Tuesday, February 23, 2021

WPX Young Bird Goes Over 500K Bbls Crude Oil Cumulative -- February 23, 2021

The well:

  • 34974, 2,403, WPX, Young Bird 34-27HQL, Spotted Horn, a Three Forks well, 20' below the top of the Three Forks; less than two full days to drill the vertical; less than a full day to drill the curve; less than a full three days to complete the lateral (wow); target window, 20-feet thick; 50 stages; 8.5 million lbs, t1/19; cum 490K 12/20; 51K month; recent production:

  • PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
    BAKKEN12-2020316424638693571566379456631
    BAKKEN11-2020305603565185371366064416255
    BAKKEN10-20203162606248108921526074296589
    BAKKEN9-20201214671493179435759472413
    BAKKEN8-20203183488354807220353108658210
    BAKKEN7-2020266073600860751480462387567
    BAKKEN6-2020219996995667982437022435291
    BAKKEN5-20203120095203331388133298261864109

This BR Waterton Well Has Just Gone Over 500K Bbls Crude Oil Cumulative -- February 23, 2021

The well:

  • 24341, 2,803, BR, Waterton 44-32TFH, Keene, t5/13; cum 522K 12/20; recent production:

    PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
    BAKKEN/THREE FORKS12-20203119491921313191918420
    BAKKEN/THREE FORKS11-20202818191964264178017046
    BAKKEN/THREE FORKS10-20203118631686289190618227
    BAKKEN/THREE FORKS9-20202718051800475225621818
    BAKKEN/THREE FORKS8-20203124122508426275826729
    BAKKEN/THREE FORKS7-20203122292736497274726700
    BAKKEN/THREE FORKS6-202028162811048311376943363
    BAKKEN/THREE FORKS5-2020311762168993425611766718
    BAKKEN/THREE FORKS4-20202620332085120122972113119

A Slawson Wolverine Federal Well Has Just Gone Over 500K Bbls Crude Oil -- February 23, 2021

The well:

  • 23108, 767, Slawson, Wolverine Federal 5-31-30TFH, Elm Tree, t9/13; cum 529K 12/20; off line 11/18; remains off line 11/19 (although 11 days in 6/19); back on line 12/19; recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-202031602865555642104488965733
BAKKEN11-2020237737758344971193082463120
BAKKEN10-2020245002455710535
BAKKEN9-202012002400
BAKKEN8-20200000000
BAKKEN7-202012002950
BAKKEN6-20200000000
BAKKEN5-20200000000
BAKKEN4-202017860649430727211
BAKKEN3-2020319229920217404172971648562
BAKKEN2-2020291310713160193681854317181660

An Inactive Slawson Well Back On Line -- February 23, 2021

The well:

  • 31563, IA/1,137, Submariner Federal 5-23-20TFH, Big Bend, t6/19; cum 15K in 25 days; cum 118K 1220; TD = 27,665 feet, three-section lateral; 101 stages; 16.1 million lbs; see this post; remains off line 10/20; recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN12-2020281435813757284831077184762153
BAKKEN11-20200000000
BAKKEN10-20200000000
BAKKEN9-20200000000
BAKKEN8-20200000000
BAKKEN7-20200000000
BAKKEN6-20200000000
BAKKEN5-20201000500
BAKKEN4-202010625012120
BAKKEN3-2020169069864915570688151741627
BAKKEN2-2020291611316753253211158970844360
BAKKEN1-2020281435114425285411347311265537
BAKKEN12-2019311666316183347381408386213528
BAKKEN11-2019291831918632345471379799551733
BAKKEN10-201919131381245757231004331835364
BAKKEN9-20190000000
BAKKEN8-2019002370000
BAKKEN7-2019110830802
BAKKEN6-2019251524214774512231166909885

Another Great MRO Well In The Antelope Sanish -- February 23, 2021

 The well:

  • 37286, drl/A-->AL/A, MRO, Strand USA 44-10TFH-2B, 33-053-09327; t--; cum 142K in 2.5 months; cum 162K 12/20; fracked 7/24/20 - 8/9/20; 7 million gallons of water; 70% fresh water by mass; produced water, 14% by mass.
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
SANISH12-2020212011320004242872975628350128
SANISH11-2020748004983548061945447435
SANISH10-20202530690313332589141202380571210
SANISH9-2020309133790798779491197821142820
SANISH8-20207149151456215149103959330203

First steps:

Judah, Age Eleven Months Old

"Damn The Torpedoes, Full Speed Ahead" -- February 23, 2021

The Long Creek Unit is tracked here.

At the earnings call for 4Q20, CLR said they would be drilling 56 wells in the Long Creek Unit with two rigs. CLR has just added permits for seven more LCU wells: 56 + 7 = 63 wells. 

Seven new permits, #38168 - #38174, inclusive --

  • Operator: CLR
  • Field: Long Creek (Williams)
  • Comments:
    • CLR has permits for seven LCU Foster Federal FIU wells in the Long Creek unit, NWNE 28-153-99
      • 38168, 5-28H1, 455' FNL 1990' FEL,
      • 38169, 6-28H1, 455' FNL 1945' FEL,
      • 38170, 7-28H, 455' FNL 1900' FEL,
      • 38171, 8-28H1, 455' FNL 1855' FEL,
      • 38172, 9-28H, 455' FNL 1810' FEL,
      • 38173, 10-28H1, 455' FNL 1765' FEL,
      • 38174, 11-28H,  455' FNL 1720' FEL,

Graphics:


"Damn The Torpedoes, Full Speed Ahead" -- CLR With Seven New Permits -- February 23, 2021

Oil prices slip on "surprise" inventory build: it's always a "surprise." LOL.  I'll wait for the EIA data tomorrow, Wednesday, February 24, 2021.

Active rigs:

$61.32
2/23/202102/23/202002/23/201902/23/201802/23/2017
Active Rigs1554665641

Seven new permits, #38168 - #38174, inclusive --

  • Operator: CLR
  • Field: Long Creek (Williams)
  • Comments:
    • The Long Creek unit is tracked here;
    • CLR has permits for seven LCU Foster Federal FIU wells in the Long Creek unit, NWNE 28-153-99
      • 38168, 5-28H1, 455' FNL 1990' FEL,
      • 38169, 6-28H1, 455' FNL 1945' FEL,
      • 38170, 7-28H, 455' FNL 1900' FEL,
      • 38171, 8-28H1, 455' FNL 1855' FEL,
      • 38172, 9-28H, 455' FNL 1810' FEL,
      • 38173, 10-28H1, 455' FNL 1765' FEL,
      • 38174, 11-28H,  455' FNL 1720' FEL,

Two producing wells (DUCs) reported as completed:

  • 36456, drl/A, BR, Glacierfill 1C, Clear Creek, first production, --; t--; cum --;
  • 36457, drl/A, BR, Glacierfill 1D, Clear Creek, first production, --; t--; cum --;

California Bullet Train Update -- LA Times -- February 22, 2021

I wasn't looking for this. I thought the project was dead. But the story popped up in my news feed, somewhere. Don't remember where. 

From The Los Angeles Times:

  • the bullet train is now estimated to cost upwards of $100 billion;
  • original budget, about $30 billion

This is just the beginning: 

A 65-mile section of California’s bullet train through the San Joaquin Valley that a contractor assured could be constructed much more cheaply — with radical design changes — has become another troubling and costly chapter in the high-speed rail project.

The segment runs across rivers, migratory paths for endangered species and an ancient lake bed through the length of Kings County, a fertile agricultural belt south of Fresno. Before awarding a contract for the section, the California High-Speed Rail Authority and its consultants knew about these sensitive issues and prepared lengthy environmental reports aimed at accelerating construction by avoiding legal obstacles.

But in 2014, when the rail authority awarded the contract, it went with the lowest bidder — a Spanish company named Dragados — which promised $300 million in cost savings by altering the design that the authority had proposed to regulators.

Seven years later, these changes have been largely abandoned and have contributed to more than $800 million in cost overruns on the Kings County segment. That figure is 62% above the contract price tag, which the rail authority has agreed to pay.

So much more. What a debacle. But it's a given that the Biden administration, unlike Trump, will continue funding this white elephant for Californians. Makes so much less sense than the Keystone XL but it's all politics. 

The bullet train is tracked here.

Corky Was The First To Notice That The Internet Was Down -- February 23, 2021

  ***********************************
Double Masking


Commentary -- 2021 -- Lots Of Work Left To Be Done In The Bakken -- February 23, 2021

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. 

This is not an investing site. I follow the operators in the Bakken to help me understand the Bakken. Different operators do things differently.

Three companies that seem best aligned to do well in an environment of rising oil prices. Two of the companies will by minimally impacted by a DAPL shutdown. I don't know about the third. It's very possible a DAPL shutdown could actually improve the situation for one or two of these three companies.

The three companies: CLR, Hess, and MRO, in alphabetical order. 

I am not recommending that individuals invest in these companies. I find them interesting from a "Bakken" point of view and not from an investing point of view. 

30-second elevator speech for these three:

  • Hess: slow and steady; stay true; no sharp turns; lots of natural gas, production, gathering, and processing;
  • MRO: some of the best sites in the Bakken; many fields are excellent fields for re-fracking;
  • CLR: damn the torpedoes; full speed ahead; more rigs; a bit more fracking; "unitized" locations by another name;

Narrative to follow.

Graphic:

Compare with:, p

Other graphics:





 


Links:

Previously posted:

Running the numbers. 

The Bakken holds 500 billion bbls of OOIP. Ten percent is definitely recoverable. Harold Hamm once suggested the Bakken held upwards of one trillion bbls of OOIP but then backed off. The "500" number comes from a paper written years ago, never vetted, never published. With new data, one does wonder if 500 is off by half. 

Early in the boom, it was expected that 1 - 3% of OOIP would be recovered/produced through primary production. It didn't take long for Whiting to show that 10% was easily achievable, and now there are estimates that percent recoverable through primary production could be much, much higher. But let's stick with the conservative numbers.

  • OOIP: 500 billion bbls
  • primary production, 10%: 50 billion bbls
  • Bakken production: one million bbls / day = 365 million bbls/year
  • do the math: (50 billion bbls ) / (365 million bbls/year) = 50,000 / 365 = 140 years of drilling and CBR

Now let's assume primary production is 20% and let's assume OOIP remains the same. Let's assume that production drops to an average of 250 million bbls/year for various reasons (Biden policies; EVs; pipelines shut down, etc):

  • 500 billion x 0.2 = 100 billion bbls
  • 100 billion bbls / (250 million bbls/years) = 400 years and CBR

The law of big numbers.

If the numbers seem impossible, remember that they were drilling in North Dakota for sixty years before the Bakken became a "thing." And the Bakken dwarfs the other plays in North Dakota. 

***********************************************
Work To Be Done

Some of the wells in the graphic above, working from west to east.

  • 21450, 1,600, MRO, Jessica USA 21-6TFH, Reunion Bay, t3/12; cum 369K 1/21;
  • 37771, conf, MRO, Plenty Horns USA 31-6H, Reunion Bay, 
  • 37774, conf, MRO, Odell USA 41-6H, Reunion Bay,
  • 18230, 552, MRO, Fisher USA 21-5H, Reunion Bay, t11/09; cum 323K 1/21; perhaps a subtle increase in production after coming back on line, 9/20;
  • 37857, loc, MRO, Morgan USA 11-5TFH, Reunion Bay,
  • 37654, drl, MRO, Albert USA 31-5TFH, Reunion Bay, 
  • 37655, drl, MRO, Joba USA 31-5H, Reunion Bay,
  • 21479, 1,753, MRO, MHA USA 11-4TFH, Reunion Bay, t6/12; cum 343K 1/21;
  • 37787, drl, MRO, Watterberg USA 41-5TFH, Reunion Bay,
  • 30512, 3,255, MRO, Gaynor USA 34-33H, Reunion Bay, t2/17; cum 405K 7/20; off line 7/20; remains off line 1/21; 
  • 30516, 1,536, MRO, Hannah USA 31-4TFH, Reunion Bay, t9/16; cum 465K 1/21;
  • 18191, 613, MRO, Raymond USA 41-4H, Reunion Bay, t12/09; cum 392K 1/21;


  • 37799, drl, MRO, Gracie USA 11-3TFH, Reunion Bay,
  • 37801, drl, MRO, Brusseau USA 11-3TFH, Reunion Bay,
  • 18378, 577, MRO, Henry Charging USA 21-3H, Reunion Bay, t4/10; cum 559K 1/21;
  • 29759, 2,456, MRO, Steinhaus 24-34H, Reunion Bay, t8/15; cum 312K 1/21;
  • 29760, 2,267, MRO, Halvorson 34-34TFH, Reunion Bay, t8/15; cum 346K 1/21;

WTI Hits $62 Overnight; Pulls Back A Bit -- February 23, 2021

Suncor: link here

India: oil imports from North American break another record. Link to Charles Kennedy.

Free cash flow. This is exactly what CLR said during its earnings call. Link here.

Must-watch YouTube: this is real video footage -- not artists' depictions. If this is confusing or disorienting, read the comments at the link.

Perseverance

 ***********************************
Back to the Bakken

Active rigs:

$61.68
2/23/202102/23/202002/23/201902/23/201802/23/2017
Active Rigs1554665641

No wells coming off the confidential list.

RBN Energy: propane and the 2021 deep freeze; where are we now? 

Here in Texas, the snow is melting, the power is back on, and some of us even have drinkable water.  We’ll be dealing with the aftermath of the 2021 Deep Freeze for months, and talking about the insane natural gas and power prices for as long as gas and power markets exist. One thing you have not heard much about during these crazy few days is propane. And given what we’ve been through, no news is good news. Sure, it was impossible to exchange a tank at the local Quickie Mart, and there were sporadic reports of delayed propane deliveries and local shortfalls. 
But even up in the coldest Midwest states, there were no market meltdowns, no skyrocketing prices. 
Instead, propane has been the go-to fuel to keep folks warm, to get energy production moving again by defrosting wellheads and pipeline valves, and even to get restaurants back on their feet. It’s always dangerous to declare a winter victory with a few weeks left to go in the season, but today we’ll take that risk.

Commentary -- February 23, 2021

Not-ready-for-prime-time. Will be edited once Sophia finishes with her schoolwork. 

Is there a disconnect here? The "surging" price of oil would suggest this would be the very time that the future of EVs would look even better and share prices of companies like Tesla should be surging in response.

The paradox: the price of oil is surging; folks are talking about oil demand exceeding supply by the end of the year; more and more EVs coming on line, we have most-friendly EV administration in the White House; crude oil and propane pipelines are being shut down, and yet, EV companies are coming under huge pressure. This should be the moment for EVs to shine. What's going on?

Commentary: GE was a high-flying stock once upon a time. I'm not sure what the tipping point was but certainly buying Alstom was in the mix. Running through the headlines this morning, I'm seeing things that suggest we may see the same thing happen to GM. But GM won't be alone. 

These are four items that got my attention over the past ten days:

  • the Texas Deep Freeze revealing the Achilles' heel of renewable energy;
  • NASDAQ plummeting over last few days; e.g., TSLA shares dropping like a rock;
  • the price of oil; projections for oil demand by the end of the year;
  • Daimler's rollout of a 250-mile range 18-EV-wheeler;
  • Warren Buffett's views about high-capital intensive industries;

Here those data points are in graphic form or video.

Texas deep freeze:

NASDAQ plummeting as interest rates trend higher but still at relative record lows. Like so many things, the headlines give traders a reason for selling even if the facts don't fit the story.

Analysts see $70 - $75 oil by this summer / end of year (2021).


Daimler EV truck:



Yes, the BWM video is a few years old, but batteries haven't improved all that much over time, and as batteries have improved over the years, the realities of rare earth metals are becoming more concerning. The biggest concern? China holds four aces in this poker hand.

Finally, this:

  • Warren Buffett's views on capital intensive industries. Link here

Some legacy industrial companies with an incredible history (think GE) are betting the farm on EVs (think Ford).

For me the tipping point came during the recent unfavorable event in Texas, the "Four-Day Deep Freeze"; seeing the range of the Daimler Cascadia; seeing the $50,000 BWM golf cart; and, no indications that anyone is addressing the issue of rare earth metals.

Bottom line:

  • Texas deep freeze revealed the Achilles heel of renewable energy: the Achilles heel: capital intensive and surprises [China]);
  • ordinary Americans cannot afford EVs; at the end of the day, EVs are luxury vehicles;
  • long haul truckers won't buy EV trucks if the range is 250 miles;
  • some legacy manufacturing companies are betting the farm on EVs