Tuesday, October 18, 2011

Sugar Beet Nation -- The Bakken, North Dakota, USA -- October 18, 2011

I was out all today with a friend who was driving truck, hauling sugar beets, near Fairview, North Dakota.

The weather was beautiful. It was an incredible day.

Our truck, not one of the largest, would carry 20 tons of sugar beets per load.  When trying to stop, E=MC2 came to mind.

[October 29, 2011: I heard today that some farmers were getting as much as 26 tons/acre, which would be considered a bumper crop.]

I was told that 9 million tons of sugar beets were harvested in this area last year (as measured at the collection facility in Fairview, ND/MT). (See first comment below.)

Five (5) New Permits -- The Bakken, North Dakota, USA

Daily activity report, October 18, 2011:

Operators: CLR (2), XTO, Chesapeake, Eternal Energy

Fields: Haystack Butte, Banks, Golgan, and Rainbow.

CHK has a wildcat in Golden Valley.

Notable wells, released from "tight hole" status:

  • 19611, 1,211, Oasis, Hendricks 5602 42-36H, Williams
  • 19980, 1,319, Fidelity, Hill 31-30H, Mountrail

Second day with "tight hole" reference and no "confidential list reports."

Natural Gas Loading Facility Being Considered by Belfield -- The Bakken, North Dakota, USA

Link here.
A proposed $10 million natural gas loading facility brought up quite a few questions during a Zoning Board meeting Monday night, so members decided it was a decision best be left to the public.

Representatives from Bear Tracker Energy LLC met with board members to discuss rezoning and a conditional use permit.

The project was proposed on 250 acres directly east of Highway 85, just south of the railroad overpass, which is less than a mile outside city limits.
The story has a byline of Belfield, not Dickinson. I originally put this location in/near Dickinson; I was wrong, this has been corrected.

Dickinson't Looking Into Need for City Planner -- The Bakken, North Dakota, USA

Link here.

Two concerns: pay and time to train employee.

The city did not budget for this position and is not sure how the position would be paid for without a grant.

And with regard to training:
Jackson also had concerns about supervision of the new employee. Jackson reminded the commission Courton is busy with planning and zoning and wondered how much time would be taken out of his time to help the new employee.
Dickinson't could always do what other boom towns have done: let a major developer from out of town, such as Denver, take over city planning.

KOG -- Interim Update -- Earnings To Be Announced November 3 --- The Bakken, North Dakota, USA

Link here.

Five operated rigs; multi-well pads in McKenzie and Dunn counties.

7,000 to 8,000 boepd currently; will exit 2011 at about 11,000 boepd.

Says their contract with HAL fracking is adequate, but is looking to have dedicated frack team starting some time next year (2012).

Crude-by-Rail (CBR) Increasing -- The Bakken, North Dakota, USA

Link here.
As the volume of crude oil pumped out of the Bakken continues to set records, oil companies are increasingly investing in rail facilities to move their product to market.

Since EOG Resources went online with a crude-to-rail transfer facility near Stanley in December 2009, several other facilities have been built and more are under construction or in the planning stage.

The capacity of rail terminals in the state is expected to reach 300,000 barrels a day by the end of this year. Terminals are projected to have capacity for 750,000 barrels a day by the end of next year and more than 800,000 barrels a day by 2013, according to the N.D. Pipeline Authority.
I noticed the same thing: a lot more rail activity than I would have expected.

The general consensus is that there is excess takeaway capacity (pipeline, truck, and rail) but with the amount of activity in CBR oil-loading facilities, one really wonders how much oil the Bakken is capable of giving up. If the CBR is any indication of the potential, Statoil's deal for BEXP is quite a coup.

The article says there are terminals in Minot, Stampede, Donnybrook, Ross, Stanley, New Town, Zap and Dore. In addition, there are two new terminals being built, one each at Epping, ND, and one at Trenton, ND, both in Williams County. Also, there are two terminals being built southwest of Zap: west of Dickinson and Fryburg, just outside the south unit of the national park.

Dickinson't-Disapproved Man-Camp Approved By Dunn County -- Six Miles North -- The Bakken, North Dakota, USA

I was very, very happy to see this.
The company that got rejected at Dickinson because the project didn't match the neighborhood did get OK'd for a man camp in southern Dunn County, about six miles north of Dickinson's city limits.

Target Logistics, which already has four man camps in the Bakken, got a recommendation for approval for a 600-person camp. The company will have to show evidence it has filed a reclamation bond of $300,000 in case the county has to clean up the site when the man camp is closed, plus pay a $35 per occupant fee every year to cover the county's cost for emergency services, or about $10,000.
Over time, Dickinson't will have more opportunities for man-camps, but I doubt they will ever see a better deal than one with the professionals at Target Logistics.

There was an interesting slant/bias to the Bismarck Tribune news story, but that's for another day perhaps.

Random Photos of New Housing Activity in the Heart of the Bakken -- The Bakken, North Dakota, USA

Yestrday I had the opportunity to explore the Bakken outback. I had heard stories of possible gouging on rents and property values so I wanted to check out some of this on my own.

It was an incredibly beautiful day. I had a nice chat with some property owners, real estate agents, landlords, and I came away quite impressed. There is incredible potential in the Bakken; the surface has literally been barely scratched.

I wasn't able to meet with any new tenants regarding some of their new property. The property in some cases was still being renovated.

The following is a very nice four-room pied-a-terre converted prairie school house for someone looking for a cozy little home on the prairie. For summer living, it is ready for immediate occupancy, but a few upgrades may be necessary for a North Dakota winter.

This is a steal at $150,000.

For those with a slightly larger home in mind, this one is also ready for immediate occupancy:

This is a rental. Recently rent had been about $350/month, but due to improvements this past year, the landlord will be raising the rent to $2,000/month.

And, then, finally, this fixer-upper:

Price negotiable.