Monday, July 25, 2011

This Should Have Been Said Much Earlier -- Our Prayers Go Out for the Men Injured at Cylcone 18 and for Their Families

I was remiss in not voicing my condolences earlier when posting about the fire.

I am thankful to a reader for remembering these men and their families at this time (see comment at this post).

I received this earlier and was not sure whether to post or not due to privacy concerns:
For those of you that are wondering how you could help AJ Rohr that was badly burned yesterday on Rig 18 in the Beach area...here is how you could help. Andy and his family are from Marmarth, ND. Go to Any Wells Fargo Bank Branch. Ask or direct your donations to the Andy Rohr medical fund. Kenneth Bagley just set this account up in Minneapolis with Wells Fargo Bank. You can start the donations coming right away for the Rohr Family.... Please help this family in need. Thank you Kenneth for your kind heart and opening up your home up to the Rohr family.
Yes, our collective prayers go out to the men injured in the fire, and to their families.

Canadian Oil Critical to US Despite Greenpeace Saying Otherwise -- Rigzone

Link here.
Despite criticism by environmental groups, U.S. imports of Canadian oil will continue to play a critical role in meeting U.S. energy needs, according to a recent report by the Calgary-based Fraser Institute, In America's National Interest-Canadian Oil.

In recent years, environmental groups have campaigned against the extraction of oil from Canada's tar sands. In advance of planned protests next month near the White House, U.S. actor Danny Glover and Canadian environmentalist David Suzuki are arguing that tar sands development has wrecked large sections of Alberta ...

In 2009, Greenpeace USA launched its "Stop the Tar Sands" campaign, which claimed that northern extraction of oil from Alberta's oil sands has "created a literal hell on earth" because land is visibly scarred by oil sands development, ... [Even] Amnesty International [has joined the opposition] ...
Some data points:
  • Canada provides more oil to the US than all the Persian Gulf countries combines
  • American imports 5.5 million more bbls of oil than it did in 1973 (OPEC embargo)
  • Canada ranks sixth among world's top oil producers at 3.3 million b/d (the others: Russia, Saudi Arabia, Iran, China -- compare their human rights records with Canada; the other, Norway)
  • IEA: oil will remain the dominant fuel through 2035
  • Global demand for crude will reach 99 million bopd by 2035; we're at 88 million bopd now
  • Unconventional oil, including Canadian tar sands, will become increasingly important

For Investors Only: A Down Day for the Market, Debt Ceiling Debate Continues, and Yet These With 52-Week Highs -- Bakken, North Dakota, USA

On another down day for the stock market, these companies hit 52-week highs:
  • Schlumberger
  • Halliburton
  • National Oilwell Varco
  • Baker Hughes (acquired BJ Services in 2010)
  • Williams Partners L.P.
All of them are in the Bakken, to the best of my knowledge.

Motley Fool: Oil service industries is where you need to be.
Schlumberger, the oilfield services giant chalked up revenue for the second quarter of the year of $9.62 billion, versus $5.94 billion for the second quarter of 2010. That, for those of you who are keeping tabs, amounts to a 62% year-over-year leap. Income from continuing operations sans charges was $1.34 billion, a 45% year-on-year improvement from $818 million. Earnings per share reached $0.98, compared with $0.68 for the same quarter in 2010. The company roundly beat the Wall Street consensus of $0.85 per share.
By the way, did  you see BHI's earnings?
The company’s earnings of 93 cents a share inched passed the Zacks Consensus Estimates by 2 cents, but showed a dramatic improvement from 23 cents earning a year ago.
Had they increased their earnings from 23 cents to 46 cents that would have been a 100% increase. Doubling that 46 cents takes time to 92 cents, and BHI earned a penny more than that. Buying BJ Services in 2010 looks really, really good in hindsight. This is BHI's fifth consecutive quarter of double-digit revenue growth

OnTrack for 1,712 Permits in North Dakota for 2011 -- Bakken, North Dakota, USA

With 966 permits for oil and gas wells issued so far in 2011, "we" are on track for 1,712 new permits for oil and gas wells in North Dakota this year (a very small number will be salt water disposal wells).
  • 2006: 422
  • 2007: 497
  • 2008: 953
  • 2009: 628
  • 2010: 1,682
  • 2011: 1,712 (estimate based on July 25, 2011, data). 
My numbers will be slightly different from the official NDIC numbers, but not by much (+/- 5 each year) because I missed a few taking them from the daily activity reports.

Be that as it may, my database shows that 49 permits issued in 2010 were canceled or have expired.

For 2010, I have data for 977 permits (off confidential list but no data; total depth reached; plugged or producing, IP). That means there are still 705 permits that are still outstanding, either drilled and on the confidential list, or not even spudded yet. That's more than all the permits issued in 2009, 2007, or 2006.

Four (4) New Permits -- Bakken, North Dakota, USA

Daily activity report, July 25, 2011 --
  • Operators: Whiting (2), Petro-Hunt, and Denbury Onshore
  • Fields: North Tobacco Garden, and three wildcats
Petro-Hunt has a wildcat in Williams County, the Stromme Family Trust 157-101-11C-2-1H.

Whiting has two wildcats, both in McKenzie County, same township, but different sections.

BEXP had another great well:
  • 18881, 1,693, BEXP, Esther Hynek 10-11 1H, Mountrail County; t4/11; cum 115K 11/12;

Trending: Top 10 List

Updates


October 31, 2020: not necessarily the top ten trending stories, but those that interest me now:

  • who owns the Permian? The majors or the independents?
  • COP -- there appears to be a huge shift in strategy
    • what next in the Bakken? 
    • monster wells in the Bakken
  • the dashboards: Bakken, Eagle Ford, Permian
  • the Mideast: in deep doo-doo
  • Apple
  • Turkey -- separate from the Mideast
    • like Fitzgerald said: "within and without"
  • investing: the strange case for/of dividends
  • cooking for one: heat is heat
  • Alaska: killing the golden goose; we will know this week
  • ILI surveillance

October 17, 2020:

1. Covid-19, second wave; vaccine? Hope springs eternal.
2. Presidential campaign coming to an end; Trump nominated third justice in his first term: Gorsuch; Kavanaugh; Amy Barrett;
3. Saudi Arabia (OPEC) in great financial difficulty; Brent oil stuck at $40/bbl
4. After hitting daily production lows earlier this summer, North Dakota's production for August, 2020, bounces back, but most see production declining again;
5. North Dakota, other midwestern/western states seen with surge in Covid cases;
6. Unemployment remains stubbornly high; stock market stuck in narrow trading range with huge volatility
7.

August 30, 2019

  1. US-China "war" on tariffs: peaked in 2Q19; the war is winding down
  2. US economy: a tale of two factions: "recession right around the corner" (anti-Trumpers) vs US ready to lap the rest of the world (Trumpers)
  3. inverted bond yield; 30-year Treasuries paying less than 2%; Fed hesitant to cut rates due to so much positive economic data
  4. US House -- Democrats haven't done a thing; US Senate quietly confirming judges
  5. Impeachment: going nowhere but now back in the news with Congress visiting home districts during August recess; fired FBI director James Comey lied and leaked, just as Trump said he had
  6. Oil glut -- Saudi Arabia remains in deep trouble; says Aramco IPO still going to happen but will open on Saudi stock market, maybe Japan; will shut NY, Hong Kong
  7. North Dakota continues to set all-time crude oil production records; New Mexico (Permian) could leap-frog ahead of North Dakota for the #2 position
  8. Dem front-runners: Biden, Bernie, and Pocahontas; Beto flamed out; from 24 on debate stage over two nights four months ago to ten Dems on debate stage on one night
  9. RBG: some say two months
  10. active rigs in the Bakken back up to recent high (around 64)
January 3, 2019
1. US stock market imploding; APPL in deep trouble -- warns on profits
2. US House -- Democrats back in control
3. Impeachment of Donald Trump all but assured
4. Oil glut -- Saudi Arabia in deep trouble
5. no one will host the Oscars
6. college football bowl games a bust
7. the Dems best bets for president, the three B's: Bernie, Biden, and Beto
8.
9.
10.

June 28, 2016
1. There are indications that Saudi Arabia has changed strategy; will focus on refining; will not increase production; will concentrate on Prince Salman's plan with greater emphasis on midstream, downstream; less emphasis on upstream
2. Completion of Panama Canal expansion could dramatically change energy picture
3. US ethane exports continue to surge, and still more to come
4. 1Q16 taxable sales and purchases for North Dakota have plummeted, but 50% higher than what they were 1Q10; North Dakota Bakken has clearly moved to "manufacturing" stage
5. North Dakota met flaring targets set for 2020 in April, 2016, data; four years early
6. DUCs, currently about 900, in North Dakota getting all the attention, but in addition, North Dakota reports 1,500 inactive wells; many producing wells not producing at full potential; production "can turn on a dime" -- production can turn a lot faster than some folks might think
7. Brexit: short term, a debacle for the equity and commodity markets, but looks like the markets will stabilize in a week or so; will take years to "unwind"
8. Fossil fuel's center of gravity has definitely shifted from Mideast and Russia to North America
9. Venezuela remains in the news; imploding
10. China, India, and Indonesia
11. Pad drilling; halo effect;
12. Active rigs may have bottomed out at 25; now back to 31
September 23, 2014
1. Oil glut worsening; price of WTI trending lower; testing the $90 floor; China storing oil off-shore in huge cargo tankers; US imports of Saudi oil dropping to record lows
2. Costs to complete a Bakken well increasing once again, due to skyrocketing costs of sand, ceramic
3. Upper Three Forks still being delineated; activity in the lower Three Forks has barely moved in the past year
4. Pad drilling in the Bakken highly disruptive
5. New flaring rules go into effect this autumn; could affect ND production; three consecutive months of 1 million + bopd out of North Dakota
6. More NGL processing plants going up in North Dakota
7. New completion techniques: slickwater + higher proppant volumes
August 15, 2013
1. Canadian oil production
2. Canadian oil reaching coasts despite demise of the Keystone XL; Canadian CBR
3. Strength in price of oil persists: still solidly above $105 -- global economy improving; signs of inflation; new turmoil in Egypt
4. Huge 30-day, 60-day, and 90-day IPs in the Bakken
5. CLR delineating the Upper Three Forks; some targeting of the LOWER Three Forks
6. New US Sec of Interior comments on North Dakota flaring 
June 22, 2013
1. EOG's new completion (fracking) strategy; lessons learned in the Eagle Ford
2. Increasing rancor among surface owners, mineral owners, farmers, ranchers, local and state politicians, oil and gas operators
3. Fed policy; China sluggishness affects price of oil
4. EPA losing interest in fracking as a concern
5. Pilot projects in the Bakken to test 24, as many as 48, wells in one spacing unit
6. Harold Hamm's divorce simmering
7. The Bakken's increasing impact on East Coast and West Coast import
8. The US central corridor: the US energy renaissance
9. Blending light domestic (Bakken, Eagle Ford) with heavy foreign oil for US refiners
May 26, 2013
  1. EOG: huge earnings report for 1Q13; stock surges; 160-acre downspacing;  
  2. EOG: some long laterals in the Parshall oil field model to 2-million-bbl EURs; better than Eagle Ford
  3. EOG: 2nd bench of the Three Forks may be better than the middle Bakken in some areas
  4. Stable price for oil, though surplus seems to be developing (WTI: $95, trending down)
  5. Mideast: Egypt imploding; SyrIran threatens Israel; Israel strikes inside Syria
  6. Increasing number of stories pro/con on the Keystone XL, suggesting decision is close [update: original list was May 7; on May 26, I updated the list, and it is clear that the decision on the Keystone won't be make until spring, 2014, at the earliest
  7. Brent/WTI narrows; putting pressure on Bakken crude-by-rail, especially to East Coast
  8. International: North Korea removes missiles from launch pad; less hysteria about euro imploding (yet to come); coal surging; no real follow-on to Kyoto Protocol, suggesting global warming movement dead for all practical purposes though ideologues (including the US president will continue to pursue) 
February 2, 2013
1. Surging stock market; rising price of oil (WTI: $98)
2. Mideast: Egypt imploding; SyrIran threatens Israel; Israel strikes inside Syria
3. State Dept states no decision on Keystone XL before end of June, 2013
4. Brent/WTI spread widens; Seaway expansion on hold; wont' be "fixed" until 4Q13
5. Otherwise, similar to January 18, 2013
January 18, 2013
1. Debt ceiling: careening from crisis to crisis. No, not Greece; the US
2. Pipelines will be the energy story of 2013
3. Multi-well pad starting to take off
4. 160-acre well density in the Bakken (incredible)
5. No movement on the Keystone XL; Hillary announces resignation; Kerry yet to be approved; sworn in; Heidi visits a HeadStart program; nothing on the Keystone XL [update: Nebraska governor approves new routing plan o/a January 22, 2013]
6. Natural gas in the Bakken becoming an ever bigger story
7. WTI/Brent spread narrowing for many reasons
8. Number of rigs in the Bakken trending higher; price of oil trending higher
9. US can't rule out chemical warfare in Syria
10. $625 million needed for Williston infrastructure over next six years due to surging population
December 10, 2012
1. ObamaCliff -- time is running out; status quo will be extended six months
2. Chinese accelerating purchase of American energy assets (Canada, US, particularly)
3. Bakken potential significantly greater than once thought (CLR's TF3; 1.5-million-bbl EURs; 1-trillion-bbl reservoir)
4. Price of oil trending lower: foreshadowing the Great Recession of 2013
5. Oil from the Bakken moving east-west-east; not north-south; Enbridge UP; ONEOKs BCOE pipeline nixed for lack of subscriber support
6. Mideast stalemate; use of chemical warfare discussed
7. Rail over pipeline (for now)
8. Political movement on Keystone XL eerily quiet despite election being over
October 22, 2012
1. Earnings season
2. Slawson targeting the Upper Bakken Shale -- Huge! Shale vs tight.
3. Mideast risk: Russia/Syria vs US/Turkey
3. The four benches in the Three Forks: altering the definition of the stratigraphic limits
5. Bakken oil selling at a premium to WTI due to rail
6. The boom continues: North Dakota sales tax collections increase 40% year-over-year 7. Greece crisis coming to a head -- and then the can kicked down the road (again)
8. Pace of permitting in the Bakken quickening
9. ONEOK's Bakken Crude Oil Express Pipeline (1,300 miles from the Bakken to Cushing); nail in coffin for Keystone XL [update: ONEOKs Bakken Crude Oil Express Pipeline DOA]
September 12, 2012:
1. Mideast heating up: Obama won't meet with Israeli PM; US ambassador to Libya killed; Egyptians storm evacuated US embassy;
2. Flexibility of rail cars now provides opportunity to bring diluent back to northern tier; remember, they are putting in a pipeline from Tioga area to take NGLs up to Canada
3. Minot, North Dakota: airport facility plans suggest more is going on in Minot than meets the eye
4. EOG -- only two relevant fields -- the Bakken and the Eagle Ford
5. Crude-by-rail
6. Work over rigs
7. Specialty rigs
8. Euro gets kicked down the road; QE3 anticipated
9. CVX hit's all-time high; XOM hits 52-week high
10. Economic boom in western North Dakota continues
August 18, 2012:
1. Bakken continues to set new production records
2. Operators decreasing rigs in the Bakken; to contain costs
3. Work over rigs
4. Energy focus moving to North America: Eagle Ford, Bakken, Permian
5. Natural gas prices may have bottomed
6. Crude-by-rail out of the Bakken
7. Boom flattening out (I don't agree)
8. Euro gets kicked down the road
9. War drums in the Mideast; Muslim Brotherhood consolidates control over Egypt
10. Price of oil creeping back to $100; White House talks about releasing SPR after September

June 25, 2012:
1. Energy focus moving to North America
2. Dropping natural gas prices, global recession doom wind, solar
3. Natural gas liquids (NGLs), ethane story coming out of the Bakken
4. Mining the Bakken: 8+ wells/spacing unit in the better Bakken
5. Crude-by-rail
6. Formations other than the Bakken getting increased attention
7. Dickinson's attitude becoming more pro-growth
8. Keystone XL: does it even matter any more?
9. Serious, serious slowdown; Euro will not survive as it exists today
10. War drums in Mideast, but amazing how this can is kicked down the road
January 18, 2012:
1. US becomes energy leader, again: natural gas glut; net oil exporter. Energy focus moving to western hemisphere
2. Fracking: sand, EPA, mismatch in drilling/fracking
3. Arab Spring: to upset balance of power in the Mideast
4. Crude-by-rail
5. New formations in the Williston Basin getting attention, esp. the Madison.
6. The Bakken: manufacturing phase
7. The Bakken: activity in 2012 moves to northeastern McKenzie County
8. Operators establishing in-house oil service support (such as fracking)
9. Saudi sets $100 as new floor -- January 17, 2012
10. Boom continues in Williston; four new motels in play; luxury apartments downtown
December 28, 2011: Notice #9 in the list below -- I failed to mention the Madison formation.  Other than that, I'm not sure I would change the list except for one thing. Maybe omit EOR, and add this one if I have to keep the list to ten:
1. The drilling / fracking mismatch continues. Recent data suggests they will drill about 2,000 wells this year in North Dakota, and be able to frack only 700 wells. Nothing yet suggests this will be a huge difference next year. Something tells me the operators are not concerned about this mismatch. This may be working to their advantage. It's counterintuitive, but ...
Original Post

This post will disappear shortly, but it will be added to the "Top Ten Lists" linked at the sidebar on the right.

This list will change periodically, and it may not have "10" items, but I will do the best I can.

Maybe it's just my imagination but for the past six months I have seen an upsurge in stories about enhanced oil recovery (EOR). A year ago I did not even know what EOR was despite a friend sending me story after story about EOR and Denbury. Now, either it's my imagination or there really are a lot more stories on EOR.

So, that's the reason for this list. Try to get folks to thinking about trends in the oil patch..

Another trend is for more powerful, specialty rigs for unconventional shale plays, and the leader in this area seems to be H&P, so this will go on the top 10 trend list.

Readers can help me with the list. I'm not even sure it will amount to anything, but we'll see.

(A huge trend in 2010 was merger and acquisition in the Bakken --> XOM/XTO; Hess/AEZ/TRZ; OXY USA/Anschutz; DNR/Encore; etc; but that activity has slowed for the moment and I expect to see more of it in 2012 but not seeing a new trend yet. [In 2011, KOG buys BTA, and North Plains, all of the latter.]

A trend we will likely see in late 2012, or early 2013, will be stories on proppants, additives in hydraulic fracking, new ideas in these additives, as the Texas law takes effect for companies to release the content of their fracking cocktails.

So with that for introduction, the start of a new top ten list:
1. Enhanced oil recovery, EOR/CO2.
2. Specialty rigs, H&P. I mentioned it within the past year, and in the last six months it has gone from $50 to $73. 2Q11 announced contracts for 42 more rigs.
3. Fracking sand and proppants. EOG fracking sand plant in Wisconsin as example.
4. Crude-by-rail. Rail will have 400,000 bopd capacity in North Dakota by end of 2011 -- that exceeds current daily production; adds flexibility.
5. Energy focus moving to Western Hemisphere, away from OPEC. (Alaska, Canadian oil sands, Bakken, Niobrara, Eagle Ford, Utica, Venezuela (reserves > Saudi's), Brazil. France bans fracking; Libya in disarray.
6. Operators setting up in-house oil service support. Chesapeake already doing this; now Oasis says they are doing same thing.
7. The Bakken: the nation's largest industrial park. Paradigm shift: no longer drilling, but rather manufacturing. The industry will look to manufacturers to learn how to make unconventional operations more efficient.
8. Integrated companies splitting upstream/downstream: MRO, COP have announced; BP could be next.
9. More formations in play in North Dakota (Bakken, TF, Spearfish, Scallion, Lodgepole, Tyler, Red River).
10.  Fracking cocktails. Texas law takes effect in 2012 that requires companies to release contents of their fracking cocktails.

Let's See If New York Grants These Fracking Permits -- Not a Bakken Story

As noted earlier, New York had put a temporary ban on fracking; I think the temporary period has ended, but I don't know if fracking permits have been issued, and whether fracking has begun in upstate New York.

Now we get a chance to see, but don't hold your breath.

Norse Energy Corp. ASA, Lysaker, Norway, which holds 180,000 net acres of leases in New York, has applied to the state for high-volume hydraulic fracturing permits for wells it would drill to the Marcellus and Utica shales.

Drilling permits will not be issued until the supplemental generic environmental impact statement becomes final, but the company said it believes that it is important to have applications ready for approval once that process is completed.

Study Released On Impact of Low-Flow in Alaska Pipeline -- Not a Bakken Story

Link here.
Alyeska Pipeline Service Co.’s ‘Low Flow Impact Study’ of the Trans-Alaska Pipeline System warns of potential operations and safety issues if flow rate on the line drops below 350,000 b/d. TAPS, completed in 1977, transported 2 million b/d at its peak. It currently carries 650,000 b/d of oil from Alaska’s North Slope to Valdez, from where it is shipped to US West coast refineries.

The study identified water dropout and corrosion, ice formation, wax deposition, geotechnical, and other concerns posing operational risks to TAPS at throughput between 600,000 b/d and 300,000 b/d, but concluded the line could be operated safely down to 350,000 b/d if a number of issues are addressed.
And if one is concerned about losing flow from this pipeline, remember two other pipelines: one is about to be lost altogether, and another one will be lost due to that: the Keystone XL, and the Cushing MarketLink.
The contrarian bet is centred on a surge in oil production in the US Midwest, particularly from the new developments in North Dakota's Bakken basin, and Canada, combined with a lack of pipelines to evacuate the glut to refining centres on the US gulf coast.

While many pipelines feed oil into Cushing, the Oklahoma City that serves as the pricing point for WTI crude, none takes the crude south to the refining hub on the US Gulf of Mexico.
 The only problem with that contrarian view, however, is the likelihood that the Keystone XL is dead. It ain't gonna happen under this administration.

For Investors Only: BHI Earnings Triple -- Bakken, North Dakota, USA

Transcript here.

For folks who have bet against energy these past couple of years, look at the two-year BHI performance

With taxes likely to go up on "Big Oil" I'm beginning to think investors in oil may want to look at oil service companies. [Just moments after posting, "Don" send me the following link: Seven Oil Service Companies With Upside Potential (I've not read it yet, but I bet it includes BHI).]

OXY USA up tomorrow and QEP tomorrow after the close.

Nope, I'm wrong: the above link did not include BHI as one of the seven oil service companies but it did include H&P, a company I first highlighted some time ago when I learned they were the company making the special rigs for the Bakken and other unconventional plays.

Financial Times Article on Spread Between WTI and Brent -- Superb Article -- Bakken, North Dakota, USA

Link here. (May require free registration and password.)
Oil trades at above $100 a barrel. Saudi Arabia is raising its output and Washington is opening its strategic reserve. Are these signs of a shortage in global oil markets that should encourage US oil producers to pump flat out?

Maybe not. Another scenario may be more likely, one that leads to thousands of barrels of crude production in the US Midwest and western Canada being shut early next year.

This scenario, anticipated by some veteran oil watchers and hedge funds, would have huge implications for global oil benchmarks. At its most extreme, it could push the discount of West Texas Intermediate, the US crude, against Brent, the North Sea benchmark, to as much as $50 a barrel. The discount recently hit a record $23.57.
This is a very, very good article. Go to the link and read the entire story. 

Flaring Natural Gas -- An Old Story -- But ... Bakken, North Dakota, USA

Update

June 13, 2016: EIA graphic on ND flaring.

July 26, 2014: spreadsheet; natural gas processing plants in North Dakota

May 20, 2014: gas capture plan. Less than 220 wells account for 60% of flaring in North Dakota; much of it on the reservation. 

May 6, 2013: the back story to flaring in the Bakken. A key article from RBN Energy

January 27, 2013: FT has story about ND flaring. Fails to mention that percentage of flaring is going down despite production of oil and gas going up. As density of wells increases, flaring will decrease.  This story has (almost) no legs.

September 7, 2012: flaring is not going to "stop" in the North Dakota Bakken -- RBN Energy. 

July 19, 2012: old story in the Christian Science Monitor. 

April 9, 2012: links to questions about flaring.

January 31, 2012: thread on flaring and studies of flaring in North Dakota.

August 15, 2011: I think this story will gradually take care of itself.  North Dakota is perhaps the worst location in the world with regard to flaring natural gas. This is certainly not because North Dakota is not environmentally friendly. In fact, North Dakota, like all farm states has a long history of environmental activism just by its very nature. If Saudi is flaring less than North Dakota (on a percentage basis), I strongly doubt it has to do with Saudi's environmental concerns. Are you kidding me?

This is all about the rapid growth of the Bakken, coming from almost nowhere in 2007, to now pushing North Dakota to number four in the US for producing oil. With every well, new pipelines are being put in and more and more new wells will be tied into a natural gas pipeline.

After the horrendous 2010-2011 winter, and the even worse horrendous 2011 spring, companies are already increasingly talking about improving the infrastructure, code-talk for roads and pipelines. Oil companies have little say in county roads compared to their desire to put in pipelines.

I think with regard to flaring, we are in a win-win situation. If you see flaring decreasing, it's because the infrastructure is being put in. If flaring continues at high levels, it simply means the oil companies are drilling faster than pipelines can be put in. But that will change over the next couple of years. The oil companies are not going to chance another winter/spring of 2010 - 2011.

Original Post

This is an old story here in North Dakota -- the flaring of natural gas, but with this story, one gets the sense that at some point, something might have to give.

I am getting out on a limb because I don't know the real issues here, but in the old days, it was not practical to put in a natural gas pipeline until the operator knew whether there was a profitable well there or not. But with literally every well in the Bakken a producer, one can argue that the companies need to put in the infrastructure, including a natural gas pipeline before drilling a well. Or maybe technology on site to compress natural gas/liquefy natural gas instead of flaring. I don't know if the technology is available, practical, or cost-effective. Probably not, due to the fact the companies continue to flare.

Again, I am well beyond what I should be writing about here, I suppose, but something tells me we will be reading more about flaring in the future, rather than less.

Here's the Reuters' story on flaring.
Flaring of natural gas from wells is on the upswing in Texas and North Dakota as oil and gas producers rush to develop new shale plays, and critics are not happy about it.

Flaring, once a common practice, involves burning off natural gas that cannot be captured and sold in order to produce more valuable oil. It is frowned upon because it causes air pollution, boosts global warming and wastes natural resources.
Read the full article to find why North Dakota is still at an advantage (compared to Texas) when it comes to flaring.

One piece of good news, see first comment below: royalties must be paid on the flared gas after 90 days, so at least mineral owners are compensated.

Fertile Valley Oil Field Update -- Bakken, North Dakota, USA

Fertile Valley oil field is a small field, only one township in size, T160N-R102W, in the southwestern corner of Divide county, abutting the Montana state line on the west, and the Williams County line on the south. The field is at the upper northwest edge of the productive Bakken in North Dakota, and it appears the wells are at the lower end of the EUR estimates compared to the rest of the Bakken. But with better technology in completing wells (and EOR) and price of oil going up, this may matter less than it would have in the "old" days.

Until lately (July 25, 2011), it had been relatively inactive. One well was drilled a couple of years ago by Newfield. Now there are four more wells in the field, all confidential.

It appears the field is pretty much controlled by Newfield at this point; all five wells are Newfield wells. The first well was not all that great, but the good news is that Newfield has a good record of completing wells, and if they went in with four more wells, including two on one pad, it suggests they are confident the field will pay off.

Updated:
  • 17946, 86, Newfield, Trigger 1-31H, Fertile Valley, Bakken; t9/09; cum 41K 4/17;
  • 20356, PNC, Newfield, Erickson 160-102-18-19-1H, Fertile Valley, Bakken,
  • 20247, PNC, Newfield, Christensen 160-102-17-20-1H, Fertile Valley, Bakken
  • 20798, 151, Newfield, Solheim 160-102-28-33-1HA, Fertile Valley, Bakken; t9/11; cum 5K bbls 6/12; problems? see below; cum 114K 4/17;
  • 20263, 345, Newfield, Pass 160-102-21-16-1H, Fertile Valley, Bakken; t9/11; cum 97K 4/17;
20798 and 20263 are on the same pad.

[These are not good wells. Perhaps this is why Newfield, in 2011, complained about the cost of drilling in the Bakken.]

*******************************
Update on #20798

Apparently a work-over rig in early 2012, resulted in a much better well:

BAKKEN8-201231321331694593129101291
BAKKEN7-201231389340445852162701627
BAKKEN6-201229377034038680161101611
BAKKEN5-20122000000
BAKKEN4-201210000000
BAKKEN3-201272516372000
BAKKEN2-20120000000
BAKKEN1-20120000000
BAKKEN12-2011122240000
BAKKEN11-201123310397000
BAKKEN10-2011121950000
BAKKEN9-2011158164410187801878

RIM -- BlackBerry Folks -- To Cut 11 Percent of Work Force -- Not a Bakken Story

Coming on the heels of the huge work force cut at Cisco, this is huge.

This is not about the economy. This is all about Apple.

Link here.
BlackBerry maker Research In Motion Ltd plans to cut about 11 percent of its workforce to slash costs as it struggles to compete against Apple Inc and Google Inc.

The announcement of 2,000 job cuts on Monday came a month after the Canadian company revealed that it would reduce headcount for the first time in a decade.

One analyst said the job cuts were slightly deeper than expected but were key to RIM's recovery from a slump triggered by product delays and intense competition from Apple's iPad and iPhone as well as devices powered by Google's Android software.
This is truly incredible.

After I posted the story above, The Wall Street Journal has a nice article on why Apple is crushing the competition

I haven't read the full article yet, but here are my reasons: a) innovation; b) risk-taking; c) aesthetics; d) get rid of disk drives; e) go wireless and go flash drive (no moveable parts inside the computer); f) aesthetics; g) don't compromise; h) aesthetics; i) aggressively protect the patents and the brand. Later, I will think of some others. But innovation, aesthetics, and not compromising are the big three. Years and years ago, Stever Jobs pointed out that when Apple had 2 percent of market share and Dell said Apple should fold, if Apple got to 4 percent of market share, Apple would double the size of their share of the market. Now here is the lede for that WSJ article:
AppleInc. is crushing it, but its success is disrupting the technology sector in ways that could hurt the stocks of many other players—friend and foe alike.

Last week, Apple's quarterly results stunned even the optimistic watchers on Wall Street. Eschewing the usual kabuki dance where a company magically beats the analysts' consensus estimate by a penny or three, Apple reported second-quarter earnings of $7.79 a share, oceans past the $5.85 estimate. 
Hmmmm... the article had nothing to do with the headline. Slopping headline writing.

Photograph of the Cyclone 18 Rig Fire -- 30 Miles Northwest of Belfield -- Bakken, North Dakota, USA

A reader sent in this photo of the fire.  See initial post here.   The Bismarck Tribune story, a day later. Also, a day later, the Dickinson Press storyVideo at this local television station site. Remember, regional links break early. Two severely burned and air evac'd to Minneapolis-area burn center; a third minor injuries. About ten personnel were on the site when the well exploded. Oil appears to be flowing under its own pressure. Discussion group with details. According to The Dickinson Press, Cyclone was an independent contractor for Continental Resources. Continental Resources said this was the first rig they had lost to a mishap in 40 years.

Don alerted me to this link which shows you exactly the type of rig Cyclone 18 was. In addition, you can see where the Cyclone rigs are drilling. A great site.  When you get to the site, click on "North Dakota," and then click on the rig you are interested in. 

If it copyrighted or the person who took the photo does not want it posted, I will remove it. I will also give credit to the photographer if information provided.


Update, Dickinson Press, July 28, 2011. 


Bismarck Tribune update, July 26, 2011.