Thursday, April 12, 2012

A Biggie -- The Bakken, North Dakota, USA

This has been reported before but it was released from "tight hole" status today:
  • 20589, 4,815, Whiting, Tarpon Federal 21-4H, Twin Valley, McKenzie; s8/11; t10/11; F; cum 155K 2/12; 30 stages; 2 million lbs proppants, mesh and sand; middle Bakken
100 feet to the west of the Tarpon:
  • 22361, loc, Whiting, Tarpon Federal 21-4-3H, Twin Valley,
50 feet south of that well:
  • 22360, loc, Whiting, Tarpon Federal 21-4-1H, Twin Valley,

The only other active well in the field at the date of this post:
  • 20710, 606, CLR, Barkley 1-5H, s7/11; t10/11; F; cum 53K 2/12;

17373, PNC, Whiting, Grantier 12-4D

MDU: Proposing An 88-MW Natural Gas Power Station Near Its Heskett Power Station North of Mandan -- North Dakota, USA

Link here.

The whole story is in the "header."

As The World Turns: Episode 45, "Under Pressure"

Tonight's episode of the surprise cable television hit, the adult soap, Keystone XL: "Under Pressure."

The Nebraska legislature, under increasing pressure to do something .... well ... does something.

Spoiler alert!
Nebraska’s legislature passed legislation on Apr. 11 allowing the state’s Department of Environmental Quality to study a new proposed route for TransCanada Corp.’s Keystone XL pipeline.

LB 1161 passed by 44 to 5 votes, more than the two-thirds required, and suspends portions of an earlier pipeline siting law enacted late last year.
It was nice to note that 44-5 is more than two-thirds.

In tonight's episode the Speaker of the Nebraska legislature is played by Freddie Mercury. The sergeant-at-arms is played by David Bowie.

The opening crowd scenes are Nebraskans cheering that the TransCanada pipeline is one step closer to reality.

Opening lyrics:
Mm ba ba de
Um bum ba de
Um bu bu bum da de
Why don't we give it one more chance?
Pressure pushing down on me
Pressing down on you no man ask for
Under pressure - that burns a building down
Splits a family in two
Puts people on streets
Um ba ba be
Um ba ba be
De day da
Ee day da - that's o.k.
[Seriously: if this bill was simply to allow a government agency to conduct a new study, how long is this whole process going to take? If it's not a sham study, it has to take at least a year to do a comprehensive study. And 5 voted against it, even though TransCanada is going to end up paying for it.]

Episode 44: "The $2 Million Heist"

Proppant Source -- Ad

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Good luck to all.

Gas Lines? Spot Shortages?

BP gas stations in Boston area fear dry pumps will ruin business -- Boston Globe


April 13, 2012: According to the Boston Globe (print edition, no link), the problem with the BP gas stations appears to be unique to BP. Apparently the problem stems from financial problems of a Rhode Island gasoline supplier under contract with Getty Petroleum Marketing, Inc. Getty Petroleum filed for Chapter 11 bankruptcy in December. According to the Globe, gasoline supplies are plentiful in the region, which has several thousand gas stations -- 2,300 in Massachusetts alone. So, not to worry, plentiful gasoline in the Boston area. Plenty of oil at Cushing. And the price of gasoline flirts with $4/gallon. Plenty of oil. Plenty of gasoline.

One BP service station owner was quoted: "A lot of my business starts with someone coming in for gas. So no gas, no business." Okay.

Original Post
Earlier today I mentioned to my wife that the electronic sign posting gasoline prices at the BP station across the street from where we are staying here in a Boston suburb must be burned out or under repair. I had not seen the electronic price posted for the past three days.

My wife told me that the local news reported that BP was having distribution problems in the "area" and that non-company owned BP service stations were not getting their deliveries. And indeed, that's what is going on at the station across the street. Orange traffic cones have been placed preventing traffic from driving into the fueling stations.

I have no idea if this has anything to do with three refineries shutting down in the Philadelphia area and the press reporting that up to 50% of refining capacity in the northeast had been taken out of production. In my mind, it doesn't matter who owns the refineries or which companies are shutting down refineries. Once the gasoline leaves the refinery, it's a commodity, it's fungible and could end up anywhere...or not end up somewhere.

So, time to start googling "gasoline shortages 2012 gas lines."

The region will have lost almost half of its refining capacity in six months by July, according to data compiled by Bloomberg based on Energy Department statistics. Requests to send gasoline on Colonial Pipeline Co.’s link from the Gulf Coast to the eastern U.S. have exceeded capacity since August, company data show.
From :CNNMoney:
And that could drive up gas prices, though the impact should be temporary -- eventually, refiners in the Gulf Coast, Europe or Newfoundland would seek to take advantage of the higher prices by shipping gas to needed areas. [Comment: superficial reporting -- how do they plan to get that gasoline there -- in the earlier story, gasoline requests have exceeded capacity since August, 2011.] 
From More refineries could close.

The "hits" all have the word "shortage" or "shortages." Interestingly enough, the articles only mention "higher prices"; they mention nothing about gas lines. But when 50% of regional refining is lost, requests for gasoline exceed pipeline capacity, and human nature to hoard if perceived shortages, one wonders if we might see gas lines on Memorial Day in the northeast.

By the way, one of the best articles on the issue is from the National Geographic, dated April 4, 2012.

Waxing Poetic -- Oil Spill -- Minimal -- The Williston Basin, North Dakota, USA

It was a dark and stormy night
Actually: bright and breezy


April 15, 2012: I believe I have posted/linked this PDF before showing the after-effects of an oil spill in North Dakota. Don sent this to me again. It puts in perspective the recent oil spill near South Heart. As usual some folks will wring their hands over this one-bbl spill; others will simply get on with life, clean it up, probably make the land better than it was, and move on. The paperwork will probably be a bigger deal than the reclamation process itself. 

April 13, 2012: Waxing poetic from The Dickinson Press.
As employees of a Denver-based drilling company vigorously sprayed down oil-glazed equipment on a rig northwest of South Heart on Thursday, a concerned landowner sat quietly in a nearby pick-up and gazed at the discolored chunk of his land blanketed by an oil spill that took place the previous afternoon.
At least one person concerned of the potential global effects -- the Heart River, into the Missouri, to the Mississippi , and then to the Gulf.
“I’m kind of concerned there about water contamination,” O’Bach said. “This will eventually drain into the Heart River.”
We're talking maybe two bbls, most of which was sopped up by soil and vegetation.
Commission representatives estimated the spill contained one barrel of oil and one barrel of water, Rasmussen said.

“You have droplets of oil,” he added.
Thirty years of fertilizer run-off into the Heart River certainly dwarfs whatever oil might end up in Heart River. 

Original Post
Link here.

A reader just sent me a note telling me it was the Parker well.

If it was the Parker well:
  • 20694, conf, Fidelity, Parker 29-32H, Green River, about 5 miles northwest of South Heart; 11 miles northwest of Dickinson

Six Months of Scare Stories Coming Out of North Korea Regarding THE LAUNCH -- Region on Nuclear Watch -- Hillary Waiting For That 3:00 A.M. Call


(Note: I had to post this, but by tomorrow it will be removed. When I delete it, any comments associated with it will also be deleted. Purely posted for entertainment value.)

400 Rigs in The Williston Basin? Whiting Says The Geology Could Support It But Infrastructure Can't

Link here to "The Republic." Link to same story here at Yahoo/AP.
As companies have flocked to tap resources there, heavy equipment has overwhelmed roads while workers have filled up available housing. The problem is more acute in North Dakota than Montana, said Mark Williams, senior vice president of exploration and development at Whiting Petroleum Corp.

There are close to 220 drilling rigs in the Williston Basin. "We could easily double the number of rigs, purely based on resources," Williams said.

However, he guessed growth could be capped at 300 rigs in the next few years until infrastructure can catch up.
Much more to the story at the link. I don't know how long the link will remain intact.

A big "thank you" to a reader for sending the link. THANK YOU.

ONEOK Stateline I Under Construction -- The Williston Basin, North Dakota, USA

ONEOK's Stateline I Natural Gas Gathering and Processing Facility Northwest of Williston, North Dakota
More on this later. 

Sent to me by a reader.

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

Daily activity report, April 12, 2012 --

Operators: ERF (4), CLR

Fields: Mandaree (Dunn), St Demetrius (Billings)

The four ERF permits will be on the same pad, two Three Forks, and two middle Bakken wells.

Nine (9) wells were released from "tight hole" status; 4 were completed/fracked, including:
  • 20589, 4,815, Whiting, Tarpon Federal 21-4H, McKenzie; s8/11; t10/11; F; cum 155K 2/12;
  • 20770, 1,514, Denbury Onshore, Serrahn 41-6SWH, McKenzie; s10/11; t1/12; F; cum 23K 2/12;
Someone wrote me the other day pointing out that we haven't heard much from Newfield in quite some time. Well, today, we did, but it was not necessarily what one would have expected: Newfield is transferring one of its operated wells to CLR:
  • 21068, conf, CLR/Newfield, Irgens Rexall 156-99-19-18-1H, East Fork, Williams
This will only raise more questions on what Newfield's plans are for the Bakken. Newfield has 7 new permits so far in 2012

Note to the Granddaughters

On a personal note, Irgens Rexall brings back a  lot of memories. The pharmacy was on the west side of  Main Street, and I believe it was just below the Craven-Hagen Clinic, and if not just below, very close by. Craven-Hagen Clinic was on the second floor of a building (probably the "Craven-Hagen Building") on Main Street; Irgens Rexall was on street level.

Fortunately I didn't have many visits to the pharmacy for medications -- despite my severe hay fever, no asthma -- but Mr Irgens also sold top-of-the-line optics, such as Kodak slide projectors. I remember one year, perhaps in my sophomore or junior year in high school I saved up what little money I earned mowing lawns to buy a Kodak slide projector. This was the first item I ever bought in my life that was a) something only "adults" bought; and, b) cost more than $5. I assume it cost $200 or so, but I could be really way, way off. I have no idea but it was clearly a big, big deal for me. I still have that Kodak projector. My mother kept things in perfect condition and all through college, graduate school, 30 years in the Air Force, etc., that projector was on the shelf in one of the coat closets in the house in Williston. I got it out periodically when I came home to look at slides. It's possible the projector moved around with us some years but I don't recall. It still works, and it's still on the shelf in one of the coat closets at "home." It's hard to believe how far technology has come in these fifty years; it's harder to believe that Kodak is a shell of its former self.

Yes, I would have to say Irgens Rexall really impressed me. Subconsciously it may have had something to do with my interest in biology and chemistry and my vocation later on in life.

For me, one cannot say "Irgens" without saying "Rexall" just as lewisandclark is one word, as is adamandeve.

I might write more on this later, but enough for now. My granddaughters are pulling me in several directions: one is working on "word wizard" and needs help; the other is coloring horses and needs advice on what colors would look best.

SeekingAlpha: Four Oil & Gas Stocks That Will Surge Past KOG in 2013

Link here to SeekingAlpha article.

The "headline" was more impressive than the article itself. The article did not impress me. 
  • CVR Energy
  • Cheniere Energy
  • Inergy
  • Rosetta Resources
Disclaimer: this is not an investment site. I post these stories because it sheds light on what is going on in the Bakken.

Investors' Article For Fans of Triangle Petroleum

Link to Investopedia. The article didn't do anything for me; maybe for you.

Investors' Article For Fans of GeoResources

Link here to Investopedia. I read it but it didn't do anything for me. Maybe it will for you.

Back to That New York Times Article on Natural Gas and Another Scam/Hoax

Flashback: from the New York Times, on/about June 26, 2011:
Natural gas companies have been placing enormous bets on the wells they are drilling, saying they will deliver big profits and provide a vast new source of energy for the United States

But the gas may not be as easy and cheap to extract from shale formations deep underground as the companies are saying, according to hundreds of industry e-mails and internal documents and an analysis of data from thousands of wells.

In the e-mails, energy executives, industry lawyers, state geologists and market analysts voice skepticism about lofty forecasts and question whether companies are intentionally, and even illegally, overstating the productivity of their wells and the size of their reserves. Many of these e-mails also suggest a view that is in stark contrast to more bullish public comments made by the industry, in much the same way that insiders have raised doubts about previous financial bubbles.
Now, fast forward:
US natural gas reserves reached record levels in 2011 as producers found and produced more gas than was consumed, the American Gas Association said. Quantities estimated to exist as a result of drilling and completing wells reached 300 tcf, AGA said in its preliminary findings.

“This ‘on-the-shelf’ inventory is the foundation, along with growing national resource estimates, that may point to as much as a 100-year gas supply in America,” AGA Pres. Dave McCurdy said on Apr. 4. “This abundance is helping to reduce prices and increase stability for our customers and also ensuring that that natural gas is America’s domestic, clean foundation fuel for now and into the future.”

The combination of reserves information and resource assessments places that future supply at 2,100 tcf or greater, according to AGA. This represents about 100 years’ of supply at current gas production rates of 22-23 tcf/year, it said.
The American Gas Association estimates US natural gas reserves reached 300 tcf in 2011. 

This is not an investment site, so I won't get into the economics of natural gas, but will focus on the NY Times argument that the oil and gas industry is overstating the abundance of natural gas in the US.

'Nuf said.

First Time Jobless Claims Rise -- Easter Blamed -- It's Always Something

Magic number: 400,000

Link here to Reuters/Yahoo!News.

Data points:
  • first time claims last week: highest level since January (this explains all the "Fed talk" yesterday)
  • unemployment benefits increased 13,000 to a seasonally adjusted 380,000
  • analysts had expected a drop to 355,000
  • four-week moving average also rose
  • Easter blamed; expectations that claims will trend lower going forward

Seeking Alpha on Natural Gas

Some months ago I said that US manufacturers were bringing their factories back to the US from overseas (figuratively, not literally, obviously) due to the very cheap energy. I won't look for the link. I remember "anonymous" writing me suggesting that I had it all wrong.

Now this SeekingAlpha article.
With the prospect of domestic natural gas prices remaining low and disconnected from global oil and gas prices for foreseeable future, U.S-based manufacturers of plastics, fertilizers and other products that use natural gas as a feedstock such as Dow Chemicals, Westlake Chemical Corp., Potash, and CF Industries are set to benefit from cheap U.S. natural gas as opposed to European and Asian competitors who do not.
Comments in the article regarding Valero in San Antonio are particularly interesting.

And again, note the link to RBN Energy earlier this morning.

Federal Deficit -- Absolutely, Absolutely Nothing To Do With The Bakken

From the print edition of the WSJ, this date, no link.

Data points (some numbers rounded):
  • the US federal government set a new record in March, 2012
  • the US federal government spent $1,200 per each American man, woman, and child 
  • the average American paid $550 in March to cover this lavish spending
  • obviously not sustainable if only Americans invested in US debt
  • fortunately the global investor is investing in US debt
  • spread across 7 billion non-American residents of planet Earth, the shortfall is only $30/person
  • through the year 2000, the US took on gross debt of <$6 trillion
  • by the government's own estimate, the US will exit 2012 with $15 trillion in debt
The biggest new federal program, ObamaCare, has not kicked in (as far as I know) which could affect the debt up or down.  Maybe with health care savings, the debt will be significantly reduced; the stock market certainly doesn't seem unnerved by expectations that the US will be $15 trillion in debt in about eight months. Last month it (the stock market) was all about Greek debt.

State Farm Filming A Commercial in Linton, North Dakota? -- Absolutely, Absolutely Nothing To Do With The Bakken

Link here to Bismarck Tribune.

As soon as they find the video for this, it will be posted on YouTube and will go viral. I'm talking about the 60 seconds of action before the photo at the link.

If you look closely in the lower right hand corner you can see "Mayhem" in a full-body cast.

Pay Gap in Massachusetts -- And In The White House -- Nothing To Do With The Bakken

On the way into Harvard Square, Cambridge, on the Metro, this little gem from the metro_news:
As the Bay State continues to lag behind the national average for equal women's earnings, a group of female state legislators is pressing a bill concerning equalizing pay for women in comparable jobs as men.
I remember thirty to forty years ago, the argument regarding unequal pay between the sexes had more to do with the types of jobs each held, for example, policeman vs teacher.

In Massachusetts, a "liberal" state with huge numbers of both men and women working in the same fields, education and medicine, that argument does not hold water.

It never dawned on me that Massachusetts lagged the national average, at 80 cents (women) on the dollar (men). Pretty sad. Pretty enlightening.

But it's even more surprising to see this in the White House. I can understand the pay differential between Buffett and his secretary and how that would skew results at Berkshire Hathaway just because of the enormity of the single CEO/secretary gap, but the president really doesn't get paid that much more than staffers, comparing salaries only.  Doesn't the president only get $400,000/year?

Another Pipeline: This One To Service the D-J Basin -- Colorado to Texas; 435 Miles


April 15, 2012: RBN Energy has the story on this one.

April 15, 2015: link to short note on this at PennEnergy.  PennEnergy links break early, requiring a subscription for archives. This short blurb mentioned two new pipelines: this one, the D-J to Texas; and the proposed ONEOK pipline from the Bakken area to Cushing. The important point in this short note:
The Bakken Crude Express Pipeline, Oneok's first foray into oil, would be able to handle as much as 200,000 barrels per day and would combine with five other proposals to offer the region the ability to ship 900,000 barrels per day.
The EPP D-J pipeline to Texas, expected to be completed by the end of 2013, would initially have a capacity of 150,000 barrels per day, expandable to 230,000 barrels per day. 

Original Post
7:30AM Enterprise Products, Anadarko (APC) and DCP Midstream (DPM) to jointly develop new NGL Pipeline to serve colorado's Denver-Julesburg Basin: Enterprise Products Partners, Anadarko Petroleum, and DCP Midstream, announce an agreement to design and construct a new natural gas liquids pipeline that will originate in the Denver-Julesburg Basin in Weld County, Colorado and extend approximately 435 miles to Skellytown, Texas. Each party will hold a one-third interest.
Political comment deleted.

The Reuters story.

Oil Sheen in Gulf -- Bakken Related?

From Yahoo!InPlay:
6:48AM Royal Dutch Shell taking proactive measures as Gulf of Mexico sheen has been spotted: On April 11, Shell notified the National Response Center of a light sheen in the central portion of the Gulf of Mexico, between the Mars and Ursa production area. Shell has no current indication that the sheen originates from wells in either the Mars or Ursa projects. However, out of prudent caution, Shell has activated the Louisiana Responder, a Marine Spill Response Corporation vessel. At this time, the source of this sheen is unknown. 
Connect that dot with the problems going on off-shore Brazil and a theme is starting to develop: development of off-shore oil in western hemisphere is not going to be easy. 

RBN Energy Blog: Natural Gas Below $2.00

Link here to RBN Energy (access may need registration): author writes about implications of oil below $2.00.

One of several observations (from RBN):
Producers of dry gas are in trouble.  They are receiving a lot less money in the door than was budgeted, because nobody did a budget based on sub-$2.00 gas.  Those that had substantial unhedged volumes will need to borrow money, sell assets and scramble to make ends meet. 
On April 9, I blogged:
April 9, 2012: Chesapeake raises $2.6 billion in cash; sells some non-core assets, including Oklahoma acreage to XTO.

April 9, 2012: Chesapeake removed its hedges for 2012 and 2013 at at time when natural gas was around $4, and just before natural gas plummeted to ten-year low, around $2.00. It will be interesting to see how this plays out.

Data For New Wells Reporting Has Been Posted -- The Bakken, Williston, North Dakota

Eight more wells were added to "New Wells Reporting" and a lot more will be posted by the end of the week.