Random Example Of Bakken Well Being Choked Back; Random Example Of A Great CLR Well -- November 7, 2015

NOTE: this page has caused a lot of confusion. I discuss the confusion in one of the comments below; I don't want to go through it all again.  I recommend folks a) ignore the entire page; b) pay attention to the raw data and ignore my comments and subject lines; and/or c) read everything at your own risk. The comments might help. 

Note, July 30, 2016: I now see why this page caused so much confusion. The production profile was apparently incorrect.  

Updates

November 23, 2016: production profile update --

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	9-2016	30	8873	8165	17440	7022	6324	698
BAKKEN	8-2016	0	0	0	0	0	0	0
BAKKEN	7-2016	0	0	0	0	0	0	0
BAKKEN	6-2016	0	0	10	0	0	0	0
BAKKEN	5-2016	2	75	65	324	37	34	3
BAKKEN	4-2016	0	0	0	0	0	0	0
BAKKEN	3-2016	0	0	24	0	0	0	0
BAKKEN	2-2016	4	282	730	614	164	157	7
BAKKEN	1-2016	31	5454	5325	12385	4045	3854	191
BAKKEN	12-2015	19	4235	4266	9802	3096	3057	39
BAKKEN	11-2015	17	3016	2950	8737	2318	2204	114
BAKKEN	10-2015	27	6851	6543	13642	4505	4004	5

July 30, 2016: it looks like the original production profile was incorrect, and has been updated since originally reported. See production profile in original post. This is the updated production profile:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2016	0	0	10	0	0	0	0
BAKKEN	5-2016	2	75	65	324	37	34	3
BAKKEN	4-2016	0	0	0	0	0	0	0
BAKKEN	3-2016	0	0	24	0	0	0	0
BAKKEN	2-2016	4	282	730	614	164	157	7
BAKKEN	1-2016	31	5454	5325	12385	4045	3854	191
BAKKEN	12-2015	19	4235	4266	9802	3096	3057	39
BAKKEN	11-2015	17	3016	2950	8737	2318	2204	114
BAKKEN	10-2015	27	6851	6543	13642	4505	4004	501
BAKKEN	9-2015	17	2549	2663	7966	1846	1706	140
BAKKEN	8-2015	31	5428	5604	14561	3419	2996	423
BAKKEN	7-2015	29	10605	10431	18830	11016	8365	2651
BAKKEN	6-2015	6	1200	1344	2481	0	0	0
BAKKEN	5-2015	5	3096	3179	4393	2244	1805	439
BAKKEN	4-2015	24	10551	10534	14475	8694	7148	1546
BAKKEN	3-2015	30	17169	16883	26028	57332	13106	44226
BAKKEN	2-2015	17	11060	10953	17569	9615	8980	635
BAKKEN	1-2015	31	5388	5307	6267	3942	3685	257

November 8, 2015: I'm being told that this well is not being "choked back" as suggested by the title; water and natural gas are still being produced. I'm confused. It won't be the first time (that I'm confused).

November 8, 2015: see first comment. Reader wonders how a well that is producing water after six months produces absolutely no oil? One would think that some oil would come up with the water. I couldn't provide satisfactory answer; maybe someone out there knows. It has to be a simple answer.

Original Post

Note the production profile for this well:

• 26485, 3,454, Statoil, Hawkeye 16-21 3H, Todd, 34 stages, 5.9 million lbs, t1/15; cum 17K 9/15;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	9-2015	17	0	0	7966	1846	1706	140
BAKKEN	8-2015	31	0	0	14561	3419	2996	423
BAKKEN	7-2015	29	0	0	18830	11016	8365	2651
BAKKEN	6-2015	6	0	0	2481	0	0	0
BAKKEN	5-2015	5	0	0	4393	2244	1805	439
BAKKEN	4-2015	24	0	474	14475	8694	7148	1546
BAKKEN	3-2015	30	17169	16695	26028	57332	13106	44226
BAKKEN	2-2015	17	0	0	17569	9615	8980	635
BAKKEN	1-2015	31	0	0	6267	3942	3685	257

*************************

Random example of a great CLR well:

• 27564, 1,235, CLR, Holstein Federal 2-25H, Elm Tree, 40 stages, 4 million lbs, t2/15; cum 180K 9/15;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	9-2015	30	22198	22368	4018	27596	26392	1204
BAKKEN	8-2015	31	19512	19459	2524	19752	12130	7622
BAKKEN	7-2015	31	30482	30535	6024	37990	36782	1208
BAKKEN	6-2015	30	32301	32443	6513	43892	43622	270
BAKKEN	5-2015	31	24112	23865	3988	27484	27243	241
BAKKEN	4-2015	30	12868	12830	1280	13628	11772	1856

******************************

Update On A Wildcat

28571, dry with plans to P&A, Roff Operating Company, Osterberg 2-16 H1, wildcat, far north, and east, about 6 miles northwest of Mohall, near Little Deep Creek oil field, a Madison formation area; if a good well, might extend Little Deep Creek east, no production data; very, very interesting -- the geologist's report states that the target was the middle Bakken; that the wellbore entered the middle Bakken target at 6,350 feet (shallow); oil present; gas values ranged between 50 and 100; the dipping suggests that anticlinal oil trapping structures could exist and be exploited; awaiting fracture/completion; spud August 20; ceases drilling September 13; total drilling days, 26; short lateral (640 acres); [Update: stimulated 5/15; 15 stages; 152K sand; many, many problems with the well, plan to P&A this well]. Mohall is near the Canadian border, about 50 miles NNE of Minot, ND; very little Bakken activity in this area

*************************************
High Volume, High Density Frack
Huge Production
SHD Well On Fort Berthold Indian Reservation

I track the Deep Water Creek Bay here, though it has not been updated in quite some time (I will do that when I find some time, if the spirit moves me).

Note number of stages and amount of proppant (62 stages, 15.3 million lbs); also note total production to date (>211K bbls)

• 19296, 2,388, SHD Oil & Gas, Golden 22-31H, Deep Water Creek Bay, 62 stages, 15 million lbs sand, spacing ICO, t3/15; cum 365K 5/16;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	9-2015	30	13597	13731	27738	10789	0	10789
BAKKEN	8-2015	31	17615	17237	12474	35799	0	35799
BAKKEN	7-2015	31	18846	18416	29250	13299	0	13299
BAKKEN	6-2015	30	21452	20597	29348	14637	76	12971
BAKKEN	5-2015	31	27545	27019	40307	17610	15838	129
BAKKEN	4-2015	30	30953	29896	46226	21505	16776	3139
BAKKEN	3-2015	31	50914	48348	68728	39880	2189	36048
BAKKEN	2-2015	23	30105	29502	70346	23000	0	23000

Random Update On CAPEX Cutbacks For 2016 -- November 7, 2015

Reuters/Rigzone provides some CAPEX cutbacks for 2016 in the shale oil industry. There is nothing new here that regular readers wouldn't already know, but Reuters puts it together in one place for a few companies. Some excerpts:

Top shale companies including Devon Energy Corp, Continental Resources Inc and Marathon Oil Corp this week released preliminary 2016 plans for capital spending that may fall by double digits.

Devon said it expects to spend $2 billion to $2.5 billion on exploration and production next year, down from about $4 billion this year.

Marathon Oil is cutting about $1 billion from its projections.

Oasis Petroleum Inc, which produces oil in North Dakota, said it expects to spend $350 million in 2016 on drilling and completion of new wells, roughly $200 million below what it plans to spend for those services this year.

Continental Resources, North Dakota's second-largest oil producer, said it will need to spend $1.5 billion to $1.6 billion next year to maintain output of roughly 200,000 barrels of oil equivalent per day. That would be less than half the roughly $3.4 billion the company expects to spend this year.

*************************************

Sam Phillips Book Review Over At The Wall Street Journal

Link here.  

Though he is acclaimed by his biographer as “The Man Who Invented Rock ’n’ Roll,” readers may still need some introduction to Sam Phillips.

Born in Florence, Ala., in 1923, Phillips moved to Memphis after World War II and got into the music business. As operator of a recording studio and later a record company, he discovered Howlin’ Wolf, Elvis Presley, Johnny Cash and Jerry Lee Lewis and made some of the earliest recordings of B.B. King and Ike Turner, including the 1951 song that some buffs consider the big bang in rock history, “Rocket 88.”

Phillips’s biographer may require less of a primer. Peter Guralnick is known for his decorated two-part chronicle of Elvis Presley’s life and his reverent but thorough fan-friendly style.

“Sam Phillips” represents his most personal foray into American music. Mr. Guralnick knew Phillips for 25 years and spent nearly a decade after Phillips’s death in 2003 writing his story. That’s longer than most rock ’n’ roll marriages. Mr. Guralnick shares his love for Sam early in the book, and Phillips clearly held up his side of the deal, sharing intimate details and private documents.

Obviously, much more at the link.

If there is a better DVD on Sam Phillips or Sun Records, I would love to know. And yes, the Muscle Shoals DVD is still the best.  

Fracking Led To A Lot Of Jobs -- Reuters -- November 7, 2015

Reuters/Rigzone is reporting:

A U.S. oil and gas drilling boom fueled by hydraulic fracturing technology added about 725,000 jobs nationwide between 2005 and 2012, blunting the impact of the financial crisis.

The findings could play into a debate over so-called fracking, in which water, sand and chemicals are injected into underground shale formations to produce oil and gas reserves that were otherwise inaccessible. 

I doubt this study will sway President Obama one way or the other. I haven't seen anything from this administration which suggests it is actually concerned about American jobs. 

By the way, perhaps the study mentioned this also, but if not, remember: these were high-paying jobs. The average income in Williston, North Dakota, was last reported to be $80,000; the national average is $72,000.

*****************************

Berkshire Hathaway

Net Income More Than Doubled From A Year Earlier

From Reuters, November 6, 2015, some data points:

• quarterly profit doubled to a record high, reflecting a huge gain on its stake in Kraft Heinz 
• 3Q15 net income rose to $9.43 billion, or $5,737 per Class A share, from $4.62 billion, or $2,811, a year earlier
• among Berkshire's larger businesses
• profit fell 34 percent from insurance underwriting to $414 million;
• rose 12 percent at the BNSF railroad to $1.16 billion; and, 
• rose 13 percent to $786 million at Berkshire Hathaway Energy
• Warren is a "buy and hold" kind of guy: Berkshire said it had lost $2 billion on its IBM stock, or 15 percent of what it paid but still has "no intention" of selling its shares

Also, Berkshire disclosed it bought a bunch of rolling stock for $1 billion:

Berkshire Hathaway Inc. said the price for the railroad assets it agreed to buy from General Electric Co. in September was about $1 billion.

Marmon Holdings, a unit of Buffett’s company, acquired about 25,000 tank cars and other equipment from GE in the deal.

Wells Fargo & Co., the world’s largest bank by market value, agreed to buy the bulk of a railcar- and locomotive-leasing unit from GE in September as the industrial giant retreats from financial services. The Berkshire and Wells Fargo deals dismantle what was General Electric Railcar Services LLC, a $4 billion-asset business that leases freight and tank cars and offers loans and maintenance services.

This $1 billion deal to buy 25,000 tank cars wasn't widely known until November 9, 2015, when the Bloomberg article was reposted over at Yahoo!Finance. Many of the comments are right in line with what many are thinking: Obama kills the Keystone after Buffett makes the purchase.

Reader Requests Assistance -- November 7, 2015

Updates

November 9, 2015: see comments. First step: determine if these are "fee minerals" or not. Second step: contact an attorney well versed in oil and gas and estate law in North Dakota.
 

Original Note

 

A reader has recently become involved with the family's estate that includes mineral acres on federal land -- Fort Berthold Indian Reservation -- in the state of North Dakota.

The reader has asked if there is a resource that would help him/her navigate the federal rules as they pertain to the oil and gas industry in the state.

I provided my two-cents worth and was going to leave it at that, but thought maybe someone out there might have some ideas. Comments can be provided anonymously, and my e-mail address is available somewhere at the blog.

Connecting The Dots With Regard To An Expensive Wind Farm The Philippines Cannot Afford -- And They Can't Afford Not To -- November 7, 2015

Comment: I'm going to re-post / link two stories that I have already posted. I failed to connect the dots, and this makes the links an even bigger story.

Three givens:

• supply: the center for gravity for fossil fuel is moving from the Mideast to the Midwest, from Saudi Arabia to the North American midwest corridor from Alberta through North Dakota and Oklahoma and down to Texas and Mexico
• consumption: the big growth opportunities for fossil fuel demand will be Asia
• Europe will be the first continent to become a net importer of oil

A new story that is developing: a major Asian supply of oil is likely coming to an end, literally running out.

When it looked like the US was going to run out of affordable energy, back in the 1980s and 1990s, it provided the opportunity for all those science projects to be considered: wind energy, solar energy, biofuels, ethanol, algae-oil, Willie Nelson used cooking oil, etc. But there is no longer any need for those science projects in the US.

However, it appears one Asian country (and there may be others) that are in the same place the US was several years ago when science projects made sense.

That country is the Philippines.

The other day I posted a story about an incredibly expensive wind farm going up in the Philippines. A country like the Philippines is in no position to put up a wind farm unless there's a lot of corruption (probably) and they see a real shortage of affordable fossil fuel in the out years. Is it possible that the Philippines sees the possibility of a real shortage of affordable fossil fuel and are taking steps now to meet the needs of their growing population and that's why they are investing in wind energy, just as the US did when it looked like Peak Oil was real? [Update, November 24, 2015: that's exactly right -- see this post from November 24, 2015 -- yes, natural gas field that the Philippines relies on will be depleted by 2024.]

This is the dot I failed to connect:

Indonesia: And then this Reuters/Rigzone story on Indonesia:

Indonesia's state-owned energy firm Pertamina plans to process more domestic crude oil in a bid to limit the impact on the country of declining production, a plight that is also affecting oil-rich neighbours Malaysia and Brunei.

All three countries, which rely heavily on energy revenues, are running out of oil. Reuters research based on government, industry and consultancy data shows they could run dry within the next 25 years.

By the way, Indonesia, Malaysia, and Brunei don't have to run out of oil to start affecting countries like the Philippines. Their production only has to drop far enough that they require all of it for domestic needs (similar to what is starting to happen in Saudi Arabia).

I don't know where the Philippines gets its oil but I assume it's very likely they get a lot from Indonesia.

Regardless, wherever the Philippines gets its oil, it is getting it from the same spot that China is probably sourcing its own imported oil. If I were the Philippines, I would hate to have to compete with China (for anything). [By the way, California is also vying for that same oil. The Philippines are competing with both China and California for oil.]

The story has been there for several years, but I only noticed it today. Previous links at the blog:

• Here's another Sad Sack story for Indonesia, July 7, 2015.
• From Jack Kemp, October 7, 2015: Indonesia's total primary energy consumption grew by 43% between 2003 and 2013.
• Both XOM and MRO are exiting Indonesia, either completely or in bits and pieces.
• Bloomberg reported back in October, 2013, that coal would replace natural gas as the dominant fuel for producing electricity in southeast in the near future.

That's enough, but I will end with one last link, which might be one of the most interesting, why the Philippines which cannot afford wind, but can afford coal, is building expensive wind farms. Yes, the trail leads back to our own President Obama. He will leave the world in worse shape then when he found it when he became president of the United States. Not many presidents can put that on their resume.