Natural Gas Shale Wells Drilled Now May Be Viable Until 2030

Motley Fool is reporting:

Motley Fool .... some shale gas wells in the U.S. could remain commercially viable until 2030.

For Bakken oil wells, EURs and rate of return is more important than how long a given well lasts, but the general consensus is that Bakken wells will produce for 39 years.  The "Basic Analysis of the Bakken" accomplished some years ago suggested that wells will be drilled into the Bakken through 2030 and will produce through 2100.

China Looking To Buy Into North American Shale

With no confirmation of the story about Chesapeake selling its Bakken acreage that ran March 1, 2013, one starts to wonder about the story's veracity. However, this Bloomberg story might a) put it in perspective; and, b) explain what might be going on.

China National Petroleum Corp., the country’s biggest oil company, is seeking its first stake in the U.S. as Chinese explorers with $40 billion of cash try to join an energy renaissance unlocking billions of barrels of crude.

“We are currently studying” investing in U.S. oil, Jiang Jiemin, chairman of the state-run company, said yesterday at the National People’s Congress meetings in Beijing. Domestic rival China Petrochemical Corp. last month agreed to buy stakes in an Oklahoma field from Chesapeake Energy Corp. for $1.02 billion. 

Chinese oil companies using government loans want stakes in shale fields that are fostering the most crude production in the U.S. in 21 years and helping wean it off Middle Eastern imports. They’ll be guided by the experience of China’s CNOOC Ltd., whose $19 billion bid for Unocal Corp. was blocked by U.S. lawmakers eight years ago. CNOOC last month won U.S. approval for a $15.1 billion purchase of Nexen Inc., albeit with curbs on operating the Canadian company’s Gulf of Mexico fields in U.S. waters. 

EOG's Completion Design Is A Game Changer -- Mike Filloon

SeekingAlpha is reporting:

Over the past year, EOG has implemented a new completion design. It was first used in the Eagle Ford and Permian, and now it has found its way to North Dakota. In the Eagle Ford, EOG has used this and has a large number of short laterals with 24-Hour IP rates north of 3000 bopd. Its best completion, the Burrow Unit #2 produced 6331 bopd. In order to increase crude production it has not focused on long fracs but those that increase the surface area around the well bore. Essentially, it wants better fracs near as opposed to farther away as it allows the crude to flow in a radius around the well bore.

Another nice article by Mike Filloon. 

There's been a flurry of articles on well designs and completion design in the past few weeks. Along with "array" drilling in the Bakken, this is going to be quite a summer.

Fourteen (14) New Permits -- The Williston Basin, North Dakota, USA; An IP of 12,248 -- One Word: Unlikely!

Updates

March 8, 2013: The NDIC corrects the IP for #22194, see below; let's see how close I was; my "final" guess was 1,248 ... and the answer was .... drum roll .... 1,248. Yes!!!  It doesn't take much to make my day! Smile.

 
Original Post
Active rigs: 186 (steady, high side)

Fourteen (14) new permits -- 

• Operators: Oasis (6), Whiting (5), Fidelity (3)
• Fields: Gros Ventre (Burke), Zenith (Stark), Fryburg (Billings), Gaylore (Billings), Hoot Owl (Golden Valley), Cottonwood (Mountrail), Sanish (Mountrail)
• Comments: Hoot Owl? Think Red River formation

Wells coming off confidential list were posted earlier; see sidebar at the right.

Producing wells completed:

• 22935, 695, CLR, Salem 3-6H, Dollar Joe, t12/12; cum 16K 1/13;
• 22194, 12,248, 1,248, QEP, Moberg 13-17/16H, Grail*, t2/13/ cum --
• 22898, 462, Murex, Karen Michelle 13-24H, t2/13; cum 95 bbls (no typo)

*The Grail is good but not this good. An IP of 12,248 is not believable. More likely 1,248, but well file did not have data yet. For the "Helis Grail," it could be 2,248.

All We Have Are Tea Leaves, But Better Than Nothing: New Secretary of Energy; New EPA Chief

Bloomberg is reporting:

In their current jobs, both have supported natural gas, the production of which by companies such as Exxon Mobil Corp. and Chesapeake Energy Corp. has boomed with the adoption of a drilling technique known as hydraulic fracturing, or fracking .... and that’s proved divisive among environmentalists. 

From the linked article:

“In the very long run, very tight carbon constraints will likely phase out natural gas power generation in favor of zero- carbon or extremely low-carbon energy sources,” Moniz said while releasing an MIT report in 2010 about natural gas. “For the next several decades, however, natural gas will play a crucial role in enabling very substantial reductions in carbon emissions.” 

"For the next several decades?" That's beyond my investing lifetime. Probably my natural lifetime, also.

And:

Moniz has backed expanded overseas sales of U.S. liquefied natural gas, something backed by companies such as Sempra Energy of San Diego and Dominion Resources Inc. of Richmond, Virginia, that are seeking export licenses. LNG is a commercial enterprise that the Energy Department regulates. A report he helped direct concluded, “the U.S. should not erect barriers to natural gas imports or exports.”

Those positions endeared him to industry, while drawing criticisms from groups fighting fracking.... 

But Moniz does want increased regulation on fracking.

Critics say fracking is fouling water supplies in communities from Pennsylvania to North Dakota and replacing one fossil fuel -- coal -- with another. Even before his pick was announced by Obama yesterday, Food & Water Watch, a Washington- based environmental group, circulated a petition against Moniz’s nomination.

Thinking of natural gas as a bridge to cleaner energy is a mistake, said Michael Brune, president of the Sierra Club. “We don’t think natural gas allows for increased use of renewable energy,” Brune said in an interview. “We should use as little of it as we can.”

Bottom line: another guy who likes more regulation but not a member of the fringe.