Tuesday, March 23, 2021

Calgary Financial Post On The Canadian Pacific - Kansas City Southern Deal -- March 23, 2021

This story is followed at this post.

From The Calgary [Alberta] Financial Post, "Canadian oil producers see a new route to Gulf Coast refineries coming from the CP Rail deal. Rail route looks promising after cancellation of Keystone pipeline." From the linked article:

Canadian Pacific Railway Ltd.’s blockbuster US$25-billion deal for Kansas City Southern offers new hope for expanded access to the Gulf Coast for Canadian oil producers that have struggled to reach heavy oil markets in Texas and Louisiana.

Canadian oil and gas companies have for years tried to expand their options to ship heavy oil from Alberta to the southern coast of the United States, but their efforts to reach the world’s largest concentration of heavy oil refineries have been challenged time and time again. Most recently, U.S. President Joe Biden cancelled permits for the Keystone XL pipeline.

CP Rail’s deal with KCS “looks promising, but we’ll have to see what they actually do,” said Tristan Goodman, president of the Explorers and Producers Association of Canada, which represents mid-sized oil and gas companies.

“They’re not terminating in a great area for us, quite frankly,” he said of CP Rail’s existing network, “so joining forces does have a benefit.”

My hunch: even if regulators don't approve this merger Canadian Pacific and KSC could certainly work together to move oil from Canada to the Gulf coast. I assume that is already occurring.  

More from the article:

Currently, crude by rail accounts for about five per cent of revenue at CP and about two per cent at KCS. The two companies believe the deal will boost these revenues.

CP spokesperson Jeremy Berry in an emailed statement said the company plans to use a crude-by-rail facility in Alberta that pulls the blending agents out of heavy crude oil to create a “pipeline-competitive way of delivering Alberta energy products to market by rail.”

He added: “We can do this as the combination will provide for a more direct and efficient route to refineries on the Gulf Coast.”

A combination of energy products, including crude oil and fracking sand, chemicals and plastics, make up roughly 20 per cent of CP Rail’s total freight revenue, Morningstar analyst Matthew Young said in a research note.

Notes From All Over -- March 23, 2021

New home sales, February, 2021: sounds very similar to "existing home sales," February, 2021 --- sales fall but still remain higher than a year ago. Link here. Some numbers rounded.

  • fell 18% month-over-month;
  • seasonally adjusted 775,000 sales;
  • 8% higher than one year ago, February, 2020;
  • January, 2021, figures revised upward to 948,000 from earlier estimate of 923,000
  • average sales price: $416,000, up from $408,400 a month earlier
  • inventories remain tight: a 4.8 month supply

Existing home sales, re-posting:

  • existing home sales dropped 7% month-over-month (Feb/Jan, 2021)
  • sales were still 9% higher than a year ago
  • prices for existing homes, 16% higher

Yemen's liquid gold: our oldest granddaughter very much enjoyed the history of honey; that's what mae this article so interesting. Link here.

According to the Qur’an a lone sidr tree, or jujube, marks the highest boundary of heaven. On earth, amid the harshness of the Yemeni desert, the sweetness of sidr honey is cherished as a symbol of perseverance. 
Yemen has long been renowned for producing some of the best honey in the world, often compared to Mānuka honey from New Zealand. Some of the highest quality, and purest, comes from bees fed exclusively on the flowers of the sidr, producing a pale coloured honey with a fiery, almost bitter aftertaste. 
While the war has made travel difficult, closing off many roads, for traditional beekeepers life is much the same: they are some of the only people in Yemen who can traverse frontlines with ease, moving around every few months in search of flowers for their bees.

Number one producer of honey in the US? North Dakota. No fiery, bitter aftertaste.

Fool's Errand To Try To Predict Price Of Oil -- March 23, 2021

Link here.

Is this the top story for the week?

Saudi Arabia is in deep doo-doo.

Oops! MRO Does It Again! Record IPs -- March 23, 2021

Record IPs at this site

Updates

Later, 10:45 p.m. CT: with regard to these staggering numbers, a reader who follows this very closely, wrote:

I just noticed that the top of that MRO TF well was almost 12,000 feet down. 
A few things to consider going forward ...

How thick is this targeted horizon? (Well reports/geologists usually describe the zone's thickness). 
Most likely no additional casing will need to be run, but if depths start to approach 13,000 feet (third/fourth benches?), then higher pressures might necessitate the 'telescoping' of casing. 
This would pose significant additional cost.

The higher formation pressures (found at deeper depths) usually greatly boost overall recoveries of the hydrocarbons. 
This would validate Lynn Helms' long ago statement that the Three Forks production may ultimately surpass that of the Bakken.

Fracturing the rock in the TF must be substantially different than frac'ing  the middle Bakken. 
It would be reasonable to speculate that the operators - now, apparently being led by MRO and CLR - would have held back in pursuing the deeper TF benches as the learning curve would understandably be somewhat financially daunting.

All in all, as these deeper TF wells come online with high production profiles, increasing activity should emerge from other operators.

 Original Post

Re-posting. Look at these incredible initial production numbers. 

The wells:

  • 37089, drl-->drl/NC, MRO, Jonah USA 11-2H, first production, 1/21; t--; cum 53K 1/21; 53K over 17 days extrapolates to 93,500 bbls over 30 days;
  • 36221, drl/NC, MRO, Daniel USA 11-2TFH-2B, 33-053-08982, Antelope, first production, 1/21; t--; cum 84K 1/21; initial production, 84K over 25 days extrapolates to 100,800 bbls crude oil over 30 days; fracked 11/22/20 - 12/2/20; 8 million gallons of water; 52% fresh water by mass; 30% produced water by mass;
  • 36222, drl-->drl/NC-->conf, MRO, Morsette USA11-2H, first production, 1/21; t--; cum 58K 1/21;
  • 36223, drl-->drl/NC-->conf, MRO, Sherman USA 21-2TFH, first production, 1/21; t--; cum 84K 1/21;
  • 36224, drl-->drl/NC-->conf, MRO, Valarie USA 21-2H, first production, 12/20; t--; cum 91K 1/21;
  • 33412, 6,509, MRO, Winona USA 21-2TFH-2B, t4/18; cum 583K 12/20; Three Forks B2; 45 stages; 10 million lbs, 73,742 bbls + 100,353 mcf (16,722 boe) = 90,465 bod in less than four months; off line 3/20; back on line 8/20; nice return to production; off line 1/21;
  • 33413, 8,475, MRO, Chauncey USA 31-2H, Antelope-Sanish, t3/18; cum 478K 10/20; back on line 8/20; production okay; off line 11/20; remains off line 1/21;
  • 33414, 5,524, MRO, Wilbur USA 31-2TFH, Antelope-Sanish, t4/18; cum 427K 10/20; did not come off line; but then off line 11/20; remains off line 1/21;
  • 33415, 7,572, MRO, June USA 31-2H, Antelope-Sanish, t3/18; cum 564K 10/20; did not come off line; but then came off line 11/20; remains off line 1/21;
  • 33416, 4,892, MRO, Miles USA 41-2TFH-2B, Antelope-Sanish, t4/18; cum 364K 10/20; did not come off line; but then came off line 11/20; remains off line 1/21;

One example of initial production:

  • 36221:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
SANISH1-2021258400583278508121211579184529058
SANISH12-20202188184426119501185

A Spectacular MRO Three Forks Second Bench Well -- March 23, 2021

The MRO Chauncey-Winona pad is tracked here

This page won't be updated. 

A reader noted one of the wells on that pad has come off the confidential list but is currently a DUC, "drl/NC." Pretty good numbers for a DUC. LOL.

The well:

  • 36221, drl/NC, MRO, Daniel USA 11-2TFH-2B, 33-053-08982, Antelope, first production, 1/21; t--; cum 84K 1/21; initial production, 84K over 25 days extrapolates to 100,800 bbls crude oil over 30 days; fracked 11/22/20 - 12/2/20; 8 million gallons of water; 52% fresh water by mass; 30% produced water by mass;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
SANISH1-2021258400583278508121211579184529058
SANISH12-20202188184426119501185


From the well file:
  • target, second bench, anticipated top of the target: 11,935.78 feet
  • the well is sited near the middle of section 35; the horizontal runs south through section 2, and through section 11; the permit says the spacing is 1280 acres;
  • narrative not yet scanned;
  • FracFocus: data noted above;

Tweet Of The Day -- March 23, 2021

Link here.


Website for the Dickinson Cattle Company ... and, no, it's not south of Williston.

Looking Good -- Another Petro-Hunt Thompson Well In The Charlson Updated -- March 23, 2021

Previous note:

  • September 29, 2020: 18111, Thompson wells, Petro-Hunt; huge jump; 462K 9/18; huge well, off line in 5/2020; will be interesting to see what it does if it comes back on line; back on line 11/20; follow for another few months; cum 627K 1/21.

Note: in 2017, this well had declined to 2,000 bbls/month; now it's back over 3,000 bbls/month. And a huge jump in production in late 2017 when the well was already six years old. Folks always talk about the decline rate in the Bakken; they don't talk about the jumps in production that are quite typical in the Bakken.

Drilled in 2011; production since 2017:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-20213133853410378345344095223
BAKKEN12-2020221956206830872758256342
BAKKEN11-20201722881856199725522153275
BAKKEN10-2020000102000
BAKKEN9-20200000000
BAKKEN8-20200000505
BAKKEN7-20200000000
BAKKEN6-20200000000
BAKKEN5-20200000000
BAKKEN4-20202221782668249240322580
BAKKEN3-20203145474609782953793260
BAKKEN2-202029624562148021175111289260
BAKKEN1-20203162526394143024186211812789
BAKKEN12-2019317611747717272833627125995
BAKKEN11-2019309236928118072656525891465
BAKKEN10-2019301175811752251521684184912987
BAKKEN9-201911438639801448675917304959
BAKKEN8-20190000000
BAKKEN7-20190000000
BAKKEN6-20191744854591100311337112240
BAKKEN5-20193111286113691977334921657716706
BAKKEN4-2019301239812465176322236022027
BAKKEN3-20191964936287174210875010743
BAKKEN2-20192711681121651296707506894
BAKKEN1-201931145881432716361658177288637
BAKKEN12-2018311505715224205823192229760
BAKKEN11-2018301425514138168220083145605314
BAKKEN10-201831147151468417502091119777918
BAKKEN9-2018301649016727196323314231050
BAKKEN8-2018311800818058197225584253680
BAKKEN7-20183118726186542234264822621254
BAKKEN6-2018291852118490490226914267130
BAKKEN5-2018301617715974594323619234073
BAKKEN4-2018724142531272343233830
BAKKEN3-2018311336013543107817386171700
BAKKEN2-2018281228112198102015598154030
BAKKEN1-2018311435614462124718249180330
BAKKEN12-2017311560015655141720020198040
BAKKEN11-2017301657016439173621634214250
BAKKEN10-2017311780217794231925838256220
BAKKEN9-20171060875680116580317566395
BAKKEN8-20170000000
BAKKEN7-20172112801495122231821720
BAKKEN6-201730189717581733401313854
BAKKEN5-2017311964200520836853350119
BAKKEN4-201730199720872003675343630
BAKKEN3-20173121012045193373235160
BAKKEN2-2017281963189018534963192109
BAKKEN1-201731224222311983454315286

End Of The Road For This Great Well? Now Listed As Abandoned -- March 23, 2021

Previous note:

  • September 29, 2020: 17612, IA/4,345, Whiting, Maki 11-27H, Sanish, t10/09; cum 882K 11/29; off line 12/19; remains off line 7/20; open hole frack; 3.6 million lbs sand; off line in 2019, but at least three wells will be drilled and fracked in the immediate area; link here;

Noted today that this well is now AB -- abandoned. 

The Hess EN-Labar Wells

It looks like the "last" EN-Labar well has been fracked. The EN-Labar wells are great wells.

  • 37062, conf, Hess, EN-Labar-154-94-1003H-5, Alkali Creek,
DateOil RunsMCF Sold
1-20212381835156
12-20203155549775
11-20203834855161

When I get caught up, I will update these wells, but here's a tease:

  • 37064, 3,857/F/A, Hess, En-Labar-154-94-1003H-6, Alkali Creek, 10.00 million lbs proppant, 30 stages, first production, 7/20; t--; cum 145K 1/21;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-2021311534215274824024634227371897
BAKKEN12-202023138001374279532103520769266
BAKKEN11-2020259967727895091733
BAKKEN10-202022169441709383112676126403358
BAKKEN9-20203033169331441537352378497282650
BAKKEN8-202031429444273725632782044930928895
BAKKEN7-2020322398223983434370561525621800

Initial Production Data For CLR's Gordon Federal Wells That Came Off Confidential List Today -- March 23, 2021

Production profiles for the two CLR Gordon Federal wells that came off the confidential list today.

Note: two of the three wells below production 100K bbls of crude oil in 2.5 months. These are not record IPs but they are huge wells.

The CLR Gordon Federal wells are tracked here. The wells reported today:

  • 36056, F/A,1,907, CLR, Gordon Federal 15-8H, 33-025-03679, Haystack Butte, first production, 11/20; t--; cum 100K 1/21; 10.07 million lbs proppant; 37 stages; fifteen hours to drill the curve; three days to drill the lateral; 30K over 18 days extrapolates to 50K over 30 days:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-20213135539355372552758631542634368
BAKKEN12-20203134035339072889454975482796696
BAKKEN11-20201829759295762367649219427166503
BAKKEN10-20200000000
  • 36055, 1,893/F/A, CLR, Gordon Federal 14-8H1, 33-025-03678, Haystack Butte, first produciton, 11/20; t--; cum 51K 1/21; 9.99 million lbs proppant; 37 stages; thirteen hours to build the curve; four days to drill the lateral; Three Forks B1 at 11,626' MD;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-20213124306241782354439023361172906
BAKKEN12-2020994409461832516169141981971
BAKKEN11-20201417408173011822728810250033807
BAKKEN10-20200000000

From the other day,

  • 36054, 2,419, F/A, CLR, Gordon Federal 13-8H, Haystack Butte, 9.7 million lbs proppants, 36 stages, first production, 11/20; t--; cum 106K 1/21; 32K extrapolates to 51K over 30 days:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-20213127913280802102251596477453851
BAKKEN12-20203145113448984147875946666899257
BAKKEN11-20201932068318702703052973459746999
BAKKEN10-20200000000

WTI Plummets; Drops 4%; Trading Below $60 -- March 23, 2021

Two headlines over at  oilprice.com:

  • Saudi Arabia sidelined by Biden's Middle East strategy; and,
  • Russia says LNG production capacity could jump threefold by 2035.

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


Active rigs:

$59.11
3/23/202103/23/202003/23/201903/23/201803/23/2017
Active Rigs1549696049

Two wells coming off the confidential list -- Tuesday, March 23, 2021: 24 for the month, 80 for the quarter, 80 for the year. The CLR Gordon Federal wells are tracked here.

  • 36056, 1,907/F/A, CLR, Gordon Federal 15-8H, 33-025-03679, Haystack Butte, first production, 11/20; t--; cum 100 1/21; 10.07 million lbs proppant; 37 stages; fifteen hours to drill the curve; three days to drill the lateral;
  • 36055, 1,893/F/A, CLR, Gordon Federal 14-8H1, 33-025-03678, Haystack Butte, first produciton, 11/20; t--; cum 51K 1/21; 9.99 million lbs proppant; 37 stages; thirteen hours to build the curve; four days to drill the lateral; Three Forks B1 at 11,626' MD;

RBN Energy: crude oil export terminal projects itching to join battle for barrels, part 3. Archived.

The Moda Ingleside Energy Center (MIEC) in Corpus Christi, the Enterprise Hydrocarbons Terminal (EHT) in Houston, and the Louisiana Offshore Oil Port (LOOP) have been loading more crude oil than any of their Gulf Coast competitors over the last year. In fact, they accounted for nearly half of the total oil exported. As many of the crude exporters have learned the hard way, leading the pack today is no guarantee you’ll still be out front six, 12, or 24 months from now. Despite the global pandemic and the market disruptions it has caused, a number of new export terminals and expansions to existing terminals are still under development, and all of them hope to draw barrels from their rivals. Today, we conclude our series with a look at planned capacity additions to Gulf Coast export facilities.