Friday, October 21, 2011

Thirteen (13) New Permits -- Freakin' Frackin' Backlog Not Stopping Permitting -- BR With 5 Very Nice Wells -- Bakken, North Dakota, USA

Daily activity report, October 21, 2011 --

Operators:  Enerplus (4), Whiting (2), Hess (2), Fram Operating (2), Marathon (2), Petro-Hunt

Fields: Squaw Creek, McGregory Buttes, Sanish, Hofflund, South Greene, and Deep Water Creek Bay.

Petro-Hunt with a wildcat in Williams;

Enerplus with permits for a 4-well pad in Squaw Creek; Hess has permits for a 2-well pad; and, MRO has permits for a 2-well pad.

Whiting has two more in its cash cow, the Sanish.

Two wells released from "tight hole" status; only one with an IP:
  • 20034, 524, CLR, Debrecen 1-3H, Stark County -- I've been eager to see how CLR did in Stark County
But look at these producing wells that were completed, wow:
  • 19287, 1,872, BR, Rising Sun 11-1TFH
  • 19865, 1,848, BR, Ole Boy 24-11H
  • 19884, 1,920, BR, Lincoln Hill 24-19H
  • 20077, 1,432, BR, Zachery 14-10H
  • 20081, 1,202, BR, Intervale 11-35H
More on these later.

Mike Filloon on Newfield, BEXP, and the Bakken -- The Bakken, North Dakota, USA

Link here.
If I [Mike Filloon] were to be apprehensive about Newfield's Bakken results, it would not be on the cost per well as much as how much difficulty it has had getting wells on line, which created a large miss in production. This company's earnings release statements lead me to believe Newfield thinks this will be an ongoin problem, but if it is smart it will take the rest of 2011 to work on well infrastructure to get pipelines on line. Trucking fluids in and out of wells in the Bakken, was very difficult for most of the winter.
That's exactly right: I have been blogging this since July. It's not the cost of the well; it's the fact that the well sits there for eight months before it's completed. That's a lot of money tied up. The fracking backlog is devastating to the bottom line.

I don't think it's the trucking problem in the winter that is as big a problem as the fracking backlog, unless of course, hauling water for fracking is part of the equation. Some of the winter production problem will be mitigated this year with all the infrastructure they've been putting in.

Looks like a big shake-out coming down the road.

Two More SeekingAlpha Articles on the Bakken -- The Bakken, North Dakota, USA

Seeking Alpha contributors have finally discovered the Bakken? My goodness, how long have we been at it? Even the New York Times has reported about the housing problems in the Bakken.

But here we have a article that begins with data that was being published two years ago.
In its 2008 report, the USGS estimated that there were 3 billion to 4.4 billion barrels of recoverable oil in the Bakken. Recently Continental Resources' (CLR) CEO said there approximately 24B barrels of recoverable oil in the Bakken using current technology. Various other reports have claimed anywhere from 167B to 500B barrels of potentially recoverable oil exist in the Bakken. It is unclear what the actual end figure will be, but it seems likely that technology will eventually improve, making more and more of the oil in the Bakken recoverable. It is already clear that the 2008 USGS estimate was an underestimate. The CLR CEO’s estimate is probably accurate (or close) for the current technology. However, big oil companies tend to plan for the future. If they buy now, they may find that they are eventually able to recover several times the originally forecast amount. It’s almost like purchasing an annuity for its current worth with a huge extra trust fund thrown in free as part of the bargain. A lot of big oil companies likely find this possibility appealing.
"....If [big oil companies] buy now, they may find they are eventually able to recover several times the originally forecast amount." Well, duh. If they buy "now." They should have bought four years ago like CLR and NOG did. Statoil finally bought this year. XOM bought in last year through XTO. COP has been here from the beginning with BR. WMB bought 7% of the reservation  -- was it last year?

Anyway, if you've been living under the Geico rock for the past two years and have not heard of the Bakken, go to the link above.

The writer favors DNR and WLL.

The second article: five drillers to "buy now."  Sounds like telemarketing.

And the five are:
  • Sandridge
  • KOG
  • GMXR
  • Stone Energy
  • Hercules Offshore
You may have heard of one or two of these.

Yet Another Drum Beat for the Tyler -- This Time Lynn Helms, Again -- The Williston Basin, North Dakota

Link here.
North Dakota's Oil and Gas director looks north and sees something like a tsunami heading toward the agrarian countryside of Hettinger County and the deep southwest of North Dakota.

It's not that far off, and oil development will come over the countryside in a wave that will overwhelm people if they don't get ready now.

"That's why we're here. We don't want you to get blown away like some of your sister cities have," Lynn Helms told some 130 people who filled the stately Memorial Hall building on New England's Main Street Thursday night to hear the latest.

Human Interest Story on the Bakken -- Billings Gazette -- The Bakken, North Dakota, USA

Link here.
The play east of the North Dakota/Montana state line now produces 440,000 barrels of oil per day from 5,000 wells. North Dakota officials predict a peak of 700,000 barrels a day.

But a recent Raymond James Financial Services report triples the state's estimate, saying production could hit 1.2 million barrels per day, Rolfstad said.

Misery Index: 13 (Unemployment Plus Inflation) -- 28-Year High

Link here.
An unofficial gauge of human misery in the United States rose last month to a 28-year high as Americans struggled with rising inflation and high unemployment.

The misery index — which is simply the sum of the country's inflation and unemployment rates — rose to 13.0, pushed up by higher price data the government reported on Wednesday.
The data underscores the extent that Americans continue to suffer even two years after a deep recession ended.
In other news, now being reported at ABC:
With the approval of the Obama administration, an electric car company that received a $529 million federal government loan guarantee is assembling its first line of cars in Finland, saying it could not find a facility in the United States capable of doing the work.
Vice President Joseph Biden heralded the Energy Department's $529 million loan to the start-up electric car company called Fisker as a bright new path to thousands of American manufacturing jobs. But two years after the loan was announced, the job of assembling the flashy electric Fisker Karma sports car has been outsourced to Finland.
It's hard to believe 41 percent of Americans either support stimulus money going to Finland or aren't listening.

There must be some federal program that I am not aware of that encourages government funding of $500 million for green-energy start-ups.  The Solyndra lone guarantee was for $535 million.

Looking For Rental Properties in the Bakken -- North Dakota, USA

I know some folks may not read the comments. For those who might have missed it, this comment may be helpful to those looking for housing:
My company is providing housing for oilfield workers in Watford City as well as a new subdivision in Minot. Along the way, we've gotten many dozens of requests (a few hundred?) that we cannot fulfill. So if any of your readers have (or know of) rental properties of any kind available in the Bakken region, please contact me. You can reach me at
This is not a paid advertisement; simply re-posting something someone sent in as a comment in reply to another posting. Only trying to be helpful. No other agenda here.

From Newfield Conference Call -- The Bakken, North Dakota, USA

Link here.
To the Williston Basin. We've been behind in our Williston Basin program all year and have taken proactive steps to adjust course. Simply stated, we had expected to exit 2011 with net production of about 15,000 barrels of oil per day. And today, we're about half that rate. Our issues relate to weather, delays in the arrival of necessary services in the field and the result in inability to complete wells timely. Compared to our original guidance, the Williston Basin is down 6 Bcf. We've reduced our operated rig count, and we'll defer completions on more than a dozen horizontal wells into 2012. This is an obvious area for us to institute strict capital discipline and preserve our budget.

Our Williston issues are not related to the subsurface. We have great assets in the Williston that can provide some of the highest returns we have in the company. Our wells have performed extremely well once online, and we've demonstrated our ability to drill wells efficiently. There's a table in NFX that shows our recent well results. The recent tightness in the service market and the subsequent cost increases have forced us to better manage our investments in late 2011.
A question on the Bakken and on spending kind of aligned with that. The $11 million well cost, that seems high relative to even some of the other operators in that play now. Why are the costs so much higher?

Lee K. Boothby

Well, I think, first of all, I guess I would take issue with your comment on the well cost. We've put ourself out and compared our drilling curves and our costs against all the operators in the area. In each of the areas that we're active, I can tell you that we're very competitive as far as the wells that we're drilling. I will tell you that all our wells this year are proportionally much higher as a result of drilling the 1,000-foot laterals. Last year and even today, we can back off and drill a 4,000- to 5,000-foot lateral in the neighborhood of $7 million. Earlier this year, we were in an 8 5 to 9 3 environment. And we've seen that number go up to 11. Now the lateral lengths that we have today are between 9,000 and 10,000 feet. And I can tell you in the $11 million, there is some element of trouble cost that are built into that, that are a reflection of what we've seen in 2011. Now many of the costs that you historically see don't have trouble cost built into them. And in the environment that we're currently drilling today, you are far more likely to see increasing costs associated with that area than you are in areas where the rig count is much low. So that is a fully-loaded facilities, trouble cost, as well as drilling complete. Now as we look forward and you see some of the contracts that you have in place for stimulation services roll-off, and you see the basin moderate or more services come in, I fully expect that number will back off. But I'd be naive in thinking that if we would be seeing a $9 million well cost anytime soon.

HP LaserJet P2055D Printer -- Printers -- HP -- Idle Rambling


September 7, 2012: I had forgotten that I had posted this (below, original post). This past week my family gave me an Apple MacBook Pro for a birthday present. Today, I decided to see if I could hook it up with the HP printer we have. I put the computer next to the HP 4450 (or whatever it was) and plugged in the USB cord. I was unable to find the CD driver for the printer. But, then, a dialogue box on the computer screen: do you want software installed so you can use this printer? I  couldn't believe it. The Apple computer recognized that a peripheral had been attached; identified; and, asked if I needed software, and when the answer was in the affirmative, it downloaded the software. Done in 20 seconds (or less). And that was it. Compare that to the PC experience below.

Original Post
As you all know, or should know by now, I am Apple Fan Boy #3.  I grew up with Apple, never owned a PC, and love Apple computers. I think I have had most models over the years. Whenever I find a new Apple store, I pull out my prayer rug, lay it down in front of the doors, and bow to Steve.

And then I go into the store.

And, yes, it is a cult.

This past week I have been setting up HP printers for a local business using PCs. Wow, absolutely incredible. Today was the third time, and it was no easier than the first time.

This is the new HP LaserJetP2055d printer that is absolutely outstanding, but installing the software is absolutely crazy. If these printers were networked, maybe I could understand it, but these are simply connected to a computer with one cord. These are simply dedicated printers to one computer.

With Apple, it is truly "plug and play" and has been since my first Apple computer in 1984. You take the printer out of the box. You plug in the printer cable, plug in the power cord, turn it on and it works. Apple computers come pre-loaded with the most commonly used printer drivers.

So, here's my experience with the HP printer. A couple of things. I follow the directions explicitly. I don't do anything without reading the instructions and watching every step along the way. But the experience has been almost identical all three times. The entire process takes about an hour to get the HP printer installed.

1. Taking the printer out of the box, removing the tape and shaking the laser cartridge, straightforward, easy to follow instructions.

2. Place the CD that comes with the printer into the computer. One has to locate the CD driver on the computer screen (not intuitive on a PC) and then go through three steps to start the download.

3. The download takes forever and then appears to get into a loop because it never completes the process. On the second and third installation, I assumed I was going too fast, so I left the room to do other tasks and came back 30 minutes later to see if the installation was successful. Nope. All three times, the installation never worked with the CD.

4. I then go to the web to find the driver. Two of the three times I found the driver immediately, but the second time for some reason was given the run-around. But you have to be geeky to figure out which driver one wants. I knew it was Windows 7, but I had no idea if I had 32-bit or 64-bit. I clicked on 64 bit.

5. Some time during that process, I got an error message (#26) saying that the installation was unsuccessful (I assume from the CD) and it automatically started searching the net for help. On the second printer, it actually said the computer could not support this printer (not true; all computers are the same in this office; and eventually all three computers and printers were working nicely). So, with all three set-ups, I got that error message -- #26 -- that said the installation would not work.

6. It took only moments to download the driver from the web. However, incredibly, it had to uninstall what was installed from the CD. Sometimes it would be best to know less information. Apple just does stuff in the background without airing all that dirty laundry.

7. I went to print a test document, and the default went to the old printer that had been disconnected. Apple would have recognized that the printer was no longer there and would have automatically gone to the only printer connected. How hard can that be. So I had to click on the new computer.

8. Non-geeks would not have understood the need to go back to the "printers" icon on the computer to set the new printer to default.

9. Somewhere along the line, the computer re-boots. It turns itself off, and then starts again. I have never known an Apple to need re-booting to connect a printer.

10. So, now, it should be ready to go. Everything is on. The computer screen says the document is being printed. Voila. Nothing happens. Nothing prints.

11. Aha, that's right. I vaguely remember what I forgot to do. I have to turn the printer off and then turn it back on. In this case, I had to do that twice.

12. So, yes, as others have noted, the WINTEL computers can do almost everything that an AAPL computer does. It just takes longer -- it took about an hour to get this third printer going -- about the same time it took for the first two printers, an hour each. And with AAPL, it is "plug and play." About 10 seconds. Of course, when I buy a printer for my Apple, I make sure the printer says it is compatible with Apple, which most of them are. But if it's compatible, it generally means the software is already loaded; Apple will recognize the printer, and it will default automatically to the only printer plugged in. It was amazing that even with the old printer disconnected, the WINTEL still defaulted to the old printer. Can it be that hard to write software to tell the printer to ignore printer drivers for printers no longer connected to the computer. From the very beginning, Steve said his computers recognize what gets connected to them. It looks like WINTEL has part of this down, but not all.

13. Oh, one last thing that WINTEL computers will do that AAPLs won't. WINTEL computers download viruses that AAPL users don't worry about. So, if you like installing security patches and firewalls, etc., you will love WINTEL.

For Investors Only -- GE, Verizon, AAPL

GE: earnings up 57 percent.

Verizon: earnings double.

AAPL: profits up 54%, I believe, but missed analysts' targets, so the shares dropped. But this is what folks missed because they were focused on iPhones and iPads: Apple sold a record number of computers this past quarter. With the rest of the PC market on a decline (due to tablets and smart phones, I find it remarkable that Apple had a record quarter -- of course, much of it was probably due to back-to-school shopping. But I just bet that the fourth quarter -- Christmas -- will be huge for AAPL.

What an awesome time to be accumulating shares in American companies when the market is so depressed. Verizon: earnings double -- sure, there's a lot of non-revenue explanations, but I've always said "the business of the business" is what counts and VZ has done very, very well.

I own shares in none of these companies and will not be buying any. I just look at these because they were in the news the last couple of days, and they reflect on the market in general.

Random Photos of a Pumping Station for Fracking Water -- The Bakken, North Dakota, USA

These are photos of a pumping station near the confluence of the Yellowstone River and the Missouri River in western North Dakota.

The pump house in these photos use to be easily visible along the banks, but with the flooding last spring, huge dikes were built literally around the shed.

Similar pumping stations are all over throughout the Bakken and are part of the reason for the success of the Bakken.

Newfield To Voluntarily Reduce Activity in the Bakken -- Simply Too Expensive -- The Bakken, North Dakota, USA

Link here.
In response to service cost pressures, Newfield is voluntarily reducing its activities in the Williston Basin. The Company has reduced its operated rig count and is deferring 13 completions into early 2012. Well production performance continues to be at or above expectations.