	0	0	0	0
BAKKEN	3-2017	0	0	0	0	0	0	0
BAKKEN	2-2017	22	724	713	180	1470	1226	70
BAKKEN	1-2017	31	1129	1202	445	2163	1822	93
BAKKEN	12-2016	30	1440	1213	441	2228	1946	51
BAKKEN	11-2016	0	0	0	0	0	0	0
BAKKEN	10-2016	26	1884	2069	363	3539	3261	78

Going Biking

Off the net for awhile.

For those who do not understand LNG (and that includes me), the post I just completed should be helpful.

I wish I could hang around and do some more blogging, but lots of biking, lots of errands.

I may not be back on the blog until late this evening.

There will be lots of factual / typographical errors to fix.

Disclaimer: this is not an investment site.

Disclaimer: I am inappropriately exuberant about the Bakken.

Fact: North Dakota just set four all-time records in the oil patch.

For newbies: it is impossible to convey how incredible the US oil and gas sector is right now. There's no question in my mind that we would not be where we are had it not been for the policies President Obama set in place during his tenure. He was absolutely correct: "We just simply can't drill our way to lower oil prices."

He was right. It wasn't simple. The oil sector needed some really well-trained and dedicated roughnecks and truckers who were willing to show up to work 24/7 during some of the worst North Dakota blizzards ever.

The oil companies needed hundreds (thousands?) of incredibly well-trained geologists coming out of engineering programs across the entire US (and a few from overseas, I suppose).

It required CEOs, bankers, investors willing to invest like drunken sailors. (Sorry, if I insulted anyone, and I probably did.) The risks they took were incredible. Some lost big; some are winning bigly.

It required an incredible partnership among state officials, oil companies, individual landowners, individual mineral owners several generations "deep."

And, the technology -- drilling two miles deep; turning on a dime -- going horizontal for two miles, all through a seam maybe 40 feet thick but a 2-foot target, and total vertical depth measured to the nearest inch after going down two miles.

No, I don't think it was simple. Barack was right. It's not simple.

The easiest thing President Obama could have done was approve the DAPL but he left that to President Trump to make the latter look good and keep his campaign promise to make America great again.

Comments are disabled. Too much spam.

I won't get to my e-mail until later this evening.

The plural of "haiku" is "haiku." It follows neither the Greek nor the Latin rules for plurals.

Pluralism means something completely different.

And the New York Times spells "fracking" with a "k."

The other day I typed the Washington Post as "Washington Pos. I'm not sure that was a typographical error.

Going biking.

Good luck to all.

By the way, there are 73 really, really smart people reading the blog. Thank you.

LNG: Tons, Tonnes, Cubic Feet, Cubic Meters, Million, Billion, Trillion, M, MM, B, T; And The Number Of Angels Dancing On The Head Of A Pin

Updates

Later, 5:47 p.m. CDT: back to more serious matters. For everyone, quick, what was the estimate for natural gas (dry) in the Bakken in the USGS Survey of 2013? From the survey:

Gas estimates ranged from 3.43 Tcf (with a 95% chance of production) to 11.25 Tcf (with a 5% chance).

For newbies, the USGS is always considerably conservative.

The Bakken is currently producing 2. 4 billion cubic feet per day (bcfpd). In a year, 365 x 2.4 = 876 billion cubic feet.

Rounding, about 1 trillion cubic feet/year currently? Assuming the math is correct (a huge assumption).

The USGS 2013 Bakken survey:

Gas estimates ranged from 3.43 Tcf (with a 95% chance of production) to 11.25 Tcf (with a 5% chance).

The Zohr? See this post. Thirty trillion cubic feet. The operator plans to max out at 2.9 billion cubic feet day. That works out to be about thirty years of production. Amazing how the law of large numbers always seems to work out.

Later, 5:29 p.m. CDT: a reader thanked me for clarifying LNG and how it's measured and sold. The reader said, that with regard to angels dancing on the head of a pin, more information was needed --

If the angels are in Texas doing the Cotton-Eyed Joe, each angel will need her very own pin (;>) Same would hold true for polkas at a ND wedding dance.

For less exuberant dancing, more information is needed:

are their wings retracted within the silhouette of their bodies?

ditto haloes?

will each pin be devoted to a certain type of dance? e.g. couples dancing a waltz will occupy less room than a bunch of individuals doing a line dance

if pow-wows are included, where do we put the drum?

inevitably at the end of the evening, somebody's gonna want to limbo, so we'll need specs on the limbo pole.

With regard to the "drum" we need to know the number of angels in the "drum group." Generally there are four members in a drum group but the groups can be far larger -- requiring a second pin, perhaps. As for placement, except in Oklahoma where the drum is in the center of the dance floor, the drum would be on the large circle between the inner circle of dancing angels and the outer perimeter of spectators.

And, once again, down a rabbit hole ...

Original Post

See this post from LinkedIn.

This is a long, long post, but I think the best bit was this, and yes, the writer actually says it ... near the bottom of the post, and I quote verbatim:

The question I always get is how long does one TCF of gas last? The answer depends on ... how fast you take the gas out of the reservoir.

LOL. I haven't had so much fun since I read Art Berman's analysis of the shale revolution.

I may have posted this years ago. I don't know. If not, I should have. From Bharat (Bob) Shah over at LinkedIn, he begins:

If you are associated with any aspect of an LNG plant, you know that the LNG plant capacity is always specified in tons per year. And that the LNG onshore storage is always in cubic meters and so is capacity of LNG carriers. And then LNG is sold on dollars per MMBTU. The heating value is in BTU/SCF. The gas flow coming in the plant is referenced in MMSCFD and the reservoir capacity is TCF.

And that's the problem:

LNG plant capacity: tons per year
LNG onshore storage: cubic meters
LNG carriers: cubic meters
LNG is sold: on dollars per MMBTU
heating value: BTU/SCF
gas flow in the plant: MMSCFD
reservoir capacity: TCF
size of the head of a pin: measured in the number of dancing angels

So, Bob makes it very, very simple:

Basis: one train, in his example, has an annualized 5 MPTA or 5,000,000 tons/year or 5 million tons or, I suppose, 5MM tons, or maybe 5 M tons

So, back to the 5 MPTA = 571 tons / hour (divide 5 million by the number of hours in a full year, 8,760 hours in a full year)

571 tons/hour = 1.26 MM (yup, all of a sudden we have switched to "MM") lbs/hour

1.26 MM lbs/hour = 75,449 Lb-Moles/Hour (I can't make this stuff up, a quick switch from "lbs" to "Lb-Moles" -- which for a moment I thought was lobster-moles)

I assume we're about to get to the number of angels dancing on the head of a pin.

So, a few more calculations, and we get to, and I can't make this up either, 1TCF approximates (we've been using "equal" signs until now, but now it's an approximation) 18 MM tons of LNG

Why the approximation? Because of the following assumptions:

feed gas composition, CO2, H2S, N2, H2O content in wellhead gas and efficiency of refrigeration compressor drivers, gas density; etc
and a bunch of other things

Another assumption: US $8 / MM BTU (this was back in 2016).

Okay, let's move on.

This next comment is refreshing: "The conversion from tons to cubic meters is simple." Well, perhaps not:

The onshore storage and the LNG carriers have a fixed capacity just as for any other liquid storage systems. This capacity is always measured in cubic meters. Why not in barrels or cubic feet, one may argue. It has always been in cubic meters and majority of LNG customers use metric measurements. The conversion from tons to cubic meters is simple. (Interestingly enough, I don't think Bob actually shows the "conversion." Instead, he jumps into the issue of shipping).

Let us say one LNG tank has a capacity of 180,000 cubic meters. So the tank holds 81,000 tons of LNG. [Bob: "You do the math."]

At 571 tons per hour of LNG production per hour per train, it holds 142 hours of LNG production.

Most LNG plants have at least two LNG tanks. Some may be a bit smaller in capacity.

Unlike crude oil tank farms, one can’t justify LNG tank farm as the LNG tanks are very expensive (LNG is stored at minus 260 deg F).

In order for LNG train(s) to keep running, the LNG must be loaded into carriers regularly. The typical LNG customer will be thousands of kilometers away from the LNG plant. The LNG carriers move slowly at about 20 knots, so several LNG carriers must be on their way to ensure onshore tanks are available for continuous LNG production. It is not profitable to curtail LNG production because the next carrier is still a few days away. The LNG shipping logistics is very complicated and must be worked out along with lining up LNG purchasers.

Okay. Now, all of a sudden, a new way to measure LNG: "TCF stands for trillion cubic feet of gas. BCM is also used and it stands for billion cubic meters."

TCF stands for trillion cubic feet of gas. BCM is also used and it stands for billion cubic meters. One bcm equals 35.2 bcf or billion cubic feet.

Gas reservoir capacity is usually referred in TCF.

The question I always get is how long does one TCF of gas last? The answer depends on the composition of the gas and how fast you take the gas out of the reservoir. The heavier components have to be removed before liquefaction but they count in the reservoir capacity. In addition, there will be other impurities and gases such as CO2, H2S etc. On my last project, the reservoir capacity was known to be 120 TCF. Our Hysis runs for a case indicated that one TCF of wellhead gas produced about 18 million tons of LNG. For the two 5 MPTA trains, the reservoir had enough gas to last 216 years. So there was plenty of gas for more trains. And the project did consider plans for future mega trains that would give total LNG park capacity to 100 MPTA. Without making adjustment for NPV, the 100 MPTA Park and 120 TCF corresponds to 840 billion dollars of LNG.

In his next post: how many angels dance on a head of a pin? Assumptions:

the pin is the standard dressmaker / all-purpose pin (not needle)
length of the pin does not matter
angels are the standard size as measured before the Fall
the angels' average separation correlates with "circular" arrangement seen in The Nutcracker and not the linear arrangement patented/trademarked by the Rockettes

Week 37: September 9, 2018 -- September 15, 2018

July, 2018, oil and natural gas data for North Dakota: four new all-time records set.

crude oil production; sets an all-time record and jumps 3.4% month-over-month
natural gas production: sets an all-time record, and even out-producing the largest gas field in the Mediterranean; in the Bakken, natural gas is an irritating and dangerous by-product
boepd production: sets an all-time record
number of producing wells in North Dakota: despite a quarter of the number of active rigs in July compared to the height of the boom, North Dakota has more producing wells than ever
other notes of interest:

there are still about 900 DUCs -- wells that have been drilled to depth but for some reason or another, the oil company has decided to postpone completion of the well -- many, many reasons will be given, but I consider the companies simply "managing their assets"
the number of inactive wells actually increased slightly month-over-month -- this is also not unexpected in Bakken 2.5

US economy: setting all-time records; small business optimism breaks all-time break; exceeds that seen during the Reagan administration; Trump economy making Connecticut great again;

International

Saudi Arabia: internal bickering likely scuttled the Aramco IPO once and for all (it would have died regardless); will focus on petrochemical dynasty
Global warming: NASA confirms that 410 is the "Goldilocks" number: CO2 greening the earth; Africa a beneficiary of the phenomenon

National

US gasoline demand: finally shows life
US crude oil draws: huge; off to the races -- WTI flirts with $70; and, here;
Official but old news: US is now #1 producer of crude oil in the universe, having surpassed Russia a month or so ago
California bucking the trend: relying more and more on Saudi oil
Permian sets a record: $95,001 / acre

Canada

The big picture: having now struck out 4/4 in getting pipelines approved, Trudeau suggests looking at the big picture;

*****************************
Back to the Bakken

Operations
Record IP in the Bakken?
CLR's Mountain Gap wells simply amazing; updated earlier;
Jump in production; and, here;
EOG well hits one-million-bbl threshold; and, another one here;
New activity regarding the CLR Whitman wells?

Bakken 2.5
Re-fracking: MRO in the Bailey

CBR
LNG?

Flaring:
Worsens in North Dakota; NDIC authorizes a study to consider underground storage of NG

Natural gas processing:
ONEOK looking at the biggest plant yet?http://themilliondollarway.blogspot.com/2018/09/oneok-north-dakota-update-september-8.html

Other formations
White Rock Oil & Gas re-enters, re-completes an old Duperow well
Random update of an old, old CLR North Red River B well
Targeting the Madison

Refineries
Administrative judge opines the "refinery near the park" can go forward

Bakken economy (link here)
Multi-family housing (apartment units, 4-plexes, duplexes) reach capacity in Williston
United Airlines will add a fourth daily Denver-to-Williston flight
Williston school districts enrollments continue to climb
Two new veterinarians set up practice in Watford City

The Million Dollar Way (The Bakken Oil Blog)

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