Friday, March 11, 2016

Friday, March 11, 2016; Delay In Reporting Wells Coming Off Confidential List

Top Bakken story of the week: Iowa Utilities Board approves Bakken pipeline

Active rigs:

Active Rigs33112192187206

RBN Energy: The Challenges of Making LNG the Go-to Bunker Fuel.
In January 2015 new international regulations came into force that reduced the permitted sulfur content in ships “bunker” fuel in Northern European and North American coastal regions. So far, international shipping companies and cruise lines have been responding to these rules primarily by switching to marine gasoil (MGO), burning lower-sulfur fuel oil, or sticking with higher-sulfur fuel oil and adding “scrubbers” to capture most of the sulfur being emitted by their ships’ engines. More recently, though, some of the shipping sector’s biggest players have unveiled plans to boost the use of liquefied natural gas (LNG) as a bunker fuel, figuring that LNG bunkering will not only help them meet existing regulations but the tougher rules likely to be implemented over the next few years. Today, we begin a short series on the opportunities and challenges associated with shifting ships from fuel oil to LNG.
Besides death and taxes, another certainty in today’s world is that the rules governing emissions from fossil-fired power plants, industrial boilers, and engines of just about every size and type will be tightened, and then tightened again. The same holds true, of course, for fuels used in ship engines (known as bunkers). The International Maritime Organization (IMO), which governs such things, in recent years has been implementing rules that gradually reduce emissions of sulfur (sulphur for many of our non-American readers). In January 2012, the “global” cap on sulfur content in marine fuel was reduced to 3.5% (from the old 4.5%), and in January 2020 it will likely be reduced to a much stiffer 0.5% (more on that in a bit). There are even tougher standards in place in the IMO’s “Sulphur Emission Control Areas” (SECAs, or sometimes ECAs), which include Europe’s Baltic and North seas and (more recently) areas within 200 nautical miles of the U.S. and Canadian coasts. In July 2010, the SECA sulfur limit in marine fuel was reduced to 1% (from the old 1.5%), and January 2015 the limit was ratcheted down again, this time to a very stringent 0.1%. Ships that ply SECA waters have the option of continuing to use higher-sulfur fuel oil and meeting the emission standards by installing post-combustion scrubbers that, as their names suggest, remove enough sulfur from the emissions to meet regulatory limits. (And, we should also point out, if a ship makes a run from, say, the non-SECA waters of Asia to the U.S. West Coast, it only needs to meet the SECA requirements during the last 200 miles of its journey—that is, it can switch from higher-sulfur to lower-sulfur fuel during the final part of its trip.)

This will be one of several QEP wells that should come off the confidential list today:
  • 29324, 1,963, QEP, Jones 3-15-23TH, Grail, t9/15; cum 130K 1/16; only 8 days in 12/15:
DateOil RunsMCF Sold

While we are waiting, some data points from the well file regarding this well:
  • API: 33-053-06233
  • according to FracFocus, fracked 9/13 - 18/2015: 5.3 million gallons of water; almost 19%, by weight, sand; works out to 44,22,900 pounds of water; 81% of what = 44,229,900 pounds = 54.6 million lbs proppant x 19% sand = 10.3 million lbs of sand (so, we'll see); no frack report yet; geologist's report not there yet
  • a Three Forks well, first bench
  • kick-off point, Lodgepole M 1; 10,350feet
  • kick-off / curve: about 400 linear feet
  • target zone: about 10,700 feet
  • permit was revised to change bottom hole location to avoid "collision issues with a nearby well"
  • spacing unit: 2560 acres
As of 9:50 a.m. Central Time, these wells have not been taken down from the confidential list. [Update: 3:50 p.m. -- these wells have finally been posted.]

2932433053062330000QEP ENERGY COMPANYJONES 3-15-23THNWNW 15-T150N-R95W3/11/2016
2932533053062340000QEP ENERGY COMPANYJONES 5-15-22THNWNW 15-T150N-R95W3/11/2016
2932633053062350000QEP ENERGY COMPANYJONES 3-15-22BHNWNW 15-T150N-R95W3/11/2016
2932733053062360000QEP ENERGY COMPANYJONES 6-15-22THNWNW 15-T150N-R95W3/11/2016
2932833053062370000QEP ENERGY COMPANYJONES 4-15-22BHNWNW 15-T150N-R95W3/11/2016
2932933053062380000QEP ENERGY COMPANYJONES 15-22-16-21LLNWNW 15-T150N-R95W3/11/2016

Zeits Over At Seeking Alpha

From Seeking Alpha:

  • Significant restrictions on re-injected water volumes now apply over the majority of the Miss Lime play.
  • Regulatory action in central Oklahoma impacts 54 of Devon’s wastewater disposal wells.
  • Asset values in the Miss Lime may be impacted due to significant operational and “seismicity liability” exposure.
  • The STACK play is not affected but is now part of the area closely monitored by the regulators.
  • The seismicity may be disruptive to operating plans due to the “blanket” nature of potential future regulatory actions.
See map at link. The article covers several issues, begins with this:
On March 7, the Oklahoma oil and gas regulator expanded restrictions on the re-injection of wastewater in western and central Oklahoma. The restriction area now covers essentially the entire Miss Lime play. The wastewater is co-produced from oil and gas wells and is believed to be the cause of the spike in the seismicity in the area. In the areas subject to restriction, over 2.5 million barrels per day of wastewater was re-injected in 2015 by the oil and gas industry.
The decision follows several notable quakes recorded this year, including the 5.1 magnitude quake reported on Feb. 13 near Fairview, Oklahoma.
Bakken Economy

Press release from Investors Real Estate Trust:
Investors Real Estate Trust, a self-administered, equity real estate investment trust investing in income-producing properties located primarily in the upper Midwest, today reported its financial and operating results for the quarter and year to date ended January 31, 2016.
From a reader from the press release:
Occupancy rates in housing in Minot is 86 % and Williston is 75 %. All other areas in the 92-96 % full range.
Bakken Economy -- For The Archives

CNBC is reporting:
There is perhaps no place where the transformation is so stark as North Dakota. The state's oil production grew tenfold over the past decade as it built a thriving industry virtually from scratch, driving unemployment to a national low and filling government coffers with surging tax revenue. 

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