Monday, May 25, 2020

See You All Tomrrow -- Good Luck To All -- May 25, 2020

Notes From All Over -- Late Evening Edition -- Memorail Day -- 2020

NASCAR: wow, this is quite incredible. NASCAR Coca-Cola yesterday; NASCAR XFinity series tonight; truck series tomorrow night, and then Wednesday, NASCAR Cup Series at Charlotte again, tomorrow night. Wow! Hard to believe. NASCAR taking advantage of this lull in live sports. Good for them. I don't miss the fans at the track at all.
Eighteen laps to go in tonight's race. Kyle Busch in fourth, second row on the re-start. This could be quite a finish. On the re-start, Kyle moves to third. Crash before the first lap after the re-start is completed; ninth caution. Kyle will still be in the second row on the next re-start.
Twelve to go on the re-start. Cindric-Gragson-Kyle. Kyle moves ot second, now takes the lead. Kyle leads with ten to go. It was the new tires. Another caution with eight to go. Amazing how good these guys are. A single car near-spin; driver saves the car; and, no one  hits him. Pretty amazing. Kyle was pulling away; had there been no caution, Kyle would have taken this race by several car lengths. Now, a re-start.
Four to go on the re-start. Kyle-Cindric-Gragson-Burton. Overtime? Very likely.
Yeah, there it is. Great re-start. For about four seconds. Fairly big crash; several cars taken out, including Gragson.  It will be quite awhile clearing up the track. Then, green flag, white flag, checkered flag, finish.
Holy mackerel. Re-start. Cindric takes the lead over Kyle Busch. The latter fights back; really, really aggressive. Busch wins. Cindric third. Daniel Hemric second.
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.

Futures: look really, really good. Maybe Governor Cuomo will have something good to say.

Wuhan flu: say what you want, but these numbers are really looking good -- ranked in order of "new deaths" yesterday.

Geico: a new Geico television commercial has an actor couple that looks very, very much like the Sussex Royals. Wow, I wish Geico would make this a new series -- like Flo (Progressive) and the "caveman" (Geico). A Sussex-Royals-lookalike-couple would be pushing the "advertising" envelope. I saw, "go for it." See spot here.

Got Covid? The fatalities will all be tested for corona virus, I assume, and if positive ....

MAGA -- more opportunities:

No comment:

A CLR Simmental Well With Jump In Production -- May 25, 2020

The well:
  • 18138, 1,161, CLR, Simmental 1-21H, 2 secs, 20k in 30 days, Elm Tree (first reported Jan 13, 2010); t12/09; cum 367K 3/20;
Production period of interest:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

A Rimrock Moccasin Creek Well Has Just Gone Over 500K -- May 25, 2020

The well:
  • 18295, 1,260, Whiting/KOG, Moccasin Creek 16-3-11H, 1 sec, t2/10; cum 501K 3/20;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

An MRO Bailey Well Has Just Gone Off Line -- May 25, 2020

The well:
  • 18196, 376, Marathon, Andi Schollmeyer 41-5H; t4/10; cum 149K 2/20;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare


A Whiting Kannianen Middle Bakken Well Has Come Back On Line -- May 25, 2020

The well:
  • 18298, 3,422, Kannianen 44-33H (Whiting); t1/10; cum 702K 3/20; off line since 4/19;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

A Whiting Odgen TFH Well Has Come Back On Line -- May 25, 2020

The well:
  • 18233, 1,239, Ogden 11-3TFH, TFS (Whiting), Sanish, t11/09; cum 278K 3/20; off line 7/19; back on line 3/20;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

A New Wrinkle In The Bakken -- May 25, 2020


From a reader regarding the original post.

First regarding the Madison well --
A lease is ‘HBP’ [held by production], whether it is a Madison well OR a Bakken [or any other formation—Red River [Bowman/Slope has lots of those]].
The difference as to the lease being held may be whether the lease is within a spacing unit for the Madison [generally a smaller spacing unit but not always anymore] or within a Bakken spacing unit.
There are a lot of variables depending on the lease wording. Further comment: Many of the more current leases have a ‘force majeure’ clause. Force majeure is ‘an act of God’ in general BUT has expanded.
Now, the first reply regarding this note, which came in a comment:
Answering the lease question. Most companies or leases are based on a 12 month non-production clause to nullify the lease (Of course each lease is potentially different.) This is the trigger to give the lease back to the original owner. Many companies will, to maintain a lease, produce every ten to eleven months a small amount of oil, market said oil, and that resets the clock. Thus keeping the lease under their control.

If you wish to get your lease back, it would be best to seek council, This would also set in motion the requirement to plug the old well and reclaim site.

I think before all is said and done that many sites will be Tier one and Two, for five to seven layers so getting better terms may be in the best interest of owners.
Force majeure: the reader also provided this:
Companies have been known to take a very liberal approach to defining force majeure if it fits their purposes. Some companies will send a letter to the mineral owners whose leases are declared by them to be extended by ‘force majeure’.

I don’t know if it is required to notify by letter—once again depends on the lease language and/or company policy.

The ‘Bakken Owner’ comment about seek ‘counsel’ is really a mineral owner’s best bet—however, once again THAT means finding an attorney ‘well versed in oil and gas law’. That is a challenge—another whole different discussion!!!

I have seen some leases wherein ‘low prices’ [with no definition of what is low price] are recited as a force majeure event.

Keep in mind that NDIC rules of one year, etc, are not necessarily sufficient to cause a lease to be extended when there is a lack of production.

NDIC rules do NOT affect a lease as to whether it is extended or not when there is no production—lease extension without production depends on the lease language

This discussion could go on and on as to this or that occurrence and/or interpretation.

Summary: breaking a lease by a mineral owner will require $, persistence, and determination—and will seldom succeed -- IMO.
Comment: I agree completely. It will take a lot of money, persistence, time, to "win" this case. The oil companies have been at this a lot longer than any of the rest of us and have certainly seen "it all."
Original Post
This is well beyond my "pay grade." I have never followed the "language of leases" in the Bakken. I don't think I've ever seen a lease except maybe a long, long time ago when I was visiting Williston. I never paid much attention if I did.

Some basics:
  • the concept of "lease held by production";
  • early on, operators put in a at least one producing well to hold their leases;
  • as more wells came in, there was less chance of losing a lease due to lack of production;
However, and here's the wrinkle:
  • now that the Bakken is shutting down, there are a few "loners" out there;
  • "loners": where a single well is still holding a lease (generally a drilling unit of 640 acre or 1280 acres) all by its "lone self";
  • what happens if that "loner" shuts down? 
I don't know. Maybe readers can enlighten me.

I know the state has rules about how long a well can be inactive before it must be plugged and abandoned. At that point, if it's a "loner," does the operator lose its lease?

My understanding is that the state is quite lenient in the length of time a well can be shut down, and waivers can be awarded.

But what about contracts or leases between the operator and the leaseholder? A reader informs me that his lease on "a loner" says that if there is no production in 120 days, the lease is null and void. His "loner" has not had production in well over a 120 days.

The reader wonders how this affects the lease on that drilling unit?

Again, this is well beyond my "pay grade." I don't follow mineral leases; I don't visit social media sites for mineral owners. The answers may be obvious. I don't know. A reader brought it to my attention. It's not something I'm generally interested in regarding the Bakken but it seems to be an interesting question.

More than likely, I'm missing something obvious.

But I'm always learning something.

One last thing: there is a Madison well in that section that is still producing. I don't think a "Madison" well holds a lease by production for a "Bakken" well but again, I've long forgotten (or never knew).

Here's A Great Example 
Of A "Loner"

Why hasn't EOG permanently abandoned this well? This well was drilled back in 2009; more than a decade later it has produced less than 30,000 bbls, and yet it remains active.
  • 17996, 58, EOG, Burke 9-10H, Stanley, t7/09; cum 30K 3/20;
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Production dates of interest:
  • 2/18 - 6/18: off line / no production for 113 days;
  • 7/13 - 9/13: off line / no production for 63 days;
  • otherwise, has never gone a month without no production

The graphic:

Another Example Of A "Loner"

The well:
  • 17946, 86, Koda Resources/Newfield, Trigger 1-31H (1 sec), Fertile Valley/wildcat near Grenora; on my watch list; this is too bad; the rumor was that this was a "good" well; 47K 3/20; 
Recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

The graphic:


Baseline for Michigan, as of May 25, 2020:

New York:


Initial Production Data For Wells Coming Off Confidential List This Week -- May 25, 2020

This is remarkable -- the initial production for wells coming off confidential list this week. Work has essentially come to a stop in the Bakken, literally "overnight."

The wells:
  • 37047, conf, CLR, Simmental Federal 10-16H, Elm Tree, no production data,  
  • 36157, conf, Nine Point Energy, S Missouri 152-103-9-11-12H, Eightmile,
DateOil RunsMCF Sold
  • 35192, conf, XTO, Zane Federal 21X-6B, Siverston, no production data, 
  • 33838, conf, Crescent Point Energy, CPEUSC Tami 9-8-5-157N-99W, Lone Tree Lake, no production data, 
  • 36471, conf, Slawson, Periscope Federal 2-10-11-12H, Big Bend, no production data, 
  • 33839, conf, Crescent Point Energy, CPEUSC Tami 4-8-5-157N-99W TFH, Lone Tree Lake, no production data, 
  • 36208, conf, XTO, FBIR Baker 34X-25D, Heart Butte, no production data, 
  • 34256, conf, Crescent Point Energy, CPEUSC Tami 3-8-5-157N-99W MBH, Lone Tree Lake, no production data,  
  • 33840, conf, Crescent Point Energy, CPEUSC Tami 10-8-5-157N-99W TFH, Lone Tree Lake, no production data, 
  • 36209, conf, XTO, FBIR Baker 34X-25H, Heart Butte, no production data, 
  • 36961, conf, WPX, Meadowlark 6-34HQL, Heart Butte, no production data, 
  • 36472, conf, Slawson, Periscope Federal 4-10-7TFH, Big Bend, no production data, 
  • 36210, conf, XTO, FBIR Baker 34X-25C, Heart Butte, no production data, 
  • 33841, conf, Crescent Point Energy, CPEUSC Tami 5-8-5-157N-99W TFH, Dublin, no production data,   
  • 37203, drl/drl, Crescent Point Energy, CPEUSC Tami 11-8-5-157N-99W-LL TFH,  
  • 36962, conf, WPX, Meadowlark 6-34HA, Heart Butte, no production data, 
  • 36599, conf, Whiting, Erickson 14-23 2H, Glass Bluff,
DateOil RunsMCF Sold
  • 36129, conf, Whiting, Evan TTT 41-4HU, Sanish,
DateOil RunsMCF Sold
  • 36963, drl/drl, WPX, Meadowlark 6-34HW, Heart Butte, no production data, 
  • 36211, drl/drl, XTO, FBIR Baker 34X-25G, Heart Butte, no production data, 
  • 36964, drl/drl, WPX, Meadowlark 6-34HB, Heart Butte, no production data, 
  • 36792, drl/drl, Sinclair, Harris Federal 3-32H, Lone Butte, no production data, 
  • 36598, 2,376, Whiting, Erickson 14-23-3H, Glass Bluff, t12/19; cum 73K 3/20;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 36358, drl/drl, Slawson, Gunslinger Federal 2-12-1H,  Sand Creek, no production data, 
  • 34259, drl/drl, Crescent Point Energy, CPEUSC Tami 6-8-5-157N-99W-LL TFH, Lone Tree Lake, no production data, 
  • 36597, 1,968, Whiting, Erickson 44-35HU, Glass Bluff, t12/19; cum 75K 3/20:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 36357, drl/drl, Slawson, Gunslinger Federal 9-12-1TFH, Sand Creek, no production data, 
  • 36132, 1,102, Whiting, Ed TTT Federal 43-4H, Sanish, t11/19; cum 111K 3/20;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 34258, drl/drl, Crescent Point Energy, CPEUSC Tami 2-8-5-157N-99W MBH, Lone Tree Lake, no production data;

Notes From All Over, Monday Morning Memorial Day -- Mid-Morning Edition -- May 25, 2020

It's possible I'm misreading this story but if accurate it validates all those earlier stories that the "Tesla battery" was unsafe at any speed, to coin a phrase. LOL.

Despite the perception that tethered vehicles already have a too-limited range, apparently the industry is going to substitute safety for range.

From ArgusMedia (caution: acronym overload follows)
Chinese auto manufacturer BYD and US EV producer Tesla have released all-electric vehicles that use lithium iron phosphate (LFP) batteries.

BYD has released the Qin and Qin Pro, which has a driving range of 300 miles. The driving range for Qin was undisclosed.
Tesla has released a new model for its Model 3 series, with more details unavailable, according to the latest declaration catalogue issued by China's ministry of industry and information technology (MIIT).

MIIT's declaration catalogue includes 12 new energy vehicles (NEVs) that use LFP batteries, accounting for 24 percent of a total of 49 NEVs.

Suppliers of the LFP batteries are: BYD, CATL, Gotion High-Tech, Penghui, Anchi New Energy and Suzhou KeYi New Power.
BYD will also provide LFP batteries to GAC and Changan Ford, in addition to feeding its own EV production.

LFP batteries are promoted as having better safety performance and lower average costs, although its energy density and EV driving ranges are shorter than nickel-cobalt-manganese/nickel-cobalt-aluminium (NCM/NCA) batteries. Many Chinese producers have put more effort into developing LFP batteries amid lower government subsidies.
I know a lot of millennials will wonder where the acronym LFP for lithium-iron-phosphate batteries came from but we'll leave that for another day.

A Sophia Story

My wife re-told this story. I had not heard it before.

When Sophie was about two and half years old, her family visited us in San Pedro, CA, at Christmas, where my wife's "ancestral" home was located.

Sophia and her family had flown to Los Angeles from Texas, but then drove the long trip from southern California to Portland, OR, without many breaks, to visit aunt Laura and her husband Tim.

Following their visit, and on their way to skiing, Sophia's family was preparing to get back into their rental yet again when Sophie refused to get into the car. She had had enough driving around.

Her dad told Sophia to get in the car immediately or walk!

Sophie started walking away. Aunt Laura heard her mutter, “I want a new family!”