Monday, August 26, 2019

DOA -- TENORM Proposal For Williston, ND -- August 26, 2019

From 2015:
Will download as a PDF or slide presentation.


I finished Chasing the Moon over the weekend; returned it to the library today. Considering buying my own copy; it was that good.

This week's book -- Wolf: The Lives of Jack London, James L. Haley, c. 2010.

From the this week's book's rreface, pages ix - x:
Nearly a decade before the death of Samuel Clemens, Mark Twain's place as America's favorite author was usurped by a California adventurer not yet thirty years old.
In 1902, Jack London was regarded merely as an up-and-coming short story craftsman, but during the following year he took the American literary stage by storm with no fewer than three significant books: an introspective probe into the nature of affection and relationships in The Kempton-Wace Letters; a conscience-searing cri de coeur for social justice in The People of the Abyss; and, then, the major sensation, a muscular Alaskan adventure  novel titles The Call of the Wild. Following these in 1904 with the darkly hair-raising The Sea-Wolf, London fast became a full-fledged literary phenomenon, a front-age celebrity, and the highest-paid writer in America.
The mass of readers who lionized the gentle humor of Mark Twain were unaware that he had hidden his true feelings from them -- his anguish at the human condition and his disgust with the moral failure of American capitalism and militarism. London shared these feelings, but in him the readership encountered a vastly different artist.
He was an angry young man who could enthrall them with his adventure stories, but he also wrote flame-throwing jeremiads against the social injustices of  his day. London's early circumstances --  illegitimacy and poverty, years of brutish child labor and numerous personal and galling experiences with class prejudice -- kindled a socialist fire in his belly that never abated
After he attained the national stage, his dismay was unassuageable that the public who adored his novels and stories did not care to hear his political opinions. After his death, memory of his politics was conveniently erased and he was refashioned as the quintessential author of boys' adventure stories. He thus became, and remains, perhaps the most misunderstood figure in the American literary canon. (He is  not the only hero in our historical pantheon to have been given a bath before inclusion there -- Charles Lindbergh comes to mind, from the right, and Helen Keller, from the left.)
London's books and stories were wildly popular during his lifetime, and just as quickly dismissed as a fad after his untimely death at age forty in1916. During the "Red Scares" of the 1920s and 1950s his attacks on capitalism called his American loyalties so much into question that, though he was long dead, the FBI opened a dossier on him. Too popular to suppress, he was retained as a literary icon of juvenile adventure, and his keen sense of social justice was quietly forgotten, except by college professors and dedicated socialists.

Jack London was a socialist not because he was lazy or sought to live on the labor of others; few American writers have ever worked harder to educate and improve themselves, or have produced a more prolific stream of work. He was a socialist because of the manifest evil that he saw result from the abuses of unrestrained capitalism -- the operative word being "unrestrained."
London himself was a lifelong capitalist, an entrepreneur; he built up a successful ranch with innovative demonstration projects, he licensed his famous name to commercial products, he took risks and did not whine when gambles failed. But the United States of the late nineteenth and early twentieth centuries was the heyday of the ugliest excesses of unfettered, laissez-faire capitalism, the "Gilded Age" (Mark Twain's term) of corporate oligarchy, of worker abuse and oppression. The result was breathtaking social injustice as vividly displayed as it is in today's very comparable era (this book c. date of 2010, during the Obama administration, but written during the Bush II administration). London witnessed the lower-class laborers slaving all their lives with no chance of getting an even break, and it represented to him a betrayal of the American dream  that he unforgivingly set his face against.
When London resigned from the American Socialist Party not long before his death, it was not because he had lost his zeal; he resigned because its members had lost theirs. 
And the preface continues for several more pages written by the author in Austin, Texas, and dated November, 2009.  

Note for the Granddaughters

Another Casualty In The Trade Wars: Tesla -- Bloomberg -- August 26, 2019

Tesla will raise prices in China sooner than expected due to Trump-Xi war on tariffs. Link here.

Also, another report of a Tesla accelerated on its own, hit pole, burst into flames. No link; I'm sure you can find the story if you want.

And finally, another hard-hitting piece of journalism in Vanity Fair -- I am surprised Vanity Fair is still publishing anything. Whatever. The link.
In public, Musk doesn’t talk much about Tesla’s factory in Buffalo—a place he once, in better times, dubbed Gigafactory 2. Gigafactory 1, of course, is Tesla’s much-hyped futuristic electric car plant outside Reno. Gigafactory 2, which is shrouded in silence and secrets, was a controversial side venture: a high-stakes move to dominate America’s growing market for solar energy. Tesla bought the factory’s main tenant, SolarCity, for almost $5 billion in 2016. The plan, in true Muskian hyperbole, was to turn the plant in Buffalo into what was billed as the largest manufacturing facility of its kind in the Western Hemisphere. SolarCity would build 10,000 solar panels per day and install them on homes and businesses across the country. In the process, it would create 5,000 jobs in an area that very much needed them. “This is one of the poorest cities in the country,” Scott says. “You get a big company here, and it’s a big deal.”

From the outside, the sheer scale of the Buffalo plant sparkles with promise. At 1.2 million square feet, it stands at the point where the Buffalo River bends through the city. The building is gleaming white, as if to signify its freshness amid a landscape of abandoned grain elevators and sprawling, desolate steel mills. The area around the factory is hardscrabble working class; until SolarCity was built, people only drove through it when the fierce wind off Lake Erie shut down the highway that residents take from the southern suburbs to downtown. Now three flags fly in front of the factory: those of the United States, New York State, and Tesla.

But three years after Tesla bought SolarCity, there are serious doubts as to whether the plant will ever fulfill its promises. The website CleanTechnica, which is mostly supportive of Musk, calls SolarCity “a disaster waiting to happen.” A potentially costly lawsuit alleges that Tesla acquired SolarCity at the expense of its own shareholders. And former employees want to know what happened to the massive subsidy Tesla received. “New York State taxpayers deserved more from a $750 million investment,” a laid-off employee named Dale Witherell wrote to Senator Kirsten Gillibrand. “Tesla has done a tremendous job providing smoke and mirrors and empty promises to the area.”
Vanity Fair turning against Tesla is akin to Walter Cronkite turning against the Vietnam War.
The Vanity Fair story on Tesla goes on forever and ever. Archived.

For $8 / year, I might just subscribe again -- but only if the magazine presents fair and balanced analysis of the trade war. LOL. 

Big Deal In The DJ -- August 26, 2019

The Niobrara / DJ / Colorado  is tracked here. Big news, link here.
  • PDC -- growing operator in two key US unconventional basins (DJ and the Permian)
  • PDC will beef up its Wattenberg Field position in Colorado by buying SRC Energy, a pure-play producer in the basin
  • $1.7 billion
  • 86,000 net acres (DJ) + 36,000 net acres (Permian) = 122,000 net acres
  • $1.7 billion / 122,000 net acres = $14,000 / net acre spread across the DJ and the Permian
  • at $55/bbl WTI, free cash flow is targeted at around $800 billion from now through year end 2021, about 50% of which will be returned to shareholders (share buybacks; paying down debt; nothing said about initiating a dividend; several high-profile Bakken operators now pay a dividend;
  • from Yahoo!Finance:
    • shares outstanding: 66.28 million
    • market cap: $1.97 billion
    • enterprise value: $3.09 billion
    • forward dividend: 0.00
    • revenue, full year, 2018: $1.313 billion = $19/share
    • net income from continuing ops: $2 billion = 3 cents/share
    • $400 million / 66.28 million shares = $5.85 / share
  • PDC would become the second-largest DJ Basin producer with 166,000 boepd
  • compare with the announcement today for COP to get the Alaska North Slope project
  • #1 in DJ: the former Anadarko Petroleum company, recently acquired by Occidental Petroleum, 301,00 boepd
  • the deal: PDC will have 182,000 net acres, producing nearly 200,000 bopd
  • PDC will also control 36,000 net acres in the Delaware Basin in Texas

Just between you and me, I think PDC got a better deal than COP (the Alaska announcement earlier today). 

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, relationship, or career decisions based on what you read here or think you may have read here. I often make simply arithmetic errors. I often misread things. The numbers above have not been proofed or triple-checked; some numbers have been rounded.

More at the linked site.

Also at the Denver BizJournal; I haven't read all of that article; not sure if there's any additional news.  Bizjournals readers will eventually hit a paywall. Apparently PDC gave the middle finger to some of its hedge fund investors. This was the last paragraph in Bizjournal:
PDC Energy has faced pressure from a hedge fund and investor in the business this year to pull back on its growth plans and focus more on returning money to investors.
Tea leaves from this announcement:
  • taking advantage of cheap money
  • a shakeout across the industry
  • companies setting themselves up for huge returns in the out years
  • DJ bigger than we think? 
  • provides some "cover" for Vicki Hollub by showing the "real" value of DJ acreage
Personal thoughts: most of this is in Weld County which includes Denver-Aurora. This should give folks pause. What could possibly go wrong?

COP Selected By Federal Government To Develop Alaska's North Slope -- August 26, 2019

Link to AP. Data points:
  • five drill sites
  • linked by seven bridges; an airstrip, 38 miles of roads, processing facility
  • project could last 30 years
  • could produce 130,000 bopd
  • max cumulative: 590 million bbls of oil
  • nine-year construction project beginning in 2020
  • oil production would begin in 2024
  • currently, Alaska is averaging 500,00 bopd

Turning Dirt For The TransMountain Pipeline -- August 26, 2019


Amarjeet Sohi is an Indo-Canadian politician, currently serving as the Member of Parliament for Edmonton Mill Woods, and the federal Minister of Natural Resources. Link here.

This is quite amazing. Folks said that if the Trans Mountain Pipeline was approved during the summer of 2019 it would still be too late to get started this season -- due to weather. Well, guess what, it looks like they are getting started ... at least at some level ... time will tell ... but as far as I know the legal and political debate is over as far as getting the pipeline built. Sure, the political debate will continue, but the work will go ahead ...

Kraken Operating With Three New Kokomo Permits; Newfield With Three New Bernice Permits -- August 26, 2019

Sayonara: I don't think this is news. EIA says Australia is on track to become world's largest LNG exporter, followed by the US. Qatar will lose bragging rights as #1 LNG exporter and will move to 3rd place. Which is fine.

Active rigs:

Active Rigs6362553075

Six new permits, #36905 - #36910, inclusive:
  • Operator: Kraken Development III; Newfield
  • Field: Sanish (Mountrail); South Tobacco Garden (McKenzie County)
  • Comments: 
  • Kraken has permits for a 3-well Kokomo pad in Sanish oil field, section 12-154-91, see graphic below;
  • Newfield has permits for a 3-well Bernice pad in South Tobacco Garden, section 18-150-99
Seven permits renewed:
  • Windridge (2): two Mallard permits in Burke County
  • Cobra (2): two NERU permits in Billings County 
  • Iron Oil: one Bear Butte permit in McKenzie County
  • Bruin: one Christine Joe permit in Williams County
  • Sinclair: one Porcupine permit in Dunn County
Four producing wells (DUCs) reported as completed:
  • 35012, 2,035, WPX, Spotted Horn 26-35HA, Squaw Creek, t8/19; cum --; #20238 with huge jump in production;
  • 31193, 1,455, WPX, Jore (Federal) 13-12TF2H, Three Forks second bench; Clarks Creek, t219; cum 31K over 40 days; (#28747)
  • 35196, 1,940, Whiting, Jackman 34-11-4H, East Fork, t8/19; cum --;
  • 35496, 673,  Whiting, Jackman 34-11-3TFH, East Fork, t8/19; cum --; (#20736)


If you want to go somewhere to get away from it all, go to Kokomo.

Kokomo, The Beach Boys

Wow, I Just Love North Texas -- Nothing About The Bakken -- August 26, 2019

Trophy Club.

A "suburb" of sorts north of Ft Worth on TX-114 west of Grapevine.

This started out as a bunch of houses surrounding a golf course.

It's now a city for the well-to-do who probably consider themselves lower middle class to mid-middle class by north Texas standards. Don't kid yourself.

It's all residential.

Most cities have a 70/30 split: 70% residential and 30% commercial, based on property taxes, and the like.

Trophy Club, TX?

That city's split is 99/1. Ninety-nine percent residential, and 1% commercial.

To say the least, they are screaming for more commercial.

And it's going to be restaurants. To start.

A few weeks ago I mentioned that the metroplex (DFW) is unofficially estimated to have a population of 7.5 million with light rail connecting Ft Worth, Grapevine, DFW, and Dallas.

It is officially forecast that by 2050 the metroplex will have a population of 50 million. Growth will shift from north of Dallas (McKinney, Frisco, and Plano) to north of Ft Worth. Roanoke will be the center of that population growth. The crossroads at TX-114 and I-35W now have a huge outlet mall, the Texas Motor Speedway, and a Buc-ees. And an airport. And a BNSF intermodal complex. And a GE facility manufacturing BNSF locomotives.

The Sunday edition of The Dallas Morning News:
Trophy Club has 13,500 residents and only 12 residential lots are left in the whole town. The town cannot grow geographically; it is surrounded by other incorporated jurisdictions. 
Trophy Club, geographically, is all  the bigger it's going to get.

One of the first restaurants the city snagged is one of our favorites: Meat U Anywhere, barbecue.

The second was Bread Winners Cafe; we've not been there.

Trophy Club bought plots of land along TX-114 and offered them to developers with tax breaks for commercial development. The most recent: HG SPLY Co.

We haven't been there but will go there tomorrow. May says she has too many errands today to go to HG SPLY Co.

What's the average size a sit-down restaurant? I don't know. Maybe, 5,000 square feet.

HG SPLY Co: 28,000 square feet with a section that caters to Sophia, 5 years old, and a section that caters to me. LOL

HG SPLY CO. opened five days ago.


No wonder Texans rank high on the "heavy" list.

Disclaimer: I often make typographical and factual errors. It is hard to separate fact from opinion on this blog. I would write exuberantly about any location where I live, or have lived, or am likely to live someday in the future.

By the way, if you've read this far, a word of advice worth hundreds of dollars.

Trophy Club.

The city is a sought-after location for police and law enforcement. Over the years, the police department has grown to be one of the biggest on a per capita basis in the area.

99 /1 split. Ninety-nine percent residential  / one percent commercial.

Where does most crime take place?

On commercial property. Sure, there are some home burglaries and some domestic disputes, but when you get right down to it, crime is also a 99 / 1 split: 99% of crime is committed in commercial / government public areas; 1% is committed on private property.

What does that mean?

The cops in Trophy Club are really, really bored.

It is guaranteed that if you drive through Trophy Club you will get picked up by the local police for any infraction, no matter how trivial. Rolling through right-turn-red-lights is probably high on the list.

Just saying.

Notes From All Over, Part 2 -- August 26, 2019

The staggering Bakken: a 22-fold jump in production -- at no cost. Link here

5G? Apparently a lot of pushback from some cities and some states in the US. Not Texas: all in.

China: I remember mentioning that once Chinese bankers starting jumping out windows, the trade war would be over. Now, in the last couple of weeks:
  • Chinese bankers are now jumping out of windows (metaphorically speaking only, as far as I know) 
  • Xi taking Trump's threats of arming Taiwan literally and seriously
  • Hong Kong imploding
2020: if the most recent headline regarding the trade war is not another false step, the 2020 campaign has officially begun.

Winter: more accurate and less political than NOAA.

The Literary Page 
The New Yorker

"Driven," Nathan Heller, for a century, we've loved our cars -- but did we ever really need them? July 29, 2019

"The Invention of Money," John Lanchester, how the heresies of two bankers becaem the basis of our modern economy, August 5 & 12, 2019

"Skin Deep," Peter Schjeldahl, Renoir's nudes, August 26, 2019

"State of the Unions," Caleb Crain, what happened to America's labor movement? August 26, 2019

"The Secretary of Trump," Susan B. Glasser, how Mike Pompeo became a heartland evangelical -- and the President's most loyal soldier, August 26, 2019

Nathan Heller


Worth a read.

Brings back memories.

Warped understanding of .... almost everything.

It begins:
The summer I was eighteen ... I got behind the wheel for what I hoped would be the first rite of my adulthood ... test-taking at he Department of Motor Vehicles in San Francisco.....

.... failed

... never took a second test ....

For years, I counted this inability to drive as one of many personal failures.
Wow. Gave up after one try.

Tells me all I need to know about this writer.

Moving on.

The Invention of Money 
John Lanchester

From the essay:
The modern system for dealing with [how to pay for waging war], this problem arose in England during the reign of King William, the Protestant Dutch royal who had been imported to the throne of England in 1689, to replace the unacceptably Catholic King James II.

William was a competent ruler, but he had serious baggage -- a long-running dispute with King Louis XIV of France. Before long, England and France were involved in a new phase of his dispute, which now seems part of a centuries-long conflict between the two countries but at the time was variously called the Nine-Years's War or King William's War. This war presented the usual problem: how could the nation afford it?
I doubt the war at the time was called the  Nine-Year's War. Moving on.
King William's administration came up with a novel answer: borrow a huge sum of money, and use taxes to pay back the interest over time. In 1694, the English government borrowed 1.2 million pounds at a rate of eight per cent, paid for by taxes on ships' cargoes, beer, and spirits. In return, the lenders were allowed to incorporate themselves a s new company, the Bank of England.
Wow, in that once paragraph, look at the all "stuff" that needs to be explored, explained, enjoyed:
  • the idea of "borrowing"
  • the idea of "taxes"
  • the idea of "interest"
  • how they arrived at a rate of eight percent?
  • how eight percent remains the standard when selling whole life insurance policies
  • how the Brits spell per cent and how we spell percent
  • how it was decided to separate out beer and spirits from other cargo
  • how it was decided to separate out beer and spirits from other domestic products
  • this was before tobacco had been introduced to England from the colonies
  • the idea of "incorporation"
  • the concept of "company"
  • the concept of a bank 
  • the concept of "national bank"
All in one paragraph. 

State of the Unions
Caleb Crain

Worth a read.

Writer laments that the loss of influence by unions cost Hillary Clinton the election.

Why would one lament over that?

Skin Deep: Renoir's Nudes
Peter Schjeldahl 

"Renoir: The Body, the Senses," at the Clark Art Institute, Williamstown, Massachusetts.

Williamstown, MA:
three hours west of Boston, MA
one hour east of Albany NY

This Week's Book

Wolf: The Lives of Jack London, James L. Haley, c. 2010.

I finished Chasing the Moon over the weekend; returned it to the library today. Considering buying my own copy; it was that good.

This Season's Fingernail Polish

The most commonly seen fingernail polish -- hue, not brand -- at Starbucks, north Texas, this season.

Link here.

The Oasis Nordeng Wells

Remember: Oasis looked for greener pastures when they moved into the Permian a few years ago.

The Nordeng wells. These two wells will report today:

34714, 320, Oasis, Nordeng 5298 12-25W 2T, Banks, t3/19; cum 230K 11/20;

DateOil RunsMCF Sold

34713, 725, Oasis, Nordeng 5298 12-25W 3B, Banks, t3/19; cum 319K 11/20;

DateOil RunsMCF Sold

Wells of interest in the Nordeng area:
34153, 658, Oasis, Nelson 5298 14-26 11TX, Banks, t3/19; cum 180K 11/20;
34154, 990, Oasis, Nelson 5298 14-26 12BX, Banks, t3/19; cum 255K 11/20;
34155, 537, Oasis, Aagvik 5298 14-26 13BX, Banks, t2/19; cum 300K 11/20;
34156, 853, Oasis, Aagviik 5298 14-26 14TX, Banks, t3/19; cum 239K 11/20;

17472, 593, Oasis, Mildred Nelson 4-25H, t6/09; cum 150K 7/20; see recent production here; 18 days at 7,000 bbls extrapolates to 11,000 bbls, which is a 22-fold jump in production. Remains off line 11/20;

34717, 1,330, Oasis, Mildred Nelson 5298 12-25W 2B, Elidah, t4/19; cum 317K 11/20;
34716, 1,070, Oasis, Mildred Nelson 5298 12-25W 3T, Elidah, t4/19; cum 236K 11/20;
34715, 892, Oasis, Mildred Nelson 5298 12-25W 4B, Elidah, t4/19; cum 290K 11/20;
34714, see above,
34713, see above,
34712, 548, Oasis, Nordengn 5298 12-25W 4T, Elidah, t3/19; cum 247K 11/20;

34718, 240, Oasis, Nordeng 5298 12-25E 5B, Banks, t5/19; cum 226K 11/20;
34719, 288, Oasis, Nordeng 5298 12-25E 6T, Banks, t5/19; cum 233K 11/20;
34720, 829, Oasis, Mildred Nelson 5298 12-25E 5T, Elidah, t5/19; cum 230K 11/20;
34721, 240, Oasis, Mildred Nelson 5298 12-25E 6B, Banks, t5/19; cum 304K 11/20;
34722, 565, Oasis, Mildred Nelson 5298 12-25E 7T, Elidah, t5/19; cum 260K 11/20;

34742, 914, Oasis, Mildred Nelson 5298 13-25 8B, Elidah, t4/19; cum 274K 11/20;
34743, 1,008, Oasis, Mildred Nelson 5298 13-25 9T, Elidah, t6/19; cum 215K 11/20;
34744, 157, Oasis, Mildred Nelson 5298 13-25 10B, Elidah, t6/19; cum 329K 11/20;
34745, 103, Oasis, Mildred Nelson 5298 13-25 7T, Elidah, t6/19; cum 250K 11/20;
34746, 607, Oasis, Mildred Nelson 5298 13-25 8B, Elidah, t7/19; cum 324K 11/20;
35120, 593, Oasis, Mildred Nelson 5298 13-25 9T, Elidah, t7/19; cum 260K 11/20;

35317, 720, Oasis, Mildred Nelson 5297 11-30 11TX, Elidah, t7/19; cum 256K 11/20;
35316, 1,146, Oasis, Mildred Nelson 5297 11-30 12BX, Elidah, t7/19; cum 314K 11/20;
35118, 1,089, Oasis, Kellogg Federal 5297 11-30-2BX, Elidah, t7/19; cum 251K 11/20;
35117, t7/19; cum 183K 11/20;
35116, t8/19; cum 234K 11/20;
35115, t8/19; cum 169K 11/20;

20026, 1,355, off line as of 9/18; Oasis, Nordeng 24-13H, Banks, t7/11; cum 304K 10/20; remains off line as of 6/19; back on line; 10-fold jump in production; see this note; off line 11/20;

The graphic:

Notes From All Over, Part 1 -- August 26, 2019

No oil for you! Taking a page from either Trump's playbook or Seinfeld's soup episode comes this from AMLO:
"No oil for you!"
From Reuters: AMLO says no new oil contracts for oil companies who are not producing oil from their current contracts in Mexico.

Another politician who thinks he understands the oil industry.

About the same as President Obama killing the Keystone XL, telling Americans we can't drill our way to lower prices, and, of course, we now have crazy Bernie who says the US needs to nationalize the $16-trillion US oil industry, making it one big TVA. I can't make this up.

I guess that's why no one in Washington is really worried about the national debt: nationalization of the US oil industry will solve that problem. 

Lily Tomlin, paraphrasing: "No matter how cynical I get, I can't keep up. (More here: I particularly like: "If love is the answer, could you please re-phrase the question.")

By the way, that call by crazy Bernie to nationalize the US oil industry is nothing new. Articles abound.

By the way, on another note, if the Keystone XL ever does get built and the heavy oil flows to the US gulf coast, there will be a surge in US oil refining the likes of which we have never seen. With or without the Keystone XL, however, my hunch is that we are going to be surprised by how much things will have changed ten years from now, and my hunch is that much of that change will be driven by Saudi Aramco. That non sequitur comes from reading several articles this morning, too many of which to link.

The tea leaves suggest the "makers and shakers" in the oil industry are putting things together now that will culminate in 2025 or thereabouts.

Rig Counts -- Energent Group -- August 26, 2019

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 what you think you may have read here.

WTI: $54.96, up 1.5%. 

Talk about timely. I had just completed this post when the following popped up in my e-mail.

Link here.


Rigs, DUCs, Completed Wells, And All That Jazz -- August 26, 2019

Disclaimer: many numbers have been rounded. Done quickly and I may have made significant errors but I think it's pretty close. 

Re-posting: a2019 Permian output surge may impact oil prices -- Rigzone contributor See this note for more regarding this article, but note this -- DUCs in the Permian.

There are also constraints on how quickly production can increase. The large and growing number of unproductive wells  (DUCs) in the Permian suggests that new pipeline capacity, allowing for higher wellhead prices, will see a surge in well fracking/completions, depending on the availability of crews. 
Historically, the number of wells fracked in a given month in the Permian has been as high as 668 (October 2014) versus a recent level of 530, and the rate has increased as much as 20-30/month, sometimes much higher. It seems unlikely that the number of fracked wells can increase by more than 50/month, but since the typical well adds about 600-700 b/d of gross output, the implication is that Permian output could grow by an additional 30 tb/d per month, or 360 tb/d by December 2020 versus the year earlier amount.  This amount is probably incremental to existing projections.
This blows me away. Remember, the Permian is much, much bigger than the Bakken.

Some data points.

  • Permian: 500 (remember, the headline news today regarding rigs -- the number of oil rigs in the Permian dropped by four last week)
  • North Dakota: 45 (Baker Huges); 65 (NDIC)
Crude oil production:
  • Permian: 4.5 million bopd
  • Bakken: 1.4 million bopd
  • Permian: 4,000
  • North Dakota: 1,000 
    • Note: these are DUCs only; does not include "inactive wells" for operational reasons
    • North Dakota has another 1,500 inactive wells; most of operational reasons
Completions, monthly:
  • Permian: 600
  • North Dakota: 100

Eleven Wells Coming Off Confidential List Over Weekend, Today -- August 26, 2019

Rigs: most recent -- last week -- the US dropped 16 oil rigs and three gas rigs vs a gain of six oil rigs the previous week. The Bakken is not mentioned.

Rigs don't matter: a 2019 Permian output surge may impact oil prices -- Rigzone contributor One would think a story of a Permian output surge would be preceded by a story of a surge in turning bits. But not to be. Rigs were reported to be down last week -- by a whopping four rigs in Texas, as just one example. From Rigzone, datapoints:
  • Permian pipeline capacity surging (see RBN Energy story below, also)
  • Permian pipeline capacity to jump by 1.5 million bbls to 2.0 million bbls -- that's as much oil as North Dakota produces daily
  • constraints may moderate production
  • price of WTI
  • flaring
  • Also, shift from trucking and CBR 
  • this is most interesting: DUCs --
There are also constraints on how quickly production can increase. The large and growing number of unproductive wells  (DUCs) in the Permian suggests that new pipeline capacity, allowing for higher wellhead prices, will see a surge in well fracking/completions, depending on the availability of crews. 
Historically, the number of wells fracked in a given month in the Permian has been as high as 668 (October 2014) versus a recent level of 530, and the rate has increased as much as 20-30/month, sometimes much higher. It seems unlikely that the number of fracked wells can increase by more than 50/month, but since the typical well adds about 600-700 b/d of gross output, the implication is that Permian output could grow by an additional 30 tb/d per month, or 360 tb/d by December 2020 versus the year earlier amount.  This amount is probably incremental to existing projections.
Back to the Bakken

Wells coming off the confidential list over the weekend, today -- Monday, August 26, 2019: 73 for the month; 120 for the quarter:
  • 34758, PNC, MRO, Tercek 14-24H, Chimney Butte,
  • 34639, SI/NC, Slawson, Wolverine Federal 12-31-30TF2H, Elm Tree, no production data,
Sunday, August 25, 2019: 73 for the month; 120 for the quarter:
  • 35975, SI/NC, Newfield, Sturgeon 150-99-18-19-4H, South Tobacco Garden, no production data,
  • 35629, 755, Petro-Hunt, Zabolotny 144-98-3B-10-3H, Little Knife, t7/19; cum 7K over 11 days;
  • 34714, 320, Oasis, Nordeng 5298 12-25W 2T, Banks, t3/19; cum 96K 6/19;
  • 34713, 725, Oasis, Nordeng 5298 12-25W 3B, Banks, t3/19; cum 132K 6/19;
  • 34301, drl, XTO, Rough Federal 44X-23H, North Fork,
  • 34172, 2,791, CLR, Ravin 4-1H, Dimmick Lake, t6/19; cum 8K 6/19; 6K over three days extrapolates to 58,290 bbls/ 
  • 34034, 153, Petro Harvester Operating Company, LLC, FLX3 21-16 163-91 D, Portal, t5/19; cum 8K over a full two months;
Saturday, August 24, 2019: 66 for the month; 113 for the quarter:
  • 35041, drl, Hess, BB-Charlie Loomer-150-95-0718H-8, Blue Buttes,
  • 24019, SI/NC, Slawson, Wolverine Federal 6-31-30TFH, Elm Tree, no production data, 
Active rigs:

Active Rigs6462553075

RBN Energy: the tough reality of a committed crude pipeline shipper. Archived.
Crude oil pipeline shippers across the U.S., and especially in the Permian, are about to experience something they haven’t seen in a few years: a bunch of new crude takeaway capacity with lower-cost tariffs coming online, and the sudden need among committed shippers to fill their pipe space. This also affects some folks committed to space on older pipelines, whose higher-cost tariffs could leave them out of the money. The start-up of pipelines like Plains All American’s Cactus II, with a super-low $1.05/bbl tariff — and several pipelines in other basins lowering tariffs — has traders with pipeline commitments old and new re-running their economics and trying to determine their best strategy moving forward. Some may be forced to move volume at a loss. Today, we analyze the recent trend in tariff compression and how traders deal with uneconomical take-or-pay contracts.
We are witnessing a dramatic change in the cost to ship crude oil across the U.S. — particularly between West Texas and the Gulf Coast. Previously, pipelines in the area were charging committed shippers well over $2/bbl to transport crude from key Permian hubs like Midland, Crane or Colorado City, TX, to the coast (think the BridgeTex or Longhorn pipelines, among others). Uncommitted rates were north of $4-$5/bbl. Those rates had seemed reasonable, especially when takeaway capacity was constrained and spreads between West Texas and the Gulf Coast or Cushing were far higher — in some cases $15-$20/bbl or more. But as new pipeline capacity out of the Permian has been built out, operators have been offering lower tariff rates in an effort to entice new shippers to (a) commit to their pipeline, and (b) gobble up any uncommitted capacity that may be left unused.