Tuesday, May 13, 2014
For Investors Only
Over at Rigzone: Anadarko raised its dividend 50%. Regular readers know why I'm posting/linking that. Also,
Anadarko
previously increased its dividend last August.
Wow, Wow, Wow -- Exactly What I Said Just A Few Hours Ago -- Top Story Over At Rizone
Reuters is reporting over at Rigzone:
Again, that was the top story over at Rigzone.
I'm surprised Rigzone didn't cite The Million Dollar Way. LOL.
Oil production from shale plays in North Dakota will likely top 1 million barrels per day (bpd) in April after missing expectations in March due to severe weather conditions, according to a state regulator.
The state's output hit 977,000 bpd in March, after winter weather interrupted well operations, Lynn Helms, director of the state's Department of Mineral Resources, said on a conference call on Tuesday.I said the very same thing earlier this afternoon: North Dakota oil production probably went over the 1-million-bopd milestone in April.
Again, that was the top story over at Rigzone.
I'm surprised Rigzone didn't cite The Million Dollar Way. LOL.
Staggering; Just Some Bakken Back-Of-The-Envelope Doodling
Note: see first comment. The reader correctly points out that I often forget to distinguish between "barrels of oil" vs "barrels of oil equivalent" when talking about EURs, IPs, etc. I'll try to do better but it is very difficult when analysts themselves often don't make it clear what they are referring to. I'm not even sure if the original Leigh Price paper differentiated "oil" vs "oil equivalent." The same goes for the price of oil -- the source of oil (WTI, Brent, Saudi) is often not provided, just assumed.
Disclaimer: this post is a good example of my difficulty expressing my thoughts. The post is a bit disjointed, but hopefully you will get the point.
Just some doodling on the back of the proverbial envelopes.
One needs to go back to the very early days of blogging to remember how big the Bakken was. I've actually forgotten the numbers; there was a quite a range between what the USGS said, what Harold Hamm said, and what others said, somewhere in between.
A couple of data points.
In general, the operators told us they were recovering 1 - 5% of the original oil in place through primary recovery. Early on, it was said that operators were recovering somewhere between 1 and 3% of the OOIP. Then, it was said that they were getting as much as 5%. Then in one of Whiting's presentations, or conference calls, it was said that some wells were recovering as much as 8%. Hold that thought.
CLR says the average Bakken well will have a EUR of 603,000 bbls. [EUR is "estimated ultimate recovery" -- the total amount of oil that a Bakken will produce over its lifetime.] Hold that thought, too.
Then, in a story yesterday, some analyst suggested the average EUR of all Eagle Ford wells drilled between 2008 and 2013 was 168,000 bbls.
With regard to the Bakken, Halcon did not take exception to CLR's estimate of 603,000 bbls. In its 1Q14 conference call, Halcon said: a) EURs of 801,000 bbls in their better acreage (Fort Berthold); and, b) 447,000 bbls in Williams County.
I was thinking about all that, when I re-read this observation at another post:
Some folks suggest the minimum number of wells that will be drilled in the North Dakota Bakken will be on the order of 50,000 wells. Others say as many as twice that number.
But let's go with 50,000 wells.
If operators were able to increase the recovery rate another 1%, or 9 billion bbls, then consider this:
I don't know about others, but I find these numbers simply staggering.
Disclaimer: this post is a good example of my difficulty expressing my thoughts. The post is a bit disjointed, but hopefully you will get the point.
Just some doodling on the back of the proverbial envelopes.
One needs to go back to the very early days of blogging to remember how big the Bakken was. I've actually forgotten the numbers; there was a quite a range between what the USGS said, what Harold Hamm said, and what others said, somewhere in between.
A couple of data points.
In general, the operators told us they were recovering 1 - 5% of the original oil in place through primary recovery. Early on, it was said that operators were recovering somewhere between 1 and 3% of the OOIP. Then, it was said that they were getting as much as 5%. Then in one of Whiting's presentations, or conference calls, it was said that some wells were recovering as much as 8%. Hold that thought.
CLR says the average Bakken well will have a EUR of 603,000 bbls. [EUR is "estimated ultimate recovery" -- the total amount of oil that a Bakken will produce over its lifetime.] Hold that thought, too.
Then, in a story yesterday, some analyst suggested the average EUR of all Eagle Ford wells drilled between 2008 and 2013 was 168,000 bbls.
With regard to the Bakken, Halcon did not take exception to CLR's estimate of 603,000 bbls. In its 1Q14 conference call, Halcon said: a) EURs of 801,000 bbls in their better acreage (Fort Berthold); and, b) 447,000 bbls in Williams County.
I was thinking about all that, when I re-read this observation at another post:
... every 1% in incremental recovery factor translates into an additional nine billion barrels of estimated ultimate recoverable reserves in the field ...What exactly is 9 billion bbls compared to the current EURs?
Some folks suggest the minimum number of wells that will be drilled in the North Dakota Bakken will be on the order of 50,000 wells. Others say as many as twice that number.
But let's go with 50,000 wells.
If operators were able to increase the recovery rate another 1%, or 9 billion bbls, then consider this:
9,000,000,000 divided by 50,000 wells = 180,000 bblsThat 180,000 bbls increase in EUR exceeds the current EURs of the Eagle Ford. That 180,000 is on top of the 477,000 bbls EURs (Williams County/Halcon); 603,000 bbls EURs (Bakken/Continental Resources); and/or, 801,000 bbls EURs (Fort Berthold/Halcon).
I don't know about others, but I find these numbers simply staggering.
Is This Insane, Or What? WTI Hits $102; Twenty-Four (24) New Permits -- The Williston Basin, North Dakota, USA -- Twenty-Four May Not Be A Record, But It's Awful Close
Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here.
Saudis say $100 oil is "fair" price.
Libya protestors say that they will open the ports "tonight." Which means there should be more oil coming to market. Saudi, a month ago or so, said they were boosting production to record levels.
And yet, on a very quiet day, with not much news, WTI goes up well over 1% and closes over $102/bbl. (After hours, it dropped back a bit.) Is this insane or what? I never, yesterday, would have predicted that oil would have gone over $102 today on such quiet news. It must be all those speculators getting back into the market. LOL.
Anyway, it is what is.
The big story today, for investors: BHI raised its dividend, the first time the company has raised its dividend since 2008. Anadarko raised its dividend by 50%. Now, I look for an announcement that CVX or XOM or both to announce a 2-1 split. COP did the spin-off and raised dividends significantly in the last couple of years; CVX beat the Ecuador rap, and XOM is, well, XOM. So, we'll see.
The second big story, of course, is that North Dakota probably hit the one-million-bopd milestone in April, 2014 (i.e., 13 days ago) coming within 24,000 bbls by the end of March. It's hard to imagine that North Dakota did not produce an additional 24,000 bopd in the month of April, but we won't know until mid-June, will we? My hunch is that the NDIC is crunching the numbers as we speak and already has a pretty good idea one way or the other.
A third story, I suppose: according to the NDIC, there are 635 wells waiting to be fracked. That's a lot wells drilled total depth, now waiting to be completed. Two thousand truckloads in and two thousand truckloads out for water and sand for each well, or something like that. I've long forgotten the specifics.
Active rigs:
Twenty-four (24) new permits --
Three (3) producing wells completed:
Saudis say $100 oil is "fair" price.
Libya protestors say that they will open the ports "tonight." Which means there should be more oil coming to market. Saudi, a month ago or so, said they were boosting production to record levels.
And yet, on a very quiet day, with not much news, WTI goes up well over 1% and closes over $102/bbl. (After hours, it dropped back a bit.) Is this insane or what? I never, yesterday, would have predicted that oil would have gone over $102 today on such quiet news. It must be all those speculators getting back into the market. LOL.
Anyway, it is what is.
The big story today, for investors: BHI raised its dividend, the first time the company has raised its dividend since 2008. Anadarko raised its dividend by 50%. Now, I look for an announcement that CVX or XOM or both to announce a 2-1 split. COP did the spin-off and raised dividends significantly in the last couple of years; CVX beat the Ecuador rap, and XOM is, well, XOM. So, we'll see.
The second big story, of course, is that North Dakota probably hit the one-million-bopd milestone in April, 2014 (i.e., 13 days ago) coming within 24,000 bbls by the end of March. It's hard to imagine that North Dakota did not produce an additional 24,000 bopd in the month of April, but we won't know until mid-June, will we? My hunch is that the NDIC is crunching the numbers as we speak and already has a pretty good idea one way or the other.
A third story, I suppose: according to the NDIC, there are 635 wells waiting to be fracked. That's a lot wells drilled total depth, now waiting to be completed. Two thousand truckloads in and two thousand truckloads out for water and sand for each well, or something like that. I've long forgotten the specifics.
*******************************
Active rigs:
| 5/13/2014 | 05/13/2013 | 05/13/2012 | 05/13/2011 | 05/13/2010 | |
|---|---|---|---|---|---|
| Active Rigs | 190 | 187 | 209 | 173 | 114 |
Twenty-four (24) new permits --
- Operators: BR (11), Hess (6), MRO (5), Enduro (2)
- Fields: Corral Creek (Dunn), Antelope (McKenzie), Bailey (Dunn), Mouse River Park (Renville),
- Comments: All eleven BR permits are in Corral Creek
Three (3) producing wells completed:
- 25157, 314, CLR, Tallahassee 3-16H, 2 sections, Baker, t4/14; cum --
- 25158, 657, CLR, Tallahassee 2-16H, 4 sections, Baker, t4/14; cum --
- 26017, 2,727, MRO, Zimmerman 21-26TFH, Killdeer, t4/14; cum --
- 22064, 110, Corinthiann Exploraiton, Corinthian Skarphol 8-33 1H, North Souris, a Spearfish well, t4/12; cum 48K 3/14;
- 25037, 535, American Eagle, Lynda 15-32-164-101, Colgan, t2/14; cum 18K 3/14;
- 25782, 150, Fidelity, Justine 25-36H, Green River, t1/14; cum 21K 3/14;
- 26377, drl, KOG, P Vandeberg 154-99-1-1-12-15H, Stockyard Creek, no production data,
- 26436, drl, BR, CCU Powell 41-29MBH, Corral Creek, no production data,
- 26582, 255, Whiting, Maus 21-26, Camel Hump, a Red River well, t1/14; cum 12K 3/14;
- 26670, drl, Cornerstone, Martinsen D-3427-6191, Little Butte, no production data,
- 26977, A, CLR, Ellison 1-21AH1, Stoneview, just beginning to produce
Will The Grid Hold? How's Renewable Energy Working Out In California? Meanwhile, Duke Replaces Coal, Nuclear With Natural Gas
Heat wave in California.
Bloomberg is reporting:
The Wall Street Journal is reporting:
On Tuesday Duke Energy unveiled plans to remake its power-generating facilities in Florida, including the construction of a natural gas-powered facility near its Crystal River facility. Data points:
Bloomberg is reporting:
California is grappling with a record drought that’s reducing hydroelectric supplies at a time when inventories of natural gas, a fuel used to produce power, are hovering near a decade low. While resources are adequate, the grid operator said last week, the state faces reliability challenges and higher prices, especially after the shutdown of the Edison International’s San Onofre nuclear plant.
On-peak power at Northern California’s NP15 hub, including San Francisco, for next-day-delivery rose $4.01, or 7.1 percent, to $60.25 a megawatt-hour at 4:51 p.m. New York time yesterday, the most for this time of the year since 2008, according to broker data compiled by Bloomberg.
****************************************
The Wall Street Journal is reporting:
On Tuesday Duke Energy unveiled plans to remake its power-generating facilities in Florida, including the construction of a natural gas-powered facility near its Crystal River facility. Data points:
- $1.5 billion
- 820 megawatts to come online in early 2016
- 820 megawatts to come online in late 2018
- will retire two coal-fired units at the Crystal River complex when new NG facilities come online
- will also decommission a Crystal River nuclear power plant due to structural problems
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