Monday, November 19, 2012

Oil Field In The Bakken With Best Wells

A reader who wishes to remain anonymous sent me this data. Like most of us, he/she was quite impressed by the Sanish, but was surprised to find the Reunion Bay oil field the best field based on oil production/well.

Although one is tempted to compare bbls of oil/field, one cannot do that due to fact that oil fields can vary significantly in size, as well as varying activity in various fields. The last two columns, bbls/month/well and bbls/day/well are most valuable.

Very interesting. And a huge "thank you" for a reader for sending this in. [It is interesting that Reunion Bay is the only field I have not updated in the sidebar at the right.]

This field is "owned" by Marathon and WPX, with Marathon having the most wells. Except for one (1) Slawson well, every well in Reunion oil field is either an MRO or a WPX well.

Heart Butte and Banks are right in the middle of the northeast McKenzie County Bakken sweet spot and is giving Reunion Bay a run for bragging rights. It is somewhat surprising to see the results of Van Hook.

Rank Field Barrels of Oil # of Wells Ave Bbls/Mo/Well Bbls/Day/Well

Some Rounded

1 Sanish 1,702,587 343 4,963 166

2 Parshall 736,000 236 3,118 104

3 Alger 597,000 124 4,814 160

4 Van Hook 531,000 105 4,963 165

5 Reunion Bay 431,000 61 6,845 228

6 Murphy Creek 392,000 137 2,861 95

7 Heart Butte 345,000 55 6,272 209

8 Banks 330,000 49 6,734 225

Random Comment Regarding Corn Ethanol

Link to a very long article over at The Oil Drum.
Corn ethanol comes next.  I described the ethanol story completely in 2004, in my most popular paper ever. There was nothing new I would add in the intervening 8 years. Basically, ethanol is obtained from burning methane, coal, diesel fuel, gasoline, corn kernels, soil and environment. We destroy perhaps as many as 7 units of free energy in the environment and human economy to produce 1 unit of free energy as corn ethanol, and make a few clueless environmentalists happier and a few super rich corporations richer. The story is even worse for switchgrass ethanol. Finally, your mileage would drop by 33% if you were to use pure ethanol as a fuel for your car. 
And so it goes. 


This video, nothing to do with anything, but lots of fun to play while reading the blog:

The Lindy Hop (Swing)

New Poll


November 20, 2012: I haven't checked the poll results so far; I generally don't look at the results until I'm ready to post a new poll which could be weeks from now.

I will probably irritate a lot of my readers, but I really don't have problems with the president's desire to increase taxes on the top 2%, i.e., roll back the Bush tax cuts. That's fine with me. And that's why I posted this particular poll.

I truly am curious to see how the "average" viewer of this blog feels about increasing taxes on the top 2% of the American population. There is no hidden agenda in the poll. A week ago I did not know / or had forgotten that the top 2% of the American population might include North Dakota farmers, but when that was pointed out, that suggested a poll would be interesting.

And that's the problem with tax policy. I personally don't want to see North Dakota family farms broken up due to taxes but then do I advocate increasing taxes on the upper 2% but exclude farmers? What about mom-and-pop family farms vs big corporate farms? Do we exclude mom-and-pop businesses; if we do, how do we define mom-and-pop businesses? Publicly traded? Then we don't include Cargill? So, it gets very difficult very quickly.  

I don't have a dog in this fight: I am not part of any family farm; I won't be in the top 2% regardless of what they do with taxes; I won't even be affected by any changes in social security. I write a lot of political-oriented posts, but at the end of the day, I am simply a spectator at this point. When it comes to politics, I might as well be on the moon.

November 20, 2012: Ms Heitkamp won't be the only one with a tough decision. The Boston Globe has a similar story.  According to The Boston Globe, one-term Scott Walker has an opportunity to add to his legacy. His only lasting legacy: it was his vote that resulted in ObamaCare being passed.

Original Post
Time for a new poll.

First, the results of the most recent poll: Will the Keystone XL 2.0 be completed by end-2016?
  • Yes: 38%
  • No: 62%
Now, the new poll.

Background for the new poll can be found at this stand-alone post.

Even at the risk of breaking up family farms, should newly-elected Heidi Heitkamp support her party's president and raise the estate tax to help avert the fiscal cliff? (It's possible the current Congress will decide the issue before Ms Heitkamp and the new Congress is sworn in next January, 20. If so, Ms Heitkamp still has the opportunity to speak out on this issue.)

Fourteen Wells Sited / Horizontals in One Section, 22-147-96, Oakdale Oil Field; One Well Already > 500K Bbls; Another Well At 422K Bbls

With two more permits announced today for section 22-147-96, Oakdale oil field, this is an update of this township, sections 22 and 27:

Before reading the rest of this post, you may want to look at an earlier post regarding the Oakdale oil field, all of 8 sections in northwest corner of Dunn County (just across the county line from McKenzie County).

Section 22-147-96:
  • 18275, 1,020, CLR, Hawkinson 1-22H, Oakdale, t2/10; cum 422K 9/12; still producing 9K bbls/month; Three Forks well; 1.9 million lbs; trip gas peaked at 9,300 units; 30 - 40 foot flare;
  • 24350, conf, 
Then south of this section, in 27-147-96, CLR has an Eco-Pad
  • 20208, 960, CRL, Hawkinson 2-27H, Oakdale, Bakken; s1/11; t9/11; F; cum 178K 9/12; 24 stages; 2.4 million lbs; Three Forks (TF1); runs north into section 22;
  • 20210, 803, CLR, Whitman 2-34H, Oakdale, Bakken, s1/11; t9/11; F; cum 533K 9/12; 24 stages; 2.4 million lbs; middle Bakken; runs south;
  • 20211, 263, CLR, Hawkinson 3-27H, Oakdale, Bakken; s1/11; t9/11; F; cum 197K 9/12; 24 stages; 2.4 million lbs; middle Bakken; runs north into section;
  • 20212, 482, CLR, Whitman 3-34H, Oakdale, Bakken; s1/11; t9/11; F; cum 67K 9/12; frack data not available? Three Forks (TF1); runs south;
On October 19, 2012, CLR was issued three more permits for section 22-147-96:
  • 24223, loc-->conf, CLR, Hawkinson 4-22H2, Oakdale,
  • 24224, loc --> conf, CLR, Hawkinson 5-22H, Oakdale,
  • 24225, loc --> conf, CLR, Hawkingson 6-22H3, Oakdale
They will all run south; are these testing the second and third benches of the Three Forks?

Then these five wells:
  • 24282, conf, CLR, Hawkinson 7-22H2,
  • 24283, conf, CLR, Hawkinson 8-22H,
  • 24284, conf, CLR, Hawkinson 9-22H3,
  • 24285, conf, CLR, Hawkinson 10-22H1,
  • 24286, conf, CLR, Hawkinson 11-22H2,
And now, today, November 19, 2012, two more permits were issued for section 22-147-96:
  • 24455, loc, CLR, Hawkinson 13-22H, Oakdale,
  • 24456, loc, CLR, Hawkinson 14-22H2, Oakdale,

Fifteen (15) New Permits, Including Three for Newfield; Several Huge BEXP Wells (Based on IPs)

Bakken Operations

Active rigs: 185 (steady, but trend is down)

Fifteen (15) new permits --
  • Operators: Whiting (4), Newfield (3), WPX (3), CLR (2), Liberty Resources (2), Crescent Point,
  • Fields: Pleasant Hill (McKenzie), Westberg (McKenzie), Oakdale (Dunn), Glass Bluff (McKenzie), Van Hook (Mountrail), Sanish (Mountrail)
  • Comments: Wow! Newfield with three permits but another day without a permit for OXY USA; Crescent Point Energy has a permit for a wildcat in Williams County.
Wells coming off confidential list were posted earlier; see sidebar at the right.

Producing wells completed:
  • 21791, 989, BEXP, Jay 24-13 1H, Banks, t9/12; cum 5K 9/12;
  • 22148, 2,958, BEXP, Albert B. 27-34 1H, Nameless, t5/12; cum 57K 9/12;
  • 22776, 276, Cornerstone, Wahlund 3-22-15H, Lostwood, t11/12; cum --
  • 22525, 293, Cornerstone, Mertes 6-22-15H, Carter, t9/12; cum 11K 9/12;
  • 22056, 2,437, BEXP, Wagenman 29-32 2H, Todd, t10/12; cum --
  • 21710, 3,229, BEXP, Rich 30-31 1H, Todd, t10/12; cum --
  • 22587, 2,633, BEXP, Lonnie 15-22 3H, Ragged Butte, t10/12; cum --
  • 22624, 2,162, BEXP,  Smith Farm 23-14 3TFH, Cow Creek, t9/12; cum 5K 9/12;
  • 23566, 845, Whiting, Kjos 14-13H, Alger, t10/12; cum --
  • 14713, 20, Denbury Onshore, originally a Madison well with cum of 78K; now a Tyler well,

Sidney, Montana: 20-Acre Shopping Center, Anchored with Reynolds Market

This is a dated story, but Don just sent it to me, otherwise I would have missed it completely.

This link will take you to a PDF. 

Reynolds Market announced back in August, 2012, that it will begin construction on a new 46,000-square-foot supermarket in April, 2013. The shopping center, The Shops at Fox Run, will be located just beyond the US Post Office on the northwest corner of the intersection of Central Avenue (Highway 200) and Holly Street.

It will be one of the largest supermarkets in eastern Montana. There is room to expand another 15,000 square feet in the future.

Reynolds Market will be the anchor tenant in a 120,000-square-foot shopping center.

Companies of Interest Announcing Dividend Increases

Although not a whole lot in some cases, nevertheless, these companies increased dividends:
  • MDU
  • National Oil well Varco
  • Union Pacific
  • Williams Cos
Union Pacific's declared increase was fairly significant, from 60 cents/share to 69 cents/share.

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read at this blog.

If Solar Is So Cheap/Good, Why All The Tax Credits? State and Federal

Another solar story with lots of story lines. Link to
Solar is surging in Hawaii. There’s no disputing that.
Solar power installations have sprouted all across the islands, helping the state move toward its ambitious renewable energy goal and adding some 2,000 “green-collar” jobs to local economies. The projects account for an estimated 15 percent of all construction statewide.
Hawaii more than doubled its solar capacity between 2010 and 2011, making it one of the top 10 solar producers nationally. That’s an impressive feat for a small state whose solar industry barely existed as recently as 2006.
But that's not the only story. Here are some of the other story lines:
  • state tax credit of 35% right off the top; another 30% from the federal government; those aren't deductions; those are credits; straight off one's tax bill
  • the state of Hawaii has lost millions in taxes
  • solar will result in increased cost for conventional utilities
  • lost millions in dollars that would have gone toward safety social net, education, and transportation 
Tax losses to the state:
During the 2010 tax year, Hawaii residents claimed $42.8 million in renewable energy credits, mostly for solar projects. In just six months of 2011, they claimed $54.9 million in credits, according to data provided to Stateline by the Hawaii Department of Taxation. This year, the price will soar to $173.8 million, the state estimates. That’s out of an overall state budget that hovers around $12 billion each year.
Hawaii will cut the credit in half starting next year.

Hawaii is not alone, the story at the link goes on:
Of the 24 states that offer renewable energy tax credits, several have already had to deal with larger-than-expected fiscal impacts.
In 2011, Oregon repealed a credit that worked too well, at one point costing 40 times its projected price tag. Over five years, the state’s Business Energy Tax Credit spurred huge growth in the state’s wind industry, but even its supporters admit it subsidized large-scale projects that would likely have gone forward without the state incentive.
Oregon has continued investing in renewable energy, but it has shifted its focus to policies that receive more scrutiny, such as revolving loans for small-scale projects and reverse auction grants for larger utilities.
Meanwhile, in oil-guzzling Louisiana, the number of solar installers has grown from a mere handful in 2007 to almost 200 today, according to Tucker Crawford, executive director of the Gulf States Renewable Energy Industries Association. And that’s in a state that has no renewable energy standard.
So, that raises the question: if solar is so good, why do 24 states have to offer energy tax credits?

Other story lines: solar will actually cost conventional utilities more -- manage the smart grid; install systems that can shut down / start up almost instantaneously when the sun unexpectedly quits shining. Yes, it happens. Go to the link.

Most of the solar is being bought by well-to-do and not paying taxes that would have gone toward social safety nets, education, and transportation.

Shale Oil Reservoir Under Santa Barbara, California -- Bigger Than The Bakken; The Oil Might As Well Be on The Moon

Two things that make this story particularly interesting:
  • it references the Bakken, still the "gold standard" against which all unconventional plays are measured
  • not only is it in California, it is in Santa Barbara -- God does have a sense of humor; there could be only two other places that would be more interesting than Santa Barbara for an oil boom: Yosemite and San Francisco
Link here to Business Insider.
According to the EIA, the Monterrey Formation, which covers an enormous chunk of Southern California and terminates near Santa Barbara, has 15.4 billion barrels of recoverable crude — four times as much as the Bakken formation in North Dakota. On Dec. 12, the Bureau of Land Management will begin auctioning off more than 17,000 acres in the formation. The problem is, California has committed to getting a third of its energy from renewable sources by 2020, the paper writes. So the state risks getting left behind as the rest of the world dives into shale, it says.
A couple of things: first note the spelling -- I've seen "Monterrey" spelled with one "r" and with two. I will sort it out later.

Second, at least one operator suggests the Bakken has one trillion bbls of original oil in place, and that primary recovery rates are approaching eight (8) percent. It is pretty much agreed that the USGS 2008 estimate of 3.65 billion bbls of recoverable Bakken oil is way too conservative. Most agree that Bakken recoverable oil is easily 24 billion bbls.

Bottom line: between politics and reality, it will be a long time before Santa Barbara rivals the Bakken for bragging rights. 

Chesapeake's Corporate Presentation: No Mention of the Bakken

A reader tells me that Chesapeake's current corporate presentation does not mention the Bakken. The link will open a PDF, so might take a moment or two.

Another reader tells me that Chesapeake recently mailed division orders to a mineral rights owner in North Dakota with a short-term deadline to get it signed. The writer says the division orders are being handled by CHK's lawyers. I have no idea of the veracity of the claim, and whether or not that is even out of the ordinary.

WSJ Links; Gut Check for Heidi -- Opportunity To Break Up Family Farms

Wow, wow, wow -- foreshadowing the Great Recession of 2013. I first blogged about this a week or so ago, citing a Boston Globe article. This morning, it's the top story above the fold, front page of the Wall Street Journal: investment falls off a cliff.
U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery.
Half of the nation's 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.
Nationwide, business investment in equipment and software—a measure of economic vitality in the corporate sector—stalled in the third quarter for the first time since early 2009. Corporate investment in new buildings has declined.
At the same time, exports are slowing or falling to such critical markets as China and the euro zone as the global economy downshifts, creating another drag on firms' expansion plans.
Elections have consequences.

A full page shouting graphic covers the front page of the fourth section: CEOs to Washington: strike a deal -- and do it now!

Speaking of "elections have consequences."
Opportunity for Ms Heitkamp to break up family farms.
Whether or not tax breaks are extended for all but the top 2%, an increase in the estate tax is a given, or is it? Will Ms Heitkamp provide the deciding vote for Mr Obama?

This will be a gut-check for Ms Heitkamp: supporting the President's goal to eliminate the Bush tax breaks will likely break up North Dakota farms. This article was in The Bismarck Tribune earlier, but it's been removed. New link:
Agriculture organizations are sounding the alarm about estate tax changes that could break up family farms if Congress does not act to stop them before January.
NAWG and more than 30 other farm organizations wrote every House and Senate office this week to urge prioritization of this important issue for farmers and ranchers.
The estate tax changes as planned could devastate family businesses in the agriculture sector by dramatically reducing the estate tax exemption, from $5 million to $1 million, while also dramatically increasing the estate tax rate, from 35 percent to 55 percent.
Many farm businesses that provide the primary income for the families who operate them would reach the $1 million threshold quickly with just a few pieces of equipment and less than 100 acres of land. This means parts of the business would almost certainly have to be split off and sold to pay taxes after the death of the primary owner.
America's oil boom: Shape up or ship out
U.S. crude-oil exports are heavily restricted. Refined products such as gasoline can be shipped abroad more easily—indeed, the U.S. became a net exporter of these last year for the first time since 1949. Refiners have been selling increasing amounts in foreign markets as domestic demand has sagged amid economic sluggishness and renewed energy-conservation efforts.
Pressure to export crude oil won't grow because the U.S. will suddenly no longer need imports. The Department of Energy expects net imports to meet 39% of domestic oil consumption in 2013. Rather, it is a matter of logistics.The rapid increase in onshore U.S. oil output in states such as North Dakota, as well as rising Canadian oil-sands output, has created a glut in the Midwest. As a result, domestic grades sell for less than international benchmarks such as Brent. West Texas Intermediate, or WTI, trades at about $87 a barrel, $22 or 20% below Brent.
Hostess union clings to hope
The union that brought the 85-year-old baker of Twinkies and Wonder Bread to its knees is holding out hope that a buyer will salvage chunks of the company and send the union's members back to work, even as Hostess Brands Inc. gears up for a fire sale.
Hostess, the company behind treats snacked on for generations, is poised on Monday to present to a federal bankruptcy judge a plan to shut down 36 plants and sell off the company's business. The liquidation was sparked by a nationwide strike orchestrated by the snack maker's second-largest union, the Bakery, Confectionery, Tobacco Workers and Grain Millers.
Profitable brands will be bought; contracts will be re-written.

Drillers begin reusing 'frack water' -- huge story, front page, above the fold, second section
Companies are racing to find ways to recycle the water used in hydraulic fracturing, chasing an emerging market that could be worth billions of dollars.
From energy industry giants Halliburton Corp. and Schlumberger Ltd. to smaller outfits such as Ecologix Environmental Systems LLC, companies are pursing technologies to reuse the "frack water" that comes out of wells after hydraulic fracturing, or "fracking"—the process of using highly pressured water and chemicals to coax oil and gas out of shale-rock formations.
Spinach, a great source for nutritional iron? Think again! This is quite incredible. I always thought spinach was a great source for iron. Nope. Wrong. 
In 1870, German chemist Erich von Wolf analyzed the iron content of green vegetables and accidentally misplaced a decimal point when transcribing data from his notebook. As a result, spinach was reported to contain a tremendous amount of iron—35 milligrams per serving, not 3.5 milligrams (the true measured value). While the error was eventually corrected in 1937, the legend of spinach's nutritional power had already taken hold, one reason that studio executives chose it as the source of Popeye's vaunted strength.
The point, according to Samuel Arbesman, an applied mathematician and the author of the delightfully nerdy "The Half-Life of Facts," is that knowledge—the collection of "accepted facts"—is far less fixed than we assume. In every discipline, facts change in predictable, quantifiable ways, Mr. Arbesman contends, and understanding these changes isn't just interesting but also useful. For Mr. Arbesman, Wolf's copying mistake says less about spinach than about the way scientific knowledge propagates.
By the way, faux environmentalists did the same thing with the hockey stick graph and global warming. And so it goes.