More Evidence of Global Warming

Or not.

San Jose hit 33 degrees for the first time on this date since 1897. Downtown San Francisco registered 37 degrees, which hadn't happened since 1952, while San Francisco International Airport reported 36 degrees for the first time since 1971.
Help, the Beatles

"Unusual" cold expected for Hollywood Oscar celebration attendees.

I can't make this stuff up. 

For Conservative Investors: 11 Commodity Stocks Paying Nice Dividends

Link here.

SCCO, COP, XOM, MRO, SUG, WMB, IP, CVX, CMC, NUE, and OGE.

Week 8: February 19 -- February 25, 2011

Memo to Jim Cramer: North Dakota is Sioux Country

What the March Hearing Dockets Tell Us About the Bakken

NOG Added to the S&P MidCap 400

BEXP Quadruples Net Income; Quintuples Earnings -- 4Q10

BEXP Announces Smart Pad Concept

BEXP Will Double Operated Rigs In Less Than 18 Months

BEXP Now Pumping Water From the Missouri For Fracking

UPS To Build Natural Gas Corridor From Los Angeles to Las Vegas to Salt Lake City

Truck Traffic To Triple Over Next Three Years on the Reservation

Minor Name Changes in MRO's Prospects in North Dakota

North Dakota Wind Farm to Expand

Update on Clash Over Water Fees for Missouri River Water

Continental Resources (CLR) Up to Seven Wells on One 640-Acre Spacing Unit

Update on Anschutz Activity in Dunn County

Dawson Geophysical: Another Investment Opportunity

Explanation Why EOG Shares Are Soaring

Now A Best Western Motel for Williston

Exactly What Does the US Mean When It Calls for High-Speed Rail? 60 MPH

Updates

March 23, 2011: Another example of high-speed rail in the US. $461 million cut travel time from Charlotte and Raleigh, North Carolina, by 13 minutes.

Original Post

These are the data points for the administration's "Sputnik moment," a high-speed train between the two Wisconsin cities: Madison and Milwaukee.

• Currently there is no passenger service between these two cities
• Bus fare costs $20/ticket
• High speed train fare: $30 (with $70/ticket subsidy paid with state taxes) = $100/ticket
• In 2013, if built, the train would average 57 mph
• By 2020, if built, the train would average 60 mph
• By 2022, if built, the train would average the same, 60 mph
• Cost of project (Madison to Milwaukee): $785 million; with inflation, $800 million
• Studies: 32 percent ridership on new trains (2013) -- not exactly overwhelming support; most prefer to stick with bus; easier access points, and gets them closer to their homes
• Likely operator: Amtrak -- noted for its on-time service 
• Biggest reason promoters advocate the "high-speed" train: if the state doesn't take the federal money, it (the money, not the train) will go to Florida.

Miscellaneous quotes from the article:

• "High-speed rail is slower than flying, is less convenient than driving and five times more expensive than either one." 
• "But if it's not really high-speed, it's just a name they're putting to it."

I can't make this stuff up.

"Let Them Eat Cake" -- Spokesman

No date set for deep water drilling permits for the Gulf of Mexico, according to administration spokesman.

U.S. crude oil futures posted their highest weekly settlement in almost 2-1/2 years on Friday on supply disruptions due to the revolt in Libya.

U.S. Secretary of the Interior Ken Salazar told reporters the situation in Libya was "not changing at all what we do" and the government felt no pressure to hurry its permitting process.

Let them eat cake.

Another Great Source of Bakken Information: the Bakken Oil Blog

I was checking out Google now that it has changed its algorithms, and I am pleasantly surprised.

In the process I ran across the Bakken Oil blog again. It is, in fact, the first "real" hit on Google with the new algorithm when searching for "Bakken oil." That's pretty impressive.

As far as I can tell, that blog is also free of advertisements.

The site directed me to "Spare Capacity Theory" which puts things into perspective.

Whiting Trivia For the Day -- Bakken, North Dakota, USA

For those of you who will be going out tonight and need something to talk about during the cocktail hour, you might note that Whiting controls 580,000 net acres in the Williston Basin (think Bakken and Three Forks, for now). That acreage cost Whiting $141 million.

Sounds like a lot.

Yup. $243/net acre.

This will also work for those going to breakfast at the Williston Econmart this morning, but generally those discussions are limited to sports. 

Whiting's Lewis and Clark Prospect -- Three Forks, North Dakota, USA

On October 31, 2010, I posted a blog about a "flurry of activity" in the Belfield, North Dakota, area.

That flurry of activity started with the first and only set of traffic lights in the city of Belfield. When traffic lights cost a million dollars to install, small towns don't take these installations lightly.

Today, that "flurry of activity" and that first set of traffic lights has a name: the Lewis and Clark prospect. WLL's most recent corporate presentation sheds light on this prospect:

• Its objective is the Three Forks formation
• It consists of 360K gross/235K net acres; 164 1280-acre units
• 12 wells in 2010; 46 in 2011
• $280 million CAPEX in 2011

From the 4Q10, earnings call:

• Based on Whiting’s evaluations, we believe there has been partial pressure depletion from Upper Bakken Shale wells drilled in this area in the 1980s and 1990s. We believe that approximately 2% of our acreage at Lewis & Clark could potentially be affected.
• Whiting completed the Teddy 44-13H with an initial production rate of 381 BOE per day from the Three Forks. We believe that this well frac’d into a water-bearing zone. The company will modify its frac design for future wells drilled in this area.
• Also of note, our Federal 32-4H discovery well produced a total of 66,300 BOE during its first six months of production, which ended May 25, 2010. Although this is a Three Forks well, it would rank the well among the top 15% of all Bakken wells drilled in North Dakota in terms of first six months total production based on information from the North Dakota Industrial Commission.
• Whiting recently broke ground for the construction of a gas processing plant at Lewis & Clark. The Belfield Gas Plant, located near Belfield, North Dakota, will have an initial inlet capacity of 30 MMcf of gas per day and is expected to be completed in November 2011. To reduce the volume of gas being flared in the Lewis & Clark area, we are in the process of installing equipment to compress the natural gas into vessels that can be trucked to the nearest gas plant. Our Belfield plant will have the capability to accept trucked gas. 

For newbies: the Williston Basin extends into South Dakota, but the Bakken Pool only extends as far south as southwestern North Dakota. The Bakken Pool includes the Bakken formation and the Three Forks formation. I don't know who called it first, but someone (either WLL or CLR; I think it was WLL) noted that there was a "pinchout" of the Three Forks in southwestern North Dakota, near Belfield. The "pinchout'" is an area where the Three Forks formation has "pinched out" farther south than the Bakken, and that's where WLL is now concentrating with the Lewis and Clark prospect.

In addition, just across a geologic line, southwest to the Lewis and Clark prospect, is Whiting's "Big Island" prospect. This is a lot smaller in terms of net acres for WLL. Right now, WLL's corporate presentation is vague on the "Big Island." WLL says there are "multiple objectives" for the "Big Island; WLL will drill just one well in this prospect in 2011, with a CAPEX of $4 million. A horizontal well costs $8 million, so a $4 million CAPEX on one well suggests a vertical. Maybe they are targeting the Lodgepole.

That "Over-Supply" Issue at Cushing

For a perspective, here's the numerical data.

And here it is in graphic form.

It doesn't take much loss of production to move the needle down.

An Unedited Saturday Morning Letter (Okay, Minor Edits) -- Bakken, North Dakota, USA

This may be a bit "unprofessional" -- but that's the way blogs are supposed to be -- posting on the run. So maybe I will clean this up later, but for now, this is a "cut and paste" of something I shared with two other folks earlier this morning. But the BEXP conference call has really excited me and I want to be sure everyone gets a chance to look at it.

Quick Note Regarding the 4Q10 BEXP Earnings Conference Call

I don't think one can find anyone more excited about the Bakken than I am, but I have to admit that the BEXP presentation (earnings conference call) is incredible. BEXP has really raised the bar. I think that's the longest, most detailed conference call I have ever seen.

I don't know if I want to do it, but I might wade through it and put data points of everything that was mentioned.

I can't even begin to say what was most interesting.

But, as a start, I will say this: I said some time ago that everyone was focused on the Bakken formation, but that's just a start. It's really the other formations that will be the big story before this is all over in this sense: the producers will have sunk wells everywhere in the Williston Basin, holding leases by production. Then they will go back in (re-frack the older Bakken wells, of course) and then go after the other formations. BEXP said as much.

[By the way, Slawson is already doing this. See NDIC March hearing dockets case 14386: Slawson wants to go back into Ambush 1-31-30H and open a portion of the vertical section of the well to the Lodgepole Formation in Williams County.]

They mentioned one that the stenographer did not catch (Miscu [ph] Dubro [ph] -- That's the "Nisku-Duperow."  As you mentioned some time ago to me, the Nisku is the Birdbear. The Birdbear-Duperow sit just beneath the Bakken/Three Forks.  [The Birdbear is NOT new. I posted about the Birdbear in February, 2010, linking articles back to 2009.]

Then they mentioned the Tyler/Heath which got a lot of press back in October, 2010.  And, of course the Lodgepole, which MRO is now asking for proper spacing for in Murphy Creek, Dunn County, case 14304, NDIC March hearing dockets.

So this drilling is going to go on and on and on.

Some of these formations are shale that will require horizontal/fracturing, but in the old days they had vertical wells going into reservoirs, so I don't know if we are going to see more conventional wells or not. 

These other formations are important because it brings up the issue of EOR. Some formations are more amenable to EOR than others.

One other note. BEXP addressed the issue of whether too many wells (four or five) on a spacing unit might start to impact production from neighboring wells (overlap).  BEXP says that's fine. They are considering putting in just enough wells to start to see that impact -- if not, they would be leaving oil in the ground.

More later, but I was really, really impressed with that presentation.