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Monday, July 25, 2022

$9-Natural Gas By The End Of The Month? $10 By October? — July 26, 2022

Updates

July 27, 2022: well, that was fast. The market just blew through $9-natural gas. 

Original Post 

The WTI-Brent spread is running $8. 

Last month, Russian crude was selling at a $30 discount. Now? Eight bucks. 

All three data points tell me one thing: oil and natural gas is getting tighter in Europe.

And then this:

Two Changes To The Blog -- July 25, 2022

Reporting "monster wells": about two years ago, before the Covid-19 lock downs, I mentioned that we were going to see a lot of wells going over the cumulative milestone of 500,000 bbls of crude oil. That was delayed, of course, because of the global pandemic. Now, with things getting back to normal, we are now seeing many, many wells going over that 500,000 bbls of crude oil threshold. That number is becoming so great, that as a general rule, I won't be posting wells that go over 500,000 bbls effective today. It would be just too many. I can't decide if I will even bother with 750,000 bbls milestone. 

Wells with jump in production ("halo effect"; advantaged oil). I've been posting those wells at this site. Likewise, there are just too many wells that fit that this description and I just don't have time to post them any more. These wells will continue to be tagged so they can easily be found.

MRO Diamond Well With Jump In Production -- July 25, 2022

The well:

  • 22668, 1,436, MRO, Diamond A 41-28H, t5/13; cum 229K 11/18; cum 262K 10/21; cum 262K 9/21; off line 9/21; remains off line 5/22; most likely from fracking of #37246, MRO, Jake 44-33TFH, first production, 12/21; t--; cum 110K 5/22.
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-202216476345661489041933560151
BAKKEN4-2022003090000
BAKKEN3-202225711371091908476296449449
BAKKEN2-202228926793252062295267748804
BAKKEN1-2022291336613219295511260199321294
BAKKEN12-202123764576022853884187027601
BAKKEN11-20210000000
BAKKEN10-20210000000
BAKKEN9-2021226345516346444620
BAKKEN8-20212981495091684359235
BAKKEN7-20212674873595172645177

Neighboring well fracked:
  • 37246, loc/A, MRO, Jake 44-33TFH, Bailey oil field, first production, 12/21; t--; cum 110K 5/22; full production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-2022312299922860389262260421741197
BAKKEN4-2022144909494895524020381551
BAKKEN3-2022311757417579304421433313643201
BAKKEN2-20222815950159713282314512140490
BAKKEN1-20223124352243375138421046203580
BAKKEN12-2021212375623617509641992018265

Stripper Well With Huge Jump In Production -- MRO -- Bailey Oil Field -- July 25, 2022

Stripper well status: November 14, 2014. 

Nothing in the file report to explain jump in production. Multiple wells have been recently fracked.

The well:

  • 22342, 1,142, MRO, Lorene Stohler 11-3TFH, Bailey, 30 stages; 2 million lbs; 39 feet; relatively high gas; ; t9/12; cum 70K 11/18; not sure why this is such a lousy well; MRO did something to "recover" this well; production much improved; cum 95K 8/21; off line 8/21; cum 154K 5/22; recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20223111304114321856114704123041226
BAKKEN4-2022271463114588200071576913618753
BAKKEN3-20223118491183873159319058137553526
BAKKEN2-202217756675641948178656546559
BAKKEN1-202213709069312693975676197729
BAKKEN12-20210000000
BAKKEN11-20210000000
BAKKEN10-20210000000
BAKKEN9-2021001200000
BAKKEN8-20212352555943465653924
BAKKEN7-20212676784244677766311
BAKKEN6-20213023017369290576457
BAKKEN5-202131868796848102386916
BAKKEN4-20212174267876667555619
BAKKEN3-20211513916810563495
BAKKEN2-20212831943621625720811
BAKKEN1-20213166372153474561329
BAKKEN12-2020317026726898967650
BAKKEN11-20203064684663289068252
BAKKEN10-2020317767746831001702122
BAKKEN9-2020309078387701021623217

Covid-19 -- July 25, 2022

So the question is, regarding President Biden and Covid-19:

  • did the vaccinations help; or,
  • is the Covid-19 sub-variant nothing more than a "common cold" — “the sniffles”?

Advantaged Oil -- July 25, 2022

Advantaged oil: I've rarely seen this term used; I believe Shell was one of the first to use it -- several years ago. Hadn't see the phrase used much; I have a tag "advantaged oil" and was thinking of getting rid of it because I seldom saw it in use. Then today, I saw "advantaged oil" used again, but forgot to get the link. So, I get the term is still occasionally used. So, let's take a look: wow, this is simply amazing, and I completely missed it. Link here.

From March 30, 2021.

A complex mix of geologic factors is in play. Relationships between reservoir geology and performance are strongest when the data are filtered by region or resource theme. And it’s only by looking at a wide population of similar reservoirs that operators can benchmark recovery factors – and pick out an asset, portfolio or play that presents an opportunity.

The scale of that opportunity could be huge. Brazil, for example, has by far the largest in place oil volumes, yet lags other leading deepwater countries in terms of average recovery factor. The prize for increasing deepwater field recovery to match international benchmarks would be enormous.

What are the subsurface factors that matter?

Our analysis focuses on three selected examples of key reservoir parameters that correlate with oil recovery factors.

These are:

  1. Porosity
  2. Reservoir depth
  3. Gross depositional environment (GDE)

Globally, the average oil recovery factors for combined primary and secondary recovery are around 32%. Increasing the recovery factor of maturing projects could significantly boost the economics of a mature asset. We can see this illustrated in our exploration of these three key subsurface factors.

An MRO Well In Reunion Bay With Nice Halo Effect -- July 25, 2022

A neighboring well, drilled in 2011, to the well below (#37283) showed a nice halo effect:

The older well
:

  • 19514, 527, MRO, Jones USA 14-14H, Reunion Bay, t4/11; cum 730K 5/22; period of interest:
BAKKEN7-201931116461154966461564177666466
BAKKEN6-201930111151107864041502164777296
BAKKEN5-2019311079910816642415031345410567
BAKKEN4-2019301120911185736814264252410685
BAKKEN3-20193112821128051260616243387011348
BAKKEN2-20192813030130351838818162549511691
BAKKEN1-2019311384413820319631558954899150
BAKKEN12-2018136870680218265660733212866
BAKKEN11-201814034395864034397
BAKKEN10-201883648360815270493904928
BAKKEN9-20180000000
BAKKEN8-20181220110
BAKKEN7-2018001260000
BAKKEN6-201826159716733492446195099
BAKKEN5-2018312352241828534332773149
BAKKEN4-2018302648260830733842548283
BAKKEN3-2018312603258537834122587278

The new well:

  • 37283, drl/A-->AL/A-->5,810, MRO, Marion USA 44-10TFH, t9/20; cum 217K in 2.5 months;  cum 267K 12/20; cum 451K 5/21; cum 495K 8/21; cum 572K 3/22; cum 584K 5/22; full production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
SANISH5-20223169886928992729582260222506
SANISH4-20222344824216488425505227602074
SANISH3-20223178867941685137693365320
SANISH2-20222883918336697440125389580
SANISH1-20223111191115541081341753402500
SANISH12-2021311267612404110224458742612378
SANISH11-20213012193122131034546760415183677
SANISH10-2021311172811810929255080535230
SANISH9-202130129241279493945148049046826
SANISH8-2021241192411991723336394340091460
SANISH7-2021311552615389762953782525480
SANISH6-20213016789167471013157442561480
SANISH5-2021312149221795130356463762124948
SANISH4-2021302605425939173046605963853403
SANISH3-2021313761137500219097525572303503
SANISH2-20212851347515032662685579824110
SANISH1-20213047626475693586768519643851174
SANISH12-20202250286501645295265042606261392
SANISH11-2020789959186453913254113161391
SANISH10-20203168977689392715990000858240
SANISH9-202030110439110134565891378241303031077
SANISH8-2020152831927932199753012026611181

Hess With Five New Permits -- July 25, 2022

Advantaged oil: I've rarely seen this term used; I believe Shell was one of the first to use it -- several years ago. Hadn't see the phrase used much; I have a tag "advantaged oil" and was thinking of getting rid of it because I seldom saw it in use. Then today, I saw "advantaged oil" used again, but forgot to get the link. So, I get the term is still occasionally used. So, let's take a look: wow, this is simply amazing, and I completely missed it. Link here.

Refiners: Link here to Charles Kennedy. 

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

WTI: $96.70.

Natural gas: $8.727

Active rigs: 46 or thereabouts.

New new permits, #39111 - #39115, inclusive:

  • Operator: Hess
  • Field: Manitou (Mountrail)
  • Comments:
    • Hess with five new EN-Hegland permits; in lot 3 section 5-155-94; 
      • to be sited between 703 FNL and 744 NFL and between 1448 FWL and 1574 FWL;

What Do You Call It ... July 25, 2022

... unemployment rate at record lows, 3.6%?
... more jobs than people seeking jobs?
... so much demand for workers, they can strike for 10% wage increases?
... recessionary talk driving prices down across the board?
... gasoline prices falling?

Utopia? 

If You Are Not Reading The Blog Daily --- July 25, 2022

Without question, "themilliondollarway" blog is the best blog with regard to energy in general, and the Bakken specifically. 

That opinion may be a bit biased.

But that doesn't mean it's not accurate.

If one is truly interested in the Bakken, and if one is not reading "themilliondollarway" blog daily ... well, what can I say?

Let's see what google ...

*****************
Bringing Home Their New $8 Sewing Machine




Well, That Happened Quickly -- July 25, 2022

Link here.

Despite Freeport being "down," this is incredible. 

  • A perfect storm of bullish factors has made the United States the world’s top exporter of LNG.
  • U.S. LNG exports rose by 12% in the first half of 2022 compared with the second half of 2021.
  • The United States is shipping record volumes of LNG to Europe to help EU allies in their efforts to fill gas storage ahead of the winter.
  • U.S. LNG exports rose by 12% in the first half of 2022 compared with the second half of 2021, and averaged 11.2 billion cubic feet per day (Bcf/d) between January and June 2022.

Off The Net For Awhile; Going Swimming -- July 25, 2022

Sunscreen: Trader Joe's $9 sunscreen all the rage, vs Supergoop's popular Unseen sunscreen at $36.

Saudi skyscraper: to be 1600 feet tall (80 stories?) and 75 miles long (no typo), two mirrored walls in the desert.

Services, oilfield: oil does not have to boom for these companies to thrive. Will make money even if oil goes to $40.

Notably, Halliburton’s operating margins—excluding charges related to its Russia exit—reached 14.2% in the second quarter, a milestone not seen since the peak of the fracking frenzy of 2014. Schlumberger’s latest quarterly operating margin of 17.1% was its highest since 2015.  
Drilling activity still isn’t what it used to be. Baker Hughes data shows that there are 23% fewer oil rigs in North America today than there were three years ago and 58% fewer compared with 2014. While oil-field service revenues are nowhere near their peak eight years ago, many years of belt-tightening and efficiency-finding has meant the businesses are able to eke out more profit on less drilling activity.  
That, and continued supply chain bottlenecks, are adding up to a lot of pricing power. Halliburton Chief Executive Jeff Miller repeatedly said on the company’s earnings call on Tuesday that the company’s equipment is “all but sold out” in the North American market for this year. The company has started talking to customers about purchases in 2023, which already looks like a tight year for equipment, according to Mr. Miller.

Sayonara: Baker Hughes has suspended all equipment and services contracts on Russian LNG projects. Link here

Severe: gap between gasoline prices in US and EU. Link here.

Five Wells Coming Off Confidential List -- July 25, 2022

Far Side: link here.

WTI: $96.52

Natural gas: $8.46

Active rigs: 42 or thereabouts.

Tuesday, July 26, 2022: 26 for the month, 26 for the quarter, 365 for the year

  • 38676, conf, CLR, Bang 5-4H1,
  • 37496, conf, Petro-Hunt, State 159-94-25A-36-2H,

Monday, July 25, 2022: 24 for the month, 24 for the quarter, 363 for the year

  • 37497, conf, Petro-Hunt, State 159-94-25A-36-3H,

Sunday, July 24, 2022: 23 for the month, 23 for the quarter, 362 for the year

  • 38675, conf,  CLR, Bang 6-4H,
  • 37498, conf, Petro-Hunt, State 159-94-25A-36-1HS, 

RBN Energy: will the propane market be prepared for winter?

We are only two months away from the official start of propane heating season in the U.S., and inventories are 3.5 MMbbl lower than last year, or 2.6 MMbbl below the five-year week-on-week low. Volumetrically, it’s a story very much like last summer: Propane exports are running high and while production is up it’s not increasing fast enough to get inventories back to where we would like to see them. But propane prices are not behaving at all like last year. At this point in 2021, the price of propane was moving higher, both in absolute terms and relative to the price of crude oil. This year, prices have been falling for the past four months and are much weaker relative to crude than a year ago. With low inventories and low prices, what are the prospects for the propane market being prepared for the upcoming heating season? And what are the risks if there's a cold-weather surprise? We’ll consider those issues and more in the blog series we begin today, focusing first on how we got here.  

Propane Exports, Seasonality and Inventories

The highly seasonal U.S. propane market is traditionally divided into two halves: April through September, when the industry builds inventories, and October through March, when inventories are drawn down to meet winter demand. About this time each year, the industry is laser-focused on the status and pace of inventory increases, and whether it looks like there will be enough supply to meet the expected surge in demand during the impending heating season, particularly if an unusual spell of sustained cold weather hits the market. In recent years this calculus has become increasingly complex as exports have overtaken total domestic demand for propane.