Friday, October 11, 2013

Nine (9) New Permits -- The Williston Basin, North Dakota, USA

Active rigs: 184

Nine (9) new permits --
  • Operators: CLR, Triangle (3), Corinthian, MRO (4)
  • Fields: Bear Creek (Dunn), Elk (McKenzie), North Souris (Bottineau), Spring Creek (McKenzie), Killdeer (Dunn)
  • Comments:
Wells coming off the confidential list were reported earlier; see sidebar at the right.

Six (6) producing wells completed:
  • 25269, 497, Triangle, State 152-102-36-25-2H, Elk, t10/13; cum 11K 8/13;
  • 25036, 428, Triangle, State 152-102-36-25-1H, Elk, t10/13; cum 16K 8/13;
  • 23944, 2,658, Statoil, Sanders 34-27 1H, Ragged Butte, no production data;
  • 25322, 1,083, Whiting, Maki 41-33-2XH, Sanish, t9/13; cum --
  • 24874, 279, Slawson, Neptan 7-22-15TFH, Van Hook, t9/13; cum 18K 8/13;
  • 23769, 827, Slawson, Waterbond 5-27-34TFH, Van Hook, t7/13; cum 41K 8/13;

The Bakken Helps US Move Past Russia To Become World's #1 Producer Of Oil And Gas

Headlines from The Williston Wire. No links. It is easy to subscribe to The Williston Wire.

The U.S. will end 2013 as the world's largest producer of petroleum and natural gas, surpassing Russia and Saudi Arabia, the Energy Information Administration said recently.  The EIA estimated combined U.S. petroleum and gas production this year will hit 50 quadrillion British thermal units, or 25 million barrels of oil equivalent a day, outproducing Russia by 5 quadrillion Btu.  Petroleum production includes crude oil, natural gas liquids, condensates, and biofuels.  U.S. and Russian energy production over the past two years have been roughly equivalent. Since 2008, U.S. petroleum production has increased 7 quadrillion Btu, with "dramatic" growth in Texas and North Dakota, the EIA said.


North Dakota struggles to keep up with oil industry; receives little help from Washington.


Mercy's Cancer Treatment Center celebrates grand opening. Something tells me the grand opening went better than ObamaCare's opening day with the on-line exchanges.


Fargo Jet Center, North Dakota's largest provider of aviation services, announced recently a joint venture with Denver, CO based Ross Aviation and Williston, ND based Overland Aviation.  "Plans are underway for improving the existing facilities to accommodate the growth Williston has realized over the past couple of years," said Jim Sweeney, President of the newly formed Williston Jet Center.


Two women-run coffee stands have attention-getting names, especially in this male-dominated oil boomtown. While one business, C Cups Espresso, is risqué in name only, competitor Boomtown Babes Espresso features sexy baristas and provocative humor. Both coffee stands have a steady stream of customers keeping the owners happy about their decisions to move across the country to start their first businesses.


Given his penchant for industrial settings, the Bakken oil patch served as an interesting subject - its gas flares and the endless nodding of its oil wells.  Yet Alan McQuillan, a London-born photographer, did not think such industrial sprawl would earn him first place in a coveted international photography competition.  Nevertheless, the Missoula resident rather pleased with his photos' top-notch showing.


This collection of aerial images shows the start of a transformation of the North Dakota landscape as dramatic production is realized from the Bakken oil formation.  Trucks haul water for fracking; facilities for loading the oil onto rail cars are under construction from Trenton to Dickinson; tiny towns like Alexander and Watford City see heavy traffic and new construction as companies build the necessary infrastructure to handle the influx of workers.

Williston Leads North Dakota In 2Q13 Taxes Despite Wet Spring Slowing Activity; Williston Soundly Beats Fargo, State's Largest City

From The Williston Wire.
The Tax Department today issued a report that reflects a slowing in taxable sales and purchases for North Dakota during the second quarter, which includes the months of April, May, and June.  Second quarter 2013 total taxable sales and purchases was $6.293 billion compared to $6.451 billion for the same quarter in 2012.  Williston lead the state in sales taxes with $795,558,467.  Fargo, the state's largest city, generated $670,450,934 during the same period. 
Comparing comparable quarters is critical, rather than comparing sequential quarters.

The PDF at the link shows that Williston has been #1 for the past eight (8) quarters.
By quarter, Williston first, then Fargo, the Bismarck (in thousands of dollars):
          Williston -- Fargo -- Bismarck
  • 1Q11: 477,058 -- 480,907 -- 302,275
  • 2Q11: 534,503 -- 590,408 -- 401,023
  • 3Q11: 721,886 -- 654,406 -- 443,012
  • 4Q11: 811,408 -- 703,905 -- 495,222
  • 1Q12: 791,005 -- 541,857 -- 386,320
  • 2Q12: 857,080 -- 665,749 -- 472,648
  • 3Q12: 952,804 -- 711,668 -- 473,716
  • 4Q12: 893,748 -- 724,815 -- 499,099
  • 1Q13: 790,192 -- 543,191 -- 392,536
  • 2Q13: 795,558 -- 670,451 -- 486,472
Here are the Williston figures only, by quarter (in thousands of dollars):

1Q07 91,503
2Q07 105,449
3Q07 118,929
4Q07 122,918
1Q08 125,562
2Q08 189,720
3Q08 209,198
4Q08 247,948
1Q09 169,162
2Q09 162,146
3Q09 150,306
4Q09 191,968
1Q10 215,924
2Q10 304,928
3Q10 378,645
4Q10 436,150
1Q11 447,058
2Q11 534,504
3Q11 721,889
4Q11 811,407
1Q12 791,005
2Q12 857,080
3Q12 952,804
4Q12 893,748
1Q13 790,192
2Q13 795,558

Or with a chart, 1Q07 - 2Q13:

Update On Explorer Pipeline Project To Carry Diluent From The Gulf Coast To Midwest On Track, On Schedule, Apparently Within Budget

This is really a great story, one of the reasons I love to blog.

A couple of years ago I would have had no idea what dilbit was or what "diluent" was. But back in September, 2012, about a year ago, I wrote a pretty long post on "diluent" with sources from Reuters and RBN Energy. That post is now "diluent central," where I update data points on this subject.

I had forgotten about some aspects of the diluent story but knew the big story. Newbies should read the post at the link before continuing.

At that post, I mentioned one of the two major pipelines that would be shipping diluent from the Gulf Coast back up to Canada: the Explorer, from Houston to Chicago. Originally, this pipeline carried gasoline/diesel fuel from the Gulf Coast to the Midwest. Now, it will be carrying diluent back to landlocked refiners taking in more Canadian crude oil.

Earlier this year, April 3, 2013, there was an article in Pipeline and Gas Journal, reporting that Explorer Pipeline's board of directors had approved funding for the first phase of what they called the Manhattan Extension Project.
The project will include 18 miles of pipeline from Explorer’s existing 24-inch mainline north of Wood River, IL to Manhattan, IL, the origin point for the Southern Lights Pipeline. Explorer expects the project to be operational second quarter 2015.
Today, the company released this press release:
Explorer Pipeline announced today its board of directors has approved full funding for the second and final phase of the Manhattan Diluent Extension Project. Explorer’s board approved phase one of the project earlier this year.
“The board’s action earlier this year allowed us to maintain the timing for the second quarter of 2015 in-service date, and this funding approval solidifies Explorer’s commitment to our shippers and our diluent growth strategy,” said Dave Ysebaert, CEO of Explorer. “This connection will provide initially up to 250,000 barrels per day of capacity into Southern Lights allowing Explorer to meet the growing demand for diluent as the capacity of Southern Lights increases.”

For The Archives: Random DOE Update On Global Coal, Wind


April 20, 2014: is reporting -- Yahoo!News is reporting -- 
The provincial government has spent $5 million to put in place the infrastructure as it seeks to transform the desolate area into one of the world's largest solar power parks, capable one day of generating up to 1,000 megawatts of electricity.
The desert park in Bahawalpur district is the latest scheme to tackle the rolling blackouts which have inflicted misery on people and strangled economic growth.
Temperatures can reach 50 degrees Celsius (120 Fahrenheit) in the country's centre in June and July, sending demand for electricity soaring and leaving a shortfall of around 4,000 MW.
"In phase one, a pilot project producing 100 MW of electricity will hopefully be completed by the end of this year," Imran Sikandar Baluch, head of the Bahawalpur district administration, told AFP.
"After completion of the first 100 MW project, the government will invite investors to invest here for the 1,000 megawatts."
One has to read quite a ways into the article to find out the rest of the story:
Work has also begun on a pilot 660 megawatt coal-fired plant in Gadani, a small town on the Arabian Sea. Another 600 megawatt coal plant has also been given the go-ahead in the southern city of Jamshoro.
But while coal may offer a short-term fix to the energy crisis, authorities are keen to move to cleaner electricity in the long run.
Short-term fix? I doubt anyone is building a coal-fired plant for less than 20 years of use. Who are they trying to kid? Politically correct thing to say, though.

Original Post

Tracking the new coal-fired power plants: excellent PDF from National Energy Technology Laboratory. A big "thank you" to Don for sending me the PDF.

Dated January 13, 2012; data updated January 13, 2012). This is from the Office of Strategic Energy Analysis & Planning.

Some data points.

Implementation of capacity significantly less than proposed capacity; for example, in 2008, 64 GW of new coal-fired plants were proposed; that estimate was continually downgraded and by 2012, actual amount of capacity implemented: 16 gigawatts (assuming I am reading slide 5 correctly)

Number of announced closures of coal-powered plants will exceed number of new plants.

  • In 2008: about 1.5 GW of new coal-generated electricity was added
  • In 2009: about 1.5 GW of new coal-generated electricity was added
  • In 2010: almost 7.0 GW of new coal-generated electricity was added
  • In 2011: back to 1.5 GW (war on coal; natural gas surge)
  • In 2012: almost 5.5 GW of new coal-generated electricity will be added
  • After 2018: nothing has been proposed
Slide 10 is most interesting: after a steady decline in coal capacity, 2010 was the largest build since 1985; after that it dropped off significantly.

Slide 16 compares China with the US.

How does the 1.5 to 7 GW of coal-generated electricity compare to China? The build rate in 2013:
  • 28 GW operational in China; 0 GW operational build rate in the US
  • 20 GW under construction in China; 0 GW under construction in the US
So, assuming I am reading the chart correctly,
  • the build rate for coal-fired plants in China for 2013: 48 GW
  • the build rate for coal-fired plants in the US for 2013: 0 GW
Slide 23: proposed US new capacity -- wind
  • 2012: 55GW
  • 2013: 28 GW
  • 2014: 15 GW
  • 2015: 11 GW
  • 2016: 8 GW
  • 2017: 2 GW

A lot of story lines in that presentation. Global story: King Coal is not dead. CO2 emissions from coal will continue to decrease in the US, while rising exponentially in China.

The Red Queen Phenomenon And The Bakken: A Random Observation

When anyone talks about the Red Queen phenomenon and the Bakken, remember this, from the September, 2013, Director's Cut:
"The drilling rig count decreased slightly from June to July, but the number of well completions jumped 102 to 251, resulting in a 6.4% increase in oil production. That number of completions is almost three (3) times the threshold needed to maintain production." 

Random Update Of Active Rigs In North Dakota By Operator

Disclaimer: this list was done quickly and not double-checked; there may be errors. It will not total 185 because I did not list operators drilling salt water disposal wells. 

There are currently 185 active rigs in North Dakota; a partial list:

Abraxas: 1
American Eagle: 2
Bakken Hunter: 1
BR: 12
CLR: 19
Corinthian: 1
Cornerstone: 1
Denbury: 1
Emerald Oil: 2
Enerplus: 3
EOG: 5
Fidelity: 4
Fram: 1
Gadeco: 1
Hess: 16
HRC: 6
Hunt: 2
KOG: 7
MRO: 5
Murex: 2
Newfield: 4
North Plains: 1
Oasis: 10
Petro-Hunt: 7
Petrogulf: 1
QEP: 9
Samson Resources: 1
Sequel: 1
Sinclair: 1
Slawson: 5
SM Energy: 4
Statoil: 4
Triangle: 3
True Oil: 1
Whiting: 16
WPX: 4
XTO: 10
Zavanna: 1
Zenergy: 2

If you are interested in comparing the current list with previous active rig lists, click on the labels ("tags") associated with this post.

Random Update Of Wells On Confidential List By Operator

On October 10, 2013, there were 2,137 wells on the confidential list.

Abraxas: 6
American Eagle: 24
Armstrong Operating: 2
Bakken Hunter: 8
Baytex: 4
Buffalo Hills: 1
Burlington Resources: 131
CLR: 282
Corinthian Exploration: 10
Cornerstone: 6
Crescent Point Energy: 8
Denbury Onshore: 2
Emerald Oil: 9
Enduro Operating: 8
Enerplus Resources: 58
EOG: 43
Fidelity: 15
Flatirons: 1
Flatland: 1
Fram Operating: 10
Gadeco: 1
GMX Resources: 8
Hess: 143
HRC: 100
Hunt: 23
KOG: 102
Legacy: 15
Liberty Resources: 1
Luff Exploration: 1
MRO: 80
Mountain Divide: 4
Murex: 8
Newfield: 72
North Plains: 4
Oasis: 75
Petro-Hunt: 95
Petrogulf: 2
Prima Exploration: 1
QEP: 79
Resolute Natural Resources: 3
Samson Resources: 45
SHD Oil & Gas: 2
Sinclair: 6
Slawson: 77
SM Energy: 32
Statoil: 141
Stephens Production: 1
Strike Oil: 1
Texakota: 9
Triangle: 13
True Oil: 5
Wesco Operating: 1
Whiting: 77
Williston Exploration: 1
WPX: 74
XTO: 125
Zavanna: 27
Zenergy: 23

Disclaimer: there may be errors. I did this quickly and did not double-check. The numbers will not add up to the total number of wells on the confidential list because the confidential list includes a few salt water disposal wells which I do not track. On the other hand, some salt water disposal wells have slipped into the numbers above; for example I see there are a couple of salt water disposal wells among the CLR wells that are on the confidential list.

By Popular Request -- The Obama Legacy

More photos here. President Obama's legacy.

Friday Energy; Coal Rail Has Huge Month

Genesee & Wyoming's traffic in Sep 2013 was 155,650 carloads, an increase of 76,411 carloads, or 96.4%, compared to G&W's traffic in Sep 2012 : Co reported traffic volumes for September 2013 and the third quarter of 2013. G&W's traffic in September 2013 was 155,650 carloads, an increase of 76,411 carloads, or 96.4%, compared to G&W's traffic in September 2012, and an increase of 10,875 carloads, or 7.5%, compared to total September 2012 carloads pro forma for the RA acquisition. G&W's traffic in the third quarter of 2013 was 482,823 carloads, an increase of 240,040 carloads, or 98.9%, compared to G&W's traffic in the third quarter of 2012, and an increase 30,630 carloads, or 6.8%, compared to total third quarter of 2012 carloads pro forma for the RA acquisition.

A Note To The Granddaughters

President Franklin D. Roosevelt: "The only thing we have to fear, is fear itself." (WWII)
President Harry S. Truman: "If you can't stand the heat, get out of the kitchen." (Korean War)
President "Ike": "A people that values its privileges above its principles soon loses both. (Boom)
President John F. Kennedy: "We choose to go to the moon." (NASA)
President Lyndon B. Johnson: "While you are saving your face, you are losing your ass." (Vietnam)
President Richard M. Nixon: "I will go to China." (China)
President Gerald R. Ford: "Ouch." ()
President James Carter: "On the hostage crisis, I have no regrets." (Iran)
President Ronald Reagan: "Mr Gorbachev, tear down this wall." (Cold War)
President George H. W. Bush: "Read my lips." (Taxes)
President William J. Clinton: "I did not have sex with that woman." (Sex)
President George W. Bush: "All hat, no cattle." (Katrina)
President Barack Obama: "Sally Jewell, take down those traffic cones." (Government Shutdown)

Halloween Could Be Really, Really Spooky This Year -- Day 11 Of The Government Shutdown; October 17 Was The Drop-Dead Date

Before the government shutdown, the SecTreasury said the US would run out of cash on October 17th, 2013. But then the government shutdown furloughed 800,000 government workers (at $300/day x 800,000 workers = $250 million/day in savings. And then it was reported that in the first 9 days of the shutdown, the government collected $56 billion in tax receipts and will not send out refunds during the government shutdown. So, all things being equal, the "drop-dead date" might have shifted a bit to the right, perhaps Monday, October 21. Of course, I doubt anyone really knows, and I doubt any government official that gives us a "drop-dead date" has any clue. They can't even get monthly labor statistics right.

We've seen this movie before, as they say. The president will take this right down to the wire, and, of course, Congress knows that. So, all proposals to raise the debt ceiling between now and the "drop-dead date" are simply gambits. One thing we know for sure: the government shutdown will go into a third week.

I see the president has ordered the traffic cones blocking the turnouts to view Mount Rushmore to be removed. I believe the military memorials in Washington, DC, are still off limits. The president also signed a bill to pay military death benefits. I'm trying to think of something that was "meaner" than the president initially refusing to pay military death benefits to surviving spouses/families. The only thing I can think of is Harry Reid's asking why "we" should open the NIH to care for a child with cancer during the shutdown. We've come a long way since the Camelot days of JFK.

But I digress. The point I was going to make before I got off-track is this: no one knows the exact "drop-dead date" but it exists. And unlike delaying a decision on the Keystone XL, this is one issue on which the president can dither for only so long. 

About seven days. 

However it turns out, it was good to see the president ordering those traffic cones removed.  


GOP establishment blames the Tea Party. 

Young Turks, Rod Stewart

Friday; Top Story Second Section WSJ -- The ND Oil Spill; Movie Review Of "Gravity"

Active rigs: 185

RBN Energy: nice analysis of the crude oil / natural gas price ratio, currently at 27 --
There are typically two ways to express the crude-to-gas ratio – the rule of thumb method that is simply crude price divided by natural gas price or the BTU ratio method that is gas price divided by (crude price /5.8) where 5.8 is the number of MMbtu in a barrel of crude. RBN Energy sticks to the rule of thumb method since it is more intuitive.
Conventional wisdom used to say that the crude-to-gas ratio should gravitate back to the 5.8 BTU ratio or its close approximation 6X (i.e. crude price = 6X gas price).  In the 10 years from August 1997 to August 2007 the ratio averaged 7.5 X – fairly close to the ‘real” BTU ratio of 6X. Then, at the end of 2008 just after crude and natural gas prices had crashed in response to the financial crisis, the ratio began to climb. It reached around 20 X during 2009 through 2011 and then skyrocketed in 2012 as natural gas prices plunged to less than $2/MMBtu in April – leading to a crude to gas ratio of 54X. Gas prices recovered from those lows but the ratio still averaged 35 X during 2012.
The Wall Street Journal

Apparently the president IS negotiating.  

China is overtaking the U.S. as a buyer of Middle East oil, adding fuel to tension between the nations over security in the region. Flashback.

The gap between the "haves" and the "have-nots" continues to widen. America's poverty rate has stabilized after rising during and right after the last recession—yet a greater share of the poor are poorer than they have been in years.

Jury sides with BP in Texas city case. A Texas jury found BP doesn't owe compensation to people who said they risked illness after the company's refinery emitted toxic gases in 2010, but it found the company was negligent for allowing the emissions after a fire.

Prospect of long closure worries workers. Many workers and businesses, including thousands with no direct government funding, are now bracing for a stark reality: protracted financial pressure if the federal government remains closed for longer.

Previously reported, but this is the top story in the second section: North Dakota pipeline spills 20,000 barrels. A Tesoro Logistics crude pipeline spilled about 20,000 barrels of oil in a rural field in northwest North Dakota, in what appears to be the largest spill in the Bakken shale formation to date.  It appears The Dickinson Press missed scoop on the top North Dakota story of 2013. I think it was reported first in The Bismarck Tribune but could be wrong. [Update, October 31, 2013: it appears the pipe spill was due to a lightning strike.]

Energy companies drill for IPO dollars. U.S. oil-and-gas exploration and development companies such have raised $12 billion this year in IPOs and secondary offerings, according to Dealogic, placing 2013 on track to be the biggest year since at least 1993 for such offerings by U.S. energy companies.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read at this site or what you think you may have read. I put the disclaimer here becasue "heard on the street" has a nice post on XOM
Still, Exxon's lackluster performance this year has left it looking cheap relative to both the market and its smaller E&P rivals. And if a debt limit debacle rears up, what will matter most is this: Exxon retains a triple-A rating, and net debt at the end of June was equivalent to about one-fifth of forecast 2013 earnings before interest, taxes, depreciation and amortization.
Compare that with an exuberant E&P sector that, on J.P. Morgan Chase's estimates, is carrying an average net debt load of 2.2 times 2013 Ebitda and looks set to outspend cash flow by 28% this year. Built for speed, yes, but not for big waves.

And now, this is the big story for the day: the movie review of "Gravity," starring Sandra Bullock and George Clooney. The review was posted September 30, 2013, but I just saw the movie yesterday. I can't recall the last movie I saw in the theater, but my wife wanted to see this one (she is a regular movie-goer) and I thought I owed her one. I figured I could handle this one. Wow, incredible. I can't get the images out of my mind. We were given 3D glasses but they should have also given us straps to tether ourselves to our seats. If you get a chance to see this movie, do not pass it up. The photography, of course, is incredible. The special effects don't appear to be anything other than real footage. The story line is great. It's hard to believe, if the movie is 90 minutes long, Sandra was on her own -- the only actor on screen for 60 of those minutes. She is incredibly believable in her role.

I never thought of Sandra Bullock as necessarily on the A-list among Hollywood actresses, close but not quite there. This movie puts her over the top. I'm not sure anyone -- maybe Uma Thurman -- could have done better. (No, this is one movie Meryl Streep could not have been in  -- in any role.) George Clooney is starting to get a reputation of being a bit too smug in movies -- playing himself and not the role -- but in this movie, he is incredible. He IS a seasoned astronaut/commander/fighter pilot/at home in his skin, having the time of his life, perhaps his last trip to space and he is enjoying it.

If you get a chance to see this movie on the big screen in 3D, don't pass it up; but remember to bring a strap totether yourself to your seat.