Friday, September 30, 2011

Generating a PDF From the GIS Map Server -- Bakken, North Dakota, USA

Elsewhere someone asked how to generate a PDF of a screen shot of the GIS map server.

It's incredibly easy: simply choose the area of the map you want to take a "photo" of, and then click on "Generate PDF" on the sidebar on the left on the GIS map server.

It may take a few minutes to complete, so just sit back a few minutes and see if the PDF will generate. You have to allow pop-ups. 

I've tried map servers for oil and gas from other states, and none of them are as easy to use as the one from NDIC. I am very impressed.

Temporary Spacing -- Rules -- Bakken, North Dakota, USA

A rare sighting.

The Face of the Bakken in the Wall Street Journal -- Bakken, North Dakota, USA

Updates

November 26, 2016: flashback. This post was originally posted back in 2011, and then tagged for follow-up in 2016. Now I have tagged it for 2021. Note that back in 2011, President Obama said that a battery would be developed that would equate to 130 miles per gallon.

We now have EVs that can go 200 miles on one charge. Miles per gallon / battery conversion here. The 2017 Chevy Bolt is rated at around 120 MPGe. Almost there.
 
Original Post
Link here.

This is the WSJ's weekend interview; a big thank you to Chris for alerting me to it.
Harold Hamm, the Oklahoma-based founder and CEO of Continental Resources, the 14th-largest oil company in America, is a man who thinks big. He came to Washington last month to spread a needed message of economic optimism: With the right set of national energy policies, the United States could be "completely energy independent by the end of the decade. We can be the Saudi Arabia of oil and natural gas in the 21st century."

"President Obama is riding the wrong horse on energy," he adds. We can't come anywhere near the scale of energy production to achieve energy independence by pouring tax dollars into "green energy" sources like wind and solar, he argues. It has to come from oil and gas. 
Not only riding the wrong horse, he's riding with the wrong posse. 

How much oil in the Bakken?

How much oil does Bakken have? The official estimate of the U.S. Geological Survey a few years ago was between four and five billion barrels. Mr. Hamm disagrees: "No way. We estimate that the entire field, fully developed, in Bakken is 24 billion barrels."

If he's right, that'll double America's proven oil reserves.

"Bakken is almost twice as big as the oil reserve in Prudhoe Bay, Alaska," he continues. According to Department of Energy data, North Dakota is on pace to surpass California in oil production in the next few years. Mr. Hamm explains over lunch in Washington, D.C., that the more his company drills, the more oil it finds. Continental Resources has seen its "proved reserves" of oil and natural gas (mostly in North Dakota) skyrocket to 421 million barrels this summer from 118 million barrels in 2006.
The president's reaction:
When it was Mr. Hamm's turn to talk briefly with President Obama, "I told him of the revolution in the oil and gas industry and how we have the capacity to produce enough oil to enable America to replace OPEC. I wanted to make sure he knew about this."

The president's reaction?
"[President Obama] turned to me and said,
'Oil and gas will be important for the next few years. But we need to go on to green and alternative energy. [Energy] Secretary [Steven] Chu has assured me that within five years, we can have a battery developed that will make a car with the equivalent of 130 miles per gallon.'"
Mr. Hamm holds his head in his hands and says, "Even if you believed that, why would you want to stop oil and gas development? It was pretty disappointing."
 I've tagged this note for follow-up in October, 2016, five years from now.

Oil and Gas: The Long View

From Merrill Lynch, published in September (2011) issue of the CFA Institute:
The overall pattern in global oil consumption growth shown in Figure 5 is formidable. The forecast is for an average increase of 1.4 million barrels per day through 2015, compared with the average increase of 1.1 million barrels per day over the past 25 years. Even considering some of the efficiency gains, a deceleration in the rate of growth in consumption does not seem likely.

Of the various emerging market countries, th dominant player is China. Over the forecast period, China will account for 32 percent of the overall growth in consumption or 2.6 million barrels of oil per day. In fact, the growing demand in China is averaging close to 500,000 barrels per day, which is a growth rate of about 5 percent a year. Other Asian countries account for 23 percent of the overall growth in consumption, and the Middle East accounts for 19 percent.

Much of the growth in oil demand in China is a result of strong demand for cars and light commercial vehicles. Figure 6 shows the sales of cars and light commercial vehicles in Western Europe, North America, and China from 1998 and estimated through 2015. The Western European automobile market was fairly flat, declined during the financial crisis, and is enjoying some recovery now. The North American market suffered an even bigger decline during the crisis but has had an impressive recovery.

The most interesting fact, however, is that China’s car market now exceeds 20 million vehicles per year. It is expected to continue to grow through 2015. To sustain this level of growth, oil demand will need to be 350,000 barrels per day per year. Oil demand in the Middle East is also rapidly expanding. In fact, the expectation is that annual demand in the Middle East will expand by about 300,000 barrels per day per year.
The reference to the Bakken:
I say that because both the oil sands of Canada and the Bakken and Eagle Ford shales in the United States have tremendous potential. With the oil shales, the development will take 10 to 15 years, and although it is not prolific in terms of individual well production, it is highly economic production that is economically better than $50 a barrel. The estimate
is that 2 million barrels per day could be developed from those two oil shale sources, in addition to an incremental 1.5 million barrels from the Canadian sands.
The article is eleven pages long with some very interesting statistics. Perhaps more later.

For Investors: SeekingAlpha On Bakken Oil Plays -- Bakken, North Dakota, USA

Link here.

Nothing new that regular readers didn't already know.

Some investors just keep accumulating shares.

Under the Radar: UK Production Decreases; Consumption Increases

Link here.

Look at the numbers (some numbers rounded):
Shipments of liquefied natural gas made up the bulk of U.K. gas imports for the first time in the second quarter as indigenous production saw its steepest ever decline.

The data show that, as some analysts predict LNG prices will revisit previous highs next year, there is little prospect for the U.K. to gain any respite from rising domestic energy bills.
 
Indigenous U.K. natural gas production fell by a record 25%.

Net imports of gas were up 5.0% despite demand falling almost 20% the previous year because of warmer weather and lower use of gas in power generation.
That's the UK. Think what is going to be happening in China and India.

And then there's the Japanese nuclear story:
Prices of LNG are expected to rise further because, since the Fukushima nuclear disaster, Japan has had to rapidly increase its gas imports for use in alternative power generation.

Prices on the spot market for LNG could revisit the highs of 2008 if around 80% of Japan's nuclear capacity remains offline, Bank of America Merrill Lynch said earlier this month.

"Government-mandated stress tests have stalled the return of all but one nuclear reactor" in Japan, it said. If the restarts aren't approved, "we estimate LNG demand growth in 2012 could reach 8.0 million tons."

"Should this occur, we see spot LNG prices next year rise to $25 per million Btu, similar levels as those seen in 2008, from $17 per MMBtu currently," it said.
 

Just How Big Is the Marcellus: Depends Upon Whom You Believe

Link here.
Maybe solving the Marcellus Shale missing resources is similar to a Columbo show. That shale has an estimated 410 trillion cubic feet (Tcf) of possible reserves according to the Energy Information Administration (EIA). So was the recent Marcellus Shale assessment by the U.S. Geological Survey (USGS) of only 84 Tcf of undiscovered potentially technically recoverable resources merely a Columbo distraction?
You know, either way you look at it, 84 or 410 trillion cubic feet is a bit of natural gas. 

Side-by-side comparison: government jobs vs private sector jobs

This is the difference between "government/green energy" jobs and "private sector/conventional energy" jobs:

Government/green energy: $1 billion and 900 construction workers; 52 permanent workers.
Private sector/conventional energy: $400 million and 1,000 direct workers, and many behind them.
Exxon Mobil Corporation’s US marine affiliate, SeaRiver Maritime, Inc., signed an agreement with Aker Philadelphia Shipyard for the construction of two new Liberty Class tankers valued at $400 million, which will create more than 1,000 direct jobs.

The double hull vessels will be used to transport Alaska North Slope crude oil to US West Coast destinations and will be built to include the latest navigation and communications equipment and exceed current environmental and energy efficiency standards.

Re-Fracs -- A Case Study -- North Dakota Petroleum Council -- Bakken, North Dakota, USA

A huge "thank you" to a reader for alerting me to this presentation.

Link here.

In addition to learning more about fracking in general, this presentation is very interesting.

I've gone through the presentation twice, very, very, quickly, and need to spend quite a bit of time to digest all that was presented.

The conclusion slide is very interesting, but one of the things not mentioned is all the "good"sand recovered in a re-frac.

The presentation, by the way, was by XTO, an ExxonMobil subsidiary.

That Didn't Take Long -- Follow-Up to Man-Camp Story -- Bakken, North Dakota, USA

A huge thank-you to CRC for alerting me to this story. It's a big story in more ways than one.

Link here.

I am out and about in the Bakken and cannot access a computer/web browser optimized for my blog. I am using a PC with Microsoft IE browser which does not suit my blogging well. I cannot link easily and I cannot post comments on my own blog! That's why I can't thank CRC directly, at the site where the comment was made. In addition, I am not posting some comments for now that I get because I cannot reply to them. There are some comments that should not be left hanging without a comment from me.

So, some comments and my comments in reply to others will have to wait.

In addition, I may not link quite as often.

Anyway, back to business at hand.

I posted earlier about Dickinson't moratorium on new man-camps (or at least a refusal to permit a 600-bed man-camp being proposed by a developer with an impeccable track record in North Dakota).

At the time I opined that several unintened consequences would develop. Already one of those unintended consequences was reported in the Williston Herald yesterday. Today, the Dickinson Press has a story of another unintended consequence: more truck traffic on asphalt state and county roads. (Regional links break often and break early.)
A temporary housing company from Boston has found land in Dunn County for a planned 595-man crew camp.


Though the camp is not being built in Dickinson, Target Logistics President Joe Murphy said it will still affect the city in a positive way.

“It will lessen pressure on the Dickinson housing market,” Murphy said. “It will mitigate the distortion in housing prices.”

Target Logistics applied for a special use permit to build a 600-man crew camp northwest of the 21st Street West and State Avenue intersection earlier this month but was turned down last week by the Dickinson Planning and Zoning Commission.

Following that hearing, several people approached Murphy with ideas for a project location. Ken Kubischta, Dickinson, was one of them.

“(The plan) was nice and neat,” Kubischta said. “Talking to the different people — the survey guy and the people hauling out the scoria for them — they all noted they have a very good reputation for keeping it nice and tight and correct.”

A new proposed site would be located southwest of the Highway 22 and 27th Street West intersection 8 miles north of Dickinson. The land covers almost 25 acres.
There was no mention of more vehicular traffic in the Dickinson area due to more remote nature of this proposed man-camp.

EOG With Nice New Well, Antelope Field; Whiting With Nice TFS Well, Sanish -- Bakken, North Dakota, USA

See link here for new wells reporting this quarter.
  • 19790, 1,318, EOG, Clarks Creek 3-0805H, Antelope, Bakken
But even more interesting is the Whiting well:
  • 19643, 1,130, Whiting, Hollinger 21-14TFH, Sanish, Bakken
This well is a TFS well in Whiting's highly productive Sanish field.
Whiting has another TFS well in this section:
  • 19938, CONF, Whiting, Hollinger 11-14TFH, Sanish, Bakken
And in the very same section Whiting  has two middle Bakken wells:
  • 18277, 1,716, Whiting, Iverson 11-14H, Sanish, Bakken
  • 18639, 2,309, Whiting, Iverson 21-14H, Sanish, Bakken
Folks, these are some huge wells Whiting is reporting in the Sanish. They were always reporting outstanding middle Bakken wells in the Sanish, and now they are starting to report great TFS wells in the same sections in the same field.

If newbies want to see the business plans of two different companies operating in the Bakken, they could do no better than looking at Whiting's Sanish field and EOG's Parshall field on the NDIC GIS map server.

  

 

 

Bird Killers: Some Get a Pass; Some Don't -- Bakken, North Dakota, USA

I've posted this story before, but now I see others have picked up on it (and have even a better job of reporting it -- smile).

Link here.

I won't re-link all the stories, but suffice it, here's the talk down at the local coffee shop: oil companies in North Dakota being charged with killing 26 ducks (most of which would have been on target for hunters this fall).

Meanwhile, whooping crane killers get a pass.

The ducks are not endangered as a diminishing species (that's why they are hunted from Canada to South America). Whooping cranes are at huge risk as a diminishing/lost species. Among everything else (including wind turbines) their natural wild food is at risk in the Gulf of Mexico where they nest. 

And that's the talk down at the local coffee shop.

Military Chaplains May Officiate Same-Sex Unions -- Absolutely Nothing To Do With The Bakken

Link here.
The Pentagon has decided that military chaplains may perform same-sex unions, whether on or off a military installation.
The ruling announced Friday by the Pentagon's personnel chief follows the Sept. 20 repeal of a law that had prohibited gays and lesbians from serving openly in the military.
Whenever my "kids" asked me "why" regarding almost anything, I said, a) google it; and/or b) follow the money.

In this case, "follow the money." The officers clubs and enlisted clubs on many Air Force installations were always looking at ways to increase revenue. My hunch is that, at least in the beginning, a fair number of receptions for same-sex unions will be held in the clubs.

I can't speak for US Army, Navy, or Marine installations because I did not serve in those branches.

Thursday, September 29, 2011

Every Action Has an Opposite and Equal Reaction -- Bakken, North Dakota, USA

Earlier this week I blogged about the moratoria on man-camps, suggesting unintended consequences.

Today, in huge letters across the top of the newspaper, The Williston Herald's lead story is about the rise in rent from $700/month to $2,000/month for senior citizen housing.
For most of the longtime tenants, like Mortensen – who has lived in the apartment for 20 years – the letter came as a shocking blow met with disbelief, amazement and a rising anger.

"I thought we might get a $100 raise but not that much," Mortensen said.

She and seven other senior citizens who live in the 30-unit complex met with the Williston Herald Wednesday to discuss their outrage over the situation – a situation that has left them feeling panicked, furious and, as Mortensen puts it, "homeless."

All of the seniors are in the same boat: They are on a fixed income of monthly Social Security checks, there are no other apartments available in the area and coming up with $2,000 per month for rent will be impossible.

"How do seniors pay for something like this?" said Donna Gilbert, who has lived at the complex for 23 years. "The city has it in their head that everybody should buy a house so they will stay here.
Interesting how things work out. Predictable.

Chaos is self-organizing.

Six (6) New Permits -- Four Wells Off The Confidential List Today -- Only One Reporting IP -- Others Probably Waiting to Be Fracked -- Bakken, North Dakota, USA

These wells came off the confidential list today; three of the four were not completed (not fracked):
  • #19050, Whiting, Teddy 21-24TFH, Billings 
  • #19805, 1461, XTO, FBIR Stephen 31X-19, Dunn
  • #20366, Hess, GO-Foss Trust-156-97-3525H-1, Williams
  • #21327, Hess, SC-Jean 157-99-0904H-1, Williams
There were six new permits:

Operators: MRO (3), Dakota-3 (WMB), G3 Operating, and Samson Resources.

Fields: Reunion Bay, Mandaree, Strandahl, Paulson.

MRO has two new permits in Strandahl field (on the same pad) and G3 Operating has a new permit in Strandahl field. Busy, busy, busy.

Taxable Sales Up $1 Billion in North Dakota

Link here (regional links break early and break often). Firgures for 2Q11.
The latest figures cover the months of April, May and June, and they show a fourth consecutive quarter of above 25 percent growth over the previous year. The first quarter of 2011 was up 33.6 percent and the third and fourth quarters of 2010 were up 28 percent and 31.2 percent, respectively, over 2009.

“Anything over 20 percent or 30 percent is pretty remarkable,” Fong said. “It’s not just the west, and it’s not just oil.”
Data points (some numbers rounded)
  • Fargo: $590 million (represents an increase of 8 percent over 2Q10)
  • Williston: $535 million (represents an increase of 75 percent over 2Q10
  • Tioga and Stanley: each had increases over 100 percent year-over-year
I can't wait to see the county totals. It is obvious that Williams County will "smother" Cass County.

Enbridge To Add 800,000+ BOPD TakeAway From Cushing -- Huge Story -- Bakken, North Dakota, USA

Link here.
Enterprise Products Partners L.P. and Enbridge Inc. today announced plans to design, construct and operate a new pipeline to transport crude oil from the oversupplied hub at Cushing, Oklahoma to the Texas Gulf Coast refining complex.

Initially, the Wrangler Pipeline will have the capacity to transport up to 800,000 barrels per day (BPD) of crude oil and accommodate the constrained medium-to-light crude oil currently stranded at Cushing and priced at a substantial discount to the oil imports that account for most of the supply being used by Gulf Coast refiners.

The pipeline will also have the capability to handle additional supplies of crude oil arriving at Cushing from other North American producers. In anticipation of future increases in crude oil volumes delivered to the Cushing area, the joint venture partners will design the pipeline to be easily expanded.
Just for starters: 800,000 bopd, but can be scaled up. Huge story.  A bit "thank you" to "anon 1" for sending the link my way.

Meanwhile TransCanada XL lingers.

XTO Has a Nice Well -- Bakken, North Dakota, USA -- September 29, 2011

19806, 1,463, XTO, FBIR Bird 31X-19, Heart Butte, t8/11; cum see below;

Current Operator: XTO ENERGY INC.
Current Well Name: FBIR STEPHEN 31X-19
Field: HEART BUTTE
Spud Date(s):  3/29/2011
Completion Data
   Pool: BAKKEN     Perfs: 10643-20668     Comp: 8/10/2011     Status: AL  
Date: 8/14/2011     Spacing: 2SEC
Production Test Data
   IP Test Date: 8/14/2011     Pool: BAKKEN     IP Oil: 1,461 

****************************
The FBIR Stephen / FBIR Bird Wells

24084, 1,241, XTO, FBIR Stephen 31X-19G, Heart Butte, t8/13; cum 188K 5/19;
23885, 1,566, XTO, FBIR Stephen 31X-19H, Heart Butte, t8/13; cum 153K 5/19;
23884, 1,436, XTO, FBIR Stephen 31X-19D, Heart Butte, t8/13; cum 209K 5/19;
23883, 1,617, XTO, FBIR Bird 31X-19D, Heart Butte, t8/13; cum 236K 5/19;
23881, 850, XTO, FBIR BIrd 31X-19G, Heart Butte, t9/13; cum 160K 5/19;
19806, 1,463, XTO, FBIR Bird 31X-19, Heart Butte, t8/11; cum 333K 5/19;
19805, 1,461, XTO, FBIR Stephen 31x-19, Heart Butte, t8/11; cum 309K 5/19;

****************************
New Pad To The West (noted 5/19)

As of 5/19, these well are all conf:
  • 35849,
  • 35850,
  • 35851,
  • 35852,
  • 35853,
  • 35854,
  • 35855,
  • 35856,

Morning Links -- Bakken, North Dakota, USA

Big story here, on CNBC last night, WLL:
Although based in Denver, Whiting is the second largest oil producer in North Dakota's Bakken shale—one of the biggest oil finds in U.S. history. Whiting has 582,000 acres in the oil-rich Bakken and some exposure to other shales, too. Since having reported a disappointing quarter in late July, WLL has fallen through the floor. The day after it reported earnings, it lost 9 percent and has now fallen 38 percent.
Motley Fool: enjoy cheap oil while it lasts; specifically mentions KOG and CLR in the Bakken as companies to look at.

SeekingAlpha: another metric to value oil companies; WLL is on the list; as well as I can tell, it's a variant of the same metric I use: bbls of oil equivalent/share value (pretty obvious metric, but just one data point, of course)

And, in the Utica:
Chesapeake said 12 horizontal wells it drilled in Utica Shale--a deeply buried rock formation that lies below parts of eight states, from Tennessee to New York as well as parts of Canada—achieved strong initial production of natural gas and liquid hydrocarbons such as oil and ethylene, which fetch higher prices than natural gas.

Meanwhile, with/without links:
  • The government raised last quarter's GDP to 1.3
  • Fewer folks applied for unemployment beneftis; first time in recent memory below 400,000
    • Weekly applications dropped 37,000 to a seasonally adjusted 391,000, the Labor Department said Thursday. That's the lowest level since April 2 and the first time applications have fallen below 400,000 since Aug. 6.




 


Wednesday, September 28, 2011

Keystone XL Only If Built In a Responsible Manner -- Okay

Link here.
State regulators in North Dakota say they support a controversial pipeline that would carry tar sands oil from Canada to the Gulf of Mexico, though they want it constructed in a responsible manner.
The vote was unanimous in support for construction but the vote regarding the process was 4-1 with one state regulator wanting the pipeline constructed in an irresponsible manner. State regulators in Nebraska are still debating the "irresponsible clause," sometimes referred to as the "pipeline from hal."

Nissan Developing Car That "Can Read Your Mind"

Link here.
One of the world's largest motor manufacturers is working with scientists based in Switzerland to design a car that can read its driver's mind and predict his or her next move.

The collaboration, between Nissan and the École Polytechnique Fédérale de Lausanne (EPFL), is intended to balance the necessities of road safety with demands for personal transport.

Scientists at the EPFL have already developed brain-machine interface (BMI) systems that allow wheelchair users to manoeuvre their chairs by thought transference. Their next step will be finding a way to incorporate that technology into the way motorists interact with their cars.
The school announced yesterday that software for blonds has been written and is being field tested with (un)surprising success. 

The President Supports A Law Allowing Unemployed to Sue If Not Hired

Link here.
Advocates for the unemployed have cheered a push by the Obama administration to ban discrimination against the jobless. But business groups and their allies are calling the effort unnecessary and counterproductive.

The job creation bill that President Obama sent to Congress earlier this month includes a provision that would allow unsuccessful job applicants to sue if they think a company of 15 or more employees denied them a job because they were unemployed.
In addition, if you are hired on the other hand, you can sue your new employer for reverse discrimination, for having hired you and not someone else.

I cannot make this stuff up.

A Little Humor -- This One Is Making the Rounds -- Not the Bakken and For Investors Only

Again, this is not an investment site, and past returns are not indicative of future results:

If you had purchased $1,000 of shares in Delta Airlines one year ago,
you would have $49.00 today!

If you had purchased $1,000 of shares in AIG one year ago, you would
have $33.00 today.

If you had purchased $1,000 of shares in Lehman Brothers one year ago,
you would have $0.00 today.

But, if you had purchased $1,000 worth of beer one year ago, drank all
the beer, then turned in the aluminum cans for the recycling refund,
you would have received $214.00.

Based on the above, the best current investment plan is to drink
heavily & recycle.

It is called the 401-Keg.

And as a bonus...

A recent study found that the average American walks about 900 miles a
year. Another study found that on average Americans drink 22 gallons of
alcohol a year. That means that the average American gets about 41
miles to the gallon!

Makes you damned proud to be an American!

Update On the Fram Operating Well in Renville County -- Madison -- North Dakota, USA

Fram Operating has five wells in North Dakota; four of them are on the confidential list. The fifth (or the first) came off the confidential list a few weeks ago:
177393307501401OGA8/17/20115590SENE 25-160-86FRAM OPERATING LLCFUNKE 1WILDCAT

NDIC File No: 17739     API No: 33-075-01401-00-00     County: RENVILLE     CTB No: 117739
Well Type: OG     Well Status: A     Status Date: 8/17/2011     Wellbore type: VERTICAL
Location: SENE 25-160-86     Current Operator: FRAM OPERATING LLC
Original Operator: UNIT PETROLEUM COMPANY
Current Well Name: FUNKE 1
Original Well Name: FUNKE 1
Elevation(s): 1762 KB   1748 GR   1748 GL     Total Depth: 5590     Field: WILDCAT
Spud Date(s):  3/14/2011
Casing String(s): 8.625" 1000'   5.5" 5588'  
Completion Data
   Pool: MADISON     Perfs: 5238-5244     Comp: 8/17/2011     Status: AL     Date: 3/14/2011
Production Test Data
   IP Test Date: 8/20/2011     Pool: MADISON     IP Oil: 105     IP MCF: 73     IP Water: 75
Cum oil: 16K 6/12;  

Production numbers are not available because it literally just came off the confidential list (August 17, 2011) and now production will be reported on a monthly basis.

This is a Madison well; not a Bakken. It reached total depth, about 5,900 feet in 8 days. Although it's a bit unclear, it appears that "they" sold at least 600 bbls in August, the month that it was tested.

One Billion Dollars in Loan Guarantees For 52 Permanent Jobs -- Not The Bakken

Link here.
Energy Secretary Steven Chu said the department has completed a $737 million loan guarantee to Tonopah Solar Energy for a 110 megawatt solar tower on federal land near Tonopah, Nev., and a $337 million guarantee for Mesquite Solar 1 to develop a 150 megawatt solar plant near Phoenix.

The two projects will create about 52 permanent jobs, Chu said.
I can't make this stuff up: more than $1 billion in guaranteed loans for 52 permanent jobs.

It's Hard To Believe -- CNNMoney Has Just Discovered the Bakken -- Bakken, North Dakota, USA

Link here. Another story from Watford City.
Believe it or not, a place exists where companies are hiring like crazy, and you can make $15 an hour serving tacos, $25 an hour waiting tables and $80,000 a year driving trucks.

You just have to move to North Dakota. Specifically, to one of the tiny towns surrounding the oil-rich Bakken formation, estimated to hold anywhere between 4 billion and 24 billion barrels of oil.

Oil companies have only recently discovered ways to tap this reserve. And along with the manpower needed to extract the oil, the town is now scrambling to find workers to support the new rush of labor.

Watford City is at the center of the Bakken formation. While it is home to less than 3,000 permanent residents, there are about 6,500 people there right now, as job hunters relocate to seek out high-paying jobs.
Unfortunately, $80,000 a year won't buy you a place to live in western North Dakota, and waitresses at $25/hour can't afford the high cost of living.

Buy my hunch is, folks will figure out how to survive. And succeed.

Man-Camp Of The Future -- Bakken, North Dakota, USA

Link here. The link won't last long. It has a great photo, so catch it now. Tomorrow the link may be gone.
Like so many other area businesses who have not been able to hire or retain employees because of the shortage of housing in the Watford City area, Johnsrud has decided that it is time for him to take matters into its own hands and come up with a housing plan to meet the needs of his company.

And what a plan it is!

According to Johnsrud, Power Fuels has finalized plans that will include six 42-unit apartments, 54 patio homes, 40 twin homes, 110 single family homes, as well as five commercial buildings on land that the company has purchased to the west of the McKenzie County Courthouse.

“The goal is to have four of the apartment buildings done this year,” stated Johnsrud. “In addition, work has started on the construction of the patio homes.”

The first three apartment buildings, according to Johnsrud, will be used exclusively to provide housing for his employees.

“In order for us, as a company to take care of our customers’ needs in the future, we needed to be able to offer affordable, quality housing to our employees.”

And Johnsrud’s plans to build a 1,000-person community in Watford City has city officials excited.
It looks like Watford City still has a bit of the "west" in it. 
Teddy would have been happy.

Five (5)New Permits -- Bakken, North Dakota, USA

Daily activity report, September 28, 2011 --

Operators: MRO, Whiting, Vecta, OXY USA, and Hunt.

Fields: Bailey, Sanish, Banner, Simon Butte, and Werner.

Whiting, of course, has the permit in Sanish.

This is Vecta's third North Dakota permit:
  • 21605 Confidential NENW 26-151-89 VECTA  BRYAN MYERS 26-1 BANNER
  • 21155 Confidential SWNW 15-152-88 VECTA MARK KOK 15-1 PLAZA
  • 21145 Confidential SWSW 26-156-86 VECTA  NESHEM 26-1 WILDCAT

 Only one well came off the confidential list today, and that had no IP reported; another waiting to be fracked, I suppose.

Whiting Presentation at IPAA -- September, 2011 -- Bakken, North Dakota, USA

Link here -- even if you can't connect to the audio, you can view the slides. I don't expect the slides to be here long, but WLL always has a great corporate presentation at their website.

Before delving into the presentation, folks should re-acquaint themselves with Whiting's prospects in the Bakken. First, click here, and scroll down to Whiting to see snapshot of their prospects in words, and then, go to the link above, and jump to slide 19 to see a graphic of the map of Whiting's prospects.

What's the first thing you notice? Yup, Whiting has added a new prospect: Missouri Breaks: 41,332 net acres, eastern Montana just across the border from North Dakota's McKenzie County.

According to the CEO in 2Q11, the company had >680,000  net acres. According to SeekingAlpha.com back in May, 2011, the company had 604,000 net acres. Totaling the net acres shown on the slide: 619,380 net acres. I have to compare that to slide 33 -- later.

Data points from the presentation:
  • Hidden Bench:  Average IP --  2,700-2900, which is significantly better than the Sanish with an average of 2,000.
  • Hidden Bench acreage: 37,170 net acres; Sanish -- 82,902 net acres
  • Lewis and Clark field:  IPs  1,300-2500 boepd
  • Missouri Break field (Montana): 2,800-2,900 boe IP's
  • Star Buck field (Montana ) 1,100-1,800 boe IP"s
  • After deducting the Sanish, Whiting has 10 years drilling for 20 rigs.
  • More to follow; too much to digest at one sitting.

 

KOG: Acquires 13,500 Net Acres Plus One Rig And A Partridge in a Pear Tree -- Bakken, North Dakota, USA

I'm joking about the partridge.

 
Data points:
  • $235 million
  • Additional 13,500 net acres ($17,000/acre disregarding all other assets)
  • Perhaps one additional rig (details to be worked out)
  • 3,000 boepd at closing (3,000 bbls x $50/bbl x 365 days) --> 54 with six zeroes/first year
  • New acreage just north of KOG's Koala Project
  • Acquisition will expand KOG's acreage position in the Bakken to nearly 110,000 net acress
  • KOG assumes operatorship of 15 drilling units on the coniguous leasehold to be acquired
Click to map here
  • The new acreage, immediately east of Williston, appears to be pretty much in Stockyard Creek oil field, and Epping oil field; it doesn't look like it extends into Brooklyn field.
See discussion here regarding this purchase over on the Teegue board.

Other data points
  • Average EUR in this area: 650,000 boe from the Bakken formation
  • No wells have yet been drilled on these lands testing the TFS
  • Current estimate: 75 operated locations in acquisition
  • Pipeline access
  • Salt water disposal access
From the KOG discussion boards elsewhere:
With this additional purchase and 3,000 bbl per day plus all of the wells coming on line Kodiak will exit the year at around 12 to 14,000 bbl. Brigham is currently at roughly 14,000 bbl.

Belfield Approves Temporary Housing -- Bakken, North Dakota, USA

Link here.
The zoning board unanimously supported a two-year conditional use permit to allow up to 26 Nabors employees to stay in facilities that will be built as part of a company expansion project. The site is adjacent to Nabors existing yard located east of Belfield on Highway 10.
Employees would be permitted to stay at the facility for up to 90 days.
Watch for more and more such alternatives to the large man-camps. It's a win-win for everyone (except for more trucks on the road,): the guys have a place to stay, and the price is a lot better than they might pay to stay at a man-camp.

New Natural Gas Pipeline -- Tioga to Sherwood -- Bakken, North Dakota, USA

Updates

October 2, 2012: Don sent me a reminder about this company. Read about the company's operations here and the connection with the Bakken.

Original Post
Key point: 77-mile natural gas pipeline to be buried between Tioga and the Alliance mainline at Sherwood, North Dakota, on the Canadian border. Aux Sable Liquids Products has a natural gas liquids processing plant in the Sherwood area.

Link here.
Veresen Inc. and Enbridge Inc., joint owners of Alliance Pipeline, will proceed with development of a natural gas pipeline lateral and associated facilities to connect production from the Hess Tioga field processing plant in the Bakken region of North Dakota to the Alliance mainline near Sherwood, North Dakota.

Alliance has executed a precedent agreement with Hess Corporation as an anchor shipper on the Tioga Lateral pipeline, including matching capacity on the Alliance mainline. Aux Sable (owned by Veresen, Enbridge and Williams Partners, L.P.) and Hess have reached a concurrent agreement for the provision of NGL services. The pipeline is expected to be in service by the third quarter of 2013.

The 77-mile Tioga Lateral will facilitate movement of the high-energy, liquids-rich natural gas to natural gas liquid (NGL) processing facilities owned by Aux Sable Liquids Products at the terminus of the Alliance mainline system. The pipeline will have an initial design capacity of approximately 120 million cubic feet per day, which can be expanded based on shipper demand.
Tioga is in the heart of the Bakken, and correctly identifies itself as the "oil capital of North Dakota."  It is located on US Highway 2 east of Williston.

Sherwood, North Dakota, is on the Canadian border almost directly north of Minot.

I visited the Tioga facility about two weeks ago and have posted photos.

It looks like Tioga's 2,500 man-camp was an important initiative. Folks rightly complain about natural gas being flared off but without workers to put in the pipelines required to capture this natural gas it won't happen.

Without man-camps located where the work needs to be done, we will simply see more truck traffic. This is not rocket science.

Tuesday, September 27, 2011

Mountrail County Joins Williams County: Moratorium on Man-Camps -- Bakken, North Dakota, USA

Link here.

Some data points:
  • For newbies, the North Dakota Bakken is concentrated in four counties: Williams, Mountrail, McKenzie, and Dunn.
  • Williams County announced a six-month moratorium on new man-camps starting this month (September, 2011). 
  • Mountrail County announced an 18-month moratorium on new man-camps effective immediately (September, 2011). 
  • The fracking backlog appears to be getting worse, not better.
  • Most motels in Williston contract out the entire motel to a specific oil or oil service company. One of the few motels that still offered rooms on a reservation basis will now contract out the entire motel to an oil service company beginning November 1, 2011. 
For every action there is an equal and opposite reaction.

Chaos is self-organizing.

BEXP, Whiting, CLR -- Motley Fool

Link here.

Whiting and BEXP have some very nice gross, operating, and net margins.

Nine (9) New Permits -- Bakken, North Dakota, USA

Daily activity report, September 27, 2011 --

Operators: CLR (4), Denbury Onshore (2), Slawson (2), Zenergy

Fields: Assiniboine, Big Bend, Demores, Siverston, St Demetrius, North Tobacco Garden, and Elk.

Slawson has permits for a 2-well pad.

Three wells were released from confidential status; none reported an IP and all went on the DRL list. The fracking backlog continues. Three wells, and not one completed.

The Dusty Streets Of Williston - Bakken, North Dakota, USA

Today was an absolutely beautiful day in the Bakken. One could not ask for a nicer day.

It was the perfect day to take photos of the busiest street in Williston. There may be roads just outside Williston and on the edges of Williston that are busier, but there is no street in Williston busier than 2nd Street West on the southwest side of town.

All trucks leaving this side of town, must bypass through the grain elevator industrial park area, and then make a left turn onto 2nd Street West, before heading west out of town and toward Montana. It's a clear shot, but unfortunately it requires one more left turn on the busy bypass to get on the highway.

Be that as it may, it leaves 2nd Street West as the busiest street in Williston. So I thought I would take some photos of the street. The photos below were taken at 5:30 p.m. just as the evening traffic begins to get heavy.

One photo is looking west, one looking east. Absolutely gorgeous photos except for the dust.





Yup, this is the busiest street in the busiest town in the Bakken at 5:30 p.m. on a Tuesday. 

[The bypass / Million Dollar Way intersection north of town is much busier, but it is an intersection of two highways, and not a "street" in Williston.]

It reminds me of the streets of Laredo:


NOG -- IPAA Presentation -- September, 2011 -- Bakken, North Dakota, USA

Link here (even if you don't get the audio, you can review the slides). I doubt the slides will stay up long, but they will most likely be available at NOG's website.

Some data points (some numbers rounded):
  • Increased net acreage from 147,407 acres to 155,000 acres; analyst's estimate at end of 2010: 130,000 net acres
  • Participated in >650 gross Bakken/TFS wells; extensive knowledge of the Bakken for a non-driller
  • Net well inventory at 3 MB / 3 TFS wells/spacing unit: 726 net
  • Acquired 12,700 net acres at $1,995/acre in 2Q11
  • No debt
  • Reserves: 120% increase since 12/31/10
  • PV10: 200% increase since 12/31/10
  • Conservative estimates
  • Estimating 30 - 40 percent production growth 3Q11 over 2Q11
  • Average cost per well: $6.5 million (compare with $9.5 million for KOG)
Unique business plan as I have noted many, many times

Three Recent TFS Stories -- Whiting's Record TFS Well -- Huge Story -- Bakken, North Dakota, USA -- September 27, 2011

This is kind of interesting and predicted some time ago.

Just as drilling in the Bakken formation is entering the "manufacturing stage," we are now seeing increased activity in the Three Forks formation, as evidenced by the recent Oasis presentation (just posted), the BEXP "record" TFS well, and now a story in Rigzone about Whiting's "record" TFS well.
In the Whiting's Pronghorn area of the Lewis & Clark prospect, Whiting completed the Smith 34-12TFH in the Sanish Sand formation flowing 2,446 barrels of oil and 2,959 Mcf of gas (2,939 boe) per day on September 15, 2011. The well was tested on a 48/64-inch choke with a flowing casing pressure of 875 psi.
The Smith well, which was drilled on the southeast side of the prospect in Stark County, North Dakota, was fracture stimulated in a total of 30 stages. The Smith 34-12TFH was drilled about a mile northwest of the Whiting-operated Hecker 21-18TFH, which posted the highest initial production rate for any Three Forks well drilled in the Williston Basin at 3,612 boe per day.
The Pronghorn area comprises 123,500 gross (114,700 net) acres, which is approximately 15% larger than the Company's Sanish field. Whiting holds a controlling interest in 75 1,280-acre spacing units at Pronghorn.
It should be noted that the article, which might have been a press release from WLL suggested that the Pronghorn is part of the Lewis & Clark prospect. They are in close proximity, sharing a very small piece of their borders, but still separate prospects, at least according to the corporate presentations.

Dickinson't is the county seat for Stark County.

This is really quite an incredible story. Two data points:
  • Whiting's Sanish field has been spectacular for Whiting; they are easily going to put in 7 to 8 wells in each spacing unit in that field
  • Whiting's Pronghorn prospect is 15 percent larger than its Sanish field
I.N.C.R.E.D.I.B.L.E.

Oh, by the way, BEXP's "record" TFS well:
  • 20640, 2,906 boe, BEXP, Irgens 27-34 2H, East Fork field, Bakken

Williston Covered by a Ball of Dust -- Dickinson -- Stark County Development Corporation Executive Vice President

Update

January 3, 2013: plain old saltwater may be best alternative to cutting down road dust. Link at The Bismarck Tribune. Magnesium chloride; now, looking at well brine water. Salt water will cost $5,000/one mile of application. Three applications close in time "stop" dust for about one year. 

December 22, 2011: Dickinson again says "no."  To everything.

December 2, 2011: Looks like Dickinson will see a bit of dust next summer -- plans afoot to build a 5-lane highway north of Dickinson.

November 29, 2011: reminder -- Dickinson will consider widening the 2-lane highway north of town to a 5-lane highway; public meeting December 1, 2011. I am watching this one closely. 

November 21, 2011: I was taken to task by several folks after I wrote another disparaging post about Dickinson's perceived anti-growth stance. Dickinson gained that reputation after the comments made about Williston by Stark County Development Executive Vice President (see below) and Dickinson's subsequent denial of a well-thought-out/professionally run man-camp. Because I was taken to task, I said that I would refrain from further negative comments about Dickinson. However, I will continue to follow Dickinson's pro-growth/anti-growth stories and will post them here. Readers can make up their own minds. Fair and balanced.
Original Post 
Link here (regional links break early and break often).
“If you have approached Williston or Watford City lately in the daytime, there is a ball of dust that just rests over their communities,” Stark Development Corporation Executive Vice President Gaylon Baker said. “We don’t want to see that happen here.”
I've been in Williston for several weeks, and drove to Dickinson and back last night, and there was no "ball of dust resting" over either Williston or Watford City. Yes, there is a lot of dust in the countryside, and it is miserable for the farmers, but if your city has asphalt roads, you don't have (much) dust. But maybe some cities don't have asphalt or cement roads.

The drive from Williston to Dickinson is 130 miles, exactly.

The drive from Watford City to Dickinson is 85 miles. And not much in between except incredibly beautiful countryside.

But there are some interesting opportunities for Target.

Oasis -- September 2011 Presentation -- IPAA

Link here.

Combination of quick notes from slides and oral presentation.

1. Acreage remains the same as previously presented.

2. 1,303 gross drilling locations; 537 net.

3. Production
  • 1Q10: 3,300 bopd
  • 1Q11: 8,000 bopd
  • 2Q11: 7,900 bopd (horrendous spring flooding)
  • 3Q11: 11,000 bopd (estimate) (could be as high as 12,500)
4. Sanish: Proven TFS infill potential in the Sanish; moving from 2 wells to 3 wells/spacing unit

5. West Williston: Hebron wells in Montana are within typical ND Bakken range; Indian Hills acreage is the deepest and IPs coming in at the middle-to-high-end of the Bakken range; TFS looks encouraging; 3 wells/formation in each spacing unit yields 10 - 15 percent of oil in place (remember when "we" were talking about 2 to 5 percent?)

6. Frack stages: 30 percent increase in frack stages leads to 20 to 30 percent increase in EURs (BEXP was first to champion this); cost per stage: $120,000; recovery per stage: 12,000 to 25,000 bbls

7. Frack stages, two examples: 28-stage yielded 44,000 bbls in first 60 days; 36-stage yielded 62,000 bbls in first 60 days

8. Well costs: $9 million; 36-stage; plug and perf

9. Rigs: operating 7; working towards 9 in 2H11

10. Frack crews: 3 dedicated (third crew operational in June 2011)

11. Discussed Oasis Well Services (OWS) -- one frack spread initially; in-house; save $1 million/well on 20 net wells/year

Not on the slides, but in the oral presentation, at about 14 minutes into the presentation:
Discussion regarding number of rigs in North Dakota: stopped at 200. The costs are geting too high and everyone is gun shy about a oil price down turn. Some of the bullishness is being quieted. Fracking costs are growing faster than drilling costs.
I blogged about this earlier.

Another "River of Opportunity -- in Oklahoma -- Not A Bakken Story

Link here.
A mighty Mississippi is starting to flow in the middle of Oklahoma's resurgent oil and gas industry. This potential river of oil occupies what is called the Mississippi Lime - porous limestone formations in northern Oklahoma and southern Kansas. The liquids-rich region, considered tapped out by vertical drilling decades ago, has been yielding reservoirs to horizontal operators such as SandRidge, Chesapeake, Devon and Tulsa-based Eagle Energy LLC during the past two years. "I think it's probably the hottest play going in the country," Eagle CEO Steve Antry said.
The play relies less on fracturing than unconventional plays.

I Was Wrong -- Bakken, North Dakota, USA

I've been blogging for some time about the passing lanes being put in south of Williston on US-85.  I've said that for all intents and purposes, the project would make US-85 a four-lane undivided highway. I was wrong.

I just came back from a round trip from Williston to Dickinson this evening.  The passing lanes will alternate down the highway and except for Indian Hill, will result in three lanes much of the way. Two lanes one way (one a passing lane) and the third lane coming the opposite way, and then alternating up and down the highway, if that makes sense.

I must say that in the passing lane at 70 miles an hour, it is a bit unnerving meeting a truck coming at you in oncoming lane going just as fast.  Again, tonight, whenever I got into a passing lane, I moved into the slow lane if a truck was behind me to him it pass. I was touring; the trucker was working. 

It's 2:19 a.m. I have to be up at 6:00 a.m. to be back in the Bakken, so going to bed now. More later.

What a beautiful road. Wow, it was a beautiful drive. If anyone has the time, I would highly recommend taking the drive but I would start out in the early evening. The traffic will still be heavy but not as bad as it would be during the day. We stopped at a service station on the west side of Watford to get a cola, and the station was filled with trucks. It was a hoot maneuvering in and among the trucks. When I come back in another life, I hope part of it is as a truck driver.

The passing lanes will be between Williston and Watford City, it appears.

South of Watford City, through the Badlands, the highway is finished and beautiful.

Between Watford City and Alexander, the new passing lane work looks complete.

From Alexander north toward Williston, the work is in various stages of completion.

The road is in great shape regardless of the weather.

I say that because unrelated to the passing lane project, there is a huge road project at the top of the hill going down into the turnoff into the North Unit of the park. This is where the landslide was earlier this summer that completely closed the road (US 85) for awhile.

The road is now open but all dirt for about a half mile. There is heavy equipment on site, and it is absolutely sporty to take the drive through this half mile. If it rains, it will be a mess, and I assume the road will become impassable for automobiles. It does not look like they can complete the road before the end of the year, but maybe they can. I am absolutely impressed how fast these contractors are working. I am really, really impressed with how much money and how much work is going on with regard to roads in North Dakota.

But I can't say enough how pretty the drive was between Williston and Dickinson. Exactly 130 miles from Four-Mile Corner (Williston) to Exit 61, Dickinson. The traffic was a bit heavy at 8:00 p.m. but on the return trip at midnight, almost no traffic. If the weather is bad or if the traffic is heavy during the middle of the day, I can imagine the trip taking a lot longer than anticipated.

We did not see any bighorn sheep crossing US 85 in the five-mile stretch of bighorn sheep crossing, but we did see one meteor. (I mention that because meteors are important in my life; bighorn sheep not so much. We did not see any moose either, south of Williston, which had been spotted earlier this spring/summer.)

There's a spirit of pioneer camaraderie in the truckstops. I wish we had a Mark Twain or a Hunter S. Thompson to write about it; it's history in the making, good, bad, or indifferent. Mark Twain would compare it to the gold rush he participated in. Hunter S Thompson would think we are all nuts.

******

While posting this, someone sent me the following: if you can't afford a doctor, go to the airport where you can get a free x-ray and breast exam. And if you mention Al Qaeda, you will get a free colonoscopy. Yup.

Flaring -- The New York Times

Link here.

This is an old story. I've blogged about it before, so I probably won't blog about it again. It's a non-story, in my opinion, but am glad the NY Times finds it interesting. Tells me volumes about their understanding of flaring.

If you want to increase risk of blow-outs, stop all flaring.

Monday, September 26, 2011

New KOG Presentation -- Bakken, North Dakota, USA

Link here.

I haven't had chance to review it yet, but didn't want to delay getting it posted.

Motley Fool on Denbury Onshore -- Bakken, North Dakota, USA

Link here. But not much said.

But Denbury Onshore has some great wells in the Bakken.

CNBC Video Links Regarding the Bakken -- Bakken, North Dakota, USA

CNBC video links will be linked at one post, click here to see updates. Most recent one is tonight's Jim Cramer interview with Harold Hamm, CLR/CEO.

Talkin' Frackin' -- What the Tea Leaves Are Telling Me -- Bakken, North Dakota, USA

Starting to connect some dots.

First, the fracking backlog which I've been talking about since July, I suppose. It seems about one out of two, or even two out of three wells coming off the confidential list are not completed, and go on to the DRL list, waiting to be fracked.

Second, the challenge of finding fracking sand. There are some great sources in Wisconsin but folks there are trying to stop the mining. This link, however, is good news. Also this note from a message board:
I live near La Crosse, Wisconsin. There is a sand company (Unimin) buying up land around here like you wouldn't believe. Where is it going? The Bakken. I guess in sand terms, we have the type of sand the fracking calls for. There are two (2) fairly large sand mountains outside of town. Unimin has built railroad tracks to two very large sand cribs (if you will). Each one opens their shoot and fills the rail cars up. These companies are paying up to $9,000/acre. One township had some long meetings to let them build roads to their sand land they bought. I believe Unimin offered the township dollars for a length of time to be paid to the township. A win-win situation. It sure looks like the Bakken is alive and kicking!
Third, the cost of ceramic proppants with a great link here. This explains a $10 million KOG well and a $6 million WLL well.  This Reuters article also talks about the high price of trucking (the word "gouging" was not used, but one can read between the lines).

Fourth: the high cost of living. I am hearing that some oil workers unable to pay the high of living (rent), are going back to Texas and Louisiana. There are other opportunities there. The folks from Idaho and Wisconsin have a worse economy in their home states and are more likely to stay.

Fifth: moratorium on man-camps in Williston and recent no-vote on new 600-bed man-camp in Dickinson't.

Sixth: the number of active drilling rigs continues to drop, which I started noticing about a week ago, despite great weather.

It all suggests to me that drillers are going to slow down a bit, wait for some things to get back in balance.

Good luck to all.

Thirteen (13) New Permits -- Some Nice New Wells -- Slawson Never Seems to Disappoint -- Bakken, North Dakota, USA

Daily activity report, September 26, 2011 --

Operators: Arsental, GMXR (2) , CLR (4), Hess (3), MRO, Newfield (2)

Fields: Stanley, Murphy Creek, Big Butte, Reunion Bay, Keene, and three wildcats. GMXR has two wildcats in McKenzie; and Hess has one wildcat in Williams County.

CLR with permits for an Eco-Pad in Dunn County: Roadrunner/Clover Eco-Pad.
Hess has permits for a two-well pad.


Four nice wells:

19623 - WHITING OIL AND GAS CORPORATION, OBRIGEWITCH 21-17TFH, NENW 17-140N-99W, STARK CO., 1,075 bopd,  BAKKEN

19984 - CONTINENTAL RESOURCES, INC., BROGGER 1-4H, LOT 2 4-153N-99W, WILLIAMS CO., 787 bopd, – BAKKEN

20223 - MUREX PETROLEUM CORPORATION, ESKELAND HERFINDAHL 7-6H, SESE 7-156N-95W, WILLIAMS CO., 672 bopd, 207 bwpd – BAKKEN

20551 - SLAWSON EXPLORATION COMPANY, INC., CRUISER 2-16-9H, NENW 21-151N-92W, MOUNTRAIL CO., 1,660 bopd, 4323 bwpd – BAKKEN

More later.

Active Drilling Rigs in North Dakota Down to 191 From Recent High of 201 -- Bakken, North Dakota, USA

The trend has been declining at a time when the weather should have shown an increase in number of active drilling wells in North Dakota.

This supports my contention: fracking backlog.

It's expensive to complete all these wells and then let them sit. On top of that, the flaring continues to be a big issue. You can only flare for so long, and if you can't flare, and you can't complete the well, at some point, you have to shut the well in. Burlington Resources has been shutting their new wells in regularly, going from "Confidential" list directly to "Shut In," not even bothering with "DRL.

Overheard in Williston today (September 26, 2011): one of the big fracking companies located in Williston is going to bring in another 300 workers this next month (October). They have contracted housing for 300 folks starting November 1, 2011.

It was confirmed by another that Williston expects 11,000 new HAL workers this next year. My hunch is that the figure comes from the HAL press release in which the company said they were hiring 11,000 more works and most of them were headed to the Bakken. I expect that not all 11,000 are coming to Williston. More likely, several thousand will be coming to North Dakota and will be spread across the western half of the state, but regardless, it will be a lot.

Sunday, September 25, 2011

TFS Well Results in the Sanish Oil Field -- Bakken, North Dakota, USA

Elsewhere the question was raised: have any TFS wells in the Sanish come off the confidential list, and if so, the results. Here's one and it's a good one:



NDIC File No: 18724     API No: 33-061-01272-00-00     County: MOUNTRAIL     CTB No: 217552
Well Type: OG     Well Status: A     Status Date: 6/21/2010     Wellbore type: HORIZONTAL
Location: LOT 4 4-152-92     
Current Operator: WHITING OIL AND GAS CORPORATION
Original Operator: WHITING OIL AND GAS CORPORATION
Current Well Name: FOREMAN 11-4TFH
Original Well Name: FOREMAN 11-4TFH
Elevation(s): 2316 KB   2294 GR   2296 GL     Total Depth: 20388     Field: SANISH
Spud Date(s):  4/4/2010
Completion Data (posted at milliondollarway.blogspot.com)
   Pool: BAKKEN     Perfs: 10767-20388     Comp: 6/21/2010     Status: AL     Date: 10/1/2010     Spacing: 2SEC
   Pool: BAKKEN     Cum Oil: 88043     Cum MCF Gas: 67052     Cum Water: 46127
Production Test Data
   IP Test Date: 6/24/2010     Pool: BAKKEN     IP Oil: 1251     IP MCF: 1173     IP Water: 1188

Just think: if Harold Hamm is correct, and the TFS and the middle Bakken don't communicate, four to five wells per spacing unit going to the TFS and four to five wells going to the middle Bakken.

This well was one of four wells in this section (4-152-92) and folks wonder why I'm inappropriately exuberant about the Bakken. Almost 100,000 bbls in one year. 

NRP Link on the Bakken -- Bakken, North Dakota, USA

Link here.

And guess what? First picture is of a man-camp, not an oil well. Smile.
A couple months ago, Jake Featheringill and his wife got robbed.

It wasn't serious. No one was home at the time, and no one got hurt. But for Featheringill, it was just the latest in a string of bad luck.

"We made a decision," he says. "We decided to pick up and move in about three days. Packed all our stuff up in storage. Drove 24 straight hours on I-29, and made it to Williston with no place to live."

That's Williston, ND. Population — until just a few years ago — 12,000. Jake was born there, but moved away when he was a kid. He hadn't been back since.

Those trucks were in North Dakota for one reason — the same reason Featheringill had decided to move his wife and three kids to a remote section of western North Dakota.

Oil.
Read the rest at the link. 

NFL Sunday Night -- Is There a Better Lead-In Anywhere?

Faith Hill's outfit tonight (September 24, 2011) was particularly awesome (I think it is the same one in the fourth video below). For all practical purposes, they are all the same, but lots of fun:










And this is where they came from:




When the game gets boring, I turn the television to mute, and play Joan Jett loud. Real loud.

From the Drudge Report: IMF Will Need Bailout -- E-Coffin

Link here

I doubt many care about the IMF needing a bailout -- after all, it's just another entity that needs a bailout.

But I love the meeting's name: E-Coffin.
Timothy Geithner, the US Treasury Secretary who proposed an increase to the EFSF at the Ecofin meeting on September 16, said that the sovereign debt pressures and banking strains in Europe were "the most serious risk now confronting the world economy". Larry Summers, Barack Obama's former chief economic adviser who was attending his 20th IMF meeting, said: "I have not been at a prior meeting at which matters have had more gravity." 
I can't make this stuff up. 

Bakken Industrial Park -- Update -- Williston-Epping Turn-Off -- Bakken, North Dakota, USA

A beautiful day in the Bakken. It was supposed to get up to about 80 degrees; it doesn't feel quite that warm. Not a cloud in the sky, and simply a beautiful day.

Even the traffic is relatively light.

These are photos of where the 720-acre Bakken Industrial Park will go north of Williston.

The first two pictures are taken from a couple miles from the east, looking west toward the man-camp. The man-camp is north of the county road leading to Epping, on the east side of Highway 2 north of Williston. Looking to the left (south of the man-camp, I believe, is the 720-acre parcel of land where the industrial park will go.


The next four pictures are taken from US Highway 2: 1) looking north to the man-camp, and then, 2) south to the new Sun Well building that is going up just at the south end of where the industrial park will be. The developer has broken ground for the new 3) Value Place extended-stay inn that will be at the industrial park; one can see 4) heavy equipment that is starting to be pre-positioned.

These four pictures all taken from the same spot:




Nice Thread Elsewhere On Factors Affecting Production -- Bakken, North Dakota, USA

Link here.

Of all that was said, the most interesting point was that regarding flaring: all things being equal, it would be nice not to flare, but if natural gas is not captured (put into pipeline) or flared, there is risk the well could blow due to natural gas build-up. Think of a shaken Coors bottle of beer or a shaken bottle of diet Coke.

When one reviews the list of things that affect Bakken production, it is obvious that North Dakota has the potential of passing both California and Alaska before the year is out in daily production. Exciting.

This Is Not An Investment Site But One Learns A Lot About Folks' Understanding of the Bakken Through Comments on Investing

This is not an investment site, and no one should use my opinions, thoughts, ramblings, etc., to make investment decisions. I take the Bakken seriously; I don't take investing as seriously as I should ... in fact, if the investing element disappeared tomorrow, my interest in the Bakken would not wane.

When I started the blog, I had no plans to include information regarding investments or even money for that matter with regard to the Bakken. I was just trying to understand the Bakken and educate myself. I had planned to keep it private, but then thought others might enjoy it, and through feedback, I might learn more.

However, over time, it was obvious -- and I have blogged this before -- that to really understand the Bakken, one could not ignore the investment side, or the money side, of the Bakken.

Naysayers regarding the Bakken, and naysayers regarding specific companies in the Bakken, have one common theme or concern: sustainability.

That concern speaks volumes.

Several points regarding sustainability:
  • Companies that got in early paid, on average, less than $500/acre, and some much less; acreage now easily goes for $6,000/acre in the better Bakken
  • The early thinking was that there would be one well per section; it is now obvious there will be as many as 7 wells per spacing unit in the better Bakken (some spacing units are still 640 acres; new spacing units are 1280 acres)
  • Everyone in the industry agrees the North Dakota Bakken is in the early stages (assuming no geopolitical debacle)
  • The North Dakota Bakken has become the "gold standard" against which all other new onshore unconventional plays are measured
  • The Bakken infrastructure is in place: largest microseismic array in the world; UND core sample library second to none anywhere in the world; takeaway capacity exceeds production; flexible takeaway capacity (rail, truck, and pipeline); a good regulatory climate
  • About 3,000 Bakken wells have been drilled (+/- a thousand); 2,400 wells through the end of 2011
  • Estimates range from 15,000 to 88,000 more Bakken wells to be drilled
  • There are currently 6,000 producing wells in North Dakota; there are about 100,000 wells in California; North Dakota is on a trajectory to surpass California in oil production by the end of this year (three months)
  • Everyone in the industry agrees that there is at least two more decades of drilling (this does not include secondary or tertiary recovery; this does not include other pay zones)
  • General consensus: the average EUR in the Bakken is estimated to be somewhere between 500,000 - 600,000 bbls (that's an average)
  • UND experts suggest that once the last Bakken well is drilled, production will continue another 70 years
  • A single gusher in the Bakken "won't move the needle" for XOM/XTO
  • A single gusher in the Bakken "will move the needle" significantly for KOG
  • There are more "KOG-like" companies in the Bakken than there are XOM/XTO-like companies in the Bakken (the point: a lot of opportunities for investors with long term horizons)
  • Williams Cos (WMB) entered the Bakken when they bought 7 percent of the mineral rights in FBIR
  • Schlumberger is building a huge double-digit million dollar complex west of Williston
  • Halliburton with already the biggest complex in Williston is now adding on; I was told the original complex was $30 million (it might have been $20 million or more than $30 million; I can't remember)
  • Bakers Hughes "supersite" west of Williston will be the biggest building in North Dakota of that type; BHI is building three such complexes: Williston, Minot, Dickinson
  • There are three CRYO sites going up west of Williston, each of which is about 15 times larger than the single site the company constructed in Haifa, Israel, six years ago
  • North Dakota is widening US 2 south of Williston; decision was made in a political nano-second and will be completed almost as quickly; I think it was started even before the President could say "shovel-ready"; in fact, I don't think the project was shovel-ready; the workers were shovel-ready
  • McCody Concrete, a local company, west of Williston, may have just put up the largest concrete building in the four-state area
  • North Dakota state's decision for a northwest state water authority took a bit longer to sort out, but once decided, work began immediately and the project is well under way; this is a $150 million project
  • There is now talk that the Bakken pool, perhaps the TFS, extends much farther east and farther north than originally discussed
As stated earlier, this is not an investment site, but ... I lost my thought -- I saw a commercial for the Chevy Volt ... well, enough of this...

More ramblings later...

Oh, now I remember. There are a lot of naysayers when it comes to the Bakken and to specific companies in the Bakken, but there are a lot of folks putting their money into the Bakken everyday. And not trivial amounts. 

Saudi: Women Given the Right to Vote

Link here.

This will be interesting to see how this plays out, and if there is more to the story. If accurate, it seems to have come out of nowhere. Something tells me it's getting very, very tense in the Mideast, both locally inside borders, and across borders.

Maybe there will be an Arab Spring II, come next year.

Hess Frack Standard: 38 Stages

Link here.

According to that blog:
On the engineering front, Hess has changed it’s frac design to 38 stages.  This includes 22 sliding sleeves, and 16 plug and perfs.  9 wells have been completed this way with 30-day average IPs of 1,000 bopd.  Hess still projects EURs of 550 Mboe.  Average drill time is down to 34 days and 7 additional days or so to complete.
By the way, one half of the geologist's summary was missing from a recent Hess file report due to the fact that only one side of the two-sided report was photocopied/faxed/published at the NDIC site. That may be why I was unable to locate a copy of the frac report.

On Sentimentality and Why "I Love My North Dakota"

CRC alerted me to a second music video of "I Love My North Dakota" by Adam Taylor. I have both videos linked at the sidebar on the right under "North Dakota Sights and Sites."

The music is the same in both; the pictures are different and that makes it worth linking both of them.

Coincidentally, I am reading H. L. Mencken's highly acclaimed, and probably highly maligned, book, In Defense of Women. Don't let the title fool you; it's as much about men as it is about women.

Mencken argues that ...
Men are sentiment. Men are romantic, and love what they conceive to be virtue and beauty. Men incline to faith, hope and charity. Men know how to sweat and endure. Men are amiable and fond. But in so far as they show the true fundamentals of intelligence -- in so far as they reveal a capacity of discovering the kernel of eternal verity in the husk of delusion and hallucination and a passion for bringing it forth -- to that extent, at least, they are feminine, and still nourished by the milk of their mothers.

Find me an obviously intelligent man, a man free of the first class, and I'll show you a man with a wide streak of woman in him. Bonaparte had it; Goethe had it; Schopenhauer had it; Bismarck and Lincoln had it; in Shakespeare, ...
That probably explains my own feelings regarding North Dakota. I am very sentimental, very much a romantic. That explains, by the way, although I post a lot of investing stories, I have never taken investing as seriously as I probably should have and another reason for the disclaimer.






Some time ago I posted something that caught the attention of someone who had very negative feelings about North Dakota. The writer was from Minnesota or California, I forget, but I think it was Minnesota. Most of the negative comments about North Dakota come from folks living in those two states. Smile. But I digress.

As I was saying, I recently posted something that caught the attention of someone who had very negative comments about North Dakota. I believe she was an investor and said that without commodities (oil and grain) North Dakota would have nothing; she said North Dakota needed to diversify. The writer did not identify her maleness/femaleness, but H.L. Mencken would have identifed her as a woman based on her concerns about North Dakota's lack of diversity. Smile.

Looking at the photos that accompany the two videos suggest to me that North Dakota is as diversified as it needs to be.

[I doubt the video shows the huge United States Air Force presence in the state; or the very impressive secondary education system; or UND's aviation program, just to name a few things that could be added to the list if anyone thought it necessary. I guess I did, but shouldn't have. The videos and the song are more than enough.]

For similar thoughts, visit the Richard Torrance site, "the stories they tell."  "oldspeed" alerted me to the site.

Bismarck Tribune's Annual Bakken Breakout Is On Newstands

This is an incredible 64-page special edition published by The Bismark Tribune quarterly. I have the summer edition linked at the sidebar on the right. 

I don't yet see the most recent edition of the "Bakken Breakout 2011" on-line, but when I do, I will get it linked.

For now, here are some of the stories:
  • Records fall; stocks rise
  • North Dakota Pipeline Authority: key players in enhanced transport capacity
  • Energy companies pitch in with flood relief effort
  • Kadrmas, Lee and Jackson: removing hurdles to energy production
  • A look back at 60 years of North Dakota oil history
  • "On the Skids": a whole new meaning
The ads may be the best part.

Steady State Punctuated by Surge Activity -- Western North Dakota - Eastern Montana

With close to 200 active rigs drilling on a daily basis in the Bakken, there is a certain "steady state" that has developed. Employers can pretty much forecast what they need going forward in terms of workforce and equipment.

But with a boom like the Bakken, compounded with the seasonal activity of farming, surges in activity can create significant havoc.

Two examples:

1. The widening of US 85 south of Williston as far as Alexander, Watford City, farther? This is not a small project. The "steady state" activity of a thousand truck trips to a single Bakken well forced the spike of activity in road building. All of a sudden, a contractor had to move in equipment, truckers, and a workforce. And find them a place to live during the duration, where there was already "no room at the inn."

2. Harvesting. I think the grain harvest pretty much takes care of itself with farmers able for the most part to manage getting their grain to market. I could be wrong on that, but I have not seen or read anything to suggest otherwise. However, the eastern Montana sugar beet industry (and the Red River Valley in the east, for that matter), is a different story. See the want ads. The sugar beet industry at both ends of the state need a surge of truck drivers for a two-week stretch. I can only assume it was a challenge years ago, but now with "every" truck driver committed to the oil industry, I can only imagine how difficult it is to find truck drivers.

And then the recent decisions to stop building places for truck drivers to live crossed my mind.

Some days I am happy to only be a spectator.

Menard's Not Coming To Williston? The Real Question Is Whether Menard's Should Build a Second Store At Minot

Link here (regional links break early and break often).

From The Williston Herald.

Menard's was aware of the Williston/Bakken opportunity in 2006.

Menard's is in talks with the developer, Granite Peak, according to the news story.

Three ways to look at this:

1. Menard's had the opportunity early on to get in at a good price; dithered; missed the opportunity. Lots of negatives and it might have been the smart thing to do. The biggest obstacles: trained employees; inability to keep shelves stocked.

2. Get back on track and be up and running as originally reported, albeit a bit delayed. Instead of 2012, perhaps 2013. The risks are now bigger to move quickly. Everything is more expensive, and with the surge in home-building the ability to keep shelves stocked, almost impossible. Independent contractors report inability to get building supplies at the Menard's in Minot as it is. The trained employee issue has only gotten worse since 2006 with so many more businesses (mostly oil service companies) having located in Williston.

3. Wait until the subdivisions are built, and then re-evaluate. Menard's is in the after-market housing surge. I don't think Menard's has anything to lose by waiting five to ten years. If Willistonites are willing to drive to Minot for building supplies, now, they won't mind driving to the Epping turnoff north of Williston where land will be less expensive than what they got planned now. Meanwhile, Menard's at Minot is handling all the business they can. The real question is whether Menard's should build a second store at Minot.

Lowe's is in Billings, Montana; Rapid City, SD; and, Bismarck, ND. My hunch is that Lowe's is watching this with a lot of interest. It wouldn't surprise me if Granite Peak/Kiewit isn't talking with Lowe's also. 

More Global Warming -- Greenland Has Lost 15 Percent of Arctic Ice -- Oceans Rise 3 to 5 Feet -- Hey, Not So Fast

Link here.

The news release promoting the latest edition of Britain's influential Times Comprehensive Atlas of the World hailed it as "the Greatest Book on Earth."

The release claimed that Greenland had lost 15 percent of its permanent ice cover from 1999 to 2011.

That translates to 125,000 cubic miles, which is enough melted ice to raise sea levels 3 to 5 feet, according to Etienne Berthier, a glaciologist at the University of Toulouse. The corresponding map in the atlas itself indicated that significant portions of Greenland's coastline had become ice-free.

But over the weekend, Sheena Barclay, managing director of Collins Geo, said that was not what happened. She did not say how the confusion arose, however.

Barclay said on a BBC radio news program last week that the Greenland map would be reconfigured.
The back story is that Al Gore drew the map of Greenland for the atlas. 

Except for the line about Al Gore, I can't make this stuff up. Direct quotes from the article. Even I can't hype the Bakken as much as "they" can hype Greenland melting. Of course, Greenland's melting might explain all flooding in the upper Midwest this year.

Saturday, September 24, 2011

Kuroki Field Updated -- Bakken, North Dakota, USA

The Kuroki field has been updated. This is one of the smallest fields in North Dakota. The wells here are targeting the Madison formation, not the Bakken. Well spacing is unitized and the wells are water injected.

On Track for 1,820 New Oil and Gas Permits for 2011 -- Bakken, North Dakota, USA

Based on the number of new permits issued so far this year (1,336), "we" are on track for 1,820 new permits for calendar year 2011.

Life Expectancy of a Bakken Well? -- Bakken, North Dakota, USA

Updates

July 4, 2016: I won't remove the post below but there's a lot more to it than EUR; it all depends on what one is measuring. In the early days of the boom, I was interested in the amount of oil that the Bakken would ultimately produce. That's why I placed emphasis on the EUR rather than the other data.

However, for operators, they must have a very complicated formula adjusting for EUR, decline rate, price of oil, cost of well, and, I suppose, several other variables. For a mineral owner, the longevity of the well directly impacts how long one gets "mailbox money." For an operator, by 2016, it was becoming clear that flattening the decline rate was perhaps one of the most important factors, all else being equal. At the linked post, one finds that the decline rate early on was as "bad" as 91% but has since dropped to less than 20% in the Permian.

Original Post
 
Elsewhere there is a new thread discussing the "life expectancy of a Bakken well."

Here's the issue under discussion: "...factual data on the average lifetime of
a horizontal fracked well in the Bakken."

No one has replied yet.

I have opined on the issue under FAQs. In fact, it's question #2 at that link.

In addition to the information at FAQs (regarding longevity of Bakken wells), the life expectancy of the average Bakken well has been discussed numerous times elsewhere on the blog.

The general consensus is that Bakken wells will produce for 25 to 39 years. But the first horizontal, fracked Bakken well goes back to about 2000. [As soon as I put in any date, someone will write and tell me that there were earlier wells.  Be that as it may, it's my myth that the current Bakken boom began in 2000 in Elm Coulee, Montana, and in North Dakota, in 2007.] So, with the current boom hardly a decade along and even much less than that in North Dakota, we simply don't know how long a Bakken well will last.

Does it even matter?

It's the EUR that matters. Having said that, longevity does serve another useful purpose but I will let readers think about that before providing my opinion on why longevity is important.