The Surge in Oil Wells Nationwide --

Link here.

Natural gas drilling has been the dominant energy story in the U.S. for the past few years, but oil is back with a vengeance.

For the first time in 18 years, the number of oil rigs working in the U.S. has exceeded the number of natural gas rigs, according to July rig data compiled by IHS-CERA, covering both land and offshore rigs.

By 2020 this surge in oil drilling could increase U.S. oil production by as much as 3 million barrels per day, Peter Stark, head of IHS-CERA's industry relations said Wednesday during a session launching the start of Summer NAPE, the semi-annual oil and gas prospects expo being held in Houston. 

But:

The surge could slow if natural gas prices continue to rise and make gas projects more attractive -- which many analysts expect in the next year.

And this is why I commented on another post why it concerns me that a well in the Bakken can now cost $9 million:

In some cases drilling for oil can cost less than for gas. Tom Ward, CEO of SandRidge Energy, said his company is spending as little as $760,000 per well in the Central Basin field in the Permian, compared to several million per well in most shale gas fields.

John Christmann, head of Apache Corp.'s Permian Basin operations, said his company has acquired acreage in the Empire ABO field in the Permian, a field where no new wells have been drilled since 1984.

"In some cases you have million-barrel wells that have never had an offset drilled near them," Christmann said, seeing strong potential for large quantities of oil.

Yup, The Permitorium Continues -- This is Truly Incredible -- US Government Playing Hardball

Link here.

Exxon Mobil Corp. and the federal government are fighting over one of the largest oil discoveries in the Gulf of Mexico that could yield billions of dollars of crude in coming years, according to a report in The Wall Street Journal.

The Julia oil field, about 250 miles southwest of New Orleans, may hold billions of barrels of oil and gas equivalent. Exxon, which announced the discovery in 2008, wants to tap that field. But the Interior Department says Exxon's leases have expired and the company hasn't met requirements for an extension.

I've followed this story for months. The Obama administration telegraphed their intentions and they followed through. The government will argue that it is tired of companies sitting on oil reserves and not developing them.

Interestingly it was the same government that put a stop on drilling in the Gulf for the past year.

Eight (8) New Permits -- Bakken, North Dakota, USA

Daily activity report, August 18, 2011 --

Operators: Hess (3), Denbury Onshore (2), Murex, MRO, CLR

Fields: Arnegard, Big Butte, Alkali Creek, McGregor, Murphy Creek and a wildcat.

CLR has the wildcat in Williams County.

Denbury Onshore has a 2-well pad permit in Arnegard oil field; Hess has a 2-well pad permit in Big Butte.

Slawson had two permits canceled (16818 and 17535); probably a typo, but NDIC reported both with the same name: Panther 1-29H, and both located at the identical location: NWNE 29-158N-91W.

This is a long list: Whiting requested and was approved "tight hole" status for seven wells; Oasis "ditto" for four wells. With one exception all of Whiting's wells were in Mountrail County (probably Sanish oil field, its cash cow); with one exception, all of Oasis' wells were in Williams County.

Carpe Diem: "Peak Solar" Hits Tennessee, Oregon

Link here.

Bottom line: solar energy comes to an end in two states as state legislatures cut subsidies. Solar was just getting too expensive.

For the longest time -- on my previous blog -- I posted the cost of solar energy; it was about 5x that of conventional energy (residential electricity: 30 cents vs 6 cents for similar unit of electricity). I finally gave up keeping track: the numbers weren't changing and one of two things was bound to happen: a) states would continue to lose money subsidizing solar energy; or, b) states would quit subsidizing solar energy.

Not once did I see the price of solar energy coming down far enough to compete with conventional sources. The economics were simply not there.

Wind energy might last a bit longer. But there is a huge difference in the economics between solar and wind energy.

This is not to say that solar energy does not have its place in the energy field. It does.

Wow, Wow, Wow! Has America Already Lost Interest in the GM Volt?

Update

This is why folks are losing interest in the electric car: the shocking truth about electric cars -- they are powered by coal, and they cost too much.

Original Post

Link here.

Polls show "early adopters" less inclined to stick with the Volt.

The big problem is the plug-in’s price, CNW data indicate.  When first introduced, the Volt carried a $41,000 sticker, though it qualified for a $7,500 federal tax credit.  For 2012, the Chevy will drop to $39,995, a $1,005 cut, though it is still thousands more than the Nissan Leaf – and nearly double the price of a base Chevrolet Cruze compact, which shares the same underpinnings as Volt.

According to Wiki:

The Edsel was an automobile manufactured by the Ford Motor Company during the 1958, 1959, and 1960 model years. The Edsel never gained popularity with contemporary American car buyers and sold poorly. Consequently, the Ford Motor Company lost millions of dollars on the Edsel's development, manufacture, and marketing. The name "Edsel" has since become synonymous with failure.

Flashback: George Will on the Volt.

Two-Part Series on Water, Fracking and The Bakken, North Dakota, USA

Link here to the first of a two-part article on water and fracking at The Williston Herald. [Update: If unable to access it, not missing much -- posted October 28, 2017.]

• drilling is occurring twice as fast as fracking
• most of the road impact is due to water-fracking-trucks.
• fracking can be accomplished in 48 hours -- once set up.

I did not read the article closely, and haven't seen the second article in the two-part series.

For newbies, there is not a shortage of water in the Bakken. There may be distribution problems, access issues, challenges with transportation of water, etc., but there is plenty of water in the Bakken oil patch for fracking.

Best Western Plus Inn and Suites Breaks Ground -- Williston, North Dakota -- Bakken, North Dakota, USA

Link here.

99 rooms.

North of Wal-Mart, north of Williston on "2 & 85" or what is commonly referred to as the "Million Dollar Way."

Best Poll of the Day -- From the Minot Daily Press

Link here.

I assume the poll is a dynamic link.

The poll today:

Who was the better president?

• Jimmy Carter
• Barack Obama

Results right now: Earl, 77%; Hussein Obama, 23%.

North Dakota Oil Production This Year Will CRUSH Previous Record -- Bakken, North Dakota, USA -- Depsite One of the Worse Winters on Record

Link here to The Bismarck Tribune, the article begins:

North Dakota oil drillers are on pace to crush the state's crude production record despite a year fraught with worse-than-normal winter weather and record spring flooding that idled rigs and hampered access to the oil patch.

The state Industrial Commission said crude production through June totaled 64.6 million barrels. Based on current production estimates, the state should end 2011 with about 133 million barrels, up about 18 percent from the record set last year.

North Dakota produced 11.2 million barrels of crude in May and 11.5 million barrels in June, according to the latest Industrial Commission figures available.

Ron Ness, president of the North Dakota Petroleum Council, called the production remarkable because the weather conditions this year have been among the worst in the state's 60-year oil history, stranding millions of barrels at well sites.

"So many roads were shut down we couldn't move crude," said Ness, whose group represents about 250 companies.

Nothing but "wow!"

Data points:

• NDIC: "we're still trying to catch up"
• June: another production record
• Every month from here on out should meet / exceed June's production
• June's production: 385,000 barrels/day -- just 15,000 short of another milestone
• Will soon hit 200 active drilling rigs (there were 193 today, another record)

Note:

North Dakota oil drillers are on pace to crush the state's crude production record despite a year fraught with worse-than-normal winter weather and record spring flooding that idled rigs and hampered access to the oil patch.

The state Industrial Commission said crude production through June totaled 64.6 million barrels. Based on current production estimates, the state should end 2011 with about 133 million barrels, up about 18 percent from the record set last year.

Despite all this:

Lynn Helms, director of the state Department of Mineral Resources, has said there were 822 idle wells in February, up from 760 in January. The number of idle rigs peaked in June at 900 because of soggy conditions and weight restrictions on roads that made many well sites inaccessible to trucks and other equipment needed to move the crude off site.

For newbies, when I speak of "rigs," I'm talking about those huge structures you see in the oil patch that are drilling for oil. In the paragraph above, I assume the writer is talking about "wells," where rigs once were. There are "only" 193 active rigs in North Dakota today, so I doubt the rigs in the paragraph above was referring to drilling rigs. But I may be misunderstanding something. It wouldn't be the first time. Someone will write in to correct me.

There are about 5,700 producing wells in North Dakota. I believe about 900 of them were shut-in, or otherwise inactive, due to weather-related issues as noted above.
For comparison:

North Dakota's oil patch pumping about 100,000 more barrels of crude daily than a year ago at this time and about double the production in 2008. State and industry officials estimate the state could hit 700,000 barrels daily by 2015.

Agency figures show Alaska production is pegged at about 550,000 barrels a day, followed by California at 540,000 barrels. Texas leads the nation with about 1,410 million barrels daily.

UK North Sea -- One Of The Best Areas for Oil Development -- Not Immune From Oil Taxes

Link here. 

The outlook of the UK upstream oil and gas industry remained fragile in this year’s second quarter, increasing modestly to 54 points from 51, according to Oil & Gas UK’s latest business confidence index.

“Across the operator community, confidence increased slightly from 46 to 48 points but this score still represents a negative outlook,” said Ken Cruickshank, OGUK’s supply chain manager.

OGUK’s index measures a number of economic indicators, including changes in business confidence, activity levels, business revenue, investment, and employment.

The index gauges overall industry confidence on a 100-point scale, with a higher rating (above 50) indicating a more positive outlook and a lower rating (below 50) representing a more negative viewpoint.

This is what oil companies are worried about: taxes.

“While it appears that some companies may feel reassured by the Treasury’s willingness to engage on ways to mitigate the negative impact of the tax increase on investment, the confidence of many independent operators in particular continued to decline in the second quarter,” Cruickshank said.

The North Dakota legislature needs to take note. 

Let's Make This Real Clear -- Re-Posting -- Bakken, North Dakota, USA

On January 1, 2009, or thereabouts, it was predicted that the North Dakota Bakken play would yield 800,000 to 1 million barrels/day by 2018.

The production curve needed to reach that range is already steeper than predicted, which means that production is now forecast to exceed that range by 2018.

At that time, 1,151 Bakken wells in the Williston Basin has combined initial potential test rates of more than 1 million barrels/day.

That number, 1 million barrels/day by those 1,151 Bakken wells, exceeded -- exceeded --  the production from 17,800 vertical oil wells drilled in the US in the same period.

Since Jan. 1, 2009, 1,151 Bakken horizontal wells in the Williston basin had combined initial potential test rates of more than 1 million b/d, more than the collective initial test value from 17,800 vertical oil wells drilled in the US in the same period, said Pete Stark, vice-president of industry relations, IHS CERA, which sponsored the kickoff session.

IHS, Stark said, has estimated that the Bakken play will be yielding 800,000-1 million b/d by 2018, but the play is already ahead of the production curve needed to reach that range.

Staggering Numbers Coming Out of Houston Conference --

From the Summer NAPE exposition in Houston.

How staggering are the numbers coming out of the Williston Basin Bakken: 

Since Jan. 1, 2009, 1,151 Bakken horizontal wells in the Williston basin had combined initial potential test rates of more than 1 million b/d, more than the collective initial test value from 17,800 vertical oil wells drilled in the US in the same period, said Pete Stark, vice-president of industry relations, IHS CERA, which sponsored the kickoff session.

IHS, Stark said, has estimated that the Bakken play will be yielding 800,000-1 million b/d by 2018, but the play is already ahead of the production curve needed to reach that range.

Wow, I wish the Obama administration would attend some of these conferences (on the other hand, maybe not: the would see all the low-hanging fruit in need of more regulation, higher taxes, and delayed permits), but this is what the "oil and wet gas plays of all types" are doing:

• Revitalizing basins
• Reducing unemployment 
• Stressing demand for rigs and oil services
• Reversing production declines in the continental onshore

And it's not just the unconventional plays like the Bakken, but rather;

• Conventional and unconventional
• Vertical and horizontal
• Shales, carbonates
• Tight oil formations
• Multiple pay zones

And,

A number of plays besides the Bakken are "getting ready to take off" in the Williston basin, said Roger Pinkerton, Marathon Oil Corp. North American onshore director exploration, although he didn't specify. Marathon has important acreage positions in the Bakken, Niobrara, Anadarko Woodford, and Eagle Ford plays.

And when I started this blog -- actually re-started it -- two years ago, I said I was inappropriately exuberant. 

Well, This Should Put Fear of Allah into Syrians ... President Obama Signs Executive Order Barring US From Importing Syrian Oil

Link here. 

Most of Syria’s oil is used domestically, but it exports 150,000 b/d, 95% of which goes to Europe, primarily to Italy, the Netherlands, France, and Germany.

The article does not say how much Syrian oil is brought into the US. And I bet none of the mainstream reporters asks.

For comparison, the North Dakota Bakken is producing about 350,000 bbls/day.

The same day the announcement is made about the executive order, the price of WTI oil drops $4.00.

Perhaps for the consumer, the President needs to sign another executive order barring the importation of oil from the Gaza Strip.

New Record: 193

Dynamic link here.

Petro-Harvester -- Madison Wells -- Bottineau County -- North Dakota, USA

This is why I love the blog and love to blog.

"Anonymous" asked me if I knew anything about some Madison wells that Petro-Harvester is drilling in Bottineau County.  Go back to the Madison wells at Stockyard Creek to see why one might be interested in the Madison.

For newbies:

• Bottineau County is north of the core Bakken; it lies along the Canadian border
• Most folks associate Bottineau County with Spearfish formation
• The Madison formation is a legacy formation; it's been producing "forever"; I believe it still accounts for about 50% of all oil produced in North Dakota; that percentage has dropped quickly over the past two years with the discovery/success of the Bakken
• Having said that, some folks may do very well going back to the Madison, especially if Madison wells don't need fracking, which can now account for 50% of the cost of the well

I will update the post when I get a chance, but here's an example of a Petro-Harvester well in Renville oil field in Bottineau County, North Dakota:

• 19315, AB/1,038, Petro-Harvester, Rice 11, Madison, Renville; t8/10; cum 130K 7/15; last produced 7/15;

History:

• This location was spud 7/31/2010, completed 8/19/2010; tested 8/22/10
• It was drilled to a depth of 6,500 feet; it looks like it was unitized, water flooded
• To date, it has produced 98,000 bbls of oil (as of 12/12)

Production history:

MADISON	11-2011	30	2311	2357	46430	0	0	0
MADISON	10-2011	31	2529	2563	52496	0	0	0
MADISON	9-2011	30	2271	2311	38189	0	0	0
MADISON	8-2011	31	2383	2479	33575	0	0	0
MADISON	7-2011	30	2891	2847	38294	0	0	0
MADISON	6-2011	30	3589	3595	36940	0	0	0
MADISON	5-2011	21	3456	3254	25000	0	0	0
MADISON	4-2011	25	1632	1530	27380	0	0	0
MADISON	3-2011	31	2235	2210	35456	0	0	0
MADISON	2-2011	28	2447	2447	31885	0	0	0
MADISON	1-2011	31	2861	2861	38553	0	0	0
MADISON	12-2010	30	2926	2926	38740	0	0	0
MADISON	11-2010	30	4599	4599	38105	0	0	0
MADISON	10-2010	31	7933	7933	36093	0	0	0
MADISON	9-2010	29	13336	13564	11644	0	0	0
MADISON	8-2010	14	10786	10558	5529	0	0	0

18452, AB/0 (not a typo), Petro Harvester, Glessing 7-16, Madison, Renville; cum 4K 3/12;
20776, DRL --> WI, Petro Harvester, Rice 13, Madison, Renville
21144, PNC, Petro Harvester, Rice 13X, Madison, Renville
20773, PNC, Petro Harvester, Riise 4, Madison, Renville
20963, DRL --> WI, Petro Harvester, Riise 4X, Madison, Renville, t8/10; cum 128K 5/16; last produced 5/16;
20775, DRL --> WI, Petro Harvester, Riise 12, Madison, Renville
19634, DRY, Petro Harvester, Greek 1-2, Madison, 18452

Data Points for August 18, 2011 -- With No Comment

Dow plunges 450 points.

New unemployment claims exceed forecasts: 409,000 vs 400,000.

Two months ago, big story: with stimulus money coming to an end, expect second round of layoffs.

Good news for consumer: Ms Bachmann says she will get gasoline back to $2.00.

Better news for consumer: Mr Obama may out-do Ms Bachman -- price of oil drops $4.05 overnight.

The New York Times: nowhere near a depression. During the depression, 25% unemployment; current "real" unemployment no worse than 17%.

Inflation rising fast: Drudge Report headline with link.

Missile that hit Israel overnight fired from Egypt; occurs months after Egyptian leader "thrown under the bus" by US "ally" of 30 years.

Drudge Report: huge photo of President and First Lady riding bikes at leisurely pace; bicycle helmets in place; no daughters in the photo.

Yesterday, story that the president will present new jobs program sometime after his vacation is over.

It is leaked that the jobs program will be to hire 500,000 to repair dilapidated schools around the country; similar to "100,000 new cops on the street" program.

Stockyard Creek Has Been Updated -- Bakken, North Dakota, USA

Stockyard Creek has been updated.

For folks living in Williston, this is a nice field to drive out to and look at the activity. There is one rig on site, just to the north of US 2, as one enters the field from the west. There are several wells on the confidential list, and my hunch is there are a lot of flares to be seen from the road.

It appears that all 33 sections of this field should be held by production now except for maybe three sections (11, 12, 30).

It's an interesting mix of wells: a lot of very good Madison wells, such as:

• 12537, 157, Petro-Hunt, State of North Dakota K 1, Stockyard Creek, Madison; s10/88; t12/88; 6/11 461K; still easily 1,000 bbls/month

...this well is still pumping 1,000 bbls/month after producing for 23 years, and another Madison well:

• 12487, 272, Petro-Hunt, Texaco Otto Boss 18-1, Stockyard Creek, Madison; s8/88; t9/88; 6/11 637K

The Petro-Hunt K 1 well has produced 461,000 bbls to date; the Otto Boss has produced 637,000 bbls to date, both Madison wells.

Meanwhile, some of the new Bakken wells look to be very good, including:

• 19220, 1,057, BTA/Baytex, 20711 Saccaro 310 1-H, Bakken, spudded 8/10, DRL; s8/10; t11/10; 6/11 110K -- spudded 8/10 and has already produced 110,000 bbls of oil

Anyway, the update is here.