Tuesday, June 11, 2013

Random Note On A Madison Sweet Spot In The Williston Basin

I always get a kick out of finding sweet spots in the Williston Basin. These are Madison wells in Lone Butte oil field, right on the county line between McKenzie County and Dunn County, about 20 miles southeast of Watford City. Look at how long some of these wells have been active, and look at some of these production numbers.
  • 8245, PA/368, t4/81; cum 402K 3/94
  • 8414, PA/538, t4/81; cum 663K 4/92
  • 8486, PA/230, t8/81; cum 59K 2/88
  • 8543, PA/488, t3/82; cum 554K 11/90
  • 8545, 363, t10/81; cum 1.16 million 8/16; still active after 35 years;
  • 8623, PA/398, t8/82; cum 398K 10/91
  • 8838, IA/623, t10/81; cum 613K 1/16; active for 34 years;
  • 8915, PA/327, t12/81; cum 188K 11/91
  • 9062, 495, t1/82; cum 1.15 million 8/16; still active after 33 years;
  • 9090, 66, t8/90; cum 161K 8/16; still active
  • 9159, PA/75, t7/82; cum 30K 10/88
  • 9160, PA/12, t12/82; cum 18K 5/88
  • 9509, IA/693, t12/85; cum 814K; went inactive 6/14;
  • 9510, 114, t10/87; cum 323K 8/16; still active
  • 9551, 463, t9/82; cum 745K 8/16; still active
Interestingly, there is almost no Bakken activity in this area yet. 

Getting Ahead Of One's Headlights

MidwesternEnergyNews is reporting:
The vast Bakken Shale formation in North Dakota and Montana, a cornerstone of hopes for North American energy production, will need costly, advanced oil recovery strategies in order to tap its full potential over the next few decades, researchers and industry officials say.
Primary oil recovery methods centered on horizontal drilling and hydraulic fracturing will leave 90 to 95 percent of the Bakken and underlying Three Forks oil resource in the ground, ....
So, before you all get excited about the article, note those two data points:
  • even at one million bbls of oil per day, the industry is leaving as much as 95% of oil in the ground (think of the potential)
  • increased production to reach full potential will occur over the next few decades
I'm not sure what "next few decades" means, but I assume it's more than one, or "they" would have said "ten years." I assume it's more than two decades or "they" would have said two decades. For me, "several decades" means a minimum of thirty years before I have to get too excited about enhanced oil recovery, though I assume most folks assume it will happen more quickly.

It's amazing how so many journalists, it seems, get well ahead of their headlights. We are nowhere close to maxing out primary production in the North Dakota Bakken and some non-specialists are already concerned about secondary and tertiary production.

But the good news:
... every 1% in incremental recovery factor translates into an additional nine billion barrels of estimated ultimate recoverable reserves in the field ...

Of course that begs the question, one percent of what yields nine billion?
0.01 x ? = 9 billion
9/0.01 = 900 billion barrels of EUR? 
Really? Again, that's why I link the sources.

Again, here's the link and the quote:
“What is the true recovery factor? We still don’t know; we’re still estimating it,” said Stark. However, for perspective, every 1% in incremental recovery factor translates into an additional nine billion barrels of estimated ultimate recoverable reserves in the field, he added. “It’s a remarkably huge field.”
Did he really say that?

Coal Ain't Dead Yet

IndyStar is reporting:
After years of ethics controversies and cost overruns, Duke Energy’s new $3.5 billion coal-gasification power plant in Edwardsport is up and running.
Officials with the Charlotte, N.C.-based energy company announced Monday that the high-tech 618-megawatt plant, located near Vincennes, has officially started commercial operations.
The plant is billed as one of the largest, cleanest coal-fired power generating facilities in the world. It uses advanced technology to gasify coal, strip out pollutants, and then burn the cleaner gas to produce electricity.
The company said the new plant will produce 10 times as much power as a former plant at Edwardsport, but emit about 70 percent less sulfur dioxide, nitrogen oxide and particulates combined.
Coal ain't dead yet. 

Smiling Faces Sometimes

Regular readers know that the "job watch" numbers are no longer credible.

When I first started blogging, the magic number of "new jobs needed" each month to keep unemployment "level" was 200,000. Then it moved to 150,000. And then 125,000 -- see link.

Now, this. This is absolutely incredible, validates exactly what I've been saying for the past year or so. Yahoo!Finance is reporting:
Conventional wisdom usually dies hard, but one long-held axiom relating to unemployment may be ready for the graveyard.
For years, economists have accepted 150,000 as the benchmark number of new jobs needed every month to keep the jobless rate level. Anything above that was supposed to lower the rate, while anything below added to the closely followed headline number.
Not so anymore, according to the Chicago branch of the Federal Reserve.
Central bank researchers, in fact, say that because of various factors that number now will be closer to 80,000.
 Moreover, a paper the Fed recently released on the issue maintains that the number will continue to fall, and at a fairly rapid pace, all the way down to 35,000 by 2016.
Note where this is coming from: the Obama Chicago branch of the Federal Reserve.

The facts are these: adding jobs at the rate of 150,000/month will get us back to an unemployment rate of 6.5% in a decade. And 6.5% is well above the benchmark 4% that is considered full employment.

So, now we have the new number: 35,000. Starting in 2016, if we add 35,000 jobs/month, the unemployment number will remain stable. LOL. Just a year ago we had to add 200,000 jobs/month -- now we're being told that we can start thinking about 35,000/month. 

By the way, the fallacy in the new projection: the Obama Chicago branch of the Federal Reserve does not include the 30 million new citizens within ten years after the immigration bill is signed (see linked article: see if you can find any reference to the 30 million new citizens).

For now, I'm not changing my numbers. Someone has to remain consistent. 

The undisputed truth:

Smiling Faces Sometimes, The Undisputed Truth

Two Interesting Articles From The WSJ

First, "she came to Omaha in 2009 with an MBA," and she is now chairman of four of Warren Buffett's businesses:
When Tracy Britt arrived in Omaha, Neb., in 2009 to meet with Warren Buffett, she brought a Harvard M.B.A., a glittering resume and a boatload of ambition. But she also brought the famed investor a gift to highlight their shared Midwestern roots: a bushel of corn and a batch of tomatoes.
The seed Ms. Britt planted that day yielded quick results: a job for Ms. Britt as Mr. Buffett's financial assistant at Berkshire Hathaway Inc. Almost four years later, it has blossomed further, with Ms. Britt emerging as one of Mr. Buffett's top lieutenants and even serving as chairman of four companies within his $284 billion conglomerate.
Second, the ACLU is suing the US over unauthorized phone data collection.
The National Security Agency’s broad collection of U.S. phone customer data received its first significant legal challenge since the disclosure of the program last week. The American Civil Liberties Union filed a lawsuit in federal court Tuesday, alleging that the National Security Agency was violating the ACLU’s constitutional rights. 
The ACLU said it is a customer of Verizon Communications Inc.'s Verizon Business Network Services and it said metadata from the ACLU’s phone calls are being collected. 
The Obama administration declassified elements of the NSA program after the U.K.’s Guardian newspaper published a secret court order that authorized the NSA collection of phone records from Verizon customers.
It's pretty clear the Obama administration worked within the law, under the Patriot Act which the President signed into law. If the ACLU is to win, I suppose the issue will have to be settled by the Supreme Court, which would have to declare the law unconstitutional. My two cents worth.

Disclaimer: I am not a lawyer, and this is not a legal site. Do not make any legal decisions based on what you read here or what you think you think you may have read here. I am not practicing law nor am I advising the ACLU. I am simply reporting a story the WSJ is reporting. 

Effects Of The Bakken Felt As Far West As Kalispell, MT -- West Of The Rockies; A "Booming Industry"

The Billings Gazette is reporting:
Kalispell native Mike White’s construction business is booming.
That’s because White, the president of Nelcon Inc., took the majority of his operation to the Bakken oil fields three years ago to offer his services to communities there overflowing with workers.
Last year, Nelcon supplied more than 10 million tons of “aggregate reserves” like sand and gravel for construction jobs in the area.
“That fuels our business,” White said, noting Nelcon has done a host of construction jobs, including highway projects, housing developments and just finished building a new airport in Sidney.
It's been long forgotten but many of the construction workers who put up all the housing (temporary and permanent) in the Bakken were from Idaho, even farther west than Kalispell, MT. 

Also, from the article, it looks like Williston's executive director of economic development is also trying to redefine the activity:
Tom Rolfstad, executive director of Williston (N.D.) Economic Development Corp., told summit attendees that modest estimates show drilling could last another 25 years. Once drilled, wells in the Bakken have had an “extraordinary” success rate of nearly 100 percent.
“It’s an industry, not a boom,” Rolfstad said.
Now the “Bakken halo effect” is spreading across the country due to a severe need in the Bakken for everything from 50,000 rail cars to help haul oil to ports to skilled workers to build dozens of transformer stations across the area to bedding for the so-called “man camps.”
“We need help, we need manpower and we need intelligence,” Rolfstad said.
I get a kick out of folks trying to define a boom. I addressed that some time ago. I honestly don't know what the definition of a boom is.

I do know that North Dakota has had an oil and gas industry since 1951, and I would think that the activity now is a tad more than what it was in the 60's, 70's, 80's, or 90's.

Perhaps the best description: an industry that is booming. Or a "booming industry."

That story of a $70 million, 5-year project in Minneapolis, earlier today, certainly suggests the Bakken is still "booming" even if it's not a boom.  I know The Atlantic Monthly folks have declared the "Bakken boom" over.

Five (5) New Permits -- The Williston Basin, North Dakota, USA; Statoil With Several Nice Wells; Wells Coming Off Confidential List Wednesday Have Been Posted

Active rigs: 187 (steady)

Five (5) new permits --
  • Operators: Statoil (3), BR, Hunt
  • Fields: Haystack Butte (McKenzie), Poe (McKenzie), Sandrocks (McKenzie), Sioux Trail (Divide)
  • Comments:Glad to see Statoil with a long-horizon
Wells coming off confidential list were posted earlier; see sidebar at the right.

Five (5) producing wells were completed:
  • 23119, 3,426, Statoil, Cora 20-17 5H, Poe, t5/13; cum --
  • 22902, 2,404, Statoil, Topaz 20-17 4TFH, Banks, t5/13; cum 2K 4/13;
  • 22605, 2,628, Statoil, Scha 33-34 3H, Alger, t5/13; cum --
  • 23728, 362, CLR, Caroline 1-2H, Rosebud, t5/13; cum -- ; 1-section spacing;
  • 22597, 459, Gadeco, Alexander 26-35H, Epping, t6/13; cum --;
Wells coming off the confidential list on Wednesday:
  • 21320, 561, Whiting, Teddy 44-32TFH, Big Stick, Bakken, t1/13; cum 22K 4/13;
  • 22582, 571, Newfield, Berg Federal 149-97-30-31-2H, Haystack Butte, t4/13; cum 13K 4/13;
  • 23564, 1,386, MRO, Steve 34-31H, Big Bend, t2/13; cum 46K 4/13;
  • 23915, 499, Samson Resources, Almos Farms 0112-1TFH, Ambrose, t4/13; cum 15K 4/13;
  • 23943, drl, Statoil, Sanders 34-27 4TFH, Ragged Butte, no data,
  • 24185, drl, Mountain Divide, Leininger 3-10-1H, Wildcat, no data, far northwest corner of North Dakota; one mile south of Fortuna, ND;
  • 24193, 250, Hess, RS-Red Crown 156-91-2536H-2, Ross, t3/13; cum 16K 4/13;
  • 24400, drl, QEP, MHA 2-04-33H-150-92, Heart Butte, no data
Note: Mountain Divide, LLC, has five permits as of this date; one is on DRL status; the second one comes off confidential list tomorrow; all five are wildcats in the far northwest corner of North Dakota, near Fortuna, ND.


 21320, see above, Whiting, Teddy 44-32TFH, Big Stick:

DateOil RunsMCF Sold

22582, see above, Newfield, Berg Federal 149-97-30-31-2H, Haystack Butte:

DateOil RunsMCF Sold

 23564, see above, MRO, Stever 34-31H, Big Bend:

DateOil RunsMCF Sold

23915, see above, Samson Resources, Almos Farms 0112-1TFH, Ambrose:

DateOil RunsMCF Sold

24193, see above, Hess, RS-Red Crown 156-91-2536H-2, Ross:

DateOil RunsMCF Sold

Why Tesla Is Succeeding While Everyone Else Is Failing: Not Exactly An Endorsement For EVs; Tesla: Target The Rich Who Want A 3rd Or 4th Car To Sit In Their Driveway As Show

Yahoo!Finance is reporting:
Miles Electric Vehicles, , a U.S. manufacturer of low-speed, all-electric cars that were used by the U.S. Navy, the National Park Service and various universities including Yale, Stanford and UCLA, filed for Chapter 11 bankruptcy protection on Tuesday.
Entrepreneur and philanthropist Miles Rubin founded the company in 2004 with the mission to “rapidly develop advanced all-electric vehicles to meet the needs of organizations and everyday drivers, while using no gas and producing zero tailpipe emissions.” According to Reuters, Miles Electric has “estimated assets in the range of $10 million to $50 million, and estimated liabilities of between $50 million and $100 million.”
Miles Electric Vehicles website here

And then the article goes on to explain why Tesla is succeeding: it catered to the rich who will buy, but probably not drive, the Tesla as a 3rd or 4th car. 

For Investors Only -- More Rigs Moving To China

Last week it was reported that HP tripled its dividend and was trading at new 52-week highs.

A lot of folks are wondering if North American rigs might be the driving force? I don't know. But this might provide a clue:

Oil & Gas Journal is reporting that:
Far East Energy Corp., Houston, is operating 18 rigs with 4 more enroute to its 418,500-acre Shouyang coalbed methane field on the Shouyang PSC in Shanxi Province southwest of Beijing, China.
The company spudded 7 new wells in the past 12 days, bringing to 23 the number of wells spudded in 2013. Five other wells reached total depth in the past 12 days, including 1 well that was drilled to TD in 12 days.
There are so many stories out there, so many opportunities.....

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or what you think you might have read here. 

Background Noise, Fluctating Predictions, But Always Nice To See -- USEIA Raises Global Oil Demand For 2013, 2014 -- The Bakken Can Handle Increased Global Demand; Don't Worry, Be Happy

Platts is reporting:
The US Energy Information Administration Tuesday raised its 2013 and 2014 global oil demand forecasts, citing strength in Asia. 
 In its June Short-Term Energy Outlook, the EIA raised its 2013 oil demand forecast by 99,000 b/d, to 90.03 million b/d, and its 2014 demand forecast by 82,000 b/d to 91.22 million b/d. 
"Non-OECD Asia, particularly China, is the leading contributor to the projected global consumption growth," the EIA said.
North Dakota production: 800,000 bopd/24 hours = 33,000 bbls/hour

A global increase in demand of 99,000 bbls/day = 3 hours of North Dakota production. "We" can handle it. 

Another Natural Gas Processing Plant In Oklahoma

Oil & Gas Journal is reporting:
Caballo Energy LLC, Tulsa, has started up a 60-MMcfd gas processing plant near Carmen, OK, in Alfalfa County, bringing Caballo’s total processing capacity in the region to about 100 MMcfd.
The Carmen plant currently operates at 80% capacity, said Caballo, and serves expanding natural gas production in the liquids‐rich Mississippi Lime and Cana Woodford shale plays. The company said that long-term dedications to the plant total more than 125,000 acres.
It is evaluating adding a second cryogenic processing plant at the 160-acre site that would give Caballo 220 MMcfd in processing capacity at Carmen as earlier as June 2014.
This has nothing to do with the Bakken, but it puts into perspective the five (or is six now?) ONEOK 100-MMcfd natural gas processing plants in the Bakken. 

Really, Really Cool

Go to this site: http://www.gigapixel.com/image/gigapan-canucks-g7.html

Then click a couple of times anywhere on the photo. Keep clicking as long as you want.

Add this to what the NSA is doing and you have ... "1984."

Pew Research: Warrentless Wire-Tapping, Massive Snooping, Unlimited Eavesdropping -- OK

Link here. The headline at the linked article suggests the subject line at the top, but that's my take on it. I didn't read any of the article, just the headline.

Al Franken said it best: “There are certain things that are appropriate for me to know that is not appropriate for the bad guys to know." Or, he could have added, "... or for Americans to know. As long as it's Obama doing it, and not Bush."

I love the grammar. "There are certain things...that is not appropriate...."

LOL: Headline In WSJ -- Markets Are Selling Off Around The Globe -- For Investors Only

The markets are selling off around the globe, purportedly because of something the Bank of Japan didn’t do.

So, what's the DOW doing at the moment, 11:46 a.m., June 12, 2012? Down ... drum roll ... down 7.84 points. At 7.84/15,230 = 0.05%. Quite a sell-off.

Of course, this is dynamic, and in five minutes there could be a flash crash.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you might have read here.

Best Bakken Story Of The Day? The Week? -- This $70 Million Project Will Take Five (5) Years To Build -- Just To Support What The Bakken Has Delivered; Upstate New York (Think Kodak, Rochester) Is Probably Noting With Concern As The Rest Of The World Moves On; The Central Corridor Is Widening To (Maybe) Include Minnesota


Later, 1:33 pm: a reader in Minneapolis area who did not want full comment published, wrote to say that, "yes," this was a huge deal. Apparently if one can find this on google maps, one will see how huge this facility is. Some thought it would be an international mall. 

Original Post

I don't want you to digress, to get off on a tangent, but after you read the story below, DO NOT PASS GO, but click on the link at the very bottom of this post. It's a story you don't want to miss. 

The Star-Tribune is reporting:
A major division of Emerson Electric Co. said Monday that it will convert .... into an engineering and manufacturing center, creating about 500 high-skilled jobs over the next five years.
Rosemount Inc. will invest about $70 million to complete and equip [the] abandoned building, which spans 500,000 square feet. It also will develop parking, roads and green space on 60 acres around the facility.
Officials from Rosemount, a unit of the $24 billion Emerson Electric Co. in St. Louis, said the incoming jobs will pay an average of about $65,000.
Workers will manufacture instruments that measure pressure, temperature and flow rates for oil, gas, refining and petrochemical plants.
The project will take five years to complete and will benefit from more than $6 million in state and local subsidies.
The new facility will serve as global headquarters for Emerson’s measurement technologies division and is part of a 10-year growth strategy. 
But, no, it's not in western North Dakota.

How many times has it been said that oil service support, research, spin-offs, start-ups, etc., need a work force and there is no work force left in western North Dakota. Companies are setting up shop in Fargo, Rapid City, Denver, Jamestown, Billings, and Minneapolis to support the Bakken.

This story has to do with an abandoned telecommunications building near Minneapolis; Shakopee is less than 30 miles from downtown Minneapolis. The story continues:
“The fact that this is a 500,000-square-foot facility means it is a tough space to fill, so this new project is a perfect project for that spot,” said Samantha DiMaggio, Shakopee’s economic development coordinator.
The property received a chance for a second life as a manufacturing hub in October, when Opus Development Corporation’s senior vice president, Dave Menke, confirmed that Opus had bought the property. Soon after, discussions began with the city, state and an economic development partnership.
As a manufacturing hub, the property is expected to deliver an economic boost for Shakopee, which has more than 37,000 residents. Greater MSP, a regional economic development partnership, calculated that the project would mean $200 million in new construction and employee wages, as well as more than $10 million in state income taxes over five years.
Road construction should begin before October.
A huge "thank you" to the reader who alerted me to this story and what it means. The reader will get a life-time free subscription to the milliondollarway blog.

Consider the story lines:
  • Minnesota is "open for business" -- look at the tax incentives
  • Minnesotans are not afraid of truck traffic after all; they are even going to build new roads to accommodate this new enterprise
  • half-million square foot building for telecommunications not needed
  • no mention of solar or wind turbine research (even though ND is #3 in wind nationwide)
  • will take five years to build -- another enterprise that has it figured out: the Bakken is going to be around for a long, long time; CEOs don't spend $70 million and five (5) years developing a project for a boom that will end in 1.5 years (eighteen months)
  • the Bakken affecting communities nationwide
  • all those folks getting educated in the trenches of the Bakken will find jobs in the heart of Minnesota if they decide to move elsewhere
Now, for that story I mentioned at the very beginning. DO NOT PASS GO. Do not leave the site. Click immediately on this 3-page internet story: no subscription needed. Free.

Memo to self: send a note to The Atlantic Monthly folks

The Coming Glut

OPEC says they will keep pumping. OPEC says they see no plans to cut pumping despite over-supply right now.

Russia supply exceeding demand, bringing down prices.

US crude oil and natural gas reserves up by a third -- LA Times reporting:
Reserves of oil and gas that can be developed using current technology are 35% greater in 2013 than in 2011, according to a new report by the Energy Information Administration, the research branch of the Energy Department.
The rise in estimated domestic reserves to 223 billion barrels of oil equivalents, which include crude oil and gas, stems in large part from the inclusion of reserves found in shale formations. Increased use of production methods such as horizontal drilling and hydraulic fracturing, or fracking, have made oil and gas trapped in tight geological formations economically recoverable.
The article includes the boiler plate conclusion:
But the energy boom has unlocked controversy along with opportunity. Dozens of communities around the country have passed limits on fracking  because of concerns about possible air and water pollution and heavy truck traffic. 
Now, they've added "truck traffic" to the mix.

It could be added that fracking has been done safely for 60 years without one reported significant problem. Even micro-earthquakes, reportedly caused by fracking, according to some, are relieving stress preventing the "big one."

At the link, there is a photograph of a flare at a fracked well. OMG. It really looks scary. If you look really, really hard, you can see the headless horseman in the background, upper right.

Chariot Sales On Fire? GM Cuts Price of Chevy Volt


June 11, 2013: wow, this guy is a shill for the US auto industry. He's about as credible as Art Carney, Mr Obama's spokeperson. 

Original Post

WNEW is reporting:
The price of the 2013 models will be cut by $4,000. Those incentives are in addition to a $7,500 federal tax credit.
The final cost will be just under $30,000. That would put the Volt in the price range of the Nissan Leaf and plug-in Toyota Prius and Ford C-Max models.
The price drop comes after sales of the Volt dipped another 4 percent in May.
The big story, however, is the California mandate that 15% of automobiles sold in that state must be EVs, by some year, 2015, 2020, I forget. One of two things are going to happen: a) the law will be changed; or, b) very, very inexpensive ObamaCars will be given away.

Oh, electric golf carts will be part of the 15% mandate. Problem solved. My hunch: the new Apple R2D2 desktop computer will power golf carts in the future.

Tuesday Morning News And Links: President Obama Now Agrees -- Plan B Should Be Available To His Daughters, Their Friends; Active Rigs In The Bakken Steady; Huge Apple Presentation Yesterday

Active rigs: 186 (steady, same as yesterday)

Wells coming off the confidential list have been posted

RBN Energy: Continuation of the series on underestimating production of natural gas; great series

WSJ Links

Section D (Personal Journal):
Section C (Money & Investing):
Section B (Marketplace):
Section A: