Thursday, July 2, 2020

Notes From All Over -- The Early Evening Edition -- July 2, 2020

Natural gas fill rate, link here:

Global oil prices: something is happening -- note the increase in Brent and OPEC basket, as well as the differential between WTI and overseas blends:

Global refineries: Prince Salman's "Vision 2030" is going to have a profound impact on global refineries. From oilprice:
A wave of new oil refineries coming online in the Middle East and China will knock others offline, ushering in a period of consolidation, according to a new report from Goldman Sachs.

Global oil demand has taken an enormous hit from the Covid-19 pandemic. Depending on who you ask, demand may recover swiftly, or it may take a few years, or demand may actually never recover to levels seen prior to the pandemic.

DNV just published a report that estimates that oil demand may have peaked in 2019, although it warned that demand in 2050 will still be about where it is today. Improvements in energy intensity offset economic growth, but because demand is mostly flat for the next few decades, the world makes little progress on climate targets in this scenario.

Fifteen New Permits -- July 2, 2020

I'm not quite sure if we are ready to move into Bakken 5.0. We'll talk about that later.

Active rigs:

Active Rigs1160675830

Fifteen new permits, #37678 - #37692, inclusive:
  • Operator: XTO
  • Field: Hofflund (Williams County)
  • Comments:  
    • I believe the daily activity report is incorrect
      • the DAR says these wells are sited in section 13-154-96; if so, they are being sited under water
      • in addition, the legal description for #37685 is incorrect; the scout ticket is correct;
    • it's much more likely these wells will be sited in section 13-154-95
    • XTO has permits for fifteen wells in section 13-154-96  (sic) -- see comments above
    • Hofflund Bakken Unit (HBU)
      • fourteen of them are Hofflund Bakken unit wells; one had the same "family" name, but not preceded by the HBU designation; it was in the Alkali Creek oil field;
      • one long single row of pads, running almost due north/south, but slightly SW to NE, very slightly off the N/S line
      • running from the SESW quadrant to the NESW quadrant
      • they are already on confidential list but based on several parameters, it's my hunch they will all run south into section 24
      • thirteen will be 1280-acre spacing
      • two will be 2560-acre unit line wells
      • it looks like: a mix of middle Bakken well and Three Forks wells
  • graphics:

History Of The Bakken

This was posted here.

From FAQs.

82a. What do you mean by Bakken 2.0? See this post. Important data points:

  • June, 2007: the very early days of the Bakken boom; began in Montana, 2000; Bakken 1.0
  • October 19, 2016: the beginning of Bakken 2.0
    • the event that triggered the Bakken 2.0 designation: the SM Energy announcement that it was selling some Bakken acreage/assets to Oasis
    • it appears Permian Shale 2.0 began with the WPX, Noble, and XOM announcements regarding acquisitions in the Permian -- late 2016/early 2017
82b. What do you mean by Bakken 2.5? See this post.
  • Bakken 1.0: began in the summer of 2007; it was originally tagged "Bakken101" and I continue to use the "Bakken101" tag 
  • Bakken 2.0: October 19, 2016
  • Bakken 2.5: April 10, 2018 -- correlates/corresponds with CLR's new completion strategies; North Dakota crude oil production to set new records; increased focus on the Permian vs the Bakken
  • Bakken 3.0: We go to Bakken 3.0 if the "Lynn Helms' production surge (LHPS - 2018) is sustained for six months.  Link here.
82c. Bakken 3.0 -- see above. The surge noted in 2018 certainly lasted for six months.

82d. Bakken 4.0 -- oil shock - market meltdown, 2020. Tag: "Meltdown_2020." And, of course, "Bakken_4.0.
"New" and very common well designations started appearing just as we went to Bakken 4.0: SI/A; F/A; F/NC. Link here for examples. SI/A are wells that have been completed, have come off the confidential list, but are immediately shut in, sometimes with no production or very minimal production (less than 500 bbls) but often 15 days of great production, such as 17K bbls crude oil over 14 days. I didn't know whether to highlight them in "red" or "blue," but because they came off confidential list "on time," had been completed and had production following a frack, I highlighted them in "red." F/A; F/NC were wells that producing wells (DUCs) reported as completed. It appears that in Bakken 4.0 we will have wells that come off the confidential list, or the SI/NC list, but are immediately shut in or choked back significantly. See this post, dated March 26, 2020, first time I tagged a post with "Bakken_4.0."
Bakken 101: across all "eras."

Unconventional 1.0; 2.0; and, 3.0 -- WoodMac.

Random Update On Drilling In The Bakken -- July 2, 2020

After reading several recent file reports and comparing them with countless file reports over the years, it appears that this is the typical drilling history for a Bakken/Three Forks well:
  • surface rig, surface hole: maybe a day; close up shop and come back later with the big rig
  • big rig:
    • vertical hole: should be done with one BHA in 24 hours; often see a second BHA and taking up to 48 hours;
    • after reaching the KOP, building the curve: 12 hours but occasionally up to a full 24 hours if a second BHA needed
    • the lateral: this is amazing -- they are now drilling long (2-section) laterals in two days, maybe 2.5 days. If a new BHA is required, maybe four days to drill a lateral
  • total drilling time: maybe as little as five or six days, although the big rig might be on site twice that long, but what amazes me is how fast they can build the curve, and then even more impressive, how fast they can drill the lateral
They then shut up shop again while waiting for the other wells on the pad to be drilled. Depending on any number of factors, they may go back in and complete (frack) the well soon after the big rig is moved off site, or they may come back months or one year later to frack/complete the well.

The fracking spread is probably on the pad for ten days, plus or minus depending on the number of wells to frack.

I think if they "had to," they could drill and complete a four-well pad in about 30 days. Two big rigs on the pad, and in ten days have all four holes drilled to depth. Then frack the four wells "simultaneously" over 10 - 20 days With infrastructure in place in most Tier 1 areas by now, once completed, the well would be recording runs pretty quickly.

A Closer Look At The Two Most Recent CLR Wells Reporting From The Brooklyn Oil Field -- July 2, 2020

The two CLR Brooklyn wells that came off confidential list today:
  • 35644, SI/A, CLR, Boise 5-24H1, API: 33-105-05028; Brooklyn, t--; cum 40K in 47 days; extrapolates to 25K over 30 days; fracked 11/21/2019 - 11/28/2019; 5.8 million gallons of water; 87.4% water by mass;
  • 35643, SI/A, CLR, Boise 6-24H, API: 33-105-05027; Brooklyn, t--; cum 53K in 54 days; extrapolates to 29K over 30 days; fracked 11/21/2019 - 11/28/2019; 8.5 million gallons of water; 86/6% water by mass;
  • 35644:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 35643:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

From the file reports

  • a north lateral;
  • target: Three Forks
  • objective: to steer the well within the 12' target zone located 14' below the Three Forks top
  • spud: 4/19/19
  • TD: 4/29/19
  • TD: 21,668' MD
  • big rig: started on 4/21/2019
  • formation tops:
    • upper Bakken: 11138'
    • middle Bakken: 11157'
    • lower Bakken: 11207'
    • Three Forks: 11233'
  • the "clean portion" of the target zone (located above the Internal 1 shale) ranged from 6 to 9 feet thick
  • very low gas, less than 500 throughout except one reading of 740; averaged 300;
  • start drilling vertical section, 2303', 0800 hrs 4/19/19
  • reached KOP at 10792'; 2337 ours; 4/21/19; TOOH for 18 hours or so while drilling the vertical
  • start curve at 10792'; start drilling at 0800, 4/2219; land curve at 11539'; 0725 hours, 4/23/19; TOOH for seven hours or so;
  • lateral:
    • lateral: begun at 0237 hours, 4/25/19
    • TD lateral: 21,668' 1953 hours, 4/29/19
  • 91% within the target zone
  • drilled from surface casing to TD in 11 days
  • a south lateral
  • target: middle Bakken
  • objective: to steer the well within the 20' target zone located 12' below the middle Bakken top;
  • spud: 4/3/19
  • TD: 5/419
  • TDP 21,612' MD
  • low gas units
  • vertical: about a day and a half; once, TOOH
  • KOP/curve: curve took about 12 hours
  • lateral: drilled in 2.5 days

Notes From All Over -- The "Forty-Five Minutes" Edition -- July 2, 2020


Later, 3:01 p.m. CDT, markets closed until Monday. Surprisingly, the market held, the Dow closing up 140 points:
  • AAPL: $364.11;
  • TSLA: $1,208.66, up $89; up 8%;
  • IMUX: up 56 cents; up 5%;
  • CLR: $18.31; up $1.25; up 7%;
  • AMZN: $2,890; up $11.60; up 0.4%
  • WTI: $40.30
Original Post

Breaking: Jeffrey Epstein's amanuensis collared in New Hampshire.

Best forty-five minutes of the day, 8:50 a.m. to 9: 35 a.m. CDT.

TCM: the "Alphabet Murders." Whoo-hoo! A "Mrs Marple" cameo?

Corona virus: the fake numbers story -- pending -- update: I'm not going to post anything on corona virus now -- I've lost interest -- I'll do it later. The numbers are so questionable. If one just thinks through the process, one knows how questionable the numbers are.

TSLA: fantastic. I could never keep track of TSLA. But now that it's gone over 1200 we have a milestone I can follow.
  • says it delivered 90,650 vehicles in 2Q20, beating expectations
  • TSLA surges: up over 6%; up almost $70
Market cap:
  • AMZN: $1.451 trillion; Bezos' net worth tops pre-divorce record; AMZN borrows $10 billion -- with a "B" -- low interest rates;
  • MSFT: $1.571 trillion;
  • AAPL: $1.589 trillion
Market caps:
  • three companies vying for bragging rights at $1.5 trillion
  • next group: $250 billion
  • then: all the rest
  • AAPL: nowhere near its recent high -- okay, it is -- but still in the green today.  
  • IMUX: down 1.45%; very concerning in a surging market;
  • CLR: up 5%
  • PFE: the glow is off -- only up 2% today -- which suggests traders know the "vaccine" story was a bunch of hooey, as they say
WTI: $40.59. Okay.

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.

Sorry: prominent climate activist apologizes for "alarmism." Speaking of which: I watched another episode in a continuing PBS series on paleontology last night (I couldn't bear watching another airing of "Singing in the Rain" on TCM).
It's always amazing to see scientists question every bit of dogma we've been taught over the past three decades, but when it comes to global warming, the science is settled. The "star" paleontologist -- a charming young woman -- lost all credibility when she said the "science was settled." Wow. Another empty head, it appears.

Rumors: new portrait on "Aunt Jemima" syrup -- George Floyd. Personally, I think "Uncle Floyd's Slightly Off-White Rice" would be a much better fit. Log Cabin syrup. LOL. That name ain't gonna change. It's a favorite in San Francisco. And, so, we will have "Uncle George" syrup.

Syrup: by the way -- of the three major widely available pancake syrups out there, Aunt Jemima is the least "messy" when pouring. I don't know how "they" do it, but there is no dripping after pouring Aunt Jemima syrup. Just saying. 

Not being reported in MSM: I haven't seen a copy of the NYT ever since Starbucks quit selling newspapers, but my hunch is the the NYT is not reporting the jobs story today.

Not fake news: both parties and both candidates reported record amounts of "cash" donations 2Q20. DNC and Biden took in more than the RNC and Trump, but the latter still has a much, much better balance sheet. 

Reasons Why The Market Is Up; Three Wells Coming Off Confidential List Today -- July 2, 2020

Report: US employers added almost 5 million jobs in June. That's more job creation than any president in history. Five million jobs added in one month. President Trump able to claim all-time new employment records. LOL. It's amazing how bandanas were the answer. If we had only known.

Jobs report, link here:
  • prior: 1.480 million
  • revised: 1.482 million (note the fake precision)
  • consensus: 1.400 million
  • actual: 1.427 million
Market response: Dow surges; up over 400 points in pre-market trading

The wall: Mexico now has the 6th-deadliest outbreak, passing Spain. This is a great Covid-19 update. Great weekend reading. Finding and posting this link is worth the price of the subscription to the blog.

They're reading the blog. We talked about this yesterday:

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: the Dow is up almost 300 points in pre-market trading. Who wudda thought? Prepare for lots of volatility today. LOL. I love it: the headlines that tell us in ten words or less why the market is up, down, or flat. Today: the market is up in anticipation of a great jobs report. Some alternative headlines:
  • the market is up: the Fed just bought Berkshire Hathaway
  • the market is up in anticipation of a Biden win in November
  • the market is up: North Korea hasn't fired a missile in several weeks
  • the market is up, noting no weird Elon Musk tweets in the past 24 hours
  • the market is up, traders see last chance to buy today; Friday, markets closed
  • the market is up, traders dismiss the new "Russian collusion" story
  • the market is up as traders prepare for four-day weekend
  • the market is up for no reason
Looking at the Dow components, I can't get excited about any of them. LOL. Even AAPL is hardly moving.  
Later: after the jobs report, AAPL up almost 3/4ths percent, up almost $3.00; trading at $367 in pre-market trading.
Motley Fool: could the new iPhone 12 propel AAPL to $500? Sure. Just not any time soon. Click bait.
Where Apple and energy intersect. Data mining.
DAPL: declares force majeure. Buys time. Link here.

OPEC basket:wow, wow, wow -- it looks like Prince MbS has quit playing games. OPEC basket surges -- hits $42.66. Link here. The rise is remarkable. This is stunning to say the least. Oilprice doesn't reflect the surge. WTI is barely above $40, but if OPEC basket number is real, one would expect WTI to follow. We'll see.

Agile but slow US shale recovery likely: Rigzone. Link here.

Three dots to connect:
  • Banks tightening credit on shale companies (Reuters story today)
  • Harold Hamm buying up outstanding shares in CLR; owns 80%; announced plans to buy more;
  • some years ago, analyst asked HH point blank: why don't you take your company private?

Back to the Bakken 

Active rigs:

Active Rigs1160675830

Permits coming off the confidential list today -- Thursday, July 2, 2020: 9 for the month; 9 for the quarter, 454 for the year:
  • 36864, drl/NC, WPX, Omaha Woman 24-13-12HD, squaw Creek,
  • 35644, SI/A, CLR, Boise 5-24H1, Brooklyn, t--; cum 40K in 47 days; extrapolates to 25K over 30 days;
  • 35643, SI/A, CLR, Boise 6-24H, Brooklyn, t--; cum 53K in 54 days; extrapolates to 29K over 30 days;
RBN Energy: Texas solar ramps up at expense of coal, no natural gas. Dog bites man.
Solar photovoltaic projects accounted for an impressive 40% of all the new electric generating capacity installed in the U.S. in 2019 — the third time since 2015 that solar additions outpaced installations of natural-gas capacity. And the early 2020s are shaping up as another good period for solar, especially in states that offer both intense sun and the broad expanses of land required for large-scale solar projects. Texas is a case in point; some 8,000 megawatts (MW) of new solar capacity is expected to be added there in the 2020-22 period. Solar power, like wind power before it, has come to be so prolific in the Lone Star State that you’d think it would be having a significant impact on how much gas-fired generation is needed day to day, right? Today, we discuss the increasing role of solar generation in the second-largest state and its impact on the demand for traditional power plant fuels.
While rig counts and production have been sagging in the Permian Basin and other plays as producers and their financial backers cut back on investments, there’s a surge under way in capital spending on renewables, especially in West Texas but also in other parts of the state. Though Texas has long been the U.S.’s leader in wind generation, with almost 30,000 MW of wind farms now online, the state’s grid has been getting even greener via new growth in solar generation — a sector historically associated more with California and the desert Southwest than hydrocarbon-centric Texas.