The Heart of the Bakken Doubles Its Revenue: $1 Million in Revenue -- Williston, North Dakota, USA

Revenue from the Williams County Treasurer-Recorder's Office and Building Department
came to more than $1.076 million. Of this, more than $980,000 will go into the county's General Fund. The rest will go to other county funds.

This was more than double the $473,000 collected in 2009. Of that year's revenue, more than $426,000 went into the General Fund.

And I think I read recently, Williston parks and recreation was still struggling for money, but maybe my memory is faulty. [Update: yes, I knew I wasn't dreaming. Williston is considering adding one cent to the sales tax to pay for Williston Parks and Recreation budget. Despite all the oil activity in the heart of the Bakken it seems when it comes to taxation, it's business as usual. Posted January 8, 2010.]

It would be interesting to know what Williston's revenues were in 2006, just before the current boom and before the recession.

Investors Only: Oasis Update -- Current Presentation -- North Dakota, USA

Investors may be interested in looking at Oasis' current presentation.

Some highlights from the January, 2011,  presentation:

Two prospects in the Bakken

• West Williston, 201,700 net acres (North Dakota and Montana)
• Nesson Anticline, 131,000 net acres

Over 2,600 potential drilling sites
Oasis will add one rig in 2011; going from six to seven rigs
Slide 8: "primarily focused on Bakken" -- that might be the cake; the Three Folks will be the frosting?
EUR: 400 - 700 thousand bbls of oil
Cost per well completion: $7 million; 28 stage, 10,000-foot lateral; 65/35 ceramic mix
2011 CAPEX:

• 69 gross operated wells
• 47 net operated wells
• 53 net wells (operated and non-operated)
• Reminder: 7 rigs
• So, if I understand this correctly, Oasis will use its 7 rigs to drill 69 wells total. That makes sense: about 10 wells/rig over the course of the year

Costs/boe (I am not sure if I have interpreted slides 19 and 20 correctly)

• LOE ($/bbl):  $7.00 (slide 19)
• G&A ($/bbl): $10.00 (slide 20)
• Total: $17/bbl?

These numbers, by the way, are in the same ball park as CLR, which states in their most recent presentation that their "total cash costs" are $16.71/bbl (slide 23). 

How and Where the Sweet Spot of the Bakken Was Formed -- North Dakota, USA

This is a link to a very nice PowerPoint slide presentation on how and where the "sweet spot" in the Bakken was formed. It was sent to me by someone who noted it at the Bakken Shale Discussion Board.

This is a PDF file so it may take a moment to download.

I will also link this presentation at one of my "welcome" or "overview" postings.

Studies Suggest Folks Underestimating Growth of Cities and Towns In North Dakota Due to Oil

Link here.

This was from the January 6, 2011, edition of the Minot Daily Press. Generally links to these small regional newspapers are lost fairly quickly.

Here are some highlights:

• A study that shows the population of key cities in the Bakken more than doubling in 25 years may be conservative, according to city officials.
• The study projected another 10,957 residents in the communities of Williston, New Town, Parshall, Watford City, Stanley and Tioga. The largest share, 7,365 residents, is forecast for Williston through 2025. Accommodating those residents would require another 5,477 permanent and temporary housing units.
• Parshall Mayor Richard Bolkan said the projected 1,812 population peak for his city seems low, although he agreed with the study that access to housing is going to be a factor in how much growth occurs. Parshall could see more than 3,000 residents if it had the housing, he said.
• One spokesman noted that the study only looked at oil drilling and not employment projections related to developments like a gas plant recently proposed [and approved] for Watford City. It also didn't consider growth from other sectors of the economy or the effect of rural growth around the city, which has been tremendous, he said. Still, the figures provide a starting point.

Super-Long Laterals -- The Bakken, North Dakota, USA

Please see the comments regarding super long laterals at this posting (the comments).

I will try to do a stand-alone posting when I have more time.

A big "thank you" to "Tom."

(By the way, I did post something along this line back in September, 2010.  What a great site. Smile.)

Japan's Oil Imports Rose 11 Percent in November Compared to Year Earlier -- Not a Bakken Story

Link here.

• Japan's Natural Resources and Energy Agency (NREA) said the country’s imports of crude oil in November rose 10.8% from a year earlier to 122.09 million bbl.
• It also marked the first sequential increase in 2 months, officials said.
• Oil shipments from the Middle East accounted for 86.2% of Japan’s total imports.
• According to the US Energy Information Administration, Japan was the second-largest net importer of oil in the world after the US in 2009, having imported about 4.7 million b/d. 

Yup. 

North Dakota Could Surpass Alaska in Oil Production

When the AP broke a story on January 2, 2011, that North Dakota could surpass every state in the union in oil production except for Texas, someone wrote in to say that North Dakota would never surpass Alaska in oil production. I countered.

Today there is a story that environmentalists have stymied Shell Oil once again in its goal to drill in Alaska.

Yes, North Dakota could indeed surpass Alaska in oil production.

Meanwhile, oil closed down today, to around $88 but still on a trend suggesting we will see $100 oil by Memorial Day, the start of the summer driving season. The moratoria on off-shore drilling continue.

Oh, by the way: here is an update on the legal status of the polar bear.

[January 13, 2011: Bloomberg's chart of the day.]

Wow, wow, wow -- BLM Lifts Drilling Suspensions in Montana -- Not a Bakken Story

Link here.

No comment needed. Yet. But be sure to read the last line.

Abraxas Operational Update and A Look at the Weather Impact -- North Dakota, USA

Wow, it's great to be back home, where I have better access to checking out "the Bakken."  (For newbies, I use "the Bakken" colloquially to refer to the entire oil industry in North Dakota. The focus in this boom has been on the middle Bakken formation, but is now moving to the Three Forks formation.)

Here is an excerpt from a January 5, 2011, news release from Abraxas:

• In McKenzie County, North Dakota, Abraxas drilled the Ravin 26-35 1H to a total measured depth of 20,835 feet, including a 9,800 foot lateral in the Three Forks formation. This well was completed with a 25-stage fracture stimulation and has been on-line since the end of November 2010 at a restricted rate due to mechanical issues (which have been resolved), winter weather conditions and shortage of trucks to haul oil from the location. During that period, the well produced approximately 13.5 MBbl of oil, 21.0 MMcf of wellhead gas and 2.5 MBbl of natural gas liquids. The well was recently flow tested at an unrestricted daily rate of 1,008 barrels of oil, 2.44 MMcf of wellhead gas and 290 barrels of natural gas liquids, or 1,705 barrels of oil equivalent per day. Abraxas owns an approximate 60% working interest in this well.
• In McKenzie County, North Dakota, Abraxas drilled the Stenehjem 27-34 1H to a total measured depth of 16,504 feet, including a 5,965 foot lateral in the middle Bakken formation. A 20-stage fracture stimulation is tentatively scheduled for the first quarter of 2011. Abraxas owns an approximate 79% working interest in this well. 

I posted this for a number of reasons:

• First, it was nice just to get back to home station where I could more easily post information;
• Second, I wanted newbies to see how many fracture stimulation stages now seem to be the norm; and, 
• Third, to validate my comments in the last few days that production targets for December, 2010, will be missed due to weather conditions in North Dakota (part of the global warming we've been seeing this year around the world)

Four (4) New Permits -- North Dakota, USA

Producers: Newfield, CLR, SM, Slawson.

Fields: Jim Creek, Van Hook and two wildcats.

One wildcat is quite a bit straight north of Williston, near Grenora.

The other wildcat is near Banks oil field, east of Williston, but on the other (south) side of the river -- to get to it, one would have to go east of Watford City on state highway 23 and then north on north on highway 1806.

Natural Gas Update

Normally I would just post this link on my natural gas page since this blog is focused more on North Dakota oil. But this article is so good, I didn't want folks to miss it.

The graphics alone are worth the price of subscribing to my blog.

Wind Energy: But It Still "Feels Good"

As a former vice-president would say, "Hey, it's an inconvenient truth."

The story says it all. Hardly any need to comment.
One would think that by now Obama Administration officials would admit that “wind farms” do not provide large economic and job benefits. However, recent Administration statements suggest the delusion continues and, perhaps, that officials do not understand why their expectations are unrealistic.

The story goes on to provide several reasons why folks were wrong:

• Ignoring the fact that much of the capital cost of “wind farms” is for equipment purchased elsewhere, often imported from other countries.
• Assuming that employment during project construction results in new jobs for local workers — most "wind farm" jobs require specialists.
• Assuming that the very few permanent “wind farm” jobs are new jobs filled by local workers – there are very few permanent "wind farm" jobs; those that are permanent are filled by those who come from "outside"
• Assuming that temporary workers who are brought in for short periods live and spend their pay checks — and pay taxes — locally; most spend their money where their permanent residence is.
• Assuming that the full purchase price of the goods and services purchased locally (often minimal in any case) has a local economic benefit.  In fact, only the local value added may have a local economic benefit. 
• Assuming that land rental payments to land owners for allowing wind turbines all have local economic benefit. In fact, these payments will have little or no local economic benefit when the payments are to absentee landowners OR if the money is spent or invested elsewhere or is used to pay income taxes that flow to Washington DC or state capitals.
• Using “input-output” models that spit out “indirect” job and other economic benefits that, in effect, are bogus.
• Ignoring the environmental and economic COSTS imposed by “wind farm” development, which are conveniently overlooked. Gee, I wonder why?
• Ignoring the fact that electricity produced from wind turbines, has less real value than electricity from reliable generating units — because that output is intermittent, volatile and unreliable. We've said this over and over.
• Ignoring the “backup power” costs; i.e., the added cost resulting from having to keep reliable generating units immediately available (often running at less than peak efficiency) to keep electric grids in balance. Yup.
• Ignoring the fact that electricity from “wind farms” in remote areas generally results in high unit costs of transmission. In fact, environmentalists have stopped new transmission lines, or new transmission lines are prohibitively expensive. 
• Ignoring the fact that the higher true cost of the electricity from wind is passed along to ordinary electric customers and taxpayers who then have less disposable income to spend in the local area.

But the last comment, printed verbatim, is right on target:

• Perhaps most important, ignoring the fact that the investment dollars going to “renewable” energy sources would otherwise be available for investment for other purposes that would produce greater economic benefits. “Wind farms” have very high capital costs and relatively low operating costs compared to generating units using traditional energy sources. They also create far fewer jobs, particularly long-term jobs, and far fewer local economic benefits. “Wind farms” are simply a poor choice if the goals are to create jobs, add local economic benefits, or hold down electric bills.