Six (6) New Permits -- Bakken, North Dakota, USA

Producers: Zenergy (3), Hess, Whiting, Continental Resources

Fields: Murphy Creek, North Tobacco Garden, Sanish, Siverston and two wildcats.

The two Zenergy wildcats will be on the same pad in Williams County, Lot 2 4-157N-100W.

It was a huge day for announcing wells that came off the confidential list (24) and two more wells that were completed.

The results of these wells (IPs) are reported elsewhere.

Al Jazeera: I Can't Make This Stuff Up -- Bakken, North Dakota, USA

I skimmed the article; will read it more closely later, but on first glance, pretty good reporting. I'm impressed.

I have to thank a reader for alerting me to this. I don't subscribe to Al Jazeera.  Maybe I will have to start. Smile.

Oasis With Another Great Williston-Area Well -- Bakken, North Dakota, USA

It appears Oasis has another great well, this time west of Williston, in the Squires oil field.

• 18799, Oasis, Stowers 5502 43-8H

Although no IP has been reported yet, February production was reported at 14,838 bbls of oil. There was significantly less oil produced in previous two months (January, 11 days, 2,600 bbls; December, 9 days, 1,500 bbls), so obviously the well was fracked sometime in January.

The well was spudded 5/12/10.

There was some difficulty with this well so it's hard to say when it was ready for fracking. There is a report in the well file that says work on the well was completed (ready for fracking) dated November 23, 2010.

Be that as it may, this looks like a good Oasis well, and it's in an area that seems to be very, very good. I get a kick out of this since this is exactly where I grew up and I always wondered if there was oil west of Williston.

Again, I have been very impressed with the success of BEXP, Whiting and Oasis.

Update: Nuclear Disaster in Japan -- Getting Worse -- Not a Bakken Story

On March 16, 2011, I wrote this:

I wonder when they do the post-mortem on the Japanese reactors, if it will be determined that the disaster was compounded and events ended the way they did when the decision was made early on to try saving the reactor rather than the nation.

Today it is being reported that the operator of the Japanese nuclear reactors damaged by the earthquake/tsunami has admitted that it appears that the reactors are "lost," and will never be used again. This suggests to me that the primary effort all these weeks has been to save the reactors. Yes, I know that is very simplistic thinking and "saving the reactors" and preventing a meltdown or release of radioactivity go hand-in-hand.

But most Americans (I assume), including me, don't understand the fine points (nor the coarse points, for that matter) of shutting down a reactor, but if it turns out that immediate action to "bury" the reactor vessels would have prevented this ongoing disaster, pundits will have a field day.

It's my understanding that radioactive water is now likely to reach the ocean.

I keep thinking of US Secretary of Energy Stephen Chu's comment that "coal is [his] worse nightmare."

This Is Worthy of A Headline? Oil Slips to Near $104 After Jump in Supply Oil Crude

Yup, that was the headline.

I'm sure the story will be gone by the end of the day, and the link broken.

In that group of early-morning Yahoo!Financials, these were the stories that did not get headlines:

• Civil war in Libya; arming the rebels; arming al-Qaeda
• Nuclear disaster worsens in Japan; evidence of meltdown
• Leaked (trial balloon) of President Obama's energy security speech tonight
• Federal budget crisis deadline looms
• GE paid no US federal income taxes in 2010

But at least we all know that oil slipped to "near" $104/barrel.

Investors Only -- Pickens' Picks -- One Surprise -- Nothing To Do With The Bakken

Updates

March 27, 2012: Wow, the news for A123 keeps getting worse. Now, they have a $55 million bill to fix faulty batteries.  Data points from the article:

• 2nd time in three months that A123 found a flaw in its automotive batteries, used in several cars, including hybrid BMWs and the all-electric Karma, manufactured in Finland; Fisker headquarters in Anaheim, CA
• company's stock peaked above $25/share in 2009; now below $1.50
• A123 already shaky after Fisker announced it would be building fewer Karmas; the loss of business there resulted in several hundred Michigan employees being laid off
• Fisker Automotive recent cut off from hundreds of millions in federal funding
• an A123 plan in Livonia, Michigan, received nearly $250 million grant from the government; has not turned a profit since its IPO in 2009
• A123 burning through cash, and probably will need to borrow more money to cover most recent bill

Original Post

At first I was not going to link this article. There were no surprises in the list compiled by an oilman.

Then I took a second look. Look what's missing. There are no -- nada, zip, zilch -- unless I missed them -- no renewable companies in this list. This list was compiled by one of the most vocal advocates for wind energy back in 2008, or whenever it was. No, nothing.

There's a difference between renewables as a significant energy source for the world's needs and the opportunity for a retail investor to make money investing in renewables. It is obvious that renewables will have minimal effect on meeting global energy needs in my investing lifetime, but that doesn't mean investing in small renewable growth companies can't be very rewarding.

So, it's surprising that there are no companies in the renewable energy business on the Pickens list.

One of his very few (only one?) non-oil-related company was A123, and that took a huge hit, down almost 20 percent so far.

A123 is in the electric battery business, particularly for hybrid vehicles. Recently their share price plunged (not my word; "plunged" was used by Motley Fool.com). Motley Fool suggested the plunge was due to financial reasons (dilutive stock offering, and other matters). With 100 million shares outstanding, another 18 million shares is a significant offering. But when oil companies in the Bakken announce a public offering, their share price appreciates as often as not. What Motley Fool failed to note was that simultaneously with the dilutive stock offering, news was coming out of Japan that the automobile industry is in a world of hurt due to rolling blackouts following loss of 30% of their electrical capacity. And correct me if I'm wrong, on top of that, the vast majority of hybrid vehicles are coming out of Japan. And as long as I'm piling on, Motley Fool also failed to note something else (see below).

Incidentally, the headquarters for A123 in Watertown, Massachusetts, is just down the street from where I am typing.

I don't particularly like linking "advertisements" for one's products, but the message in this MarketWatch story is worth the link:

The underlying thesis is that a country in which public unions are starting to strike at the state levels and the federal government is cutting services and welfare for the poor and elderly can no longer afford to subsidize many of these so-called alternative/green companies like A123. And while that thesis continues to play out, one of the other primary tenets behind our bet against A123 specifically is that this Company is nowhere near generating real cash flow and that the Company will have a very hard time surviving without a major dilution or debt raise — or a miracle — in its current iteration. Indeed, on the company’s most recent earnings call, they told analysts to expect their EBITDA loss would widen again this year.

The title of the link from "A123 Headlines" was: "Alternative Energy Is Doomed and How To Profit On the Collapse" and is in the Wall Street Journal.

It will be interesting to hear tomorrow morning whether the president reiterates that oil is yesterday's energy in tonight's energy "security" speech. As one listens to the speech (which I won't hear) keep in mind that his economic czar is the CEO of GE, a huge proponent of wind energy, but a company that has been rapidly diversifying into oil; his Secretary of the Interior formulated the "permitorium" in the Gulf; and his Secretary of Energy is a nuclear physicist who advocates nuclear energy.

Libya and Hess

Of the American companies affected by the "kinetic military action" in Libya, Hess may be the most affected.

One has to wonder how that will affect a) Hess activities in North Dakota; and, b) first quarter earnings.

This may become a bigger story before long.

A three-month comparison between Hess and EOG (share price appreciation) is very informative. In the past three months, EOG's share price has appreciated 30 percent; Hess' share price has appreciated 10 percent.

Hess wells in the Bakken continue to be mediocre at best, and January, 2011, weather will significantly affect production quotas for some Bakken companies.

Wow, Wow, Wow -- Another Natural Gas Story -- Hess

It is amazing what $105 oil and a nuclear disaster will do to fast track fossil fuel interest.

New Jersey fast tracks three new natural gas power plants.

New natural gas-fired power plants proposed by NRG Energy Inc, Hess Corp and Competitive Power Ventures moved closer to reality on Tuesday under New Jersey's long-term capacity pilot program, the New Jersey Board of Public Utilities said.

The three facilities, with capacity totaling 1,949 megawatts, were the first selected to obtain 15-year contracts under a controversial state law designed to encourage new power-plant construction by offering developers long-term, ratepayer-subsidized contracts.

Whatever happened to wind?

Number of Active Drilling Rigs Down Significantly -- Bakken, North Dakota, USA

See first comment in response to this posting: I may be completely off base on this posting. More than likely the decrease in rig count is purely seasonal. Road restrictions in the spring limit truck traffic on muddy roads. I will leave the post up, but it's probably completely wrong.  

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A few weeks ago North Dakota had 174 active drilling rigs, an all-time high. Since then there has been a steady slide. Today, the number of active drilling rigs is down to 168.

It is not unusual for a fluctuation in rig count. But with better weather, higher oil prices, and smaller companies having added (or planned to have added) more rigs, it is surprising that the slide has occurred at all. One would have expected a rise, not a drop.

Most likely this is just random fluctuation and the number of active rigs will go up again any day now.

It's possible some rigs have moved across the border in to Montana. It's possible that some companies are looking at the Niobrara in Colorado and Wyoming, and even the Eagle Ford in south Texas.

Drilling these wells is not inexpensive. The wells get even more expensive when the price of oil goes up, and the price of wells get more expensive when there is more competition for support services, especially fracking. Add to this that recent wells have had lower IPs, which means that it will take longer to pay off these wells. Operators depend on cash flow to fund future operations.

Is the decline in the number of drilling rigs a canary in the coal mine? Are some companies having a cash flow problem funding their announced CAPEX? Or is it simply random fluctuation? If it's the former we could see additional merger activity, or even buyouts. Publicly traded companies may issue more shares to raise cash; privately held companies may sell out.

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See first comment below: I may be completely off base on this posting. More than likely it's purely seasonal. Road restrictions in the spring limit truck traffic on muddy roads. I will leave the post up, but it's probably completely wrong.