Monday, September 9, 2019

Random Update Of Recently Completed Slawson Torpedo Federal Wells -- September 9, 2019

The Slawson Torpedo Federal wells are tracked here.  Before starting, see this post.

Production data for some of these wells.

The wells:
  • 31277, 825, Slawson, Torpedo Federal 9H, Big Bend, t12/18; cum 95K 7/19:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 31276, 2,942, Slawson, Torpedo Federal 8H, t12/18; cum 48K 7/19:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 31275, 3,632, Slawson, Torpedo Federal 7H, t12/18; cum 67K 7/19:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

The Day The Dinosaurs Died -- September 9, 2019

The three-meter problem (dinosaurs, fossils):
So, there you have the three-meter problem.

Now, a follow-up, from The Wall Street Journal:
Drilling into the seafloor off Mexico, scientists have extracted a unique geologic record of the single worst day in the history of life on Earth, when a city-sized asteroid smashed into the planet 65 million years ago, wiping out the dinosaurs and three-quarters of all other life.
Their analysis of these new rock samples from the Chicxulub crater, made public Monday, reveals a parfait of debris deposited in layers almost minute-by-minute at the heart of the impact during the first day of a global catastrophe. It records traces of the explosive melting, massive earthquakes, tsunamis, landslides and wildfires as the immense asteroid blasted a hole 100 miles wide and 12 miles deep, the scientists said.
The sediments also offer chemical evidence that the cataclysm blew hundreds of billions of tons of sulfur from pulverized ocean rock into the atmosphere, triggering a global winter in which temperatures world-wide dropped by as much as 30 degrees Fahrenheit for decades, the scientists said.
Exactly what the researcher found in Bowman, ND:
Geologists study rocks as a record of compressed time, with ticks of the geologic clock typically measured in layers that accumulate over thousands of years. In the Chicxulub crater, though, hundreds of feet of sediments built up rapidly, recording impact effects like a high-speed stop-action camera, the scientists said.
“Here we have 130 meters in a single day,” said Dr. Gulick. “We can read it on the scale of minutes and hours, which is amazing.”
The asteroid blasted a cavity between 25 and 30 miles deep in the first seconds of impact, creating a boiling cauldron of molten rocks and super-heated steam, according to the scientists’ interpretation of the rock. Rebounding from the hammer blow, a plume of molten rock splashed up into a peak higher than Mount Everest.
Amazing what gets posted on the blog.

But writing a story on the the meteor that killed the dinosaurs and not mentioning Hell Creek, Montana, or North Dakota, is an incomplete story.

The $10 million project, by the way, didn't seem to tell us anything we didn't already know, at least in the big scheme of things. I'm somewhat impressed the researcher got the grant but it doesn't take a rocket scientist to figure out how he sold this project.

A $10 million well in the Gulf of Mexico? They've got 50+ rigs in the Bakken drilling $8 million wells every day and getting just as much geology out of those wells. Just saying.

US Oil Production Has "Hit A Wall" -- Oilprice Contributor -- September 9, 2019

For the archives:
Two weeks ago, published my notes which supported my belief that U.S. oil production has “hit a wall”. Archived.
Last week, EIA confirmed my conclusion. The EIA’s 941 report shows that after U.S. crude oil production peaked in April at 12,123,000 barrels of oil per day production declined 8,000 BOPD in May and another 33,000 BOPD in June.
Preliminary estimates say that when actuals are available for July, they will show an even larger decline.
These are not big declines, but with the active drilling rig count continuing to fall, I feel confident in telling you that U.S. oil production over the second half of this year is not going higher.
When EIA reports actual production figures for July at the end of this month, they are surely going to be lower because of the well shut-ins due to Hurricane Berry in the Gulf of Mexico.
Barring another GoM hurricane, oil production should rebound a bit in August and September. However, I don’t see anything that will return U.S. oil production to the peak set in April.
So, we will see.

EIA 941 reports at this link. Most recently, both Texas and North Dakota showed an increase in production in June, 2019, compared to May, 2019. Alaska and California, along with Oklahoma, Wyoming, and New Mexico, accounted for the greatest decline which was insignificant to say the least. Compare this data with export data from Saudi Arabia.

EIA 914 reports are at this link.

Again, for this oilprice contributor, it's all about rig counts.

Actually, there's something interesting about that. I might come back to that if I remember.

By the way, the oilprice contributor says we will see the data in the July 941's at the end of this month (September, 2019).

We may have a preview with the "EIA dashboards." The current dashboards have actual data through July, 2019, and projected data through September, 2019:

EIA dashboards
The Eagle Ford is declining but I don't see declines in the Bakken or the Permian. And a lot of the decline in US shale is simply good business sense.

So, again, this is where we stand, reposting from above:
Last week, EIA confirmed my conclusion. The EIA’s 941 report shows that after U.S. crude oil production peaked in April at 12,123,000 barrels of oil per day production declined 8,000 BOPD in May and another 33,000 BOPD in June.
Preliminary estimates say that when actuals are available for July, they will show an even larger decline.
US crude oil production:
  • April, 2019, all-time record: 12,123,000 bopd
  • May, 2019, declined by 8,000 bopd (note the false precision)
  • June, 2019, a further decline of 33,000 bopd
  • 8,000 / 12,123,000 = 0.00066 or 0.066%
  • 33,000 / 12,115,000 = 0.002724 or 0.272%
Background noise.

If the contributor is correct, he will write another article.

If the contributor is not correct, we won't hear a thing.

The EIA dashboards, September production over August production:
  • Permian: up 75,000 bopd
  • Bakken: up 3,000 bopd
  • Eagle Ford: down 6,000 bopd
  • net: up 72,000 bopd
Director's Cut for North Dakota, crude oil production:
  • June, 2019, preliminary: 1.424624 million bopd; all-time record; an increase, month-over-month of 29,977 bopd [the final figure is generally higher than the preliminary figure]
  • May, 2019: 1.394,648 million bopd; an increase of 2,163 bopd (essentially flat, but not a decrease)
  • April, 2019: 1.392,485 million bopd: an increase of 725 bopd (flat, but not a decrease)
  • March, 2019: 1.391,760 million bopd:

Nice Little Jump In WTI; Nine Point Energy, Formerly Known As Triangle, Has Three New Permits -- September 9, 2019

WTI: up 2.35%; up $1.33/bbl; and trading at $57.85. The new "Alfalfa" -- Prince ABS -- "hints" at new production cuts. One can only read the tea leaves, but there were three possibilities early on:
  • do nothing, stay the course
  • threaten the west with another stab at crushing US shale operators
  • hint at cutting -- perhaps "jawbone" the price of oil up a bit while sorting things out
We might come back to this later. By the way, at the same time, Russia is looking at a national budget based on $25-oil next year as one of the possibilities.

Forecasting the price of oil is very similar to looking at the 150 possible tracks an early hurricane 250 miles off the coast of Florida might take --- anywhere from Alabama to New Jersey. And, yes, NOAA, was correct -- Hurricane Dorian was so huge it easily could have hit Alabama -- according to early tracks. It was a another front coming in from the west that pushed, thank goodness, Hurricane Dorian to the northeast, away from a direct hit on Florida. Unfortunately it also stalled the storm over the Bahamas.

Back to the Bakken

Active rigs:

Active Rigs6366553773

Three new permitss, #36945 - #36947, inclusive:
  • Operator: Nine Point Energy
  • Field: Sandrocks (McKenzie)
  • Comment: 
    • Nine Point Energy has permits for a 3-well Sanders N pad in section 9-150-100; Sandrocks oil field 
Three permits renewed:
  • MRO: a Frances USA, a Doris USA, and an Esther USA all in Mountrail County
Naming: it appears Bruin is starting to change their alpha-naming method --
... in the old days, it was simply Fort Berthold 152-93-9B-10-10B, for example, but with all the "Fort Berthold" wells it was impossible to "easily" tell from the name where the well was located or if it was part of a family of wells. Now, Bruin is using this method: "FB Bonita 152-93-9B-10-10B" so that it's easy to tell that a particular well is part of a specific pad, such as "the Bonita pad" in this case. The "FB", of course, stands for "Fort Berthold." A very nice welcome improvement.
Continuing the example, from the file report for:
  • 36654, loc, Bruin, FB Bonita 152-93-9B-10-10B: middle Bakken; 1280 acres; sections 9 & 10-152-93; sited in section 8-152-93; [the old name would have simply been "Fort Berthold 152-93 ----]
  • 36657, loc, Bruin, FB Bonita 152-93-9B-10-14T: Three Forks first bench; 1280 acres; sections 9 & 10-152-93; sited in section 8-152-93;
Five producing wells completed:
  • 35113, 1,113, Abraxis, Lillibridge 20-17-16H, Pershing, t7/19; cum 18K over 23 days;
  • 35112, 952, Abraxis, Lillibridge 20-17-15H, Pershing, t7/19; cum 16K over 23 days;
  • 35111, 768, Abraxis, Lillibridge 20-17-14H, Pershing, t7/19; cum 8K over 18 days;
  • 35110, 968, Abraxis, Lillibridge 20-17-13H, Pershing, t7/19; cum 4K over 13 days;
  • 32408, 1,547, Slawson, Slasher Federal 1 SLH, Big Bend, t8/19; cum -- ;

And People Take These Guys Seriously -- September 9, 2019

These Ten Will Appear On Stage

From a note posted earlier this year --
March 17, 2019: Beto announced this past week; everyone knows Biden is running; yet to announce. Biden (29%); Bernie (22%); Kamala (11%); Pocahontas (7%); Beto (5%).

How to keep them straight:
  • Biden: Harold Stassen, plagiarist, groper, creepy
  • Bernie: crazy, socialist, numerous million-dollar homes
  • Beto: crazy, eats dirt, feeds feces to wife
  • Harris: used to be hard on crime; at one time, #BlueLivesMatter--ed; now, not so much
  • Pocahontas: no sympathy for those who cheat to get into college -- yes, she actually said that in response to the USC admissions scandal
  • Booker: a blank face
  • Buttigieg: former US Marine; alternate lifestyle
  • Klobuchar: global warming speech during frigid snowstorm
  • Castro: confused, as we all are; which twin is he?
  • $ang: one grand/month to everyone, including billionaires and multi-millionaires
  • Hickenlooper: a blank face
  • Gillibrand: federal taxes of $27K on $210K income
  • Inslee: Nude Green Eel -- only plank in his platform

Natural Gas Drives Me Nuts -- September 9, 2019

Natural gas drives me nuts. LOL.

I track US LNG export terminals at this post.

Earlier today I posted this update:
September 9, 2019: behind schedule? In the graphic above [at the linked article], EIA shows Cameron to have "T3" by 3Q19. A couple of weeks ago, SRE announced that the first train of the Cameron LNG liquefaction-export project had initiated service, located in Hackberry, LA. The article does confirm that the Cameron facility will have three trains. It's hard to say from the story, but it sounds like the capacity of all three trains combined is 12 million tonnes per annum of LNG, or nearly 1.7 billion cubic feet per day. Conversion at this site.
What drives me nuts about LNG? All the different ways they measure LNG and and all the different  ways they report it.

In the example above, they reported it two different ways:
  • tonnes (not tons) 
  • cubic feet
In one case, it's
  • millions of tonnes (not tons), and
  • billions of feet
And then most ridiculously, in one case they report volume:
  • over one year; and
  • over one day
Having said all that, three Cheniere Texas trains at Corpus Christi will provide 13.5 million tonnes per annum, or 330K boepd.

LOL. Now it's boepd.

But it does look like a typical LNG train has a nameplate capacity of about 4 million tonnes per annum, or a hundred-thousand boepd.

By the way, at the "conversion site" linked above, to add more confusion:
  • "M" = million (not, thousand)
  • "k" = thousand

Crude oil? Barrels of oil per day. BOPD. One number. Method.

Unless it's a spill and then it's measured in gallons. 

US Stock Market Jumps On German "T-Bond" -- WSJ --September 9, 2019

Crazy. Data points from one WSJ article this morning. Again, this is from one article:
  • U.S. stocks ticked higher after economic data from Europe came in better than forecast
  • European government bond yields also rose across the board on expectations of a rate cut by the European Central Bank
  • the Italian 10-year yield rose to 0.916% from 0.885% Friday. The German 10-year bund was yielding minus 0.606%, up from minus 0.634% at the end of last week
Okay. The US market gets excited when the German 10-year bond rises to a minus 0.606% yield from a minus 0.634% at the end of last week.

You have got to be kidding.

Two questions.

With German 10-year bond yield trending toward a minus 1% yield, exactly how far can the European Central Bank cut rates? LOL. And Trump blames the Chinese for currency manipulation. LOL.

Exactly what is the difference between 0.606% and 0.634%?

Remember, when calculating with "%" -- move the decimal over two places .... so ...
  • $100,000 x 0.00606 = $606.
  • $100,000 x 0.00634 = $634.
So, if you have $100,000 sitting around, you will pay Germany $28 less if you let them hold your cash for ten years. I guess that $28 is for each year; if so, we're talking a savings of $280. Your $100,000 will return you $99,720.

Of you can buy ATT (T) which pays almost 6%. Every year, with dividend increases likely and capital appreciation almost guaranteed (over ten years). $6,000 x 10 years = $60,000, and, of course, one can take that $6,000/year and re-invest.

Einstein: strongest force in the universe -- compound interest.

What am I missing?

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 possibly read here.

Monday, Monday -- September 9, 2019

From Energent this morning:

North American rig location at this site.

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 never in a gazillion years thought I would ever see this again:

What's going on?

Seven Wells To Come Off Confidential List -- September 9, 2019

Peak demand? Not so fast. Oil will "reign" as the dominant transport fuel, Rigzone. Data points
  • gasoline, diesel and jet fuel dominate 98% of the transport sector
    • passenger vehicles account for 40 - 50% of the transport sector (I assume the analysts are talking about fuel demand)
  • global:
    • 1 billion oil passenger vehicle
    • 6 million EVs (at most; probably less)
  • 2018, global
    • 95 million cars sold
    • 1 million of those 95 million were EVs
  • JD Power, Americans re: EVs
    • 39% would buy an EV
    • 51% do not see EVs as reliable as oil-based ones
  • developing countries: huge problem -- high cost of EVs
    • example: China's "slowdown"; 2018
      • 28 million cars sold
      • 750,000 of those 28 million were EVs
  • coal?
    • coal accounts for 60 - 70 percent of their national power supply/demand
    • EVs can increase home electricity use by 50 percent or more
  • US
    • top income quintile received 90% of the tax credits for EVs
  • Tesla:
    • unable to make a profit in 15 years
    • faces even more uncertainty now that the company has hit its 200,000 units threshold, thereby phasing-out the $7,500 federal tax credit
  • often unreported
    • ICEs continue to improve, often just as fast as EVs
    • example: SUVs operate about 99% cleaner than models produced in the 1960s
  • Tesla outsells all other EV manufacturers by factor of "many"
  • Tesla federal tax credits have ended
  • hunch: Tesla's rate of growth in sales will fall -- significantly
  • hunch: overall, US growth in sales of EVs will fall significantly, year-over-year, 2020/2019 vs 2019/2018
Venezuela: China stops refinery expansion; says it was not being paid; link here;

Rig count: continuing its decline, US oil and gas rig count drops by six; Elizabeth Warren says she will ban fracking; that will probably affect things a bit more than the current weekly rig count change;

Throwing in the towel: Cuadrilla owners have had enough; considering selling the company;

Back to the Bakken

Wells coming off the confidential list today, over the weekend -- Monday, September 9, 2019: 26 for the month; 158 for the quarter:
  • 35954, SI/NC, RimRock, Two Shields Butte 5-7-8-8H, Heart Butte, no production data,
  • 35754, SI/NC, XTO, Tom State 34X-1A, Alkali Creek, no production data,
Sunday, September 8, 2019: 24 for the month; 156 for the quarter:
  • 35979, 2,461, Newfield, Sturgeon 150-98-18-19-3H,  South Tobacco Garden; t7/19; cum 11K over 5 days extrapolates to 63,576 bbls/30-day month;
  • 35753, SI/NC, XTO, Tom state 34X-1E2, Alkali Creek, no production data,
Saturday, September 7, 2019: 22 for the month; 154 for the quarter:
  • 36014, SI/NC, RimRock, Two Shields Butte 5-7-8-1H3U, Heart Butte, no production data,
  • 35752, SI/NC, XTO, Tom State 34X-1B, Alkali Creek, no production data,
  • 35222, SI/NC, Hess, BB-Federal A-LS-151-95-0915H-6, Blue Buttes, no production data,
Active rigs:

Active Rigs6166553773

RBN Energy: Canadian shippers back on Enbridge's Mainline shift. Archived.
It’s a challenging time to be active in the crude oil market in Western Canada. Barrels are selling at a huge discount to domestic U.S. benchmarks, there is major uncertainty surrounding most new pipeline projects and crude-by-rail opportunities, and Alberta officials are unsure how long to maintain caps on production. As a result, the Canadian market is wildly volatile. It seems like a piece of the fundamentals equation changes on a weekly basis, which makes it next to impossible for producers, shippers, refiners or anyone else really to make long-term decisions and plan for the future. And now, the Enbridge Mainline pipeline system is asking folks to do just that: sign up for multi-year take-or-pay contracts on Western Canada’s biggest takeaway system, or risk leaving barrels stranded for who knows how long. Some market players aren’t buying in. In today’s blog, we recap the recent protests of Enbridge’s plan and examine what might be driving the decisions of Canada’s biggest oil companies.