Wednesday, January 16, 2013

Whiting Reports Three Wells; BR WIth a Huge Well; CLR, Zenergy, MRO, Whiting All With Nice Wells; Wells Coming Off the Confidential List Thursday

Active Rigs:  185

Wells coming off the confidential list today:
  • 21655, 1,123, Whiting, Solberg 34-11PH, Bell, t7/12; cum 38K 11/12;
  • 22054, 535, G3 Operating, Boyds 1-29-32H, Strandahl, t9/12; cum 14K 11/12;
  • 22094, 608, Whiting, Lydia 41-14PH, Bell, t7/12; cum 27K 11/12;
  • 22594, 1,303, Whiting, Solberg 44-11PH, Bell, t7/12; cum 33K 11/12;
  • 22640, 1,443, MRO, Henry Charging USA 31-3TFH, Reunion Bay, t9/12; cum 51K 11/12;
  • 22790, 2,325, BR, Kirkland 21-28MBH 2SH, Pershing, t1/12; cum --; 4 sections;
  • 22892, 1,552, Zenergy, Dwyer 27-34H, Rawson, t9/12; cum 22K 11/12;
  • 23101, drl, QEP Energy, MHA 1-06-32H-150-92, Heart Butte,
  • 23157, 446, MRO, Paul Rohde 31-29H, Werner, t9/12; cum 9K 11/12;
  • 23213, 1,703, CLR, Hartman 3-28H, Chimney Butte, t12/12; cum --
Is it just me, or are others noting a lot of activity in the Strandahl oil field?

Brent Pipeline Off-Line Due To Incident [Update: Should Be Back On-Line]


January 17, 2013: Link to Oil & Gas Journal.
Abu Dhabi National Energy Co. (TAQA) has begun restoring the flow of an estimated 80,000 b/d of crude oil in the Brent pipeline system following a precautionary pipeline shutdown because of a hydrocarbon release into a platform leg on the Cormorant Alpha platform, which remains shutin.
The pipeline system and platform are operated by TAQA Bratani Ltd. Investigations found no connection between the Brent pipeline system and the pipeline involved in the release. The process of restarting Brent throughput follows a technical evaluation determining it is safe, TAQA said.
Oil, by the way, rose about $1.30 today with WTI in the $95 range; Brent in the $111 range.
Original Post

Not sure if this is a "big" story or not. It's the first story at Oil & Gas Journal today but I didn't see it elsewhere in the mainstream media. Rigzone says the leak shuts down 10% of UK's oil production.
Abu Dhabi National Energy Co. (TAQA) shut down Cormorant Alpha platform in the northern UK North Sea and the Brent System pipeline infrastructure extending through the platform as a precaution following a hydrocarbon release into one platform leg.
There was no hydrocarbon release into the environment, TAQA said. It evacuated 92 noncore personnel following detection of a hydrocarbon release Jan. 15.
Cormorant Alpha platform handles about 90,000 b/d of crude oil feeding the Brent system pipeline, including 10,000 b/d from Cormorant field.
TAQA Bratani Ltd. operates Cormorant Alpha, which is 232 miles from Peterhead, Scotland. The Brent system transports crude oil from more than 20 North Sea fields to an export terminal at Sullom Voe in the Shetlands Islands.
So, we'll see tomorrow if it's mentioned anywhere else. 

EPA Shenanigans in Weatherford, TX

This is an incredible story that MDW first linked on March 24, 2011, then again an update on April 12, 2011.

The story continues, this time in the Casper, WY,

Earlier links:
This whole story stinks, as we used to say, to "high heaven."


At the March 24, 2011, link, this key paragraph:
During a hearing in January, David Poole, Range Resources’ general counsel, said the expert testimony would show the company’s gas wells were not responsible for the contamination of nearby water wells. The EPA did not send witnesses to testify at the January hearing.
In the latest story (the first link):
When a man in a Fort Worth suburb reported his family's drinking water had begun "bubbling" like champagne, the federal government sounded an alarm: An oil company may have tainted their wells while drilling for natural gas.
At first, the Environmental Protection Agency believed the situation was so serious that it issued a rare emergency order in late 2010 that said at least two homeowners were in immediate danger from a well saturated with flammable methane. More than a year later, the agency rescinded its mandate and refused to explain why.
Now a confidential report obtained by The Associated Press and interviews with company representatives show that the EPA had scientific evidence against the driller, Range Resources, but changed course after the company threatened not to cooperate with a national study into a common form of drilling called hydraulic fracturing. Regulators set aside an analysis that concluded the drilling could have been to blame for the contamination.
Does anyone truly believe that the EPA gave up another investigation for reasons cited in this article? Really? The EPA drops a case against an independent oil and gas company simply because the country threatened to withdraw from a national study on fracking? You have got to be kidding.

This is just one of many scientific articles that explains the phenomenon. This link will take you to a "quick view," but one can download the original PDF file from there. Another article here that is easier to read.

North Dakota's School Land Permanent Trust Now Reaching $2 Billion

This is an excellent article in The Minot Daily News.
North Dakota's school land permanent trust fund is growing by leaps and bounds thanks to the Bakken development.
"It took 122 years to hit $1 billion," said deputy land commissioner Jeff Engleson of the North Dakota Department of Trust Lands. "It took two and two quarter years to hit the second billion."
North Dakota has about 743,000 surface acres of trust lands, located primarily in the western part of the state oil country. The land was granted to the state as it was to the majority of westward expansion states by the federal government at its founding and is intended to support public education for as long as the state exists.
This is one of those articles I hope it not lost due to archiving. I may come back to it and post data points so that if the article is lost, we have the major points.

I don't know if the trust lands referred to in this article are the same as those discussed in one of my earliest posts, and linked at the sidebar at the right, at the very bottom:
The origins of granting sections 16 and 36 of each township to public education.

Early History of North Dakota: Essential Outlines of American History
by Clement Augustus Lounsberry, p. 628.

"The idea of assigning a constant share of all United States public lands, for the support of free education, wherever the public domain might extend beyond the limits of the original states, was first engrafted upon this nation, by our Revolutionary forefathers, in the general ordinance for public surveys, passed by Congress May 20, 1785; this great statute devoting section 16 in each township "for the maintenance of public schools within the said township."
From the North Dakota Department of Trust Lands:
In 1889 the brand new State of North Dakota, through an act of Congress called The Enabling Act, received a gift of over 3 million acres of land from the Federal Government for the purpose of funding public education in the State to perpetuity. Typically, that transfer included Sections 16 and 36 in every North Dakota township. To manage the assets, Article IX of the North Dakota Constitution created the Board of University and School Lands, more commonly referred to as the Land Board. The Land Board is comprised of the Governor, Secretary of State, Attorney General, State Treasurer and Superintendant of Public Instruction.
If so, and if I understand the article correctly, it begs the question why we are still hearing about funding issues for the states public schools....maybe someone can enlighten me.

[Added: see comments below -- 3 million acres originally; then to 1.8 million acres and most of this was in the west.]

Other data points from the article:
North Dakota is in good shape compared with many other states, according to a recent study that examines the management of school trust lands for all 50 states. The team from Utah State University found that 30 states have lost school trust lands; 20 states still have permanent trust lands. Of those states, not all of them have managed their income as well as others.
Richard West, executive director and professor at the Center for the School of the Future at Utah State University in Logan, Utah, said other states have lost school trust lands due to mismanagement or neglect of fiduciary duty. California, for instance, had lost 92 percent of its original school trust fund acreage as of 2011 and had just $61 million in a permanent trust fund. Nevada had lost 100 percent of its original 4 million acreage and has $307 million in its permanent trust fund for schools. Wisconsin had lost nearly 100 percent of its original 1.5 million acreage and had a permanent trust fund valued at $836 million.
Other states, like North Dakota, have benefited from energy development. Texas, for instance, had $31.2 billion in its permanent trust fund in 2011.

ONEOK Increases Dividend

According to a press release: the board of directors of ONEOK, Inc. today increased the quarterly dividend 3 cents per share, or 9 percent, to 36 cents per share from 33 cents per share, effective for the fourth quarter 2012, payable Feb. 14, 2013, to shareholders of record at the close of business Jan. 31, 2013.

According to one reader who sent me this note, historically, OKS will follow with a similar announcement.

Looking at the chart/history of OKE, dividend increases are fairly frequent and irregular. I only began to follow ONEOK after they started operations in the Bakken. 

Twelve (12) New Permits -- The Williston Basin, North Dakota, USA

Bakken Operations

Active rigs: 185 (very interesting, how it is creeping back up)

Twelve (12) new permits --
  • Operators: Petro-Hunt (5), Oasis (3), Baytex, Slawson, BEXP,
  • Fields: Van Hook (Mountrail), North Tioga (Burke), East Fork (Williams), Cow Creek (Williams), Whiteaker (Divide), Tree Top (Billings), Little Knife (Billings), Cottonwood (Burke)
  • Comments: None.
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Producing wells completed:
  • 22907, 519, CLR, Cheyenne 2-4H, Dollar Joe, t12/12; cum --
  • 22906, 310, CLR, Cheyenne 3-4H, Dollar Joe, t12/12; cum --
  • 21165, 810, MRO, Orvie 24-20H,  Strandahl, t11/12; cum 6K 11/12
Four permits canceled:
  • 24472, PNC, XTO, Buford 12X-16B, Williams
  • 22191, PNC, Samson Resources, Carrera 17-20-163-97H, Divide
  • 22192, PNC, Samson Resources, Cakyman 8-5-163-97H, Divide
  • 22253, PNC, Samson Resources, Hero 22-15-163-96H, Divide

Burger Time Expanding, Revamping

Link here to The Bismarck Tribune.
Burger Time, which has a 20-year history in Bismarck, is expanding across the state.
General manager Sean Marconi said the restaurant plans to open more locations and update its look.
“Minot used to be the fifth busiest (location) now it’s the first,” Marconi said. Bismarck is the second busiest.
Burger Time has eight stores across North Dakota, South Dakota and Minnesota: Grand Forks, Minot, Bismarck, Fargo, two in Sioux Falls, St. Cloud and Moorhead.
Marconi said the company plans to build second stores in Bismarck, Minot and Fargo, as well as stores around the Bakken region in Williston, Dickinson, Watford City, Stanley, Ray and Tioga.
If they can staff it, it will be interesting to see if the Williston store becomes the busiest.

Williston Basin Bakken in Montana: a Dud?

Part III in this series at This article doesn't say a whole lot. Not sure why that particular map was shown. Overall, not impressed. But the link is there.

Crude OIl, Gasoline -- January 16, 2013 -- Idle Chatter -- No Real Cohesiveness

Some disjointed thoughts and comments. This post may not be ready for prime-time. May be amended later tonight. Being put together "on the run."

PSX up over $2.00 today.

Some data points from today's energy reports from the US government:
  • nation's crude oil supplies decreased, but supplies at Cushing rose; supplies fell by one million bbls; analysts expected a build of 2.5 million bbls
  • gasoline supplies grew by almost 2 million barrels; analysts expected a rise of 3 million bbls
  • four-week average for gasoline demand: slightly less than a year earlier
  • refineries: 88% utilization; analysts expected the rate to fall to 89%
  • distillates, which includes diesel fuel and heating oil, rose slightly more than expected
  • benchmark crude oil rises about 50 cents/gallon
Now, the PSX story:
  • refinery fire at a PSX refinery, took the refinery off-line; refinery should be back up and running soon (if not already back on-line) -- so, forget about the fire; this is the real nugget -- PSX is refining WCS oil; WCS oil is discounted almost $40 to WTI; gasoline is pretty much the same price in any given city, regardless of the source of the oil; no wonder PSX is up today
I cannot sort out why crude oil supplies decreased -- sure, winter shut down some fracking in the Bakken, and Canadians might be cutting back, but supplies actually increased at Cushing. I would call it a "wash" except a 3.5 million-bbl delta seems fairly significant.

Oil cannot be exported, but refined products can be exported. Is it possible that more refined products are being exported? 

Meanwhile, the supply of gasoline creeps up; demand for gasoline slightly less than a year earlier.

So, the price of oil creeps up today (futures) and gasoline in my neighborhood staying the same. It's been that way for several weeks now. At some point gasoline needs to increase in price if oil keeps going up. But a) gasoline demand destruction; and b), price of WCS keeping downward pressure on price of gasoline.

Another comment: what might this mean, "Meanwhile, the supply of gasoline creeps up; demand for gasoline slightly less than a year earlier."?

A couple of thoughts:
  • if the economy of the US was indeed improving as I'm hearing from talking heads, wouldn't demand for gasoline be increasing? And home construction, etc., all those trucks -- distillates rose more than expected. The supply of heating oil rising should not be surprising: it's been another incredibly mild winter in the northeast where they still use a lot of heating oil. So, does less demand for gasoline portend a less robust economy going forward....
  • it appears maybe the refiners are noting the same demand destruction; refinery utilization dropped slightly more than expected....

Flashback: The Debt Ceiling -- Oh, So, Yesterday

I haven't re-read the post (and I certainly haven't edited it, so there may be factual errors in it), but the the general theme -- that Social Security checks will be delayed if the the Debt Ceiling is not lifted is ... oh, so ... yesterday.

The Debt Ceiling, July, 2011. [Wow, combining "guns" and the "Debt Ceiling" in one video is pretty prescient. Enjoy.]

The angry young man who repeatedly called wolf, with apologies to Mr Aesop. Using the three-letter word beginning with "b" would not be politically correct in this context.

Market -- Idle Chatter

CVX melting up; solidly above $112 now, but COP and XOM down a bit. But, wow, PSX -- which has a connection with the Bakken -- is jumping today, up over 3%. Nice jump.

ENB: down but essentially flat, flirting with 52-week high.

CLR: up, but essentially flat
OAS: down, but essentially flat
KOG: down; but essentially flat, also
TPLM: down 1%

TRP: down, but essentially flat, and trading near its 52-week high; interesting in light of recent news coming out of the Canadian oil sands

Delta: hit a new 52-week high; see an earlier MDW post regarding Delta
BRK-B: down, but around its 52-week high
UNP: up a bit; flirting with 52-week high

SRE: flat, down a bit, but wow, the "MAX" chart looks incredible
MDU: flat, down a bit

Nothing jumps out at me, except a) PSX action today; b) SRE appreciation over the years.

Oh, one other thing: with all the talk about the oil sands shutting down, all things being equal, this should be good news for the Bakken. 

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here. I generally look at companies that interest me for a variety of reasons. I hold shares in some of the companies listed above, and have no plans to buy or sell any shares in the next 10 days or so.

More On CLR's Fourteen (14) Wells Sited in Corner of One Section on 2560-Acre Spacing Unit

Note: I will be updating data for this 14-well pad at this post: CLR's Atlanta pad.

Fourteen wells on three pads (6-4-4) in the northwest quadrant of 6-153-101. See drilling exhibit here.

PermitStatusOperatorNameCountyFieldTest DateCUMStatus Date
23372ROSCLRAtlanta 1-6HWmsBaker------
23371LOCCLRAtlanta 2-6HWmsBaker------
23370LOCCLRAtlanta 3-6HWmsBaker------
23369LOCCLRAtlanta 4-6HWmsBaker------
23368LOCCLRAtlanta 5-6HWmsBaker------
23367LOCCLRAtlanta 6-6HWmsBaker------
23366LOCCLRAtlanta 7-6HWmsBaker------
23365LOCCLRAtlanta 8-6HWmsBaker------
23364LOCCLRAtlanta 9-6HWmsBaker------
23363LOCCLRAtlanta 10-6HWmsBaker------
23362LOCCLRAtlanta 11-6HWmsBaker------
23361LOCCLRAtlanta 12-6HWmsBaker------
23360LOCCLRAtlanta 13-6HWmsBaker------
23359LOCCLRAtlanta 14-6HWmsBaker------

The wells are all confidential, and the names of the wells do not help us sort out which formation is being targeted. A quick look at the 2012 CLR wells reveals that CLR generally does not put "TFH" in a well's name. In fact, all three Charlotte wells, testing different TF benches were all simply "H" wells.

Based on the fan shape, I will suggest that they are all middle Bakken wells. Perhaps there is information at the exhibit that I missed.

CVX Acquires More Acreage in Asia; CLR With Lots of Debt

From Yahoo!Finance In-Play:
Chevron Acquires New Offshore China Acreage: Co announced that its China subsidiary has entered into production sharing contracts with China National Offshore Oil Corporation (CNOOC) for two exploration blocks in the South China Sea's Pearl River Mouth Basin. During the exploration phase Chevron China Energy Company will be the operator of the two shallow water blocks, which in total cover an area of approximately 2,233 square miles (5,782 square km). "Exploration of these blocks builds on our strategy to grow our business across the Asia Pacific region, where we are developing LNG, deepwater, shale and sour gas resources," said George Kirkland, vice chairman, Chevron Corporation.
CVX continues to rise in price. COP and XOM pretty much flat today.

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

Meanwhile, over at SeekingAlpha: CLR with lots of debt. And yes, lots. 

WTI/Bakken Spread at Clearbrook: $4.00 Today

Dynamic link at Bloomberg.

Wednesday Links

Japan grounds Boeing's new airplane. No links; the story is everywhere.

A staggering one out of three residents in Illinois live in poverty or near the poverty level. This is not an op-ed. This is from the US Census Bureau.
"Illinois' 33%: Report on Illinois Poverty," is based on 2011 U.S. Census Bureau data. It declares a crisis sparing no community in Illinois, and only worsening under budget cuts to government programs and policies that alleviate poverty.
The flu epidemic: maybe we are starting to see a peak; maybe the curve is starting to flatten.

Another minority leaves the president's cabinet, a Latino. His cabinet becomes even less diverse. Link to Yahoo news
The resignation of Salazar, who is Latino, comes as the White House faces criticism for President Barack Obama's four consecutive appointments of white men to top posts: John Kerry for secretary of state, Chuck Hagel for secretary of defense, John Brennan for CIA director and Jack Lew for treasury secretary. Those picks, combined with a recent New York Times story highlighting the president's "all-male" inner circle and other reports suggesting a lack of diversity, have driven criticism, which the White House has flatly rejected.

WSJ Links
Many of the links will require a paid subscription to WSJ, but googling can generally find the article somwhere, though it may take some work. 

Section D (Personal Journal):
Mossberg has his weekly column; this time on a quick way to send photos, files, and money -- using the iPhone. This incredible new app is available only on the iPhone. Xsync app. Link is to a non-WSJ site.

Section C ( Money & Investing):
Great drought map of the US as it affects the wheat market; North Dakota pretty much spared.

Malls are dead.

M & A activity in the oil patch in 2013.  
As it is, it looks cheaper to buy barrels on the stock market via deals than drill for them right now. Sanford C. Bernstein says the Western oil majors, including the likes of Exxon and Chevron, now trade at an average enterprise value of less than $15 a barrel of oil equivalent of proved reserves. This metric is shorthand for the value investors place on reserves, enabling comparisons between companies and with the costs of finding and developing reserves via drilling. Right now, those finding-and-development costs are $18.
North America is likely to remain the hottest area for deals this year—and that is where price weakness could actually help. While high energy prices engender exuberance, low prices can bring even reluctant sellers to the table. After all, the megamergers of the late 1990s creating the likes of Exxon Mobil were in part a reaction to oil prices crashing to under $10 a barrel.
Section B (Marketplace):

US wind industry's roar might diminish in 2013

How Dell went from PC king to buyout fodder.

Shell CEO scripts a leading role for gas

Nissan races to catch up in hybrids; after its all-electric Leaf missed sales targets, car maker tries to find answer to Toyota Prius. Two words: death spiral.

Section A:
Can't wait to see how lawmakers react to the president's proposal on guns, ammunition.

Page 3: Mars rover ready to dig in; delays in Medicaid pay vex hospitals.

Op-ed: green energy's baptists and bootleggers, Holman W. Jenkins, Jr.

Op-ed:  The wages of unemployment: labor-force participation has declined since 2000, and among the reasons are soaring government benefits. Soaring.

Op-ed:California could be the next shale boom state.

In the Fairfield Sun-Times: Fracking and Dithering Used in the Lede


January 25, 2013: New York state continues to dither
Governor Andrew Cuomo has publicly remained neutral on the issue. Last year he ordered a health review of fracking before finalizing his decision, but the Nov. 29, 2012 health review deadline was missed and delayed, again.
However, the opposition for allowing this widely-used procedure is growing louder. In January 2013, environmental advocates walked to the governor's office and delivered 50 boxes of what they said were 204,000 anti-drilling comments to the DEC.
My hunch: no decision until at least after the next presidential election in which Gov Cuomo will be a primary candidate.

Original Post

You have to love it. Finally, honest reporting:
Spooked by left-wing environmental activists, New York Gov. Andrew Cuomo has been dithering over whether or not to approve the production of natural gas by means of hydrofracking from the Marcellus Shale formation in his state. Activists are trying to block approval by claiming that fracking can cause health problems. Today, the New York Times is reporting that a study done a year ago by the state’s Health Department finds that fracking can be done safely.
I guess the only way this paragraph could have been improved would have been to replace the word "activists" with "radicals." I am not a philologist, but "reactionaries" is probably even more important than "radicals."

"Radicals" or "wildcatters" as they are called in the oil and gas industry embraced fracking some time ago.

Wheat and Barley Stocks Up Huge in North Dakota

Link to The Bismarck Tribune.

Wheat and barley stocks up are in the Dakotas, though barely in South Dakota.

Data points, as of December 1, 2012:
  • Wheat, North Dakota: up 33%
  • Wheat, South Dakota; up less than 1%
  • Barley, North Dakota: up 86% -- wow
  • Barley, South Dakota: up 9%
And so it goes.

Time For A New Poll

Results of the last poll: do you think there will be 200 active rigs in North Dakota by September 30, 2013?
  • Yes: 65%
  • No: 35%

So, time for a new poll. I don't watch network television as a rule any more. I don't have a television set in my home in San Antonio (well, actually, I do, but only used as a monitor to watch DVDs). I happen to catch network television when I'm with my family in other states, and work hard to catch sports events. If it's available, I will tune into CNBC periodically but generally turn it off if Hawaii 5-O is on. Or Remington Steele. If the latter are not showing, I have lunch.

[If I am with my granddaughters in the Boston area, I listen/don't watch CNBC from 7:15 a.m. to 7:30 a.m. while making them breakfast; but then we watch SpongeBob SquarePants together while having breakfast.]

However, without exception, I never, never watch the Hollywood award shows any more, and I no longer watch the President when he comes on. I turn the television off when he starts speaking.

I am curious how many others specifically turn off the television when the president starts talking. I don't mean "tuning him out" or checking back once in awhile to see what he's saying but whether completely turning the set off or to another channel when he's speaking.

I won't watch the State of the Union Address but I won't consider that part of the question because the State of the Union Address still has a lot of pomp and circumstance: it's an event.

So, with all that as prelude, the question is: do you, as a rule, listen to President Obama's speeches?

Another Look At 14 Wells in One Section for 2560-Acre Spacing in the Bakken

Earlier I posted a screen shot of 14 wells on 2560-acre spacing.  A reader commented on this, providing the location, just southwest of Williston, west of US Highway 85, north of the river. With that description easy to find on the GIS map server.

Here is my comment, posted at that site:
I finally took some time to look at the GIS map server and these fourteen wells. It is really, really impressive.

Three pads: one 6-well pad; one 4-well pad; one 4-well pad. In section 6-153-101.

All three pads, all fourteen wells, are in one long line west to east, or east to west, in the northwest quadrant of the section. And as noted, just to the northwest of these fourteen wells, in the same section, is a dedicated salt-water disposal well.

Think of the cost savings. One road out to the general area. One natural gas pipeline out to the general area. One rural electric power line out to the general area. Look at all the farmland that was not plowed under.
Say what you want, I think the way "they've" come up with the spacing AND the field rules have really helped make the development of the Bakken rational, sensible, and very, very fair to all involved. 

Global Warming Dumping "Buckets" Of Snow on Boston

But first -- RBN Energy -- analysis of pricing of natural gas.

Now back to global warming. The temperature is very mild this a.m. in the Boston area. I can shovel the four-inch snow "pack" -- although it is not yet packed -- without gloves or coat. It really is quite mild. The snow must have started about midnight based on the pattern of snow, car tracks, etc. And, as noted, it must be about four inches, maybe three inches, but it is still coming down pretty quickly. Not huge flakes, but not small ones either. The snow is very moist, and absolutely perfect for snowballs, though a big snowman might not quite work, quite yet.

I have a dilemma. I really don't want to ride the bike but the roads are clear (with slush); too easy to slide in. But I don't want to take a bus for such a short destination. So, while I sort that out, outside to do some shoveling.