Rigzone: Despite Tough Winter, North Dakota Still Setting Records

Rigzone is not saying anything we don't already know, but it's nice to see Rigzone printing the story.

Highlights of the story, taken from the Director's Cut:

• North Dakota State University study completed in January: every well in the state has a $3 million impact on the state's economy as the dollars flow through the state
• Ergo, 5,332 wells produce about $16 billion in "total business volume" -- of course that's over time; most of those wells were drilled years ago
• The NDSU study estimates the oil and gas industry had a total business volume of $13 billion in North Dakota for the year 2010
• State spokesman said most drilling targets Bakken/Three Forks in northwestern part of the state, but drilling is picking up in the southwest, south of Dickinson
• Even South Dakota is seeing some exploratory activity
• Fracking was mentioned as the chokepoint
• January, 2011: a record 5,332 producing wells; compare with 4,190 a year earlier

Where is Teddy Roosevelt When We Need Him?

Well, isn't this hunky dory?

• Alaska pipeline running under capacity ... any less, the pipeline will have to shut down ...
• BP and Shell both deferring any more drilling off Alaska ...
• "Permitorium" continues in the Gulf of Mexico ...
• EPA regulations hanging over domestic drilling ... like the sword of Damocles ...
• Libya's flow of oil hanging in the balance ...

What an opportunity for a someone to step forward and lead America!

I wonder what Teddy Roosevelt would do if he were still around today?

What will it take to get Washington's attention that the nation's energy program is on the wrong trajectory?

Minor Changes In Names of MRO's Prospects in the Bakken

In the most recent MRO presentation (accessed February 21, 2011), MRO has made some minor changes to its Bakken prospects.

First, MRO's net acreage in the Bakken has increased from 380,000 to 391,000 net acres

Second, there are some minor changes in the names, and additions/deletions of MRO's prospects in the Bakken.

These are MRO's current prospects in the Bakken:

• Cazador: just north of the reservation in the Nesson anticline
• Myrmidon: northwest corner of the reservation
• Hector: eastern area of Marfa, just outside of the reservation, Dunn County
• Ajax: continuation of Marfa, southwest of Marfa, Dunn County
• Paris: west of Marfa, in Williams County, about same size as Ajax
• Diomedes: northwest Williams and eastern Montana (Sheridan County) (new)
  
• Menelaus: very small prospect in west central McKenzie (new)
• Aeneas: northwest corner of McLean, east of river (new)
• Helen: very small, scattered acres north of Hector (new)
  
• Elk Creek: very small, scattered acres west of Helen (new)
  

These prospects no longer show up in the presentation:

• Odysseus: north, Divide County
• Cassandra: east of Williston
• Marfa: MRO's largest area; southwest of the reservation; borders the reservation, Dunn County 
• Blacktail: very, very small area west of Ajax

Update on Three Monster Wells in the Sanish -- Bakken, North Dakota, USA

This is why I remain excited about the Bakken.

Take a look at sections 25 and 36 in T154N-R91W in the Sanish oil field. (These two sections adjoin each other, north/south.)

This township is "owned" by Murrex and Whiting.

In section 36, one short lateral, #16839, spudded back in late 2007.

In section 25, there are two wells. #18408 is an extended short lateral (a slightly longer short lateral but not a full long lateral), extending into section 36; and, #17263, a long lateral, sections 25 and 36.

16839, 864, Jacob Daniel 25-36H-RE, was originally spudded in October, 2007. It continued to produce approximately 9,000 bbls/month when the decision was made to re-enter the well in 2009. As of 5/13, this short lateral has produced 424K bbls of oil (at $50/bbl = $17.5 million at the wellhead).

17263, 3,124, Chandler James 25-36H, was spudded July 4, 2008. Production was volatile the last six months of 2010, but is now producing upwards of 15K/month. As of 5/13, this long lateral has produced a total of 944K bbls (at $50/bbl = $37 million).

18408, 1,945, Amber Renee 25-36H, was spudded December 21, 2009. It still is producing 30- to 35,000 bbls/months. As of 5/13, Amber Renee had produced 777K bbls of oil (at $50/bbl = $24 million).

All three wells are Murex wells.

******

Update on several other monster wells. In black bold is the total amount of oil produced as of January 1, 2012.

• 17092, Behr 11-34H, Whiting, 3,027, Sanish, 919K bbls.
• 17222, Austin 18-21H, EOG, 1,769, Parshall, 797K bbls.
• 17227, Austin 21-28H, EOG, 3, 292, Parshall, 860K bbls. 
• 16954, Austin 6-15H, EOG, 3,633, Parshall, 707K bbls.
• 17263, Chandler James 25-36H, Murex, 3,124, Sanish, 944K bbls.
• 16059, USA 2D-3-1H, PetroHunt, see Charlson Field update for this, the most successful well to date in the current boom, 1,358K bbls (over the one million mark). Be sure to read the comment at this post.

Permits in the 17XXX series were spudded in 2008. One has to assume the wells are only getting better, all things being equal.

*****

Mineral rights and royalties

Take another look at the three wells mentioned above in sections 25 and 36, T154N-R91W.

I assume that with 1280-acre spacing, anyone who has mineral rights in any of those two sections participates in royalties from a long lateral that is in both sections.

However,  and this is very interesting, I would assume that has to also be true for a short lateral in a 1280-acre spacing unit. So, even though #16839, the Jacob Daniel is only a short lateral, because it's in a 1280-acre spacing unit, folks who have mineral acres in section 25 will participate in royalties, even though the short lateral is only in section 36. I suppose it's possible, that when the lateral is so obviously in only section, there may be an exception.

But with horizontals, it seems the spacing unit determines who participates in royalties. This is very important when one looks at the way Whiting is laying down up to seven horizontals in two sections.

A Big Shout Out and A Collective Thank You To All Those Who Have Visited This Site

Over 500,000 page views since the beginning.

Thank you.

I started the blog about three years ago. I was not happy with the original blog and deleted the entire blog, losing some nice posts in the process.

This blog has been up a little more than one full year. It seems much longer. The first posting is dated October 24, 2009.

North Dakota Wind Farm To Expand

Minnesota Power plans to increase the capacity of of its Bison Wind Farm by 105 megawatts. The wind farm is being constructed in two stages, Bison 1 and Bison 2.

The wind farm capacity will be approximately 185 megawatts with this increase.

The wind farm is on the border of Morton and Oliver counties.

Bison 1 is a 31-turbine project. The first 16 turbines were 2.3 megawatt; the last 15 turbines will be 3-megawatt turbines and will be up by the end of the year.

Bison 2 will be a 35-wind turbine project, all 3-megawatt turbines.

A spokesman said that the 3-megawatt turbines will mean twice the capacity in half the footprint.

Update on Clash Over Water Fees for Missouri River

The public comments period was closed February 1, 2011. The period had been extended for 15 days, receiving comments from more than 70 tribes, federal, state and local agencies.

The US Army Corps of Engineers wants to charge a fee for taking water from the Missouri River.

There has never been a precedent for this charge according to Senator John Hoeven (previously the governor of North Dakota).

"The Missouri River shall forever be the property of the state of North Dakota and our water users must have access without cost and without the requirement of surplus water agreements. The U.S. Army Corps of Engineers is attempting to achieve monetary gain where none is justified," governor Jack Dalrymple said. Corps Project Manager Larry Janis said a review of public comment received is still ongoing.

The Corps proposes a fee of $20.91 per acre foot of water.

It should be noted that the Corps has said it can release 100,000 acre feet of water for fracking. It should also be noted that the Missouri River is 100,000 acre feet above the flood stage plan.

Environmentalists Release Impact Statement for the Keystone XL

Updates

February 28, 2011: Alberta's Energy Resources Conservation Board (ERCB) has responded to the "Tar Sands Pipeline Safety Risks" discussed below. As expected, the response has data to question the conclusions drawn by the National Resources Defense Council, et al. But then, I doubt science has much to do with this.

Original Post

A few weeks ago I posted links to articles suggesting that Texas refiners and environmentalists have joined together to stop construction of TransCanada's Keystone XL pipeline.

We now see "tangible" evidence of how opponents of the Keystone XL pipeline will proceed.

The Natural Resources Defense Council, Pipeline Safety Trust, National Wildlife Federation, and Sierra Club, issued a report ‘Tar Sands Pipeline Safety Risks’ highlighting what the organizations call an increased risk of pipeline spills due to the elevated corrosivity of oil sands crude.

The report describes how oil sands crude differs in chemical composition from other petroleum and the difficulty that this poses both in transportation and in cleanup when spills occur. 

The article goes on to describe why heavy sands oil is more corrosive; to report that refiners are finding quartz sand particles in the oil; and, to state that the Canadian system has had more problems than the US pipeline system.

The crude pipeline system in Alberta, which is newer but carries more tar sands oil than that in the US, has experienced 16 times more safety incidences due to internal corrosion than the US system, which the report describes as a strong indicator of the corrosive nature of raw tar sands oil.

Before TransCanada can bring the Keystone XL pipeline into the US, the Secretary of State must sign off on it. Comments in the press suggests she leans toward supporting it, as does President Obama. This report will make it much more difficult, at least in my opinion, and will certainly result in delays.