Tuesday, September 20, 2011

Active Drilling Rigs in North Dakota Down to 194 From Recent High of 201 -- Bakken, North Dakota, USA

Anomaly? Something going on? Some rigs moving to Montana?

Weather is great; nothing being reported locally that would directly impact drilling rigs.

If the number continues to drop, or stabilizes significantly below 190, and the rigs cannot be accounted for by going over to Montana, two things come to mind: a) work force issues -- Williams County has put a six-month moratorium on man-camps; and, b) the significant fracking backlog.

Just noting the number now. More to follow.

For Investors: Motley Fool on QEP, Whiting, and Newfield -- Bakken, North Dakota, USA

Link here.
When it comes to the oil and gas industry, assets matter a lot. For companies operating here, there’s nothing more important than reserves, rigs, submersibles, and refineries. However, these assets must be capable of generating profitable returns.

Value for money

These returns indicate whether a given company has the capability of using its assets efficiently and profitably. After all, it makes little sense for an exploration and production company to have a lot of acreage but not the ability to pull out the oil (or natural gas, for that matter) within. In short, it pays to find out how valuable these assets are to the company.
Here, we will find out whether a given company’s assets are profitable and efficient compared to its peers based on some important metrics.
I don't follow QEP very closely, but WLL has one of the better business models in my estimation, and Newfield has had some outstanding Bakken wells. Another one that keep impressing those who follow the Bakken: BEXP.

Incredible: Today's Motley Fool Epistle -- Bakken, North Dakota, USA

Link here.
"Luck is what happens when preparation meets opportunity" -- so goes the first-century Roman proverb. Twenty centuries later, it still holds good.

While shale plays like Bakken are always in the news and grab investors' attention, not all companies operating here necessarily do well. Opportunity must be backed by sound business models. Bakken player Brigham Exploration seems to be getting better at this job.
And that's just a start to a great note from MF.

Motley Fool: Insiders Buying The Bakken -- Bakken, North Dakota, USA

Link here.

This Motley Fool paragraph is chock full of interesting tidbits; each phrase worth its weight in gold:
Maybe there's more than just coincidence in the fact that two Bakken oil shale plays, Continental Resources and Hess, are both seeing their CEOs buying large tranches of stock.
Continental, as the largest producer with 23 rigs, expects the Bakken to only grow in importance, estimating that the region has 24 billion barrels. With resistance to drilling growing in other parts of the country, the Bakken will be a linchpin in the country's onshore oil-production capabilities. It's why you'll find Kodiak Oil & Gas, EOG Resources, and many others targeting development there.
I wish I were 30 years younger. 

Conflict of Interest

As a military veteran I have a conflict of interest in this posting. Take it for what it's worth.

Two links without comment.

All give some, some give all.  
The counterinsurgency tactic that is sending U.S. soldiers out on foot patrols among the Afghan people, rather than riding in armored vehicles, has contributed to a dramatic increase in arm and leg amputations, genital injuries and the loss of multiple limbs following blast injuries.
Benefits too costly.
Leon Panetta’s words came after the Defense Business Board conducted a study on retiree benefits, The Post’s Walter Pincus reports. The study found that military retirement plans now exceed levels of the private sector. Retirement plans, the board said, are “unfair” because 83 percent of those who serve receive no retirement pay.

Perhaps most telling, the study found that the costs of military retirement plans were growing exponentially. Military pensions and health care for active and retired troops now cost the government a whopping $100 billion a year. And that will only get larger as life expectancy increases.

A Completely Random Post -- Tenaris

This link is just to satisfy my nostalgia. About two years ago I invested in Tenaris but sold it some months later; I currently hold no shares in Tenaris and have no plans to do so.

Although this link only brought back pleasant memories for me, it might give other investors another idea of how to play the Bakken or the oil industry in general.
Tenaris and PCC Energy Group, a business of Precision Castparts, have been awarded a milestone contract to supply 9-5/8" Range-3 Corrosion Resistant Alloy (CRA) tubing for Saudi Aramco's Arabiyah & Hasbah offshore gas development project.

Together, the companies will supply 57,400 feet of 9-5/8" OD CRA casing used as tubing (Alloy 28 and G3), which will ship out over the course of several months. The plain end pipes will be manufactured by Precision Castparts' Energy Group at its forging plant in Houston, Texas.

Subsequently, the material will be threaded with TenarisHydril BlueTM and Wedge 513TM premium connections at Tenaris's state-of-the-art threading facility in the Kingdom of Saudi Arabia.

New Company in Williston -- CCS Energy Services -- Heart of the Bakken, North Dakota, USA

CCS Energy Services is now in Williston.
CCS Corporation, headquartered in Calgary, AB, is North America's largest, privately held, integrated oil and gas environmental services company. Founded in 1984, our organization, with over 3,000 employees, provides customers with a unique, integrated proposition that addresses environmental and waste management issues throughout the exploration lifecycle, from discovery to abandonment.

CCS delivers its comprehensive portfolio of innovative environmental and waste management capabilities through a network of state-of-the-art facilities and an extensive array of specialized assets. With successful completion of thousands of projects utilizing a wide range of progressive technologies, we are a recognized industry leader with a proven track record of success.
The website says the company has 3,000 employees; three hundred (300) now live and work in Williston. Huge.

This is not the first venture into the Bakken for CCS. Here's a press release from July, 2011, earlier this year:
CCS Corporation continues to expand into the United States with the acquisition of KT Hot Oil Company (KT) of Watford City, North Dakota. This is the company’s second acquisition this month in the attractive Bakken region shale play and third in the United States.

“KT is a well-respected organization with a long history of providing safe and reliable solutions in the basin,” said John Gibson, CCS Corporation Chief Executive Officer. “This acquisition will add significant value to our current Bakken operations and builds on CCS’s commitment to providing innovative energy and environmental solutions to the oil and gas industry.”

KT was founded in 1995 and operates in four key segments: frac water heating, hot oiler services, fluid hauling and salt water disposal wells.

Six (6) New Permits -- Bakken, North Dakota, USA

Daily activity report, September 20, 2011 --

Operators: Whiting (3), GMX Resources (2), BEXP

Fields: Banks, Ranch Creek, Beicegel Creek, Sanish, Big Stick, and Simon Butte

At least one "new" field for me (Beicegel Creek). Whiting with another permit in its cash cow, the Sanish.

As reported elsewhere, of the eight wells released from CONFIDENTIAL LIST today, only four reported an IP.

Beicegel Creek is a three-section field in southeast corner of McKenzie County, near Grassy Butte, just a mile west of US-85.

Short Update on Technology Being Used in the Bakken -- Bakken, North Dakota, USA

Although this link is to SeekingAlpha.com for investors, even non-investors interested in the Bakken will benefit from reading the opening couple of paragraphs:
In the past decade, four innovative technologies have evolved to help make such drilling more accurate–and profitable. One is 3D imaging for locating deposits and directing drills.

Another is swell packers, simple packets first used in 2001 in Norway that swell when they meet hydrocarbon molecules, which helps isolate oil deposits deep underground, replacing the costly and often ineffective use of cement.

The third is “perf and plug,” which controls how a company fractures rock by pre-fracturing between swell packets, which can better direct subsequent fracturing.

The fourth technology is the basis for my stock recommendation this issue. It’s ceramic proppant. Proppant does just what it sounds like it does–it props open rock. Once rock is fractured, usually by a controlled explosive device, the rock literally needs to be propped open to allow the flow and pooling of the target liquid to occur.
So, it was the Norwegians that had a role in swell packers; I'm impressed. 

Eight Wells Come Off the Confidential List Today -- Results Posted -- Bakken, North Dakota, USA

Of the eight wells, two were placed on DRL status, and one SHUT IN.

Petro-Hunt's Storhaug well was a wildcat, I believe, but it will be part of the Dublin oil field, I assume. 

The Hunt Oil well (Shell 1-15) is in the Parshall oil field and had an IP of 200 which is very low for that field. On the other hand, this well was on the eastern side of the field and others have commented that the west half of Parshall is great; the east half not so good.

  • 19617, DRL, QEP ENERGY COMPANY TRINITY 1-14-23H-155-102 NWNE 14-T155N-R102W
  • 19646, 482, PETRO-HUNT, L.L.C. STORHAUG 157-100-2A-11-1H NWNE 2-T157N-R100W
  • 19840, 200, HUNT OIL COMPANY SHELL 1-15-10H 1 SESW 15-T153N-R89W
  • 20269, 574, PETRO-HUNT, L.L.C. FORT BERTHOLD 152-93-17C-08-2H SWSW 17-T152N-R93W
  • 20340, DRL, SAMSON RESOURCES COMPANY BEL AIR 14-23-163-99H NWNE 14-T163N-R99W
  • 20354, 1,200, CONTINENTAL RESOURCES, INC. VARDON 1-14H NWNE 14-T150N-R97W


When I first linked the "wind site," it was a very useful and free site. I see now that AWEA.org has now gone commercial. The "education" stuff is all free, but if you want any data, you need a paid subscription (or a password from a friend). It is quite disappointing. The organization describes itself as a "lobbying force for wind development and voice for wind manufacturers in the United States. Includes wind energy information." But when it charges for access to its data it speaks volumes. Sad. Noted September 20, 2011.

News and Updates
Minnesota's wind power initiative, September 20, 2011.