The Million Dollar Way (The Bakken Oil Blog)

Wednesday, August 14, 2024

A Reader Has Several Questions Regarding The Bakken -- August 14, 2024

Locator: 48419B.

Updates

May 25, 2025:

The Grayson Mill Marilyn wells:

39317, drl/A, Grayson Mill, Marilyn 31-33 1H, Painted Woods, t10/24; cum 148K 3/25;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2025	20	10211	10125	21686	9443	9268	175
BAKKEN	2-2025	27	14782	14812	29401	16534	14938	1596
BAKKEN	1-2025	30	19661	19743	38791	18472	17109	1363
BAKKEN	12-2024	31	28438	28505	56806	27970	20370	7600
BAKKEN	11-2024	29	38731	38582	75224	34800	30404	4396
BAKKEN	10-2024	24	28592	29380	66222	23618	3811	19807
BAKKEN	9-2024	9	7911	6874	9966	9731	0	9731

39318, drl/A, Grayson Mill, Marilyn 31-33 2H, Painted Woods, t10/24; cum 128K 3/25;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2025	21	9730	9700	26543	10010	9772	238
BAKKEN	2-2025	25	17616	17649	35028	20212	18126	2086
BAKKEN	1-2025	31	22925	22906	50139	23923	22158	1765
BAKKEN	12-2024	31	23474	23494	58434	24864	18105	6759
BAKKEN	11-2024	26	28700	28626	76463	26796	23411	3385
BAKKEN	10-2024	21	25000	24790	64017	22089	3564	18525
BAKKEN	9-2024	2	81	70	1537	15	0	15

39319, drl/A, Grayson Mill, Marilyn 31-33 3H, Painted Woods, t10/24; cum 139K 3/25;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2025	25	7262	7322	24884	7939	7736	203
BAKKEN	2-2025	27	18735	18834	39927	24804	22441	2363
BAKKEN	1-2025	31	29012	29037	56815	32053	29659	2394
BAKKEN	12-2024	31	33983	33845	78006	37570	27357	10213
BAKKEN	11-2024	27	25507	25456	68840	22276	19469	2807
BAKKEN	10-2024	25	24101	23978	71365	20298	3275	17023
BAKKEN	9-2024	3	672	584	3091	128	0	128

39320, drl/A, Grayson Mill, Marilyn 31-33 4H, Painted Woods, t10/24; cum 131K 3/25;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2025	20	8981	9000	25345	11638	11426	212
BAKKEN	2-2025	28	19340	19423	44757	27003	24480	2523
BAKKEN	1-2025	31	28550	28540	65978	30517	28265	2252
BAKKEN	12-2024	31	30633	30530	84554	30436	22162	8274
BAKKEN	11-2024	25	24720	24630	71656	21441	18726	2715
BAKKEN	10-2024	23	18863	18705	65192	15311	2470	12841
BAKKEN	9-2024	3	45	39	1586	13	0	13

Wells of interest:

21660, IA/2,344, Grayson Mill, Wing 4-33 1H, Painted Woods, t4/10; cum 261K 4/24; offline since 5/24;,
18534, IA/1,924, Grayson Mill, Mortenson 5-32 1H, Painted Woods, t4/10; cum 222K 4/24; offline since 5/24;
18439, IA/2,323, Grayson Mill, Jack Erickson 6-31 1H, Painted Woods, t3/10; cum 267K 4/24; offline since 5/24;

Original Post

Locator: 48419B.

In a long note like this, there will be content and typographical errors. This is the first iteration for this post. It will go through several iterations, updates, corrections. The usual disclaimer for the blog still applies.

My comments are a bit disjointed below because I was updating things, and going back and forth while studying the maps and production data. But I think the reader can get the gist of what I'm saing.

A reader had a question: how will four new wells affect three existing wells?

The graphics are below.

The three existing (older) wells are identified with red ovals.

The four new wells, still on confidential list, are on a 4-well pad, the pad identified with a blue oval.

The existing wells are in three adjacent stand-up 1280-acre spacing units; the three wells run south to north.

The new wells, on a four-well pad, as noted, are on a laydown 1920-acre (three section) spacing unit; the horizontals run from west to east.

First question: how will the new wells affect the existing / producing wells in regard to their "status" once the new wells are completed?

Answer: this is crucial -- all wells "stand alone." It does not matter that new wells are being drilled in the same area -- in the sense that the old wells will still exist, regardless of new wells being drilled. So, ignore the new wells; the existing wells keep "doing their thing."

In this case, the new wells are not even in the same spacing units as the existing (older) wells.

Second question: how will the new wells affect the existing / producing wells in regard to "actual production"?

1. If the reader has minerals in all six sections of the existing wells, the reader will participate in oil royalties from the four new wells.
2. If the reader has minerals only in the south sections (sections 4, 5, and 6) the reader will not collect royalties from the four new wells. [This applies to the reader.]
3. If the reader has minerals only in the north sections (31, 32, and 33), the reader will collect royalties from the four new wells. [This does NOT apply to this reader.]

4. In this case, the reader says he/she has a mineral interest only in the south section. This means that the reader will not participate in the new horizontal wells.

Break, break.

Now, how will the new wells affect the production of the existing wells/ To some extent, it depends on whether the existing wells and the new wells are targeting the same formation. Based on the names of the wells and the reader's input, it appears that the existing wells and the new wells are all middle Bakken wells.

Assuming they are all middle Bakken wells, it is likely that the new wells will "enhance" the production of the existing wells. In some Bakken fields in North Dakota, new wells have a huge "positive" effect on existing (older) wells, whereas in other Bakken fields, new wells have little effect on existing (older wells).

These wells are in the Painted Woods oil field. In this field, newer wells tend to have little to no effect on existing (older) wells.

So, what's likely to happen:

1. The operator will take the existing (older) wells off line while the newer wells are fracked. Generally, once the wells are drilled to depth, the operator will frack the four wells in short order. Existing (older) wells may be taken off line for a short time -- as little as one month in some cases -- or much longer -- sometimes months.

2. Once the new wells are fracked and associated work on these wells completed, which may be several months from now, the existing (older) wells will be brought back on line. This does not always happen; this will be discussed in greater detail below.

3. When the older wells are brought back on line, initial production may be less, the same, or more than what the production was prior to being taken off line. But within a few months, production from the older wells will be back to what the production was before they were taken off line.

4. All things being equal, the new wells should have much better production than the old wells because the operators have gained a huge amount of experience over the years of drilling the Bakken.

What could happen?

If the new wells are really, really, really good, and the old wells are "petering out" and getting too expensive to maintain for the amount of oil being produced, the operators could take the older wells off line permanently.

What else is likely to happen?

If the wells are really, really, really good -- and even if only pretty good -- the operator will drill four more horizontal wells in a laydown 1920-acre unit consisting of sections 4, 5, and 6.

These are the graphics:

Everything above is a mixture of fact and conjecture (opinion) based on my experience following the Bakken since 2007. I have no formal training in oil exploration / production, and no background in the oil business or geology. Everything above could be absolutely wrong, and/or interpreted incorrectly by readers. But I'm pretty sure I know what's going on. If I'm wrong, I will be quite surprised, though absolutely anything is possible.

Later, I will look at the production profiles of the existing wells and see if anything else comes to mind.

I doubt I will spend much time on the new wells because they are still on confidential list, but we'll see.

Once I post this, I will wait for the reader to see if he/she has more questions, or if something needs clarification, but I probably won't get to those questions for another 24 to 48 hours.

Bottom line: because the reader has a mineral interest only in the south section in the 2-section, 1280-acre unit, the reader will NOT receive royalties from the new horizontal wells to the north BUT and this is a huge "BUT" -- the operator will eventually drill four similar horizontal wells west to east, cross the south unit, and the reader will participate in those four wells. There is no way to guess when the operator will drill these four wells -- it could be next year or ten years from now, but it will happen (conjecture) based on how things are being done in the Bakken.

I will correct the formatting of this post later.

The original question from the reader (with some mild editing):

We have an interest in a well that is in a 1280-acre standup drilling unit. Our interest is in the south section of this two section drilling unit. This well was drilled in 2010 and is still producing as of the last royalty payment received.

Apparently, a new 1920-acre extended lateral drilling unit was formed but in a lay down configuration. This lay down drilling unit runs through the north section of our drilling unit but not in the south section where we have an interest.

Back in May, Grayson Mill began drilling four new wells from west to east in this new drilling unit. The question is, does this new drilling unit negate our current drilling unit and well altogether possibly leaving us hung out to dry? Answer: no. The new spacing unit, the new wells, do not "negate" your current drilling unit. Your drilling unit exists forever for the existing well. That can't be changed.

Would our well likely be shut in permanently due to this new unit configuration? Answer: yes, it's possible but not likely.

Our well and the new four wells are all middle Bakken wells so at some point the well bores will cross and being that the MB seam is not that thick, you would think there will be some drinking of each other's milkshake? Answer: impossible to quantify. But in all my years of looking at production profiles, I have come to certain conclusions but it's an opinion with which most folks would disagree with me, so I won't opine.

And think what the effect could be on our well when fracking occurs on the new wells. I realize they shut existing surrounding wells in while fracking occurs close by, but this is an actual well bore crossing. At the end of the day, I have a feeling this is not a positive situation for our interest. Yes, they will take the wells off line while the new wells are being fracked -- in fact they are already off line -- see below. No one can predict whether the wells will be brought back on line but my hunch is that they will be brought back on line -- see below -- but it is very iffy.

The area of concern: sections 4, 5, and 6 - T154N R102W (Wing, Mortenson, and Jack Erickson) and sections 31, 32, 33 - T155N R102.

The four new wells are sited in section 31-T155N R102W. (Marilyn wells). I believe all these wells are currently Grayson Mill wells. Yes, they are all Grayson Mill wells.

With regard to the "milkshake" analogy, there's no way to quantify that. I can opine on that but I doubt anyone would agree with me. The new wells are too far away to affect the south section (some may disagree with that) so if the operator shuts in the existing wells, he is shutting in a lot oil, suggesting to me, the operator won't shut in the older wells at this time. [I just checked the production profile of the existing wells. Those three older wells were shut in the last 17 days of May, 2024, and the entire month of June, 2024. Prior to being taken offline, the wells were each producing around 800 bbls off oil / month which is getting pretty low. The good news is that the operator still shows these wells as active. I'm betting they come back on line but not 100% comfortable in that bet.]

The worse thing that could happen, is YES, the operator could shut in the reader's well. But, long term, the operator, as mentioned above, will eventually drill four new horizontal wells across the south section where the reader has minerals.

From the reader's perspective, this is likely to be bad news -- these new wells being drilled. From my perspective, it's great news. It tells me the operator is interested in this area. It's unfortunate for this reader that the new wells were not one mile to the south but eventually wells will be drilled there also (conjecture).

One last thought: if the new wells really, really affected the older wells positively, then it's even less likely the operator would shut in the older wells. But again, in the Painted Woods oil field I have not seen much of a halo effect. I would love to be pleasantly surprised in this situation.

Columbia President Resigns -- August 14, 2024

Locator: 48418GAZA.

Tag: Columbia president resigns

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Good Vibrations

Link here.

Intel -- Lunar Lake -- Core Ultra 200V

Locator: 48417INTEL.

Original Post
August 14, 2024

September 3, 2024: Lunar Lake now shipping. Re-named: Core Ultra 200V.

Intel's Lunar Lake, wiki, August 14, 2024.

Intel's Lunar Lake changes everything about X86. Forbes, July 3, 2024.

Intel sells stake in chip designer Arm Holdings, Yahoo!Finance, August 14, 2024.

Could Intel be booted from the Dow? Asking for a friend, August 14, 2024.

From Forbes, wow, this sounds like Apple's M4 -- SoC --

This year’s Computex in Taiwan, arguably the largest and most influential PC trade show in the world, saw Intel unveil more details about its Lunar Lake processor during CEO Pat Gelsinger’s keynote. I was personally surprised that Intel didn’t lead with Lunar Lake and PCs during Gelsinger’s presentation, considering that Computex is predominantly a PC-oriented show. Instead, it led with data center and server AI products, which I believe was a mistake because most people’s focus at the show is on PCs. But it seems clear there was an executive decision on Intel’s part to talk up its competition with NVIDIA.

Just before Computex, I had the opportunity to attend Intel’s Tech Tour in Taiwan, the company’s third such architectural briefing series around the world. The purpose of these tours is to showcase Intel’s latest innovations and shine a light on the local Intel teams that make its global success possible. Last year’s Meteor Lake processor briefing was held in Penang, Malaysia, where the company does a lot of its packaging and testing. Taiwan is strategically important for Intel because it is the heart of the PC ecosystem, and all PC vendors have a significant presence there.

Lunar Lake is Intel’s best bet to compete with the rising threat of Arm-based architectures, especially those coming from Apple and Qualcomm, which deliver both high performance and efficiency for laptops. While AMD also offers some competition, its AI processors have been positioned more for high performance than low power consumption. Lunar Lake’s specs and design also align with Microsoft’s vision of what makes a Copilot+ PC.

To accomplish all this, Lunar Lake is not just another incremental improvement over Intel’s previous designs; it is a radical departure for the traditional x86 paradigm that has dominated the PC industry for decades. At a platform level, Lunar Lake is an evolution from last generation’s Meteor Lake with further improvements to performance and efficiency and a continuation of its advanced packaging design. This includes the introduction of on-package memory.

One of Intel’s most important ingredients in accomplishing this task was radically changing how it implemented its different types of CPU cores. Lunar Lake is a significant departure because it focuses on power efficiency and does so by prioritizing a cluster of four Skymont efficiency cores (sometimes called E-cores) over Lion Cove performance cores (P-cores) for most tasks. By isolating the efficiency cores into a four-core cluster, Intel is also able to keep as many workloads as possible on the smaller, more efficient cores before lighting up the bigger, more power-hungry performance cores.

One of Intel’s engineering achievements for Lunar Lake is that in certain workloads Skymont’s single-threaded performance is anywhere from 38% to 68% faster than the last generation. Not only that, but the new Skymont cores are much more dynamic, delivering the same performance at one-third the power, 70% greater performance at the same power or even 2x the performance at marginally higher power. The four-core cluster can deliver up to 2.9x the performance of two of Meteor Lake’s E-cores at the same power.

These new E-cores are so performant that they are effectively on par with earlier Raptor Cove performance cores found in Intel’s 13th and 14th Gen desktop CPUs. The Lion Cove P-cores also deliver a 14% uplift over their Redwood Cove counterparts in Meteor Lake, making them the fastest cores in the CPU. Intel has architected these cores’ power and performance curves to overlap perfectly, maximizing the performance and power efficiency of the SoC. The next generation of Thread Director is designed to make sure that workloads are appropriately sent to the right cores, optimizing for efficiency and prioritizing the E-cores for the first time ever.

Lunar Lake is Intel’s first implementation of its second-generation GPU architecture, dubbed Xe2. This is the same GPU architecture planned for the company’s much-anticipated discrete Battlemage GPUs that are expected to ship soon. Intel says that the new Xe2 architecture is 50% faster than its predecessor inside of Meteor Lake and features new XMX engines, which increase AI performance to 67 TOPS. Intel has also spent the last year working on improving graphics drivers for its Xe family of GPUs, which means that the Xe2 architecture will come out of the gate much more optimized for most games, including older titles.

This, paired with the expected 48 TOPS from the NPU on the same SoC, delivers well over 100 TOPS of platform AI performance, which makes for a nice statistic but will almost never be possible to utilize all at once. The important part is that the NPU and GPU are each quite performant and can deliver high-end AI experiences that developers want their users to have. What’s more important is how efficiently the GPU and NPU deliver this level of performance—and how that preserves battery life. Intel says that its fourth-generation NPU is twice as performant at the same power as the last generation and capable of four times as much peak performance.

Much, much more at the link.

By the way, articles like this in Forbes were the reason I finally subscribed to Forbes.

List of Intel CPU microarchitectures.

I have no idea why wiki does not list Intel Lunar Lake at this page.

Meteor Lake.

Comment: personal investing --

I have no positions in Intel --
I'm overweight in tech, right now --
I have positions in seven incredibly good tech companies and don't see the need for any more --
I would not replace any of my tech positions with Intel --
but, having said all that, I'm going to be watching Intel like a hawk for the next twelve months and if there is any hint that Intel starts to move like I think it could -- I'll be the first to start a new position --
if I rode Intel down to $20 with the recent sell-off, I might:

hold, hoping for better times; or,
sell it all, take the tax loss harvest, and then buy back in 30 days

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Disclaimer Briefly

Reminder

I am inappropriately exuberant about the US economy and the US market,
I am also inappropriately exuberant about all things Apple.
See disclaimer. This is not an investment site.
Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.
Reminder: I am inappropriately exuberant about the US economy and the US market,
I am also inappropriately exuberant about all things Apple.