Sunday, September 4, 2011

Observations in the Bakken -- Housing -- Sunday, September 04, 2011 -- Bakken, North Dakota, USA

See first post on my initial observations in the Bakken, summer, 2011. This continues my observations.

First, this is the best time of the year in western North Dakota. The weather is wonderful; if the US Air Force has sprayed the mosquitoes larvae,  it's great to be outside.

Second, the number one story remains affordable housing. After lots of driving around, specifically looking at all the construction that is going on, I am convinced that the housing situation will be resolved by the end of 2013. If the housing situation remains a problem after 2013, folks have seriously underestimated how huge the Bakken is going to be.

Before the boom, there were probably about 3,000 houses in Williston. The Kiewit subdivision alone will add about 2,000 more units, if completed. There are probably another several hundred or so units that have gone up in the last year or so (apartment units, duplexes, single family homes, etc). Again, these are just wild estimations. My hunch is that the vast majority of young men living in the man-camps will elect not to buy homes here in Williston; they will work here, but return to their own home elsewhere outside of North Dakota. I would not be a bit surprised if there is actually a slight excess of single family homes in 2014 based on the pace at which they are building now.

Third, it will be interesting to see if oil companies decide to frack during the winter or postpone until the spring. Even under the best of circumstances, the numbers suggest that fracking cannot keep up with drilling for the next six to twelve months. If oil companies do not frack during the winter, the backlog in the spring will be significant.

NY Times: US Post Office Could Shut Down Later This Year -- Not a Bakken Story

Link here.
According to the New York Times: decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.
But let's just blame it on the Internet revolution, which by the way, was invented by Al Gore, according to Al Gore.

And the US Postal Service needs to be fully funded: certainly one can argue that the US Postal Service is central to America's Homeland Security.

California Employment Hits a Record Low -- Not Likely To Recover For Several Years -- Not a Bakken Story

Link here.

Every paragraph in the linked story is bad, bad news.
The percentage of working-age Californians with jobs has fallen to a record low, and employment may not return to pre-recession levels until the second half of the decade, according to a research group.

Just 55.4 percent of working-age Californians, defined as those 16 or older, had a job in July, down from 56.2 percent a year earlier and the lowest level since 1976.

California’s 12 percent unemployment rate in July, the nation’s second-highest after Nevada, compared with 9.1 percent nationwide.

Women have disproportionately trailed men in regaining jobs.

“Women represent nearly half of the workforce,” Anderson said in a telephone interview. “They gained just one of the 10 jobs added.” 
I won't even begin to comment. 

Oil Well Explosion - Fire Near Sidney, Montana -- No Injuries

Link here.

This is the entire story:
An explosion and fire occurred at an oil site east of Sidney at around 8:30 a.m. Sunday. Unofficial reports say there were no injuries. Sidney firefighters responded to the call and are at the site controlling the fire.
Updates if I get them.

Random Photos of Two BEXP Wells West of Williston -- Just Outside City Limits -- Bakken, North Dakota, USA

The top well picture:
NDIC File No: 19584     API No: 33-105-01971-00-00     CTB No: 119584
Well Type: OG     Well Status: A     Status Date: 5/20/2011     Wellbore type: Horizontal
Location: SWSE 8-154-101     Footages: 250 FSL 2395 FEL     Latitude: 48.169396     Longitude: -103.699823
Current Operator: BRIGHAM OIL & GAS, L.P.
Current Well Name: DAVE ARNSON 8-5 1-H
Elevation(s): 2040 KB   2014 GR   2014 GL     Total Depth: 20300     Field: TODD
Spud Date(s):  1/6/2011
Casing String(s): 9.625" 1940'   7" 10972'  
Completion Data
   Pool: BAKKEN     Perfs: 10972-20300     Comp: 5/20/2011     Status: F     Date: 5/24/2011     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 40278     Cum MCF Gas: 20473     Cum Water: 37502
Production Test Data
   IP Test Date: 5/24/2011     Pool: BAKKEN     IP Oil: 2192     IP MCF: 1629     IP Water: 4570

The second well: 

NDIC File No: 19829     API No: 33-105-02016-00-00     CTB No: 119829
Well Type: OG     Well Status: A     Status Date: 5/25/2011     Wellbore type: Horizontal
Location: SWSE 8-154-101     Footages: 250 FSL 2375 FEL     Latitude: 48.169396     Longitude: -103.699741
Current Operator: BRIGHAM OIL & GAS, L.P.
Current Well Name: O'NEILL 17-20 1-H
Elevation(s): 2040 KB   2014 GR   2014 GL     Total Depth: 20855     Field: TODD
Spud Date(s):  2/3/2011
Casing String(s): 9.625" 1997'   7" 10883'  
Completion Data
   Pool: BAKKEN     Perfs: 10883-20855     Comp: 5/26/2011     Status: F     Date: 5/29/2011     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 41988     Cum MCF Gas: 19762     Cum Water: 41396
Production Test Data
   IP Test Date: 5/29/2011     Pool: BAKKEN     IP Oil: 2965     IP MCF: 2303     IP Water: 3732 

Update on the Kiewit Subdivision Northwest of Williston -- Bakken, North Dakota, USA

I have added video (very amateurish) and a few photos of the progress on the subdivision northwest of Williston where approximately 2,500 units will be built.

For Investors: Amass A Fortune with KOG? Motley Fool -- Bakken, North Dakota, USA

Link here.
The exploration and production specialist has rich assets in the Bakken fields of North Dakota and Montana, which, as the Fool's Dan Dzombak points out, ought to make it particularly attractive to a larger company. With a unique ability to increase output even as it is already keeping a busy production schedule, Kodiak is a prime buyout candidate.

Highly rated CAPS All-Star Keekers44 agrees Kodiak looks like an attractive takeover target, and with 95% of the CAPS community rating the E&P star to outperform the broad market averages, it's apparent they think that even if it remains a stand-alone company it will do well for itself.
The original site links to other sites which I have de-linked for easier reading. 

Again, Williston Is Ahead of The Curve: Pawn Shops -- Kind of a Bakken Story

Link here.
Today, the modern pawn industry has become something else entirely. Many of these shops, which also operate like small banks, are publicly traded companies and are becoming cultural phenomena. The embodiment of the new era of the pawn shop is Rick Harrison, star of History Channel's monster hit Pawn Stars and author of the book "License to Pawn". Harrison, who runs the Gold & Silver Pawn Shop in Las Vegas, Nevada recently sat down with Breakout to discuss the economy, misconceptions about his business, and the endless number of curios he comes across when dealing with the 3,000 to 4,000 customers coming through his shop every single day.

Harrison immediately addressed the lingering perception of pawn shops preying on the down-and-out, or especially in Las Vegas, desperate gamblers down to their last chips. Despite the tough times, nearly 80% customers reclaim their goods; meaning a pawn shop transaction is more like a bridge loan for the roughly 25 million Americans without a traditional bank account, rather than a legitimized loan sharking operation.
There may very well be a pawn shop in Williston (I'm sure there is) but I have not found it.  I was too lazy, my bad. There is indeed a pawn shop in Williston:

Carns & Sons Pawn Shop   @  1206 2nd Avenue West  has been in business for several decades . 

Also, see comments below.

Denbury Onshore To Put Seven (7) Wells on One Spacing Unit -- Bakken, North Dakota, USA

From an earlier post:

If I am reading the NDIC September dockets correctly, both Slawson and Denbury Onshore are proposing to put 7 density wells in one section. I went through the dockets fairly quickly, so I may misunderstand what I'm reading, but someone will correct me if I'm wrong.

Here are the case numbers from the September, 2011, NDIC dockets that suggest to me, 7 wells on 640-acre spacing units. The dockets can be found at the NDIC website, linked at the sidebar on the right, under "Data."

  • 15758, Slawson: extend MonDak and/or Squaw Gap-Bakken; establish 2 640-acre units, 7 wells on each 640-acre unit; establish 2 320-acre unit and 3 wells on each, McKenzie County
  • 15845, Denbury Onshore: 7 density wells on each 1280-acre unit and each 640-acre unit, Dunn County
  • 15846, Denbury Onshore: 7 density wells on each 1280-acre unit and each 640-acre units, Charlson-Bakken, Williams, McKenzie County
  • 15847, Denbury Onshore: 7 density wells on each 1280-acre unit and each 640-acre unit, Murphy Creek-Bakken, Dunn County
  • 15848, Denbury Onshore: 7 density wells on each 1280-acre unit and each 640-acre unit, North Tobacco Garden-Bakken, McKenzie County
  • 15849, Denbury Onshore: 7 density wells on each 1280-acre unit and each 640-acre unit in Siverston-Bakken, McKenzie County
  • 15850, Denbury Onshore: 7 density wells on each 1280-acre and each 640-acre unit, Tobacco Garden-Bakken, McKenzie County
  • 15851, Denbury Onshore: 7 density wells on each 1280—acre and each 640-acre unit, Antelope-Sanish, McKenzie, Mountrail County
  • 15852, Denbury Onshore: 7 density wells on each 1280-acre and each 640-acre unit, Camp-Bakken, McKenzie, Williams County
  • 15853, Denbury Onshore: 7 density wells on each 1280-acre and each 640-acre unit in Cedar Coulee-Bakken, Dunn County
  • 15854, Denbury Onshore: 7 density wells on each 1280-acre unit and each 640-acre unit in Corral Creek-Bakken, Dunn County

 Denbury Onshore's Alexander Office, just north of Alexander, North Dakota, south of Williston -- heart of the Bakken.

Random Photo of a Madison Formation Well -- Still Producing -- South of Williston, Heart of the Bakken, North Dakota, USA

I believe this is a photo of an old Madison well, south of Williston, on Indian Hill:

NDIC File No: 11345     API No: 33-053-02006-00-00     CTB No: 211345
Well Type: OG     Well Status: A     Status Date: 3/19/1985     Wellbore type: Vertical
Location: NWSE 33-153-101     Footages: 1500 FSL 1500 FEL     Latitude: 48.028437     Longitude: -103.674408
Current Operator: SM ENERGY COMPANY
Current Well Name: FREDRICKSON 33-33 1
Elevation(s): 2156 KB     Total Depth: 13640     Field: INDIAN HILL
Spud Date(s):  1/2/1985
Casing String(s): 9.625" 3090'   5.5" 9633'  
Completion Data
   Pool: MADISON     Perfs: 9273-9461 G     Comp: 3/19/1985     Status: AL     Date: 3/19/1985     Spacing: SE
   Pool: RED RIVER     Comp: 3/19/1985     Status: DRY     Date: 3/19/1985
Cumulative Production Data
   Pool: MADISON     Cum Oil: 144719     Cum MCF Gas: 119017     Cum Water: 88378
Production Test Data
   IP Test Date: 3/19/1985     Pool: MADISON     IP Oil: 243     IP MCF: 170     IP Water: 1

Random Photo of a BEXP Well Still on Confidential List -- 20655 -- Raymond 17-20 1H -- Bakken, North Dakota, USA

From the NDIC website:
NDIC File No: 20655     API No: 33-053-03551-00-00
Location: NENE 17-151-101     Footages: 350 FNL 830 FEL     Latitude: 47.905259     Longitude: -103.629386
Current Operator: BRIGHAM OIL & GAS, L.P.
Current Well Name: RAYMOND 17-20 1-H

How Good Are The Bakken Wells? Sometimes A Picture Is Worth A 1000 Words


December 25, 2017:
  • 23761, 825, XTO, Nelsen State 24X-33F, Indian Hill, 30 stages; 2.7 million lbs, t2/13; cum 75K 10/17;
  • 23762, 1,246, XTO, Nelsen State 24X-33A, Indian Hill, 30 stages, 3.5 million lbs, t2/13; cum 181K 10/17;
Original Post
This is midway between Alexander, North Dakota, and Williston -- the heart of the Bakken:

One would assume this would be a gathering or storage site, but all the neighboring wells have their own tanks. This appears to be the site of # 20971 and #20066:
  • 20066, DRY, XTO, Nelsen State 24X-33, Indian Hill, miserable conditions during blizzard conditions; attempts to continue were abandoned; spudded April 23, 2011; geological supervision released May 26, 2011.
  • 20971, 1,087, XTO, Nelsen State 24X-33R, Indian Hill, 24 stages; 2.8 million lbs, t9/11; cum 178K 10/17; this well was spud May 31, 2011; problems with this well, also but finally completed; didn't see the bump in production until 9/17 when production went from aroudn 3,000 bbls/month to 6,000 bbls/month for a couple of months;

Fracking Water -- Bakken, North Dakota, USA


A personal note to me suggests that these lines are not bringing fracking water in but rather one is an oil pipeline and one is for waste water (salt water/brine) or possibly one is for natural gas. That would make more sense: fracking is a one time event; moving oil and salt water is an on-going task.

Original Post

Probably the number one problem on the highways is trucking the water used for fracking.

In the old days, when the wells were spread out that was about the only economical way of doing it.

Now, two things are happening: many, many wells are going to be drilled closer and closer together, and the new pipeline for the Western Area Water Supply is now going in, making it possible for oil companies to tap into this supply for fracking.

Here is a photo of some of that fracking water pipeline that is being laid. This is midway between Alexander, North Dakota, and Williston -- the heart of the Bakken, just to the east of the US Highway 2.

I assume the green pipe is for fresh water for fracking, and the black pipe is for salt water that comes back up during the fracking process.

More Global Warming Coming Our Way -- Bakken, North Dakota, USA

It got down to 39 degrees last night here in Williston, the heart of the Bakken. That's only a few degrees above freezing.

I remember growing up in North Dakota, and the first freeze was usually about Halloween.

Folks are starting to talk about an early freeze here in North Dakota this year.

Yup, more global warming coming our way.

Map of October 11, 2011, BLM Lease Sale -- Bakken, North Dakota, USA

The map is a PDF file.

It appears the only leases available from BLM in this sale in North Dakota is in the southwest part of the state: Golden Valley, Billings, and Slope counties.

Photos of the New Baker Hughes Building in Williston -- Heart of the Bakken, North Dakota, USA


Baker Hughes is building three "SuperSites": in Williston, Dickinson, and Minot. The selection of Minot is very, very interesting, a subject for a later date.  Here's an artist's rendition of the site at Minot (remember: click on photo to open in another window where you can zoom in):

Photo sent to me from Kent.

Original Post

I believe this will be the largest building in Williston when complete. More on this story later, but the photographs are here for archival purposes.

It appears that the office building as depicted in the artist's rendition is not started. I think only the industrial / garage portion of the building is pictured above. I don't know if you can see it, but just to the right of the steel structure is a huge cement slab; that's where the office building could go. On the other hand, the artist's drawing suggests the office building will sit in front of the steel structure. Either way, it appears this should be the biggest building in the Williston area.

Black Sand, Grey Sand -- Bakken, North Dakota, USA

If you google "proppants ceramics oil" today, the first hit regards Chinese proppants, the second hit is about Carbo Ceramics, the company that started in Texas, and then outsourced their manufacturing process to Russia, if I remember correctly.

I was unaware of the Chinese proppants until this week; I was only aware of the Russian ceramics.
China Ceramic Proppant (Guizhou) Ltd is a manufacturer of Ceramic Proppant in Guizhou, China. Being one of the best ceramic proppants in the world, all products - Pacific MidProp made by China Ceramic Proppant (Guizhou) Ltd are exported to overseas markets.

China Ceramic Proppant (Guizhou) Ltd is also the only Chinese manufacturer that has a distribution network in North America, which facilitates the fastest and most convenient delivery of our products to the customers.
I can't remember exactly how I asked the question to one of the local oil company employees (pretty high up in the food chain of that particular company), but his reply was Chinese proppants. That suggested to me that the market in the local area was seeing more Chinese proppants than Russian proppants. To me, it doesn't matter. It was just an interesting observation.

The Russian proppant is black in color and is referred to as (Russian) black sand. The Chinese proppant, on the other hand, is lighter in color and referred to as grey sand. Or maybe it's gray sand.

I was told that several railroad cars come in twice a week from the west coast with Chinese proppants and are off-loaded here in Williston. From here, much of it goes to Beulah, North Dakota, where it is distributed nationwide.

It makes sense that the Chinese proppants might be making a bigger inroad here in North Dakota: huge ports on the west coast, particularly in Portland, Oregon, and then a straight shot on the railroad to Williston. I could be wrong, but depending on where the Russians ship their proppants, if it ends up at the Houston port, it would be a bit of a less-direct shot for trains to transport it to North Dakota. But something tells me the railroads have this figured out, also.

I'll try to get a photograph of the Guizhou proppants as they come of the train some day. According to their website: 
All our products are packed in 1500kg tote bags. The bags are made of double layer pp material, in addition to a plastic inner bag. For severe weather conditions like in Siberia, an additional plastic outer bag is used for further weather protection.

Photos of Chinese proppants here

Oil Companies Helping With Housing Shortage -- Bakken, North Dakota, USA

Several of the major oil companies and the oil service companies have on-site areas for temporary living facilities for their new employees, including employees' personal recreational vehicles (which sounds like a misnomer) and commercially-provide man-camp facilities.

At least one of the top ten oil companies in the Bakken has taken it a step farther. The company has bought at least one parcel of land in the center of the residential area of Williston, has cleared the land, put in water, sewer, utilities, and is preparing to build what appears to be about 24-single unit homes. At least it appears there is room for 24-single unit homes. It's possible there will be mixed residential facilities to include apartments, but it seems single unit homes are more likely.

The oil company, I am told, put in the water, sewer, and utilities itself simply because the city would have not gotten to the project quite as quickly due to the demand for infrastructure.

To me, this suggests that the oil folks think that the surge in oil activity will continue for many years. They are not building permanent structures for a short stay.

By the way, speaking of building. Remember the 2,500 new units going in northwest of Williston? Some folks have suggested that Menard's of Minot is going to be very, very busy helping supply the raw materials needed for these new houses. Perhaps Menard's will be visited by folks after they move into their new homes and do some of their own remodeling and additions, buy my hunch is that Kiewit, et al, will be bringing in their own raw materials by train. It appears the next stage will foundations, either basements or concrete slabs. I would hope they would put in basements. Basements add a lot to homes in northwestern North Dakota (don't require much heating during the winter, and are very cool during the summer) but something tells me to expedite things, these homes will be sitting on concrete slabs. I hope I'm wrong. I think I may be in the area long enough to see what they do out there.

Opinion Piece in Williston Herald: Something Amiss in Williston -- Bakken, North Dakota, USA


November 30, 2012: for lack of a better place for this story, I will link it here -- an  open letter from the President of Wal-Mart West, who speaks highly of his associates.  If the link breaks in the future, which I assume it will at some point, try googling "San Francisco Chronicle our workers over their jobs Wal-Mart."
Original Post

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

A former Willistonite, currently pursuing a Ph.D. in Wisconsin, visits Williston once or twice yearly. He writes:
I had once thought that my family’s description of the boom had been a bit hyperbolic; in fact, it may have been charitable. I discovered a Walmart so disheveled it appeared that there had been a natural disaster in the area. Friendly faces and greetings seemed missing from the sidewalks of the town I had grown up in. Yet the most disheartening change was story after story of native retirees being forced to sell or move out of a place they could no longer afford. When rent in Williston exceeds the price of a flat in Manhattan, something is horribly amiss. It is not just a travesty; it suggests an ensuing tragedy.
He concludes:
The seemingly casual disregard for roots is ultimately the problem posed by an oil boom. A rapid surge in transient workers is not by nature family oriented. Some families have made the move and at least intend to establish roots, and God bless them. But in the long-run civilization is not built on man camps; ghost towns are.

I respect Mrs. Dionne’s discovery of “peace of mind” — something we all cherish. But when this fragile life comes to an end, one’s ultimate goal is rather to rest in peace. This was the goal of so many old-timers who cultivated the Upper Missouri Valley, and it came with a life well spent. Their “peace of mind” was that someone would one day, hopefully, visit their gravesite. Prosperity does not ensure posterity. Posterity is what the “old-timers” gave us. The question for many of us, then, is what do we give in return.
My hunch: this will all take care of itself over time. Change is difficult for some. The man-camps are necessary for the workers required during the surge; at some point the surge will level off, and then decline. The man-camp facilities are temporary and will disappear. It would be much worse to over-build permanent facilities and end up with boarded-up neighborhoods. Williston over-built with permanent structures in the last boom and it took years to get out from that. There are many stories of smaller towns who almost went bankrupt, some did go bankrupt, by overbuilding permanent structures in previous booms. The man-camps are an innovative way to manage a surge in workers. It sure beats tents and campers. The man-camps will disappear. Williston will be bigger and stronger than ever five years from now. It ain't gonna be a ghost town. It will take 30 years to drill the Bakken wells, and then another 75 years of continued production. (See analysis of the Bakken at the sidebar at the right.) And that's just the Bakken.

Speaking of hyperbole: I visit the Wal-Mart regularly. To describe it as if it had been hit by a natural disaster is over the top. If one wants to see a Wal-Mart that appears to have been hit by a natural disaster, visit a Wal-Mart during the week prior to leading up to a hurricane. The Williston Wal-Mart appears to be doing quite well considering the volume of folks served and the constant problem of keeping employees. My hat is off to all those Wal-Mart workers for doing what they do to keep up with all of us.

Early Registration Ends September 6: Petroleum Council Annual Meeting -- Medora, North Dakota

Link here (regional links break early and break often).
The North Dakota Petroleum Council will be holding its 30th annual meeting from Sept. 20-22 in Medora.

Registration begins at the Harold Schafer Center on Sept. 20, with a book signing by historian and scholar Clay Jenkinson in the evening.

Sept. 21 events begin at with a 7 a.m. registration at the Medora Community Center.
Data points:
Former US Congressman JC Watts to give keynote address on "Washington Politics and the Race to 2012."

Halliburton, Continental Resources, XTO Energy, EOG Resources and Whiting Oil and Gas will present.

NDIC Oil and Gas Director, Lynn Helms, will present.

Bakken East of Minot? -- Bakken, North Dakota, USA

I have a hunch that by the end of 2013, we will hear that there is significant recoverable oil east of Minot. And significantly east of Minot.

I can't post more at this time, but I want to lay down the date-time stamp if this turns out to be accurate.