Five (5) New Permits; HRC Reports Two High-IP Bakken/Three Forks Wells -- November 17, 2015

Active rigs:

	11/17/2015	11/17/2014	11/17/2013	11/17/2012	11/17/2011
Active Rigs	64	184	183	187	201

One producing well completed:

• 29391, 1,142, XTO, Johnsrud Federal 34X-14H, Bear Den, 18-foot target zone with the first bench TF; within target zone 94.%; t11/15; cum 2K 9/15 (10 days of production); API 33-053-06257; from FracFocus:

• 8/22 - 25/15: 2.6 million bbls water, proppant 11%
• 9/30 - 10/1/15: 1.6 million bbls water, proppant 13%

Wells coming off the confidential list Wednesday:

• 27103, 2,808, HRC, Fort Berthold 148-94-27C-22-8H, McGregory Buttes, 23 stages, 3.5 million lbs, t5/15; cum 88K 9/15;
• 27105, 2,552, HRC, Fort Berthold 148-94-27C-22-7H, McGregory Buttes, a Three Forks well, 31 stages, 4.7 million lbs, t5/15; cum 69K 9/15;
• 31100, SI/NC, Hess, BL-Iverson C-LE-155-96-1423H-1, Beaver Lodge, no production data,
• 31140, SI/NC, Statoil, Cheryl 17-20 XE 1H, Banks, no production data, 

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27105, see below, HRC, Fort Berthold 148-94-27C-22-7H, McGregory Buttes:

Date	Oil Runs	MCF Sold
9-2015	8302	10580
8-2015	3056	4833
7-2015	15843	11444
6-2015	27261	23458
5-2015	13756	13935

27103, see below, HRC, Fort Berthold 148-94-27C-22-8H, McGregory Buttes:

Date	Oil Runs	MCF Sold
9-2015	12445	8876
8-2015	3744	2739
7-2015	19223	14231
6-2015	29393	26927
5-2015	22881	25907

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Five (5) new permits:

• Operator: Slawson
• Fields: Big Bend (Mountrail)
• Comments: based on location of the pad and the name of the wells (Submariner Federal) these wells will run west-to-east under the river. Of the five new permits, four will most likely be 1280-acre spacing; one will be on an overlapping 1280- or 2560-acre drilling unit.

TransCanada: Mexico Is A Bigger Deal Than The Keystone -- November 17, 2017

BloombergBusiness, today, writes that TransCanada will build the Tuxpan to Tula natural gas pipeline in Mexico:

TransCanada won the rights last week for its sixth pipeline in Mexico, one of the company’s key targets for growth. The Nov. 10 decision came four days after the U.S. denied TransCanada’s bid to build its Keystone XL oil sands project across the border into Nebraska where it would connect to existing pipes leading to Gulf Coast refineries.

That's what it says, TransCanada's "sixth pipeline in Mexico."

But just a few days ago, Oil & Gas Journal wrote:

By 2018, with Tuxpan-Tula, TransCanada will have five major pipeline systems, with $3 billion invested in Mexico.

Yes, I checked that several times, and "cut and copied" it directly to the blog.

So BloombergBusiness says this will be TransCanada's sixth, and Oil & Gas Journal says it will TransCanada's fifth pipeline in Mexico.

Other data point points from the BloombergBusiness article:

• TransCanada beat out Carlos Slim's Grupo Carso and Sempra Energy for this pipeline
• TransCanada now holds the rights to develop and operate 2,000 kilometers of pipelines in Mexico
• TransCanada currently only operates gas pipelines in Mexico but wants to expand to oil and power generation
• with Mexico much less difficult to deal with, TransCanada argues that Mexico is a bigger deal than the Keystone XL
• the company said it plans to extend its dividend growth plan of 8 to 10 percent annually through 2020 as more and more Mexican projects come on line
• there is little pushback in Mexico once the government approves a project
• Mexico plans to expand its pipeline infrastructure 75% by 2018 and is seeking as much as $10 billion in investment for 24 new projects in the short term

And then this:

• Mexico is planning to hold as may as five pipeline auctions before the end of January, 2016, and TransCanada will look at all of them.

After all, with the Keystone XL killed, TransCanada has other eggs to fry, or whatever the idiom is.

Pipeline, The Ventures

Walmart Beats -- November 17, 2015

National Oilwell Varco to close another Texas facility, cut jobs:

The facility, at 6738 Sideview Road in San Angelo, will cease operations, which will be finalized between January 15 and January 29, 2016.

The company did not specify a reason for closing the support facilities, though it cited economic reasons for closing other Texas facilities in previous WARN letters this year. Those letters have included 85 job cuts in Houston; 150 in Willis, north of Houston; and 110 in Mineral Wells, in North Texas.

Speaking of which, a reader wrote to tell me that OXY USA took the sign off its building in Dickinson earlier today, November 17, 2015.

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Wal-Mart Beats

Yahoo!Finance is reporting:

Wal-Mart (WMT) gave an upbeat earnings outlook for the current quarter after posting earnings per share that topped Wall Street views in its latest quarter. However, sales slightly missed forecasts, falling more than 1% from a year earlier on weak sales overseas. 

Shares up nicely.

And this is the answer to the oft-asked question: Wal-Mart or Walmart?

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Walmart vs Kroger, Whole Foods

I don't recall ever being in a Kroger supermarket before this past weekend. I assume I have, just didn't know it or don't remember.

My granddaughter and I were looking for a place to eat during a break in the water polo tournament, and on our way to Jersey Mike's subs in Flower Mound, TX, we walked by a Kroger. I've never met such friendly employees in a grocery store before, nor have I seen a nicer store.

When we walked in, an employee asked us if we wanted coffee and a donut. I assumed it was a fund-raising effort by some organization but it turned out to be simply Kroger's way of greeting us this particular Saturday morning. She had just run out of coffee, but told me there was more coming, but if I was in a hurry, there was also (free) coffee just inside the store.

The store was bright, not particularly busy, and seemed to have a really nice selection. I didn't do much comparison shopping but did note that there was an ample supply of 20-lb turkeys for 59 cents/pound (store brand) and Butterball 20-lb turkeys for $1.19/pound. So much for the media scare that there would be a shortage of turkeys this year, and if one found them, they would be overpriced. Yes, I know there's a lot of bone in a turkey but these prices are better than the prices we are used to paying for chicken in many cases.

Throughout the store there were many samples to try, and we almost did not need to go to lunch. But my granddaughter loves Jersey Mike's (this was my first time) and so we watched what we ate at Kroger and then went to Jersey Mike's. Best subs I have ever had. I told that to my daughter, and she says Jersey Mike's subs are good, but there is one sub restaurant that was better, but she couldn't remember the name; they were in Charleston, SC.

I have trouble with those who think Walmart and Kroger / Whole Foods are competitors. I think the customer profile for Walmart is a whole lot different from that of either Kroger or Whole Foods. I'm not saying which store will do better, Walmart or Kroger financially or is a better investment, I'm just saying that if given a choice, I would go to Kroger to shop for groceries before I would go to Walmart. But then that's me, and I'm not raising a family of six on blue collar wages.

Evidence Of Communication Between Wells -- November 17, 2015

Updates

April 26, 2016: in the original post, it was noted that #26158 was taken off-line (status: inactive). As of November, 2015, this wells was back on line:

• 26158, 3,771, Statoil, Johnston 7-6 3TFH, Banks, t11/14; cum 67K 2/16;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	2-2016	22	6895	7397	7691	12292	11236	591
BAKKEN	1-2016	25	13396	13316	12341	22228	20262	978
BAKKEN	12-2015	28	16274	16317	14975	27740	26382	177
BAKKEN	11-2015	21	12614	12039	18486	25698	23888	965
BAKKEN	10-2015	0	0	0	0	0	0	0
BAKKEN	9-2015	0	0	0	0	0	0	0
BAKKEN	8-2015	0	0	0	0	0	0	0
BAKKEN	7-2015	0	0	120	0	0	0	0
BAKKEN	6-2015	8	3838	3826	1834	5467	5028	439
BAKKEN	5-2015	27	4147	4221	2267	18398	14921	3477

 

Original Post

 

This is a long note. There will be typographical and factual errors. I may be seeing things that do not exist. If this is important to you, go to the source.

While looking up this well for other reasons I happened across this little gem, which is another pixel in the Bakken mosaic, helping me to better understand the Bakken.

29564, SI/NC, Statoil, Skarston 1-12 XE 1H, Banks, no production data,

I think this is a big, big deal, but then I am inappropriately exuberant about the Bakken. I get excited about a lot of things that turn out not to be so exciting and I have been accused of "childlike glee" (yes, that accusation followed one of my book reviews over at Amazon.com).

So with childlike glee and with inappropriate exuberance I post the following -- a small excerpt -- from the file report on this well:

As a measured depth of 20,411', April 4, 2015, the decision was made to stop and circulate out gas while transferring mud and increasing the mud weight. The decision was then made to continue to circulate off bottom while preparation could be made to switch the drilling fluid to oil-based mud. The oil-based mud was then increased to 12 ppg. It was found that even with 12 ppg oil-based mud, the shut in casing pressure (SICP) continued to increase while the well was shut in. It was then decided that the mud weight should be increased further to near 14.2 ppg. This process took several days to complete.

It was later discovered that the unidentified mineral was in fact, ceramic proppant. This is sometimes used as frac sand, or in conduction with quartz sand. It was also later confirmed, that there was in fact communication with an adjacent well that had been recently completed. 

It was believed that this communication between wells was causing the increased pressure and fluid gains.

This adjacent well was the Statoil Johnston 7-6-3TFH (#26158).

The mud weight was increased to 14.2 ppg....after drilling resumed, the pressure increased, and fluid gains were seen. The decision was then made to shut the well in and circulate bottoms up. This yielded a trip gas of 4,602 units, and a large flare ....
...drilling resumed .. while drilling ahead within the lateral, the ROP was near 35 ft/hr.

The slow ROP was due largely to the high mud weight. This caused the pump pressure to be near the maximum pump pressure rating of 5,000 psi at half pump strokes of the previous salt water driling fluid. Even with the high mud weight, slow ROP, and going through the gas buster, the background gas was near 750 units, and a 3 - 10 foot flare produced.

While nearing the end of the drilling, the report continues:

Bottoms up was circulated through the choke, after getting back to bottom. This resulted in a 10'flare and a trip gas of 6,282 units. ... [several challenges ensued]...the lateral was called TD at 20,823 feet (approx 1225 feet early) on April 14, 2015.

Separation and formations:

Horizontal separation between the laterals of the Skarston well and the Johnston well: about 600 feet. 

Vertical separation between the two laterals, approximately, 130 feet, it appears.

• The Skarston well, TVD = 10,903 feet
  The Johnston well, TVD = 11,035 feet

The target formations:

• Skartson: middle Bakken
• Johnston: Three Forks

The Johnston well:

• 26158, IA/3,771, Statoil, Johnston 7-6-3TFH, Banks, 35 stages, 4.5 million lbs sand and ceramic, t11/14; cum 18K 9/15; there is no information in the file report why this well is now inactive 

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	9-2015	0	0	0	0	0	0	0
BAKKEN	8-2015	0	0	0	0	0	0	0
BAKKEN	7-2015	0	0	120	0	0	0	0
BAKKEN	6-2015	8	3838	3826	1834	5467	5028	439
BAKKEN	5-2015	27	4147	4221	2267	18398	14921	3477
BAKKEN	4-2015	30	0	0	0	0	0	0
BAKKEN	3-2015	31	0	0	0	0	0	0
BAKKEN	2-2015	28	0	0	0	0	0	0
BAKKEN	1-2015	31	0	0	0	0	0	0
BAKKEN	12-2014	31	0	0	0	0	0	0
BAKKEN	11-2014	30	10319	10137	16985	0	0	0

Another Blow For Alaska -- November 17, 2015

Updates

November 20, 2015: Alaskans would rather let the state go broke and increase taxes. 

Alaska’s finances are unlike those of any other state. It has no income tax, no statewide sales tax and among the lowest per capita tax burdens in the U.S. Instead of from taxes, its money comes overwhelmingly from two sources: oil revenue, which provides close to 90 percent of the discretionary budget, and federal funds, of which Alaska has historically been among the top per capita recipients.

Revenues have slumped along with oil prices, however. In fiscal 2012, when oil prices spent much of the year above $100 a barrel, general fund revenues topped $7 billion. This year, with oil prices down to about $40 a barrel, the state expects to collect just $2.2 billion. Even after billions of dollars in budget cuts in the past two years, the state still faces an estimated $3 billion shortfall heading into the next fiscal year.

Alaska’s problems go beyond oil prices. Federal funding has fallen since stimulus funds dried up after the recession, and the state’s influence in Washington has waned since the electoral defeat of longtime U.S. senator Ted Stevens in 2008. The prices of other natural resources, such as gold and salmon, have also declined. Most significantly, the state’s oil production has been falling for decades, dropping below 500,000 barrels per day in 2014 from a peak of more than 2 million barrels per day in the late 1980s. Lower production means it takes higher prices to generate the same amount of tax revenue; the state estimates that it would take prices of $110 a barrel or more to balance the state budget at current production levels.

Making matters more difficult: Alaska may be entering a recession, if it isn’t in one already. “It’s at that point where my gut says we’re tipping toward recession,” economist Jonathan King of Anchorage consulting firm Northern Economics said earlier this week.
On Friday, the federal Bureau of Labor Statistics reported that after two months of job losses, Alaska added about 2,000 jobs in October compared with a year earlier. But the oil industry continued to cut jobs, as did the government, which makes up a larger share of employment in Alaska than in any other state but Wyoming. Alaska’s unemployment rate, at 6.4 percent in October, is well above the national mark of 5 percent.

Original Post

Seeking Alpha is reporting:

• Statoil says it is exiting its Alaskan operations and closing its office in Anchorage, saying its leases in the Chukchi Sea are no longer competitive within its global portfolio
• the decision means STO will exit 16 operated leases and its stake in 50 leases operated by ConocoPhillips
• it follows Shell's September decision to pull out of controversial drilling off Alaska's Arctic cost after failing to find sufficient signs of oil and gas to make further exploration worthwhile

I've lost the bubble on whether Alaska has raised its taxes on oil production or if it is still being discussed.

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California, Too

The Los Angele Times is reporting that California taxpayers are going to pay a lot more to bailout pension fund for state employees. 

The board of California's largest public pension fund approved a plan Wednesday to lower its estimate of future investment returns — a move that will require taxpayers to pay billions of dollars more than expected over the next decades.

For years, the California Public Employees' Retirement System has estimated it will earn an average of 7.5% or more a year from its investments. Under the new plan, the pension fund will slowly reduce that rate to 6.5%.

The plan that will reduce the rate in small increments over the next 20 years.

The vote was criticized by Gov. Jerry Brown, who had urged the board to move more aggressively to 6.5% rather than stretching the change over decades.

With investment income contributing less to the cost of government worker pensions, taxpayers must pay more.

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If This Doesn't Put A Smile On Your Face ...

I will come back to these videos later, but if you haven't seen them, wow ... what a thrill awaits you.

A reader alerted me to Jools Holland's second episode in this documentary series, but it was so incredible, I had to go back to the first episode.

If you don't have time to look at a YouTube video today, simply click on the video below, move to 3:50, and let it play in the background while you scroll down the blog. This piano teacher charges $4 / second, according to Jools.

Walking To New Orleans, Fats Domino, Jools Holland's Walking To New Orleans And this is why I love to blog.