Thursday, July 19, 2012

Off The Internets For Awhile...

... but I will leave you with this great news. It never quits. 

It fits the pattern; once you've made your billion, you want things to slow down; you certainly don't want others to catch up with you.

Hopefully I'll be on the internet later this evening.

The BR Llano Well -- IP Reported Was An Error

A cut and paste from another post:

Only three wells were completed or reported an IP, including a 6,800-bbl-IP reported by BR. We will see if this is correct. [Update: not correct.]
  • 20637, 6,800, 1,980, BR, Llano 34-34H, Charlson, t6/12; cum 249K 6/17;

With regard to BR's Llano well noted above, one of the best wells ever is only five miles northeast of the Llano well. The following well is in the same field and the same township as the Llano well:
  • 16059, 729, Petro-Hunt, USA 2D-3-1H, Charlson field, s6/06; cum 1.63 million 6/17; still producing 5,000 bbls/month (6/17); this Bakken well continues to produce 9,000 bbls a month (5/12; and has no pump on it; it is also a short lateral; a sundry form states "NO" under "type of frac." Update: it now has a pump.
Folks are talking about this well over here (link broken) Be sure to read the first two comments at this post.

San Bernardino -- Second Poorest City in the US After Detroit -- US Census Bureau -- Absolutely Nothing To With The Bakken

(If you came here looking for the Bakken, scroll up or scroll down, but definitely do not read this post if you are only interested in the Bakken. And if you are over 70 years of age, and on heart medication, consult your physician first before proceeding. If you are a teacher in California, read this post only if you are married to a policeman.)

... and then this:
San Bernardino’s general fund goes to cover public-safety costs, of which 80 percent is compensation. Firefighters’ wages averaged just over $130,000 in 2010, while police officers averaged closer to $95,000—this in a city in which over a third of the population lives below the poverty line. In 2010, San Bernardino’s highest-paid employee was a police sergeant, who took home $317,179. He and his fellow officers benefited from an amendment to San Bernardino’s charter, enacted in 1955, that based salaries on average police and firefighters’ wages in ten comparably sized California cities. Problem is, most of these cities—including Pasadena, Huntington Beach, Irvine, and Thousand Oaks—have per-capita incomes at least double that of San Bernardino’s.
Don't even get me started.
San Bernardino is, as Mayor Pat Morris calls it, a “blue-collar town”—and currently one with a 16 percent unemployment rate. The U.S. Census Bureau last year designated it the nation’s second-poorest city, behind only decrepit Detroit. Nearly 46 percent of residents receive some form of government assistance.
A police sergeant earns $320,000 in one year and 50% of the city he works in receive government assistance. And quite some time ago, someone took me to take for referring to California as "lala land." I don't  think I was far off. 

The Best Thing For A Sitting President Facing a Tough Re-Election: War

War in August? Bet on it. Commander: Nobel Peace Prize winner.
The US Navy has unexpectedly dispatched a fourth aircraft carrier to the Persian Gulf, along with a fleet of underwater drones in what is being considered just the latest move in a series of escalations leading towards a potential war with Iran.

The deployment of dozens of small, unmanned submarine-like watercraft was confirmed by the Los Angeles Times this week, which cites military officials speaking on condition of anonymity.
Iran may not yet know about the drones, so please don't forward this link to Al Jazeera


The same reader, thank you, also sent me this link: Syrian leaders are ready to use chemical weapons if cornered. I would say "they" are cornered. 

But I digress. The story is NOT Syria. The story is NOT Israel-Iran (although it will be a huge story when it happens). The BIG story is elsewhere.

Gaza Strip-Yemen-Lebanon-Kuwait-Turkey/Kurdistan-Iraq-Libya-Egypt-Syria .... do you notice a trend, and, worse, do you notice the Mideast name missing? Drum roll....

Missing in that list: Saudi Arabia. I don't know how much folks along the US beaches are paying attention to what's going on over there, but I can tell you that this is a huge story in the coffee shops in Turkey. I remember hearing stories of the French helping the US revolutionaries in 1776, or thereabouts. I don't think there's a lot of love lost between the 2,300 Saudi princes and the tens of thousands of revolutionaries waiting for their moment.

The End of Gravel Pit Proposal at Teddy Roosevelt Ranch

Link here to Bismarck Tribune.
Development of a gravel mine near the site of Theodore Roosevelt's historic Badlands ranch in western North Dakota will not continue, a Montana businessman said Wednesday.

Roger Lothspeich of Miles City, Mont., told The Associated Press that he signed an agreement Wednesday with the U.S. Forest Service to work out an exchange for other federal land or mineral rights at a different location.
Forest Service district ranger Ron Jablonski called it "a major change in direction" and said the agency is anxious to work with Lothspeich. He also said the exchange could be for other land or mineral rights on yet-to-be-determined federal land.

I'm glad this story is resolved. 

PennEnergy Story on Fracking Sand -- Great Story

Link to Same story in Minot Daily News.
Smart Sand and Canadian Pacific Railway Limited today announced a strategic long-term partnership under which the two companies will supply and ship premium, Northern White frac sand to the unconventional oil and gas industry in key North America producing regions (including the Bakken and Eagle Ford formations, and the Utica and Marcellus Shales).

The two companies also announced the partnership’s first initiative: building a new frac sand transload facility, expected to be the region’s largest, in Makoti, North Dakota that will serve the Bakken formation in the Williston Basin beginning in early 2013
Opportunities never end for agile investors, and opportunities never end for those who want to build their own business. Oh, that's right. Under this administration, that's a myth -- that folks build their own businesses.

Old Story -- Flaring Increased -- Christian Science Monitor

Link here to PennEnergy.
With developing investment in shale oil exploration in North Dakota, as well as some other unconventional resources, many oil companies have seen a dramatic rise in the amount of natural gas being flared, burnt off to reduce the emission of harmful methane.

Under pressure from the World Bank, many of the largest producers of natural gas have begun to scale back flaring, instead setting up the necessary infrastructure to capture the gas. However, the U.S. saw flaring rise 223 percent from 2007 to 2011, making it the fastest growing offender in the world.

Many businesses are upset about the wasted resources, aside from any environmental concerns, but at present some regions of North Dakota's Bakken shale simply lack the necessary infrastructure. 
The time period studied: 2007 to 2011. Well, duh, this is when the boom took off. I can think of a lot of others things to say, but I don't want to go there. And I have better things to do.

Wow, It Never Quits -- A New Oil Service Company to Williston

From the Williston Herald:
ISCO Industries, a Louisville, Ky.-based pipe supplier and custom manufacturer of high-density polyethylene (HDPE) piping products, today opened a new facility in Williston to service the energy and oil patch market in the Bakken oil shell region.

The new facility stocks HDPE pipe, fittings, fusion equipment and fusion equipment repair parts. In addition ISCO Industries offers fusion services and fusion repair services. The facility will support full-service HDPE packages for the oil and gas market.
I wonder if the owner built his own company, or if somebody else (the government?) built this business? Whatever. It doesn't matter. ISCO found the Bakken. 

Weekly Jobs Claims: The Spin Continues -- Can The Mainstream Media Spell "Surge"?


August 20, 2012: New York City unemployment hits 10%. Yesterday I was taken to task by "Connie" for my remarks below, suggesting that I misunderstood CNBC, Reuters, and Bloomberg. When you go to to the link regarding New York City unemployment, be sure to read the comments. 

Original Post

Remember: the magic number is 400,000

The number of Americans filing new claims surged this week.

So, how did mainstream media report this?

First: CNBC -- and I'm not kidding; I can't make this stuff up -- this is their lede:
The number of Americans filing new claims for unemployment benefits rebounded last week, pushing them back to levels consistent with modest job growth after a seasonal quirk caused a sharp drop the prior period. 
Talk about obfuscation. That's the first paragraph. On top of the obfuscation, they didn't even dare put the new numbers in the first paragraph. Wow. That, I find incredible. I simply linked to the most reliable source to find the weekly jobs number and the first paragraph: last week's "good news" -- which, by the way was not all that good.

By the way, CNBC used the word "rebound" in its headline reporting the debacle; one usually associates "rebound" with good news. The spin does not quit.

Reuters: to their credit, they did use the word "surge" but it wasn't until the eighth paragraph, farther than most folks read, that Reuters finally got around to telling how bad it was:
A second report from the Labor Department showed initial claims for state unemployment benefits rebounded 34,000 to a seasonally adjusted 386,000. A seasonal quirk caused claims to drop 24,000 in the prior week.
But then this: to make sure that "we" don't get too depressed, according to Reuters, things really aren't so bad after all:
The four-week moving average for new claims, a better measure of labor market trends, fell 1,500 to 375,500 - staying in the middle of the range it has held for much of 2012.
Bloomberg: simply "more Americans" filed, but this, according to Bloomberg, was simply due to "volatility" in the automotive sector. Don noted that automobile companies schedule annual plant layoffs every year -- that's why they're called "annual." So, from Bloomberg:
The volatility in the numbers was due to a change in the timing of annual automobile plant layoffs, a Labor Department official said as the data were released.  
But this is what I find most amazing, the very next Bloomberg paragraph:
Determining whether the labor market is improving or deteriorating has been more difficult in recent weeks because a reduction in the number of auto-plant layoffs typical at this point of the year has thrown the Labor Department’s seasonal adjustment process out of line. It may take weeks to judge the direction the labor market is taking.  
The most advanced course in economics or business that I took in college (that I recall, and not including statistics) was "Economics 101" and even with that minimum amount of education, I can tell you "whether the labor market is improving or deteriorating.... in recent weeks." In fact the 34,000 new unemployed, mostly high school graduates, can probably tell you "whether the labor market is improving or recent weeks."

But having said all this, the deteriorating jobs picture was not the worse story of the day. The worse news: factory activity decreased in the mid-Atlantic states (to the best of my knowledge, GM, the big auto manufacturer, and Detroit, are not in the mid-Atlantic states, so blaming the new numbers on volatility in auto layoffs is somewhat disingenuous); business activity contracted in general from 17 to 13 percent (I guess "someone isn't building their business"); and, further, house resales dropped 5.4%.

The spin does not quit.

No one dares use the word "surge." Analysts are said to be confused by what the numbers really mean. The analysts point out that the four-week moving average is stable. The analysts were caught off-guard by the "annual" auto layoffs which occurred this year. The mid-Atlantic states were singled out as particularly challenging for manufacturing. Detroit, where the unexpected scheduled layoffs were said to have occurred, is not in the mid-Atlantic states.

By the end of the day, this jobs report will be forgotten, and 34,000 more folks will join the unemployment lines.

After Solar, The Next Industry to Bite the Dust

Simply look at the list of companies here and then compare their business plans / strategies with the solar companies that the President backed. For newbies, this refers back to the US Navy spending $26/gallon of diesel to prove that biofuels "work."

Denbury's Completions -- Improving; Less Stages, More Water -- Filloon

Link here to Mike Filloon at

Tea leaves are suggesting to me that completion designs a year from now in the Bakken are going to be significantly different than they are today, based on the series that Mike has posted on completion designs over the past few weeks, and some personal observations, confirming what Mike is seeing.

Daily Activity Report -- July 19, 2012

Daily activity report, July 19, 2012
New permits
Operators: pending
Fields: pending
Three wells come off confidential list today:
  • 20720, 32, Ballantyne, Olson 2, Southwest Landa, a Madison well, t3/12; cum 628 bbls 5/12;
  • 21656, 712, CLR, Pierce 1-21AH, Upland, t4/12; cum 11K 5/12;
  • 21853, 294, MRO, Sitting Owl US 34-8H, Deep Water Creek Bay, t5/12; cum 1500 bbls 5/12;
Producing wells completed: pending

Potpourri -- Energy Links, KOG Production, Oil Up 2 Bucks; Chokepoints

Independent Stock Analysis.

RBN Energy: Propane 101 -- The propane molecule from discovery to delivery. Quite a story. Another great post from RBN Energy. One could put together an entire oil and gas course for an engineering school with RBN's essays. It amazes me such professional, well-written, unbiased information is provided for free. Thank you, RBN Energy.

I see oil is up almost $2.00. I would have thought this is due to rising tensions in the Mideast and "Syria spiraling out of control" (the administration), but if folks are really worried about the Mideast imploding, would the market in equities be up as well? I don't know, but add this to the announcement that first time unemployment claims "surged" and tie that in with all "green" at the top of Yahoo!Finance and it's very confusing. I haven't watched CNBC in weeks, so I have no idea what the talking heads there are saying, though I don't miss them.

I see KOG released 2Q12 sales volumes: almost 400% year-over-year increase in sales volume. Sequentially, quarter-over-quarter, a 20% increase. I don't know about you, but for those who have built their own business (which apparently no one has -- President Obama), a 20% increase in growth, year-over-year is not trivial. I wonder if Apple is growing its business 20% quarter-over-quarter, or 400% year-over-year. Of course, Apple would not be where it is today had it not been for the government building a) the internet; and, b) the chips. I see there's a new website out there: "You Didn't Build It."

Also, I see Newfield is raising its production forecasts, but doesn't mention the Bakken. "Newfield said it had encouraging results from Uinta's Central Basin, the Cana Woodford in the Anadarko Basin of Oklahoma and the Maverick Basin Eagle Ford." Is this new, or did I miss this, "Maverick Basin"?

Someone commented earlier today that takeaway in the Bakken will probably get "worse," before it gets better. This is going to be a rambling paragraph so hang on, but through an analogy, it will be explained by takeaway is going to get worse in the Bakken. First, a given: the pipelines currently cannot handle all the oil that is being produced. Another given: up to 75% of all Bakken oil (if not all ND oil) is handled by truck at least part of the journey to pipeline or rail -- NDIC comment this past year.  The pipelines follow the same layout as "street heirarchy" in suburban traffic planning.  The net result in "street heirarchy" is that at peak traffic/rush hour traffic, there are significant bottlenecks at the through streets. The local streets all feed into a through street which feed into the boulevards and/or major thoroughfares. The relatively good news for suburbanites, these bottlenecks are only felt a couple times each day and are predictable. Leave for work a few minutes early and one can miss the bottleneck. Now, oil pipelines. The "local pipelines" are (at best) taking oil from a string of wells right now, one well in each spacing unit. But look at the daily reports from Monday and Tuesday of this week. On Monday, WPX announced it will have 14 wells in one section, and those 14 wells will feed into a local pipeline. Forget the bottleneck at Cushing, or the bottleneck were the local pipelines feed into a regional pipeline, imagine the takeaway that will be required for 14 wells in one section. Then on Tuesday, the same thing, QEP will have 12 wells in one section. It doesn't matter what spacing unit the horizontals go to, the oil will all end up at the same place. So, that's problem number one: the choke point of 14 wells feeding into a "local pipeline."  There's another problem. Pause. Think. Have another cup of coffee. This is the second problem: they aren't drilling those 14 wells or 12 wells where the return is likely to meager. They are drilling where production is likely to be at the high end for the Bakken. The devil is in the details. When one looks at all those graphs in which the state and the operators talk about pipeline takeaway capacity, exactly what pipelines are they measuring? A "Keystone XL" pipeline will arithmetically handle all the oil the Bakken could produce, but if the "local pipeline" infrastructure is not in place, it won't matter, will it? So when one sees 14 wells on one section, and then 12 wells on a neighboring section, the next question should be: do you see backhoes out there laying bigger-diameter local pipelines?

Speaking of "the business you didn't build," -- which I wasn't (but I was thinking about it) -- it looks like the biggest business that you truly didn't build -- it was built by the US government -- the quasi US-government-operation, the US Post Office is technically out of money. Postal employees should not be concerned; the US Congress is not -- they're getting ready for their August recess.

Now to some stand-alone postings. Good luck to all.