Wednesday, September 5, 2012

Wells Coming Off Confidential List Thursday; XOM HIts a New All-Time High

21474, 845, Whtiting, Kjelstrup 44-24TFH, Cooks Peak, t3/12; cum 27K 7/12;
22079, 795, Hess, EN-Fretheim 154-93-0508H-3, Robinson Lake, t6/12; cum 44K 7/12;
22266, drl, BEXP, Panzer 22-23 2TFH, Alger,

Cooks Peak is a very irregularly shaped oil field in southwestern North Dakota. It is west of Whiting's activity in the Pronghorn Sands in the Bell oil field area.  The horizontal/directional wells in this field appear to be predominantly Birdbear wells; if the Kjelstrup well is a good well, it might open a new chapter in the Bakken.

That's another nice Hess well in Robinson Lake:
Monthly Production Data
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-201229125351269854841460214466136
BAKKEN6-201229216672152190672299022362628
BAKKEN5-20128973194321015191129390


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Another great educational article from RBN Energy: refining 101.

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Oil futures are up one dollar. Brent up over $114.
Oil futures rose above $114 per barrel on Thursday, buoyed by expectations the European Central Bank will manage to ease its debt crisis with a new programme of bond purchases.
I'm sure there will be some profit taking before the day is over, and so XOM won't hit a new high today, but XOM certainly is close to hitting an all-time new high. [I was wrong: XOM his an all-time high this a.m.] [Later: XOM blasts through to hit all-time new high; may even close at all-time new high.]

Egypt's Largest Company To Build Fertilizer Plant in Iowa

Egypt's largest company announced plans to spend $1.4 billion building a fertilizer plant in Iowa, tapping into cheap U.S. natural-gas supplies and the nation's role as the world's most important food exporter. Orascom Construction Industries opted to build the plant in the heart of the Corn Belt over a competing package of incentives from neighboring Illinois, highlighting the tough "beauty contests" between U.S. states for investment from domestic and overseas companies.
So many story lines; so little time.

Added, later, after "anon 1" sent in a comment:
Egypt-based Orascom Construction Industries plans to build the largest project in Iowa history — a $1.4 billion fertilizer plant — and also buy the state’s largest construction company.  
The Weitz Co. is one of Iowa’s oldest companies — at 157 years — and has built many of the state’s most prominent buildings, including arenas, academic halls, corporate headquarters, hospitals and hotels.  
The purchase was disclosed Wednesday at a news conference that also announced that Orascom will bring the fertilizer plant to Lee County in southeast Iowa.

Railroads Are Booming -- Thanks To The Bakken -- Carpe Diem

Link here to CarpeDiem.com.
Among the biggest beneficiaries of the demand for transport of crude oil out of North Dakota’s Bakken shale region are the owners of the two main rail links to the region, Canadian Pacific Railway and Burlington Northern Santa Fe, which is owned by Warren Buffett’s Berkshire Hathaway.

For Investors Only -- From Yahoo-InPlay -- TransCanada Submits New Plan for Keystone XL 2.0 Connector (275 Mile Link)

Disclaimer: this is not an investment site.

Enbridge Energy commenced underwritten public offering of ~14 mln of its Class A Common Units: Co expects to use the net proceeds from the offering, including the proceeds from any exercise of the over-allotment option, to fund a portion of its capital expansion projects, for general partnership purposes or any combination of such purposes.

QEP Resources announces pricing of $650 mln of 5.25% senior notes due 2023. The notes are being offered to fund a portion of the consideration to acquire producing and undeveloped oil and gas properties in North Dakota's Williams and McKenzie counties. The oil and gas properties will be acquired pursuant to two related purchase and sale agreements.

TransCanada submits Supplemental Environmental Report to the Nebraska Department of Environmental Quality for the preferred alternative route for the Keystone XL Pipeline in Nebraska: Today's filing respects the NDEQ's timelines and the overall regulatory process for determining a re-route in Nebraska, as requested by the U.S. Department of State in November 2011. The preferred alternative route and additional information presented in the SER addresses feedback from over 670 Nebraskans who took part in open house discussions, hundreds of additional comments submitted to the Nebraska DEQ and direct conversations with landowners along the pipeline corridor. The route covers approximately 210 miles of the Keystone XL route in Nebraska and increases the length of the pipeline in the state by 20 miles to a new total length of approximately 275 miles. The Nebraska DEQ and other state and federal agencies developed a map that accurately defines the Sandhills region. The re-route respects this map and avoids the Sandhills area. The route included in the SER crosses fewer miles of threatened and endangered species habitat, fewer streams and rivers and considerably fewer miles of severely wind erodible soils. Also, two wellhead protection areas have been avoided. In addition to submitting the SER to the Nebraska DEQ, TransCanada will provide an environmental report to the DOS on September 7, 2012. The environmental report is required as part of the DOS review of the company's Presidential Permit application. Keystone XL will be the safest pipeline built in America.

SM Energy provides update on operated Eagle Ford production; announces increase in borrowing base: Co announced that net production from the Company's operated Eagle Ford shale program averaged 230 MMCFE/d in July 2012. For the second quarter of 2012, net production in this program averaged 207 MMCFE/d. SM Energy also announces that it is currently starting up additional tank batteries to allow for continued production growth in its operated Eagle Ford shale program.

Zoning for Housing and Oil Field Training Facility Approved for Stark County

Updates

September 9, 2012: background re: MBI out of Minneapolis.

Original Post

Link here to Dickinson Press/InsideClimate News.
With protests by a neighbor lingering in the air, the Stark County Commission on Tuesday approved a rezoning request for 78 acres of Belfield land that Missouri Basin Inc. Energy Services plans to use as an oil field training and housing facility. 
Jim Arthaud, CEO of MBI Energy Services, said the company hopes to start finalizing plans now that it has the commission’s approval. Brian Dolyniuk of Beach, the land owner, requested the zoning change at a Stark County Planning and Zoning Board meeting last month, so MBI could purchase the property and construct a 60-unit housing complex to accompany a workover rig and driver training facility.
Very, very interesting.
Just Dropped In To See What Condition My Condition Was In, Willie Nelson


It surprised my daughter to hear that this was a cover, a song that I heard back in 1968, or thereabouts.

Whiting Presents at Barclays -- SeekingAlpha

Link here to SeekingAlpha.com.

After the QEP/Helis deal, many analysts are arguing that most Bakken-centric companies are undervalued. On a peer-to-peer basis the two companies that seem most undervalued to me are Whiting and Oasis.

Disclaimer: this is not an investment site. Make no investment decisions based on what you read at this blog.

ONEOK Presents at Barclays -- SeekingAlpha Transcript

Transcript at SeekingAlpha.com.

Highlights as they pertain to the Bakken:
We have more than $6 billion of announced internal growth projects in the Bakken shale, the Midcontinent, and the Gulf Coast 
When we talk about growth at ONEOK Partners, we've got to highlight the crude oil, natural gas and NGL development that's occurring in the prolific Bakken Shale in the Williston Basin.  
When our projects that we've announced in the Bakken are completed, we will have invested in our gathering and processing segment almost $1.5 billion to construct for new natural gas processing plants at a capacity of 100 million cubic feet per day each. They are in North Dakota, the Garden Creek number one and two plants. The Stateline's number one and two plants and we divide county gas gathering system. These projects together will increase our current processing capacity in the Bakken Shale to approximately 500 million cubic feet per day. 
Talking amore about the Bakken Shale, we are making major NGL infrastructure investment in the Bakken as well, and those investments are backed primarily by the NGL production from our existing and new processing plants that I just talked about on the previous slide. 
We have begun construction on a 500-mile Bakken NGL pipeline that's going to be in service during the first half of 2013, which will transport unfractionated or raw NGLs to the Conway and Mont Belvieu market hubs. It will utilize a pipeline. We already own a 50% ownership in, which is our Overland Pass pipeline, and the NGLs will be fractionated at our Williston fractionator, which is also in a process of being expanded. 
One of the key points I would like to make about the Bakken NGL pipeline is that it will for the first time allow processing plant in the Bakken or in the Williston Basin to recover and transport ethane which currently is not possible. 
In the Bakken, and we have to talk about the crude oil, it is a prolific crude oil play with projection expected to increased well over 1 million barrels per day within the next five years, because of that growth crude oil takeaway capacity in general is absolutely required for this area. 
In order to connect this additional supply to the marketplace that's being developed, we've announced plans to build the crude oil pipeline to bring like-suite and when I say suite low to no hydrogen sulfide crude oil from the Bakken Shale to the crude oil hub in Cushing, Oklahoma. The 1,300 mile Bakken crude oil express pipeline will parallel more than 80% of current and planned NGL pipelines and it is expected to be in service by early 2015.
There is so much more. Go to the link for all of it.

I don't know if there's necessarily anything new in the presentation for regular readers of the blog, but for newbies, lots of information; for everyone, it's nice to see it all put in one presentation.

  • ONEOK continues to build on its natural gas experience/expertise in the Bakken, announcing another natural gas processing plant within the last few months; and, 
  • reiterates what others are saying: the Bakken will be producing 1 million bold by 2015

Daily Activity Report, Wednesday; BEXP WIth Three (3) Huge Wells (IPs); OXY USA Reports Another Well

Active rigs: 192

Twelve (12) new permits:
  • Operators: Oasis (3), Fidelity (2), Petro-Hunt, Whiting, Murex, MRO, Corinthian, CLR, Zenergy
  • Fields: Zenith (Stark), North Tioga (Burke), Sanish (Mountrail), Dickinson (Stark), Harding (McKenzie), Camp (McKenzie), North Souris (Bottineau), Oliver (Williams)
One of the Oasis permits is for a salt water disposal well in Baker oil field, McKenzie; and Whiting has a permit for a wildcat in McKenzie County

There were seven (7) wells released from the confidential list:
  • 20632, 765, XTO, FBIR Nellieoldmouse 13X-13, Heart Butte, t5/12; cum 10K 7/12; 
  • 21472, 669, Whiting, Holmberg 44-24TFH, Sanish, 
  • 21619, 62, OXY USA, Sorlie 160-90-7-P16-1H, Dimond, 
  • 21645, drl, Hess, SC-1WX8-1H, Banks, 
  • 21844, 209, CLR, Pojorlie 21-2-1H, Russian Creek, 
  • 22223, 0, CHK, Hutzenbiler 9-137-99 A, a Madison well;  t6/12; cum 242 bbls 7/12; 
  • 22254, 140, Corinthian, Corinthian Backman 16-34 1H, a Spearfish well;  t4/12; cum 11K 7/12; 
And, seven (7) producing wells were completed:
  • 19347, 44, Hess, AV-Schwartz-163-93-0211H-1, Short Creek,
  • 21227, 909, Zavanna, Leopard 20-17 1H, Stony Creek, 
  • 21694, 3,347, BEXP, Cora 20-17 1H, Poe, 
  • 20997, 2,823, BEXP, Charles 3-10 1H, Todd (city of Williston),
  • 21146, 2,109, BEXP, Sjol 5-8 1H, Williston oil field, 
  • 22863, 5, Petro Harvester, Rice 14, a Madison well, Renville oil field, 
  • 21785, 830, ERF, Jackal 149-93-31A-30-1H, Mandaree oil field; 

Out and About For Awhile

Hard to say when I will post again tonight.

For Investors Only: SandRidge vs Petrobakken -- Seeking Alpha

I guess a little bit for everyone today: a note for my granddaughters (earlier); a political note (just a few minutes ago); another battery story (earlier); and, now a post for investors. [Disclaimer: this is not an investment site.]

I like the candor of this writer (at the link below): somehow he/she just kept plugging away and now his/her portfolio is almost fully Canadian energy.

Link here to a nice discussion regarding SandRidge vs Petrobakken. I've never owned shares in PetroBakken but it has always intrigued me. To some extent, I see parallels between KOG and OAS.

Politics: None of the Top ND Politicians Are Attending the Convention This Week

Saving money

From the Dickinson Press/InsideClimate News:
For North Dakota, none of the top-ticket Democrats are among the state's 27 delegates at the convention. 
It's similar across the country, where several prominent party leaders and Democratic candidates decided not to attend this weeks ceremonial festivities ... 
... many ways to complete that thought.

By the way, there was a huge story in the WSJ today about a US Senate race in North Dakota now seen as a toss-up. This will be an opportunity for those opposed to fracking to keep control of the US Senate. 

An Inconvenient Truth: The Oil Drum on Electric Vehicles

Updates

Later, September 5, 2012: Wow, speaking of batteries, I lost the bubble on this one. Is another one about to bite the dust? A123 down to 22 cents/share and 10% drop triggers short-selling alarm precluding further short sales until an up-tick, or something like that. Details at the link. A123 had been as high as $5.00/share this past year. Now down to 22 cents and falling. [See disclaimer for this site; this is not an investment site.]

Original Post
Link here to the Oil Drum.

Anyone who visits the "MillionDollarWay.blogspot," needs to visit the Oil Drum at least once a week and scroll down; it's an excellent site.

With regard to the linked story:

Batteries fail—as certainly as death and taxes. Rechargeable batteries at least offer the possibility of repeating the cycle, so are in this sense more like recurrent taxes than death. But alas, the story cannot repeat indefinitely. One cheerful thought after the other, yes? But wait, there’s more… Add to their inevitable demise an overall lackluster performance in battery storage technology, and we have ourselves the makings of a blog post on the failure of batteries to live up to their promises
To set the stage, the specific energy of gasoline—measured in kWh per kg, for instance—is about 400 times higher than that of a lead-acid battery, and about 200 times better than the Lithium-ion battery in the Chevrolet Volt. We should not expect batteries to rival the energy density delivered by our beloved fossil fuels—ever.
I think most folks with any common sense came to this same conclusion. I've been posting similar thoughts for quite some time. The linked article is full of graphs and very good writing. 

And for that performance, one can purchase a compact for $40,000. 

Bakken-Centric Companies in Play?

Reuters via Investopedia:
Reuters reports that some analysts are highlighting what they see as cheap valuations of some operators in the Bakken. Some of the companies that might be taken out by a larger operator due to this discounted valuation include Kodiak Oil & Gas, Whiting PetroleumOasis Petroleum, and Northern Oil and Gas, all of which are cheap on price-to-earnings or acreage value.
I've said the same thing for two years: cheap based on acreage value.

Disclaimer: this is not an investment site. Make no investment decisions based on what you read here. This is a blog, a daily journal to help me understand the Bakken. I share it with others who often correct my mistakes and myths and provide relevant links.

Daily Activity Report for Tuesday, September 4, 2012

Ten (10) new permits:

  • Operators: XTO (5), Whiting (2), OXY (2), CLR
  • Fields:  Murphy Creek (Dunn), Sanish (Mountrail), Heart Butte (Dunn), New Home (Williams)

It looks like XTO has permits for a 5-well pad in Heart Butte.

Wells coming off confidential list were reported earlier.

In addition, one producing well was completed:

  • 22338, 2,425, KOG, Thomas 154-98-15-33-28-1H3, Truax
Random thought: someone suggested this the other day. XTO and KOG are operating in North Dakota very, very close to each other. I cannot think that XTO is not looking at KOG acreage; and ...

... some years ago, someone told me everyone/every thing has a price. 

Actually, go to the Heart Butte link and look at the 2012 permits that have been posted so far: QEP, XTO, WPX.  And that's where KOG has some of its best wells. QEP, WPX, KOG, and XTO. Wow, what a neighborhood. 

Energy Links for Wednesday And Off-Topic Items

The race is often won by the first one out of the blocks. I thought about that when I saw the headline that RadioShack announces that it will "begin" a wireless service, through an existing wireless partner. Let's see, how long has wireless been around? Lots of story lines, but the one that strikes first is the ability of a CEO to skate to where the puck will be (Wayne Gretzky/Steve Jobs). And yesterday's news that Heckmann will buy Power Fuels in the Bakken tells me that Heckmann's CEO knows where the puck will be in five years (see earlier story). I am absolutely impressed and excited. I can't wait to see how North Dakota's natural gas industry will develop over the next few years. President Obama is a huge supporter of natural gas corridors (see an earlier link) and a Mr Pickens has been shouting about natural gas for years. Wouldn't it be interesting if the Bakken natural gas story was the real sleeper in all of this?

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Wow, the WSJ is a great newspaper. I subscribe but don't read it on-line (except in passing/surfing the net). Today's edition has a full section on investment for retirees.  I remember my first year in high school; we moved over as 10th graders. Our social science teacher had us read the NY Times every Friday or thereabouts; I forget if it was weekly; probably was. Best writing I had seen. I loved it. I still love the NY Times for the writing, and once I realized it's front page was the first page of the editorial / op-ed section, it was easier to read. I just skipped the front page and read the rest first, returning to the front page when I got to the op-ed section.  [Actually, I doubt that's true. As a sophomore, I probably had no clue. Now, with the WSJ, I read the paper from back to front, starting with the fourth section and moving toward the first section, saving the best part for last, the op-ed/opinion pages.

Back to that social science teacher. He was also the assistant wrestling coach. Talked me into wrestling. They needed a 95-pounder, and loss was only 3 points vs a forfeit, 5 points. All I had to do was show up and save the team 2 points; I won about 60% of my matches. My toughest opponents: Minot Ryan and Watford City. The opponents I feared the most: anyone from Montana. I thought Montana was where the Olympic Gods/Titans resided. I think the only Montana team we wrestled was the Billings high school team. I have repressed all memories of those matches. I remember Minot Ryan and Watford City very well. Oh, that's right, we also wrestled Sidney. I can still recall my Minot/Watford City opponents, but not their names. Wow, did I respect them. The Minot Ryan 95-pounder took "State," I believe. I lost to him in regionals.

I think it's pretty impressive that the assistant wrestling coach/assistant football coach had us reading the NY Times. Something tells me that doesn't even happen in NYC.

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Saudi Arabia to be a net importer of oil by 2030? -- SeekingAlpha. I did not read the story past the first paragraph -- 2030 is past my investing lifetime. Whether the writer agrees / disagrees with Citi in that analysis, it fits my worldview, and the impact will be a lot sooner than 2030. The impact could indeed be felt within my investing lifetime. (Do I need to say [again] that this is not an investment site. It is shared with those who want to read it simply for information, education, and entertainment. Hopefully more of the former than the latter.]

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The US slips in global competitiveness ranking; fourth year in a row the US has dropped a notch or two. This year it fell from 5th to 7th place, dropping two places. Meanwhile 2Q12 US productivity jumped significantly, revised upward from 1.6 to 2.2 percent. Despite headwinds, American business keeps slogging forward. If we're seventh in competitiveness, and our productivity is jumping, this says volumes for optimists going forward. Imagine how well six other countries are doing! Global recession? What global recession?

NFL opening game tonight?

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RBN Energy: Coal -- the export market.

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A reader sent me the link to this "newsletter." My response:
That's a great "historical" document. 
This is an "advertisement" for a paid subscription; we used to get these as junk mail.
So, this newsletter at the time was trying to get subscribers by talking about the Bakken. Even with all their enthusiasm for the Bakken, they underestimated it. 
The newsletter was posted in 2011 -- this was the last line:  "However, when considering faltering production in California and Alaska, I wouldn't be surprised to see North Dakota overtake the third -- and possibly even the second -- position within the next decade."
"Possibly second.....possibly in the next decade."

Less than a year later North Dakota was in second place, ahead of both Alaska and California.

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Hopefully the NDIC daily activity report for yesterday will be up first thing this a.m. For some reason it was not linked/posted last night; that happens occasionally. I used to think it was due to an intern's mistake, but when I wrote that the first time some time ago (tongue in cheek), a reader sent me a note telling me that NDIC generally does not have interns on its staff.

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