More Than Enough Water for Fracking

Link here.

The U.S. Army Corps of Engineers says Lake Sakakawea ended April at one of the highest spring levels on record.
Data points:

• Elevation at end of April: 1,847 feet
• 7.5 feet higher than same time last year
• US Army Corps of Engineers will begin releasing water at twice the rate it had been
• Missouri River running through Bismarck will rise 5 feet and stay that high throughout the summer

Yeah, that's more than enough for fracking. Can the Army still charge uses of the Missouri River a "storage fee" when water is so high it's being released? Just a rhetorical question.

Blizzard Paralyzes Western North Dakota -- Bakken Shut Down

Link here.

One can assume all wells are shut in, but that's the least of their problems. Note that all electricity is lost in Williston except for police department, fire department, hospital and home for the aged.

I do not recall ever a storm this bad in North Dakota. Ever.

Update on Dedicated Fracking Teams -- Bakken, North Dakota, USA

WLL says it has two dedicated frack teams in North Dakota. Whiting estimates that each team can frac 100 wells/year.

See link here for update on drillers with dedicated frac teams. In addition, one can always find the update by clicking on the label "DedicatedFracking" at the bottom of the blog.

Investopedia's Take on Whiting -- Bakken, North Dakota, USA

Link here.

Costs were also higher this time around. Whiting engages in some relatively sophisticated operations with service providers like Baker Hughes (NYSE:BHI) and those technologies don't come for free. Per-barrel cash costs rose about 13%, though depreciation and depletion allowance (DDA) costs were relatively flat on the same basis.

Still in the Right Places

First quarter performance may disappoint the Street, but Whiting is still a leading player in the Bakken Three Forks area. What's more, the company still has meaningful potential from its Lewis & Clark acreage (in the Bakken) and the Delaware Basin in West Texas. 

That comment regarding DDA was very interesting in light of the Obama administration suggesting an end to these "subsidies." 

Eleven (11) New Permits -- Bakken, North Dakota, USA

This is the most new permits in one day that I have seen in over a year.

Drillers: Continental Resources -- Harold Hamm (7), Hess (2), Samson Resources (2).

Fields: Six of the permits will be a 2-well pad in Elm Tree and a 4-well Eco-Pad in Jim Creek.

Hess permits will be a 2-well pad in Big Butte.

And Samson Resources will be a 2-well pad in Ambrose field.

The last permit, a CLR permit, will be in Haystack Butte.

In addition, Newfield reports another nice well in Friday's daily activity report :

• 19202, 1,010, Newfield, 1-H Manolo 21-16, Williams County

QEP reports:

• 19467, 617, QEP, MHA 2-04-03H-149-90, McLean

Mexico Could Be Net Oil Importer Within 10 Years

From the Oil and Gas Journal:

Without sufficient investments in oil field development and the use of new, advanced technologies, Mexico faces becoming a net oil importer in 10 years.

Mexico’s oil production peaked at about 3.9 million b/d in 2004. Since 2005, output has fallen by more than 25% to 2.98 million b/d in 2010.

South Dakota Utility to Request Rate Increase To Pay for Transmission Line It May Not Need

There are several assumptions in the headline, but it's not rocket science.

Basin Electric wants to build a "huge" $43 million transmission line across South Dakota to ensure there is enough electricity to power the pumping stations along the proposed TransCanada Keystone XL pipeline.

The Keystone XL is not yet approved; indications are the earliest the federal government will issue a "thumbs up/thumbs down" is by the end of the year, 2011. Meanwhile, opposition to the Keystone XL grows among private landowners (particularly in Texas) and environmental groups. (Click on "Keystone" label at bottom of blog.)

If the pipeline goes in, TransCanada will "help" pay for it; until the pipeline goes in, utility customers will pay for it; and if the pipeline doesn't go in, and the transmission line goes in, well, someone still has to pay for it.

Most likely the utility is only getting the permission to build it now, but won't build it until the pipeline is approved and funding from TransCanada arranged. Unless, of course, there are other reasons that are not being said (like wind) to build the line.

Utility Requests 19 Percent Rate Increase in Colorado

Link here.

Black Hills Energy is asking Colorado regulators for a rate increase that would boost a typical residential bill by nearly $19 a month and a typical small-business bill by about $67 a month.

The company said Friday the increase would generate about $40 million more a year, an increase of nearly 19 percent in the annual revenue of its Colorado subsidiary.

FLASHBACK: 

April 6, 2011: Colorado: the state must have missed the memo -- renewable energy is going to push utility rates through the roof; Colorado mandates that utilities supplying electricity to Colorado must get 30% of their energy through renewable energy (euphemism for "wind")

Meanwhile, expect the same in South Dakota -- a rate increase for a transmission line that may not be needed (if the administration goes "thumbs down" on TransCanada's Keystone XL).  My bet: the Keystone XL permit will not be approved by this administration this year.

Shovel-Ready Jobs -- Oil and Gas Industry -- Pennsylvania

Oil and gas industry ready to provide thousands of new jobs.

US: Natural Gas Supplies Hit Record, More Oil Rigs Than Gas Rigs; EPA To Issue Fracking Guidelines

Natural gas production in the US has set new records. Another link here.

Over past year there has been a gradual switch to drilling for oil rather than natural gas. There are now more rigs drilling for oil than natural gas in the US.

That may accelerate when EPA comes out with fracking guidelines for natural gas.

All things being equal, price of natural gas should go up (Moodys at SeekingAlpha.com). This past week, some price increase.

Happy Anniversary To the Bakken -- North Dakota, USA,

NDIC File No: 16164     Well Type: Oil and Gas     Well Status: Active   
Wellbore type: HORIZONTAL
Location: SESE 36-153-90   
Current Operator: EOG RESOURCES, INC.
Original Operator: EOG RESOURCES, INC.
Well Name: PARSHALL 1-36H
Total Depth: 11,325     Field: PARSHALL
Short lateral
Spud Date(s):  4/11/2006
IP: 463
Cumulative: 158,014
Current production: 900 bbls/month