Four DUCs Reported Monday In North Dakota; Hess Reports Two Completed Wells In The Bakken; September 13, 2015

Active rigs:

	9/13/2015	09/13/2014	09/13/2013	09/13/2012	09/13/2011
Active Rigs	69	199	180	192	200

Wells coming off the confidential list this weekend, Monday:

Monday, September 14, 2015:

• 29579, SI/NC, XTO, Satter 31X-1CXD, Sivertson, no production data;
• 30097, 1,702, Hess, BB-Ole Anderson-151-95-3130H-4, Blue Buttes, t8/15; cum --
• 30698, SI/NC, Statoil, Hospital 31-36 7H, Alger, no production data;

Sunday, September 13, 2015:

• 29990, SI/NC, Abraxas, Stenehjem 5H, North Fork, no production data;
• 30451, 791, Hess, EN-D Cvancara S-154-93-0904H-11, Robinson Lake, t8/15; cum --

Saturday, September 12, 2015:

• 29578, SI/NC, XTO, Satter 31X-1G2, Sivertson, no production data;

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Close?

I thought the California initiative to cut gasoline usage by 50% in that state within 15 years was a stunt. How wrong I was. I don't think I, or most Californians, understand how close this initiative came to pass. See the Los Angeles Times story here.

My hunch is that however this proposal began, it gained momentum when Jerry Brown et al saw how easy it was to cut water consumption in their state by 30%.

Something tells me this bill will be re-packaged, new alliances formed, and the bill will re-surface next year.

The unintended consequences, of course, would be severe. Already state revenue from gasoline taxes is not keeping up with required road maintenance, much less new roads that are needed. Cut gasoline usage by 50% and tax revenue will be cut proportionately but highway maintenance will still be required (new roads may not be required). The tax revenue lost would, of course, be made up with new "fees" for all registered vehicles.

Week 36: September 6, 2015 -- September 12, 2015

Same ol', same ol', I guess. This is the lull before the next bit of bad news and I expect some more bad news to come out of the Williston Basin (with regard to the price of oil). Having said that, this is a must-read article, Shale 2.0.

Operations:
Active rigs one away from tying record post-boom low
Whiting's Flatland wells have been hooked up to the ONEOK pipeline system

Bakken economy
$400 million urea fertilizer plant in the works for Beulah, ND 

Miscellaneous
Impressions, the Bakken, #1
Impressions, the Bakken, #2
Impressions, the Bakken, #3

We'll See: The Dakota Access Pipeline -- September 11, 2015

The AP is reporting, out of Bismarck:

Mountainous piles of steel pipe are being staged across four states in anticipation of building the biggest-capacity pipeline proposed to date to move crude from North Dakota's prolific oil patch.

But stockpiling the pipe is a gamble for the Dallas-based Energy Transfer Partners' Dakota Access Pipeline, a $3.8 billion, 1,130-mile project that still needs approval from regulators in North Dakota, South Dakota, Iowa and Illinois.

My hunch: North Dakota will approve; South Dakota and Illinois will delay decision; and Iowa will block. Remember, Bernie Sanders is leading Hillary Clinton in Iowa. That's all I need to know. 

Organizers learned a lot from the Keystone. And there's no pressing need.

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Storage In America

Reuters (Jack Kemp) is reporting:

U.S. commercial crude stocks are still close to their highest levels in over 80 years, but operational requirements prevent refineries filling on-site storage facilities to their maximum capacity.

An increasing proportion of U.S. crude oil stocks is held in off-site tank farms, some owned or leased by refiners themselves, but many owned or leased by marketers and traders.

According to the Energy Information Administration (EIA), which surveys storage capacity every six months, total crude in storage at the end of March was 475 million barrels, and the country had capacity to store up to 660 million.

Only 182 million barrels of storage capacity, around 28 percent, was on site at oil refineries. The rest was off site at tank farms or in pipelines, railroad tank cars, barges and oilfield tanks.

Most of the crude at refineries and tank farms is stored in giant cylindrical tanks with a roof that floats directly on the surface of the oil.

Storage tanks need to be kept filled to a minimum of around 20 percent to support the roof and operate the pipes and other equipment.

Living in America, Neil Diamond

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Putting Things Into Perspective

Yesterday I was surprised to see the EIA headline that California was #3 among the US states for refining capacity. #3? Then I went to the link: #3 accounts for about 10% of total US refining. In other words, if California refining went away, it would have no -- okay, minimal -- impact on US refining. It would be painful for Californians, but for the US, it's all about Texas and Louisiana when it comes to refining.

The tea leaves suggest that refining capacity will not change much for California going forward.

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One Last Thought Before I Leave The Bakken

I have coffee in the morning at the Daily Addiction on Main Street in Williston for the wi-fi. The music is alternative music, reggae, etc. At least that's what it is now and was yesterday at this time.

They have a single flat-screen television which is placed in a pretty good spot for viewing; of course, only video, no sound. And what do they run, apparently all day long? C-Span. I kid you not. Speeches in front of empty chambers.

It really doesn't matter. Ninety percent of business is take-out. I'm the only one sitting here now. At the height of the boom, it was hard to find an empty chair. At the height of the boom, lines stretched from the counter to the front door; now one or two in line at most.

But C-Span?

Shale 2.0 -- September 11, 2015

My observations in the Bakken suggest the same thing as this writer suggests. From economics21:

It is true that the oil-price collapse was caused by the astonishing, unexpected growth in U.S. shale output, responsible for three-fourths of new global oil supply since 2008. And as lower prices roil operators and investors, the shale skeptics’ case may seem vindicated.

But their history is false: the shale revolution, “Shale 1.0,” was sparked not by high prices—it began when prices were at today’s low levels—but by the invention of new technologies. Now, the skeptics’ forecasts are likely to be as flawed as their history. Continued technological progress, particularly in big-data analytics, has the U.S. shale industry poised for another, longer boom, a “Shale 2.0.”

John Shaw, chair of Harvard’s Earth and Planetary Sciences Department, recently observed: “It’s fair to say we’re not at the end of this [shale] era, we’re at the very beginning.” He is precisely correct. In recent years, the technology deployed in America’s shale fields has advanced more rapidly than in any other segment of the energy industry. Shale 2.0 promises to ultimately yield break-even costs of $5–$20 per barrel—in the same range as Saudi Arabia’s vaunted low-cost fields.

The shale industry is unlike any other conventional hydrocarbon or alternative energy sector, in that it shares a growth trajectory far more similar to that of Silicon Valley’s tech firms. In less than a decade, U.S. shale oil revenues have soared, from nearly zero to more than $70 billion annually (even after accounting for the recent price plunge). Such growth is 600 percent greater than that experienced by America’s heavily subsidized solar industry over the same period.

Shale’s spectacular rise is also generating massive quantities of data: the $600 billion in U.S. shale infrastructure investments and the nearly 2,000 million well-feet drilled have produced hundreds of petabytes of relevant data. This vast, diverse shale data domain—comparable in scale with the global digital health care data domain—remains largely untapped and is ripe to be mined by emerging big-data analytics.

Shale 2.0 will thus be data-driven. It will be centered in the United States. And it will be one in which entrepreneurs, especially those skilled in analytics, will create vast wealth and further disrupt oil geopolitics.

Archived. Incredibly good article. A must-read.

EVs Sales Down 25% Year-Over-Year

Normally this story would simply be an add-on, but when you see a headline suggesting that EV sales were down 25% year-over-year, it needs a stand-alone post, or at least at the top of a new post. A trade magazine is reporting:

If you have been a follower of plug-in vehicle sales in the United States this year, then you knew this month was coming – the bottom of the barrel as it were. Compared to a year ago, August 2015 is EV sales-armageddon!

Put another way, with only the last inventory scraps of the first generation Chevrolet Volt, Toyota Prius PHV, and now obsolete Nissan LEAF left on lots to compete against a strong August of 2014 – it was a total comparative bloodbath.

For August, an estimated 8,972 plug-ins where sold, a slight gain over July, but significantly off 25% from the ~12,172 moved a year ago.

But, according to the linked article, sales will jump come September.

August, 2015, sales: 8,972
August, 2014, sales: 12,172

As usual, a lot of attention to EVs and intermittent energy, but in the big scheme of things, not a lot going on.

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Russia? Doing Just Fine, Thank You -- Bloomberg

Bloomberg/Rigzone is reporting:
At a time when the collapse in crude prices pushes Russia’s economy into a recession, the nation’s oil producers are managing to beat their western counterparts. On measures including cash flow, profit margins and share prices, OAO Rosneft, Lukoil PJSC -- Russia’s two largest oil producers -- and OAO Gazprom Neft are performing better than Royal Dutch Shell Plc, BP Plc or Exxon Mobil Corp.