Friday, October 14, 2011

Nine (9) New Permits -- 1/4 Wells Off Tight Hole Status Fracked -- MRO Reports Two Very Nice Wells -- The Bakken, North Dakota, USA

Daily activity report, October 14, 2011 --

Operators: CLR (2), Petro-Hunt (2), Sequel (2), G3 Operating, Fram Operating, and Oasis.

Fields: Jim Creek, Union Center, Rainbow, Charlson, and Temple.

Sequel has permits for a 2-well pad.

G3, Fram, and Oasis, all have a permit for a wildcat in Williams, Renville, and Williams County respectively.

Only one of four holes released from "tight" status was completed and reported an IP:
  • 19320, 881, Whiting, Brehm 21-4H, Mountrail County.
However there were two producing wells that were completed:
  • 19667, 902, MRO, Buffalo 34-12H, Dunn
  • 20529, 1,523, MRO, Randi USA 41-17H, Mountrail
I remember when it was said elsewhere (and it was true) that MRO never had any good wells, or at least none with IPs greater than 350 or so. That's probably been about two years, and this past year MRO has had some great wells, including these two, based on IPs.

No wells came off the confidential list today but eleven (11) more wells were reported as "plugged or producing" and you know that "all" Bakken wells are producers.

A company unfamiliar to me took over operation of a couple of Petro Harvester wells. Open Range Inc will take over operation of (both near the Canadian border; near Columbus, ND; both originally Sagebrush Resources wells, and both Madison wells:
  • 18899, 1, Busch 2-5, spudded in 4/10, and has a cumulative of 22 bbls 18902, 2, Busch 10-5, spudded in 5/10; and has a cumulative of 401 bbls
Two comments:
  • I doubt if the IPs of these two wells were inflated; and,
  • This is further proof that an IP of 5,000 is preferable to an IP of 1.
I remember when I first started this blog more than two years ago: the big argument was the validity of IPs and if they meant anything. Wow, we've come a long way.

Open Range is new to North Dakota. They now operate a total of four (4) wells all up in Portal field. Two of them are on the confidential list.

Dismantling The Obama Health Care Plan One Piece At A Time -- Absolutely Nothing To Do With The Bakken

Just so you all know, before I start: I support the intent of the Obama health care plan, and support much of the individual pieces of the program. I don't know the details of most of the plan so it's inappropriate for me to comment on those pieces. Of course, by their own admission, most of those who voted for it at the time, had not read it either, but that's another story.

But even before the bill is adjudicated (would that be the right word?) in court, the administration is starting to, as the story says below, "pull the plug" on certain parts of it.
The Obama administration Friday pulled the plug on a major program in the president's signature health overhaul law - a long-term care insurance plan dogged from the beginning by doubts over its financial solvency.

Targeted by congressional Republicans for repeal, the long-term care plan became the first casualty in the political and policy wars over the health care law. The program had been expected to launch in 2013.
My understanding is that this was not entirely partisan as the writer would suggest.

Committee Formed to Address Issue of Homeless on Main Street -- Not Yet -- Bakken, North Dakota, USA

These are the three stories on the front page of today's Williston Herald.

First, this may be my favorite of the three: the landlady who raised the rent from $700 to $2,00 on senior citizens says she "felt sick when she raised the rent, and feels sicker now."

Then these two articles should have been printed side-by-side but due to spacing one was printed above the other: "Planning and Zoning Committee votes against a 450-bed man-camp" that would have been built north of the city.

The companion article: "Committee formed to address campers in city." The sidebar includes this quote: "We're starting to see a campground mentality."

That was predicted just a few weeks ago. It's not worth looking for the link right now.

If the natural progression plays itself out, one can expect we will soon see the following headline: "Committee formed to address the homeless camped out on Main Street." 

Remember tent cities in Williston? Look where this article appeared -- AthleticBusiness.com. Darin Krueger says he was brought up “like any North Dakota kid.”


“I was taught that if people need help, you do what you can to try to take care of them,” says Krueger, the director of the Williston, N.D., parks and recreation department. That was the thinking that drove Krueger and his colleagues to officially allow a small group of men to live in tents on a portion of Williston’s main outdoor recreation complex. The accommodation became temporary, after it “kind of blew up on us,” Krueger says.
Shortly before this article was published in Athletic Business.com, the tent cities were banned in the city's parks.

This is interesting. This is the Canadian experience, from the same link:
In December 2009, a British Columbia appellate court upheld a lower court’s ruling that a ban on tent cities in public parks violated a person’s constitutional right to security, if there is not adequate shelter space available. The ruling stemmed from a 2005 lawsuit that resulted when the city of Victoria shut down a tent city that had as many as 70 residents at one of its parks.
There are options which I have alluded to before but some things are left best unsaid.

I first blogged about the housing problem more than a year ago, April 21, 2010, following a New York Times article highlighting the problem. It is not as if the current situation was unpredictable. Obviously if the New York Times was writing about it in April, it must have been known locally as early as January 2010. In just two months, it will have been two full years and the county is denying man-camps and wondering what to do about RVs on residential streets.

I know the study regarding campers on residential streets won't include the issue of residents parking their pickup trucks on sidewalks but that issue also needs to be addressed, along with motorboats, trailers, and recreational vehicles. If someone cannot use the sidewalk and takes the street instead (especially someone in a wheelchair or pushing a stroller) and gets hit by a passing motorist, I'm not sure where the liabilty rests, but my hunch is that a good lawyer would. In Boston, the owner of the house is held liable if an injury occurs on the snow-covered sidewalk in front of the house. Boston requires that walks be cleared of snow by the owner -- the ordinance was first put into effect in 1976.

Fantastic Friday: Huge Stories Today -- The Bakken, North Dakota, USA

As regular readers know, I post up to a dozen new stand-alone posts every day and update several other previous posts (as long as I am not traveling).

Earlier this morning I posted a reply to the comment I received some time ago from "anonymous" that North Dakota had only wheat and oil, and needed to have a more diverse economy if it was going to survive economically.

So I replied. In the course of that reply, I learned that the United States Air Force has stationed a number of Global Hawk aircraft at Grand Forks AFB. That is absolutely incredible. The aircraft arrived just last month, and are without question, one of the huge success stories of the 21st century. (I guess the first Global Hawk arrived in June, 2011, but the new models arrived last month.)

The idea for an unmanned surveillance aircraft of this type was but a twinkle in someone's eye when I was in my 20th year or so in the Air Force, and stationed at Langley AFB, Virginia, where Air Combat Command was the "sponsor" for the new technology. I was part of the mission that oversaw development of the Global Hawk, although I had absolutely no direct involvment. And then I moved on, and sort of forgot about it.

I started reading about the "US drone assassinations of US citizens" recently and still didn't remember the Global Hawk but then today, a writer let me know.

So, as I started out earlier today, saying that there were going to be some fantastic stories posted today, little did I know how exciting some of them were to become.

A huge "thank you" to my readers in general, and to "anonymous" in particular, for pointing out that the missions of the Minot and Grand Forks air bases had changed.

With regard to Minot AFB, it still does have the B-52H and the intercontinental ballistic missiles (unless the Minot AFB website is out of date -- highly unlikely). Aha -- the Air Force has not changed as much as I was led to believe. In fact, now that I am rambling, I remember how excited some local Minot folks were when the USAF announced that it would be bringing in another squadron of B-52's. The 69th Bomb Squadron was reactivated at Minot AFB on September 3, 2009.

Yeah, I would say that North Dakota still has a pretty diverse economy: grain, oil, coal, ranching, Air Force, universities, tourism, railroad, and whatever else I noted earlier this morning at the link above.

Oh, one last thing: the B-52 has outlived any number of other weapon systems, and has adapted from a high-altitude bomber (that's where the "strato" in Stratofortress comes from) into a low-level stand-off bomber. I was lucky enough to have my first (and only flight) in the B-52 in about 1982 (I forget the exact year, but I think it was 1982. It was already 30 years old then, its maiden flight taken in 1952 following the signing of a contract to have them built in 1946. 1952 - 2012 will be 60 years old. Hmmm.

The Three Best Oil Fields in the Bakken -- Mike Filloon -- SeekingAlpha.com

Mike has posted the third in a series on the three best fields in the Bakken.
Three fields have dominated with respect to oil production in North Dakota. These three fields are also controlled by three separate oil producers. The three fields and the top acreage holders in those fields are:

  • Alger Field-Brigham (BEXP)
  • Sanish Field-Whiting (WLL)
  • Parshall Field-EOG Resources (EOG)

Oil Is Up Almost $3.00 Today

That's all.

I can't update that information on the applet at the sidebar on the right using Microsoft IE. I generally use my trusty old Apple to blog, but it's not available during the day when I am out and about.

However, it appears the IE browser is now working properly, at least, for posting comments, and for me to reply to them. At one time last week and earlier this week, I could not even post comments to my own blog using Microsoft IE.

Update On Columbus, North Dakota, Burke County, Building -- The Bakken, North Dakota, USA

I first posted this story back on August 25, 2011.

A New Orleans developer has begun site work in Columbus on a residential and commercial project that could add 400 homes and between 480 and 576 apartment units over the next three to five years.

I see others are now reporting on it with an update:
The oil industry is breathing new life into the tiny town of Columbus - and with the addition of a new housing development, the population could quadruple in size.

Over the next four years, developers will turn this 160-acre lot north of town into a 400-home development.

That's a big change for the Burke County city of about 130 people.

It's a project the town hopes will help them keep their post office, and it will proceed gradually - the first phase is only about 12 homes and an apartment-house.

The Utica: Bakken Deja Vu

The Utica shale drilling permit graphs look just like those coming out of the Bakken.

By the way, and I will probably post this again elsewhere if I develop the story, but I've blogged several times about the risk North Dakota has with regard to other shale plays competing for North Dakota workers. Most folks who have commented have suggested I am insane.

Yesterday, I was approached by someone asking me about living conditions in San Antonio vs Williston (my permanent home is now in San Antonio). Her fracking company was offering her the opportunity to move to a San Antonio suburb to help develop Eagle Ford shale. Just saying.

In addition, Utica/Ohio is a new competitor for workers.

Connecting the Solar Dots -- Pulitzer-Prize Potential for An Enterprising Young Reporter

The link.
General Electric Co. will build the largest solar factory in the U.S. near Denver.

The company, which had announced in April it would build the factory, said Thursday it had selected Aurora, Colo., a suburb east of Denver, as the location.

GE is a leader in manufacturing natural gas turbines and wind turbines, but it had mostly stayed away from solar until it acquired PrimeStar Solar, a small panel maker, earlier this year.

GE is entering the solar business at a brutal time for makers of solar panels, the squares of crystalline silicon or thin films of metal that turn the sun's rays into electricity.
The dots: Solyndra. Bankruptcy. Government loans. Economic czar. GE/CEO. Cronyism. Tax Breaks. GE Paid No Taxes in 2010. Solar Panels. Glut of Panels. Way Cheaper Elsewhere. Immelt. Share Price Going Nowhere. The Shadow of Welch.

As noted, this could be a potential Pulitzer Prize-winning story for an intrepid reporter.

Fantastic Friday: Huge Stories Today -- The Bakken, North Dakota, USA

Another huge story for this Fantastic Friday in the Bakken:
The Transportation Department will complete this fall "Super 2" construction on 40 miles of U.S. Highway 85, between Watford City and Williston. The $47 million project includes additional turning lanes and passing lanes that will help ease road congestion and enhance safety for motorists. Plans are for Highway 85 to eventually become an undivided, 4-lane highway between Watford City and Williston.

This week, the city of Williston and Williams County commissioners have approved a route for a permanent northwest bypass to alleviate traffic in Williston. Transportation Department officials immediately began work to draft an environmental study and a project design steps toward securing right-of-way property.

The Transportation Department is also considering bypass routes for the cities of Dickinson, Alexander, New Town and Watford City.

The state has provided $2 million for environmental studies needed to advance work on bypass routes for Williston and Dickinson. The state also has budgeted $3 million for Williston's permanent bypass.
The article provides an update on other highway / road projects in North Dakota.

Fantastic Friday: Some Huge Stories Will Be Blogged Today -- The Bakken, North Dakota, USA


Update


This is SOOO coool, and the reason I love to blog. I retired from the US Air Force some years ago, and purposely have not checked in with what it is doing or even paid any attention. Even things that occurred "on my watch" I have forgotten. Someone (see comments below) pointed out that the missile wing and the bombers have left Minot and Grand Forks,and that was many, many years ago. Wow, does time fly by when a) you are having fun; and, b) when you are getting old.

Anyway, I digress. Not only have the missions changed, but the mission at Grand Forks is even cooler than when I was there. First, the tanker mission (which was there when I was there) is now part of mobility command (if I'm not mistaken) and that's a cool mission -- logistics -- in the 21st century. But secondly, the Global Hawk mission is incredible. Now, I can't say for a fact that the Global Hawks have yet arrived at Grand Forks, but my sources say they are. If so, this is an incredibly good mission for the base, and for the city, and for the state. This is state-of-the-art technology, a great fit for UND students to study. The Global Hawk was sponsored by DARPA which was the real inventor of the internet, not Al Gore. Oh, heck yah! They have arrived! See Governor Hoeven's website: the first of ten Global Hawks arrived last month.

So, anyway, one more thing to add to the list of great things in North Dakota.


Just so folks know, Texas Wagyu beef was served by President Obama to visiting South Korean guests. The Wagyu beef, no doubt, came from Texas. Yeahh.
Wagyu is a Japanese breed of cattle, one from which the famous Kobe type of beef is produced.

Original Post


The first beef I have today is with the Bismarck Tribune. When I got "home" last night, the hard copy of the newspaper had a huge front story implying that the first roundabout in North Dakota was going to be in Keene, North Dakota (it has not been built yet; it is only in the "what if" stage). The Tribune said that it would be the first traffic circle between Fargo and Billings, which means there might be a traffic circle in Fargo. If not, the first traffic circle in North Dakota is in Williston. It is already built, drivers are already using it, and lo and behold, there are no written instructions or guildeposts on how to use it. Imagine that. Contrary to the lengthy article in the Tribune suggesting that North Dakotans would be perplexed/surprised by a traffic circle, Willistonites appear to be navigating this circle just fine. For those who have not seen it, the traffic circle is out by the Harvest Hills subdivision, the one that would have had a park (don't get me started).

But I digress. Here's what I really wanted to talk about: another beef story.

Some time ago I received a crabby note from someone who said North Dakota was hampered by the fact it only had two industries: wheat and oil.  The writer said North Dakota, if it wanted to prosper, needed to diversify.

I have told folks that I don't post all comments. That was one I did not post. It was ludicrous on the surface and I did not want to embarrass the writer, who signed himself, "anonymous."

The writer, of course, was wrong. There is quite a bit of diversity in North Dakota: oil, farming (not just grain, but also sugar beets, e.g.), ranching, railroad, coal, tourism, two air force bases (airborne and missile, both), aeronautics, colleges and universities second to none in the region, industry (Bobcat), industrial processing (potatoes; largest processing plant in the US? I am not sure); technology (doesn't Microsoft have one of its largest campuses in Fargo?); and, of course, lutefisk (it is my understanding the biggest market in the US for lutefisk is North Dakota -- of course, we are consuming it and not producing it).

All that background for this. This is a huge story. For "anonymous," who felt North Dakota needed a bit more diversification, perhaps this will help (I doubt it).
Kim & Price, an American-South Korean joint venture, plans to slaughter North Dakota cattle and package meat for export to South Korean consumers. The cost of the facility would be between $80 million and $100 million.

“We continue to evaluate sites that are around Bismarck, but are more rural,” said Roger Hoyum, a management consultant working for the Kim & Price Corp., which plans to build a plant to process 1,250 head of cattle a day.
I do not know if North Dakota ranchers raise enough cattle to process 1,250 head per day, but I doubt it. If I am wrong, Warren Buffett, right now, is busy calculating how many more train cars he needs to bring in cattle from Montana, Wyoming, South Dakota, Nebraska to satisfy this processing center. (According to "agclassroom") there are 1.7 million head of cattle in the state.

By the way, two years ago, I would not have been able to "conceptualize" $100 million. But now I can. That figure, $100 million, represents the amount of new building that was done in the city of Williston in 2010. In 2011, that figure will be approximately $300 million. So for Willistonites, look at all the building that has gone in Williston in the past two years, and imagine one facility in Bismarck taking up about one-fourth of that. Yes, this is a huge story. And once built, it will continue for a long, long time.

I assume that Japan will follow. The Japanese love Kobe beef and something tells me the Japanese are looking at this deal. (Of course, the two are unrelated in the sense that the Korean deal is a direct result of the recent legislation to improve trade between the US and Korea, Panama, and Columbia.

This article will provide some data that might help put the Bismarck packing plant in perspective. Investors  plan to re-open an Iowa packing plant that was closed in 2004 due to mad cow disease scare. The Tama processing plant will start out smaller in scale than it was when it closed. It will cost about $10 million to renovate and re-open. It will likely start with a work force of about 100 employees and then ramping up to as many as 350. The packing plant, like the one in Bismarck no doubt, will be working with custom processors who will provide their own source-verified cattle. The plant is estimated to handle about 800 head/day, very similar to the Bismarck published plans.

I said there would be several "fantastic Friday" stories. Obviously a traffic circle (roundabout) in Williston, and a beef packing plant in Bismarck, can't be the only news stories to get me excited.

Later, I will talk about the Lodgepole formation. Very, very exciting. And it's  not even 8:00 a.m. yet.

Oh, one last thing: this will be news for most NoDaks, but according to First Lady Michele Obama, North Dakotans are living in a "veritable food desert." Not a "food dessert" -- such as Norwegian rice pudding (julegröt/julegrøt/julegrød) -- but "desert" as in "no food or water." I cannot make this stuff up.

Not for the politically correct:







Original Post
 

Comparing Production by Formation in the Williston Basin -- The Bakken, North Dakota, USA

Update


Earlier this week I posted the note below but did not identify the formations. I was interested in folks looking at the data first, noting that wells in some formations are averaging one million barrels of production over 20 years, and others are struggling to get to 150,000 barrels over 20 years. Of course, with the Bakken, the jury is still out. Bakken wells are getting to 150,000 barrels in about three to four years, often sooner, but we don't know what the total cumulative average will be 20 - 30 years from now.

I have updated the post below to show the formations.

I don't know the difference between the Lodgepole and the Lodgepole/Bakken, but my hunch is that the "Lodgepole" refers to the reefs down around Dickinson, where the Lodgepole/Bakken refers to the more classical formation which lies continuously above the three Bakken formations. Based on some new wells coming in, I think that will be sorted out in the next six months, if not sooner.

Original Post
 

Oil was discovered in North Dakota in 1951. Oil has been produced from not less than 36 formations -- 36 formations -- in North Dakota, in the Williston Basin.

Statistics have been kept from the beginning. The crude (no pun intended) table below shows the total amount of oil produced from a given formation (first column), the total number of wells drilled into that specific formation (second column in bold), and the average amount of oil, so far, produced by each well targeting that formation, dividing first column by second column (in bold red).

Later, I will identify the formations.  First, I want folks to look at the data, and ask some questions.

One cannot compare formations, unfortunately, directly with each other in all cases, because the first column is the total accumulated production since oil has been produced from that formation -- some formations have been producing oil continuously since 1951. Other formations are fairly new (such as the Bakken, and especially the Three Forks) and have not been producing for as many years. However, I think I will be able to say with a certain amount of confidence that one can compare two formations.

Bakken (mostly middle Bakken):   204,716,740               2341                    87,448

Bakken/Three Forks):                   659,678                           12                   54,973

Lodgepole:                                  56,901,337                      49               1,161,251

Lodgepole/Bakken:                       5,883                                 1                      5,883

Madison:                                       914,789,572                5505                 166,174

Red River:                                     105,475,181                  696                 151,544

Red River B:                                  123,988,984                   542                 228,761

Red River and RR B:                      229,464,165                 1238                 194,603

The first thing one notices is that the third formation down is in a league of its own: over 1 million bbls/oil/well since 1951. The fifth, sixth, seventh, and eighth formations have been producing oil since oil was discovered in 1951. Obviously not quite true, because only one well was producing oil in 1951 (the Clarence Iverson well). However, based on the little information I have, or can remember, the amount of oil produced by the fifth, sixth, seventh, and eighth, formations has accumulated over the last 20 years or so. Same with the formation "# 3."
 
Formation # 3: > 1 million barrels/well since 1951; these wells are still active and still highly productive.
Formation # 6: > about 200,000 barrels/well since 1951; many of these wells produced for 20 - 30 years but if older than 20 years have become stripper wells.