Thursday, March 29, 2012

Petro-Hunt Well Near Dublin Oil Field Targeting the Madison Formation -- The Williston Basin, North Dakota, USA

Remember that string of wells Petro-Hunt is drilling near Dublin oil field, and folks wondering which formation Petro-Hunt is/was targeting? Here's the first well to be reported. Petro-Hunt was targeting the Madison with this well. 

Brooklyn Field Updated -- The Bakken, North Dakota, USA

Link here.

Burlington Resources With Another Midnight Run Permit in Union Center Oil Field -- The Bakken, North Dakota, USA

This is an opportunity to take another look at Union Center oil field; it's been updated.

This new well will be the 7th well on section 1-T152N-R96W, and there's room for more. The IPs are 2,000+.

Nebraska: Quickly Becoming the Laughing Stock of America, The World ...

Link to AP/Yahoo News.
A bill that would let Nebraska resume its environmental study of the proposed Keystone XL pipeline won first-round approval from lawmakers Thursday, while critics warned that the state was exposing itself to a legal challenge.

Lawmakers voted 35-2 on the measure that would allow the stalled review to proceed. President Barack Obama rejected a federal permit for the project in January, but pipeline developer TransCanada has said it will reapply.

Malcolm Sen. Ken Haar, an outspoken pipeline opponent, said the bill would open the state to a court challenge. Haar said the bill qualified as unconstitutional special legislation that could apply only to TransCanada. He said TransCanada was "a victim of its own machinations" by pressuring Congress to try to force the president's approval.
If you don't understand this, what the senator is saying is that at some point down the road, he will take this to the Supreme Court of Nebraska, arguing that it is unconstitutional to hold a special legislative session to discuss one issue. So, Nebraska will go down the long road of studying this proposal, spending millions of dollars in the process, going through each painstaking step, knowing that it will be all taken to court anyway. The silver lining in this cloud: it's Nebraskan taxpayers' money.

You think this is about the aquifer? This has nothing to do with the aquifer. This is about faux-environmentalists who will stop at nothing to stop the Keystone XL 2.0. 

Approval to get the pipeline through Nebraska will be tied up in court "forever," and TransCanada cannot proceed without this, unless they want to skirt Nebraska completely. Forget about going to the west of Nebraska: Colorado will be even worse. 

Nope, Obama killed the Keystone XL 1.0, giving unprecedented moral support to faux-environmentalists intent on stopping any more oil activity in Nebraska. This is becoming an international joke,  a sad commentary on American industry today. Meanwhile the faux-environmentalists will ensure that thousands of unnecessary trucks and unit trains will continue carrying oil south from the Bakken.

The NDIC Reported IP for the G3 Operating Well -- Incorrect -- A TYPO -- The Bakken, North Dakota, USA

21083, 4,113, 413, G3 Operating, Doris 1-28-33H, s9/11; t1/12; F; cum 6K; a wildcat in the far northwest corner of Williams County, about 22 miles northwest of Williston; target was the Upper Bakken; 30 stage frack with 3 million lbs white sand.

The original from G3 Operating shows the IP to be 413. The NDIC erred in the transcription.

Elsewhere, readers have not yet picked up on this error (12:20 a.m., March 30, 2012). 

Seven (7) New Permits -- A TYPO Affecting a G3 Well -- Another Re-Completed Well -- The Williston Basin, North Dakota, USA

Daily activity report, March 29, 2012 --

Operators: OXY USA (2), XTO, Crescent Point, BR, Oasis, CLR

Fields: Union Center, Alger, Fayette, Brooklyn, and West Capa

Crescent Point Energy has a permit for a wildcat in Williams County.

Three (3) wells were released from "tight hole" status; only one was completed/
fracked, but it was a good one (it must have set some kind of record assuming it's not a typo):
  • 21083, 4,113, 413,  G3 Operating, Doris 1-28-33H, s9/11; t1/12; F; cum 6K; a wildcat in the far northwest corner of Williams County, about 22 miles northwest of Williston; target was the Upper Bakken; 30 stage frack with 3 million lbs white sand; to the best of my knowledge, this is the first time this well has been mentioned on this blog. The IP reported by NDIC is a typo (as noted above, I suggested this might be a typo): G3 Operating reports the IP to be 413 on the original well file.
One well was recompleted:
  • 7631, Missouri River Royalty Corp, Henry Torstenson 1, McKenzie, From Red River to Duperow

Obama Wants to End Long-Standing Tax Breaks On Big Oil; Shift Revenue to Solyndra, Algae


January 3, 2012: CarpeDiem's look at "Big Oil" subsidies and tax breaks

Later, same evening: Senate votes 51-47 to defeat the Obama proposal. Needed 60 votes to pass. Ms Olympia Snowe (R) who complains about difficulty of working with Obama, voted with Obama on this one. Article refers to "depletion allowance" as subsidies. Oil money would have been used for more "Solyndras; for whooping crane killers; and, for coal-powered cars.  [Note: Ms Olympia Snowe gives the president an "F" "in paying attention to Olympia Snowe." -- see second link.]

Later: White House cannot explain why Obama has flip-flopped on the issue. In 2005, he voted for the energy bill with a lot of tax breaks for the oil and gas industry.

Original Post
Link here.
Many congressional Republicans say cutting the tax breaks would lead to higher fuel prices, raising costs on oil companies and affecting their spending on exploration. Obama couldn't end the subsidies when Democrats controlled Congress earlier in his term.
He may have better luck this time with rising gasoline prices, but most folks know that increased taxes on "Big Oil" will be passed on to the consumer. This is not rocket science.

Maybe he's got it all wrong. Make it easier for "Big Oil" to drill, and support lower corporate taxes, and we might actually see lower prices at the pump.

Investors "Demanding" Drillers Come Clean About Amount of Flaring -- Another McGuffin

Corporate social responsibility
Based in London 
Hours after this story, the oil patch provides an answer


March 29: 2012: Several hours after posting the story below, I came across a story in today's Williston Herald about Statoil (recently bought BEXP in the Bakken) using flared natural gas directly from the well to power the rigs. This should take a bit of the wind out of the F&C Asset Management sails.

Original Post

To best of my knowledge, flaring data from North Dakota is freely and easily available from public sources. Regardless, oilmen are working this issue hard in North Dakota and ONEOK has taken advantage of it. At its best (when natural gas was priced a lot higher than it is now), the natural gas produced in North Dakota as a by-product of oil drilling accounted for less than 3 percent of the industry's economic play in North Dakota. Less than 3 percent.

See Reuters link here.
Investors representing $500 billion in assets are pushing energy companies in the shale oil rush in North Dakota and other states to disclose the amount of natural gas they burn - a practice they see as a wasteful financial risk.

"We want to encourage companies to articulate plans for resolving this issue while shale oil production is still in its relative infancy," said Karina Litvack, the head of governance and sustainable investment at F&C Asset Management.

Litvack is one of 36 investors who sent a letter to 21 oil drillers including Continental Resources Inc, Exxon Mobil, and Chesapeake Energy Corp asking them to disclose the amount of natural gas they are burning off, or flaring, at shale oil operations in North Dakota, Texas, Colorado and Ohio.
Regular readers know that the "wasteful financial risk" is a McGuffin.  In fact, oil and gas industry investors have much more to lose if a choke hold is placed on the oil and gas industry with regard to flaring. The price of natural gas is dropping fast, and might even go below $1 according to reports yesterday, though most folks don't think it will go much below $2.

Natural gas is a natural byproduct of drilling for oil and with oil commanding record high prices, the threat of "wasteful financial risk" is an outright lie. It will be interesting to see if we the "real" story behind the headline.

For more about F&C Asset Management, start with wiki:
F&C Asset Management Plc is a leading asset management company. Unlike many asset managers which are divisions of large financial firms such as banks, F&C Asset Management (known as F&C) is a standalone publicly-listed asset manager. It is an active shareholder with a strong commitment to corporate social responsibility. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.
Regardless, this will be a great opportunity for folks to learn more about the great investment opportunities to be had in the Bakken.

Disclaimer: I was not one of the 36 investors who, along with Litvack, sent any letters to any oil company regarding flaring.

Initial Jobless Claims -- Fall Less Than Expected

Remember, the magic number is 400,000


Later: my hunch was correct with regard to "the spin." MSNBC, others, tried to suggest that the jobless numbers were "great." See below. In fact, investors not impressed. Oil down $2, continuing it's free-fall, but much worse, the overall market continues its slide. Folks, the jobs numbers simply are not good.

Original Post
Watch the spin:
The number of Americans seeking unemployment benefits dropped last week to the lowest level in almost four years, adding to evidence of an improving U.S. labor market.

Initial jobless claims fell 5,000 in the week ended March 24 to 359,000, the lowest since April 2008, the Labor Department reported today in Washington. The median forecast of economists in a Bloomberg News survey called for 350,000 claims. 
Reuters take:
Stock index futures extended losses on Thursday after data showed the domestic economy expanded as expected in the fourth quarter while initial jobless claims were slightly worse than expectations.
Oh, and last week:
The prior week's figure was revised up to 364,000 from the previously reported 348,000. Economists polled by Reuters had forecast a claims reading of 350,000 for last week.