Sunday, May 27, 2012

Gathering and Processing Bakken Gas Economic

Director's Cut for May, 2012, is now on-line.

Is this first time I've seen the following posted in the Director's Cut? "The high liquids content makes gathering and processing of Bakken gas economic."

Director's Cut: May 25, 2012 -- Bakken Gas Economic

Link here.

First time I've seen this comment in the Director's Cut: "The high liquids content makes gathering and processing of Bakken gas economic."

Production hits all-time high in North Dakota (again):
  • Feb, 2012, oil: 558,558 bopd 
  • Mar, 2012, oil: 575,490 (NEW all-time high)
  • Feb, 2012, producing wells: 6,726 
  • Mar, 2012, producing wells: 6,921 (NEW all-time high)
  • Feb, 2012: 168
  • Mar, 2012: 181 (all time high: 245, 2 Nov 10)
  • Mar, 2012: sweet crude,  $76.29
  • Feb, 2012: sweet crude, $83.26
  • Jan, 2012: sweet crude, $88.09
  • Dec, 2011: sweet crude, $88.75
  • Nov, 2011: sweet crude, $88.54
Director's comments:
The 6.5 minute horizontal drilling/hydraulic fracturing video used in the Bakken Basics presentations is available for free at (requires Real Player)
Lengthy comments on federal regulation of fracking. See linked document.

When Did They Know? and, What Did They Know?

Back in April, 2011, I posted a story about the record bonuses being paid for leases in the Belfield, North Dakota, area. At the time, I opined it was the Tyler they were interested in along with the Three Forks. At the time state officials were talking about the huge number of rigs that would eventually target the Tyler. Now those same officials and others are talking about 500 wells between Belfield and Dickinson targeting another formation, along with the Three Forks formation.

We now know about Whiting's Pronghorn Prospect in this area, and the Pronghorn Sand which could be the best payzone in the Bakken

One has to wonder whether the Whiting folks knew about the Pronghorn Sand back in April, 2011, when lease bonuses were setting records.  It takes awhile to put a "prospect" together, I would assume. Something tells me the Whiting folks knew they were sitting on something huge. It certainly explains the record amounts paid for the leases.


With no activity reports to review over the 3-day weekend, I had a bit of free time to study more closely the area between  Dickinson and Belfield, the area of Whiting's Pronghorn Prospect. I don't have any significant news, just idle chatter. It is amazing how many wells have been drilled and permits pending about 15 miles northwest of Dickinson where I first noted an interesting string of Whiting wells, and first blogged about them in January, 2011, almost a year-and-a-half-ago.  A lot has happened in the meantime. It now explains why Target Logistics wanted to place a man-camp in that area (the one that was denied by local officials and caught my attention). It now explains why there is talk of one of the largest (if not the largest) crew camps in North Dakota going up in the Dickinson area. It is interesting that MDU and Whiting have partnered on an oil and gas gathering system in the area. It suggests that the gathering system is going to be quite huge, considering that two major players have partnered.

Whiting's annual report mentioned that the company, in January, 2012, had completed a 7-mile oil pipeline connecting the Pronghorn Prospect with the Bridger Four Bears system. Regardless of whether they specifically knew this was a "new" formation, this suggests to me they knew they were sitting on something big.

I have said often that the center of activity for 2012 will be northeastern McKenzie (moving west from EOG's Parshall field and Whiting's Sanish field). But in 2013, the center of activity is going to be the area between Belfield and Dickinson. It is simply amazing to watch this all develop.

Reminder: The NDIC Oil Fields Inside Whiting's Pronghorn Prospect

For newbies: think of Whiting's Pronghorn Prospect as the company's "new Sanish" in the southwest. The prospect is located on either side of the interstate between Dickinson and Belfield.

The Pronghorn Sand is a formation which is between the middle Bakken and the Three Forks formations.

I assume the oil journals have articles on the Pronghorn Sand. If Ifind any articles, I will link them.

Whiting's most recent corporate presentation says they are targeting the Pronghorn Sand in their Pronghorn Prospect (not mentioning the Three Forks), but yet a number of Pronhhorn Prospect wells were said to have targeted the Three Forks.  Because I am not a geologist, I won't add my thoughts.

Whiting now designates middle Bakken wells with a simple "H"; the Three Forks wells with "TFH"; and, Pronghorn Sand wells are designated with a "PH."

These are the oil fields inside Whiting's Pronghorn Prospect (my best guess; will be updated as new information flows), but consider the area between Dickinson and Belfield, especially north of the interstate as the area of the Pronghorn Prospect:
Pronghorn Prospect, north of I-94, between Dickinson and Belfield
  • Whiskey Joe -- nw of Park, Park west of Bell
  • Bell -- north of Belfield
  • Park -- east of Bell
  • North Creek -- between Bell and New Hradec
  • New Hradec -- east of Bell, ne of Zenith
  • Dutch Henry Butte -- east of New Hradec
  • Green River -- east of Belfield, north of Zenith, north of I-94; west of Dickinson
Pronghorn Prospect, south of I-94, west of Dickinson
  • South Heart -- south of Dutch Henry Butte -- south of I-94; west of Dickinson
  • Zenith -- south of Bell, east of Belfield; west of South Heart; south of I-94; west of Dickinson
  • Gaylord -- south of Belfield; south of the interstate; west of Zenith
  • Fryburg -- sw of  Belfield; west of Gaylord
  • Davis Creek -- sw of Belfield; south of Fryburg; southwest of Gaylord oil field

A Note For and About the Granddaughters

In 2004 I began an aggressive reading program. I had not read for pleasure since college but in 2004, near the end of my Air Force career, when I thought I was done with traveling, I was sent overseas to a remote air base.

The commander set me up in a very nice room on base and the first thing I did to combat the loneliness was to start reading. I remember the commander walking into my room shortly after I had arrived; he was shocked to see a stack of books about four feet high. On the weekends I walked many, many miles in the countryside, but during the week I read books in the evening for pleasure.

That aggressive reading program has continued. You can see a small part of my library at one of my other blogs. I go through different phases. I went through a Virginia Woolf phase, and then an Anaïs Nin phase, a James Joyce phase, and eventually an Ernest Hemingway phase. I had never appreciated Hemingway; in fact, I don't ever recall reading anything of his until recently. Of all the biographies involving Hemingway, the one I enjoyed the most was the one written by his third wife, Martha Gellhorn. I am thrilled to see that someone else was intrigued by the relationship and has produced a movie, Hemingway and Gellhorn, to be shown on HBO sometime later this month. We don't 'get" HBO and I won't see the movie when it first comes out (if I ever see it) but that's fine. I have my own "myth" of those two and don't want to have a movie disrupt/distort it.

I am thrilled that the older granddaughter, age 8, is a voracious reader and retains "everything" she reads. The five-year-old is just beginning to read and one gets the feeling she will pick up reading even more quickly than the first one did and become just as much a reader. We all spend a lot of time reading together, and as they get older, the group reading becomes even more enjoyable.

Canadian Oil Production Could Reach 6 Million BOPD by 2020

Independent Stock Analysis alerted me to this story: Canadian oil production could hig 6 million bopd by 2020.

For comparison, in round numbers, Saudi Arabia currently produces about 10 million bopd.  Russia, slightly more, and the US slightly less (than Saudi Arabia). A nice quick reference here.