Thursday, April 18, 2013

WellStar Energy: New Operator In North Dakota

Rigzone is reporting:
WellStar Energy Corp. announced that the first well has been drilled and the second well has been spud on its anticipated primary non-operated joint venture (JV) in Dunn County, North Dakota.

The Company expects to have a 40 percent working interest in each of the wells upon completion of the acquisition from a private Colorado corporation (the "Vendor") of certain non-operated oil and gas properties consisting of approximately 18,271 gross (7,273 net) contiguous acres located in North Dakota (the "Assets") which will constitute a "fundamental acquisition" (the "Acquisition") for the Company under the policies of the TSX Venture Exchange (the "TSXV").

In addition, two wells have recently been drilled and completed in the Bakken formation on the Company's anticipated secondary joint venture lands, which are contiguous to the primary joint venture but have a different operating partner. The wells are currently producing from two drilling units in which the Company has a potential 12.497 and a 5.208 percent working interest. The Vendor, through consultation with the Company, participated in the FREDERICKS USA 43-26H well (the Fredericks Well). 
The second well, GARY BELL USA 23-36H ("Gary Bell Well") was successfully drilled and completed. The Vendor, through consultation with the Company, went non-consent on the Gary Bell Well. The Company expects to have a 12.497 percent working interest in the Gary Bell Well upon closing of the Acquisition after a three hundred percent penalty is paid from production revenue. Both wells have been put on confidential well status.
The same story is in the WSJ, April 18, 2013
In addition, pursuant to the terms of the Amending Agreement, the purchase price for the Assets has been increased to US$51,600,000 from US$51,550,000. 
It looks like this is the company.
Wellstar Energy Corp. operates as an oil and gas company. It has an option to acquire non-operated oil and gas assets covering 7,273 net acres in North Dakota. The company was incorporated in 1985 and is headquartered in Vancouver, Canada.
The company's website: http://www.wellstarenergy.com/s/Home.asp

Quick back of the envelope on this producing property: $51.6 million/7,273 net acres = $7,000/acre.

The wells (about a mile apart from each other):
  • 24429, conf, MRO, Fredericks USA 43-26H, Wolf Bay (on the reservation), producing;
  • 24309, conf, MRO, Gary Bell USA 23-36H, Wolf Bay (on the reservation), producing;
 18,000 gross acres would be spread across about 28 sections.  Wolf Bay oil field is about 28 sections.

Wow, Isn't This The Truth -- Europe: The Odd Man Out

Rigzone is reporting:
Russia and China will lead the way in the production of resources from shale after the U.S., according to executives, but Europe will likely lag behind.

Torbjorn Tornqvist, chief executive of trading house Gunvor, said Wednesday it was clear that shale production on a scale similar to that in the U.S. is possible in several of the world's biggest current energy producers and consumers -- but that Europe is unlikely to be transformed by it.

He also said that China, Australia and South America were promising as a shale-exploiting countries.

Mr. Tornqvist sounded a much less positive note for Europe, which has so far been divided on its approach to the relatively new technology of hydraulic fracturing, the method of extracting shale resources known as fracking. France has voiced strong opposition to the idea, while the U.K. government has insisted that shale gas production "will happen."

Mr. Tornqvist said: "Europe? You all know the problems there: political problems, no-one really wants to see rigs on the landscape -- and problems and fears about groundwater and so forth will prevent Europe from exploiting its resources, which aren't that big anyway," Mr. Tornqvist said.
I assume when asked about Europe, Mr Tornqvist did all he could to keep a poker face. All he could do to keep from laughing. 

Random Look At Manufacturing Stage in Robinson Lake, Hess

The "norm" in the Bakken is now eight (8) wells / 1280-acre spacing unit in the better Bakken. 

Hess/Robinson Lake

Section 19-154-93, two pads, parallel with each other; 10 wells
Five wells on one pad, running west-to-east; these wells are less than two years old; Bakken wells will produce for 39 years
  • 19568, 602, Hess, EN-Weyrauch-154-93-1918H-1, Robinson Lake, t4/11; cum 109K 2/13;
  • 19569, 600, Hess, EN-Weyrauch-154-93-1918-2, Robinson Lake, t6/11; cum 105K 2/13;
  • 19570, 612, Hess, EN-Weyrauch-154-93-1918H-3, Robinson Lake, t10/11; cum 82K 2/13;
  • 20901, 1,232, Hess, EN-Weyrauch B-154-93-3031H-1, Robinson Lake, t12/11; cum 170K 2/13;
  • 20902, 970, Hess, EN-Weyrauch B-154-93-3031H-2, Robinson Lake, t12/11; cum 171K 2/13;
Five wells on a brand new pad, running west-to-east
  • 25294, conf, Hess, EN-Weyrauch 154-93-1918H-8, Robinson Lake,
  • 25295, conf, Hess, EN-Weyrauch 154-93-1918H-7, Robinson Lake,
  • 25296, conf, Hess, EN-Weyrauch 154-93-1918H-6, Robinson Lake,
  • 25297, conf, Hess, EN-Weyrauch 154-93-1918H-5, Robinson Lake,
  • 25298, conf, Hess, EN-Weyrauch 154-93-1918H-4, Robinson Lake,
Section 21-154-93, two pads, parallel with each other, 9 wells.
Six wells on one pad, running west-to-east
  • 19074, 629, Hess, EN-Frandson-154-93-2116H-1, Robinson Lake, t12/10; cum 107K 2/13;
  • 19075, 225, Hess, EN-Frandson-154-93-2116-2, Robinson Lake, t5/11; cum 91K 2/13;
  • 19076, 1,325, Hess, EN-Frandson-154-93-2116H-3, Robinson Lake, t8/11; cum 215K 2/13;
  • 19077, 717, Hess, EN-Trinity-154-93-2833H-1, Robinson Lake, t2/11; cum 141K 2/13;
  • 19078, 941, Hess, EN-Trinity-154-93-2833H-2, Robinson Lake, t7/11; cum 150K 2/13;
  • 19079, 1,125, Hess, EN-Trinity-154-93-2833H-2, Robinson Lake, t8/11; cum 197K 2/13;
Three wells on a brand new pad, running west-to-east
  • 25203, conf, Hess, EN-Trinity-154-93-2833H-4, Robinson Lake,
  • 25204, conf, Hess, EN-Trinity-154-93-2833H-5, Robinson Lake,
  • 25205, conf, Hess, EN-Trinity-154-93-2833H-6, Robinson Lake,
Section 10-154-93, two pads, in line with each other; 6 wells.
Three wells on one pad, running west-to-east
  • 23038, 515, Hess, EN-Horst S-154-93-1003H-4, Robinson Lake, t12/12; cum 24K 2/13;
  • 23039, 450, Hess, EN-Horst S-154-93-1003H-5, Robinson Lake, t12/12; cum 24K 2/13;
  • 23040, 521, Hess, EN-Horst S-154-93-1003H-6, Robinson Lake, t1/13; cum 22K 2/13;
Three wells on a brand new pad, running west to east
  • 24388, conf, Hess, EN-Uran A 154-93-1522H-2, Robinson Lake,
  • 24389, conf, Hess, EN-Uran A 154-93-1522H-3, Robinson Lake,
  • 24390, conf, Hess, EN-Uran A 154-93-1522H-4, Robinson Lake,

TrainWreck: Health Premiums To Soar

EverydayHealth is reporting:
Few aspects of the Affordable Care Act are more critical to its success than affordability, but in recent weeks experts have predicted costs for some health plans could soar next year.
Now health law supporters are pushing back, noting close ties between the actuaries making the forecasts and an insurance industry that has been complaining about taxes and other factors it says will lead to rate shock for consumers.
"Most actuaries in this country -- what percentage are employed by insurance companies?" Sen. Al Franken, a Minnesota Democrat, asked an actuary last week at a hearing of the Committee on Health, Education, Labor and Pensions.
The committee was discussing a study published last month by the Society of Actuaries (SOA) predicting that, thanks to sicker patients joining the coverage pool, medical claims per member will rise 32 percent in the individual plans expected to dominate the ACA exchanges next year. In some states costs will rise as much as 80 percent, the report said.
The witness was unable to answer Franken's question, but the senator made his point.
Insurance is why actuaries exist. The industry and the profession are hard to separate.
Cue up Connie Francis.  A lot of congressmen and senators are going to be out of office come next November.

Four Of Seven On Drill Status Coming Off Confidential List; No More BEXP; STO From Now On?

For investors only, Yahoo Earnings Calendar says BHI (64 cents) and SLB (99 cents) will be reporting earnings tomorrow morning before the market opens. 

*************************

This looks like the first day that we won't be seeing BEXP any more (oh, I suppose there are still some BEXP wells out there, I don't know), but now watch for STO instead of BEXP.

Wells coming off the confidential list Friday:
  • 21056, 273, CLR/Newfield, Wilson 154-100-29-32-1H, Catwalk,  t1/13; cum 20K 2/13;
  • 23088, 283, OXY USA, Kuntz 1-23-14H-142-98, Saddle Butte, t10/12; cum 6K 2/13;
  • 23510, 269, Whiting, Brueni 11-28PH, Green River, t11/12; cum 14K 2/13;
  • 23543, drl, STO/BEXP, Albert B. 27-34 5H, Nameless,
  • 23589, drl, Samson Resources, Bakke 3229-2TFH, Ambrose,
  • 23797, drl, KOG, Smokey 3-30-18-3H3, Pembroke,
  • 23972, drl, STO/BEXP, State 36-1 4TFH, Stony Creek
**********************

21056, see above, CLR, Wilson 154-100-29-32-1H, Catwalk:

DateOil RunsMCF Sold
2-2013115280
1-201375320


23088, see above, OXY USA, Kuntz 1-23-14H-142-98, Saddle Butte:

DateOil RunsMCF Sold
2-201311441
1-2013961157
12-2012239102
11-201218130
10-20129520

 23510, see above, Whiting, Brueni 11-28PH, Green River:

DateOil RunsMCF Sold
2-201330822544
1-201340053403
12-201244483695
11-20121878300
10-2012660

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

Active rigs: 185

Eleven (11) new permits -- 
  • Operators: Hess (7), XTO (3), Zenergy
    Fields: Hofflund (Williams), Foreman Butte (McKenzie), Siverston (McKenzie), Alkali Creek (Mountrail)
    Comments: Again, XTO is very active. Hess is becoming very active.
The one well that came off the confidential list was reported earlier; see sidebar at the right.

Every day, wells are approved for "tight hole" status; I generally don't comment on them, but today's daily activity list is quite interesting: Oasis has 13 wells that have been approved for "tight hole" status. The wells are pretty much located throughout many counties in the northwest Bakken.

There was one permit cancelled, interestingly enough, a Newfield permit:
  • 24292, PNC, Newfield, Johnson 150-99-33-28-10H, South Tobacco Garden,
There were ten (10) producing wells completed. This is a fairly large number for one daily report:
  • 21249, 371, CLR, Strid 3-26H, Lindahl, 4-section spacing; t3/13; cum --
  • 22117, 1,251,WPX, Dora Smith 5-8HC, Van Hook, t3/13; cum --
  • 22475, 761, SM Energy, Dishon 1-30H, Ft Buford, t3/13; cum --
  • 23153, 1,820, KOG, Koala 154-97-15-33-28-2H, Banks, t3/13; cum --
  • 23154, 1,651, KOG, Koala 154-97-15-33-28-2H3, Banks, t3/13; cum --
  • 23524, 1,004, SM Energy, Ceynar 4-18HA, Poe, t2/13; cum 7K 2/13;
  • 23525, 1,096, SM Energy, Ceynar 4X-18H, Poe, t3/13; cum 2K 2/13;
  • 23526, 885, SM Energy, Ceynar 4-18HB, Poe, t2/13; cum 8K 2/13;
  • 23703, 2,208, Oasis, Carol J A 5200 14-29T, Camp, t4/13; cum --
  • 23756, 510, SM Energy, Prochnick 15-35HSA, West Ambrose, t3/13; cum 2K 2/13;

2013 Pipeline Infrastructure Spending To Grow By 56% -- Wall Street Transcript

I did this once before. I can't afford a subscription to the Wall Street Transcript, but just based on the lede and the list of companies mentioned, one can get a pretty good idea of the magnitude of the opportunities.

Topics covered in the interview:
  • North American Electrical Transmission
  • energy infrastructure companies
  • infrastructure spending
YahooNews is reporting:
I am following two key themes, or markets, right now. The first is electric transmission and distribution infrastructure, which I touched on with contractors. Electric transmission is the movement of electricity across the high-voltage electrical network. We are entering the third year of a strong investment trend in this market. I estimate that the electric transmission market has essentially doubled over the 2010 to 2012 time frame. During that time, it has gone from about $11.2 billion in 2010 to $22 billion in 2012, and we are forecasting continued high teens growth in 2013 and 2014. We are seeing more of that growth coming from Canada in 2013 than we have seen over the past two years.
And then this:
Another very important trend I'm following that is really powerful is energy pipeline; again, this includes oil, natural gas and NGL pipelines. This is a market that's really been driven by the development of the shale plays and the need for infrastructure to transport those products across the U.S. As a result, you are seeing an absolutely - a massive buildout of pipeline infrastructure to support the developing shale plays. The infrastructure is at the site of the shale plays, with gathering systems as well as transporting in or transporting out, which involves midstream and long haul pipes.
Right now, there is a lack of takeaway capacity for oil both in the Bakken and at the Cushing hub, so we are seeing the construction of a number of pipeline projects aimed at alleviating those capacity constraints. We are forecasting an increase of about 56% growth in pipeline spending in 2013...
It will be interesting to add additional pipeline data to "Pipelines of Interest."

Enbridge Updates Eastern Access Crude Oil Project

Oil & Gas Journal provides an update to Enbridge's Eastern Access Crude Oil Project.

I have summarized the update at "Pipelines of Interest."

This is how I see it, the Enbridge projects:
a) Sandpiper Pipeline to get Bakken crude oil to Superior, MN (minimizes Clearbrook, MN)
b) Line 5, expansion from Superior, MN, into Canada (at Sarnia, Ontario)
c) Line 9a, reversal, from Sarnia, Ontario, to North Westover, Ontario, (and from there to Montreal/St Lawrence Seaway and/or Maine

d) all the other pipeline projects in the Eastern Access Crude Oil Project are reversals, extensions, additions, etc., inside the US, to move oil into Line 5 and/or Line 9a.
I could be wrong on this, but that's how I see it.

TPLM Presented At OGIS; That Presentation Is Not Yet Posted; The March, 2013, Corporate Presentation

There is nothing new here. Mike Filloon has covered Triangle Petroleum very, very well, on multiple occasions.

But by typing some of this stuff out, it helps me remember.

Data points on the March, 2013, Triangle Corporate Presentation:
  • pure-play Williston Basin operator
  • 86,000 net acres
  • 85% oil weighted
  • northwestern North Dakota, northeastern Montana
Three areas:
a) Core: oblong oval, Williston and Alexander foci
b) Station Prospect, northeast Montana
c) Other (non-operated, 14,000 net acres) (?)
McKenzie County, Core Area
  • 22,000 net acres
  • plug and perf; 100% ceramic
  • 114 operated locations
  • 2 rigs
  • 46 permits approved or submitted
  • McKenzie AFE: $11.4 - $12.3; average: $11.9 --- $12 million
Montana, Station Prospect
  • 50,000 net acres
  • 354 operated locations
  • long-term leasehold allows "wait-and-see approach"
Vertical integration
RockPile Energy: pressure pumping
  • second spread expected to be operational in 2Q14
  • expanding into cased hole wireline services; exp to be op in 2Q14
Caliber Midstream
  • crude oil, dry gas (to Northern Border Pipeline), produced water, freshwater (from WAWS)
Production
4Q14 production: 4,800 boepd (estimated) (from slide 17, March, 2013, corporate presentation, upper right-hand graph)
Actual 4Q13: 1,950 boepd (that's what slide 17 showed, 4Q13)
Actual 3Q13: 1,389 boepd (that's what slide 17 showed, 3Q13)
According to the January, 2012, corporate presentation, the company estimated exiting 2012 with 3,200 boed. Unless I made a typo, there's a big difference between 3,200 and 2,000 boepd. Again, I may have made a typographical error, but those are the numbers I posted when I saw the presentation.
NOTE: the dates on slide 17 of the March, 2013, presentation seem to be in error, but in an e-mail to the company, I received a reply stating that as of January, 2013, we are into TPLM's 2014 fiscal year.  Screenshots are nice to have.

Hearing Dockets: Quick Look

June 26 - 27, 2013:
  • increasing number of wells/spacing unit
  • CLR with 17 wells on a 640-acre spacing unit
  • some large overlapping units (5,120 acres; 4,260 acres)
  • the "norm" appears to be 8 - 10 wells on a 1280-acre spacing unit, but the number is increasing
  • very few cases to assess risk penalties against non-participating owners
  • several cases to redefine the stratigraphic limits in various fields
May 29 - 30, 2013
  • increasing number of cases to assess risk penalties against non-participating owners
  • more cases than usual for unrestricted flaring (or I may be just more sensitive to this issue with recent ND legislative action regarding flaring)
  • one case with 8 wells on a 640-acre unit (80-acre spacing)
  • two cases each for 3 wells on 320-acre units (~ 100-acre spacing)
  • several cases by Slawson to open the vertical portion of a hz Bakken well to the Lodgepole
April 24 - 25, 2013:
  • the trend seems to be overlapping 2560-acre spacing units. The expectation is that the purpose of these spacing units is to "catch" the areas along the section lines that are currently being missed due to "setback" rules;
  • having said that, CLR is requesting 14 wells on each of 7 existing 2560-acre spacing units
  • also, EOG is requesting 22 wells on an existing 2560-acre spacing unit
  • we continue to see companies requesting to site 12 wells on 1280-acre spacing units
  • we continue to see evidence of downsizing: Slawson wants to create a 640-acre spacing unit for 6 wells; the effective spacing is equal to 12 wells on a 1280-acre unit, but these would be short laterals
March 27 - 28, 2013:
  • the trend seems to be overlapping 2560-acre spacing units
  • SM: establish 22 overlapping 2560-acre spacing units
  • some 320-acre spacing units; with 3 wells each
February 27 - 28, 2013:
  • 14 wells on existing overlapping 2560-acre spacing units
  • Bakken Hunter: requesting permits for up to 264 wells
  • 7 wells in one 640-acre spacing unit
January 16 - 17, 2013:
  • Lots of wells
  • Hess: 48 wells in Ross oil field
  • QEP: 56 wells on several 1280-acre spacing units
  • QEP: 32 wells on several 1280-acre spacing units
December 19 - 20, 2012:
  • Both OXY USA and Newfield were absent, though OXY did have a few cases but not new drilling;
  • XTO with XOM's deep pockets moving to 8 wells on 1280-acre units; 
  • Liberty Resources also moving to 8 wells on 1280-acre units; 
  • Baytex moving to 7 wells on 1280-acre units; a couple of cases of multiple wells on 320-acre and 640-acre units; 
  • more than usual (?) number of requests to maximize production for a month or so (I assume to give them time to put the natural gas pipelines in); 
  • for as many cases as there were, not so many pooling cases, interestingly. 
November 28 - 29, 2012 :
  • OXY USA and Newfield are noticeably absent.
  • Many of the "continued" cases had to do with redefining stratigraphic limits.
  • Note the BR requests for 2560-acre units; some have suggested this is because of "national grasslands," i.e., the Little Missouri National Grasslands and/or Little Missouri State Park. That may be true in some cases. But it certainly looks like several of the fields (including Clear Creek, Pershing, North Creek, and Sand Creek) are outside the grasslands. In addition, in last month's hearings, CLR had requests for multiple 2560-acre unit clearly outside "protected" areas. I think the overlapping 2560-acre spacing units noted below are requested for reasons other than the grasslands.
October 24 - 25, 2012:

  • based on these two days of hearings, it's "all" CLR
  • definition of stratigraphic limits to change across the Bakken -- it will be interesting to see what the boys have to say about this
  • no evidence that current players are down-sizing Bakken spacing units; if anything units are getting bigger; that's good news
  • very few cases to revoke previously issue permits -- interesting
  • many more cases to settle risk penalty issues -- even more interesting
  • 7 wells on one 640-acre unit (Petro-Hunt); 6 wells on each of 2 640-acre units (EOG)
  • incredible number of wells per case
  • it is impossible to miss the scores of cases in which CLR is requesting that the stratigraphic definition of the Bakken Pool be "redefined."
September 26 - 27, 2012:
  • Hess with a lot of 8 wells/1280-acre spacing units; 20 wells on 2560-acre spacing units
  • CLR with 18 wells on 1280-acre spacing units
  • a few overlapping 2560-acre units mentioned
  • the norm is still 8 wells on 1280-acre spacing units
August 22 - 23, 2012:
  • Hess with a lot of 8 wells on 1280-acre spacing units
  • overlapping 2560-acre spacing units mentioned
  • again, Hess with a lot of wells; 170 wells in one case, for example
  • Samson Resources: 5 overlapping 2560-acre spacing units; 14 wells each (70 wells total)
  • XTO with a lot of wells: one case with 72 wells; another with 112 wells; more
July 25 -  26, 2012
  • moving to 2560-acre spacing
  • the standard is now 4 wells on each 1280-acre spacing unit, but 8 wells/1280 in the better Bakken
  • more wells on smaller spacing units are being seen; Hess: 8 wells on one 640-acre spacing unit; in that section, a well with a huge IP for a Hess well:
  • 18725, 2,178, Hess, short lateral
June 27 - 28, 2012:
1. This seemed to be a particularly short docket. Generally, each day has 19 - 20 pages of cases. This time it was about 14 pages each day. It did not take long to summarize the report.

2. For the past several months now there has been a trend toward four to seven wells on each spacing unit. In this month's report, I was surprised to see that Hess is looking to put up to as many as nine wells in each of several 1280-spacing units in Robinson Lake, and as many as nine wells in one 640-acre spacing unit in Cedar Coulee. The Robinson Lake oil field is incredible; click here to see how a Hess 6-well pad is doing. Also, results of a very nice Hess 6-well pad in Robinson Lake here. If you can access the NDIC GIS map server, take a look at the multi-well pads in Robinson Lake. It's quite impressive.

3. I thought this case was interesting:
  • 18159: XTO, Corral Creek-Bakken, 8 wells on an existing 1280-acre unit; Dunn
I thought BR was given the responsibility for developing this field.

4. It seems this hearing will be dominated by BEXP, Hess, and Oasis. 
5. Resource Drilling, LLC: first time I saw this company. According to NDIC, Resource Drilling has one well:
  • 21171, Halvorson 14-13 1H, Clear Water,
6. Interesting space units:
  • 18111: Samson Resources, West Ambrose-Bakken Pool, create a 2080-acre unit, 14 wells; Divide
    18112: Samson Resources, Ambrose-Bakken Pool, create 5 2080-acre units; 14 wells on each unit; 70 wells; Divide;
7. Petro Uno Resources: first time I saw this company. According to NDIC, Petro Uno has one well:
  • 15167, Petro Uno,  Beta Race Federal 22-6, Ice Caves
8. 18021: Whiting, Chateau-Three Forks Pool, proper spacing for development of this field; Billings County. I don't understand this. The Bakken Pool incorporates the three Bakken formations (upper, middle, and lower) and the multiple formations of the Three Forks. I don't know why NDIC is calling this the "Three Forks Pool." In this same hearing docket there is another case in which NDIC refer to a "Sanish Pool."
May 30 - 31, 2012:
  • 4 wells on 1280-acre spacing units
  • an occasional overlapping 2560-acre spacing unit was mentioned
  • an occasional 8/1280; an occasional 6/640
  • Zenergy: establish 16 new 1280-acre spacing units; 8 wells each
  • G3 Operating with one case for 672 wells, Williams County
  • Huge, huge docket for Zenergy
  • CLR with 10 wells on one 2560-acre spacing unit
April 25 - 26, 2012:
1. You will see a lot of requests for multiple wells on 2560-acre spacing. 2560-acre spacing is not new. This was being addressed back in March, 2010:

  • 12244: Commission; 2560-acre spacing for all future BAKKEN POOL horizontal drilling
  • 12245: Commission; 1280-acre spacing for standup and / or laydown horizontal drilling
  • 12246: Commission; eliminate/reduce the setbacks currently established for heel and toe of horizontal wells in ND
2. There are scores of pooling cases in this month's hearings. Because I consolidate pooling cases into a single line, it is not as obvious, but there are literally scores of pooling cases, pretty much one of the last administrative steps before drilling.

3. 6 wells on a 640-acre unit. We're used to seeing 6 - 7 wells on a 1280-acre spacing unit, but we don't often see six wells in one section (at this point in the boom; later on it will be routine). One example is case 17434, a request by Hess to place as many as wells in one section in the Manitou-Bakken field. The Manitou field is near the bull's eye of the Bakken; and just west of "ground zero" for the oil industry in North Dakota. Another example is case 17499, in which Hess wants to put 6 wells in a 640-acre unit in Alger field, another very, very good field. By the way, the rumored 12-well pad for $100 million is in Alger field. (You know, when Filloon first rumored this, it seemed like a big deal; no longer such a big deal -- and that was just a week ago or so.)

4. The Lodgepole well north of Williston continues to excite some folks, including me. Case 16897, continued from last month, concerns the Oasis Clark well.

5. Marmon oil field is getting a lot of attention. Petro-Hunt wants the field extended by 18 sections in the township to the west. One section (section 34) is already part of the Otter oil field, so I am not sure how that will work out. Case 17444. Marmon field is about 20 miles west-northwest of Ray, which should end up being a pretty good field.

6. BR wants to put 14 wells on a 2560-acre spacing unit. Case 17446.

7. Some crazy trivia. Petro Uno Resources has one (1) permit in the state of North Dakota, file #15167. Petro Uno has an active well, Beta Race Federal 22-6, drilled back in 2001. In this month's hearing, Petro Uno is asking for temporary spacing for this well. Case 17551. This is a Duperow/Red River well that is producing less than 100 bbls/month; cumulative is about 72K since it was spudded in 2001. Initially targeting the Red River, it last produced from that formation on a regular basis in 2006. It re-entered the Duperow in 2010.

8. Hess is requesting to place as many as 6 wells on 1280-acre spacing units in no less than 16 oil fields in the Willison Basin.

9. I've talked often about the legacy formations (Madison, Red River, Duperow). I've opined often that "they" didn't quit drilling the Madison because it had nothing else to offer; they quit drilling when opportunities got better elsewhere. At $100/bbl, the Madison is looking good again. So, Zenergy is going after the Madison with requests for 17 640-acre units and 8 320-acre units in McKenzie and Williams counties. Cases 17579 - 17581. Petro-Harvester is also going after the Madison, case 17444.

10. More interesting trivia. Zenergy is requesting to create 20 1280-acre units in Foreman Butte. This field is already spaced for the most part as 1280-acre units, and yet almost every well in that field is a short lateral. (It's possible, they were drilled when the field was spaced with 640-acre units and has since been changed to 1280-acre, but I have no idea). Case 17582.

11. This is about as active as I've seen Zenergy in any docket. Zenergy is requesting up to 147 wells in four cases, 17750 - 17753.

12. Remember the Cottonwood field that Fidelity discovered, and then sold to Oasis? Look at case 17456: Oasis is requesting spacing for as many as 54 wells in 9 new 1280-acre units, 6 wells each on those units.
March 28 - 29, 2012:
  • 7 wells on 1280-acre units is now the norm
  • BEXP is now putting 8 wells on a 1280-acre unit
  • Look at all the 2560-acre spacing units
  • Look at 14 wells on one 2560-acre unit 
  • Look at 7 wells on 800-acre units
  • Look at a 2560-acre unit; 16 wells 
  • Look at request for 102 new wells in one case
  • Look at request for 96 new wells in one case
  • Hess requesting permits for 468 new wells -- someone else can check my math; this was done quickly; errors possible 
  • It looks like Oasis is requesting permits for 108 new wells
  • A lot of cases relate to pooling, which means drilling is soon to come
February 28 - 29, 2012:
  • lots of wells; 6/1280; Hess has a case for 12 wells on one 1280-acre spacing unit
  • BR with several 2560-acre spacing units; 12 wells each
  • several cases involving the Spearfish
January 18 - 19, 2012:
  • seeing more 1280-acre spacing units
  • 6/1280
  • KOG and Truax; KOG very active
  • EOG to test water injection
  • Chesapeake active
  • occasional Lodgepole vertical well
  • many 8/1280
December 14 - 15, 2011:
  • It is clear that the standard is seven wells in each 1280-acre unit; or four wells in each 640-acre unit. That's the standard, there are exceptions.
November 16 - 17, 2011:
Starting to get a feeling how big the Bakken is going to be 

I started transcribing/summarizing dockets back in January, 2010, and highlights are accessible. But this is as far back as I'm going to go now.

Natural Gas Pricing Spikes

Updates

Later, 1:42 pm: natural gas surges to new 2013 high

Original Post

So, the question: is it an overall good news story? WTI plummets from $97 to $86, but natural gas is going from $3 range to $4.40 range over the past year. I don't have a good memory for natural gas price, numbers, dates, so folks may want to check it, but the natural gas price trend is very interesting.

Only One Well Came Off The Confidential List Today

The results have been posted.
  • 22513, 699, Hess, BL-Amelia 156-95-1415H-1, Beaver Lodge; t12/12; cum 35K 2/13;
Hess has really had some great wells recently.

Back to the future. This well is in the oldest oil field in North Dakota, I believe, the Beaver Lodge. (There may be older fields, but this is associated with the discovery well in the state.)

A couple things to note: the well was tested December 30, 2012, and is already on a pump, something recently discussed.

The second thing to note: the company I associate most with natural gas in North Dakota is Hess. So here we have Hess operating in the oldest field in North Dakota, which must be criss-crossed with more miles of pipe than anywhere in the state, and at the end of February, 2013, when latest data available, the well was still flaring 100% of the natural gas it produced.

It was off-line for ten days in February, so that's when the pump was probably put in and maybe the natural gas line being brought up to the well pad.

The Amelia well is sited in an interesting location. Although it is in the Beaver Lodge, it is not located in the area where the wells are densest. This is the only Bakken well in the immediate area. Considering that we will eventually see as many as 4 or even 8 wells in each section, it just shows how much more work is yet to be done. Being this far away from where most of the activity in the Beaver Lodge is explains the delay in getting hooked up to a natural gas pipeline.

Another point of interest. Just a mile to the southwest is another lone Hess Bakken well:
  • 16617, 38, Hess, BL-Heen-156-95-2227H-1, Beaver Lodge, t10/07; cum 22K 2/13; producing about 350 bbls of oil per month. Folks will ask how these wells can be economical. I don't know if they are, but they will hold the spacing unit lease as long as it is producing. Interestingly, whatever decline this well had from its initial production, it level off quickly and has remained steady since 2008. According to the NDIC website, this well never flared any natural gas; it was collected and sold starting the very first month and it, too, was away from the main area of the Beaver Lodge field.
I was surprised to see that the Beaver Lodge is almost all 1280-acre spacing.

It is also interesting to scroll through the history of Hess in the Bakken

Dickinson Experiencing Same Growth Pain, Challenges As Williston

The Dickinson Press is reporting:
At its regular meeting Wednesday at City Hall, when approving the preliminary plat for West Ridge Second Addition, the Dickinson Planning and Zoning Commission warned Roers Vice President Larry Nygard and any other developers that the city may have to pick and choose which developments get infrastructure first if the Legislature doesn’t provide oil impact funding to Dickinson, as well as other affected cities and counties.
I hate to have to point out the obvious, but "everyone" has to prioritize.

Jobless Claims Rise; Nothing to Worry About -- Reuters; This Is The "New-Normal"; Minnesota: Worse, But Still In Line With National Trends

Jobs report. Let's see who reports first: Drudge Report, Yahoo, AP, Reuters, Bloomberg.

I believe I saw analysts expected a number of 350,000 on CNBC this a.m. but saw it briefly; could be wrong.

Remember, 400,000 is the magic number. Need to stay below 400,000.

And it looks like it was Reuters, first to report

This week: 352,000 (last week was revised upward to 348,000; the original number was 346,000).

Four-week moving average rises: 361,250 (up from previous week which was 358,500).

States with increase in claims of more than 1,000 (some numbers rounded):
  • New York (20,000; the state doesn''t allow fracking); North Carolina (4,400); Ohio (3,000); Michigan (2,900), and Texas (2,500).
States with a decrease in claims:
  • California (13,000, the state allows fracking); Pennsylvania (1,300, the state allows fracking)
So now, we wait for the spin.

***************************

Business Insider: it could have been worse.
The latest weekly initial unemployment claims report is out, and it's a bit worse than expected.  
Claims climbed to 352,000 from 348,000 a week ago.

Economists were looking for a reading of 350,000.

While disappointing, there was nothing too worrisome about the report.

Some may actually be encouraged by the fact that claims are increasingly being impacted by the sequester. In other words, people are glad things aren't any worse.
Reuters (interesting: first report to show that numbers for California and Kentucky are again estimated).
The number of Americans filing new claims for unemployment benefits rose slightly last week, which could further allay fears of a major setback in the labor market recovery.
Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 352,000 the Labor Department said on Thursday. The prior week's number was revised to show 2,000 more applications than previously reported. A Labor Department analyst said claims for California and Kentucky had been estimated.
Despite the increase last week, which was broadly in line with economists' expectations, claims held near a level economists normally associate with average monthly job gains of more than 150,000. That could help to further ease concerns of a deterioration in labor market conditions after nonfarm payrolls posted their smallest increase in nine months in March.
The four-week moving average for new claims, a better measure of labor market trends, rose 2,750 to 361,250.
The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 35,000 to 3.07 million in the week ended April 6.
****************************
Minnesota

A little bit closer to home, the StarTribune is reporting on Minnesota's numbers:
Minnesota's endless winter helped cool off the job market in March, as employers cut 5,200 jobs, a sharp dip after seven straight months of gains. 
The monthly jobs report, issued Thursday by the Minnesota Department of Employment and Economic Development, also showed that February gains were less robust than initially thought, revised downward from 14,500 jobs to 9,900
Construction and weather-sensitive restaurant and retail hiring was weak compared to March 2012, said Steve Hine, the state's labor market economist, and they will likely be weak when the April numbers are revealed in a month. 
“I’ve got to say, looking out the window, that we may see an extension of this weakness into April’s numbers,” he said. 
The unemployment rate improved to a seasonally-adjusted 5.4 percent, largely because more people stopped looking for work, dropping the state labor force participation rate to 70.8 percent. That's near the record low, 70.7 percent, set in September 2012
The job losses are also in line with national trends. The Bureau of Labor Statitistics said earlier this month that the nation only created 88,000 jobs in March -- far below average and below analyst expectations.
Well, as long as "we're in line with the national trends," why worry?

For Investors Only: Lost In The Correction: Huge Earnings

Lost in the correction, the earnings have been huge. Some misses, but the general tone is very, very good. For quick reference, earnings for some of the companies I follow are one click away. I hope investors are taking advantage of the pullback to accumulate.

Disclaimer: this is not an investment site. Make no investment decisions based on what you read at this blog, or what you think you read at this blog.

Noble yesterday noted 1Q13 net income was up 25%. Huge.

Now, today Union Pacific Railroad announces a record quarter. It blew past quarterly earnings estimates, $2.04 vs $1.96, and had this to report:
  • Diluted earnings per share of $2.03 improved 13 percent.
  • Operating revenues totaled $5.3 billion, up 3 percent.
  • Operating income totaled $1.6 billion, up 8 percent.
  • Operating ratio of 69.1 percent improved 1.4 points.
  • Despite lower carloadings, operating revenue increased 3 percent in the first quarter 2013 to $5.3 billion versus $5.1 billion in the first quarter 2012.  First quarter business volumes, as measured by total revenue carloads, decreased 2 percent compared to 2012.  Volume declines in coal and agricultural products more than offset growth in chemicals, intermodal and automotive shipments.  Volumes for industrial products were flat versus 2012 driven by a reduction in hazardous waste shipments.  In addition:
  • Quarterly freight revenue increased 3 percent compared to the first quarter 2012, mainly driven by core pricing gains.
  • Union Pacific's operating ratio of 69.1 percent was a first quarter record, 1.4 points better than the first quarter 2012. 
  • The average quarterly diesel fuel price of $3.23 per gallon in the first quarter 2013 was flat compared to the first quarter 2012. 
  • The Customer Satisfaction Index of 94 set a first quarter record, 1 point better than the first quarter 2012.
  • Quarterly train speed, as reported to the Association of American Railroads, was 26.4 mph, flat versus the first quarter 2012. 
  • The Company repurchased 2.9 million shares in the first quarter 2013 at an average share price of $136.58 and an aggregate cost of $394 million.
Verizon beats estimates.
The telephone company added slightly more wireless subscribers than expected and saw improved growth in its FiOS home Internet and television service.
Verizon said it added 188,000 FiOS Internet customers and 169,000 FiOS television subscribers in the quarter. Rethemeier had expected 150,000 Internet customers and 125,000 FiOS TV customers.
Its earnings rose to $1.95 billion or 68 cents per share compared with $1.69 billion or 59 cents per share in the year-earlier quarter and analyst expectations for 66 cents per share.

Well, This Is Crazy, But Not Unexpected From This Administration

Terrorists can avoid long security lines when coming to the US now that the US has opened FIRST customs post in the Middle East.

"Everybody" is against it. Only winner: Abu Dhabi 's Etihad Airways. I can't make this stuff up.

The Wall Street Journal is reporting:
Amid strong objections from U.S. airline pilots and carriers on both sides of the Atlantic, White House officials have agreed on a customs facility in Abu Dhabi that will allow passengers from there to bypass long lines upon their arrival in the U.S.
The agreement between the U.S. and the United Arab Emirates, which was firmed up this week, calls for the Department of Homeland Security to set up a preclearance post at Abu Dhabi International Airport—the first of its kind in the Middle East.
Under the arrangement, which mirrors similar facilities in Canada, Ireland and the Caribbean, passengers would go through U.S. customs and immigration before takeoff and avoid delays at their destinations.
The sole beneficiary of the move would be Abu Dhabi's Etihad Airways, which operates the only non-stop service from that fast-growing hub to the U.S., and has been expanding its routes along with its Persian Gulf peers, Emirates in Dubai and Qatar Airways. 
This is truly incredible. What are we thinking?

While We're Waiting For The Job Numbers, Apologists For ObamaCare Should Note....

The Wall Street Journal is reporting that federal government checks, yes, from the same government that will implement ObamaCare later this year, are bouncing, as in failing to clear:
Borrowers who have spent two years waiting for banks to compensate them for potential foreclosure abuses ran into a new problem this week: Checks sent as part of a $3.6 billion federal settlement wouldn't clear.
It is the latest black eye for a federal foreclosure-review that has been criticized by homeowners, lawmakers and a government watchdog.
Fewer than 12 borrowers were unable to cash checks, but the incident is another embarrassment for federal banking regulators already faulted for prematurely halting the review and not securing more money for affected homeowners.
I can't make this stuff up.

Thursday Morning Links; Terrorists Get Opportunity To Test Expedited Entry Into US; Federal Bail-Out Checks Bounce

Active rigs: 185 (steady)

RBN Energy announces Houston conference.
The basic premise for School of Energy follows the same theme we write about each day in the Daily Energy Post – the relationships between the energy commodities are changing….such that the markets for natural gas, NGLs and crude oil are tied together in ways we’ve never seen before.  What happens in gas impacts NGLs, which influences crude oil, which loops back to the natural gas market.  As we’ve said frequently, there was a time when you could live out your career in the gas business, or the NGL business, or the crude business and get by with knowing very little about the other hydrocarbon markets.  Those days are gone forever.  School of Energy is designed to integrate your knowledge of these three commodities with hands-on, practical instruction and training.  In each of five ‘blocks’ we’ll drill down on an important aspect of the market, explain how it works, download spreadsheet models and learn how to use them.  You’ll walk out the door with the ‘how-to’ PowerPoints and the Excel models on your hard drive.  No talking heads, no mind numbing speeches.  Just practical, usable energy market fundamentals.
*Summer* School of Energy will be held at The Woodlands Waterway Marriott Hotel & Convention Center, 1601 Lake Robbins Drive, The Woodlands, TX on July 11 and 12, 2013.  As described below, there is also an optional ‘Preschool’ on July 10.  
WSJ Links

Section D (Personal Journal):

Section C (Money & Investing):
  • Microsoft's failure to launch is no joke. 
This is what things have come to for Microsoft Corp.: A New Yorker spoof about North Korea's missile test being delayed by Windows 8 glitches seemed credible enough to be picked up as a news story by a Chinese media outlet.
Thursday's fiscal third-quarter results for the period ended in March should reflect Microsoft's failure to sufficiently reignite personal-computer sales. The analysts' consensus for earnings per share, 79 cents as recently as December, has dropped to 68 cents now. That would still be up from 60 cents a year earlier. But the boost from new products should have been much bigger. Not only do the recently revamped Windows and Office franchises contribute 60% of sales combined, they are an even heftier chunk of Microsoft's bottom line.
The big drop in expectations came as research firm IDC last week reported a 14% drop in global PC shipments during the first quarter, about twice as bad as expected. Intel Corp.'s earnings call this week deepened the gloom. Meanwhile, tablet sales are surging and may overtake PC unit sales by 2015.
Borrowers who have spent two years waiting for banks to compensate them for potential foreclosure abuses ran into a new problem this week: Checks sent as part of a $3.6 billion federal settlement wouldn't clear.
It is the latest black eye for a federal foreclosure-review that has been criticized by homeowners, lawmakers and a government watchdog.
Fewer than 12 borrowers were unable to cash checks, but the incident is another embarrassment for federal banking regulators already faulted for prematurely halting the review and not securing more money for affected homeowners.
Section B (Marketplace):
Hollywood studios and theater owners are rethinking the idea of letting people pay extra to watch movies at home while the films are still playing in cinemas.
  • Google fiber heads to Provo, Utah. First, Kansas City, now Provo. I think Austin is still in the running.
Section A:
  • Senate scuttles gun limits; no link; story everywhere. It is interesting that this is the lead story. Heidi Heitkamp at the center of disappointment; quid pro quo - the Keystone XL?
  • Supreme Court: police cannot force blood tests.
  • IEA: scant gains made on CO2 emissions. How much money has been spent? Would it have been less expensive to move the Maldivians to higher ground? The polar bears, thank you, are doing fine.
Even in Europe, which has some of the world's most ambitious emissions-reduction targets, coal use is rising, the IEA said. In Europe's largest economy, Germany, CO2 emissions edged higher last year as more coal was burned because it was cheaper than natural gas, according to the government's federal environmental agency.
The IEA report comes as long-standing climate-protection policies in Europe are increasingly under threat. On Tuesday, the world's flagship plan to tackle global warming, the European Union's Emissions Trading System, was put in doubt after the European Parliament rejected a proposal to support the carbon market.
Popular support for renewable-energy subsidies is also falling. Spain recently made retroactive cuts to such subsidies in a bid to keep down electricity costs.
The US which has lowered its emissions the most, was not mentioned in the article for its successes, unless I missed it.