What A Doofus -- August 16, 2019

North Dakota just set an all-time record for crude oil and natural gas production.

Wow, what a doofus. From February 28, 2017.

Six New Permits -- August 16, 2019

Active rigs:

$54.92	8/16/2019	08/16/2018	08/16/2017	08/16/2016	08/16/2015
Active Rigs	61	58	55	32	74

Six new permits, #36859 - #36864, inclusive:

• Operators: MRO, Whiting, Enerplus
• Fields: Antelope-Sanish (McKenzie); McGregory Buttes (Dunn), Sanish (Mountrail); Squaw Creek (McKenzie)
• Comments:
• MRO has permits for a two well Papa George USA / Rock Woman USA pad in lot 2 / section 4-151-94; Antelope-Sanish;
• Whiting has permits for a two-well Satterthwaite pad in lot 3 / section 7-153-92, Sanish oil field;
• Enerplus has a permit for an Iron well in section 32-148-93, McGregory Buttes
• WPX has a permit for an Omaha Woman well in section 25-149-95, Squaw Creek

Two permits renewed:

• Whiting: a Dietz permit and a Solberg permit, both in Stark County

Five producing wells (DUCs) reported as completed: to be completed later --

• 34401, 2,357, WPX, Lion 18-19HC, Mandaree, t7/19; cum --; check #17658; #20517; perhaps others;
• 34867, 3,490, Hess,  BB_Eide-151-95-3328H-13, Blue Buttes, t7/19; cum --; check #24128; #21429;
• 34866, 2,943, Hess  BB_Eide-151-95-3328H-12, Blue Buttes, t7/19; cum --;
• 34865, 3,080, Hess  BB_Eide-151-95-3328H-11, Blue Buttes, t7/19; cum --;
• 35013, 2,161, WPX, Spotted Horn 26-35HW, Squaw Creek, t8/19; cum --; neighboring well #20238 showed a moderate jump in production, 6/19;

Rig Counts From Twitter -- August 16, 2019

Breakeven Points In The Bakken -- August 16, 2019

Updates

Later, 1:41 p.m. Central Time: I found what I was looking for, from May 10, 2019:

In the Whiting earnings call, the CEO said the rate of return on "parent-well-uplift" is "infinite." I thought that was hyperbole and at the linked post, I suggested what he might have met.

Having thought about that, technically speaking, he is absolutely correct. The rate of return associated with that well was based on projections and actual production from the well without extra production as a result of the "halo" effect. If one continues to separate all those costs / the rate of return from "halo" production, then, yes, of course, the rate of return is infinite. That production was never anticipated; it was never factored into the original rate of return. The real question, of course, does it "move the needle"?

Later, 11:55 a.m. Central Time:

Google: How much does it cost to produce a barrel of oil in Saudi Arabia? The marginal cost (the cost of producing an additional barrel of oil) is lowest in Saudi Arabia at US$8.98 per barrel; the highest in the U.K. at US$44.33. -- June 28, 2018.

The Motley Fool has an article on this question, March 19, 2017. The Motley Fool needs to do a column on "You Won't Believe What It Costs/Bbl To Drill Oil In The Bakken!"

Later, 11:50 a.m. Central Time: in reply to the reader's comments in the original post -- I believe the NDIC has factored a lot of those questions into their analysis. The bigger question is this: how much lower can the breakeven cost go? I will comment on that later. I think a CEO of one of the Bakken operators actually touched on this some months ago. In some cases, the marginal cost trends toward $0.00 (no typo).

Original Post 

I really don't have time to go into this now. I'll throw out some data points, some reader's note, etc., etc., and let readers think about these things. I may or may not get back to this.

First, break-even prices as reported in The WSJ just a few days ago, August 11, 2019:

Second, the break-even prices as reported in the Director's Cut, yesterday, for June, 2019, data (look at the breakeven price for oil in Mountrail County):

Third, comments from a reader:

More than a quick glance at the table [above] that shows well breakeven prices by ND counties and one has to question its utility.

Take the "Statewide" value, for example.

What weighting is applied to come up with $12/bo? If the same weighting is applied uniformly, for each county, don't we already have an apples and oranges issue to sort out? Then put a statewide value in the same column? New wells, in one county may be predominantly Red River, another Madison or Bakken. Wildcat or exploration vs. development wells.---I believe you actually just found a Wildcat well.

Fourth, the Bakken heat map (linked at the side bar at the right.

Finally, the activity in one county in the Bakken, McKenzie County.

The entire county:

West-central McKenzie County:

Northeast McKenzie County:

Still Looking For That Optimum Well Spacing Density -- RimRock's KOG Skunk Creek Wells -- Updated -- August 16, 2019

Production data for the Skunk Creek wells has been updated.  In addition, a new map of the area of interest has been posted at that same link. This post will not be updated. Updates are at the linked site.

Of note:

Off line:

• 19587, 2,665, Rimrock/KOG, Skunk Creek 12-10-11-9H, South Fork;  t10/11; cum 367K 3/19; off line as of3/19;
• 22162, 1,749, Rimrock/KOG, Skunk Creek 16-2-3-13H, South Fork, t12/12; cum 246K 6/19; -- off line as of 6/19;  

Off line for a month, but now back on line:

• 19817, 212, Rimrock/KOG, Skunk Creek 2-8-17-7-15H, South Fork; t1/12; cum 201K 6/19; choked back a bit; very unusual production profile; 

Graphics:

14-well density and counting.