Week 37: September 13, 2015 -- September 19, 2015

This has been a very interesting week for those who enjoy reading tea leaves. There are reports out there that clearly suggest Saudi Arabia is ready to ... well, I don't know what they are ready to do ... apparently they have clearly stated that they have destroyed the US shale gas industry, but I don't know what that means for Saudi Arabia. The production numbers coming out of the Bakken and the number of new permits this past week certainly doesn't suggest the Bakken is dead. But in the big scheme of things, I suppose, not much has changed, and most of us still think it's going to get much worse before it gets better.

Graphics
Monthly US crude oil production 
Daily production -- must see 

Operations
EOG's Riverview sets a new Bakken record
EOG update and Zeits' update on the Bakken in general
Director's Cut: ND production unchanged (down 0.8%) month-over-month

Pipelines
Is the Sandpiper dead?

Bakken economy
Western North Dakota television market one of the fastest growing in the US 
Direct air flights from Fargo to Seattle in the works
Ports-To-Plains conference to be held in Williston, October 6 - 8, 2015; also here

Miscellaneous
Samson Resources files for bankruptcy protection  
Whiting can survive on $50 oil - Zeits

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.... and yes, I think the book in the foreground is upside down...

Was The Sandpiper Keystoned? -- September 18, 2015

I'm not sure what this means, but it seems concerning. WDIO is reporting:

The Minnesota house speaker is questioning whether the Dayton administration quietly supported environmental groups fighting the Sandpiper Oil Pipeline.

The Minnesota Court of Appeals reversed a decision by state regulators to grant a "certificate of need" for the Sandpiper Oil Pipeline.

Here's more of the background, as reported by the Park Rapids Enterprise:

A judicial panel overturned a state commission decision that a crude oil pipeline across Minnesota is needed, at least until the project's environmental impact can be studied.
It was not immediately clear what impact Monday's Minnesota Appeals Court decision could have on construction of the Sandpiper pipeline.

The decision means that the Minnesota Public Utilities Commission cannot issue a "certificate of need" to a subsidiary of Enbridge Energy Partners until the environmental study is complete. The PUC on June 5 voted to issue the certificate that the court now has overturned.

There was no immediate response from Enbridge or the PUC about how the ruling will impact the pipeline construction timetable or whether Monday's decision will be appealed to the state Supreme Court.

So, it's dead.

The crude oil unit trains will keep rolling through Minneapolis-St Paul. 

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And So Is Minnesota

Link here.

Typical wages in Minnesota and across the country remain flat despite a low unemployment rate and economy that's largely recovered from the recession, according to new data released by the U.S. Census Bureau Thursday. The numbers point to continued income equality in the state and nation, largely based on race.

The median household income in Minnesota was $61,481 in 2014. That's just $30 more than the 2013 numbers and only slightly up from the 2010 household income.
Minnesota also continues to struggle with racial income disparities. The median household income for whites ($61,481) and Asians in Minnesota is twice that of African-American households ($27,026). American Indian households also had less income, with median earnings of $32,764 (casinos?).

Median household incomes for whites in the state rose almost $7,000 between 2010 and 2014 while household income for black or African-American residents rose just over $150.

The median household income for African-Americans in Minnesota dropped by almost $4,000 between 2013 and 2014, according to the Census data.

"There remains to be a lot of individuals in our economy that are not experiencing the kind of improvement that even these kinds of overall figures would suggest," Hine said.

The poverty rate for African-Americans has increased by 5 percent in Minnesota, or about 20,000 people. The new data shows that about 113,000 black Minnesotans now live below the poverty line. 

But "no" on jobs if connected to Big Oil.  But $15 / hour for those flipping burgers.

Seventeen (17) New Permits -- North Dakota, September 18, 2015

Active rigs:

	9/18/2015	09/18/2014	09/18/2013	09/18/2012	09/18/2011
Active Rigs	67	199	180	194	199

Seventeen (17) new permits --

• Operators: BR (7), MRO (6), Whiting (3), Oasis, 
• Fields: Corral Creek (Dunn), Reunion Bay (Mountrail), Banks (McKenzie), Missouri Ridge (Williams),
• Comments: 

Five (5) permits were renewed, including --

•  one by Cornerstone (a Tafelmeyer in Burke County), two by Enduro (both in Bottineau County); and, two by EOG (both Austin wells in the Parshall oil field, Mountrail County).

One (1) producing well was completed --

• 29889, 109, Enduro, LDCMU 9-32-H1, Little Deep Creek, a Madison well, t9/15; cum --

Comments: for all I know, by this time next year, the Bakken will be dead and abandoned having succumbed to the Saudi surge in production, seventeen (17) new permits in one day does not seem to suggest the Bakken operators have called it quits. In addition to the number -- 17 new permits -- it's important to note that the permits involved four different companies (and did not include CLR SM eenrgy, or EOG, among others still active in the Bakken). Also, note that the permits were across all four major Bakken counties (Mountrail, Dunn, Williams, and McKenzie) and in four different fields. A reminder to newbies: once permits are granted, it is the state's expectation that the wells will be drilled within 12 months, and many companies move much more quickly. In the current pricing environment and considering that most of the Bakken is "held by production," these companies are not permitting wells for the "fun of it." They are in survivor mode and every action speaks volumes. All well there has been a good showing of new permits, but seventeen in one day should catch your attention. Maybe the NDIC folks got these out of the way so they could go hunting next week.

Update On A Record Well In The Bakken -- September 18, 2015

Updates

January 2, 2015: production updated --

30286, 1.974, EOG, Riverview 102-32H, Antelope, s3/16/15; TD 3/20/15; MD 15,564', TVD 10,523'; short lateral, 23 stages, 12.8 million lbs, 320-acre spacing, W/2 sect 29-152-94, t6/15; cum 271K 11/15; 

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
SANISH	11-2015	22	23234	24173	7765	67426	0	64716
SANISH	10-2015	31	39211	39182	10746	82984	53058	26345
SANISH	9-2015	30	45634	45278	11980	81474	56321	21521
SANISH	8-2015	23	39587	39590	11087	70189	10574	59278
SANISH	7-2015	31	86922	87531	22132	178373	0	177874
SANISH	6-2015	22	36401	35152	11454	346	0	0

From a sundry form: EOG is selling this crude oil to Shell Trading (US) Company at the lease. Shell will use Prairie Field Service as the crude transporter. Effective October 1, 2015.

From a sundry form: EOG is selling this crude oil to Enterprise at the lease. Enterprise will use Big Lease Trucking to transport the crude. Effective November 1, 2015.
There was vegetation fire in the area; well was shut in during a few days in August, 2015.

From a sundry form: "In order to increase frac volumes, EOG respectfully requests authorization to increase the hole size and lay 5 1/2" liner as described in the Preferred Option.

Original Post

I'm going to quit blogging! I have seen something so incredible, I cannot even get my hands around it as they say. This is so incredible. I thought I was overly exuberant about the Bakken, but I have been overly conservative. A reader brought this to my attention. This well is still on confidential status but look at the production in the first full month (for newbies, a well that produced 50,000 bbls in the first year back in 2007 was considered a good Bakken well. This well produced almost 100,000 bbls in the first month -- okay, a little hyperbole but 87,531 bbls of oil in the first full month of production.

• 30286, conf, EOG, Riverview 102-32H, Antelope, s3/16/15; TD 3/20/15; short lateral, tpending; cum -- 

Date	Oil Runs	MCF Sold
7-2015	87531	0
6-2015	35152	0

Note: this was a short lateral. I don't agree completely, but some folks feel that, all things being equal, a long lateral (two sections) should double the production of a short lateral (one section), which this one was. If so, this would have produced in excess of 150,000 bbls the first full month.

But I'm kidding. I will keep blogging. But it seems I've been way too conservative in my estimates of what the Bakken can do. I hope the roughnecks and frackers were rewarded for this incredible well. The well is still on confidential list so we don't know the completion history.

The original post on this well is linked here.

Random Update Of A Well Still Flowing Since Spud Six Years Ago -- September 18, 2015

The well:

• 17147, 2,101, XTO, Boucher 41X-21, Hofflund, t4/09; F; cum 690K 7/15;

This is a Three Forks well. There are some minor sundry forms but the last major sundry form was dated March 23, 2009. No work on this well since -- or at least not enough work to require a report. It is still flowing at 5,000 bbls per month. Very little water being produced. Multiple payzones were evaluated when drilling this well; middle Bakken was felt to be economical. Gas readings while drilling gradually increased to 750 to 10,000 units; it was noted that the "abnormally high readings while drilling the lateral tangent to casing point may have been due in part to the close proximity to the recently frac'd DeAngelis 41X-21. For most of the lateral, the high volume of gas required the mud to be diverted through the gas buster, resulting in consistently strong flares. Extremely stron glares, at times exceeding 50 feet, were observed with trip gas and downtime gas kicks." It was a challenge to control the gas.

Open hole frack with 900,000 lbs of sand in six stages.

Sometimes paperwork fails to catch up with what is happening in the field; in this case I do not see any evidence this well is on a pump.

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Unemployment

Wow, this article has some interesting data points. This one caught my eye. Despite a gazillion dollars in stimulus and eight years into the recovery, 36 states -- thirty-six states -- have higher unemployment now than they did prior to the onset of the great recession. Thirty-six states. For most of us, there are only 50 states (for the president, there are 57 states.)

Sinclair says that 36 states still have higher unemployment rates than they did before the Great Recession began in December 2007. And 14 have rates much higher than the 5 percent that the Fed says is consistent with a healthy economy, including Alabama, Arizona, California and North Carolina.

Another lost decade.

The writers were quick to point out that despite the bust in the Bakken boom, North Dakota's unemployment rate dropped to 2.9%, down from 3.0% in the previous month.

The article noted:

Still, North Dakota, which has benefited from a boom in oil and gas drilling, is one of three states to lose jobs in the past year. The other two are West Virginia and Alaska.

By the way, West Virginia is reeling due to the war on coal and won't recover in my lifetime, but the state will still continue to vote for Obama environmentalists.

North Dakota has the second lowest unemployment rate -- not the lowest -- and is second to that industrial state of the midcontinent, Nebraska, even though Nebraska's unemployment rate rose from 2.7% to 2.8%.