Canadian Rig Count Increases By Significant Number Relative To US Drop -- January 18, 2016

A reader noted that the number of active rigs in Canada jumped by 61 this past week compared to a continuing drop off of oil and natural gas rigs in the United States. My "not-ready-for-prime-time" reply:

If there is a logical reason for the sharp increase in the Canadian rigs (not due to political subsidies, supports, tax breaks, etc), one might think it has to do with the type of oil being produced. 

US refineries along the Texas/Louisiana coast were all optimized for heavy oil from Canada -- that conversion was done years ago in anticipation of the Keystone XL. Those refineries are now saturated with light oil, which they cannot process without a good addition of heavy oil.

It's very possible that what we are seeing with the increase in Canadian rigs makes "logistical" sense: the light oil glut in the US will result in rigs coming down in the US (light oil) and rigs increasing in Canada (heavy oil).

Also, there is some increased interest in Bakken wells and Spearfish wells just north of North Dakota in Canada. 

It is also much cheaper, relative to the US, to drill in Canada now. The Canadian dollar is near an all-time low at 70 cents US.

And then look at this forecast five days ago: Canadian dollar will drop to 59 cents US in 2016, a Canadian investment banker in Canada forecasts. The banker's new forecast doesn't see the loonie above 65 cents US at any time between the end of 2016 and the two years that follow.

It is also possible Canada will announce two rate cuts this year. 

Update On Four Newfield Pads In Sand Creek Oil Field -- January 18, 2016

See this post for background.

An update of four neighboring Newfield multi-well pads in Sand Creek oil field. Three of the pads are 3-wells pads; one well is a 4-well pad.

Pad A remains on line; only a few days off-line for any of the wells: SW 16-153-96, all horizontals run north; wells #27526, #27527, and #27528. The production from #27527 is perhaps the best:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2015	30	4421	4634	1202	12039	11175	609
BAKKEN	10-2015	26	1355	1177	560	4211	3948	144
BAKKEN	9-2015	30	3967	4221	1066	20463	14026	6167
BAKKEN	8-2015	31	4785	4327	1265	28253	15976	11997
BAKKEN	7-2015	31	5284	5484	1221	18596	14669	3657
BAKKEN	6-2015	30	5715	5581	1383	22395	8574	13552
BAKKEN	5-2015	31	7955	7974	1782	27825	0	27546
BAKKEN	4-2015	30	13111	12991	2254	32985	0	32721
BAKKEN	3-2015	31	9434	9334	1425	15847	3	15565
BAKKEN	2-2015	28	9912	10484	1829	17700	0	17448
BAKKEN	1-2015	17	16512	15827	4474	25565	23	25542

Pad B remains on line; a few days off-line for any of the wells : SE 16-153-96, all horizontals run north; wells #25074, #25073, and #25072. The production from #25072 is perhaps the best:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2015	30	4746	5170	947	17667	16320	1081
BAKKEN	10-2015	27	3844	3710	992	12149	11831	93
BAKKEN	9-2015	30	4584	4499	903	20383	13556	6557
BAKKEN	8-2015	31	5395	5182	1102	26565	20878	5408
BAKKEN	7-2015	31	6496	6120	1143	17841	14140	3423
BAKKEN	6-2015	30	6426	6548	1144	20583	3964	16366
BAKKEN	5-2015	31	8300	8752	1431	21673	0	21394
BAKKEN	4-2015	30	12821	12764	1900	24854	0	24584
BAKKEN	3-2015	31	10014	9609	1053	12737	0	12458
BAKKEN	2-2015	28	9698	9766	1055	13989	0	13737
BAKKEN	1-2015	25	24203	23916	4850	38756	0	38756

Pad C, this is perhaps the most "sporadic" of the four pads; NE 21-153-96, all horizontals run south; wells #28765, #28766, and #28767. Production from #28765 is typical of the three wells on this pad, even down to exactly only 12 bbls produced in the 30-days production in March, 2015, in all three wells. 

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2015	28	10888	10294	6190	20739	14384	6134
BAKKEN	10-2015	22	44	0	48	63	45	0
BAKKEN	9-2015	30	9726	9938	2045	17321	9103	8036
BAKKEN	8-2015	31	17682	17815	3453	25621	14997	10344
BAKKEN	7-2015	30	13395	13064	2550	17753	13019	4579
BAKKEN	6-2015	25	102	206	62	129	0	122
BAKKEN	5-2015	31	0	0	0	15	0	0
BAKKEN	4-2015	30	0	0	0	6	0	0
BAKKEN	3-2015	30	12	0	0	23	0	0
BAKKEN	2-2015	28	3226	3598	592	6553	160	6299
BAKKEN	1-2015	30	25653	25010	7185	34991	0	34991

Pad D, three of the four wells were off-line April/May, 2015, but since then all have been on-line. This pad is perhaps the best of the four: NW 22-153-96, all horizontals run south; wells #29268, #29113, #29114, and #29115. The one well of these four that has never been off-line is #29115; in April/May, 2015, when the sister wells off off-line, this well produced slightly less than 3,000 bbls in April and slightly more than 7,000 bbls the following month. All four wells took a huge jump in production in July, 2015. Production from #29114 is typical of the other wells on this pad:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2015	30	6232	6300	2514	26335	25172	902
BAKKEN	10-2015	31	7125	6989	2223	17645	17225	141
BAKKEN	9-2015	30	8570	8421	2445	21026	15564	5192
BAKKEN	8-2015	31	12964	12989	3397	23370	7841	15250
BAKKEN	7-2015	30	10247	10010	1766	14030	7373	6490
BAKKEN	6-2015	25	154	233	27	15	0	8
BAKKEN	5-2015	31	0	0	0	6	0	0
BAKKEN	4-2015	30	0	0	0	14	0	0
BAKKEN	3-2015	31	8960	9213	2388	14869	0	14678
BAKKEN	2-2015	28	11725	11821	3300	15132	0	14880
BAKKEN	1-2015	31	18749	18720	6473	20030	6383	13647
BAKKEN	12-2014	16	15022	14507	6738	20149	1831	18318

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It should be noted that these four Newfield pads will soon have a new neighbor. One section to the east, in section 15-153-96, XTO has a rig on a 4-well pad:

• 31223, conf, XTO, Harley Federal 24X-15F,
• 31224, conf, XTO, Harley Federal 24X-15B,
• 31225, conf, XTO, Harley Federal 24X-15E,
• 31226, ROS, XTO, Harley Federal 24X-15A, 

The wells are all sited on a north-south line even though most horizontals in this area run north/south.

Update On President Obama's War On Coal; It Will Cost Minnesotans Another $5/Month In Utility Bills -- January 17, 2016

Update on Big Stone. I think I've blogged about it before -- a long, long time ago -- ah, yes, here are some links (a mixture of Big Stone and Big Stone II [Milbank, SD]):

• the cost of going green, July 31, 2010 
• MDU and Otter Tail will get paid for power plant built, never used, October 24, 2009  
• Minnesotans enjoy higher utility rates, April 14, 2011 
• transmission line, March 23, 2014
• why MDU utility bills are increasing, July 25, 2015

This week it's being reported that it's likely that after $400 million in renovations and attempts to comply with EPA rules and regulations, most was for naught. Not to worry. It will only cost Minnesota rate-payers $5/month.

An environmental retrofit of Otter Tail Power Co.’s largest coal-fired power plant has finished significantly under budget, but the achievement is clouded by worries that new greenhouse gas rules will curtail how much the plant operates in future years.

In a report to Minnesota regulators this week, the Fergus Falls-based utility said the Big Stone, S.D., power plant owned with two other utilities went back into full operation Dec. 29, and the project cost, while not yet finally tallied, will be at least 22 percent below the original budget of $491 million.

But those emissions controls don’t reduce carbon dioxide, the gas linked to global warming. During the Big Stone retrofit, the U.S. Environmental Protection Agency proposed and later finalized its Clean Power Plan to cut greenhouse gas emissions at coal-fired power plants.

At first, Otter Tail officials raised alarm with the EPA that the plant — the only coal-fired generator in South Dakota — would be forced to shut down, stranding an investment that costs residential ratepayers in Minnesota about $5 per month. But the final rule softened South Dakota’s carbon targets, and the utility officials no longer are concerned about shuttering the plant.

Even so, the risk is that Big Stone, just across the border from Ortonville, Minn., won’t be allowed to operate at full capacity. It might have to shut down part of the time or run at partial output. Rudolf said it could take years before the answer is known. South Dakota has joined other states to challenge the carbon rule in federal court, but the state plans to develop a compliance plan in case that effort fails.

Based on the comments at the article, it was obvious "no one" cares.

Oh, when will this craziness end?

When will all this craziness end? I'm going to have to pay for all this 20 years from now.

Veeder Op-Ed On The Bakken -- January 17, 2016

Ms Veeder has an op-ed in The Dickinson Press this week. Nicely done. Also, please click on her blog, which I have linked at the sidebar at the right, as one of my featured blogs.

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Soccer

Our youngest granddaughter -- age 18 months -- at weekly soccer practice this morning. This was the first day they wore their "jerseys."

The Geico Rock Award, 2016: Best In Show -- Hillary Clinton

Best In Show: Hillary Clinton -- apparently unaware that it was the Electoral Vote not the popular vote that counted.

Hillary Clinton: wins the popular vote by 2.5 million votes (and maybe more). Despite winning the popular vote, she says Russian hackers rigged the system against her. She lost the electoral vote. She did not visit the state of Wisconsin even once during the campaign; apparently she was unaware that the US elects presidents based on the results of the Electoral College and not the popular vote.

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Category Winners

 Announced December 16, 2016

Environmental Activists and Warmists:

• Prof Peter Wadhams, Cambridge, predicating as recently as late summer, 2016, the Arctic Ocean would be ice-free this year; it wasn't -- not by a long shot

Group Award:

• Natural Resources Defense Council: realizing ten years late that biofuels are worse than oil. 

Intermittent Energy: 

• The individual who spent his life savings (about $40,000) to save a few bucks/month on utility costs

Bakken Boom, Williston Region: 

• Strippers and their patrons who failed to notice the Bakken boom was over

Bakken Boom, Dickinson Region: 

• No nominees this year
  

Radicalized Muslim Terror, Western Hemisphere:

• Obama: his under-estimation of the JV team; went golfing; would get the intel briefing on the 15th tee

Radicalized Muslim Terror, Europe:

• Merkel: on opening her country's borders, before realizing, "maybe not such a good idea"

Radicalized Muslim Terror, Mideast:

• Shi-ite cleric who lost his head speaking out in a country where speaking out is frowned upon; if he wins, the award will be awarded posthumously

State Government:

• Connecticut: raises corporate taxes despite warnings/protests from local businesses; GE moves out

2016 President Election:

• Hillary Clinton: wins the popular vote by 2.5 million votes (and maybe more); despite winning the popular vote, says Russian hackers rigged the system against her; she lost the electoral vote; did not visit the state of Wisconsin even once during the campaign; apparently she was unaware that the US elects presidents based on the results of the Electoral College and not the popular vote.

Miscellaneous:

• Al Sharpton: #BlackLivesMatter is "not anti-cop" speech; 24 hours later, #BLM-inspired shooter kills three Baton Rouge cops; injures many more

The Nominees

 

Nominations for the 2016 Geico Rock Award are coming in faster than I can manage. Because there are more than usual this year, we will have to establish categories:

• Geico Rock Award: Best In Show
• Geico Rock Award: Group Award
• Geico Rock Award: Intermittent Energy
• Geico Rock Award: Bakken Boom, Williston Region
• Geico Rock Award: Bakken Boom, Dickinson Region
• Geico Rock Award: Radicalized Muslim Terror, Western Hemisphere
• Geico Rock Award: Radicalized Muslim Terror, Europe
• Geico Rock Award: Radicalized Muslim Terror, Mideast 
• Geico Rock Award: State Government
• 2Geico Rock Award: 2016 Presidential Election
• Geico Rock Award: Miscellaneous

The winner in each category will compete for the "Best In Show" trophy. There can be no consecutive "Best in Show" winners: this is known as the "Obama Rule." There can be consecutive annual winners in all categories, except "Best in Show. Categories are still being added. Nominations through December 20, 2016, will be accepted. Suggestions for nominations are scrutinized. The judges are not looking for nominations for the Darwin Award, although there can certainly be overlap (consider the Shiite cleric inciting revolution in a country not particularly lenient when it comes to such talk).

Winners will be announced, assuming I don't get bored with this activity, or that I don't forget, on/about December 31, 2016.

Geico Rock Award: Environmental activists and warmists

• BNSF trains in Willmar, MN, could be traveling in both directions
• Global warming is making the historic 2016 winter storm worse 
• Prof Peter Wadhams, Cambridge, predicating as recently as late summer, the Arctic Ocean would be ice-free this year

Geico Rock Award: Group Award

• Natural Resources Defense Council: realizing ten years late that biofuels are worse than oil.  

Geico Rock Award: Intermittent Energy

• The individual who spent his life savings (about $40,000) to save a few bucks/month on utility costs
• The Minnesota couple who failed to notice how inexpensive natural gas was   
• NY Times writer, Eduardo Porto, who points out the obvious

Geico Rock Award: Bakken Boom, Williston Region 

• Strippers and their patrons who failed to notice the Bakken boom was over
• Tim Rezvan: it takes time to bring a DUC on-line 

Geico Rock Award: Bakken Boom, Dickinson Region

Geico Rock Award: Radicalized Muslim Terror, Western Hemisphere

• Hillary: her misunderstanding of the Benghazi situation; went to bed early, knowing she could read about it in the morning
• Obama: his under-estimation of the JV team; went golfing; would get the intel briefing on the 15th tee

Geico Rock Award: Radicalized Muslim Terror, Europe

• Newsweek: posting the story that Muslims are forming "nations within nations" -- apparently not understanding the basics of Islam 
• Merkel: on opening her country's borders, before realizing, "maybe not such a good idea"

Geico Rock Award: Radicalized Muslim Terror, Mideast

• Shi-ite cleric who lost his head speaking out in a country where speaking out is frowned upon; if he wins, the award will be awarded posthumously

Geico Rock Award: Federal Government

• FERC wants to know why electricity transmission costs are so high in New England
• Janet Yellen: economic outlook uncertain
• Marco Rubio, Presidential aspirant (and smartest of the group) is not aware that the US oil export ban has been lifted
• US official: yes, it appears to be terrorism
• Two NY Times staff writers note that ObamaCare marketplaces are in trouble  
• Two Tennessee state "officials" note that Tennessee is ground zero for the ObamaCare implosion

Geico Rock Award: State Government

• Connecticut: raises corporate taxes despite warnings/protests from local businesses; GE moves out

Geico Rock Award: 2016 Presidential Election

• President Obama: I knew Hillary was going to  win anyway. 
• Hillary Clinton: wins the popular vote by 2.5 million votes (and maybe more); despite winning the popular vote, says Russian hackers rigged the system against her; she lost the electoral vote; did not visit the state of Wisconsin even once during the campaign; apparently she was unaware that the US elects presidents based on the results of the Electoral College and not the popular vote.

Geico Rock Award: Miscellaneous

• Peak Oil blog is still up and running 
• Danny DeVito: the US is a racist nation 
• Clinton campaign spokesman Brian Fallon; he apparently did not hear his boss' speech on putting coal companies out of business.  
• Robert Frank and Rick Newman: noting that some states do not have a state income tax; and some folks take advantage of this little known fact 
• Rick Newman, Yahoo!Finance: noting that Saudi Arabia knows something about oil that the rest of us don't know.  
• Ken Hall, Three Affiliated Tribes Councilman: for not knowing the "Pocahontas" story and how it related to Elizabeth Warren and Harvard University. 
• Al Sharpton: #BlackLivesMatter is "not anti-cop" speech; 24 hours later, #BLM-inspired shooter kills three Baton Rouge cops; injures many more 
• Janet Yellen: the slow recovery confounds economic experts

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Past Winners

Geico Rock Award: Best in Show, 2015:  SecState John "I Served In Vietnam" Kerry: Rejection of Iran Deal Will Lead to U.S. Dollar Not Being the World's Reserve Currency.

Geico Rock Award: Best in Show, 2014: Ted Cruz was not aware he was a Canadian, that he had dual citizenship, until the media reported it. Once he found out, it took him nine months to officially renounce it. Coincidentally this was about the same time he got serious about running for president. This guy graduated from Harvard Law School.

Geico Rock Award: Best in Show, 2013: Devon Shire over at SeekingAlpha for reporting that Bakken oil production was decreasing the day before the Director's Cut came out, suggesting otherwise. Link here. 

Geico Rock Award: Best in Show, 2012:

We Can't Drill Our Way to Lower Gas Prices -- 

President Barack Obama with best advisers money can buy

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Speaking Of Gasoline At Low Prices

CNBC is reporting:

While gas prices are low nationwide, some stations are slashing the fuel's price to rock-bottom levels to the tune of less than 50 cents a gallon.

The drastic price cuts are part of a gas price war at three Houghton Lake, Mich., stations.

During the last three days, the prices dropped below a buck per gallon, falling as low as 46 cents at Sunrise Marathon. Meanwhile, the Beacon & Bridge gas station was as low as 47 cents, said employees of each station in interviews with CNBC.

A nearby Citgo says its prices slumped to 95 cents a gallon.