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
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 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


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.