Where Does North Dakota Stand On Permitting? Also, Comment On Oasis Completions; July 17, 2015

Updates

Later, 12:35 a.m., July 18, 2015: this is entirely coincidental. I posted the note below a few minutes ago. Then I checked the Discussion Group and saw a message pending. The reader provided this link with a look at permitting in North Dakota:

Since the start of 2015, there have been 1116 permits issued in the Bakken shale play, with a monthly high coming in January at 238 permits issued. This past week, there were 29 permits issued, a -53% decrease from the previous week which had 62 permits.

The top permitting county this past week was McKenzie with 14 permits, down -26% from the prior week, which had 19 permits. Other active counties include Mountrail with 6 permits, Williams with 5 permits, and Divide with 4 permits in the last week. Active drilling rigs are also declining but some operators are talking about adding rigs to core acreage.

In addition to their note on permitting, the authors also talk about Oasis completions: Oasis Improves Completions with High-Intensity Slickwater Fracs:

Oasis Petroleum has completed 167 frac jobs in the Williston since the beginning of 2014, pumping 200K tons of raw sand, 31K tons of resin, and 84K tons of ceramic.

They have used Nabors, Schlumberger, and Baker Hughes for the majority of their jobs in the Williston.

In a completion in Williams County, Oasis used a total of 11.7 million pounds of proppant using 7.8 million pounds of ceramic from Carbo Ceramics, and 3.9 million pounds of raw sand in 20/40 and 40/70 mesh sizes.

They also used the friction reducer WFR-6W from Nabors, which totaled 3,901 pounds or 0.007% of the total mass pumped. They have been testing a new completion design in the core of the Williston, going from 100% ceramic to 90% raw and 10% resin, with 50 stages (up from 36 when they were using the slickwater design).

Original Post
 

I track permitting projections at this site. As of today, July 17, 2015, North Dakota has issued 1,276 oil and gas permits in calendar year 2015, which calculates out to 2,426 by the end of the year. That's more than the number of permits issued in 2013 but less than the number issued in 2014. This is how 2015 looks to date:

Total permits. This is from my database. See disclaimer. I assume my numbers are different from those of the NDIC, but I also assume they are very close. These are only oil and gas permits, not salt water disposal permits. If this information is important to you, go to the source:

• 2014: 3,012
• 2013: 2,247
• 2012: 2,187
• 2011: 1,916

Real time (date, # of permits; projection to end of year)

• July 17, 2015: 1,276, 2,426
• February 10, 2015: 327, 2,911
• January 29, 2015: 241, 3,033
• January 28, 2015: 230, 2,998
• January 23, 2015: 195, 3,095
• January 16, 2015: 134, 3,057
• January 15, 2015: 114, 2,896
• January 14, 2015: 104, 2,738
• January 13, 2015: 97, 2,723
• January 12, 2015: 78, 2,373
• January 9, 2015: 75, 3,042
• January 8, 2015: 71, 3,239
• January 7, 2015: 57, 2,972
• January 2, 2015, 14: 2,555

Casualties In The Oil And Gas Industry; Look At The Brazilian Numbers -- Staggering -- July 17, 2015

This is really quite a remarkable story.

On June 1, 2015, I posted this:

With today's Wall Street Journal article on the slump in oil prices, I was reminded of the list I posted back in January.

Countries on the watch list with plummeting oil prices:

• Venezuela
• Russia
• Jordan
• Lebanon
• Nigeria
• Brazil 

One can add Argentina to that list.

One can add Columbia to the list.

Add Mexico to the list.

So, where do we stand? Bloomberg/Rigzone is reporting:

Eight months into OPEC’s plan to hit rival oil producers, the casualties are mounting.

Surprisingly, the most resilient may be the one that triggered the fight: the U.S.

Projections for combined daily output from Brazil, Canada, Russia, Mexico and Colombia by the end of the decade were cut by 2.8 million barrels since oil slumped last year, data from the countries and the International Energy Agency show.

In contrast, the U.S. Energy Department increased its estimate for crude output in 2020 by more than a million barrels.

Prices fell more than 45 percent in the past year after the Organization of Petroleum Exporting Countries refused to cut output, instead pressuring rival producers to eliminate a global supply glut.

While the number of active U.S. oil rigs has halved, production remains close to a three-decade high and is forecast to keep growing after a pause in the coming year.

Projects elsewhere will suffer more, according to Standard Chartered Plc and BNP Paribas SA.

“Some have misinterpreted OPEC’s strategy as targeting U.S. shale oil production,” said Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas in London.

“But any attempt at shutting down U.S. shale oil will prove futile. Rather, OPEC has aimed at crowding out investment in higher cost and less efficient conventional basins.”

I'm not exactly sure how Bloomberg can say the "US triggered the fight." It's my understanding that back in October, 2014, with a glut of oil on the world market, the country (or organization) that has historically cut back on production to keep prices high, specifically said they were not going to cut production. In fact, Saudi Arabia suggested that they would be increasing their production.

But I have trouble agreeing that the US started this fight.

Also, note that the Red Queen is still on the treadmill. From the article: "While the number of active U.S. oil rigs has halved, production remains close to a three-decade high and is forecast to keep growing after a pause in the coming year."

To the list above, Mexico needs to be added.

Memo to self: another note to Jane Nielson.

More at the linked story:

Brazil and Canada are among those “most in the firing line” at current prices, Paul Horsnell, the head of commodities research at Standard Chartered in London, said July 13.

Brazil’s so-called pre-salt offshore fields, and Canada’s tar sands are “frontier” oil provinces where costs are higher because of their technical complexity or remoteness, he said.

Petroleo Brasileiro SA cut its 2020 production target by 1.4 million barrels a day to 2.8 million, reducing planned capital expenditures through 2019 by a third, the Rio de Janeiro-based company said June 29.

The Canadian Association of Petroleum Producers reduced its 2020 oil production forecast by 270,000 barrels a day to 4.64 million on June 9.

The IEA pared its 2019 production estimates for a range of non-OPEC nations on Feb. 10. Its forecast for Russia was cut by 5.4 percent to 10.45 million a day while Mexican output was projected at 2.67 million, 8.9 percent lower than previously.

“U.S. production is going to continue to tick up over the next few years,” said Standard Chartered’s Horsnell. “Non- shale, non-OPEC is going to struggle.”

Entering The 21st Year WIthout Any Statistically Significant Warming Trend -- The Daily Caller, July 17, 2015

Updates

July 18, 2015: this is interesting. Shortly after posting the note below, a reader reminded me that NOAA had admitted to "fudging its data." I had forgotten all about that, and did not read the entire article linked below which reminded us of that fact.

Back on Jun4 , 2015, I posted:

Wow, talk about incredible. A US government agency "fixing" the data. The Daily Caller is reporting:All that work and we're talking 0.012 degrees.

National Oceanic and Atmospheric Administration scientists have found a solution to the 15-year “pause” in global warming: They “adjusted” the hiatus in warming out of the temperature record.

New climate data by NOAA scientists doubles the warming trend since the late 1990s by adjusting pre-hiatus temperatures downward and inflating temperatures in more recent years. “Newly corrected and updated global surface temperature data from NOAA’s [National Centers for Environmental Information] do not support the notion of a global warming ‘hiatus,'” wrote NOAA scientists in their study presenting newly adjusted climate data.

To increase the rate in warming, NOAA scientists put more weight on certain ocean buoy arrays, adjusted ship-based temperature readings upward, and slightly raised land-based temperatures as well.

Scientists said adjusted ship-based temperature data “had the largest impact on trends for the 2000-2014 time period, accounting for 0.030°C of the 0.064°C trend difference.” They added that the “buoy offset correction contributed 0.014°C… to the difference, and the additional weight given to the buoys because of their greater accuracy contributed 0.012°C.”

This is the note in the linked article belwo about fudging the data:

“Newly corrected and updated global surface temperature data from NOAA’s [National Centers for Environmental Information] do not support the notion of a global warming ‘hiatus,’” wrote NOAA scientists in their study.

The study was highly criticized for inflating the temperature record since the late 1990s to show vastly more global warming than was shown in older data. The warming “hiatus” was eliminated and the warming trend over the period was more than doubled.

“There’s been so much criticism of NOAA’s alteration of the sea surface temperature that we are really just going to have to use the University of East Anglia data,” Pat Michaels, a climate scientist with the libertarian Cato Institute, told The Daily Caller News Foundation.

“I don’t think that’s going to stand the test of time,” Michaels said of NOAA’s recent adjustments.

Original Post

The 2015 graduate students, college graduates and high school graduates have never experienced any global warming. The Daily Caller is reporting:

After September of this year, the Earth will be entering its 21st year without statistically significant warming trend, according to satellite-derived temperature data.

Since September 1994, University of Alabama in Huntsville’s satellite temperature data has shown no statistically significant global warming trend. For over 20 years there’s been no warming trend apparent in the satellite records and will soon be entering into year 21 with no warming trend apparent in satellite data — which examines the lowest few miles of the Earth’s atmosphere.

Satellite data from the Remote Sensing Systems (RSS) group also shows a prolonged “hiatus” in global warming. After November of this year, RSS data will be in its 21st year without warming.  Ironically, the so-called “hiatus” in warming started when then vice President Al Gore and environmental groups touted RSS satellite data as evidence a slight warming trend since 1979.

A Shout-Out To Some Excellent Bloggers -- July 17, 2015

Without question, I think the two best contributors on the Bakken are Michael Filloon and Richard Zeits. I have a tag for both of them at the bottom of the blog, but it's always possible I missed a few.

Mark Perry, who started out with his own blog, Carpe Diem, and is now part of AEI, is probably the best blogger on the US economy. Period. Dot. He is linked at the side bar at the right (Carpe Diem) as a "featured blog."

For "Energy_101" there is no better source than RBN Energy. The RBN energy seems to have started as a simple e-mail newsletter about the time the Bakken boomed and has since turned into an "energy institute of higher learning." I don't think I have a specific link or tag for RBN Energy but it is linked almost every business day (Monday - Friday) in the blog.

Coyote Blog is another one of the featured blogs linked at the sidebar at the right. I can't put my finger on, but for some reason, the blog resonates with me and remains a featured blog all these years.

Thirteen (13) New Permts -- North Dakota; Zeits On Halcon In The Eagle Ford, July 17, 2015

Active rigs:

	7/17/2015	07/17/2014	07/17/2013	07/17/2012	07/17/2011
Active Rigs	73	196	189	209	178

Thirteen (13) new permits --

• Operators: Oasis (7), XTO (3), Newfield, BR, Hess
• Fields: North Tobacco Garden (McKenzie), Siverston (McKenzie), Lost Bridge (Dunn), Sand Creek (McKenzie), Robinson Lake (Mountrail)
• Comments: the Oasis permits look like three distinct pads in section 23-151-99 (two 2-well pads, and one 3-well pad);

Slawson cancels two permits: one Ironbank well in Williams County and one Howo well in Mountrail County
Evidence of changing a target to a better payoff during period of low prices: CLR with a name change; new name: Alpha 5-14H; was Alpha 5-14H2;

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The Gold Standard Is Still The Bakken

From Richard Zeits on Halcon's El Halcón in the Eagle Ford, Texas, over at Seeking Alpha today:

HK estimated that its type well in El Halcón generates ~17% well-level IRR, using 452 type curve, the current $7.5 million AFE and mid-May strip pricing. The economics should become more compelling once the company implements additional costs savings and completes its lease capture program.

Assuming those additional savings are achieved, the play should be viable at the project level at oil prices above ~$60-$65 per barrel. However, El Halcón still remains a distant second in terms of well productivity per dollar invested relative to the company's core acreage in the Bakken on the Fort Berthold Indian Reservation.

The El Halcón is not just behind the Bakken, but is "a distant second."

From Richard Zeits in one of his comments at the linked article: "The reality is that HK has the best track record in the play and competition has subsided lately." I assume he means the entire Eagle Ford play. Considering EOG is also there, that's quite a statement.