Week 16: April 16 -- April 22, 2011

Two New Natural Gas Plants to Come On-Line Soon

Enbridge to Apportion Space on Pipelines 5 and 6B: Not Enough Takeaway Capacity

Schlumberger Profits Up 40 Percent, 1Q11

Halliburton Reports Huge 1Q11 Profits

176 Active Oil Rigs: New Record

Fidelity (MDU) Adds a Second Rig in the Bakken

Beaver Lodge Oil Field: Oldest Field in the Williston Basin, Update

Operators With Dedicated Frac Teams

KOG Operations Update; Before 1Q11 Earnings Report

Update: The Madison Formation in the Williston Oil Basin

Samson Oil and Gas (SSN) Files 1Q11 Operations Report

Putting In Pipelines Before Drilling / Sixteen Wells Per Pad -- Wyoming

Staggering Amount of Natural Gas Flared From Single Well in Stark County

Tesoro Expanding Refinery Operations at Bismarck

From Afghanistan -- Absolutely Nothing To Do With The Bakken

While in the service,  I had the privilege, over a 30-year career, to spend a fair amount of time with US Marines.

Tonight, while surfing YouTube, I ran across the following:

.... a comment on YouTube:

I'm 19 years old. I am deployed to Afghanistan now. I am in love for the first time with a girl who has no idea. This song is way before my time, but really tells my story. I will probably die here and she will never know. What a waste. Well, here I go again. Duty calls. Semper Fi.

I'd Love You To Want Me, Lobo (Kent Lavoie) -- posted February, 2011

It seems all marines are 19 years old.

I pray he comes home safely and finds his "girl."

Manipulation? What Manipulation? I'm Shocked! Shocked!

Most of you probably recall a couple of weeks ago Goldman Sachs signaled the end of the rise in the price of oil and the price of oil "magically" dropped. 

For those who do not remember, here's a link that might help.

I don't remember the exact prices, but I think WTI was about $113 at the time and after the Goldman Sachs warning, WTI dropped back to about $108. I don't know if it got down to as low as $107.

That was around April 11 - 14.

It's hardly been ten days and futures tonight have WTI back to $112.92 up another 63 cents. As far as I can tell, nothing has changed between April 11 and April 24, except possibly S&P saying US could lose its AAA credit rating if it doesn't get its financial house in order.

I'm not an agile trader but agile traders could have done very nicely after Goldman Sachs made their announcement. 

The administration has appointed a task force to look into oil price manipulation, fraud, etc. I wonder where they will start. Something tells me they won't start looking on Wall Street.

Meanwhile, Bank of America last week reiterated that WTI oil will likely go to $120, and possibly spike to $140 for a short period of time.

For Investors Only: Canadian Opportunities

Link here.

This is a very nice article on the opportunities in Canada for investors, written from an American perspective by an American investor:

Finally, may I suggest Canadian investments because every day the US dollar is purposely debased by our current government, securities denominated in Canadian dollars become more valuable. (Actually, they hold their value while the USD depreciates, but the effect is the same when repatriated in the dollars Americans must use to buy goods and services.) I’d rather own rising stocks of growing companies reporting in a currency that appreciates than any combination absent these three factors.

Canada is the quintessential export economy, with a banking system in better shape than the US. (The World Bank ranks Canada #1 for banking stability.)

The phrase "purposely debased by our current government" is a very interesting phrase. Some pundits are arguing that the US government's plan is to "inflate" our way out of the current $14 trillion debt problem, much of that debt related to pensions and entitlements. By purposely debasing the US dollar, i.e., weakening the dollar, inflation will eventually "solve" the debt problem -- at least in the minds of some pundits.


The SeekingAlpha article is a nice read.

Oxy's Home Page: The Bakken, North Dakota, USA -- Quite Incredible

The various pages of corporate websites change on a regular basis, so OXY's operations page regarding North Dakota is unlikely to remain the same for long. Catch it while you can.

The link above takes you to OXY's operations in the Bakken and North Dakota, and is quite eye-catching.

OXY has a market cap of 82 billion dollars and is a global company. To see the company's emphasis on the Bakken is quite exciting.

Initiatives To Cut the Gas Tax!

The New Hampshire House speaker is proposing that the state lower the state gasoline tax by 5 cents (from eighteen cents to thirteen cents) for two months to help folks afford gasoline.

CONCORD — House Speaker William O'Brien, R-Mont Vernon, proposed a 5 cent per gallon cut in the state gasoline tax for two months to help residents coping with soaring prices at the pump.

O'Brien said he fully expects the House of Representatives will embrace his plan as early as next Wednesday.

O'Brien's proposal would cut the gasoline tax to 13 cents per gallon until June 30 when it would go back up to 18 cents.

"I think this is very important for folks pulling up at the pump," O'Brien said during a news conference in his office.

"It's important for small businesses too. This is a relief that they need and it is something we have an opportunity to do."

Well, that should help.

I can't make this stuff up. Gasoline is selling for a bit less than $4.00/gallon in New Hampshire .

Update on Hess' Stacked Laterals in Pleasant Valley -- Bakken, North Dakota, USA

Locator: 10031B.

Updated: October 14, 2023.

Current update: October 16, 2012. In retrospect, very little proppant was used; and number of stages lower than norm in 2012. These wells were drilled late 2010, early 2011.

This is an update for the six Hess wells on one large pad in Pleasant Valley. Hess requested a 2560-acre spacing unit for these six wells.

• 18775, 511, Hess, EN-Fisher-157-94-2116H-1, Pleasant Valley, t8/10; B, 18 stages; 18K lbs sand; 125K 6/18; cum 165K 8/23;
  
• 18776, 376, Hess, EN-Dolan-157-94-2833H-1, Pleasant Valley, t10/10; B, 18 stages; 17K lbs sand; 108K 6/18; cum 134K 8/23;
  
• 18777, 176, Hess  EN-Fisher-157-94-2116H-2, Pleasant Valley, t11/10; B, 22 stages, 0.9 million lbs sand; 141K 6/18; cum 178K 8/23;
  
• 18778, 182, Hess, EN-Dolan-157-94-2833H-2, Pleasant Valley, t12/10; B, 22 stages, 1 million lbs sand; 101K 6/18; cum 128K 8/23;
  
• 18779, 321, Hess, EN-Fisher-157-94-2116H-3, Pleasant Valley, t3/11; B, 22 stages, 0.8 million lbs sand; 128K 6/18; cum160K8/23;
• 18780, 236, Hess, EN-Dolan-157-94-2833H-3, Pleasant Valley, t3/11; TF, 22 stages, 1 million lbs sand;114K 6/18; cum 141K 8/23;

My original hunch: It appears that these will all be stacked laterals, one Middle Bakken lateral and one Three Forks lateral from each well. Not so sure.

Sand / Proppant Confusion

• 18776: This is a good example of the confusion I noted regarding sand/proppant. On the standard form, Hess noted in the "Lbs Proppant" box that they used 4,562 lbs of proppant, but in the details, Hess noted 17,000 lbs of sand. So, was it 17,000 lbs of sand and 4,562 lbs of ceramic, or something else? I don't know. See screen shot below.
• 18775: This is a good example of the confusion I noted regarding sand/proppant. On the standard form, Hess noted in the "Lbs Proppant" box that they used 4,666 lbs of proppant, but in the details, Hess noted 18,000 lbs of sand. So, was it 18,000 lbs of sand and 4,666 lbs of ceramic, or something else? I don't know.

Original posting: It's too early to tell how good these wells will be but based on other wells in the area, these will probably hit 100,000 bbls/well in less than two years. [Later: wrong. These wells are very poor wells -- at five years  - 6/18- most have not even got to150K bbls.]

Update: interesting model with these six wells. Is Hess trying to cut costs on the initial frac, and then go back in and re-frac them?

Screen shot, #18776, frack report:

Update on Hess' Stacked Laterals in Ross Oil Field -- Bakken, North Dakota, USA

Back in February, 2010, I noted that Hess would be drilling six wells on one large pad, and had requested (before the NDIC) a 2560-acre spacing unit for these six wells. Those wells have been drilled; two remain on the confidential list, but here is an update:

• 18602, 207, Hess, RS-Nelson Farms A-156-90-2829H-1, t; cum 115K 6/12;
  18603, 154, Hess, RS-Shuhart 156-90-2726H-1, t8/10; cum 64K 6/12;
  18604, 366, Hess, RS-Nelson Farms A-156-90-2829H-2; tested 10/10;  cum 106K 6/12;
  18605, 339, Hess RS-Shuhart 156-90-2726H-2, t11/10; cum 54K 6/12;
  18606, 117, Hess RS-Nelson Farms A-156-90-2829H-3; t1/11; cum 77K 6/12;
  18607, 120, Hess, RS-Shuhart 156-90-2726H-3; tested 3/11; t3/11; cum 41K 6/12;

The IPs are low, but over time it looks like these are going to be great wells. According to the well files, the four wells off the confidential list are all stacked laterals, one Middle Bakken lateral, and one Three Forks lateral. So, it appears off one/two pads, Hess has 12 long laterals, and it looks like each stacked pair will hit 100,000 bbls in less than two years.