The Million Dollar Way (The Bakken Oil Blog): 04/04/21

Sunday, April 4, 2021

Notes From All Over -- April 4, 2021

Latest from Mark Perry: unwed mothers. I don't think it's as simple as Philip Carl Salzman and Mark J Perry are making it out to be. For me, it's either very, very simple, or very, very complicated. I think it's very, very complicated.

Saudis adjust oil prices: link here. For me, background noise; I'm no longer particularly interested in Saudi's tweaking of prices. On another note, there is more and more talk of production gradually being increased. It's a seasonal thing. Not to be taken out of context, but exports are more important to track than total production, unless Saudi starts setting new production records.

Saudi Arabia: crude oil production, link here.

Markets, early Sunday evening after a three-day weekend:

WTI: trading down 40 cents, but still above above $61 at $61.05;
Futures:

Dow: up 135 points
S&P 500: up 14 points (the 10:1 ratio intact)
NASDAQ: up 10 points

Flashback: Bakken Update -- EOG, Whiting Well Results Prove Parshall Field More Productive Than The Sanish -- Michael Filloon -- July 14, 2013

It's hard to believe this SeekingAlpha article by Michael Filloon is still available on the internet.

Archived.

The article begins:

There are no two better fields in the Williston Basin for middle Bakken results than Parshall and Sanish. Parshall and Sanish fields are the focal point of EOG Resources' (NYSE:EOG) and Whiting's (NYSE:WLL) Bakken plays. EOG and Whiting were some of the earliest operators; this kept acreage costs down but also provided its pick of the best leaseholds. These two fields have seen more development than any other area of the Bakken. All have very good results, but both have a different history. Geology is not much different, except the depth of the middle Bakken and Sanish Sands.

The Three Forks is also shallower than around the Nesson Anticline. Shale thickness seems consistent in both the middle Bakken and Three Forks. The isopach below shows Bakken thickness of over 120 feet. Keep in mind thicker shale does not necessarily mean better EURs; it could provide a larger number of locations. This is evident in the picture [at the article].
Whiting believes it can maintain seven locations per mile in the Sanish Field. The lower Bakken shale is extremely thick in both the Sanish and Parshall fields. It will maintain only three in the upper Three Forks. The Hidden Bench prospect is very interesting as it plans to drill eight locations in the middle Bakken, but this probably has to do with the Bakken Silt being thicker in this area. The upper Three Forks could be a big deal in this leasehold as it plans seven locations. It is twice as thick as in Mountrail County. The Pronghorn Sands may have something to do with this as well, but that is a guess on my part. Obviously, the Bakken is the focus in both Parshall and Sanish.
The Three Forks is comprised of two to four layers or benches of shale. The Three Forks has seen less development than the middle Bakken. EURs of the Three Forks in Mountrail County have lagged other areas. Northeast McKenzie County's Three Forks' locations have been the best in play, but there have been excellent Pronghorn Sands results in Billings and Stark counties. As seen above, the first bench of the Three Forks is somewhat thin compared to McKenzie County.

Much more at the linked article, including some incredible graphics.

Meanwhile, dovetailing with this article, were comments sent to me by a reader about the same time I was re-reading the Filloon article above:

In the hydrocarbon world, your comments on the significance of 'stacked pay' are pretty much right on.

Some other time, I may delve a bit into the 'stuff' that I have learned in this subject, with the Powder River Basin providing much of the raw data, operators' approach, economical viability ... or lack thereof.

Pretty interesting topic that is much more complex than the superficial terms being bandied about might indicate.

Lastly, for today, you may find it instructive to track the geologist's reports on these Three Forks second bench wells, especially as the top of the TF 2B is reached.

If the top of the next lower formation is noted, all the better as you will be able to identify the thickness of the second bench in that location.

(Note, while the KOP - Kick Off Point - for the lateral will be [well] above the top of the next lower formation, often operators will deliberately drill deeper to get precise geological information.

They will then cement in this exploratory 'hole' and resume the curve/lateral drilling).

The production numbers that both MRO and CLR are showing from these second bench wells are astonishing.

I am certain the other Bakken operators are monitoring these developments very closely.

In reply:

yes, periodically, I do track the thickness of the various Three Forks benches;
yes, I have often seen the operators drill lower than the target, then cement that in, come back up and continue with the lateral through the planned target; and,
yes, the production numbers are astonishing. CLR's acreage is across most of the Bakken so their wells may vary significantly; MRO seems to be concentrated in a much smaller geographic area that is either an incredibly good area, or they have really optimized their completion strategies, or perhaps a bit of both.

Updating The Oldest Wells In North Dakota -- April 4, 2021

The Clarence Iverson #1 discovery well first produced oil on April 5, 1951. Here's an update of the oldest wells in North Dakota still active.

Recently, the oldest actively producing well, #35, was put on the AB list.

35, 503, Hess, Beaver Lodge-Devonian unit H-310, Beaver Lodge, the Madison formation, t4/52; cum 216K 7/17;

then, the Devonian, March, 1960, cum 2.092 million bbls cumulative
last production from the Devonian, July, 2017

Back in 2019, I had to go through a lot of permits to find the oldest actively producing wells. These appeared to be the five oldest actively producing wells at that time. They are vertical wells with a depth of around 9,000 - 12,000 feet. They are Madison wells, and the oldest will turn 65 years old this year. I'm updating them today, April 4, 2021. Note that #498 is no AB; #554 is also AB; #629 is IA;

These Madison wells have each taken 50+ years to produce 500,000 bbls.

The wells:

498, AB/292, Hess, Tioga-Madison Unit L-132 HR, Tioga, t7/54; cum 535K 12/19;
554, AB/408, Hess, Tioga-Madison Unit L-128 HR, Tioga, t8/54; cum 282K 10/19;
629, IA/159, Hess, Tioga-Madison Unit O-151 HR, Tioga, t9/54, cum 788K 6/20;
637, 350, Rim Operating, Hofflund 18HR, Hofflund, t12/54; cum 425K 2/21;
774, 156, Petro-Hunt, CMSU D0216, Charlson, t6/55; cum 477K 2/12;

With regard to #498:

there is a sundry form dated June 1, 2018, asking to "PA" the well, but, then, there follows
a sundry form saying the well was returned to production 6/19/2018
the well had been taken off line 3/16 due to low oil prices (per company's sundry form) but then returned to production 6/18. It has not produced any oil since 1/20. And prior to that, not much.

The other wells:

#554: after being off line every so often after 1999, it's finally "dead": no production since, 10/19;
#629 has a similar production profile to #554. No production since 6/20;

#637 is a much better well recently but was offline for several years, from 12/89 to 5/05 -- by the way, this would be a conventional well that disproves Hubberts peak oil theory; just saying; recent production is very, very good for this old well --

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod
MADISON	2-2021	28	1216	1263	4508	182
MADISON	1-2021	31	1351	1286	5145	202
MADISON	12-2020	31	1383	1466	5162	202
MADISON	11-2020	30	1600	1746	3567	195
MADISON	10-2020	31	1379	1286	3747	202
MADISON	9-2020	30	1319	1268	4960	195
MADISON	8-2020	31	1317	1261	3623	202
MADISON	7-2020	31	1306	1481	3765	202
MADISON	6-2020	27	1102	1477	3699	176
MADISON	5-2020	11	235	0	33	72
MADISON	4-2020	20	982	643	2562	130
MADISON	3-2020	31	1332	1295	3593	202
MADISON	2-2020	29	1230	1295	3520	189

#774 has a similar production profile as the first two above; taken off line for six months in 2021, it returned to production 11/20:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	Vent/Flare
MADISON	2-2021	25	160	165	1322	38	0
MADISON	1-2021	21	188	246	521	41	0
MADISON	12-2020	31	321	267	814	55	0
MADISON	11-2020	12	155	130	399	22	0
MADISON	10-2020	0	0	0	0	0	0
MADISON	9-2020	0	0	0	0	0	0
MADISON	8-2020	0	0	0	0	0	0
MADISON	7-2020	0	0	0	0	0	0
MADISON	6-2020	0	0	0	0	0	0
MADISON	5-2020	0	0	0	0	0	0
MADISON	4-2020	22	136	147	877	120	82
MADISON	3-2020	31	96	89	1249	123	103
MADISON	2-2020	26	64	64	828	24	12

By the way, you ask, how is Mr Woodrow Star doing? See this post. Mr Star is no longer alive -- it is now AB, last producing, 6/19.

1987, 150, CLR/Pan American/Prima, Woodrow Star "A" 1, Antelope field; Sanish; t10/58; cum 1.105586 million bbls 6/19;

Having said that, it looks dismal -- there were no "runs" in November, 2018, the first time there have no runs in six months.

Let's see when the next producing well after #637 shows up:
638, PA,
639, PA,
640, PA,
641, 325, Hess, Larson Fresh Water Well 1, Tioga, the Madison; t8/54; cum 320K 1/79;

Pool	Date	Days	BBLS Oil	BBLS Water
MADISON	1-1979	0	0	0
MADISON	7-1976	0	0	0
MADISON	10-1971	31	138	2335
MADISON	9-1971	30	133	1777
MADISON	8-1971	30	138	1703
MADISON	7-1971	27	162	2326
MADISON	6-1971	30	274	2815
MADISON	5-1971	31	229	2667

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Oldest Wells Still Producing

But from there, far and few between.

This is what is pretty much looks like until we get to the Denbury Red River wells in southwest North Dakota in the 16500 range:

642, dry; Caroline Hunt Trust Estate, Obed Larson 1, wildcat, Deadwood, 8/9/1954;
643, PA; Amerada Hess, Tioga-Madison Unit P-156, Tioga, t9/54; cum 91K 11/62;
644, dry; Gordon B. Butterfield, Rudolph Trautman 1, wildcat, precambrian, 8/2/1954;
645, dry; Shell Oil Co., Murphy Christensen 1, wildcat, Devonian, 7/10/1954;
646, PA; Flying J Exploration & Production, Inc., Madision, t8/54; cum 144K 8/69;
647, PA; Hess...II, LLC, Beaver Lodge-Madison Unit No-28D, t9/54; cum 204K 3/70;

Tens of thousands of wells like that, until ...

16500, 425, Denbury Onshore, LLC, CHSU 31C-9NH 16 Cedar Hills, t4/06; cum 387K 1/21;

One can scroll through "Monster Wells" to see how old some of the great wells were / are, tracked here.

Happy Birthday To The Williston Basin -- The Williston Herald Looks Back At 70 Years Of Oil In North Dakota -- April 4, 2021

Happy birthday to the Williston Basin. Seventy years old tomorrow.

Link here. The Williston Herald looks back at 70 years of oil in North Dakota.

In April 1951, the North Dakota landscape changed forever with the discovery of oil. We look back at the discovery through the Herald archive and other sources.

Billboard's number one hits in April, 1951:

If, Perry Como; and,
How High the Moon, Les Paul and Mary Ford.

I was going to post the videos but they are so awful, I just couldn't do it.

From The Herald, seventy years ago. I would be born some four months later, in a North Dakota city other than Williston, but then moved to Williston two years later.

April 4, 2021, for the archives:

INDIA reports highest ever record-breaking new covid-19 cases in one day. Wow, the US was lucky Trump was president when this all began. My hunch: under a different administration, "we" would be testing new vaccines.
let's fact check this:
link here; yes, 92,000 new cases reported yesterday; India is #1 in the world with number of new cases reported yesterday;
link here; second wave very, very obvious;

Energy Notes From All Over -- Easter Sunday Edition -- April 4, 2021

China, John Kerry, and climate change:

John Kerry: "We can work with China on global warming."
Algore: "Here, hold my beer."

OPEC basket price: it's been awhile since we've posted this data. Saudi Arabia can't "make it" on 6-handle oil; and Saudi Aramco has said as much, telegraphing it will slash its "promised" annual divided with sub-$80-oil. From OPEC:

Flashback: it never quits -- it's hard to believe but this August 10, 2012, Harvard study is still available on the net. Archived. Pre-pandemic analysis:

Global oil supply capacity is growing at an unprecedented level, and could result in an overproduction glut and steep dip in oil prices, according to a June 2012 study from Harvard University's Kennedy School of Government.

Contrary to the idea among some that global oil supply is running out, additional production of 17.6 million barrels of oil per day (bopd) could come online by 2020, boosting global production capacity to 110.6 million bopd, even with depletion rates for currently producing oilfields and reserve growth.

"This would represent the most significant increase in any decade since the 1980s," said Leonardo Maugeri, author of the study "Oil: The Next Revolution -- The Unprecedented Upsurge of Oil Production Capacity and What It Means for the World."

The Bakken was cited as the "gold standard" when evaluating shale plays:

The United States has more than 20 big shale oil formations, in particular the Eagle Ford shale, which has a hydrocarbon endowment on par with the Bakken. Most U.S shale and tight oil plays are also profitable at a West Texas Intermediate price ranging from $50 to $65 per barrel, making them "sufficiently resilient" to a significant downturn in oil prices.

Multiple formations in the Permian. I get a kick out of all the analysts justifying the high prices paid per net acre in the Permian based on:

thickness of the play; and,
multiple formations.

Memes.

Conventional oil metrics.

USGS 2013 survey. To the best of my knowledge, never updated.

based on data from actual wells drilled;

99% of Bakken wells at this time were middle Bakken wells
middle Bakken formation fairly well defined;

Three Forks first bench: minimal information;

Three Forks second bench: no evaluation;
Three Forks third bench: ?
Three Forks fourth bench: ??

Leigh Price paper: middle Bakken only?

Gasoline demand:

Top Rigzone stories this past week, based on page views, link here:

NextDecade, Oxy sign Texas CO2 storage deal;
connected to NextDecade's Rio Grande LNG project in Brownsville, TX
Total, XOM to exit OG1 JV
next year, Qater Petroleum will become the sole owner of the longstanding Qatargas Liquefied Natural Gas Company Limited (QG1) joint venture;
Berkshire Hathaway lobbies Texas for more gas-fired power; previously posted;

Notes From A Neanderthal -- April 4, 2021

Even a caveman can read this graphic.

Link here.

Texas counties, sorted by population, greatest to least:

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EU In Panic-Pandemic Mode
Back To More Lockdowns

Under the previous administration the NYTimes would never have posted this article; it would have made Trump's vaccine rollout program look too good. But, wow, what a story. The EU has really blown it, according to the all-knowing NYTimes editors. I don't have a dog in this fight, but the economic gap between the US and the EU will surely widen. To get to the article, there's a paywall, but you can get past it using your google sign-in.

*******************************
Easter Dinner

We're moving into a new apartment. Like the Jeffersons, we are "moving up." Our wells came in. LOL. That's a joke.

Long story about the apartment. Maybe another day.

As a lark, I bought a small rack of lamb. It's just the two of us. I've never done a rack of lamb before; it's always been lamb chops, our favorite dinner. But as mentioned, as a lark, I thought I would give it a try. The photos are posed. I have to get an adult chef's hat and apron and the kitchen needs to be cleaned up ... but give us a couple of weeks. The hat and apron belong to six-year-old Sophia.

In the photos below, note that I have not had a "professional" haircut since February, 2020 -- more than a year ago. All haircuts have been done by six-year-old Sophia.

Why Not? Kiplinger And Barron's 75 Top Stocks For 2021 -- April 4, 2021

Link here.

Summary:

In October-December, 2020, Kiplinger Today published four articles, stocks therein I named "Kiplinger Top Stocks For 2021.":

11 Best Monthly Dividend[s];
21 Best Stocks;
11 Dividend Growth Stocks;
25 Dividend Stocks Analysts Love.

Then, in March, 2021, Barron's Weekly published "Retire on Dividends" listing 10 to start. All told, five Kiplinger/Barron's articles listed 78 stocks. Three duplicates left 75, with 66 paying dividends.
The top-ten Kiplinger/Barron's stocks for 2021 boasted net gains from 12.41% to 29.14% from O, MPC, PSX, CVX, ETR, WMB, ABBV, VLO, EIX, and EPD.
Energy led the top-tier again 3/30/21.
Prices of 17 of these 75 Kiplinger/Barron's top stocks for 2021 (listed by yield) made the possibility of owning productive dividend shares from this collection more viable for first-time investors.
$5k invested in the lowest-priced five of ten top-yield Kiplinger/Barron's top stocks for 2021 showed 72.56% LESS net-gain than from $5k invested in all ten. Big (higher-priced) stocks solidly led these top stocks for 2021 pack into April.

Something tells me this market has more room to run.

Hardly Worth Posting -- Initial Production Data For Wells Coming Off Confidential List This Next Week -- MRO Will Report Another Huge Well -- April 4, 2021

The wells:

37323, conf, MRO, Oscar Thorson USA 41-8TFH-2B, Reunion Bay, 1600-acre spacing; Three Forks second bench;

Date	Oil Runs	MCF Sold
2-2021	31131	54199
1-2021	45732	67215
12-2020	57961	73471
11-2020	676	0
10-2020	49194	43525

37858, conf, Red Trail Energy LLC, RTE 10.2, wildcat, SWNW 10-139-92, no production data;
37818, conf, CLR, Dallas 4-30H, Truax, no production data,
37591, drl/NC, Slawson, Loon Federal 2-24-25H, Big Bend, no production data,
37592, drl/NC, Slawson, Loon Federal 5-24-25TFH, Big Bend, no production data,
36247, drl/NC, BR, Stortroen 2C TFH, Dimmick Lake, no production data,

Wells Coming Off Confidential List This Next Week -- April 4, 2021

Monday, April 12, 2021: 6 for the month, 6 for the quarter, 87 for the year:
None.

Sunday, April 11, 2021: 6 for the month, 6 for the quarter, 87 for the year:
37833, conf, Midwest AgEnergy Group, LLC, MAG 1,

Saturday, April 10, 2021: 5 for the month, 5 for the quarter, 86 for the year:
None.

Friday, April 9, 2021: 5 for the month, 5 for the quarter, 86 for the year:
37323, conf, MRO, Oscar Thorson USA 41-8TFH-2B,

Thursday, April 8, 2021: 4 for the month, 4 for the quarter, 85 for the year:
None.

Wednesday, April 7, 2021: 4 for the month, 4 for the quarter, 85 for the year:
37858, conf, Red Trail Energy LLC, RTE 10.2,

Tuesday, April 6, 2021: 3 for the month, 3 for the quarter, 84 for the year:
37818, conf, CLR, Dallas 4-30H,

Monday, April 5, 2021: 2 for the month, 2 for the quarter, 83 for the year:

None.

Sunday, April 4, 2021: 2 for the month, 2 for the quarter, 83 for the year:

37591, conf, Slawson, Loon Federal 2-24-25H,

Saturday, April 3, 2021: 1 for the month, 1 for the quarter, 82 for the year:

37592, conf, Slawson, Loon Federal 5-24-25TFH,
36247, conf, BR, Stortroen 2C TFH,

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Sunday, April 4, 2021