Wednesday, March 2, 2016

Bakken-Brent Spread And US Crude Oil Imports -- March 2, 2016

Two connecting dots.

First, this from the weekly EIA report:
The Bakken crude oil spot price discount to Brent averaged $8 per barrel (b) in August 2015. It narrowed to average only $2/b in November 2015, and by January 2016 averaged $1.69/b (Figure 1). The narrower the spread between domestic and imported international crude, the more likely costal refineries will choose to run imported crudes rather than domestic supplies shipped via rail.
Second, from John Kemp's tweets earlier today:
US weekly crude oil imports were running at some of the highest rates in two years this past week. 
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Connecting Dots

Nursery Rhyme Rock, Wynona Carr

I was listening to that song when I was distinctly reminded of a "modern day" rockabilly singer, but I couldn't remember who that was.

This next video let me to her:

Finders Keepers, Wynona Carr

This is the rockabilly singer:

Finders Keepers, Tom Stormy Trio
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EIA: Update On CBR, From The Bakken To The Three Coasts -- EIA -- March 2, 2016

Updates

March 26, 2016: see these two recent stories also with regard to Bakken CBR:
Original Post
 
Note: see first comment -- the EIA makes it very, very easy to find past articles. 

This had a dynamic link which suggested this link might be broken. [I am wrong: see first comment -- the EIA makes it very, very easy to find past article.]

It's a nice update for a number of reasons, especially for the archives. The entire article is re-posted here.

Rail still moves crude from the Midwest to coastal regions, but in smaller volumes.
The movement of crude by rail (CBR) within the United States, including intra-Petroleum Administration for Defense Districts (PADD) movements, reached 928,000 barrels per day (b/d) in October 2014, with most of the shipments originating in the Midwest (PADD 2) and going to the East Coast (PADD 1), West Coast (PADD 5), and Gulf Coast (PADD 3). Since October 2015, CBR volumes have declined as production has slowed, crude oil price spreads have narrowed, and pipelines have come online.

The economics of CBR flows depend largely on significant domestic crude discounts compared with international crudes. As domestic crudes that price in the Midwest, such as West Texas Intermediate (WTI) and Bakken, are no longer at large discount to waterborne crudes such as North Sea Brent, there is less of a cost advantage for costal refineries to run the domestic crudes.

The Bakken crude oil spot price discount to Brent averaged $8 per barrel (b) in August 2015. It narrowed to average only $2/b in November 2015, and by January 2016 averaged $1.69/b (Figure 1). The narrower the spread between domestic and imported international crude, the more likely costal refineries will choose to run imported crudes rather than domestic supplies shipped via rail.



Crude supplies carried by rail from the Midwest to the East Coast (PADD 2 to PADD 1) continue to be the largest rail movement, accounting for 50% of total CBR moved within the United States in December 2015, the latest month for which data are available.

However, this flow has been trending downward since reaching 465,000 b/d in April of last year. With a narrowing price spread between domestic and imported crude oil, PADD 1 rolling four-week average crude oil imports increased to 973,000 b/d for the week ending February 19 compared with 797,000 b/d five weeks earlier. This is consistent with trade press reports of increased imports of West African crudes by East Coast refiners in recent months. Increased runs of imported crude in PADD 1 have reduced the need for CBR shipments to that region.

The next largest CBR movement is from PADD 2 to PADD 5, which typically goes to refineries in the Pacific Northwest. While movements from the Midwest to the West Coast fell in the early part of 2015 during planned and unplanned refinery outages, deliveries resumed when refineries restarted in late spring. The West Coast received an average of 139,000 b/d of crude oil by rail from the Midwest in 2015, roughly comparable with 2014 levels. Despite narrowing domestic and imported crude price spreads, CBR flows to PADD 5 continued as refinery outages and supply tightness, specifically in California, increased gasoline crack spreads last summer, prompting increased refinery runs. The increased runs allowed PADD 5 crude oil imports and CBR flows to increase simultaneously, as PADD 5 imports increased to 1.2 million b/d in September 2015, including 38,000 b/d by rail from Canada, while crude supply from PADD 2 via rail set a new high of 182,000 b/d.

CBR from the Midwest to the Gulf Coast (PADD 2 to PADD 3) formed the largest inter-PADD rail movement from 2011 to 2013. Midwest-to-Gulf Coast rail movements started to decline in the second half of 2013 as new and expanded pipeline capacity came online, beginning with the Enterprise Product Partners Seaway Pipeline reversal. As additional pipeline capacity was added throughout 2013-15, CBR movements to the Gulf Coast from the Midwest continued to decline, dropping to 38,000 b/d in December 2015, 75,000 b/d less than in the previous year. Other crude producing regions, such as the Niobrara crude from PADD 4 (Rocky Mountains) and Permian Basin crude from PADD 3 (Texas and New Mexico) also experienced growth in pipeline takeaway capacity to the Gulf Coast refining centers, reducing the need for railed crude supply from PADD 2 (Figure 2).


Continued pipeline takeaway expansions and interconnections with existing pipelines in crude-producing regions such as the Bakken and the Gulf Coast will further reduce the need for intra-PADD rail flows within the Midwest and the Gulf Coast, as well as inter-PADD rail flows from the Midwest to the Gulf Coast. However, no crude oil pipeline infrastructure currently exists to move crude to the East and West coasts from the Midwest. Therefore, future CBR flows to the coasts will depend on the price dynamic between domestic and international crudes, as well as any long-term contractual volume commitments made by refiners.
U.S. average retail regular gasoline and diesel fuel prices increase
The U.S. average retail regular gasoline price increased five cents from the previous week to $1.78 per gallon on February 29, down 69 cents from the same time last year. The Midwest price rose 11 cents to $1.72 per gallon. The West Coast price increased seven cents to $2.21 per gallon. The Gulf Coast and Rocky Mountain prices each rose three cents to $1.56 per gallon and $1.70 per gallon, respectively. The East Coast price increased less than a penny to $1.74 per gallon.

The U.S. average diesel fuel price increased one cent from the prior week to $1.99 per gallon, down 95 cents from the same time last year. The Rocky Mountain and Midwest prices each rose two cents to $1.88 per gallon, and $1.94 per gallon, respectively. The West Coast price increased by a penny to $2.19 per gallon. The Gulf Coast price increased by less than a penny to remain virtually unchanged at $1.87 per gallon.
Residential heating fuel prices decrease
As of February 29, 2016, residential heating oil prices averaged just under $2.09 per gallon, less than 1 cent per gallon lower than last week and $1.20 per gallon lower than last year's price for the same week. The wholesale heating oil price this week averaged $1.13 per gallon, 3 cents per gallon higher than last week and $1.24 per gallon lower than a year ago.
Residential propane prices averaged nearly $2.03 per gallon, less than 1 cent per gallon lower than last week and 34 cents per gallon lower than one year ago. Wholesale propane prices averaged 51 cents per gallon, 4 cents per gallon higher than last week and 27 cents per gallon lower than the price last year.
Propane inventories fall
U.S. propane stocks decreased by 3.7 million barrels last week to 63.1 million barrels as of February 26, 2016, 8.0 million barrels (14.5%) higher than a year ago. Gulf Coast and Midwest inventories decreased by 2.3 million barrels and 0.6 million barrels, respectively, while East Coast and Rocky Mountain/West Coast inventories each decreased by 0.4 million barrels. Propylene non-fuel-use inventories represented 4.6% of total propane inventories.

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Random Look At Zavanna's Tomahawk Wells In East Fork Oil Field -- March 2, 2016

A closer look at the four Zavanna Tomahawk wells in the East Fork oil field. A single well (#23115) was drilled back in 2012. In 2014, a 3-well pad was drilled about 150 feet to the northeast (#28431 - #28433, inclusive).

In a long note like this there will be typographical and factual errors; if this is important to you, go to the source, NDIC and FracFocus.

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  • 28431, A, Zavanna, Tomahawk 10-3 2TFH, East Fork, upper Three Forks, 28' thick; stimulated 9/11/15; 35 stages; 6 million lbs; no test date, s7/14; cum 10K over 2.5 months; stand-alone post later;
NDIC File No: 28431     API No: 33-105-03530-00-00     CTB No: 223115
Well Type: OG     Well Status: A     Status Date: 11/4/2015     Wellbore type: Horizontal
Location: SWSE 10-155-99     Latitude: 48.256711     Longitude: -103.397738
Current Operator: ZAVANNA, LLC
Current Well Name: TOMAHAWK 10-3 2TFH
Elevation(s): 2224 KB   2199 GR   2199 GL     Total Depth: 20650     Field: EAST FORK
Spud Date(s):  7/7/2014
Completion Data
   Pool: BAKKEN     Perfs: 11459-20586     Comp: 11/4/2015     Status: F     Date: 11/4/2015     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 10226     Cum MCF Gas: 6568     Cum Water: 124863
Monthly Production Data:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-2016313482332334892000
BAKKEN12-201512211120641567024421891372
BAKKEN11-20152946334267688114056360816
BAKKEN10-2015200549070040

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  • 28432, A, Zavanna, Tomahawk 10-3 3H, East Fork, a middle Bakken, 36 stages, 6 million lbs;  no IP, stimulated 9/1/15; s7/14; cum 64K over 3 months; 
NDIC File No: 28432     API No: 33-105-03531-00-00     CTB No: 223115
Well Type: OG     Well Status: A     Status Date: 11/5/2015     Wellbore type: Horizontal
Location: SWSE 10-155-99        Latitude: 48.256711     Longitude: -103.397615
Current Operator: ZAVANNA, LLC
Current Well Name: TOMAHAWK 10-3 3H
Elevation(s): 2224 KB   2199 GR   2199 GL     Total Depth: 20790     Field: EAST FORK
Spud Date(s):  7/2/2014
Completion Data
   Pool: BAKKEN     Perfs: 11327-20713     Comp: 11/5/2015     Status: F     Date: 11/5/2015     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 64022     Cum MCF Gas: 38160     Cum Water: 87019
Monthly Production Data:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-201629276582630231260000
BAKKEN12-2015271484614320200771499914282315
BAKKEN11-20152621518198203228622851172575207
BAKKEN10-201520033963100280

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  • 28433, 0 (no typo), Zavanna, Tomahawk 10-3 4TFH, East Fork, a middle Bakken according to stimulaton sundry form but likely a typo since rest of file suggests a Three Forks well, 40 stages, 7.4 million lbs; stimulated 10/22/15; cum 70K over 3 months; 
NDIC File No: 28433     API No: 33-105-03532-00-00     CTB No: 223115
Well Type: OG     Well Status: A     Status Date: 11/8/2015     Wellbore type: Horizontal
Location: SWSE 10-155-99    Latitude: 48.256711     Longitude: -103.397492
Current Operator: ZAVANNA, LLC
Current Well Name: TOMAHAWK 10-3 4TFH
Elevation(s): 2224 KB   2199 GR   2199 GL     Total Depth: 21330     Field: EAST FORK
Spud Date(s):  6/30/2014
Completion Data
   Pool: BAKKEN     Perfs: 11440-21265     Comp: 11/8/2015     Status: GL     Date: 12/2/2015     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 70440     Cum MCF Gas: 69809     Cum Water: 77782
Production Test Data
   IP Test Date: 10/22/2015     Pool: BAKKEN     IP Oil: 0     IP MCF: 506     IP Water: 1396
Monthly Production Data:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-201631193131850119714000
BAKKEN12-20153129380279693203641880337987620
BAKKEN11-201519217472003122740269861430012403
BAKKEN10-201540032929430883

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  • 23115, 773, Zavanna, Tomahawk 10-3 1H, East Fork, a middle Bakken, 35 stages, 4 million lbs; t9/12; cum 280K 1/16;
NDIC File No: 23115     API No: 33-105-02665-00-00     CTB No: 223115
Well Type: OG     Well Status: A     Status Date: 9/13/2012     Wellbore type: Horizontal
Location: SWSE 10-155-99       Latitude: 48.256547     Longitude: -103.398152
Current Operator: ZAVANNA, LLC
Current Well Name: TOMAHAWK 10-3 1H
Elevation(s): 2222 KB   2198 GR   2200 GL     Total Depth: 20570     Field: EAST FORK
Spud Date(s):  6/25/2012
Completion Data
   Pool: BAKKEN     Perfs: 11313-20570     Comp: 9/13/2012     Status: GL     Date: 5/30/2015     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 279721     Cum MCF Gas: 425315     Cum Water: 252711
Production Test Data
   IP Test Date: 9/24/2012     Pool: BAKKEN     IP Oil: 773     IP MCF: 935     IP Water: 710
Monthly Production Data:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN1-201631629461738224000
BAKKEN12-20153133763534220151966118700499
BAKKEN11-2015133213372719045613361330
BAKKEN10-2015002440000
BAKKEN9-2015227402679349022
BAKKEN8-20153111210105411026441541395431536
BAKKEN7-201529116501142179902819027410348
BAKKEN6-2015231732715542112783046229381738
BAKKEN5-2015236601438194030532892131
BAKKEN4-20150000000
BAKKEN3-20150000000
BAKKEN2-20150000000
BAKKEN1-20150000000
BAKKEN12-20140000000
BAKKEN11-20140000000
BAKKEN10-20140000000
BAKKEN9-20140000000
BAKKEN8-20140000000
BAKKEN7-20142336943471228843983877163
BAKKEN6-20142956985706442867555902421
BAKKEN5-20141117691710149216051156285
BAKKEN4-2014213126367422774391398296
BAKKEN3-201431627861253981646328033198
BAKKEN2-20142878047201491080543357302
BAKKEN1-201431632067234084639835462390
BAKKEN12-20133169396466444777286331935
BAKKEN11-201330571363543736670650371222
BAKKEN10-20133178097785500985947516616
BAKKEN9-20132046763399406354464896252
BAKKEN8-20132247385248340468775707827
BAKKEN7-20132789868302564112948111771354
BAKKEN6-201330100031100863971428512843995
BAKKEN5-2013311118710661719115926136791785
BAKKEN4-2013301269411926833518222161061669
BAKKEN3-20133117965183001154126243232452536
BAKKEN2-20132819366199651244527750229234410
BAKKEN1-20132911833112711071816454326112761
BAKKEN12-201228163811674812386231071018912486
BAKKEN11-20123014953149521162921075185362092
BAKKEN10-201231184321852816145243581061913277
BAKKEN9-20121816353151242514121558021275

Pay zones from the geologist's report, #23115:
The potential oil producing intervals logged during the vertical were from the lower Charles Formation to the base of the Mission Canyon Formation.

They are determined by gas data, samples, and reliable offset well comparisons.

The Ratcliffe Member consists of about 100’ of interlaid deposits of dolomite, limestone, and anhydrite. This member traditionally is t he first interval to show a significant increase in gas and porosity in this field. Dark brown oil stain was also observed in sample throughout the entire interval.

The Midale Member is the basal member of Charles Formation. It generally consists of off white to gray-brown argillaceous limestone and dolomite with a few high-porosity zones. In general, the high porosity zones are near the top of the member and correlate to beds of dolomite, the remainder being limestone. Water saturation values indicate a favorable interval from 9,257’ to 9,262’.

During the curve, the primary oil-producing zones start with the Mississippian-Devonian Bakken Formation. It is comprised of two black petroliferous shale members with a silty, calcite- and dolomite- cemented sandstone middle member with some intergranular porosity.

This middle member was the target for lateral drilling on this well.

The Upper Bakken Shale Member is characterized by high gamma and consists of 20’ of black, carbon aceous and petroliferous shale with abundant pyrite. It is considered a source rock.

The Middle Bakken Member consists of three distinct lithologies, all of which are oil- producing. A siltstone interval encountered directly below the Upper Shale Member, is generally light brown to medium gray and shows spotty to even brown oil stain .

The second lithology of the Middle Bakken Member is a fossiliferous limestone (packstone). It lies directly below the siltstone and is normally about two feet thick as shown by nearby offset wells. The base of this packstone defines the upper limit of our target zone. Samples from this interval show common even brown oil staining .

The third distinct lithology of the Middle Bakken Member is silty sandstone located directly below the packstone which also contains the ideal target zone. It typically consists of silty sandstone comprised of some subangular quartz grains which are moderately cemented with calcite and dolomite. It also contains trace amounts of disseminated and nodular pyrite. The first 2’-3’ below the packstone within the Stony Creek field are typified by decreasing amounts from top to bottom of sucrosic dolomite in which oil staining is the heaviest. However, this dolomite thinned out by the end of the well.
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Active Rigs Hit New Post-Boom Low: 34 -- March 2, 2016; Four Reasons Why The Bakken Scares Saudi Arabia

Active rigs:


3/2/201603/02/201503/02/201403/02/201303/02/2012
Active Rigs34120192184205

Two (2) new permits so far today:
  • Operator: HRC
  • Field: Four Bears
  • Comments: a 2-well pad
Wells coming off the confidential list Thursday:
  • 28715, 3,899, Whiting, P Johnson 153-98-1-6-7-16H, Truax, t9/15; cum 182K 1/16;
  • 29695, 2,312, Whiting, P Bibler 155-99-16-31-8-13H, Truax, t9/15; cum 120K 1/16;
  • 29697, 2,581, Whiting, P Bibler 155-99-16-31-7-16H, Stockyard Creek, 9/15; cum 103K 1/16;
  • 29698, 1,608, Whiting, P Bibler 155-99-16-31-7-16H3, Stockyard Creek, t9/15; cum 80K 1/16;
  • 31461, SI/NC, Statoil, Shorty 4-9F, Stony Creek, no production data,
  • 31552, 243, Denbury, CHSU ML31-01NH 05, Cedar Hills, Sourth Red River B, t11/15; cum 12K 1/16;
Three (3) permits renewed, including -
  • BR (2), two Cleetwood permits in McKenzie County
  • EOG, a Hardscrabble permit in Williams County
Six (6) producing wells completed (in a long note like this there will be typographical and factual errors; if this information is important to you, go to the source, NDIC and FracFocus):
  • 28079, 689, Oasis, Helling Trust Federal 5494 42-22 12T2, Alkali Creek, t12/15; cum 4K over first 8 days; no days in 1/16;
  • 28431, A, Zavanna, Tomahawk 10-3 2TFH, East Fork, no test date, s7/14; cum 10K over 2.5 months; stand-alone post;
  • 28432, A, Zavanna, Tomahawk 10-3 3H, East Fork, no test date, s7/14; cum 64K over 3 months; stand-alone post;
  • 30767, 1,644, Statoil, Judy 22-15 7TFH, East Fork, t1/16; cum 3K over 31 days, first month;
  • 31397, 1,309, Newfield, Larsen Federal 152-96-9-4-12H, Three Forks according to well summary; s9/29/15; TD, 10/17/15; according to well summary, planned as upper Three Forks; 22.6% drilled in 15; upper Three Forks target zone; 26% drilled in 15' middle Three Forks target zone; no frack data at NDIC site yet, but FracFocus shows the well was fracked 12/15 - 21/2015, using 5,247,480 gallons of water and 13.6% sand by weight ; t2/16; cum --
  • 31398, 1,667, Newfield, Larsen 152-96-9-3HLW, Westberg, THREE FORKS 2nd Bench according to well summary, but well evaluation said planned as upper Three Forks well; ended up beint a Upper and Middle Three Forks well; s9/29/15; TD, 10/17/15; 2 sections; 22.6% drilled in 15' upper TF target zone; 26% drilled in 15' middle Three Forks target zone; frack data not availabel at NDIC yet, but FracFocus showed well fracked 12/19-20/2015, with extraordinarily low amount of water, 1,790,754 gallons of water, but extraordinarily high (by percentage) sand, 12.44% by weight of total proppant; will be interesting to see Newfield's frack data; t1/16; cum 35K first 30 days;
Operator transfer, from Triangle USA Petroleum to Burnett Energy, Inc.:
  • 10734, Lee 8-32, a Madison well, now a SWD well; drilled back in 1984
  • 12282, Lee Family 1-8H; a Madison well, now a SWD well; first drilled back in 1987
  • Comment: with these two new wells, Burnett Energy has nine (9) wells in North Dakota dating back to 1985;
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31552, see above, Denbury, CHSU ML31-01NH 05, Cedar Hills:

DateOil RunsMCF Sold
1-20163804815
12-201543681012
11-20153955835
10-201561

 29698, see above, Whiting, P Bibler 155-99-16-31-7-16H3, Stockyard Creek:

DateOil RunsMCF Sold
1-201698598207
12-20151121014930
11-20151824323056
10-20151422715764
9-2015258209112
 
 29697, see above, Whiting, P Bibler 155-99-16-31-7-16H, Stockyard Creek:

DateOil RunsMCF Sold
1-201687735796
12-20151408619103
11-20151991726525
10-20152445225522
9-2015352178094
 
 29695, see above, Whiting, P Bibler 155-99-16-31-8-13H, Truax:

DateOil RunsMCF Sold
1-20162145327726
12-20151795825726
11-20152186228712
10-20152516328944
9-20153351010202
 
 28715, see above, Whiting, P Johnson 153-98-1-6-7-16H, Truax:

DateOil RunsMCF Sold
1-20162332319581
12-20152991521900
11-20153903327757
10-20154513918411
9-2015442223440
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Ex-Chesapeake CEO McClendon Dies In Car Crash -- March 2, 2016

http://finance.yahoo.com/news/ex-chesapeake-ceo-mcclendon-dies-194802665.html.

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Lotteries -- College Tuition -- Failure Rates

So many story lines in this article. 
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