Monday, August 1, 2011

For Investors Only: Enbridge Entities Increase Dividend -- Bakken, North Dakota, USA

Link here (which is dynamic).

Both Enbridge Energy Management (EEQ) and Enbridge Energy Partners (EEP) increase dividends.

Previous dividend for both: $0.5138

New dividend for both: $0.5325

Memo To Self: Follow-Up On This Well In Six Months

18530, 2,686, WLL, Jorgensen 12-27H, Sanish, Bakken; t5/10; cum 445K 1/17;
  • Spud date: 3/10/2010 (a little more than a year ago)
  • 18-stage frack
  • Test date: 5/13/2011 (about a year ago)
  • Total production through November, 2012: 319K
Production history:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare



For Newbies: Why I Remain Inappropriately Exuberbant About The Bakken -- North Dakota, USA

This is a cut and paste of an earlier post, but I have updated it to show the cumulative totals these wells have produced.

This is why I remain excited about the Bakken.

Take a look at sections 25 and 36 in T154N-R91W in the Sanish oil field. (These two sections adjoin each other, north/south.)

This township is "owned" by Murrex and Whiting.

In section 36, one short lateral, #16839, spudded back in late 2007.

In section 25, there are two wells. #18408 is an extended short lateral (a slightly longer short lateral but not a full long lateral), extending into section 36; and, #17263, a long lateral, sections 25 and 36.

16839, 864, Jacob Daniel 25-36H-RE, was originally spudded in October, 2007. It continued to produce approximately 9,000 bbls/month when the decision was made to re-enter the well in 2009. As of June 30, 2011, this short lateral has produced 350K bbls of oil (at $50/bbl = $17.5 million at the wellhead).

17263, 3,124, Chandler James 25-36H, was spudded July 4, 2008. Production was volatile the last six months of 2010, but is now producing upwards of 15K/month. As of June 30, 2011, this long lateral has produced a total of 742K bbls (at $50/bbl = $37 million). I believe the Chandler James was a 10-stage frac.

18408, 1,945, Amber Renee 25-36H, was spudded December 21, 2009. It still is producing 30- to 35,000 bbls/months. As of June 30, 2011, Amber Renee had produced 476K bbls of oil (at $50/bbl = $24 million). I believe the Amber Renee was a 14-stage frac.

All three wells are Murex wells. These wells are less than four years old. Bakken wells are expected to produce 25 - 35 years.


Update on several other monster wells. In black bold is the total amount of oil produced as of June 30, 2011.
  • 17092, Behr 11-34H, Whiting, 3,027, Sanish, 705K bbls.
  • 17222, Austin 18-21H, EOG, 1,769, Parshall, 688K bbls.
  • 17227, Austin 21-28H, EOG, 3, 292, Parshall, 733K bbls. 
  • 16954, Austin 6-15H, EOG, 3,633, Parshall, 603K bbls.
  • 17263, Chandler James 25-36H, Murex, 3,124, Sanish, 742K bbls.
  • 16059, USA 2D-3-1H, Petro-Hunt, see Charlson Field update for this, maybe the most successful well to date in the current boom, 1,160K bbls (over the one million mark). Be sure to read the comment at this post.
Permits in the 17XXX series were spudded in 2008. One has to assume the wells are only getting better, all things being equal.

Random Note: Texas Sets All-Time Record for Electricity Demand -- August 1, 2011

Link here.
As of 5 p.m. the ERCOT system demand was 66,925 megawatts – above the all-time record of 65,776 MW that occurred Aug. 23, 2010. Peak usage usually occurs around 5 p.m. most days, so hitting this peak so early in the day is a bit surprising.
Tomorrow, we should see the final number for August 1, 2011. Incredible. 

Under the Radar: European Giants Suffering Decreased Production -- Not A Bakken Story

TINowhere in this story is any reference made to the release of oil from world strategic petroleum reserves earlier this summer, but sometimes very little dots can be connected to the larger dots.

In this case, RigZone reports that the major European oil giants have been unable to increase year-over-production.
When Europe's major oil companies reported quarterly earnings last week, headlines across national capitals once again excoriated the petroleum giants for soaring profits in the face of consumers anger at high fuel prices.

Yet the profits couldn't mask a trend that continues to trouble Wall Street and corporate boardrooms: Nearly every major oil company reported year-on-year oil and gas output declines, often in the double-digits.

Big Oil is throwing huge resources at the problem with more open embrace of unconventional petroleum developments, high-risk exploration in frontier areas and corporate restructuring. But even if these strategies work in some cases, there is little doubt that anemic petroleum output signals a long-term challenge confronting the sector.
The article talks about increasing costs and riskier projects to find and produce more oil. This comes at the same time governments are looking at the profits these companies are making as a way to help get them out of their budget crises. Okay.

Data points:
  • BP: 11 percent output drop (yes, extenuating circumstances)
  • Italian giant ENI: 15 percent drop to overexposure in Libya
  • Spain's Repsol: 17 percent drop, multiple reasons
  • Norway's Statoil: 17 percent drop
  • UK: not mentioned in this article, but significant production loss reported elsewhere
On my "Top Ten" list at the sidebar at the right highlights the trend of production interest moving from OPEC to the western hemisphere.

This helps explain the WTI-Brent spread (understanding that the storage tanks are overflowing at Cushing, Oklahoma).

Strandahl Oil Field Update -- Bakken, North Dakota, USA

Original Post

Six miles north of the Hebron oil field, bordering the Montana state line, lies the 36-section Strandahl oil field, covering the entire T157N-R103W.

I've not driven that particular field, but based on what I've seen in the surrounding area, it is probably fairly flat, non-descript, and covered with golden grain about this time of the year.

There's not a lot of activity in this small field yet, but four wells / permits in 36 sections, this far west and this far north from the "core" Bakken is not bad. In addition, it appears the primary operators, G3 and Oasis have a limited number of rigs that they can throw against this field. But activity is bound to pick up over time based on all the Oasis and BEXP activity in the Bull Butte oil field immediately to the south.

For investors, G3 is a subsidiary of GEOI (GeoResources). 

Permits and activity currently in the Strandahl:
  • 19169, 685, G3 Operating, Carlson 1-11H, Strandahl, erratic production; looks stable at about 3K bbls/month for now; 22K after first 6 months
  • 19574, 444, Oasis, Grimstvedt Federal 5703 42-34H, Strandahl; 24K first 6 months
  • 20707, confidential, G3 Operating, Pasternak 1-1-12H, Strandahl
  • 20533, rig on site, G3 Operating, Rasmussen 1-25-36H, Strandahl

Thirteen (13) New Permits -- Bakken, North Dakota, USA

Daily activity report, August 1, 2011 --

Operators: BEXP (4), Continental Resources (4), Slawson, Petro-Hunt, EOG, Marathon, and Strike Oil

Fields: Parshall, Squires, Elmore, Reunion Bay, Sakakawea, Lindahl, North Tobacco Garden and two wildcats.

This is Strike Oil's third permit in North Dakota. They currently have one other well in DRL status (permit 17632) and one inactive well (17606).

BEXP will have two wells on one pad, another in Sakakawea oil field, and a wildcat.

CLR will have another Eco-Pad with their four well permits, in Lindahl field, Williams County.

Petro-Hunt has the other wildcat, in Williams County,

Other news in the daily activity report:

One nice well:
  • 20214, 2,004, BEXP, Field Trust 7-6 1H, Williams County

Fracking Backlog -- As Usual, BEXP Reports Another Great Well -- Bakken, North Dakota, USA

Of the nine wells that came off the confidential list over the weekend as posted elsewhere, five were placed in DRL status, which generally means that they are waiting to be completed, or have recently (within the last 30 days of the most recent report) been completed. Five out of nine means greater than 50 percent of recently drilled Bakken wells are awaiting fracking. It was either WLL or CLR that said they would be "caught up" with fracking by November, meaning that they would have the "more normal" number of wells waiting to be fracked.

I think the fracking backlog will continue to be a problem for quite some time; the competition from the Utica, the Marcellus, the Niobrara, and the Eagle Ford cannot be underestimated.

A sixth well was shut in.

Of the three that did report, again BEXP reported a very nice well (fracked within the six months which BEXP tends to do):
In addition, EOG reported a nice well for the Clear Water field; it's IP not all that great, but production in the early months looks great:
  • 19400, 527, EOG, Sidonia 37-2932H, Clear Water, Bakken (nice well; 42K in four months)
CLR has a Red River in DRL status:
  • 19717, DRL, CLR, Wallman 42-9H, Medicine Pole Hills, West Red River (not a Bakken)
Prima reports a wildcat, in Burke County, far north of the core Bakken; this is the area of chicken scratch (when you see the GIS map, you will see why it is called this). The wells are not all that great in this area, but with $100 oil over time, Prima must feel they are economical:
SM reports another well in the West Ambrose. Is it just me or does it seem that the West Ambrose and Ambrose fields are getting a bit interesting?
It's too bad so many wells remain in DRL status.

For Investors, Reminder: SM Reports After Close Today; MDU Reports Tomorrow -- Bakken, North Dakota, USA

PennEnergy Blog: North Dakota Oil Production Skyrockets -- Bakken, North Dakota, USA

Link here.

... but we all knew that already ...

The article includes a stunning graph.
Currently the fourth-largest oil producer in the United States, North Dakota is only surpassed by Texas, Alaska and California – nonetheless, mounting oil production from North Dakota's prolific Bakken shale may soon change that.

The US Energy Information Administration recently focused on the recent upward trend oil production from North Dakota in its report entitled, "Rising North Dakota Oil Production: Recent Trends and Future Prospects."-- July 27, 2011

Since 2005, oil production in North Dakota has tripled to an average of 307,000 barrels of oil a day in 2010 – a number that is likely to jump again in 2011. In January 2011, oil production in the state reached an average of 341,000 barrels of oil a day, and in February, North Dakota's oil production averaged 360,000 barrels of oil a day, showing a definite trend upward.