Monday, December 26, 2011

Wow! Drew Brees -- Passing Record -- Dan Marino's Record Had Stood for 27 Years

No link yet. [I don't think the record is more than five minutes old, and wiki is already updated to reflect it. Incredible.]

Just occurred -- televised.


I really don't want that much NFL football, but to be able to see this record-setting event is quite exciting.

Themes That Could Be Developed From the Ohio Fracking Sand Story

Link to the original story here.

A great writer or story teller could develop the following themes from this one story.

1. Everyone imagines winning the lottery. Here's someone who has done just that: won the lottery.

2. Hydraulic fracking requires sand or proppants of some sort. But the "discovery" of hydraulic fracking which is now being used worldwide didn't just happen. It took  a lot of research and the laboratory was the Bakken.

3. It is remarkable that the fracking sand was found so close to the "next big thing," the Utica.

4. If this sand is as good as they say it is, or as the article implies, maybe less ceramics from China and Russia will be needed. This has interesting implications for not only China and Russia, but also frackers.

5. If this sand is used in the Bakken, it will require railroad transportation, again implications for the transportation section.

6. The more individuals, the more businesses, the more sectors, the more states that benefit from hydraulic fracking, the less likely the EPA will be allowed to shut it down.

Frack Sand Central -- Ohio Has The Perfect Fracking Sand --


Proppants and other materials need for fracking, for sale.

Best link yet for "all you wanted to know about fracking sand."


April 23, 2017: soaring cost of sand

March 13, 2012: faulty well, not fracking, causing the problems -- WSJ.

January 6, 2012: now the kooks, idiots, hand-wringers are worried about fracking sand. This article is hardly worth linking, but  it's here for three reasons: a) archives; b) another typical story in The Dickinson Press; and, c) follow-up to earlier stories about sand in Wisconsin. Same story, different "newspaper."

September 13, 2011: article on Texas frac sand. Great article. Especially since I call San Antonio home now.

Original Post
Link here.

This link was sent to me by "anon 1." Thank you.

This is an incredible story, and it is incredible on many levels, none of which I will discuss. I will leave it up to the reader to think about the significance of this story. I can think of three or four themes that could be developed from this one story.
Rob Sidley is sitting on a gold mine, thanks to Mother Nature.

His family-owned company produces the special sand needed for the drilling boom in Ohio’s deep layer of Utica shale.

The sand is perfect for the hydraulic fracturing process — or fracking — which uses force to open cracks in the shale and free up natural gas, oil and other lucrative products.

The sand is nearly 100 percent quartz. It is round and spherical. It is hard and strong. It is resistant to water and chemicals. It is a sand that flows almost like a liquid. It can survive heavy pressures deep underground.

It takes 6,000 to 8,000 tons to frack one well, depending on the size of the well, so Sidley has a valuable commodity as drillers begin to focus their attention on eastern Ohio.
Actually, while completing this, I thought of a fifth theme. Maybe later.

Note: someone can check my math, but the greatest amount of sand in fracking a Bakken well is upwards of four million pounds. BEXP is using 4 million pounds of proppants (mostly sand) but the "average" is probably closer to 2 million pounds. Dividing 4,000,000 by 2,000 lbs/ton, one gets about 2,000 tons, so either, a) my math is wrong; b) my facts are wrong regarding amount of sand being used in Bakken wells; and/or, c) Utica gas/oil wells are going to be using significantly more sand that Bakken wells. Maybe someone can tell me where I'm wrong. 

That comment about "a sand that flows almost like a liquid," until I almost slipped and fell on ceramic proppant, I would not have understood that phrase. But stepping on ceramic proppant (which I suppose is much like this fracking sand) is literally like slipping on "black ice." A very interesting phenomenon.

Random Retail Thought -- Can You Think of Many Retail Outlets That Sell Just One Brand?

Car dealerships: although even that has changed over the years, with many dealers selling two brands (often one American; one foreign)

Fast food restaurants -- e.g., McDonald's sells only its products, except for the branded drinks 

Service (gasoline) stations ...

... and then it starts to get difficult .... even Firestone sells non-Firestone tires ... Sears appliance stores? I don't know; I haven't been in a Sears appliance store in years ...

Apple -- one brand .... (yes, Apple stores do have some non-Apple brand accessories, but very, very limited in scope; much like branded drinks in fast food restaurants)

Ikea -- selected non-Ikea brand accessories, again

Telecom -- one branded spectrum (ATT, Verizon, Sprint), but multiple cell phone brands

Obviously I am not including the outlet stores seen in a few locations around the US.

I started thinking about that in view of John C Dvorak's recent column and while reading the bio of Steve Jobs, a Christmas gift from my wife.  How far could Apple expand its product line?

Some Dots To Connect -- Sort of Related to the Bakken, North Dakota, USA

As usual for this site, some numbers rounded -- 

First dot: North Sea tax grab blamed for record slump in UK oil and gas production -- four days ago
UK natural gas production in the third quarter of 2011 slumped to the lowest level since records began in 1996, ... This also represented the largest year-on-year quarterly decrease ever seen, ... down 30 percent year-over-year ...
Oil production fell 20 percent in the third quarter compared to the same period last year, the largest annual quarterly drop since reporting for oil began in 1995.
Total UK energy production fell by 20 pecent in the third quarter, the biggest year-on-year fall recorded since the data for the entire sector was first compiled in 2000.
Industry body Oil & Gas UK suggested the surprise imposition of a £2bn-a-year tax hike in the March Budget contributed to the greater-than-expected decline.
Second dot: Brazil ready to double oil output -- ten months ago
Petrobras is set to rapidly increase in size in relation to Brazil’s economy as it prepares to double domestic oil production through the development of its recently discovered huge “pre-salt” fields, said Jose Sergio Gabrielli, chief executive.

Brazil’s national oil company, which plans to invest $224bn in capital expenditure by 2014, will need to issue a further $30bn-$40bn in debt during the next three to four years, Mr Gabrielli said. The plans also envisage a more than 50 per cent increase in refinery output.

“Right now Petrobras’ investment is around 2 per cent of Brazilian GDP and the supply chain as a whole should be somewhere around 7-8 per cent of Brazilian GDP now,” Mr Gabrielli said in a briefing with foreign journalists. “As we plan to grow faster than the Brazilian economy, this proportion (Petrobras’ share of gross domestic product) should increase.”

Group predicts the British economy will overtake France -- ranked fifth this year -- by 2016.
Sixth dot: actions have consequences. Some say this is the first rule of life.

Recent Well Completions -- NOG Participation -- The Bakken, North Dakota, USA

From ops update, December 15, 2011
  • 21035, 628, Conoco, Rose 147-99-28-2H, wildcat, McKenzie, west of Corral Creek
  • 20721, 1,135, Slawson, Mustang 2-22H, Van Hook, Mountrail,
  • Montana, 607, G3 Operating, Olson Ranch 1-21-16H, Roosevelt, MT
  • 21067, 666, Slawson, Stampede 2-36-25H, Painted Woods, Williams
  • 19736, 669, Oasis, Lynn 5501 11-10H, Squires, Williams
  • 19521, 1,558, Hess, EN-Jorstad 157-94-0904-1, White Earth, Mountrail
  • 21250, 3,625, Slawson, Gabriel 3-36-25H, North Tobacco Garden, McKenzie

About Those Newfield $10 Million Bakken Wells -- The Bakken, North Dakota, USA

Some random data ponts:
  • when the current Bakken boom began in 2007 in North Dakota, the majority of wells were short laterals, one-stage fracking
  • I've long forgotten the cost of those early wells, but $3 - $5 million comes to mind; I may be way off
  • now we're seeing mostly long laterals; 24 - 36 stage fracks; much more sand; expensive ceramics
  • Newfield wringing its hands over high cost of Bakken wells; Newfield says we've seen the last of $10 million Bakken wells (meaning they will be higher)
Fast forward, December, 2011, ops update from NOG
  • anticipates avg $7.4 million for Bakken wells in 2012
  • long laterals will be the norm
Schlumberger is on record saying that there will be increasing price pressure on fracks going forward -- but other costs will be incurred. See this excerpt from recent SSN operations update (December 15, 2011):
Everett #1-15H, Williams County, ND (SSN 26% working interest)
Fracture stimulation operations commenced on the Everett #1-15H well on December 4th with two stages pumped before operations were suspended due to hydraulic problems with the main pump units. The pumps could not be fixed on site and have been de-mobilized for repair. No stand-by charges are being incurred by Samson as the stimulation company is absorbing these. [This is the frack's team first frack job.]

Stimulation operations will continue early in the new year. The stimulation will be 20 stages and place 2.37 million pounds of proppant.

The Everett #1-15H well is Samson’s sixth Bakken well in the North Stockyard Field.

Samson Oil and Gas Update -- The Bakken, North Dakota, USA

SSN: Australian company. The compnay has interests in the Williston Basin, in North Dakota Bakken and Montana Bakken.
  • SSN is not an operator; it has leases in the Bakken
  • partners with others
  • until recently, most acreage located in Stockyard Creek
  • announced 20,000 new acres in the ND Bakken, July, 2011
  • announced 90,000 new acres in the MT Bakken, Dec, 2011
  • it appears it partners often with Zavanna in Stockyard Creek
  • a very small market cap: $175 million; thus one good well can make a difference
Recent investment site news:
From SeekingAlpha, December 23, 2011 -- one of three companies on "must-have" list for 2012
  • Primary Petroleum (PETEF.PK)
  • Samson Oil and Gas (SSN)
  • Dejour Energy (Kokapelli Field, northwest Colorado)
From Motley, Fool, December 20, 2011 -- one small cap to watch
  • this article reminded me that SSN sold part of its Niobrara holdings to Chesapeake
  • strengthened its balance sheet
North Dakota Bakken
Samson's main producing asset is the North Stockyard Field, where the company has five producing wells with Bakken potential. So far, these five wells have achieved initial production rates of between 900 and 2,936 barrels of oil equivalent per day, or BOEPD. One additional well is waiting to be fracked, and the company expects to drill six additional wells, four in 2012 and two in 2013. These wells should provide reasonably strong results, since they're infill wells being drilled alongside its producing wells.
Montana Bakken
The Roosevelt Project, located in Montana. The company has 26,000 net acres, good for 81 net drilling locations. While this acreage is considered by some as a fringe play, the company has high hopes and will be completing two initial wells in cooperation with Halliburton.
Colorado, DJ Basin, Niobara
  • Springs project
  • 16,000 acres 
Operations update from Motley Fool
Samson's main producing asset is the North Stockyard Field, where the company has five producing wells with Bakken potential. So far, these five wells have achieved initial production rates of between 900 and 2,936 barrels of oil equivalent per day, or BOEPD. One additional well is waiting to be fracked, and the company expects to drill six additional wells, four in 2012 and two in 2013. Also, this from Motley Fool, December 15, 2011 -- "a great 2011 for SSN."
That sixth well the Motley Fool talks about is the Everett 1-15. They've had problems with the fracking. It's not costing them any money because SSN negotiated a fixed price with the fracking company since it is the first fracking job for this particular fracking team (spread) -- the plan is for a relatively low number of stages (20); other companies are move to 30+ stages; the norm is moving toward 24 - 28 stages.
This comment from a reader, December 26, 2011
I read where Sampson repored their first well near Fort Kipp, MT. showed some positive results and they are set to begin their second expoloration well near Brockton, MT.
This is about an hour to two hours west of Williston, which I think is on the western edget of the Bakken. It will be interesting to see those results.