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

Locator: 23000MRO.

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-->5,502, MRO, Jonah USA 11-2H, first production, 1/21; t1/21; cum 53K 1/21; 53K over 17 days extrapolates to 93,500 bbls over 30 days; cum 399K 5/23;
  
• 36221, drl/NC-->6,420, MRO, Daniel USA 11-2TFH-2B, 33-053-08982, Antelope, first production, 1/21; t1/21; 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; 437K 5/23;
  
• 36222, drl-->drl/NC-->7,0083, MRO, Morsette USA11-2H, first production, 1/21; t1/21; cum 58K 1/21; cum 370K 5/23;
  
• 36223, drl-->drl/NC-->7,146, MRO, Sherman USA 21-2TFH, first production, 1/21; t12/20; cum 84K 1/21; cum 440K 5/23;
  
• 36224, drl-->drl/NC-->12/20, MRO, Valarie USA 21-2H, first production, 12/20; t--; cum 91K 1/21; cum 346K 5/23;
  
• 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; cum 716K 5/23;
  
• 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; cum 534K 5/23;
  
• 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; cum 491K 5/23;
  
• 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; cum 654K 5/23;
  
• 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; cum 417K 5/23;
  

One example of initial production:

• 36221:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
SANISH	1-2021	25	84005	83278	50812	121157	91845	29058
SANISH	12-2020	2	188	184	426	1195	0	1185

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;
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
SANISH	1-2021	25	84005	83278	50812	121157	91845	29058
SANISH	12-2020	2	188	184	426	1195	0	1185

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:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2021	31	3385	3410	3783	4534	4095	223
BAKKEN	12-2020	22	1956	2068	3087	2758	2563	42
BAKKEN	11-2020	17	2288	1856	1997	2552	2153	275
BAKKEN	10-2020	0	0	0	102	0	0	0
BAKKEN	9-2020	0	0	0	0	0	0	0
BAKKEN	8-2020	0	0	0	0	5	0	5
BAKKEN	7-2020	0	0	0	0	0	0	0
BAKKEN	6-2020	0	0	0	0	0	0	0
BAKKEN	5-2020	0	0	0	0	0	0	0
BAKKEN	4-2020	22	2178	2668	249	2403	2258	0
BAKKEN	3-2020	31	4547	4609	782	9537	9326	0
BAKKEN	2-2020	29	6245	6214	802	11751	11289	260
BAKKEN	1-2020	31	6252	6394	1430	24186	21181	2789
BAKKEN	12-2019	31	7611	7477	1727	28336	27125	995
BAKKEN	11-2019	30	9236	9281	1807	26565	25891	465
BAKKEN	10-2019	30	11758	11752	2515	21684	18491	2987
BAKKEN	9-2019	11	4386	3980	1448	6759	1730	4959
BAKKEN	8-2019	0	0	0	0	0	0	0
BAKKEN	7-2019	0	0	0	0	0	0	0
BAKKEN	6-2019	17	4485	4591	1003	11337	11224	0
BAKKEN	5-2019	31	11286	11369	1977	33492	16577	16706
BAKKEN	4-2019	30	12398	12465	1763	22236	0	22027
BAKKEN	3-2019	19	6493	6287	1742	10875	0	10743
BAKKEN	2-2019	27	11681	12165	1296	7075	0	6894
BAKKEN	1-2019	31	14588	14327	1636	16581	7728	8637
BAKKEN	12-2018	31	15057	15224	2058	23192	22976	0
BAKKEN	11-2018	30	14255	14138	1682	20083	14560	5314
BAKKEN	10-2018	31	14715	14684	1750	20911	19777	918
BAKKEN	9-2018	30	16490	16727	1963	23314	23105	0
BAKKEN	8-2018	31	18008	18058	1972	25584	25368	0
BAKKEN	7-2018	31	18726	18654	2234	26482	26212	54
BAKKEN	6-2018	29	18521	18490	4902	26914	26713	0
BAKKEN	5-2018	30	16177	15974	5943	23619	23407	3
BAKKEN	4-2018	7	2414	2531	272	3432	3383	0
BAKKEN	3-2018	31	13360	13543	1078	17386	17170	0
BAKKEN	2-2018	28	12281	12198	1020	15598	15403	0
BAKKEN	1-2018	31	14356	14462	1247	18249	18033	0
BAKKEN	12-2017	31	15600	15655	1417	20020	19804	0
BAKKEN	11-2017	30	16570	16439	1736	21634	21425	0
BAKKEN	10-2017	31	17802	17794	2319	25838	25622	0
BAKKEN	9-2017	10	6087	5680	1165	8031	7566	395
BAKKEN	8-2017	0	0	0	0	0	0	0
BAKKEN	7-2017	21	1280	1495	122	2318	2172	0
BAKKEN	6-2017	30	1897	1758	173	3401	3138	54
BAKKEN	5-2017	31	1964	2005	208	3685	3350	119
BAKKEN	4-2017	30	1997	2087	200	3675	3436	30
BAKKEN	3-2017	31	2101	2045	193	3732	3516	0
BAKKEN	2-2017	28	1963	1890	185	3496	3192	109
BAKKEN	1-2017	31	2242	2231	198	3454	3152	86

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,

Date	Oil Runs	MCF Sold
1-2021	23818	35156
12-2020	31555	49775
11-2020	38348	55161

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;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2021	31	15342	15274	8240	24634	22737	1897
BAKKEN	12-2020	23	13800	13742	7953	21035	20769	266
BAKKEN	11-2020	2	599	677	278	950	917	33
BAKKEN	10-2020	22	16944	17093	8311	26761	26403	358
BAKKEN	9-2020	30	33169	33144	15373	52378	49728	2650
BAKKEN	8-2020	31	42944	42737	25632	78204	49309	28895
BAKKEN	7-2020	3	22398	22398	3434	37056	15256	21800

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:
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2021	31	35539	35537	25527	58631	54263	4368
BAKKEN	12-2020	31	34035	33907	28894	54975	48279	6696
BAKKEN	11-2020	18	29759	29576	23676	49219	42716	6503
BAKKEN	10-2020	0	0	0	0	0	0	0

• 36055, 1,893/F/A, CLR, Gordon Federal 14-8H1, 33-025-03678, Haystack Butte, first production, 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;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2021	31	24306	24178	23544	39023	36117	2906
BAKKEN	12-2020	9	9440	9461	8325	16169	14198	1971
BAKKEN	11-2020	14	17408	17301	18227	28810	25003	3807
BAKKEN	10-2020	0	0	0	0	0	0	0

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:
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2021	31	27913	28080	21022	51596	47745	3851
BAKKEN	12-2020	31	45113	44898	41478	75946	66689	9257
BAKKEN	11-2020	19	32068	31870	27030	52973	45974	6999
BAKKEN	10-2020	0	0	0	0	0	0	0

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	3/23/2021	03/23/2020	03/23/2019	03/23/2018	03/23/2017
Active Rigs	15	49	69	60	49

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 production, 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.