For those who missed it or want to see it again, here's the link to Jim Cramer's interview with Senator John Hoeven.
If the link is broken, there is nothing new there that is not already know to regular followers of the Bakken.
Oil.
Wind.
Common sense.
North Dakota has an abundance of all three.
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Monday, February 28, 2011
First Deepwater Drilling Permit Since the Gulf Spill
Updates
March 1, 2011: a "talking head" on CNBC today opined that this first permit was "political." He warned investors not to get excited about deep water drilling in the Gulf. He expects the next permit won't be issue for quite some time. In addition, I don't expect BP and others to rush back in.
Original Post
Rigzone is reporting that the first deep water drilling permit has been issued for drilling in the Gulf of Mexico since drilling was suspended on June 12, 2010 following the blowout/spill.
I am very happy to see that this may be the beginning of a return to a normal economy in Louisiana. Let's hope so. Those folks have been through a lot.
Good luck to all. That's a cliche. I know "luck" has very little to do with. Godspeed? May the force be with you.
Australia, Wyoming, and Enhanced Oil Recovery -- Denbury
Before reading the rest of this post, you may want to review coal beneficiation, above-ground coal gassification, and below-ground gassification.
Although this story pertains to an event in Wyoming, it is relevant to the energy story in North Dakota.
An Australian company has bought three oil fields in Wyoming. These are old fields but may give up more oil with enhanced oil recovery (EOR), i.e., flooding the reservoirs with carbon dioxide.
Linc Energy Limited, an Australian firm has plans to conduct underground coal gassification in the Powder River Basin. Carbon dioxide is a byproduct of the gassification process and will be used for EOR in these Wyoming oil fields.
An American company most associated with EOR (at least in my mind) is Denbury. Denbury recently entered the Bakken in a big way by acquiring Encore.
Denbury Promotional Presentation on EOR
Although this story pertains to an event in Wyoming, it is relevant to the energy story in North Dakota.
An Australian company has bought three oil fields in Wyoming. These are old fields but may give up more oil with enhanced oil recovery (EOR), i.e., flooding the reservoirs with carbon dioxide.
Linc Energy Limited, an Australian firm has plans to conduct underground coal gassification in the Powder River Basin. Carbon dioxide is a byproduct of the gassification process and will be used for EOR in these Wyoming oil fields.
An American company most associated with EOR (at least in my mind) is Denbury. Denbury recently entered the Bakken in a big way by acquiring Encore.
How "GOOD" Is the Bakken? Very, Very Good -- Bakken, North Dakota, USA
In 2009, North Dakota produced 80 million barrels of oil.
In 2010, North Dakota produced 113 million barrels of oil. That represents an increase of more than 40 percent.
In 2010, North Dakota produced 113 million barrels of oil. That represents an increase of more than 40 percent.
The state set production records almost monthly in 2010, jumping from an average of 236,200 barrels daily in January to nearly 343,900 in December. A record 356,505 barrels a day was pumped in November, with nearly 10.7 million barrels produced for the month, state documents show.One year ago there were 94 rigs drilling in the state. There are now as many as 172 rigs drilling in the state.
BEXP: Microseismic Data Support Eight Wells In One 1280-Acre Spacing Unit -- Bakken, North Dakota, USA
This has been reported earlier, but some folks may have missed it: BEXP's micro-seismic data shows that one 1280-acre unit will support eight (8) horizontal wells, a combination of Bakken formation and Three Forks formation wells.
Microseismic data accumulated during the Brad Olson 9-16 2H well fracture stimulation indicates that frac wings appear to extend laterally 500 ft on either side of the wellbore. The results imply an increase to 782 total net locations from 590 in the Ross-Parshall-Austin and Rough Rider project areas, according to BEXP.
Speaking of Electric Vehicles ...
Update
June 9, 2012: The verdict is in (again): it makes little sense to buy a hybrid based on an LA Times analysis. They are less fun to drive; significantly slower; less storage space. Counter-intuitive: the hybrid Prius is noisier than its all-gasoline counterpart, the Camry. At $4.00/gallon it takes about five years to start realizing savings. If you bother to read the article, note one glaring omission: if batteries wear out, and if so, when they need to be replaced and at what cost? As far as I know, all batteries eventually need to be replaced.
February 28, 2011: "Chevrolet Volt makes little economic sense," Consumer Reports.
Consumer Reports offered a harsh initial review of the Chevrolet Volt, questioning whether General Motors Co.'s flagship vehicle makes economic "sense."The extended-range plug-in electric vehicle is on the cover of the April issue — the influential magazine's annual survey of vehicles — but the GM vehicle comes in for criticism.
"When you are looking at purely dollars and cents, it doesn't really make a lot of sense. The Volt isn't particularly efficient as an electric vehicle and it's not particularly good as a gas vehicle either in terms of fuel economy," said David Champion, the senior director of Consumer Reports auto testing center at a meeting with reporters here. "This is going to be a tough sell to the average consumer."And that's only the beginning. It gets worse.
By the way, someone recently wrote in asking about batteries in electric vehicles and if severe weather (heat or cold) affected them. Consumer Reports pretty much put that question to rest: severe cold does affect the battery. Big time. I would assume that severe weather will also shorten the life of these $7,000 batteries. Re-sale value at three years? Hmmm.
Original Posting
.... has anyone seen any television commercials for the two coal-powered automobiles, the Chevrolet Volt or the Nissan Leaf?
Seriously.
It may just be me, watching the wrong channels, but I have not seen a television commercial for the Chevrolet Volt or the Nissan Leaf.
Some might say they are selling so well that advertising is not necessary, but if that were true, we would not see so many Apple iPad commercials either.
Just saying.
[Nissan sold 87 Leaves in January, 2011; up from 19 in December.
Chevrolet has delivered 647 Volts through January. The Volt was launched in November. Link here. The Prius, incidentally, dropped off the top 10 list in January, 2011.]
[As a reminder, for current EV's to be economical, oil has to cost between $174 and $250/bbl based on a year-long study by unbiased academic team.]
Ten (10) More Permits in North Dakota
Producers: CLR (3), Marathon (2), BEXP (2), G3 (2), and Whiting.
Fields: Reunion Bay, Banks, Sanish, Dollar Joe, Cabernet, Pembroke and two wildcats.
The two wildcats will be G3 wells on a single pad about 18 miles north-northwest of Williston.
Two BEXP wells will also be on a single pad in the Banks field. The Banks field is opposite the Stockyard Creek on the other side of the river (Banks is on the south side; Stockyard Creek is on the north side.)
[Inside the original post: "Interestingly enough, the company that first advocated multiple wells on one pad, received three new permits today but all three of CLR's new permits will be in different locations (different fields, for that matter)." See first comment below: CLR is concentrating on getting current lease activity tied up; according to recent earnings call, in two to three years, most of their rigs will be back on Eco-Pads.]
Whiting has another permit in its cash cow, the Sanish.
The state is on track for 1,819 new permits for calendar year 2011.
On today's daily active report, Slawson's Silencer 1-29H, reported an IP of 1,026 bopd. Burlington Resources' Phantom Ship 24-22H reported an IP of 1,885 bopd.
But this is what is most interesting: eleven wells were released from confidential status, but two were canceled permits. So, we're talking about nine wells. Of those nine wells, only three reported an IP. Six wells were completed; they reached total depth, but did not report any production. This tells me that they are still waiting to be fracked. If the well went on the confidential list the day it was spudded, and it reached total depth in 30 days, that means the folks have waited five months to get it fracked. Huge backlog for fracking. I haven't seen this in a long time (if ever), where six out of nine wells (2/3rds) are not reporting production at end of six months confidential status because they are waiting to be fracked.
Marginal players, under-capitalized companies, small producers, etc., are not going to be able to survive financially if they have to wait five months to get a well fracked that was otherwise completed in less than 30 days.
Fields: Reunion Bay, Banks, Sanish, Dollar Joe, Cabernet, Pembroke and two wildcats.
The two wildcats will be G3 wells on a single pad about 18 miles north-northwest of Williston.
Two BEXP wells will also be on a single pad in the Banks field. The Banks field is opposite the Stockyard Creek on the other side of the river (Banks is on the south side; Stockyard Creek is on the north side.)
[Inside the original post: "Interestingly enough, the company that first advocated multiple wells on one pad, received three new permits today but all three of CLR's new permits will be in different locations (different fields, for that matter)." See first comment below: CLR is concentrating on getting current lease activity tied up; according to recent earnings call, in two to three years, most of their rigs will be back on Eco-Pads.]
Whiting has another permit in its cash cow, the Sanish.
The state is on track for 1,819 new permits for calendar year 2011.
On today's daily active report, Slawson's Silencer 1-29H, reported an IP of 1,026 bopd. Burlington Resources' Phantom Ship 24-22H reported an IP of 1,885 bopd.
But this is what is most interesting: eleven wells were released from confidential status, but two were canceled permits. So, we're talking about nine wells. Of those nine wells, only three reported an IP. Six wells were completed; they reached total depth, but did not report any production. This tells me that they are still waiting to be fracked. If the well went on the confidential list the day it was spudded, and it reached total depth in 30 days, that means the folks have waited five months to get it fracked. Huge backlog for fracking. I haven't seen this in a long time (if ever), where six out of nine wells (2/3rds) are not reporting production at end of six months confidential status because they are waiting to be fracked.
Marginal players, under-capitalized companies, small producers, etc., are not going to be able to survive financially if they have to wait five months to get a well fracked that was otherwise completed in less than 30 days.
EOG: To Sell 14 Million New Shares -- Explains EOG's Share Price Drop Today
Link here.
EOG will offer up to 11.8 + 1.77 million new shares = 13.57 million shares.
Total outstanding shares right now: 254.08 million.
13.57/254.08 = 5.3%.
EOG is transitioning from natural gas company to oil company faster than any other natural gas company, according to some analysts.
Folks worried about dilution of earnings are missing the big picture.
14 million new shares when there are already 254 million shares out there: doesn't amount to a hill of beans, as they say, in the Bakken.
Issuing 5.3% more shares doesn't get may attention (except to report it). What gets my attention is when someone pays $17,000/mineral acre in the Bakken in North Dakota.
EOG will offer up to 11.8 + 1.77 million new shares = 13.57 million shares.
Total outstanding shares right now: 254.08 million.
13.57/254.08 = 5.3%.
EOG is transitioning from natural gas company to oil company faster than any other natural gas company, according to some analysts.
Folks worried about dilution of earnings are missing the big picture.
14 million new shares when there are already 254 million shares out there: doesn't amount to a hill of beans, as they say, in the Bakken.
Issuing 5.3% more shares doesn't get may attention (except to report it). What gets my attention is when someone pays $17,000/mineral acre in the Bakken in North Dakota.
Finally, Some Are Speaking Out: Too Much Regulation and Companies Will Go Elsewhere
March 1, 2011: Although he is no longer CEO of GE, he is still seen by a CEO by many. Jack Welch is now the second well-known CEO to go public regarding the Obama administration: President Obama's move to the center is all talk so far.
It has always been perplexing to me why CEOs have not been more vocal about government regulations and how they can negatively impact a company. (The most obvious reason CEOs don't talk about it is because they fear they will government contracts, I assume. Others don't want to get dragged into the political arena for any reason.)
Finally, a Fortune 500 company CEO is speaking out. I doubt he will be the last.
Transcocean (RIG) moved to Switzerland a couple of years ago. RIG is a deep-sea driller and last time I looked, not a lot of ocean-going activity anywhere near Switzerland.
3M is also in a state that is well-known for high taxes and cumbersome regulations. One of Minnesota's iconic companies has recently shifted its manufacturing plants to North Dakota. 3M probably took note.
Wow, wow, wow -- Obama Supports Letting States Opt Out of ObamaCare Earlier
Link here.
This is very, very interesting. If a new bill is passed, allowing this, expect a few other things to be added to the bill.
ObamaCare is starting to unravel. It goes without saying that almost any union or corporation that wants to opt out of the plan is being given a waiver. If unions, corporations, and, now, the states, can opt out, who's left?
This is very, very interesting. If a new bill is passed, allowing this, expect a few other things to be added to the bill.
ObamaCare is starting to unravel. It goes without saying that almost any union or corporation that wants to opt out of the plan is being given a waiver. If unions, corporations, and, now, the states, can opt out, who's left?
LINN Energy Enters The Bakken
Link here.
More to follow.
Recently I noted that with the huge backlog in fracking, undercapitalized E&P companies, or individuals / companies owning relatively small acreage, will probably realize that they will face a long delay in seeing their assets developed. Many will decide the wait is not worth it, and look to sell.
The backlog in fracking is very likely going to lead to accelerated consolidation in the Bakken, as well as larger, better capitalized companies buying in for the first time.
The backlog can result in a delay as long as six months for an otherwise completed well to be fracked. That's a lot of time to have one's money tied up in a $7 million Bakken well that is not producing at maximum rates.
More to follow.
The Company signed a definitive purchase agreement to acquire certain oil properties in the Bakken play from Concho Resources for a contract price of $196 million, subject to closing conditions.I was unable to find a recent summary of Concho Resources (CXO) holdings in the Bakken, but based on CXO's 2009 annual report, CXO had 11,193 net acres with 146 gross drilling locations. Cost / acre works out to: $196 million / 11,193 acres = $17,510. I am told by others that the price paid worked out to $16,500/acre. So, let's call it $17,000/acre. That would be the highest amount paid/acre in the Bakken that I am aware of; the previous record was $12,000/acre. Does it make sense? I'll post on that later. But, yes, it makes sense.
*******
Recently I noted that with the huge backlog in fracking, undercapitalized E&P companies, or individuals / companies owning relatively small acreage, will probably realize that they will face a long delay in seeing their assets developed. Many will decide the wait is not worth it, and look to sell.
The backlog in fracking is very likely going to lead to accelerated consolidation in the Bakken, as well as larger, better capitalized companies buying in for the first time.
The backlog can result in a delay as long as six months for an otherwise completed well to be fracked. That's a lot of time to have one's money tied up in a $7 million Bakken well that is not producing at maximum rates.
Investors: Newfield Update at SeekingAlpha
Link here.
Newfield operates around the world, but with respect to the Williston Basin:
Newfield operates around the world, but with respect to the Williston Basin:
Newfield has 271,000 net acres in the Williston Basin. 171,000 net acres are currently in active development while the remaining 100,000 are exploratory phase. Newfield has several areas of particular interest including 55,000 net acres in the Elm Coulee field, and several areas on or adjacent to the North Dakota Nesson anticline. Recent 9,000 ft laterals have had IP rates of 3417 to 3311 boepd.Newfield wells reported so far this quarter (1Q11) from the Williston Basin:
- 19179, 2,674, Newfield, Johnsrud 150-98-6-7-1H, Siverston, Bakken. 53K in first two months
- 19112, DRL, Newfield, Charlotte 150-98-17-20-1H, Siverston, Bakken
- 17918, 2,166, Newfield, Clear Creek Federal 1-26H, Bakken
- 18497, 1,878, Newfield, Ursus 1-20H, Bakken
- 18641, 1,856, Newfield, Megamouth 1-8H, Siverston, Bakken
- 18741, 407, Newfield, Dahl 1-5H, Siverston, Bakken
- 19026, 1,507, Newfield, Sawfish 1-1H, Poe, Bakken, 21K in first 60 days
Hitting on All Cylinders -- Minot, North Dakota, USA
In addition to oil impact, the Minot Air Force Base north of the city, increased economic impact eight (8) percent year-over-year, from $475 million to $500 million. (As usual, figures rounded.)
Link here. (Regional links break early and break often.)
Link here. (Regional links break early and break often.)