Saturday, October 12, 2019

Legacy Fund -- Earnings Projections -- October 12, 2019

Legacy Fund. The Legacy Fund is "composed" of two parts:
  • deposits
  • earnings
"By the end of the next decade, earnings from the Legacy Fund are projected to top $_____________ every two years." [Two years is used because the ND budget is a "biennium" budget.]

Quick: fill in the blank.

By working backwards, and making various assumptions, one can estimate the total value of the Legacy Fund by the end of the next decade.

Of course, "they" assume the next administration won't ban fracking.

************************************
WSJ Writer Out Of The Loop

Two articles side-by-side.

First, the Jeff Bezos article over at The Atlantic.

Second, the "trust-busting" article in this week's edition of The WSJ. The writer of that article completely missed the "Amazon" story. The writer mentioned Amazon once in this "trust-busing" article but it had nothing to with Amazon except as a travel site like Expedia and how Google "maps" a site "like Amazon. Any writer who writes about US monopolies and writes about trust-busting and fails to mention Amazon is obviously "out of the loop.

From The Atlantic article on AWS (Amazon Web Services):
[Amazon] had wandered into the cloud-computing business long before its rivals. Amazon Web Services (AWS) is, at its most elemental, a constellation of server farms around the world, which it rents at low cost as highly secure receptacles for data. Apple, the messaging platform Slack, and scores of start-ups all reside on AWS.

Other Big Tech companies have fretted about the morality of becoming entangled with the national-security state. But Bezos has never expressed such reservations. His grandfather developed missile-defense systems for the Pentagon and supervised nuclear labs. Bezos grew up steeped in the romance of the Space Age, a time when Big Business and Big Government linked arms to achieve great national goals. Besides, to be trusted with the secrets of America’s most secretive agency gave Amazon a talking point that it could take into any sales pitch—the credentials that would recommend it to any other government buyer.

One of Amazon’s great strengths is its capacity to learn, and it eventually acclimated itself to the older byways of Washington clientelism, adding three former congressmen to its roster of lobbyists. (Amazon’s spending on lobbying has increased by almost 470 percent since 2012.) It also began to hire officials as they stepped out of their agencies. When the Obama administration’s top procurement officer, Anne Rung, left her post, she headed straight to Amazon.

If retail was a maddeningly low-margin business, AWS was closer to pure profit. And Amazon had the field to itself. “We faced no like-minded competition for seven years. It’s unbelievable,” Bezos boasted last year. AWS is such a dominant player that even Amazon’s competitors, including Netflix, house data with it—although Walmart resolutely refuses, citing anxieties about placing its precious secrets on its competitor’s servers. Walmart is more suspicious than the intelligence community: In 2013, the CIA agreed to spend $600 million to place its data in Amazon’s cloud.
Further on:
At the heart of Amazon’s growing relationship with government is a choking irony. Last year, Amazon didn’t pay a cent of federal tax. The company has mastered the art of avoidance, by exploiting foreign tax havens and moonwalking through the seemingly infinite loopholes that accountants dream up. Amazon may not contribute to the national coffers, but public funds pour into its own bank accounts. Amazon has grown enormous, in part, by shirking tax responsibility. The government rewards this failure with massive contracts, which will make the company even bigger.
Posted by at

Week 41: October 6, 2019 -- October 12, 2019

Top international non-energy story:
  • President Trump abruptly pulls fifty US troops out of Syria; sends 2,000 troops to Saudi Arabia
Top international energy story:
Top national non-energy story:

Top national energy story:
Top North Dakota non-energy story:
Top North Dakota energy story:

Geoff Simon's top North Dakota energy stories:
  • Denbury and CO2-EOR in southwestern North Dakota
  • Re-fracking likely to be next big trend for oil in the Bakken
  • ND taxable sales and purchases show growth for ninth straight quarter
  • Sales of electric vehicles in China are slowing; year-over-year, EV sales dropped 5% in July, 2019, and dropped 11% in August, 2019 -- and this is in a centrally-managed economy with goals to cut coal usage;
Operations:
Three Forks, second bench:
Operators:
Birthday wishes:
Bakken economy:
Commentary:
Miscellaneous:
Further reading:
Posted by at

New Nominee For The Geico Rock Award -- 2019 -- October 12, 2019

Link here.


Full list of the nominees for 2019 are at this post.
Posted by at
Labels:

Bakken Daily Oil Per Well -- Random Update -- October 12, 2019

Disclaimer: I am inappropriately exuberant about the Bakken. I often see things that do not exist in the real world. I often misread stuff. There will be factual and typographical errors in all my posts. If I find them, I correct them. If any of this is important to you, go to the source.

Note: there's a big difference between what physically happens in the oil patch and what happens on Wall Street. I would never make a recommendation about investing. I track Wall Street "stuff" to help put the Bakken in perspective, and more importantly, keep me from getting bored. Having said that, I would say this: there are a lot better places to invest than in US oil. LOL.

This was taken from the second half of this post. This is so interesting, I'm going to re-post the second half of that post:
EIA dashboards:
Wow, wow, wow. I haven't looked at this in a long, long time. This is incredible.

To get to the spreadsheet:
This is huge.

I followed this data for years, posting updates every so often. And then about two years ago I quit tracking it for various reasons. Mostly because I wasn't interested in the data any more; I understood what was going on. Remember, the purpose of the blog is to help me understand the Bakken; it's not about capturing all the Bakken data or archiving it all. Once I understand something about the Bakken, I often lose interest.

But look at this: during the boom, in the early days of the Bakken and continuing into 2013, on a "daily oil per well" basis, the wells were setting records, as high as 140 bbls/day/well across the entire Bakken (including all the old wells and the dreaded Bakken decline rate).

Then starting in early 2016, "daily oil per well" dropped below 100 bbls/day and gradually leveled off at about 90 bbls/day. I assumed it would go lower and lower as older Bakken wells grew older and older.

Had the "daily oil per well" continued to drop we would have seen any number of "negative" stories about the Bakken. I would have become depressed.

But out of curiosity, after seeing the ShaleProfile report today, I was curious. What does the "Bakken daily oil per well" show?

Wow, wow, wow. The Bakken is back above 100 bbls/day per well.

That's huge. Folks don't realize this. This was not supposed to happen.

Almost no Bakken wells are abandoned. There are thousands of Bakken stripper wells; thousands of Bakken wells that are producing less than 500 bbls/month -- that's less than 20 bbls/day/well. It would seem impossible for the few wells that start production each month to "offset" these old, old, old wells.

One would expect the overall Bakken daily oil per well to keep falling. But to see the number turn the corner (from 94) and bounce back to 104 is, to say the least, quite incredible.

Anecdotally, I've noticed how incredible the wells are -- MRO, CLR, WLL, WPX -- incredible  work but I never expected this:


When did we last see numbers above 100 bbls/well/day? Back in 2015. Four years ago.

Peak oil? What peak oil?

Hubbert.

And the wells are costing much less now (2019) than they did in 2015.

One last thing. Up above I wrote:
Almost no Bakken wells are abandoned. There are thousands of Bakken stripper wells; thousands of Bakken wells that are producing less than 500 bbls/month -- that's less than 20 bbls/day/well. It would seem impossible for the few wells that start production each month to "offset" these old, old, old wells.
Know what else is interesting?

The old, old, old Bakken wells don't get worse, and worse, and worse. Most of them level off / plateau off at 300 to 500 bbls/month. (Meanwhile, the new wells simply get better and better).

But some of the old, old, old Bakken wells jump in production (halo effect; parent-child uplift).

My hunch is that "Bakken daily oil per well" will be fodder for Bakken naysayers, but I'm not sure. This could be quite interesting.
*************************************** 
Sophia Visiting Corky's Relatives


This is actually quite funny. There is "Calvin and Hobbes" and there is Sophia and Corky.

Yesterday, Sophia and I stopped by the local farm that opens its gates to urban folks for the entire month of October. One of the highlights: the animals -- cows, donkeys, pigs, llamas, sheep, goats, roosters, chickens.

One of the bigger delights are the those little miniature pigs.

Later, while enjoying some kettle popcorn, sitting at the picnic tables, I mentioned to Sophia that it was nice for Corky to get to see her relatives.

And swear to God, I'm not making this up. Sophia seemed downright sad when she said, "I thought [her relatives] were all dead."

Sophia was not sad that Corky was able to see her relatives. I think Sophia was sad because she (Sophia) had erroneously told Corky that her (Corky's) relatives were all dead. And now Sophia was depressed that Corky might think that she (Sophia) had lied to her. Sophia did not mean any harm; she really thought that Corky's relatives were dead.

Corky's relatives, according to Sophia, were from Colorado, but had moved to Wisconsin (or maybe, it was Michigan, I forget). But after that move, Sophia lost track of Corky's relatives. She thought maybe they had moved to Hawaii, which, of course, would explain the demise of Corky's relatives -- the Hawaiians love pork barbecue. 

[Note: it did not help matters that my wife -- Sophia's grandmother -- thought the same, that all of Corky's relatives were dead -- after all, she sees Corky's relatives every week at Albertson's, Kroger's, Tom Thumb. And not in a "good way."]

Posted by at
Labels: , , ,

ShaleProfile -- Update Through April, 2019

Link here.

The link will take you to a "commercial" site; lots of stuff behind a paywall, but the stuff that is free is worth reading.

I noted one particular item that caught my interest. It has to do with "well productivity."

Some direct quotes from the linked article:
In the comments section at the bottom of this post, I will comment on some recent articles that questioned whether well productivity is stalling in the Permian.

Oil production from horizontal wells in these states grew to close to 7 million bo/d in April (after upcoming revisions), setting a new record. That would represent a y-o-y growth of 1.3 million bo/d, but the rate at which production is increasing has slowed down since the end of last year.

Also here you can see that well productivity increased significantly over the years, and is still going up, although the rate of growth is going down. But what if you normalize for the lateral length, which has increased in almost all of the basins?
The current report is focused on the Permian. The author writes that it will post an update on the Bakken when the next Director's Cut is released next week.

Since about 2010, "all" Bakken wells are drilled with 9,000-foot horizontals, the "standard" Bakken long lateral, cutting through two sections (1280-acres). Horizontal lengths have not been standardized in the Permian based on what is reported at DrillingInfo.

I'm sure the folks at ShaleProfile will "normalize" something for the Bakken to make their point, but anecdotally I see ever-increasing productivity from Bakken wells. The same is seen at the EIA "dashboards":

EIA dashboards:
Wow, wow, wow. I haven't looked at this in a long, long time. This is incredible.

To get to the spreadsheet:
This is huge.

I followed this data for years, posting updates every so often. And then about two years ago I quit tracking it for various reasons. Mostly because I wasn't interested in the data any more; I understood what was going on. Remember, the purpose of the blog is to help me understand the Bakken; it's not about capturing all the Bakken data or archiving it all. Once I understand something about the Bakken, I often lose interest.

But look at this: during the boom, in the early days of the Bakken and continuing into 2013, on a "daily oil per well" basis, the wells were setting records, as high as 140 bbls/day/well across the entire Bakken (including all the old wells and the dreaded Bakken decline rate).

Then starting in early 2016, "daily oil per well" dropped below 100 bbls/day and gradually leveled off at about 90 bbls/day. I assumed it would go lower and lower as older Bakken wells grew older and older.

Had the "daily oil per well" continued to drop we would have seen any number of "negative" stories about the Bakken. I would have become depressed.

But out of curiosity, after seeing the ShaleProfile report today, I was curious. What does the "Bakken daily oil per well" show?

Wow, wow, wow. The Bakken is back above 100 bbls/day per well.

That's huge. Folks don't realize this. This was not supposed to happen.

Almost no Bakken wells are abandoned. There are thousands of Bakken stripper welsl; thousands of Bakken wells that are producing less than 500 bbls/month -- that's less than 20 bbls/day/well. It would seem impossible for the few wells that start production each month to "offset" these old, old, old wells.

One would expect the overall Bakken daily oil per well to keep falling. But to see the number turn the corner (from 94) and bounce back to 104 is, to say the least, quite incredible.

Anecdotally, I've noticed how incredible the wells are -- MRO, CLR, WLL, WPX -- incredible  work but I never expected this:


When did we last see numbers above 100 bbls/well/day? Back in 2015. Four years ago.

Peak oil? What peak oil?

Hubbert.

And the wells are costing much less now (2019) than they did in 2015.

One last thing. Up above I wrote:
Almost no Bakken wells are abandoned. There are thousands of Bakken stripper welsl; thousands of Bakken wells that are producing less than 500 bbls/month -- that's less than 20 bbls/day/well. It would seem impossible for the few wells that start production each month to "offset" these old, old, old wells.
Know what else is interesting?

The old, old, old Bakken wells don't get worse, and worse, and worse. Most of them level off / plateau off at 300 to 500 bbls/month. (Meanwhile, the new wells simply get better and better).

But some of the old, old, old Bakken wells jump in production (halo effect; parent-child uplift).

My hunch is that "Bakken daily oil per well" will be fodder for Bakken naysayers, but I'm not sure.

This could be quite interesting.
Posted by at
Labels:
Subscribe to: Posts (Atom)