Wanna See Another Big Bakken Well? 172K In Less Than Four Months -- August 17, 2018

The well:

• 23964, 2,712, WPX, Arikara 15-22HB, Reunion Bay, t3/18; cum 172K 6/18; 

Full production profile:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2018	30	32609	32731	19377	32417	6018	22758
BAKKEN	5-2018	31	43695	43651	25834	34431	8204	21395
BAKKEN	4-2018	30	51019	51100	24475	40203	6632	27961
BAKKEN	3-2018	23	44344	44100	29464	46739	5301	36583

Another Arikara sister well:

• 33642, 2,183, WPX, Arikara 15-22HQL, Reunion Bay, Three Forks NOS, 51 stages, 8.6 million lbs, t3/18; cum 159K 6/18; a huge, huge well;

Full production profile:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2018	30	30209	30204	37980	24681	20528	921
BAKKEN	5-2018	31	45314	45378	43213	37022	0	32173
BAKKEN	4-2018	30	46390	46342	54699	37901	1794	31143
BAKKEN	3-2018	26	37458	37208	54200	37533	1980	31545

And while we are at it, another sister well:

•  33619, 2,229, WPX, Arikara 15-22HA, Reunion Bay, t3/18; cum 160K 6/18;

Full production profile:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2018	30	32624	32751	19759	50799	6020	41136
BAKKEN	5-2018	31	44645	44584	28010	60315	10147	45234
BAKKEN	4-2018	30	46971	47015	38998	63457	20106	38174
BAKKEN	3-2018	23	35412	35217	36529	46990	7812	35278

There seems to be a trend here.

And for newbies, there are even better wells than these in the Bakken. This is why the breakeven price in some areas of the Bakken is less than $20/bbl.

Another Arikara sister:

• 23965, 2,528, WPX, Arikara 15-22HW, Reunion Bay, t3/18; cum 147K 6/18; 

Full production profile:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	6-2018	30	29453	29571	25509	41561	5435	32823
BAKKEN	5-2018	31	41122	41040	36135	49552	5201	39794
BAKKEN	4-2018	30	35360	35473	27086	42610	6744	31931
BAKKEN	3-2018	30	41052	40826	41157	49549	5070	3994

There are more and there will be more but enough for now.

Bakken 2.5 -- 2017 Year-End Update -- NDIC

Selected slides from NDIC's 2017 year-end update, posted May 24, 2018.

The full presentation can be accessed here.

Year-end overview:

Productivity per new well by US shale play:

Breakeven costs across the Bakken:

Future (60,000 wells needed to drill out the Bakken; currently, around 14, 000):

Making America Great Again -- The Market, Energy, And Political Page, T+4 -- August 17, 2018

Follow-up from earlier this week when Walmart reported 2Q18 earnings.

This graphic is absolutely incredible (at least in my mind):

Before leaving the house today, I saw a snippet, and I mean a snippet, less than three minutes, of CNBC. Andrew Sorkin seemed surprised that the economy was doing so well. Confirmed exactly what Larry Kudlow said at the cabinet meeting yesterday: folks honestly did not believe this could happen. And some still don't believe it's has happened. That jobs could come back. The previous president told us that those jobs were never coming back. Wow. And when jobs come back, people have more discretionary income. And sales at Walmart go up.

By the way, not often talked about: all the money being left to baby boomers by the greatest generation. Folks who served in and lived through WWII are often credited with making America what it is today (see Tom Brokaw); they are now dying off in droves, but they are leaving their children, the baby boomers, a bit of a financial estate. I read somewhere that this is the first generation in US history -- the baby boomers -- that will inherit money from the previous generation -- or something to that effect. And it will continue to the next generation. The baby boomers (us) will be the second US generation to leave money to our heirs. From CNBC a year ago:

Intergenerational transfers of wealth create risks and opportunities for individual investors and the financial advisory industry.

Over the next 30 to 40 years, $30 trillion in financial and non-financial assets is expected to pass from the baby boomers — the wealthiest and one-time largest generation in U.S. history — to their heirs. Therefore, navigating this latest transition will be critical.

But I digress. The Walmart graph from The WSJ: 

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From The Mind of Maxine Waters

DUCs In North Dakota Continue To Increase -- August 17, 2018

Before we get to the DUCs, let's look at the "breakeven" cost in the Bakken because that's probably of more interest to readers.

This is from yesterday's Director's Cut, June, 2018, data. Years and years ago, Whiting said they were profitable with  the price of oil below $25.

A few months ago a reader raised a question regarding my thoughts on DUCs.

I suggested that operators in North Dakota were "managing their assets," suggesting that it is not due to shortage of frack crews. Obviously it's a combination of both, but I think "managing their assets" is the bigger reason why DUCs are increasing. About two months ago, John Kemp said we were entering a period of "severe backwardation." For newbies, North Dakota doubled the number of months operators were required to complete their wells once spud. Up until the Saudi Surge of 2014 - 2016, North Dakota required operators to complete their wells within one year of spud; operators now have two years, and can go longer with a waiver.

Most sources with which I am familiar don't think DUCs are all that significant a metric to follow.

By the way, there should be an inverse relationship between DUCs and inactive wells, all things being equal, as we see an increase of pad drilling and infill drilling.

Except for a decrease back in January, 2018, the number of DUCs has been steadily increasing. The data is updated here; this page won't be updated.

These are the recent stats for DUCs:

June, 2018: 993, up 38 from previous report
inactive: 1,458, down 111

May, 2018: 955, up 13 from previous report
inactive: 1,569, down 48

April, 2018: 942, up 26 from previous report
inactive: 1,521, down 132

March, 2018: 916, up 15
inactive: 1,653, down 1

February, 2018: 901, up 48
inactive: 1,654, down 100

January, 2018: 853, down 24
inactive: 1,554, up 85

December, 2017: 877, down 6
inactive: 1,469, down 23

And the number month-over-month has also been increasing.

• June: up 38
• May: up 13
• April: up 26
• March: up 15
• February: up 48 (North Dakota winters are at their worse in February -- an outlier)
• January: down 24

Filloon On Cimarex In The Permian -- August 17, 2018; Pleasant Surprise -- Active Rigs In ND Jump To 60

Can US shale stop a global oil supply crisis? From oilprice. Some nice data points and interesting perspective. 


How many nails in a coffin does it take? 

Keystone XL delayed again, and this one is a long delay. and there is still a second court case in Nebraska that could upend everything. From oilprice: the US State Department must review the entire project now that Nebraska has approved an alternate route. And, of course, the alternate route in Nebraska is being contested in court. One would think that only the short segment in Nebraska that was revised would require an environmental impact study, but the judge ruled that the entire pipeline -- from Canada to Cushing must be reviewed -- start all over again. Not just an amendment.

Filloon: update on Cimarex as huge Permian wells increase oil outputs.

Opportunities abound in the oil sector after significant sell off.

Disclaimer: this is not an investment site.

Trucking: wow, how many times have we written about this in the past year? From The WSJ.

GOM: reduced royalty rates will lead to even greater increase in GOM activity -- Rigzone. 

Making America great again: youth unemployment hits 52-year low. From The WSJ. Headline/story: bark bigger than the bite. Note labor participation rate. What a great country.

*********************************

Back to the Bakken

Wells coming off the confidential list today:

• 32231, 2,706, WPX, Elm 19-18HQ, Mandaree, 4 sections, Three Forks, 41 stages; 6.1 million lbs, a nice well; 44K in less than 2 months; t6/18; cum 45K 6/18; [#20517 to the west, never taken off-line showed a nice little jump in production]
  

Active rigs:

$65.96→	8/17/2018	08/17/2017	08/17/2016	08/17/2015	08/17/2014
Active Rigs	60	53	32	74	194

RBN Energy: how crude refiners, midstreamers and shipping companies are preparing for jIMO 2020. This will be very interesting. How will Canada be affected?

Implementation Day for the IMO 2020 rule on low-sulfur marine fuel — is ticking, and while that date may still seem far away, it is decidedly not.

The impending switch from 3.5%-sulfur fuel oil to marine fuel with sulfur content no higher than 0.5% will affect a broad swath of the energy sector worldwide, not to mention consumers of diesel and other low-sulfur distillates that will be in much higher demand by this time next year as the run-up to IMO 2020 kicks into high gear.

Already, complex and simple refineries alike are evaluating changes to their crude slates and planning to add equipment that will enable them to produce more high-value distillate and less “bottom-of-the-barrel” residual fuel oil, the source of high-sulfur marine fuel.

U.S. midstream companies are gearing up to export more light, sweet crude from the Permian and other shale and tight-oil plays to simple refineries that will no longer be able to get by refining heavy, sour crudes. Marine-fuel suppliers are testing various blends to see which might produce IMO 2020-compliant fuel at the lowest cost. As for ship owners, they’re preparing for topsy-turvy fuel prices in late 2019 and 2020 as this wrenching change plays out. Today, we consider key market participants’ latest thinking on the likely effects of the new rule for low-sulfur marine fuel.