Thursday, November 15, 2018

The Data Suggests The US Has Been Producing In Excess Of 12 Million BOPD For The Past Two Months -- November 15, 2018

Because the blog has so many posts each day, it's easy for some great reader comments to get buried; missed by others.

Go to this post from earlier today, and note this comment from a reader:
November 15, 2018: see first comment ... really, really interesting, especially the "crude oil" observation:
That's the last gas injection; Kemp's graphs show heating demand closer to mid-December norms ...
The unexpectedly high crude inventories have been telling me that [US crude oil] production has been under reported; line 13 of the weekly U.S. Petroleum Balance Sheet (unaccounted for crude) has been averaging north of 500,000 bpd for two months: 
Production + imports - exports should equal oil refined + oil stored.
My guess is that US production has been running over 12 million bopd at least a couple weeks now.
If in fact, the US is able to consistently produce in excess of 12 million bopd -- that's quite remarkable. Especially if one notes that:
  • the number of rigs is well down from what it could be
  • the Permian is nowhere near its potential; the Permian is in its very, very early stages
  • interesting things are going on in the Bakken
    • much, much better wells
    • newly fracked wells are positively affecting existing, producing wells
  • most shale fields are constrained by takeaway capacity and/or other issues
  • it seems US shale operators are barely breaking a sweat

Random Update Of A Huge WPX Wells Well In Reunion Bay -- November 15, 2018

This is pretty cool. Back in March, 2018, I suspected activity in the area of this well -- from that linked post:
Incredibly nice well comes off line:
  • 19246, 1,425, WPX, Wells 32-29H, Reunion Bay, t3/11; cum 566K 9/18; 
Recent production:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

For wells like this -- 3K/month after seven (7) years of production and a cumulative of over one-half million bbls of oil -- and then taken off-line -- one suspects some activity in the area --
So, back in March, 2018, because a great well was taken off-line, I suspected "some activity in the area" -- euphemism as the time for "fracking neighboring wells.

It turns out I was exactly right. 

The following wells were fracked/tested in January, 2018, just when the well above was taken off line: #32671, #32672, and #32673.

See graphic at the time:

Update of the production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

CLR's Radermecher 1-15H Has Been Updated -- November 15, 2018

We've talked about this well many, many times.

Nothing new here, but 9/2018 production has been updated. Huge halo effect. See this post.

Roy Clark, RIP -- November 15, 2018

Another "Clark" died earlier this week (November 13, 2018?). Merle Clark from North Dakota. A huge "thank you" to Don for letting me know. See also this post.

SCM Merle Clark close from Ken Howie on Vimeo.

The obituary at this site.
Merle J. Clark was born December 5, 1937 in Miles City, MT, the son of Elmer and Margarette (White) Clark.  He entered this world with a heart of a lion, at only 2 lbs, 2 oz.
He grew up on the family ranch and attended grades 1-4 at Marmarth, grades 5-8 at Pretty Butte Country School, and grades 9-12 at Miles City, MT; graduating from Custer County High School with the class of 1956.  Merle went on to attend and graduate from Western College of Auctioneering in Billings in 1958. After serving with the Miles City National Guard from 1963-1969, Merle returned home to the ranch while continuing serving in the guards. 
On November 8, 1967, Merle and Linda Dyba were united in marriage in Miles City.  The couple was blessed with two children:  Ward and Christy.  The couple returned to the ranch and have made it their home ever since.
Merle owned and operated Clark Auction Service for 50 years.  He was a rodeo participant competing as prize winning bareback rider from 1954-1968.  He eventually moved into the role of rodeo announcer for the tri state area for over 40 years.
Merle was an amateur paleontologist and an avid historian; spending his life learning from the past.  He loved collecting old cars and created countless leather works.  He loved people and possessed an uncanny ability to recite history and to tell stories; stories that would bring knowledge and an abundance of humor into any conversation.  Merle never met a stranger.  He was ageless.  He had a lot to give, while asking for very little in return.  He could take the Bible and reflect on a verse for any “mishap” life may have dealt.  Psalm 23 was his favorite.  Merle loved living on the ranch, caring for his cattle, and getting together with his neighbors.  He influenced several generations of young men throughout the area and left behind countless “best friends”.
Merle had a passion for serving his family and community.  He was a loyal friend of FFA, serving as Chapter President from 1955-1956, and State Secretary from 1956-1957. He received the Montana American Farmer Award in 1958, American Farmer Degree, ND Historical Society Local Historian of the Year and Cowboy Moments Award.  Merle was a charter member of Little Missouri Saddle Club, and the Marmarth Historical Society.  He served on the board of directors for many organizations including the Pioneer Trails Regional Museum, Little Missouri River Commission, Slope County Commission for 11 years, Social Services Welfare Board, and was President of the Marmarth School Board.  He was also a trustee of the ND Cowboy Hall of Fame, Mystic Theater Cowboy Poetry, and was a founding member of the Marmarth Bible Church.
Much more at the link.

Regarding his birth weight, from another site:

If you are visiting a very premature baby in a neonatal intensive care unit (aka NICU), you may be surprised by how small the baby is. A baby born at 27 weeks weighs only around 1,000 grams (2 pounds, 3 ounces); a baby born at 30 weeks weighs around 1,450 grams (3 pounds, 3 ounces).

Theoretical limit: somewhere between 20 and 24 weeks is the limit at which a liveborn can survive due to maturity of lungs/circulatory system.

Marmarth, ND, to Miles City, MT: today -- 1 hour and 30 minutes. In early winter back in 1937, it would have probably taken a bit longer.

New Natural Gas Pipeline In Pennsylvania Opens Just In Time For Winter -- November 15, 2018; North Dakota With Five More Oil & Gas Permits

ISO New England: spot price starting to surge, now about $125/MWh; demand is slightly higher than forecast; "hydro" tapped;

  • New England natural gas: Williams Cos Inc's Atlantic Sunrise pipeline has begun operating -- data points:
  • northeast Pennsylvania
  • added 1.7 Bcfpd in new takeaway capacity to the region
  • October permitting for new shale gas wells shot higher
  • EQT Corp: the nation's top gas producer, continued as the leading company for new permits
  • note:  
statewide, permitting activity dropped 26% when compared to a year ago. With production still increasing in Appalachia this year, fewer permits indicates drillers are getting even more efficient at getting gas out of the ground with fewer wells and longer horizontal laterals.
Back to the Bakken
Active rigs:

Active Rigs62553964186

Five new permits:
  • Operators: Zavanna (4): Denbury
  • Fields: Patent Gate (McKenzie); Poe (McKenzie); Cedar Hills (Bowman)
  • Comments: Zavanna has permits for a 4-well Usher pad in 28-151-100 (Patent Gate/Poe)
Seven permits renewed:
  • Crescent Point Energy (5): five CPEUSC Tami wells in Williams County
  • Petro-Hunt: one USA permit in McKenzie County
  • MRO: one Flynn USA permit in Mountrail County 
One dry hole: it appears Legacy Reserves Operating re-entered an old Madison / Birdbear well to target the Bakken in Roosevelt oil field, section 4-142-102; file #17230; unsuccessful.

The Market, Energy, And Political Page, Part 2, T+9 -- November 15, 2018

I was just getting ready to check ISO New England, when I got this note from a reader:
From 3:00 p.m. to 7:00 p.m. Eastern Standard Time today, the local spot electricity prices could skyrocket.
Right now, note the sudden surge in the price of electricity in New England, link here:


Sophia's grandmother was happy to see that Sophia "sees" Grammy" as being significantly younger than her grandfather -- that would be me. Apparently Sophia thinks I raised Sophia's Grammy just as I am taking care of Sophia now. LOL.

Wow! EIA: US Crude Oil Inventories Jumped 10.3 Million Bbls -- Even More Than API Estimate -- Now At 442.1 Million Bbls -- November 15, 2018 -- The Numbers Suggest US Crude Oil Production Is Now Exceeding 12 Million BOPD


November 15, 2018: see first comment ... really, really interesting, especially the "crude oil" observation:
That's the last gas injection; Kemp's graphs show heating demand closer to mid-December norms ...
The unexpectedly high crude inventories have been telling me that [US crude oil] production has been under reported; line 13 of the weekly U.S. Petroleum Balance Sheet (unaccounted for crude) has been averaging north of 500,000 bpd for two months: 
Production + imports - exports should equal oil refined + oil stored.
My guess is that US production has been running over 12 million bpd at least a couple weeks now.
Original Post

Weekly petroleum report, EIA: posted. Yesterday's API report showed a whopping 9 million-bbl increase. Today, EIA validates that estimate:
  • US crude oil inventories: surged 10.3 million bbls -- most I have ever seen; this must be a record
  • US crude oil inventories: now back to 440 million bbls -- near the level at which the industry said "we" needed to re-balance a few years ago
  • US crude oil inventories: 5% above 5-year average
  • US crude oil inventories: no evidence to suggest the trend will change
  • refineries operating at 90.1% capacity; unchanged from last week; at lower end of capacity
  • distillate fuel up by a whopping 8% from same period last year
Natural gas fill rate. Link here. Small print in the graphic below:
  • natural gas inventories are 528 Bcf less than last year at this time
  • natural gas inventories are 601 Bcf less than the five-year average
  • at 3,247 Bcf, total working gas is [well] below the five-year historical range

Polar blast. NYC spokesperson says the city is ready for this weekend's "polar blast." This cold snap will be followed by another "polar blast." Weatherchannel forcast:

There was a net increase in natural gas storage last weekend. The curve suggests that historically we should see one more week of net increase in storage.

The market:

-- movers and shakers had already "baked in" the crude oil numbers
-- no one seems worried about supply of natural gas
-- so, we'll see

The Market, Energy, And Political Page, T+9 -- November 15,2018

EIA's monthly drilling productivity report was released November 13, 2018. Link here. At the link one can find "new-well production per rig by region"; production by region; and, DUCs by region.

Look at all the DUCs in Eagle Ford -- double that of the Bakken. And then look at all the DUCs in the Permian -- 5x as many. Is that correct? So, the Permian has almost twice/thrice as many DUCs as all the wells that will be drill in North Dakota this year. I assume about 1,400 wells will be drill in North Dakota this year, and there are 3,900 DUCs in the Permian.

NoDaks: "No to wind!" Link here. If you've driven through Kansas lately, you will see why these folks are coming out against wind. Along with everything else wrong with wind, these folks know that wind will increase their utility bills.

EOG Activity Increasing A Bit Back In The Parshall -- Interesting To Watch -- November 15, 2018

EOG is focused on the Eagle Ford in Texas, but that doesn't mean it's not active in the Bakken. It looks like some EOG activity in the Bakken.

The well:
  • 16550, 1,329, EOG, Ralph 1-32H, Parshall, t9/07; cum 448K 9/18;  a short lateral; TD = 14,100; some would argue that had this been a long lateral -- the "Bakken standard" -- production would be doubled; 
The graphic:

Relevant production back in 2016 - 2017:

Have We Talked About Dvirnak Lately? CLR Wants To Place 28 Wells On One 2560-Acre Drilling Unit -- November 15, 2018

For newbies: 16XXX series wells were permitted back in the early days of the boom (2006 and 2007). Most of them were poor wells by the standards of 2018. They will "all" be candidates for re-fracks -- 16XXX through 18XXX series. It will be a long time (decades) before they get back to all these wells.

Comment: we go from a lousy well to a great well, at no additional cost for the operator. By the way -- there is a suggestion in the sundry forms that the jump in production to this extent was unexpected; there was an "overflow" at the site of #16537 that required reclamation.

Plans: see this post.

The well:
  • 16537, 202, CLR, Dvirnak 14-6H, Jim Creek, 33-025-00617, t9/07; cum 238K 9/18; stripper well status of 2016; no evidence of re-frack;
Recent production data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

The graphic:

Random Update Of The Singlet EOG Wentz Well, A Short Lateral, In Parshall -- November 15, 2018

The well:
  • 16534, 1,204, EOG, Wentz 1-29H, the only Wentz well so far,  a huge well; bump in production; t5/08; cum 473K 9/18; a short lateral; some would say, had this been a long lateral, double the production;
Relevant production:

The graphic:

Four neighboring wells:
  • 30442, t10/16; cum 236K 9/18; long lateral
  • 30444, t10/16; cum 122K 9/18; long lateral
  • 31009, t9/16; cum 85K 9/18; short lateral
  • 31010, t9/16; cum 169K 9/18; intermediate lateral (16,524 feet)

New England Ups Coal To Back-Up Renewable Energy -- Renewable Energy Declines Just As Demand Surge Hits -- November 15, 2018

Where's all that renewable energy? And it's only mid-November. Another month for the winter solstice?

And this is in a country rich in natural gas and renewable energy and it still requires coal. Imagine what is going on in China and India.

The Honduran horde? Earlier this week I asked "whatever happened to the caravan?" Well, the leading elements have already arrived; more are arriving; gaining numbers and gaining speed; and, they are streaming across the border. Apparently lead element is massing in Tijuana but I'm sure there are other locations. So, we have fires to the north and streams of illegals crossing in the south. For the archives. Nothing to do with the Bakken.

CBR Obstacles WIth Focus On The Bakken -- RBN Energy -- November 15, 2018

Brrr .... it's cold outside --

Global warming scam:
  • prestigious, famous Scripps Institution, UC San Diego, fudged data for peer-reviewed Nature article; link here;
  • I'm sure others will read it differently; that's my take -- but institutes like Scripps "don't" make "mistakes" like this
  • says it was a mistake; will re-submit
  • this is standard practice: headline story; if scam / fake data found -- and that's always a big "if," then apologize, call it a mistake, and re-submit with new data
Jobs: pending --
Weekly petroleum report, EIA: pending. Yesterday's API report showed a whopping 9 million-bbl increase.

US to set crude oil production record in December, IEA, link here:
  • 7.94 million bpd in December
    • this will be an increase by 113,000 bopd, to almost 3.7 million bopd
    • led by the Permian: anticipated increases of 63,000 bopd
    • all basins are expected to report increased production: including the Bakken
  • likewise: natural gas production is forecast to increase across the board
    • the Appalachian Basin: just over 30.4 billion cubic feet per day in December
Exports: US to become net exporter of petroleum for first time since 1949. Data points and story linked here.

Op-Ed: interesting op-ed on IEA's latest world energy outlook but the most interesting details were posted at the very, very end; I never would have guessed it based on the rest of the very, very long op-ed. I assume Clyde Russell is a faux environmentalist. Op-ed over at Reuters.

Back to the Bakken

Wells coming off the confidential list today -- Thursday, November 15, 2018:
  • 33870, SI/NC, MRO, Arthur 24-35H, Bailey, no production data, 
  • 32801, SI/NC, Oasis, Ceynar 5298 42-32 11T, Banks, t--; cum 51K 9/18;
Active rigs:

Active Rigs63553964186

RBN Energy: why new rail car specs are creating obstacles for CBR, with a focus on the Bakken. Below, just part of the article. For the entire post, go to the linked article. Archived.
It’s been well-reported that crude oil pipeline capacity is getting maxed out in many basins across the U.S. and Canada. From Alberta, through the heart of the Bakken, all the way down to the Permian, pipeline projects are struggling to keep up with the rapid growth in some of North America’s largest oil-producing regions. Crude by rail (CBR) has frequently been the swing capacity provider when production in a basin overwhelms long-haul pipelines. While it is more expensive, more logistically challenging, and more time-intensive, CBR capacity is typically able to step in and provide a release valve for stranded volumes. But recently, CBR capacity has been tougher to come by and has taken longer than expected to ramp up. A key aspect of this issue is a new requirement for up-to-date rail cars. Today, we look at how new rail demands and uncertainty in domestic oil markets are combining to create a major hurdle for new CBR capacity.
In today’s blog, we focused primarily on the Bakken, just for the purposes of showing a concrete example. But this same issue is manifesting itself across North America in other basins where pipeline takeaway capacity is not sufficient. Permian traders are having an extremely tough time getting tank cars and are hesitant to take out leases when they know lots of new pipeline capacity is coming online towards the end of 2019. In Canada, Cenovus Energy recently signed up for a three-year deal to move 100 Mb/d via rail to try to take advantage of access to cars and CBR capacity while it could. The discount Canadian producers are taking is much worse than Bakken, with Canadian heavy crude trading at a staggering $42/bbl discount. Canadian railroads have indicated they are willing to increase CBR capacity, but tank car access will continue to be a challenge for producers.
All that said, even if you can find cars, you still have to complete the rest of the puzzle. You’ve got to get the railroad to provide you reliable logistical support, you’ve got to find a CBR terminal that hasn’t been mothballed completely, and you need to find a downstream market that wants a Bakken barrel and is able to receive it via rail. The question now is who are the folks that can put together creative terms for DOT117Js to maximize profits now and minimize losses in three to four years when pipelines make many of them redundant?
Much more at the linked article.