Record Snow, Record Cold -- Boulder, CO; Bismarck, ND -- October 11, 2019

FWIW.

Link here.

The good news is that atmospheric CO2 does not cross international borders, otherwise it would be a lot worse here in the US getting all that CO2 from China and India:

Parent / Child Wells -- Random Note -- October 11, 2019

Well, look at this.

Regular readers of the blog know that I am inappropriately excited about the "halo" effect -- that jump in production seen in Bakken wells when they are brought back on line after being off line for a few weeks or a few months while neighboring wells are fracked. In some cases (rarely) the "parent" well is off-line for less than a month.

I tag posts discussing this phenomenon as "halo" or "jump in production." I noted the phenomenon almost a decade ago but had not seen validation from a credible source.

[The very first post that was tagged with the halo effect was dated August 19, 2010. Link here: http://themilliondollarway.blogspot.com/2010/08/another-first-for-north-dakota_19.html.]

I did receive a phone call from an analyst at the largest fracking company in the Bakken at that time about six years ago asking me about my observations. The analyst said his company was referring to these as "parent/child" wells. I did not post the specifics of that phone call at that time assuming that some of the information I had been told was proprietary.

[I was in Belmont, MA, when I received the phone call. I was last in Belmont, MA, in 2013: that's why I know that the phone call was at least six years ago.]

I continue to look for validation from credible sources. About a month ago, maybe two or three months ago, I started getting hints of validation from Whiting. I think I have posted some of that, but I can't recall for sure.

Break, break.

It's my observation that the parent / child interaction in the Bakken is "positive." Either there is no effect, a subtle effect, or a huge positive effect, but I have not seen any suggestion that the parent / child interaction is "bad news" in the Bakken.

On the other hand, however, there have been numerous stories in the popular press that this is not the case in other shale plays. There are concerns, particularly in the Permian, that new wells (or "children" wells) are having an adverse effect on older wells ("parent" wells).

Break, break.

Tonight, in the process of looking for something else, I ran across this slide in a recent Whiting presentation.

The link: https://event.webcasts.com/viewer/event.jsp?ei=1260399&tp_key=d761d52d8c.

Slide #9.

Screenshot:

Note: "Parent / child well activity [in the Bakken] is positive vs experience in other shale plays."

By the way, that one slide above has many, many other interesting data points. 

"Damn The Torpedoes, Full Speed Ahead" -- CLR's Vardon Wells In Siverston Oil Field -- October 11, 2019

This page will not be updated. These wells are tracked elsewhere. 

Another example of "damn the torpedoes, full speed ahead" by CLR. These are the Vardon wells in Siverston oil field. These wells are tracked here.

Currently, CLR has fifteen (15) Vardon wells,

• status:
• ten (10): drl status
• four (4): completed; some off line while work in the area is going on
• one (1): completed but inactive while work in the area is going on
• target:
• middle Bakken: five (5)
• H1, first bench Three Forks: three (3)
• H2, second bench Three Forks: four (4)
• HSL (assume middle Bakken): two (2)
• HSL1 (assume first bench Three Forks): one (1)

These wells are huge.

Typical production profiles:

• 33231
  
  

  Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
  BAKKEN	8-2019	31	27417	27358	20219	47449	27847	19195
  BAKKEN	7-2019	31	31905	31881	23980	54045	17032	36606
  BAKKEN	6-2019	16	15880	15586	14842	26129	22204	3715
  BAKKEN	5-2019	0	0	0	0	0	0	0
  BAKKEN	4-2019	0	0	0	0	0	0	0
  BAKKEN	3-2019	0	0	0	0	0	0	0
  BAKKEN	2-2019	0	0	0	0	0	0	0
  BAKKEN	1-2019	0	0	0	0	0	0	0
  BAKKEN	12-2018	0	0	0	0	0	0	0
  BAKKEN	11-2018	0	0	0	0	0	0	0
  BAKKEN	10-2018	16	13612	14537	12805	24254	1265	22792
  BAKKEN	9-2018	29	28228	28045	24902	47199	24555	22284
  BAKKEN	8-2018	30	24872	24922	22618	42600	19784	22446
  BAKKEN	7-2018	31	24798	24151	30630	45206	32677	12127
  BAKKEN	6-2018	16	13494	13544	17781	29920	23987	5744
  BAKKEN	5-2018	31	39074	39428	42497	78201	75308	2893
  BAKKEN	4-2018	30	33771	33451	44940	68045	55979	12066
  BAKKEN	3-2018	25	32798	32643	53557	57379	45291	12088
  BAKKEN	2-2018	4	645	476	6164	1599	0	1599



• 33230:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	8-2019	31	12957	12941	15370	25402	18867	6128
BAKKEN	7-2019	31	15970	16016	17317	29678	23059	6212
BAKKEN	6-2019	18	14324	14149	11364	23673	12064	11373
BAKKEN	5-2019	0	0	0	0	0	0	0
BAKKEN	4-2019	0	0	0	0	0	0	0
BAKKEN	3-2019	0	0	0	0	0	0	0
BAKKEN	2-2019	0	0	0	0	0	0	0
BAKKEN	1-2019	0	0	0	0	0	0	0
BAKKEN	12-2018	0	0	0	0	0	0	0
BAKKEN	11-2018	0	0	0	0	0	0	0
BAKKEN	10-2018	16	12355	12990	12918	21534	620	20717
BAKKEN	9-2018	29	30078	30382	24538	50399	22182	27857
BAKKEN	8-2018	30	21555	21345	17732	39733	33829	5534
BAKKEN	7-2018	31	46510	46003	32108	77197	32846	43951
BAKKEN	6-2018	15	9546	9337	10392	19604	14912	4549
BAKKEN	5-2018	31	37042	37505	34637	72096	70219	1877
BAKKEN	4-2018	30	41415	41026	45928	85214	56398	28816
BAKKEN	3-2018	26	42941	43156	50585	80980	44064	36916
BAKKEN	2-2018	10	1090	684	12931	3669	0	3669
BAKKEN	1-2018	0	0	0	0	0	0	0

Vance Federal Wells In Truax Oil Field Have Just Been Fracked -- October 11, 2019

It appears the Vance Federal wells in NENE 17-154-97 have been fracked. I only checked one well on the pad, but the neighboring older wells are all off-line suggesting activity in the area. The NDIC shows these wells as DUCs (SI/NC) but, in fact, according to FracFocus, have been fracked.

I only looked at this well:

• 35274, SI/NC, Whiting, Vance Federal 41-17TFHU, Truax, t--; cum --; from FracFocus -- fracked 8/11/2019 - 8/25/2019; a relatively moderate frack with 6.4 million gallons of water; 88.67% water by mass; sand, 11% by mass; 

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

Space

I've been watching the Blu-Ray version of Apollo 13, the Ron Howard movie. In light of recent news articles talking about the difficulty China and India have experienced trying to land an unmanned space probe on the moon highlights just what an incredible success NASA and the moon missions were. I've watched the movie twice in the past few days, and am now watching it again with the commentary by Ron Howard. Absolutely incredible.

A Belated Happy Birthday To Wilms A 1 -- Wiley Oil Field -- 59 Years Old -- October 11, 2019

From a post elsewhere:

• 2669, 102, Denbury Onshore, Wilms A 1, Wiley oil field; t6/60; cum 445K 8/19; still active after 59 years, just plugging away, day after day, 500 bbls/month ~ $40,000/month, costing about a dollar a day to operate, I suppose. It is classified as a horizontal re-entry; it looks like it was re-entered in 2003; only one (1) day in 2/16; INACTIVE as of 3/16; appears to be back on status as of 10/16; but then back off-line 8/17; back on line as of 12/17;

Recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
MADISON	8-2019	28	439	565	10557	0	0	0
MADISON	7-2019	30	352	242	12797	0	0	0
MADISON	6-2019	27	372	270	11399	0	0	0
MADISON	5-2019	28	368	535	15064	0	0	0
MADISON	4-2019	30	359	288	12159	0	0	0
MADISON	3-2019	31	350	406	10853	0	0	0
MADISON	2-2019	28	298	256	9586	0	0	0
MADISON	1-2019	31	315	243	10443	0	0	0
MADISON	12-2018	31	294	270	10660	0	0	0
MADISON	11-2018	25	286	284	10109	0	0	0
MADISON	10-2018	31	222	397	14154	0	0	0
MADISON	9-2018	30	166	313	16133	0	0	0
MADISON	8-2018	31	324	185	17650	0	0	0
MADISON	7-2018	31	447	550	16236	0	0	0
MADISON	6-2018	30	662	537	15908	0	0	0
MADISON	5-2018	31	600	721	15652	0	0	0
MADISON	4-2018	28	456	364	12103	0	0	0
MADISON	3-2018	31	506	812	13445	0	0	0

The Bakken Is Simply Incredible -- October 11, 2019

The Bakken is simply incredible.

Another example at this post.

Four Huge DUCs Reported As Completed; Only Two New Permits -- October 11, 2019

The incredible Bakken: see this well. 

Active rigs:

$54.70	10/11/2019	10/11/2018	10/11/2017	10/11/2016	10/11/2015
Active Rigs	58	68	59	33	68

Two new permits:

• Operator: Whiting
• Field: Sanish (Mountrail)
• Comments:
• Whiting has permits for a two-well S-Bar pad in lot 1 / section 7-153-92, Sanish oil field

Four producing wells (DUCs) reported as completed:

• 35651, 3,150, WPX, Bird Bear 35-26HS, Spotted Horn, t9/19; cum --;
• 35648, 3,261, WPX, Hackberry 34-27HG, Spotted Horn, t9/19; cum --;
• 35650, 3,901, WPX, Bird Bear 35-26HB, Spotted Horn, t9/19; cum --;
• 35649, 3,090, WPX, Bird Bear 35-26HU, Spotted Horn, t9/19; cum --;

US Crude Oil Imports -- October 11, 2019

Let's take another look at the EIA weekly petroleum report ending October 4, 2019 (the most recent one) and take a look at imports. Specifically, let's take a look at US imports in million bopd.

Link here. From the EIA weekly petroleum report for the most recent data available --

• So, most recent data, US imports averaged about 6.2 million bopd.

Historical US crude oil imports.

• July, 2019: 296,072/31 = 9.6 million bopd
• June, 2019: 277,155 / 30 = 9.2 million bopd
• February, 2019: 241,591 / 28 = 8.6 million bopd 
• last October, 2018: 293,506 / /31 = 9.5 million bopd

From twitter:

It is what it is. I'm not sure why it's "Yikes."

US Crude Oil Days Of Supply -- EIA -- October 11, 2019

Link here.

Notes From All Over, Part 4 -- October 11, 2019

From twitter:

Notes From All Over, Part 3 -- October 11, 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 think you may have read here.

Timing: I get a kick out of this. I'll never be able to find the post when I first said this, and I think I said it more than once, but don't quote me on that. I opined that "the market" was focused on two things: the "Fed" and China. Trump controlled the timing of one, but not the other. Actually, I mentioned the market was focused on three things, but I can't remember now what the third thing was. It was not earnings; not geopolitical events; something else. Doesn't matter.

Moving on.

Dow: up 450 points. But still below it's all time high. At 26,952 right now (10:27 a.m. CT).

Recession is right around the corner.

Trump rally last night was huge.

Trump rally in Dallas next week.

WTI: surprise, surprise. Up 1.6%; up 84 cents; trading a bit over $54. Right in the sweet spot.

• good for the US economy to stay below $60
• Bakken operators thrive above $52
• Saudi can't survive on $60.24 Brent -- and that's where Brent is right now

In the news:

• AAPL: up another 2% right now. Up almost $5/share; now trading just below $235.
• SRE: down about a buck.
• EW: up almost $3. Trading right at $229.
• XLNX: up 4.5%. Trading at $97 right now but remains well off its highs.
• BKH: up 1.2% -- pretty good for a little old utility
• RDS-B: up about 1.4% today but well below its highs
• BRK-B: with all the AAPL it holds, it should be doing well -- up 1.4%; well off its highs
• D: up a little

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

Waiting For Godot? No, Waiting For The IPO Valuation

Link at The Wall Street Journal.

It could come in well under $2 trillion. If so, it won't make the king very happy.

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

Steve Jobs

I normally don't post these types of stories, too much fluff, but this one I found intersting.

Link at The Wall Street Journal: "The Lesson I learned from Steve Jobs."

Jobs' legacy continues to build.

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

Apple Picking In New England

Link to The Wall Street Journal. One of the highlights while living in Belmont, MA, a suburb of Boston, was visiting the apple farms in New England. But apples were just the beginning. The article itself is fairly awful but the headline caught my attention and brought back some wonderful memories.

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

A Book To Consider?

The Deep History of Ourselves: The Four-Billion-Year Story of How We Got Our Conscious Brains, Joseph LeDoux, c. 2019

379 pages.

Short, stand-along 3 - 4 page essays.

Sort of like talking with the author while sipping good Scotch in January in Edinburgh, with our soulmates. Perhaps in a quiet, fairly empty pub.

The Bakken: 2Q19 Taxable Sales In Williston, Williams County Up More Than 6%

Quick data points:

• North Dakota's taxable sales and purchases for the second quarter of 2019 are up nearly 8.4%
• Second quarter taxable sales and purchases were up 6.34% in Williston and 6.09% in Williams County
• Williams County's taxable sales and purchases rose from $423,659,194 in 2018 to $449,451,615 in 2019 
• Williston's increased from $402,042,984 to $427,535,297

Link here.

Of the 50 largest cities in North Dakota, the highest percent increases for the second quarter of 2019 (compared to the second quarter of 2018) were as follows:

• Watford City – increase of 35.6%
• Beulah – increase of 24.1% 
• Lincoln – increase of 21.4%
• Washburn – increase of 20.7%
• Rolla - increase of !5.8%

Of the six cities with the largest population in North Dakota, all posted second quarter increases, with Dickinson’s growth the largest at 12.3% and Grand Forks the smallest, at 0.6%.

Counties with the highest percent increases for the second quarter of 2019 (compared to the second quarter of 2018) were as follows:

• Burke – increase of 78.0% 
• Bottineau – increase of 32.8% 
• McKenzie – increase of 30.4% 
• Benson – increase of 24.9% 
• Bowman – increase of 21.8% 

All but one of these counties – Benson County – are in the state’s western “oil patch”.

Clicking on this link should result in a pdf being downloaded:

• 2nd Quarter 2019 Sales and Taxable Purchases Report

Airport Opened -- And, Yes, As Posted -- A Delay In First Arrival -- October 11, 2019

Link over at The Williston Herald. This is almost as exciting as the first discovery oil well in North Dakota in 1951 -- and ironically, coincidentally -- the events are obviously related: the first oil well in 1951 and the new international airport in 2019. Sixty-eight years. Headlines and highlights:

• In a serendipitous twist of fate, a delay actually added to the story of the airport
• 4,000 tour the airport; dedication ceremony, more
• photos at this site
• United Airlines scheduled to be first land; I believe Delta got the bragging rights
• first time in 24 years that one US airport closed the same day its "replacement" airport opened; the airport 24 years ago? Denver International Airport

Notes From All Over, Part 2 -- October 11, 2019

Gulf of Oman: this is a pretty cool story. Link here.

Fujairah’s strategic location. Being one of the seven emirates that make up the UAE, it’s the only one with a coastline solely on the Gulf of Oman and none on the contentious Persian Gulf.

But also something else:

Furthermore, the port’s Fujairah Oil Industry Zone (FOIZ), which hosts the Middle East's largest commercial storage capacity for refined oil products, tied-up with S&P Global Platts to deploy blockchain solutions in 2018 that facilitate submissions of weekly oil storage data by market participants, improving transparency.

EPD pipeline: from Rigzone. Data points:

• Midland to ECHO crude oil pipeline system to be expanded
• will link its 6 million-bbl Midland, TX, storage facility to its ECHO Terminal in Houston
• via its Eagle Ford system in South Texas
• would bypass a major Texas groundwater source -- would avoid the Edwards Aquifer
• set to be in service by 2021
• initial capacity: 450,000 bpd
• would be able to expand to 540,000 bpd

 Edwards Aquifer: a big, big deal in central, south Texas.

Notes From All Over, Part 1 -- October 11, 2019

Updates

October 12, 2019: this article over at zerohedge is so good, I'm tempted to post it in its entirety even at risk of copyright inquiry.

October 12, 2019:

October 11, 2019: from the WSJ, an op-ed -- "California's Dark Eyes" -- why the progressive paragon is living like it's 1899 (no typo).

Californians are learning to live like the Amish after investor-owned utility PG&E this week shut off power to two million or so residents to prevent wildfires amid heavy, dry winds. Blame the state’s largest blackout on a perfect storm of bad policies.

Two dozen or so wildfires in the past few years have been linked to PG&E equipment, including one last fall that killed 85 people. PG&E under state law is on the hook for tens of billions of dollars in damages and has filed for bankruptcy. For years the utility skimped on safety upgrades and repairs while pumping billions into green energy and electric-car subsidies to please its overlords in Sacramento. Credit Suisse has estimated that long-term contracts with renewable developers cost the utility $2.2 billion annually more than current market power rates.

A report this week by Next 10 and Beacon Economics warns that the state isn’t on target to meet its climate goals in 2030 because Californians refuse to abandon SUVs for electric cars. Wildfires last year produced more CO2 than the state’s businesses, homes and farms, offsetting state emission reductions in 2017 nine times over.

Environmental regulators responded to the report by claiming that carbon from burned trees is more “natural” than from combusted fossil fuels. Perhaps they’ve inhaled too much of their own smoke.

One comment that pretty much encapsulates readers' thoughts:

This is the same state that dropped $77 billion on a high speed rail project that no one wanted, designed to connect places no one went to, and failed to create a single piece of useful public infrastructure out of it.  But I'll bet a whole lot of homes, cars, planes, vacations, and private cash hordes were built from it.  There are countries in the world that would put people to death over such a travesty of public funds malfeasance.  No one even lost their job over that.  California is utterly and irredeemably corrupt. 

And this:

I was reading the interesting tale of the rechargeable Lithium-ion car battery. A Nobel was just given to three fellows responsible for the chemistry/engineering aspects-one 97. The down side from an environmental side was the relatively enormous 50-60 lbs of cobalt required. Supposedly 500,000 lbs of ore must be mined in one of several far away places in order to achieve that. Compared to clean natural gas and a CO2 extraction system attached to the engine  the environmental impact of the electric car is dubious at best. But that's why Musk needs to get off this rock pile. We need to be messing up other places not here. 

Original Post

California moratorium on oil and gas leases has ended. See below.

Finally; should have been done years ago. Why didn't the US Postal Service do this ten years ago? And it still hasn't. But UPS will. UPS will spend $450 million to add 6,000 vehicles to its natural gas fleet. Link here. Amazon did one better: adding a coal-powered fleet (AKA EVs). Posted earlier.

$5 gasoline in California? Nope, how about $6 gas? I remember all the pushback I got when I "predicted" $5 gasoline for California. The price of gasoline has risen 86.4 cents / gallon since the start of the year. And this is the end of the driving season. Links everyone. This is from Forbes.

While the CNN story focuses on this recent spike, the reality is that the lowest price Californians have experienced during 2019, according to the U.S. Energy Information Administration (EIA), came during the week of January 28, when the price for a gallon of regular averaged $3.206. Texans paid $1.962 during that same week.

Let's see how this goes? US opens up California land for oil, gas leasing. LOL. Over at Rigzone.  Like that will go anywhere.

The U.S. Department of the Interior’s Bureau of Land Management has opened up 722,000 acres of federal land in California’s central coast for oil and gas leasing and development.

The land is located primarily in Fresno, Monterey and San Benito counties. The decision makes 680,000 acres of federal mineral estate available for lease with controlled surface use stipulations and an additional 42,000 acres available for lease with no surface occupancy requirements.

It also marks the end of a five-year moratorium on oil and gas leases in California. The state had not had an oil and gas lease sale since 2013.

The catch:  However, it doesn’t authorize any actual drilling for exploration or development of oil and gas resources, according to a BLM press release.

Geography lesson: quick! Where is the Gulf of Oman? We'll come back to this later.

Global Warming Slams North Dakota, Colorado; Market Surging? Oil Up A Bit -- What's Not To Like? -- October 11, 2019

Global warming hits the US. St Greta prays for Boulder, CO; and, Bismarck, ND. In all the years I grew up in North Dakota (I was born in Bismarck), I do not recall one time when snow closed Bismarck in early October. We'll get back to this.

Market. wow.

AAPL: may have hit price-point for movers and shakers to recommend buying; but still cautious. The first "price point" to buy was $219; then it was moved to $225. I see AAPL futures are now solidly over $132. One assumes the new price-point before recommendation to buy will be moved to $135 or maybe $140. Memo to self: call financial advisor.

California on fire: wildfires and forest fires now being caused by generators folks have installed because utility companies shutting off power. Largest first in past 24 hours due to garbage truck dumping hot trash that sparked fire.

WTI: nice jump in price.

Oil demand: up; new record set.

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 think you may have read here. 

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

Back to the Bakken

Williston Basin International Airport off to a great start. International. As was Sloulin International Airport.

Only one well coming off the confidential list today -- Friday, October 11, 2019: 31 for the month; 31 for the quarter:

• 35713, 1,450, WPX, Nancy Dancing Bull 1-36HQL, Mandaree, t7/19; cum 28K 8/19;

Active Rigs:

$54.30	10/11/2019	10/11/2018	10/11/2017	10/11/2016	10/11/2015
Active Rigs	56	68	59	33	68

RBN Energy: update on Cushing-related pipelines. Probably one that needs to be archived.

Crude oil inventory levels aren’t the only thing in a constant state of flux at the crude storage hub in Cushing, OK. 

A year ago, we blogged extensively about Cushing’s major players, storage assets and incoming and outgoing pipelines, as well as plans for new pipes that highlight the hub’s continued significance, even in an increasingly Permian- and Gulf Coast-focused energy sector. 

A lot has changed since then, though. Some pipeline projects into and out of Cushing have advanced to final investment decisions (FIDs), while others have floundered or foundered. Also, brand-new pipeline projects have been announced, as was a big acquisition that will make Energy Transfer a major player in Cushing storage. Today, we begin a short series on recent developments at the Oklahoma oil hub and how they reflect changes in the ever-evolving U.S. energy markets.