Sunday, July 26, 2020

Focus On Fracking Has Been Posted -- July 26, 2020

Focus on Fracking: this week's edition is posted. Early! Headline: distillate inventories at a 38-year high, even as refinery utilization stays near 30-year low.

We talked about this earlier in the week. I missed that additional data point: even with refineries operating at (nearly) a 30-year low, distillate inventories are at a 38-year high.

On top of that, as we discussed earlier, distillate inventories are usually lowest during the summer. And so with all that, it is beyond the pale to see distillate inventories this high. Truly unprecedented. So unexpected.

In that earlier discussion, I asked the question why distillate inventories might be so high this year. I didn't answer it then and I won't answer it now, although I'm pretty sure I have the answer. It goes back to our years using heating oil when we were stationed in Germany.

Oil Man, Chad Cooke Band

See "Texas Country Music" here.
Texas Country Music (more popularly known just as Texas Country or Texas Music) is a rapidly growing subgenre of country music from Texas.
Texas country is a unique style of Western music and is often associated with other distinct neighboring styles, including Red Dirt from Oklahoma, the New Mexico music of New Mexico, and Tejano in West Texas, all of which have influenced one another over the years, and are popular throughout Texas, the Midwest, the Southwest, and other parts of the western United States.
Texas Country is known for fusing neo-traditional country with the outspoken, care-free views of outlaw country. Texas Country blends these sub-genres with a "common working man" theme and witty undertones, these often combine with a stripped down music sound.
Neither the location of birth nor the location of upbringing seems to calculate in the definition of a Texas Country artist, as long as the origin is not in the corporate Nashville scene as the genre tends to be anti-Nashville. The genre differentiates from Nashville country with its rejection of pop influences that is found in Nashville Country recently, but does not necessarily mean the artist/group is Texas based.

Biodiesel In The US -- EIA -- July 26, 2020

Re-posting: earlier today I posted EIA bio-diesel data -- see below the fold below. I mentioned that there was something "wrong" with that data. Actually nothing is "wrong" with the data, I mis-wrote; there is simply some data missing.

Perhaps that data is there and perhaps I simply missed it. But here's the thing, as Elizabeth Warren would say.

A gazillion words and several diagrams are provided, implying the virtues of biodiesel.

We are clearly told how much biodiesel the US produces (by state) and how much the US consumes (by state) on an annual basis. But does the EIA article tell us how much diesel the US produces/consumes each year? Perhaps I missed it but I didn't see it there, and the graphic certainly doesn't include it.

So, how much biodiesel is produced / consumed on an annual basis in the US compared to "regular" diesel?

  • from below, the annual production / consumption of biodiesel in the US is about 50 million bbls (consumption has actually declined for the past two years);
  • from other sources, annual production of "regular" diesel in the US / consumption of "regular" diesel in the US is about 1.8 billion bbls / 1.5 billion bbls
    • let's call it 1.5 billion bbls
  • 50 million bbls (biodiesel) / 1.5 billion bbls ("regular" diesel): 3.3%
Disclaimer: I often make simple arithmetic errors and often misread things. This may be incorrect. If this is important to you, go to the source.

Pop Quiz 
Bio-diesel: what's wrong with these two screenshots and the article at the EIA link? Answer later.

Link here and here.

A Zavanna Panther Well With A Jump In Production -- July 26, 2020

Another well with a small jump in production after eight years of production. And, yes, four "new" wells on this pad were recently fracked/completed.

The well:
  •  21226, 996, Zavanna, Panther 16-21 1H, Stony Creek, t4/12; cum 426K 5/19; off line 5/19; remains off line 10/19;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Crank It Up!

Send your spouse to the store to get you some quinine-containing tonic water and turn the volume up as high as it will go.

I don't always listen to Apache, but when I do, so do the neighbors.

Notes From All Over, Late Sunday Afternoon -- July 26, 2020

Actions Have Consequences

Pop Quiz

Bio-diesel: what's wrong with these two screenshots and the article at the EIA link? Answer here.

Link here and here.

The Movie Page

On TCM earlier today, A Star Is Born -- much fun, early in the film, Esther reveals where she was born:

Wow, If This Doesn't Move Me To Tears!

Telephone Line, ELO - Jeff Lynne

Currently, The Four Wells Of Most Interest -- July 26, 2020

Note: the neighboring wells remain off line:
  • 20529,
  • 20530,
The wells:
  • 34601, drl/A, MRO, Salveson USA 24-21H, 33-061-04204; Reunion Bay, t--; cum 170K 3.5 months; a 54K month; fracked 1/12/2020 - 1/26/2020, 8.3 million gallons of water; 99.99965% water by mass;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 34602, drl/A, MRO, Gerhardt USA 14-21H, 33-061-04205; Reunion Bay, t--; cum 145K 3 months; a 56K month; fracked 1/12/2020 - 2/10/2020; 7.7 million gallons of water; all water?
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

FracFocus, screenshots:



The five wells on that pad:
  • 34601, see above,
  • 34602, see above,
  • 34598, drl/NC, MRO, Hanlon USA 11-28TFH, 33-061-04201, Reunion Bay, t--; cum 92K 3 months; fracked 2/1/20 -2/10/20; 7.5 million gallons of water; no sand listed;
  • 34599, drl/NC, MRO, McRoberts USA 14-21TFH, 33-061-04202, Reunion Bay, t--; cum 101K 3.5 months; fracked 1/27/20 -2/10/20; 7.6 million gallons of water; no sand listed;
  • 34600, drl/NC, MRO, Verne USA 24-21TFH, 33-061-04203, Reunion Bay, t--; cum 160K 4 months; a 52K month; fracked 1/12/20 -1/25/20; 8.3 million gallons of water; no sand listed; water by mass, 99.99967%;

More Observations On The EIA July, 2020, Dashboards -- July 26, 2020

Further observations on the EIA dashboards, July, 2020:

The first Saudi surge, 2014 - 2016:
  • number of active rigs in the Bakken plummeted from "200" to "50"
  • the number of active rigs in the Bakken never recovered; in fact after plummeting to "50" rigs, the number of active rigs fell another 50% to 25 active rigs, before "recovering" back to "50"
  • production during this period? actually increased slightly initially, and then surged when price recovered;
  • time period: about two years;
The second Saudi surge, late 2019 - early 2020:
  • number of active rigs in the Bakken plummeted to record lows, hitting an all-time low of ten active rigs in North Dakota;
  • the first phase, the Saudi surge, has pretty much played itself out (July, 2020);
    • lasted less than six months;
  • the second phase, demand-destruction brought on by Dr Faustus and Wuhan flu, is yet to play out
  • production per well surged during the second Saudi surge; see this post for more;
Possible long-term consequences vis-a-vis the Bakken:
  • first Saudi surge
    • the number of active rigs in the Bakken becomes even less significant in the overall picture of the Bakken
  • second Saudi surge
    • it's possible the price of oil will "never" recover; Bakken operators will thrive on $60-oil; Saudi will either learn to live on $60-oil or will implode;
    • global economy will thrive on $60-oil
    • US shale operators will become even more efficient
    • North Dakota will "learn to live" on 850,000 bopd production, and like it; 
      • $10 million / month into the Legacy Fund is just fine
      • it's time for ND legislators to get serious about "growing" the Legacy Fund (of course that won't happen -- just saying it's time for them to get serious about it)
Disclaimer: I am inappropriately exuberant about the Bakken. The metonymical Bakken.

Disclaimer: the opinions expressed in this post do not necessarily reflect the opinions of the hosting browser or blog owner.

Mississippi, Pussycat

Notes From All Over -- July 26, 2020

This on Covid-19, from a reader.

The link is here.

My reply to the reader:
Wow, that's a great note. Thank you for doing all that work.

It is interesting, isn't it? That explains why government officials, the CDC, etc., are not really all that concerned about Covid-19 except as a political issue: keeping their jobs; not losing face; affecting long-term health care policies; affecting pending elections; etc; etc.
If this was all that serious, we would be doing more than wearing masks and staying six feet from others. Swimming pools and beaches remain open, etc, etc.

I still haven't met anyone I know that has tested positive for the virus. We were told last week that someone in our apartment complex tested positive for the virus: I assume it was a worker. No resident would be "dumb" enough to tell management he/she was positive: it would mean a mandatory 14-day quarantine in a small apartment. Interestingly enough, not one more case has been reported. Not a particularly infectious virus.
Speaking of which, has anyone seen any grocery store, Wal-Mart, Target, close because one of their employees tested positive for the virus? Not me.
Again, thank you for the note. I will post it with minor editing.
A Damn Near Perfect Film

TCM: "The Breaking Point."

John Garfield, Patricia Neal. Directed by Michael Curtiz. Based on Ernest Hemingway's To Have and Have Not, 1937. Original movie, 1944; the Garfield re-make, 1950. I've watched the 1944 movie and hated it; the 1950 re-make was incredible.

The best part of "The Breaking Point": the metaphorical merging of two of the lead characters, John Garfield and Juano Hernandez into one character.

I do think TCM keeps getting better and better. Unfortunately "Noir Alley" now goes away for a month, and we move to "Summer Under The Stars."

Idle Rambling Regarding The July, 2020, Dashboards -- July 26, 2020

Continuing observations regarding the EIA dashboards:

I was asked yesterday whether the Permian was better than the Bakken. With regard to crude oil, mano a mano (individual well vs individual well): my answer -- impossible to answer. Depends. Depends on what one is measuring. Depends on time frame. But at the moment, I would prefer having mineral interests in a Bakken well than a Permian well.

I don't track the Permian so I could be wrong, but it's my understanding the it costs a lot more to drill / complete a well in the Permian in the Bakken, and if includes the mineral acquisition rights, the costs in the Permian are considerably greater. Again, I could be wrong.

Look at those dashboards, again (below). The EIA shows August oil production in bpd per rig, new oil production, and August natural gas production:
  • Permian: 964 bbls of oil/day and lots of gas 1,867 mcfpd (which is a "negative" in this pricing and environmental market)
  • Bakken: 2,147 bbls of oil/day and lots of gas, 3,570 mcfpd (which is a "negative" in this pricing and environmental market); 
  • Bakken oil / Permian oil: 2.23x;
  • Bakken nat gas / Permian nat gas: 1.91x
Years ago, as part of the Saudi disinformation campaign on US shale (SDC-USS), it was said that US shale could not "turn on a dime." It would take months for oil production to respond to market conditions. Not only can "new-well production" turn on a dime, so can legacy oil production.

In the Bakken, note how remarkable the August numbers were -- both the production and the fact that the number of rigs remained at an all-time low. Rig counts don't matter.
  • what matters month-to-month: a) pricing/demand; b) takeaway capacity; c) cost of takeaway capacity; d) DUCs reaching "expiration" dates;
  • what matters over six months to a year: a) pricing/demand; b) fracking spreads; c) takeaway capacity; d) DUCs/trending;
The Dashboards

See this post.

EIA dashboards:
Yeah, this is what a V-shaped recovery looks like:

In addition to the notes and commentary above, see the comments at this post from a yesterday:

A reader commented:
It's high grading. Going from 50 rigs to ten rigs, means you're only driling the 20% best wells.
My reply:
I would prefer to say operators (those few who are drilling) are drilling the "best locations," and from there some great wells are being reported.
The "best locations" in the geographic Bakken are due to some unique properties of the geographic Bakken. Compare the Bakken and the Eagle Ford, for example, with the Permian:
What interests me is the "parameters" the operators (who are still drilling) are using to determine the "best locations" and what parameters are used to decide whether to drill the middle Bakken or the Three Forks. This, of course, is proprietary (closely hold) information and not known to those outside the decision-making process.
For example, why is QEP not drilling the Grail, one of the best fields in the Bakken; and why is CLR still drilling the Brooklyn, one of the more "average" fields in the Bakken?
And, then from there, deciding on the best completion strategies: I am seeing quite a variation in the completion strategies.

It's almost as if the Bakken operators can fine-tune this so carefully, they have locations that they will drill with $20-oil; locations that they will drill with $30 oil; locations that they will drill with $40 oil; and, so on.

And, although many of us (including myself) get excited to see the rig count increase, in fact, the rig count actually has little impact on total production in the Bakken.

Remember: "almost 100%" of currently drilled wells are DUCs. That "almost 100%" may be on the high side but probably not by much. Of the 67 wells coming off the confidential list so far the quarter, not one had an IP reported (though some did have some production, and in some cases, quite a bit):
One last thought: the decision to add a rig is not made overnight. My hunch is that between the time the decision is made and the rig added could be several months. What did the operators see three months ago that led to an increase of active rigs from ten to thirteen?

I find it quite fascinating.

By the way, keeping track of the operators with active rigs and the number of active rigs employed by each operator, for me, is a leading indicator of what operators think about the future.

Right now, if Slawson adds a third rig, that would mean a whole lot more to me than if CLR adds a third rig.

Likewise, it would be huge if Whiting shows up with an active rig on the list. Did anyone note that Whiting is reporting a lot of new wells, but has no rigs on the active rig list?

Wow, don't get me started. This is simply so fascinating.

Updating DUCs From 3Q19 -- July 26, 2020

Continuing the process of going through the 3Q19 DUCs and updating IPs and production, not previously updated. See more updates at this post

The wells:
  • 35225, 2,610, Hess, BB-Federal A-LS-151-95-0915H-3, Blue Buttes, t10/19; cum 161K 5/20; 
  • 34755, 4,485, MRO, Higgins 31-26TFH, Killdeer, a DUC, but produced 10,437 bbls over 5 days which extrapolates to 62,622 bbls over 30 days; t7/19; cum 250K 5/20;
  • 36089, 220, WPX, Ruby 31-30HEL, Antelope-Sanish, a DUC, but produced 21K bbls over 17 days; t7/19; cum 150K 5/20;
  • 24018, S631, Slawson, Wolverine Federal 7-31-30TFH, Elm Tree, t12/19; cum 44K 2/20; off line 3/20; remains off line 5/20;
  • 35226, 3,466, BB-Federal A-LS-15-95-0915H-2, Blue Buttes, t10/19; cum 190K 5/20; 
  • 34756, 3,011, MRO, Snider 41-26TFH, a DUC, but produced 12K over 8 days; t7/19; cum 194K 5/20;
  • 34757, 5,361, MRO, Ruth 44-23TFH, Chimney Butte, t8/19; cum 199K 5/20;
  • 24020, 594, Slawson, Wolverine Federal 3-31-30H, Elm Tree, t11/19; cum 59K 2/20; remains off line 5/20; 
  • 35227, A, Hess, BB-Federal !-LS-151-95-0915H-1, Blue Buttes, t--; cum 94K 5/20;
  • 34639, 601, Slawson, Wolverine Federal 12-31-30TF2H, Elm Tree, t12/19; cum 96K 4/20; off line 5/20; 
  • 35975, 1,834, Newfield, Sturgeon 150-99-18-19-4H, South Tobacco Garden, t7/19; cum 159K 5/20;
  • 35041, 3,511, Hess, BB-Charlie Loomer-150-95-0718H-8, Blue Buttes, t10/19; cum 144K 5/20;
  • 24019, 682, Slawson, Wolverine Federal 6-31-30TFH, Elm Tree, t12/19; cum 50K 2/20; remains off line 5/20; 
  • 35978, 2,865, Newfield, Sturgeon 150-99-18-19-2H, South Tobacco Garden, t7/19; cum 123K 5/20;
  • 35042, 4,251, Hess, BB-Charlie Loomer-150-95-0718H-9, Blue Buttes, t10/19; cum 211K 5/20;
  • 35043, 4,051, Hess, BB-Charlie Loomer-150-95-0718H-10, Blue Buttes, t10/19; cum 203K 5/20; 

Fun To Watch -- US "Culture" -- July 26, 2020

US "culture" and I'm using the word loosely. LOL.

Here's the link. If you want to skip that link and go directly to YouTube (less than 70,000 views -- you can be among those who push this over a million, LOL):

Most interesting: note the name of the 16-y/o music phenom that went viral back in 2019!

I actually blogged about her back on July 2, 2018, almost a year before she went viral across the entire US!

Initial Production Data For Wells Coming Off Confidential List This Week -- July 26, 2020

Note: six months ago it was late January, and early February in North Dakota, the latter being the most severe month of the winter.

The wells:
  • 36986, conf, CLR, LCU Truman Federal 2-23HSL, Long Creek,
  • 36627, conf, XTO, Arnold 21X-17H, Tobacco Garden,
  • 36418, conf, Zavanna, Panther 16-22 5TFH XE, Stony Creek,
DateOil RunsMCF Sold

  • 36161, conf, Hess, GO-Hauge-LW-156-97-2116H-1, Dollar Joe,
DateOil RunsMCF Sold
  • 37309, conf, WPX, Omaha Woman 24-13-12HIL, Squaw Creek,
  • 37248, conf, CLR, Monroe 4-2HSL, Banks,
  • 36630, conf, XTO, Arnold 21X-17BXC, Tobacco Garden,
  • 36389, conf, Whiting, Ogden 12-3XH, Sanish,
DateOil RunsMCF Sold
  • 36631, conf, XTO, Tobacco Garden 21X-17D, Tobacco Garden,
  • 36492, conf, Hess, TI-Stenbak-158-95-2526H-6,  Tioga,
DateOil RunsMCF Sold
  • 31523, SI/A, CLR, Steele Federal 9-24H, Banks, t--; cum 140K over 4.5 months;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 36491, drl/A, Hess, TI-Stenbak-158-95-2526H-5, Tioga, t--; cum 38K 3.5 months;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Wells Coming Off The Confidential List This Next Week -- July 26, 2020

Monday, August 3, 2020: 4 for the month; 75 for the quarter, 521 for the year:
36986, conf, CLR, LCU Truman Federal 2-23HSL, Long Creek,

Sunday, August 2, 2020: 3 for the month; 74 for the quarter, 520 for the year:

Saturday, August 1, 2020: 3 for the month; 74 for the quarter, 520 for the year:
36627, conf, XTO, Arnold 21X-17H, Tobacco Garden,
36418, conf, Zavanna, Panther 16-22 5TFH XE, Stony Creek,
36161, conf, Hess, GO-Hauge-LW-156-97-2116H-1, Dollar Joe,

Friday, July 31, 2020: 71 for the month; 71 for the quarter, 517 for the year:

Thursday, July 30, 2020: 71 for the month; 71 for the quarter, 517 for the year:

Wednesday, July 29, 2020: 71 for the month; 71 for the quarter, 517 for the year:
37309, conf, WPX, Omaha Woman 24-13-12HIL, Squaw Creek,
37248, conf, CLR, Monroe 4-2HSL, Banks, the Monroe-Pasadena wells are tracked here;
36630, conf, XTO, Arnold 21X-17BXC, Tobacco Garden,

Tuesday, July 28, 2020: 68 for the month; 68 for the quarter, 514 for the year:
36389, conf, Whiting, Ogden 12-3XH, Sanish,

Monday, July 27, 2020: 67 for the month; 67 for the quarter, 513 for the year:
36631, conf, XTO, Tobacco Garden 21X-17D, Tobacco Garden,
36492, conf, Hess, TI-Stenbak-158-95-2526H-6, Tioga,

Sunday, July 26, 2020: 65 for the month; 65 for the quarter, 511 for the year:
31523, conf, CLR, Steele Federal 9-24H, Banks, the Steele Federal wells are tracked here;

Saturday, July 25, 2020: 64 for the month; 64 for the quarter, 510 for the year:
36491, conf, Hess, TI-Stenbak-158-95-2526H-5, Tioga,