Significantly Fewer Posts Over The Next 72 Hours

I will be posting much less frequently over the next 72 hours.

Good luck to all.

OXY USA reported a couple nice wells today:

• 18985, 1,556, OXY USA, State Knopik 1-21-16H-144-97, Little Knife, Bakken
  18823, 906, OXY USA, State -1-16-21H-143-96, Fayette, Bakken

Very Nice Piece on BEXP On a Day Like Today -- Bakken, North Dakota, USA - For Investors Only

Link here.

As stated in past posts, BEXP used their Q1 call guidance wisely, building Basin power outages in April into their near-term thinking. Most of the Street is likely to be sitting on the mid or just under it as the weather has not exactly been a quiet issue, first with snow melt and then with inordinate rainfall which eventually led to widespread road closures. But here's where BEXP shines in pointing out that while this may be a bump in the road, they haven't been simply wading about waiting for the great flood to recede ... and then the author provides four points....

For investors, today is not the kind of day one looks at the value of one's portfolio.

The Gambler, Kenny Rogers: "... if you're gonna play the game, boy, you gotta learn to play it right. Know when to walk away, know when to run, you never count your money when you're sitting at the table. There will be time enough for countin' when the dealer's done ..."

Today is the kind of day one looks at which shares are on sale. I personally use KOG as my "barometer" for the Bakken and when it hits $6.00 it's time to buy. Someone else suggested that to me, and trying to track all the other companies is way too hard.

The Bakken companies, unlike the farmers, are still putting in their seed corn in 2011.

2H11 will be outstanding for Bakken companies, and 2012 will be even better. But then I'm always looking through oil-covered glasses.

The Powder Keg In Fairview, Montana -- Bakken, North Dakota, USA

This place may simply have the best pizza in the world. It is truly incredible. Everything is made from scratch and made fresh daily. The manager and two others come in every day at 8:00 a.m. to start preparing the ingredients that will be used later when the restaurant opens at 4:30 p.m. (Mountain Standard/Daylight Time).

There is a note in the menu that answers the question how long it will take for the pizza to be ready. Since they don't start preparing your pizza until it is ordered, it's about a 25-minute wait, but the atmosphere is such you don't mind the wait. (Of course, you can call ahead, and they will tell you when the pizza will come out of the oven.)

There is a full menu, but everyone comes for the pizza. The manager-on-duty the night we visited said folks come as far away as Bismarck, North Dakota, for the pizza. (184 miles)

This is what someone from Louisville, had to say about it:

I have nothing but great things to say about this restaurant. Though it's sort of out in the middle of nowhere in a tiny town in Eastern Montana, the food is delicious! They have one of the best BBQ beef pizzas I have ever eaten. They also have pizzas you wouldn't normally eat, such as biscuits and gravy pizza. The breadsticks and fried green beans are to die for, and if you're not in the mood for pizza they have many other dishes (though their pizza is what they're known for and by far the best thing on the menu). 

Home made ice cream for cones and/or sundaes are free for all customers. You serve yourself, and make your own sundaes. It really is quite incredible.  

I put this on the same list of outstanding places to eat as Roy Moore's lobster shack in Rockport, Massachusetts. Now I have four restaurants on that list.

The third is Eats 'N Treats in Bowman, North Dakota.

The fourth is the First International Bank and Trust in Watford City, North Dakota.

Give Credit Where Credit Is Due -- EOG, Two Great Wells -- Bakken, North Dakota, USA

Over the past year I have given EOG a lot of grief for reporting wells with less-than-impressive IPs (just one data point, yes, I know).

But elsewhere some folks were talking about production in "35/36-151-91."

Those are sections 35 and 36 in T151N-91W, Parshall oil field, Williston Basin, North Dakota.

According to the NDIC GIS server, there are only three wells in these two sections (and all of them are spudded in section 36). I originally thought all of them ran under the river, but I was wrong:

• 18827, 732, EOG, Liberty 10-36H, Parshall, t2/11; cum 182K 6/12;
• 18828, 1,066, EOG, Liberty LR 16-36H, Parshall; this is a shorter short lateral running northwest to southeast; t2/11; cum 201K 6/12;
• 19919, 1,648, EOG, Liberty LR 21-36H, Parshall, t7/11; cum 197K 6/12;

The "LR" designation for #18828 is confusing; one almost wonders if plans for the well were changed after the permit was granted.  I thought "LR" stood for long lateral under the river, but this is a shorter-than-usual short lateral running away from the river. (Of course, with changing channel, or with flooding, the horizontal may actually be under water at times.)

Production runs for 18827:

Date	Oil Runs	MCF Sold
4-2011	15937	0
3-2011	15700	0
2-2011	17654

Production runs for 18828:

Date	Oil Runs	MCF Sold
4-2011	16338	0
3-2011	17977	0
2-2011	15750	0

These two wells, to date, after just three months, have produced 99,356 bbls of oil, and at $50/bbl --> $5 million. At $75/bbl --> $7.5 million.

No precipitous drop in production after the first month which is common for Bakken wells, but I assume we will see the typical Bakken decline over the next six months or so. But still, two very nice wells, and a third being drilled.

Note the nomenclature of the wells.

Nothing To Do With The Bakken -- But Trees Cause More Pollution Than Automobiles

And that was back in 1981.

• Tree cause more pollution than automobiles do." -- Ronald Reagan, 1981 

Since then automobiles have become much "cleaner" and ... to best of my knowledge ... trees haven't changed.

Biologists all know this (the source is CBC News):

The world's trees, shrubs and other plants do produce massive amounts of hydrocarbons - nine times as much as do automobiles, by some counts.

Those gases, most notably isoprene, are major ingredients of ozone, a lung irritant linked to asthma and other serious respiratory ailments.

Ozone formation also requires a second ingredient: nitrogen oxides, a byproduct of the combustion of fossil fuels. A major source of those gases is the tailpipe of just about every car, truck and bus on the planet. [Catalytic converters were introduced on a wide scale in 1975 to decrease production of nitrogen oxides.]

A forest of 10,000 of the trees emits perhaps 22 pounds of hydrocarbons an hour - the equivalent of spilling a dozen gallons of gasoline and allowing it to evaporate, according to an estimate by the University of California Cooperative Extension.

Those emissions can contribute to ozone formation wherever there is enough sunlight and a ready source of nitrogen oxides.

Wow, I miss Ronald Reagan.

Flashback: President Carter -- We Will Run Out of Oil By 1990

Link here.

“The oil and natural gas we rely on for 75 percent of our energy are running out,” warned the President in a televised speech on energy policy. And because we are running out, “we must prepare quickly” for a transition “to strict conservation and to the use of coal and permanent renewable energy sources, like solar power.”

Of course, the President who said this was not Barack Obama. (Could you imagine Obama calling for a transition to coal?) The President was Jimmy Carter — on April 18, 1977. In the same speech, Carter also said that “in spite of increased effort, domestic production has been dropping steadily at about six percent a year.” Regarding oil in particular, he warned that if consumption continued to rise at the same five percent annual rate it had in the past, “we could use up all the proven reserves of oil in the entire world by the end of the next decade” — that is, by the end of the 1980s.

Not only have we not run out of either oil or natural gas, but in the case of natural gas, America’s “proved reserves” have actually risen significantly since 1977. According to the Energy Information Administration (EIA, a part of the U.S. Department of Energy), the United States possessed 207 trillion cubic feet of (dry) natural gas in 1977, as compared to 272 trillion cubic feet in 2009. How could the nation’s proved reserves go up instead of down, despite all of the natural gas that has been consumed since 1977?

I remember that speech very, very well -- the one in 1977 saying that we could run out oil in my lifetime. Hmmm.


Significantly more natural gas reserves in 2009 than in 1977. Hmmm.

I find it interesting that President Carter -- a nuclear engineer by training -- advocated a return to the use of coal, and interestingly, to solar energy. In an earlier post I noted that renewable energy accounted for 1.8 percent of all energy used by the world in 2010. One-point-eight percent, with all the incentives, tax breaks, government grants, ever-increasing price of oil, since 1997 -- and all renewable energy still accounts for less than 2 percent of global energy consumption. 

A few years ago I remember the former XOM CEO stating we would have to grow something like 20 percent in renewable energy annually for 20 years and renewable energy still wouldn't make a dent in the world's demand for energy.

Wow, google is incredible. I was able to find that 20/20/1 quote by Lee Raymond, from Newsweek magazine:

Wind and solar. People have misinterpreted what we've said for years. I'm not against wind. I'm not against solar. But they are uneconomic. They don't compete on a stand-up basis with fossil fuels. They require huge subsidies. If you assume 20 percent growth in wind and solar for 20 years, it's still a half of 1 percent of the world's energy. -- September 20, 2004. 

Hmmm.