Tuesday, December 18, 2018

Vern Whitten's Favorite Photos Of The Bakken -- December 18, 2018

Wow! What a great Christmas present!

Over the years Vern Whitten has shared his photos of North Dakota and the Bakken. The posts featuring his photos always become "top posts."

From Mr Whitten regarding this group of photos:
Over the past 7 years, I've taken thousands of photos of rigs, frac sites, and well pads.
The geography you'll see varies from badlands and pothole country
to farmland, and Lake Sakakawea.

Here are 40 of my (Mr Whitten's) favorite photos.
The forty photos are here.

Mr Whitten adds:
Let me know if you have questions, and feel free to pass these along. Post them to social media if you wish.
Vern Whitten Photography
(701) 261-7658

Random Update Of Two MRO Baker Wells In Van Hook Oil Field -- December 18, 2018

These wells came off the confidential list today:
  • 26282, 762, Bruin, Fort Berthold 147-94-1B-12-5H, McGregory Buttes, t11/18; cum --
  • 34139, 2,528, WPX, Raptor 13-24HZ, Reunion Bay, t11/18; cum --
  • 34138, 1,241, WPX, Raptor 13-24HY, Reunion Bay, t11/18; cum --
  • 34140, 2,126, WPX, Raptor 13-24HEL, Reunion Bay, t11/18; cum -- 
    • neighboring wells: #22114, #22113;
This information will not be updated on this site. There are two neighboring wells to the east of these recently fracked wells of interest:

The wells:
  • 22114, 1,712, MRO, Baker USA 11-18TFH, Van Hook, t10/12; cum 451K 10/18:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

  • 22113, 2,077, MRO, Baker USA 11-18H, Van Hook, t11/12; cum 472K 10/18;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Another API Inventory Build -- WTI Drops 7% -- December 18, 2018

WTI: down a whopping 7%; down $3.60; now trading at $46.60. One gets the troubling feeling that GS was just a year or two early when they forecast $20 oil.

Surprise, surprise: surprise inventory build. API report:
  • another huge build of 3.45 million bbls
  • analysts had expected a draw of 2.475 million bbls
  • peak oil? I don't think so.
Trajectory: the last time we saw this trajectory of downward prices it was due to the Saudi surge (their one-trillion-dollar mistake). This time is seems very, very different. 

See updated note here.

Active rigs:

Active Rigs67514064183

Nine new permits:
  • Operators: Equinor (6); Whiting (3)
  • Fields: Todd (Williams); Sanish (Mountrail)
  • Comments: Equinor has permits for a 6-well Pyramid pad in section 15-154-101; Whiting has permits for a 3-well Fladeland permit in section 10-154-92;
One permit reinstated:
  • Slawson: an Atlantis Federal permit in Mountrail County
Four permits renewed:
  • Hess: four EN-Madisyn permits in Mountrail County
Eight permits canceled:
  • Crescent Point (5): five Legacy Et Al Berge permits in Bottineau County
  • BR (2): two Hawkeye permits in Dunn County
  • Nine Pointe Energy: one Helling permit in McKenzie County
Seven producing wells (DUCs) reported as completed:
  • 26282, 762, Bruin, Fort Berthold 147-94-1B-12-5H, McGregory Buttes, t11/18; cum 120K 4/19;
  • 34139, 2,528, WPX, Raptor 13-24HZ, Reunion Bay, t11/18; cum 130K 4/19;
  • 34138, 1,241, WPX, Raptor 13-24HY, Reunion Bay, t11/18; cum 73K 4/19;
  • 34140, 2,126, WPX, Raptor 13-24HEL, Reunion Bay, t11/18; cum 170K 4/19;
  • 34467, 1,624, Whiting, Wold 41-5-1HR, Banks, t12/18; cum 127K 4/19;
  • 34468, 2,031, Whiting, Wold 41-5-1TFHR, Banks, t12/18; cum 94K 4/19;
  • 32784, 724, Whiting, Kessel 44-35PHU, Park, t12/18; cum 31K 4/19;

The Energy, Market, And Political Page, Part 2, T+43 -- December 18, 2018

Eats: I would "argue" that north Texas has more great restaurants ($ to $$$$) per capita than any other place in the US. The competitions is fierce. Taco Bueno is bankrupt.

Saudi in deep doo-doo: needs $84-oil to balance its books in 2019. Right now, Brent going for $56; and "OPEC Basket" trading for $58. Ouch.

MDU: record November construction backlog. Press release.

California: what took them so long. California finally mandates electric buses. By 2029.

USPS: what's taking them so long? Why aren't all those neighborhood golf carts that the USPS uses not EVs? Another example that tells me the Deep State really isn't worried about manmade global warming.

Apple: what Apple doesn't need -- bad press. And this is really, really bad press. From the WSJ, for Apple, it's a rout in India. Wrong kind of phone; wrong business model; too expensive; losing its cachet; no longer a must-have phone.

The Energy, Market, And Political Page, T+43 -- December 18, 2018 -- It Looks Like Trump Blinked; Space Is "Officially" Militarized

December 18, 2018, T+43: it looks like Trump blinked on the wall. Instead, US State Dept gives Mexico $5 billion in aid, to help stabilize southern Mexico. So, we've gone from [not providing] $5 billion to strengthen our own southern border to giving Mexico $5 billion to strengthen their southern border. LBJ knew that when he "lost" Walter Cronkite, he lost his presidency. Some weeks ago, Trump lost Tucker Carlson.

Global warming: I assume before the year is over, President Trump will give in to his daughter Ivanka and support the Paris Protocol on global warming. The US still has an outstanding IOU / pledge of $3 billion to transfer to poor nations in the name of global warming.

George Carlin: said he did not vote. He said it did not matter. History is proving him correct. On almost every "issue" it appears we are about back to where we were November 7, 2016. The only good news that might yet come out of the Trump presidency: at least Hillary did not get elected.

Flynn: I have very little understanding of the "Flynn" case but any US general officer doing "business" with Turkey that is not directed by POTUS or DOD probably ranks right up there with Benedict. From a news story:
Later in the hearing, though, [Judge] Sullivan ripped into Flynn, calling his plea "very serious" and accusing him of being an unregistered agent of a foreign country [Turkey] while serving as national seucrity adviser.
The judge even asked prosecutors if Flynn could have been charged with treason, which they hesitated to answer.
"Arguably, you sold your country out," Sullivan told Flynn, saying he would not hide his "disgust" or "disdain" for the offense.
Protecting their own: those ethics charges against Brett Kavanaugh? Chief Justice Roberts hands the case off to federal court which handles cases in Colorado, Kansas, Oklahoma, New Mexico, Utah and Wyoming. That court, the Tenth Circuit Court, says it's not in their jurisdiction. Blows off the charges and that's that last we will hear of that. No link; "blogger" blocks links that that site.

Pompeo: in the big scheme of things, Trump may be correct that this has all been a witch-hunt, but more and more, the president and some of his best folks are coming down on the wrong side of how some of his supporters see things. 

Ryan Zinke: incredibly disappointing.

2020: Pence vs Beto? Unlikely. But not ruling it out.

Theme song for 2019:

Space Command: I spoke too soon. Space is "officially" militarized. Trump to establish the nation's eleventh "combatant command":

The science is settled:

Wells Coming Off Confidential List 1Q18 -- IPs Have Been Updated -- December 18, 2018

Initial production data has been updated for the wells coming off the confidential list in the first quarter, 2018 (1Q18). There are very few DUCs left, and most of the remaining DUCs in this quarter have been completed, are producing, but have not yet come off the confidential list. These wells came off the confidential list less than a year ago, and these are some huge wells. It gives newbies an idea of the current status of the Bakken.

Break Even Costs? Where Does One Even Start? -- December 18, 2018

Disclaimer: there may be some hyperbole in this post, but I think it's pretty accurate. I am inappropriately exuberant about the Bakken. 

The well:
  • 17498, 498, MRO, Chimney Butte 34-11H, API: 33-025-00804, Bailey, t11/08; cum 344K 10/18;
So, this well was drilled back in 2008, at the beginning of the Bakken. At that time, it may or may not have been a good well. It may have paid for itself; it may have been a financial disaster. Who knows? But 2008? That's ancient history for the Bakken. Those costs have long been "booked." But the well did what it was intended to do:
  • provide the company with knowledge about the geology of the drilling unit; and,
  • hold the lease by production (and the well held the lease for ten years) until the company was ready to drill in the area again
Production after the initial frack:

Then in late 2017/early 2018, MRO went back into the area and drilled a few more wells. See graphic at this post.

And then look what this well did when MRO went back into drill some more wells in that area.
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

This well was a stripper well by 2017, producing less than 1,000 bbls/month. But then in 2018, production jumped to 41,000 bbls/month.

The company did not have to pay exorbitant costs for a new lease; did not have to prepare a new pad; did not have to build a new 10-mile road out out to the pad; did not have to re-negotiate new leases with a gazillion mineral rights owners; did not have to run a new electricity line out to the site; did not have to bring out a new fractionator; and, it's possible frack water/produced water/crude oil pipelines were already in the area.

For the cost of a re-frack, MRO got a huge well. The original frack was an open-hole frack with less than 500,000 pounds of sand. Most of the cost of this well back in 2008 was the cost of drilling, not much cost in fracking it. Now in 2018, no costs of drilling, but simply fracking. That's not quite true.

MRO put a rig back on this site. In 2008, setbacks were 500 feet. Now, under new rules, the horizontal could be extended. MRO redrilled part of the lateral, drilling a sidetrack, straightening out the heel portion of the well, and extending the original length. Pretty cool, huh?

The frack data is not posted by NDIC yet but according to FracFocus, this was a small/medium frack: 5.7 million gallons; 89.4% water.

Frack sand is plentiful; has come down in cost. This was a small/medium re-frack. This well will go on to produce for 35 years. It will undergo multiple re-works; small re-fracks; major re-fracks; probably see more target zones drilled; and, benefit from neighboring fracks.

How does one even begin to calculate the break even costs of Bakken wells? The experts still use the same methods that were used by folks calculating break-even costs in conventional drilling.

By the way, how does one even "appraise" these Bakken wells? This is absolutely fascinating. When a grandfather has a trust, and the trust "goes" to his six grandchildren, for tax purposes, etc., the wells must be appraised at some point. How do they even begin to appraise these wells? I have no idea.

Full production profile for this well can be found here.

Sited In Section 14-146-94, Some Huge MRO Wells In Bailey Oil Field

Some (all?) of these wells have been posted previously

The graphic:

The wells:

33597, 3,514, MRO, Stanton 41-3H, Bailey, t5/18; cum 176K 10/18;

33599, 5,000, MRO, Grand Coulee 14-11TFH, Bailey, t6/18; cum 128K 10/18;
33580, 3,276, MRO, McFadden 14-11H, Bailey, t6/18; cum 130K 10/18;
33581, 6,573, MRO, Olea 24-11TFH, Bailey, t6/18; cum 143K 10/18;
33582, 5,305, MRO, Morrison 24-11H, Bailey, t6/18; cum 142K 10/18;
33583, 5,694, MRO, Sundby 24-11TFH, Bailey, t6/18; cum 141K 10/18;

33437, 3,115, MRO, Tipton 34-11H, Bailey, t6/18; cum 115K 10/18;
33436, 4,491, MRO, Gifford 34-11TFH, Bailey, t6/18; cum 147K 10/18;
33435, 4,538, MRO, Hugo 34-11H, Bailey, t6/18; cum 145K 10/18;
33443, 4,152, MRO, Marlene 34-11TFH, Bailey, t6/18; cum 130K 10/18;

17498, 498, MRO, Chimney Butte 34-11H, Bailey, t11/08; cum 344K 10/18; see this post;

Around The Bakken -- December 18, 2018

The well, frack data not posted, but look at production -- 230K in less than ten months; actually about 8 months --
  • 31623, 97 (no typo), BR, Craterhawk 8-14 UTFH-ULW, Antelope-Sanish, t1/18; cum 232K 10/18;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

A dry Madison well:
  • 33087, DRY, St Croix Operating, Northern Border #1, North Haas, a Madison well; 
A really, really nice CPEUSC middle Bakken well:
  • 31471, 47 (no typo), Crescent Point, CPEUSC Makowsky 4-31-30-158N-99W,  Ellisville, a middle Bakken well; t2/18; cum 145K 10/18;
Another really nice CPEUSC TFH well, 113K in less than eight months:
  • 32900, 496, Crescent Point, CPEUSC Makowskky 7-31-30-158N-99W TFH, Ellisville, t3/18; cum 113K 10/18;
Petro-Hunt, 145K in less than six months: 
  • 33141, 1,479, Petro-Hunt, Thompson 153-95-8C-6-4H, Charlson, t5/18; cum 145K 10/18;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

 Zavanna is back to fracking:
  • 33678,1,026, Zavanna, Hanson 28-33 5H, Stockyard Creek, t1/18; cum 147K 10/18;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
 A BR middle Bakken well; 156K in less than eight months:
  • 33553, 480, BR, Gladstone 3-1-25MBH A, Sand Creek, t2/18; cum 156K 10/18;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

The CPEUSC Makowsky Wells In Far Northwest Corner Of North Dakota

I would have to go back and look at the "original" map of the "hot spots" in the Bakken, but I've never considered this area (far northwest North Dakota) to be a "hot spot," or a Tier 1 region of the Bakken. I'm not even sure it would have qualified as a Tier 2 location several years ago. But look at what CPEUSC is doing in this area. These wells are hitting 100,000 bbls in less than eight months.  

This goes hand-in-hand (or hand-in-glove) with recent announcement by another driller that it has also expanded its core position in the Bakken because the wells have gotten that much better.

If, in fact, this area turns out to be a great spot in the Bakken:
  • it certainly expands the Bakken;
  • it tells me how much better the completion strategies are;
  • it tells me how much the geologists have learned about the geology;
  • it tells me how far the roughnecks have come (with regard to experience)
The wells:
  • 32901, 64, Crescent Point, CPEUSC Makowsky 6-31-30-158N-99W, Ellisville, t2/18; cum 90K 10/18;
  • 32900, 
  • 32898, 86, Crescent Point, CPEUSC Makowsky 5-31-30-158N-99W TFH, Ellisville, t2/18; cum 86K 10/18;
  • 31669, 86, Crescent Point, CPEUSC Makowsky 2-31-30-158N-99W, Ellisville, t2/18; cum 107K 10/18;
  • 31472, 58 (no typo), Crescent Point Energy, CPEUSC Makowsky 3-31-30-158N-99W, Ellisville, t2/18; cum 95K 10/18; 
  • 31471, 47 (no typo), Crescent Point, CPEUSC Makowsky 4-31-30-158N-99W,  Ellisville, a middle Bakken well; t2/18; cum 145K 10/18;  
  • 22323, 181, Crescent Point Energy, CPEUSC Makowsky 31-30-158N-99W, Ellisville, t10/14; cum 152K 10/18;
The graphics:


First It Was Kows To Kazhakstan, Now It's Quows To Qater

Qatar has been in the news of late. All in the past month, these news stories: Qatar dropped out of OPEC; it will expand activities in Mexico; and, Qatar looks to invest as much as $20 billion in the United States.

How the reader got from there to here is beyond me, but the reader's -- should we say, obsession -- with North Dakota beef led us to this: Qatar imports 97% of its food.

Wiki provides an interesting chart, ranking countries by their "real" population density: population density based on "arable land." Of course, how well countries use their arable land and to what purpose they use their arable land is another question.

Having said that, Qatar has a couple of million people and not much arable land. How much arable land? This is what the reader calculated:
Qatar is now claiming to have around 3 townships of arable land ... and that's for 2 1/2 million people.

If we put Watford City, ND, at the west end of a rectangle, it would run 18 miles east.  So, you'd hit the eastern edge of that rectangle one mile after Johnson's Corner.  The rectangle would only be 6 miles north to south.

Or, Killdeer would be a mile from the eastern edge of a rectangle that ran west to the McKenzie County line - again 6 miles north and south.

Not a lot of farmland, even it were higher quality.  The population number would compare to the combined populations of North Dakota, South Dakota and Montana. 
They also include grazing land in that same "arable" designation  (thus the tie-in with beef). 
Now back to airlifting cows. First it was was "kows to Kazakhstan." Now it's "quows to Qatar."

From wiki:
In July 2017, following the closure of Qatar's only land border with Saudi Arabia, the country announced plans to airlift 4,000 cows in a bid to meet around one-third of its dairy demand. Local company Baladna will be responsible for the dairy production.
Later, Baladna announced that it will be importing an additional 10,000 cows so that they can meet Qatar's dairy requirements in full by 2018.
Domestic production of meats, dairy products, and crops increased by 400% from June 2017, the onset of Qatar's diplomatic spat, to March 2018, according to the Ministry of Municipality and Environment. Nearly all (98%) the demand for poultry is being met.
The reader's comment regarding dairy farming in Qatar: Their dairy cow import scheme is ludicrous - Dairy is a water-intensive agricultural production.

By the way, that Watford City - Johnson Corner rectangle: the Qatar of North America, I suppose. Didn't The Atlantic publish an article with the title, "Qatar of the Plains," or something to that effect, some time ago.

For the quows and the kows, it was a one-way flight, so no frequent-flyer miles accrued.

Speaking of Airlifts ...

... it seems Chip, our elf on the shelf, got himself into somewhat of a predicament overnight ----

WTI Below $49 -- December 17, 2018 -- Activity Along The Gulf Coast Staggering

King of the Permian: this is really quite amazing. This speaks volumes about short-cycle projects (Chevron's term). I mentioned some time ago that Exxon came late to the Permian and overpaid. Whether they overpaid or not is yet to be seen, but certainly they made up for lost time. Bloomberg is now reporting that Exxon has overtaken rivals to become the most active driller in the Permian Basin, showing the urgency with which the world’s biggest oil company by market value is pursuing U.S. shale. [Insert shout-out to Art Berman here.]
Even after a slow start in the region of West Texas and New Mexico, Exxon is now operating more drilling rigs than Concho Resources Inc., which merged with RSP Permian Inc. earlier this year to create one of the biggest Permian-focused explorers.
For Exxon, the Permian is still small when placed in the context of its global reach. In the third quarter of this year it produced just a fraction of the oil titan’s total production. But CEO Darren Woods expects strong growth each year through 2025. By then, he’s targeting as much as 800,000 barrels a day from the Permian and the Bakken in North Dakota, which would be about 20 percent of today’s overall production.
Woods’ escalation in the Permian is essentially a bet that Exxon can drill wells so cheaply that they’ll be profitable despite crude’s 26 percent in just 10 weeks time.
Back to the Bakken

Only one well coming off confidential list today -- Tuesday, December 18, 2018:
  • 33690, 984, Oasis, Lite 5393 41-11 11B,  Sanish, 50 stages, 9.8 million lbs, t7/18; cum 92K 10/18;
Active rigs:

Active Rigs67514064183

RBN Energy: new liquefaction trains, pipeline capacity revving up gulf coast feedgas demand.
Feedgas demand at U.S. LNG export terminals has climbed 1.3 Bcf/d, or ~40%, in just three months to an average 4.4 Bcf/d in December to date and hit an all-time single-day high of over 4.6 Bcf/d last Tuesday. The big jump in demand came as U.S. Gulf Coast LNG operators have begun commissioning three new liquefaction trains, including the initial trains at two new export terminals. At the same time, pipeline expansions targeting both existing and newly active terminals have been completed to meet that demand. How are the new trains being supplied and what’s the effect on gas flows? Today’s blog takes a closer look at recent changes in liquefaction and feedgas delivery capacity and their effect on feedgas flows, starting with Cheniere Energy’s Sabine Pass Liquefaction.
U.S. Gulf Coast LNG exports are a fast-changing landscape. After somewhat of a lull in LNG export growth through the first three quarters of 2018, incremental demand for feedgas has revved up this fall.
In late September (2018), feedgas receipts totaled an average of about 3.1 Bcf/d. More than 80%, or ~2.6 Bcf/d, of that was going to Cheniere’s Sabine Pass Liquefaction (SPL) in Cameron Parish, LA. The only other export facility in operation at the time — Dominion’s Cove Point terminal in Maryland — was down for maintenance and averaged just 0.4 Bcf/d in September, about half of its capacity.
Since then, SPL has begun taking feedgas for commissioning its Train 5. The facility also now has access to a new feedgas interconnect following the full in-service of Kinder Morgan Louisiana Pipeline’s Sabine Pass Expansion Project last week. In the meantime, two pipeline expansions — Williams/Transco’s Atlantic Sunrise and TransCanada/Columbia Gas Group’s WB Xpress — improved Cove Point’s access to Marcellus/Utica gas.
Further, commissioning activities began for the first trains at two brand new facilities — Cheniere’s Corpus Christi Liquefaction began taking feedgas for the commission of its first train, and Cameron LNG has begun commissioning its Train 1, with feedgas flows expected any week now.
Next, we look at each of these developments in turn by facility, starting today with SPL.