Wednesday, November 30, 2011

CLR With Permits for a 6-Well Pad in The Bull's Eye Of The Bakken -- Camp Oil Field -- McKenzie County -- Where Action Is Headed in 2012

In today's daily activity report, November 30, 2011, it appears CLR has permits for putting six wells on one pad. The wells will be only 45 feet apart from each other. It's very possible this is not the first six-well pad, but it's the first time I have noted it (a long time ago I blogged a 6-well pad and was told it was two 3-well pads very, very close to each other). So, as far as I am concerned this is the first "real" 6-well pad unless someone can point out others to me.

Last week, I blogged that BEXP had permits for a 5-well pad.

Regardless of whether these are the first 5- and 6-well pads, they clearly demonstrate we are in the manufacturing phase of drilling the Bakken.

Camp oil field is practically in the "bull's eye" of the Bakken, and where the activity is headed in 2012. Camp oil field is literally a stone's throw from the industrial parks west of Williston, just south across the river. Schlumberger, BHI, Cal-Frac, McCody Concrete, Hexom, Cudd, Statesline, and about 55 of their closest friends could not possibly be in a better location for drilling the "bull's eye" of the Bakken.

By the way, west of Williston, it appears another electrical substation is going in next to the large one that is already there. The infrastructure is there, but no wires, transformers, yet. 

CLR's 6-well pad will be about three miles from:
  • 18437, Oasis, 2,887, Angell 5200 31-28H, tested 5/23/10;  Most recently (9/11) it is producing about 2,000 bbls/month and has produced a total of 122,000 bbls to date (9/11). s12/09; t5/10. 
It will be about a mile from:
  • 20638, 591, CLR, Kuhn 1-12H, Camp, Bakken, s5/11; t8/11; 44K 10/11 -- almost 50K in first two months; producing 13K bbls monthly. Don't let that IP of 591 fool you. This is a great well.
It is about the same distance from another great well:
  • 19578, 749, CLR, Missoula 1-21H, Camp, Bakken, s11/10; t3/11; 60K 10/11 and producing 8,000 bbls monthly; 
There are currently four rigs on site in Camp oil field (BEXP [2], Oasis, and SM).

Here are the permits for the six CLR wells going on one pad:
  • 21977 - CONTINENTAL RESOURCES, INC., FLORIDA 3-11H, SWNE 14-152N-100W, MCKENZIE CO., 1560' FNL and 1408' FEL, DEVELOPMENT, CAMP, 'Tight Hole',
  • 21979 - CONTINENTAL RESOURCES, INC., ALPHA 3-14H, SWNE 14-152N-100W, MCKENZIE CO., 1560' FNL and 1363' FEL, DEVELOPMENT, CAMP, 'Tight Hole',
  • 21980 - CONTINENTAL RESOURCES, INC., FLORIDA 1-11H, SWNE 14-152N-100W, MCKENZIE CO., 1560' FNL and 1318' FEL, DEVELOPMENT, CAMP, 'Tight Hole', 21981 - CONTINENTAL RESOURCES, INC., ALPHA 1-14H, SENE 14-152N-100W, MCKENZIE CO., 1560' FNL and 1273' FEL, DEVELOPMENT, CAMP, 'Tight Hole',
  • 21982 - CONTINENTAL RESOURCES, INC., FLORIDA 2-11H, SENE 14-152N-100W, MCKENZIE CO., 1560' FNL and 1228' FEL, DEVELOPMENT, CAMP, 'Tight Hole',
  • 21983 - CONTINENTAL RESOURCES, INC., ALPHA 2-14H, SENE 14-152N-100W, MCKENZIE CO., 1560' FNL and 1183' FEL, DEVELOPMENT, CAMP, 'Tight Hole'
So, maybe next year when I return to the Bakken, I can drive down a few miles from Williston and see six flares on one pad. Exciting.

Fifteen (15) New Permits -- The Bakken, North Dakota, USA

Daily activity report, November 30, 2011 --

Operators: CLR (6), Whiting (3), Chesapeake (3), SM, Fidelity, Hunt

Fields: Camp, Parshall, New Hradec, Croff, Sanish.

Chesapeake has permits for three wildcats, all in Stark County.

It appears CLR has permits for six wells on one pad.

And not any surprise, Whiting has three permits for wells in their cash cow, the Sanish. It looks like these three wells will be filling in sections 8/18 in 154-91, but hard to say for sure. In this immediate area are the following five long horizontal wells:
  • 18082, 858, Whiting, Carkuff 11-12H, s6/09; t8/09; 130K 10/11
  • 18085, 1,370, Whiting, Jones 11-8H, s8/09; t10/09; 164K 10/11
  • 19069, 2,320, Whiting, Strobeck 12-12H, s7/10; t10/10; 161K 10/11
  • 19259, 2,746, Whiting, Jones 12-8H, s8/10; t10/10; 139K 10/11
  • 19355, 3,159, Whiting, Sikes State 43-16H, s9/10; t1/11; 127K 10/11
Reported elsewhere, three wells came off the confidential list; two were completed. Fidelity reported a nice well:
  • 20514, 1,145, Fidelity, Clifford 14-24H-5, Bakken, Mountrail County
Of five (5) wells on DRL status, all were Bakken and none were exciting. In fact the IPs were worrisome, but there may be explanations. The IPs were 353, 19, 60, 44, and 50 -- not good using just that single data point. But there may be more to follow. Respectively they were OXY USA, OXY USA, OXY USA, Prima Exploration, and OXY USA wells, all in Burke and Dunn counties.

The Hypocrisy Amazes Me -- BLM Fast Tracks Proven Golden Eagle / Whooping Crane Killers; Holds Up Any Project That Might Threaten A Sage Grouse; Oil Company Fined for Killing a Single Sandplover During Worse Spring Flood In Decades

The hypocrisy amazes me.

BLM fast-tracks proven golden eagle and whooping crane killers, but will hold up any project that threatens a sage grouse.
The U.S. Bureau of Land Management says it will fast-track three Wyoming wind energy projects in 2012, although representatives from the BLM’s state office say the projects were already considered priorities.

The BLM named the Sand Hills Ranch, Chokecherry/Sierra Madre and White Mountain projects among 17 renewable energy priority projects in four states due to receive increased focus next year.

The BLM’s 2012 priority list also includes solar, wind and hydropower projects in Arizona, Nevada and California.

The 1,000-turbine Chokecherry and Sierra Madre Wind Energy Project is proposed by Denver-based Anschutz Corp. subsidiary Power Co. of Wyoming for south of Rawlins. It is the largest wind farm on the BLM’s list.
Two words: Sierra Club.

Kiewit -- Buffett -- The Bakken -- Home Construction -- The Bakken, North Dakota, USA

Some dots to connect; random data points.

Kiewit Instructure Group is doing the earthwork of some of the residential subdivisions in Williston, including the largest subdivision, Harvest Hills, northwest of Williston; Kiewit is linked in with Granite Peak and Knife River (MDU subsidiary) on the projects (Granite Peak subdivision, Timbers subdivision, and Harvest Hills subdivision).

I was told by one of the construction foremen in Williston that Warren Buffett "owns" at least one of the construction companies building the houses which are brought to Williston, pre-assembled elsewhere, and then placed on basement foundations; the garages are built on site.

Today it is announced that Warren Buffett will be buying the Omaha World-Herald Company, publisher of Nebraska’s principal daily newspaper, The World-Herald, as well as six other daily papers.
In a statement, Mr. Kroeger said that Mr. Buffett’s offer to purchase the company “presented a unique opportunity to address our long-term capital needs and continue local ownership of the Omaha World-Herald, which is consistent with the legacy left to us by Mr. Kiewit.” Peter Kiewit, the owner of an Omaha-based construction and mining company, purchased the paper in 1962.

After Mr. Kiewit’s death in 1979, 80 percent of the paper became owned by employee shareholders and 20 percent by the Peter Kiewit Foundation. 
Warren Buffett, of course, owns the Burlington Northern Santa Fe railroad, which is the primary (only?) railroad serving the Bakken boom.

Cramer's Energy Picks -- Seeking

Link here.

  • EOG: "one of the single ways to play the many large oil discoveries in the US." But wait for a pullback.
  • CHK: "could trade around $40 (currently $23) in the next couple of years, but that would most likely depend on stronger natural gas prices and lower unemployment." Well, duh.
  • ETP: strong dividend payout; yields over 8 percent; the company is about to sell the propane division which could be a positive move for the stock
  • COP: solid yield, company will buy back shares, and plans for a stock split
  • KMP: strong dividend yield of over 6 percent and a stable revenue source keeps this stock from large sell-offs
  • ESV:  strong dividend with a yield of 3%; trades for 8 times 2012 earnings
  • APA: growth potential attractive
Note disclaimer at top of sidebar at the right. This site is not an investment site; no one should make any investment decisions based on what is posted here. If something looks wrong on this site, it probably is. Fact check with wiki, or similar ultra-reliable source.

I was not impressed with this article. It looks like a grab bag of energy companies with an overweight in natural gas. The reason the writer suggested Cramer liked many of these is because Cramer thought the share price would appreciate. Okay.

US Could Be Energy Top Dog Again - Investopedia

Link here
The potential is huge and could make the U.S. top dog in energy production, once again.
That would be something: the US becomes the world's energy leader once again. And to think the administration could take credit for this turnaround if those folks weren't so ideologically opposed to oil.  Wow.  

I think this might be the first administration in years to never utter the phrase "energy independent" and yet it could be the first administration in 50 years that could truly lead us into energy independence. The irony of it all.

The linked article is about Enbridge's decision to reverse the flow of oil from Cushing to the Gulf, rather than from the Gulf to Cushing, the current direction. 

At the linked article, look at WLL, CLR, and DNR.

I am surprised at how often DNR is mentioned by investment blogs.

Speaking of which, note the disclaimer at the top of the sidebar on the right. This is not an investment site. Don't make any investment decisions based on what you read at this site. If something seems wrong on this blog, it probably is. Fact check at wiki.

Cairn To Abandon Two Exploratory Wells in Greenland; Re-Evaluate Program There


January 21, 2014: Statoil to abandon Greenland for "greener" pastures.

January 23, 2012: Never give up. Now, Statoil will join Cairn in looking for oil off Greenland.

December 1, 2011: Good, I'm not confused. Rigzone reports what I noted below -- "Cairn remains optimistic despite recent failures in Greenland."

November 30, 2011: Well, I'm confused, although it doesn't take much to confuse me. Today, it's being reported that Cairn is optimistic about prospects in Greenland:
Cairn Energy PLC expressed encouragement that all ingredients for commercial success are present off western Greenland after its 2010 and 2011 wells encountered oil and gas shows in multiple basins and found reservoir quality sands in the Atammik block.

The company is evaluating data on multiple blocks and discussing farm-outs in selected areas. It is considering another 3D seismic survey over the Lady Franklin and Atammik region next year that could lead to further drilling in later years.
The rest of the story did not sound all that encouraging, but who knows? That's a rhetorical question; please don't answer. 

Original Post

Link here. Just another example how fortunate North Dakota is to have the Bakken.
London-listed shares of Cairn Energy fell 3.8% after the company said it’s abandoning two exploration wells in Greenland. The company said it would review its exploration program there. 
This was on a day when other oil companies soared; price of WTI solidly at $101/bbl; and US stock market soared 400 points. Not all energy companies are being treated equal.

Note disclaimer at top of sidebar at the right. This is not an investment site. Do not make any investment decisions based on what you read at this site. If something seems wrong at this site, it probably is. Fact check at wiki.

Speaking of Greenland, the Vikings were apparently the cause of anthropogenic global warming a thousand years ago through the use of their coal-powered Viking ships. 

By the way, a bit of trivia. The term "rostrum" comes from the Latin rostum, meaning beak. The beak of the Viking ships were called rostra. Following a successful raid, the victorious Vikings would carry in the rostrum of a defeated opponent and place it in their mead halls as decorations. That's the background to why the speaker's dais of modern day is still called a rostrum. To the best of my knowledge, the Vikings did not need teleprompters.

Russia Sounds Alarm on Shale Natural Gas -- Wall Street Journal

Earlier this week I suggested Gazprom had infiltrated the EPA. That was tongue-in-cheek; I may not have been too far off the mark.

Gazprom and the EPA now appear to agree: fracking is dangerous.
Shale gas has revolutionized the gas business in the U.S., and industry experts and executives say the same could happen in Europe and Asia.

Russia, however, has repeatedly downplayed the role of shale gas and insisted it won’t hurt its lucrative model of extracting gas at deposits in West Siberia and pumping it through huge pipelines to consumers in Russia and Europe.

But in a sign the phenomenon is in fact being taken seriously, the board of directors at the world’s biggest gas producer, state-owned OAO Gazprom, this week highlighted environmental risks and the high costs of production in Europe.
Comments at the link were priceless: a) Gazprom using a page from Al Gore's playbook; and, b) when have the Russians ever been concerned about the environment.

By the way, the US has now leapfrogged over Russia and is now the #1 producer of natural gas in the world. Despite all the efforts of the administration to hamstring the oil and gas industry on shale gas development, the US has jumped to number 1.

The EPA might argue otherwise, that it hasn't determined whether fracking is dangerous, but facts speaker louder than teleprompted words: the EPA is set to issue federal guidelines on fracking, and that wouldn't be necessary if the EPA didn't think fracking was dangerous.

This is Pretty Special: Forbes Touts KOG -- The Bakken, North Dakota, USA

Link here.

Of the tens of thousands of small-cap companies, a group of analysts interviewed by Forbes included KOG among the five -- five as in 5 -- small-cap companies that they think have growth potential.

The list of five: KOG, Cinemark Holdings, Hibbett Sporting Goods, Alamo Group, and Bristow Group.

Wow, that's pretty special.

US Workers Increased Their Productivity --

Link here.
Over the summer, consumers increased their spending at triple the rate seen in the spring. That helped the economy expand, which likely boosted worker productivity.

When demand rises and productivity is low, it's usually a sign that businesses have reached the limit on the amount of work they can squeeze out of their work forces. That often leads some to hire more workers, if they want to grow. 
Does anyone see the fallacy in that analysis? No, businesses don't have to hire more workers. There are at least three more options: a) add technology; b) increase efficiency; and/or c) out-source non-core competencies.

What do those three options have in common? A couple of things: a) no pensions; b) no health care premiums.

Speaking of which, remember all the waivers the Department of Health and Human Services has given to states and businesses that cannot afford ObamaCare? It turns out DHHS is fairly selective to whom they will give those waivers. Red states need not apply.

By the way, there is a fourth option which my nephew is experiencing at the truck manufacturing plant in Portland, Oregon, where he works: mandatory overtime. Initially, overtime was offered to the senior union workers, but now, with so much work, overtime is being offered to all, and if there is still more work to be done, they are being "offered" mandatory overtime.

Companies will be doing everything they can to forgo hiring new employees, at least until after the 2012 election.

Beautiful, Balmy, Bakken Day -- Weather Storm Warming For Next 24 Hours -- The Bakken, North Dakota, USA

If things go as scheduled, this will be my last full day in the Bakken for awhile. Sad face. Tomorrow I fly out of Williston's international airport on a direct flight to Boston. Just kidding. I have a layover in Denver. 

Another beautiful day in the Bakken, 34 degrees or so. No breeze to speak of, so it feels even warmer. We are being told there is a weather storm warning for the next 24 hours with blowing snow, perhaps as much as four inches of falling snow, and a low of 11 degrees. So, we'll see. You may remember that the National Weather Service will no longer be reporting wind chill temperatures. The official reason is that it confused folks; the real reason is that wind chill temperatures put a chill on the "sky-is-falling" global warming alarms. A 60-degrees-below-zero wind chill just does not jive with global warming.

I see that TCOP is up $1.67, solidly over $100, in futures market today. We'll know in a few minutes where the price of oil is headed today.

I just updated "New Wells Reporting," a carryover from yesterday; nothing exciting to report, and unless you have absolutely nothing else to do, I would not bother going to the link. 

Elsewhere, they are talking about the "production life of a Bakken well."  It's 34.5 years. Some wells will be economically productive for 50+ years; some for 25 years, but the average will be 34.5 years. That is based on critical analysis of the current 5,000+ wells still producing in the Williston Basin, some of which have been producing since the late 1950's. I'm waiting for Dufus to weigh in. Algorithms to calculate the horrendous Bakken decline rate versus the economic viability of the Bakken wells can be deduced from corporate presentations of the past two years regarding the Bakken. Note the free fall in economic viability that occurs when the EPA bans fracking.

Speaking of which, I'm sure you all saw the press release from yesterday regarding EPA's stance on regulating fracking. If you parse the phrases very closely, you will note the EPA is saying exactly what Lynn Helms has been saying. One can infer from the press release that the EPA is only concerned about the diesel used in fracking wells in frigid North Dakota weather. That's why it will take the EPA four years (or more) to write the 500-page (or more) definition of diesel. By the way, note the titles of the EPA officials contacted: "Director of Ground Water and Drinking Water"; and, "Director of Drinking Water Protection Division."  Apparently, the "Director of Ground Water Protection Division" was unavailable for the conference call. I assume the three work for the "Executive Director of Well Water, Ground Water, Drinking Water, Safety and Protection, and General Harassment of Big Oil Division (WWGWDWSPGHBOD as it is known in DC).

So, 8:32. Let's see what TCOP is doing: up $1.21. Solidly above $101.

Good luck to all.

And, I just noticed: the snow has started to fall. A nice light snow, just covering the ground now. 

8:51 a.m. Up $1.71.


Another dot to connect when answering the question why did the president kill the Keystone XL project? Some argued that this was a slap in the face of one of America's closest allies and friends. It turns out that the president's world view is that all 190 countries are equal, none should get special treatment.
Obama’s latest gaffe also raises questions about his overall approach to the Special Relationship. This has been a presidency that has significantly downgraded traditional US alliances, from Britain and Israel to eastern and central Europe, while appeasing brutal enemies like Iran as well as strategic adversaries such as Russia. All too often, Washington’s allies have been taken for granted, and even undermined. As a senior State Department official put it in 2009, in the eyes of the current administration: “there’s nothing special about Britain. You’re just the same as the other 190 countries in the world. You shouldn’t expect special treatment.”
The "latest gaffe" refers to the president's response to the sacking of the British Embassy in Tehran in which he said it was the "English Embassy." Wow. No wonder Newt will let the president use his teleprompter in any debate; Newt wants to give the president a level playing field.


Memo to self: file under "Unintended Consequences." San Francisco's new city ordinance enacted to stem the sale of McDonald's Happy Meals will: a) encourage the sale of McDonald's Happy Meals; b) provide an extra ten cents for every Happy Meal sold to McDonald's favorite charity (their own); and, c) will, in the end, make more money for McDonald's. Money is fungible. That extra ten cents going to charity is ten cents that won't have to come from somewhere else. 

As a rule, I don't care for lawyers. In this case, I will make an exception to the in-house lawyer who thought of this. 

By the way, this is the way it works: a) kids have started their Happy Meal toy collection and want to continue it; b) kids will ask their parents for the toy; they don't care what comes in the bag as long as they get the toy; c) parents will ask for the Happy Meal, thinking that's where the toy is; it isn't; d) McDonald's server will tell them (and the signs will tell them) that San Francisco requires the parents to first plunk down ten cents for the toy; and, e) then they can order the Happy Meal. 

To poke a real stick in the left eye of the San Francisco council, McDonald's should advertise a promotion in which a parent buying a toy for ten cents will get a Happy Meal at discount (yes, a discount of ten cents). And then put the two items -- the Happy Meal and the ten-cent toy -- in two different non-biodegradable paper containers for the San Francisco landfill. Although I suppose San Francisco dumps their garbage into the ocean halfway between Los Angeles and Tokyo.


Yesterday I posted a note about American Airlines filing for bankruptcy. Today Boeing -- who makes the planes for American Airlines -- says filing for bankruptcy is good for business. Now that AA has filed for bankruptcy, AA will now have more money to buy more planes. Only in America. 

The Issue of Flaring: North Dakota's Modern Day MacGuffin

This story at PennEnergy does not cite the author, but it must have been sent in by the Bismarck Tribune. Just a hunch.
As companies continue developing the plentiful shale oil and natural gas resources in North Dakota, the state has seen a dramatic rise in the amount of gas that does not make it to market, according to the U.S. Energy Information Administration.

Over the past six years, natural gas production has nearly tripled in North dakota, reaching more than 485 million cubic feet per day, with the development of the Bakken shale formation using previously unavailable extraction methods.

Much of this production boom, however, has followed the development of oil resources in the region and the necessary infrastructure for utilizing and transporting natural gas - namely pipelines - has not grown as quickly. As a result the percentage of natural gas wasted through flares and other means of disposal has risen from around 10 percent through the first half of the last decade to more than 35 percent today, peaking above 40 percent in early 2009.
Just to keep things in perspective: a) the US is awash in natural gas; it hardly missed the natural gas from North Dakota; b) the Bakken is an oil field; not a natural gas field; the natural gas coming from the Bakken represents four (4) percent of the hydrocarbon economic values of the Bakken; and, c) natural gas is a natural by-product of oil production.

This is not rocket science.

Even if is an issue, it will be resolved over time. North Dakota does not allow operators to flare gas from a well for more than a year.

The whole issue is a red herring.

Like the Ogallala aquifer, the issue of flared natural gas is a modern day MacGuffin.

One Miracle State -- North Dakota -- Carpe Diem -- The Bakken, North Dakota, USA

Link here.
The chart above shows the "Coincident Economic Activity Indexes" for the U.S. and a sample of U.S. states (New York, Florida, California, Arizona, Minnesota, Illinois, and Wisconsin).  The coincident economic indexes are based on four variables: nonfarm payroll employment, the unemployment rate, average hours worked in manufacturing, and wages and salaries.  
When you read the comments to that post, you will understand one reason I quit taking comments; the number of inane comments was overwhelming.  

And, of course, Carpe Diem's cartoon of the day was right on target (no pun intended, when you see the cartoon). 

Week 47: November 19 -- November 25, 2011

Whiting's Pronghorn Prospect; and, here

Crude-by-rail; Louisiana sweet crude prices

New active drilling rig record: 204

Waterflooding and the Bakken

The Madison

Frac sands specs

Diesel shortage in the Bakken

New fracking company in town: Liberty Liberty Oilfield Services

Gas lift systems in the Alger oil field

1,000 vehicles per day through Belle Fourche on way to the Bakken

Number of ND "income millionaires" rises 40 percent

BEXP's 5-well pad

500,000 bopd by end of year -- guaranteed

Mike Filloon's multi-part series on the KOG acquisition of North Plains Energy

RIG in Trouble -- Rigzone

Link here.
Transocean Ltd. said it is offering 26 million shares of its common stock as the offshore oil drilling giant looks to raise funds to help refinance a recent acquisition of a Norway-based rival.

Shares were down 8.3% to $42.11 as the company said the offering represents up to 8.9% of its total issued and outstanding shares. The move casts a pall on Transocean's $1.43 billion purchase of Aker Drilling ASA at a time when the company has been dealing with disappointing quarterly earnings, a downgrade in credit ratings, and unsettled litigation related to the Deepwater Horizon oil spill.

The offering, and its dilutive effect, highlight the fact that the Aker acquisition "has now devolved from looking like a regrettable deal to a borderline catastrophic deal," said analysts with Simmons & Co. The analysts said they had previously criticized the deal as overpriced and ill-timed due to the strain it placed on the company's balance sheet.
See disclaimer at top of the sidebar at the right. This is not an investment site. Make no investment decisions based on what you read at this site. 

Big Oil Will Have Tough Time Cracking Shale Success Overseas -- Rigzone

Great article from

References to lessons learned from the Bakken throughout. Again, more proof that, although the Bakken may not be unique, it is extremely rare.

Tuesday, November 29, 2011

Senator Hoeven Confirms Lynn Helms' Reading of the EPA -- The Bakken, North Dakota, USA

Press release from Senator John Hoeven's office released at 4:22 p.m., Tuesday, November 29, 2011. If you read the statement very closely, parse the words and phrases closely, you will see that it is exactly what Lynn Helms has been saying.

For the moment it revolves around the definition of "diesel." Incredible.



Agency Clarifies Plans Regarding Fracking Guideline

WASHINGTON – Senator John Hoeven today said the Environmental Protection Agency has clarified that it is not planning a moratorium on hydraulic fracturing, or fracking, in North Dakota. The agency will, however, provide guidelines that state regulators can use to draft rules governing the use of diesel fuel in fracking under the Safe Drinking Water Act.

In a conference call arranged by Senator Hoeven, EPA officials Cynthia Dougherty, Director of the Office of Ground Water and Drinking Water, and Ann Codrington, Director of the Drinking Water Protection Division, said the agency will provide a process for the state of North Dakota to provide input on the diesel fracking guidelines before they’re finalized. The state will continue as the primary regulator, they said. Hoeven stressed the need to make the rules realistic and workable, and to ensure that there is a process for their implementation so there is no gap in the state’s ability to oversee hydraulic fracturing.

Dougherty said the agency is working on a definition of diesel, which she said can have a broad range of meanings. Hoeven said the definition needs to be realistic, considering diesel is a product of petroleum, which is being recovered. Diesel is currently used in very small quantities in some fracking solutions. Companies can either substitute diesel with another suitable fluid or seek a permit from the state to use it. The agency will issue the diesel guidelines in draft form after the first of the year, and provide an opportunity for input during a public review process.

          “At a time when western North Dakota needs to attract private-sector investments in everything from housing to grocery stores to hotels and restaurants, the EPA must provide the kind of certainty investors need to make decisions,” Hoeven said.

Hoeven arranged today’s call to address concerns from residents and the industry that the agency was planning a moratorium on hydraulic fracturing.


Six (6) New Permits -- Liberty Resources LLC Getting Active -- The Bakken, North Dakota, USA

Daily activity report, November 29, 2011 --

Operators: CLR (2), MRO, Fram Operating, Oasis, Whiting

Fields: Bailey, Oliver, Cottonwood, Cedar Coulee, and Gaylord.

Fram has a permit in Renville County.

Gaylord oil field is in Billings County, part of Whiting's southern operations in North Dakota.

I knew it was too good to be true: yesterday, all five wells coming off the confidential list were fracked/completed. Today, only one of three wells coming off the confidential list was fracked/completed. And it wasn't even a particularly good well.

Four wells on DRL status reported today: Hess had two good wells; Samson reported a Divide County well, and Petro Harvester reported a Madison well:
  • 20148, 952, Hess, EN-Chamley-156-93-0508H-1, Mountrial (sic) (NDIC typo on this one two with regard to name of well)
  • 20391, 824, Hess GO-Haug-156-98-3031H-1, Williams
  • 20232, 304, Samson Resources, Mustang 7-6-163-98H, Divide
  • 21455, 55, Petro Harvester, J. Swenson 22-1, Burke County, Madison formation (NDIC failed to provide the name of this well; lots of typos on daily activity reports some days)
I don't know if this means anything. If I was still taking comments, someone might tell me what was going on. Cornerstone Natural Resources has canceled seven permits. That's not unusual for permits to be canceled; there is often a good reason. But this one catches my attention, all coming at the same time by a company that is relatively small in the Bakken. Cornerstone has only 47 permits in North Dakota. The seven canceled permits are distributed across several oil fields.

This is interesting: Newfield has transferred operator status of these wells from Newfield to Liberty Resources, LLC. 
  • 14637, 210, Liberty Resources LLC, Jeffrey 33-33, Williams, Madison formation; s5/97; t7/97;  54K 10/11
  • 14771, 219, Liberty Resources LLC, Shae 21-33, Williams, Madison formation; s10/97; t12/97; 68K 10/11
  • 20748, conf, Liberty Resources LLC, Lindy 156-100-10-3-1H, Williams
Liberty Resources LLC only has nine (9) wells in North Dakota. Could Liberty Resources LLC be a subsidiary of Newfield? Not likely; nothing at their website. Liberty Resources, LLC, does have some backing however; LR LLC has paid $4,250/acre for several 640-acre tracts in Williams County. On August 30, 2011, just a few months ago, I noted that Liberty Resources LLC was a new operator in North Dakota. I wouldn't be a bit surprised if there is a board of directors connection between the two. A search might lead you here.

Again, for newbies, this is a great site to get a snapshot view of players in the Bakken.

And this is interesting. Again, without comments, I may not get information. Energy and Environment Research Center (EERC), University of North Dakota, reported four dry holes in Burke County. All four wells were very, very shallow: total depth of the four -- 1,211; 1,242; 1,275; and, 1,640 feet.

For Willistonites Only -- Virgil Syverson Passed Away Yesterday -- Age 94

Link here.
Virgil Syverson, a beloved teacher and band leader who brought the gift of music to Williston for more than six decades, has died.

Syverson died of natural causes at Mercy Medical Center Monday night at the age of 94.

“Music was his life,” said Williston resident Tom Kvamme, a longtime friend of Syverson. “There’s no other way to describe him.”

Syverson, a Minnesota native, came to Williston in 1947 to head up the music programs at Williston High School.

Widely known as “Mr. Music” in western North Dakota, Syverson was known as a positive influence for thousands of students and an inspiring role model for countless music educators.
Wow, a Williston icon. Perhaps no one more well known.

A bit of trivia: A slight man, Virgil was selected from his unit to be a tank driver in WWII. He served under General George S. Patton. My hunch is that Mr Syverson took no guff from the general. He certainly took no guff from his students. Smile.

As far as I know, Mr Syverson was singularly responsible for "Band Day," perhaps the biggest public celebration in Williston, followed closely by the annual First Lutheran Church Lutefisk dinner held on the coldest day in North Dakota, the last Thursday of every February.

Under Mr Syverson I learned to play the coronet/trumpet ... but not very well. I was so bad, Mr Syverson, always the tactful one, suggested I switch to French horn because he did not have enough French horns. I don't think he ever came right out and told me why he was having me switch; but I knew, and was grateful. I was no longer last chair among nine or ten trumpeters; I was second (of two) French horn players, and sat next to a very wonderful young woman.

Hmmm, passing of a true Williston icon.

Forbes: What Me, Worry? Buy Shares of Big Oil Companies With Huge Natural Gas Reserves in the Far East

This is not an investment site. See disclaimer at the top of the sidebar at the right. Do not make any investment decisions based on this blog. This site is for my personal archives, for education, and for entertainment. 

Link here. [Notes below in brackets, are my comments in response to the Forbes article.]
Without fracking, North Dakota’s boomtimes would come to a neck-wrenching halt.

Helms may be guilty of a bit of hyperbole in his assessment of the EPA’s intentions on fracking. [That's what Keystone XL folks thought.]

Analysts at Tudor, Pickering & Holt in Houston think the only worry could be over the practice of fracking with diesel fuel. In North Dakota drillers often use diesel in their fracks because it is a good lubricant even in frigid Dakota winters.

Even though the concentrations of diesel used are less than .1% of the millions of gallons of frack fluids injected down a well, the practice gets special scrutiny. According to the Safe Drinking Water Act, once diesel is mixed into a frack job the well is subject to special permitting requirements that don’t apply if there’s no diesel involved. So, says Tudor, Pickering, Helm’s concerns would only apply to the diesel-frack subset. [Forbes misunderstands: this is no longer science; this is political. The president is up for re-election; in the polls he loses by a margin equal to the number of environmental votes in swing states.]

As for a blanket federal ban on fracking? The analysts figure that not even Washington bureacrats [sic]suffer such severe “cranial rectosis.” Stop fracking, and nat gas prices would surge from $3.37 per thousand cubic feet today to $12, in a heartbeat. [Which would be a win-win for everyone: wind energy advocates and natural gas investors alike. Oh, the consumer, you ask? Has the consumer ever been a player in these issues? They weren't when they closed the Gulf. They weren't when they shut down Keystone XL.]

As for a blanket federal ban on fracking? The analysts figure that not even Washington bureacrats [sic] suffer such severe “cranial rectosis.” Stop fracking, and nat gas prices would surge from $3.37 per thousand cubic feet today to $12, in a heartbeat. [It will. Who wants mineral oil in their drinking water? Even though mineral oil is prescribed by pediatricians for oral intake for babies with constipation.]
I wouldn't bet the farm that the EPA is going away on this issue. Even Helms' response to the Bismark Tribune article was not all that reassuring.

By the way, is there a new spelling for bureaucrats? Twice in that article "bureaucrats" was misspelled, at least the way I was taught. At least Forbes spells "fracking" correctly.

Don't Worry, Be Happy, Bobby McFerrin

If you think fracking is going to be banned in the US, and think that natural gas will go from $3 to $12 overnight, what do you do?

Don't worry, be happy, buy COP. From another 2009 Forbes story:
It's been a tough year for ConocoPhillips. In January it took $34 billion in writedowns on its 20% stake in Russia's Lukoil and its 2005 acquisition of U.S. natural gas player Burlington Resources. It also overpaid in a $8 billion deal for gas assets of Australia's Origin Energy. With gas prices plunging further since then, bottoming out below $3 per million BTU last month, neither deal has looked smart
By the way, what famous investor has a huge stake in COP?  A hint: he's the same fellow that, by virtue of owning the BNSF railroad, benefitted from the Keystone XL project falling through.

Longest EOG Well? -- The Bakken, North Dakota, USA

Link here
This might be the longest Three Forks horizontal well. EOG has drilled a 22,385-foot well, file # 19721, Liberty LR 19-23H.
Looking at the GIS map server, #19231, Liberty LR 13-14H might be longer, but it is still on the confidential list.

EOG Has Some Incredible Wells -- The Bakken, North Dakota,USA

Link here.

I have just updated that post, showing some incredible wells: short laterals; more than 110K in less than a year.

Reminiscing on Reading -- This Is Not Meant For Those Looking To Read About the Bakken

I started an aggressive reading program in 2001, and started a blog to track that program. I believe I have "turned" that blog off, as a first step ....

I remember, as a kid growing up in North Dakota, we had the best library in the world, the James Memorial Library. I can remember to this day, as if it was yesterday, running into the children's section, so excited to be able to pick out my own book. I have no idea how my mother found time to take us to the library. She had at least four children then; I can't remember if #5 had come along yet. But the family had very little money. I don't know if we had a second car. I assume we did; how else would we have gotten to the library? It was just a bit too far to walk. But it was a great experience. I remember peeking around the corner from the children's section, dreaming about the day I would be allowed to go into the "adult" section of the library. From just around the corner I could see what are now called "stacks." I was amazed to see that there were so many books that one had to walk up steps to get to another level of books. Wow, it was daunting, but exciting. I remember the library but I don't remember, at all, the winters or how cold they were. Well, if I think hard, I can remember them. But I don't have to think hard about remembering James Memorial Library.

I can remember, also, as a kid growing up in North Dakota, four books or magazine articles that captured my attention:

In eighth grade it was two articles in National Geograhic, one on "honey ants" and the other on lasers. I remember taking them on vacation and reading them in the lower bunk bed in a very small room in my cousin's house. The same house that had a canary that my aunt let out to fly, to get exercise.

Somewhere between eighth grade and my sophomore year in high school it was a book on Stonehenge.

And in eighth grade, it was Carl Sandburg's biography of Abraham Lincoln.

Oh, I guess there was another book. It was a biography of Albert Schweitzer.

Of all those, I would love to find a copy of the book I read on Stonehenge. I've looked for it at bookstores in Boston, discount bookstores in San Antonio, and at Powell's in Portland, Oregon, but have never run across it.

I was reminded of that book from a link on the Drudge Report today: "Pits Add to Stonehenge Mystery."

Today, on my desk is my traveling library for the moment:
  • Prairie Peddlers: The Syrian-Lebanese in North Dakota, William C Sherman, Paul L. Whitney, and John Guerrero
  • Plains Folk: North Dakota's Ethnic History, North Dakota Centennial Heritage Series
  • In Trace of TR: A Montana Hunter's Journey, Dan Aadland
  • Amazing Grace: A Vocabulary of Faith, Kathleen Norris
  • Prairy Erth: A Deep Map, Wililam Least Heat-Moon (no misspellings)
  • The Lakotas and the Black Hills: The Struggle for Sacred Ground, Jeffrey Ostler
  • The Great Sea: A Human History of the Mediterranean, David Abulafia
I finished The Lakotas and the Black Hills a few days ago but will go back and re-read portions of it.

Least Heat-Moon's Prairie Erth has turned out to be the most surprising of all of them; Least Heat-Moon was not always a favorite of mine, but this one is very, very good. Surprising, considering the subject matter.

I am happy to say that I bought all of these books at Books on Broadway in Williston. I have bought two copies each of Plains Folk and Prairie Peddlers. My first copies are back home in San Antonio.

KOG vs BEXP -- Mike Filloon -- -- The Bakken, North Dakota, USA

Link here.
In summary, east of Nesson continues to have the highest expectations in the Basin ... it is possible Kodiak has a higher number of very good acres compared to Brigham. Don't take this wrong, as Brigham has more than double Kodiak's acreage, but most of its leasehold is farther west.

The 40,100 net acres in Brigham's Ross/Sanish/Parshall acreage is some of the best in the Bakken, but may only be slightly better than Kodiak's Polar and Koala plays which total approximately 90,000 net acres.

If the Smokey play is added, it is 116,000 net acres.

It is my conclusion that Kodiak has a much better good acre concentration than Brigham...

Remember EURs are estimates, and IP rates can vary significantly in the first week or two of production. The numbers from Koala have been nothing short of great. Koala 9-5-6-5H had a 90-day IP rate of 1103 bopd. This was done with a lateral shorter than 9000 feet long and only 24 stages. Watch these numbers closely as this is the most important variable with respect to Kodiak's future.
That is as good an assessment as I have ever read with regard to any company in any oil patch. Mike deserves a lot of credit for posting this. Mike, thank you. 

Oh, just one change. Near the bottom Mike writes, "The numbers from Koala have been nothing short of great." I would have said, "...nothing short of spectacular," but we have all become numb from the staggering results of the Bakken.

KOG Getting Bigger in the Bakken -- Motley Fool

Link here.
Oil companies are lining up to increase their acreage position in the U.S.' shale plays as they have huge deposits of reserves to extract. The latest is Kodiak Oil and Gas, ...
 Kodiak is buying new acreages in the Williston Basin in North Dakota from a private oil and gas company for $590 million in cash and stock. The deal, which is expected to close by January 2012, will increase Kodiak's total acreage in the Bakken shale by 50,000 acres to 155,000 acres ...
The acquisition guarantees Kodiak proven reserves of 19.7 million barrels of oil equivalent. Current output capacity of the reserves stands at about 3,500 barrels of oil equivalent per day ...The icing on the cake is that the acquisition includes gas pipeline facilities connected to an interstate pipeline network to be operational by 2012. The new acreage is also close to a crude oil railway terminal, which is a major source of transport in the Bakken play.
The "milliondollarway" blog is not an investment site. This site if for my personal archives, something for my grandchildren to look back on and laugh. It is also for education and entertainment. Do not make any investment decision based on this blog. See my disclaimer at the top of the sidebar at the right. If something appears to be wrong on this site, it probably is. Check the facts at "wiki." 

Why Bakken? -- Motley Fool -- The Bakken, North Dakota, USA

Link here.
Did you know that oil and natural gas is the fastest-growing manufacturing industry in the U.S.? It's amazing to imagine that a country whose oil and natural gas output was sliding for four decades is now the third biggest global producer. It all started with the discovery of huge reserves in the U.S. shale fields.

Ever since reaching peak production in 1970, there has been a steady decline in the U.S. oil and natural gas output. In the 1990s, the U.S. imported about two-third of the total oil consumed. Production declined to such an extent that total production in 2006 was almost equal to the production volume of 1947. The depleting reserves were spelling doom for the industry.

Then dawned a new era characterized by new and advanced technologies of exploration and extraction. Hydraulic fracturing and horizontal drilling were discovered, which made extraction from below the hard rocks of the U.S. shale fields a reality and at affordable costs, too. Shale fields like Bakken, Barnett, Eagle Ford, Woodford, and Marcellus gained significance. These shale fields boast huge quantities of reserves, with Bakken being the biggest.
I seldom read these articles very closely and I could have missed it, but it does not appear the Motley Fools are aware that the EPA is about to ban fracking. I guess that's why they are called "fools."

This is not an investment site. This site if for my personal archives, something for my grandchildren to look back on and laugh. It is also for education and entertainment. Do not make any investment decision based on this blog. See my disclaimer at the top of the sidebar at the right. If something appears to be wrong on this site, it probably is. Check the facts at "wiki."

Ken Rogers Comments On Almost, North Dakota -- The Bakken, North Dakota, USA

From the regional newspaper that, at least to me, supports a moratorium on fracking to allow "us" to catch our breath:
First, Almont, and then Glen Ullin, both in Morton County, acted to ensure no man camp would be built in their communities. They don’t want the trouble. They don’t want the grief. They beg off saying their communities are too small. That there are not enough services.
Almost, ND, doesn't want a bunch of men all living in a building together. At least not oil men. Construction workers, though? That's okay.

NDIC Lynn Helms Responds to Bismarck Tribune's Article On Demise of Fracking in the Bakken


When the "original post" was posted, one could not find the link to the press release. Now, near the end of the day (4:14 p.m. CST), I see that NDIC has a link to its press releases. Here is the link to the press release below.

Original Post

Google the link: "Lynn Helms NDIC fracking Bakken"

In a three-paragraph press release, Lynn Helms backs off (a bit) on his concern that the Bakken will go into free fall early next year when if the EPA bans fracking.

I wonder who called him first after the story was published: KOG or CLR?

This is the "cut and paste" of the press release, dated November 28th, 2011 (contact Alison Ritter 328-8036):
The Department of Mineral Resources, Oil and Gas Division says there is no reasonable basis to make a prediction on the outcome of hydraulic fracturing regulations. Division Director Lynn Helms says, "A recent news article implied an outcome prediction on my part, but I made no such prediction and have no reasonable basis to make one at this time."

Helms went on to say, "We continue to affirm our position that the state is in the best position to regulate hydraulic fracturing. While some reports try to frame this issue as EPA regulation versus no regulation, the state of North Dakota has been regulating hydraulic fracturing and is in the process of promulgating new rules to continue to strengthen the sound regulatory oversight."

North Dakota has already demonstrated that the Oil and Gas Division of the Department of Mineral Resources is best situated to closely monitor oil and gas drilling and fracturing operations to ensure they are conducted in an environmentally sound manner. The state is fully prepared to assert and defend its regulatory rights to do so.
By the way, for what it is worth, I have a solution for the entire issue, but knowing that if I can think of it, much smarter folks in Bismarck and in the oil patch have also thought of it. It boggles my mind they have not done it yet.

When those folks introduce that solution, I will link it to this post, and note the date-time stamp.

Good luck to all.

Global Warming: South African Summer; Tennessee Winter -- Not About The Bakken Where It Is Still Warm and Balmy

This was priceless. I didn't even see it on the Drudge Report.

I doubt any of you are aware but the UN is holding yet another global warming conference, this time in South Africa -- it's summer there. It turns out, conference promoters are having trouble getting delegates to show up at the convention center: it's too cold. I can't make this stuff up.
The weather gods seem to be making a statement on the issue of climate change, with the east coast [of South Africa] gripped by rainy and unusually cold weather for much of this week.

This comes as Durban puts the finishing touches to preparations for the 17th Conference of the Parties of the UN Framework Convention on Climate Change (COP17) starting next week.

More than 20 000 delegates – government, business and UN leaders, and environment activists, celebrities and media – are expected to descend on the city.

The sun is expected to make a brief appearance on Wednesday, followed by the onset of another cold front.

“The weather gods might be sending us a message here,” joked Salwa Dallalah, the UN’s head organiser for the conference.

“Delegates may find themselves having to carry umbrellas, but we can’t do anything about the weather. I am not a scientist, but Durban people have told me that it’s unusually cold. It will be a pity if the rainy weather continues, especially because many Europeans and Americans will come for COP17 expecting lovely summer weather,” she said.
This is in South Africa, their summer. Too cold for a global warming conference. I cannot make this stuff up. This story is not being reported in very may places. Google and see if you can find it. I first read about it in the hard copy of the Bismarck Tribune, the regional newspaper that is in favor of banning fracking as far as I can tell, but the story is not on-line in the BT.


In a bit of other global warming news, west Tennessee, which gets winter about as often as drillers hit a dry well in the Bakken, is experiencing a major snow storm.
The snow has started to fall again in Jackson after a break last night, but should stop completely by noon today, according to Chris Duke, a meteorologist with the National Weather Service in Memphis.

The total amount of snow accumulation in Madison County has been between two to four inches, with some isolated areas of higher amounts, Duke said.

The area may receive another inch before the snow moves out of the area around noon, which is when the winter storm warning ends, he said.
I do not recall Elvis Presley ever singing about snow in Memphis.

In the Ghetto, Elvis Presley

As the snow flies
On a cold and gray Chicago mornin'
A poor little baby child is born
In the ghetto
And his mama cries
because if there's one thing that she don't need
it's another hungry mouth to feed
In the ghetto

People, don't you understand
this child needs a helping hand
or he'll grow to be an angry young man some day.

CNOOC Central


July 23, 2012: CNOOC to buy Nexen; huge premium; CNOOC has only nine years of proven reserves. 

November 30, 2011: CNOOC in joint venture in the deepwater Gulf of Mexico with Nexen. Nexen is one of the leaders in deepwater GOM, producing 20,000 bbls/day.

Original Post

Just a little footnote in the long march of CNOOC's quest to garner an ever-larger share of the world's oil reserves.
CNOOC announced that CNOOC Luxembourg S.a r.l, an indirect wholly-owned subsidiary of the Company, has completed its acquisition of OPTI Canada Inc. ("OPTI"). The total value of the consideration is approximately US $2.1 billion. An application to delist the OPTI Shares will be filed by OPTI with the TSX Venture Exchange.
I guess if the US doesn't want Canadian oil, the Chinese are happy to take it.

Likewise, if the US doesn't want the oil in the Gulf of Mexico, China is more than happy to take it.
China's leading offshore oil producer CNOOC Ltd yesterday said it agreed to buy small stakes in oil assets in the Gulf of Mexico from Norway's Statoil, marking its first entry into oil reserves in the gulf.
CNOOC Ltd, through its subsidiary, OOGC America Inc, has signed an agreement with StatoilHydro for four prospects in the Gulf of Mexico, namely Tucker, Krakatoa, Logan and Cobra, the company said in a statement yesterday.
My hunch is that when the bottom falls out from under the Bakken when the EPA bans fracking, the Chinese will buy the state of North Dakota, knowing that sanity will eventually return to the White House.

I am not being facetious. After the last bust in the Williston Basin, a local man and wife bought up huge assets (I won't get more specific; folks would know who I am talking about) of oil equipment and just let it sit. They are now one of the wealthiest couples in the US. It took a few years, but it all worked out nicely.

Did I say "long march" for the CNOOC saga? The CNOOC buy-in of the Gulf was back in 2009. Ancient history in the oil business.

From OPTI's website, which will soon go away, I assume:
OPTI Canada is a Calgary, Alberta-based company, established in 1999 to develop major integrated bitumen and heavy oil projects in a joint venture with our partner, Nexen Inc. OPTI holds a 35 percent working interest in all joint venture assets including all reserves and resources and current and future expansion developments, with Nexen as the sole operator and 65 percent working interest owner. Our first project, the Long Lake Project (the Project), is located near Fort McMurray, Alberta and includes the Long Lake SAGD (steam assisted gravity drainage) Operation and the Long Lake Upgrader.

The Project is the first to use OPTI’s OrCrude™ process, integrated with gasification and hydrocracking processes. Through gasification, the configuration substantially reduces the exposure to and the need to purchase natural gas. Through these processes, the Project delivers a high quality synthetic crude oil from the Canadian oil sands with low operating costs at full production.
On a 100 percent basis, the Project has capacity to produce up to 72,000 barrels per day of SAGD bitumen production. The Project is expected to produce up to 58,500 barrels per day of products, primarily 39 degree API Premium Sweet Crude (PSC™) with low sulphur content, which makes it a desirable refinery feedstock.

Start-up of the Upgrader and production of first PSC™ was announced in January 2009.
Note the phrase:  The Project is expected to produce up to 58,500 barrels per day of products, primarily 39 degree API Premium Sweet Crude (PSC™) with low sulphur content, which makes it a desirable refinery feedstock. That oil, no doubt, would have found its way into the Keystone XL project, the project scuttled by the President, yes, the one so concerned about American jobs.

Bakken oil is 43-degree API premium sweet with low sulphur content also -- literally the best oil in the world. One can pour most Bakken oil directly into a hydrocarbon engine and the engine will run without first refining the oil. Or so I've been told.

Oh, by the way, a reminder how incredibly rich the Bakken is, yes the Bakken that the EPA will shut down:
Organic-carbon values are calculated from formation-density logs using the equation: TOC... is organic-carbon content ...Test calculations comparing this equation to laboratory organic-carbon analyses from 39 wells in North Dakota show an average absolute difference of 1.1% in organic-carbon content. Organic-carbon content, calculated at 159 locations in North Dakota and 107 in Montana, averages 12.1% for the upper member of the Bakken Formation and 11.5% for the lower member. The mass of organic carbon in the Bakken Formation is approximately evenly divided between the upper and lower members, and it totals about 126 X 10 12 kg in the study area, of which 102 X 10 12 kg are in the thermally mature region. Tentative estimate that hydrocarbons equivalent to 132 billion bbl of 43 degrees (API gravity) oil have been expelled.--Modified journal abstract. 
Saudi Arabian TOC is about 0.5%. That's half a percent. The decimal point is not in the wrong spot.

Wartime Presidents Almost Always Get Re-Elected

Price of oil was up as much as $3.00 in futures yesterday before the market opened; of course, it pulled back, but it finished up and is up again today, flirting with $100.

I didn't talk about it much yesterday, but when oil goes up $3 or $4 in one day, and CNBC tries to explain it away on European economic issues or rebounding US economy, that's a bunch of bunk. "They've" been talking about a rebounding US economy for over a year, and the CNBC talking head this morning said there is no end in sight regarding the European debacle.

So, when oil goes up in price by three or four dollars, you have to look for another reason. Early yesterday morning, Drudge Report linked the Kuwaiti story and, no doubt, what that story represented was the reason for the spike in oil futures. Rigzone agrees.
Oil futures jumped Monday, touching $100 a barrel for the first time in more than a week, lifted by unrest in Syria and the prospect of additional sanctions against Iran.

Futures ended the day higher following news of geopolitical unrest on several fronts. The European Union signaled it will recommend additional sanctions on Iran, including a possible oil-import ban, during a meeting of foreign ministers set for Thursday in Brussels.

Meanwhile, the Arab League on Sunday approved economic sanctions on Syria as punishment for the regime's crackdown on protesters.
Rioters stormed the British Embassy in Tehran (Iran) today and chanted "Death to America" -- they need to learn to read or get a new map -- and that's part of the Arab spring that the president catalyzed. More to come, I'm sure.

A wartime president almost always gets re-elected.

LBJ was a notable exception.

What The Terrorists Couldn't Do, the Unions Did -- Absolutely Nothing About the Bakken


February 18, 2012: the plant did open in South Carolina; the NLRB backed off. Now the president visits the plant and touts it as an example of American know-how -- the very plant he tried to close. I doubt he pulled the cotton over anyone's eyes.  How do you spell "chutzpah"?

December 26, 2011: NLRB could be shut down in 2012.  The Senate won't confirm Obama's appointments and the board will be without a quorum. Wow.

Talk about timing. I posted the below yesterday, November 29, 2011. Today I get a note from Don that the issue seems to have been resolved. Boeing will get to keeps is South Carolina factory.

Original Post

Wow, did you all see this? American Airlines just declared bankruptcy. Cost of fuel too high. You think fuel is high now, wait until the EPA shuts down the Bakken. "They've" already shut down the Keystone XL.

The bankruptcy announcement is such a non-story I did not find it at Yahoo!Financial, but buried in the Drudge Report.
American was the only major U.S. airline that didn't file for bankruptcy protection after the 2001 terrorist attacks. The last major airline to file for bankruptcy protection was Delta in 2005.

American says labor-contract rules force it to spend at least $600 million more than other airlines.
So, unions and cost of fuel.

Sound familiar? Think GM.

I cannot make this stuff up. I "cut and paste" the odd bit just as it was written in the story, with terrorist attacks and unions juxtaposed.

I'm still waiting to hear if the unions can shut down Boeing.  Google "NLRB, Boeing, South Carolina."


By the way, here is what another says about the American Airlines bankruptcy, and national bailout and nationalization is not far behind:
In the least surprising development since this morning's sunrise, the parent company of American Airlines, AMR (AMR) officially filed for bankruptcy. Indicting of American bankruptcy laws, AMR whined that they were at a competitive disadvantage to the other majors due to not having filed for bankruptcy during either the wake of 9/11 or the financial crisis. Pride goeth before the fall indeed.

Salmon says the failure of giant airlines is more the rule than the exception. "If you look at the history of all the airlines on the planet earth since the year dot, they've lost untold billions of dollars." he says. "In the aggregate it's a dreadful business."

Salmon says we'd be better off not bailing out our flying behemoths. "Let them die and get replaced by a large number of nimbler airlines like they have in Europe where you actually get much lower prices, much better service," he offers.

How Long Does It Take to Frack A Well? -- The Bakken, North Dakota, USA

I see someone was googling "how long does it take to frack a well?"

See question #12  at my FAQs link at the top of the blog.

Elsewhere (this link is now irrelevant) there is a discussion on length of time to frack.

Bottom line: they can do a one-stage frack in one day, but a one-stage frack is a thing of the past.

Most fracks are now 24 - 36 stages, and take as little as 3 - 5 days and as long as a couple of weeks, depending on type of frack and if any problems are encountered along the way.

After January 1, 2012, the EPA will be promoting something new: 0-stage fracks.

For Investors Only -- Marathon Petroleum Company is Cheap -- The Bakken, North Dakota, USA has an article for investors on Marathon Petroleum Company. Reminder: Marathon Petroleum Company (MPC) is the spin-off from parent company Marathon Oil (MRO). The spin-off debuted on June 31,2011. MPC is the refiner, trasnporter, and marketer of petroleum products. Its parent company continues to explore for oil and natural gas, and said company brings that oil and natural gas from thousands of feet underneath the ground (and the sea?) and ships it to its daughter company who takes it from there.

Spoiler alert: the stock is cheap!

The SeekingAlpha article is very, very good, but there needs to be more passion. After a full page of extolling the virtue of this company, the writer says this: "I think the shares are worth a look..."

Okay, after writing a full page on MPC, one could argue that one has already taken a look.....

Here's the passionless but required disclaimer:
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
That would be true for me also (that part about "no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours").  But somehow that pretty much negates the entire tone of the article. After reading how cheap MPC is, one would think the writer would be shouting: buy, buy, buy. I know Jim Cramer would. Until tomorrow, when Jim Cramer would say, sell, sell, sell.

Note my disclaimer at the top of the sidebar on the right: this is not an investment site. Do not make any investment decisions based on what you read at this site. And for heaven's sake, don't make any travel plans based on my directions.

Beautiful, Balmy, Big Sky Day in The Heart of the Bakken -- The Bakken, North Dakota, USA


Wow, did you all see this? American Airlines just declared bankruptcy. Cost of fuel too high. You think fuel is high now, wait until the EPA shuts down the Bakken. "They've" already shut down the Keystone XL.

The bankruptcy announcement is such a non-story I did not find it at Yahoo!Financial, but buried in the Drudge Report.
American was the only major U.S. airline that didn't file for bankruptcy protection after the 2001 terrorist attacks. The last major airline to file for bankruptcy protection was Delta in 2005.

American says labor-contract rules force it to spend at least $600 million more than other airlines.

Original Post
At 25 degrees today, or something like that, it feels much warmer than yesterday: no breeze today. Wow, it's a beautiful day. It's going to be very difficult to leave the Bakken.

I see we are starting at 197 active drilling rigs today; it looks like the folks are starting to pack it in, waiting for that EPA shoe to drop. It's been a nice run. We've been as high as 204 rigs, and with such beautiful weather one would expect the number of rigs to increase, especially since most companies earlier this year announced that they were going to increase the number of rigs by the end of 2011.

Big Sky Country. That's a Montana state trademark, but I think we're close enough to the state line to be able to say we have "big sky" here also.

I stopped by my favorite store at the corner of 1804 and the east bypass (yes, Williston has a bypass on the east side of town also). I honestly did not know one could buy stun guns. My favorite note of the day: on the counter at Scenic Sports (gas station, sports shop, fast food, convenience store, natural history museum, all rolled into one) -- "Do Not Place Your Minnows On the Counter. Thank You." And then a smiley face. The counter is covered with "bounced" checks. The bounced checks are from two folks -- one individual has not less than ten (10) bounced checks, totaling more than $800. One check was for $127. Fool me once, shame on you; fool me twice, same on me. I think I know on whom I would use one of those stun guns.

I see the price of oil is up another $1.05 today, nearing the century mark again. The buyers of oil know what the price of oil will be when the Bakken is shut down. It isn't going to be a pretty picture.

The usual inane 30-second sound bites on CNBC this a.m. The news reader said that house prices declined another 4% this past quarter, but, and this is the inane sound bite, "but at least it wasn't as bad as the same quarter last year when home prices were down 6%. Well, hello. House prices can't fall a whole lot more. The talking head said house prices were down 75% in Detroit from ten to twelve years ago. Well, that was ten to twelve years ago. A lot has happened since then.

Hey, speaking of exploding cars, how much is a Chevy Volt worth these days.

Some of you, no doubt, received this in your e-mail today. This was in the e-mail of a co-worker (yes, I occasionally do things that appear to be "working") she received today, and I quote it in full, the first paragraph:
Susan Johnson,  (made up name to protect the co-worker, but not even "Dear Susan,")
Your mobile service device isn't just a convenient way to access your Capital One (raised R) account. It's also a way to win a 2012 Chevy Volt plus $5,000 cash or an iPad2!.
The note continues but that was enough for me.

My co-worker said she will choose the iPad2. They have a new house and the garage is attached.

I cannot make this stuff up. Let's see, just the comparison between the iPad2 and the Chevy Volt would have been interesting, but Capital One (raised R) had to throw in $5,000 in cash, I guess, to cover new garage expenses.

Hey, speaking of beautiful, balmy, Big Sky country, coming into work at sunrise today, a beautiful, shiny, black, brand-new, Warren Buffett unit train heading west into Williston, paralleling 1804. What an incredible site. You know this fracking ban: maybe having Warren Buffett on our side will turn out to be a godsend. Deus ex machina. My eighth grade Latin teacher taught me that. He taught me a lot of things. He was one of my 23 favorite teachers in Williston, and he was the best Latin teacher in town. Incredible. My German teacher also taught student driving. The Germans are very, very good driving instructors. Mr Berg's students are the few drivers in this country that can still parallel park. "You vill pull up to the parked car in front of the open space. You vill come to a complete stop...." Warren is going to lose a lot of money if the EPA shuts down fracking.

Well, oil is up $1.35. That would be WTI spot price on the television crawler. Let's see what the "real" price of Bakken is -- the Louisiana sweet: wow, up almost $2.00 from yesterday at $111.220. That was easy (raised R). Go to the top of the blog, click on "Data Links," and scroll down to Louisiana sweet crude.  

By the way, as a reminder, I turned off "comments." I couldn't keep up with monitoring the comments coming in. The comments were important: a) I knew folks were reading what I was writing; and, b) folks were correcting my mistakes.

So, as a reminder, if you read something at this site that seems wrong, it probably is. Fact check by going to "wiki."

Yesterday Don caught my error saying that if you turn west south of Alexander you will end up in Watford City. Actually, if you turn west south of Alexander you will end up in a wheat field. If you are in a(n) SUV you will probably get to Fairview, unless you run into an old Madison well first.

Yes, for newbies, there was life before the Bakken. It was called the Madison. And the Madison will rise again when the EPA shuts down fracking.

Current favorite on our radio stations:

Fish, Craig Campbell
I assume the truckers and roughnecks are looking for girlfriends who love to fish.

Monday, November 28, 2011

Source of Fracking Water for the Bakken

Someone googled that question: the source of fracking water for the Bakken? See question 50 at FAQs (I occasionally change the numbering, so the number could change; use browser to search water if necessary).

It's the Missouri River for the most part.

Well water is also used.

Through 2011, I believe most water was provided by independent water distributors and, perhaps, the city of Williston municipal water supply. Sometime in 2012/2013, I assume most fracking water will be provided by WAWS. I don't know the specifics on fracking water because I do not follow it closely. There is not a supply issue regarding water for fracking in the Bakken.

There is more than enough water in the region for fracking. The one thing the Bakken is not short of is water, regardless of what folks may tell you. One inch of water off the top of the Sakakawea Lake (the Missouri River behind the Garrison Dam) will provide all the water that is needed for 5,000 Bakken wells annually; and the operators can drill a max of about 2,000 wells each year.  So don't let anyone suggest there is not enough water. Period. Dot.

For more, look at the tag "WAWS" or "water" below -- at the very bottom of the blog where the labels/tags are kept.

For Newbies, This May Be Best Snapshot Overview of Operators in the Bakken

The best snapshot overview of the operators in the Bakken may be at the link:
I do my best to keep this page up to date.

Most important metrics for me:
  • net acres
  • daily production
  • number of operated rigs (NOG is an exception; no operated rigs)
  • number of dedicated frack teams (hard to find, document)
As long as I'm rambling, for newbies: 90% of my new posts and updated material pertains directly to the Bakken. Ten percent of daily material has to do with non-Bakken information. I am very passionate about certain topics and I understand that some folks do not appreciate my passion for those non-Bakken posts and updates, but that's the price of admission to this otherwise free site.

If you don't like the non-Bakken posts, simply skip those posts. For every post I blog daily (and I post as many as ten new stand-alone posts each day) I update another two or three previous posts. I often update posts I put up earlier in the day.

If you read only the latest post, you will miss all the other posts that have gone up during the day.

In addition, there is a huge amount of archived material at this site. There are multiple ways to locate what you might be looking for, using a combination of browser search applications.

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

Daily activity report, November 28, 2011 --

Operators: BR (2), CLR, Petro-Hunt, XTO, and Whiting

Fields: Haystack Butte, Oliver, Clear Creek, Boxcar Butte, and the Sanish.

Whiting has another permit in its cash cow, the Sanish.

BR has a wildcat in McKenzie County.

All five (5) coming off confidential list were reported elsewhere and all five were completed, representing something of a milestone. It's been a long time since 100% of all wells coming off confidential list were completed.

Of the five Helis had a remarkable well:
  • 19680, 2,246, Helis, Johnson 1-4/9H, Grail, Bakken; s5/11; t9/11; cum 35K 9/10; 28 stages, 2.7 million pounds sand.
The daily activity report was otherwise unremarkable.

How Many Dead Eagles? Apparently As Many As ....

This is truly incredible; I've blogged about this before: wind farm developers will be given a pass to kill unlimited number of golden eagles, bald eagles, and whooping cranes, among other migratory birds, and one oil company has already plead guilty to killing a solitary sandplover.

Here's today's story on "how many eagles will the wind turbines kill?" Of course, no one knows, and we will never know because coyotes, wolves, and other predators quickly dispose of any bird killed by a wind turbine.
The available data, science and policy haven't caught up with the pace of wind energy development. Still, wind energy development is apparently killing golden eagles, which seem especially susceptible to collisions with the turbines.

"We really don't know how many birds are being killed by wind turbines," said Trish Sweanor, a U.S. Fish and Wildlife Service biologist.
They are protected by three federal laws: the Bald and Golden Eagle Protection Act, the Migratory Bird Treaty Act and the Lacey Act. These laws prohibit possession or sale of eagle feathers and parts and have protected bald eagles since 1940 and golden eagles since 1962 by making it a crime to kill the birds.
But wind farm developers will be given a pass on any migratory bird deaths caused by their blades.

Meanwhile, elsewhere, this story, where wind farm developers are being helped in mitigating bird deaths, including the sage grouse which has grounded almost every other pro-growth project:
Wind farms are often touted as producers of environmentally friendly energy. In recent years, Wyoming has seen a boom in wind energy development with about a dozen more projects in planning stages.

Developers do seek to mitigate disturbances and deaths of animals, including sage grouse. But one of the biggest quandaries for those developers is the degree to which wind farms hurt federally protected golden eagles and how that damage can be decreased.

Right now the federal agency works with developers to limit development in crucial habitat as a way to mitigate effects on birds. But once a turbine is placed, there is little that can be done to alleviate bird deaths, said Trish Sweanor, a U.S. Fish and Wildlife Service biologist.
It's unfortunate the oil and gas industry isn't provided the save opportunities.

The good news: it's gonna be difficult to convince a judge that a pro-growth project cannot go forward due to the endangered sage brush when the wind farms are killing them anyway. 


Meanwhile in other Wyoming news: snowpack still above normal, but not by much. More global warming will change that by the end of January.
The Natural Resources Conservation Service in Casper said that the statewide average snowpack went from 110 percent last week to 101 percent on Monday.

Last year at this time, the statewide average snowpack was 104 percent.

Six basins are above average and seven are below.
Last year at this time: 104 percent; this year: 101 percent; neither reproducible nor statistically significant, no doubt. Even if it is, still a very wet spring next year.

Garfield on the "Oil Crisis"

A lot of folks cannot understand how we came to have an oil shortage in the United States, a country uncommonly rich in natural resources.

Well, here's a very simple answer.

Nobody bothered to check the oil.

We just didn't know we were getting low.

The reason for that is purely geographical.

Our oil is located in: Alaska, California, coastal Florida, coastal Louisiana, coastal Alabama, coastal Miississippi, North Dakota, Wyoming, Colorado, Kansas, Oklahoma, Pennsylvania, and Texas.

Our dipsticks are in Washington, DC.

The Price of Gasoline, Michael Nesmith

The following, also by Michael Nesmith as seen above, was the first video ever to win "Best Video" award on MTV, if you believe what you read.

Lucy and Ramona, Sunset Sam, Cruisin', Michael Nesmith

West Hollywood, 1979. My daughter and I roller skated here on very rare occasions. That was in another life and a few years later. Michael Nesmith of the Monkees: his mother "invented," holds the patent for, "White Out," something we don't see much any more.

Mike Nesmith was incredibly talented. He also wrote this song:

Different Drum, Linda Ronstadt and the Stone Poneys

New Truck Stop South of Alexander & West of Watford City -- The Bakken, North Dakota, USA

This is more proof that the activity in the Bakken is moving south and west to McKenzie County next summer if the EPA doesn't shut it down.
About two miles south of Alexander, you curve left and head east toward Watford City on US Highway 85. If you were to continue south from Alexander you would end up on State Highway 68 which takes you to Sather Lake, "the grasslands," and then a gentle curve west to Sidney, Montana, about ten miles south from the US Highway 85 / State Highway 68 junction where this photograph was taken.

The sign is self-explanatory.

The 605-phone number takes you Wlk Construction in Hayti, South Dakota, in the eastern part of the state near Watertown, SD. The 360-number is from the Vancouver, Washingon (state) area.

The location is excellent: on the south side of Alexander, far enough away from town to deconflict traffic issues there; right at the junction of a very busy national highway and soon-to-be-very-busy state highway.

Hopefully I am fortunate enough to return to the Bakken in a year and take a photograph of the truck stop.

Chariots on Fire: The New Chevrolet Volt

Date-time stamp. Check.
Volt: Chariots on fire. Check.
Now to continue with the rest of the post. And check.

Alright. Now that the phrase is date-time stamped, we can see if anyone beats "me" to the punch on the new name for the Chevy Volt.

Don sent me that gem: the suggested new name for the Chevy Volt. I cannot take credit for it, but I have just googled "Chariots on fire" and "Volt" and nothing popped up on the first two pages. I added "Chevrolet" and still nothing popped up. So, we will see if anyone claims that new name. [Update: 4:32 p.m.: now there are more hits on google re: chariots of fire and the Volt, but this blog still holds the #1 and #2 spot on Google for this specific search. But the effort has brought me to a great blog: and Detroit's hottest car.]

Speaking of which, and I did not know this until Don alerted me to it, General Motors is providing a loaner car to owners of the Volt until this is all sorted out.

Right now, General Motors is thanking their lucky stars (if this can really be called "lucky") they only sold 6,000 Volts, far fewer than the 10,000 they had projected. Some have suggested (certainly not me) about 5,500 of those 6,000 were sold to dealers; if true GM is probably only in the hole to the tune of about 500 cars.

From the linked story:
The company says it will contact the owners to reassure them that the cars are safe. But it's making the offer to make sure Volt owners don't lose confidence in the cars.
In lieu a copy of the actual contact letter, I am paraphrasing what is likely to be in the GM letter offering the loaner car (this is not the real letter; it is only my imagination): 
Dear treasured Volt owner,

You have no doubt been reading in the newspapers, hearing on the radio, and seeing reports on television about the potential for the Chevrolet Volt to burst into flame if involved in a severe crash. To date, fender benders have not resulted in any exploding batteries or flash fires.

We want to reassure you that the Volt is entirely safe. Therefore, we are offering you a loaner car until this issue is resolved. Of course, that begs the question: if the Volt is entirely safe, why are we offering you a loaner car? For two reasons: a) we know you are no fool; and, b) our lawyers told us to.

If you are interested in a loaner car, please have a friend drive you to your nearest GM dealer in his/her non-Volt car, or take public transportation, or walk. Under no circumstances should you be driving your Volt to pick up a loaner.

For those of you who do not desire a loaner, we will be sending out a lawyer to have you sign a waiver releasing GM from all liability.

Again, please be assured that the Volt is entirely safe.

s/Representative of Government Motors
The letter is made up. GM offering loaners for a perfectly safe car is not made up.

Okay, now google "Chariots on fire" and "Volt."


On a completely different note, I really do have to hand it to pundits how quickly they come up with these things: Chevy ... Camaro ... Corvette ... Chevelle ... Chariots ...

And I am not making this up, the Chevy Spark is due to be released in the summer of 2012. Yes, the Spark. Something tells me GM has formed a focus group to determine whether a different name might be warranted.


GM has scheduled a conference call to answer questions:
This is why the head of GM North America, Mark Reuss, and the head of GM Global Product Development, Mary Barra, are holding a conference call to answer questions about the Chevy Volt. 
The article does not say: are those two talking to each other, or will other folks be invited in on the conference call?

This is the last line of the article:
GM and NHTSA have both said the Volt is safe.
I guess that's why there is an ongoing federal investigation into this government-owned automobile manufacturer and why GM is providing loaner cars to Volt owners, because the Volt is safe.

As noted above: the first thing I would do at GM is consider changing the name of the Spark due out next summer. Or change the name of the Volt to "Blaze" as another wit has suggested. Blaze and Spark.

Would you want a Spark sitting next to a Volt with a battery that tends to burst into flame because it has no steel protective covering which the Nissan Leaf has?