Carl Martin

Carl Martin
Contributor since: 2008
Okay. When a stock is very close to it's latest bottom, one is supposed to short it? Then, when it reaches a new all time high, one is supposed to go long? And, this works,...if you are on a college budget? Or, does doing this force you to live on a college budget? Brandon, what are you trying to tell us?
I find it quite revealing, that CHK bulls so often refer back to their asset sale to SWN. Like, the past sure was a lot better, than the present, and maybe future too. Not a good sign.
Wolf,
"Two major drillers have gone bankrupt this year."
Names, please?
"Tens of billions of dollars from investors have been drilled into the ground to never be seen again."
Your proof, please?
lol wut,
The reason I have never disputed your well results, is that I simply have never disputed them. That means that I accept them. What I don't accept is your conclusion,....until you prove it to me. I just don't accept your well results as proof of what you are saying. It is simple. You are convinced, but I am not.
Here's partly why.
"That fact that operators are electing to invest considerable capital to vertically down space wells in these formations is evidence that conventionally executed fractures fail to adequately drain vertical sections in many laminated plays."
You essentially are saying that they do drain vertical sections, and in fact, you are saying that, that is all that they do. Right?
"If the oil came from the LBS and sourced down how could it not be in the frac barriers as well?"
Well, it could. What I meant was that I understood, that these various frack barriers, which are laminated shales, should not be considered as source rock like the LBS. Well, they might also be, but not in any meaningful amounts.
"It must have passed through them to get to the lower benches, right?"
Yes, no, maybe, I don't know for sure. I have not studied the exact laying down of these various levels, or when, how, why, the oil got there etc. It doesn't really interest me, because I simply accept that the oil is there, and can be gotten out. But, it might take some time, and cost too much money to make cents. Besides, I am not a geologist. Therefore, I don't actually have to get anything right. I'm still enjoying the default position.
"Come on man, I don't believe you know anything about geology."
Perhaps you are right. Most of what I sent you was entirely in other people's words, hence the quotes. And, furthermore, it was solely meant for you, not me. I don't really need to know any of that stuff. I only take in new information, if it is necessary, or enjoyable. Finding all that stuff for you, was not exactly my idea of fun. But, I did enjoy it, somewhat.
It was just a shovel thrown down in the hole you are in, so with it, you can now dig yourself out if you want. But, if you would rather dig yourself in deeper, I will not stop you. However, I will point out again, if you don't have anyone else to agree with you, then you are all alone with all your own ideas. I actually admire that somewhat, but I rely quite heavily on downloading almost all my information from other people.
Well, I do not know of any particularly successful pilot test for the lower TF's at present. But, I'm also not exactly looking for one, either.
"I'm claiming the poor results are because there isn't really any oil down there."
Well, at least you now admit, that you are only claiming there isn't any oil there, and the poor well results are what you use to back up your claim.
So, now all I need is your proof, because your claims are not my proof.

"I'm saying you won't find a successful pilot and this is the geologic reason why a successful pilot will never be found."

Nope! What you say is not a geological reason in and of itself. That is where your mistake is, right there.
Richard,
As you well know, I'm no expert, but my understanding has always been that the exponential decline rate usually starts as low as 8%, and here I totally assume, goes right down to about 1%, or even less, assuming that the well has a reasonably long life, which often requires high oil prices.
I have no problem with any numbers between 6%-10%, as a start. Higher than that, I think you end up towards the end of hyperbolic decline. Of course there is also the harmonic decline, and also at least two other types, that aren't quite right there in my mind at present.
But, back to the beginning, I just wanted to get your confirmation on the declining exponential rate part. Surely, we are in the right ball park.
Richard, okoil,
Do you have any insights into how good NFX's Springer shale land position is at this point. Or, where it is located in relation to CLR's land position?
lolwut,
Here's some more relevant stuff. You like info, right?
"Hydraulic Continuity
As noted, there are wells in numerous oil and gas resource plays in which diagnostics have conclusively proven excellent communication of fracturing pressure between two adjacent horizontal wellbores during treatment. In some cases, it is evident that liquid chemical tracers, solid tracers and even full wellbore volumes of frac sand have been conveyed during treatment into adjacent wellbores.
It is irrefutable that a propped fracture connecting two wells has been established in a large number of fields. These unique well pairs provide tremendous opportunities to interrogate the conductivity and durability of fracs. Unfortunately, the news is sobering. The majority of these wells appear to have essentially zero hydraulic continuity six months after frac treatment. It appears that drawdown causes some portions of the fracture to collapse as the wells are produced.
A case in point is the Eagle Ford Shale, where data demonstrated connection during stimulation of three parallel laterals at 500-600 foot spacing. Chemical tracers and solid radioactive proppant were observed in most stages in adjacent horizontal wells. Soon after cleanup and initial flow back, pressure communication testing was performed by bringing the center well onto production while parallel laterals remained shut in with pressure gauges recording the pressure influence. Lag times of 43 and 55 minutes elapsed before any pressure influences were documented in the offset wells. However, when a similar interference test was conducted three months later, the lag times increased to 76 and 81 minutes.
While this may be attributed partly to compressibility changes, it also suggests the “flow path length” between wells had increased, indicating deterioration of the fracture network. It is interesting to note that if the connecting fractures were envisioned to behave as an infinitely conductive pipe, a pressure pulse in one well could be observed at 500 feet with a lag time of less than one second. Furthermore, the pressures would equilibrate through this infinitely conductive pipe, and there would be no difference in the wells’ bottom-hole pressures. Clearly, it is incorrect to envision these fractures as infinitely conductive, open channels.
More sophisticated efforts to evaluate pressure pulse movement through narrow fractures are ongoing, but to date, the data remain a challenge to the industry’s description of hydraulic fractures.
It also is compelling that when testing was repeated three months after initial stimulation, despite production from the central well, the bottom-hole pressure in offset wells continued to increase, showing that the reservoir was capable of supplying hydrocarbons to those wellbores much more rapidly than the hydraulic fractures connecting the wells could deplete the pressure. It is surprising to most in the industry that the ultralow-permeability Eagle Ford rock could supply hydrocarbons to a well more rapidly than it could be drained through a number of interconnected fractures.
Wellbores stacked vertically have shown similar loss of hydraulic connection over time. It has been repeatedly documented that it is possible to inject fracturing fluids through the Lower Bakken Shale, apparently creating fractures connecting stacked laterals landed in the overlying Middle Bakken and underlying Three Forks. The vertical separation of these wellbores is often less than 100 feet.
Frac fluid, chemical tracers, solid radioactive tracers and full wellbores of sand have been recovered from offsets, corroborating pressure monitoring and microseismic data demonstrating that it is possible to initially create fractures connecting Middle Bakken and Three Forks laterals. However, wells frequently appear to operate independently, with little sustained production interference. Many Three Forks wells produce distinctly different water cuts and gas-to-oil ratios than adjacent Middle Bakken completions, illustrating that the wells are draining unique reserves and that the connecting fractures are not infinitely conductive.
At least five Bakken operators have announced plans to evaluate “high density,” “vertical down spacing,” or “array fracturing” to land laterals in multiple horizons, in recognition that fractures are insufficiently capturing resources throughout the section. A conceptual image is shown in Figure 1. Similar efforts are under way in the Niobrara, Woodford, Montney and several Permian Basin plays. That fact that operators are electing to invest considerable capital to vertically down space wells in these formations is evidence that conventionally executed fractures fail to adequately drain vertical sections in many laminated plays."
lol wut,
Here's some more info, that might be helpful.
"There are also cases where stacked laterals demonstrate the ability to initially create a fracture connecting wellbores completed within 100-foot depths, such as the Bakken and Three Forks. However, after being brought into production, these stacked laterals often show little or no sustained continuity, and commonly produce distinctly differing water cuts, indicating that the wells are draining unique reserves. The hydraulic continuity/conductivity within the fractures is evidently compromised during drawdown and production. There is clearly a large pressure loss within whatever fracture network connects the two laterals, unlike what most frac models predict.
In some situations, adjacent wells have been stimulated permanently by fracturing operations on an offset well. While “bashing” can either improve or damage production on adjacent wells, a positive influence of specific well pairs has been observed in the Haynesville, Bakken, Eagle Ford, Niobrara and Barnett. If fractures were infinitely conductive conduits as many envision, a newly drilled offset would consistently steal reserves from nearby wells. However, documentation of positive interference allows us to improve our understanding of frac performance, unambiguously demonstrating that created fractures do not reliably perform as highly conductive conduits between wells in a wide range of rock types and stress conditions."
Adam s,
But when? Their debt payment profile is well known.
Richard,
Okay. This is just small potatoes, but it sounds like you don't/won't commit to a declining exponential decline rate, like I do?
I realize the part about the vast changes in the industry, and the general lack of long term reliable information. I suppose, I am working more off of old shale gas well models, and just transferring that, more or less, to newer shale oil wells.
lol wut,
It certainly would help your case, if there was at least one other person on this planet that agrees with you. Is there? If not, I don't think you should chew me out over anything. Somehow in all this, I am innocent. Perhaps, you don't understand, that I am enjoying the default position, while you are struggling to prove all the assertions you are making. I really only have to ask you questions. AND, MY ONLY QUESTION IS WHERE IS YOUR PROOF?
Telling me the same thing 10 times doesn't convince me of anything, other than you obviously have no proof for your rather outlandish assertions. You are accusing an entire industry of what would probably result in being a trillion dollar fraud. I consider what is maybe just everyday stuff to you, to be quite serious in nature.
"if oil is actually present there"
Don't you actually know whether the oil is present or not?
"must fight buoyant forces to source down. "
What buoyant forces?

This all occurred millions of years ago. It's a long gone by, done deal. But, because the oil moved down throughout the entire TF system, it is essentially everywhere, except for in the respective frack barriers. Although, the oil moved, it stayed in the same general system, therefore it is "considered" ? to be source rock ? even though it ain't. This is because the whole millions of years long process has resulted in Lower Bakken Shale oil getting displaced to the lower TF's, in such a manner to resemble, what might have happened, if it actually were source rock. Therefore, it is to be considered as "source" rock. It is mostly dolomite, which is just a carbonate laced with magnesium, and assorted other minerals. Because each zone is of a different age, each zone has different properties, pressures, organic content, etc.
Apparently, it did not require great pressure to force the oil in, simply because it eventually got there. Easy in does not necessarily mean easy out Again, though. As you still haven't told me what pore size you are operating with, or what pressure gradient, I really have nothing to go by. I continue to think that you are merely lost in your own sea.
I believe pore sizes are better determined by the actual core samples of the actual rock down there. As, I am not well enough acquainted with the term free fluid porosity, I will not really comment about it. But, here are a few items just pulled out of context, which might help your understanding.
"Older NMR logs may indicate very low porosity in shales." Meaning they are not to be trusted.
" The magnitude of the polarization correction must be monitored because, in addition to porosity, the T1/T2 ratio is also influenced by changes in the types of formation and pore fluid. This method generally works well in clastics, but in conditions of high T1 and T2, such as in CARBONATES or light oil, the correction may actually introduce ADDITIONAL ERROR".
"Assuming that the mobility of reservoir fluids is primarily controlled by pore size (i.e., the producible fluids reside in large pores and the immobile, or bound, fluids reside in small pores), a fixed-T2 value can relate directly to a pore size at or below which fluids will not move. This value (T2cutoff) is used to divide the T2 distribution into movable (i.e., producible or free fluids and FFI) and immovable (i.e., bound-fluid, BVI, and CBVI) components (Fig.5).[4] T2cutoff is a variable that differs from one formation to another and is influenced by a variety of factors including:
◾Capillary pressure
◾Lithology
◾Grain size
◾Compaction
◾Pore characteristics
I seriously doubt if you have the background to get in this deep and not get caught up in merely proving your own bias. You seem to be assuming that any given rock formation always has the same size pores. This is not always so! But, I don't enjoy operating with so much information, that I have not been specifically trained to understand. The risk of mistakes is extremely high for me, so I tend to hold back instead.
But, why do you think the pores get smaller the deeper one goes?
"What do you think I meant by moveable oil?"

You have not been using that term. You are talking about oil that does NOT move. And, I don't really know what that is, because whatever it is, it lies outside of ordinary shale oil production, so it has no interest to me. I am only interested in oil that is produced.
"Yes, this information is out there."
That is what I doubt. I think it is only your misunderstanding, that is out there. That's why I need confirmation from another person. That would help make your case.

But, why not just email CLR, and get all the correct answers you need?
dhunter3759sa,
How about fleshing that out a little? We need more color.
Richard,
My beef is with the terminal part. I ONLY refer to them as exponential declines. This is because terminal decline is a PO expression. I have never heard it used by a reliable source of information, like yourself. My concern is that it is getting misinterpreted by the PO crowd to mean that when the production decline gets to around 6-7-8%, then production is then terminated.
It is quite widely believed that shale oil wells only last for five years or less. That's because many people think that the hyperbolic decline just grinds down to zero that quickly, and that is all that there is.
Just curious. Do you actually think the exponential decline, and lets just use your 10%, or so, just stays at 10%, or that it too, declines with time? Because, sometimes what you write leads me to believe, that you maybe think that way. If so, I don't agree with you, and hand the football back to you.
I'd like to hear your reasons why, not that I fully disagree with you.
Gee Harry,
That is unfortunate. Why don't you try writing an article on that here? I think it would be well received in this space. There has developed quite a group of naysayers among all us bulls, so any extra light shined would be appreciated.
"the CEO's art and wine collection. " LOL! I bet Harold's art and wine collections are huge. That is to say, the ones his wife didn't get.
lol wut,
I have never felt that much of anything you have said or linked to has ever had any real relevance for me. It well might be very relevant to where you are at, but I could not locate anything of any interest to me. Perhaps, we are just two different people?
If you would like a clearer explanation, then try this: My geological understanding is that the frack barriers you are referring to are mainly composed of laminates. This means that it is somewhat difficult to direct a water frackture straight through this kind of rock. If you can imagine a brick wall, then try to frack straight up it, what would likely happen?
Assuming all the bricks were very strong, and there were certain weaknesses in the surrounding morter, you might get a fracking pattern, that resulted in a frack going up one level, then to the right for 10 bricks, then up another level, then to the left for 20 bricks, then up another level, then to the right for 15 bricks, etc. Most of the distance covered would be horizontal, not vertical. The frack would quickly become exausted by all the 90 degree turns. That is basically what happens with those type of frack barriers. That's why they are not so easily fracked through.
Next, why don't you just Google "Lower Three Forks Stratigraphy", and go from there? You will find much to back up your assertions. But, I could find no proof of your claims. Perhaps, you could find some.
"You have admitted you don't know what a terminal decline is, so do you even know how companies come up with EURs?"
Not so, I merely put the question out there. Why don't you just answer it, and enter into communication with me on this subject?
#1.) is correct. the rest aren't.
"So to tie all this back to CLR... TF2+ has no producible oil therefore no upside."
That is what we don't agree upon. I am awaiting your proof. Circumstantial evidence does not qualify as proof. I am patiently waiting for you to introduce the word pressure. That is what everything depends upon. Instead, you are using boe. That's a very good and easy place to start, but it is only a start. You will have to be able to prove it geologically. That you have not even once used the word pressure, is very telling. Instead, I am only feeling the pressure of hot air. And, I know you can do much better than that. Right?
I am not very interested in impairments, but there seem to be many others here with good understandings of such. I think you should confront them with any lingering doubts you might have.
Their game plan is best understood by reading their investor presentations. The written transcripts here at SA, are also very easy to understand. Then you are supposed to email them with all your concerns. They will respond in a few days. Then just keep pressing them for everything you want. That is what I have done many years ago.
Adam s,
As you are allowed to look at the maps of their land positions free of charge in their investor presentations, why not have a look?
But, just curious. Rocks better than what?
So far, I'm still very far into positive territory from a legacy investment from about 2009. The stock is not likely to go much lower from here. But, who cares anyway? I invest long term. I buy low and sell high. That's what most other people here do too. Maybe you should try it. I've heard it beats complaining by a mile or so.
World,
Yes, it is based upon the company's extensive experience in the Bakken. They have merely changed the nature of their production profile, by focusing solely on 800+mboe wells in the core area, rather than drilling so many much lower EUR lease holding wells located on the more marginal outlying areas, just like ever single other E&P oil company has also been forced to do by low oil prices. Not to worry. The world will continue turning and the sky is not yet falling. It is only the people who DON'T invest in CLR, that are worried, not the ones that do. Funny about that.
Would anyone mind telling me what they mean by 6-7-8% terminal decline rate? Sorry, but I have no idea what that actually is supposed to mean. Please clarify, someone out there.
che,
At the end of the day, it all comes down to how much oil they have/expect to have, in the ground just waiting for them to take out. It is what all the debt is ultimately riding on. As long as the creditors can be reasonably convinced, or bluffed if you like, there will be no long term problems for this company. Other companies? Yes, indeedy so.
Yes, Thanks, Valueguy65.
Very good explanation, even if I only understand the half of it.
World,
I am not sure. I am not so interested in all the various accounting issues going on especially during this overly stressed pricing environment. My position has always been that the rocks rule, and that the rocks have tremendous amounts of recoverable oil in them. I do not believe in PO.
lol wut,
It is the semantics that are wrong with this article. Good Work! You nailed it correctly, this time. Semantics has to do with the meaning of words. As I told you before, geology is 90% words and only 10% science. That's why the words have to be right to get the science right.
The boe produced aspect is obviously positive, as merely one boe produced would be positive. But, you are probably referring to the cost of producing the boe's, which would obviously be negative at today's prices.
"What makes you think there is more oil in the ground than what they can legally claim? "
I believe we have covered this area already, but it is not something I think. It is something I know, because I have studied the geology, and invite you to do the same. When that deed is done, you will find yourself in complete agreement with me, regarding the geology of the Bakkken. Good luck in all your future endeavors!
"It is interesting to note that the sale price for this acreage was 20% higher than CHK's current market capitalization."
That really is quite extraordinary. Like, maybe it is just plain oversold.
Good article. Very clear flow of information.
Author,
"Continental Resources (NYSE:CLR) is a "bellwether" United States fracking company that operates primarily in the Bakken region of North Dakota."
"CLR also has test properties in the SCOOP and STACK region of Oklahoma "
So far, almost everything CLR, as well as what most other companies, have been doing in the Bakken comes under the heading of R&D, not production. That is to say, R&D at the rate of about 1.1 million bpd.
CLR is also doing a lot of R&D work in the SCOOP and STACK plays, that also results in considerable production.
I have absolutely no reason to believe, that you have any idea of what is actually going on in this space, and why.
CLR is not a "fracking company". But CLR, an E&P company, does have a fracking arm added to their company profile. A "fracking company", whatever that is, would probably be a fracking service company. That is what you mean, right?
Perhaps, CLR just has quite a bit more oil underground, than you are aware of. You might just want to think a bit about that possibility.
C&C,
Ya still ain't got the gas part right. It's much worse than you think. This could go on for years, but you'll see a slight change upward if/when we get out of the shoulder season, any week now.
Well said PabloMike.
lol wut,
I thought this discussion was over. You did capitulate. But, you still have not learned anything new. Your assertions have no credibility, because you do not back them up with FACTS, instead only your opinions, which have no value here.
IT is you, Y-O-U, that needs, not to talk, but to listen, to Petro. He is getting paid for what he does, and knows. We aren't.
I have no reason to believe, that you know what CLR's, plus the rest of the industry's, full field pilot project in Antelope field is all about. The oil was not expected to even flow before midsummer, when all the completion work was to be finished. As I have no information on the results, as yet, I assume they shelved it, and those 29 wells are probably currently listed as DUC's.
None of the other projects CLR has done, that you are referring to, are full field development projects. They are various downspacing projects and lower TF test projects. They are all part of the on going delineation process of the lower TF benches. Okay? If the results are not satisfactory to you, then you will just have to find some way to deal with it. So far, you obviously aren't doing too well about it. Better research might help. Trust me. What you are reacting to isn't actually there.
Long Player,
Yes, first of all, shale ain't easy! It just plain ain't. But, with enough time and effort it can all make sense, and also cents, if you know what I mean.
It could be said, that they are always testing, because they simply are. This is because they are still in the infancy stage in shale oil development. There are still far more questions than answers. On the other hand it could be argued, that some companies are in development mode, but then they are perhaps developing one zone, while still testing another. The problem is that technology is advancing so quickly. There is some kind of Moore's law in there, because there are quantum leaps in understanding, and sometimes with EUR's too. A case in point is QEP's latest well. Michael would know better, but I think it beats at least 90% of all MB and TF1 wells to date. And, that's from the TF2.
The main problem is the publics misunderstanding of decline rates.
HOT TIP: As soon as someone starts talking about decline rates as some kind of serious problem, then you know with 100% certainty, that person is either putting you on, PO typically, or they just plain don't have any idea of what they are talking about.
You need to start with geology, then remember that geology is 90% words, and only 10% science. It is absolutely no different than learning a foreign language, and yes, it is indeed foreign to a beginner, all of it. If you are not good with language, words, meanings, etc you will soon be lost.
But, you must also be very strong in math, and be able to think clearly and logically to understand how it's all tied together. Also, you have to be able to understand time, and the effects thereof on rocks and oil, over periods of hundreds of millions of years. Then chemistry must be understood, because you are dealing with how various chemical elements bond to form rocks, often under immense pressure and heat, over long periods of time.
Then, you need to know both sides of chemistry and how they interact with each other. That is to say both inorganic chemistry, and organic chemistry, which is based upon the incredible versatility of the element carbon. As soon as you have carbon in there plus water, then you have hydrocarbons, or what we call life. So, that calls forth the next discipline which is biology, but not birds, fish, dinosaurs, and elephants from today, but the real primitive ancient ones, back to invertebrates and way beyond, and of much smaller size, plankton like.
So, it all ends up being the intersection of biology, chemistry, and geology over a time span of millions of years. All this taking place in Nature's massive laboratories at great depths, temperature, pressure, and time scales, that ordinary people will not be able to relate to very easily.
With shale oil it's all coming own to the minute pore sizes in the rock, and the sheer pressures caused by both surrounding rocks above and below, combined with the pressure of expanding natural gases. Then the over pressure of a fracking event is added in to that already highly pressured mix. The oil/gas starts to come out as a Newton's 2nd law reaction to the added fracking pressure. It is all about pressure waves. The hyperbolic decline curve is just the signature of a fracking pressure return wave, as measured by oil and gas content, that comes out with it. It goes on for about 5-6 years at present, but might change in the future.
When the fracking pressure return wave is expedited, the matrix returns to the same LACK of equilibrium present in the original system. That causes the oil and gas to flow under a different dynamic called exponential decline, which is governed by the slowly falling natural over pressure in the rock matrix. That's the hand off, that the defense (PO believers) never see. So, it's pretty easy to win this game against them! LOL
Yeah Ben,
How about an article?
Ben Ten,
Yes, volatility is the name of the game for the bigger players. Each day the price of oil is put right where the oil traders want it to be. It is not very difficult to do. They push the price up as far as they can, then they turn around and push it right back down again. Heads they win, tails you lose. Works every time. Good luck out there everyone.
From the link, and it says it all. Is the world this crazy? YES!
"What is winning supposed to look like for the Saudis?"