Thursday, February 14, 2013

Update on Bakken Shale Discussion Group Thread on 160-Acre Spacing

Yesterday I noted three interesting threads over at the Bakken Shale Discussion Group.

The third of the three, regarding 160-acre spacing in the Parshall oil field just got more interesting. It is important to note that I am not saying this is 160-acre spacing, others are saying it.

From that thread that started the discussion:
The first 160-acre spaced wells in the Core area, the Wayzetta 022-1509H and 149-1509H, had maximum rates of 1,185 and 1,265 Bopd, respectively.
  • 22703, conf, EOG, Wayzetta 22-1509H, the well file shows this well to be on a 1920-acre spacing unit, going through three sections, 9/10/15-153-90. The well is still on confidential, so Larry must have source of information to provide an IP. 
  • 22704, conf, EOG, WAyzetta 149-1509H, the well file shows this well to parallel #22703 -- 1920-acre spacing through the same sections, 9/10/15-153-90; the well file includes a drilling report suggesting this well has been drilled, waiting completion at time of filing. The well is still on confidential, so Larry must have a source of information to provide an IP.
More to follow.

Wells Coming Off the Confidential List Friday

21427, conf, Slawson, Sniper (Federal) 2-6-7H, Big Ben,
22729, conf, BEXP, Alger State 16-21 2TFH, Alger,
22845, conf, MRO, Diamona A 31-28TFH, Bailey,
23030, conf, BR, Walter 31-29MBH, Haystack Butte,
23040, conf, Hess, EN-Horst S-154-93-1003H-6, Robinson Lake,
23207, conf, Newfield, Orvis State 150-99-21-16-2H, South Tobacco Garden,
23334, conf, QEP, MHA 3-03-35H-150-92, Heart Butte,
23345, conf, CLR, Milton 3-14H, Hamlet,
23352, conf, CLR, Missoula 3-21H, Camp,

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RBN Energy looks at alkylate, a blending component that accounts for about 12% of the US gasoline pool.
Alkylate is a valuable blending component that accounts for about 12 percent of the US gasoline pool. Alkylate is manufactured by combining elements derived from NGLs and crude oil refining and is an important link between these two hydrocarbon markets. Alkylate has critical qualities required to meet complex modern gasoline quality specifications. Today we look at the qualities and manufacture of alkylate.
US Gasoline is a complicated product that refiners blend to meet local quality and regulatory specifications using a number of components often referred to as the gasoline blending pool. Alkylate is an important gasoline blending component that has little name recognition outside refinery circles.  A number of previous RBN blogs touch on the alkylate story.
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 I won't be posting any WSJ links today; nothing in the entire newspaper today was interesting enough to post. A few stories about the Heinz-Buffett/3G deal. Nothing of significance on the op-ed pages. Even page 3 of section A was pretty dismal. And so it goes. Looking forward to the weekend edition.

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Boeing 787 Dreamliner-related: Airbus replacing its lithium batteries with "conventional" batteries.

Random Update of Seven More WPX Permits in Section 2-150-92, Van Hook

In today's daily activity report, WPX was issued permits for seven more wells in section 12-150-92, Van Hook. Four of the wells will run north; three south; all 1280-acre spacing.

In the spacing unit immediately to the west of these seven new permits: currently in sections 2/11-150-92:
  • 22908, 235, WPX, Mason 2-11HWR, t8/12; cum 57K 12/12;
  • 22129, 196, WPX, Mason 2-11HA, t7/12; cum 33K 12/12;
  • 22130, TA, formation instability; drilled to vertical total depth; no horizontal;
  • 22131, 502, WPX, Mason 2-11HX, t10/12; cum 38K 12/12;
  • 18737, 1,034, WPX/Zenergy, Mason 2-11H, t2/11; cum 171K 12/12;
  • 22216, 347, WPX, George Evans 11-2HD, t10/12; cum 35K 12/12;
  • 22215, 504, WPX, George Evans 11-2HZ, t10/12; cum 38K 12/12;
  • 22214, 436, WPX, George Evans 11-1HC, t10/12; cum 38K 12/12;
  • plus several more on confidential list or on DRL status
These two wells have horizontals in the same spacing units as the seven new WPX permits:
  • 19150, sections 13/24-150-92, 895, WPX/Zenergy, FBIR 13-24H, t2/11; cum 181K 12/12;
  • 18754, sections 1/12-150-92, 2,104, WPX/Zenergy, Olson 1-12H, t12/10; cum 149K 12/12

Update on Bismarck's Tubular Transport & Logistics / Northern Plains Commerce Centre

For the archives.

Don sent the link. The Bismarck Tribune is reporting:
The Bismarck City Commission has extended Tubular Transport & Logistics’ lease to run the Northern Plains Commerce Centre loading facility by another six months until one of TTL’s partners buys the property.
TTL brokers materials to the oil industry in western North Dakota and unloads and delivers lumber and rebar from rail cars at the NPCC facility. TTL’s operations at the NPCC would not change if the property is sold to the partner.

The Miraculous North Dakota Boom Is Over -- The Atlantic

I haven't had a chance to read the entire article at this link in The Atlantic which "anonymous" sent me with the question, "thoughts?"

Here are my thoughts, quickly done, needing to move on:
That would be correct, the boom is over. We are now in the manufacturing stage. The manufacturing stage was forecast about a year ago.

This is the neatest bit of trivia. Anyone who has a well in North Dakota (any mineral rights own) will eventually have four wells; some will have eight wells; a smaller number will have 16 wells, and maybe more. But when this all started, folks were happy if "their one well" came in. They had no idea, and some still do not yet realize, that they will eventually have 4, 8, 16 or more wells.

If the boom is over, I would say most North Dakotans would be thrilled; now to move into the even busier manufacturing stage.
Exciting, isn't it? Now, time to get back to the Bakken manufacturing stage. Did you all note that WPX was issued permits for seven wells on one pad today, something we never saw a year ago.

For the record:

February 14, 2013:
  • Permits to date: 322
  • Projected # of permits for 2013: 2,612
  • Projected # of permits for 2012 same time one year ago: 1,841
  • Permits issued in 2012: 2,521 with 30 or so ultimately canceled.

Eleven (11) New Permits -- The Williston Basin, North Dkaota, USA

Bakken Operations

Active rigs: 182 (steady, no change)

Eleven (11) new permits --
  • Operators: WPX Energy (7), Petro-Hunt (2), CLR, BR
  • Fields: Van Hook (Mountrail), Elidah (McKenzie), Medicine Pole Hills (Bowman), North Tioga (Burke)
    Comments:
Wells coming off the confidential list were posted earlier; see sidebar at the right.

One producing well was completed:
  • 21614, 15, BTA Oil Producers, 9215 JV-P Snow-B-1R, Billing County

North Dakota #1 In Food Production For The Nation and The World -- Williston Wire

All about agriculture in this edition.

From the Williston Wire. No links; it is very easy to subscribe to the Williston Wire.

North Dakota is #1 for food production for the nation and for the world.

Corn belt vs the northern plains; the cost of raising corn.

The Williston Wire notes that the president did not mention agriculture or rural American in his SOTU address.

Off The Net For Awhile

Request For Lease Information Near Zahl, ND

In case folks don't read the comments:
Need info on leasing 2 parcels near Zahl, Nd. douglasnelson4477@yahoo.com

No Guts, No Glory -- New York Delays Decision On Fracking -- Need More Time To Study

Updates

February 15, 2013: industry feels comfortable/optimistic with status of fracking studies in New York

Original Post

Someone has said that fracking dates back to 1940, if I recall. I could be way off. I do know that fracking has been around for a few years, but I guess New York state needs more time to study the issue. My hunch is that the health department provided an update the governor did not like and told them to continue studying.

Oil & Gas Journal is reporting:
New York Gov. Andrew Cuomo's administration faces a delay in deciding whether to allow high-volume hydraulic fracturing because the state Department of Health said it needed more time to review the practice.
The health department's decision to take more time to review a state environmental impact statement on fracing means a delay for the state Department of Environmental Conservation, which had tentatively planned on releasing an extensive environmental review Feb. 13.

Wells Immediately North And West Of Williston Have Been Updated

Cumulative production numbers for wells immediately north and west of Williston have been updated. Really not worth re-visiting. No new wells; no rigs in this area. Production has increased about what one would expect.

At The Open: Bakken Within 75 Cents of Parity of WTI

Today, the spread between Bakken/WTI at Clearbrook is $1.00 but at the open the spread was as close as 75 cents. The link is dynamic.

Meanwhile, Brent/WTI spread: $21, no change.

Other crude oil pricing links at the "Data Links" page.

Nice Op-Ed In Grand Forks Herald on America's Energy Future

CRC sent the link.

An op-ed in the Grand Forks Herald.

Three suggestions:
  • regulators: get "real" with regulations on fracking
  • regulators: get "real" off-shore (imagine grounding all airlines forever after one mishap)
  • regulators: get "real" on the Keystone XL

Uinta -- Again, The Comparison Is To The Bakken

Uinta Basin: northeast corner of Utah.
 
The Green River Formation is found in the Uinta Basin. There are official estimates of 3 trillion bbls of original oil in place (OOIP) in this formation. Seventy-five (75%) of the Green River formation is under federal (BLM) control.

News and Updates

March 31, 2018: will exit the Bakken and Uinta; looks like it becomes a pure Permian play

May 25, 2017: Tesoro and EP Energy announce joint venture in Uinta Basin; 60-well program.

April 3, 2015: tar sands in the Uinta Basin.

March 17, 2015: Newfield suspends drilling in Utah's Uinta basin due to slump in oil prices.

October 22, 2013: Ultra pays $650 million for 49,000 acres in the Uinta that currently has 38 producing wells, 4,000 bopd. $/acres = $13,265/acre. Ultra has been acquiring leasehold interest in  Pinedale since 1997 and is now the largest interest owner in the field.
The oil acquisition fits the company’s strategy of profitable growth with exceptional returns at oil prices well below $75 per barrel.
September 10, 2013: RBN Energy: the challenge of transporting the yellow and black waxy crude oil out of the Uinta Basin.

August 27, 2013: RBN Energy: handling the expanding production from the Uinta.

February 27, 2013: intermediate oil and gas companies are DISAPPEARING from the Uinta Basin; intermediate oil and gas companies in the Uinta Basin are being bought or merging with others. SeekingAlpha.com

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The Salt Lake Tribune is reporting that transportation ills may disrupt development of the Uinta basin.
Utah’s Uinta Basin could see huge growth in oil and natural gas production — akin to the current boom in North Dakota — except for one problem: the remote area lacks adequate transportation to handle it.
Unless that problem is solved, $30 billion worth of oil and gas may go undeveloped there over the next 30 years. It could cost Utah’s economy $10 billion, and prevent creation of nearly 27,000 jobs.
This story was first published February 9, 2013. 
As you look at the Uinta Basin, we have one primary artery. That’s [U.S.] Highway 40," said Sen. Kevin Van Tassell, R-Vernal. It has only two lanes for much of its length, and super tanker trucks already travel it constantly a few minutes apart bringing crude to refineries near Salt Lake City.
The study looked at how much oil and gas production could be lost over the next 30 years because of transportation bottlenecks.
"We believe conservatively it is $30 billion," said Cory Pope, UDOT program development director. He added that the cost, in turn, to Utah’s economy is about $10 billion in lost taxes and benefits to businesses, and a loss of nearly 27,000 jobs.
Pope said that also means Utah would be losing on average $180 million in taxes a year over that time, equivalent to about 4 percent of the state’s annual tax collection.
Hmmmm.....not insurmountable....whining....

What did the Bakken have? One artery, also, "2 & 85"?

Mideast: Egypt Running Out of Diesel

Reuters is reporting Egypt is about to run out of diesel:
Fathy Ali is beyond anger as he queues for hours in a line of 64 trucks and buses to fill his tank with scarce subsidized diesel fuel, known in Egypt as "Solar."
"This has become part of my life. I come and wait for hours or days, depending on my luck," the chain-smoking bus driver said at a besieged gas station on Cairo's Suez High Road, wrapped in a scarf and thick coat for the long ordeal. "At the start it used to upset me a lot but now I've kind of given up."
Diesel supplies are drying up as a cash-strapped government struggles to cap a mounting bill for subsidies it has promised the IMF it will reform to secure an elusive $4.8 billion loan desperately needed to keep a sagging economy afloat.
The situation appears near breakdown with growing shortages, unsustainable subsidies and foreign exchange reserves running out, raising the risk that fuel bottlenecks lead to food shortages and pose a risk to political stability.
Foreign reserves are down below $15 billion, less than three months' imports, despite deposits from Qatar and Turkey. The Egyptian pound has lost 8 percent of its value this year and a black market has emerged for hard currency.
Egypt's strategic reserve is down to three days, though there are suggestions that the problem is more of a distribution problem than supply problem. 

My heart goes out to those just trying to raise a family in Egypt. 

For Investors Only: EOG Continues To Rise; SLB Hits A 52-Week High

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

... SLB goes ex-dividend tomorrow, February 15, 2012. No specific news that I am aware of regarding SLB's move today. 

Lease Advice For Mineral Owners; Surface Owners

Don provided the link.

The Dickinson Press is reporting:
Saxowsky told the few dozen people at the meeting that there are 8,000 oil-producing wells in the state, but thousands of more are expected in the next five to seven years.
The average lifespan of an oil well is 30 to 40 years, according to Tessa Sandstrom, communication manager for the North Dakota Petroleum Council.
Because of that, Saxowsky said mineral rights owners may want to see about including in their lease that the oil company is obligated to drill the wells at a decent pace.

Jobless Claims Drop More Than Expected; Four-Week Average (Better Measure) Rose

Remember: the magic number is 400,000

Reuters is reporting:
The number of Americans filing new claims for unemployment benefits fell more than expected last week, offering hope that the sluggish labor market recovery may have picked up a step.

Initial claims for state unemployment benefits dropped 27,000 to a seasonally adjusted 341,000, the Labor Department said on Thursday. The prior week's claims figure was revised to show 2,000 more applications received than previously reported.
Economists polled by Reuters had expected claims to fall to 360,000.
"Politically" this is a great report but I believe the rate of recovery will still be six years or more before we get back to pre-recession employment levels. Or something like that. But every little bit helps.

Other data points:
  • four-week moving aveerage: 352,000 (rose 1,500)
  • still receiving benefits: 3.11 million; 130,000 less than previous report
  • still receiving benefits: lowest level since July, 2008; could reflect people exhausting their benefits.
LA Times writes a nice, fair and balanced story on this week's numbers. This is an important data point:
Thursday's report showed that continuing claims for unemployment benefits stood at 3.1 million in the week ended Feb. 2. That is lowest since July 2008, before the worst of the recession hit and the job market began to tumble. 
A lot of folks should be coming back into the job market. 

For All That Hand-Wringing: More Coal To China; Shipped By Warren

Link provided by Don.
Gillette-based Cloud Peak Energy Inc. signed a deal to ship up to 16 million metric tons of coal a year through the Gateway Pacific Terminal at Cherry Point in Bellingham, Wash., the two companies announced Wednesday.
The coal will be exported to Asia, Colin Marshall, Cloud Peak Energy’s president and CEO, said in a prepared statement.
Coal would come from the Spring Creek mine near Decker, Mont., the Youngs Creek property acquired by Cloud Peak last year and land made available through recently announced option and exploration agreements with the Crow Tribe in Montana, the statement said.
The Kyoto Protocol excludes China from "mandates." Canada withdrew from the protocol. The US did not sign up to the Kyoto Protocol.

Newfield Updates

Links provided by "anon 1":

Press release:
Newfield produced 50 million BOE in 2012, including 11.9 million BOE in the fourth quarter of 2012. Full-year production exceeded the Company's most recent guidance by approximately 0.5 million BOE. 
Newfield incurred a $1.5 billion non-cash full cost ceiling test writedown associated with the carrying value of Newfield's domestic proved reserves. The non-cash writedown relates primarily to low natural gas prices and the sale of non-strategic assets. 
During the fourth quarter of 2012, Newfield also incurred a non-cash charge for deferred income taxes of approximately $550 million. The charge was primarily related to the Company's focus on U.S. operations and its repatriation of accumulated profits from its international subsidiaries. In December 2012, the Company used repatriated cash to reduce borrowings under its revolving credit facility. 
Newfield's actions related to its international assets and year-end proved reserves will impact financial results for the fourth quarter of 2012. The Company expects to report a net loss of approximately $1.2 billion or $8.80 per share.

Year-End 2012 Proved and Probable Reserves:

Proved reserves at year-end 2012 were 566 million BOE, down 13% from 652 million BOE at year-end 2011. The decrease relates primarily to low natural gas prices, the sale of non-strategic assets in 2012 and produced volumes. This decrease was partially offset by the addition of 86 million BOE of reserves through the Company's active drilling programs. Reserves were determined using SEC pricing of $2.76 per MMBtu of natural gas and $94.84 per Bbl of oil.
Press release
For 2013, the Company plans to invest $1.7 $1.9 billion (excludes capitalized interest and overhead), with the entire budget substantially allocated to liquids plays. Total company production is expected to range from 44 – 47 million BOE. This compares to 2012 production, adjusted for asset sales, of approximately 47 million BOE. Adjusted for asset sales in 2012, Newfield expects that its 2013 domestic liquids production will increase more than 35%. Natural gas volumes are expected to decline about 14% from 2012 levels due to a continued lack of investment and natural field declines.
The Company's four domestic oil resource plays will receive a capital allocation of $1.4$1.5 billion. These areas include the Cana Woodford, Uinta basin, Williston basin and the Eagle Ford. In its international operations, the Company plans to invest $300$400 million. A significant component of this investment includes the ongoing development of the Pearl oil field, offshore China. First oil sales from the Pearl development are expected in early 2014.

Warren Buys Heinz -- Happy Valentine's Day -- From Hallmark! Thursday Links

Active rigs: 182 (steady).

Wells coming off the confidential list have been posted.

What a treat! Another vacation spot we enjoy close to home, pretty much a stay-vacation is Corpus Christi. Several years ago it looked a bit "recession-hit" but it sounds like it should be booming now. RBN Energy has a great update on Corpus Christi.
Total crude oil shipped out from the South Texas Port of Corpus Christi increased 19 fold between November 2011 and November 2012 from 2.1 MMBbl to 36 MMBbl. All of that crude is coming from the Eagle Ford shale oil basin 70 miles north of Corpus in the form of light crude or condensate via pipeline. Six marine terminals have been built or expanded at Corpus but can they handle the traffic jam? Today we review how the Port is coping.
RBN Energy certainly does provide nice updates. I am really impressed. And the "subscription" is still free. 

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Warren Buffett buys Heinz.  Stock surges. I wonder if this has anything to do with John Kerry's plans?  Just coincidental, I assume. Warren says he's been looking at Heinz since 1980. Warren will partner with 3G Capital on this deal, 50/50. Perfect fit for 3G Capital: owns Burger King. Warren/3G will pay a 20% premium: this is one of the nice things about buyouts. One sees the premium folks are willing to pay. I have always assumed similar numbers in the oil patch: a 20% premium. 3G Capital: "3G = three guys." The three richest guys in Brazil; perhaps the three richest guys in the world.

American Airlines -- US Airways; Berkshire Hathaway -- Heinz; NYSE; Comcast -- NBC; and so it goes. I'm waiting for huge energy deal. 

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WSJ Links

Section D (Personal Journal):
Rise of the Rent-a-Porshe

Section C (Money & Investing):
Was GM deal to buy back shares money well spent?
Comcast is content to diversity

Section B: Marketplace
This may end up being a stand-alone post, just a warning: paid by a federal grant, workers played board games. I had mixed feelings about posting the "Solyndra" story yesterday, but now that I see this WSJ story, I feel a bit more comfortable. I am still amazed that I get an occasional comment from folks praising the government's Solyndra deal. Wow. I assume those comments are coming out of North Korea, Iran, or Russia. China, not.

Time explores magazine sale

Comcast: all in for NBC; also, GE to splash new cash on buybacks, payouts, purchases

Random thought: a common them -- the gulf between the "haves" and the "have-nots" continues to widen.

Boeing looking at interim 787 fixes

Apple may lose iPhone naming rights in Brazil (starting here, links may require subscription)

Cisco hints of upturn as profits rise

Aha, a more realistic survey compared to an earlier survey that put Tesla on the top ten list of cars "loved" by their owners; this survey of cars for top quality does not include Tesla (in the article)

Section A:
Page 3 and we've talked about page 3 often: big story on "farm boom sows jobs bounty." Companies mentioned: Monsanto, Deere, Dupont Pioneer, Cargill, JBS SA. University grads in agricultural courses will do very, very well; the front page of the WSJ has a story that China is converting farm land to housing developments;

Random comment: GE's Welch says the same thing I posted some days ago -- the sequester is political theater; doesn't amount to a hill of beans; it's all about jobs in Washington; maybe 0.5% GDP;  this is similar to a write-off in a corporation; $85 billion in a 3.5-trillion-dollar spending economy

Mexico moves on energy in economic reset

Kerry says he has plan for Syria power shift

Op-Ed: the four faces of Mount Rushmore have been replaced with one face (you can get which face is now on Mount Rushmore)

Op-ed: learning to love the sequester, a valentine

Op-ed: from SEAL Team Six to retiring without health insurance. I must be missing something: the editorial says "a retired 16-year veteran of the US military" -- retirement is at 20 years. But as long as someone wants to increase / extend military benefits, that's fine with me. All gave some; some gave all; if you have problems with that, visit the US Army hospital at Fort Sam Houston, San Antonio, Texas, and talk to some of the quadruple amputees

Op-ed: the $9 minimum wage that already exists

Op-ed: a warning from the asteroid hunters