Monday, December 20, 2021

Well Said -- The Shale Revolution -- December 20, 2021

From SeekingAlpha

  • Barring a major discovery in the coming 11 days, the oil & gas industry will deliver its worst exploration year since 1946, according to data compiled by Rystad Energy. 
  • As the industry has pivoted to short-cycle (shale) production, it's moved (far) away from the wildcatter business model of the past several decades. 
  • For context Shell spent $7b in preparation and drilling for one exploration well off the coast of Alaska in 2014; in 2021 and after the $70b acquisition of BG, Shell is on pace to spend $1.5b on exploration. 
  • The shale revolution has changed the business model for global integrateds, but with majors like Exxon, Chevron, Conoco Shell, Total, BP  and others largely walking away from exploration and top-tier assets like the Brazilian pre-sal, there is a lot of pressure on the energy transition and shale patch to ensure the world avoids an energy crisis, the likes of which Europe is currently experiencing.

The Bruin FB James Wells Updated; Frack Data Provided -- December 20, 2021

The Bruin FB James wells are tracked here

Reminder: columns below --

  • formation; month/year; days of production; oil production; runs, water, MCF produced, MCF sold, vent/flare;

The wells:

  • 31458, 6,311, FB James 150-94-3A-10-6B, Spotted Horn, 33-053-07032, t11/19; 98K over 25 days; extrapolates to 118,184 bbls crude oil over 30 days; cum 604K 10/21; initial production; 14.8 million lbs proppant; 54 stages;
  • 31457, 4,406, Bruin, FB James 150-94-3B-10-13B, Spotted Horn, 33-053-07031, t10/19; 70K over 33 days; cum 433K 10/21; early production, 25K over 7 days extrapolates to 105,883 bbls crude oil 30 days; 14.8 million lbs proppant; 54 stages;
  • 31456, 4,617, Bruin, FB James 150-94-3B-10-12T, Spotted Horn, 33-053-07030, t10/19; 74K over 34 days; cum 197K 10/21; fracked with 8.8 million gallons of water; 8.94 million lbs proppant; 54 stages;
  • 31455, 5,346, Bruin, FB James 150-94-3B-10-11B, Spotted Horn, t10/19; 79K over 29 days, cum 305K 10/21;
  • 31454, 5,603, off line 10/21;, Bruin, FB James 150-94-3A-10-10T, Spotted Horn, t11/19; 85K over 28 days; cum 243K 10/20;
  • 35962, 4,471, Bruin, FB James 150-94-3A-10-7T, Spotted Horn, t11/19; cum 36K over 17 days; cum 174K 10/21; 8.99 million lbs proppant, 54 stages;
  • 35963, 4,103, Bruin, FB James 150-94-3A-10-8T2, 54 stages; 9 million lbs; Three Forks second bench; Spotted Horn, t11/19; cum 33K over 17 days; cum 140K 10/21;
  • 35964, 5,029, Bruin, FB James 150-94-3A-10-9B, Spotted Horn, t11/19; cum 43K over 15 days; cum 266K 10/21;

Notes From All Over -- December 20, 2021

XOM / Fayetteville: to be sold to Presidio Petroleum? Link here. Presidio:

  • founded in 2017
  • co-CEOs
    • co-founded by Chris Hammack, formerly CEO of Trinity River Energy
      • Trinity River Energy, a $1 billion+ E&P backed by KKR and Riverstone
      • Texas A&M, degree in Petroleum Engineering
    • co-founded by Will Ulrich
      • formerly head of corporate development and strategic planning for Atlas Energy
      • helped grow Atlas to a $10 billion enterprise; Harvard College; began as investment banker at UBS

Senator Warren: "And that's not enough."

From Twitter

Fuel Mix Chart -- ISO NE -- December 20, 2021

I posted ISO NE data earlier today. This is an update.

There is something interesting of note in the four-quadrant graphic below.

Prices are high and erratic. The wholesale cost is in the sixth decile.

But of interest is something seen in the lower right-hand quadrant, the fuel mix chart, in the four-quadrant graphic.

WPX Is Reporting Some Incredible Crosby Chase Wells In Spotted Horn -- December 20 ,2021

Again, these are incredible wells, and again, these wells are not atypical in the Bakken of the wells currently being drilled.

The Crosby Chase wells: :

  • 37308, drl/NC, WPX, Crosby Chase 2-1HC, Spotted Horn, first production, 6/21; t--; cum 159K 10/21;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 37307, drl/NC, WPX, Crosby Chase 2-1HY, Spotted Horn, first production, 5/21; t--; cum 197K 10/21; 14,717 bbls over 8 days extrapolates to 55,200 bbls crude oil over 30 days:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 37306, drl/NC, WPX, Crosby Chase 2-1HG, Spotted Horn, first production, 6/21; t--; cum 198K 10/21; 
  • 37305, drl/NC, WPX, Crosby Chase 2-1HZ, Spotted Horn, first production, 6/21; t--; cum 159K 10/21;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 37304, drl/NC, WPX, Crosby Chase 2-1HIL, Spotted Horn, first production, 6/21; t--; cum 167K 10/21;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

A Closer Look At The Recently Completed WPX Patricia Kelly Well In Spotted Horn; A Huge Well; 216K In Less Than Six Months -- December 20, 2021

The Patricia Kelly wells are tracked here.

The well:

  • 37232, 2,409, WPX, Patricia Kelly 2-1HA, Spotted Horn, 33-053-09306, first production, 5/21; t--; cum 216K 10/21; fracked 4/13/2021 - 4/19/21; another small frack: 4.9 million gallons of water; 82.925% water by mass; proppant 16.33% by mass;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

From the geologist's report:
  • spud: November 18, 2020;
  • TD: 21,674; November 27, 2020;
  • curve began on November 21, 221; completed November 22, 2020
  • lateral drilling began November 23, 2020; completed on November 27, 2020
  • target: 20 feet below the top of the middle Bakken
  • eight miles north of Mandaree;

The parent well (subsequent to this well, nine more wells on two pads):

  • 23639, 1,482, WPX, Patricia Kelly 2-1HB, Spotted Horn, 33-053-04342, fracked 3/9/13 - 3/9/13 (a one-day frack); 2.4 million gallons of water; 16 stages; 3.23 million lbs proppant;

Recent production of the parent well, note the small jump in production when it came back on line, the well went from 3,500 bbls / month to over 16,000 bbls / month;

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Petro-Hunt With Two New Permits; WPX Reports A Huge Well In Spotted Horn; Two DUCs Reported As Completed -- December 20, 2021

Active rigs: NDIC is reporting 33 active rigs; one is an SWD well; I did not check for duplicates:

  • Scout Energy, a Heath-Madison unit; iron Hand 108: Billings County, file #3951 in Billings County; a re-entry well; this well last produced oil in 1999;
  • CLR with ten active rigs; possibly a duplicate; haven't checked;
  • Murex has an active rig; #38598;
Active Rigs3215546951

Two new permits, #38711 - #38712, inclusive:

  • Operator: Petro-Hunt
  • Field: Little Knife (Dunn)
  • Comments:
    • Petro-Hunt has permits for two Terres wells in NWNE 18-144-97; 
    • the wells will be sited 295 FNL and between 1715 and 1750 FEL;

Two producing wells (DUCs) reported as completed:

  • 37232, 2,409, WPX, Patricia Kelly 2-1HA, Spotted Horn, 33-053-09306, first production, 5/21; t--; cum 216K 10/21;
  • 37398, 1,522, CLR, Rodney 9-29H, Cedar Coulee, 33-025-04007, first production --; t--; cum --;

Off The Net For Awhile -- Going Biking -- December 20, 2021

Lox and bagel for lunch with an ounce of Shieldaig Islay.

Sophia, age seven, received her first Pfizer Covid-19 vaccine last week, and I got my booster today. 

I don't think Pfizer has the blood-clotting problems but whisky is a "natural" preventative. 

Don't want to take any chances. 

Will have a Shieldaig booster while watching the first of two NFL games later this afternoon. 

But first, a bike ride. 

Islay: home to the world's peatiest whiskies

Russia "Reluctant" To Boost Natural Gas Flow To Europe; Rigs Don't Matter -- Saudi Arabia -- December 20, 2021

I doubt this is political but talk of sanctions on Nordstream 2 gives Russia the cover they need to cutting back on natural gas sales to Europe.

This has to do more with Russia's critical need for natural gas as winter weather starts than politics. 

And if that's correct, it tells me all I need to know about "spare capacity." 

Irina Slav is reporting that Russia is "reluctant" to boost natural gas flows as cold snap hits Europe.

Saudi Arabia: rigs don't matter.

Burning Oil To Generate Electricity In The US -- As Bad As Coal But A Whole Lot More Expensive -- December 20, 2021

Link here.

For the past week or so, ISO NE has been very, very affordable; wind energy bringing overall price down. 

But it surprised me today. I wasn't surprised so much by the spike in price (6th decile) as I was about the "source" of that electricity: oil. Oil? Are you kidding me? I can't even imagine burning any oil at in the United States to generate electricity, but "NE" is literally right next to the biggest source of natural gas in the known universe. 

The Middle East burns oil to generate electricity, but in the United States?


Not Only Completing Four To Six Wells Simultaneously, But Developing Three To Four Pads In Close Proximity -- December 20, 2021

Some time ago, I stated that fracking four to eight wells at a time on one pad was now the norm in the Bakken, and that operators who failed to do this on a regular basis would not be operating for long in the Bakken.

A reader at the time responded:

A few years back, some industry executive was explaining some of the economics behind not only 4 to 6 wells per pad simultaneously being drilled/completed, but also the then-emerging trend of simultaneously developing 3 to 4 pads in close proximity.
I did not give that much thought at the time. I thought the reader was repeating what I had said, but I missed the second part of that: "... the then-emerging trend of simultaneously developing three to four pads in close proximity."
Wow, it just occurred to me: MRO has a three-rig drilling program in the prolific Bailey and is reporting incredible wells. Likewise, CLR has a two- to three-rig drilling program in at least one of its high-density projects, the Long Creek Unit.

A Closer Look At The Most Recent FB Belford Well To Be Reported -- December 20, 2021

The Bruin FB Belford wells are tracked here

The well:

  • 36302, conf, Bruin, FB Belford 148-95-22D-15-14B-LL, Eagle Nest, 33-025-03775, first production, 6/21; t--; cum 123K 10/21; FracFocus reports two fracks, which we've discussed before:
    • first frack, 5/11/21 - 5/22/21: 8.367 million gallons of water, 83.04421% water by mass; 10.22434% sand by mass;
    • second frack, 5/11/21 - 5/22/21; 8.939 million gallons of water; 83.04421% water by mass; 10.22434% sand by mass;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Geologist's narrative, summary:

  • pad, well, and target:
    • a north facing lateral well, middle Bakken
    • on an 8-well pad
    • goal of the build section was to land in the drilling window 14 - 24' below the upper Bakken shale in the middle Bakken
    • the lateral was drilled to a total depth of 21,216' MD
    • the target formation was 41' thick;
    • the top of the target window was set for 14' below the top of the middle Bakken
    • the bottom of the target window set for 24' below the top of the middle Bakken
    • in other words, a target window 10' thick
  • dates:
    • spud date: August 27, 2019
    • landing point: September 1, 2019
    • total depth reached: September 6, 2019
    • total lateral length: 10,094 feet
  • drilling and max gas units
    • above the drilling target footage: 2,563' 25.39%
    • in drilling target footage: 7,531' 74.61%
    • below the drilling target: 0 0
    • daily footage and max daily gas in the lateral
      • day 1: 3,600' 7,338 units
      • day 2: 2546' 9999 units
      • day 3: trip for MWD tool at 17,283' approx time: 18.75 hours
      • day 4: 1,881' 8862 units
      • day 5: 2,052' 2677 units
  • assuming one day to drill the vertical well, this well took six days to reach total depth;

Three Wells Coming Off The Confidential List; Bruin Reportes Another Huge FB Belford Well; Shale Operators Cash Flow Update -- RBN Energy -- December 20, 2021

Over the weekend, Art Berman noted that US shale operators were "swimming in cash." RBN Energy discusses that below.

Now, Art Berman has tweeted again: world total liquids production has recovered to the December, 2014, level but remains about 6 million bopd (about 6%) less than the November, 2018, peak.

Art must have been on a roll, also tweeting at the time: "shale companies spent $6 billion in capital expenditure in the last quarter ... cash from operations, meanwhile, sits at around $13 billion, approaching record levels."

Back to the Bakken

Active rigs: estimate only; NDIC provides update at close of business each day.

Active Rigs3115546951

Monday, December 20, 2021: 75 for the month, 104 for the quarter, 330 for the year:

  • None.

Sunday, December 19, 2021: 75 for the month, 104 for the quarter, 330 for the year:

  • 38185, conf, CLR, Tallahassee FIU 7-21H, Baker, 33-035-0659,  no production data,
  • 37189, conf, Whiting, Feehan 11-9HU, Sanish, 33-061-04634, first production, 9/21; t--; cum 64K 10/21;
Saturday, December 18, 2021: 73 for the month, 102 for the quarter, 328 for the year:
  • 36302, conf, Bruin, FB Belford 148-95-22D-15-14B-LL, Eagle Nest, 33-025-03775, first production, 6/21; t--; cum 123K 10/21;

RBN Energy: E&Ps bas in the warmth of strong third-quarter profits, cash flow. Archived.

It may seem like a strange turn of phrase, but the best way to describe the E&P sector’s recent round of quarterly earnings calls is a celebration of remarkable climate change. Buffeted and nearly swamped over the past few years by price volatility, investor revolt, regulatory restrictions, and a global pandemic, oil and gas producers finally have the opportunity to bask amid robust returns in an increasingly sunny economic environment. 
E&Ps are enjoying higher profits and massive free cash flow, raising their dividends, and looking forward to 2022 with renewed optimism. In today’s RBN blog, we outline the dramatic recovery of E&Ps since mid-2020, examine the surge in third-quarter results, and look ahead to the next round of earnings calls this winter.