Price of Natural Gas Soon To Reach Tipping Point

Again, the price of natural gas has risen, catching me by surprise.

Many months ago (a year or so ago?) I posted that when natural gas hits $5, a lot of oil and gas exploration and production companies are going to start looking real good.

Well, I see natural gas is now up to $4.65. This is getting a bit exciting.

The link is a dynamic link and the value will change over time.

The GM Chevy Volt Scam -- I Can't Make This Stuff Up -- Not a Bakken Story

Link here.

Automobilemag.com reports that General Motors has responded to my report questioning whether dealerships are gaming Chevy Volt tax credits. Chevy Volt spokesperson, Rob Peterson, states that "NLPC is confused." He then goes on to confirm that the dealerships purchasing Chevy Volts and reselling them as used vehicles are entitled to the $7,500 tax credit. Clearly, it is GM that is confused, considering that this was the main point of my report.

This is really quite incredible. Something tells me Volts are not being bought by limousine liberals.

The report goes on:

GM does not deny that Chevy dealerships are selling Chevy Volts to other dealerships, including a KIA dealership, for resale. At the same time, Peterson also touts the high demand for Volts claiming, "we don't sell Volts at the moment - it's almost like we deliver them."

By this statement, you wouldn't know that sales for the Volt averaged a dismally low 425 per month for the first four months of the year. GM recently stated that they had the capacity to build at a pace of 17,000 per year. So, here's a question for GM and Mr. Peterson: If demand is so high for the Chevy Volt, why would a Chevy dealership sell the vehicle to other dealerships, particularly when there are supposedly customers lined up to pay full price? The answer seems clear to me. GM is exaggerating the "high demand" for the Volt.

Truly incredible. But then what would one expect from Government Motors? It's all about perception.

Five (5) New Permits -- Bakken, North Dakota, USA

Daily activity report for May 31, 2011 --

Drillers: Whiting (2), Hunt, Zenergy, and Petro Harvester

Fields: Ross, Gaylore, Dore, Sanish, and Renville

Whiting, as usual, one well in its cash cow, the Sanish, and another permit elsewhere; in this case Gaylord.

No other information posted today.

Flood Update -- First Time Ever: Corps Will Raise Spillway Gates at Garrison -- Public Cleared Out

Link here. From the Bismarck Tribune:

History will be made at 8 a.m. Wednesday when for the first time ever the U.S. Army Corps of Engineers raises Garrison Dam spillway gates to help relieve a massive amount of water in Lake Sakakawea behind the dam.

The lake level is less than 1 foot from overtopping the spillway and the corps will raise about half of the 28 gates to control the flow and equalize output between the regulatory tunnels on the west side of the dam and the spillway on the east side, said Lake Sakakawea manager Linda Phelps.

The gates will be raised about 1 foot and will release about 15,000 cubic feet per second down the massive spillway apron, into the spillway pond far below and through an outlet channel out to the Missouri River.

Because the corps doesn't know exactly where the spillway water will flow, or how high it will get before the channel kicks into full running capacity, some precautionary measures are being taken to protect the public, Phelps said.

June Hearing Dockets for North Dakota Are Posted

Link here.

Hess has allocated one-third of their total worldwide CAPEX to North Dakota Bakken -- and it is starting to show.....

• Hess with requests for dozens of new wells
• Hess with more than 60 requests for pooling (about the last step before drilling)

Case 15150 is interesting: Slawson -

• 640-acre unit, 11-152-93, 3 wells
• 640-acre unit, 12-152-93, 3 wells
• 640-acre unit, 12-152-92, 6 wells
• 640-acre unit, 7-152-91, 6 wells
• 640-acre unit, 8-152-91, 6 wells
• 640-acre unit, 9-152-91, 6 wells
• So, if I am reading that correctly, in Fort Berthold, in this single case, Slawson is requesting permits for 30 wells, which includes 6 wells on 4 640-acre units, and then what amounts to 6 wells on a 1280-acre unit. Six wells on a 640-acre unit is impressive. Maybe more on that later. If I am misreading this, hopefully someone will point that out to me. Remember, EURs for core Bakken wells are in the range of 700,000 bbls and there is minimal depletion/communication between horizontal wells in neighboring Bakken/Three Forks formations.

15067: 5 wells on a 640-acre unit, 29-149-92; Heart Butte-Bakken, Dunn; this is in addition to four wells on a 1280-acre unit 17/20-149-92. Sections 17/20/29 lie on a north-south axis.

15119: XTO, about 22 1280-acre units; 6 wells each; 132 wells, Heart Butte-Bakken, Dunn (I have to confirm this one)

Remember: Dakota-3 is a subsidiary of WMB. Dakota-3 acquired 50+ Zenergy wells recently. WMB acquired about 7 percent of the Fort Berthold Indian Reservation's mineral acres.


Note case 14310, cont: True Oil LLC, proper spacing for Burlington Resources 11-1H, Red Wing Creek-Madison, McKenzie, and then click here for the "rest of the story."

Wednesday, June 22, 2011

14916: Whiting, proper spacing for Ray-Red River Gas Pool, Wms
14917: Oasis, temporary spacing for Twobins 5501-42-20H, and Drummond 5501-44-21H, Wms
14918: Oasis, allow unrestricted production in Strandahl-Bakken, Wms
14919: Oasis, allow max production of Grimstvedt Federal 5703 42-34H, Strandahl-Bakken, Wms
14920: Oasis, allow max production of Cowden 5404 13-35H, Painted Woods-Bakken, Wms
14921: Hess, to establish a 1920-acre unit; 6 hz wells; Mountrail County, 155N-94W
14922: Hess, 3 hz wells on 5 spacing units, Beaver Lodge-Bakken, Wms, 15 wells total?
14923: Hess, 6 hz wells on one 1280-unit, Big Gulch-Bakken, Dunn
14924: Hess, 3 hz wells on one 1280-unit, Capa-Bakken, Wms
14925: Hess, 4 hz wells in one 640-acre section, Cedar Coulee-Bakken, Dunn
14926: Hess, 3 hz wells on one 1280-unit, Hofflund-Bakken, Wms
14927: Hess, revoke a Ursa permit, Wilson 36-35H, McKenzie
14928: Hess, revoke an OXY USA permit, Steve Kudrna 1-32-29H-143-95, Dunn
14929: Hess, add 8 sections to Ray field; 3 hz wells/1280-acre unit, 12 wells?, Wms
14930: Hess, designate two 1280-acre units in East Fork-Bakken, Wms
14931: Hess, add 4 sections to Camp field, Wms and McKenzie
14932: Hess, 3 hz wells on four spacing units, Oliver-Bakken, 12 wells?, Wms
14933: Hess, 3 hz wells on 14 spacing units; 42 wells, Wheelock field, Wms
14934: Hess, to complete the EN-Cvancara A-156-93-3231H-1, Mountrail
14935: Hess, revoke a CLR well, Foster 1-28H, Wms, McKenzie
14713, cont: Hess, proper spacing for Big Gulch-Bakken, Dunn
14245, cont: Hess Bakken Investments II, revoke a Sinclair permit, Robert Peterson 11-3H, McKenzie
14325, cont: Hess Bakken Investments II, add two sections; designate two 1280-acre units, Truax-Bakken, Wms, McK
14936: Petro Harvester Operating, convert Cameron 1-12, Kuroki Field, to injection, Bottineau
14937: Petro Harvester Operating, 2 wells on each 80-acre unit, South Coteau-Madison, Burke
14938: Petro Harvester Operating, 2 wells on each 80-acre unit, Columbus-Madison, Burke
14939: Cornerstone, establish a 1280-acre unit, 1 hz well, Burke
14940: Cornerstone, to include two sections in Coteau-Bakken; 1 hz well, Burke
14941: Cornerstone, add 1 section; establish 2 1280-acre units; Little Butte-Bakken, 1 hz well each, Burke
14942: Cornerstone, add 2 sections; 1 hz/1280-acre unit; Foothills-Bakken, Burke
14943: OXY USA, max production in Cabernet-Bakken, Dunn
14944: Murex, 1 hz in a 1280-acre unit, McK
14945: Newfield Rocky Mountains, revoke a CLR permit, Stockton 1-28H, Wms
14946: Marathon, 4 hz wells on each 1280-acre unit; 3 units; 12 wells, Van Hook-Bakken, Mountrail
14947: Marathon, 4 hz wells on each 1280-acre unit; 3 units; 12 wells, Big Bend-Bakken, Mountrail
14948: Marathon, 4 hz wells; 1280-acre units; all units in 4 townships; Reunion Bay-Bakken, Mountrail, McK
14949: Marathon, max production in Reunion Bay-Bakken, McK
14950: KOG, to establish 640-acre units in two sections; 3 hz wells in each; to establish a 1280-acre unit for 5 wells; MonDak-Bakken, McKenzie
14951: KOG, establish a 1280-acre unit; 2 hz wells; Moccasin Creek-Bakken, Dunn
14952: Petro-Hunt, salt water disposal
14953: Petro-Hunt, salt water disposal
14725, cont: SM Energy, proper spacing for West Ambrose-Bakken, Divide
14231, cont: SM Energy, revoke a CLR permit for Koeser 1-11H, McK
14762, cont: Petro-Hunt, revoke a Newfield permit for Jackman 156-100-110201H, Wms
14763, cont: GMXR, to establish a 1280-acre unit, 1 hz well; McKenzie
14764, cont: GMXR, extend Ranch Creek; 2 sections; one-1280-acre unit, McK
14451, cont: Sequel, to establish 6 1280-acre units; 1 hz well each; McK
14310, cont: True Oil LLC, proper spacing for Burlington Resources 11-1H, Red Wing Creek-Madison, McK
14954: KOG, saltwater disposal, Pembroke field, McK
14955 - 14961: Whiting, pooling in Big Stick-Bakken, Billings
14962: Oasis, flaring, Contreras 5502 42-7H, Wms
14963: Oasis, flaring, Ernst 6092 42-31H, Burke
14964: Oasis, flaring, Vuki 5502 42-7H, Wms
14965 - 15027: Hess, pooling in many different fields across the Bakken
15028: Petro-Hunt, pooling in Powers Lake-Bakken, Mountrail
15029: OXY USA, pooling in Dimond-Bakken, Burke
15030: OXY USA, pooling in Dimond-Bakken, Burke
15031 - 15035: SM Energy, pooling in several fields
14732, cont: Cornerstone, saltwater disposal
15036: Zenergy, establish 1 1280-acre unit, and 1 640-acre unit, McK
15037: North Plains, extend Truax, establish 1 1280-acre unt; up to 7 wells in that zone, Wms, McK
14771, cont: North Plains, temporary spacing for Collyer 9-8H
14519, cont: North Plains, extend Truax, establish 1 1280-acre unit; up to 6 wells in that zone, Wms, McK
14527, cont: North Plains to revoke CLR permit for Sharon 1-17H, Wms
14541: Oil for America, temporary spacing for Zastoupil 22-1, Stark
15038: Landtech, saltwater disposal
15039: SBG Disposal, saltwater disposal
15040: Saltwater Disposal of ND, saltwater disposal
15041: Saltwater Disposal of ND, saltwater disposal
15042: DRD Saltwater Disposal, saltwater disposal
15043: DRD Saltwater Disposal, saltwater disposal

Thursday, June 23, 2011

15044: Samson Resources, temporary spacing Haugland 16-21-163-98H
15045: OXY USA, proper spacing for Dimond-Bakken, Burke
15046: Newfield, et al, proper spacing for Sand Creek-Bakken, McK
15047: Newfield, 8 1280-acre units; 5 wells per unit; 40 wells; South Tobacco Garden-Bakken, McK
15048: Newfield, 6 wells on1 1280-acre unit; Westberg-Bakken, McKenzie
15049: EOG, define Squaw Creek-Bakken, McK
15050: Denbury Onshore, temporary spacing for Joseph 11-1H, McK
15051: Denbury Onshore, extend Arnegard field/Ellsworth field; establish 5 1280-acre units, 1 hz well each; McK
15052: Denbury Onshore, extend Magpie-Duperow; establish a 320-acre unit; 1 hz well; Billings
14787, cont: Denbury Onshore, temporary spacing for Christianson 24-9NEH, McK
14801, cont: Denbury Onshore, revoke Zenergy's permit for Rink 13-24H; McK
15053: Abraxas, 2 wells on a 1280-acre unit, McK
15054: Slawson, establish a 1280-acre unit, Kittleson Slough-Bakken, 1 hz well, Mountrail
15056: Slawson, establish a 1280-acre unit, Van Hook-Bakken, 6 hz wells; Mountrail
15057: Slawson, establish a 1280-acre unit, Big Bend-Bakken, 6 hz wells; Mountrail
14568, cont: Slawson, establish a 320-acre unit, 3 wells, Mountrail
15058: CLR, alter the stratigraphic rules for the Banks-Bakken pool, McK
15059: CLR, establish a 2560-acre unit in Elidah-Bakken; Eco-Pad; multiple wells from the pad, McK
15060: CLR, 2 1280-acre units; increase density; 4 hz wells from each pad; 7 wells on each spacing unit; Eco-Pad, North Tioga-Bakken, Wms
14780, cont: CLR, redefine rules for Upland-Bakken, Divide
14782, cont: CLR, 2 1280-acre units, Stoneview-Bakken/North Tioga-Bakken, Viking field, 1hz well each, Burke
14543, cont: CLR, temporary spacing for Haag 1X-21H, Billings
14356, cont: CLR, create a 2560-acre unit; 4 wells; Eco-Pad; McK
14062, cont: CLR, temporary spacing for Norway 1-5H, McK
15061: Chesapeake, create a 1280-acre unit, 1 hz well, Stark County
15062: Chesapeake, create a 1280-acre unit, 1 hz well, Stark County
15063: Chesapeak, create a 1280-acre unit, 1 hz well, Stark County
15064: Cirque, 2 640-acre units; 1 hz well each, Merer County
15065: Dakota-3, establish a 320-acre unit in Squaw Creek-Bakken; 1 hz well
15066: Enerplus, create a 1280-acre unit, 7 wells, Dunn
15067: Enerplus, 4 wells on a 1280-acre unit; 5 wells on a 640-acre unit, Heart Butte-Bakken, Dunn
15068: GMXR, create a 1280-acre unit, 1 hz well, St Demetrius-Bakken, Billings
15069: GMXR, extend New Hradac-Bakken; create a 1280-acre unit; 1 hz well; Stark County
15070: Zenergy, extend Cartwright/Glass Bluff-Bakken, to establish 2 1280-acre units; 1 hz well each, McK
14784, cont: Newfield, temporary spacing for Christensen 159-102-17-20 1H, Wms
14785, cont: Newfield, create a 1280-acre unit, 6 wells; Sand Creek-Bakken, McK
14786, cont: Newfield, Newfield, create a 1280-acre unit; 6 wells; Siverston-Bakken, McK
14081, cont: Sinclair, temporary spacing for Bighorn 1-6H, Dunn
14370, cont: Encore Energy Partners, temporary spacing for Schutlz 1; McK
14542, cont: Greggory Tank, legalese, risk penalty involving CLR
15071: EOG, risk penalty legalese involving Liberty LR 17-11H, Van Hook-Bakken, Mountrail
15072: EOG, risk penalty legalese involving Liberty LR 19-23H, Van Hook-Bakken, Mountrail
15055: EOG, risk penalty legalese involving Liberty LR 14-233H, Van Hook-Bakken, Mountrail
15073: EOG, risk penalty legalese involving Ross 22-07H, Alger-Bakken, Mountrail
15074: EOG, risk penalty legalese involving Ross 27-2728H, Alger-Bakken, Mountrail
15075: EOG, pooling in Painted Woods-Bakken, Wms
14682, cont: EOG, flaring in Squaw Creek-Bakken, McK
14683, cont: EOG, flaring in Spotted Horn-Bakken, McK, Mountrail
14684, cont: EOG, flaring in Ross-Bakken, Mountrail
14685, cont: EOG, flaring in Parshall-Bakken, Mountrail
14686, cont: EOG, flaring in Antelope-Sanish, Mountrail
14687, cont: EOG, flaring in Clear Water-Bakken, Burke, Mountrail
15076 - 15083: Newfield, pooling across the Bakken
15084: Newfield, 8 1280-acre units; 5 wells each; 40 wells; South Tobacco Garden-Bakken, McK
15085 - 15087: GMXR, pooling, New Hradec-Bakken, Stark County
15088 - 15095: CLR, pooling across the Bakken
14804, cont: Fidelity, 7 1280-acre units; 3 wells each; 21 wells; Stanley-Bakken, Mountrail
15096 - 15098: Zenergy, pooling
15099 -  15113: XTO, pooling
15117: XTO, 1 1280-acre unit; 3 wells; Haystack Butte-Bakken, McK
15118: XTO, 1 1280-acre unit; 3 wells; Midway-Bakken, Wms
15119: XTO, about 22 1280-acre units; 6 wells each; 132 wells, Heart Butte-Bakken, Dunn
15120 - 15130: BEXP, pooling across the Bakken
15131: BEXP, flaring in Catwalk-Bakken, Wms, McK
15132: BEXP, increase density wells on each 1280-acre unit in Zones III and IV of Briar Creek-Bakken, 4 wells each; McK, Wms
15133: BEXP, increase density wells on each 1280-acre unit in Todd-Bakken, 4 wells each; Wms, McK
15134: BEXP, 3 1280-acre units; 4 wells each; 12 wells, Painted Woods-Bakken, Wms
15135: BEXP, increase density wells on each 1280-acre unit in Zones IV, V, and VIII of the Alger-Bakken, 4 wells each; Mountrail
15136: BEXP, 4 1280-acre units; 4 wells each; 16 wells; Elk-Bakken, McK
15137: BEXP, 3 128-acre units; 4 wells each; 12 wells; Bull Butte-Bakken, Wms
15138: BEXP, 1 1280-acre unit; 4 wells; Last Chance-Bakken, Wms
15139: BEXP, 1 1280-acre unit; 4 wells; Glass Bluff-Bakken, McK
15140: BeXP, 3 1280-acre units; 4 wells; East Fork-Bakken, Wms
15141 - 15148: Dakota-3, pooling across the Bakken
15149: Citation, saltwater disposal
15150: Slawson, Fort Berthold Indian Reservation

• 640-acre unit, 11-152-93, 3 wells
• 640-acre unit, 12-152-93, 3 wells
• 640-acre unit, 12-152-92, 6 wells
• 640-acre unit, 7-152-91, 6 wells
• 640-acre unit, 8-152-91, 6 wells
• 640-acre unit, 9-152-91, 6 wells

15151: Slawson, saltwater disposal
15152: Zavanna, saltwater disposal
15153: Dakota-3, et al, flaring in Van Hook-Bakken, Dunn, McLean, Mountrail
15154: Slawson, flaring in Big Bend-Bakken, Mountrail
15155: Dakota-3, flaring in Reunion Bay-Bakken, McKenzie
15156: XTO, flaring in Sorkness-Bakken, Mountrail
15157: Dakota-3, et al, flaring in Heart Butte-Bakken
15158: OXY USA and Cirque Resources, flaring in Dimond-Bakken, Burke
15159: BEXP, flaring in Catwalk-Bakken, Wms, McK
15160: Drilltech, saltwater conversion
14869: Hunt, commingling request
14870: cont: Hunt, commingling request
14871: cont: Hunt, commingling request
14872: cont: Hunt, commingling request
14873: cont: Hunt, commingling request
14695: cont: Baytex, flaring, Whiteaker-Bakken, Divide
14696: Baytex, flaring, Ambrose-Bakken, Divide
14697: Baytex, flaring, Ambrose-Bakken, Divide
14698: Baytex, flaring, Whiteaker-Bakken, Divide

More Global Warming --

Burgess Junction, Wyoming: a photograph is worth a 1,000 pages of warming data published by the "scientific community."

Week 21: May 21 -- May 27, 2011

EPA: Fracking -- No Evidence of Ground Water Contamination 

KOG Makes Huge Acquisition; Acquires Fifth Rig

New Record: 179 Active Drilling Rigs

ONEOK: 62-Mile LNG Pipeline Through McKenzie County

Why the IP is Just One Data Point: A 33-IP Well --> 140,000 Bbls To Date

Update on Hess Natural Gas Plant Expansion Near Tioga

First Observations in Williston -- Heart of the Bakken

How Bad is the Fracking Backlog?

That 3,000 IP Legacy/Bottineau Well? Probably Wishful Thinking

Whiting's Jones 44-35 Well: Lots of Chatter

Update on Future of the Bakken

Five More Hotels To Open In Dickinson By End of 2012 -- Bakken, North Dakota, USA

Link here (regional link).  Another story, same source, dated June 10, 2012 -- same info?

Data points:

• Construction continues on three hotels
• Two more planned by end of 2012

• La Quinta Inn & Suites: 79 rooms, pool
• Candlewood Suites: 90 rooms

• La Quinta in area of Pizza Hut and Country Kitchen
• Candlewood at intersection of Sims and 14th Street East
• Microtel Inn & Suites, could open this week; 79 rooms
• Hampton Inn & Suites, under construction; 85 rooms
• The Astoria (previously Albertson's): 95 rooms

Folks are still skittish about the boom and bust cycle of the oil industry; they've been through this before

“I think those extra hotels coming in are going to be needed,” a spokesperson said. “They’re going to give some relief for the visitor industry coming in.”

However, she is unsure if the hotels will be needed if the oil boom busts.

“Currently we need the hotels,” she said. “We need every room, but we’re going to have to see where prices are at and what happens with the energy industry.”

The Bakken analysis (linked on the sidebar at the right) says that it will take until 2030 to drill out the Bakken and the Bakken will produce through 2100.

Encana Opens First Natural Gas Fleet Fueling Station in DJ Basin, Colorado

Link here. From PennEnergy:

The station, located approximately 30 miles northeast of Denver on County Road 22 in Fort Lupton, Colorado, will serve the fueling needs of the company's DJ Basin natural gas fleet. Encana Natural Gas Inc. will own the station that will fuel the local fleet of field vehicles. The station is located at the Kerr-McGee Platt Valley Plant, which is owned by a subsidiary of Anadarko Petroleum Corporation. 

"This new station represents another significant step toward converting the U.S. fleet to run on cleaner-burning natural gas," said Eric Marsh, Encana's Executive Vice-President & Senior Vice-President, USA Division. In addition to serving the local fueling needs, the station will supply fuel to Anadarko's and Noble Energy, Inc.'s expanding natural gas vehicle fleets in the DJ Basin. The growing needs of these three companies is expected to quickly take daily natural gas throughput to the station's capacity of 500 gasoline gallon equivalent (GGE) - fuel for about 50 vehicles per day.

Another Inconvenient Truth -- Another Reason Folks Are Avoiding the Housing Market

Update

June 21, 2011: William McGrun, in the June 21, 2011 issue of the Wall Street Journal discusses why South Bend, Indiana, is on Newsweek's list of the top ten (10) dying cities in the US. He notes: "When Governor Daniels (R) succeeded in getting a property tax cap through in 2008, South Bend responded by pressing the county to raise local income taxes -- threatening that otherwise it would have to cut police and crossing guards and the like."


June 19, 2011: Marblehead, Massachusetts, chose to override Proposition 2 1/2 and will be raising property taxes. Median home property tax will go up $300 the first year, and under $250 for years 2-20.

As word spread through the building that three out of the four proposals had passed, Jean Eldridge looked on glumly and wondered how some residents would pay for the tax increases.

“I’m so disappointed,” said Eldridge, who opposed the school and transfer station proposals.

“There are so many people out of work, losing their homes, and there are a lot of people in town on a fixed income – including myself. This makes me sick.”

Do you think that will be the last property tax hike for Marblehead for the next 20 years?

June 4, 2011: I see that the mayor of Philadelphia is considering raising property taxes again this year to bailout the schools after raising property taxes ten (10) percent last year. As noted below, there is no limit on how much they can raise property taxes in most states.

Also being discussed as part of the School District bailout is a hike in property taxes similar to last year’s nearly 10-percent hike (see related story), which the administration says could bring in $95 million.

Original Post

Front page story of New York Times: Housing Index Expected To Show A New Low In Home Prices

The desire to own your own home, long a bedrock of the American Dream, is fast becoming a casualty of the worst housing downturn since the Great Depression.

Even as the economy began to fitfully recover in the last year, the percentage of homeowners dropped sharply, to 66.4 percent, from a peak of 69.2 percent in 2004. The ownership rate is now back to the level of 1998, and some housing experts say it could decline to the level of the 1980s or even earlier.

The article goes on:

Housing is locked in a downward spiral, industry analysts say, not only because so many people are blocked from the market — being unemployed, in foreclosure or trapped in homes that are worth less than the mortgage — but because even those who are solvent are opting out.

“The emotional scars left by the collapse are changing the American psyche,” said Pete Flint, chief executive of the housing Web site Trulia. “There was a time when owning a home was a symbol you had made it. Now it’s O.K. not to own.” 

Go ahead and read the article. See if you notice something unsaid. See if you notice another reason -- perhaps one of the biggest reasons why folks are not rushing to get back into the housing market.

Jump To Below the Fold

I didn't read the entire article but I read enough of it to get the feeling the writer did not address one of the biggest reasons why folks are not rushing to get back into the housing market.

There is a joke about home ownership in several communities. Once the final mortgage payment is made, a homeowner is now renting his/her home from members of the local teachers' union, firemen's union, police union, or the city's "fathers." We saw it most recently in Wisconsin and in Bell, California.

Theoretically, there is no limit to what one might end up paying in property taxes.

$5 Gasoline and Cuban Oil in the Gulf

I can only imagine the public's reaction to $5.00 gasoline when the US has a moratorium on drilling off-shore and the Cubans are drilling in our backyard.

First, the Goldman Sachs story that we will see $5.00 gasoline this summer.

Even with pressure on gas prices easing en route to Memorial Day, Goldman Sachs predicts U.S. consumers could see $5 a gallon this summer.

Goldman estimates oil could reach $135 per barrel by mid-July, with accompanying gas prices hitting the $5-per-gallon mark, the New York Post reported Sunday.

Then, the Cuban story.

"... the discovery of up to 20 billion barrels of oil in the waters off of Cuba's coast, 100 kilometres from Florida..."

How Much Water in North Dakota? Too Much For Amtrak

Update

May 31, 2011, 4:07 p.m. Amtrak now scheduled to arrive 6:40 p.m. tonight in Williston; fueling depot was unable to refuel the train in Minot; will refuel in Williston, which means the wait in Williston might be a bit longer than usual.


May 31, 2011: The Amtrak train is completing its run from Chicago to Williston to Portland, Oregon, today. This will be the last run until Saturday as it stands now. But the train is running today as usual (though a few hours late coming into Williston).

Original Post

Amtrak has started canceling service across North Dakota (and Montana/Idaho?) due to flooding.

I don't know the particulars. We all knew that Amtrak was going to start avoiding Devils Lake but that was something different than what appears to be going on now.  We know that coming from the west last week, Amtrak almost couldn't get into Williston due to the flooding.

I'm not sure exactly when the cancellations start, but my sister was just notified that her Wednesday reservation has been canceled and she will leave three days later, Saturday.

Apparently the Empire Builder will be going back and forth between Chicago and Minneapolis, and on the west coast only between Portland/Seattle and Spokane. For now it appears that the interruption in service is temporary and very short-lived. [I may be too optimistic. See first comment below which is quite helpful.]

1-800-872-7245 for "Ask Julie" at Amtrak.

It is confusing. Maybe travel is only affected some days. It is all contingent upon BNI (Burlington Northern) when they will make the track available.

Charolais Cattle -- McKenzie County -- The Bakken, North Dakota, USA

McKenzie County, North Dakota, Charolais:

One of the nice things about blogging is observations made by other folks. I never thought about it, but it turns out the oil companies have contracted with a manufacturing firm to provide cattle guards in the Williston Basin.

On one of my first road trips, it was not uncommon to drive across four cattle guards to get to a well site. The cattle guards are identical and it is obvious they are being mass produced by a mom-and-pop operation with five employees. (I'm making that up, but you get the point.)

I was told the cattle guards are individually made at the site, and that may be true, but the cattle guards I drove over yesterday all looked alike. Until told differently, my hunch is they are being mass produced in a steel building somewhere in western North Dakota. [Update, June 23, 2012: being built by Steffes Group, Dickinson-based; business has doubled; recently added capacity west of Grand Forks.]

Why I Stay Excited About the Bakken, North Dakota, USA

I wish I could say more, and I apologize that I cannot. This is a trivial posting but it's a datapoint that may prove interesting in hindsight.

There is a Fortune 500 company expanding in Williston. The company already has operations in the Bakken but is in the process of "building."

Based on comments, it sounds like there may be more potential than even the most optimistic scenarios (notwithstanding CLR's prediction of 24 billion barrels of recoverable oil).

Hydraulic Fracturing -- Fracking --

From PennEnergy:

What is the process of extracting natural gas from deep shale formations supposed to be called in its condensed version? Is it fracing or fracking? How about fraccing? Frac, frac-out and frac job also have been bandied about.

Fracking seems to be the short choice among most folks, although some industry officials and online media bloggers tend to favor fracing. But, fracing makes it appear the term rhymes with tracing when it actually rhymes with tracking.

Fracturing, fracing, fracking? In the end, it’s only a word.

I am attempting to be consistent throughout the site, and use the "k" when appropriate.  The AP style book and Modern Language Association will eventually sort this out. My hunch: the "k" will win out. 

I originally posted on this some time ago; one can find more at FAQ and scroll down to #34.

Still Think Price Of Oil Is Going To Go Down? Germany To Exit Nuclear Energy By 2022

Link here.

Chancellor Angela Merkel's ruling coalition declared on Monday it would shut all German's nuclear reactors by 2022, in a policy reversal drawn up in a rush after the Fukushima disaster in Japan.

The coalition, sensitive to accusations it may increase dependence on highly polluting brown coal, said it planned to cut power use by 10 percent by 2020.

"Highly polluting brown coal"?

"Cut power use by 10 percent"?

It doesn't take a rocket scientist to sort out the carbon footprint on this one.

Bullwinkle Lurks

Neil tells me "they" have counted about 100 moose who have made their home in the Missouri Basin area.

My number one goal this trip to Williston is to get a photograph of a North Dakota moose. My niece has a photograph but it is taken with a smartphone at a mile or so away, and it looks like a brown speck.

For Investors: Seeking Alpha on Oil and Gas Master Limited Partnerships

Six companies listed. At least one is in the Bakken: EEP.

For all those investors who are tired of CISCO and MICROSOFT going nowhere for the past five years, look at some of the Bakken-related companies. Just saying.

Boondoggle That Utility Customers Will Be Paying For -- Wind Story

Link here.

A wind farm planned just south of Rawlins has added a radar system to monitor birds.


The radar, originally for the military, will help developer Power Co. of Wyoming LLC collect data about the habitat and migration patters of golden eagles, bald eagles, hawks and other bird species and bats at the proposed 1,000-turbine wind energy project.

The information will be used to help create a management plan for eagles, birds and bats on the company’s Chokecherry and Sierra Madre Wind Energy Project.

The proposed 2,500 megawatt, $4 billion to $6 billion wind farm site will sit on portions of 154 square miles of the Overland Trail Cattle Co. ranch, a 500 square-mile checkerboard of public and private land.

My understanding is that the FAA will install several observation towers in Wyoming and retired FAA air traffic controllers will guide the migrating birds through the wind turbine maze. Washington bureaucrats are now drafting a plan to collect eggs, and attaching transponders to hatchlings.

These hatchlings -- when they grow up -- will then "lead" their flock of birds through dangerous windmill territory.

Call signs have already been assigned: "Bald Eagle 1."  "Bald Eagle 2."  "Egret 1." "Egret 2."  "Whooping crane 1." "Whooping crane 2." "Bat 1." "Bat niner-one-two-niner-three."

Crows and pigeons will not be provided transponders. They will be on their own.

Branding -- North Dakota -- Heart of the Bakken -- There's More to North Dakota Than Oil

Branding -- McKenzie County -- Memorial Day Weekend, 2011.

This was at least one of three sites where this group was branding cattle. It appears they could accomplish their goal in about 45 minutes (maybe less) in each area that they branded.

This is just one area so you can get a feeling about the number of head of cattle involved.

It was "fun" to note that the mother cows did not stray far from where their calves were being branded.

Clicking on the photos can enlarge them, and they are not copyrighted. 

Road Trip -- McKenzie County -- Mondak Oil Field -- Bakken, North Dakota, USA

This is a posed, staged photo.

The bad news: there is no signage identifying this well.

The good news: based on GIS map server, and a few landmarks, there is a 99.99% chance that this well sits where this gentleman has a few mineral acres. The best landmark: a rig-on-site a few miles north which matches the one on the GIS map server. There is currently only one rig-on-site in the Mondak oil field.

The bad news: this well is still confidential and neither the gentleman nor the photographer know which way the horizontal legs run.

The bad news: based on where this well is sited inside the section, the horizontal legs most likely run south. The gentleman's mineral acres are north.

More bad news: this well has only three tanks. A small well?

Good news: The area is becoming very active, and over time additional wells will be put in.

Another Story on Lack of Adequate Workforce in the Bakken -- North Dakota, USA

This time: a focus on Minnesota workers. From the Minneapolis Star Tribune:

North Dakota's governor and commerce and tax commissioners, among other state officials, recently launched a full-scale recruiting mission in the North Star state. They are seeking engineers, electricians, IT pros, machine operators, health care experts and anyone else who wants a job, so long as they don't mind relocating.

"We are in such a wonderful position over here right now," said North Dakota Commerce Commissioner Alan Anderson. "But we have a 3.3 percent unemployment rate. ... So we have to either get some more folks coming back home or get more coming across the state line to share in the opportunities."

In the Twin Cities, North Dakota officials have dined with business leaders and brought in 40 businesses to interview 350 Minnesotans at a job fair in Minneapolis. They also have tapped Minnesota's colleges and universities for hiring leads.

After just a few days in Williston, I have heard many, many stories regarding this issue.

Perhaps when I have more time, I will post a few notes.

Coal Still King -- Not a Bakken Story

Link here.

Moose Spotted Near Missouri River Bridge South of Williston

Updates on flooding at this link.

My niece spotted a moose along the Missouri River near the bridge south of Williston. Fortunately she has a photo of it on her smart phone. I'm pretty impressed.

Trivial Chatter -- Painted Woods Oil Field -- Bakken, North Dakota, USA

This evening I took the opportunity to see the flooding of the Missouri around Williston, North Dakota. It is quite remarkable.

On the way back home I drove through Painted Woods oil field, and was amazed at all the activity. It is one thing to post about the Bakken based on what I read, but it's quite another thing to actually drive through it. I didn't have much time so it was a quick look, but here are some of the wells in the Painted Woods oil field. Talk in Williston is that this field has turned out to be quite a good field.

Again, for newbies, I use 100,000 bbls of cumulative oil as a significant milestone. Once a well hits 100,000 bbls (in my mind), it's free and clear for the rest of its producing history. 

This is a "cut and paste" from the Painted Woods field update:

New wells posted at second update (May 28, 2011) following original post:

• 18906, BEXP, 2,640, Michael Owan 26-35 1-H; IP 7/10; 75K as of 3/11
• 18992, Slawson, 826, Stampede 1-36-25H; IP 11/10; 33K as of 3/11
• 18796, BEXP, 2,213, Abe Owan 21-16 1-H; IP 9/10; 62K as of 3/11
• 18955, BEXP, 2,278, Weisz 11-14 1-H; IP 8/10; 72K as of 3/11
• 19031, BEXP, 1,773, Boots 13-24 1-H; IP 9/10; 41K as of 3/11
• 19085, BEXP, TD, Brad Olson 9-16 3H; IP 4/11;
• 19086, BEXP, 2,472, Brad Olson 9-16 2H; IP 11/10;47K as of 3/11
• 19389, BEXP, 1,936, M. Olson 20-29 1-H; IP 12/10; 48K as of 3/11

Five new wells posted at first update following original post:

• 18791, BEXP, 1,578, Abe 30-31 1H, spudded 4/10; 75K as of 3/11
• 18443, BEXP, 1,976, Owan 29-32 1H, spudded 4/10; 76K as of 3/11
• 18771, Zenergy, 683, Johnson 29-30H, spudded 4/10; 55K as of 3/11 (Squires field)
• 18793, EOG, 274, Mont 100-28H, spudded 3/10; 25K as of 3/11 (Squires field)
• 18622, EOG, 680, Mont 1-28H, spudded 3/10; 30K as of 3/11 (Squires field)

The Squires wells were listed because they are so close to the Painted Woods field.

Gee! The New York Times Likes Oil --

Link here.

I have not read the article. I saw the source, read the first three paragraphs, realized it was old news, and moved on.

The Texas field, known as the Eagle Ford, is just one of about 20 new onshore oil fields that advocates say could collectively increase the nation’s oil output by 25 percent within a decade — without the dangers of drilling in the deep waters of the Gulf of Mexico or the delicate coastal areas off Alaska.

Enjoy. Let me know if the New York Times is fair and balanced.

I'm sure Snopes.com will say this is all hyped.

Triangle Petroleum Doubles Its Acreage -- North Dakota Bakken (Montana)

Triangle Petroleum recently announced a 42,000 net-acre acquisition in the Bakken (Montana side of the border). This will bring Triangle's Bakken property to about 72,000 net acres.

This was announced a few days ago, but  I am only now getting caught up after being on Amtrak for a couple of days.

The press release states this is the North Dakota Bakken (Williston Basin) but I have to remind folks that there is an Alberta Bakken in Montana and sometimes these two "pools" are misidentified.

Flooding in Western North Dakota

Links

US Army Corps of Engineers

Photos:

• June 1, 2011

Updates

August 31, 2013: Update on repairs --

Work is also being done on the dam's massive flood control gates, all 28 of them. The gates have the capacity to release 660,000 cfs at maximum operating pool of 1,854 feet. A record level of 1,854.8 feet occurred in 1975. Lake Sakakawea reached 1,854.6 feet on July 1, 2011.

"The gates had never been used prior to 2011," noted Lindquist. "We're conducting testing to insure the welds and structural integrity of the gates. We'll be painting them and replacing seals. Meanwhile, everything remains operational."

Corps preparing for rest of summer, looking to 2012. High levels will persist; wet areas receding very slowly, and still huge amounts of water to pass through. July 29, 2011.

Leak in the Dike At Williston; Corps Closes Levee to the Public, June 1, 2011

The U.S. Army Corps of Engineers has restricted all public access to a seven-mile portion of the levee around Williston.

Corps officials said crews have been working to fix a small "boil", or leak in the levee as well as conduct inspections.

Wolf Point, Montana, to see flooding, Billings Gazette, May 31, 2011.


In the middle of the worse flooding on the Missouri in its history, the US Army Corps of Engineers found time (May 31, 2011) to release the results of this study:

The Army Corps of Engineers has released a final environmental study on the impact of building nesting habitat for endangered birds on the Missouri River.

Parts of the river between Fort Peck, Mont., and Sioux City, Iowa, are designated as critical habitat for the piping plover and interior least tern. Both species build nests on sandbars and sandy shoreline.

Something tells me the Corps releasing water from Ft Peck dam has inundated all those sandbars. May 31, 2011.

First time ever: Corps Will Raise Spillway Gates at Garrison; Public Cleared Out, May 31, 2011

From a Bismarck resident, Sunday, May 30, 2011:

"...Many of the homes near the river are already 3 feet deep in water and they haven’t even started the really high water releases yet from the dam.  They were releasing 12 cubic feet per second....today they are 120 cfs and will go to the max of 150 csf in a week.  They are estimating about $300,000,000 worth of homes will be lost.  They are also saying there will be water filling the basements for 2 months.......and the whole town could lose water and sewage (in 3 to 4 weeks).   The National Guard is here plus about 8,000 to 10,000 people are volunteering with sandbagging, etc.  They have moved a lot of the animals from the zoo....can’t move the big Kodiac bears as they are about 20 years old and would not survive the anesthetics.  So, if it gets too bad they will destroy them.  It is really sad here.  Will likely hit the national news in a week or two when the pictures are more shocking..."

May 30, 2011: South Dakota flooding due to release of water at Garrison Dam. Cities affected: Pierre, Yankton.

From Neil (again, not sure exactly when these numbers apply, due to fact, I got to e-mail late, and still catching up:

Fort Peck power house 10,000
Fort Peck spillway 40,000
Milk River 10,000
Yellowstone 75,000 - unsure if this will maintain.
Expected gauge at Culbertson after a few days 60,000-probably Sunday or so.
Expected gauge are Williston after a few days 135,000
I am also told that the Milk River watershed in Canada has seen some major rain and that might bump the Milk substantially during these high releases.

Sunday, May 29, 2011: Corps to release more water at Garrison.

Neil sent this note, Saturday evening, May 28:

On Thursday Fort Peck will go to 50,000 cfs. With the Milk River and others the flow at Williston bridge will be 140,000 cfs.

Gregg sent this note, Saturday, May 28, 5:05 p.m.:

The corp of engineers,state,city, and county officials are having a briefing, 5:30 Bismarck time. KFYR radio will be broadcast it over the internet.
Its a real drama playing out down there.

http://www.kfyr.com/main.html

Original Post

For those interested in a "almost-instantaneous" information on water flowing into Sakakawea Lake (behind Garrison Dam, North Dakota) and water being released, this is some interesting information.

I have to thank "Don" for putting all this information together and sending it forward:

The total inflow to Garrison/Lake Sakakawea from these three (3) sources is (as I) type: 121,400 cubic feet  per second.

The release is 90,000 cubic feet per second.

These flows will go up or down. But there is only 4 ft in the Lake Sakakawea before it breaches the spillway locks on the east side of Garrison Dam. 

76,900 cft per sec from the Yellowstone River;  25,200 from the Missouri (Big MO), and 19,300 from the Little Missouri.

The Yellowstone River near Sidney, Montana:

http://nwis.waterdata.usgs.gov/mt/nwis/uv?site_no=06329500

BIG Missouri near Culbertson, Montana:

http://nwis.waterdata.usgs.gov/mt/nwis/uv?site_no=06185500

Little Missouri in Medora, North Dakota:

http://nwis.waterdata.usgs.gov/nd/nwis/uv?site_no=06336000

I cannot even imagine 30,000 cubic feet of water per second net inflow into the lake. Per second.

Peak Oil? What Peak Oil? -- Yes, I Know the Story Is About Natural Gas But One Gets the Point

Link here. From Rigzone:

For now, state geologists are finished with their research in central North Carolina.

After studying 59,000 acres in the Deep River basin for 15 years, they have concluded that Lee, Chatham and Moore counties could produce enough natural gas from shale to make North Carolina self-sufficient for 40 years at current levels of consumption.

"That's what we think," said Kenneth Taylor, chief of the N.C. Geological Survey. "We could become a net exporter." 

Samson Update on Everett 1-15H -- Bakken, North Dakota USA

Link here.

Samson O&G advised that the Everett #1-15H well is drilling ahead in the lateral at a measured depth of 13,107 feet.

The lateral is being drilled whilst observing characteristic oil and gas shows. The Everett #1-15H well is Samson’s sixth Bakken well in the North Stockyard Field.

Meanwhile, they are still working on Earl:

Significant progress has been made in recovering the parted tubing string which was being used to drill the isolation plugs in the Earl #1-13H well. The remaining tubing and drilling assembly consists of a 1,200 feet section and the top of this fish has been conditioned such that it should be able to be extracted in the next 24 hours.

I Guess Minnesota Enjoys Those Higher Utility Bills -- Governor Vetoes Bill To Lower Utility Costs

Yup, the governor vetoed the bill. Meanwhile, states on the East Coast are dropping out of "cap and trade" agreements. As long as residents enjoy paying higher utility costs, that's their choice. Meanwhile, one can expect that manufacturers with high electricity needs (like technology companies) will simply choose other states in which to locate (or relocate).


Follow this incredible story here.

Nice Article on Water For Fracking -- Human Interest Story -- Bakken, North Dakota, USA

Nice story on the water haulers in the Bakken. I believe this is about how Harold Hamm (CLR/Founder and CEO) started out in the oil business in Oklahoma three or four decades ago.

It's a regional link, so unfortunately, it's likely to be broken soon. Enjoy it while you can. From the McKenzie County Farmer.

It takes as much as one million gallons of water to frac a single Bakken oil well. Frac water is freshwater that is used to pressurize and fracture oil-bearing formations to increase permeability and enhance the flow and recovery of oil.

Frac water is typically transported in 7,500 to 8,000-gallon tanker trucks from a freshwater well to the oil well location, so it takes at least 125 tanker loads per well. It’s easy to see that getting water to a well site can be a time-consuming effort, and if trucks are waiting in line for hours, like they were last Thursday in Watford City, it can be frustrating for the truck driver as well as the oil company.

Oil companies typically send trucks to the closest water source, and last Thursday it was easy to see that Watford City was the closest source for many drivers, as there were 25 waiting in line to fill their tanks.
“I’ve been waiting for three hours and I have about another hour till it’s my turn,” says Alan Barth, who has contracted his truck to Missouri Basin Well Service. “I do get paid by the hour, so that makes it a little easier waiting in line. But it is still frustrating because I want to be productive for the company.”

Another Motley Fool Article on KOG -- Bakken, North Dakota, USA

Link here.

When exploration and production companies sense that they are doing well, they go for the kill through expansion efforts. Kodiak, for its part, is planning on doing precisely that. The company plans to increase its acreage position in Williston Basin by 36%. Clearly, the company sees lots of opportunity ahead. 

The Denver-based company will acquire 25,000 net mineral acres in McKenzie County, North Dakota for $85.5 million in cash and stock. As a result, the company will also acquire working interest in two active wells, which are currently producing 200 net barrels of oil equivalent per day. However, that's just the small picture.

At the end of the first quarter this year, Kodiak had a two-rig drilling program in the Williston Basin. Today, the company is currently mobilizing its third rig, and has contracted for a fourth. Now, with the completion of this transaction, a fifth rig gets added to the company's arsenal.

When I first blogged this story, I did not do the math. A thirty-six percent increase in Bakken holdings is huge. Huge. And going from two rigs to five rigs is a pretty big jump, also. Now, they need to get a dedicated frack crew, unless they have one, and I missed it (or forgot).

Goldman Forecasts -- Again, and Again, and Again

Wasn't it a Goldman Sachs forecast that started the freefall in WTI oil prices from $115 to $95 recently?

I honestly forget. It is impossible for me to keep up with Goldman Sachs forecasts, but like the weather, their predictions will eventually come true. Just wait long enough. This was back on May 24th (2011).

Oil also got a boost from reports by Goldman Sachs, J.P. Morgan and Morgan Stanley that said prices will almost certainly be higher later this year. The investment banks said the recent 15 percent drop was only a brief pause in what will likely be a long-term rise to near-record levels.

Goldman Sachs expects WTI to hit $135 per barrel by the end of 2012. Morgan Stanley predicts Brent will average $120 per barrel in 2011 while J.P. Morgan said Brent should hit $130 per barrel in the third quarter.

I believe Bank of America is targeting $140 oil

Nine (9) New Permits -- Bakken, North Dakota, USA

Updates

March 12, 2012: the first well for Silver Oak reported an IP today --

• 20950, 55, Silver Oak Energy, Rankin 1-35H, Cedar Hills, Red River B (not a Bakken), s9/11; t2/12; cum 1,566 bbls 1/12

This is their only permit in North Dakota, at least under this operator's name.

Original Post

Daily activity report:

Drillers: EOG (2), Petro-Hunt (2), Hunt, SM Energy, CLR, BR, and Silver Oak, LLC.

Fields: Cedar Hills, Kittleson Slough, North Tioga, Ray, Haystack Butte, West Ambrose, and two wildcats.

Petro-Hunt has a wildcat permit in Williams County, and Hunt Oil has a wildcat permit in McKenzie County.

This is the first time I had heard of Silver Oak, LLC. It has a permit in Slope County. Armstrong Corporation picked up 640 acres in Slope County for $30/acre from the state in the most recent auction (May, 2011, ND lease auction). This is the very first permit ever for Silver Oak, LLC, in the state of North Dakota.

The only other interesting information on today's report was the Newfield Helsingborg well with an IP of 2,862 in McKenzie County (Sand Creek oil field, right next to the interesting Charlson field).

If I Were TransCanada, I Would Just Lock It Up With China

Updates

August 16, 2011: I think this is a dead issue, but to humor the TransCanada folks, I will link the story. The story is about TransCanada's plan to ensafety the pipeline.

August 15, 2011: long, long story in PennEnergy about the pressure on Obama to support the Keystone XL pipeline. Links to PennEnergy, others, usually occur early. This is a gut check for Obama. I can see it going either way and can argue either side.

August 8, 2011: well, this reassures me. Ms Hillary Clinton tells Canada not to worry; US wants Keystone XL. Yup. Sure. 

July 27, 2011: House passes bill requiring Obama administration to make Keystone XL decision by November 1, 2011. Needs to be passed by the Senate. Won't happen. Even if it does, Obama will ignore it.

July 26, 2011: Another casualty of the Keystone XL. Developers wanting to build the nation's first new refinery since 1976 want to delay construction by 18 months from the date a final permit is issued. The article does not say why the Texas company wants to delay construction but one can speculate it has to do with the XL. The refinery will process heavy oil from the Canadian oil sands.

July 20, 2011: Looks like just a matter of time before Keystone XL lost. It may end up being a win-win for all.

July 11, 2011: The recent XOM spill in the Yellowstone, as inconsequential as it will ultimately be environmentally, will be one more nail in the Keystone XL pipeline. Meanwhile, this shovel-ready job sits ready to go.

June 26, 2011: Looks like China is ready to take Canadian oil / Keystone XL if the US doesn't want it.

June 24, 201l: US House Committee on Energy and Commerce Committee passed a bill to place pressure on Obama administration to make decision regarding the Keystone XL pipeline. I'm not holding my breath. This is the same administration who denies any hostilities going on in Libya.

The US House Energy and Commerce Committee on June 23 passed legislation aimed at pressuring the Obama administration to reach a decision on the Keystone XL crude oil pipeline project’s cross-border permit application. The full committee passed HR 1238 by 33 to 13 votes after its Energy and Power Subcommittee approved the bill on June 15.

The measure would require the US Department of State to reach a decision on the proposal by Nov. 1. The project would expand shipments from Canada of oil produced from Alberta oil sands by 1.3 million b/d. “This project has been delayed long enough,” committee chairman Fred Upton (R-Mich.) said following the vote. “It’s time to make a decision, and this bipartisan bill will make it happen.”

June 16, 2011: Good news: Federal panel approves fast-track approval for Keystone XL. Bad news: this panel is so far down the food chain, this vote means nothing. This is a subcommittee of a larger committee in the US House. TransCanada needs someone to pass a law fast-tracking fast-track legislation. This bill won't see the light of day in my investing lifetime.

The US House Energy and Commerce Subcommittee on Energy and Power Wednesday approved a bill to help fast-track the construction of Transcanada's proposed Keystone XL Pipeline.

The North American-Made Energy Security Act (H.R. 1938) requires the Obama administration to issue a final order by Nov. 1, 2011, on whether the Keystone XL Pipeline can be built to transport oil from Western Canada to Texas. The bipartisan bill will now move to the full Energy and Commerce Committee for consideration.

Original Post

Link here.

A dispute over a plan to send oil from western Canada to the Texas Gulf Coast moved to Capitol Hill on Monday, where a House panel debated whether to speed a decision by the Obama administration.

Republicans on the House Energy and Commerce Committee are backing a bill that would set a Nov. 1 deadline for the State Department to decide on the $7 billion project. A Canadian company wants to build a 1,900-mile pipeline to carry crude oil extracted from tar sands in Alberta, Canada, to refineries in Texas.

Rep. Fred Upton, R-Mich., who chairs the energy panel, said it makes sense to pursue reliable and affordable energy in North America. The proposed Keystone XL pipeline would create thousands of jobs and help cut $4-a-gallon prices at the pump, Upton said.

"We need to act soon as China is very interested in pursuing the same resources," Upton said. "If we don't say yes soon, China will lock it up."

I personally don't understand TransCanada's reluctance to put in a pipeline to the west coast of Canada and ship their total production to China. I must be missing something.

Why an IP is Just One Data Point -- One Well With An IP of 33 --> 140,000 Bbls To Date

Permits/Wells

• 25133, loc, Whiting, Jurgens 41-13PH,
• 23165, loc, Whiting, Duletski 41-13PH,
• 22954, loc, Whiting, Dietz 11-18PH,
• 22120, A, Whiting, Duletski 41-18PH, cum 22K 1/13;
• 21975, 781, Whiting, Duletski 11-13PH, t3/12; cum 43K 1/13;
• 21259, 270, Whiting, Duletski 21-13TFH, t7/12; cum 29K 1/13;
• 20960, 476, Whiting, Kessel 41-17TFH, t1/12; cum 42K 1/13;
• 20912, 653, Whiting, Duletski 11-16TFH, t5/12; cum 29K 1/13;
• 20060, 258, Whiting, Binstock 21-30TFH, t7/11; cum 21K 1/13;
• 20028, 707, Whiting, Duletski 21-16TFH, t6/11; cum 72K 1/13;
• 19820, 843, Whiting, Dietz 21-17TFH, t3/11; cum 85K 1/13;
• 19816, 202, Whiting, Paluck 21-28TFH, t4/11; cum 30K 1/13;
• 19810, 741, Whiting, Dietz 21-18TFH, t7/11; cum 53K 1/13;
• 19809, 222, Whiting, Arthaud 21-29TFH, t5/11; cum 26K 1/13;

Original Post

A reader recently alerted me to a couple of new permits in the Gaylord oil field.  The Gaylord oil field is a small field, located next to the very interesting Bell and Zenith oil fields near Belfield, North Dakota, in the southwest part of that state.

As noted, Gaylord is very small, not even one whole township; it is perfectly square -- four sections by four sections for a total of 16 sections. For such a small field, it is currently quite active with two rigs on site, and a third well nearing completion.

Two wells were spud in the Gaylord oil field in 2001 and 2002, both Madison wells:

• 15134, 33, short lateral, Denbury Encore, Hanson 41-19, Madison formation, t8/01; cum 165K 1/13; still active, 1,000 bbls/month; and, 
• 15302, 67; short lateral, Whiting, Hanson 41-24H, Madison formation, 20K bbls; permanently abandoned; test date 8/2002.

Something tells me Whiting will eventually go back to that Hanson 41-24H well.

Update on Expansion of Hess Natural Gas Plant Near Tioga -- Bakken, North Dakota, USA

Link here.

Mustang, a Wood Group company, has been awarded detailed design and procurement services by Hess Corporation for the expansion of its Tioga natural gas plant in the Bakken oil play in northwestern North Dakota. The project will expand the facility's capacity from approximately 110 MMSFD gas to 250 MMSCFD. The cryogenic gas plant will be designed for ethane recovery, full fractionation and sales of natural gas liquids (NGL).

Great Idea: Eliminating Open Oil Waste Pits -- Bakken, North Dakota, USA

Link here.

North Dakota is mulling a ban of oil waste pits amid a spate of toxic drilling discharges and an increasing number of migrating birds that have died by mistaking the polluted ponds for fresh water.

Lynn Helms, the director of the state Department of Mineral Resources, said Thursday that regulations may be changed requiring oil companies to recycle liquid drilling wastes instead of dumping them in open pits.

The so-called closed loop system that would allow only dry material to be stored on site may be cheaper for companies in the long run, Helms said.

For investors, there are opportunities.

EU Waiving Ban on Some Toxic Chemicals -- Good News for Big Oil

Right now, this is a great story for First Solar and solar panel manufacturers, in general, but industries across the board will end up using these toxic chemicals in myriad ways. It's the law of unintended consequences.

EU ministers voted on Friday to exempt solar panels from a ban on toxic substances in electrical goods, enabling leading maker First Solar to keep selling its products in the industry's biggest market.


The revised European Union law generally bans the use of six hazardous substances in electrical and electronic equipment, including cadmium, which is used by U.S.-based First Solar -- the world's No. 1 solar company by market share -- in its panels.

This sort of reminds me of the story about California regulators allowing huge solar farm in area where desert tortoises are threatened. Ya gotta love it.

The New Norm

This is incredible! I posted this story back on May 9, 2011. The Wall Street Journal must have picked up my story and ran with it.

Another big "thank you" to Don for sending me the link. The Wall Street Journal did not ask for my opinion.

For Investors Only: Interested In Both the Bakken and The Eagle Ford (Texas) -- EOG

Link here. This SeekingAlpha story has five companies, including EOG, that could soar in the Texas Eagle Ford.

Some are calling it the most revolutionary energy find since the Spindletop gushers sparked the Texas oil boom of 1901. Others are going even further, claiming it could be the single most significant economic development in the history of the Lone Star State. Any way you look at it, the Eagle Ford shale, spanning 14 counties across south Texas, has huge potential to make an impact on the fossil fuel industry.

The under-hyped Eagle Ford shale covers over 6 million acres, with some experts suggesting that the reserves could eventually yield in excess of 10 billion barrels of oil. The number of drilling permits issued has skyrocketed in the past year and a half, from a total of 94 issued in 2009 to well over 1,000 in 2010. The area’s high percentage of carbonate shale means that more oil can potentially be produced than natural gas, and technological advancements like horizontal drilling will help exploit the area’s resources to the fullest extent. 

For comparison, the Bakken may hold up to 24 billion barrels of recoverable oil. 

Bureaucratic Reporting As Required by the Obama Administration -- MDU

Printed in its entirety; link here.

This report is being filed in accordance with section 1503 of the "Dodd-Frank Wall Street Reform and Consumer Protection Act." On May 24, 2011, Connolly-Pacific Co., an indirect subsidiary of MDU Resources Group, Inc., received an imminent danger order issued by the Mine Safety and Health Administration under section 107(a) of the Federal Mine Safety and Health Act of 1977 at the Pebbly Beach Quarry on Catalina Island, California. The order was issued upon the observation of rock loading near a high wall that was deemed unsafe. A berm has been erected and signage placed to prevent access to the area while the company considers further action to address the matter. 

And then folks wonder why some of us dislike federal regulations. 

I wonder if the sign needs to be written in eighteen different languages. I doubt the sign absolves MDU of any litigation if someone ignores the sign and falls off the rock.

For similar filing, click here. 

Incredible Story From the Drudge Report -- Not a Bakken Story -- 22-Year-Old Student Solves One of Physics' Most Perplexing Problems -- And The Student Is A "She" -- Good for Amelia

And what are you doing during your summer break?

A 22-year-old Australian university student has solved a problem which has puzzled astrophysicists for decades, discovering part of the so-called "missing mass" of the universe during her summer break.


Undergraduate Amelia Fraser-McKelvie made the breakthrough during a holiday internship with a team at Monash University's School of Physics, locating the mystery material within vast structures called "filaments of galaxies."

Link here. 

More Global Warming Hits Colorado -- 25 Feet of Snow On Highways

We will see this turn to more flooding later this spring/summer.

Link here.

Update: Snow is deeper in Aspen, Colorado, on Memorial Day than it was New Year's Day.

Nice Newfield Well Off Confidential List -- Bakken, North Dakota, USA

19096, 2,862, Newfield, Helsingborg 1-22H, Sand Creek, Bakken

Click on Sand Creek for update that was posted some time ago. The Sand Creek oil field is in a fairly non-descript area of the Basin. It is located a bit farther east of the Stockyard Creek oil field and is on the south side of the river (the Stockyard Creek is on the north side).  It is immediately west of the very nice Charlson field.

First Observations In Williston, Heart of the Bakken -- North Dakota, USA

First observations in Williston:

1. Restaurants are very, very short of help. Some restaurants are closed some days of the week.  Gramma Sharon's, for example, one of the city's favorites, closes every Wednesday due to lack of staff; they have a sign upon entry: "Please be patient; we are short of staff." McDonald's closes restaurant early but keeps drive-through open. For one of the busiest times of the day, breakfast, one person serving inside with at least ten people -- all oil men, it appears -- on way to work. Two lanes of traffic in drive-through with at least fifteen vehicles -- mostly pick-up trucks -- in line(s).

2. North, west, and east of Williston -- just on edge or outside city limits everywhere new industrial buildings going up. I did not see any what-we-called in the Air Force "quality-of-life" activities -- no new restaurants, parks, schools, roads, etc. The city is probably overwhelmed just trying  afloat with current demands. New dormitory going up at local college. New Schlumberger site going up west of Williston.

3. Water, water, water everywhere. All my years of growing up in Williston, I never even thought there was an issue with flooding locally. Now the water is five feet below flood stage on the dikes south of Williston. Much of low-lying areas east and northeast of Williston now under water. Amtrak rails almost under water; water up to the "ballast" -- the rocks on either side of the tracks holding the trackbed in place. Amtrak trains creep down the tracks into Williston. Some say the wheels actually in water; others say it didn't actually go over the track. The story is that due to the huge amount of snow (global warming) in the Rocky Mountains, they will be releasing more water from Ft Peck Dam upstream (as I write this); that water will flow towards Williston. If more water from Garrison Dam near Bismarck is not released, then there will be more flooding in the Williston area. And, of course, if more water is released from Garrison Dam in North Dakota, more water will flood Mississippi, Louisiana, points south. More in regional papers, including Bismarck. Also here, about oil wells in Williston area under water.

5. US Army Corps of Engineers has public viewing site southeast of Williston; usually open to traffic for public to drive in and park, walk up the steps on the dike to look at the Missouri River. Now, signs posted keeping traffic out, closing parking lot due to "emergency situation." We drove in; very, very polite gentleman said we could park long enough to go up and look at the Missouri River. We there about five minutes; others followed us in to take a look.

6. Having nothing to do with snow pack in Montana, or flooding, there is also just too much water still in the fields from the past winter (snow; global warming). Farmers are unable to get their machinery in the fields to plant seed. They have until June 5, 2011, to get the seed in; they cannot buy crop insurance after June 5. And farmers won't plant without crop insurance. "Most" farmers have insurance bought last year that pays them this year if they can't get their crop in this year. Of course, with rising price of commodities, they won't get nearly that much in insurance that they would have gotten from actual production. [Note: the June 5th date varies by crop, and there is a sliding scale after that date. Some dates passed in late May.]

7. Oil-related trucks, of course, everywhere.

8. Coming into Williston on Amtrak, from Minot, passed Stanley, Tioga (where oil was first discovered in North Dakota, in 1951): lots of new rail sidings, new rail spurs going into oil-loading facilities. New pipeline being laid everywhere. Until you see the actual process of laying pipeline, I don't think one realizes how big a project it really is. For the larger diameter pipe, it looks like the right-of-way is about the width of two railroad lines, maybe twenty yards across.

9. At McDonald's today, I heard no one speaking Norwegian, German, or Russian, but I heard a fair amount of Chinese being spoken -- by the customers, not the staff. Those speaking Chinese were all under 25 years of age, or so it appeared.

More later.

Three (3) New Permits -- Bakken, North Dakota, USA

Daily activity report:

Drillers:  CLR, Denbury Onshore, and Whiting

Fields: Indian Hill, Elk, and Sanish.

Denbury reports a very nice well today:

• 18525, 2,640, Denbury Onshore, Thompson 31-11SWH, Charlson oil field, McKenzie County

The report was very, very benign today. Whiting's permit is in its cash cow, the Sanish.

The Charlson oil field has been a very good oil field; this well is in a relatively inactive area of this field. 

First-Time Unemployment Claims Rise

Unexpectedly.

New U.S. claims for unemployment benefits unexpectedly climbed to 424,000 last week from a revised 414,000 in the prior week, pointing to a painfully slow improvement in the nation's job markets.

Link here.

And oil back over $101.00.

Fracking: No Ground Water Contamination -- EPA

Link here.

At a U.S. House Oversight Committee hearing yesterday (May 24, 2011?), President Barack Obama’s EPA administrator, Lisa Jackson, admitted the environmental risk of hydraulic fracturing is practically nonexistent.

“I’m not aware of any proven case where the fracking process itself has affected water, although there are investigations ongoing,” she said.

A big "thank you" to Greg for alerting me to this story.

Eight (8) New Permits -- Bakken, North Dakota, USA

Daily activity report.

Drillers: Newfield (4), Hess (2), Baytex, and KOG

Fields: Mondak, Alger, East Fork, and one wildcat.

The four Newfield wells will be on two two-well pads.

The two Hess wells will be in the Alger field.

The daily activity report is otherwise pretty benign.

Fewer Posts -- Still On Amtrak

Fewer posts than usual because I am still traveling.

Sundance Announces Results of Wells It Is Participating In -- Bakken, North Dakota, USA

Sundance Energy Australia Ltd reported the following initial production rates from its developmental drilling campaign in the  Williston Basin, May 13, 2011.

Some of these have been reported elsewhere.

Initial Production Rate (boepd)

• Bear Den 7-17H, 2,290 
• Mandaree 9-4H, 1,442 
• Bear Den 4-20H, 1,809 
• Henderson Fed. 4-26/35, 2,321
• Hodenfield 15-7H,  2,210 
• 1-H Sandhill 25-36H, 1,206  
• Henderson 16-34H, 1,089
• Hodenfield 15-23H, 1,704 
• Twilight 1-24H, 798 
• Reed 3-3H, 715  
• Bergstrom 2-28H, 2,171
• Dahl 15-22H, 1,179 
• Foss Family Trust 15-23H, 2,608

How Bad Is The Backlog? -- Bakken, North Dakota, USA

Five wells came off the confidential list today: only one reported the IP. The other four: status listed as DRL which generally means they are waiting to be fracked.

The only one reporting an IP, a BEXP well:

• 19532, 1,276, BEXP, Hospital 31-36 1H, Alger, Bakken, 13K in first 16 days

The other four:

• 19477, 435, ERF, Eagles Nest 34-44H, McGregory Buttes, Bakken, 11K in first 8 days
• 17646, 284, OAS, Peters 11-1H, Gros Ventre, Bakken
• 19472, 37, Renegade, A Trout 6H 3-14, Wildcat, Bakken
• 19108, 1,200, Arsenal Energy, Amy Elizabeth 11-2H, Stanley, Bakken

It looks like it's time to update McGregory Buttes oil field. Not only have I seen a lot of activity in this field lately, but that's a pretty good well for ERF: 11,000 bbls in first 8 days (rounded). McGregory Buttes is located in the southwest corner of the reservation, about the size of 1.5 townships (36 sections/township, generally).

The Alger oil field has been an exceptionally good field. One example, posted at the link, last year:

• May 26, 2010: BEXP announced two great wells today. One of them was in the Alger field: Jack Cvancara 19-18 1H, just one mile from BEXP's Sorenson 29-32 1H (see paragraph below).  "Jack" has the second highest IP, 5,035, for a Bakken well in the Williston Basin (to date), second only to his sister well, the Sorenson. The Alger field continues to surprise, continues to excite.

Also, notice how old the OAS well is: permit #17646 -- that was first issued back in 2008 time frame. The Gros Ventre, fairly inactive, is just west of the Cottonwood oil field, an undistinguished oil field to date. 

Renegade's Trout well is very far north, toward the Canadian border, a real wildcat.

Fewer Posts -- I'm On Amtrak For Next Two Days

I will leave you with this: yet one more article on KOG from Motley Fools.

Six (6) New Permits -- Bakken, North Dakota, USA

Daily activity report

Drillers: Denbury (2), Fidelity, Petro-Hunt, Hess, and Whiting

Fields: Zenith, Clear Creek, Tobacco Garden, Big Butte, and Sanish.

The two Denbury permits are both in Tobacco Garden but different sections.

The Fidelity permit is in the very interesting Zenith field.

The Whiting permit is in WLL's cash cow, the Sanish.

Today's report removes the IP from the Legacy well in Bottineau County that was reported yesterday; today, the report simply reports total depth reached, a bit over 6,000 feet. I believe about 3,000 feet vertical and 3,000 feet horizontal. More to follow, I assume.

Update On Legacy Well On Bottineau County

Company press release dated May 24, 2011:
http://www.legacyoilandgas.com/documents/NewsRelease-May24_2011.pdf. 

See previous posting regarding this well.

I would not have noticed this except for fact I am traveling and had to download the daily activity report from yesterday, May 23, 2011.

It appears the report has been changed without comment.

Permit #19462, Legacy, Legacy Etal Emory Norm 4-19H, has been completely removed.

I may be wrong on this. If anyone else wants to check a "new" daily activity report for May 23, 2011, to confirm, that would be nice. But the DAR I downloaded a few minutes ago for yesterday does not show the Legacy well.

Pundits Say Drop in Oil Price Partly Due to Slowdown in Chinese Economy

Pundits said that part of the reason for today's drop in price of oil was due to the Chinese having some success in slowing their over-heated economy.  (Of course, the big reason was the strengthening of the US dollar and the continued fiscal problems in Europe: the PIIGS.)

With regard to China, Rigzone reports that "Chinese Oil Demand Reaches Third Highest Level Since 2005."

Week 20: May 14 -- May 20, 2011

USGS To Undertake New Bakken/TFS Assessment

1,500 Additional Family Housing Units Proposed -- Williston, North Dakota

American Eagle Spuds First Horizontal Bakken Well

Update: Wells With IPs Greater Than 2,000 BOPD

There Are Now Nine (9) Wells Along the Hess Long Lateral #17117

Surge Energy Update

How Bad Is The Fracking Backlog in the Bakken?

BEXP To Accelerate Drilling

The Urse Borseth 15-22H: Why The Bakken Remains Exciting

Taxable Sales Up As Much As 50% in the Bakken

MDU's Knife River to Open Operations in Williston -- Heart of the Bakken

Federal and State Money Flowing Into the Bakken: $1 Billion To Start

Google Blogger Down For Two Days: Missing Blogs

Legacy: Incredible Story -- Or Am I Missing Something?

DISREGARD THIS POST: The reported IP of 3,000 was a gross error. I will leave this for archival purposes for the time being. UPDATE

May 26, 2011: Based on press release and comments, these are my thoughts regarding this well (numbers rounded)(feel free to comment) --

3,000 feet vertical (thus, the Spearfish).

3,000 feet horizontal (longer than EOG Spearfish horizontal wells).

Mud with little oil show in the Spearfish (this well).

Company's press release: the company remains optimistic about Spearfish prospects in Bottineau County and will report results of this well later.

My hunch: this well is either dry or disappointing.

May 24, 2011: This report was removed from an updated version of the May 23, 2011, daily activity report. For now, I do not know what was going on. See new posting here.


ORIGINAL POST

First, read this earlier post --> Legacy: To Extend Play into North Dakota

The future of the Spearfish formation in Bottineau Country remains a real mystery.

Early on, NDIC/Director, Lynn Helms, or others, said "we" could see 2,000 to 7,000 wells in a relatively small area along the North Dakota-Canadian border a bit east of the Bakken activity. There were articles that EOG would bring its Saskatchewan experience and success across the border into North Dakota.

But then, after a few wells were drilled, completed, and reported, EOG's activitiy ended. This was about the same time that EOG was shellacked by shareholders after reporting 3Q10 results. Shortly after that I posted a short essay questioning whether EOG had thrown in the towel on the Spearfish in North Dakota. 

In today's NDIC daily activity report, Legacy reports a huge well:

• 19462, 3,000, Legacy, Legacy Etal Energy Norm 4-19H, Bottineau

According to the NDIC report it's a Bakken well, but when you go to the well file, it is reported as a SPEARFISH well. Because it was just released, the file report is not yet available.

For more on Legacy, use the search app at your browser to search "Legacy" at this site, or go to the "tags" at the bottom of this site, and click on "Legacy."

If this is not a typo, and it's truly a 3,000 bopd IP in the Spearfish, this will be very, very interesting. Remember, it seemed that EOG was not having the success in the Spearfish that the Canadians were having in southwest Manitoba.

The next thing to watch for: the cost of these wells. A typical Bakken well costs $7 million. The Canadian Spearfish well: $1.5 million.

For more on the Spearfish, click here, or on the link at the sidebar on the right.