CLR With Plans For Ten More Putnam Wells -- August 18, 2018

Active rigs:

$65.91↑	8/17/2018	08/17/2017	08/17/2016	08/17/2015	08/17/2014
Active Rigs	59	53	32	74	194

Four new permits:

• Operator: CLR
• Field: East Fork (Williams)
• Comments: permits for a four-well Putnam pad in NENW 25-156-100; back on August 10, 2018 -- from the daily activity report -- CLR has permits for a 6-well Putnam pad in NENE 25-156-100;

And that was all.

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The Putnam Wells

The graphic:

The wells: 

• 27049, 1,189, CLR, Putnam 1-25H, East Fork, t3/14; cum 359K 6/18;

Making Mexico Great Again -- August 17, 2018

Wow, I'm in a great mood. My seasonal allergies are kicking in but other than that ...

... I just got back from a 8-mile bike sprint. I took my usual 3-mile "relaxing" ride to Starbucks early this a.m. I got my blogging done and then had a "brain storm." I jumped on my bike and rode as fast as I could to Schwab in Southlake (TX), made an appointment for next week, and then continued the sprint back home.

First thing I see is this link sent to me by Don: NAFTA deal on track -- could bolster US - Mexican natural gas trade. Anyone who has been following this story and politics in Mexico, this is an incredible story on so many levels. From the article:

After some strong rhetoric on both sides, it now looks like the Trump administration and Mexican counterparts could have a preliminary NAFTA deal by the end of the month. This would be quite timely given that Mexico's newly elected President, Andres Manuel Lopez Obrador, will take office in December and has indicated he would respect renegotiations. In particular for my field, a bigger and better NAFTA would boost the growing U.S.-Mexican energy relationship built on free-trade.

As the go-to fuel, natural gas will increasingly be the story between the two nations. Mexico has accounted for the bulk of U.S. gas exports, with 90% coming from pipelines and the rest from LNG. The U.S. now accounts for 60-65% of Mexico's total gas supply. Since its domestic output comes along with crude oil extraction as "associated gas," Mexico's gas production has fallen 30-40% since 2010 alone, as its oil production has been spiraling since the 2004 peak.

And now, with AMLO wanting to ban fracking, U.S. gas could gain even more market share in Mexico. Although fracking isn't expected to be a significant source of domestic supply for at least five years, Mexico does have great shale potential: an EIA-reported recoverable shale gas resource of 550 trillion cubic feet. AMLO will serve just one 6-year term but has made answering the question of "When Will Mexico Start To Frack For Natural Gas?" even more difficult to gauge.

Mexico's goal is to expand oil production by 30% or so to ~2.6 million b/d, but the coming stream of new gas supply that would bring won't significantly reduce the need for more U.S. supply anytime soon. Just recently, as new pipeline capacity has been added and some lines became fully operational, pipeline imports into Mexico are breaking the 5 Bcf/d mark for the first time. That's over 6% of all current U.S. natural gas production  - and could reach over 6 Bcf/d next year. Ultimately, without the Mexican gas outlet for U.S. sellers, our prices would be ~40% lower, which again, could do more harm than good.

More at the link.

Now this.

I wrote this on the blog a couple of days ago:

My wife has signed up for a financial management course. It's a free course. Won't cost her a thing. She says she doesn't know anything about managing money. Actually she does quite well. I will be her instructor. The financial management course will be to show her where our assets are and how to access them after I die ... which, of course, could be sooner than later.

A reader noted that and suggested this video in response:

Taps
That suggestion can be interpreted at least two different ways: one humorous, one more serious. I took the suggestion as a very humorous suggestion.

But. having just talked with Schwab -- and, no this is not a paid advertisement -- I think I have a four-point plan that will work just fine.

Reveille Wow, what a great country.

Mr Klug Goes To Washington -- August 17, 2018 -- The Market, Energy, Political Page, Part 2 -- T+4

Making America great again, link here:

Mayor Howard Klug and City Administrator David Tuan are among a select group of North Dakota leaders, invited to the White House on August 30, where Trump administration officials are eager to hear about the North Dakota miracle. Chiefly, how western North Dakota has helped to not only feed the world, but keep its engines running. 

New airport on schedule, link pending -- original source has wrong link.

New airport construction is continuing to move forward and was the main focus of the Williston City Commission meeting Tuesday evening. The XWA project team received approval on two task orders for construction on the commercial parking lot and navigational aide installation. They also discussed a new provider for electronic advertising opportunities for the current airport, Sloulin Field International.

DAPL to expand, link here:

The CEO of Energy Transfer Partners said Aug. 13 he hopes to announce an expansion of the Dakota Access Pipeline soon. Kelcy Warren, CEO of the company that developed the $3.8 billion pipeline, participated in a roundtable discussion with U.S. Energy Secretary Rick Perry and other energy industry leaders at the University of Mary in Bismarck.

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The Market, Energy, And Political News Of Note Today, Continues/Continued 

Does he ever sleep? Does he ever quit thinking? Wow, whether you love him, hate him, or somewhere in between, this president never quits. Now this: best advice ever -- Trump asks SEC to mull half-year corporate filings. Poll at the sidebar at the right: what are your thoughts? Perhaps base it on market cap? Perhaps by exception -- with SEC approval on case by case basis -- for companies like Tesla with huge market cap but earnings make little difference. I don't know.

Wow: the Dow held today; not up much, but up, after a 400-point surge yesterday. The other indices "red" but not by much. Correction: only one major index is still red, the NASDAQ -- think tech.

Nimble traders yesterday did well. I see some of the oil companies bounced back. But look at this:

• AAPL: up another percent, trading at new all-time highs, now at $215/share, and this is after going "ex-div" as the big guys say
• BRK-B: up a bit
• WMT: green, but not by much; still not at $100
• TSLA: dropping like a rock again
• UNP: in a trading range; one to watch with expanding economy and all that talk about truckers not able to keep up 
• ENB: up 3%
• ETP: up 2.5%

Wanna See Some Other Great Wells That Just Reported? -- August 17, 2018

None of these wells had a constrained period. These were all DUCs that came off confidential list in 1Q18 -- and by early 3Q18 they had been completed. This is way faster than what I was seeing during the Saudi Surge, announced late 2014, effects seen early 2015 - early 2017.

None of these wells (at time of reporting) had a full 30 days of production. You can do the extrapolation. For example, that first well, 50,785 bbls in 22 days extrapolates to 69,000 bo in 30 days. Then the NG, 64,104 MCF = 10,688 boe over 22 days extrapolates to 14,556 boe. Add the bo and the NG boe and you get 84,000 boe in 30 days.

I remember some years ago when I was posting "monster wells" that I was cherry-picking. I certainly was. I didn't quite understand the "charge." Regardless, it's now almost impossible to cherry pick. If you doubt me, scroll through the wells that came off the confidential list 1Q18 -- except for a handful they are all completed -- DUCs and all. And the vast majority would be considered monster wells by the criteria used back in 2007.


Also, very few of those wells are using huge fracks. Many are still 45-stage fracks with 7 to 8 million lbs of proppant. Very few are the 60+ stage fracks, 10 million + lbs that CLR now considers its optimized completion strategy.

We're in "Bakken 2.5" but if the wells continue in this manner, I may move to Bakken 3.0.

And in NY state -- every year that goes by that fracking is banned, huge amounts of money being left on the table (or, more correctly, in the ground). My hunch is that New York state is banning fracking for reasons other than concerns about fracking per se. I don't know how well folks know New York state, but "upstate" it is absolutely gorgeous and lots and lots of really, really rich people live there, and millions of average and well-to-do New Jersey folks vacation in upstate New York. My hunch is that "these folks" are very concerned about turning upstate New York into "Saudi Arabia" or "western North Dakota." For that reason, I can't blame them. It's a legitimate concern. The topography between North Dakota and New York is incredibly different; and I strongly believe that North Dakota -- just a few counties at that -- was perfect, on so many levels for the oil industry. I'm not sure that New York state is where they should be drilling if there's more than enough oil and natural gas. It's unfair to the mineral owners, I know, but this is a democracy and compromises have to be made.

Wow, how did I get on that soapbox?

The wells:

• 33583, 5,694, MRO, Sundby 24-11TFH, Bailey, t6/18; cum 51K after 22 days:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2018	22	50785	50147	76002	64104	0	60661

• 33443, 4,152, MRO, Marlene 34-11TFH, Bailey, t6/18; cum 44K after 25 days;
• 33435, 4,538, MRO, Hugo 34-11H, Bailey, t6/18; cum 29K after 13 days;
• 33582, 5,305, MRO, Morrison 24-11H, Bailey, t6/18; cum 42K after 16 days;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2018	16	41749	41225	67114	36292	0	33522

• 33581, 6,573, MRO, Olea 24-11TFH, Bailey, Three Forks B1, 45 stages; 11.776 million lbs, 262K/stage, t6/18; cum 55K after 22 days:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2018	22	55074	54382	86799	42450	0	38804

• 33580, 3,276, MRO, McFadden 14-11H,  Bailey, t6/18; cum 17K after 14 days;


• 33599, 5,000, MRO, Gravel Coulee 14-11TFH, Bailey, t6/1; cum 42K after 16 days:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2018	19	41732	41208	51493	39002	0	36212

 

Wanna See Another Big Bakken Well? 172K In Less Than Four Months -- August 17, 2018

The well:

• 23964, 2,712, WPX, Arikara 15-22HB, Reunion Bay, t3/18; cum 172K 6/18; 

Full production profile:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2018	30	32609	32731	19377	32417	6018	22758
BAKKEN	5-2018	31	43695	43651	25834	34431	8204	21395
BAKKEN	4-2018	30	51019	51100	24475	40203	6632	27961
BAKKEN	3-2018	23	44344	44100	29464	46739	5301	36583

Another Arikara sister well:

• 33642, 2,183, WPX, Arikara 15-22HQL, Reunion Bay, Three Forks NOS, 51 stages, 8.6 million lbs, t3/18; cum 159K 6/18; a huge, huge well;

Full production profile:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2018	30	30209	30204	37980	24681	20528	921
BAKKEN	5-2018	31	45314	45378	43213	37022	0	32173
BAKKEN	4-2018	30	46390	46342	54699	37901	1794	31143
BAKKEN	3-2018	26	37458	37208	54200	37533	1980	31545

And while we are at it, another sister well:

•  33619, 2,229, WPX, Arikara 15-22HA, Reunion Bay, t3/18; cum 160K 6/18;

Full production profile:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2018	30	32624	32751	19759	50799	6020	41136
BAKKEN	5-2018	31	44645	44584	28010	60315	10147	45234
BAKKEN	4-2018	30	46971	47015	38998	63457	20106	38174
BAKKEN	3-2018	23	35412	35217	36529	46990	7812	35278

There seems to be a trend here.

And for newbies, there are even better wells than these in the Bakken. This is why the breakeven price in some areas of the Bakken is less than $20/bbl.

Another Arikara sister:

• 23965, 2,528, WPX, Arikara 15-22HW, Reunion Bay, t3/18; cum 147K 6/18; 

Full production profile:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2018	30	29453	29571	25509	41561	5435	32823
BAKKEN	5-2018	31	41122	41040	36135	49552	5201	39794
BAKKEN	4-2018	30	35360	35473	27086	42610	6744	31931
BAKKEN	3-2018	30	41052	40826	41157	49549	5070	3994

There are more and there will be more but enough for now.