Several "Huge IP" Wells Coming Off The Confidential List Christmas Day And Boxing Day, December 25, 2014

As you go through the list below, think about this. Most of these wells were drilled six months ago, back in June, 2014. We still have July, August, September, and October, and probably November, and December (of 2014), to get through before the current slump in oil prices starting affecting things. Spread this observation across all the unconventional shale across the US and one can see the glut of oil isn't likely to slow down quickly. [It turns out this was said back on December 9, 2014:

It will take six months or so to whittle away the 1m barrels a day of excess oil on the market – with US crude falling to $50 - given that supply and demand are both “inelastic” in the short-run.]

I know I'm not saying that correctly, but hopefully you get the point. Mixing metaphors, I suppose: there are at least a year's worth of wells in the Bakken pipeline yet to come on line. Peak oil? LOL.

Richard Zeits talks about the "myth" of the oil glut, but RBN Energy suggests "we're" already maxing out with regard to storage sites in North America.

The wells reported here do not represent the response to the slump in oil prices; way too early to see that response.

Note the amount of proppant EOG used in that Wayzetta middle Bakken well, and also note the amount of proppant CLR is using.

Friday, December 26, 2014:

• 25747, 915, EOG, Wayzetta 29-1424H, Parshall, 43 stages; 13.6 million lbs sand; conditioning unit on site, s10/19; TD10/31, middle Bakken, 1920 acres, t4/14; cum 138K 11/14; 
• 27144, 2,256, QEP, Kirkland 2-23-14TH, Grail, t9/14; cum 57K 11/14; 
• 27145, 2,213, QEP, Kirkland 4-23-14BH, Grail, t9/14; cum 62K 11/14; 
• 27146, 2,172, QEP, Kirkland 3-23-14BH, Grail, t9/14; cum 63K 11/14; 
• 27430, 930, WPX, Roggenbuck 4-9HW, Van Hook, t11/14; cum --  
• 27705, 2,163, QEP, Kirkland 22-15-23-14LL, Grail, t9/14; cum 72K 11/14; 
• 27791, 2,096, QEP, TAT 1-33-28BH, Grail, t8/14; cum 70K 11/14;
• 27792, 1,664, QEP, TAT 2-33-28-BH, Grail, t8/14 cum 64K 11/14; 
• 27816, drl, QEP, TAT 33-28-34-27LL, Grail, s4/14; cum 63K 11/14; 
• 28084, drl, CLR, Holte 2-32H, Stoneview, no production data 
• 28099, drl, Hess, EN-Dobrovolny A-155-94-2413H-7, Manitou, no production data, 
• 28157, drl, MRO, Snow Bird USA 31-17TFH, Van Hook, no production data, 
• 28501, 370, Hunt, Alexandria 161-100-22-15H-1, Alexandria, t9/14; cum 11K 11/14;  

Thursday, December 25, 2014: 

• 26889, 704, Oasis, Brier 5200 44-22 4T2, Camp, t6/14; cum 37K 11/14; interesting production profile; 
• 27632, 514, OXY USA, Kary 3-24-13H-144-97, Cabernet, t6/14; cum 47K 11/14; interesting production profile;
•  27633, 519, OXY USA, Kary 4-24-13H-144-97, Cabernet, t6/14; cum 50K 11/14; interesting production profile; 
• 27941, drl, Hess, GN-Cambrian-159-98-2536H-2, Big Stone, no production data, 
• 28042, drl, SM Energy, Torgeson 2-15HS, West Ambrose, no production data, 
• 28085, drl, CLR, Holte 3-32H1, Stoneveiw, no production data, 
• 28098, drl, Hess, EN-Dobrovolny A-155-94-2413H-6, Manitou, no production data, 28238, 838, MRO, Hollingsworth 24-22TFH, Chimney Butte, t9/14; cum 17K 10/14; 
• 28357, drl, MRO, Davis 24-22H, Bailey, no production data, 28405, 980, CLR, Harrisburg 1-34H, Indian Hill, t10/14; cum 23K 10/14;  
• 28599, conf, Oasis, Chalmers 5301 44-24 3BR, Baker, no production data, 
  

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25747, see above, EOG, Wayzetta 29-1424H, Parshall

Date	Oil Runs	MCF Sold
10-2014	10120	3848
9-2014	3431	806
8-2014	22561	3675
7-2014	26547	842
6-2014	26469	3736

27144, see above, QEP, Kirkland 2-23-14TH, Grail:

Date	Oil Runs	MCF Sold
11-2014	17334	13108
10-2014	21691	20544
9-2014	18114	9268

 27145, see above, QEP, Kirkland 4-23-14BH, Grail:

Date	Oil Runs	MCF Sold
11-2014	17238	14001
10-2014	20719	20893
9-2014	23512	12778

27146, see above, QEP, Kirkland 3-23-14BH, Grail:

Date	Oil Runs	MCF Sold
11-2014	18549	15021
10-2014	22166	24302
9-2014	21616	11244

27705, see above, QEP, Kirkland 22-15-23-14LL, Grail:

Date	Oil Runs	MCF Sold
11-2014	21285	26443
10-2014	24798	28261
9-2014	25536	7381

27791, see above, QEP, TAT 1-33-28BH, Grail:

Date	Oil Runs	MCF Sold
11-2014	11485	5444
10-2014	16658	17090
9-2014	24734	7703
8-2014	17182	5184

27792, see above, QEP, TAT 2-33-28-BH, Grail:

Date	Oil Runs	MCF Sold
11-2014	16042	8454
10-2014	21982	24637
9-2014	18716	5753
8-2014	6933	3269

27816, see above, QEP, TAT 33-28-34-27LL, Grail:

Date	Oil Runs	MCF Sold
11-2014	7665	1574
10-2014	16164	28072
9-2014	28123	2809
8-2014	11178	0

Merry Christmas, 2014 --

I wouldn't think I would have time to post something on Christmas morning, but there seems to be 90 seconds of free time between breakfast with out-of-town guests and opening gifts. Oh, add 20 seconds. The wifely unit just said she was going to make more coffee.

I will come back to this article later, but it's pretty good -- at least I thought it was when I read it last night after a reader sent it to me. The New York Times is reporting that oil's swift fall raises US fortunes abroad. It begins:

BRUSSELS — A plunge in oil prices has sent tremors through the global political and economic order, setting off an abrupt shift in fortunes that has bolstered the interests of the United States and pushed several big oil-exporting nations — particularly those hostile to the West, like Russia, Iran and Venezuela — to the brink of financial crisis.

The nearly 50 percent decline in oil prices since June has had the most conspicuous impact on the Russian economy and President Vladimir V. Putin. The former finance minister Aleksei L. Kudrin, a longtime friend of Mr. Putin’s, warned this week of a “full-blown economic crisis” and called for better relations with Europe and the United States.

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Efforts To Improve Infrastructure Funding In Oil Patch On The Docket

The AP is reporting:

Relief could be on the horizon for strapped public services in the Northern Plains' booming oil patch, as elected leaders in Montana and North Dakota move to steer more money into the region during the states' upcoming legislative sessions.

Most drilling for oil and gas is in North Dakota. Yet the population growth from the boom has spilled over the border, and both states face rising pressures on infrastructure that are taxing the ability of local governments to keep pace.

In North Dakota, Gov. Jack Dalrymple is proposing to change the formula for oil and gas tax distributions so local governments get 60 percent, up from the current 25 percent.

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Humor For The Day

The New York Times is reporting:

Germans have welcomed solar panels glinting on their rooftops and windmills looming over their fields, and they have even put up with a doubling of their electric bills. But enthusiasm for all things green appears to have reached a limit with a plan to string high-voltage transmission lines along the outskirts of cities like Fulda in the center of the country.

Dozens of protest groups have sprung up over the past year along the 500-mile path of the project, SuedLink, one of four high-voltage direct current lines that are to carry wind-generated power from north to south.

Businesses have been wary of the growing costs that the policies have imposed on them, but citizens have been largely stoic. They have protested when the government seemed to waver in its commitment, even as the cost of power for an average family of three has climbed to 85 euros a month, about $103, from 41 euros since 2000, according to government statistics.

“I have been following energy policy for 30 years and have gone along with everything,” said Mr. Lange, a self-employed music teacher from Fulda’s eastern Kämmerzell district. “The moment that I heard they wanted to build this behind my house, I thought, enough!”

Flashback -- August 8, 2011 (Posted December 24, 2014)

Flashback: see this link.

Actually, the only reason I'm posting that link is so I can put up a different video of the Bakken theme song:

It's Only Make Believe, Conway Twitty
It's hardly the best rendition, but the historic film footage of NYC is priceless.

Looking Back -- The Late 1970s, Early 1980s -- Posted December 24, 2014 During The New Slump In Oil Prices

I assume there are typographical errors on this page; I will eventually get around to correcting them.

From Seeking Alpha, is this the best investment in shale oil? This is a must read, not for investment purposes -- remember, this blog is not an investment site -- but to compare the situation now with past situations in the oil industry, as noted in the excerpt from The Prize below "the fold." [SA articles are often archived and available only by subscription. This article may be worth saving. A word to the wise.]

Don sent me the SA article linked above quite some time ago; I was traveling and only recently got back to it. And I'm glad I did.

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For The Archives

From page 714, The Prize: The Epic Quest For Oil, Money, & Power, by Daniel Yergin:

Meanwhile the oil market was responding to the phenomenal rise in prices over the 1970s and consumers' fears for the future. Yet the exporters were still unwilling to face up to the fact that that "objective conditions" of the marketplace were truly shifting.

They would not contemplate a price cut.

Prices were still in disarray, but finally, October 1981, they came to a new agreement.

Saudi Arabia would raise its price from thirty-two to thirty-four dollars a barrel, while the others agreed to bring their price down from thirty-six to thirty-four dollars.

So prices would be unified. When all the changes were factored in, the average price of oil on the world market would still, because of the Saudi increase, go up a dollar or two. For the other producers, the compromise did, of course, mean a price cut. Yet there were consolations. Saudi Arabia had agreed, at last, as part of the deal to go down to its old 8.5-million-barrel-per-day ceiling.

Iraq and Iran remained locked in bitter battle. Yet even a war between two of the most important exporters could only retard but not cancel out the powerful forces that had been set in motion by the two oil shocks.

October 1981 represented the last time that the OPEC price would go up, at least for a decade. The "divine laws of supply and demand" were already in motion to drive prices down, though not yet with the thunderous vengeance that was still to come. It was, as Yamani had said, as simple as ABC.

That was the end of chapter 34.

Chapter 36: "The Good Sweating: How Low Can It [the price of oil] Go?

Chapter 36 includes a section sub-titled "Market Share." It begins:

In the first days of June 1985, OPEC ministers congregated at Taif in Saudi Arabia. Yamani read them a letter from King Fahd, who sharply criticized the cheating and discounting by other OPEC countries that had led "to a loss of markets for Saudi Arabia."

Saudi Arabia would not abide such a situation forever. "If Member countries feel they have a free hand to act," said the King, "then all should enjoy this situation and Saudi Arabia would certainly secure its own interests. 

I read this book years ago, but reading it again, is quite fascinating in light of the current situation.

If one has not read this book, you may not be interested in reading from the beginning, but certainly from Chapter 34.

By the way, and this was back in the late 1970s, this excerpt from the book:

Some companies like Occidental and Unocal, were already working on shale oil technology.

In 1980, Exxon, the world's largest oil company, looking ahead to what seemed the inevitable shortage, hastily bought its way into the Colony Shale Oil Project on the Western Slope.

Sixty years before, in another period of shortage, the company had acquired acreage in  the same are to develop shale oil as a fuel. Nothing had come of it then.

Now Exxon became, by far, the leader, spending fully a billion dollars on shale oil development, getting ready for the "new era of energy."

Exxon had had a love affair with shale oil for a long time," recalled Clifton Garvin, the company's chairman. "It was a challenge, technically, and certainly economically."

Nevertheless, the country seemed committed to developing secure sources of liquid fuels. And the technology seemed available.

But over the subsequent two years, the economic outlook changed quickly and drastically. In real terms, the oil price was going down; so was demand. So were forecasts for both. Surplus production capacity was building in the oil-exporting countries. And, all along, the cost estimates for the Colony Project kept going up.

"We were looking at $6 or $8 billion for 50,000 barrels per day," recalled Garvin. "And there was no expectation that that was the end of it.

The next day, Garvin assembled a senior management team and  asked what would be the consequences of stopping. "It was a tough decision. I rode that decision."

On May 2, 1982, Exxon announced tersely that it was terminating the Colony Project. Nothing that the company now saw in the economic outlook could make the shale oil project viable.

The boom on Colorado's Western Slope ended literally in hours, as work came to an instant stop.....now, in three towns in Colorado, newly built homes were empty; weeds quickly covered landscaped lots; half the apartments went unrented; construction workers from the Midwest packed up and headed home; traffic evaporated from the roads; and teenagers with nothing else to do took to vandalizing the partly built homes and office buildings.

The very next paragraph is incredible, but I have to stop somewhere.

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For The Granddaughters

 Yes, it was posed.

Lighting For US Highway 85, State Highway 23 Corridor Near Watford City -- December 24, 2014

Bakken.com is reporting:

State transportation officials say additional roadway lights will be installed on the U.S. Highway 85 and North Dakota Highway 23 corridor near Watford City.

The project is scheduled to be completed in mid-February.

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Ohio-Area Electric Grid -- For The Archives

ColumbusBusinessJournal is reporting:

The electric grid operator that includes Ohio lines wants to postpone some planned generating plant retirements next year to help hedge against potential winter power shortages in 2015.

PJM Interconnection, a regional transmission organization that handles electricity for 61 million Americans in 13 states and Washington, D.C., said this week it will seek to delay the idling of 2,500 megawatts of electric generation through April 2016.

"PJM Vice President for Operations Mike Kormos said the RTO is acting in light of the 22 percent forced outage rate from last January and uncertainty over the role of demand response in the wholesale markets," the publication said.

During January 2013's polar vortex cold snap, peak electricity demand led to 22 percent, or 40,000 megawatts, in forced outages of PJM capacity, compared with the average rate of 7 percent.

American Electric Power Company Inc. CEO Nick Akins has pointed to such strained capacity as a warning sign that environmental regulations starting next year, which will shut down 7,200 megawatts worth of AEP generation, will threaten reliability.