28388, dry,
Welter Consulting, Miller 31-3, Wildcat, far northeast of the core
Bakken; on a line directly from Kenmare to Minot, the well is about
2/3rds of the way from Minot to Kenmare (closer to Kenmare than Minot);
Madison well; a vertical well, not a Bakken
28350, 2,
Anschutz, Jacobson 1-29-134-104, wildcat, punch the coordinates into
Google maps; at the south end of Little Missouri National Grassland,
about 30 miles by road northwest of Bowman; this is not Bakken country; a
Red River well; Also, note no "H" designation; the scout ticket says
the Deadwood; according to the well file, the targets are the Red River,
the Tyler, The Lodgepole on 160-acre spacing. Estimated total depth:
11,408 (deep). Slope County. Vertical; t1/15; cum 35 bbls; pretty much off-line since completed; top form says "see plug and abandon procedures"
Saturday, July 11, 2015
Random, Abbreviated Note On Global Refining -- July 11, 2015
Some nice data points regarding global refineries. Apparently a lot of capacity has come on-line this past and more to come. Bakken.com is reporting:
And the Ruwais refinery: From TradeArabia:
Every time you read about Saudi et al increasing production, remember, a lot of this oil is for its own refineries.
By the way, once gasoline production from the RFCC unit is stable, Adnoc will no longer need to import gasoline and the country will be well-balanced. It might even have about 845,000 to 1.69 million barrels a year to export.
Our two oldest granddaughters are 12 and 9 years old. The nine-year-old, all of a sudden it seems, has taken an interest in putting together a killer wardrobe. She is quite artistic, knows what she is doing, and plans well ahead.
Today, while out shopping with their grandmother, the nine-year-old told her older sister that from now on, she (the nine-year-old) needs to be involved in all clothing purchases by her 12 year-old-sister since she will eventually get them as hand-me-downs.
"In 2015-2016, net capacity additions will be more than needed, which will cause the global utilization rate to decline, and casts a doubt on the continuation of current unusually high refining margins,” the IEA said in its monthly report.
The bulk of the new capacity is coming in the United States, where refineries are adding pieces of equipment to enable them to process more oil from the shale boom, and also from China.
In the Middle East, ADNOC’s Ruwais refinery in Abu Dhabi is set to join two 400,000 barrels per day (bpd) mega units that officially launched in Saudi Arabia in 2014.
The IEA estimates that global refining capacity will rise by 1.1 million bpd per year in 2015 and 2016, bringing worldwide capacity to just over 97 million bpd – a 2 percent increase.
While some closures are already planned in Europe and Asia, the agency no longer thinks these will be enough to balance the new additions.By the way, did you catch that part about Saudi's two new 400,000 bopd megaunits? That's another reason Saudi needs to increase production. I think some analysts are forgetting that.
And the Ruwais refinery: From TradeArabia:
State-owned Abu Dhabi National Oil Co (Adnoc) is expected to ramp up run rates and have all of the units at its newly expanded Ruwais refinery operating by June (2015), industry sources said.
The expanded refinery, which is currently running at close to 60 per cent of capacity, aims to start up a residual fluid catalytic cracking (RFCC) unit and a hydrocracker unit by the end of April, one of the sources familiar with the matter said.
Once the units start up, Adnoc will ramp up its operating rate to near 100 per cent by processing more crude oil at the end of April before scaling back to about 80 to 90 per cent of its capacity by June, the source added.
The expanded refinery will more than double the capacity from 415,000 barrels-per-day (bpd) and process the flagship Murban crude oil grade.More than double 415,000 bopd sounds an awful lot like one million bopd.
Every time you read about Saudi et al increasing production, remember, a lot of this oil is for its own refineries.
By the way, once gasoline production from the RFCC unit is stable, Adnoc will no longer need to import gasoline and the country will be well-balanced. It might even have about 845,000 to 1.69 million barrels a year to export.
************************
Planning Ahead
Our two oldest granddaughters are 12 and 9 years old. The nine-year-old, all of a sudden it seems, has taken an interest in putting together a killer wardrobe. She is quite artistic, knows what she is doing, and plans well ahead.
Today, while out shopping with their grandmother, the nine-year-old told her older sister that from now on, she (the nine-year-old) needs to be involved in all clothing purchases by her 12 year-old-sister since she will eventually get them as hand-me-downs.
Staggering: All Four Top Bakken Counties Now In The Top Ten Oil Producing Counties In The US -- July 11, 2015
A huge "thank you" to a reader for sending me this.
I posted the May data which the reader sent me just a few days ago; today the reader sends me the June data. We assume the data was released based on the release of the Director's Cut as well as other sources, and sources from Texas.
Here it is, a dynamic link: http://diindex.drillinginfo.com/.
All four top North Dakota Bakken counties are now in the top ten of all oil-producing counties in the entire United States:
Note: McKenzie County slipped to #2 simply because operators voluntarily cut production; Williams dropped to #9 after being at #7, but look at this: Mountrail entered the list at #7. Wow.
This comes despite an all-out effort to dial-back production in Texas and North Dakota. In North Dakota, the number of active rigs hit a new post-boom low this past week; the majority of wells coming off the confidential list are not being completed and are being shut in (SI/NC); and, the wells that are still producing are being choked back.
The NDIC director alluded to one reason why IPs (30-day, 60-day, 90-day production numbers) are improving:
I think the most important reason is "attention to detail." With prices so low, oil company officers are watching with eagle eyes what is going on out in the field. I bet the field managers are noticing an increased amount of "micro-managing."
So, what do we mean by "attention to detail"?
The most important thing is the quality of the work force. With cutbacks, the best people are going to be kept on.
One key to a good well is keeping the lateral in the 40-foot middle Bakken seam or the 10-foot Three Forks seam. As the Bakken has matured, there is more and more information about the time/distance the horizontal stays in the seam. My gut feeling is that anything less than 98% gets the CEO's attention. To stay in the seam requires the best geologists and the best roughnecks, and I assume a bit of luck. But they say folks make they own luck.
The second thing: after seven years in the Bakken, operators are learning the best ways to complete a well. There are many solutions, most of which I don't understand, and I really don't track it.
However, two variables are easy to track: number of frack stages and the amount of proppant. And it is clear that operators are pushing toward well over 36 stages and 10 million lbs proppant for the best wells. There's still an argument regarding sand and ceramic; it appears most operators use a combination of sand and ceramic, but EOG uses sand only in the Bakken.
Another reason: North Dakota has the largest microseismic array in the world. Do microseimic arrays help? Yes -- see this post.
By the way, I have no idea but I would suspect that with a lot of geologists on contract but not needed in the field (only 73 active rigs vs 200 rigs) that guys like Harold Hamm has his geologists poring over coring samples at the University of North Dakota and poring over geologists' reports of producing wells -- finding the best of the best areas, and putting together a list of wells just begging to be re-fracked.
With the decreased activity, my hunch is most operators can drill and complete a well the way they had planned, not having to settle for "second best." When a problem develops in the field, and there's a shortage of personnel or spare parts, sometimes, the only solution is to abandon the well or just press on with what one has, perhaps cutting corners and hoping for the best. With such decreased activity as we have now, I assume there is more than adequate support services ready to assist 24/7. Maybe a minor point, but if helps keep the bit in the seam 98% of the time vs 92% of the time, it will make a huge difference.
May reminded us at 7:15 p.m. that 7-11 stores offered FREE Slurpees on July 11. We walked down to the 7-11 in our neighborhood only to find that the offer ended at 7:00 p.m. I bought Olivia a Slurpee for $1.73. The cashier threw in two bags of Doritos for free and one pair of really cool sunglasses, also for free, which Olivia forbade me to wear on the walk home.
I posted the May data which the reader sent me just a few days ago; today the reader sends me the June data. We assume the data was released based on the release of the Director's Cut as well as other sources, and sources from Texas.
Here it is, a dynamic link: http://diindex.drillinginfo.com/.
All four top North Dakota Bakken counties are now in the top ten of all oil-producing counties in the entire United States:
Note: McKenzie County slipped to #2 simply because operators voluntarily cut production; Williams dropped to #9 after being at #7, but look at this: Mountrail entered the list at #7. Wow.
This comes despite an all-out effort to dial-back production in Texas and North Dakota. In North Dakota, the number of active rigs hit a new post-boom low this past week; the majority of wells coming off the confidential list are not being completed and are being shut in (SI/NC); and, the wells that are still producing are being choked back.
The NDIC director alluded to one reason why IPs (30-day, 60-day, 90-day production numbers) are improving:
- The number of well completions rose slightly from 102 (final) in April to 114 (preliminary) in May but initial production rates are increasing 10 - 20% per month as drilling and completions focus more and more on the best portion of the core Bakken and Three Forks area.
I think the most important reason is "attention to detail." With prices so low, oil company officers are watching with eagle eyes what is going on out in the field. I bet the field managers are noticing an increased amount of "micro-managing."
So, what do we mean by "attention to detail"?
The most important thing is the quality of the work force. With cutbacks, the best people are going to be kept on.
One key to a good well is keeping the lateral in the 40-foot middle Bakken seam or the 10-foot Three Forks seam. As the Bakken has matured, there is more and more information about the time/distance the horizontal stays in the seam. My gut feeling is that anything less than 98% gets the CEO's attention. To stay in the seam requires the best geologists and the best roughnecks, and I assume a bit of luck. But they say folks make they own luck.
The second thing: after seven years in the Bakken, operators are learning the best ways to complete a well. There are many solutions, most of which I don't understand, and I really don't track it.
However, two variables are easy to track: number of frack stages and the amount of proppant. And it is clear that operators are pushing toward well over 36 stages and 10 million lbs proppant for the best wells. There's still an argument regarding sand and ceramic; it appears most operators use a combination of sand and ceramic, but EOG uses sand only in the Bakken.
Another reason: North Dakota has the largest microseismic array in the world. Do microseimic arrays help? Yes -- see this post.
By the way, I have no idea but I would suspect that with a lot of geologists on contract but not needed in the field (only 73 active rigs vs 200 rigs) that guys like Harold Hamm has his geologists poring over coring samples at the University of North Dakota and poring over geologists' reports of producing wells -- finding the best of the best areas, and putting together a list of wells just begging to be re-fracked.
With the decreased activity, my hunch is most operators can drill and complete a well the way they had planned, not having to settle for "second best." When a problem develops in the field, and there's a shortage of personnel or spare parts, sometimes, the only solution is to abandon the well or just press on with what one has, perhaps cutting corners and hoping for the best. With such decreased activity as we have now, I assume there is more than adequate support services ready to assist 24/7. Maybe a minor point, but if helps keep the bit in the seam 98% of the time vs 92% of the time, it will make a huge difference.
*********************************
Ah, The Joys Of Summer
May reminded us at 7:15 p.m. that 7-11 stores offered FREE Slurpees on July 11. We walked down to the 7-11 in our neighborhood only to find that the offer ended at 7:00 p.m. I bought Olivia a Slurpee for $1.73. The cashier threw in two bags of Doritos for free and one pair of really cool sunglasses, also for free, which Olivia forbade me to wear on the walk home.
Definition of a California summer: sunglasses, Doritos, and a Slurpee.
Week 27: July 5, 2015 -- July 11, 2015
There were so many huge stories this past week, for the Bakken and from around the world. Without question, the big story was the fact that crude oil production increased month-over-month in both Texas and North Dakota despite all the efforts to cut back. The second big story was a story we did not see: we have not yet seen any major oil companies in severe distress (although that is in the eye of the beholder and subject to opinion).
The other big story was posted by DrillingInfo: North Dakota has three counties in the list of the top ten US oil-producing counties: Williams, McKenzie, and Dunn.
There is so much oil on the market, and the trend is not likely to change, that Ford is moving its small-car operations out of the US.
BP's annual statistical review of world energy, 2015, was also linked this week. The outlook in brief was notable in what it did not say.
Despite falling crude oil prices, California, at least temporarily, is looking at $5-gasoline. Californians have petitioned the governor for relief but it is unlikely he's listening. Let them eat cake. By the way, it appears California policy makers have pretty much started down the road of closing down the state's oil and gas industry. California's attitude toward oil and gas is starting to remind me of Brazil.
The Director's Cut for May, 2015, data was released. Think about that. Data for the summer is yet to come.
I haven't done this before but I think it's becoming too big to ignore. I have always "limited" the big stories of the week to the Bakken, but this is an exception: writers at The Los Angeles Times, a huge supporter of ObamaCare, concede that health care premiums in 2016 "won't simply rise, they will skyrocket." This has huge implications for the US economy, including the oil and gas industry as they start to downsize in the face of an oil glut.
It looks like folks are coming around on a newly accepted definition for full employment: about 6% unemployment. I think it's 8%.
Another huge international story: the Boston Consulting Group reports that US manufacturing costs on par with those of China due to very, very low energy prices, due to ... fracking.
The number of active rigs in North Dakota hit a new post-boom low (73) this past week, well below the high of over 200 two years ago.
RBN Energy started a nice series on refining operations in the US. A must-read.
Perhaps my favorite story this past week:
Crude oil
Production increases 16% month-over-month in Texas; 3% in North Dakota
Despite slump in oil prices, fourteen new permits in one day, multiple operators including small ones like Thunderbird
Random update on the Hess Lodgepole well northeast of Tioga
Fracking
The octofrac
UNP sets frack sand shipment record
Random update of a re-fracked well, BR's #17118, the Remington 14-11H
Natural gas
A re-look at Bakken's natural gas production
Soaring demand for LNG
Bakken economy
Update on EPD bid to buy WMB
The Williston Wire: Williston has North Dakota's largest walk-in humidor; new restaurant in Wildrose (only restaurant in 30-mile radius; construction on Williston's new airport to begin next spring
Taxable sales, first quarter for the past six years
Bakken 101
Random example of NDIC oversight, siting of pumps
Photography
Whitten Log
The other big story was posted by DrillingInfo: North Dakota has three counties in the list of the top ten US oil-producing counties: Williams, McKenzie, and Dunn.
There is so much oil on the market, and the trend is not likely to change, that Ford is moving its small-car operations out of the US.
BP's annual statistical review of world energy, 2015, was also linked this week. The outlook in brief was notable in what it did not say.
Despite falling crude oil prices, California, at least temporarily, is looking at $5-gasoline. Californians have petitioned the governor for relief but it is unlikely he's listening. Let them eat cake. By the way, it appears California policy makers have pretty much started down the road of closing down the state's oil and gas industry. California's attitude toward oil and gas is starting to remind me of Brazil.
The Director's Cut for May, 2015, data was released. Think about that. Data for the summer is yet to come.
I haven't done this before but I think it's becoming too big to ignore. I have always "limited" the big stories of the week to the Bakken, but this is an exception: writers at The Los Angeles Times, a huge supporter of ObamaCare, concede that health care premiums in 2016 "won't simply rise, they will skyrocket." This has huge implications for the US economy, including the oil and gas industry as they start to downsize in the face of an oil glut.
It looks like folks are coming around on a newly accepted definition for full employment: about 6% unemployment. I think it's 8%.
Another huge international story: the Boston Consulting Group reports that US manufacturing costs on par with those of China due to very, very low energy prices, due to ... fracking.
The number of active rigs in North Dakota hit a new post-boom low (73) this past week, well below the high of over 200 two years ago.
RBN Energy started a nice series on refining operations in the US. A must-read.
Perhaps my favorite story this past week:
- for the past several years we've been told how inexpensive renewable energy is getting
- Minnesota is mandating ever-increasing use of renewable energy
- Minnesota's public electricity provider has requested (and was approved) it's seven electric rate hike since 2006 and more such hikes could be down the road
- ither the owners of the utility (stockholders) are getting very, very rich, or renewable energy is not as cheap as we're being told
Crude oil
Production increases 16% month-over-month in Texas; 3% in North Dakota
Despite slump in oil prices, fourteen new permits in one day, multiple operators including small ones like Thunderbird
Random update on the Hess Lodgepole well northeast of Tioga
Fracking
The octofrac
UNP sets frack sand shipment record
Random update of a re-fracked well, BR's #17118, the Remington 14-11H
Natural gas
A re-look at Bakken's natural gas production
Soaring demand for LNG
Bakken economy
Update on EPD bid to buy WMB
The Williston Wire: Williston has North Dakota's largest walk-in humidor; new restaurant in Wildrose (only restaurant in 30-mile radius; construction on Williston's new airport to begin next spring
Taxable sales, first quarter for the past six years
Bakken 101
Random example of NDIC oversight, siting of pumps
Photography
Whitten Log
BP's Annual Statistical Review Of World Energy, 2015 -- July 11, 2015
This is really cool. From last year, almost this same date, the world had 53.3 years of oil left at current rates of consumption -- BP. One year later: 52.5 years of oil left at current rates of consumption -- BP.
On a straight line of decline, there should have been 52.3 years of oil left at this point, but at 52.5 years, we have a bit longer before we run out. Prognostication: when the 2016 report comes out, the time left should be better than expected with a) poor economy (less energy use); and, b) all that Bakken oil that's been left in the ground waiting for higher prices. Just a little levity on a Saturday morning.
I can't recall if I've linked the BP's 2015 Statistical Review of World Energy. A reader sent me the link. I always enjoy the BP annual review. It appears to report the data with no hidden agenda. Over the years it's been one of the resources that has keep me bullish on fossil fuel.
Among the many, many pages and many, many PDFs that can be viewed and/or downloaded from the 2015 annual assessment, the "outlook in brief" might be as good as any spot to start. I've only read the report on that page; I have not watched/listened to the video, but there is glaring "omission" in the "outlook in brief."
So:
To help me keep track:
Wind: maintaining rapid growth, wind power generating capacity grew by 16.2% in 2014, with capacity increasing by 52GW to reach 373GW by the end of 2014.
Solar: new installations totaling 40.2 GW in 2014 took global solar power generating capacity to 180 GW by year-end, a 28.7% increase versus the end of 2013. Capacity has more than quadrupled in the past four years
Electricity, a bit surprising, reflects current economic conditions: Growth was down on 2013 (2.7%) and remained well below the ten year trend (3.0%). OECD electricity declined by -0.8%, falling for the second year in a row. Non-OECD electricity grew by 3.6%, slower than 2013 (5.5%) and well below the ten year trend (5.9%). Electricity generation grew in all regions except Europe & Eurasia, where it declined by 1.6%. China (+4.0%) and the US (+0.7%) remain the largest and second largest electricity generators, India (+9.6%) is third while Russia (+0.5) overtook Japan (-2.4%) in 2014 to take fourth place. Global electricity generation: 23,636.52 terrawatt hours.
Coal, read this one closely, lots of hidden data in this one 30-second soundbite: Consumption outside the OECD grew by 1.1%, the weakest growth since 1998, driven by a flattening of Chinese consumption (+0.1%). Ukraine (-20.2%) and the UK (-20.3%) posted significant declines. India (+11.1%) experienced its largest volumetric increase on record and the world’s largest volumetric increase. Consumption fell in all regions except Africa (+2.0%) and North America.
Oil: in last year's 2014 report, BP raised its reserve estimate by 1.1% to 1,687.9 billion barrels, which is enough oil to last the world 53.3 years at the current production rates. In this year's 2015 report:
Installed capacity of world's power plants (electricity) (some numbers rounded, raised a bit for my purposes):
However, this site shows significantly different numbers, and the site shows that, as of 2012, China had more capacity than the US.
Data for 2012: global total capacity = 5492 GW
On a straight line of decline, there should have been 52.3 years of oil left at this point, but at 52.5 years, we have a bit longer before we run out. Prognostication: when the 2016 report comes out, the time left should be better than expected with a) poor economy (less energy use); and, b) all that Bakken oil that's been left in the ground waiting for higher prices. Just a little levity on a Saturday morning.
I can't recall if I've linked the BP's 2015 Statistical Review of World Energy. A reader sent me the link. I always enjoy the BP annual review. It appears to report the data with no hidden agenda. Over the years it's been one of the resources that has keep me bullish on fossil fuel.
Among the many, many pages and many, many PDFs that can be viewed and/or downloaded from the 2015 annual assessment, the "outlook in brief" might be as good as any spot to start. I've only read the report on that page; I have not watched/listened to the video, but there is glaring "omission" in the "outlook in brief."
So:
- outlook in brief
- 2014 in review
- renewable power
- solar power
- wind power
- electricity, pdf : this spreadsheet is most interesting; it shows exactly when China overtook the US in electricity consumption (2010) and the change between the two countries is startling. India still represents a very small percent (especially when considered per capita, but having said that India doubled electricity consumption between 2004 an 2014
**************************
To help me keep track:
Wind: maintaining rapid growth, wind power generating capacity grew by 16.2% in 2014, with capacity increasing by 52GW to reach 373GW by the end of 2014.
Solar: new installations totaling 40.2 GW in 2014 took global solar power generating capacity to 180 GW by year-end, a 28.7% increase versus the end of 2013. Capacity has more than quadrupled in the past four years
Electricity, a bit surprising, reflects current economic conditions: Growth was down on 2013 (2.7%) and remained well below the ten year trend (3.0%). OECD electricity declined by -0.8%, falling for the second year in a row. Non-OECD electricity grew by 3.6%, slower than 2013 (5.5%) and well below the ten year trend (5.9%). Electricity generation grew in all regions except Europe & Eurasia, where it declined by 1.6%. China (+4.0%) and the US (+0.7%) remain the largest and second largest electricity generators, India (+9.6%) is third while Russia (+0.5) overtook Japan (-2.4%) in 2014 to take fourth place. Global electricity generation: 23,636.52 terrawatt hours.
Coal, read this one closely, lots of hidden data in this one 30-second soundbite: Consumption outside the OECD grew by 1.1%, the weakest growth since 1998, driven by a flattening of Chinese consumption (+0.1%). Ukraine (-20.2%) and the UK (-20.3%) posted significant declines. India (+11.1%) experienced its largest volumetric increase on record and the world’s largest volumetric increase. Consumption fell in all regions except Africa (+2.0%) and North America.
Oil: in last year's 2014 report, BP raised its reserve estimate by 1.1% to 1,687.9 billion barrels, which is enough oil to last the world 53.3 years at the current production rates. In this year's 2015 report:
Total world proved oil reserves reached 1700.1 billion barrels at the end of 2014 sufficient to meet 52.5 years of global production The largest additions to reserves came from Saudi Arabia, adding 1.1 billion barrels. The largest decline came from Russia, where reserves fell by 1.9 billion barrels. OPEC countries continue to hold the majority of the world’s reserves, accounting for 71.6% of the global total. South Central America continues to hold the highest (R/P) ratio, more than 100 years. Over the past decade, global proved reserves have increased by 24%, or over 330 billion barrels.The math:
- this year: 1,700.1
- last year: 1,687.9
- (1700.1-1687.9)/1687.9 = 0.7% increase in reserves. Not very much. Peak oil?
*****************************
Other Sites; Many Undated; Old Data
Installed capacity of world's power plants (electricity) (some numbers rounded, raised a bit for my purposes):
- US: 1,000 GW
- China: 750 GW
- Russia; 250 GW
- India: 175 GW
- Germany: 135 GW
- Brazil: 100 GW
- UK: 85 GW
However, this site shows significantly different numbers, and the site shows that, as of 2012, China had more capacity than the US.
Data for 2012: global total capacity = 5492 GW
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