ATCO Lodge -- Man-Camp -- Williston, North Dakota -- BEXP Wells -- North of Williston, North Dakota -- Bakken, North Dakota, USA

This is the ATCO man-camp just north of Wililston, North Dakota, on US Highway 2 & 85.  Just across the road, about two miles to the west are two very nice wells. I believe they are the BEXP wells:

• 19002, 2,130, BEXP, Smith Farm 23-14 1-H, spud 6/10; tested 10/10; 86K as of 6/11
• 19119, 3,425, BEXP, Heen 26-35 1-H, spud 7/10, tested 11/10; 106K as of 6/11

"God's country," as we like to say up there.

Big sky country, too.

Devils Lake, North Dakota Flooding -- Not A Bakken Story

This is one of the better videos I have seen documenting the tragedy in north-central North Dakota, the growing Devils Lake, swallowing the hopes and dreams of countless North Dakota farmers and their families.

It is hard to believe that this is occurring in the same state that is experiencing a boom just to the west.


Devils Lake, North Dakota
It is thought that "Devils Lake" was a mis-translation from the native American name for the lake, Spirit Lake.

Energy Firms Competing For Hires -- Rigzone.com

Link here.

Despite a big drop in oil and stock prices in recent days, U.S. energy companies bearing down on the country's shale fields have yet to waver from plans to add staff this year to boost domestic production.

The industry is hiring as it brings new U.S. supply on line and demand grows from power-generation companies switching to natural gas from coal or fuel oil.

"Our industry is competing for talent," said Jim Haynes, vice president for U.S. operations at Spectra. "We continue our hiring mode."

Energy companies will be competing across all geographic areas. I have posted a couple of times in the past few months that North Dakota will be competing with the Niobrara, the Eagle Ford, the Marcellus and the Utica. 

Among the hotter areas for employment growth: Some 50,000 job additions this year are expected for the Barnett shale of Texas, and 48,000 in the Marcellus shale of Pennsylvania, West Virginia, Ohio and New York, according to the IPAA.

Besides the Barnett and Marcellus shales, U.S. energy companies plan to beef up rolls in the Haynesville shale of Texas and Louisiana, the Eagle Ford of South Texas, the Bakken of North Dakota and Utica formations of Ohio.

Folks may recall the visit to the University of North Dakota (geology, engineering) by CLR/CEO Harold Hamm last year. 

Surge Energy Has New Presentation -- Spearfish, North Dakota, USA

Link here.

The Largest Industrial Park in the United States -- Photos -- The Bakken, North Dakota, USA

When the flurry of earnings reports were coming out and earnings conference calls were being made, someone noted something interesting and sent it my way.

It was noted that Oasis Petroleum, in their conference call, suggested that unconventional drilling is significantly different that what has gone on in the past. With conventional drilling, Oasis suggested it was just that: drilling. But with unconventional, horizontal drilling, and fracturing, Oasis says it is a lot more like manufacturing than drilling.

This is how I replied, pretty much unedited, not very polished, but hopefully folks get what I'm trying to say. Here's the reply:

One of the great things the Air Force offered was outstanding continuing education in areas one would not expect. I received a lot of free education with the Air Force. One of the things I most enjoyed was learning about "core competencies" of businesses, and learning that successful businesses were more likely to become successful when they learned what business they WERE REALLY in.

For example, one could argue that Burlington Northern took off as a railroad when it realized it was not in the railroad business, but in the TRANSPORTATION business, and set up intermodal industrial parks (like that commerce center in Bismarck, North Dakota) in which Burlington Northern brought together ocean-going tankers on the coasts, and truckers across the nation, and integrated their operations (of course, the intermodal container was a huge innovation, but it came about when someone recognized the connectivity between ships-trains-trucks).

Likewise, in the old days, they talk about "sticking a straw in the ground," a conventional well, but there's no question that unconventional drilling, horizontal and fracking, has changed all that. In the old days, the key was finding the oil; today, it seems the key is completing a well. So, when I hear Oasis using language like this, it suggests to me their leadership is very, very smart, and they've recognized they are not in in the oil drilling business, but in something else, I'm not sure what else to call it, but like they say, it's more like a manufacturing process than anything else.

In manufacturing, one needs to get the components to the assembly line on time and in the right order and not have late deliveries of crucial components or components stacking up waiting to be used, taking up space.

Talk about similarities in the Bakken. Each well is a project of its own, with a project manager, a project calendar (probably made by Microsoft), and things moving along on schedule -- lease, pad building, small rig spudding, large rig drilling to total depth, frack team on site, fracking, trucking stuff in and trucking stuff out. They say it takes 74 companies to get a well from a dream to production.

From an investor's point of view, I feel more comfortable investing in a company who has a CEO who seems to see the big picture, perhaps from a different angle. When I see comments made by the CEOs in these various conference calls, one gets the impression we have some brilliant people in charge of these companies. My respect for Oasis went way up when I heard/read those comments. 

If the Bakken is the nation's largest industrial park, Williston is the front office. Be sure to take a hard hat if visiting.

See also: Oasis Wells Services, Inc., a new company.

The following photos were sent to me, taken near Westby, Montana, just the across the state from North Dakota. It certainly gives one the feeling that the activity in the Williston Basin is a manufacturing process, not simply drilling wells.

Wow! Talk About “What Goes Around, Comes Around." Déjà Vu All Over Again

Don't worry; I will be getting back to the Bakken momentarily, but some things are just too compelling.

This is one of those things: a link to another blog, with three very interesting entries:

• Senator Joe Biden Opposes Raising the Debt Ceiling in 2006
• Senator Barack Obama Opposes Raising the Debt Ceiling in 2006
• Standard and Poor's Debt Downgrade Warning in 1995

Now, back to the Bakken.

Seven (7) New Permits -- Bakken, North Dakota, USA

Daily activity report, August 10, 2011 --

Operators: BR (2), ERF (2), CLR, KOG, and Samson Resources

Fields: Cabernet, Fayette, Squaw Creek, Brooklyn, Poe, and Ross

BR has a two-well permit pad at the border of Cabernet/Fayette.

Enerplus (ERF) has the two-well permit in Squaw Creek.

CLR has anther permit in the active Brooklyn field.

***************

BEXP announced a nice well:

• 19868, 2,541, BEXP, Tufto 18-19 1H, Williams County

Two other wells came off the confidential list but still not completed and placed on DRL status (reported elsewhere)

Petro-Harvester acquired eight older wells from Great American Royalties (Steinhaus and Hedges wells) in Bottineau County. All eight wells targeted the Madison formation; have produced between 100,000 and 175,000 bbls of oil since they were spudded back in 1975 - 1981. It looks like they are all still active, producing 75 - 100 bbls/month.

The following permits were renewed:

• #17559 – Summit Resources, Inc., Carlye 8-17., NWNE 17-138N-92W, Stark Co.
• #19425 – Hess Corporation., BB-Stonewall-150-95-9H-1., NENW 9-150N-95W, McKenzie Co.
• #19452 – Hess Corporation., RS-Ball-157-90-2227H-3., SESW 15-157N-90W, Mountrail Co.
• #19453 – Hess Corporation., RS-Johnson-157-90-1510H-3., SESW 15-157N-90W, Mountrail Co.
• #19454 – Hess Corporation., RS-Ball-157-90-2227H-2., SESW 15-157N-90W, Mountrial Co.
• #19455 – Hess Corporation., RS-Johnson-157-90-1510H-2., SESW 15-157N-90W, Mountrail Co.
• #19456 – Hess Corporation., RS-Ball-157-90-2227H-1., SESW 15-157N-90W, Mountrail Co.
• #19457 – Hess Corporation., RS-Johnson-157-90-1510H-1., SESW 15-157N-90W, Mountrail Co.

If This Story Doesn't Catch Your Attention, Nothing Will -- A Banking Story, Not a Bakken Story

Link here.

This bank is voluntarily closing its doors because the federal government feels its loans are too risky: to hometown dentists, small businesses, etc. Whether you like banks or hate banks, this story has a message.

The bank wrote off 1.25% of its loans last year, well below the industry average. This "small" bank made $11 million last year. But the Feds thought it too risky. Read the story. You may agree. Not.

The good news: the "bank" will open its doors under new business plan, won't call itself a bank, and will get backing from one of the founders of Microsoft.

Interesting story. Thank goodness for the internet.

Menards -- TIF District -- 200-Acre -- Phase I Improvements: $5.7 Million -- Largest Ever for Williston -- Bakken, North Dakota, USA

Updates

February 17, 2012: no evidence that Menard's is coming to Williston any time soon. Very interesting. My hunch is they couldn't get the employees they would need.

Original Post

Link here.

The Williston City Commission voted to approve a Tax Increment Financing District for a new retail center west of town Tuesday.

A TIF District would be created for the 200-acre Sand Creek Town Center site planned by Granite Peak Development.

City Auditor John Kautzman said the value of land and improvements for Phase I of the district was $5.7 million. A total of $1.45 million would be assessed through the TIF District.

Data points:

• Original story earlier this year, click here
• Menards announced April 5 intent to build a 200,000 square-foot facility on a 16.5 parcel of land on this 200-acre development
• The development area to be called Sand Creek Town Center
• Development site north of US Highway 2 along 35th Avenue West (to me this sounds like it is just west of the bypass that swings around Williston on the west side)
• In addition to $5.7 million up front for Phase 1, the city would also commit $2.5 million of sales tax revenue created from new retail stores; right now Menards is the only occupant
• In addition to $5.7 million up front for Phase 1, the city would also commit $250,000/year for nine years in STAR Fund dollars
• The TIF District would be paid off over 15 years
• Sand Creek was where I spent many days of my boyhood tramping around exploring and catching fresh water life, mostly frogs with legs to small to eat. I learned to start a campfire using flint and steel in this area as a boy scout. But that was about all. I wasn't very good at the outdoors stuff. I did learn that it's cold to camp out in January in North Dakota

Based on the story, it sounds some members of the Williston City Commission were more than just skeptical, but downright nervous about this project going forward. One of five commissioners voted against it.

I don't know if this is  how you do it, but: $1.45 million TIF assessment + (9 x $250,000) + $2.5 million = $6.2 million vs the $5.7 million appraised land value and improvements

I cannot deny that as a commissioner I also wouldn't have some anxiety. The oil industry is well known for boom and bust cycles. What I would most be interested in is how much will the improvements for Phase 1 cost. If I understand the story correctly, the $5.7 million for the first phase is the value of the land as well as improvements. If nothing is built there, the value of the land is fairly low. If the improvements are nominal, one could argue that Menards, the other retail stores that might come in, and Granite Peak Development could share in the costs.

I have never been in private business, no little to nothing how commercial real estate works, so take my 2 cents worth for what it is: 2 cents worth.

It would be nice to see Menards in Williston, but would Menards come if asked to share a bit of the risk in improvements? Of course, Menards will argue they are committing to huge risk by just buying / leasing the land and building the facility.

For Investors: Samson Oil and Gas / Double Eagle Petroleum -- Motley Fool

I probably will not post much about investing in Bakken companies during the current period of extreme volatility in the stock market.

Companies operating in the North Dakota oil patch reported outstanding results in the second quarter of 2011, a quarter in which, frankly, I thought would be a problem: the flooding was atrocious in North Dakota and affected oil production. Right now, these companies would be celebrating new highs in their share prices, but like the rest of the market, many of them have been caught up in the volatility. Their current share price, or market cap, does not reflect what these shares, or companies, will be worth a year from now.

On a day when the market has another huge slide, two things: a) the price of oil is up, now down; and, b) shares in Bakken oil companies are rising.

So, I will let this play out before posting a lot more on investing issues.

Having said that, here is one: Motley Fool has noted Samson Oil and Gas; and, Double Eagle Petroleum, are now on its radar.

Good luck to all.

Blog Is Loading More Slowly Than Usual ...

... it's possible it's just my computer, but unlikely. It seems it is taking a bit longer for the blog to load today.

Both Wells Released From Confidential Status on "DRL" Status -- Bakken, North Dakota, USA

I will post those later on "New Wells Reporting," but "DRL" status suggests continued evidence the fracking backlog continues.

One was an XTO well, in the Haystack Butte field, the other, Samson Resources, a wildcat.

By the way, generally speaking, the term "wildcat" has lost a lot of its significance when talking about the Bakken.

Here they are:

• 19907, DRL, XTO, Inga Federal 41X-29, Haystack Butte, Bakken
• 19525, DRL, Samson Resources, Yukon 12-1-163-98H, Wildcat, Bakken

Anschutz Sells Remaining Bakken Assets -- Bakken, North Dakota, USA

Anschutz sells the rest of it's Bakken holdings. Buyer not disclosed, but noted to be a Canadian company. $115 million.

Link here.