KMI has been added to the list of ticker symbols at the sidebar on the right.
By the way, I cannot take credit for thinking of putting those ticker symbol lists on the blog. Someone wrote to me suggesting I do that -- it turned out to be one of the best ideas ever for the blog.
Pages
▼
Sunday, February 13, 2011
1,195 Wells on the Confidential List -- North Dakota, USA
I have not kept records for number of wells on the confidential list on a regular basis, but it's possible that the 1,195 wells currently on the confidential list is a record.
Fifty-eight (58) of those wells will come off the confidential list in February, which is relatively low.
However, it will be a busy March: 123 wells are scheduled to come off the list in March, 2011; wells put on the confidential list any time in September, 2010, will come off in March.
Fifty-eight (58) of those wells will come off the confidential list in February, which is relatively low.
However, it will be a busy March: 123 wells are scheduled to come off the list in March, 2011; wells put on the confidential list any time in September, 2010, will come off in March.
"The six-month period shall commence on the date the well is completed or the date the written request is received, whichever is earlier. If the written request accompanies the application for permit to drill or is filed after permitting but prior to spudding, the six-month period shall commence on the date the well is spudded."
China Rising: Based On GDP, China Overtakes Japan; China #2 Behind USA -- Nothing To Do With The Bakken
Updates
January 10, 2014: China surpasses US as world's largest trading nation. The [London] Guardian is reporting:
China became the world's largest trading nation in 2013, overtaking the US in what Beijing described as "a landmark milestone" for the country.
China's annual trade in goods passed the $4tn (£2.4tn) mark for the first time last year according to official data, after exports from the world's second largest economy rose 7.9% to $2.21tn and imports rose 7.3% to $1.95tn. As a result total trade rose 7.6% over the year to $4.16tn.
The US is yet to publish its 2013 trade figures, but with trade totalling $3.5tn in the first 11 months of the year, it is unlikely to beat China. The shift in the trading pecking order reflected China's rising global dominance, despite a slowdown in economic growth last year. [I remember some time ago I pointed out that the Chinese economy would soon become the #1 economy in the world; one reader took me to task on this prediction.]Two days later, this headline: Oil Prices Rise After Chinese Export Report
Oil prices rose Monday as China said exports in January surged, a sign that the global economy was gaining steam.
China said that exports jumped 37.7 percent -- more than double the rate in December -- to $150.7 billion. A rise in Chinese exports suggests consumer demand is rising as well, and that could expand consumption of gasoline, diesel and other fuels.
Original Post
Link here.
Although it's only expected to be temporary, China is now #2, behind the USA in terms of GDP.
Japan’s economy contracted for the first time in five quarters as exports slowed and government stimulus faded, a pullback projected to be temporary as demand from China and U.S. revives output this year.
Gross domestic product shrank an annualized 1.1 percent in the three months ended Dec. 31, following a revised 3.3 percent expansion in the previous quarter. The median forecast of 26 economists surveyed by Bloomberg News was for a 2 percent drop.That's a pretty significant miss by the economists: the forecast was a 2 percent drop; actual number was 3.3 percent. (1.3 represents 65 percent of 2.0 --- they were off by 65 percent.) [If your plane trip was expected to be two hours, but it took 3 and a third hours, the trip was 65 percent longer than planned.]
It's only a matter of time before China holds the number 2 slot "permanently." If China and Japan are this close now, it's just a matter of time before China beats Japan on a regular basis.
The "contest" for GDP ranking between Japan and China reminds me of the race for the #1 ranking in market cap between XOM and AAPL.
It should be noted that, sort of on a related note, GM sold more cars in China than the US last year (2010) which is a first for GM -- selling more cars in China than the US in one year.
FAQ: "160-Acre Spaced Wells" and "320-Acre Spaced Wells"
Update
The NDIC sets the "spacing" for oil wells in North Dakota. The NDIC schedules hearings on a monthly basis to meet with oil companies and others to set policy, regulations, issue permits, etc., with regard to the oil patch.
One of the issues the NDIC deals with is the "spacing" for oil wells. "Spacing" can be different for oil fields and for different formations.
Generally speaking, Bakken formation spacing has been 640-acre and 1280-acre spacing. In the early days, the spacing was generally 640 acres, but gradually the spacing has increased to 1280 acres. It is my understanding that Bakken spacing is now set for 1280 acres unless otherwise specified.
Regardless of where the well is placed in that 640-acre or 1280-acre spacing unit, anyone who owns mineral rights in that spacing unit shares in the royalties of oil taken from that spacing unit.
More than one well can be placed within a spacing unit. Again, in the early days, generally one well was spud in one spacing unit. If the well was productive, that well "held the lease by production." Not only did the producing well negate the need to re-negotiate the lease on a regular basis (as long as the well produces, the lease remains in effect), but it also held the spacing unit for future drilling. Over time the number of wells being permitted in a spacing unit has increased from one well to as many as eight wells in one 1280-acre spacing unit. [Update: September 03, 2011 -- companies are now requesting as many as 7 wells in 640-acre spacing.]
In cases where the oil field is particularly productive, the spacing has been brought down to 320-acre spacing, and I have even seen 160-acre spacing for the Bakken.
Vertical wells into the Madison and the Spearfish may more likely be 40-acre spacing.
Spacing does not mean that there are wells are actually sitting 640 acres or 1280 acres from each other. Several wells can be placed right next to each other; all of them will be governed by the 640-acre or 1280-acre spacing rules.
Original and Earlier Posts on Spacing
Disclaimer: I believe the information below is still correct, but I included an update above to say it a bit differently. It can be a difficult concept to understand.
The Q & A was in the comments to another post, but I doubt many folks read the comments.
So, as a rough draft, I will "cut and paste" what I wrote, and then edit it if it is incorrect or confusing.
This was my answer to the question regarding "160-acre spacing" and "320-acre spacing."
In addition to this stand-alone post, this site also has a very extensive frequently-asked-questions post (FAQ). It's one of the tabs at the top of the blog.
******
"160-acre spacing" and "320-acre spacing"
One comment before starting: there's a difference between the spacing units the state defines and the spacing of wells, if I understand it correctly.
Until recently, the standard spacing unit in North Dakota was 640 acres; in 2010/2009 (I forget exactly which year), NDIC set the standard at 1280-acre spacing units. Unless specified otherwise, producers can assume new oil fields or additions/extensions to existing fields will have 1280-acre spacing.
That means when a well is placed in a 1280-acre unit, any mineral owner in that 1280-acres shares in the oil royalties produced by that well.
However, with permission from the NDIC, a producer can put one, two, three or more wells on that 1280-acre unit. The producer has to convince the state (NDIC) that the well will be financially viable. (They don't want a lot of wells for no reason; of course, the producers want to minimize expenses also).
The terminology gets confusing when multiple wells are placed on one spacing unit. Over time, reporters are becoming more consistent. The state determines the spacing unit, e.g., 640- or 1280-acre spacing. That does not mean that only one well can go in that spacing. With agreement between operators and the state any number of wells can be placed on a single spacing unit.
If there is one well on a 1280-acre spacing unit, anyone who owns any acres in that spacing unit will share part of the royalties generated by that one well. If two wells are placed in that unit, anyone who owns any acres in that spacing unit will share royalties from those two wells. Even though there are two wells on that 1280-acre spacing unit, one does not say the wells have 640-acre spacing. The wells themselves, no matter how many on that spacing unit, are paying royalties to mineral rights owners based on 1280-acre spacing. Over time, the state could chance the spacing unit to a different size.
To repeat: for the mineral owners inside a 1280-acre unit, the mineral owners will share royalties from however many wells are placed in that unit.
In the "old days," vertical wells were often sited on 40-acre spacing units.
For the operators of the wells in that unit, they will recover their costs per well based on the percent they have in that well.
Whiting's Sanish Field Development Plan (SPDF) will have additional wrinkles for mineral owners because some of those laterals extend slightly past section lines. [The Whiting Sanish Field Development Plan can be found in slide 33 of this presentation. The link may change over time, but the presentation will probably include this plan on one of its slides for quite some time.]
In their SPDF, note that Whiting will put in as many as seven (4 Bakken and 3 TF) wells in some 1280-acre units.
Voyager Oil and Gas --> Emerald Oil (EOX)
General Information
Earnings are reported at separate sites. Look for "earnings" at the sidebar at the right.
NEWS
June 30, 2015: Mike Filloon's update on Emerald;
March 17, 2014: Mike Filloon's update on Emerald; still bullish but concerned about slickwater frack costs; concerned about company's liquidity as it transitions to operator status.
February 16, 2014: Mike Filloon is very bullish on Emerald.
November 24, 2013: Emerald was very active in the December, 2013, hearing dockets.
June 25, 2013: operations update; a fantastic well; 2-rig program now (up from 1 a while ago)
February 5, 2013: Emerald signs with private equity firm in New York; also data points regarding Montana acreage.
January 8, 2013: Emerald will sell Colorado acreage; focus on its 48,800 net acres in the Bakken.
September 25, 2012: Emerald Oil (EOX) prices public offering of 93.75 mln shares of its common stock to the public at $0.80 per share. From Yahoo!In-Play. July 12, 2012: VOG to acquire Emerald Oil; to operate under Emerald Oil name and ticker symbol EOX.
April 15, 2012: Operational update.
May 26, 2011: Update.
In 2011 Voyager has acquired 4,123 net mineral acres at an average price of $1,239 per acre in the Williston Basin targeting the Bakken and Three Forks formations.March 2, 2011: Update.
Voyager controls approximately 28,000 net acres targeting the Bakken and Three Forks as of May 15, 2011. We anticipate that the industry will eventually drill as many as six wells per 1,280 acre unit which would equate up to 131 net wells on our current leasehold. Most of the newly acquired acreage is located in Richland County, Montana where Brigham Exploration announced the Johnson 30-19 #1H discovery.
The Johnson well was reported to produce 2,962 barrels of oil equivalent "BOE" during its early 24-hour peak flow back period.
February 8, 2011: raises $50 million cash to acquire acreage, execute drilling program.
October, 2010: Provides operational update, October, 2010.
Some Initial Thoughts on Unitization and Enhanced Oil Recovery in the Bakken, North Dakota, USA
I have noticed a trend towards increased density wells, infill wells, and references to 160-acre spacing in the North Dakota Bakken in multiple sources: NDIC hearing dockets, corporate presentations, and investment blogs. [I started seeing an increase in infill well permits in the March, 2011, NDIC hearing docket, but they really started to pick up in the April, 2011, docket. There are now requests to put as many as thirteen wells in one 1280-acre spacing, and as many as six wells in one 640-acre spacing unit.]
When the number of wells begins to saturate a field, folks will start talking about "unitization," which Schlumberger defines as the combining of multiple wells to produce from a specified reservoir.
Others associate unitization with enhanced oil production (maybe that is implied in the Schlumberger definition). "Unitization is similar to pooling, but it occurs when producer(s) are ready to use enhanced oil recovery to maximize production from a common reservoir. Sixty percent of royalty owners (weighted) must agree to unitization before the NDIC will authorize it." One can find requests for unitization in non-Bakken formations in North Dakota in the hearing dockets.
Terms associated with "unitization" include pressure maintenance, secondary recovery, and tertiary or enhanced oil recovery (EOR). Wikipedia has a nice overview. It is interesting to note the differences in definitions of these terms at the various sites. Those sites will take you to discussions of waterflooding and enhanced oil recovery (particularly the use of CO2 to increase oil production) Denbury is one of the leaders in EOR; it bought Encore (back in 2009/2010) which is active in North Dakota.
Because of the nature of the geology of the North Dakota Bakken, there are folks that argue the ND Bakken is not amenable to waterflooding or enhanced oil recovery. That is yet to be determined. Theoretical articles support the contention that unitization won't work in the ND Bakken, but theoretical arguments several years ago also suggested that the ND Bakken was not economically viable.
Farther west, in the Alberta Basin Bakken, "they" have begun exploring enhanced oil recovery techniques. Specifically, Crescent Point is looking to use enhanced oil recovery techniques in the Alberta Bakken.
As noted above, some argue that waterflooding won't work in "tight formations" like the Alberta Bakken or the North Dakota Bakken. Experts acknowledge that but Crescent Point is going to try.
For now, in the North Dakota Bakken, we're going to see increasing emphasis on infill / increased density wells. Take a look at what Whiting is doing in the Sanish. Look at BEXP's February corporate presentation with a relatively new wrinkle: increased emphasis on infill wells in their Ross Prospect and their Rough Rider Prospect (slides 16 and 18). Producers talk of "pilot" wells to see if spacing units can support additional wells.
EOG's #16713, Austin 1-02H: EOG requested and was given permission to test CO2 injection back in 2008.
Background of Austin 1-02H
When the number of wells begins to saturate a field, folks will start talking about "unitization," which Schlumberger defines as the combining of multiple wells to produce from a specified reservoir.
Others associate unitization with enhanced oil production (maybe that is implied in the Schlumberger definition). "Unitization is similar to pooling, but it occurs when producer(s) are ready to use enhanced oil recovery to maximize production from a common reservoir. Sixty percent of royalty owners (weighted) must agree to unitization before the NDIC will authorize it." One can find requests for unitization in non-Bakken formations in North Dakota in the hearing dockets.
Terms associated with "unitization" include pressure maintenance, secondary recovery, and tertiary or enhanced oil recovery (EOR). Wikipedia has a nice overview. It is interesting to note the differences in definitions of these terms at the various sites. Those sites will take you to discussions of waterflooding and enhanced oil recovery (particularly the use of CO2 to increase oil production) Denbury is one of the leaders in EOR; it bought Encore (back in 2009/2010) which is active in North Dakota.
Because of the nature of the geology of the North Dakota Bakken, there are folks that argue the ND Bakken is not amenable to waterflooding or enhanced oil recovery. That is yet to be determined. Theoretical articles support the contention that unitization won't work in the ND Bakken, but theoretical arguments several years ago also suggested that the ND Bakken was not economically viable.
Farther west, in the Alberta Basin Bakken, "they" have begun exploring enhanced oil recovery techniques. Specifically, Crescent Point is looking to use enhanced oil recovery techniques in the Alberta Bakken.
Having locked up a dominant land position in both the [Alberta] Bakken and Lower Shaunavon plays in Saskatchewan, Crescent Point Energy Corp. hopes to more than double its reserves with further exploitation and enhanced recovery.The company believes it could more than double their current reserves over the next three to five years, just through infill drilling, waterflood implementation and production optimization. EOR and production optimization could provide an additional 5,000 drilling locations and the potential to add over 500 million bbls of reserves. [This section corrected April 3, 2011; see comment section.]
[According to its CEO], Crescent Point is well positioned to further exploit two of Western Canada's hottest plays.
As noted above, some argue that waterflooding won't work in "tight formations" like the Alberta Bakken or the North Dakota Bakken. Experts acknowledge that but Crescent Point is going to try.
For now, in the North Dakota Bakken, we're going to see increasing emphasis on infill / increased density wells. Take a look at what Whiting is doing in the Sanish. Look at BEXP's February corporate presentation with a relatively new wrinkle: increased emphasis on infill wells in their Ross Prospect and their Rough Rider Prospect (slides 16 and 18). Producers talk of "pilot" wells to see if spacing units can support additional wells.
******
Connecting some dots regarding CO2 injection in the North Dakota Bakken.
EOG's #16713, Austin 1-02H: EOG requested and was given permission to test CO2 injection back in 2008.
Background of Austin 1-02H
- Short lateral in the prolific Parshall oil field, section 2-T154N-R90W
- Spudded December 13, 2007
- IP: 781 bbls
- A monster well, as many are in the Parshall: > 222K in first 10 months, prior to CO2 injection
- CO2 injected for 11 days; half in September; half in October
- Wells monitored in the immediate 2-mile radius to see if CO2 was breaking through (communicating) with other wells; CO2 was detected in one well a mile away; not immediately detected at two other wells about same distance away.
- I found it interesting that one of the wells where CO2 was not detected, had a significant increase in monthly production following the injection; it may have just been coincidence (Bruhn 1-12H, #17128, a non-EOG well).
- To date: this well has produced a total of 416K bbls of oil; most recently it is producing 4,000 to 5,000 bbls/month
******
Investors: Possibility of Mergers in Oil Service Sector
SeekingAlpha had a short list of potential candidates that might be involved in mergers, some being acquired, some doing the acquiring.
The list is at this link.
I recognize three or four companies on this list as having a presence in the Bakken.
One name that jumps out at me on that list is Helmerich & Payne. I've mentioned them once or twice before on this blog. They manufacture some of the rigs being used in North Dakota, including the FlexRig. Investors might want to revisit this link.
The list is at this link.
I recognize three or four companies on this list as having a presence in the Bakken.
One name that jumps out at me on that list is Helmerich & Payne. I've mentioned them once or twice before on this blog. They manufacture some of the rigs being used in North Dakota, including the FlexRig. Investors might want to revisit this link.