Thursday, November 21, 2013

The Permian, An Update, Seeking Alpha; And A Note On The Bakken

Before I get to the main post, just a bit of trivia. At the moment, a headline story over at Yahoo!Finance is the story that ONEOK will be building a new natural gas processing plant in western North Dakota. It's about the 7th story down, between the Lance Armstrong story and the Russian plane crash story.
An Oklahoma energy company said it will build its biggest factory yet in western North Dakota to help capture and bring to market more of the natural gas that currently is being burned off as a byproduct of soaring oil production.
Oneok Partners LP, a subsidiary of Tulsa-based Oneok Inc., and Gov. Jack Dalrymple announced Tuesday that the company intends to invest up to $780 million on projects that include infrastructure upgrades, an expansion of a pipeline and a new factory capable of processing about 200 million cubic feet of natural gas daily, or double the amount of any of its existing plants in the state.
Oneok officials made the announcement at the state Capitol in Bismarck with Dalrymple, who thanked the company and called its plans a needed and "remarkable capital investment."
Oneok already operates four natural gas processing factories in North Dakota, and has two more under construction that are slated for completion late next year and early 2015. The seventh, called the Lonesome Creek plant, will be located 12 miles west of Watford City, in McKenzie County. 
Now, for the original reason for this post: on the Permian, over at SeekingAlpha.
Recently, Permian producers have highlighted their activities in the Cline Shale play, recognizing more of the varied options of production offered by the prolific Permian Basin. The Cline Shale, located in the eastern part of the Permian Basin, extends 140 miles long and 70 miles wide. The depth of the Cline ranges from 5,000 feet at the Eastern Shelf to 9,500 in the Midland Basin. Initially the Cline was expected to have the reserve capacity of the Eagle Ford, but the jury is still out on reserves. The Cline play was expected to hold between 30 - 35 billion boe, but the issue is what portion is economically recoverable. The eastern bits of the Cline have higher clay content, and toward the western parts, less clay. Halliburton and other services companies are working to find ways to deal with complications arising from clay.

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