Sunday, July 14, 2019

Trends In The Bakken -- July 14, 2019

Trends in the Bakken:
  • permitting seems to be picking up over the past few weeks
  • the number of active rigs are dropping from 60 - 65 range to 55 to 60 range during best drilling months of the year (see below; this is actually good news for investors)
  • EOG is back to work in the Bakken (EOG generally ceases new activity during the winter months)
  • CLR is "carrying the water" in the Bakken right now
    • very few other operators are reporting new wells
    • CLR seems to be accounting for about 75% of new wells coming off the confidential list
  • new areas in the Bakken not being reported with regard to wells coming off the confidential list
    • most new wells reporting are from established pads
  • although I haven't checked recently, earlier this year wells were being completed with fewer stages (35 - 45) than last year (40 - 60)
    • most wells were being completed with moderate amounts of sand (small amounts when compared to what I recall being used in the Permian); there are exceptions, EOG, for example, reported huge amounts of sand in some of its wells recently coming off the confidential list
  • the narrative suggests that production in the Bakken is being held up by lack of infrastructure; the problem is not so much pipeline or CBR as it is flaring; the state has become more tolerant of flaring but even so
  • this is most interesting: corporate presentations and news in the business sections of newspapers suggested this was the year (2019) that operators were going to concentrate on their bottom lines: cutting debt, maximizing free cash flow, etc. Apparently, some operators were getting "feedback" from their bankers and their investors that it was time to focus on finances
    • that may explain some of the reason for the decline in the number of active rigs during the best part of the year for drilling in North Dakota
    • Lynn Helms did mention some weeks ago -- before the decline -- that there would be a decline in the number of rigs this summer
  • the Director's Cut for May, 2019, data is scheduled to be released tomorrow
    • I would be surprised if the crude oil production for April, 2019, was not revised upward -- in which case it would have set a new all-time record for crude oil production in North Dakota
    • I anticipate another great report tomorrow
  • if we get another great report tomorrow, it will again suggest that the number of active rigs is not a big issue right now
    • by the way, month-after-month, North Dakota is setting new all-time production records for BOE which is not being reported by the Bismarck Tribune or other outlets; 
    • this corroborates the problem the operators and the state is having: even with flat crude oil production, the amount of natural gas production keeps increasing and NG gathering and processing companies cannot keep up with the increased production (a nice problem to have, by the way; I'm not complaining); in this business, you never want to have excess infrastructure
  • what little I know suggests that smaller operators who moved out of the Bakken to the Permian are facing huge challenges; it was incredibly expensive to buy into the Permian and the infrastructure problems were similar to the early days of the Bakken
  • it would be nice to see an analysis by Wood Mackenzie or Rystad comparing parent-well uplift and/or parent-daughter interference in the Bakken with that in the Permian
    • it's my impression that with regard to the "halo effect," the Bakken is doing just fine
    • if you don't believe me, look at this most recent post, or this blog; with regard to that latter blog, I simply can't keep up with all the examples
  • when I get the chance, I will talk about CLR and its "damn the torpedoes, full speed ahead" philosophy
Disclaimer: I remain inappropriately exuberant about the Bakken

Note: I continue to appreciate all the feedback I get from readers; I learn a lot from the readers

Shout-out: to all the roughnecks and truckers -- enjoy your summer -- summers are not long enough in North Dakota; use lots of DEET

CLR's Pletan-Dvirnak Pad Has Been Updated -- July 14, 2019

I can't decide whether to provide a new stand-alone post regarding CLR's 9-well Pletan-Dvirnak pad. It appears the graphic at the linked post has not changed; if it has, it's minor, so for now, the original post will be updated, no new stand-alone post.

On second thought, maybe I do need to do a stand-alone post. We'll see. But look at this older well:
  • 20806, 744, CLR, Dvirnak 2-7H, API: 33-025-01366; Jim Creek, t12/11; cum 339K 5/19; recent production; this well was not re-fracked according to sundry forms at NDIC or according to FracFocus:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Notes From All Over -- Part 1, July 14, 2019

Barry on the Bayou, a few observations:
  • most of the video out of New Orleans last night showed no rain, no unusual flooding, not much wind
  • this morning, on my twitter feed (granted, it's very limited) not one note about the tropical storm (a hurricane for a few minutes)
  • Drudge has not changed his banner regarding the storm
  • the power outage in NYC affecting 2.5% of the city's population appeared to have pre-empted coverage of Barry
  • "National news coverage of Tropical Storm Barry is its own disaster," Lamar White, Jr, Bayou Brief, July 12, 2019
  • WSJ, above the fold: nothing on the storm
Boeing: as predicted. We've discussed this several times -- "Boeing 737 MAX grounding could stretch into 2020" -- WSJ
  • recently reported that Boeing lost its first sale to Airbus over this debacle (I believe it was Saudi Arabia canceling the Boeing 737 MAX order and buying Airbus; if not KSA, then one of the other Mideastern countries
Oxymoron, not OXY: "Oxymoron alert: some "high-yield" bonds go negative" -- more than a dozen junk bonds, which usually carry high yields, now trade in Europe with a negative yield -- WSJ.

Must be a really, really slow news day: above the fold in the WSJ -- Trump has seen high turnover among top White House aides. And so?

Not good: Colombian rebels now have free rein in Venezuela; a "sanctuary country" as they fight the Colombian government.

By the way: that NYC blackout -- one more reason (as if it needed any more reasons) why Amazon ditching Brooklyn was the right move.

Not so forever. Who would have guessed. Forever 21 trying to avoid bankruptcy. 

The Bakken Revolution And The Pipeline Buildout -- July 14, 2019

Before I get to the ArgusMedia article, a note that a reader sent me last night:
As a further indication of the future pathways of natgas, LNG, and the amazing confluence of numerous technologies, Cheniere just signed a contract to provide LNG to the Norwegian company, Hoegh, who is placing the just-christened "Galleon" off Port Kembla, Australia.

The Galleon is a floating storage and regasification Unit (FSRU), essentially an LNG ship that has the capacity to regassify the liquid and deliver it ashore.

The Port Kembla import terminal is being built especially cheaply ($170 million) and in a very brief time frame (~16/18 months). The terminal is expected to provide 70% of the gas needs for New South Wales.

The ability to cheaply liquefy (in ever smaller volumes), store, ship, and regassify natgas is upending long standing practices on a global scale.

Combining the ability to now deliver gas quickly to far flung locations around the world, coupled with the latest iterations of built for purpose combined cycle gas plants, countries such as Brazil, Bangladesh, Jamaica, Argentina, Pakistan and several others are quickly embracing this emerging, disruptive paradigm.

World's largest FSRU is departing Turkey and soon will be setting up in Hong Kong.
Now, back to the ArgusMedia article:

Although this is a short piece, it's certainly worth reading, from ArgusMedia: how the US shale boom has propelled pipeline infrastructure buildout. Essentially it's a 2 and a half minute video but it's pretty good.

From twitter today, alerting me to the story:

Houston connectivity is growing.

Houston is the chokepoint.

Then this:

The Hunting And Fishing Page

Link here to The Bismarck Tribune.
A Bismarck man whose invention in 1964 revolutionized walleye fishing is being inducted into the North Dakota Fishing Hall of Fame.
The bottom bouncer today is a staple of most anglers’ tackle boxes, for fishing lakes or rivers with weedy or rocky bottoms that can cause a lot of lost tackle and frustration.
They have the late Bob Meter to thank. Half a century ago, his own frustration led to the creation of what has become a classic piece of tackle.
Meter was one of the North Dakotans who “put fishing on the map,” said Bill Mitzel, editor and former publisher of Dakota Country Magazine.

CLR Will Report Several Great Bakken Wells This Next Week -- July 14, 2019

Companies reporting initial production for wells coming off the confidential list this next week. 

The full list of wells coming off the confidential list this next week is posted here.

35432, conf, CLR, Syverson 4-12H,  East Fork:

DateOil RunsMCF Sold

35108, conf, CLR, Carson Peak 6-35H1, Oakdale:

DateOil RunsMCF Sold
34353, conf, CLR, Morris 4-23HSL, Oakdale:

DateOil RunsMCF Sold

35581, conf, Petro-Hunt, Dolezal 146-97-31C-30-4H, Little Knife:

DateOil RunsMCF Sold

33538, conf, CLR, Hendrickson Federal 14-25HSL,  Elm Tree:

DateOil RunsMCF Sold

  35495, conf, CLR, Burian 4-27H1, St Demetrius:

DateOil RunsMCF Sold

 35080, conf, CLR, Carson Peak 7-35H, Oakdale:

DateOil RunsMCF Sold

34354, conf, CLR, Hawkinson 16-22HSL 1, Oakdale:

DateOil RunsMCF Sold

 34352, conf, CLR, Morris 5-23H2, Oakdale:

DateOil RunsMCF Sold

35081, conf, CLR, Carson Peak 8-35H2, Oakdale:

DateOil RunsMCF Sold

Wells Coming Off The Confidential List This Next Week -- July 14, 2019

Monday, July 22, 2019: 38 for the month; 38 for the quarter;
35758, conf, Petroshale, Helen 2TFH
35176, conf, MRO, State Eileen 34-36TFH

Sunday, July 21, 2019: 36 for the month; 36 for the quarter;
35432, conf, CLR, Syverson 4-12H, 

Saturday, July 20, 2019: 35 for the month; 35 for the quarter;
35919, conf, Petroshale, Helen 1MBH, 
35175, conf, MRO, State Eggert 24-36H, 
34891, conf, BR, Gorhumbian 3A MBH-ULW, 

Friday, July 19, 2019: 32 for the month; 32 for the quarter;
35108, conf, CLR, Carson Peak 6-35H1
34353, conf, CLR, Morris 4-23HSL,
33475, conf, EOG, Liberty LR 47-1416H, 
33474, conf, EOG, Liberty LR 110-1416H, 

Thursday, July 18, 2019: 28 for the month; 28 for the quarter;

Wednesday, July 17, 2019: 28 for the month; 28 for the quarter;
35581, conf, Petro-Hunt, Dolezal 146-97-31C-30-4H,
33538, conf, CLR, Hendrickson Federal 14-25HSL, 

Tuesday, July 16, 2019: 26 for the month; 26 for the quarter;
35524, conf, MRO, Mason 14-31TFH
35495, conf, CLR, Burian 4-27H1
35080, conf, CLR, Carson Peak 7-35H, 
31804, conf, EOG, Riverview 36-3031H, 

Monday, July 15, 2019: 22 for the month; 22 for the quarter;
35525, conf, MRO, Hayes 14-31H, 
34354, conf, CLR, Hawkinson 16-22HSL 1
34352, conf, CLR, Morris 5-23H2

Sunday, July 14, 2019: 19 for the month; 19 for the quarter;
35526, conf, MRO, Gwen 44-36TFH,
31805, conf, EOG, Riverview 25-3031H, 

Saturday, July 13, 2019: 17 for the month; 17 for the quarter;
35801, conf, CLR, Carson Peak 8-35H2
31806, conf, EOG, Riverview 24-3031H, 

Coal -- Part 3, I Guess -- July 14, 2019

This is pretty cool. For the past couple of days I've been doing a short series on coal (see this link).  Today I noted that oilprice posted a story yesterday (July 13, 2019) on the very same subject with the very same them.

The Book Page

From the Tate Museum in London [UK], our older daughter brought me a copy of Hamlet: Globe to Globe -- 193,000 Miles, 197 Countries, One Play, Dominc Dromgoole, c. 2018.

Absolutely fascinating. In addition to the story, I love the "English" or British idioms. I find myself initially confused, not understanding a particular idiom or a particular way a sentence is structured -- after several re-readings, or more clues a few pages later, I figure it out. I may provide a list of such words, phrases. We'll see.

Example: very first page, second sentence: "away days." I had no idea what the author was talking about.

When I was in the USAF, we called our annual strategic sessions "offsites" because we generally went off-base for one or two days to work on strategic planning. It turns out the Brits call these "offsites," "away days."

The story is about the Shakespeare's Globe Theatre [London] players touring all seven continents and 197 countries performing Hamlet.

Page 1, introduction, in the planning stages,
We imagined that we would attract student companies and amateur groups, but as the idea spread, it captured the imagination in the way only stupid ideas can, and grew rapidly in scale. Everyone wanted to join it -- apart from the French -- and we were inundated with enthusiasm from all corners of the globe.
Including North Korea.

But not France.


As Good As The Permian Is Said To Be, It's Hard To Believe Those Wells Are Better Than These Wells -- July 14, 2019

These graphics were posted a few months ago. Let's see how those wells are doing that are identified in the second graphic.

The graphics:


PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare