XOM Sets Extended Reach Record -- Not a Bakken Story, But Maybe Some Day

Link here.

Data points:

• XOM's subsidiary, Exxon Neftegas Limited, offshore far east Russia
• Sakhalin-1 Project, an international consortium
• Odoptu OP-11 well: total depth -- 40,502 feet (12,345 meters or 7.67 miles)
• World record for extended-reach drilling (ERD)
• Horizontal reach of 37,648 feet (11,475 or 7.13 miles): also a world record of horizontal reach
• Record-setting well completed in 60 days

Wow, a 7-mile horizontal lateral and almost 8 miles to total depth.

Marcellus Shale: Enough Gas to Meet Nation's Need for 20 Years

Link here.

What a great opportunity. Let's hope the bureaucrats and politicians don't blow it.

Brent Vs NYMEX: The Spread, Already A Record, Is Likely To Get Worse

Link here.

More than ever, the price of oil depends on where you look. Oil prices have sunk to a two-month low around $85 a barrel on the New York Mercantile Exchange, but ICE's Brent oil futures are soaring toward $100 a barrel.

The gap between the two prices--more than $12 as of Friday morning--is the biggest ever. NYMEX March futures were recently trading up 0.3% at $85.85 a barrel, while ICE March Brent trades up 0.6% at $97.97 a barrel. (Bakken is NYMEX.)

If it's due to a storage problem at Cushing, Oklahoma, the spread is likely to get worse.

Rigzone: 18-1 Price Spread (Oil - Natural Gas) -- Staggering -- North Dakota, USA

Look at that price spread between natural gas and oil predicted by the end of the year. 

U.S. energy producers are making a massive investment shift from natural-gas production to unconventional oil drilling as natural-gas prices stagnate, said Sylvia Barnes, managing director and head of banking at investment firm Madison Williams and Co.

The widening spread between oil and natural-gas prices is driving the investment shift, Barnes said. The oil-to-gas price ratio, which was traditionally 6-to-1, is expected to reach 18-to-1 by November, 2011.

Aren't we already there, 18-to-1? I must be tracking the wrong numbers; even the linked article says natural gas is stuck at $4 per million British thermal unit and oil is well past $72.

Eight (8) New Permits -- Seven (7) Great Whiting Wells -- North Dakota, USA

Producers: Hess (2), BEXP (2), Peak, Prima, OXY, Zavanna

Fields: Dollar Joe, Mandaree, Great Northern, Dimond, East Fork, Alger.

The two BEXP wells will be on one pad in Alger field, Mountrail.

Seven phenomenal Whiting (WLL) wells reported by NDIC:

• #18635 – Littlefield 21-12H, NENW 12-153N-91W, Mountrail, 2,591 
• #18658 – Mayer 12-3H, SWNW 3-152N-92W, Mountrail, 2,685
• #18743 – Miller 43-10H, NESE 10-153N-92W, Mountrail,  1,468 
• #18761 – Fladeland 43-9H, NESE 9-154N-92W, Mountrail, 3,027 
• #18876 – Rohde 14-6XH, LOT 7 6-153N-91W, Mountrail, 3,023
• #18926 – Hagey 12-13H, SWNE 13-154N-92W, Mountrail, 2,140
• #18928 – Ogden 12-3H, SWNE 3-154N-92W, Mountrail, 1,890 

49 Steps

Forty-nine bureaucratic steps deter energy development on federal land.

Yup.

WLL With Eight (8) Outstanding Wells -- Bakken, North Dakota, USA

For those who still doubt the potential of the Bakken, these were released by the NDIC today:

• 18990, 1,054,WLL, Knife River State 21-16H, Sanish, Bakken
• 18928, 1,890, WLL, Ogden12-3H, Sanish, Bakken, 55K in first 3 months
• 18926, 2,140, WLL, Hagey 12-13H, Sanish, Bakken, 51K in first 3 months
• 18876, 3,023, WLL, Rohde 14-6XH, Sanish, Bakken, 67K in first 3.5 months
• 18761, 3,027, WLL, Fladeland 43-9H, Sanish, Bakken, 74K in first 4 months
• 18743, 1,468, WLL, Miller 43-10H, Sanish, Bakken, 37K in first 3 months
• 18658, 2,685, WLL, Mayer 12-3H, Sanish, Bakken, 45K in first 2 months
• 18635, 2,591, WLL, Littlefield 21-12H, Sanish, Bakken, 92K in fir 4 months

Whiting has never had a need to "inflate" or "hype" their IPs, in my opinion.

 

For links to the well files, click here.

 

Two other things about Whiting:

• They are maximizing cash flow from the Sanish while stepping out into the edges of the Bakken and the pinchout of the Three Forks in the southwest part of the state. In the same locations, they are no doubt studying the legacy fields, the Tyler formation, and the Lodgepole.
• Whiting has made it very well known how they plan to put in as many as eight wells in their spacing units in the Sanish.

Continental Resources is still "the face" of the Bakken, but I have to admit that I have been quite impressed with Whiting for the past year. Absolutely stunning, in my estimation. It will be interesting to see the number of frack stages and the proppants WLL is using, something we may not know for quite some time.

 

Note: some of these may have been previously reported in Whiting press releases, or by statements from partners with working interests in these wells. Reported IPs from the same well can vary depending on whom is doing the reporting.

 

 

 

 

Spain, Wind Power, and 20 Percent Unemployment

Updates

January 2, 2012:  GE will acquire wind farms in Spain and France.

In its concerted effort to reduce debt and maintain investment grade credit rating, Iberdrola SA, the biggest utility firm in Spain, has decided to divest its French wind parks to a consortium of companies led by General Electric Company for about $529 million. The divested portfolio includes 32 wind parks with total installed capacity of 321.4 megawatts that are directly or indirectly controlled by Iberdrola Renovables France, the French subsidiary of the Spanish utility company.

The strategic move is aimed at reducing its huge debt burden, which has been consistently on the rise as the Spanish government failed to pay the bills for selling power at regulated prices due to the continued sovereign debt crisis. To add to its woes, Iberdrola presently has a dismal credit rating by S&P at just a notch above the ‘junk’ rating. With the asset sale likely to bring in additional liquidity, the company hopes to remain afloat at least for the time being, although some experts anticipate an imminent dividend cut.

Don tells me that he used $2.25 million for megawatt costs when determining profitability. The above: $530/320 --> $1.65 million which is about 75% of $2.25 million -- and Don says "maybe" one could make money at that cost ($1.65 million/megawatt.

Original Post

When I think of Spain, I think of wind power. Remember all the stories about Spain's success with wind power?

Today I see on the Drudge Report, Spain's unemployment rate has soared to 20 percent. It is amazing all the comments at that link that called attention to the same issue.

This reminds me of the Harvard University study that shows wind energy results in few new jobs and higher utility costs in the US.

Chevron 4Q10 Profit Jumps 72 Percent

Link here.

PennEnergy uses the word "skyrockets" to describe earnings.

Well, Maybe GMX Resources Doesn't Consider It Too Late or "Me Tooish" -- Bakken, North Dakota, USA

Just a few days ago ZMan stated the entry of some small companies into the Bakken as "a little too late and "me toosh."

I'm not exactly sure what to make of the Bakken entry as that seems more than a little late and "me tooish" but numbers will tell and we'll have those in hand around March 1.

I agreed.

So I doubt there was anyone more surprised than I to find this story on Yahoo!InPlay first thing this a.m.:

GMX Resources acquires five (5) oil resources in Bakken and Niobrara, announcing it has signed three (3) additional purchase and sale agreements resulting in a total of about 68,000 net acres in the core development of the Bakken/Sanish-Three Forks.

In addition, GMX Resources announces a CAPEX of $31.5 million in the Williston Basin for 2011. Press release here.

The company plans to drill 10,000-foot lateral FlexRig3 rigs beginning later this year (2011) and drilling continuously thereafter.

In a separate press release, GMX Resources announced an offering of $100 million of common stock and $200 million offering of senior notes.

Note: the FlexRigs, specifically the FlexRig3, in this story, a new wrinkle in the Bakken first noted in the conference call with Hess.