The Million Dollar Way (The Bakken Oil Blog): Red

Showing posts with label Red_Queen. Show all posts

Tuesday, February 9, 2021

Back To Rig Counts -- February 9, 2021

And we've come full circle. Back to the future. The Red Queen.

Link here. At link, click on the graphics for enlargement.

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North Dakota Oil Well Productivity

Daily Oil Per Well

Historical monthly oil production statistics

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Back to Body Counts

Monday, February 3, 2020

Red Queen Fell Off Her Treadmill in 2018

The "Red Queen" fell off her treadmill in 2018.

From the EIA over the weekend, increased production, fewer wells:

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Grilled Lamb For Super Bowl Sunday

The "recipes" all say 2-inch lamb chops will be medium-rare at 3 - 4 minutes on each side on a medium hot grill.

I've never found that to be true.

Yesterday:

Two lamb chops: cave-man style -- directly on the wood charcoal; four minutes, turn, and then two more minutes; six minutes total;
Five lamb chops: on the grill, four minutes on each side; 8 minutes total;
Four lamb chops: on the grill, four minutes on each side; turn, an additional 2 minutes; 10 minutes total;

Results:

Cave-man style: perfect
8 minutes: too rare, and both my wife and I life rare fish (sushi); barely seared tuna; and, rare to medium-rare lamb chops;
10 minutes: perfect

I had planned to do the lamb chops for four minutes on each side cave-man style but it was obvious they were going to be done much more quickly than that. After take the lamb chops off the charcoal, they were placed in heavy-duty aluminum to finish cooking for another 15 minutes (in the car on the ride home).

Directly on "organic" wood charcoal.

Tuesday, January 21, 2020

Rystad Energy On US Shale And The "Red Queen" -- January 2020

From Rystad Energy, posted earlier.

Rystad Analysis on the "Red Queen" effect -- the number of new wells needed to maintain current production and the actual number of new wells:

Monday, January 20, 2020

Rystad Energy: All That Talk About A US Shale Slowdown? Not So Fast -- January 20, 2020

Link here (and below). Spend some time on this one. Archived.

A reader provided this comment based on Rystad Energy analysis of the US shale plays:

Rystad Energy provides pushback on the anti-shale stuff from oilprice.com and others in the mainstream media. From Rystad Energy, best shale predictor last three years:

https://www.rystadenergy.com/newsevents/news/newsletters/UsArchive/shale-newsletter-jan-2020/

0. Yes, rate of growth in 2019 was less than 2018. But 2018 was monstrous at almost 2 million bopd. Still had over 1 million bopd in 2019 (used to be considered large).

1. Permian is most important at ~70% of growth. But still worth checking the other basins to see where the 30% growth comes from.

2. New Mexicanos on pace to pass the North Dakotans in oil production in 3-4 years. Where did you hear that earlier? ;-) [This assumes the environmentalists in New Mexico don't get the upper hand.]

3. A lot of the negative shale stories come from journalists covering the independent shale companies (which have halved growth). But privates and supermajors actually increased growth in 2019 versus 2018. Don't see whole story of the industry if you only follow the "name" shale companies.

4. Long laterals (two-mile vs one-mi)le increasing steadily, with change to development drilling. Old story for the Bakken, but other plays catching up.

5. Base decline ("Red Queen") is starting to flatten out. Grew a lot in 2018 because of the massive boom of new wells. But starting to settle down with slower growth of 2019. (2H19)

5.5. Meanwhile (2H19), wells are STILL getting stronger in new oil production. Sorry peak oilers. Shale keeps getting stronger, not weaker! (Sit down in the corner, Art Berman and hang that sign around your head and put on the cone shaped hat.)

P.s. Note for 5/5.5, the figure actually has a different scale on the bottom part of the y axis (1000 bopd, total shale versus bopd/well). It's a little confusing, but I understand why they want to compare the two. It shows why shale is still growing, even with fewer completions (rig and frack spread drop). Thing is that we're still making more wells than needed to just match the Red Queen.

Year-on-year growth.

Tuesday, November 5, 2019

Notes From All Over, The Evening Edition -- November 5, 2019

FANG: futures show this stock trading down 10%.

Canadian crude oil prices tumbling; Keystone (not the XL) pipeline shutdown due to leak. WSJ update. Western Canadian Select (WCS) trades for $22/bbl less than WTI.

It's been worse. One year ago, November, 2018, the discount was an astounding $44.

Shale. "The drawdown is for real this time" -- HFI Research. Archived for future reference. At SeekingAlpha but will probably disappear behind paywall soon. Still using a) conventional oil metrics; b) the Red Queen analogy; and, c) rig counts. No mention of advantaged oil.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, career, or relationship decisions based on what you read here or think you may have read here.

Momentum stock: Walgreens Boots Alliance.

ND Supreme Court:

For those interested (I'm note): the link.

Under Trump's watch: the first trade surplus in petroleum in more than forty years helped the US post a lower trade deficit in September compared to August, 2019.

Futures: again, green. Amazing. Two of the three major indices closed higher today; the S&P 500 was down four points.

BA: up 2%

Awkward: "The View" co-host Meghan McCain did not appear on set with Jane Fonda. I had forgotten what a/c John McCain was in when he was shot down -- the A4 Skyhawk.

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Nothing To Do With Anything -- I Just Felt In The Mood

I'll Play The Blues For You, Joe Bonamassa
It's funny ... when I play The Blues loud and and play it over and over I can take myself back to I-40 from Nashville to Knoxville, June, 1971.

Reading (and re-reading for the umpteenth time), volume II of The Life of Graham Greene, 1939 - 1955, by Norman Sherry, c. 1994. My edition is signed by the author.

WWII. Cold War. Kim Philby. Vivien. Dorothy. Catherine.

Don't Pull Your Love, Hamilton, Joe Frank, and Reynolds

Tuesday, May 28, 2019

The Red Queen Has Not Fallen Off Her Treadmill -- Yet -- May 28, 2019

From Rigzone, why shale operators are now generating more cash with fewer rigs:

petroleum engineers are really good at what they do
oilfield services have little pricing power
more than enough sand; much of it located "in-basin"

To the first bullet I would add that petroleum engineers are just part of the overall team. The roughnecks and truckers are critically important to the entire operation. Along with pad managers, landmen, corporate suits, state regulators, etc. etc.

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A Great Memorial Day Weekend

We all made it home safely.

Olivia's soccer team took the championship in their "division" in Colorado over the weekend. She was the high scorer. In one game she made all three goals and a penalty shot; her team won that game 4 - 0. Or maybe it was two goals and a penalty shot, 3 - 0. I will check later.

Arianna and I made it back safely from a great water polo weekend in San Antonio. San Antonio is an impressive city -- I can say I prefer it to Dallas-Ft Worth, but anywhere in Texas is fine.

One of many high points in San Antonio: discovered "Great Harvest Bread Company." Arianna and I both wished there was a "Great Harvest" in our area. It turns out there is! In Southlake.

I dropped the rental car off this morning, walked to McDonald's. It was a beautiful, cool, overcast morning. Later May will be pick me up.

Then Memorial Day barbecue, one of the best barbecues in a long time. Salmon and hot dogs. The salmon turned out perfectly. Incredibly moist. Teriyaki marinade. Sixteen minutes in aluminum foil over hot coals; open aluminum foil for last five minutes.

At Sophia's house about a mile down the road from our little apartment complex hovel. Waiting for the coals.

Saturday, May 25, 2019

Permian DUCs -- May 25, 2019

It looks like others have also noted the impact of "inactive wells" and DUCs.

See this link for Bakken data. Data below is for the Permian.

From twitter yesterday:

Actually, in this small graphic lots of interesting information. Most interesting, the "red queen" phenomenon -- or not!

This has to be extremely concerning for Saudi Arabia.

It is certainly yet another dagger in the coffin of "Peak Oil."

Friday, May 24, 2019

North Dakota Sets Record For Number Of Non-Producing Wells -- May 24, 2019

Updates

May 25, 2019: It looks like others have also noted the impact of "inactive wells" and DUCs.

The original post (down below) was for Bakken data. Within hours of posting the Bakken data, the Permian data was also posted.

There are a number of take-aways from this data, most those related to the Red Queen. Also, factoring into this is "breakeven prices" and that research.

From twitter yesterday:

Original Post

I could be wrong but I bet I'm correct, or very, very close.

Note: this does not include wells that have been plugged and abandoned since 1951. These are "current" wells that have not yet been plugged/abandoned. These wells are identified in scout tickets as IA (inactive) or SI/NC (DUCs).

Link here for the data.

It appears that "we" have set a new record in the number of DUCs for most recent data available, March, 2019: 968. I believe the previous record was 959.

March, 2019:

DUCs: 968, up 74 from last report

inactive: 1,697, up 30 from last report

total: 2,665 (up from 2,561 last week; this represents about 1,000 more wells than will be drilled this calendar year; 2,561 is about what North Dakota will complete every three years)

The number of inactive wells may be at an all-time high or very near an all-time high. When I first started tracking this data I suggested that the number of inactive wells never exceeded 1,700. In March, 2019, there were 1,697 inactive wells.

For newbies: there are three main "groups" of inactive wells:

the largest group of inactive wells are wells taking offline for operational reasons, and will come back on line in a few months
there are a few wells that are placed on inactive status on the way to plugging and abandoning
the smallest group of inactive wells are wells that in purgatory: these are wells that the operator is trying to figure out what to do with them;

Taken together, DUCs and inactive wells, I do believe we have a new record. Combining DUCs and inactive wells, I think we have a new all-time record of 2,665 wells.

It looks like about 300 wells will come off the confidential list [on average] every quarter this year, suggesting about 1,200 wells will come off the confidential list for the entire year of 2019.

Data:

1Q19: 346 wells came off the confidential list;
4Q18: 228 wells
3Q18: 190 wells
2Q18: 263 wells
1Q18: 242 wells
Total for CY2018: 923 wells

Disclaimer: I often make simple errors in arithmetic. My numbers will not agree with the official data provided by the NDIC. There could be any number of reasons for the difference. But, in the big scheme of things, I bet my numbers are pretty close.

Sunday, May 5, 2019

Oasis Well: Production Jumps Almost 20X -- Not Re-Fracked -- The Excitement Of The Bakken -- May 5, 2019

Better production ten years later than when it was first drilled/fracked/completed in 2009.

Let's see: 14,517/816 = can we say production jumped almost 18x -- or almost 20x -- after daughters were fracked? See full production profile at this post. This well runs diagonally under/over a number of daughter wells.

Disclaimer: I am inappropriately exuberant about the Bakken.

The well:

17986, 510, Oasis, Aagvik 1-35H, API 33-053-03008, Banks, t12/09; cum 213K 3/19; this well runs diagonally under/over all the "new" Aagvik wells being drilled/fracked.

Not re-fracked, according to FracFocus.

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2019	31	14517	14326	11035	46044	45734	0
BAKKEN	2-2019	28	13631	13616	10792	42137	35242	6615
BAKKEN	1-2019	7	3680	3356	3350	9811	5931	3810
BAKKEN	12-2018	0	0	0	0	0	0	0
BAKKEN	11-2018	0	0	0	0	0	0	0
BAKKEN	10-2018	0	0	0	0	0	0	0
BAKKEN	9-2018	0	0	0	0	0	0	0
BAKKEN	8-2018	0	0	0	0	0	0	0
BAKKEN	7-2018	24	470	559	100	1028	756	32
BAKKEN	6-2018	20	526	587	0	1274	1052	22
BAKKEN	5-2018	0	0	0	0	0	0	0
BAKKEN	4-2018	15	354	291	190	942	775	17
BAKKEN	3-2018	31	816	869	180	2176	1842	24
BAKKEN	2-2018	21	576	600	0	1449	1239	0

Tuesday, April 9, 2019

Monday, April 9, 2019 -- T+97, Part 2

The Red Queen is back, The WSJ. Link here. Most surprising, already 155 comments. First comment:

"..You really look at the entire life cycle of the asset.”....Chevron chief.

This is the company that two months before 2015 oil price collapse said $120 a barrel is a new normal.

The reason he is saying this is not because thus Big Boy is any smarter - but their overheads - not to mention bureaucracy - does not allow quick decision making.

I spent 43 plus years in the oil patch - upstream, though not in shale - and working for Big Boys.

These are the same Boys who scoffed

that there is even such a thing called shale fracking that might yield a bonanza. They are coming to this party late and trying to spin they missed it out in the first place.

Now, as to flaring of gas - while one bcf a day sounds big - but when you are producing 100 more times as much - this gas is a rounding error.

And ok to compare it to auto emissions - but without shale, many Americans won't be able to drive as much because gas prices would be so high.

A good alarming story - but just a story.

I only read the first five comments. The first five folks commenting were on the same page of music that I am on.

Thursday, February 28, 2019

Random Update Of An Old Petro-Hunt USA Well In Charlson Oil Field -- February 28, 2019 -- Coming Up On One Million Bbls Crude Oil

Updates

March 13, 2019: mystery solved; see this post. Hubbert's peak oil theory states that once a well starts to decline it never recovers. Another nail in that coffin.

March 13, 2019: look at the jump in production -- not re-fracked according to FracFocus; nor is there any sundry form suggesting this well was re-fracked:

Recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2019	31	18660	18742	5033	24830	17676	6939
BAKKEN	12-2018	15	9183	8330	3048	10684	9086	1496
BAKKEN	11-2018	0	0	0	0	0	0	0
BAKKEN	10-2018	12	3261	3644	743	7087	5811	1197
BAKKEN	9-2018	30	9277	9448	1985	16977	14265	2503
BAKKEN	8-2018	31	9216	9040	2116	17960	17618	126
BAKKEN	7-2018	31	9724	9873	2209	17890	17595	79
BAKKEN	6-2018	30	10650	11102	2855	16461	16076	176

February 28, 2019: the original note was posted in late 2017 (see below). I was curious to see how this well was doing. According to FracFocus this well has never been refracked. The NDIC file's last sundry form was dated February 18, 2016.

The well:

20342, 1,430, Petro-Hunt, USA 153-95-4B-9-1H, 33-053-03453, Charlson, t11/11; cum 910K 12/18;

1,370,174 mcf = 228K boe
910K bo crude oil
total boe: 1.1379 million boe

Look at the production profile since 7/17: a few months this well was producing about 9,000 bbls each month, but then taken off one for about two months, and then produces the equivalent of 18,000 bbls in one month.

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	12-2018	15	9183	8330	3048	10684	9086	1496
BAKKEN	11-2018	0	0	0	0	0	0	0
BAKKEN	10-2018	12	3261	3644	743	7087	5811	1197
BAKKEN	9-2018	30	9277	9448	1985	16977	14265	2503
BAKKEN	8-2018	31	9216	9040	2116	17960	17618	126
BAKKEN	7-2018	31	9724	9873	2209	17890	17595	79
BAKKEN	6-2018	30	10650	11102	2855	16461	16076	176
BAKKEN	5-2018	31	11129	10573	2472	17002	16704	82
BAKKEN	4-2018	30	11191	11390	2549	16514	15353	952
BAKKEN	3-2018	31	11710	11530	2433	16543	16327	0
BAKKEN	2-2018	28	11134	11230	2470	16231	15528	508
BAKKEN	1-2018	31	12724	12821	2902	18163	17947	0
BAKKEN	12-2017	31	13263	12940	2992	17633	17343	74
BAKKEN	11-2017	30	13117	13454	3108	16769	8209	8351
BAKKEN	10-2017	31	14439	14496	3282	19217	0	19001
BAKKEN	9-2017	30	12674	12004	3682	16658	0	16477
BAKKEN	8-2017	4	501	690	85	861	839	0
BAKKEN	7-2017	31	5175	5311	460	8108	7892	0

As soon as one looks at the updated graphic, one sees exactly what has happend.

The index well -- the one we are looking at is #20342.

The three neighboring wells:

from the north:

32533, fracked/tested 12/18; huge production -- 15K in first 23 days;
32532, fracked/tested 12/18; huge production -- 16K in first 16 days;

from the south:

30685, fracked/tested 8/17; huge production -- almost 200K in less than a year and a half;

So, again, another example of an older well that keeps on jumping in production when neighboring wells are fracked. Several years ago, one operator suggested that studies showed that these examples worked best when at least three neighboring wells were fracked simultaneously around an older well. If so, the study must have been based on very little data; the Bakken was not quite old enough to have had many examples of three neighboring wells being fracked simultaneously around an older well when that "study" was cited. Whatever.

Anyway, here's the updated graphic:

Hubbert said his theory applied not only to oil fields and basins, but also to individual wells. Once a well started to decline, it had reached its own "peak oil" and would never show increased production. And so it goes.