The Million Dollar Way (The Bakken Oil Blog): 09/16/19

Monday, September 16, 2019

The NFL Page -- September 16, 2019

Who in the world ever scheduled Cleveland Browns against the New York Jets on Monday Night Football, second week? What were they thinking? The following was before tonight's game:

An Amazing Day: WTI Up Eight Dollars; North Dakota Reports Record Production In July, 2019; Now Nine DUCs Reported As Completed; Eight New Permits; Four Permits Renewed

Active rigs:

$62.09	9/16/2019	09/16/2018	09/16/2017	09/16/2016	09/16/2015
Active Rigs	62	65	56	32	70

Eight new permits, #36961 - #36968, inclusive:

Operators: WPX (4); RimRock Oil & Gas (4)
Fields: Heart Butte (Dunn County); South Fork (Dunn County)
Comments:

WPX has permits for a 4-well Meadowlark pad in section 27-149-92; Heart Butte oil field;
RimRock has permit for a 4-well Nosepress/Nollie/Boardslide/Shifty pad in section 10-148-93, South Fork oil field;

Nine producing wells (DUCs) reported as completed:

34656, 1,131, Petro-Hunt, USA 153-95-3B-10-2H, Charlson, t8/19; no production data,
34657, 1,328, Petro-Hunt, USA 153-95-3B-10-3H, Charlson, t8/19; minimal production;
34658, 1,050, Petro-Hunt, USA 153-95-3B-10-4H, Charlson, t8/19; no production data,
34655, 1,748, Petro-Hunt, USA 153-95-3B-10-1H, Charlson, t8/19; no production data,
34533, 2,068, Whiting, Thomas Federal 12-10-2H, Truax, t8/19; no production data,
34568, 1,811, Whiting, Thomas Federal 44-4TFH, Truax, t8/19; no production data,
34567, 2,045, Whiting, Thomas Federal 44-4HU, Truax, t8/19; no production data,
34503, 1,666, Whiting, Thomas Federal 12-10TFH, Truax, t8/19; no production data,
36598, SI/NC, Whiting, Erickson 14-23-3H, Glass Bluff, no production data,

Four permits renewed:

Whiting (3): three Lapica permits in Mountrail County
Windridge: one Coot permit in Burke County

Well name changes, continued: Bruin changed the name of 10 more wells; all had the simple "Fort Berthold" to "FB" change but more importantly, the target formation was changed in many cases, including what appears changing a middle Bakken well to a second bench Three Forks well

With The July, 2019, Data, North Dakota Set Four New All-Time Records

See this post.

Behind a paywall, but if you haven't reached your 3-article limit, naturalgasintel has a nice article on same subject.

Crude oil production:

July, 2019, preliminary: 1,442,459 bopd -- new all-time high -- up 1.2% month-over-month
June, 2019, final: 1.425,230 bopd (previous all-time high)

Gas production:

July, 2019, preliminary: 2,947,892 MCF/day, also a new all-time high; up 2.2% month-over-month
June, 2019, final: 2,885,293 MCF/day

BOE, July, 2019, preliminary:

natural gas: 2,947,892 MCF/day = 491,233 boe
crude oil: 1,442,459 bopd
total boe, preliminary for July, 2019: 1.933692 boepd

Producing wells:

July, 2019, preliminary: 15,943 (another new all-time high)
June, 2019, 15,752

Another Record -- July, 2019, Data -- North Dakota Sets Second Consecutive Monthly Production Record

For the archives: this data was released on Monday, September 16, 2019, the first business day after the Iranian drone attack on Saudi Arabia taking out almost 6 million bopd production/export. Throughout the day, the price of WTI has been climbing slowly and is now trading up almost $8/bbl, up almost 15%, and trading at $62.78. Brent:

up: 14.90%
up: $8.97/bbl
trading at: $69.19

Breaking news: Saudi Arabia shuts light oil pipeline to Bahrain after attack. Reuters. Data points:

Bahrain is now short upwards of 230,000 bopd
Bahrain (Bapco) is working to secure vessels to bring in about 2 million bbls of Saudi crude as a result of the pipeline shutdown
Bapco:

shut down 22,000 bpd unit at its Sitrah refiney today (Monday)
another 22,000 bpd unit also reduced run rates to 45%

three fields identified as being compromised by attack on Abqaiq:
Ghawar
Shaybah
Khurais

Tea leaves: it now appears Saudi Aramco will face weeks before the majority of supply from the giant Abqaiq plant is restored. The fact that the price of oil continues to climb throughout the day suggests that things are worse than first reported. "Alfalfa" apologist says Saudi Arabia is "simply re-tooling." LOL.

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The Director's Cut

Data For July, 2019

North Dakota Oil and Natural Gas Production

Disclaimer: usual disclaimer applies. As usual, this is done very, very quickly. It is not proofread. There will be factual and typographical errors on this page. If this is important to you, go to the source.

A huge, huge "thank you" to Lynn Helms and his staff at the NDIC getting this information out in a timely and transparent manner. I am not aware of any other state that does such a good job providing such data.

Link here.

Crude oil production:

July, 2019, preliminary: 1,442,459 bopd -- new all-time high -- up 1.2% month-over-month
June, 2019, final: 1.425,230 bopd (previous all-time high)

Gas production:

July, 2019, preliminary: 2,947,892 MCF/day, also a new all-time high; up 2.2% month-over-month
June, 2019, final: 2,885,293 MCF/day

BOE, July, 2019, preliminary:

natural gas: 2,947,892 MCF/day = 491,233 boe
crude oil: 1,442,459 bopd
total boe, preliminary for July, 2019: 1.933692 boepd

Producing wells:

July, 2019, preliminary: 15,943 (another new all-time high)
June, 2019, 15,752

Permitting:

August, 2019: 127
July, 2019: 141
June, 2019: 127

Rig count:

Today: 62 (all-time high was 218 on 5/29/12)
August: 62
July: 57
June: 63

New feature on the daily activity report: Fort Berthold Reservation partitioned out

Completions:

July, 2019, preliminary: 114
June, 2019, 102 (revised)
May, 2019, 113 (final)

Gas capture:

statewide, captured: 77%
statewide, captured:

July, 2019: 2,276,856 MCF/day
all time high was May, 2019: 2,287,761 MCF/day
FBIR Bakken:
July, 2019, captured: 68%

Off line, to end of June:

DUCs: 930, down 53
inactive well count: 1,675, up 122
wells off line for operational reasons are tracked here;

For break-even prices in the Bakken, see the screenshot from the Director's Cut a month ago (look at the breakeven price for oil in Mountrail County):

Daily Global Deficit: Two Million BOPD, Crude Oil, Global -- Focus On Fracking -- September 16, 2019

Again, FocusOnFracking is best weekly summary of global petroleum with focus on US shale revolution. From last night's weekly post:

OPEC has estimated that during the 3Q19, all oil consuming regions of the globe will be using 100.63 million barrels of oil per day, ...

meanwhile, OPEC and the rest of the world's oil producers were still only producing 99.24 million barrels per day during August, which means that there was a shortfall of around 1,450,000 barrels per day in global oil production...

... in addition, the 1,980,000 barrel per day shortfall that we had previously figured for July based on last month's figures would now be revised to a deficit of 2,220,000 barrels per day in July, 2019....

....hence, for the 2nd quarter as a whole, even after those downward revision to demand, the world's oil producers were producing 767,000 barrels per day less than what was needed...

Global oil demand / supply deficit, in bullet-form:

3Q19, estimate of demand, global, crude oil:

100.63 million bopd

3Q19, global production, crude oil:

99.24 million bopd

3Q19, shortfall, crude oil, original estimate:

1.45 million bopd

July, 2019, crude oil, deficit, revised:

2.220 million bopd (up from previous estimate of 1.980 million bopd)

total, 2Q19, deficit: 767,000 bopd

June, 2019, deficit: 620,000 bopd
May, 2019, deficit: 990,000 bopd
April, 2019, deficit: 860,000 bopd

And, this was before the attack on Abqaiq which accounts for about 6 million bopd crude oil exports.

XWA Opening: 10.10.19

XWA to open 10.10.19.

"Current" photo:

Bruin With Some Interesting Well Name Changes -- Continued -- September 16, 2019

Bruin is changing new permits with "Fort Berthold" lead-in to simply "FB." This stands for "Fort Berthold," not "Facebook.

Bruin is also changing the name of several Sylte Mineral Trust wells to WM Polar. These wells are located in Williams County, north of Williston. "Polar" certainly describes their location.

Noted in the daily activity report for Friday, September 13, 2019.

Daily Activity Report For Friday Posted -- Monday, September 16, 2019 -- MRO Reports Completion Of A Huge DUC

New permits: CLR with seven new permits for their Long Creek Unit, #36954 - #36960, inclusive, LCU Ralph and LCU Reckitt Federal (previously posted based on information from elsewhere).

Two disposal wells permitted, including Bohmbach SWD 1 in Elm Creek.

Two producing wells (DUCs) reported as completed:

34502, 2,558, Whiting, Thomas Federal 12-10H, Truax, t8/19; cum --; [#23709, #23708, #22074]. See full production profile for #23708 at this post.
34757, 5,361, MRO, Ruth 44-23TFH, Chimney Butte, t8/19; cum --; [#27074. #26015, #26016, all off line]

Name changes: Bruin has eight more well name changes. I will get back to these later.

Seven permits renewed:

Oasis (6): six Pederson permits in McKenzie County
Windridge Operating: one Coot permit in Burke County

Notes From All Over, Part 1 -- September 16, 2019

Tea leaves: a quick scan of twitter this morning suggests --

it will take longer than first forecast to "get back to normal"
Saudi has resumed "normal" loading operations
full loading coming from strategic storage facilities
Saudi has told foreign customers to expect full supplies
however, Saudi said to be reducing allocations to own refineries, local economy
Saudi officials consider delaying Aramco IPO pending full evaluation
no one has yet suggested that Saudi Arabia paid Iran to hit their storage facilities to raise the price of oil -- this would be the "Hillary/Comey/Clapper" scenario
most interesting note: Saudi Arabia said to be concerned that other producers will over-react to the situation --- in other words, Saudi Arabia is worried about losing market share as customers find other (more reliable) sources

Market: I'm not even sure if it's worth posting share prices for oil companies. A quick look early this morning confirms what we all expected. Shares of publicly traded oil companies jumping from 2% to 15%. Maybe not as high as 15% but some approaching double-digit percentage increases.

Interestingly enough, most (all?) are still below their 52-week highs. There are headlines suggesting that prices in the oil sector still do not reflect reality. Which, of course, does not make sense if one accepts market efficiency and the philosophy of free markets.

So, get it while you can.

Get It While You Can, Janis Joplin
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.

Opinion: it's hard to believe this article (an op-ed piece) made the MarketWatch page -- "The truth about the stock market that "Never Trumpers" cannot accept. Link here. My hunch is that Brett Arends will never work for CNN Business News.

Memo to Donald Trump’s critics: Just 3,000 more points to go!

That’s how much further the Dow Jones Industrial Average has to fall before you can start saying Trump’s been bad for the stock market.

Yes, the Dow has plunged more than 1,000 points in a couple of weeks, thanks to the president’s tariff spat with China. Yes, it went through a wild swing Wednesday, plummeting more than 500 points at the open before rallying.

But: Perspective, folks.

The Dow was just 18,000 when Trump was elected nearly three years ago. Right now, even following Monday’s big drop, it’s above 26,000.

Futures: Dow down 94 points, hardly remarkable. It's almost as if nothing happened over the weekend. If the Dow finishes in the green today, even by a little bit, it will speak volumes about the health of the US economy.

If Saudi does not retaliate militarily this is why: if ten bottle rockets can knock out 50% of Saudi's crude oil exports, can one imagine how much would be knocked out in the first 24 hours of all-out war? Yeah, that much.

Non-oil proxy today: UNP. UNP was up at the close on Friday; today, futures, UNP is absolutely flat.

Director's Cut Pending -- To Be Released Later This Afternoon; Still Waiting For Friday's Activity Report -- Monday, September 16, 2019

Reminder: Director's Cut is scheduled to be released this afternoon at 3:00 p.m.

Road to Mexico: Mexico's growing reliance on US oil will continue. Operative word in that headline over Rigzone -- "growing." Not just "reliance on US oil, but "growing reliance on US oil." Hmmm. Wow, I haven't seen "Cantarell" in a long, long time. North Dakota producing about the same amount as Mexico. Who wudda thought?

It has been a long and winding road for Mexico’s oil industry over the past 15 years. With the peaking of supergiant Cantarell, once the world’s second largest oil field, Mexico's crude production has been sliced in half to below 2 million b/d. Proven oil reserves have collapsed from 50 billion barrels 20 years ago to just 8 billion barrels today. Mexico’s crude oil exports to primary customer, the U.S., have been plummeting. From 2006-2018, shipments to the U.S. fell 60 percent to 720,000 b/d. After lengthy delays, Mexico in 2013 critically passed its Energy Reform to bring in outside investment and expertise to help production rebound. It remains a bumpy ride, however, and the new AMLO administration has been resistant to deregulation.

In turn, Mexico has been increasingly forced to deepen its dependence on the U.S. to meet oil demand at home. Falling production has been exacerbated by a refinery shortage, surging imports of refined products. In 2018, Mexico imported 1.2 million b/d of products from the U.S., or six times more than its intake before peak oil production. The country last year imported 520,000 b/d of gasoline from the U.S., nearly a five-fold boom over the past decade.

About where we were last summer: $60.31 (WTI).

Brent at $66.70 still not enough to meet Saudi's budget

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Back to the Bakken

Rig count (AIIM/FWIW): Rigzone -- Texas dropped the most rigs, at eight. The following states also lost rigs this week:

West Virginia (-3)
Louisiana (-2)
Alaska (-1)
California (-1)
Colorado (-1)
Ohio (-1)
Pennsylvania added two rigs
while North Dakota and Oklahoma tacked on one rig apiece.

Wells coming off the confidential list today --

Monday, September 16, 2019: 43 for the month; 175 for the quarter:

35522, SI/NC, Hess, EN-Davenport-156-94-1003H-3, Big Butte, no production data,

Sunday, September 15, 2019: 42 for the month; 174 for the quarter:

36142, 181, Hunt, Cook 146-93-24-13H-4, Werner, t8/19; cum --;
35521, SI/NC, Hess, EN-Davenport-156-94-1003H-2, Big Butte, no production data,

Saturday, September 14, 2019: 40 for the month; 172 for the quarter:

None.

Friday, September 13, 2019: 40 for the month; 172 for the quarter:

35520, SI/NC, Hess, EN-Davenport-LE-156-94-1003H-1, Big Butte, no production data,