Saturday, September 28, 2019

Flashback: Back To 2013 -- Spacing And "Bench Communication" In The Bakken -- September 28, 2019

Goldman Sachs on 320-acre and 160-acre spacing in the Bakken. September 25, 2013. Link here.

Array Fracking to Enable Bench Communication. September 17, 2013. Link here.

These are great articles, albeit from a different time when oil was $100/bbl. I am surprised these are still available, not behind a paywall. One may want to archive them before they are lost. Both articles are now archived.

For more, click on "KOG's Polar Pilot Project."

Going Back Home, Wilco Johnson, Roger Daltrey

Urban Life -- Why It's Impossible To Compete With Amazon -- September 24, 2019

Follow-up: the compact fluorescent lights, a set of four, arrived today, from, less than two days after they were ordered, and in perfect condition. Color me impressed.

Original Note

A bulb burned out in our 1,000-square-foot hovel. When I removed the lighting fixture, it turned out to be one of the LED bulbs that the utility companies were pushing down our throats ten years ago, or whenever it was. [Later: see first comment. This is not an LED. It's a CFL. How come I didn't know that?]

I grabbed the bulb and rode my bicycle down to Lowe's earlier this evening. No luck. They didn't have the bulb. On the way home I stopped at a Super Target. [For some reason, I now always associate Target stores with Ill-Hand Omar but that's another story for another time.]

Back to the bulb. Back to Target. Same story. They did not have the funky bulb either. Both Target and Lowe's were well stocked with the standard screw-in bulbs, but none of the bulbs as shown above.

I rode my bike home, got on, and within ten seconds found the bulb. I ordered a pack of four, and it didn't cost a penny -- "cash back" on the Amazon Visa card paid for everything. The bulb will be here Monday, in two days.

College Football

This is why I don't watch college football any more. Scores from today according to a google search:

2 Alabama: 59
Mississippi: 31

Florida: 38
Towson: 0  (never heard of it; it's in Maryland)

22 UCF: 49
Connecticut: 0

7 Auburn: 42
MS State: 9
third quarter

5 Ohio State: 38
Nebraska: 0

20 Michigan: 52
Rutgers: 0

6 Oklahoma: 55
Texas Tech: 16

I guess there was one good game:
1 Clemson: 21
North Carolina: 20
CIA -- Secret Agent Man

Secret Agent Man, Johnny Rivers

Talk about perfect lyrics:
leads a life of danger
he stays a stranger
odds are he won't live to see tomorrow
they've given you a number and taken 'way your name
you let the wrong words slip
while kissing persuasive lips
the odds are you won't live to see tomorrow
My college roommate's favorite guitarist/singer.

Another Well WIth 4x Jump In Production -- From 4,000 Bbls/Month To 16,000 Bbls/Month -- September 28, 2019

The well:
  • 18859, 680, CLR, Carson Peak 3-35H, Oakdale, Bakken, t5/11 cum 740K 7/19;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Congratulations! One Million Bbls Cumulative Since 2011 -- September 28, 2019

This well was drilled back in 2011. Less than ten years later it has produced in excess of one million bbls of crude oil and is still going strong. 

The well:
  • 20342, 1,430, Petro-Hunt, USA 153-95-4B-9-1H, t11/11; Charlson; cum 1.017849 million bbls 8/19; 25 stages; 3.1 million lbs proppant; went IA 1/14; still inactive as of 6/14; back on line September, 2014; tracked here; off line as of 10/18; back on line as of 12/18; update here; also, here
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Other wells on that pad:
  • 27208, 2,262, Petro-Hunt, USA 153-95-4B-8-2HS, t12/14; cum 625K 8/19; producing at 6,500 bbls/month;
  • 27918, 1,167, Petro-Hunt, USA 153-95-4B-9-1HS, t12/14; cum 444K 8/19; producing at 4,000 bbls/month;
The graphics:

The Bakken Never Quits -- Another Jump In Production -- September 28, 2019

Again, for newbies, these jumps in production:
  • may not move the needle for the operators in the big scheme of things;
  • are often unexplained by the "experts";
  • are often "blown off" by the "experts" as no big deal; but
  • small mom-and-pop mineral owners love this lottery.
Here's another one.

The well:
  • 23397, 969, CLR, Collison 1-23H, Avoca, t12/12; cum 245K 7/19;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare


Norwegian Jade, Eric Gales and Beth Hart

Week 39: September 22, 2019 -- September 28, 2019

Top international non-energy story:

Top international energy story:
Top national non-energy story:
Top national energy story:
Top North Dakota non-energy story:

Top North Dakota energy story:
Geoff Simon's top North Dakota energy stories:
  • XWA: three years to the day, from groundbreaking to "open for business," October 10, 2019
  • Lakebed minerals survey in progress; Lake Sakakawea
  • Petrochemicals: the next "boom" coming to ND? -- NPR Radio
  • City investing $1 million to new pipeline to sell water to Davis refinery 
  • XWA receives another $6 million in federal grants
Bakken 2.5:
Waste Water Management:
Bakken Economy:

CLR -- Tweaking A Business Model? -- September 28, 2019

I only post the summary of the agenda for the monthly NDIC hearing dockets to simply give me an idea of where the Bakken is headed. It is not posted as a source of information to follow any more specifically than that, if that makes sense. The summary is done quickly; in "shorthand"; and I do not listen to the audio when the cases are heard, nor do I follow up with the results.

But I am curious. Maybe a reader can explain this.

In the September, 2019, hearing dockets:
  • Case 27937, CLR, Elm Tree-Bakken, establish an overlapping 2560-acre spacing unit, section 2, 3, 10, and 11-153-94; 26 wells, McKenzie, Mountrail counties
Then, in the October, 2019, hearing dockets:
  • Case 28055, CLR, Elm Tree-Bakken, on an existing 2560-acre unit, sections 2/3/10/11-153-94, 27 wells; McKenzie and Mountrail counties
Both cases involved the same sections in Elm Tree oil field. In the first case (#27937) CLR requested to establish a "new" overlapping 2560-acre unit on which to place as many as 26 wells; then, a month later, CLR in case #28055 requested to place as many as 27 wells on that "existing" 2560-acre unit.

It's possible I'm misreading something again, but I've looked at it several time. I would imagine the October case will supersede the September case, but perhaps a reader can explain the difference. 

On another note, other recent "large" CLR cases:
  • 28056, CLR, Cedar Coulee-Bakken, on an existing 2560-acre unit, section 20/29/32-147-96; and, section 5-146-96; 22 wells; Dunn County 
  • 27961, CLR, Big Gulch-Bakken, 14 wells on an existing 1280-acre unit, section 19/30-147-96; Dunn County
  • the Long Creek Unit: upwards of 60 wells on ten sections drilled with two rigs starting in 2H19 and being completed by 2021 or thereabouts
With regard to the subject line suggesting that CLR is "tweaking its business model" I don't have time to go into that now, but it certainly seems CLR is doing something a bit different starting the second half of calendar year 2019. If so, Harold Hamm has telegraphed that several times, either in interviews, or company press releases, or corporate presentations. I am way out in front of my headlights but it gives us something to talk about.

By the way, my definition of an ideal well: an ideal well is one that pays for itself in the first six to twelve months, and then provides steady free cash flow for the next 34 years. The better that free cash flow the "more ideal" that well.

The Graphic

From above, case 27937:

Dividend Talk; Lots On PDX In The Permian -- September 28, 2019

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 think you may have read here.

: I often make typographical and/or factual errors. If this is important to you go to the source.  It is more apt to occur in a long note like this.

T: this story was a bit misleading. Completely accurate but misleading. Early in the story, the writer says that the  4th-quarter-51-cent-dividend represents a 2% increase from the 4th quarter one year earlier. That's true, but the dividend was actually raised a quarter or two earlier this year.

PDX: a lot of folks suggest shale operators are losing money. But there are some paying a dividend. And some are increasing their dividends. I completely missed this because I don't follow the Permian closely, but back on August 6, 2019, it was reported that Pioneer Natural Resources announced a hefty increase in its quarterly dividend.
 ... an increase in the Company’s cash dividend to a quarterly amount of $0.44 per common share (equivalent to $1.76 per share on an annualized basis as compared to $0.64 per share previously). The quarterly dividend of $0.44 is payable October 10, 2019, to stockholders of record at the close of business on September 27, 2019 .... that was yesterday. Sorry for the late notice.
PDX: density note. From Zach's, September 5, 2019 --
Unlike many other operators in the Permian Basin, Pioneer steered clear of downspacing issues, primarily due to the amount of choice acreage it has in the region.
Downspacing is the method of drilling wells closer together in a particular area to maximize output. The pure-play Permian basin producer has operations across 680,000 net acres in the Midland Basin. While its peers have well spacing of less than or equal to 600 feet, Pioneer’s wells are situated 850 feet away from each other.
In 2019, the company intends to drill and produce 265-290 wells in the region compared with 270 wells drilled last year.
Moreover, the upstream energy player expects Permian production through 2019 in the band of 320-335 thousand barrels of oil equivalent per day (MBoE/D), higher than 319.9 MBoE/D a year ago.
Pioneer expects to operate an average of 21-23 rigs this year, from which it will likely generate free cash flow of $600 million.
This is expected to help the company to continue increasing quarterly dividends. Notably, it has managed to increase annualized dividend by roughly 2100% over the past few years.
Markedly, of the authorized $2-billion share buyback program, the company has executed $528 million of repurchases.
PDX, comments on previous note. I find that note on Pioneer Natural Resources staggering. This is hyperbole, but not much: to some extent, PDX is coming close to doing in the Permian almost a third or a fourth of what the entire Bakken is doing (again, very, very general comments; very, very rough data follows, in some cases but it helps me put PDX in perspective:
  • Some Bakken/PDX comparisons:
    • rigs:
      • entire Bakken: 60
      • PDX in the Permian: 21 - 23
    • wells drilled:
      • entire Bakken in one year: somewhere between 800 and 1,000, I suppose
      • PDX in the Permian: 265 - 290
    • production:
      • entire Bakken: 1.8 million boepd or thereabouts
      • PDX in the Permian: 320,000 boepd
  • Some PDX / CLR comparisons
    • acres:
      • PDX in the Permian: 680,000 net acres
      • CLR in the Bakken: 796,000 net acres (May, 2018)
    • rigs:
      • PDX: 21 - 23
      • CLR: I have to check but I assume in the 4 - 5 range
    • production:
      • PDX in the Permian: 320,000 boepd
      • CLR in the Bakken: 187,000 boepd
    • number of wells to be drilled per year
      • PDX in the Permian:  265 - 290
    • CLR in the Bakken: around 200 but I need to confirm