Friday, May 10, 2013

By The Time This Pipeline Is Approved, We'll Be In Another Ice Age

Reuters is reporting:
The Obama administration is unlikely to make a decision on the Canada-to-Nebraska Keystone XL pipeline until late this year as it painstakingly weighs the project's impact on the environment and on energy security 2014 mid-term elections, a U.S. official and analysts said on Friday.
The decision may not be made until November, December or even early 2014, said a U.S. official, as President Barack Obama will not rush the process, which still has a number of stages to work through. One of those stages has not even begun yet and will run for months.
"The president has to be able to show that the administration looked under every stone to ensure it knew as much as it possibly could about the impact of Keystone," said the official, who did not want to be named given the sensitive nature of the project.
Analysts agreed that a decision would not be made by this summer as the State Department had suggested when it issued an environmental review on the pipeline on March 1.
I would have to say the Keystone Pipeline story -- regardless how it turns out -- will be the president's lasting legacy. 

If the decision is not made before March, 2014, it will be delayed until after the mid-term elections. This is not rocket science. The president's party is likely to lose the Senate, and the opposition's majority in the House could widen. The Keystone XL will probably be the deciding factor in some races. As ridiculous as that is. It also keeps a lot of campaign money flowing.

My hunch is that the controversy over the Keystone will affect decision-making process on all new interstate pipelines. The activist environmentalists lost on the fracking issue (the technology moved faster than the activists could organize) and shutting down pipelines, shuts down drilling, and fracking by default. 

Crude-by-rail is in the driver's seat. 

Petro-Preneurs In North Dakota -- Mark Perry On Kudlow

10 minutes 25 seconds of great interview with CarpeDiem's Mark Perry and others (including some apologist for Solyndra; his five seconds of sound bite was four seconds too long).

Department of Energy: "a private equity fund" for pet projects .... projects that all failed....

Dickinson, Williston, Minot mentioned. In that order.

Making $95,000/year, but living in their cars. [Comment: Jim Cramer lived in his car at one time. JK Rowling, the author of the Harry Potter series, and perhaps the wealthiest woman in the world is said to have lived in her car (I believe she was too poor to have owned a car at that time, but the point is well taken). I doubt many folks are living in their cars for many months before they leave the Bakken or find a place to live. And submariners live in a smaller space than a car for extended periods of time. Don't take this out of context, but I'm getting tired of some of these cliches.] 

Huge impact on states well outside of North Dakota.

"Saudi America."

Crystal clear videos of pumpers. 

Regular readers won't hear anything new, but it's amazing to hear "Dickinson, Williston, and Minot" on Kudlow.

The interview finishes with concerns about the EPA and fracking regulations. The concern is still out there, folks.

Random Comment -- Nothing To Do With The Bakken -- I'm Waiting For The Spurs Basketball Game (On Radio)

I have a political note to post later. It's been written, but it's in draft status so it can be buried deep in the blog later. I don't want political notes to take precedence over the Bakken.

But as I was going through some of the archives, I was reminded of this: good, bad, or indifferent, and no matter what party you are affiliated with (if any), it is a fact that President Obama signed off on extending 98% of the Bush tax cuts ... and making them permanent. I had forgotten that.

Considering the political environment in Washington, DC, I find it completely amazing that 98% of the Bush tax cuts were made permanent.

Ten (10) New Permits -- The Williston Basin, North Dakota, USA; XTO Reports A Nice Well

Active rigs: 185 (steady)

Ten (10) new permits --
  • Operators: Abraxas (4), Triangle (3), OXY USA, Stephens Production, EOG,
  • Fields: Manning (Dunn), Parshall (Mountrail), Pershing (McKenzie), Antelope Creek (McKenzie),
  • Comments: This is Stephens' first well in North Dakota; the well will be about 12 miles almost directly north of Minot, a wildcat: Matson 3-1.
The results of the wells I had coming off the confidential list today were not posted for some reason.

Two producing wells were completed:
  • 23287, 844, Hess, AN-Bohmbach 153-94-2734H-2, Antelope, Three Forks/Sanish, t4/13; cum-
  • 23470, 1,551, XTO, Lawlar 41-15SH, North Tobacco Garden, t4/13; cum --
It's interesting Hess refers to the Bohmbach well as a "Sanish" well. I've generally considered the "Sanish" limited to Whiting's wells in the Sanish oil field. The "Sanish" in this area is closely associated with the Three Forks.  The USGS 2013 Survey states: "The Pronghorn Member (formerly known as "Sanish sand")"; and, "The Pronghorn Member of the Bakken Formation, although geologically and stratigraphically defined as part of the Bakken Formation (LeFever and others, 2011), is assessed with the Three Forks Formation. Where present, the Pronghorn Member is in fluid communication with the underlying Three Forks reservoirs." [Again, note the plurality of "Three Forks reservoirs."]

The file report for the Hess AN-Bohmbach well is confusing (for me). The summary clearly states at the very beginning: "...a horizontal extended-reach lateral meant to test the production potential of the Middle Bakken formations (sic) in the Antelope area."

Then specifically, "the top of the Middle Bakken came in one foot higher than expected at 10,778 TVD.... the curve portion of the well was finished approximately 21 vertical feet into the Middle Bakken Formation at a measured depth of 11,275' and TVD of 10,798."

Then: "North-South Three Forks Lateral  11,275' -- 20,457' MD"

Continuing: "The AN-Bohmbach-153-94-2734H-2 Middle Bakken lateral was started on November 15, 2012, .... total depth .. was called because of a MWD tool failure ... on November 12, 2012, with a MDof 20,458' MD and TVD 10,793 TVD (sic). This was the cessation of drilling....North to South, Three Forks lateral."

The completion data was not there; if it was, I missed it.

Proposed Joint Qatar - Exxon LNG Exporting Terminal In Texas

Remember this past winter, how cold it got in Great Britain (notwithstanding all that global warming talk); the island nation ran dangerously close to running out of natural gas (they killed the coal industry under Thatcher).

Qatar and Exxon hope to build a LNG export terminal in Texas specifically to answer Great Britain's needs. Maybe that's why President Obama went down to Texas this week, to see how the project was coming along. He should approve it; the terminal is 70% owned by the Arabs.

The (London) Globe and Mail is reporting, which explains the incorrect spelling:
Under the deal, the companies would send up to 15.6 million tonnes of LNG each year to their South Hook terminal in Wales from the Golden Pass plant in Texas, pending U.S. government approval to build the plant and export LNG.
The Golden Pass LNG Terminal is owned by Golden Pass LNG, a joint venture formed by affiliates of three of the world’s largest and most experienced oil and gas companies. Qatar Petroleum (70%), ExxonMobil (17.6%) and ConocoPhillips (12.4%).

Crescent Point -- Joins The CBR Crowd in Canada -- Rail Beats Pipeline By $5/Bbl

The Calgary Herald is reporting:
Fast-growing intermediate oil producer Crescent Point Energy Corp. is moving nearly a third of its crude oil production by rail and plans to do more, it revealed Thursday.
On a conference call to discuss its first-quarter results, president and chief executive Scott Saxberg said the company moved an average of 31,500 barrels per day to market by rail in the first three months of the year using two loading facilities in Saskatchewan and another in Alberta.
Near mid-year, it plans to open its own rail loading facility in Utah to initially move about 5,000 bpd of oil from the Uinta Basin assets it bought late last year. It is currently moving 1,000 of its 9,000 bpd output through a third-party rail facility.
“On the rail front, we continue to increase the amount of crude we ship through our facilities in Saskatchewan and Alberta, which has given us access to new markets and reduced our exposure to crude oil price differentials,” Saxberg said.
Trent Stangl, vice-president of marketing, said the net benefit of moving crude by rail varies widely but has been $5 to $6 per barrel better than pipeline so far.

Tuscaloosa Marine Shale -- For The Archives

Other Sources


 Updates


January 9, 2015: can the Tuscaloosa Marine Shale survive? -- RBN Energy.

November 29, 2014: a nice conversational opinion piece on the TMS. Nice to see cool heads. 

August 22, 2014: Zeits reports on another nice Halcon well in the TMS.

May 8, 2014: GDP 1Q14 earnings transcript; Halcon spikes 10%.

March 19, 2014: SeekingAlpha notes that Halcon has significantly increased its mineral acreage in Tuscaloosa Marine Shale; note the Crosby well -- 154,000 bbls in one year; 

February 27, 2014: a human interest / update of the Tuscaloosa Marine Shale.

November 13, 2013: RBN Energy, part 2, Tuscaloosa Marine Shale

November 7, 2013: RBN Energy begins a new series on the Tuscaloosa Marine Shale

August 26, 2013: from EOG at SeekingAlpha:

  • The complexities of the Tuscaloosa Marine shale - including a softer rock that won’t easily release the oil it hoards - have been difficult to solve, but Goodrich Petroleum, which recently purchased part of a 277K-acre Tuscaloosa leasehold and seven wells, thinks it has cracked the code.
  • GDP seems off to a good start: Its Crosby well produced an average of 1,137 bbl/day during its first 30 days of production.
  • Meanwhile, Indigo Minerals, with nearly 300K acres in the formation, hopes partner EOG Resources also will break through in the Tuscaloosa.

Original Post
Rigzone is reporting.

Data points:
The Louisiana Geological Survey more than a decade ago estimated that the Tuscaloosa Marine shale might contain 7 billion bbl of recoverable oil. They estimated that the shale is 50 ft thick or more across 3.8 million acres in central Louisiana and southern Mississippi.
The first modern exploratory wells have been drilled in the play only in the last 3-4 years with the evolution of horizontal drilling combined with multistage hydraulic fracturing.
Many consider existing Mississippi EOR policy to the best in the US, the MDA said, but House Bill 841 decreases the sales tax paid on electricity to 1.5% for oil and gas produced in the state using CO2. The bill will benefit Denbury Resources Corp., which has an extensive integrated CO2 EOR program in Mississippi fueled by CO2 from Jackson Dome that is injected into oil producing fields in Mississippi and other states.

Remember All Those Stories Back In 2011 And Earlier Suggesting The Bakken Was All Hype? Fast Forward: US Crude Oil Exports Are Poised To Reach The Highest Level In 28 Years

Snopes thought the Bakken was hyped back in 2011 and have never gotten back to updating the article.

This still remains one of my favorite posts. Jane Nielson, in 2010, said:
Frequent Internet users are getting emails about the Bakken Formation in North Dakota and Montana, supposedly a great oil bonanza just waiting to be tapped if only nasty enviros would let it happen. The emails and websites say that Bakken would solve all our petroleum “needs.” (What, me worry about  global warming?)
Don’t believe it. There’s some oil to be gotten out of Bakken, and it’s going to be exploited. But the “bonanza” is nothing but hype.
Wow. Jane has not updated this post. Jane must have given up. Her last post was dated July 23, 2012.

But I digress.

Whether or not the Bakken is/was hyped, Americans who use gasoline can thank the Bakken for keeping prices of oil down. Bloomberg is reporting that Bakken oil has brought the price of Brent crude oil down:
U.S. oil exports are poised to reach the highest level in 28 years as deliveries to Canada more than triple, helping bring down the price of the global benchmark Brent crude relative to U.S. grades.
The shipments will rise to at least 200,000 barrels a day by the end of the year, according to Ed Morse, head of global commodities research at Citigroup Global Markets Inc. Exports were 59,600 in 2012 and haven’t averaged more than 200,000 since 1985. The U.S. restricts companies from sending American crude abroad, with Canada an exception. 
The premium for Brent, used to price European and West African crude, over U.S. West Texas Intermediate narrowed to less than $8 a barrel this week from $25.53 in November. The export increase allows refiners in eastern Canada including Valero Energy Corp. and Irving Oil Corp. to replace cargoes from overseas with less-expensive U.S. oil, benefiting from the shale-drilling boom that’s pushed domestic output to the highest level since 1992. 
So much for all those stories saying the Bakken was hyped. "US oil exports is poised to reach the highest level in 28 years."

I.N.C.R.E.D.I.B.L.E.
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I also remember after posting a comment about US oil exports I was told that laws did not allow the US to export oil. I noted that the exceptions to the law forbidding US oil exports were big enough to drive an oil truck through.

BES: Bakken Energy Services

This is very, very interesting.

A reader sent me the URL link without saying anything more about it.

I know nothing about this organization other than what I find at the web site.

But what I see: very, very interesting.

I could be wrong, but it's sort of like a co-op among oil industry service companies. By combining their resources, and that means much more than just financial resources, this "co-op" can do things its members could not otherwise do on their own, or at least not as well on their own. It really helps newcomers to the Bakken.

Everything below is taken from their website with my own comments thrown in as I go along. If I make mistakes, that would not be unusual. I make a lot of mistakes but will correct them when I become aware of them.

There are currently 40 companies listed as part of the "BES Team." The 40 companies are located across the nation, but mostly in North Dakota and Montana. Most are "local" but there are several national companies, at least two that had their start in Alaska, it appears.  Going down the list: Fargo; Bozeman (MT); Williston; Minot; Bismarck; Dickinson; Grand Forks; area code 541 = Oregon; a company headquartered in Dallas (TX); Parshall (ND), Killdeer.

The co-op can provide just about any contracting service the oil industry needs for infrastructure support. There is a media company (radio station) associated with the group; there is a financial services company associated with the group.

As I go through the list, it's almost like a Rotary Club for the oil services support industry.

As you scroll up and down the list, it is easy to see the synergies that such a group provides. It really is quite amazing.

A couple of examples, again, much of this "cut and paste" from the website:

First, I get a kick out of Quality Mat. From the website: 
North Dakota’s largest inventory of Rig Mat can be found in Williston and Killdeer. Quality Mat has grown into the largest mat producers in the world and is one of the oldest companies in the business–we’ve been there since the beginning.Their area code is a Galveston, Texas, area code.
Then, Riley Brothers Construction: 
With locations Minot, Dickinson and Parshall,  ND locations Riley Construction Employing 130 construction professionals. We have  the latest technology, and an extensive equipment fleet of excavators, dozers, scrapers, trucks, paving equipment and support tools, heavy and highway. Their area code is central Minnesota, near Minneapolis.
Sandstone Services in Bismarck, ND: 
100 % Native American-owned oilfield services company operating in the Williston Basin. Sandstone Energy Services includes: mobile tire repair and sales, equipment rental, hot shot, and roustabout services.
Atigun: 
An equipment rental/sales company specializing in oilfield services type equipment. The company was incorporated in 1991 and we rent equipment all over the State of Alaska, with our primary focus being the Kenai Peninsula and the North Slope. We also rent equipment in the Williston Basin in North Dakota, Wyoming, and Montana.
That just touches the surface. I could have picked any of the 40, but somehow those caught my eye(s) first. 

My mind keeps wandering back to those venture capitalists from New York, Connecticut, and Singapore looking for opportunities in the Bakken. Truly amazing what some folks think of doing.

Friday Morning Links

Active rigs: 183

RBN Energy: impact of a late, cold spring on energy.

WSJ Links

Section M (Mansion):

Section D (Arena):

Section C (Money & Investing):

Section B (Marketplace):
  • Amazon keeps firing on all cylinders; developing smartphone with 3-D screen; moving beyond Kindle Fire; will put pressure on Apple; in addition to competing technology, Apple needs to be concerned with two things re: Amazon: a) Amazon is used by way more people; and, b) it is much easier to order through Amazon -- at least that's the perception; Amazon does not seem to have a natural competitor;
The steelworkers rejected a proposed contract last week that would have frozen hourly wages for six years, installed a lower wage scale for new hires, altered pension benefits and allowed the company to disregard workers' seniority when selecting employees for short-term layoffs.
  • Speaking of unions: the new governor of Washington state offering incentives aimed at keeping manufacturing and design work for Boeing Co's revamped 777 jet in facilities around Seattle. Isn't the governor/state worried about all the CO2 emissions that would be generated by workers driving to work; I guess they're only worried about CO2 emissions if they come from coal shipped to China
Section A
  • White House goes back to its base: bailout student loans; now that the deficit is dropping faster than expected, a lot of extra money to bail out students (and their parents); the bailouts never quit, do they? I'll be making the last payment on the last student loan for my younger daughter sometime in the middle of 2014 -- woohoo.
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A Note To The Granddaughters

With regard to that last link above about computer grads needing to learn a bit of computer programming. Our nine-year-old granddaughter (who will be ten years old this summer) just sent me the link to her webpage. Working with her dad, she did the entire webpage in html code, no cutting and pasting, all her own work. It is quite impressive. Her dad worked with her and the did a superb job. I would have done it the "wrong way" -- just using a "blogging" application, but her dad had her actually use html code from the outset. It is really quite incredible.