Sunday, October 13, 2019

The New Gunderson Wells Have Been Completed; All Gunderson Wells Back On Line -- October 13, 2019

This is pretty cool. After being off-line for about a year, an Equinor Gunderson well in Banks oil field is back on line:
  • in early 2018, it was taken off line, producing less than 2,000 bbls/month
  • it was brought back on line a few months ago; in its first full month of production after being brought back on line: 13,669 bbls of oil -- whoo-hoo!
The well:
  • 23006, 2,590, Equinor/Statoil/BEXP, Gunderson 15-22 6H, Banks, s6/12; t12/12; cum 269K 8/19; 
Here are the Gunderson wells in 15/22-152-98:
  • 33863, 2,805, Equinor, Gunderson 15-22 5H-R, Banks, t9/18; cum 229K 8/19; see production below;
  • 33862, 2,131, Equinor, Gunderson 15-22 7TFH, Banks, t9/18; cum 163K 8;19; see production below;
  • 22577, 3,129, Equinor/BEXP, Gunderson 15-22 4TFH, 15-152-98, Banks, t4/14; cum 267K 8/19;
  • 22578, 3,906, Equinor/BEXP, Gunderson 15-22 3H, 15-152098, Banks, t3/13; cum 394K 8/19;
  • 22839, dry, Equinor/BEXP, Gunderson 15-22 5H, 15-152-98,
  • 20345, 2,746, Equinor/BEXP, Gunderson 15-22 1H, t7/1l; cum 396K 8/19;
  • 23005, 1,964, Equinor/BEXP, Gunderson 15-22 2TFH, Banks, t12/12; cum 126K 8/19;
  • 23006, 2,590, Equinor/BEXP, Gunderson 15-22 6H, Banks, t12/12; cum 269K 8/19;
22839, 22577, and 22578 are on the same pad.
23005 and 23006 are on the same pad.
There is a seventh well in that same section:
  • 16135, IA/240, MBI, LM 2, a Madison well, a fairly short lateral, t5/06; cum 63K 9/12;
33862, 7TFH:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN8-20193115321150541223851998519980
BAKKEN7-20193113213134381387442950429500
BAKKEN6-201925154231520613891496074951988
BAKKEN5-201929129021311713607361523608765
BAKKEN4-201923133951327716667386203860020
BAKKEN3-2019301583115927242905103850860178
BAKKEN2-201927191121910230628581585809167
BAKKEN1-201928162611609435024440294401712
BAKKEN12-20182011323114512470138077038077
BAKKEN11-20182719428197013507762468121661252
BAKKEN10-20186416537286391880476761128
BAKKEN9-2018568076736134801407175486523

 33863, 5H-R:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN8-20193116235159631255749575495750
BAKKEN7-20193115666160101250948074480740
BAKKEN6-2019262222421894135176620366034169
BAKKEN5-20192916068165461353245089450863
BAKKEN4-20193025823255852066177984779840
BAKKEN3-201931297492975523311925899256128
BAKKEN2-2019272416324218233477353673241295
BAKKEN1-201928246172436926973670516701239
BAKKEN12-20182117647177881595260134060134
BAKKEN11-20182725313255152543181842169080152
BAKKEN10-2018641763746393790938536557
BAKKEN9-2018575467467119521402657938233

Whiting Well In Sanish Appears To Be Active -- October 13, 2019

This page will not be updated. This well will be tracked elsewhere.

The well:
  • 35945, A, Whtiing, White 43-33H, Sanish, t--; cum --;
Production;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN8-20198566453583497350403469

All wells sited in section, running parallel to each other, running southeast to northwest:
  • 25350, 1,501, Whiting, Carl Kannianen 24-33H, Sanish, t8/13; cum 208K 8/19; offline the past four months, just coming back on line, 8/19;
  • 25384, 384, Whiting, Harttrom 24-33H Sanish, t10/13; cum 188K 8/19; off line past four months; nice bump in production when it came back online 8/19;
  • 18298, 3,422, Whiting Kannianen 44-33H, Sanish, t1/10; cum 702K 4/19; off line since 4/19;
  • 20437, 134, Whiting, White 43-33TFH, Sanish, t12/11; cum 171K 8/19; offline the past four months, just coming back on line, 8/19;
  • 35945, see above;
  • 36025, n/d, Whiting, White 43-33-2TFH, Sanish, t--; cum --;
  • 19174, 2,090, Whiting, Kannianen 43-33H, Sanish, t10/10; cum 391K 4/19; off line for past five months; neighboring frack; still off line 8/19;
  • 25323, 468, Whiting, Make 42-33XH, Sanish, t9/13; cum 218K 6/19; off line for past three months; neighboring frack;
  • 20840, 3,376, Whiting, Maki 41-33XH, Sanish, t2/12; cum 633K 8/19; off line for past three months; just now returning to production, 8/19;
  • 25322, 1,083, Whiting, Maki 41-2XH, Sanish, t9/13; cum 333K 8/19;
This is a great example of the difference between two oil fields:
  • it appears that we're not seeing any parent-child uplift in the Sanish;
  • huge parent-child uplift for the Charlson

Advantaged Oil -- October 13, 2019

There will be nothing new posted here. I needed a post to bring together several other posts so that it could be more easily linked at the sidebar at the right. Lumping, no splitting.

Non sequitur, October 13, 2019
  • parent-child uplift
  • advantaged oil
  • infinite returns on investment
Advantaged oil, October 13, 2019
  • advantaged oil
    • using technology to grab more bbls from mature fields
    • use market forces to maximize returns
  • how does one do that?
    • short-cycle projects
    • digital technology, perhaps including AI
    • types of oil, heavy vs light; turning on a dime; producing the oil refiners want/need
    • low risk, low cost
    • high margin
Advantaged oil, October 13, 2019
  • links to four articles
Advantaged oil, October 9, 2019
  • features of the Bakken 
Right kind of oil, February 18, 2019

Sand -- October 13, 2019

Source: frack sand, North Dakota, will download as a pdf.

From that source:

Crush resistance, of concern: in the 2011 study linked above, site #1 (north of the highway) did not meet "crush resistance criteria -- and it was a big miss) where site #7 did meet crush resistance criteria. Across such a wide area, quality of sand will likely vary. Sames from locations 2, 3, 5, 7, and 8 met criteria back in 2011. Sites 1, 3, and 7 are in the McHenry area.

Updates

Later, 9:44 p.m. CT: a reader wonders if DrillingInfo might be willing to help us sort out a cost/benefit analysis of brown vs white sand; and, of course, later, ceramic -- comment being brought up for here to make it easier to google --
I'm too lazy to Google for it right now, but I'm intrigued by the difference between white sand (Wisconsin, more expensive, more globular) and brown sand (Texas, less expensive at least down there, and more plate-y). In theory, globular should give better well performance initially and hold more of the fracture open longer. However, in the Permian, operators have decided that the cost difference is worth the performance drop (and can be made up by stuffing more cheap sand in).
But there is also an interesting example in the Deep Utica, where they tried "backing off" even more expensive ceramic proppant (to sand). [But they] found that the wells were so deep and prone to frac closure, that they needed the high strength (but unfortunately high cost) ceramic.

I would love to see a good statistical study (are you reading this comment, DrillingInfo?) that compares white and brown sand performance. Of course there have been many other confounding changes over time in well design and crew practice (and geology), but you could control for that with proper statistical analysis.

Right now, it sort of feels very seat of the pants, rather than statistically validated. Like if brown is fine, why didn't they test it earlier (what took them so long)? Also, have they really proved that the brown is the better choice in terms of NPV?
Later, 7:14 p.m. CT: see first comment -- this is really quite fascinating --
A truck every 10 minutes has been rolling out of the frac sand pit in McHenry County for the last two weeks. The plant appears to be running 24 hours a day for the last month.
The site is one mile east of the town of Denbigh, ND and 1/4 mile south of US Highway 2. Sounds like another plant is going to go up 1/2 mile north of US Highway 2 straight north of the current site. No end to the sand at these two locations. 
Original Post
Well costs in the Bakken once infrastructure, leasing in place:
  • drilling to depth
  • fracking
The two -- drilling, fracking -- use to be about 5050 for a $8 million well. Over time, drilling costs have come way down. Drilling is now about 1/3; completion about 2/3rds of the complete cost to bring a Bakken well to production.

Drilling costs have come way down in the Bakken, due to two reasons:
  • day rates down significantly
  • significantly less time to drill to depth
Fracking costs:
  • fracking spread contracts
  • sand/water
I don't know the relative cost of fracking spread contracts vs sand/water but if costs can come down on either sand or water there will be a savings.

Sand: today it is being reported there may be source for fracking sand in North Dakota. From The Grand Forks Herald:
A deposit of sand in north-central North Dakota could be a boon to the state's oil industry.

The sand – a variety specifically needed in the process of hydraulic fracturing – has been found in McHenry County, roughly 160 miles west of Grand Forks between the towns of Rugby and Minot.

Another has been found in Mercer County, northwest of Bismarck.

Fred Anderson, a North Dakota Geological Survey geologist, said the sand could be a "game-changer" for the state.

“The reduction in cost would be high,” Anderson said. “It’s a huge deal for the state of North Dakota."

Asgard Resources, of Williston, has received a permit to dig sand in McHenry County.

Non Sequitur -- From The Bakken -- October 13, 2019

Reading about "advantaged oil" and remembering recent comments from a Bakken operator regarding "returns on investments are infinite" one begins to think that there is a nexus among these terms in the Bakken:
  • parent-child uplift
  • advantaged oil
  • infinite returns on investment
*********************************
Swimming Lessons

Sophia, Emler, October 13, 2019

Just A Matter Of Time: EOG Starting To Drill Out Section 8-155-94 -- October 13, 2019 -- Reader Looking For Information

See this post.

Reader asking for any information from any reader regarding section 8-155-94:
Not much activity on section 8 since the first 4 wells.
I see they have permits for 8 additional wells. I see that another company is drilling from that section going south.
Any information on EOG pad for future drilling. [Will EOG add more permits for this drilling unit?]

Any info appreciated.

s/ Bakken in the day.
The map shows that EOG has eight more locations in this section as "Bakken In The Day" has noted. But most importantly, EOG has two of those locations with DUCs:
  • 33278, SI/NC, EOG, Clarks Creek 41-0805H, Antelope-Sanish, no production data, file reports off confidential;
  • 33279, SI/NC, EOG, Clarks Creek 42-0805H, Antelope-Sanish, no production data, file reports off confidential;
************************************************
Permits

Over at NDIC well search:
File No
Well Status
Location
Operator
Well Name
19790
IA
SESE 8-151-94
EOG RESOURCES, INC.
CLARKS CREEK 3-0805H
20550
A
SWSW 8-151-94
EOG RESOURCES, INC.
CLARKS CREEK 10-0805H
20602
A
SESE 8-151-94
EOG RESOURCES, INC.
CLARKS CREEK 15-0805H
22505
A
SWSW 8-151-94
EOG RESOURCES, INC.
CLARKS CREEK 100-0805H
33275
LOC
SESE 8-151-94
EOG RESOURCES, INC.
CLARKS CREEK 38-0805H
33276
LOC
SESE 8-151-94
EOG RESOURCES, INC.
CLARKS CREEK 39-0805H
33277
LOC
SESE 8-151-94
EOG RESOURCES, INC.
CLARKS CREEK 40-0805H
33278
NC
SESE 8-151-94
EOG RESOURCES, INC.
CLARKS CREEK 41-0805H
33279
NC
SESE 8-151-94
EOG RESOURCES, INC.
CLARKS CREEK 42-0805H
33280
LOC
SESE 8-151-94
EOG RESOURCES, INC.
CLARKS CREEK 43-0805H
33334
LOC
SESE 8-151-94
EOG RESOURCES, INC.
CLARKS CREEK 129-0805H
34342
LOC
SESE 8-151-94
EOG RESOURCES, INC.
CLARKS CREEK 130-0805H

The "other operator" looking to place wells in this section:
File Number
Status
Location
Operator
Name
Field
34575
LOC
SWSE 8-151-94
ENERPLUS RESOURCES USA CORPORATION
TEGU 151-94-17A-20H-TF-LL
ANTELOPE
34576
LOC
SWSE 8-151-94
ENERPLUS RESOURCES USA CORPORATION
LIZARD 151-94-16B-21H
ANTELOPE
34577
LOC
SWSE 8-151-94
ENERPLUS RESOURCES USA CORPORATION
CAYMAN 151-94-16B-21H-TF
ANTELOPE
34578
LOC
SWSE 8-151-94
ENERPLUS RESOURCES USA CORPORATION
GECKO 151-94-16B-21H
ANTELOPE
34579
LOC
SWSE 8-151-94
ENERPLUS RESOURCES USA CORPORATION
BASILISK 151-94-16B-21H-TF
ANTELOPE
34580
LOC
SWSE 8-151-94
ENERPLUS RESOURCES USA CORPORATION
FRILLED 151-94-16B-21H
ANTELOPE
34581
LOC
SWSE 8-151-94
ENERPLUS RESOURCES USA CORPORATION
ANOLE 151-94-16B-21H-TF
ANTELOPE
34582
A
SWSE 8-151-94
ENERPLUS RESOURCES USA CORPORATION
KOMODO 151-94-17A-20H-TF
ANTELOPE
34583
A
SWSE 8-151-94
ENERPLUS RESOURCES USA CORPORATION
ALLIGATOR 151-94-17A-20H
ANTELOPE
34584
A
SWSE 8-151-94
ENERPLUS RESOURCES USA CORPORATION
CROCODILE 151-94-17A-20H-TF
ANTELOPE

Do We Have Another Winner! -- October 13, 2019

Wasn't there a movie, "Dancing With Bulls"? Kevin Costner or something? 

 35714, conf, WPX, Nancy Dancing Bull 1-36HQL, Mandaree,


DateOil RunsMCF Sold
8-20195512343622
7-201973520

************************************
Global Warming -- North Dakota
This Is Only October
We Haven't Even Celebrated Halloween Yet


"Advantaged Oil" -- October 13, 2019

See this post for background on "advantaged oil."

I would like to find a better discussion of "advantaged oil" but these seem to be the parameters involved:
  • short-cycle projects
  • digital technology, perhaps including AI
  • types of oil, heavy vs light; turning on a dime; producing the oil refiners want/need
  • low risk, low cost
  • high margin
I am absolutely 1000% convinced that there are several examples of operators focused on "advantaged oil" in the Bakken.

One. The most obvious is what Whiting and CLR have already suggested. Whiting has been much more upfront about it: parent-daughter uplift. I doubt there is any better example of "advantaged oil" as defined by BP.

Two. The second example is what MRO is doing in the Bailey oil field and CLR is doing in the Brooklyn oil field: methodically drilling it out.

In the Brooklyn oil field, I haven't noticed anything particularly striking but in the Bailey oil field, I have, and that would be a third example of "advantaged oil" in the Bakken (but sort of a combination of the first two examples): methodically drilling out an oil field that shows huge promise for "parent-daughter uplift."

Three. Another field that appears likely to be the best ever oil field in the universe to benefit from the "parent-daughter uplift": the Charlson oil field in the Bakken. Again, "advantaged oil." There is a very, very subtle reason why I separate the Charlson out from the others.

Four. A fourth example of "advantaged oil" in the Bakken: CLR's mega-density projects such as the Long Creek Unit -- low price, high margin returns -- 60 wells in ten sections drilled out by two rigs and completed by two or three frack spreads. It appears CLR is doing that in several places in the Bakken but simply not marketing with the same headline-grabbing news like the LCU.

Five. Interestingly, if "advantaged oil" is closely associated with "digital outcome" as mentioned at the post linked above by BP (Thunder Horse), then I would argue that the world's largest microseismic array which is located in North Dakota is another example of "advantaged oil." [Note: the microseismic array was the largest at one time; I don't know if that still holds true. I would argue that the "core library" at the UND - Grand Forks may be the most comprehensive oil-related library in the world, depending on how one measures these things.]

Six. One can argue that my sixth example is similar to the ones already mentioned, but I would argue that it's different. The Williston Herald already had a story on it this past week: re-fracking will be the next big thing in the Bakken. Operators will use digital information to sort out where best to begin re-fracking. MRO has the lead from what I can tell but others are starting to join in. 

From an earlier post: some comments with focus on the Bakken:
  • manufacturing: it was a local Willistonite that first coined the phrase, "... manufacturing stage in the Bakken..." -- said perhaps six years ago; now an industry standard concept
  • predictable
    • "no dry holes" -- I said that from the very beginning about the Bakken -- the Bakken is simply unique in this regard -- something oil companies had not experienced before -- knowing that they will strike oil when they drill a Bakken well
    • not only are there "no dry holes," operators can predict with near 100% accuracy the potential of a new well based on "offset" wells; provides innumerable benefits
  • flexible
  • modular: operators can acquire neighboring acreage easily; operators can easily sell non-core assets
  • small capital costs (relative to off-shore projects)
  • scalable: here's a word I've not yet seen in the discussion regarding the Bakken (again, I'm using the first definition of the "Bakken" -- but unlike huge offshore projects that take years of planning; huge outlays; etc., the "Bakken" is 100% scalable. I'm not talking about production, I'm talking about drilling/completing new wells
  • timeliness, from time to concept to spud to production
    • offshore: measured in years
    • Permian: measured in months
    • the geographic Bakken: measured in weeks
  • new paradigm
    • conventional oil: boom and bust
    • shale: manufacturing ups and downs

Reason #2 Why I Love To Blog -- Feedback From Readers -- Learning Something New -- October 13, 2019

This is really cool. I posted something about which I knew little and I was clearly in front of my headlights. I thought I should have deleted that post but before I could delete a reader commented on it. I was saved by that reader who tactfully told me "to be careful."

In addition to that, there was more. The reader used a phrase I had not seen before, actually two phrases:
  • advantaged oil
  • advantaged natural gas
Advantaged.

I had not heard that term before and I could not figure out what it meant.

It was very, very difficult to find anything on "advantaged" used in this context.

What little I found suggests "advantaged" used in this context is more fitting for "advantaged oil" than for "advantaged natural gas."

It appears that either Phillips 66 or BP coined the phrase. My hunch it was Phillips 66 that coined the phrase but BP took the phrase and "ran with it."

Four links:
  • from oilandgas360: we are all about 'advantaged oil' and 21st century data processing capacity: BP.
  • from Quora: what is advantaged crude ... and why is Phillips 66 investing in infrastructure that "drives" toward it?
  • from drillers.com: BP scores a win off the Digital Oilfield
  • from 247wallst.com: what another one billion bbls of oil means for BP
From the first link, January 18 2018, more than a year ago:
BP’s Chief Operating Officer for Developments and Technology James Dupree recently defined BP’s current upstream focus. The new focus was no doubt influenced by the commodities price downturn.
Dupree said BP’s upstream priority is on what BP calls “advantaged oil.”
“From an investment perspective, an advantaged oil project means a short cycle time for development (from finding the resource to producing first oil) and a low development cost,” Dupree said in a recent interview published in BP’s in-house magazine.
“Scale is important as well; we are usually talking about large-scale developments, and often in areas where we – or our partners – have existing infrastructure. Typically, we look for light oil (with a low density, this flows easier than heavier crudes) with a high deliverability. In other words, wells that produce at a high rate,” Dupree said.
The majority of BP’s portfolio today is advantaged oil, according to Dupre. “We’re pursuing resources in regions where we have existing positions, for example by applying the latest seismic technology around our Thunder Horse field in the Gulf of Mexico and the Clair field in the UK North Sea.
Dupre said BP is applying enhanced oil recovery technologies to extract more from Prudhoe in Alaska. “The results have been fantastic; they have reduced decline, holding production almost flat – and the overall breakeven for the business is down by 40%.”
From the second link, last updated, January 11, 2015, more than four years ago:
Though it has the name of an one of the original 'oil patch' companies, the modern Phillips 66 consists of the downstream assets (i.e, refineries and distribution) spun out of ConocoPhillips in 2012. The company in its prior incarnations had a long history of processing the heavy and sour crudes from Alaska, California, Mexican, and Canadian oil fields. For this reason, they claim an 'advantaged crude culture', and the press release is announcing their intention to double down on the competitive advantage they've identified for themselves in a very competitive industry. It's also timely, given that the growth in North American crude oil production has mainly been in the category of advantaged crudes.
From the third link, dated much more recently, July 2, 2019:
Shale has sucked all the O2 out of the room in recent times. This new announcement by BP and credited to their analysts at their Houston, Tx Center for High-Performance Computing, processing data from a 2018 exploration well in a matter of weeks, could change that narrative in the coming year. New billion barrel fields are not commonly found anymore, and the ones that are found are much harder to find than in years past. Particularly ones that are “advantaged,” as defined by BP’s Chief of Upstream, Bernard Looney.
In upstream the business is focused on growing both gas and advantaged oil – focusing on only those resources that are low cost or high margin – to be resilient to any price environment.
From the fourth link, dated January 8, 2019, fairly recent:
Bernard Looney, BP’s Upstream chief executive, said of the discovery and expansion:
BP’s Gulf of Mexico business is key to our strategy of growing production of advantaged high-margin oil. We are building on our world-class position, upgrading the resources at our fields through technology, productivity and exploration success… And these fields are still young – only 12% of the hydrocarbons in place across our Gulf portfolio have been produced so far. We can see many opportunities for further development, offering the potential to continue to create significant value through the middle of the next decade and beyond. 
Tell me if I'm wrong, but it seems journalists are quoting CEOs but not providing more background by what CEOs exactly mean when talking about "advantaged oil." It seems very nuanced, a shorthand lingo.

Again, from oilandgas360:
BP’s Chief Operating Officer for Developments and Technology James Dupree recently defined BP’s current upstream focus. The new focus was no doubt influenced by the commodities price downturn.

Dupree said BP’s upstream priority is on what BP calls “advantaged oil.”

“From an investment perspective, an advantaged oil project means a short cycle time for development (from finding the resource to producing first oil) and a low development cost,” Dupree said in a recent interview published in BP’s in-house magazine.

“Scale is important as well; we are usually talking about large-scale developments, and often in areas where we – or our partners – have existing infrastructure. Typically, we look for light oil (with a low density, this flows easier than heavier crudes) with a high deliverability. In other words, wells that produce at a high rate,” Dupree said.

The majority of BP’s portfolio today is advantaged oil, according to Dupre. “We’re pursuing resources in regions where we have existing positions, for example by applying the latest seismic technology around our Thunder Horse field in the Gulf of Mexico and the Clair field in the UK North Sea.”

Dupre said BP is applying enhanced oil recovery technologies to extract more from Prudhoe in Alaska. “The results have been fantastic; they have reduced decline, holding production almost flat – and the overall breakeven for the business is down by 40%.”
Transportation costs are not mentioned as one reader suggested.