Inappropriately Exuberant About The Bakken -- Again -- March 1, 2019

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The market: who wudda thought?

Forbes investing course 101: climbing a wall of worry. Decades ago, I took the Forbes investing course. I've read some of Benjamin Graham, don't remember much.

WTI: fundamentals suggest that oil should be trending lower and yet it is trending higher.

Tea leaves: everything suggests the market will continue to trend higher, but the jump today was quite remarkable it seems, but still the Dow is still not much above 26,000.

TSLA: at the end of today, the company will have about $1 billion less cash than it had yesterday, if reports are correct. Right now the Yahoo!Statistics page shows Tesla has $3.69 billion in cash or $21.34/share. We'll see if that changes next week. Unless it's already changed and I missed it. TSLA is down almost 8% in early morning trading, off $25 and trading for about $295. It certainly appears that investors are not happy with:

• the $1 billion debt payment
• the announcement that show rooms are cloing
• the announcement that the company continues to lower the MSRP on its cars

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Back to the Bakken

Disclaimer: I am inappropriately exuberant about the Bakken. I often make simple arithmetic errors. I often mix facts with opinions with extrapolations with assumptions and it is often hard to tell them apart. I do this for my own benefit to help understand the Bakken. 

I've linked the CLR Pasadena wells several times in the past few weeks, it seems. Another CLR Pasadena well came off the confidential list today. I wonder if anyone paid attention to the frack strategy:

• 34591, 2.635, CLR, Pasadena 4-11HSL, Banks, 68 stages; 13.5 million lbs, t11/18; cum 137K 1/19;

From FracFocus:

• 12,616,683 million gallons of water
• water: 88.25564% by mass
• calculating proppant mass from that data (link here) 
• 12,616,683 gallons of water * 8.35 pounds/gallon of water = 105,349,303 pounds of water
• 142.956 million lbs
• 100-88.25564 = 11.744%
• 0.11744 * 142.956 million lbs = 16.79 million lbs sand
• my calculations from FracFocus are always on the high side for the lbs of proppant but always in the "ballpark" as they say

From the NDIC well file:

• well spud date: February 17, 2018
• rig spud date: March 10, 2018
• cease drilling: April 1, 2018
• TD: 22,606'
• tVD: 10,967.31' (0.31 feet = 3.72 inches)
• target: middle Bakken
• the curve landed at 10,987.61' TVD, approximately 13' below the top of the target zone and approximately 22' into the middle Bakken
• for the targeted lateral section, the targeted TVD zone ranged between 9' and 27' below the top of the middle Bakken
• for those interested, the Neset geologist's report is incredibly detailed describing the lateral drilling
• drilling cased in the lateral section approximately 2' above the top of the target zone
• the rate of penetration average 250 feet/hour
• background gas average 869 units with a maximum of 3,539 units
• lateral #1 reached total depth with an estimated 91.9% of lateral footage within the middle Bakken target zone; 5.0% of the total footage is estimated to be above the target zone; 3.1% is estimated to be below the target zone

In the production profile below, note:

• the most recent month show, 1/19, was only 12 days of production; 22,286 extrapolates to 55,715 bbls/30 day-month
• the first full month of production, a full 30 days, was 63,845 bbls
• the first nearly full month of production after all was said and done, 42,580 bbls
• So, in three months, had they been full 30-day months: about 162,000 bbls x $50 at the well head = $8.1 million
• cost to drill / complete a well: $6 - $8 million in the Bakken; I assume this one was at the "high" end
• this well will produce for 35 years

Production profile:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2019	12	22286	22559	17602	24039	18392	5496
BAKKEN	12-2018	30	63845	63786	49843	60698	17628	42714
BAKKEN	11-2018	27	42580	42513	40310	54655	38023	16319
BAKKEN	10-2018	4	7415	7161	7463	10386	6928	3458
BAKKEN	9-2018	3	954	928	0	0	0	0
BAKKEN	8-2018	6	244	244	4667	0	0	0