Saturday, August 18, 2012

Investment Opportunity

The following was sent in as a comment, but unlikely that many would see it.

Here it is. Consider it a public service announcement. I know nothing more about this than you, the reader:
I am building a 4-plex right outside of Watford City which will be available to be moved into the first part of Nov, 2012. We own enough property and have enough water for 6-8 more 4-plex units. Each unit is a 2-bed, 1-bath. We are looking to sell the 4-plex once complete and to keep building and selling, unless we can get some investors together to fund and rent them out. If interested in visiting about this please e-mail me at bizventures.tw@gmail.com and leave your name and contact information and I will get back to you.
I post it more as an example of the "stuff" that is going on in the oil patch than as an investment opportunity. Others will see it differently, I suppose. 

Cost of Re-Fracs as Of Summer, 2012

This came in as a comment. Again, since some folks don't read comments, I want to post this here where it is more accessible:
Re-fracs on wells usually incorporate the same stage designs as the initial frac. The DJ Basin re-fracs with guar-based gel are costing around $100,000/stage, depending on the amount of sand and gel used.

Gel is very expensive right now. I was informed that guar-based-gel is costing around $400.00/gal now as opposed to $75.00/gal a year ago. This is due to a scarity of product.

With the pumping rates being around 30 BPM to 40 BPM in the Williston Basin, gel has to be used to carry the sand into the horizontal wells. Some oil companies are using a slickwater design with the pumping rate being around 60 to 80 BPM (depending on formation). These stages are usually using a friction reducer (FR) and some secondary chemicals to carry the sand.The costs are cheaper with FR as opposed to gel, but are eaten up with the increased cost of ceramic sand.
I think it was Oasis who spoke about guar in their most recent (2Q12) earnings conference call; they mentioned they were able to obtain what they needed, but they were noticeably quiet about how much it cost.

I now have better insight/understanding regarding Slick Water. Thank you.

Speaking of Subsidies: Solar Subsidies Up 6-Fold; Wind Subsidies Up 10-Fold

As usual, the WSJ gets to the nut of the problem:
The nearby chart shows the assistance that each form of energy for electricity production received in 2010. The natural gas and oil industry received $2.8 billion in total subsidies, not the $4 billion Mr. Obama claims on the campaign trail, and $654 million for electric power. The biggest winner was wind, with $5 billion. Between 2007 and 2010, total energy subsidies rose 108%, but solar's subsidies increased six-fold and wind's were up 10-fold.
The best way to compare subsidy levels is by the amount of energy produced. But the Energy report conspicuously left out this analysis, though Congress specifically requested it.
Solar subsidies, and what do we have to show for it? Solyndra, Amonix, Abound Solar, SunPower - sputtering, Konart Technologies, First Solar -- Enbridge connection; Solar Trust, Cardinal Solar Technologies, Energy Conversion Devices, Topaz Solar Farm (Warren Buffett) -- status unknown, Evergreen Solar, SpectraWatt.

More Chariots On Fire: Fisker Hybrid Vehicles Now Recalled

Fisker recalls 2,400 Karmas for cooling problems due to bad fan; results in vehicle fire.
Fisker Automotive, a green car company that received funding from the U.S. government, is recalling about 2,400 Karma plug-in hybrids to repair a faulty cooling fan unit that was the cause of a vehicle fire in Woodside, California last week.

The Anaheim, California-based automaker, founded in 2007, said the August 10 fire began in front of the left wheel, where the low temperature cooling fan is located. An "internal fault" caused the sealed unit to fail, starting a slow burning fire, Fisker said in a statement on Saturday.
Looks like an easy fix. Provided as a public service announcement.


Week 33: August 12, 2012 -- August 18, 2012

Bakken Economic Development
Update on Williston economic development:
Blackwood Estates Subdivision, Pheasant Ridge Development (Watford City), master plan for Parshall (680 homes, 600 apartments, 320 hotel rooms), Marriott extended stay opens in Bismarck; etc.
New 120-unit apartment complex in Watford City
Williston: busiest McDonald's, busiest Wal-Mart, busiest gas station in the US
Update on hotel/motel construction in the oil patch
New airport for Bowman, ND -- paid for by US taxpayers
More oil patch housing, Oppidan to invest $100 million
More oil patch housing, 1,500 units to Burlington (west of Minot)
Port of North Dakota (Minot), update
Another update on Bakken economic development:
Area's largest RV park and apartment complex in Harvest Hills subdivision; Hampton Inns and Suites opens in Williston; Target Logistics opens Stanley Hotel; Microtel Inn and Suites opens in Stanley; indoor RV park;
Building permits (in dollar amount) may exceed 2011 record year
Halliburton, Love's Trucking building apartment complexes for their workers (same link)
Fourth year in a row: North Dakota best employment stats in the US
Bakken operations
Bakken boom will get bigger; at least 35,000 more wells to drill -- state official
KOG acquires 80 Bakken acres from the state; $560K
Serka Services, Turkey, enters the Bakken
Work over rigs: the next big thing to talk about in the Bakken
Re-fracking Marathon wells
Whiting pursues Red River formation in the Williston Basin - Oil and Gas Journal
For newbies: keep an eye on the Three Forks 
The Bakken in 2025: 2 million bopd; natural gas production to quintuple 
North Dakota daily production: sets new record, 660,000 bopd
Another OXY well
North Dakota State lease sale, August, 2012
Fracking
Obama re-defines 50-year-old trucking regulation to hinder fracking
Cost of re-fracks, summer, 2012
Rail
CBR narrows the WTO-Bakken differential
Tesoro to move more Bakken oil by rail
Pipelines
Archival
Largest pea processing plant in the Americas in Williston
US CO2 emissions lowest in 20 years
Permian will exceed takeaway capacity
Eagle Ford costs to get crude to market
US energy revolution: is this just the tip of the iceberg?
The Great Plains: Joe Kotkin in the WSJ
PBS discovers the Bakken boom
Solar power: the math doesn't work

Update On Williston Area Economic Development -- From the Williston Wire

Short updates from the Williston Wire. Generally no links because you, too, can subscribe to the Williston Wire for free.

Blackwood Estates Subdivision, a modular home subdivision, consisting of 87 one-acre lots, will have model homes available for viewing by September, 2012. I think I've discussed why "they" are able to build houses so quickly in the oil patch in previous posts.

Meanwhile, a Missouri entrepreneur has moved his business and his family to Williston to build custom homes in the oil patch. He has built his own business, starting in 2000; he is 37 years old.  They are Chris and Melissa Jeffries, president and vice president, respectively, of JFE Construction.

Pheasant Ridge Development broke ground on the north side of Watford City. The development will cover 36 acres; in two to three weeks, there should be 15 to 20 homes under construction. For newbies, Watford City is in the heart of the Bakken, the county seat of McKenzie County where the Bakken oil activity is headed this year.

From Dickinson: a Michigan-based company is set to lease apartments for corporate tenants; 32-unit, two- and three-bedroom town homes will be available next summer. Haan Development has built two low-income multi-family projects in Williston and is also working on a similar 40-unit project in Dickinson.

A master plan for Parshall is moving along to develop 320 acres north of the Parshall High School: lots for 680 homes, 600 apartments, 320 hotel rooms, and 30 commercial lots. According to wiki: As of the census of 2000, there were 981 people, 339 households, and 240 families residing in the city. Parshall also has the distinction of holding the state's coolness record: On February 15, 1936, Parshall recorded a temperature of -60 °F (-51 °C), setting a state record low temperature which still stands today.

Most interesting to me: the El Rancho Hotel in Williston, long-known for its fabulous Sunday buffets, may be getting out of the restaurant business. It will turn over food and beverage operations to the Williston Brewing Company. This sounds very, very exciting, interesting, and another reason to return to Williston.

A Marriott extended stay hotel has opened in Bismarck. If you can't find lodging in the oil patch, Bismarck is just a few hours down the road via some incredible scenery.

The Williston Wireline links a story updating folks on all the road construction projects which are proceeding well, according to the spokesperson.

This is the big story everyone is talking about: the state says the Bakken boom will get bigger -- 35,000 more wells to drill. Harold Hamm has said somewhere around 48,000 Bakken/Three Forks will be needed. Sometime ago on the back of an envelope, I also calculated about 48,000 total wells based on current data. The current projections are that about 2,000 wells will be drilled each year. So, 17 to 24 more years of drilling activity. Home of Economy in Williston is going to be selling a lot of Carhartt work clothing for many, many years.

The Williston Wire links to a very interesting blog that I "discovered" only recently. I can't remember if I have bookmarked it at the sidebar at the right.  Again, for folks who feel the Bakken is being "ruined" by high operating costs, this might be something useful to read. Or not. We all have our myths (world views).

The Williston Wire has a great link to the China energy story in the US.

LA Times Front Page Story on Enbridge; North Dakota's BakkenLink Pipeline Updated; "Arab Spring" Note

You don't often see a pipeline story on the front page of a liberal newspaper.

But there it is: all about the success Enbridge is having.
A major rival to the controversial Keystone XL oil pipeline project is vastly boosting its U.S. pipeline system, but it's avoiding the same scrutiny that federal regulators, environmentalists and landowners are giving Keystone owner TransCanada Corp.

Enbridge Inc. is proceeding largely unencumbered with plans to spend $8.8 billion in the U.S. to transport greater volumes of petroleum to the Gulf Coast and other markets than TransCanada would with its Keystone XL pipeline project from Alberta, Canada, to the Gulf Coast.

Rather than building a single new pipeline, Enbridge is replacing smaller, existing pipeline with bigger pipes, adding pumping capacity and installing new supply lines alongside existing ones.
It still boggles the mind that TransCanada didn't do the same thing.

By the way, Warren Buffett with his Burlington Northern has thousands of miles of right-of-way for all kinds of opportunities.

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Speaking of pipelines, progress on the BakkenLink from Beaver Lodge oil field to Fryburg is moving along. The BakkenLink, by the way, was scaled back in scope after President Obama killed the Keystone XL. 

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Why does this seem to surprise the mainstream media, that "Arab Spring" is taking Egypt back to the 15th century? [Update: wow. Just moments ago I sent an e-mail suggesting that the Iranian president Ahmadinejad would be visiting Egypt soon -- even though Egypt has no money with which to help Iran during the sanctions, but now I see that the new Islamic Muslim Brotherhood president of Egypt will be visiting Iran -- a first in decades. It looks like Pan-Muslim-Arabism is starting to take shape. Saudi has got to be concerned. Israel knows that the Egyptian military -- particularly the Air Force -- is in the worse shape it's been in decades, also. Do you think the price of oil is going to trend down?]

Another Great Bakken Website -- DrillingInfo

There are so many incredibly good websites out there covering the Bakken.

I visit this site from time to time, but it just dawned on me that I may not have it linked at my sidebar at the right. On the other hand, I've linked so many websites, maybe it's there and I just don't see it tonight. The site: DrillingInfo.

Regardless, check this site out. If it's the first time you've seen this site, scroll through it quickly; I think you will be surprised at some of the great topics covered.  It does link to other unconventional shales than the Bakken.