Thursday, August 2, 2012

Human Interest Bakken Story Picked Up By Rigzone

This Bismarck Tribune story was picked up by
As the oil industry completes its infrastructure design phase and enters its full development phase in 2012 and 2013, there's good news for residents, officials and community leaders in the oil communities experiencing this remarkable growth. Soon, nearly all of the infrastructure needed to develop the Bakken will be in place, and western North Dakota is settling into a period of steady growth.
Compare that fact with this statement from SM's conference call:
As others have disclosed recently, equipment shortages and fabrication delays are a real problem in South Texas right now. In our particular case, we have seen several months of slipping schedules for delivery of tanks and vessels required for assembly of new tank batteries and other required facilities. Limited midstream capacity is creating high back pressures and reducing rates on our existing wells and sharply limits the amount of actual incremental field production we can generate from new completions. 
I have mentioned this directly or indirectly for the past two years. 

WOW -- SM Whiffs on Revenues -- Motley Fool

Earlier today (or late last night) in a comment, I mentioned that a reader sent a note to me suggesting things were not so "hunky dory" in the Eagle Ford. Today, in SM earnings transcript:
As others have disclosed recently, equipment shortages and fabrication delays are a real problem in South Texas right now. In our particular case, we have seen several months of slipping schedules for delivery of tanks and vessels required for assembly of new tank batteries and other required facilities. Limited midstream capacity is creating high back pressures and reducing rates on our existing wells and sharply limits the amount of actual incremental field production we can generate from new completions. We're working hard with our midstream provider to resolve these issues, and we are making good progress. However, in the meantime, we have delayed some completions until we can realize more economic benefit from completion spending. -- Transcript
Motley Fool: SM whiffs on revenues. Stock takes a huge beating. 

EOG Reports 2Q12 Production; Increases Forecast for 2012 Production to 37 Percent YOY

EOG's press release here.
Due to robust operational results from the Eagle Ford and Bakken plays, EOG's total crude oil and condensate production for the second quarter 2012 increased 52 percent compared to the second quarter 2011. Total crude oil, condensate and natural gas liquids production increased 49 percent over the same period in 2011. Based on these outstanding results, together with contributions from its West Texas Wolfcamp and New Mexico Leonard horizontal shale plays, EOG has increased its 2012 total company crude oil and condensate production growth target to 37 percent from 33 percent and its total liquids production growth target to 35 percent from 33 percent. Overall, EOG has increased its total company full year 2012 production growth target to 9 percent from 7 percent with no changes to its capital expenditure budget.

In the South Texas Eagle Ford, EOG drilled its best well to date. The Boothe Unit #10H in Gonzales County began initial production at 4,820 barrels of oil per day (bopd) while an offset well, the Boothe Unit #9H, had an initial production rate of 3,708 bopd. The Boothe wells produced 972 and 527 barrels per day (bpd) of natural gas liquids (NGLs) and 4.5 and 2.4 million cubic feet per day (MMcfd) of associated natural gas production, respectively.

"We continually focus on making better wells and with an initial flow rate in excess of 4,800 barrels of crude oil per day, EOG's Boothe Unit #10H is clearly the top producing oil well in the entire Eagle Ford play to date," Papa added.

Two Great Wells, BEXP and Newfield; Friday Morning Links (Starting Thursday Evening); Oil Up Almost $4 -- Speculators

Wells coming off the confidential list, Friday:
  • 22178, 2,363 BEXP, Lund 3-34 1H, Briar Creek, t5/12; cum 28K 6/12;
  • 22181, 2,263, Newfield, Wisness 152-96-21-2H, Clear Creek, t3/12; cum 52K 6/12;
Producing wells completed:
  • 22001, 600, G3 Operating, Pasternak 1-4-9H, Williams,
  • 21183, 1,638, KOG, Smokey 16-20-32-15H, McKenzie,
Twelve (12) new permits
  • Operators:  Hess (7), WPX (3), Denbury (2)
  • Fields: Alkalik Creek (Mountrail), Blue Buttes (McKenzie), Van Hook (Mountrail), Charlson (McKenize)
Five of the seven new permits for Hess are in lot 1, section 4-154-94, Alkali Creek, Mountrail County, probably all on the same pad, or very close.
Energy links at Independent Stock Analysis.

Another great RBN Energy link. This past week I received several queries/comments related directly or indirectly to the "Seaway Reversal." Sometimes it's nice to get a short, simple update regarding some issue, and the update RBN provides for the "reversal" is superb. Go to the link for the story.

Foie (dis)gras -- Absolutely Nothing To Do With The Bakken

Yes, I have been following this story -- I'm in California and it's hard to miss. I probably would not have posted it, but someone sent me a link to good to pass up. So, from City Journal: the “foiepocalypse,” or the banning of foie gras.

Most interesting thing in the linked story: the number of ways folks will get around the law.

Thank you to a reader for sending me the link.

What's most interesting to me about this is the "real" story regarding the feeding of these animals. Again, one gets the feeling that the folks who penned the legislation (or promoted the legislation) had never been on a farm, and had certainly not researched (honestly, seriously, and in an unbiased manner), foie gras. I used to be "against" foie gras, but no longer. Very, very interesting.

In 2006, Chicago became the first jurisdiction in the United States to ban foie gras. Within two years, the city council, with the strong backing of then-mayor Richard Daley, overwhelmingly repealed the ban in the face of similar defiance. Scofflaws were so commonplace that offending establishments had even earned a special sobriquet: “duckeasies.”

Polymer Flooding -- New Extraction Technique -- China -- Nothing To Do With The Bakken

Linking this story solely for future reference if needed.
Data showed the oil-recovery rate in the testing block was raised by 10.3 percent and could be lifted by up to 12.1 percent, according to the country's largest oil and gas producer. This marks a breakthrough in the application of polymer flooding in conglomerate layers, a key technique that will bolster oil production ...

Job Losses RISE Less Than Expected -- "The Claims Number is Not That Bad"

Remember: the magic number is 400,000


August 2, 2012: Once you get past the spin and think about it overnight, the $64 million question is why did the Fed not act this week (more stimulus) when the jobs report was another horrendous report, and even the Fed mentioned the recovery (?) was deteriorating. I assume most people feel that the Fed has no more arrows in its quiver. Maybe one more arrow. If so, this is why the Fed is delaying action. They are looking to July when the numbers are expected to get even worse -- and they they will have to act.

Two data points:
  • The unemployment rate is expected to have held steady at 8.2 percent in July. It has been stuck above 8 percent for more than two years, the longest run since the Great Depression.
  • The total number of people employed is 4.9 million lower than before the 2007-09 recession.
Original Post
That's the Yahoo!Finance headline: job losses rise less than expected.

The job story was one of the top five stories earlier this morning, but by 8:28 a.m PDT, it was off the front page. Ho-hum.

From the article:
  • the data continues to be influenced by distortions from seasonal auto shutdowns (it's always something); 
  • initial claims for state unemployment benefits rose 8,000 to a seasonally adjusted 365,000;
  • economists polled by Reuters had forecast claims rising to 370,000 last week (pretty close)
  • the prior week's figure was revised up to 357,000;
  • "The claims number is not that bad," said Cary Leahey, a senior economist;
  • the four-week moving average for new claims, a better measure of labor market trends, fell 2,750 to 365,500, the lowest in four months
The lowest in four months. Happy days are here again.

For the view at the WSJ on the job loss numbers, click here.

Oasis With Two Nice Wells Including a Gusher; Daily Links;

I will be out and about all day. Other than these links nothing is likely to be posted until later this evening.

  • 20113, 254, EOG, Short Prairie 2-1011H, Round Prairie, t2/12; cum 35K 6/12;
  • 20121, 312, OXY/Anschutz, Repetowski 1-34-27H-143-98, Hungry Man Butte, t2/12; cum 13K 6/12;
  • 20886, 317, EOG, Clarks Creek 1-1-1819H, Clarks Creek, t4/12; cum 39K 6/12; 31 stages; 3.9 million pounds; no ceramics; IP water: 0.
  • 20952, 116, EOG, Lostwood 16-3526H, Kittleson Slough, t2/12; cum 37K 6/12;
  • 21586, drl, CLR, Clover 2-10H, Murphy Creek, s2/12;
  • 21667, 3,285, Oasis, Cliff Federal 5200 14-5H, Camp, t312; cum 69K 6/12;
  • 21721, 1,918, Oasis, McCauley 5501 14-3H, Tyrone, t3/12; cum 43K 6/12;
  • 21950, 712, Denbury, Johnsrud 21-13SEH, Siverston, t4/12; cum 16K 6/12;
  • 22338, drl, KOG, Thomas 154-98-15-33-28-1H3, Truax, s2/12; cum 42K 6/12; no IP yet
For newbies: Camp oil field is in the heart of the Bakken, south of Williston, south of the river. The Tyrone oil field is north of Williston.

I seldom see an IP of "0" for water in a fracked well, but that's what EOG is reporting for its Clarks Creek well (file #: 20886). I really don't know what to make of it, but that's the report. Cumulative production of water is very little at 9K bbls.

Four (4) producing wells were completed:
  • 21182, 1,213, KOG, Smokey Kenny 16-20-17-2H3, McKenzie,
  • 21181, 182, KOG, Smokey Karen 16-20-17-2H, McKenzie,
  • 20439, 706, Zavanna, Thelma 1-21H, Williams,
  • 21873, 640, Zavanna, Bengal 1-2H, Williams,

Seven (7) new permits --
  • Operators: BEXP (3), Whiting (2), Triangle, Marathon
  • Fields: Antelope Creek (McKenzie), Strandahl (Williams), Alger (Mountrail), Dutch Henry Butte (Stark), Cow Creek (Williams)
Energy links at Independent Stock Analysis.


RBN Energy: primer on diesel continues, part II.


Earnings out today: SM, KOG, WPX, ENB, others. GM profits plunge 40% -- I think a lot of folks have given up hope.  Government Motors.

Dilbit and Taxes

From InsideClimate
Dilbit is exempt from the tax, because the 1980 legislation that created the tax states that "the term crude oil does not include synthetic petroleum, e.g., shale oil, liquids from coal, tar sands, or biomass..."

... the 1980 definition of crude oil dates back to a time when it wasn't financially feasible to produce tar sands oil on a large scale. The first sizeable shipments of dilbit into the U.S. didn't occur until 1999.
Interesting article at the link.

Strongest Words Yet From TransCanada: Keystone XL

From Oil and Gas Journal:
  • continued regulatory delays could place the proposed 700,000-b/d Keystone XL pipeline in jeopardy
  • the Keystone Cushing MarketLink project would not proceed without approval of Keystone XL, explaining that the economics do not work for the line as a stand-alone facility (this project was planned for 2013)
The story at the link is a very, very good summary of the situation.

I Didn't Write This: "All The Above Except Off-Shore -- The Permitorium Continues

I did not write this: "All-Of-The-Above Energy Except When It Involves Off-Shore." Don't "blame" me; I'm just the messenger.
All-of-the-above became President Obama's rallying cry, but his and his administration's actions have not matched the rhetoric. For most observers that became evident when President Obama rejected the opportunity to accelerate the approval process for permitting the construction of the Keystone pipeline to bring oil sands output to the United States. The latest demonstration of this selective rather than all-inclusive embrace of energy supplies came with the unveiling of the latest five-year plan for offshore oil and gas lease sales, the principle driver for drilling and producing activity in the Gulf of Mexico.
After September 10, 2012, one can add redundant federal fracking regulations to the short list (but growing) of things the "all-of-the-above energy" program does not include: Canadian oil, frack-derived oil, off-shore oil. Oh, also coal. And, nuclear energy. I think we've discussed this before.

The "all-the-above energy" program includes Solyndra; GE-wind; $26/gallon Navy biofuel; and algae.