However, I did post about ten new posts last night, and updated older posts.
I'm watching the daily active rigs: we're at the all-time high of 201, and a) the weather is great; and, b) the 3-day weekend is behind us.
I also wouldn't be surprised to see a nice daily activity report out of NDIC yesterday. A lot of new permits yesterday were reported, but no new wells.
Someone asked why they would be laying track for crude-by-rail oil loading facilities an an oval/circle like they are doing just outside of Trenton. Last night I drove by both that facility and the one at Dore. The Dore facility is a linear layout and the length of the train was huge, and, of course, blocking a lot of railraod crossings used by local farmers. One more reason for the oval layouts.
By the way, did you all note this line in the most recent "Director's Cut"?
The idle well count dropped significantly to 816 wells in July, but normal is 450, indicating a continuing backlog of over 350 wells waiting to be fracked.He also mentioned that with pipeline, truck, and rail, takeaway capacity easily meets production.
dEAR bRUCE,
ReplyDeleteSeveral recent wells are paying off themselves within 2-3 months.
With a 30 year life time, why is the industry insisting on 88-82.5 % royalty share?
I speak of both the Private, Non-profit and State of North Dakota lands and mineral lands.
State of Alaska, (which ownes all the mineral lands in the state) is asking 85-95% Royalty rate.
I doubt they are paying off in 2 - 3 months, with royalties, taxes, etc., but they are paying off rapidly. You may have meant 2 - 3 years not months. And after 2 - 3 years, the Bakken decline rate is horrendous. Regardless, those exceptions have to "subsidize" the ones that don't pay off as quickly.
ReplyDeleteI don't follow royalty percentages because I own no minerals.
Please send link regarding Alaska's 85 - 95% royalty rate. According to Alaska Oil and Gas Auction Data, "the state sets a fixed rate of 12.5 percent."
Lots of misinformation out there.
Bruce, I dont know if this is the best place to do this but here goes. Please greet your family. We are so sorry for your familys loss. You guys are in my thoughts more than you can imagine.
ReplyDeleteMerle
Hi, Merle,
ReplyDeleteThat's fine to put that note here. Occasionally Craig would post a note to tell me of a mistake I had made on the blog. It was always great to hear from him.
He was kind enough never to laugh at my mistakes.
Thank you for taking time to send a note. Dad asks about you often.
Grade crossings seem a logical reason for the ovals. I hadn't considered that.
ReplyDeleteIn terms of well payoff, a "good" Bakken well is supposed to produce one thousand barrels of oil per week. With tanker truck haulaway that might mean four million in oil revenue per year. A basic Bakken well costs around six million. That would be a year and a half payback if all the revenue from the oil was used but you have royalties, taxes, insurance maintenance, repair, operating labor, ect..
It would be difficult to find a scenario with a payback under three years.
Greg,
ReplyDeleteI'm glad you did that calculations. There is another "blogger" (not me) who has come to the same conclusion: companies are getting their investment back in three years.
And with "no" dry wells in the Bakken, it's almost guaranteed.