Zoos Around The Country Helping Out Minot Zoo -- Due To Flooding -- Penguins Already There; Bears Eager to Arrive

Great human interest story.

They came 507 miles by truck, 13 of them packed in small plastic pet crates, a flood-ravaged home behind them and a capital city before them.

The African penguins from Minot, N.D., waddled into their public display at Como Zoo in St. Paul on Thursday morning, just a few of the approximately 230 animals evacuated from the Roosevelt Park Zoo that now is under 4 to 14 feet of water.

They zipped around a 5-foot-deep pool, slid down faux rockwork and loudly hee-hawed like donkeys (hence their colloquial name, jackass penguins) as senior zookeeper Allison Jungheim slipped silvery fish into their gaping beaks.

The penguins, which include the Como-hatched male, Squirt, join three bears and 13 frogs evacuated to Como Zoo. The penguins were the first to go on display; the bears are quarantined and will follow in about a week.

No, Virginia, they are not fattening up the penguins for the polar bears.

Investors Only: Four Energy Stocks To Consider, Including Hess -- Bakken, North Dakota, USA

Four companies mentioned, including Hess.

HES has a P/E of 9.61, a forward P/E of 8.81, and its projected earnings growth for the year is 48.2%. It holds a very conservative accounting rating. HES hit a high 3 weeks ago of $79.03 and has since fallen to $69.19, providing us an opportunity to enter at a value price. 

DOE: SPR Release Oversubscribed -- Counterintuitive -- American Storage Tanks Are Full -- Very, Very Interesting -- Shippers' Windfall? -- NAT?

Link here, from the Oil and Gas Journal:

The Department of Energy described interest in the tender of crude from the US strategic reserve as “very high and oversubscribed,” he said. “We can therefore expect that all of the 30.2 million sweet bbl offered will be taken, and the question now is where do we find the spare storage tank capacity to hold all those barrels?”

Jakob said, “We count five large international oil-trading companies taking floating storage options in tankers (a mix of very large crude carriers and Suezmaxes). Some oil might have to stay on the water while some room is made in the onshore tanks.”

He noted, “A few investment banks had been expressing doubt that there will be any takers for the SPR barrels, but the DOE’s comments of yesterday indicate this was wishful thinking while those institutions rant about market manipulation.

I am surprised. There will be costs associated with storing oil in off-shore tankers.

I assume the asking price for DOE SPR oil closely matches the "crawler" price, or the spot price one can find linked in the Data Page. 

I noted earlier that if oil was taken from the US strategic petroleum reserve, it would be headed overseas. Maybe I was too hasty when I said that I was talking metaphorically since oil is fungible. Maybe it really will be headed overseas. Wouldn't that be something: the US exporting oil to Europe?

For shippers, is this a windfall? Tracking shipping rates and/or share prices of such companies as NAT might be interesting.

Michael Filloon Has a Five-Part Series on Marathon and Eagle Ford, South Texas -- Yes, This Is a Bakken Story

I highly recommend that anyone interested in the "true" value of Bakken acreage should read closely Mike Filloon's five-part series on Marathon and it's recent purchase of South Texas Eagle Ford acreage for more than $20,000/acre.

This is an "ad lib" note that I sent a friend, that could have been overheard at the Econo-Mart in Williston. I haven't put a lot of thought into this (as you can all tell), but it might be an interesting conversation starter.

But this is the conversation starter:

Since I don't follow the Eagle Ford, I had not paid attention to this transaction.

I went back and read the five part series. Very interesting.

In Part 2 of Michael Filloon's very nice five-part series:

Look at the difference in the number of acres / well. Since the Eagle Ford can drill approximately 160 acres in one well, it significantly increases the net resource potential of the field. Don't take this as gospel, its estimates have a well every 833 acres in the Bakken and companies like Brigham (BEXP) are drilling 4 wells per 1280 acres and are talking about increasing to five or six wells. The most important variable with respect to unconventional plays is reliable and repeatable data. We also do not know for sure what wells will be producing in 15 years. These numbers are just an educated guess. As technologies increase, along with proficiency in completion and production, this could increase IP rates and EURs significantly in a matter of years.

Part of the reason Filloon says Eagle Ford is worth $20,000 - $25,000/acre in this area of the Eagle Ford is multiple pay zones, if I understand him correctly.

Multiple pay zones are also true in the Williston Basin (Bakken, TF, Tyler, Spearfish, Madison, Red River, etc.).

"Producing in 15 years."  Most analysts in the Bakken think these wells will produce upwards of 30 years. [I won't be around to find out.]

One has to wonder if $500 to $10,000 / acre in the Bakken turns out to be a very, very good investment when some are willing to pay $20,000 to $25,000 / acre in the Eagle Ford. When you look at the EURs Filloon quotes in the Eagle Ford they aren't a whole lot different than what we are seeing in the Bakken.

Unitization: Great Explanation -- Bakken, North Dakota, USA

For a great description of "unitization," click here and go to "second comment," posted June 30, 2011. [This link is now broken.]

I've also linked it at my "frequently asked questions" page: this appears to be best the answer from most reliable source (this site is down) posted July 1, 2011:

"Basically, under untization, the spacing units disappear and the entire  field boundary lines become a big spacing unit, where all the owners within the field share in production from the entire field, which is allocated to  the owners by an agreed upon formula. The field becomes one big "spacing  unit," because the oil is being artificially forced across would have been the old spacing unit boundaries by the secondary recovery methods  (i.e., waterflood, CO2 etc.).  There will be a hearing or a number of  hearings with the DMR.

The state law requires that 60% of the mineral ownership approve of the  unit, and I believe votes are weighted by amount of acreage owned in the  unit. Most of the larger, older, conventional (i.e., non-Bakken) fields have  been unitized in ND -- Beaver Lodge, Blue Buttes, Fryburg, Big Stick.  The only one I'm aware that was defeated by the mineral owners was in Little  Knife field (Madison pool), and I think most would agree that such action  left a lot of recoverable oil in the ground.

Don't hold me to this, but if you are leased -- and your leases are not currently held by production -- if your leases are included in the unit (and  assuming the unitization plan is approved), they will be considered to be under production, as you will receive royalties pursuant to the formula."

An earlier source said this, which I posted August 2, 2010: Whatever unitization is, it remains a "non-issue" in North Dakota as of 2010. Seriously, here the discussion begins  (this site is down). Unitization is similar to pooling, but it occurs when producer(s) are ready to use enhanced oil recovery to maximize production from a common reservoir. With the Bakken being one huge continuous "reservoir" it's  hard to see how unitization could work, unless they do it by field, an arbitrary designation, in my mind, when it comes to the Bakken. Sixty percent of royalty owners (weighted) must agree to unitization before the NDIC will authorize it. To date, unitization has not occurred in North Dakota (August 2, 2010).

The NDIC hearing docket for August, 2011, will consider unitization of Lost Bridge-Bakken. The state is considering unitizing the Little Missouri State Park, October, 26, 2011.

An effort to unitize the Grail oil field failed. The operator took the case off the NDIC hearing dockets when faced with a fair amount of opposition to unitization.

Have a Happy Fourth of July Weekend

* They travel miles in the heat.
* They risk their lives crossing a border.
* They don't get paid enough wages for what they put on the line -- their lives.
* They do jobs that others won't do or are afraid to do.
* They live in crowded conditions among a people who speak a different language.
* They rarely see their families, and they face adversity all day ~ every day..

Yup ... our military.

Hats off to all our military members, families, retirees. Good on ya!

US Energy Provides Bakken Operational Update -- Bakken, North Dakota, USA

Link here. Go to link for full story.

U.S. Energy Corp. has 18 producing wells in the Rough Rider acreage block under the drilling program with Brigham Exploration. To date, all fifteen of the Company's 1,280 acre spacing units are held by production and 4 additional infill wells are scheduled to be drilled and completed in the second half of 2011.

Completed wells during the second quarter of 2011.

• The Brad Olson 9-16 #3H well was completed with 32 fracture stimulation stages and had an early 24-hour flow back rate of 2,375 boed.
• The Kalil Farms 14-23 #1H well was completed with 33 fracture stimulation stages and had an initial flow back rate of 1,603 boed.
• The MacMaster 11-2 #1H well was completed with 34 fracture stimulation stages and had an initial flow back rate of 1,129 boed.
• Completion initiatives are currently underway at the Hovde 33-4 #1H well, and the well is currently flowing to sales.

Note: During the second quarter of 2011, production and completion operations in the Rough Rider area have been hampered by one of the worst winters in North Dakota history along with one of the wettest springs on record. Significant rainfall and flooding have continued to impact road travel, trucking of produced oil and access to numerous flooded sites in the basin. Thus far, only the Sedlacek Trust well has experienced site flooding, which will continue to impact production from that well until the water has receded.

Several New Posts -- Bakken, North Dakota, USA

I just posted several new stand-alone posts, with minimum opinion or comment.

Almost all of these links were sent to me by Don.

I will go back and comment on these links later, but right now lots of family activity and commenting may have to wait.

Except to note that price of oil has slipped on news that China manufacturing growth slipped, but market up nicely on US own manufacturing report.

Microsoft's Second-Largest Campus Is In Fargo, North Dakota -- Nice Article on North Dakota -- The Bakken and Agriculture -- Must See TV

Link here.

In recent weeks, North Dakota has been in the news because of the historic and damaging flooding of the Missouri and Souris Rivers. But as the waters subside, it's worth focusing on the state's economy. For at a time of stagnant wages and a high unemployment rate, this vast, lightly populated Peace Garden State is one of the few places in America where jobs are plentiful.

In May nonfarm payroll employment was up 4.3 percent from the year before, and the unassuming state sported a gaudy 3.2 percent unemployment rate. In several counties, the rate is below one percent. The state's job office has 15,205 listings, up 64 percent from May 2010. North Dakota, which is one of the smallest states by population (about 670,000) and one of the largest geographically, has .7 unemployed persons for every job opening. In the U.S., the labor force participation rate is an anemic 64.2 percent. In North Dakota, it stands at 74 percent.

Includes a video.

Two sectors noted:

• oil
• agriculture

Without bragging, state officials will let you know that the state is the largest single producer in the U.S. of fourteen crops, including barley, canola, durum wheat and navy beans. As more people around the world eat — and eat better — North Dakota's farmers are finding new markets and plowing funds into equipment and processing capabilities. "We've seen phenomenal growth in our export markets, triple digit growth in the last few years," said John Mittleider, manager of agriculture and energy development at the North Dakota Department of Commerce.

And yet, 45 percent of jobs are on the east side of the state:

Officials note that 45 percent of the job openings in the state are in the eastern Red River Valley. Beyond energy — wind farms, coal mining, a new power plant under construction in Spiritwood — the state has a small technology sector and a larger health care one. Microsoft's campus in Fargo is the technology giant's second-largest one outside of its home base in Redmond, Washington.

"They" failed to mention that North Dakota is also number one in honey production, far ahead of #2, California.

Dunn County, Oil Companies To Partner on Roads -- Bakken, North Dakota, USA

Link here. (Regional link will break; free registration, but requires log-in.)

Dunn County Commission Chairman Daryl Dukart and Auditor Reinhard Hauck say oil companies are doing their part to take care of roads and they want to keep that relationship going. They plan to do this by devising a road maintenance plan, they said at a special conference Thursday morning at the Dunn County Courthouse.

County officials say the discussions with companies about working together to keep roads safe and maintained have gone well.

A Tale of Two Cities (Counties?) -- Bakken, North Dakota, USA

Williams County commissioners continue to approve most requests for development. See earlier post.

Stark County commissioners in state of denial.

I have no opinion on this. The county commissioners across the oil patch are in a very tough position. I feel strongly that they are doing what they feel is best for their folks. Good luck to all.

Minnesota State Shuts Down -- Budget Issues

Update

July 20, 2011: Governor signs bill to end shut down. The tipping point? Beer. 

July 19, 2011: Minnesota's "payday loan" -- incredibly poor return, highly speculative, -- and all for $700 million to cover current expenses, and nothing in the headlines about the $5 billion gap.

July 16, 2011: The can is kicked down the road, but the state is poorer, comes out with a worse credit rating, and will probably have to deal with budget shortfall again early next year.  The delay only made things worse. The number $700 million keeps popping up as the amount needed to get through the current debacle; the overall budget gap at one time was reported to be $5 billion.  Minnesota might want to look at some things its neighboring states are doing. The agreement still needs to be passed by both the House and the Senate.

July 14, 2011: Over? If so, was it due to beer? MillerCoors was going to have pull all 39 brands of beer in the state.

July 13, 2011: Over? According to radio news report, the governor is willing to sign the budget, contingent upon ... state Republicans have not responded to his "contingent" speech.

July 11, 2011: Longest shutdown in history; no new talks scheduled. 

July 10, 2011: No sense of urgency and now the bars may have to shut down. 

July 8, 2011: The rich are not unanimous in wanting to raise taxes on themselves. The governor's plan to tax the rich would be twice the tax rate paid in Illinois. At best it raises $700 million, a far cry from the $5 billion gap. By the way, the $700 million might be needed just to pay the increased interest rates that will now be levied on Minnesota as their credit rating tanks.

July 5, 2011: The budget impasse certainly doesn't seem to be all that urgent. It's hardly a front pae story in the Minneapolis Star-Tribune. The brief story simply states the governor and the GOP will resume budget talks about 2:30 p.m. this afternoon. If this were serious, folks would be meeting around the clock.

July 4, 2011, day 4: Highway construction comes to a halt; blue collar workers hit the hardest; shovel-ready jobs halted.

The blow from the shutdown has been almost immediate for hundreds of companies with state contracts. Across Minnesota, the private sector is bracing to see how dramatically the shutdown will affect the state economy, as lawmakers and the governor continue to argue over how to close a $5 billion deficit.

Matt Kramer, head of the St. Paul Area Chamber of Commerce, described the mood among his members as one of exasperation. "It's an almost resigned -- 'Can you believe this is happening again?'"

July 3, 2011: This is really quite incredible, a state shutting down and all the unintended consequences. And I always thought Minnesotans were smarter than Nodaks.

Minnesota stands to lose millions of dollars in revenue and get saddled with millions more in new expenses for every week that the widespread shutdown of state government persists.

In both subtle and stark ways, the shutdown that began Friday will bring new financial pain to the state treasury. Closing many operations will save the state some money, but an array of revenue sources as diverse as the lottery and highway toll lanes have been cut off.

Significant new costs also are emerging, some of which the state will never recover.
"It's not like money stops going out the door because of a shutdown," said John Pollard, a spokesman with Minnesota Management and Budget.

One of the biggest new expenditures: unemployment benefits for roughly 22,000 freshly laid-off state employees. In most cases, those workers are entitled to collect 50 percent of their pay while not working, according to a spokeswoman for AFSCME, the union that represents 18,000 state workers.

Original Post

Link here. 

Something tells me this will simply be a 5-day Fourth of July weekend for state employees, that the legislators will have made their point by Tuesday, and a budget will be passed by Tuesday night, July 5, 2011.

A win-win for everyone. 

Or not.

New York State May LIft Moratorium on Fracking -- Fracking Deemed To Be Safe

Update

July 25, 2011: Norwegian company applies for fracking permits. 

July 1, 2011: New York State -- fracking is safe, but first permits probably won't be issued this year.

New York State environmental authorities have determined that hydraulic fracturing can be safe, but the first permits to apply the controversial drilling technique won't likely be issued this year, the state's top environmental official said Friday.

Original Post

Link here.

New York state Governor Andrew Cuomo is expected to lift a moratorium on the controversial natural gas extraction technique known as hydraulic fracturing, The New York Times reported on Thursday.

Such a move could open the state to a gas drilling boom similar to what is happening in neighboring Pennsylvania, and it would certainly raise opposition from environmentalists who believe "fracking" or "hydrofracking" pollutes drinking water.

A spokesman for Governor Andrew Cuomo, Joshua Vlasto, called the report "baseless speculation and premature."

Just a trial balloon. Common ploy on controversial subjects in politics.

Canada Continues to Drop Number of Rigs -- US Increases

Link here. It ain't seasonal.

Maybe more on this later.

Three (3) New Permits -- Bakken, North Dakota, USA

Daily activity report is very quiet going into the 4th of July weekend --

Operators: Zenergy, CLR, and SM Energy

Fields: Lake Trenton, Haystack Butte, and Camp