Friday, December 28, 2012

Random Update of CLR's Burian 1-27H, Three Forks Well in St Demetrius Oil Field; Another 100K+ Well In Less Than A Year

An individual asked for an update of:
  • 21806, 854, CLR, Burian 1-27H, St Demetrius, Three Forks well; 30 stage, 3 million lbs proppant; t3/12; cum 116K 10/12:
Note: the well has only been off-line about 7 days since being completed; another great well. And, also no longer flaring.

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Week 52: December 23, 2012 -- December 31, 2012

North Dakota leads the world in shale oil technology

Nice update
Huge Washington Post article on Bakken oil to east coast refinery
Rail trumps pipelines for Bakken oil

Water availability for fracking

Economic development
Williston to annex 4,800 acres
Williams County solidly above $1 billion in taxable sales
Dickinson leads state in single family housing permits
North Dakota: fastest growing state in the United States

Oil well blowout five miles west of Watford City, no injuries, capped

Bakken distillates pricing at $131/bbl; compares with $127 for WTI

Klondike Kutters: Coast Guard Cutter Caught in Tow Line To Kulluk


 January 1, 2013: Kulluk rig now runs aground.
Days of efforts trying to guide a mobile offshore drilling rig through stormy Alaska seas hit a crisis Monday night when crew members were forced to disconnect the rig from its last remaining tow line and the vessel went aground on a small island south of Kodiak.
“The first priority was the safety of the people,” said Darci Sinclair, spokeswoman for the unified command of U.S. Coast Guard, Shell Alaska and drill ship owners who had been trying mightily to avoid just such an eventuality ever since the Kulluk rig first ran into trouble Thursday night.
The 266-foot conical drill barge first broke free of its lines last week while being towed back to port in Seattle after a summer season of drilling off the coast of Arctic Alaska. Troubles mounted when the tow vessel, the Aiviq, lost all four of its engines due to possible fuel contamination, and the drill rig was briefly adrift.
Original Post
Link here to LA Times.
Adding to a season full of headaches for Shell Alaska’s debut offshore drilling program in the U.S. Arctic, the company’s Kulluk drilling rig was stuck in monster seas off the coast of Alaska on Friday as its tugboat’s engines failed and the Coast Guard cutter that came to assist became entangled in a tow line.
There were no immediate threats to crew or equipment, but Shell Alaska was rushing additional aid vessels to the scene as the Kulluk, which drilled the beginnings of an exploratory oil well in the Beaufort Sea over the summer, sat without ability to move forward in 20-foot seas about 50 miles south of Kodiak.
Almost makes the Bakken seem like paradise, or a garden of Eden. But wow, our prayers go out for these seamen.

Looks Like OXY USA Will Have A Nice Well in Murphy Creek

21685, conf, OXY USA, Scott 2-7-6H-143-95, Murphy Creek oil field, no IP yet, but produced > 21,000 barrels of oil in first month of production (first month is seldom a full month)

Mambo Italiano, Ysabella Brave

US Petroleum Demand Hits Lowest Level For a November Month in 17 Years; Foreshadowing the Recession of 2013; Other Data Shows US Advantage Relative To Europe

Link here to Oil & Gas Journal.
US petroleum demand remained weak in November, averaging 18.5 million b/d and reaching the lowest level for the month in 17 years, the American Petroleum Institute reported.
Other data points:
  • gasoline demand, 8.5 million b/d, fell 0.3% y/y (inconsequential)
  • distillate fuel demand, 3.8 million b/d, fell a significant 6.3% y/y (significant)
 Looking toward the Great Recession of 2013:
“The economy has shown modest improvement—in employment, for example – but the fundamentals of fuel demand fail to indicate a strengthening recovery is imminent,” API Chief Economist John C. Felmy said.
“Look at the weakness in distillate deliveries, including ultra-low sulfur diesel fuel, which is critical to shipping just about everything in our economy,” he continued. “It was down 4.5% from November last year.”
But, looking at the advantage the US has over Europe in manufacturing, going forward:
  • crude oil and condensate production, meanwhile, climbed 13.3% y/y to nearly 6.8 million b/d
  • production of natural gas liquids, an increasingly important element of US oil and gas production because of their role as a manufacturing feedstock, rose 1.5% from November 2012 to 2.4 million b/d

For Investors Only: NOG

Link here to
Based on the nine tests that Northern Oil and Gas received on profitability, debt and capital, and operating efficiency, the company achieved five passes and a moot point out of nine. This is a good grade for financial health. Northern Oil and Gas did not pass the debt and capital aspects of the paper. As the company is growing, it is increasing its debt.
This is not necessarily a bad thing, but it is an aspect of the company to be aware of and keep an eye on moving forward.
Looking forward, analysts at MSN money have estimated that NOG will post an EPS of $1.00 for FY 2012 and $1.27 for FY 2013. Overall, the company is showing good results regarding its financial health with five passes and a moot point out of nine.
If the article shows "billions" of outstanding shares, that is an error. The number of outstanding shares is in "millions." Don noted this; by the time you get to the link, it may have been corrected.

Eight (8) New Permits -- The Williston Basin

Bakken Operations

Active rigs: 187 (steady)

Eight (8) new permits --
  • Operators:  QEP (4), Baytex (2), Fidelity, and Hess
  • Fields: Grail (McKenzie), Stanley (Mountrail), Timber Creek (McKenzie), Whiteaker (Divide)
  • Comments: The QEP permits in the Grail are very exciting; this is part of the QEP/Helis deal; see sidebar at the right.
Wells coming off confidential list were reported earlier; see sidebar at the right.

Assuming Monday is a normal business day, there is only one more day in 2012 for issuing new permits. At close of business today, the NDIC had issued 2,520 permits for calendar year 2012 for oil and gas permits (this does not include permits for salt water disposal wells). It appears, assuming Monday is a normal business day, we will end 2012 with 2,545 permits issued for the calendar year. 

Random Update of the Blue Buttes Field: This Really Is An Incredible Well: Look At First Two Months' Production

The Blue Buttes oil field has been updated. BR "owns" the field, but Hess has some wells there, also.

Some of these BR wells are incredible, hitting almost 100,000 bbls in less than three months; others hitting 100,000 bbls in four months.

One example, this is a QEP well acquired in the Helis deal (see sidebar at the right):
  • 21564, 2,288, QEP/Helis, Levang Federal 14-21/16H, Blue Buttes, t8/12; cum 97K 10/12:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Another First For North Dakota: Longevity For Its Residents

Link here to The Bismarck Tribune.

U.S. Census Bureau data regarding "centenarians" -- people who live to be 100 years old:
  • North Dakota ranks No. 1 in the number of centenarians per 10,000 people, at 3.29.
  • South Dakota was second at 2.95.
They all want to live that long to see how the Bakken plays out. Hoo-ah!

Nice Update on Crude-By-Rail

Link here to The Bismarck Tribune.

Several story lines, a lot of data points.

The best story line for faux environmentalists: rail less safe than pipe for shipping oil. Irony. The lack of adequate pipeline is not due only to the actions of faux environmentalists, but those actions have certainly contributed to the problem.
The environmental fears carry an ironic twist: Oil trains are gaining popularity in part because of a shortage of pipeline capacity — a problem that has been worsened by environmental opposition to such projects as TransCanada's stalled Keystone XL pipeline. That project would carry Bakken and Canadian crude to the Gulf of Mexico.
Wayde Schafer, a North Dakota spokesman for the Sierra Club, described rail as "the greater of two evils" because trains pass through cities, over waterways and through wetlands that pipelines can be built to avoid.
Some interesting data points:
  • better routing can result in more than an additional $700,000 / train in profits
  • in 2009: 10,000 train cars carrying crude oil
  • in 2012: estimated 200,000 train cars carrying crude oil
  • this is just the start: most from the Bakken, but cars soon to be added for Texas, Colorado, and western Canada
  • rail will be a long term business for oil because trains are faster than pipelines (I did not know that; it's counterintuitive); reliable; and flexible
  • BNSF at one million bbls per day; will increase
  • BNSF will invest almost $200 million in track upgrades, other improvements in the Bakken
  • BNSF also increasing train lengths from 100 oil cars/unit train, to 118; that's almost a 20% increase
  • sounds like a huge industry, but overall, crude oil shipments represent less than 1 percent of all carloads
Also from the linked article:
Oil-loading rail terminals can be built in a matter of months, versus three to five years for pipelines to clear regulatory hurdles and be put into service, ...
The surge comes at the right time for railroads: Coal shipments — a mainstay of the rail industry — have suffered because of competition from cheap natural gas.
In the eastern U.S., CSX and Norfolk Southern railroads haven't seen as much growth because oil from the Marcellus Shale area of Pennsylvania, Ohio and New York is close enough to refineries that trucks haul the crude. [Lots of crude on the highway.]
Yet BNSF is beginning to haul Bakken crude east to Chicago, where it hands off the tank cars to CSX or Norfolk Southern for delivery to Eastern refineries. It has also sent oil to the West Coast, a trend that could increase if Alaska crude production falters, as some industry observers are predicting.

At Least We Now Know Why The President Returned To Washington ....

... to "order" a pay raise for federal workers.

I cannot make this stuff up.

Thank you to a reader who alerted me to this.

It is interesting: the other day I opined why the President was returning to Washington, DC, because I honestly feel things are going exactly his way with the ObamaCliff. There is no good personal, political reason to be in Washington right now, so the question was why he returned. I suggested that it had more to do with the debt ceiling than the ObamaCliff, but it's obvious it had to do with this executive order raising the pay of federal workers. (I hope that works for military retirees, also. Smile.)

Yes, he could have signed the executive order in Hawaii, but everyone loves to get "thank you's" in person. He had to be in Washington to personally bow to and thank well wishers who stopped by to thank him.

Wow, raising the pay of federal works at this moment in time. I can't wait to see the comments of those coming to his defense. If one can defend this action ....

..... I assume one's pension is based on one's pay, and a lot of folks are retiring from his administration and the pay raise is important.... will make a difference...I assume Tim Geithner noticed this first....or possibly Lisa Jackson....or Eric Holder....

Hillary doesn't need the money...

Union Center Oil Field Has Been Udpated

Union Center oil field has been updated at this link.

Remember, this field is less than 6 sections (6 x 640 acres = 3,840 acres minus a hundred acres or so) and is about 3,750 acres all told.

One Graph Says It All -- Please Don't Read The Story -- Just Look At The Graph


Later, 1:18 pm: US CO2 emissions could drop to levels seen in 1990 by the end of 2012.
The bottom line is that America’s carbon emissions may drop back close to 1990 levels this year. That result would have been thought impossible, even at the end of 2011.
But the shale gas revolution makes a reality many things recently thought impossible.  It was thought impossible to slash carbon US carbon emissions back to 1990 levels by 2012.  It was thought impossible to massively, quickly cut carbon emissions and, at the same time, have lower energy bills.
Shale gas production has slashed carbon emissions and saved consumers more than $100 billion per year.  Truly astonishing!
It looks like the one country that did not sign the Kyoto Protocol will meet or exceed the goals.
  • agreed to reduce their greenhouse gas emissions by 5.2% on average for the period 2008-2012, relative to their annual emissions in a base year, usually 1990
  • the benchmark 1990 emission levels accepted by the Conference of the Parties ... were the values of "global warming potential" calculated for the IPCC Second Assessment Report
Original Post
Link here to a very neat graph.

This graph should replace all the Farrah Fawcett posters of the 1970's in the dorms of today's college students.

Yeah, like that will happen.

Draco, Euclid, ... Freyr ..... Gandalf the White

What a hoot! Winter storms now being named. We've had Draco and Euclid, and it looks like Freyr could be forming:
Weather Channel meteorologist Guy Walton said a weather pattern with the potential to become Winter Storm Freyr is poised to enter the West Coast on Wednesday and move through the Rockies on Thursday. It could then head for the lower Mississippi Valley, then the Southeast and hit the Northeast on Sunday.
And today, 65 percent of the US is covered by snow
Between the widespread swaths of snow delivered by Winter Storm Draco and Winter Storm Euclid, the area covered by snow in the United States was up to 65 percent as of Thursday morning.
This is easily higher than the peak coverage we saw during last year's snow-starved winter, which was 47.7 percent on February 14, 2012.
As we head into the weekend, yet another storm system is taking shape that will likely deliver snow from the Ohio Valley to some of the major cities along the I-95 corridor of the Northeast. This storm could cause some headaches for the abundance of holiday travelers on roads and in the air this weekend.
Ah, yes, evidence of more global warming. Increased precipitation was predicted by global warming.

I've gotten back into my Tolkien phase (yet to see the new Hobbit movie) but I am re-reading Tom Shippey's biography of the 20th century's greatest author. I can hardly wait for Storm Gandalf. Folks might remember in The Lord of The Rings: Gandalf the Grey, and Gandalf the White.

By the way, back to Freyr:
Freyr (sometimes anglicized Frey, from *frawjaz "lord") is one of the most important gods of Norse paganism. Freyr was associated with sacral kingship, virility and prosperity, with sunshine and fair weather, and was pictured as a phallic fertility god. Freyr "bestows peace and pleasure on mortals." Freyr, sometimes referred to as Yngvi-Freyr, was especially associated with Sweden and seen as an ancestor of the Swedish royal house.
This god will be fun to explain to elementary school children. Especially that "sunshine and fair weather" part. Irony is a difficult concept for six-year-olds.

More Friday Links -- Regional: Bowman and Stark Counties

The city of Dickinson sees a need for almost $200 million to provide infrastructure required for all new construction that is envisioned.
The city receives between $5 million and $6 million through the oil impact grant program, but a bill written by Rep. Robert Skarphol, R-Tioga, would increase that amount to $12.7 million each year of the upcoming biennium, City Administrator Shawn Kessel said.
“A nice increase,” he said. “Unfortunately, we have identified needs that far exceed that type of revenue.”
Yes, there is a bit of a delta there.

But for roads, the county is doing well:
While many western North Dakota communities are scrambling to keep funds to keep roads in good shape because of an oil boom, Stark County is $650,000 ahead.
Let's hope global warming doesn't dump a lot of snow on the Stark County roads necessitating a lot of snow removal overtime. Assuming this is all part of the same pot of money, which may be a wrong assumption.

Bowman County preparing for the boom:
After witnessing the housing shortages and rent increases in other western North Dakota communities, Bowman County is attempting to get ahead of the game.
Members of Bowman County Commission reviewed a purchase order agreement Thursday during a regular meeting in Bowman that moves the county another step closer to obtaining the Jesco Apartments from a private interest for close to $500,000.
Located in the Bowman, the apartments offer subsidized low-income family housing, something that Bowman County Commissioner Bill Bowman says could have been put in jeopardy.

Friday Meanderings -- Some Bakken, Some Not; More Great Wells Being Reported

Wells coming off the confidential list today have been posted. BR has two gushers; CLR has a really nice well.  

A reader sent a comment noting a Red River well reported earlier:
  • 22750, 455, Whiting, Rieckhoff 44-22, Camel Hump, Red River well, t8/12; cum 36K 10/12; this well is producing 10,000 bbls of oil/month. This is a huge well. The well is in an area where not much drilling is being done, but it is not a wildcat. 
It is in the same section as:
  • 19917, 273, Whiting, Maus 23-22, Camel Hump, Red River well; t7/11; cum 62K 10/12;
I mention the "locality" of the well which tends to confirm what I noted yesterday. Both of these wells are still flaring natural gas. Note that the Maus well was tested over a year ago. See comments yesterday about flaring. By the way, the Red River formation will be on the list of top stories for 2012 when I post that list.

I see the EPA has finally done the right thing: calling water a pollutant. Yes, I can't make this stuff up. A reader sent the link. According to the EPA, water can be considered a pollutant. It is interesting to note that the faux environmentalists, however, have not noted that the number one greenhouse gas is water vapor. Water vapor accounts for for 95 to 97% of all green house gases. CO2 accounts for around 3% and a very small amount of that 3% is actually anthropogenic.

RBN Energy: feeding the power burn.
The generation of power from natural gas will be the most important growth sector for the gas industry for the foreseeable future – certainly for producers, but also for the pipelines that provide the transportation service to deliver the gas to power generators.
Handling the infrastructure and service challenges that come with increased power burn is therefore a priority.
This is true for the nation as a whole, but was specifically raised this year by the Midwest Independent System Operator (MISO) in the heart of coal country - where coal-to-gas switching was most significant during 2012.
But back to some great wells. Magnum Hunter is reporting two great wells in the Eagle Ford, Yahoo! In-Play:
Magnum Hunter announced production results from two new Eagle Ford Shale wells operated by the company. Both wells went on production Dec 22, 2012. The Rhino Hunter #1 located in Lavaca County, TX, is producing ~2,033 barrels of oil per day and 1,113 mcf of natural gas (2,218 boe/d) on a 16/64" choke. The Zebra Hunter #1 is also located in Lavaca County, TX, and is producing ~1,995 barrels of oil per day and 898 mcf of natural gas (2,145 boe/d) on a 16/64" choke.
Notice the 16/64" choke.

Back to the EPA. A reader sent in this link: filling her shoes.  Early on, the writer writes:
Following Lisa Jackson's resignation on Wednesday, her successor will inherit the tricky task of regulating a drilling boom that has revolutionized the energy industry but raised fears over the possible contamination of water supplies.
"Regulating a drilling boom?" Give me a break. This is the most regulated industry (except for banks, perhaps) in this country. This is the industry whose CEOs will be criminally charged if one migratory bird, i.e., a duck, is harmed by their drilling. But the wind industry is a) fast-tracked when it comes to approving wind farms; and, b) given 100% immunity on slicing and dicing eagles, hawks, and whooping cranes. 

And "raised fears over the possible contamination of water supplies." Who is raising these fears? Faux environmentalists. Even the BLM is now on record that "we've" been fracking for more than 60 years in California and there is no evidence that fracking is detrimental. At least one agency has the courage to say so, and they said so in a letter, and they will go to court to defend their position. Good for them. Maybe I will find the link later. Too much to do now.


Apple / Microsoft

Oh, I almost forgot, the biggest story for me personally, yesterday. I finally got to touch the Surface. Yesterday Miss Daisey and I drove to one of the nicest malls in southern California. The mall has both an Apple store (been there "forever") and a "new" Microsoft store. The two stores are pretty much at opposite ends of the mall. We visited the Apple store first, of course. Miss Daisey had not seen the iPad mini. Then we took the long walk to the Microsoft store and saw the Surface. All I can say, after seeing the Surface, is "wow."

[While writing this piece, I was curious if the Zune was still being sold. I checked Yes, it appears you can order the Zune. I then checked out the Zune on wiki and found that the Zune had been discontinued in 2011. I missed that. The Zune just quietly died and faded away, I guess. I predict the same for the Surface. Check back in two years. I doubt it will be competitive a year from now, but it will be kept on life support for an additional year, for "pride of ownership" reasons.]

The Microsoft store is a knockoff of the Apple store, but not nearly as high tech. The Apple store uses iPads or iPad minis as "labels" for each product on display. Microsoft used typewritten labels embedded in the display if I recall correctly; I didn't pay attention. It would be difficult to use the Surface the same way Apple used the iPads or iPad minis: the Surface is just too big. It must a be a third longer than the iPad, and twice as long as the mini-iPad. The weight of the Surface is more than notable.

But I digress. Back to the stores. When we walked into the Apple store, it was crowded; shoulder-to-shoulder. We had to wait our turn to even touch an iPad mini, and they had about a dozen on display to "play" with. All ages of customers were using the iPad minis. In striking contrast, the Microsoft store was virtually empty. At the table with six Surfaces, we were the only customers. Later in the day, we walked back past the Apple store. The Apple store was now limiting the number of customers inside the store, and they now started a waiting line for new people wanting to go in. Miss Daisey was blown away: a line forming to limit the number of people in the Apple store. Again, this was after Christmas, there were no specials, there were no new product launches. This was the middle of the week in the middle of the day, and Apple had to hold back customers coming into the store.

This particular Apple store is much smaller than the Boston Boylston Apple store. The mall store was on one floor, and forty, fifty feet wide facing the mall, I suppose (I'm a terrible judge of dimensions). The one on Boylston/Boston is probably half again as wide (store-front) and three floors.  Because of the limited wall space, there was a small selection of Apple accessories.

Is that Apple store selling anything? The "trainer" who talked to us -- who was not a salesman, he pointed out -- mentioned that prior to Christmas the store had sold out every product they had available. I may have misheard, maybe they had sold out every iPad and every iPad mini, but it sounded like he had said, every Apple product they had in the store was sold (Apple does not sell display models).

I was thrilled to have seen the iPad and the Surface almost in a side-by-side comparison. I am officially Apple Fanboy #3 so my comments about the Surface lose objectivity for those who know I am such a fan. I did not mention one thought I had about the Surface to Miss Daisey, but she was very unimpressed. And she is not a techie. Not by a long shot.

The photograph at Drudge with the three at the White House is priceless: Harry Reid looking to the left, looking away from the President; John Boehner looking left toward the president, almost a beseeching look; and the President, well, looking ... glum.