The Future Of Domestic, Unconventional Oil -- EOG CEO -- September 12, 2014

This is a must-read article in the most recent issue of Petroleum News Bakken: EOG Resources CEO Thomas on the future of domestic, unconventional oil. This is a very, very long article, jam-packed with information about the subject. One cannot really do the article justice by cutting/pasting a few items.

Some data points:

• the article was based on the CEO's keynote speech at Barclays CEO Energy Power conference, New York City, September 4, 2014
• 95% of all horizontal oil produced in the US comes from just six plays
• Eagle Ford: 39%
• Bakken: 30%
• Permian Basin: 15%
• Midcontinent plays: 5%
• Denver-Julesburg Basin: 4%
• Powder River Basin: 2%
• Almost 70% of all horizontal oil production comes from two fields
• both the Eagle Ford and the Bakken are starting to slow down in production -- "it is like all fields do"
• the CEO does NOT see another Bakken or Eagle Ford out there
• world-class oil fields that are 15 billion to 20 billion bbls of recoverable oil
• Permian: one of the bigger plays but probably won't grow as fast as the Eagle Ford

This is a key data point and explains why we may not be seeing shale development elsewhere globally:

"... for pure shale fields, only the highest quality shales are economically feasible to develop. There are not that many shales that are capable of producing oil."

This is another key data point; it has been touched upon rarely in the blog; some operators have tested the "theory" in the Bakken:

The EOG CEO is optimistic about the potential for vertically stacked plays involving a combination of formation types such as tight sandstones and tight carbonates "because the frack technology works there just as well as it did in the shale."

He provides, as an example, the Delaware Basin:

• southeast New Mexico and western Texas
• stratigraphy is similar to the Bakken
• high-quality shale intervals overlying overpressured sandstones, which, in turn, overlie other shales
• the upper shale in that play: the Leonard; estimated oil content of 50%
• it overlies the Bone Spring sandstone with an estimated oil content of 70%
• under the bone Springs sand is the Wolfcamp shale with an estimated 31% oil content

Another stacked unconventional play: the Denver-Julesburg Basin:

• northern Colorado
• Niobrara shale: 71%
• deeper Codell sandstone: 78%

(For comparison purposes: much of the Bakken is 94%+ oil content.)

Powder River Basin

• Wyoming
• Parkman sandstone: 69% oil
• Turner sandstone: 34%

Again, more at the link.

A huge "thank you" to the reader sending me this link.

Note: Petroleum News Bakken spells it ("frack") with a "k."

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"Big Bang Theory, Season 7"

$34.99 on Amazon.com

Available September 16, 2014

On Blu-Ray

Speaking of Blu-Ray, I wrote this in my journal on March 29, 2006:

First item of interest: HD-DVD vs Blu-Ray.

Toshiba will release HD-DVD next month, and Panasonic will release Blu-Ray in  September – battle lines have been drawn.

This will be very interesting to follow.

To summarize:

HD-DVD (15 – 45 GB): Microsoft, Intel (moved to Blu-Ray, Jan 06), Universal, Paramount (switching back and forth)

Blu-Ray (50 – 100 GB): Panasonic, Apple, porn industry (as of Jan 2006), Sony, Disney, Sharp, Fox, MGM, Time Warner, Dell, H-P.

Note: Microsoft has delayed – again – its new operating system, called Vista – many issues.

EU unhappy with MSFT trying to imbed Google-like and PDF (Adobe)-like applications – trying to shut down Google and Adobe!! But now, I wonder – MSFT is delaying Vista until after 2007 – I wonder if MST realized Blu-Ray most likely – and either Blu-Ray has to be added to Vista or at least thought about.

I predicted Blu-Ray would ultimately win out based on two data points -- both of which are noted above.

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Warning: explicit lyrics.

Flower of Carnage, Meiko Kaji

Top Story In Rigzone Today: North Dakota's Record Production -- September 12, 2014

Reuters via Rigzone is reporting:

North Dakota's daily oil production jumped 5 percent in July to an all-time high, though the number was lower than expected as producers worked to meet aggressive flaring-reduction targets, state regulators said on Friday.

The production numbers, which have been steadily rising for years, highlight the massive investments Hess Corp, Whiting Petroleum Corp and other companies are making to develop the state's oil-rich Bakken and Three Forks shale formations and others.

Despite the positive production data, shares of top North Dakota oil producers fell with the broader market.

The investments have brought thousands of new workers to North Dakota, as well as billions in infrastructure and real estate investment, making the state the fastest-growing economy in the United States.

North Dakota's oil wells produced 34.4 million barrels in July, up from 32.8 million barrels in June, the North Dakota Department of Mineral Resources said. That averaged 1.1 million barrels a day.

Natural gas production in the state hit 1.3 billion cubic feet per day, also an all-time high. The percentage of natural gas flared in the state fell to 26 percent in July from 30 percent in June.

In an effort to curb flaring, the wasteful burning of natural gas, state regulators issued strict goals earlier this year with key benchmarks for flaring percentages each month.

For Oct. 1, for instance, the state's oil producers cannot flare more than 74 percent of natural gas produced. If they do, they face fines.

I could be wrong, but I thnk the "74% rule" affects only wells crude oil production above a certain level, 6,000 bbls/month?

Much more at the linked article.  It was just interesting to see this as the lead story over at Rigzone.  I wonder if Jane Nielson reads Rigzone?

Interesting bit of trivia: the lede mentioned Whiting and Hess, but failed to mention "the face of the Bakken," Continental Resources.

With regard to flaring, PetroGlobalNews is reporting:

Norway-based Statoil said Wednesday it will expand its use of technology that powers equipment with natural gas that would otherwise be flared at its Bakken, North Dakota sites.

The technology captures flare gas and uses it to power drilling rigs and equipment.
Statoil already implemented the technology in a pilot program at six drill rigs and one fracking fleet in Bakken.

The technology is being developed with GE and Calgary-based Ferus Natural Gas.
The system captures natural gas as it is released from oil wells and separates out liquid propane and butane. The remaining natural gas is then compressed. The compressed natural gas can be used to fuel trucks and other equipment.

Statoil said the technology, called the Last Mile Fueling Solution, will allow it capture between 3 million and 5 million cubic feet per day of natural gas.

This story has been reported earlier but this provides more detail about GE's role.

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Memories

Seventeen (17) New Permits -- North Dakota; September 12, 2014

Of course the big story coming out of the Bakken today is yet another record-setting production report.

Seventeen (17) new permits --

• Operators: QEP (5), OXY USA (5), SM Energy (3), Denbury, Enduro, American Eagle, Hess
• Fields: Hawkeye (McKenzie), Skjermo (Divide), Spotted Horn (McKenzie), Camp (McKenzie), Hungry Man Butte (Billings), North Grano (Renville), Cedar Hills (Bowman), Grail (McKenzie)
• Comments:

Wells coming off the confidential list today were posted earlier; see sidebar at the right.

Three (3) producing wells completed:

• 28207, 555, Triangle Petroleum, Nygaard 150-101-28-33-2H, Pronghorn, t8/14; cum --
• 27365, 907, EOG, Parshall 77-22H, Parshall, one section, t9/14; cum --
• 27364, 822, EOG, parshall 76-22H, Parshall, one section, t9/14; cum -- 

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Apple iPhone 6 and 6 Plus Update

We're Gonna See Long Lines Next Friday

It looks like we're going to see the long lines in front of Apple retail stores that we've come to expect next Friday. Apple can no longer make same-day hipping claims but will have iPhone 6's and iPhone 6 Plusses available in Apple retail stores Friday, September 19. Those two data points add up to one thing: long, long lines. In addition, it will be the first time folks will be able to actually in their little paws the phones themselves to determine what they want a big iPhone or a really big iPhone. Unless a real shooting war breaks out in the Mideast next Friday, the lines in front of the Apple retail stores will be the big story.   

 

And cynics will say it was all staged. By Apple.

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  Global Warming Sun God Has A Sense Of Humor

Snowfall: Not Only Rare, But Record-Setting

The Casper Star Tribne is reporting:

A late summer snowstorm dropped up to 20 inches of snow in parts of Wyoming.

The rare September snow on Wednesday and Thursday damaged trees and caused power outages in some areas of northern Wyoming.

While the heaviest snow fell in the Big Horn Mountains, the town of Buffalo received as much as 10 inches.

The 3 to 5 inches that fell in Cody is the earliest recorded snowfall there since 1915, when records started being kept.

The previous earliest recorded snowfall in Cody was Sept. 12, 1970.

City Of Richardton -- Moving Closer To Fracking Sand Transloading Facility - September 12, 2014

Updates

October 21, 2014: a reader notes that they are starting to move earth west of Richardton for this new transloading terminal. 
 

Original Post

The Dickinson Press is reporting:

The City of Richardton’s Planning Commission recommended approval of a Halliburton frack sand plant after tabling it at its last meeting over landowner concerns.

The Richardton City Commission must still approve the project at its Sept. 22 meeting.

Halliburton has requested the rezoning of 300 acres on I-94 to the west of Richardton for a transloading facility and a frack sand plant. The company hopes to be running trucks by June.

Richardton is about 25 miles directly east of Dickinson. 

My first thoughts:

• 2007 - 2010: the years of delineating the Bakken
• 2010 - 2011: the years of new pipeline
• 2011 - 2014: the years of CBR
• 2014 - 2015: the year of fracking sand 
• 2015 - 2016: the year of "big" retail

Or something like that; the data points may need to be refined.

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That Was Easy

The initiative/referendum to break up California into six (6) -- count 'em -- six states failed to get enough signatures to get on the November, 2014, ballot. The "adventure" was called "quixotic."

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Government Motors Pulls Chevrolet Corvette, Temporarily

Yahoo!Finance is reporting:

Auto dealers were told to stop selling the 2015 Chevrolet Corvette and shipments were delayed from the General Motors plant that makes the hot-selling sports car while the company addresses two issues, GM said Friday.

Not related to ignition switches; just the brakes and the air brakes. Nothing serious. LOL. 

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Global Warming

Climate Change

Extreme Weather

Ice Age

The NOAA is reporting that 246 "low maximum records were broken or tied" the first ten (10) days of September:

246 Low Max Records Broken or  Tied From Sept 1 to Sept 10 according to the NOAA.

A “Low Max” means that the maximum temperatures for the day was the lowest it has ever been. This indicates daytime cooling.

Below is a screenshot showing location and the biggest difference between old record and new record.

I wonder how much atmospheric CO2 will rise once Iraq War III begins (all those fighters and bombers; all those tanks; all those fuel trucks; all those Toyota pick-up trucks). One reader thinks that, in fact, atmospheric CO2 will start to rise now that autumn is here, leaves start falling, and vegetation hunkers down for a long cold winter. What we need to do is ban winter. Actually, rising CO2 should make vegetation more lush, taking in more CO2, and actually resulting in a new homeostasis.

What impresses me most is how God, Allah, Algore, and/or nature set parameters that are so easy to remember:

• 400 ppm -- the amount of atmospheric COS that will bring the world to an end as know it
• 2 C -- the global warming threshold that will bring the world to an end as we know it
• 2100 -- the year the world comes to an end as know it

Homer could not have done it better.

Now we have 52 explanations for the global warming pause, but still just one explanation for global warming 18 years ago: 400 ppm. It's complicated. Never mind that we've passed the 400 ppm threshold and things have actually started to cool down.

North Dakota Crude Oil Production Hits New All-Time Record: 1,110,642 BOPD; Permitting Continues To Increase

A 1.7% increase month-over-month (the daily bopd). The monthly increase was 5% but July has one more day than June.

Disclaimer: this update is always done in haste; typographical errors are likely. This is for my use only. Others should go to the source. 

Oil:

• July, 2014: 1,110,642 bopd (preliminary; new all-time high)
• June, 2014: 1,092,519 bopd (revised; third consecutive month to go over 1 million bopd) 
• June, 2014: 1,1,092,616 bopd (original)
  
• delta: 18,123 (daily bopd)
• 18,123 / 1,092,519 = 1.659%

Producing wells: 

• July, 2014: 11,090 (new all-time high)
• June, 2014: 11,079  
• May, 2014: 10,902

Permitting:

• August, 2014: 273
• July, 2014: 265
• June, 2014: 247
• May, 2014: 234
• All-time high was 370 in 10/2012
  

Pricing:

• Today, 2014: $74.50
• August, 2014: $78.46
• July, 2014: $86.20
• June, 2014: $90.03
• May, 2014: $88.31
• April, 2014: $85.68
• March, 2014: $86.72

Rig count:

• Today: 198 (all time high was 218 on 5/29/2012)
• August, 2014: 193
• July, 2014:  192
• June, 2014: 190
• May, 2014: 189
• April, 2014: 188
• March, 2014: 193
  

Director's comments:

• drillers continue to outpace the completion crews: number of wells waiting completion (end of July) : 630 (an increase of 45)
• rig count in the Williston Basin is gradually increasing
• US natural gas storage:  14% below five-year average
• percentage of natural gas flared in North Dakota:  26% (Tioga plant below full capacity due to delayed expansion of gas gathering from Lake Sakakawea)
• number of rigs actively drilling on federal grassland: unchanged at 4 (generally it's been 1 rig)