Joan Jett and the Black Hearts to Play at 4 Bears Casino, New Town, North Dakota

May 20, $35.


I Love Rock and Roll, Joan Jett



I Hate Myself For Loving You, Joan Jett (no video)

Final Honor Flight Scheduled

Link here. Regional links break often and break early.

The fifth and final flight from Bismarck of World War II veterans leaves Friday morning for Washington, D.C., to visit the World War II Memorial and other national monuments.

Roughrider Honor Flights from Bismarck have escorted more than 500 World War II veterans on the two-day trips, and this final flight will complete the waiting list, according to Honor Flight committee chairman Kevin Cramer.

My father was one of the 500 to have been honored with this flight. He said the trip was absolutely incredible, one of the best experiences ever in his 89 years of life.  My dad served in the US Navy during WWII, making countless trips across the Atlantic taking troops to Europe and returning with prisoners of war. Once the war turned its attention to the Pacific, he made several trips to China.

No veteran ever pays any cost for the trip. All the trips have been funded by donations from businesses, groups and individuals. The cost for each previous flight was about $165,000. Because of rising fuel costs and the size of the final flight, with more than 125 veterans, this flight will approach a cost of $200,000, Cramer said.

Carpe Diem

Truck tonnage and traffic volume continue to increase. The stories and the graphs are quite remarkable.

Talk about mixed data coming out of the economic recovery.

House prices/values officially hit a double dip low (announced May 5, 2011). Corporate earnings are up across the board (past two weeks). 1Q11 GDP growth was pathetic (1.8 percent). Railroad traffic is way up. Truck tonnage and traffic volume is way up (see links above). Record sales receipts in Orange County, Florida (link posted elsewhere). First-time jobless claims up for fourth week in a row (link posted elsewhere). Fewer Chevy Volts sold in April but that was because more were given to dealers; but GM is making them as fast as they can (link posted elsewhere). Pick and choose the data you want to follow, I guess.

Director, NDIC, Updates Conferees on North Dakota Oil Potential

Data points from a speech given by Lynn Helms, Director, NDIC, to the 19th Williston Basin Petroleum Conference, Regina, Saskatchewan. Link here (regional links break often and break early). The article was published/last modified May 5, 2011.

• "We're going to give Texas and Alaska a run for their money."
• The success of the Bakken is well-known and other formations could eventually add substantial growth.
• The Three Forks has come into its own in 2010.
• The first well targeting the "third formation," the Tyler Formation, will be drilled later this year.
• The first phase of drilling in the Bakken could lead to approximately 28,000 Bakken wells. So far, only 2,200 have been drilled, most in the past few years. [Note the phrase: "the first phase."]
• Total pipeline capacity is not expected to be reached until 2015.
• NDIC expects $3.5 billion to be spent in 2011 for natural gas and pipeline investments in North Dakota.
• Each well should produce an averageof 575,000 bblsof oil, resulting in an average of $7 million in royalties paid to those owning mineral rights.
• The state collects about $4 million in tax revenue from each well.
• Wells cost about $7 million each to drill and complete.

Schlumberger's HIWAY Fracturing Process -- Petrohawk's Experience

Updates

August 31, 2012: EinNews link (not sure if this is linked elsewhere or below).

August 31, 2012: update on the process; a very good article. 

Original Post

Link here.

Again, we described one very important development today in our press release, the HiWAY frac, and we have placed several slides on our website under Presentations titled HiWAY Frac Results. These are very interesting slides. I'd encourage you to take a look. Incidentally, the NAVs for each of our core positions, the Haynesville/Bossier and the Eagle Ford, in my opinion, have a greater value than where the market trades Petrohawk today. We really do look forward to the future.

Also, click here, and once you get to this page, click on "presentations" on the sidebar at the left, and then click on  "HIWAY Frac Results." The presentation should be impress you. [July 31: that link has been broken. This was the URL: http://www.petrohawk.com/presentations.php. However, a pay site caught the essence:

Petrohawk Energy is promoting Schlumberger's HiWAY, a new hydraulic fracturing technology that the company is using in the Eagle Ford Shale. HiWAY tests brought "spectacular early results," said Floyd Wilson, chairman and CEO of Petrohawk. HiWAY also helped Petrohawk boost its liquids and natural gas production by 32% and 37%, respectively, the company said.

As noted earlier, Schlumberger has a huge presence in the Williston Basin, and a huge footprint/industrial park east of Williston.

Another article here on improvements in fracking.

The Battle Continues: June Sales of Chevrolet's and Nissan's Coal-Powered Cars Posted; Volt Outsells the $109,000 Tesla Roadster (Now "Retired")

Update

July 4, 2011: Sales of Nissan Leaves soar:

The battle between the Nissan Leaf and the Chevy Volt continues. June 2011 auto sales figures were posted today and the Nissan Leaf has taken a commanding lead. Last month, 1,708 Nissan Leafs were sold, up from 1,142 Leafs sold in May 2011 and significantly higher than the 573 sold in April. Year-to-date Nissan Leaf sales total 3,875.

General Motors also saw an increase in sales of their newest electrified vehicle, the Chevy Vole, during June. In May 2011, Volt sales totaled 481 units. That number jumped up to 561 for June, bringing year-to-date Volt sales to 2,745. At the end of May 2011 there was only a 17-vehicle margin between year-to-date Leaf and Volt sales but now that has jumped to 1,130.

June 22, 2011: In the original post below I noted that the Volt had outsold the Tesla Roadster. Today it was announced that the Tesla Roadster has come to the end of the line. No more Tesla Roadsters will be built. The official sales figure for the Tesla Roadster remains at 1,650. Worldwide.

I find it amazing the spin "they" can put on these stories. For example, from the link: the Tesla was never meant to be a big seller; the company will now focus on a sedan; and, the roadster inspired the Volt.

The new Tesla offering, the S Sedan, won't be available until 2012. One would think that if the Roadster was such a "hot" car they would have kept it in production until their follow-up vehicle was ready. This would be like GM or Toyota halting all manufacturing in between new model releases, I suppose.

Original Post

Link here. We're talking about Chevrolet Volts and the Nissan Leaves.

Sales of plug-in electric cars continued at a steady pace in April, with 493 Chevrolet Volts and 573 Nissan Leafs [sic] sold during the month.

That brings yearly totals of the cars to 1,703 and 1,025 respectively.

There were also 326 Volts and 19 Leafs [sic] sold last December, the month in which each car first went on sale.

If I had the time I would post some comments, but maybe later.

For now, note that we are talking about 500 units/month for each. April was the first month in which the Nissan Leaves outsold Chevrolet Volts.

Someone told me that a shortage of extension cords was slowing the sale of the Chevy Volt. Apparently extension cords longer than five miles are very hard to come by. Smile. I only report what someone told me. I doubt this is true.

So, how do Volt sales compare with the Tesla?

With a total of 2,029 Volts sold, that model now becomes the highest-selling highway-capable electric car in the U.S. It surpassed estimated total deliveries of 1,650 for the Tesla Roadster since it went on sale very late in 2008.

Tesla Motors has consistently declined to report on its monthly sales. Each quarter's sales of its $109,000 Roadster and Roadster Sport models only become apparent once it files required information with the Securities and Exchange Commission.

The linked article mentions several other coal-powered cars, including the "beleaguered Wheego."

I cannot make this stuff up.

Ten (10) New Permits -- Bakken, North Dakota, USA

Drillers: Whiting (2), BEXP (2), Hess, BTA, BR, CLR, G3, and Samson Resources.

Fields: Clear Water, Ambrose, Stockyard Creek, Park, Sanish, Williston, Upland, and three wildcats.

BR has a wildcat in McKenzie County; BEXP has a wildcat in Williams County; and, G3 has a wildcat in Williams County.

Four wells came off the confidential list today; only one reported an IP. The other three reported status as DRL which probably means they are waiting to be fracked. Wells coming off the confidential list, may list status as DRL up until thirty days after they have been fracked. With three of four wells coming off the confidential list and reporting status as DRL, it suggests the backlog of fracking continues.

Japan's Response to Nuclear Disaster

From Rigzone.com:

Under that growth strategy, Tokyo aimed to have the nation's economy expand a real 2% or more on average by fiscal 2020, by focusing budgetary allocations and accelerating deregulation on seven designated areas such as energy and the environment.

Under the revised growth strategy, however, Japan reportedly will put more emphasis on the development of renewable energy such as power generated by solar, wind, and geothermal heat, as well as the enhancement of electric accumulators.

More to the point, Japan will seek to secure electricity without depending on nuclear power too much. 

I have a bit of trouble sorting that out, but "accelerating deregulation on seven designated areas such as energy and the environment" suggests to me the Kyoto protocol is under scrutiny.

Without an engineering background, I don't know the technical difference between a battery, a storage battery, and/or an electric accumulator. Interestingly enough, the first three pages of "google" hits were not helpful. Until someone provides a better explanation, it sounds like the term "battery" is used when one is talking about a unit that provides electricity on a regular basis to operate a vehicle or power a flashlight. An electric accumulator, on the other hand, is a storage battery that "accumulates" electricity (is being charged) by the source it will eventually provide backup electricity under conditions when the primary source is not operating.

Aha, here it is:

Accumulator is characterized as an electrochemical device that can transform electrical energy into stored chemical energy and by reversing the process, release energy again.

Moreover, accumulator refers to an apparatus for accumulating or increasing the intensity of an electric charge. It is known as capacitator in modern terms.

That is, when wind turbines are turning, excess electricity is accumulated in a standby unit that will turn the turbine when the wind is not blowing or when there is an unexpected outage.

Had the Japanese had electric accumulators to back up the nuclear power plants, Japan could have returned to "normal" electric output sooner. Something tells me FEMA might be very interested in such technology.

Schlumberger's HIWAY Frac -- Mentioned in CLR's Earnings Conference Call

In today's CLR earnings conference call, Harold Hamm mentioned a "hiway frac."

This is a link to the process.

Schlumberger has a huge operation in the Bakken and a huge industrial park east of Williston.

Schlumberger describes the process as this:

To allow more fracture conductivity in conventional fracturing jobs, HiWAY channel fracturing fundamentally changes the way that proppant fractures generate conductivity. It engineers stable flow channels into the proppant pack that are connected from the tip of the fracture back toward the wellbore, creating the optimal connection between the reservoir and the wellbore. The productivity of the fracture is decoupled from the actual permeability of the proppant used, so rather than flowing through the proppant pack, hydrocarbons flow through stable channels—meaning infinite fracture conductivity.

Bottom line: "rather than flowing through the proppant pack that has just been pumped explosively into the shale, the oil flows through stable channels."

CLR's Harold Hamm says this about "highway fracking":

And we just pumped our first hiway frac, which pulses proppant into the frac zone instead of injecting it under continuous but increasing concentrations.

Note: the SeekingAlpha transcript had "hiway" spelled slightly different but I corrected it to eliminate search engine confusion.

Highlights of the CLR Earnings Conference Call -- 1Q11 -- Bakken, North Dakota, USA

Data points [blogger comments]

Milestone: almost 1.5 years under their 5-year program to triple production from year-end 2009 to year-end 2014

• Right on track
• 1Q11 production stronger than expected
• 51,663 boepd for 1Q11, 34% increase over 1Q10; 8% increase over 4Q10
• 4Q10 was 27% higher than 4Q09
• [51,663 bopd -- at $70/bbl --> $3.6 million/day]
• Bakken production: 25,523 boepd in first quarter
• [25,523 -- at $70/bbl --> $1.8 million/day]
• This is amazing: CLR maintains production in the Red River units in southwest North Dakota; only one rig but producing 4,065 boepd from those units [4,065 --> $285,000/day (one rig)]
• Red River unit production up 17%
• Production grew 67% year-over-year

Notable well lists (in 1Q11)

• 25 gross wells; 12 wells that tested over 1,000 boepd
• The strongest: Bud 1-19H tested at almost 2,000 boepd
• Many CLR wells restricted to minimize flaring; without restrictions could have tested double or more
• 6 of their strongest 8 wells in Williston area (the "Williston" prospect)

The Williston Prospect

• Still considered exploratory
• 6 of CLR's strongest 8 wells in this prospect
• Aakron 1-27H tested at 1,407 boepd, 3,600 psi on a 16/64" choke; a very strong well

North Dakota vs Montana

• Less discussion separating the two
• Now: more about the "Bakken" cross both states

Fracking

• Experimenting with various methods
• For the first time in years, using sliding-sleeve systems along with perf-and-plug
• Stages: 24 is the norm, but anywhere from 18 to 30
• Pumped their first Schlumberger "HIWAY" frac -- pulses proppant into the frac zone

Future

• Still tens of thousands of wells to drill over next 2 to 3 decades
• Still feel that there is at least 24 billion boe recoverable
• USGS estimate of 4.3 billion boe recoverable based on 2007 data and reported in 2008
• Since then a technological revolution with more than 2,000 additional wells drilled
• The Bakken play is a conventional play with increasingly predictable well results
• The entire scope of the Bakken (15,000 square miles) is now considered (by the oil industry) to be viable for development -- the entire scope (makes me think of Chesapeake's recent announcements
• Will maintain

Cash Flow

• $269 million
• 53% higher than one year earlier
• 22% higher than previous quarter (and remember, the current quarter hard hit by weather)

Takeaway

• Some others in the Bakken constrained by takeaway capacity; not CLR
• CLR first in line when pipeline operators increase capacity
• Ship on all pipeline systems in the Bakken
• Ship by rail out of three separate facilities
• Can generally get around bottlenecks due to so many options
• Operations
• Maintain 22 rigs in the Bakken
• Substantial backlog, currently 63 wells drilling/awaiting completion in the Bakken
• Next 2 weeks: 13 new ND wells on-line
• Hiland: to bring on-line its 30 million cubic feet/day plant on May 15
• Because of Eco-Pads, production in next quarter could be lumpy
• Need to hire a lot of professionals to meet target of tripling production

2Q11 Bakken Company Earnings -- Bakken, North Dakota, USA

It will be interesting to see the earnings report for the second quarter for 2011. Oil prices have fallen significantly this week and could continue.

It will be interesting to see whether 1.5 months of production in one quarter when oil rose to $114 will be a better or worse quarter than a three-month period when we have three months worth of production (minus five days due to April 30 - May 1 blizzard) when oil fell back to $90. That was hard to write; maybe harder to understand.

Saying it another way:

• 1Q11: in the Bakken, we might have "lost" as much as 1.5 months of production due to winter weather; during that quarter, the price of oil rose to $114/bbl
• 2Q11: in the Bakken, barring any more blizzards, it appears we may have lost only a week of production due to winter weather; the price of oil is falling quickly; whether it falls back to $90/bbl is yet to be seen

My hunch: the 2nd quarter will be outstanding (remember, these companies have hedges, collars, and most of the oil has already been sold on contract.

And the 2nd half will be even more outstanding. Production will increase; infrastructure will improve; more takeaway capacity will come on line; and, workers will be more productive.

Speaking of oil field workers, by the way, it's my understanding that the drillers and oil service companies are not enamored with the man-camps. The work force is too undependable. The men live locally for two weeks, then return to Texas or their homes elsewhere for a couple of weeks. There is no guarantee they will return from their homes when their two weeks are up, and thus there is an on-going problem of fielding enough men for a scheduled job.

Companies are looking into developing their own housing projects, with 2- and 3-bedroom apartment complexes and/or single unit homes, and rent them back to their employees with the understanding that they bring their families to North Dakota, particularly the Williston area. There will be more than enough work for their spouses: the new Menard's coming into Williston will see to that.

By the way, as long as I'm rambling, how much work will there be in Williston?


Here is the data for new building permits in Williston, 2010 (2009):

• Williston: 770 permits; $106 million (257; $45 million)
• That's $106 million in permits for Williston in 2010
• It's my understanding that estimates for 2011 will be $150 million.

About That View of the Recession in the Rear View Mirror ---

--- first-time jobless claims rise to eight-month high.

The number of Americans filing for jobless aid rose to an eight-month high last week and productivity growth slowed in the first quarter, clouding the outlook for an economy that is struggling to gain speed.

While the surprise jump in initial claims for unemployment benefits was attributed to factors ranging from spring break layoffs to the introduction of an emergency benefits program, economists said it corroborated reports this week indicating a loss of momentum in job creation.

Although the economists do concede that the increase in jobless claims cannot be ascribed to special circumstances only, they do say that part of the rise had to do with spring break. 

I do believe there is "spring break" every year. Surprise indeed.

Results of the May, 2011, North Dakota Lease Auction -- Oil and Natural Gas

Link here to the state site. (See comments: Clear Creek Resources, LLC, is a subsidiary of Chesapeake Energy.)

Link to the state site with results by county.

Also, a summary by the Bismarck Tribune.com (data points, some numbers rounded):

• Yesterday's (May, 2011) quarterly state auction resulted in $47 million for the state
• Cumulative > $500 million over the past three years
• More than 61,000 acres were leased in yesterday's auction; average price $800/acre
• The average very misleading due to very small bonuses ($12/acre, for example) in many areas
• Leases sold in four counties outside the state's traditional oil patch: Stutsman, Adams, McHenry, and McIntosh (actually Adams is fairly close; Stutsman is almost as far east as Fargo)
• Of the 1.2 million acres managed by the state, only 320,000 acres are still unleased

Highlights:

• Not much was offered by the state that caught investors' attention. [Update: See first comment below: any unleased state land is available; the auction list is determined by what folks are interested in bidding on.]
• Highest bonus paid: $8,300/acre for 146 acres in Mountrail Country; Larco Resources, LLC
• Biggest bidder: Larco Resources, LLC
• Other big bidders: Clear Creek Resources, LLC; Kasmer and Aafedt; Slawson Exploration; Daniels Petroleum; Sierra Resources; Stephens; Liberty; Diamond
• Hess paid $6,500/acre for several tracts in McKenzie County
• Cody Oil and Gas Corporation was the notable player in Emmons, McIntosh, and Stutsman counties
• All tracts in Stark County were picked up by Clear Creek Resources; almost all them for $900/acre

In Mountrail County:

• Sections 26, 27, 28, 32, 33, 34, and 35 in T153N-R93W received much interest ($7,000 - $8,300/acre). These sections are under the Missouri River and sit in/between the Sanish and the Elm Tree oil fields. 

In McKenzie County:

• Sections 29, 30 and 32 in T154N-94W were exciting (around $6,500/acre). These three sections are in/near Alkali Creek, Elm Tree, and/or Charlson oil fields.

In Dunn Country:

• Sections 24, 25, 26, and 27 in T143-N95W brought around $5,500/acre). These sections are in Murphy Creek and in a very active part of the Bakken.

Chesapeake and the Williston Basin -- More Than Just the Bakken

There's been a lot of interest lately with regard to Chesapeake coming into North Dakota with a bigger footprint.

I was skeptical how fast Chesapeake could accrue acreage in North Dakota at this late date without attracting attention or buying out a large player already in the Williston Basin. Based on some very perceptive comments from "anonymous" and more specifically "anon 1" I realize I was missing the point.

Three things to remember:

• Chesapeake has historically been focused on natural gas (yes, I know, they are shifting their focus, also, like many other natural gas companies
• The Williston Basin is much more than just the Bakken (click on this site to see a general map)
• The recent story that shallow natural gas has been found under every county in North Dakota (except one)

This is very, very exciting. As "anon 1" said, wouldn't it be interesting if CHK took a large position east of the river?

By the way, the results of yesterday's North Dakota state lease auction are now posted.

Washingtonians (DC) Residents: Two Percent of Income Goes For Gasoline -- Two Percent Of Income -- Price of Gasoline Too High?

CNNMoney.com has an interesting story on cost of gasoline.

"They" say that the amount of money spent on gasoline by the "average" American this past April was $368.  Last April (2010), it was $281. And two years before that, April, 2009, it was $174.

The story makes is sound like the $368 this year assumes that you spent nothing on gasoline last April or the April before that:

Round-trip airfare from New York to Los Angeles. More than a dozen dinners for two at Applebee's. Two 16 GB iPod nanos.

These are just a few of the things you could have bought if you weren't spending $368.09 a month on gasoline.

As Al Gore would say, there are two inconvenient truths not noted in the article.

The first inconvenient truth is the delta, not the actual amount of money, being spent on a monthly basis, in an article like this.

The delta is $87 (this year vs last year), about $20/week, about $3.00/day, about one coffee and a donut at Dunkin' Donut.

The second inconvenient truth is the general state of the economy. We were in a severe recession back in 2009, perhaps the worse in modern times. Unemployment was very, very high, and coming up with $175 a month for gasoline when one is unemployed is a bit tougher than coming up with $370 when employed. And, again, it is the delta that is important.

The price of oil has fallen back from its recent highs and it looks like the price of gasoline should drop just before we go into the summer driving season. 

The delta of $87/month works out to about $1000/year, about what the delta would be in higher taxes had the Bush tax breaks not been extended. Just saying. Taxes are a much bigger expense than gasoline for most Americans. And if not taxes, FICA withholding for those who do not pay any federal income tax.

About $60 of the $368 spent on gasoline last month went toward taxes on gasoline at the pump. The indirect cost of government regulation and corporate taxes brings the cost up significantly. And, finally, if you bought all your gasoline at an Exxon station, XOM made a profit of about $2.10 on that $368 spent for gasoline.

The last paragraph of the CNN article:

The only other region where drivers spend less income on gas is Washington D.C., where the average household spent just $89 on gas in April, or about 2% of total income.

Perhaps that is why Congressmen and the administration do not feel our pain. Just 2 percent of the annual income of Washingtonians goes toward gasoline. Incredible.  Remember, this is data provided by CNN, not FOX.

Census In North Dakota Highlights Huge Employment Opportunities -- The Baby Boomer Bulge About To Retire

Link here.

From the Minneapolis StarTribune.com:
U.S. census data released Thursday shows the number of North Dakota residents between the ages of 55 and 64 more than doubled between 2000 and 2010.

"We definitely recognize, along with the rest of the country, that we have a work force issue looming," said Paul Govig, deputy director of the North Dakota Commerce Department.

The Census Bureau's data shows 81,819 North Dakotans between 55 and 64 as of April 1, 2010, an increase of 53 percent from a decade ago.

The bureau released age breakdowns for 13 states Thursday. Nationwide estimates from 2009 showed the 55-to-64 age group was the fastest growing since 2000, rising 47 percent.

Baby boomers were born between 1946 and 1964 (varies from author to author). Using those dates, the first baby boomers will turn 65 years old this year. The first baby boomer was eligible for social security three years ago. The first baby boomer will reach full retirement age in two years. 

During the 20-year baby boom, the largest spike occurred in 1949. Those folks will turn 62 years old this year, the first year they can collect social security (generally speaking), but at a much reduced rate than if they wait to full retirement age.

[A big thank you to Greg over at fourfiftygas.com for alerting me to the story.]

Carpe Diem

Two nice stories to start your day.

Link here: second best March in tax sales for Orange County, Florida; California tax revenues up, surprising analysts. Very, very interesting.

Interesting link here regarding volatility of oil prices. You may be surprised to learn which commodity (an agricultural product) that is banned by the US government to be traded on the futures market.  The bill was pushed through by an up-and-coming freshman representative: Gerald Ford of Michigan.

And oil prices falling nicely just before the driving season.