Saturday, August 10, 2019

Random Look At Re-Fracked Wells In The Helis Grail -- August 10, 2019

The note posted some time ago:
  • 23278, 2,143, QEP, Paul 1-26/35H, Grail, Three Forks, t1/14; cum 294K 6/19; huge jump in 3/18; re-fracked 2/18; 30 stages; about 9 million lbs; all four wells on this pad were re-fracked and resulted in huge results: #25304; #25305; #25306
23278, production after the re-frack:
BAKKEN7-201826685869011142920184185681616
BAKKEN6-201830916091521534520540178912649
BAKKEN5-20183110636105701689420252182222030
BAKKEN4-20183010970110072007617475157651710
BAKKEN3-20182713987139744535422124197982326
BAKKEN2-20181201141000
BAKKEN1-201832802341544894740
BAKKEN12-201731221524131199527251440
BAKKEN11-201730229821711261295028848
BAKKEN10-20173121162141119730092569363
BAKKEN9-20173022012150158929772531435

Posting the jump in production of the other three wells:

25306, 2,460, QEP, Paul 1-26-35BH, Grail, t12/13; cum 461K 6/19:
BAKKEN9-20183011161110529735448323291311836
BAKKEN8-20183111655117568977419542824313711
BAKKEN7-2018311286012867964037893348603033
BAKKEN6-20183013735137671123134265298464419
BAKKEN5-20183118438183571600040027360164011
BAKKEN4-20182621973220012339740445364873958
BAKKEN3-20182923938236674431137786338133973
BAKKEN2-20181300000
BAKKEN1-201800970000
BAKKEN12-20172921652320914473246170
BAKKEN11-201730194718787353903381611
BAKKEN10-2017312274228276239843402481

25305, 2,243, MRO, QEP Paul 2-25-35BH, Grail, t12/13; cum 414K 6/19:
BAKKEN9-2018301070410561611326891197427099
BAKKEN8-20182488078980473424680166148066
BAKKEN7-2018311400214053743135997331152882
BAKKEN6-2018301702317060977039183341295054
BAKKEN5-20183122665226151384748496436364860
BAKKEN4-20183031451312862361155051496635388
BAKKEN3-20181816359163482454924435218662569
BAKKEN2-2018120931000
BAKKEN1-201833362831268157890
BAKKEN12-20173127022933908616360130
BAKKEN11-201730272725838945412529115
BAKKEN10-2017312587253194541143512497
BAKKEN9-2017261715170177933262828486
BAKKEN8-2017312613268897872707153117
BAKKEN7-20173132803252106592669065201

25304, 2,257, QEP, Paul 2-26-35TH, Grail, t12/13; cum 359K 6/19:
BAKKEN7-2018311124711250972724556225901966
BAKKEN6-20183011859118961106425900225593341
BAKKEN5-20183116438163771586331570284063164
BAKKEN4-20182920602206572249134540311603380
BAKKEN3-20183024956247794331637711337463965
BAKKEN2-2018110829000
BAKKEN1-201832091821126155960
BAKKEN12-20173118131979753407239730
BAKKEN11-20173019091809784306829999
BAKKEN10-2017311820183094029162490352
BAKKEN9-2017301765171372524612092360
BAKKEN8-2017311976199610863335328154
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The Bakken Is Like A Box Of Chocolates -- One Never Knows What One Might Find -- August 10, 2019

I was curious about this well because it's production jumped 6-fold, yes, another MRO well in the Bailey oil field:
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-201923223922535251630865523
BAKKEN5-201964566607534394182
BAKKEN4-2019302723274461622386681218
BAKKEN3-20193131723087753000
BAKKEN2-2019283118310080723111116829
BAKKEN1-201931341833818322684224735
BAKKEN12-20183136703854944000
BAKKEN11-20183041394068132727041602143
BAKKEN10-201831468546431736297611011433
BAKKEN9-20183048874926185430151841721
BAKKEN8-20183156165674284035612840216
BAKKEN7-20183160285937362035982266798
BAKKEN6-201830578256524868442829101005
BAKKEN5-2018131971180933041513603674
BAKKEN4-2018002220000
BAKKEN3-20180000000
BAKKEN2-20180000000
BAKKEN1-20180000000
BAKKEN12-20171520344037
BAKKEN11-2017144354865839627417
BAKKEN10-201731859909250120186861
BAKKEN9-201730845794150837214420
BAKKEN8-201731865871110792315288
BAKKEN7-201731845814124804439181

So, what does its neighborhood look like? The graphic:


The wells of interest:
  • 36737, ros, MRO, Kloster 24-12H, 33-025-03873, Bailey,
  • 36736, drl, MRO, Emil 24-12TFH, 33-025-03872, Bailey,
  • 36735, drl, MRO, Ritter 34-12TFH, 33-025-03871, Bailey,
  • 16654, 311, MRO, Buehner 34-12H, Bailey, t8/07; cum 192K 8/07; the well is back on line:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-201928153615487531285690418
BAKKEN5-2019932323142129884160
BAKKEN4-20190000000
BAKKEN3-20190000000
BAKKEN2-20190000000
BAKKEN1-201900180000
BAKKEN12-2018123063697831117991
BAKKEN11-20183084382731979849653
BAKKEN10-201831924914223846324421
BAKKEN9-201830944940161800504198
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Idle Rambling On A Saturday Evening -- August 10, 2019

Guns, NRA, and the Second Amendment: there is such an incredibly great way to handle this issue. I would love to blog about it, but I'm not ready to wade into that quagmire. But there are some huge opportunities for Trump and/or his Democrat opponent, whoever that might be, to really propose a grand plan, ala "ObamaCare" and solve the problem at the federal level once and for all. It starts with going back to what the founders meant with regard to private ownership of guns: take the founders seriously but not literally.

Beautiful evening: poolside. Sun doesn't set for another hour but the shade of the trees has completely blocked it out.

Disneyland: update, August 9, 2019. I'll never see Disneyland again, nor will I ever see Disney World. I visited Disneyland more than a half dozen times; enjoyed every visit. During my last visits I would take my Wall Street Journal, find a place to have a cup of coffee on Main Street and pretty much stay settled until noonish. In the afternoon, do a few air-conditioned rides; a dinner; and, then watch the fireworks. I think the last time I went, one ride. Pirates of the Caribbean. Lots of great memories. Disney tickets are under-priced.

North Korea: it's too bad. The country lost its one opportunity. Will never get it again. The North Korean military, of course, doesn't see it that way.

Grilling: potatoes. WSJ.
Like woolly socks and puffy parkas, baked potatoes are usually considered cold-weather comforts. This miffs me, a cook who’d make potatoes my desert-island staple.

So I was thrilled when I flipped open “Charcoal,” a new live-fire cookbook from Los Angeles chef Josiah Citrin, and found a recipe for “loaded” potatoes with crème fraîche, aged Gouda and herbs. Charred and crackling on the outside, tender at the center, they’re what Mr. Citrin calls his “fire-roasted take on the standard steakhouse potato”—and what I call the answer to my warm-weather baked potato cravings.

With a little attention to temperature control, just about any grill can do double duty as an outdoor “oven”—and save you from toiling in a sauna-like kitchen. And grilling potatoes is a largely hands-off affair: less time stooped over the grill, more time sipping rosé.

I called up Mr. Citrin for a few pointers, and he assured me there’s no need to get hung up on fussy details. Sure, at his restaurant, Charcoal, Mr. Citrin insists on oversize, 1-pound Yukon Gold potatoes for their creamy, subtle flavor.
But he said it’s perfectly fine to substitute russets. And while he buries whole potatoes, naked, in a bed of smoldering embers—an approach that produces a charred jacket and sweet, smoky flesh—less dramatic yet hardly less delicious results can be achieved by wrapping potatoes in aluminum foil and cooking them over indirect heat on an ordinary charcoal kettle or gas grill.
Finally, and reasonably enough, for perfectly even, tender, fluffable flesh, he suggests parboiling the potatoes ahead of time, briefly, in heavily salted water. “There’s about a million ways to approach grilled baked potatoes, and they’re almost all great,” he said. 
Comment: I like the idea of burying whole potatoes, naked, in a bed of smoldering embers.
Tonight for dinner: twice-baked potatoes with spicy chili.

Hatch chili season in Texas, New Mexico, is underway.

FedEx split from Amazon: plenty of slack in the system. USPS needed this boost.

Recession just around the corner: heavy-duty truck orders hit lowest level in nine years. Class 8. I don't know about "specialty truck" business, e.g., Western Star.

Steyer: can he get into the debates? You know things are going badly when "free chow" resulted in a crowd of only 25 people (half of them, I bet, were "journalists.") At least he had time to shake everybody's hand. Twice. Necessary to be in the debates: at least 130,000 unique donors and reach at least 2% in four approved national polls before ... August 28, 2019 -- to win a slot on the debate stage in Houston. Steyer is currently polling, through August 6:
  • 1%: the Economist
  • 0%: SUSA
  • 1%: Quinnipiac
  • 1%: Politico
Best comment at the Steyer article:
I would like him to talk about a political system where outrageous sums of money are poured into election campaigns.
Six months until the first primary. Six months in Iowa. Wow, get a life. If I were a billionaire, I would spend it anywhere but in Iowa. And my mom is from Iowa so I feel I can say that.

Our Town, Iris DeMent
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A Question Many Are Asking, I'm Sure -- And CLR Fields It Brilliantly -- August 10, 2019

Compare this back and forth with the "back and forth" one might expect at a Tesla earnings call.

From the transcript:

Q:
And my kind of related question, if I may, is -- and I don't meant to sound petulant in any way, but what is the value of Continental being a public company?
Harold Hamm:
Okay, I'll take that, Doug. First of all, on CAPEX, we've -- by releasing seven rigs we certainly expect that CAPEX in second-half of the year is normally much slower. And John went through the quarter-by-quarter rundown. So will we be spot on with the [$2.6 billion]. I think we're going to be really close, and we certainly have capability here to adjust on the fly as we go forward.
But talk about the value of being public, in today's market we don't see a lot of value in it, just to tell you like we see it here today, but we can't control the market. We can control what we're dealing with here on a daily basis. And that's what we're doing. We didn't start a buyback program to go public or private. We think as long as value is not reflected in the stock we got to be buying it back, and that's what we're doing. And that's what we'll continue to do.
******************************************

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

*************************************

Comment: this might be as good a time as any to reiterate the purpose of the blog. This is not an investment site.

The "welcome/disclaimer" site is incredibly long but taken as a whole should give folks an idea what the blog is all about.

From the "welcome/disclaimer":
This is a blog, short for "web log," or diary.  It was started for my use only since HTML provided a great way to track the Bakken boom. I decided to open it to the public for various reasons which I discuss elsewhere [the short answer: others reading the blog and responding have taught me a lot about the Bakken].

I will make mistakes, and I have made some doozies. Most of the mistakes could have been avoided had I posted more slowly, and had the posts been reviewed by an expert in the oil and gas industry. If something looks wrong, it probably is. If a [material] mistake is brought to my attention, I will address it immediately. If I ever get the feeling that my posts on the Bakken are doing more harm than good, I will bring down the site. It is not my intention to mislead anyone on the Bakken.
The longer version:
Summary
  • this is not an investment site
  • "million dollar way" has nothing to do with investing; it comes from the metonym for US 2 & 85 leading north out of Williston where I grew up; the "million dollar way" was my "way out of Williston" literally, figuratively, and metaphorically
  • the writer has no formal training and no experience in the oil and gas industry
  • when the writer first started blogging, he knew nothing about horizontal drilling; he still knows very little
  • the writer is inappropriately exuberant about the Bakken
  • the writer is inappropriately exuberant about investment opportunities for those with long horizons, but has no formal training and/or education in investing
  • this is a blog; it is difficult to separate fact from opinion on this blog and most other blogs
  • all information on the Bakken is dynamic; information about the Bakken may change even as the post is being posted
  • all information on the Bakken is posted in "good faith"
  • non-Bakken information is generally tongue-in-cheek; the reader should presume such information is opinion
  • posts on global warming and ObamaCare are there to help put the Bakken into perspective
  • posts regarding the stock market and investing are there to help make sense of the Bakken; if one wants to better understand the Bakken, follow the money
  • posts on Apple (AAPL) are there because I grew up with Apple computers and am fascinated with the business model; I used to say that I would never own shares of AAPL stock; that is no longer true
  • politically the writer is a social conservative, a fan of Ronald Reagan; not a Republican 
  • the writer does not watch television as a rule, so has no clue what talking heads are talking about on a real-time basis
  • the writer has a very, very thin skin and never could have made it as a businessman in the real world
  • the writer has a very, very thin skin and never could have survived the oil and gas industry
  • the blog is nothing more than the idle comments I would have with friends at a local cafeteria in Williston
  • the blog is full of typographical and factual errors; if something looks wrong, it probably is
  • the blog is "for my use only" but folks are free to read it
  • any photos folks send to me I assume are in the public domain unless otherwise stated by the sender
  • the webmaster works very hard at keeping anonymous those readers who wish to remain anonymous but may not always succeed
  • when it comes to the standard investment disclaimer, I use the same "philosophical" disclaimer that folks use at SeekingAlpha
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CLR Presentation -- 2Q19 -- Investor Update

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

CLR website, presentations link here.

2Q19 earnings transcript: SeekingAlpha. Archived.

August, 2019, investor update, dated August 5, 2019.

Focus: shareholder returns.

Value generators, ongoing --
  • sustainable, cash flow positive growth: up to $5 billion FCF next five years
  • net debt reduction: $1.3 billion net debt reduction over the last three years; targeting $4.2 billion long term
Value generators, added  --
  • $1 billion share repurchase program
  • $92 million repurchased as of August 2, 2019
  • quarterly dividend begins August, 2019: annualized: $75 million / year
  • sale of water facility, $85 million, will more than pay for first year of dividends
Low cost leader among peers --
  • low cost per boe: 
    • LOE per BOE: less than $4.00 (about $3.75) -- better than previous guidance
    • top-tier G&A: at less than $2/boe ($1.57 -- better than previous guidance), about 6% G&A/EBITA
Guidance --
  • production: up slightly
  • LOE per BOE: down slightly
  • G&A per BOE: down moderately
  • production tax: flat to slightly up (guidance: 8.5%)
Bakken --
  • 22% oil growth y-o-y: 150,000 bopd
  • 35 gross op wells with first production 
  • 60-well-Long Creek Bakken Unit Development announced
Bakken production -- 
  • 1Q19 step-outs outperforming legacy wells by 75% to 145% at 120 days;
  • Average first year cumulative oil production
    • flat at about 200,000 bopd, 2017 - 2018 (inclusive)
    • significantly greater than the less than 150,000 bbls in 2016 and about 90,000 bbls in 2014
Long Creek Bakken Unit -- slide #12 at the presentation --
  • 10 square miles
  • 6,400 gross acres; 5,600 net acres
  • five 1280-acre stand-up drilling units 
  • 56 wells, 2 rigs
  • first production: 3Q20
  • drilling to begin 4Q19
  • 87% average working interest
  • all products to be on pipe
  • row development
  • installation of facilities already underway
***********************************
Observations -- Long Creek Unit

CLR's graphic of the Long Creek Unit:


Screenshot of NDIC map, Long Creek:

CLR's graphic:
  • 1-2-1-1
  • four drilling units, west to east
NDIC graphic, Long Creek field:
  • only three drilling units, west to east
  • so it looks like one unit is either in Crazy Man Creek (to the west) or the Truax (to the east) 
  • we already know sections 22/27 make up one of the five drilling units
****************************************
CLR -- Yahoo!Finance

2Q19 earnings:
  • missed by a penny
  • 2Q19: 53 cents/share vs 73 cents/share a year ago
2Q19 revenues:
  • beat estimates
  • 2Q19 revenues of $1.2084 billion vs 1.166 million estimate
  • 2Q19 revenues of $1.2084 billion vs 1.1371 billion a year ago quarter
Production surges:
  • averaging 331,414 boepd in 2Q19 vs 284,059 one year earlier
  • oil production: 193,586 bopd, up from 157,116 bopd one year ago = a 23% increase in production
Average price realized:
  • 2Q19: $54.66/bbl
  • 2Q18; $63.35/bbl
Total expenses jump: see linked article

Balance sheet:
  • cash: $206.5 million
  • debt: $5.767.3 billion
South region:
  • will release seven rigs by the end of 4Q19, due to efficiency gains in Springer and Woodford
  • from Reuters:
    • will decrease the number of rigs it operates in Oklahoma to 12 from 19 this year, citing improved productivity.
    •  “The key thing here is it emphasizes the efficiency gains we’ve received from our rigs,” Continental President Jack Stark said during an earnings call with investors. The company has not reduced the number of wells it plans to drill 
Comment: I can already see the headline -- "CLR cuts number of rigs by 40%; slowdown in sight?"
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And I Thought It Was Going To Be A Quiet Saturday Morning -- August 10, 2019

Epstein dead. No link. Story everywhere. "Was no longer on suicide watch." Obviously some big rollers were involved. This pretty much ends the investigation. A collective sigh of relief was heard across the US, from Maine to New Mexico.


Uber: latest firm to flounder post-IPO.

Solar: SoftBank's bid to build a solar-power empire founders.

IPO: Saudi plans for biggest-ever IPO are back on. Later: largest company in the world by revenues; first conference earnings call; last 30 minutes; no one learns anything new. Alfalfa breathes a sigh of relief. Link here.

**************************
Solar

From the linked story:
For years, SoftBank Group Corp. Chief Executive Masayoshi Son has talked about building a global renewable-energy empire capable of carrying solar power across continents.
The Japanese investor sought deals of immense scale in Saudi Arabia, India and beyond. He promised to spend hundreds of billions of dollars tackling one of the world’s toughest challenges—meeting its growing energy demand with less carbon-intensive sources.
Today, his boldest proposals are foundering. Mr. Son has announced plans to build as much as 220 gigawatts of solar capacity in Saudi Arabia and India by 2030—equivalent to half of what exists today around the world. Yet SoftBank has managed to contract for around 3 gigawatts in India and has about 700 megawatts in Japan. The company hasn’t completed a project in Saudi Arabia and doesn’t appear close to winning a major contract there soon.
In India, developers including SoftBank were hit last year by unexpected increases in taxes and tariffs, cancellations of auctions and land disputes. One solar park in the country where SoftBank is building a plant has been hit by delays stemming from squatters refusing to move off the land allocated to the project.
Japan: note that is "megawatts," not "gigawatts."

1,000 megawatts = 1 gigawatt. 

******************************
IPO

From the linked article:
Saudi Arabia’s oil company is reviving plans for an initial public offering with the aim of accomplishing what would be the world’s biggest listing as soon as early next year.
The IPO process for Saudi Arabian Oil Co., known as Saudi Aramco, is being accelerated as government officials hope to capitalize on the positive market reaction to the state-owned company’s debut bond sale in April, which raised $12 billion.
Saudi officials also believe international outrage over the murder of dissident journalist Jamal Khashoggi in the kingdom’s consulate in Istanbul is easing.

Lipstick On Your Collar, The 50s and 60s Show
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The CLR Alfsvaag Wells In CMC

The graphic:


The wells (multiple pads; some run north; some run south):
  • 30238, 1,439, CLR, Alfsvaag 5-31H1, 68 stages; 10.6 million lbs, CMC, t9/17; cum 371K 12/20;
  • 30237, 1,782, CLR, Alfsvaag 4-31H, 10 stages, 1.5 million lbs, CMC, t8/17; cum 135K 12/20; cum 433K 5/22; "well partially completed; will return once repairs are made"; see this post; cum 160K 5/22;
  • 28936, 849, CLR, Alfsvaag 2-31H, 40 stages; 8 million lbs, CMC, t3/15; cum 426K 23/20; cuum 478K 5/22;
  • 28935, 852-->IA, CLR, Alfsvaag 3-31H1, CMC, t3/15; cum 256K12/20; cum 264K 3/21;
  • 22986, 613, CLR, Alfsvaag 1-31H, CMC, t10/12; cum 508K 5/22;
At time of original post:
  • 22986, 613, CLR, Alfsvaag, CMC, t10/12; cum 435K 6/19; recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN6-201930349536272756427438690
BAKKEN5-201931382736953226604656270
BAKKEN4-201930365238753383532949270
BAKKEN3-201931361034113910499445780
BAKKEN2-201928326632384027442740490
BAKKEN1-20193135753521550841233603103
BAKKEN12-201831291134406076315827780
BAKKEN11-201810526123706264940
BAKKEN10-20180000000
  • 22986, one of many jumps in production for this well:
BAKKEN5-2015311249512555106241016722027720
BAKKEN4-20152799410103226100
BAKKEN3-2015271090911398117221055115948754
BAKKEN2-201517607656039688560405475
BAKKEN1-20152000000
BAKKEN12-2014200120202
BAKKEN11-20141600019016
BAKKEN10-2014272700314412273283315427
BAKKEN9-2014305449557226657156691629
BAKKEN8-2014315665557526626580632431
BAKKEN7-2014313773367020653723369231
BAKKEN6-2014305203513921505549551039
BAKKEN5-2014315319520023334691466328
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