"Recession Just Around The Corner" -- Never Mind -- August 16, 2019

Talk of recession ... well, that didn't last long.

From oilprice.

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Bonus: $16,000 / Acre -- Eagle Nest Oil Field -- Dunn County

See this post for background.

From that post:

Dunn County

• 4 parcels
• all parcels bought by Enerplus Resources
• parcel size: 160 acres (2); 75 acres (2)
• bonus paid: $15,776 / acre
• parcels:
• Lots 1, 2 - section 16-148-95
• NW4 - section 16-148-95
• Lots 3, 4 - section 16-148-95
• SW4 - section 16-148-95

The graphic:

The wells in the graphic:

• 25210, 2,789, Bruin, Fort Berthold 148-95-22C-15-5H, Eagle Nest, t4/14; cum 384K 6/19; showed significant jump in production, 6/17;
• 25209,
• 25208, 2,7149, Bruin, Fort Berthold 148-95-22C-15-4H, Eagle Nest, t4/14; cum 318K 6/19; showed several moderate-to-significant jump in production since it was first completed;
• 25207, 2,219, Bruin, Fort Berthold 148-95-27B-34-4H, Eagle Nest, t5/14; cum 275K 6/19;
• 26323, 3,138, Bruin, Fort Berthold 148-95-22C_15-9H, Eagle Nest, t4/14; cu 449K 6/19;
• 26322, 3,317, Bruin, Fort Berthold 148-95-27B-34-8H, Eagle Nest, t4/14; cum 389K 6/19;

• 22531, 754, Enerplus, Emerald 148-95-03A-10H, Eagle Nest, t10/12; cum 289K 6/19; a steady Eddy that suggests easily a doubling of the EUR if it were re-completed with current completion strategies;

• 22300, conf, Bruin, FB Belford 148-95-22D-15-2T, Eagle Nest; Bruin must have gotten tired of typing out "Fort Berthold"; now abbreviate it, "FB" (no, it does not stand for FaceBook)
• 18969, 802, Bruin, Fort Berthold 148-95-27A-34-1H, Eagle Nest, t9/12; cum 306K 4/19; went off line 4/19; a steady Eddy that suggests easily a doubling of the EUR if it were re-completed with current completion strategies;
• 22301, conf, Bruin, FB Belford 148-95-22D-15-3B, Eagle Nest; look how old this permit is;
• 18968, 875, Bruin, Fort Berthold 148-95-22D-15-1H, Eagle Nest, t9/12; cum 308K 4/19; went off line 4/19; a steady Eddy that suggests easily a doubling of the EUR if it were re-completed with current completion strategies;
• 36307, drl, Bruin, FB Belford 148-95-22D-15-6T, Eagle Nest;
• 22298, IA/1,095, Bruin, FB Belford 148-95-22D-15-6T, Eagle Nest; t10/12; cum 223K 6/19; offline as of 2/19;
• 36306, drl, Bruin, FB Belford 148-95-22D-15-7B, Eagle Nest;
• 36305, loc, Bruin, FB Belford 148-95-22D-15-8T, Eagle Nest;
• 36304, loc, Bruin, FB Belford 148-95-22D-15-10B, Eagle Nest;
• 36303, loc, Bruin, FB Belford 148-95-22D-15-13T-LL, Eagle Nest;
• 36302, loc, Bruin, FB Belford 148-95-22D-15-14B-LL, Eagle Nest;
• 22299,

Quarterly Lease Sales Results For August, 2019 -- Bowman County; Golden Valley; Billings County Particularly Active; Dunn Went For $16,000 / Acre

President Trump looked into buying Greenland; it looks like Northern Energy Corporation is looking to buy Bowman County, North Dakota.

Quarterly lease sales results have been released for August, 2019. Link here.

Billings County

• 8 parcels
• inexpensive parcels were 80-acre parcels
• expensive parcels were 8-acre parcels
• three parcels with bonuses of $5 / acre
• four parcels with bonuses between $750 and $802 / acre
• one parcel with a bonus for $1,001 / acre
• bidders: Great Plains Land Services; North Energy Corporation

Bowman County

• 473 tracts
• most tracts were 40-acre and 80-acre tracts
• almost all parcels bonuses for $1 / acre; 
• Northern Energy Corp was the bidder for around 450 of the 473 tracts
• the dozen or so parcels not bought by Northern Energy Corp were by The Triple T (It Takes TIme); Yockim Resource Exploration Co; Anderson Oil Ltd; Inland Oil & Gas; Interwest Petroleum Corp; and, Kenneth O'Sullivan

Dunn County

• 4 parcels (see this post for graphic)
• all parcels bought by Enerplus Resources
• parcel size: 160 acres (2); 75 acres (2)
• bonus paid: $15,776 / acre
• parcels:
• Lots 1, 2 - section 16-148-95
• NW4 - section 16-148-95
• Lots 3, 4 - section 16-148-95
• SW4 - section 16-148-95

Golden Valley

• 130 parcels
• almost all were 80-acre; and, 160-acre parcels
• bidders: almost all -- Northern Energy Corp
• bonus: almost all were $1.00 / acre
• a few parcels were bought by Interwest Petroleum Corp; The Armstrong Corp; and, Great Plains Land Services;

McKenzie County

• 4 parcels
• parcel sizes: 160 acres (2); 138 acres; 24 acres
• bidders: Andesite Energy (3); Oasis
• bonuses paid by Andesite: $668 / acre; $700 / acre; and, $1,151 / acre
• Oasis paid $3,301 / acre for the 138-acre tract

Mountrail County

• 1 parcel
• Northern Energy Corp
• 80-acre parcel
• bonus: $1,541 / acre

Ward County (Minot)

• 69 parcels
• almost all of them: The Triple T, Inc
• almost all 80-acre and 160-acre parcels
• bonuses: almost all were $1 or $2 / acre
• a few outliers, A Triple T, Inc, bonus of $23 / acre; $13 / acre; $12 / acre
• the three parcels not picked up by Triple T were picked up by Kenneth O'Sullivan;

Number Of Wells In The Bakken Off-Line, Inactive, DUCs Are Near An All-Time Record -- August 16, 2019

I track DUCs and wells off-line for operational reasons here.

In March, 2019, a record number of wells were either DUCs or off-line for operational reasons: 2,665.

The following two months, the numbers dropped.

However, in the most recent reporting period, June, 2019, the number of wells off-line again increased. As of June, 2019, 2,536 wells are off-line. That's about three years worth of drilling in the Bakken. About 850 wells are drilled, completed, brought on line each each in North Dakota with WTI in the $55 range. 

I don't have the ability or time to track production of wells coming back on line on a statistical meaningful and accurate way, but this is my gut feeling. When middle Bakken and Three Forks first bench wells are taken off line for operational reasons and then brought back on line:

• less than 1% come back with a production rate less than what it was before they went off line;
• 50% come back at the same production rate compared to when they first came off line;
• 40% come back with a slight-to-moderate increase in production; and,
• 10% come back with a huge jump in production.

The first six months, and especially the first three months after a DUC is completed, the production of that well is at its best. I have come to expect a crude oil production rate of 20,000 bbls/month in the first full month of production after a DUC is reported as completed.

Back of the envelope:

• inactive well count: = 1,500: 90 bbls/well/day = 135,000 bopd being stored underground;
• completed DUCs = 1,000; 700 bbls/well/day = 700,000 bopd being stored underground
• total: 835,000 bopd
• 835,000 / 1,400,000 = 60%

Disclaimer:

• my assumptions are often wrong
• almost nothing is static in the Bakken
• I often make simple arithmetic errors
• in a note like this, there will be factual and typographical errors
• in a blog like mine, it is difficult to separate fact from truth, as Sleepy Joe would say
• in a blog like mine, it is also difficult to separate fact from opinion
• I am inappropriately exuberant about the Bakken

What A Doofus -- August 16, 2019

North Dakota just set an all-time record for crude oil and natural gas production.

Wow, what a doofus. From February 28, 2017.