The Million Dollar Way (The Bakken Oil Blog): 04/10/19

Wednesday, April 10, 2019

The False Precision Is Truly Non-Credible -- April 10, 2019

Link here.

This is "parts per million."

Fourhundredelevenpointninesevenpartspermillion. LOL.

Can you imagine the headline had it been fourhundredelevenpintninesix?!?!

And how do we know whether it was 411.969 or 411.971? Why won't Mauna Lao Observatory release the unredacted data with all the supporting data? And why does it take so long for the data to be released?

Last month it was 411.75.

Two New Permits; Two Permits Renewed -- And That Was All -- April 10, 2019

Active rigs:

$64.52	4/10/2019	04/10/2018	04/10/2017	04/10/2016	04/10/2015
Active Rigs	62	59	52	31	93

Two new permits:

Operators: Whiting
Field: Glass Bluff (McKenzie)
Comments: Whiting has permits for a 2-well Monson pad in section 32-152-103 in Glass Bluff oil field;

Two permits renewed:

Lime Rock Resources: two State Dvorak permits, both in Dunn County

And that was it.

Wednesday, April 10, 2019, T+98, Part 1

Biggest Apple story not reported yesterday? Except over on MacRumors and the WSJ? From The WSJ -- Apple music has overtaken Spotify in US paid subscribers.

Apple Music has surpassed Spotify's paid subscriber count in the United States, according to sources familiar with the matter who spoke with The Wall Street Journal. The shift reportedly happened earlier in 2019; Apple had more than 28 million U.S. subscribers in February compared to Spotify's 26 million paid U.S. subscribers.

This was reported last summer an industry source, but now months later The WSJis corroborating the report.According to the paper, Apple Music has been adding subscribers "more rapidly" than Spotify, with a monthly growth rate of 2.6 to 3 percent, compared to 1.5 to 2 percent for Spotify.

That seems pretty straightforward. Now, let's look at the comments over at MacRumors:

apparently Verizon customers get Apple Music free
so, if Spotify partnered with AT&T...
reminds me of when Internet Explorer was the most widely used browser (because it came installed on every PC) -- I did not know you had to pay for Internet Explorer every month

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Texas Taxes

A most regressive tax plan introduced.

Folks are complaining about high property taxes here in Texas, as property values go up and up and up.

Folks are looking for property tax relief.

Suggestion: cut property taxes but increase sales tax.

Sales tax: nothing more regressive than sales tax.

NOG's 25th Annual IPAA OGIS Presentation, April 9, 2019

Link here.

Note: in a long note like this there will be factual and typographical errors. Some numbers are rounded. Opinions/comments are interspersed with data points. This is posted b for my benefit to better understand the Bakken. If this information is important for you, go to the source.

Data points:

net acres: 157,083; 93% held by production; 40+ operator partners

the majority of the operator partners are the best in the business
majority of acres in the Bakken "big 4" counties
production: 36,258 boepd
proved reserves: 135.5 million boe
3,737 days of production at current rate = 10 years

cash flow, 4Q18: $500 million; from operations: $430 million
look at this: 22 employees

that's it: 22 employees

non-consent: if NOG does not participate in any given well, NOG does not lose its rights to participate in future wells in same zones in same drilling spacing unit (a great example of an open-book test)
experience: over 5,000 wells so far; 30%+ of all Bakken and Three Forks wells drilled so far --

I knew it had to be high; I did not know it was that high

the Bakken:

NOG says 7.4 billion bbls of recoverable oil
15,000 producing wells so far

the Red Queen? Nope: "Williston rig activity may be plateauing, but production continues to grow as well efficiency and recovery is enhanced"
current wells with EURs that now exceed 1 million boe

2017: 12 month production up 25% over 2016
2018: 12 month production up 6% over 2017

NOG will continue with accretive acquisitions
Debt (numbers rounded):

12/13/18: $830 million
6/40/18: $635 million
Notes: 8.5% due 2023 -- $700 million
Revolving credit facility -- $140 million

US Crude Oil Inventories Increase By A Whopping 7.0 Million Bbls -- April 10, 2019

Updates

Later, 9:44 p.m., April 10, 2019: from twitter --

Later, 12:00 noon, April 10, 2019: after the release of EIA petroleum data this morning, WTI was essentially flat, maybe up 24 cents. Since then, WTI continues to rise, now up almost a percent for the day. I guess no one cares that US crude oil inventories have increased by 17 million bbls over the past 3 weeks, or 14.2 million bbls over the past two weeks.

The market: a great market today, the kind I like to see. The Dow is down 30 points, but my watchlist is practically all green.

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

Original Post

EIA's weekly petroleum report, link here:

US crude oil inventories up a whopping 7.0 million bbls
LOL -- at 456.5 million bbls, the US crude oil inventories are at the five year average -- going unreported is that that the 5-year average now includes the Saudi $1 trillion mistake / Saudi surge of 2014 - 2016
at 456.5 million bbls, largest inventory in 20 weeks
but look at this: total motor gasoline inventories decreased by 7.7 million bbls just as the US starts to enter its annual driving season; it can all be traced back to the Obama policies; not enough heavy oil to counter al that light oil, and, there are some refineries "down" due to "unexpected" maintenance; gasoline will get expensive;
refineries operating at 87.5% capacity; at the far low end of the continuum
crude oil imports are 15.5% less than the same four-week period last year -- this is not trivial; if that is mostly heavy oil, it's a problem for refiners
everything else is white noise

WTI after the report: up 24 cents, at $64.22. Not sure how this is being calculated; at the start of the day, WTI was $64.43 -- both from the same source (oilprice)

Week	Week Ending	Change	Million Bbls Storage
Week 0	November 21, 2018	4.9	446.9
Week 1	November 28, 2018	3.6	450.5
Week 2	December 6, 2018	-7.3	443.2
Week 3	December 12, 2018	-1.2	442.0
Week 4	December 19, 2018	-0.5	441.5
Week 5	December 28, 2018	0.0	441.4
Week 6	January 4, 2019	0.0	441.4
Week 7	January 9, 2019	-1.7	439.7
Week 8	January 16, 2019	-2.7	437.1
Week 9	January 24, 2019	8.0	445.0
Week 10	January 31, 2019	0.9	445.9
Week 11	February 6, 2019	1.3	447.2
Week 12	February 13, 2019	3.6	450.8
Week 13	February 21, 2019	3.7	454.8
Week 14	February 27, 2019	-8.6	445.9
Week 15	March 6, 2019	7.1	452.9
Week 16	March 13, 2019	-3.9	449.1
Week 17	March 20, 2019	-9.6	439.5
Week 18	March 27, 2019	2.8	442.3
Week 19	April 3, 2019	7.2	449.5
Week 20	April 10, 2019	7.0	456.5

Note: in the graphic above, for the past 20 weeks, the current inventory of 456.5 million bbls is the largest inventory reported.

Minnesota Schools And Churches Closed Due To Global Warming -- April 10, 2019

That historic "springtime" snowstorm wallops the midwest.

Snow is coming down fast and furious in the Rockies and north-central U.S. and is expected to accumulate up to 30 inches in some pockets. Meanwhile, thunder and lightning are accompanying the intense snowfall in some areas.

The storm blasted parts of the West with heavy rain, heavy mountain snow, power-cutting winds and blowing dust on Tuesday with more on the way into Wednesday night.

The early stages of the storm knocked out power to 50,000 in the Los Angeles area and kicked up dramatic dust storms in Nevada.The already massive storm will continue to gain strength across the nation's heartland into Thursday, bringing everything from damaging winds to blizzard conditions, flooding rain and severe weather.

As the storm stretches across the country, a total of 200 million people in the United States will feel the impacts of this intense weather system that may be second only in strength to the "bomb cyclone" that hit much of the same area about a month earlier.

One wonders if the NOAA thermometers will "catch" this storm, and/or if NOAA will seasonally adjust the readings.

That "historic winter storm" starting to impact the Great Plains.

From KEYC:

Albion Lutheran Church-St. James: No Lenten services or supper
Augustana/East Sveadahl Ministries: Closed Today; No activities or worship today
Butterfield-Odin: Closing at 9:30 AM
Comfrey: Closing at 9:00 AM
GFW Schools [WEB]: Closing at 10:45 AM
Marshall: Closing at 10:00 AM; No PM Preschool
Milroy: Closed Today
MN Valley Lutheran: Closing at 9:45 AM
Mountain Lake [WEB]: Closing at 9:00 AM; Kindergarten Round-Up postponed until a later date.
Mt. Lake Christian: Closing at 8:50 AM
New Hope Lutheran-Comfrey: No evening activities; No Soup Supper or evening church services
Redwood Area [WEB]: Closing at 9:55 AM
SJL-Northrop: Closing at 11:00 AM
Sleepy Eye Public: Closing at 9:30 AM; No evening activities Springfield: Closing at 9:30 AM
St. James [WEB]: Closing at 10:30 AM
St. John's Lutheran School-Sleepy Eye: Closing at 9:30 AM
Windom: Closing at 9:00 AM

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Global Warming: The Science Is Settled

But ... Human Evolution ... The Answer Is Still Out There

From The WSJ:

a new species
"a good case that this is something new that we have not seen before"
for the first time, the Philippines is part of the evolutionary debate
new species: Homo luzonensis

This Hess Sivertson Well Coming Back On Line? -- April 10, 2019

From an earlier post:

January 5, 2019: #30084, off line as of 4/18; a huge well; one day of production, 2/19;

The well:

30084, 1,348, Hess, BB-Sivertson-LN-151-95-1719H-1, Blue Buttes, t4/15; cum 221K 2/19:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	2-2019	1	9	0	1	2	0	2
BAKKEN	1-2019	0	0	0	0	0	0	0
BAKKEN	12-2018	0	0	0	0	0	0	0
BAKKEN	11-2018	0	0	0	0	290	0	290
BAKKEN	10-2018	5	0	0	108	883	0	883
BAKKEN	9-2018	2	0	0	43	928	0	928
BAKKEN	8-2018	1	50	0	12	1094	0	1094
BAKKEN	7-2018	0	0	0	0	0	0	0
BAKKEN	6-2018	4	223	806	66	1028	223	805
BAKKEN	5-2018	28	2389	2496	457	7997	720	7277
BAKKEN	4-2018	30	2696	2766	487	8394	22	8372

Sister wells with little change past few months (#30082 and #30083).

It Appears Slawson Has Completed/Is Completing The Jore Federal Wells In Clarks Creek -- April 10, 2019

Some life in this well? From an earlier post --
January 6, 2019: #28747; a mediocre Slawson Clarks Creek well off line much of this year; nice jump in 2/19; will watch for a few more months.
The well:

28747, 2,592, Slawson, Jore Federal 2-12H, Clarsk Creek, t9/14; cum 190K 2/19;

Recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	Vent/Flare
BAKKEN	2-2019	6	1207	1179	8743	1711	1546
BAKKEN	1-2019	4	49	0	0	82	57
BAKKEN	12-2018	0	0	0	0	0	0
BAKKEN	11-2018	0	0	0	0	0	0
BAKKEN	10-2018	1	18	345	0	27	20
BAKKEN	9-2018	6	457	209	222	621	543
BAKKEN	8-2018	0	0	0	0	0	0
BAKKEN	7-2018	0	0	0	0	0	0
BAKKEN	6-2018	0	0	0	0	0	0

The Jore Federal wells are tracked here (that post has not been updated in quite some time -- needs to be updated).

It looks like this Jore Federal pad is now being fracked/completed. For example:

31191, SI/NC, Slawson, Jore Federal 13-12TF2H, Clarks Creek, t--; cum --: spud date, May 24, 2018; cease drilling, June 18, 2018; Three Forks Second Bench; vertical section drilled in 84 hours; one trip was made due to motor failure; the curve was drilled in 20 drilling hours; second bench gas units as high as 1,599 units; the well bore was 100% within the target zone; top of Three Forks hit at 10,665' TVD and the top of the Three Forks Second Bench hit at 10,703' TVD; TVD was 10,756.18 feet;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	2-2019	9	6391	5910	17943	11559	0	10833

Three Of The Five XTO Little Pete Federal Wells Back On Line -- Great Wells -- April 10, 2019

Three of the five XTO Little Pete Federal wells are now back on line. See this post where these wells are tracked.

32217:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	2-2019	6	2191	2616	2359	2745	1857	869
BAKKEN	1-2019	21	12662	12917	14007	14795	12876	1830

32218:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	2-2019	24	13101	12610	12473	16319	16122	30
BAKKEN	1-2019	9	5171	4949	4927	6745	6699	0

32219:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	2-2019	24	12286	11710	20577	13672	11960	1588
BAKKEN	1-2019	7	2138	2046	5253	3155	3133	0

32220: remains off line.

32221: remains off line.

Wednesday, April 10, 2019, T+98

List of accomplishments at day 98 for the 115th US Congress:

Moving on.

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

The market: early morning trading --

WTI: said to be up 45 cents but seems to be where it was yesterday at $64.43
DOW: down 20 points
XLNX: up almost 2%; up over $2/share; now trading at $131/share
UNP: still struggling; down another half a percent;
EOG: recovers a bit; trading at $99
NOG: nice; up a percent
JAG: nice; up half a percent
CVX: same here; up half a percent
BA: wow; when will the bleeding stop; down another $5.00; trading around $364
TSLA: infusion of cash from FiatChrysler as predicted some years ago; up $2.42/share

Mid-morning trading, except for XLNX, nothing remarkable

XLNX: up almost $4/shr

Two Wells Coming Off Confidential List Today -- April 10, 2019

Historic storm: from Accuweather -- it could be quite a storm. In the Great Plains, it looks like South Dakota will get hit the hardest.

Depending on the exact track of the storm, snow could extend as far south as Kansas.
North Dakota, less the southernmost counties, may miss the brunt of this storm.

Inventory: crude oil inventories still significantly above normal level -- Saudi. With huge bond offering Saudi has wiggle room to cut production. Note: all things being equal, Saudi will increase production within a few months as domestic demand increases.

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Back to the Bakken

Wells coming off the confidential list today -- Wednesday, April 10, 2019: 31 wells for the month; 31 wells for the quarter

33684, drl, Crescent Point Energy, CPEUSC Berner 3-19-18-157N-99W MBH, Lone Tree Lake, no production data,
33683, drl, Crescent Point Energy, CPEUSC Nelson 3-30-31-157-99W MBH, Lone Tree Lake, no production data,

Active rigs:

$64.43	4/10/2019	04/10/2018	04/10/2017	04/10/2016	04/10/2015
Active Rigs	62	59	52	31	93

RBN Energy: pipe constraints, crude economics take gas markets on a wild ride.

The winter 2018-19 natural gas market was one of the most chaotic in recent memory, with the NYMEX Henry Hub futures contract last fall rocketing up to nearly $5/MMBtu in a matter of weeks, only to collapse in late 2018/early 2019 to an average $2.60 in January. The physical gas market also swung to extremes in recent months, setting both the highest ($200/MMBtu at the Sumas, WA, hub) and lowest (negative $9.00/MMBtu at the Waha hub) trades ever recorded in the U.S. These anomalies occurred amid steep supply growth from the Marcellus/Utica and Permian producing regions and rapidly advancing demand, particularly from burgeoning LNG exports along the Gulf Coast, while infrastructure scrambled to keep pace to bridge the two. And there’s more of that volatility ahead. Close to 5 Bcf/d more LNG export capacity is being added this year alone, and Lower-48 gas production is poised to continue growing. Today, we lay out our view of the recent volatility and the biggest factors shaping the gas market over the next five years.

This past winter was one of records and extremes. Gas production continued to set new highs, topping 89 Bcf/d for the first time at the end of March and averaging just under 88 Bcf/d for the November-March period. Marcellus/Utica production growth slowed a bit in recent weeks, in part due to weather-related freeze-offs and some pipeline outages. But the increases before that were astronomical, with average volumes this winter (November through March) up by a whopping 9.5 Bcf/d from a year earlier — and, as we’ll get to later, we haven’t seen the last of it. Domestic demand also set records, led by the power sector. But, by far, the biggest movement on the demand side was in exports, which peaked at nearly 10.5 Bcf/d in mid-March, up 3.2 Bcf/d (or 40%) year-on-year, with the bulk of that increase coming from LNG exports, primarily from the Gulf Coast. At the 10.5-Bcf/d level, that’s about 12% of total Lower-48 gas production moving to export markets now

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What Condition My Condition Is In

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Wednesday, April 10, 2019