Friday, December 2, 2016

Possible Halo Effect Of An EOG Well Recently Brought Back On Line -- December 2, 2016

Check later:

Start before 25005; 25005; 25006; 25007; 25008; 25009; 25010; 25011; 25012; 25016; 25033; 25034; start with 25035. 

Updates

December 17, 2016: this is a very interesting subject. I've long wondered how far out -- radially -- fracking is effective. The payzones in the Bakken are very thin -- 50 to 80 feet -- so I'm not going to worry about horizontals separated vertically. I'm simply concentrating, for now, on horizontal wells in the same payzone (generally the middle Bakken).

When the Bakken boom began a lot of folks were to led to believe or believed for some reason that the Bakken would "average" about one well per section. Based on some early CLR wells, it was clear to me that there would be multiple wells in each section and I blogged about that early on. I was the first one to talk about that on a blog on a regular and a frequent basis.

As the horizontals increased in number in one section, the question naturally arose, how close can a horizontal be drilled without impacting a neighboring horizontal. A section is 5,280 feet x 5,280 feet. Generally speaking, we are now seeing spacing of six horizontals across one section/one payzone which works out to about 800 feet separation.

So, let's say the separation gets down to 500 feet between horizontal wells (again, horizontally, not vertically). If the data confirms that if a new frack has no effect on an older well 500 feet away -- again, no effect -- then the question naturally arises: can the horizontal separation between horizontals be decreased further.

Caveat: higher intensity fracking became more common in 2016. One would assume that would extend the radial efficacy of fracking.

More rambling: it's important to remember proved reserves are based on potential for economic recovery. One begins to wonder if high-intensity fracking might increase/expand the number of "sweet" spots in the Bakken, if that makes sense. We're already seeing that in stories about the Permian: that better technology / improved completions have increased the inventory of future drilling sites for companies operating in the Permian.

To me this is very confusing. I have two problems: I have trouble understanding it, or conceptualizing it; and, I have trouble articulating it. For now, all I can do is wait and watch, or is it, watch and wait?

December 16, 2016: from a reader with regard to the halo effect:
You are the only one pushing the "halo effect" narrative.  It is probably just pressure buildup from the well being off line.  Would get the same effect even if no nearby frack, just gave the well a rest and brought it back on line.  Easy to test. 

Go look at what happens when CLR brings wells back on line from shut in (with no nearby drilling).  Bet you see a "halo effect" there also.  Which just means there is no such thing as halo effect.  Bashing the nearby well doesn't make the existing well produce better.  All you see is a temporary blip up from shutin in during completions. 

It's crazy to think there is some super secret halo effect that companies don't talk about, but Bruce Oksol has detected.  After all there are all kinds of companies touting their advances in proppants and other aspects of well design.  If there were a halo effect, we would hear it on the investor calls.  And service companies would spread the knowledge all over the place.

How many times must you be told this?  The answer, my friend, is blowing in the wind.
Later, 4:06 p.m. Central Time: I have added this to my FAQ list, #81, following a comment from a reader  --
81. What do you mean by "halo effect" when neighboring wells are fracked? When existing, neighboring wells are very, very close to new wells that are being fracked in the same formation, common sense suggests that some of the "new" fracking might extend to the older, existing wells.
In fact, there are numerous examples in which an existing well shows increased production after a neighboring well is fracked.
However, I have always had a concern that the increased production is simply a result of increased pressure building up while the existing well is taken off-line during the fracking of the neighboring well.
Once the older well is brought back on line the increased production is simply due to pressure that has built up and once the well has been back on line for a few months, production returns to what it would have been regardless.
That's why I call it the "halo effect" -- it is very likely that it is simply a build-up in pressure and has nothing to do with the fracking of the neighboring well per se. So, for now, the "halo effect" is simply an observation and I am not making any conclusion why it is happening. But yes, my initial enthusiasm regarding the "halo effect" and what I originally implied, may be (and is likely to be) completely wrong, and due more to my inappropriate exuberance about the Bakken than a rational explanation.
Regardless of the reason for the "halo effect," it will often result in increased "mailbox money" for a few months (all things being equal) when the well is brought back on line, but don't expect it to necessarily continue forever.

Original Post
 
I will come back to this one later. It shows the halo effect of fracking, I believe:
  • 16795, 1,519, EOG, Austin 4-09H, Parshall, open hole frack, 2.6 million lbs; t12/07; cum 656K 10/16; API: 33-061-00570;
Monthly Production Data

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-20163138993809859301414471315
BAKKEN9-201630470747201172321629720
BAKKEN8-2016314168417724552420214326
BAKKEN7-2016314654463916852303203729
BAKKEN6-2016304649457922861596126686
BAKKEN5-2016273357337428991178734234
BAKKEN4-201631909551449490
BAKKEN3-20160000000
BAKKEN2-20160000000
BAKKEN1-20160000000
BAKKEN12-20151004710100
BAKKEN11-201521140314806981125720243
BAKKEN10-201513981930427723519109
BAKKEN9-20152714191434861271101837
BAKKEN8-2015311837185111316391049338
BAKKEN7-201531189219011141568128039
BAKKEN6-201530186718721091436110587
BAKKEN5-201528176817761071322107521
BAKKEN4-201530220521871721444117625
BAKKEN3-201531246725002071606131440
BAKKEN2-201528228522851241514126917
BAKKEN1-20153126102617149173514206


Screenshot of the area under discussion:


Random Update Of An EOG Well Brought Back On Status -- December 2, 1016

Locator: 10010EOG.

Updates

January 11, 2022: updated production data.

Original Post 

This is the well that was taken off-line for quite some time while EOG fracked wells in the immediate area. The well went back on status in early 2016. Over the next few months, we will see the results of this well and area wells. I don't see any evidence of any halo effect.

  • 17011, 1,663, EOG, Parshall 4-20H, t7/08; cum 431K 5/17; IA as of 5/14; shut in while EOG executes a downspacing and infill drilling program; dated August, 2014; active as of 3/16; off line 5/21; cum 451K 5/21; cum 467K 11/24;
Of interest: it looks like an open hole frack with 1.8 million lbs proppant; no record of the frack at FracFocus.

Of interest: of the newer wells that have been fracked and the date reported, note the number of high-intensity wells.

Monthly Production Data since 2/14:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN10-201631106610391722193727
BAKKEN9-201630981933292249990
BAKKEN8-201631108612013173051520
BAKKEN7-201631115810582473021470
BAKKEN6-201630118912173072611101
BAKKEN5-201631132713003523311770
BAKKEN4-201630159014363385233721
BAKKEN3-20161053039636825619315
BAKKEN2-20160000000
BAKKEN1-20160000000
BAKKEN12-20150000000
BAKKEN11-20150000000
BAKKEN10-20150000000
BAKKEN9-20150000000
BAKKEN8-20150000000
BAKKEN7-20150000000
BAKKEN6-20150000000
BAKKEN5-20150000000
BAKKEN4-20150000000
BAKKEN3-20150000000
BAKKEN2-20150000000
BAKKEN1-20150000000
BAKKEN12-20140000000
BAKKEN11-20140000000
BAKKEN10-20140000000
BAKKEN9-20140000000
BAKKEN8-20140000000
BAKKEN7-20140000000
BAKKEN6-20140000000
BAKKEN5-201413843960606105540
BAKKEN4-20143020572067288166315130
BAKKEN3-201431219321931501806163516
BAKKEN2-20142819971983227140812680

Screenshot of the area under discussion:



The section in which #17011 is sited is part of three different sized-drilling units: a 640-acre unit; a 1280-acre unit; and a 2560-acre unit. In time, it will also be part of a 5120-acre unit.

There are no less than thirteen (13) horizontal wells that are in this section, in part or whole:
  • 28404, TATD-->1,399, EOG, Parshall 31-1820H, producing as of 1/17; still on confidential; t1/17; cum 267K 11/21;
  • 28402, TATD-->428, EOG, Parshall 30-1820H, producing as of 1/17; still on confidential; t1/17; cum 211K 11/21;
  • 27391, TATD-->998, EOG, Parshall 68-1820H, producing as of 1/17; still on confidential; t1/17; cum 233K 9/21;; went off line 10/21;
  • 28401, 1,611, EOG, Parshall 153-1820H, Parshall, t1/17; cum 57K 5/17; cum 195K 11/21;
  • 27390, 918, EOG, Parshall 69-1820H, Parshall, t1/17; cum 81K 5/17; cum 269K 11/21;
  • 27445, 766, EOG, Parshall 158-20H, Parshall, t1/17; cum 54K 5/17; cum 118K 11/21; recently back on line after being off line for almost a year; cum 118K 11/21; ; recently back on line after being off line for almost a year;
  • 27444, 335, EOG, Parshall 78-20H, Parshall, t1/17; cum 22K 5/17; offline since 4/21; struggling; cum 61K 11/21;
  • 17011, 1,663, EOG, Parshall 4-20H, one section, t8/08; cum 431K 5/17; API 33-061-00635; offline as of 5/21; cum 451K 11/21;
  • 28602, 1,031, EOG, Parshall 154-1721H, 44 stages,  8.9 million lbs, t2/15; cum 247K 5/17; cum 296K 11/21;
  • 28603, 942, EOG, Parshall 99-1721H, 53 stages, 12 million lbs, t12/14; cum 157K 5/17; cum 165K 11/21; recently back on line after being off line for quite some time;
  • 27123, 1,083, EOG, Parshall 42-2117H, 44 stages, 11.3 million lbs, t2/15; cum 337K 5/17; cum 439K 11/21; back online after recently being off line;
  • 28014, 221, EOG, Parshall 67-2117H, 45 stages, 11.4 million lbs, t2/15; cum 110K 5/17; cum 153K 10/21; offline -- online -- off line;
  • 27124, IA/1,053, EOG, Parshall 43-2117H, 28 stages, 5.7 million lbs, t2/15; cum 147K 5/17; cum 176K 11/20;

Sunni Caliphate's Footprint Continues To Shrink -- December 2, 2016

I track the Sunni caliphate (aka ISIS, aka ISIL, aka IS, aka EIEIO) at this post.

In today's Wall Street Journal there's an update of sorts. I don't think the update is all-encompassing as the articles I want to post at the link above. I'm trying to keep things on that page to a minimum; otherwise there will be too many balls to juggle and I will the bubble (mixing metaphors).

But the WSJ has a neat map and a neat update of where "we" are in the Mideast with regard to ISIS, so it's worth capturing to at least some degree.

The map:

********************** 
Custer's Trial: A Life o the Frontier of a New America
T. J. Stiles (winner of the Pulitzer Prize)
c. 2015
DDS: BIO CUS

Not quite ready for this. Seems a bit tedious. There are no reviews of this book over at Amazon.com.

Random Update Of ONEOK -- December 2, 2016

ONEOK was a big name in the Bakken, early on. I track it here. I haven't updated ONEOK in a long time. Now this, from Zacks:
Shares of ONEOK Inc. OKE scaled a new 52-week high of $56.00 on Dec 1, before closing at $54.42. Over the past 52 weeks, ONEOK Inc.’s shares have ranged from a low of $18.84 on Dec 18, 2015 to a high of $56.00 on Dec 1, 2016. The average volume of shares traded over the last three months is approximately 1.9 million.
One year ago, ONEOK trading under $20.

Now, ONEOK trading at $55. 

$12 Coffee? November Unemployment Rate "Tumbles" To 4.6% -- Yahoo!Finance -- December 2, 2016

The magic numbers:
First time claims, unemployment benefits: 400,000 (> 400,000: economic stagnation)
New jobs: 200,000 (< 200,000 new jobs: economic stagnation)
Economists estimate the labor market needs to create about 125,000 jobs a month to keep the unemployment rate steady, though estimates vary -- Reuters.
Today's November, 2016, numbers:
  • new jobs: 178,000
  • forecast: 180,000
  • hoping for: 200,000
  • unemployment rate ticks down to 4.6% (Yahoo!Finance says the rate "tumbled"; says the number of jobs added was a "tad lighter" than forecast)
How did the market react to that news? Meh. No change. Dow 30 futures still down about 30 points.

********************************
Starbucks CEO To Focus On High-End Coffee Shops

From The Wall Street Journal:
Howard Schultz is stepping down as chief executive of Starbucks Corp. to lead an effort at the company to build high-end coffee shops that will charge as much as $12 a cup, his next attempt to revolutionize the way Americans consume coffee.
This simply tells me how much money is floating around the US.  A lot of people have a lot of money. There are a lot of six-figure income folks that don't want to sit and drink coffee with teen-agers.
Starbucks’s move toward high-end coffee, a project referred to internally as “Siren Works”—after the mythological creature in the coffee chain’s logo—is aimed at refreshing its brand, which has been facing increasing competition from specialty roasters such as Stumptown and Intelligentsia, as well as from mass coffee purveyors like Dunkin’ Donuts, which has been introducing more drinks such as cold-brewed coffee.