Michigan Oil & Gas Monthly – January 2015

Welcome to the first ever edition of the Michigan Oil & Gas Monthly by RMP.   We will be publishing this monthly magazine / newsletter to keep you up to date on activity in the Michigan oil patch.  We will be taking a  look at Michigan hydrocarbon production and fresh water management.  This magazine, like everything else published at RMP, is free and will always be free.  The format will be an article like this one you’re reading with an accompanying video (like the one above) that showcases the same information.

Each month in this report we will be recapping basic activity & statistics from the prior month.  We have already published this post and this post to bring you up to speed on the basics of Michigan petroleum geology and Michigan hydrocarbon production.  As stated in the aforementioned posts, activity in Michigan is at its lowest level in recorded history since records started being kept in 1927.  So, there is not a ton of new activity to report in Michigan as most of the reservoirs we are aware of in the state are conventionally depleted and most new reservoirs found are modest producers as compared to other oil & gas plays in America.  The activity that is going on in Kalkaska, however, is different than anything that’s ever been done in Michigan.  So, even though permit numbers and activity is down to its lowest level in Michigan history, the activity that is happening now is new, exploratory, and larger in scale.  Wells targeting the Collingwood formation use 1,000x to 2,000x more fresh water per completion than do Antrim gas wells.  The first well ever targeting the Collingwood as a producing formation was completed in early 2010.

As far as hydrocarbon production goes in Michigan and all other states, remember that production reporting lags behind the current date by at least two months.  Operators have 45 days grace to report the prior months’ figures.  It then takes some time for the MDEQ to compile this industry data and publish it.  We will begin our production reporting soon when all the 2014 data is published by the MDEQ & MPSC.   There is a broad base of production data so we will look at many different aspects of production in upcoming editions of this magazine.  For this first edition, we are just going to look at application, permit, PRU#s , and plugging numbers issued over the past month.

Click any image below to enlarge.  Let’s get started.

Here’s a listing of the 3 applications received by the MDEQ from January 1 to January 31 2015:

Michigan January 2015 Oil & Gas Applications
Michigan January 2015 Oil & Gas Applications. Click image to enlarge.

 

Here’s a listing of the 5 permits issued by the MDEQ from January 1 to January 31 2015:

Michigan January 2015 Oil & Gas Permits Issued
Michigan January 2015 Oil & Gas Permits Issued. Click image to enlarge.

 

Here’s a listing of the 24 permits plugged that were published by the MDEQ from January 1 to January 31, 2015:

Michigan January 2015 Oil & Gas Permits Plugged
Michigan January 2015 Oil & Gas Permits Plugged. Click image to enlarge.

Michigan also added one new PRU# this month and it’s #21669.   It is assigned to permit#60859.  This well is named the USA Merrill 1-18A and it produced an average of 5.1 bbls/day for its first two months on production.


 

Key Performance Indicators

Although there is not direct proportion between apps and permits to wells drilled and completed, there is a direct relationship between applications made, permits issued,  wells drilled, and wells completed.   Below are some key performance indicators or KPI’s in the Michigan oil patch that can be helpful in supporting the findings we publish.

The 5 Year Trend Number of Permits Issued Per Year KPI:

The number of permits issued each year is indicative of interest in Michigan hydrocarbon exploration.  We exclude the first year 1927 from our ranking system as permits were partial that year.   Using 1928 as the first full year of recorded permit history in Michigan we have data for 87 years of activity.   All rankings then are the number of permits in the year specified out of 87 total years. The apex year for permits issued in Michigan was 1992 with 2,024 permits issued.  The nadir point was 1931 with 111 permits issued.   The 5YR Trend Permits Issued KPI looks at the permits issued ranking over the last five years.  This KPI will remain static through 2015 and analyzed against the 2015 permits as we go.  Below is the summary of the year, the number of permits issued, and that year’s rank with a denominator of 87 years.

Michigan Oil & Gas 5 Year Permits Issued Trend
Michigan Oil & Gas 5 Year Permits Issued Trend.

 


 

The Apps to Plugs Ratio KPI:

The apps to plugs ratio is self explanatory.  By looking at the number of applications to wells plugged KPI we can see wells coming vs wells going.   This KPI along with the previous one supports our original 2014 & 2015 outlook post with more numbers and data.

2015 Apps to Plugs Ratio  KPI:

3 Applications : 24 Wells Plugged

 


 

The Permits to Plugs Ratio KPI:

The permits to plugs ratio is nearly the same as the apps:plugs ratio but with permits instead of applications.

2015 Permits to Plugs Ratio KPI:

5 Permits Issued : 24 Wells Plugged

 


 

At respectmyplanet.org we demonstrate with numbers and data the things we say.   We try to keep it simple, but analyzing Michigan oil & gas data can be complex.   If you follow this monthly magazine, you will come to realize respectmyplanet.org will always provide you non-partisan information and has no financial conflicts of interest with any oil or gas company.   Our interest is in protecting fresh water and making sure that the hard working men and women in Michigan have well paying jobs that provide energy in the most environmentally and economically sound manner.

As we talk more and more about oil & gas exploration’s decline in Michigan and how it relates to fresh water, we will examine important current issues like the size of Collingwood well completions vs the size of Antrim well completions with regard to fresh water and sand consumption.  We will also look at the productivity of these wells in relation to increased strain on Pure Michigan fresh water management.   These are important issues as one Collingwood hydraulic fracturing completion can consume more water than 2,000 Antrim hydraulic fracturing completions, yet many groups and  media sources talk about and compare wells like these as if they were an apples to apples comparison.  Some groups imply that Collingwood style hydraulic fracturing has been going on since the 1930’s when it started less than five years ago in 2010.  Why?  Why would an authority figure offer ignorant or knowingly inaccurate comparisons with such certainty?  We have examined questions like these day in and day out for four years and now it’s time to share what we have learned in our monthly magazine.  The more you know, the better you can understand these intricacies when issues become complex.  By following us, learning to use our exclusive mapping software, and educating yourself, you will find it very easy to gauge the truthfulness of things you hear in the media about energy issues.  If we see something that does not jive with common sense and data, we will do our best to examine and analyze it.

By following RMP, you will also learn about how activity in the Michigan oil patch now is different with regard to primary and secondary recovery than it was in previous decades.   CO2 injection  secondary recovery in Niagaran wells drilled in the 1970’s & 1980’s is being hyped by industry advocates and politicians alike as a boon to hydrocarbon recovery in the Michigan basin.  Petroleum engineers are talking about secondary recovery of hydrocarbons in similar quantities to those of primary recovery in the 70’s & 80’s.  The 70’s & 80’s were Michigan’s most productive years in recorded history.   We will be watching this closely and will tell you the truth with data as developments unfold.   CO2 secondary recovery is a hot topic in the Michigan oil patch as global warming advocates call for sequestration of green house gasses and oil industry entrepreneurs see potential profit in CO2 sequestration.   We will report data related to this hot topic as information becomes available.

If you want to keep up with what’s going on in the Michigan oil patch and with regard to energy issues faced by Michigan, America, and the world, follow our Michigan Oil & Gas Monthly magazine by liking us on facebook, following us on Twitter, and subscribing to our YouTube channel.  Please consider making a tax deductible donation to our organization if you would like to see us grow and continue to provide  educational information as a free public service.

Thanks for reading RMP’s very first edition of our MOGM magazine.  Come back at the end of each month to check out a new edition of MOGM.

 


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3 Replies to “Michigan Oil & Gas Monthly – January 2015”

  1. Hi Matt,

    Thanks for the new info. Highly informative as always.

    One question: You mentioned in the video about the use of nitrogen with sand and water. Is this new? Does nitrogen replace the typical chemical cocktail that drillers use, or is it over and above these chemicals?

    Thanks for the clarification and this latest update.

    Regards,
    Steve

    1. Steve,
      I am a financial analyst by profession and only an amateur geologist by hobby over the last 4 years so I am learning just like you. I don’t have all the answers to your questions and recommend you ask a geologist in your specific area of rock or formation if you have a specific completion question. The MDEQ has geologists assigned by area so it would just be a matter of asking the geologist in that specified area. You’ve given me a good idea though, as I will publish a breakdown of geologists by area and try to integrate it into our exclusive mapping software like I do with congressional representatives on the location pages.

      From what I have seen and heard in my studies of geology over the last 4 years, Nitrogen (N2) is and has been a common ingredient in hydraulic fracturing in the Antrim formation. There’s a term we have been using in conversations that “It’s all about the rock”. It means the geology dictates the completion and production. Every well and every completion is unique and each well has it’s own story. This is what makes analyzing this data and reporting on it more complex than any big data I have ever studied. It is also the reason that people have been getting away with making inaccurate claims because data and software to interpret those claims as true or false has not existed until now.

      I can say with confidence that Nitrogen makes up about 80% of the air you breathe. I can also say that N2 is mixed with water to create a foam that has carried sand into naturally occurring fractures in the Antrim shale to help prop them open to produce natural gas for decades and is nothing new. I can also say that N2 has recently been experimented with for exploration in A1 Carbonate completions near Lake Michigan and near Lake Huron on our main page featured map. In recent years petroleum geologists and operators like Alta Energy (PN 60575 Riley 1-22HD1) tried and failed with N2 completions in different stages of their horizontal well bore. The Riley 1-22-HD1 location page is here and is one of our featured wells on the RMP homepage. We also have completion records in the Media Library tab of the Riley 1-22HD1’s location page if you’re interested in reading more about some of those A1 style completions which are bigger than Antrim completions.

      Thanks for checking out our webpages.

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