Bakken 2.0: Ten (10) New Permits; Twelve (12) Permits Renewed; No DUCs Reported As Completed -- October 28, 2016

Active rigs:

	10/28/2016	10/28/2015	10/28/2014	10/28/2013	10/28/2012
Active Rigs	34	69	191	180	186

Ten (10) new permits:

• Operators: CLR (4), Hess (3), HRC (2), North Range Resources
• Fields: Rattlesnake Point (Dunn); Banks (McKenzie); McGregory Buttes (Dunn), Grassy Butte (McKenzie)
• Comments: generally speaking, when seeing multiple permits by same operator, it is pad drilling

Twelve (12) permits renewed:

• EOG (10): ten Hawkeye permits, all on same pad, Hawkeye permits, section 25-152-95 (see below)
• Petro-Sentinel (2): one Miller permit and one Coyote Creek permit, both in Bowman County

I don't recall if I've seen Petro-Sentinel before. The company has three permits in North Dakota. The first well, a wildcat, was drilled: dry.  The two renewed permits today are in an established oil field: Coyote Creek, Bowman County.

No DUCs were reported as completed.

The EOG Hawkeye wells have been mentioned many times on the blog. They are tracked here. Ten EOG Hawkeye permits renewed today:

 

Bakken 2.0: Oil Poised For Strong Comeback -- Lynn Helms, NDIC -- October 28, 2016

From the Williston Herald:

The comeback of oil may have been slower than desired or expected, but the numbers building up behind the scenes show it is building for a comeback that may be stronger than some might wish, the state’s top regulator of oil and gas said Wednesday.

“OPEC doesn’t want oil at $25 and they don’t want it at $75,” Lynn Helms, director of North Dakota’s Department of Mineral Resources, said. “That $50 is no miraculous number, it’s where most of the shale plays aren’t going to play.”

I've said the same thing for quite some time now: the sweet for the US when it comes to oil - $46 - $52.  

The reasons he is so confident include the fact that half of the project well numbers are either already in the queue or in the process of being permitted for drilling and completion, as well as moves he is aware of, to keep industry moving in the Bakken.

Scenarios:

He has prepared three price scenarios to help agencies in their planning efforts. These include a price shock scenario, with oil prices suddenly going back to $75 and $80 ranges, as well as a more likely medium scenario, where it sits at $45 a barrel through much of 2017, hits $55 in 2018 and hits $65 in 2019. That one has rig counts at 30, 50 and 70 respectively. 

Wow, CVX; Williston -- Headline Story In Oil & Gas Journal; Soybeans Surging -- October 26, 2016

Wow, CVX:

• CVX: story here; 3Q16 earnings of $1.3 billion, down from $2 billion in 3Q15; surprises with a dividend hike; stronger than expected earnings; 68 cents vs 37 to 40 cents; wow;  

I remember over the years being told that CVX was the weakest among COP, XOM, and CVX. COP posts a $1 billion loss in 3Q16; XOM under SEC investigation; and CVX surprises with earnings and an increase in the dividend, which of course sent share price up.

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Williston: Headline Story in Oil & Gas Journal

 
From Oil & Gas Journal today on US rig counts: Williston’s biggest jump in 2 years.

US land-based rigs gained 5 units this week to 533, with rigs engaged in horizontal drilling also rising 5 units, reaching 450, up 136 since May 27.

Directional drilling rigs rose 3 units to 54. North Dakota and its Williston basin led the major oil- and gas-producing regions with a 5-unit jump to 35, representing their biggest increase since Aug. 8. 2014.

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Soybeans

Soybean exports power US economy to best performance in two years. -- Reuters.

In 2014 - 2015, North Dakota moved up to 9th place: 202 million bushels in 2014; 190 million bushels in 2015.

In 2012 - 2013, North Dakota ranked 10th on the list for soybeans; 163 million bushels in 2012; 139 million bushels in 2013.

In 2004, North Dakota ranked 10th on the list for soybeans, based on cash receipts.  

Random Graphic Update On The Parshall Oil Field As We Transition From Bakken 1.0 To Bakken 2.0 -- October 28, 2016

I wanted to capture EOG activity in the Bakken as we transition from Bakken 1.0 to Bakken 2.0.

Over the next few years, I am curious to see:

• if EOG moves to longer laterals;
• where they will concentrate their drilling; and,
• changes in well density.

The Parshall oil field can be easily divided into four unequal quarters going from the north to the south.

This is what the entire Parshall encompasses, the area outlined in green. The inset shows this area in the state of North Dakota, just east of Watford City:

In the graphics below, I have zoomed in to get a better idea of the length of the laterals (in general) and the general well density in each of the uneven quarters. To ensure I captured the entire Parshall oil field, there will be overlap at the boundaries. In addition, there is non-Parshall acreage to the east and west in each graphic.

This is the northernmost quarter:

This is the southern quarter north of the reservation (the reservation is shaded brown in all these graphics; the blue, of course, is Lake Sakakawea/Missouri River):

This is the northern quarter of the reservation:

This is the southernmost quarter of the entire Parshall:

Hess Plans To Increase Bakken Production In 2017 -- Argus Media -- October 28, 2016

Hess to increase Bakken production in 2017. Data points: 

• plans will not be detailed until January; preliminary remarks in 3Q16 earnings call
• Hess''s core in the Bakken competitive with Permian and Eagle Ford
• Hess ND production in 3Q16: 107,000 boepd (113,000 a year earlier)
• CWC: lowered to $4.7 million in the Bakken; down 11% yoy; 50-stage completion (previously, 35-stage completions); for a long lateral, $4.7 million is quite incredible; needs to be followed
• average EUR: 900,000 boe in 3Q16; should reach 1 million boe in 4Q16
• 4Q16 Bakken production: should reach 105,000 boepd
• Utica: 30,000 boepd
• IS Gulf of Mexico: 61,000 boepd
• 3Q16 CAPEX: $435 million (global)
• full-year 2016 CAPEX: $2 billion (global) -- down $100 million from recent projection and half of  of 2015 spending
• loss in 3Q16 widened to $339 million compared to $279 million a year earlier

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The Race Underground: Boston, New York, and the Incredible Rivalry That Built America's First Subway 

Doug Most,
c. 2014

DDS: 388.42 MOS

It may be best to read the Epilogue, the Acknowledgments, and the Author's Notes first before reading the book itself. I started to read the book but it did not catch my attention. I had no feeling for where the author was taking me or how he was going to get me there.

These will be the only notes I place on the MillionDollarWay. Any updates will be followed at another site. 

After reading the Epilogue, Acknowledgments, and Author's Notes, I had my bearings, and felt comfortable to begin reading the book.

Some quick takeaways: the London subway initially failed because they used steam engines underground, which made no sense. It was the relationship between the electric sector (think Edison) and the tunneling engineers that made the difference, and the success of the Boston and the NYC subways.

Some quick facts:

• Boston won the race: 6:00 a.m. September 1, 1897, the subway opened to its first passengers
• NYC: in the evening, 7:00 p.m., October 27, 1904, seven years later, NYC opens its first subway to passengers
• within two days in Boston, the "novelty was over"
• no neighborhood was more excited about the subway than Harlem
• a rallying cry for a NYC subway was "fifteen minutes to Harlem"; that helped keep the dream alive
• the blizzard of 1888 was perhaps the turning point in getting the NYC project going
• Abram Hewitt's vision for the NYC, used the blizzard of 1888 to spur the project; came up with the idea for the city pay for and own the subway system but hire a private business to build and run it; Hewitt died a year before the subway opened
• if one man deserves more credit than he's received for the birth of the subway, it's Frank J. Sprague, died 1934; he saw the greatest flaw (steam engines) in London's Underground which had opened 30 years before Boston/NYC decided to replicate it -- the delay was because steam did not work; Sprague, an employee of Edison's, figured it out; Sprague and Edison in huge public battle over share of glory; Edison won, Sprague lost
• Fred Pearson, the Tufts prodigy, died aboard the Lusitania; Pearson owed much of his engineering legacy to the Whitney brothers
• while living in Boston area for four years and traveling to Provincetown, Cape Cod, numerous times, I was never aware of the importance of the Cape Cod Canal, not built until 1913; "short-cut" from NYC to Boston; without it, ships had to sail clear around Cape Cod 
• William Barclay Parsons: key engineer for both the NYC subway and the Cape Cod Canal
• Parsons had a small firm; it became a behemoth which thrives to this day: Parsons Brinckerhoff -- also responsible for the infamous Big Dig in Boston
• Parsons Brinckerhoff now responsible for the Second Avenue subway now under construction in NYC; the most complex, one of the most expensive public projects the city has ever undertaken; two 22-foot-wide tunnels, 80 feet below the surface; tunneling through solid rock [Update: Second Avenue Subway now open, January 1, 2017.]
• number of pages devoted to the Boston subway pale in comparison to the number of pages written on the NYC subway
• Boston's subway was America's first, but it has been largely ignored by historians and authors
• the Whitney brothers have also been treated unequally