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Thursday, August 25, 2011

North Dakota Is the New Texas -- Bakken, North Dakota, USA

Nothing new in this story, but written by someone who just visited:
Forget potential, look at what is happening right now - on the ground. I was in Williston, North Dakota, last month. The place is absolutely bonkers - construction everywhere. Trucks roar down rural roads. Motels, even mid-week, with no vacancies. Long lines at retail establishments and gas stations. Oil rigs and storage facilities sprouting all over the prairie.

It is hard to believe that a few years back, due to rural depopulation, some advocated turning the Dakotas into a vast grassland where only buffalo would roam. So much for prognosticators. Fortunately, the buffalo are still thriving.
Tonight, my second night in Williston after being gone for a couple of months, I realized I needed a loaf of bread. I was ready to go to Economart, when I remembered another option.

I bought my bread, and spoke with the "manager." She said they have several stores in Montana and North Dakota and she occasionally fills in at the store in Williston. She said when she comes to Williston, she cannot find a room at any of the motels. In the past two years several new motels/hotels have popped up and still there are not enough rooms. I talked to one motel manager and she says folks are getting the word that west of Minot nothing can be found for overnight lodging.

I wonder if the SeekingAlpha writer (above) actually saw any buffalo. The only buffalo, as far as I know, in the oil patch are in the Theodore Roosevelt Park -- the north unit near Watford City, and the south unit near Dickinson ("near" being "relative").

Costco Removes Parking Lot Chargers for Electric Vehicles -- No One Was Using Them

Link here.
Incredible story. I didn't even know Costco had charging stations in their parking lots. Maybe the charging stations weren't being used because no one knew they were there. After all, all the reports out of Detroit suggests GM is building electric vehicles (the Volt) as fast as they can make them, and they are flying out of dealers' showrooms, so there should be dozens, if not hundreds of Volts out there. I guess they just aren't at Costco. Oh, that's right. Costco is for those who are watching their pennies. Anyone who can afford a Volt isn't worried about saving pennies.

Costco, the membership warehouse-club chain, was an early leader in offering electric-vehicle charging to its customers, setting an example followed by other retailers, including Best Buy and Walgreen. By 2006, Costco had installed 90 chargers at 64 stores, mostly in California but also some in Arizona, New York and Georgia. Even after General Motors crushed its EV1 battery cars, the Costco chargers stayed in place.

Yet just as plug-in cars like the Nissan Leaf and Chevrolet Volt enter the market, Costco is reversing course and pulling its chargers out of the ground, explaining that customers do not use them.

“We were early supporters of electric cars, going back as far as 15 years. But nobody ever uses them,” said Dennis Hoover, the general manager for Costco in northern California, in a telephone interview. “At our Folsom store, the manager said he hadn’t seen anybody using the E.V. charging in a full year. At our store in Vacaville, where we had six chargers, one person plugged in once a week.”
Incidentally, our first home was in Vacaville, California -- the first house we bought.

This site needs a little music.


If You Go Away, Shirley Bassey

Music To My Ears: Enbridge Pipeline In Canada Gaining Traction -- Not a Backken Story

Link here.
Enbridge has found strong commercial support for its proposed $5.5 billion 1,1177-kilometer twin pipeline development project and marine terminal in Canada.

Filing with the Canadian regulator National Energy Board, Enbridge's Northern Gateway Pipelines has signed commercial agreements that fully subscribe for the long-term service and capacity of both the crude oil export pipeline and condensate import pipeline. The Canadian producers and Asian markets have agreed on commercial terms relating to the long-term use of the project.

The Northern Gateway project will build two pipelines from Edmonton, Alberta to a new marine terminal in Kitimat, British Columbia, on Canada's West Coast. Currently under regulatory review, the proposed Northern Gateway project would transport 525,000 barrels a day of oil for export and import 193,000 barrels per day of condensate.

Columbus, North Dakota, To See Some Activity -- Potash?

"Anonymous" alerted me to this article on potash.
A New Orleans developer has begun site work in Columbus on a residential and commercial project that could add 400 homes and between 480 and 576 apartment units over the next three to five years.
"We are going to try to recreate Columbus with an old-town feel," said Allan Hegquist, partner in Holms Development Corp.

Holms Development, the oversight company, and its green building affiliate, HCI of North Dakota, plan to start construction in early September on the first 12 homes and 24-unit apartment building, with completion of the houses in late November and apartments by early February.
The population of Columbus, North Dakota, was 133 in the most recent census. 

Greenhouse Gas Emissions From Shale Natural Gas Probably Overstated

Again, for those who care (I do not have a dog in this fight, and wouldn't post these links except that I know some folks are interested in this information), the link is here.
Estimates that the US Environmental Protection Agency and others have used for greenhouse gas (GHG) emissions from shale gas production probably are overstated, IHS Cambridge Energy Research Associates said in a new report.

 Estimates are being used that are not supported by data, do not reflect current industry practice, and would be unreliable to use as a base for decision-making.”

EPA estimates were based on two workshop presentations describing methane captured during “green completions”—operations designed to capture as much methane as possible, according to the report. It said EPA assumed that similar methane levels were produced at every other US well, and that those emissions were not captured at all. Such assumptions do not conform to current industry practices, it stated.

18 - 13 - 13 - 14: Fourteen (14) New Permits Today -- Bakken, North Dakota, USA

Incredible.

Daily activity report, August 25, 2011 --

Operators: Hess (4), Slawson (3), QEP (2), Newfield, Burlington Resources, EOG, MRO, Denbury.

Fields: Arnegard, Elm Tree, Beaver Lodge, Siverston, Blue Buttes, Heart Butte, Parshall, Strandahl, Alger, and Haystack Butte.

Slawson, Hess, and QEP all have 2-well pad permits.

Two wells were released from confidential status: both of them reported IPs. Perhaps the fracking backlog is starting to be resolved.

Slawson had a nice well:
  • 20229, 1,184, Slawson, Jughead Federal 2-26H, Mountrail
So, Monday of this week: 18 new permits; Tuesday, 13; Wednesday, 13; and, today, 14 new permits.

Lynn Helms says there are 1,000 permits issued that still have to be drilled and another 250 waiting to be approved.

How Busy Is The Bakken? 1,000 Undrilled Permits and 250 Permits Waiting for Approval -- Bakkekn, North Dakota, USA

Link here (regional links break early).
According to Lynn Helms, director of the Department of Mineral Resources, the number of new drilling rigs in the Williston Basin is projected to reach an unprecedented 225 by the end of the year.
“There are at least 1,000 undrilled permits,” says Helms, “and 250 permits in the queue waiting to be approved.”
Helms states that an oil company leases a tract of land for three years, and then applies for a drilling permit. However, the drilling permit is only good for one year. After that, the oil company has to re-apply, go to the bottom of the queue and risk losing its leasehold.
Datapoints:
  • Despite the previous winter being one of the worse on record, ND is still on pace to bring in more drilling rigs than ever before
  • North Dakota is projected to crush the state’s crude production record
  • North Dakota produced 64.6 million barrels of crude from the beginning of this year to June; by the end of the year, it is estimated the state will produce 133 million barrels
  • Currently: 1,000 undrilled permits
Pace of activity:
“Current permit activity suggests that companies intend to drill 5,000 wells over the next 2½ years,” states Helms. According to Helms, in the last five years, 2,600 wells have been drilled. This will be nearly twice the number of wells drilled in half the amount of time.



 

Continental Resources Drilling Deeper Into the Three Forks -- Bakken, North Dakota, USA

I've already posted this several times, but now Eric Fox over at Investopedia has a story on the same.
The Three Forks formation lies just under the better known and more developed Bakken formation in the Williston Basin. Although the Three Forks formation can be up to several hundred feet thick, Continental Resources has done most of its Three Forks development in the upper twenty to thirty feet of this play.

Continental Resources decided to investigate the hydrocarbon potential of the bottom layers of the Three Forks and obtained core samples from five wells that penetrated the entire Three Forks formation. These core samples were spread out across a hundred mile wide portion of Continental Resources leasehold.

Halliburton To Hire 11,000 More North American Workers -- Bakken, North Dakota, USA

Link here.
Jim Brown, president of Western Hemisphere, said many of the new hires will be sent to North Dakota's oil-rich Bakken shale, which is one of the largest oil finds in U.S. history and where Cramer broadcast a special episode of "Mad Money" on Wednesday. Brown said Halliburton is currently hiring across the board--from MBAs to unskilled workers.
Weslink has noted the irony in this: see comment below.

Halliburton probably catches more adverse press than any US company that I am aware of, and yet, it will be hiring 11,000 new workers, most of whom will be employed stateside.

Meanshile, GE has moved its medical devices headquarters to China, along with the jobs. It should be noted that the GE/CEO is the president's economic czar.