Wednesday, November 23, 2011

China - Venezuela in High Level Talks

Just one week ago -- November 17 -- I posted a story about China re-entering Ameria's oil shale play.

Today Rigzone has a story on the Chinese funding oil projects in Venezuela to the tune of $4 billion.

Note the amount of Venezuela oil being shipped to China:
Venezuela will sign on Wednesday a new $4 billion loan agreement with China that will go to finance oil projects in the hydrocarbons-rich South American country, according to Venezuelan Oil Minister Rafael Ramirez.

The two countries, which are holding a summit of high-level officials in Caracas, will also renew a separate $4 billion tranche of an existing bilateral development fund, Ramirez told reporters Tuesday.

Venezuela has increasingly turned to the Asian giant for credit lines in recent years to finance projects ranging from housing to mining to agriculture in the South American country. In return, Venezuela is repaying the loans with shipments of crude oil, which currently amount to more than 400,000 barrels a day, according to the Venezuelan Oil Ministry.
400,000 bopd represents about the amount currently be produced by the Bakken on a daily basis. Can you imagine the total Bakken output going to one country, China in this case?

E-Mails From the Global Warming Community -- Comments Not Necessary

Link here.
Observations do not show rising temperatures throughout the tropical troposphere unless you accept one single study and approach and discount a wealth of others. This is just downright dangerous. We need to communicate the uncertainty and be honest. Phil, hopefully we can find time to discuss these further if necessary,” reads one message.

“I also think the science is being manipulated to put a political spin on it which for all our sakes might not be too clever in the long run,” reads another.

"I find myself in the strange position of being very skeptical of the quality of all present reconstructions, yet sounding like a pro greenhouse zealot here!” reads a third.
A most respected business magazine, Forbes, has picked up on the release of these e-mails, also:
Three themes are emerging from the newly released emails: (1) prominent scientists central to the global warming debate are taking measures to conceal rather than disseminate underlying data and discussions; (2) these scientists view global warming as a political “cause” rather than a balanced scientific inquiry and (3) many of these scientists frankly admit to each other that much of the science is weak and dependent on deliberate manipulation of facts and data.
It just keeps getting worse. This one from Mail Online.
Following on from the original 'climategate' emails of 2009, the new package appears to show systematic suppression of evidence, and even publication of reports that scientists knew to be based on flawed approaches.

And not only do the emails paint a picture of scientists manipulating data, government employees at the Department for the Environment, Food and Rural Affairs (Defra) are also implicated.

One message appeared to show a member of Defra staff telling colleagues working on climate science to give the government a 'strong message.'

The emails paint a clear picture of scientists selectively using data, and colluding with politicians to misuse scientific information.
"The essential English leadership secret does not depend on particular intelligence. Rather, it depends on a remarkably stupid thick-headedness. The English follow the principle that when one lies, one should lie big, and stick to it. They keep up their lies, even at the risk of looking ridiculous." -- Joseph Goebbels, Wikiquote

More Evidence That "We've" Entered the Manufacturing Stage in the Bakken -- A 5-Well Pad -- BEXP -- The Bakken, North Dakota, USA


February 26, 2016: the original was very short, just pointing out the beginning of the "manufacturing stage" in the Bakken; the IPs, production profiles, and halo effect were all updated this date. 
Original Post
I think this is the first bona fide 5-well pad (permits) in the Bakken, in Alger field, one of the better Bakken fields, all in SWSW 20-155N-92W, all are 350 feet from the south line; the farthest west is 950 feet from the west line, and then they are spaced 25 feet apart, so that the farthest east is 1,050 feet from the west line :
  • 21952, 4,293, BEXP, Sorenson 29-32 3H, Alger, t9/12; cum 261K 12/15;
  • 21953, 2,790, BEXP, Cvancara 20-17 2TFH, Alger, t9/12; cum 178K 12/15;
  • 21954, 3,078, BEXP, Sorenson 29-32 4H, Alger, t9/12; cum 227K 12/15;
  • 21955, 2,972, BEXP, Cvancara 20-17 3H, Alger, t9/12; cum 201K 12/15;
  • 21957, 1,779, BEXP, Cvancara 20-17 4TFH, Alger, t7/14; cum 86K 12/15;
Pretty cool.

When you get to the Alger field (see link above), check out the huge BEXP wells in that field, and then do a head-to-head comparison of IPs with other drillers in that field.

This is where some record IPs were recorded by BEXP (Cvancara and Sorenson). I need to go find the links. This is really quite incredible.

Interestingly enough, these wells are just a few miles to the northeast of where KOG acquired the North Plains Energy acreage. Very, very exciting.

Production Profiles For Past Few Months

21952, 4,293, BEXP, Sorenson 29-32 3H, Alger, t9/12; cum 261K 12/15:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

21953, 2,790, BEXP, Cvancara 20-17 2TFH, Alger, t9/12; cum 178K 12/15:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

21954, 3,078, BEXP, Sorenson 29-32 4H, Alger, t9/12; cum 227K 12/15:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

21955, 2,972, BEXP, Cvancara 20-17 3H, Alger, t9/12; cum 201K 12/15:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

21957, 1,779, BEXP, Cvancara 20-17 4TFH, Alger, t7/14; cum 86K 12/15:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

 Just one example of the halo effect. The first four wells were taken off-line in the summer of 2014, when the fifth well was fracked. This is the production profile of one of those four wells (#21954) around that time:


Fourteen (14) New Permits -- BEXP With Permits for 5 Wells on One Pad -- The Bakken, North Dakota, USA

Wow, the NDIC deserves a break tomorrow -- fourteen new permits today!

Operators:  BEXP (5), Marathon (4), OXY USA, Denbury Onshore, Legacy, KOG, Whiting

Fields: Siverston, Alger, Mondak, Zenith, Killdeer.

OXY USA has a permit for a wildcat; Legac, also.

A long time ago I suggested that, I think it was EOG, was putting six wells on one pad; I was taken to task; someone told me it was three wells on each of two pads right next to each other. Well, be that as it may, BEXP has permits for five wells on one pad in Alger oil field.

None of the wells released from the confidential list were all that exciting (only two of five were fracked; and these two had mediocre IPs).

Of the wells on DRL status that have now been completed, some wells of concern, and a couple of good ones:
  • 19525, 45, Samson Resources, Yukon 12-1-163-98H, Divide
  • 20274, 1,253, MRO, One Feather USA 11-17H, Deep Water Creek Bay, McLean
  • 20287, 1,244, MRO, Johnson 44-32H, Reunion Bay, Mountrail
I know I sound like a broken record, but MRO is joining Newfield, Slawson, BEXP, WLL, Oasis, KOG as having consistently good wells. 

Pressure Pumpers -- For Investors -- The Bakken, North Dakota, USA

For investors, it might be interesting to know who manufactures the pressure pumpers used by Halliburton, et al, to fracture the Bakken wells (and the Haynesville, and the Marcellus, and the ... well, you get the picture).

I assume Cal-Frac Well Services and Weatherford are two of many, although they may also use pressure pumpers manufactured by others (Sundyne?). 

I don't know who makes pressure pumpers but at least one person has asked me the question, so I'm not the only one.

For a nice short review of the evolution of pressure pumpers, click here.

If there's enough companies, I might even be able to add a "top ten" list of pressure pump manufacturers to the sidebar at the right.

Euro On Death Watch -- Was It Just Three Years Ago The World Wanted to Switch From Dollar To Euro?


November 26, 2011: a columnist suggests the demise of the euro is more than a possibility.

Original Post

Link here.
(Reuters) - OPEC may abandon the dollar for pricing oil and adopt the euro but any such switch will "take time," OPEC Secretary-General Abdullah al-Badri (Libyan) was quoted as saying by a weekly magazine.

A decline in the dollar has eroded oil exporters' purchasing power, prompting some members of the Organization of the Petroleum Exporting Countries to call for a switch away from the U.S. currency.

The euro is on death watch.

Privately Held Samson Investment Acquired by KKR -- $7.2 Billion -- The Bakken, North Dakota, USA

Link here.
An investor group led by Kohlberg Kravis Roberts & Co. LP will acquire Samson Investment Co., Tulsa, Okla., one of the largest private US exploration and production companies, for $7.2 billion.

Founded in 1971, Samson employs nearly 1,200 and owns interests in more than 10,000 wells, of which it operates over 4,000, in the US. The company has key positions in oil and liquids-rich plays such as the Bakken, Powder River, Green River, Granite Wash, Cana Woodford, and Cotton Valley as well as in the Haynesville and Bossier gas shales.
For more background on KKR / Samson Investment Company, click here for Bloomberg .

Less Than 50 Percent Wells Reported Today Were Completed/Fracked -- The Bakken, North Dakota, USA

Link here.

Fracking backlog continues. As noted many, many times: I remember the 2Q11 earnings calls that the operators said they would be caught up by November. The data as of August suggested otherwise. Today, again, three (3) of five (5) wells coming off confidential list were not completed/fracked.

Of the two wells that reported IPs, neither were exceptional, except that in the era of 30+ frac stages, MRO's Waldock USA 21-16H well (permit 20494) was fracked with only four (4) stages.

John Deere's Profits Jump 46 Percent -- Wow -- The Bakken, North Dakota, USA


May 16, 2012: John Deere/CEO visits Bismarck (regional links break early and break often); huge distributor is in Bismarck, ND. 
A booming economy is attracting a lot of attention to North Dakota and a lot of officials.

A busy oil patch and a nation leading Ag industry brings the CEO of John Deere to western North Dakota.

Ag Reporter Sarah Gustin visits with this top official about John Deere's presence in North Dakota's 2 largest industries.

(Ron Offutt / RDO Founder) "It doesn't get any higher in Moline, Illinois than who's here today. So Sam, chairman of John Deere, would you come say a few words to this great team, because we are proud of it.

The CEO of John Deere, Sam Allen is stepping out of the office and into the shop to get a 1st hand look at the equipment he oversees.

RDO Ag and Construction is the largest independent dealer for John Deere.

RDO has 60 locations in 9 states.

Bismarck is the largest store.
Original Post

Link here.

It sure would be fun to see John Deere sales broken out by region, state, and county. One just wonders how much western Dakota farmers and non-farming contractors have spent on heavy (and light) equipment this past year, either as a result, directly or indirectly, of the oil boom in the Bakken.

My hunch: North Dakota contributed a lot to John Deere's bottom line.

Half Million Bbls Daily -- By End of Year -- Guaranteed -- NDIC -- The Bakken, North Dakota, USA

Link here.
North Dakota oil drillers have outdone last year's record crude production and are nearing a milestone of a half-million barrels of oil a day, according to an Associated Press analysis confirmed by state and industry officials.

The AP count based on current drilling activity and production estimates found the state already has surpassed the 113 million barrels produced through all of 2010.

Ron Ness, president of the North Dakota Petroleum Council, confirmed the numbers on Wednesday and said the state should end the year with about 150 million barrels of oil.

Helms said the state would surely hit the half-million daily barrel mark by year's end.

Pronghorn Sands Sub-Formation -- Introduction -- The Bakken, North Dakota, USA

Whiting Petroleum continues to post the most interesting / informative corporate presentations. Over time the corporate presentations change, and unfortunately some great slides gradually disappear. Take a look at slide 16 at Whiting's current corporate presentation.

A new pay zone is being targeted by Whiting: the Pronghorn Sand(s). This is my introductory blurb:
Sometime in 2011, Whiting started referring to a new prospect as the Pronghorn prospect, a bit southeast of their Lewis & Clark prospect in southwestern North Dakota. Over time, a bit more information trickled out, and now, based on a recent Whiting corporate presentation (same link as above) it appears there is a new formation at least in some parts of the Bakken: the Pronghorn Sand(s), an upper formation which is just below the Bakken. See slide 16 of Whiting's November, 2011, presentation (unfortunately those presentations will change over time, and this slide may be "lost." 

The graphic reveals that in Whiting's Tarpon prospect there is the well-understood middle Bakken, lower Bakken, and Three Forks formations. Whiting is presently drilling into both the middle Bakken and the Three Forks in their Tarpon prospect. 

In their Lewis & Clark prospect, the middle Bakken thins out to be almost negligible, but the Three Forks remains fairly thick (about the same as elsewhere in the Williston Basin). Interestingly enough, the Pronghorn Sand just begins to show up in the Lewis & Clark, and although not very thick, is thick enough to be drilled.

In the Pronghorn prospect, the middle Bakken becomes very thin. The Three Forks remains the same, but here the Pronghorn Sand is very thick and the target for Whiting drilling. 
On the sidebar at the right, I have added this new sub-formation to the Three Forks section. 

Great Interactive Graphic of Unemployment in the Country -- Yes, It's All About The Bakken...

...and the farming, and the military (two USAF bases), and the Burlington Northern, and the technology (Fargo/Microsoft, to name one)....

Link here

Two thinks I find interesting about that link.

Of course, the first is the bright blue state (employed) right at the center of the graphic among a sea of pink and red (unemployed).

Again, the authors of these employment/unemployment articles certainly see the world from a positive perspective, as in:
Nationally, the unemployment rate declined to 9% from 9.1% last month.
That decrease (and had it been an increase, I would have said the same thing, so there is no hidden agenda here), is neither reproducible nor statistically significant. 

The second thing of interest: the interactive graphic comes from a blog. Yes, a blog. And not only old blog, but a Wall Street Journal blog. Who would have thought blogging would have come so mainstream?

Along that same line: have you noted how mainstream media is now using YouTube video to tell their stories? Bloggers have been doing that for quite some time. I caught on to that little gem about a year ago.

Anyway, I am digressing and rambling. Go to the interactive map linked above to see how North Dakota is doing compared to the rest of the country.

New Community on the Prairie -- Centerville -- The Bakken, North Dakota, USA

Elsewhere they're talking about the excitement of the Bakken.

The discussion includes a link to a November 6, 2011, Minot Daily News article on a new community outside of Ross, North Dakota: Centerville.
Eisenschenk says he doesn't consider that he's "building a town," instead saying there is a need in the oil patch for the services Centerville will provide. It is no secret that housing has become extremely scarce ...

"When you are here you see what some of the guys are living in now," said Eisenschenk. "Some bus from Minot to Williston every day. Some pay $100 a night to sleep in their truck..."

The concept of Centerville, so named because it is in the heart of the Bakken Formation, was originally developed by a Texas speculator who never completed his plan. Eisenschenk and fellow investor Joan Braaten-Eilers, both St. Cloud, Minn., took a look at the project and decided to follow through with the development. Braaten-Eilers is familiar with the region. Her father was a long-time banker in Minot and her mother and sister still reside there.
The new community will have a population in excess of 500 folks. To put that in perspective, the town of Ross, next door, had a population of 97 in the 2010 census.

By the way, my hunch is there will be an entirely new community in the Williston area by 2020, but I won't say more than this now.

Reminder: Data Links Page -- The Bakken, North Dakota, USA

For newbies: a reminder that there are an incredible number of useful links regarding the Bakken and the oil patch in general at my "Data Links" page.

In addition, for a quick look at the operators in the state, the link is here. I try to keep this page current, but sometimes things are missed.

Workers Moving Into State -- Workers Moving Out Of State -- Incredible Map -- Forbes

Link here.

Greg sent me this.

This is an incredibly fun-to-use, simple-to-use, interactive map.

You can actually drill down to the county. Drill down on Williams County and see where folks are moving in from and where they go when they leave.

Unfortunately, the data is only as recently as 2009.

I hope FORBES updates this or provides us the link when the 2010 - 2012 data comes out.

Another First for the Bakken -- Well, The First in 35 Years -- A New Refinery -- The Bakken, North Dakota, USA

This has been posted earlier, but now it has made the PennEnergy News! Pretty exciting.

As reported earlier, Dakota Oil Process plans to build a 20,000 bopd refining plant outside of Trenton, North Dakota. The plant will produce diesel for local trucking needs.
The U.S. could see a new oil refinery for the first time in decades, as fuel demand within the oil industry itself spikes, according to Reuters.
Much has been made recently of the lack of approval for new nuclear power plants, but the country also has not seen another oil refining plant built in 35 years.

However, the Bakken shale oil fields in North Dakota have created a booming economy that is heavily reliant on a variety of different diesel-powered vehicles. With only one refinery in the state, a 58,000 barrel per day diesel plant owned by Tesoro Corp, demand often dramatically outstrips production, particularly if there are any issues at the distant facilities in the Midwest that supply much of the state's diesel.

"Trucks arrive at the loading station and some wait three to four hours and others in excess of eight hours," Bud Kerr, operations manager at hauling company J5, told Reuters. "The problem appears to be worse than what it was last year."

The article says that this will meet about 10 percent of the state's requirements. The real question is how much will this meet the local requirement -- hopefully close to 100 percent. Smile.

Update on the Alberta Bakken --

Link here, sent to me by Don.

November 22, 2011: Update regarding the Alberta Bakken from the October 5, 2011, edition of the Calgary Herald.  Data points
  • 2.6 billion bbls recoverable oil (similar to Williston Basin Bakken); 7 - 10 percent recoverable OIP
  • References Canada's biggest conventional play, the Pembina oilfield, 8 billion bbls; only one-fifth produced since the 1950s
  • Typical well: 250 bbls/day; $4 million to drill; breaks even at $70 (US)
  • Canada side: 31 producing of 47 drilled; Montana side: 8 producing wells of 23 completed
  • References the Williston Basin Bakken: both deposited at same time, but geology different
  • In Montana, the most active driller: Newfield; others: Primary Petroleum, Abraxas, and American Eagle