Monday, November 8, 2010
Human Interest Story: Kathleen Neset and Neset Consulting Services
There is a very nice human interest story over at PrairieBusiness about a consulting geologist firm started by Kathleen Neset about thirty years ago. She started out alone, and now has sixty (60) crews working for her throughout the Bakken. A crew consists of a mudlogger and a geologist who handle 24 hour shifts. The geologist operates a 12-hour day shift and the muddlogger continues the duties during the evening.
Oasis Reports 3Q10 Earnings
Earnings report press release here, and Seeking Alpha story here.
I'll let others sort it out for now; lots of moving parts and business jargon I don't dare interpret. I have a gut feeling that I know what it all means, but not sophisticated enough to know for sure. Oasis already has lots of acreage but continues to buy more acreage. Closed on another 16,700 acres on November 5, 2010.
It's amazing how far OAS has come in such a short period of time. It's market cap of $2.2 billion almost equals that of BEXP which has been around for a long time. By market cap, OAS is in the same league as MDU which has been around for decades.
I'll let others sort it out for now; lots of moving parts and business jargon I don't dare interpret. I have a gut feeling that I know what it all means, but not sophisticated enough to know for sure. Oasis already has lots of acreage but continues to buy more acreage. Closed on another 16,700 acres on November 5, 2010.
It's amazing how far OAS has come in such a short period of time. It's market cap of $2.2 billion almost equals that of BEXP which has been around for a long time. By market cap, OAS is in the same league as MDU which has been around for decades.
Week 44: November 1 - November 7, 2010
Weekly Links for Fossil Fuel Investors
South Heart Coal Resubmits Permit Request to Strip Mine Coal for Power Production in State
CLR 3Q10 Earnings, Conference Call
Results of Re-Fracking
KOG 3Q10 Earnings, Operations Update
Update on a Whiting $12 Million Well After Less Thank Two Years of Production
Whiting Hitting on All Cylinders
$8,600/Acre in the Bakken
Another Big Pipeline
EOG Reports Three Nice Wells
Update on South Heart Action: Whiting and Fidelity
Whiting Seeks Natural Gas Processing Plant Outside Belfield
SM (St Mary) Reports 3-Well Simul-Frac
NDIC November Hearing Dockets Posted
Great New BEXP Wells Announced
Wind Turbine Energy Efficiency Worse Than Expected
South Heart Coal Resubmits Permit Request to Strip Mine Coal for Power Production in State
CLR 3Q10 Earnings, Conference Call
Results of Re-Fracking
KOG 3Q10 Earnings, Operations Update
Update on a Whiting $12 Million Well After Less Thank Two Years of Production
Whiting Hitting on All Cylinders
$8,600/Acre in the Bakken
Another Big Pipeline
EOG Reports Three Nice Wells
Update on South Heart Action: Whiting and Fidelity
Whiting Seeks Natural Gas Processing Plant Outside Belfield
SM (St Mary) Reports 3-Well Simul-Frac
NDIC November Hearing Dockets Posted
Great New BEXP Wells Announced
Wind Turbine Energy Efficiency Worse Than Expected
Nine (9) New Permits in North Dakota
Operators: Oasis (2), Zenergy (2), Petro-Hunt, CLR, Burlington Resources (COP), XTO, and Ward-Williston.
Fields: Heart Butte, Van Hook, Stoneview, Bull Butte, Bailey, Little Deep Creek, Banks, and two wildcats.
On track for 1,625 new permits in calendar year 2010.
Fields: Heart Butte, Van Hook, Stoneview, Bull Butte, Bailey, Little Deep Creek, Banks, and two wildcats.
On track for 1,625 new permits in calendar year 2010.
Whiting Operations Update
This was previously reported but reached me today via the Oil and Gas Journal.
October 28, 2010: The estimates of the recoverable oil reserves in the North Dakota Middle Bakken (MB) and Three Forks (TFS) formations continue to pleasantly surprise Whiting Petroleum Corp., Denver, which said that it also appears that further infill drilling is warranted in Sanish field.
Sanish oil field, "owned" by Whiting
October 28, 2010: The estimates of the recoverable oil reserves in the North Dakota Middle Bakken (MB) and Three Forks (TFS) formations continue to pleasantly surprise Whiting Petroleum Corp., Denver, which said that it also appears that further infill drilling is warranted in Sanish field.
Sanish oil field, "owned" by Whiting
- Whiting operates 152 wells in the Sanish
- Additional frac stages have contributed to higher initial production rates
- Currently: 27,385 boepd from MB and TFS
- 3Q10: 22,275 boepd from the Sanish, up 113% from 3Q09
- Whiting says it now expects to drill 534 gross operated wells in the Sanish (an additional 152 operated wells)
- 83 will be "wing wells," medium length laterals (7,500 feet); will be drilled in the northeast and southwest portions of the 1,280-acre spacing units
- Will now drill three TFS wells per 1,280-acre units rather than previous plan of two TFS wells per unit
- Will add 80 gross well locations in the Sanish
- Estimates that 323 gross wells remain to be drilled
- 57 wells through mid-October for calendar year 2010
- 51 Bakken wells: average boepd = 2,541 (21% more than average before 2010)
- 7 TFS wells: average boepd = 1,433 (42% more than average before 2010)
- 15 - 30 fracs/well in 2010; average = 20/well
- Before 2010, most wells were fracked with 10 stages
- Using more proppant and fluid now: 50K bbl fluids and 4 million lbs
Whiting plans to maintain nine operated rigs in the Sanish through 2012Parshall field
Whiting has one dedicated frac crew at Sanish; 100 wells/year
Cost: <$5 million/well
Average 20,000 feet measured depth; 10,000 ft lateral
Average length of time: 19 days
19 fewer days on location saves $900,000 in drilling costs
Whiting expects to have all Sanish oil connected to pipeline by end of 2010
- Some participation in 129 wells
- Lewis and Clark Prospect: Stark County
- Golden Valley, Billings and Stark counties
- Froehlich well: averaged 1,109 boepd in first 30 days
- Discovery well: Federal 32-4TFH: flowed 1,970 boepd from the TFS, Nov 2009
- One year later, Federal 32-4TFH continues at 259 boepd (pumping), 32 boepd higher than the well's production rate at the end of July, 2010
- Four operated rigs; will increase to five by end of November; plans to have nine by mid-2011.
- Goal: 13 TFS wells in 2011
- Plan: 30 frac stages
- Estimates at least 500 potential wells targeting the TFS
NOG Reports 3Q10 Earnings; Shares Up Following Report
3Q10 earnings press release.
Operations summary:
18590, Alamo 1-19-18H, 1,625, Slawson, Big Bend
18617, Badger 1-9H, 2,057, Slawson, Van Hook
18621, Diamondback 1-21H, 2,013, Slawson, Van Hook
19047, Revolver 1-35H, 1,946, Slawson, Van Hook
18180, Stallion 1-1-12H, 2,753, Slawson, Big Bend
18589, Sniper Federal 1-6-7H, 3,784, Slawson, Big Bend
19215, State 36-1 2H, 2,356, BEXP, TFS, Stony Creek
18841, Amanda 21-14H, Conoco, 1,833, Haystack Butte
19010, Armada 1-14-13H, 1,460, Slawson, Van Hook
18871, Neptune 1-15H, 2,578, Slawson, Van Hook
Banks 5692 44-34H, 949, Oasis
19039, Hoiby 158-94-4B-3-1H, 831, Petro-Hunt, Wildcat
19101, Gustafson 29-32-161-92, 694, Samson, Foothills
19052, McGahan 1-18-7H, 697, Hunt, Ross
18868, Abelmann 23-14 1H, 4,169, BEXP, Camp
19030, Kjorstad 5300 24-22, 2,713, Oasis, Wildcat, 22-153N-100W
19080, Domaskin 19-30-29H, 2,731, Fidelity, Sanish
18896, Clifford Bakke, 26-35 1H, 5,061, BEXP, Alger
Operations summary:
As of November 5, 2010, Northern Oil has spud approximately 23.68 net wells during 2010. Management now expects to spud approximately 25 net wells throughout 2010, up from previous guidance of 24 net wells, and expects to increase production volumes further by 30 to 35% in the fourth quarter of 2010 compared to the third quarter of 2010.19000, Goblin 2-16H, 1,338, Slawson, Van Hook
18590, Alamo 1-19-18H, 1,625, Slawson, Big Bend
18617, Badger 1-9H, 2,057, Slawson, Van Hook
18621, Diamondback 1-21H, 2,013, Slawson, Van Hook
19047, Revolver 1-35H, 1,946, Slawson, Van Hook
18180, Stallion 1-1-12H, 2,753, Slawson, Big Bend
18589, Sniper Federal 1-6-7H, 3,784, Slawson, Big Bend
19215, State 36-1 2H, 2,356, BEXP, TFS, Stony Creek
18841, Amanda 21-14H, Conoco, 1,833, Haystack Butte
19010, Armada 1-14-13H, 1,460, Slawson, Van Hook
18871, Neptune 1-15H, 2,578, Slawson, Van Hook
Banks 5692 44-34H, 949, Oasis
19039, Hoiby 158-94-4B-3-1H, 831, Petro-Hunt, Wildcat
19101, Gustafson 29-32-161-92, 694, Samson, Foothills
19052, McGahan 1-18-7H, 697, Hunt, Ross
18868, Abelmann 23-14 1H, 4,169, BEXP, Camp
19030, Kjorstad 5300 24-22, 2,713, Oasis, Wildcat, 22-153N-100W
19080, Domaskin 19-30-29H, 2,731, Fidelity, Sanish
18896, Clifford Bakke, 26-35 1H, 5,061, BEXP, Alger
CLR Reports a Red River Well -- Bakken, North Dakota, USA
November 8, 2010: Permit # 16064, 72, CLR, MPHU 44-9, Medicine Pole Hills, 9-130-104. This is a "Medicine Pole Hills unit in the Cedar Hills field.
Look how old that permit is, 16064; granted in 2005, I assume.
Click here for CLR's discussion of Red River units. I think this might surprise newbies. It certainly surprised me.
CLR's Red River Units comprise a portion of the Cedar Hills field, listed by the Energy Information Administration in 2008 as the 7th largest onshore, lower 48 field in the United States, ranked by liquid proved reserves. The Cedar Hills field is in the far southwestern part of North Dakota, far northwestern corner of South Dakota, and west central Montana along the border abutting North and South Dakota.
How important are the Red River units to CLR?
Look how old that permit is, 16064; granted in 2005, I assume.
Click here for CLR's discussion of Red River units. I think this might surprise newbies. It certainly surprised me.
CLR's Red River Units comprise a portion of the Cedar Hills field, listed by the Energy Information Administration in 2008 as the 7th largest onshore, lower 48 field in the United States, ranked by liquid proved reserves. The Cedar Hills field is in the far southwestern part of North Dakota, far northwestern corner of South Dakota, and west central Montana along the border abutting North and South Dakota.
How important are the Red River units to CLR?
- CLR production from the Red River units accounted for 38% of Continental's production in 4Q09.
- The Red River units accounted for 21% of CLR's year-end 2009 proved reserved.
Oasis Reports a Nice Well in Robinson Lake (Bakken, ND, USA)
18857, 2,023, Oasis, Berry 5493 11-6H, Robinson Lake, Bakken
Cumulative: 35K in first 55 days.
I posted this at the Robinson Lake some time ago:
Cumulative: 35K in first 55 days.
I posted this at the Robinson Lake some time ago:
The Robinson Lake is exciting for two reasons. First, Oasis (see below, under NEWS), which some have said could be the next CLR, has a couple of new permits in this township, as noted above, and Hess has the multi-well pads. [These were the new permits/wells: 18857 and 17661, at that time.]It is my opinion that Oasis "IPs" are "real" as anyone's; not inflated, in other words.
Active Rigs at 154 (Two Below Record) -- Bakken, North Dakota, USA
For those concerned that things are quiet in the Bakken, note that the number of active oil rigs in North Dakota has risen back to 154, just two short of the all-time record. It should be noted that some rigs have been moved to the Montana site of the Bakken over the past few months.
The price of oil for West Texas Intermediate (WTI) remains near $87/barrel. Some folks tell me that their royalty checks suggest ND Bakken oil is selling for just under $80/barrel. If true, that is quite impressive. Those could be hedged contract prices and may not be related to the spot price of Bakken oil.
The price of oil for West Texas Intermediate (WTI) remains near $87/barrel. Some folks tell me that their royalty checks suggest ND Bakken oil is selling for just under $80/barrel. If true, that is quite impressive. Those could be hedged contract prices and may not be related to the spot price of Bakken oil.
Uranium Strip Mining in North Dakota
This story has been reported in a couple different places over the past few days: there is renewed interest in strip mining uranium in North Dakota. This link is to today's story in the Dickinson Press.
Comment: ain't gonna happen in my investing lifetime.
Comment: ain't gonna happen in my investing lifetime.
MDU To Request a Rate Increase Following Disappointing Quarter
MDU will request a rate increase .... wind energy is costing too much.
North Dakota requires a certain percentage of renewable energy be provided by wind.
According to the link above, MDU analysts show that with that requirement removed, MDU made about $3 million in profits. I have no idea what is meant by that since the article did not elaborate, and the article did not say what that figure was in comparison to. MDU posted an operating income of $19 million in 3Q10 compared to an operating income of $15 million in 3Q09.
It is my understanding that regulated utilities are guaranteed a "reasonable" rate of return (I don't know the formula) on their regulated activities and guaranteed recuperation of costs incurred for projects mandated by law.
Investors were disappointed in MDU's 3Q10 earnings report. MDU earned 32 cents/share in the most recent quarter compared to 50 cents/share in 3Q09.
According to MDU's most recent 10-Q, MDU's average cost of fuel and purchased power per kWH is 2 cents. I do not know what the electricity costs coming from the two MDU wind farms, but just to remind folks what wind energy costs, here are the projections for the Cape Wind project off the coast of Massachusetts: Wind Cape energy: 21 cents/KWH and will increase at 3.5% annually.
Off-shore wind energy is significantly more expensive than on-shore wind energy, and although it is difficult to get accurate figures, two facts: a) general consensus is that wind energy is at least 50% more expensive than coal for generating electricity; and, b) wind energy costs about 10 to 12 cents per kWH.
It should be noted that wind energy is the least of MDU's challenges right now. MDU is a diversified conglomerate and the general downturn of the economy has hurt its materials and construction division and lower natural gas prices continue to be a significant problem.
3Q10 earnings conference call.
Billings Gazette link with same story.
North Dakota requires a certain percentage of renewable energy be provided by wind.
According to the link above, MDU analysts show that with that requirement removed, MDU made about $3 million in profits. I have no idea what is meant by that since the article did not elaborate, and the article did not say what that figure was in comparison to. MDU posted an operating income of $19 million in 3Q10 compared to an operating income of $15 million in 3Q09.
It is my understanding that regulated utilities are guaranteed a "reasonable" rate of return (I don't know the formula) on their regulated activities and guaranteed recuperation of costs incurred for projects mandated by law.
Investors were disappointed in MDU's 3Q10 earnings report. MDU earned 32 cents/share in the most recent quarter compared to 50 cents/share in 3Q09.
According to MDU's most recent 10-Q, MDU's average cost of fuel and purchased power per kWH is 2 cents. I do not know what the electricity costs coming from the two MDU wind farms, but just to remind folks what wind energy costs, here are the projections for the Cape Wind project off the coast of Massachusetts: Wind Cape energy: 21 cents/KWH and will increase at 3.5% annually.
Off-shore wind energy is significantly more expensive than on-shore wind energy, and although it is difficult to get accurate figures, two facts: a) general consensus is that wind energy is at least 50% more expensive than coal for generating electricity; and, b) wind energy costs about 10 to 12 cents per kWH.
It should be noted that wind energy is the least of MDU's challenges right now. MDU is a diversified conglomerate and the general downturn of the economy has hurt its materials and construction division and lower natural gas prices continue to be a significant problem.
3Q10 earnings conference call.
Billings Gazette link with same story.
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