Thursday, September 6, 2012

From the Williston Wire -- Williams County Labor Force Moves to #3 in State

In July 2012 Cass County (Fargo) had a civilian labor force of 87,159; Burleigh County (Bismarck) 48,578; Williams County 36,538; Grand Forks County 35,690; and Ward County (Minot) 30,273.
As of the 2010 census, the population of Williams County was 22,398 (wiki).

Construction begins on Buffalo Wild Wings in Williston.

"The Williston" will have a grand opening on September 7. Former Elks building. Boutique hotel, fine restaurant dining, and a bar.

Enbridge completes first phase of Berthold Expansion Project (CBR, 10,000 bbls).

Schlumberger gives South Dakota School of Mines a $49 million gift.

Delta Air Lines, the only major carrier that owns its own refinery, is looking at buying Bakken oil because of its competitive price.

BNSF announcers it now has capacity to carry one (1) million barrels out of the Bakken. Keystone XL? Who needs the Keystone XL?

Heckmann buys Power Fuels (previously posted).

Reynolds Market will begin construction on a new 46,000 square-foot, state-of-the-art supermarket in April, 2013, in Sidney, Montana; the shopping center will be one of the largest in eastern Montana.

New laundromat, Oil Capital Laundromat, opens in Tioga, North DAkota.

Mercy Medical Center to celebrate grand opening of new addition (BirthPlace at Mercy and Outpatient Surgery Center), September 12.

Several other human interest stories. No links provided; folks can subscribe to the Williston Wire.

What They Will Be Talking About Friday Morning; TRANSCRIPT -- KOG at Barclay's; TPLM Earnings Transcript

As usual, Peggy Noonan has it exactly right: soft extremism at the convention.

For those who missed it the first time around, the "quote of the day" from the other day:
Quote of the day:
"If you look at just buying one gallon of gas, it really doesn't hurt us at all, but the problem is a lot of US consumers are buying multiple gallons of gas every single day." -- analyst, August 30, 2012.
I assume this analyst does not own a car, but buys gasoline in one-gallon plastic containers for his Briggs and Stratton lawn mower.
Story of the day (well, at least for the moment): why flaring will not "stop" in the Bakken -- RBN Energy.

From the WSJ today: the shale revolution -- what could go wrong? -- lots of quotes from the "hofmeister." The whole article may be there; or  you may need a subscription (sometimes these links seem to change on me.)

Active drilling rigs: 193 (up).

Wells coming off confidential list, Friday:

  • 20126, 379, EOG, Kandiyohi 19-2932H, Clear Water, t3/12;  cum 37K 7/12; 
  • 20220, 1,427, EOG, Lostwood 10-2227H, Kittleson Slough, t3/12; cum 64K 7/12; 
  • 21430, 382, EOG, Kandiyohi 26-3328H, Clear Water, t3/12; cum 32K 7/12; 
  • 21967, 806, Petro-Hunt, Brenna 152-96-23C-14-5H, Clear Creek, t7/12; cum 26K 7/12; 
  • 22057, drl, BEXP, Wagenman 29-32 1H, Todd,
  • 22296, drl, Triangle, Larsen 157-101-28-33-1H, Otter,
  • 22340, 366,  Slawson, Revolver 2-35H, Van Hook, t5/12; cum 26K 7/12; 

Eleven (11) new permits were issued Thursday:
  • Operators: Fidelity (2), KOG (2), Whiting, Citation, G3 Operating, North Plains Energy, CLR, XTO, Cornerstone
  • Fields: Climax (Williams), Smoky Butte (Divide), Truax (Williams), Zenith (Stark), Haram (Bottineau), Dutch Henry Butte (Stark), Sanish (Mountrail), Last Chance (Williams), Stoneview (Divide), Woburn (Burke)
The Whiting permit is for another Pronghorn Sand(s) well.

Wells released from confidential status today were reported earlier.

In addition, one producing well was completed:

  • 20874, 732, KOG, Oppegaard 9-9H,  Truax, t1/12; cum 36K 71/2; 
I assume the pullback in the price of oil today was due to the inevitable Euro-zone recession, coming sooner than later. I haven't watched CNBC since early August so I don't know what the talking heads were saying about the volatility in oil price today. 


Transcript: KOG presentation at Barclays.

Transcript: TPLM earnings conference call.

Although XOM settled below its all-time high, it did set a new all-time high; CVX came close.

Bullish on CVX -- SeekingAlpha. Talk of CHK or Hess as possible acquisitions by CVX.


Data points from the KOG presentation at Barclays.

  • after acquisitions last year, it took some time to get "out of the gates"; now hitting on all cylinders
  • one full-time completion (fracking) crew now; will have a second crew in next month or so
  • completing four to five net wells every month
  • pad drilling coming to completion stage
  • trying hard to bring lease operating costs down; now down to $5, $6/bbl range
  • deepest wells in the basin; costs down to $10.5 million
  • moving from mid-30s to low 20s (days) to reach total depth
  • infrastructure / oil service support much better; back-up available in hours, not days now
  • 8 rigs for next 3 months; considering laying down one rig after that
  • will try a six-well pad
  • 155,000 net acres; "25 of that is probably a tier two type property. The balance is pretty solid acreage and we are going to see EURs 650,000 up to 1 million bbls"
  • Dunn County: gas-to-oil ratio -- 600 to 800
  • West side of the Bakken: gas-to-oil ratio -- double that of Dunn
  • KOG thinks acreage in terms of a) east of the Nesson; b) west of the Nesson
  • the Three Forks is "a much larger interval"; KOG mostly drilling the upper bench (TF1)
  • number of drilling locations increasing, not going down
  • drilling locations: 4 middle Bakken; 3 TF1 -- seven total per drilling unit
  • KOG has taken wells from 1,300-1,400 feet apart down to about 1,000 -- (I've suggested this narrowing for quite some time -- and I think it will get down even lower)
  • three in the Three Forks; will that increase? most likely; looking at TF2
  • 10 to 12 year inventory of drilling
  • East side, Dunn County: EURs of 800,000 to 1 million bbls; expect middle Bakken to better than TF, but surprised with some of the TF wells; 3 rigs in this area; working with XOM -- 2 rigs on KOG acreage;
  • West side, McKenzie County: IPs might be a bit better but that's because of more gas; the Koala wells are really good wells; 3-well pads right now; able to sell nearly 100% of our gas produced and oil is moving by pipeline
  • West side, Williams County: "believers" in ceramic in the steeper part of the basin; all of our wells we've talked about are completed with 100% ceramics; 28 stages; 325 feet/stage; the Williams County wells are very similar to what they've seen in Koala; some gathering work to do; all wells hooked up to gas pipelines; working with ONEOK to put additional pipe in; looking to improve the flaring issue;
  • flaring more gas in Williams than other areas; EURs similar to Koala, 750 to 1 million bbl;
  • Grizzly prospect, McKenzie: a bit of a mixed bag; the IPs not as big, but neither are the declines; EURs 400 to 600 on the western side; 600 to 750 on the eastern side
More at the link above.

Photos of the Epping Crude-By-Rail Facility


September 7, 2012: from KOG's Barclays presentation earlier this week, quoted from SeekingAlpha:
I think one of the most encouraging things here is what we've seen build out in the rail. So I think there is five or six facilities today, most of these are moving anywhere from 60,000 to 90,000 a day of production. The most recent one, that's closest to our Polar block that we just talked about, is the Epping facility. Noted that they finally delivered their first production to the Anacortes Facility out in Seattle. That was the first outlet to the west coast there. So I think that's really encouraging that the oil started to move by rail there. They get their unloading facility built. These are all positives and this really feeds into the differentials that we've all talked about.
Now, look at the photos below.
Original Post

[See first comment. I inadvertently put the wrong name of this facility in the original post. It's been corrected due to acute observation of a reader; much appreciated.]

A reader sent me a "ton" of photos of the new Epping crude-by-rail facility. I have not gone through all the photos yet, and had planned to post them in some kind of order, but they are too good to wait. So, I will post one set now, and then go through the other two sets, and see how best to re-arrange and post photos.

Enjoy. More later on this subject. A "huge" thank you to the reader for sending me these photos. They really are incredible.


  • there are 16 of these crude-by-rail facilities in the Bakken (see sidebar for list)
  • the "norm" is for 118-tank unit trains
  • crude-by-rail facilities were established because pipelines could not meet production demands
  • BNSF is owned by Warren

As you look at these photos, remember, this is a 24/7 operation (note the "stadium" lighting). Trucks are coming in/going out continuously. Think of 118-unit trains operating continuously from 16 CBR sites throughout the Bakken, with trucks coming in/going out 24/7, and then think of the carbon footprint of CBR operations, many of them needed because faux environmentalists won't allow pipelines to be laid. I'm thrilled so many truck drivers have jobs, when folks complain about all the trucks on the road, at least some of the "blame" can be placed on faux environmentalists.

Steve Zachritz on Triangle Petroleum -- SeekingAlpha

Disclaimer: this is not an investment site. This is not a recommendation. In fact, a reader sent me the link as an informational item. Enjoy.

Link here to
Triangle Petroleum (TPLM) completed the transition from non-operated Bakken wannabe player to operated and vertically integrated Bakken player on a growth path similar to household Williston Basin names Oasis and Kodiak with the release of today's 2Q13 results. The quarter beat analyst estimates (more on that in the table and notes below) but more importantly TPLM reiterated its long term focus on the North Dakota side of the play where they have proven, largely derisked acreage in both Williams and McKenzie Counties, North Dakota.
A reminder about Triangle:
  • 2 wells are being zipper-fracced by Rockpile, their in house frac spread...

It should be noted that TPLM has about 86,500 net acres in North Dakota and Montana, which is significantly more than the 27,600 net acres that QEP recently acquired for $1.38 billion, most of it from one operator. It's easy to do the math. 

TPLM's market cap is about $300 million. Again, this is not an investment site. It is simply idle chatter among those interested in following the Bakken. 

High Performance Rigs Coming to The Bakken; Day Rates: $20,000 Back in 2010

This article was published back in August 2010. I don't recall if I ever posted it. It will be posted now for archival purposes.

Two high-performance rigs coming to the Bakken.
The rush to tap into these gas-rich formations is proving a bonanza for Tulsa, Okla.-based Helmerich & Payne, the dominant supplier of high-performance drilling rigs able to extract gas from the shale pockets. Last month, Helmerich & Payne announced plans to build 16 high-performance rigs, many under multiyear contracts commanding day rates in the mid-$20,000s to service the most promising oil and gas shale basins in the U.S. The latest orders bring the company's total to 19 rigs for this fiscal year, ending Sept. 30, 2010.
Again, note: this article is two years old. It is being placed here for archival purposes.

For Investors Only: Enbridge Continues To Raise Cash; Invest in Infrastructure

Disclaimer: this is not an investment site. No recommendations are being made. Just information from Yahoo!In Play. The link is dynamic.

Enbridge to invest up to $600 million to support gas distribution growth in Toronto Area (ENB): Co announced its Board of Directors has committed up to $600 million to expand Enbridge Gas Distribution's (EGD) natural gas distribution system in the Greater Toronto Area to meet the demands of growth in the GTA and continue the safe and reliable delivery of natural gas to current and future customers. The estimated capital cost is contingent on finalization of the scope of the project. The target for construction of the upgrade project is in 2014 and 2015. The project is subject to approval by the Ontario Energy Board.

Enbridge Energy priced an underwritten public offering of 14 million of its Class A Common Units at $28.64/unit (EEP) :

Housekeeping: Epping Oil Field Has Been Updated; Two KOG Wells > 100K, No IP Yet

Link here.

KOG has some great wells in this field.

For newbies, look at this well:

  • 20507, DRL, KOG/BTA, 20711 Swanson 3328 1H, Bakken, Epping; cum 111K -- no IP yet

Note that this well has produced 111,000 bbls to date and has not yet reported an IP.

Also, if you go to the site, be sure to look at the Madison well that is still producing 800 bbls/month after 30 years of production.  

By the way, KOG has another well on "drl" status that has produced more than 100,000 bbls to date:

  • 20730, drl, KOG/BTA, 20711 Long 112 1H, Stockyard Creek, s10/11; cum 102K 7/12; no IP yet

Global Economy (Nothing About the Bakken); Sports

For the Bakken, scroll down.

I see that the GDP for the Euro-zone has contracted for two months of the last three. I forget the definition of a recession, but some years ago I was told that a recession was two consecutive quarters in which the GDP contracted. [Later: I see the AP is reporting the same thing:
Even growth in traditional economic powerhouse Germany is slowing, and the OECD's interim assessment said that Europe's largest economy could slip into recession by the end of the year.]
President Reagan probably understood the difference between a recession and a depression as well as anyone.

Not to worry; doesn't the third of four FedEx Championship golf tournaments start today? Speaking of which: great football game last night. I don't have any fond allegiance to the Cowboys, but it was interesting to note the story line written by / for the commentators last night and then see the game play out.

Unemployment: Four-Week Moving Average Inches Up

Remember: the magic number is 400,000

Link here to Yahoo/AP.

The AP says the four-week moving average, which the AP says is a better indicator of labor market trends, edged up to 371,250.

Last week's unemployment numbers were also revised ... drum roll, ... upward. Last week's applications for unemployment were 3,000 more than previously reported.

This week's number: 365,000.  The best it has been in ... drum roll, ... a month. That's the headline: jobless claims fall to lowest level in a month. I can't make this stuff up.

Happy days are here again. No need for QE3. The job market is improving -- lowest level of first time unemployment claims in a month. Just that inconvenient truth: the four-week trend edge up. Hmmm.

It's interesting to scroll through the updates.

I see that, because of the construction boom, there are not enough workers. (Note: there are two links there.)
Dykstra sees buyers taking advantage of low interest rates and low home prices. He is building about forty houses a month now, but says he would build sixty if he had enough labor and contractor support.