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:
https://www.eia.gov/petroleum/supply/weekly/pdf/table1.pdf
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
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:
Pool
Date
Days
BBLS Oil
Runs
BBLS Water
MCF Prod
MCF Sold
Vent/Flare
BAKKEN
1-2018
1
1
0
2
231
0
0
BAKKEN
12-2017
8
299
342
179
624
457
0
BAKKEN
11-2017
30
1145
1105
280
2034
1657
0
BAKKEN
10-2017
31
1527
1558
382
2027
1465
0
BAKKEN
9-2017
28
1343
1316
492
1729
1051
164
BAKKEN
8-2017
31
2471
2505
438
3180
2384
137
BAKKEN
7-2017
31
2986
2989
465
3843
2747
379
BAKKEN
6-2017
30
3017
2978
524
3883
2318
857
BAKKEN
5-2017
31
3474
3486
619
4470
2787
914
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.
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.
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.
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.
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:
$56.56😌
11/15/2018
11/15/2017
11/15/2016
11/15/2015
11/15/2014
Active Rigs
62
55
39
64
186
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.
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:
************************
Spuds
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.
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:
https://www.eia.gov/petroleum/supply/weekly/pdf/table1.pdf
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
Oh-oh.
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
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 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;
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.
16534, 1,204, EOG, Wentz 1-29H, the only Wentz well so far, a huge well; bump in production; t5/08; cum473K 9/18; a short lateral; some would say, had this been a long lateral, double the production;
Relevant production:
BAKKEN
4-2017
30
4293
4266
2357
1190
354
652
BAKKEN
3-2017
31
5655
5606
3375
1366
1095
81
BAKKEN
2-2017
28
5564
5580
3616
1425
1243
10
BAKKEN
1-2017
30
4789
4768
4400
1332
1142
9
BAKKEN
12-2016
29
3743
3757
5277
1199
1028
0
BAKKEN
11-2016
30
6048
6223
5683
1743
1365
194
BAKKEN
10-2016
30
4224
4156
7477
1215
503
536
BAKKEN
9-2016
12
1460
1263
4859
385
322
11
BAKKEN
8-2016
0
0
0
0
0
0
0
BAKKEN
7-2016
20
872
889
191
474
337
16
BAKKEN
6-2016
30
1389
1419
185
760
566
10
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)
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.
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
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,
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.
