XTO To Use Wells As Injection Wells As Part Of An Enhanced Oil Recovery Pilot Operation -- November 6, 2019

From the NDIC dockets for November,  2019.

Thursday, November 25, 2019 (these are cases, not permits):

• Case 28131, XTO, Cedar Coulee-Bakken, to use wells located in section 33-148-96 and section 4-147-96  as injection wells for an enhanced oil recovery pilot operation; Dunn County
• Case 28132, XTO, Bear Creek-Bakken; to use wells located in sections 27/34-148-96 as injection wells for an enhanced oil recovery pilot operation;

Wells in Bear Creek, sections 27/34-148-96:

• eleven horizontal wells:
• 32479, IA/2,701, XTO, Werre Trust Federal 14X-34AXB, middle Bakken, t7/18; cum 350K 10/19; went inactive 10/19; remains inactive 3/20;
  
• 32480, a nice well; went inactive 10/18; remains inactive 3/20;
• 32481, a very nice well; went inactive 11/19; remains inactive 3/20;
• 32499, currently inactive, 3/20; intermittent production since 11/18;
• 32500, a huge well; went inactive 11/19; remains inactive 3/20;

• 32367, a mediocre well; went inactive 11/19; remains inactive 3/20;
• 32366, a very good well; went inactive 11/19; remains inactive 3/20;

• 29673, a very good well, 500K; remains on line;
• 29672, a very good well, cum 421K, as of 3/20; remains on line;
• 18294, 341, XTO, Werre Trust 44-34H, Bear Creek, t3/10; cum 577K 3/20; remains on line;
• 29871, 1,529, XTO, Werre Trust Federal 44X-34D, Bear Creek, t7/15; cum 389K 3/20; remains on line;

Wells in Cedar Coulee, section 33-148-96 and section 4-147-96:

• five horizontal wells:

• 16914, 570, XTO, Martin Federal 31X-33H, middle Bakken, t5/08; cum 345K 3/20;
• 25335, 2,616, XTO, Martin Federal 21X-33B, middle Bakken, t5/14; cum 415K 3/20;
• 25334, 2,212, XTO, Martin Federal 21X-33F, Cedar Coulee, t4/14; cum 50*K 3/20;
• 25333, 2,791, XTO, Martin Federal 21X-33A, Cedar Coulee, t4/14; cum 380K 3/20;
• 25332, 1,994, XTO, Martin Federal 21X-33E, Cedar Coulee, t6/14; cum 300K 3/20;

EOG -- 3Q19 -- Earnings

EOG press release here.

• exceeded crude oil production target range
• raised full-year 2019 crude oil growth target from fourteen to fifteen percent
• CAPEX near low end of target range
• generated "significant" net cash from operating activities and free cash flow
• reduced year-to-date well costs by five percent
• added 1,700 net premium locations to inventory now totaling 10,500 locations
• net premium locations now total over fourteen years of drilling inventory 
• new Delaware Basin Wolfcamp M and Third Bone Spring plays add 1.6 billion boe net resource potential
• "highly economic" at $40 oil and flat $2.50 natural gas price (company's definition of premium inventory)
• Wolfcamp M: an initial 855 net premium drilling locations; net resource of 1.0 billion boe across its 193,000 net acre position
• Third Bone Spring:
• 585 million boe across its 200,000 net acre position 
• net income for 3Q19: 
• $615 million vs $1.2 billion one year ago
• $1.06/share vs $2.05/share one  year ago
• adjusted: $1.13/share vs $1.75/share a year ago
• the Bakken was not mentioned in the press release except in the financial tables (mentioned once)
• brought 15 gross wells on line in the quarter
• brought 13 net wells on line in the quarter
• lateral length: 10,600 feet (longer than any other play)

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Coloring Inside The Lines

Quarterly Lease Sales Results For North Dakota Have Been Posted -- Northern Energy Buying North Dakota -- November, 2019

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

Note: no parcels sold in Mountrail County or Dunn County.

Northern Energy Corporation headquarters in Bismarck, ND.

Disclaimer: I do this quickly. There will be typographical and factual errors. If this is important to you, go to the source. 

Billings:

• 46 parcels, more or less
• most parcels, 40-acres, 80-acres; and, 160-acres
• low bids overall, but best bonus: $366/acre, 40 acres, Norra Resources, LLC, section 26-144-98
• all parcels except five went to North Energy Corporation  
• one parcel to Douglas Morton
• three parcels to Norra Resources, LLC
• one parcel to Petro-Hunt, LLC

Burke:

• 18 parcels
• most parcels 40-acre, 80-acre, and 160-acre
• most parcels for $2.00/acre
• best bonus:  $206/acre for two separate parcels
• 1.72 acres, section 29-91-162
• 10 acres, section 29-91-162
• all parcels except four went to North Energy Corporation
• one parcel to Lynx Oil Company
• one parcel to Douglas Morton
• two parcels to Norra Resources, LLC

Divide:

• 3 parcels
• every parcel: 80 acres
• bonus: $26/acre (2); and, $36/acre (1)
• all parcels went to Northern Energy Corporation

McKenzie:

• 21 parcels
• almost all parcels were160 acres
• bonuses as low as $2.00
• best bonus: $512/acre -- 7.47 acres in section 18-146-98
• all parcels except one went to North Energy Corporation
• one parcel went to Lynx Oil Company

Williams:

• 8 parcels 
• 77 acres to 160 acres
• best bonus: $663/acre -- SE4-section 34-158-96
• every parcel: Northern Energy Corporation

Number Of Active Rigs In The Bakken Continue To Fall -- Now Down To 53 -- Slawson With Two New Permits -- November 6, 2019

Gasoline demand: link here.

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Back to the Bakken

Flashback: seven years old, but still a great video. 

Active rigs:

$56.55	11/6/2019	11/06/2018	11/06/2017	11/06/2016	11/06/2015
Active Rigs	53	66	52	37	64

Three new permits, #37160 - #37162, inclusive:

• Operators: Slawson (2); WPX
• Field: Big Bend (Mountrail); Spotted Horn (McKenzie)
• Comments: 
• Slawson has permits for a two-well Pike Federal / Motune Federal pad in section 10-151-02, Big Bend oil field
• WPX has a permit for a single Pronghorn well in section 27-150-94; Spotted Horn oil field;

Five permits canceled:

• EOG (3): three Van Hook permits in Mountrail County
• QEP (2): two MHA permits, both in Mountrail County

Two producing wells (DUCs) reported as completed:

• 35275, n/d, Whiting, Vance Federal 41-17H, two sections, Truax, t--; cum --;
• 35274, n/d, Whiting, Vance Federal 41-17TFHU, four sections, Truax, t--; cum --;

Brazil Off-Shore Auction A Total Disaster -- Bloomberg -- November 6, 2019

Link here. Brazil offshore auction a "total disaster." Look at the lede --

Brazil’s largest-ever auction of oil deposits flopped, sending the real tumbling, after state-controlled Petroleo Brasileiro SA did most of the bidding while other major oil companies stayed away.

• Brazilian currency slumps after two blocks sold to Petrobras at the minimu
• two other blocks go unsold; Exxon among companies not bidding 

Brazil is not a "short-cycle" story. Shale changed things. When I first started investing, back in 1984, oil companies were "valued" based on two criteria:

• earnings
• reserves

In addition, investors took the long view. That was then. Today, millennials, growing up in a world that has only twelve more years, are in a hurry. They don't have a long view. They need to see a return on their investments now: share appreciation and dividends. Does it matter the size of XOM's reserves in 2030 if the world ceases to exist in 2035 and/or if the world no longer uses oil in 2025? For companies to be relevant today, they need to provide an "immediate" return on investment for millennnial "investors." Brazil is not going to give Exxon that return on investment in the next six years.

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The Brazilian Story Is Huge

Re-posting: this commentary is linked at the sidebar at the right. It's from the Dallas Fed which, I would think, would know a bit about the oil industry and particularly, the US shale industry. There's a slight flaw in their analysis but that's fine. It should not affect their conclusions.

And their conclusions are summed up in one graphic which I find absolutely amazing. Spend some time on it. Note that the data is biannual -- every two years (2009, 2011, 2013, etc. through 2019).

Tag: breakeven points.