Tuesday, December 31, 2019

Third Lowest Number Of Permits Issued In A Calendar Year In Nine Years -- December 31, 2019

Updates

January 1, 2019: in the original post I was going to note that despite low number of permits and low number of active rigs, production is setting all-time records. It was great to see that a reader did that for me. See comments. I've brought the comment up here for easier access:
EIA 914 shows another record for US (October, 2019, monthly production): 12.66 MM bopd. And that's with 0.1 MM bopd still to return from GOM outages.

https://www.eia.gov/petroleum/production/ 
It will be very, very close, but I'm still seeing a chance that we will finish 2019 (December, 2019, monthly data) with a 13-million-bopd in production.

Record natgas also
https://www.eia.gov/petroleum/production/#ng-tab 
Natural gas production is comfortably over 100 BCF/d total withdrawals, lower 48, at 105.1 BCF/d. (I don't count Alaska production since it is just reinjected.)

ND showing over 3 BCF/d
LA just popped over 9 BCF/d and is a hair away from breaking its November, 2011, record.

The peak oil/gas folks have been reduced to saying growth is "too slow" or "about to turn" since they've been boot-stomped by actual production, hitting new records almost every month.  
Search on the blog: "doofus-in-chief."

Original Post

It looks like the last time I estimated the number of oil and gas permits issued by the NDIC for calendar year 2019 was posted on October 8, 2019. At that time, this is what I posted:
Projection: Based on the number of permits in each of the following months, the number in bold was the projected number of permits for calendar year 2019 had the rate for the entire year remained the same as that one month. For example, based on the number of permits issued in April, 2019, had that been the "rate" for the entire calendar year (2019), 1,582 permits would be issued for calendar year 2019.

  • January, 2019: 1,495
  • February, 2019: 1,434
  • March, 2019: 1,578
  • April, 2019: 1,582
  • May, 2019: 1,660
  • June, 2019:  1,557
  • July, 2019: 1,671
  • August, 2019: 1,495
  • September, 2019: 1,107
  • first 8 days of October, 2019: 1,688  
So, how did that turn out?

Total number of NDIC oil and gas permits: 1,397.

At this post, dated  June 22, 2019, the number of permits by calendar year and the projected number of permits at that time for calendar year, 2019, with the new number added:
  • 2019, 1,397
  • 2018: 1,466
  • 2017: 1,189
  • 2016: 818
  • 2015: 2,055
  • 2014: 3,012
  • 2013: 2,671
  • 2012: 2,522
  • 2011:1,916 
There were only two years in which fewer permits were issued.

I'll have a breakdown of the permits by operator, field, etc., later.

Aliso Canyon Natural Gas, California, Update -- December 31, 2019

Update regarding Aliso Canyon.

The article is over at S&P Global, Platts, dated December 31, 2019.

The headline FERC makes Cal-ISO gas constraint tool permanent as Aliso Canyon limitations persist.

The lede:
California Independent System Operator has received the go-ahead to make its maximum gas burn constraint a permanent operational tool to help avoid blackouts in Southern California amid continued limited operations at the Aliso Canyon natural gas storage facility.
When conditions warrant, the constraint allows Cal-ISO to limit the amount of natural gas that can be burned by power plants in the Southern California Gas and San Diego Gas & Electric regions.
The provision:
Cal-ISO was previously authorized to use the tool on a temporary basis. The Federal Energy Regulatory Commission Monday approved the grid operator's October 31 proposal (ER20-273) to make permanent three tariff provisions associated with the constraint.
One of the tariff provisions authorizes enforcement of the constraint, while another gives Cal-ISO the authority to override competitive path assessments based on actual system conditions in order to deem certain transmission constraints uncompetitive when the gas constraint is enforced. The last provision permits Cal-ISO to suspend virtual bidding if the bids are introducing adverse market outcomes in conjunction with the use of the gas constraint.
Assessment:
Available gas capacity to serve customers based on best and worst case scenarios for pipeline supplies coupled with potential storage field utilization ranges from 3.77 to 4.11 Bcf/d with the support of Aliso Canyon, and 3.20 to 3.54 Bcf/dD if Aliso Canyon supplies are unavailable, according to the assessment.
Scenario this year:
Under no scenario does SoCal Gas expect to have adequate supplies to handle the 1-in-10-year cold day demand forecast, which would prompt curtailments of core customers. But the utility "does not believe ... that core service is at risk this winter season" because, with the exception of the worst case pipeline supply scenario without Aliso Canyon, supplies are projected to be sufficient to meet the 1-in-35-year peak day demand, the report said.

The Decade Ends With "The Face Of The Bakken" With The Last Six Permits -- December 31, 2019

What a great way to finish the year, and the decade!
The last six permits issued by the NDIC in 2019 are CLR permits. Also, really cool, these are in the name of a pharmacist I knew very, very well when I was growing up in Williston. And, finally, several years ago, a reader asked "when" there would be more "Irgens Rexall" wells. I had no idea, of course, but I assured the reader there would eventually be more "Irgens Rexall" wells. Well, here they are.
Six new permits, #37290 - #37295, inclusive --
  • Operator: CLR
  • Field: East Fork (Williams County); Big Gulch (Dunn County)
  • Comments:
    • CLR has permits for a 5-well Irgens Rexall pad in section 19-156-99, East Fork oil field
    • CLR has a permit for another Kate well in section 19-147-96, Big Gulch oil field
Ten permits renewed:
  • Hess (5): five Bingeman permits in Williams County
  • EOG (2): two Austin permits in Mountrail County 
  • Hunt (2): two Patten permits in Mountrail County
  • Berenergy: a Borstad permit in Bottineau County
********************************** 
The Irgens Well

Back to "Irgens Rexall." There is currently one "Irgens Rexall" well:
  • 21068, 491, CLR, Irgens Rexall 156-99-19-18-1H, East Fork, t5/12; cum 232K 10/19; 
Active rig -- on the last day of the year, the last day of the decade, active rigs and the price of WTI:

$61.0612/31/201912/31/201812/31/201712/31/201612/31/2015
Active Rigs5567493961

***********************************
Look How Far We've Come

Form the file report for #21068:
  • permitted by Newfield Production Company
  • Newfield spudded the well on 10/29/11; surface casing
  • Newfield transferred operation of the well to CLR on/about April 5, 2012;
  • spud date: February 3, 2012
  • TD/date: 20,565'; March 28, 2012
  • total drilling days: 24
  • twenty miles northeast of Williston, ND
  • middle Bakken
  • upper Bakken shale top: 10,706' true vertical depth (TVD); peak gas of 2,739 units;
  • middle Bakken top: 10,722' TVD
  • gas levels ranged from 200 units to 3,563 units; mud flow through the gas buster
  • TD of 20,555' MD
  • frack: 40 stages; 3.788 million lbs sand/ceramic; a pretty big frack for 2012;
  • that well, drilled in 2012, now seven years old, produced a cumulative of 232K bbls of oil
  • compare that with two wells that were drilled early this year in the very same field, very same area:
    • 34461, 1,365, CLR, Peterson 3-29H1 (a Three Forks well), 60 stages, 6.1 million lbs; East Fork, t1/19; cum 145K 
    • 34464, 1,628, CLR, Peterson 6-29H (a middle Bakken well), 60 stages; 9.1 million lbs; East Fork, t1/19; cum 154K 

Why The Saudis Suddenly Agreed To "Partner" WIth Kuwait -- Oilprice -- December 31, 2019

I haven't read this article closely and entirely, but what little I have read is quite fascinating. Archived.

Why The Saudis Suddenly Agreed To This Mega Oil Deal -- Simon Watkins, oilprice.

I'll get back to this later. 

A Nice EOG Hawkeye Well In Clarks Creek Back On Line -- December 31, 2019

This page will not be updated. These wells are followed elsewhere.

The well:
  • 22486, 2,421, EOG, Hawkeye 100-2501H, Clarks Creek (see stand-alone post); 3-section spacing (1,920 acres); t9/12; cum 783K 10/19: super long lateral (15,000 ft); Three Forks well; off line as of 4/19; back on line as of 19/19;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-20191618461772236919700
BAKKEN9-20190000000
BAKKEN8-20190000000
BAKKEN7-20190000000
BAKKEN6-20190000000
BAKKEN5-201900340000
BAKKEN4-201926230221839341121
BAKKEN3-20193112091200152526371734517
BAKKEN2-20192711561152225424271940154

Wells of interest in this area:
  • 22484, 2,946, EOG, Hawkeye 102-2501H, Clarks Creek, t1/13; cum 601K 10/19; not taken off line;
  • 22487, 67, EOG, Hawkeye 02-2501H, Clarks Creek, t12/13; cum 853K 10/19; not taken off line;
  • 32488, conf, EOG, Hawkeye ...
  • 32489, conf, EOG, Hawkeye ...
  • 32490, conf, EOG, Hawkeye ...
  • 31808, 1,981, EOG, Riverview 22-3031H, 51 stages; 13.9 million lbs; Clarks Creek, t8/19; cum 125K 10/19, production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-2019313724737302353941771561668558115
BAKKEN9-2019305726757325502621634681529229281
BAKKEN8-20191630169299382471063390615311758

  • 31806, 1,316, EOG, Riverview 24-3031H, 52 stages; 17.3 million lbs; Clarks Creek, t8/19; cum 111K 10/19;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-2019314052640536411431201151127515393
BAKKEN9-2019304596146006584271098751024326178
BAKKEN8-20191724076238924435050857493451410

  • 31807, 2,222, EOG, Riverview 23-3031H, t8/19; cum 108K 10/19; 49K month;
  • 31805, 2,073, EOG, Riverview 25-3031H, 52 stages; 11.6 million lbs; Clarks Creek, t8/19; cum 139K; 61K month --
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-20193148914489434515464717600352711
BAKKEN9-20193060834608776412274720694214034
BAKKEN8-2019152973129504350723586234795973

  • 31805, 2,073, EOG, Riverview 25-3031H, Clarks Creek, t8/19; cum 139K 10/19; 61K month;
  • 22200, 528, EOG, Riverview 4-3031H, Clarks Creek, t7/12; cum 465K 10/19; off line 1/19; back on line 9/19; minimal jump in production; 
  • 22199, 1,088, EOG, Riverview 100-3031H, Clarks Creek, t6/12; cum 481K 10/19; off line 1/19; back on line 9/19; no increase in production;

Notes From All Over, Part 1 -- December 31, 2019

Shale: making America great! I find this absolutely fascinating on so many levels -- US exports of petroleum products to Canada and Mexico:


Reality check: while Bezos, Elon, et al are talking about building cities on Mars, China is doing that here on Africa ... now. My hunch: we'll have a city in Africa with ten million Chinese before we have 25 earthlings living on Mars. [But hopefully, the first 25 will include St Greta the Exploited.]




Idle rambling: twenty-four more hours (actually less) for Rocket Man to act. I suggested a few days ago that connecting the dots would perhaps suggest why North Korea did not send the US the "Christmas present" that was promised. Here's one of those dots:


US Embassy in Iraq: Iran taking a page out of their 1979 playbook. Two observations:
  • North Korea hoped to be on the front page this Christmas; appears Iran stole NK's thunder;
  • in Iraq, this could change everything -- what to watch? price of oil
**********************************
Idle Rambling

I'm still fascinated by the changing landscape of the investment world. Absolutely fascinating. 

Schwab, website:
Schwab is the industry leader and largest custodian of Registered Investment Advisor (RIA) assets,1 providing custodial, operational, practice management, and trading support to more than 7,500 independent RIA firms. For over 30 years, we have worked resolutely with independent advisors to develop proven processes and insights for starting, building, and growing their firms.
Meanwhile, apparently Merrill Lynch is getting out of the business. From RIABiz:
Merrill Lynch retreats from stealth RIA custody business just as major rival Wells Fargo runs for daylight in a bid to keep breakaway advisor assets.
Major banks pursue competing RIA custody strategies after running programs for years out of their vest pockets.
October 24, 2019 — 8:50 PM by By Lisa Shidler Brooke's Note:
At Bank of America, revenues basically never go up. In 2014, the Charlotte, N.C., bank hauled in $86 billion in revenues. In 2018, revenues only reached $91 billion. Nobody expects them to be much better in 2019, maybe up 1%.
That seeming revenue ceiling makes cutting costs mandatory for earnings growth, and that's why -- finally -- the bumbling Merrill Lynch RIA custody unit is getting the ax. At least, RIAs say that's what BofA is telling them. It sure is an ignominious end to a concept that had two good reasons to live. It gave Merrill Lynch a way to retain brokers who would otherwise migrate to Fidelity, Schwab, TD, or other custodians.
It also gave Merrill a head start on a post-apocalyptic future when brokers go extinct -- a time that admittedly never seems to arrive. This BofA move pretty much puts three of top four wirehouses at square one-- or square zero-- in RIA custody. Only Wells Fargo, tentatively, is heading in the opposite direction. (See: Wells Fargo finally gives its 600 hiring managers an RIA channel to sell but still with the Trade-PMR brand) It has a partnership with TradePMR that is retaining Wells Fargo brokers -- perhaps because it is content to accept the slimmer margins of a clearing relationship.
It will be interesting to see where Schwab heads after the merger/buyout of TDAmeritrade.

*******************************
Idle Rambling

I hear that the DFW metroplex is the world's largest "center" for Amazon fulfillment/distribution centers. Apparently there are 17 Amazon "distribution centers" in the DFW metroplex. It has an air hub north of Fort Worth, TX, the Alliance Airport; connections with the old Redbird airport south of Dallas; and, operations out of DFW International Airport. That from a life-long logistics professional who stops by Starbucks on a regular basis. Three centers within a bicycle ride of our little hovel: Amazon Fulfillment Center DFW6; Amazon FTW2, and USPS, all three just north of the DFW airport.

The "old" Redbird Airport -- now the Dallas Executive Airport-RBD. Wiki note here. I can't find anything to connect Amazon and the Dallas Executive Airport.

With regard to the Alliance Airport, more here.

********************************
The Book Page

Slogging through The Anarchy: The East India Company, Corporate Violence, and the Pillage of An Empire, William Dalrymple, c. 2019.

Page 138 of 397 pages of text.  We've come to the end of the Plassey Revolution. The wiki snapshot:
The Battle of Plassey was a decisive victory of the British East India Company over the Nawab of Bengal and his French allies on 23 June 1757, under the leadership of Robert Clive which was possible due to the defection of Mir Jafar Ali Khan.
The battle helped the Company seize control of Bengal. Over the next hundred years, they seized control of the entire Indian subcontinent and Myanmar
Absolutely fascinating. 

Plassey? Anglicized form of Palashi, a city in the West Bengal district of India. West Bengal is in the far northeast corner of India.

From page 139:
What the people of England did understand very clearly was the unprecedented amount of money -- or to use the newly Anglicised word, loot -- that Clive was bringing back with him. Not since Cortés had Europe seen an adventurer return with so much treasure from distant conquests.
Loot, etymology: early 19th century (as a verb): from Hindi lūṭ, from Sanskrit luṇṭh - ‘rob’.

It is amazing that a company of maybe a dozen owners/principal shareholders "conquered" India, and no one really knew what was going on.

By the way, this explains the "Plassey" one sees on maps of London, and England in general. 

Happy New Year's Eve -- December 31, 2019

Ten cities: jobs and growth -- from CNBC --
10. Round Rock, TX (Austin, "silicon alley")
9. North Charleston, SC
8. Charleston, SC
7. Denver, CO
6. New Bruanfesl, TX (gateway to San Antonio)
5. Greeley, CO
4. Miami, FL
3. Mount Pleasant, SC
2. Denton, TX
1. Longmont, CO
Observations from the list above:
  • South Carolina: three
  • Texas: three, including #2
  • Colorado: three, including #1
  • Florida: the one outlier
Denton: just north of where we live; the population center of the DFW metroplex is predicted to move to this area -- pretty amazing.

Denton is just northeast of the Fort Worth Alliance Airport --  
HQ2? Who needs it? From Zack's: Amazon to open regional air hub in North Texas, create jobs. From December 13, 2018:
In a bid to strengthen its delivery services, Amazon.com, Inc.,plans to open a regional air hub at the Fort Worth Alliance Airport, which is expected to commence its operations from 2019. This new air hub is also expected to create multiple job opportunities for North Texas residents. Fort Worth Alliance Airport is west of Grapevine, well north of Fort Worth, off I-35W, south of the Texas Motor Speedway and south of  ... yes ... Buc-ee's!
***********************************
Back to the Bakken

Active rigs:

$61.2012/31/201912/31/201812/31/201712/31/201612/31/2015
Active Rigs5567493961

No wells coming off confidential list today.

RBN Energy: the top 10 RBN Energy blogs of 2019 -- supply, exports, and low prices.
December 2019 U.S. crude oil production soared 1.1 MMb/d above this time last year to 12.8 MMb/d. It’s a similar story for natural gas, with Lower-48 production climbing to 95 Bcf/d, up 6 Bcf/d over the year. That’s a little off the breakneck growth rate of 2018, but still quite healthy, even in the context of Shale Era increases. And it all happened in the face of continued infrastructure constraints, crude prices that fell from the mid-$60s/bbl in April to average $55/bbl from May through October, and gas prices that in several months were crushed to the lowest level in 20 years. It’s all too much supply to be absorbed by the U.S. domestic market. And that means more pipes to get the supply to the Gulf Coast and more export facilities to get the volumes on the water. What has all this meant for the market’s response to these developments? Well, at RBN we have a way to track that. We scrupulously monitor the website “hit rate” of the RBN blogs fired off to about 28,000 people each day and, at the end of each year, we look back to see which topics generated the most interest from you, our readers. That hit rate reveals a lot about major market trends. So, once again, we look into the rearview mirror to check out the top blogs of the year based on the number of rbnenergy.com website hits.

Monday, December 30, 2019

North Dakota Has New Record Population: 762,062 In 2019

The Bismarck Tribune and The Williston Herald are both reporting a new record population for North Dakota, 2019, at 762,062 people.
  • June 5, 2019: 760,900; at that time North Dakota's growth rate was "an astounding" 1.99%, which ranked second in the nation;
  • up "considerably" from 672,000 recorded in 2010
  • 762-672/672 = 13.4% increase in 10 years
  • North Dakota: US state with the largest percentage in population growth since 2011
  • current growth rate is second only to the District of Columbia
  • projections, North Dakota:
    • 800,000 by 2020
    • one million by 2040
  • city populations, interactive map
    • Williston: 24,494
The Bismarck Tribune is also reporting that a family that owns a Billings County ranch has filed a lawsuit over a proposed bridge slated to cross the Little Missouri River. 

*******************************
Movie Night

Bombshell: great movie. Loved it.

Roger Ailes was outed/ousted in 2016. After he was fired by the Murdoch family, the older Murdoch took over control of the network.

That was about three years ago. It is with some irony, then, that this was on The Drudge Report just as the movie was playing across the country:



The Murdoch family is portrayed in a neutral to positive light. Ailes, of course, was not, but all-in-all, fair and balanced. 

***********************************
The Book Page

I can't remember what book I was reading but there was a nice discussion of cochineal. It might have been the history of the East India Company, but I forget. I was vaguely aware of cochineal but only vaguely.

Hold that thought.

I know nothing about Campari. I've seen ads for Campari over the years but never knew what it was.

Finally, from this site, some interesting factoids/facts about Campari. The most interesting factoid/fact:
  • strict vegans cannot drink Campari made in some countries
  • the reason "egg" is sometimes listed as an ingredient in Campari
Nothing to do with cochineal: one of my all-time favorite television commercials:


Twelve DUCs Reported As Completed -- December 30, 2019

Active rigs:

$61.6312/30/201912/30/201812/30/201712/30/201612/30/2015
Active Rigs5566493961

Three new permits, #32787 - #32789, inclusive:
  • Operator: Kraken Operating, LLC
  • Field: Oliver (Williams County)
  • Comments: 
    • Kraken has permits for a 3-well Marcy pad in section 24-157-98, Oliver oil field
Twelve producing wells (DUCs) reported as completed:
  • 30993, 65, BR, Gudmunson 6-1-26TFH, Elidah, t11/19; cum --;
  • 30992, 101, BR, Gudmonson 7-1-26MBH, Elidah, t11/19; cum --;
  • 30991, 176, BR, Gudcadia 8-1-26TFH-ULW, Dimmick Lake, t11/19; cum --;
  • 33786, 290, Crescent Point Energy, CPEUSC Lloyd 6-27-34-157N-100W TFH, Marmon, t11/19; cum 4K over 28 days;
  • 33784, 1,039, Crescent Point Energy, CPEUSC Lloyd 2-27-34-157N-100W MBH, Marmon, t11/19; cum 10K over 30 days;
  • 33782, 122, Crescent Point Energy, CPEUSC Lloyd 7-27-34-157N-100W TFH, Marmon, t11/19; cum --;
  • 33785, 161, Crescent Point Energy, CPEUSC Elena 2-22-15-157N-100W MBH, Marmon, t11/19; cum 8K over 30 days;
  • 33787, 41, Crescent Point Energy, CPEUSC Elena 6-22-15-157N-100W TFH, Marmon, t11/19; cum 4K over 30 days
  • 33783, 307, Crescent Point Energy, CPEUSC Elena 7-22-15-157N-100W TFH, Marmon, t11/19; cum --;
  • 34882, 4,018, Hess, AN-Norby-152-94-0409H-4, Antelope-Sanish, t11/19; cum 21K over 12 days;
  • 34883, 3,757, Hess, AN-Norby-152-94-0409H-3, Antelope-Sanish, t11/19; cum 28K over 17 days;
  • 34884, 3,519, Hess, AN-Norby-152-94-0409H-2, Antelope, Sanish, t11/19; cum 25K over 18 days.
Neighboring wells to the Hess AN-Norby wells:
  • 28257, to the west, a very nice well that was taken off line 9/19; 2,059, XTO, Nelson Federal 41X-5D, Antelope-Sanish, t10/15; cum 287K 101/9;
  • 17609, to the east, a big well that was taken off line 9/19; 504, Hess, AN-Norby-152-94-0409H-1, Antelope-Sanish, t1/09; cum 358K 10/19;
  • 18909, to the east, a big well, not taken off line; 674, CLR, Rollefstad 2-3H, Antelpe-Sanish, t8/10; cum 314K 10/19;
Note: these neighboring wells will all be re-fracked at some point.

To the east of the CPEUSC wells, is another 6-well CPEUSC pad, all wells on confidential status with a rig on site; the rig is sitting on #34166 (TFH) and #37003 (MBH), both with these footages: 256 FNL 280 FWL.

Two older wells near the Gudmonson/Gudcadia wells:
  • 19548, 508, CLR, Gudmunson 1-26H, Elidah, t10/11; cum 371K 10/19; off line for two months, 7/19 - 9/19;
  • 25147, 2,256, BR, Gudmunson 11-26TFH, t6/13; cum 272K 10/19; has not been taken off line;

Making America Great, Off Shore Drilling -- December 30, 2019

US returns to being a net oil exporter. Rigzone.
Thanks to the shale oil revolution, for the first time since the 1940s, the United States exported more oil than it imported last September. In that month, U.S. exports of crude oil and refined products exceeded imports by 89,000 barrels a day, according to EIA statistics.
This marks a significant turning point, for only a decade ago, American imports exceeded exports by a hefty 12 million barrels a day. Commenting on this change, Bob McNally, a former energy consultant to President George W. Bush and president of the consulting firm Rapidan Energy Group, said,  “the U.S. return to being a net exporter serves to remind how the oil industry can deliver surprises -- in this case, the shale oil revolution -- that upend global oil prices, production, and trade flows.”
The International Energy Agency (IEA) believes the U.S. is on track to become a sustained net oil exporter in either late 2020 or early 2021. It forecast an increase in U.S. exports of crude and refined products from 550,000 b/d in October 2019 to average 750,000 b/d in 2020. This uptick will have a positive impact on the U.S. trade balance.  In 2018, th U.S.petroleum trade deficit stood at $62 billion or 10 percent of the country’s trade balance according to Rystad Energy. Thanks to the ongoing growth in shale tight oil, the U.S. could enjoy a petroleum trade surplus in 2020.
The shale oil revolution also has geopolitical consequences, not least in that it will weaken the influence of America’s traditional Middle Eastern oil suppliers, such as Saudi Arabia, United Arab Emirates and Kuwait, on Washington’s foreign policy.    
Offshore drilling poised for an upswing in 2020? Rigzone.
Offshore drilling has been depressed but, now with increased activity, oil production could peak in 2020 before joining shale in a slowdown that could dramatically rewrite market supply predictions. Overall rig demand is forecast to rise from 473 units in 2019 to 550 units in 2021, an increase of 16 percent according to IHS forecasts. Jeremy Lake, Vice President, Transocean, confirms the 6 percent rise in active floating rigs in the first half of this year and forecasts a market utilization rate above 80 percent. Lake also expects demand for jack-up rigs to increase from 345 units in 2019 to 388 units in 2021, a rise from 69 to 84 floaters and the number of drillships to increase from 59 to 78.  
Gulf of Mexico oil output targeting record year. Rigzone.
Despite a massive downturn in investment in the U.S. Federal Gulf of Mexico (GOM), industry experts including Rystad Energy and the U.S. based Energy Information Agency (EIA) are anticipating that 2020 will be yet another record year. “2020 is expected to be another record year with average production above 1.9 million barrels per day,” states Joachim Milling Gregersen, an analyst on Rystad Energy’s Upstream team. This is an additional 100,000 barrels a day on 2019 despite the increasing ferocity of the regular hurricanes in the region, which force the entire industry to close down for days at a time. For example, Hurricane Barry caused a drop of 700,000 barrels of oil per day (bopd) in U.S. crude production during the week of July 19th, according to the U.S. EIA.
Note:
  • GofM: 1.9 million bopd
  • North Dakota: 1.5 million bopd

Re-Fracking In The Bakken -- The Returns Are Going To Infinity -- December 30, 2019

With regard to the subject line: yes, I am inappropriately exuberant about the Bakken. My focus is on the mom-and-pop mineral owners in North Dakota.

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

Re-posting. This is mostly for newbies. Earlier today I posted:
Shale bust redux.
For those who subscribe to The WSJ, you probably saw the "as shale wells age, gap between forecasts and performance grows" by Rebecca Elliott and Christopher M. Matthews. If the story sounds familiar, it's because it is. This this has been previously posted. From the same writers, almost exactly one year ago, January 2, 2019, also in The WSJ, "fracking's secret problem -- oil wells aren't producing as much as forecast." And then again, September 29, 2019, by the same two writers, RE and CMM, "shale boom is slowing just when the world needs oil most."  Really? Two final nominees for the Geico Rock Award for 2019.
I don't know if the Permian is different than the Bakken when it comes to fracking, re-working, mini-fracks, halo effect, advantaged oil, major re-fracks, etc., but I think the jury is still out with regard to the thesis that Elliott and Matthews would suggest. Below is not an atypical example of what is going on in the Bakken.

In the data below, note:
  • from the original completion date, 6/08, to 5/18, ten years, this well produced 123,000 bbls of crude oil; 
  • then after the re-frack in early, 2018, the cumulative by 10/19, had jumped to 471,000 bbls of crude oil
  • this well, after a re-frack -- and a well that could have easily been written off, abandoned, and plugged -- came roaring back to produce 348,000 bbls of crude oil between in about eighteen months, and with oil about $20/bbl higher -- and the only cost -- the cost of fracking -- at a time when service costs and sand are at record lows
Good, bad, or indifferent, the mom-and-pop mineral owners are probably wondering what just happened when they opened their most recent royalty checks. Good for them.

*******************************
A Re-Fracked Well In The Bakken

The well:
  • 17100, 240, CLR, Mountain Gap 31-10H, Rattlesnake Point, t6/08; cum 123K 5/18; cum 471K 10/19;
We now have the re-frack data: 57 stages; 13.93 million lbs; test 3/18:

Production data before/after the re-frack:
BAKKEN9-20183025164252122623631413278813140
BAKKEN8-2018313599735753453744292442309210
BAKKEN7-20183141189414275749245918433442169
BAKKEN6-20183052661527136344257604528864326
BAKKEN5-20181726682264103645028245211007145
BAKKEN4-201856946945436137901379
BAKKEN3-20180000000
BAKKEN2-20180000000
BAKKEN1-20180000000
BAKKEN12-20170000000
BAKKEN11-20170000000
BAKKEN10-20170000000
BAKKEN9-20170000000
BAKKEN8-20170000000
BAKKEN7-20170000000
BAKKEN6-2017221712403388880
BAKKEN5-201731296239371221166

Production following original frack:
BAKKEN12-20083126452442285143014300
BAKKEN11-20082830423128407341634160
BAKKEN10-20083040063566101936453046599
BAKKEN9-2008252005229118717261545181
BAKKEN8-2008313844364352734843319165
BAKKEN7-20083139694095104330202952725
BAKKEN6-200830591456482002390303903
BAKKEN5-20083116002305000

Corpus Christi: Biggest Boom Since WWII? -- December 30, 2019

Is Corpus Christi undergoing a boom like never seen since WWII? I don't know but it certainly seems that Corpus Christi has been in the news a lot this year. I noticed that when I was going through the top stories for the year. Then, today, RBN Energy has another update on the city. Re-posting (and archived):
RBN Energy: Plains All American's Cactus II ramps up Corpus deliveries.
t’s safe to say that Permian producers had a good Christmas. Sure, their stock prices may be off a bit and their rig counts are down. But the absolute prices they are paid for their crude oil are up by almost $20/bbl versus this time in December 2018, and the price spreads between the Permian and neighboring markets have significantly narrowed as a result.
What’s driving this change? There are a variety of factors at play, but chief among them is the new pipeline infrastructure that has helped lift Permian producers’ oil price realizations. Today, we check in on the status of one of the major new pipelines that have contributed to the seismic shift in the Permian oil market this year.
From August 13, 2019:
RBN Energy: Plains All American Cactus II oil pipeline nears commercial operation. [We posted a screenshot from twitter regarding this yesterday.) This will be a big story over time. Archived.
It’s no secret by now that Permian oil markets have struggled over the last two years as nagging takeaway-pipeline constraints put a damper on production growth and, at times, hammered pricing in the basin. Like the Houston Astros’ opponents in the AL West, though, the days are numbered now for Permian oil market constraints, as two new large-diameter pipelines from West Texas to Corpus Christi will be in-service by the end of the month. One of those pipes, Plains All American’s Cactus II, is set to enter service this week.
Cactus II consists of 575 miles of new 26-inch-diameter pipeline and extends from McCamey, TX, in the southern Midland Basin to delivery points near Corpus Christi. Note that Cactus II can also access the oil hub at Wink, TX, in the Delaware Basin via a capacity lease on another Plains-operated pipeline. Also, while Cactus II closely follows the route of Plains’ original Cactus Pipeline , the two pipelines do not share facilities. From the Permian, Cactus II extends southeast toward the Texas Gulf Coast and has been completed to Ingleside, TX, which is just across the bay from Corpus Christi. Plains confirmed last week that Cactus II is in the process of taking linefill in preparation for entering commercial service this week. Plains is also working to complete a final segment of Cactus II that will run from Taft, TX, to delivery points across the water from Ingleside along the Corpus Christi Ship Channel. This segment is expected to be completed by the end of the first quarter of 2020.
From August 20, 2019, Platt's:
From S&P Global:
The first US crude cargo originating from the new Cactus II pipeline loaded onto the Aframax Paramount Hatteras out of the Buckeye Terminal in Corpus Christi, Texas.

The Paramount Hatteras is currently stationary near GOLA after arriving there Monday. It's likely the ship is headed to the terminal to conduct a reverse lightering job for a VLCC set to export.
CFlow shows the Paramount Hatteras anchored next to the Irini N Lemos, a currently unladen VLCC. SK Energy booked the Irini N Lemos for a US Gulf Coast-South Korea run at lump sum $4.975 million, loading August 17-21, according to Platts fixture logs.

".... soon be the first in the Port of Corpus Christi to export these barrels transported to South Texas via one of three large Permian long-haul pipeline projects," ...

On August 12, Trafigura announced in a press release that the 670,000 b/d Cactus II pipeline began service to Ingleside, Texas. Cactus II service to Corpus Christi is expected to start in the first quarter of 2020.

Cactus II will be joined by the 400,000 b/d EPIC crude pipeline and the 900,000 b/d Gray Oak pipeline, both expected to start up by year's end.
From September 10, 2019:
RBN Energy: Corpus Christi crude oil exports surge to a record.
Despite last month’s much-publicized start-up of two new crude oil pipelines from the Permian Basin to the Gulf Coast — Plains All American’s Cactus II and EPIC Crude Holding’s EPIC Pipeline — tangible evidence of how much crude is actually moving on those pipelines has been hard to come by. That’s because crude oil pipelines don’t post daily flow data, like some natural gas pipelines do, and shipper volumes are a closely held secret that often only becomes available long after the fact.
However, Cactus II and EPIC both deliver into the Corpus Christi, TX, market area, where a number of export facilities have been waiting to move Permian barrels out into the global market. We’ve been keeping a close eye on Corpus-area docks and have noticed a significant increase in export volumes over the last few days — a clear indication that Permian crude on Cactus II and EPIC has broken through to the global market. Today, we detail a recent rise in Corpus Christi oil export volumes driven by new supply from the Permian Basin.

Two Final Nominees For The 2019 Geico Rock Award -- December 30, 2019

Active rigs:

$62.0712/30/201912/30/201812/30/201712/30/201612/30/2015
Active Rigs5666493961

Wells coming off the confidential list: see long list below.

RBN Energy: MPLX's BANGL, fracs and exports plan. Archived.
Over the past two years, MPLX has been ramping up its midstream development activity in the Lone Star State, or more specifically in the “Permian-to-Gulf” market, where it’s been building or buying into gathering systems, gas processing plants, and crude and natural gas takeaway pipelines, among other things.
Marathon Petroleum Corp.’s midstream-focused master limited partnership also has been in hot pursuit of a number of possible NGL-related projects, including MPLX’s proposed Belvieu Alternative NGL (BANGL) Pipeline and three big fractionation plants in the Sweeny, TX, area, and a planned LPG export terminal in Texas City, TX.
As a group, these projects would require millions of barrels of underground salt-cavern storage capacity for y-grade and NGL purity products along the Texas coast, as well as multiple pipeline connections to move the stuff to where it needs to be.
Today, we continue our series on Gulf Coast NGL storage with a look at the NGL side of the MLP’s Permian-to-Gulf strategy.
RBN Energy: Plains All American's Cactus II ramps up Corpus deliveries.
t’s safe to say that Permian producers had a good Christmas. Sure, their stock prices may be off a bit and their rig counts are down. But the absolute prices they are paid for their crude oil are up by almost $20/bbl versus this time in December 2018, and the price spreads between the Permian and neighboring markets have significantly narrowed as a result. What’s driving this change? There are a variety of factors at play, but chief among them is the new pipeline infrastructure that has helped lift Permian producers’ oil price realizations. Today, we check in on the status of one of the major new pipelines that have contributed to the seismic shift in the Permian oil market this year.
Shale bust redux.
For those who subscribe to The WSJ, you probably saw the "as shale wells age, gap between forecasts and performance grows" by Rebecca Elliott and Christopher M. Matthews. If the story sounds familiar, it's because it is. This this has been previously posted. From the same writers, almost exactly one year ago, January 2, 2019, also in The WSJ, "fracking's secret problem -- oil wells aren't producing as much as forecast." And then again, September 29, 2019, by the same two writers, RE and CMM, "shale boom is slowing just when the world needs oil most."  Really? Two final nominees for the Geico Rock Award for 2019. 
Geico Rock Award: The nominees for the 2019 Geico Rock Award are tracked here.

Reply: in Forbes, September 6, 2019, Dan Eberhart had a nice reply, "no, shale's not dying, it's just maturing."

*************************************
Busy, Busy Day Today?

Unless I'm missing something, the NDIC has not posted IPs for wells coming off the confidential list two Saturdays ago (since Saturday, December 21, 2019). I just checked and going back to December 21, 2019, these wells are still listed as yet to come off the confidential list. It could be a very, very busy day. And I had planned to go to the movies with my wife today. Wow.

Monday, December 30, 2019: 98 for the month; 303 for the quarter:
  • 36370, conf, Newfield, Hoffman 150-98-18-19-10H, 
  • 36134, conf, XTO, Arlys 34X-31H, 
  • 35239, conf, Lime Rock Resources, Anderson 13-24-4TFH
  • 22300, SI/NC, Bruin, FB Belford 148-95-22D-15-2T, Eagle Nest, no production data,
Sunday, December 29, 2019: 94 for the month; 299 for the quarter:
  • 36369, conf, Newfield, Hoffman 150-98-18-19-5H, 
  • 22301, SI/NC, Bruin, FB Belford 148-95-22D-15-3B, Eagle Nest, no production data,
Saturday, December 28, 2019: 92 for the month; 297 for the quarter:
  • 36368, SI/NC, Newfield, Hoffman 150-98-18-19-5H, Siverston, no production data, 
  • 36133, SI/NC, XTO, Arlys Federal 34X-31C, Siverston, no production data,
  • 34835, 2,105, Enerplus, Eos 149-93-33D-28H-TF, Mandaree, t6/19; cum 95K 10/19;
  • 34776, 357, Enerplus, Thai 148-94-11C-2H-TF, McGregory Buttes, t6/19; cum 28K 10/19;
  • 30891, 776, Oasis, Stenberg 5199 11-97B, Poe, t7/19; cum 139K 101/9;
Friday, December 27, 2019: 87 for the month; 292 for the quarter:
  • 36367, SI/NC, Newfield, Hoffmann 150-98-17-20-5HLW, Siverston, no production data,
  • 35878, 1,344, Whiting, Domaskin 21-20HU, Sanish, t7/19; cum 65K 10/19;
  • 35875, 709, Whiting, Domaskin 34-17TFHU, Sanish, t7/19; cum 27K 10/19;
  • 35744, 411, Whiting, Ogden 41-9TFHU, Sanish, t7/19; cum 59K 10/19;
  • 35699, SI/NC, Slawson, Mole 6-20TFH, Big Bend, no production data,
  • 34773, 573, Enerplus, Hidalgo 148-94-11C-2H-TF,  McGregory Buttes, t6/19; cum 63K 10/19;
Thursday, December 26, 2019: 81 for the month; 286 for the quarter:
  • 36366, SI/NC, Newfield, Hoffman 15-98-17-20-6H, Siverston, no production data,
  • 34836, 576, Enerplus, Nyx 149-93-33D-28H-TF, Mandaree, t6/19; cum 114K 10/19;
  • 30179, SI/NC, Slawson, Challenger Federal 7-29-32TFH, Big Bend, no production data,
Wednesday, December 25 2019: 78 for the month; 283 for the quarter:
  • 35782, 1,739, Hess, EN-Farhart-156-93-0409H-4, Baskin, t6/19; cum 86K 10/19;
  • 35698, SI/NC, Slawson, Mole 7-20TFH, Big Bend, no production data,
Tuesday, December 24, 2019: 76 for the month; 281 for the quarter:
  • 35903, SI/NC, Slawson, Orca Federal 1 SLH, Big Bend, no production data,
  • 35570, 451, Whiting, Anderson 11-7-2TFH, Sanish, t7/19; cum 35K 10/19;
  • 35569, 1,276, Whiting, Anderson 11-2H, Sanish, t6/19; cum 70K 101/9;
  • 35120, 593, Oasis, Nordeng 5298 13-25 9T, Banks, t7/19; cum 99K 10/19;
  • 34837, 655, Enerplus, Homer 149-93-33D-28H-TF, Mandaree, t6/19; cum 87K 10/19;
  • 34774, 1,738, Enerplus, Ancho 148-94-11C-2H, McGregory Buttes, t6/19; cum 138K 10/19;
Monday, December 23, 2019: 70 for the month; 275 for the quarter:
  • 36524, SI/NC, Slawson, Challenger Federal 9-29-32H, Big Bend, no production data,
  • 36173, drl, XTO, Lavern 42X-14H, Capa,
  • 35902, SI/NC, Slawson, Tempest Federal 1 SLH, Big Bend, no production data,
Sunday, December 22, 2019: 67 for the month; 272 for the quarter:
  • 36172, drl, XTO, Lavern 42X-14CXD, Capa,
  • 34838, 1,123, Enerplus, Hera 149-93-33D-28H, Mandaree, t6/19; cum 135K 10/19;
  • 30178, SI/NC, Slawson, Diamondback 1 SLH, Big Bend, no production data,
Saturday, December 21, 2019: 64 for the month; 269 for the quarter:
  • 36171, drl, XTO, Lavern 42X-14BXC, Capa,
  • 35901, SI/NC, Slawson, Slasher Federal 722-27 MLH, Big Bend, no production data,
  • 34746, 607, Oasis, Nordeng 5298 13-25 8B, Banks, t7/19; cum 126K 10/19;

Sunday, December 29, 2019

Re-Frack Data For A CLR Mountain Gap Originally Completed Back In 2008 -- December 29, 2019

See this note for this well.

The well:
  • 17100, 240, CLR, Mountain Gap 31-10H, Rattlesnake Point, t6/08; cum 123K 5/18; cum 471K 10/19;
We now have the re-frack data: 57 stages; 13.93 million lbs; test 3/18:

Production data before/after the re-frack:
BAKKEN9-20183025164252122623631413278813140
BAKKEN8-2018313599735753453744292442309210
BAKKEN7-20183141189414275749245918433442169
BAKKEN6-20183052661527136344257604528864326
BAKKEN5-20181726682264103645028245211007145
BAKKEN4-201856946945436137901379
BAKKEN3-20180000000
BAKKEN2-20180000000
BAKKEN1-20180000000
BAKKEN12-20170000000
BAKKEN11-20170000000
BAKKEN10-20170000000
BAKKEN9-20170000000
BAKKEN8-20170000000
BAKKEN7-20170000000
BAKKEN6-2017221712403388880
BAKKEN5-201731296239371221166

Production following original frack:
BAKKEN12-20083126452442285143014300
BAKKEN11-20082830423128407341634160
BAKKEN10-20083040063566101936453046599
BAKKEN9-2008252005229118717261545181
BAKKEN8-2008313844364352734843319165
BAKKEN7-20083139694095104330202952725
BAKKEN6-200830591456482002390303903
BAKKEN5-20083116002305000