NBC Nightly News -- September 4, 2011 -- Boom Town -- Bakken, North Dakota, USA

This was the video segment on NBC's evening news, Sunday night, September 4, 2011: http://www.msnbc.msn.com/id/21134540/vp/44393017#44393017

I have no idea how long this video will stay linked.

An Apple, Inc., Story -- Not a Bakken Story

Every once in awhile, there's another story about CEOs being paid too much.

Shares of Apple, Inc., (AAPL) are in the $370 range/share.

There are about 930 million AAPL shares outstanding. Apple, Inc.'s market capitalization is about $350 billion.

The general consensus is that the shares of Apple, Inc., will fall in price when the former CEO, Steve Jobs, passes away.

I don't know the exact number, but within the ballpark of figures, shares of Apple, Inc., dropped about $20/share when Jobs announced his resignation as CEO due to health reasons (though he stayed on as chairman of the board).

930 million shares  x $20 = $18,600 million or almost $20 billion.

Mr Jobs was getting paid a lot less than $20 billion as CEO, but yet the company's net worth, as measured by market cap, dropped by that amount. And that was just announcing his retirement as CEO.

No further comment.

Holding the Bacon, Lettuce, Tomato, and the Mayonnaise in the Bakken

I won't mention where we were this past weekend so as not to embarrass anyone, but I almost experienced a scene out of Five Easy Pieces:




Five Easy Pieces
Dad and I stopped at a small diner for lunch (not in Williston). I was hungry; dad said he was not hungry. Just as I was mentioning to dad that if he was not hungry maybe he would just like some toast and coffee, the waitress came into our conversational sphere and said, "Breakfast is over. No toast. You can order anything on the lunch side of the menu, but nothing on the breakfast side."

I ordered a bacon-lettuce-tomato sandwich to share with dad. You have no idea how much I wanted to order him his own BLT and to tell the waitress to hold the bacon, lettuce, and tomato, and mayonnaise, and just bring dad some toast.

Smile. Yup. Life imitating art.

Ticket to Bakken -- Bakken, North Dakota, USA

Some folks go to great lengths to find articles that mention the Bakken.

A Seattle journalist/artist posted illustrations of life under a landmark Seattle viaduct. At the time I am writing these, the illustrations haven not loaded; I don't know if they will.

But this is the caption to one of the photos:

Robert Joseph Tripp is one of eight homeless men who camp at the south end near the stadiums. "I'm out of here," he said when I asked about his plans. "I have a ticket to North Dakota in my backpack."

The illustrations are loading, but taking a long time. Click the link at your own risk. Smile.

Hess Tioga Yard -- Bakken, North Dakota, USA

For newbies: Tioga had a population of about 1,200 in 2010. Oil was discovered in North Dakota, about 15 miles south of Tioga in 1951 -- the Clarence Iverson well.

Photos of the Tioga Hess Yard follow. There were taken on Labor Day, 2011. The office was closed in observance of the holiday.

At the time the photos were taken, the following position was being advertised by Hess for this location (I do not know if the advertisement is current and/or still open):

The Tioga Gas Plant, field compression facilities, oil and gas gathering systems, and product export facilities are being expanded as part of the overall Bakken development in North Dakota. The Senior Facilities Project Engineer is responsible for leading a project team in planning, evaluating, designing and installing compressor and dehydration stations required to support the Bakken development.

The position will report to the Bakken Field Facilities Project Manager within the Developments organization. A sound knowledge of onshore oil and gas operation and upstream project execution is required. Potential candidates must have excellent interpersonal and problem-solving skills, be a motivated self-starter, and be willing to relocate to North Dakota.

The photos (double-click on photos to open in another window and then enlarge):

Video of the Originating Site for the Enbridge Bakken Expansion Project -- Bakken, North Dakota, USA

Update

Video of the originating site for the Enbridge Bakken Expansion Pipeline Project was taken today. This is at Beaver Lodge, North Dakota, about eight miles south of Tioga, North Dakota. (For newbies, Beaver Lodge oil field was where oil was discovered in North Dakota in 1951 -- the Clarence Iverson well.)

Origination Site for the Bakken Expansion Project, Beaver Lodge Terminal  
Description of the project:

Enbridge's Bakken Expansion Program will involve U.S. projects which will be undertaken by EEP at a cost of approximately US$370 million; and Canadian projects which will be undertaken by EIF at a cost of approximately Cdn $190 million.

The expansion program will originate at Beaver Lodge, North Dakota, in the heart of the Bakken, and will follow existing EEP and EIF rights of way to terminate at and deliver to the Enbridge mainline terminal at Cromer, Manitoba.

Once on the Enbridge mainline, Bakken production will have access to the multiple markets accessible from the mainline and connected pipeline systems.

Still photos of the same (click on the third photo below and enlarge it to see the complex from a distance):

Original Was Posted July 9, 2011

Link here (regional link will break soon).

Personalities:

• Kesley Myhre, Enbridge spokesperson
• Justin Kringstad, Director, North Dakota Pipeline Authority

North Dakota Pipeline Authority, mission:

The North Dakota Pipeline Authority works with the companies to help them understand the oil play, as well as offer support through the state and federal government. The North Dakota Pipeline Authority is a state agency that started in 2007.

Current status: three major options for pipelines in the Bakken

• Enbridge system: 210,000 bbls/day
• Tesoro pipeline: 58,000 bbls/day 
• Butte Pipeline: 118,000 bbls from eastern Montana to Wyoming

Currently, maybe 60,000 to 70,000 bopd transported by rail

Four additional projects being proposed or underway:

• TransCanada Bakken MarketLine: expected to start mid- to late-2013; 100,000 bopd from Williston Basin to major hubs in Oklahoma and Texas
• True Company 'Baker 300': 118,000 bopd now; by the end of 2011, that oil flow will increase to 150,000 bopd; and in 2012, increase to 200,000 bopd
• Plains Bakken: will ship up to 75,000 bopd from western North Dakota (100 miles from Trenton) to an existing pipeline along the Canadian and Montana border
• Enbridge Bakken Expansion Program: currently shipping 210,000 bopd; by the end of 2013, the company expects to add another 120,000 bopd capacity

Enbridge projects under construction:

• The Beaver Lodge Loop project: loop an existing pipeline or place another pipeline adjacent ot existing pipeline system; from Enbridge's Beaver Lodge Station through Stanley to Berthold Station
• The Bakken Expansion Project: replace 11 miles of a newly reactivated pipeline, from Berthold to the Canadian border; a new pump station at Lignite, ND, and a new pump station at Kenaston, ND; cost o the US side is $370 million; the expansion work on the Canadian side is $190 million

Lest We Forget -- Not a Bakken Graph

Source: Forbes. From Yahoo News.

From MSNBC:

When Barack Obama unveils his jobs and economic plan to a joint session of Congress on Thursday, he'll do so at the lowest point of his presidency, according to a new NBC News/Wall Street Journal poll.

Perhaps most ominously for Obama, a majority of respondents -- 54 percent -- think he's facing a longer-term setback from which he's unlikely to recover. Back in January, just 39 percent agreed with that assessment.

Actually I don't think it's that bad: Californians still overwhelmingly support the President for re-election, and going through the parking lots in Williston, I see no California license plates. None. And California has the second highest unemployment rate (12%) right behind Nevada. Come to think of it, there are no Nevada license plates here either, suggesting that folks have learned to cope with unemployment in those states.

Mike Filloon's Three Part Series on Bakken Mid-Caps -- Bakken, North Dakota, USA

Update

It turns out this was Part I of a 3-part series. So, here for easy linking, the three parts:

• Part I
• Part II
• Part III

Original Post

Link here.

Another very good article for investors. From what I can tell, Mike Filloon has hit the high points from the recent conference calls.

There is more and more discussion regarding the high costs of these wells and how folks are trying to manage the costs. In the "old" days the wells cost $3 to $6 million. Today they can cost $8 to $9 million. Sounds like quite a jump. "Don" pointed out to me, that others seem to be forgetting,... drum roll ... in the "old days" they were drilling short laterals (one section); they now drill twice as long (long laterals, two sections) and well more than three or four times as many fracture stimulation stages.

The Majors in the Bakken? -- Bakken, North Dakota, USA

Some folks are waiting for the "majors" to come into the Bakken. I agree with them and know exactly what they are saying. Right now, we see projects in the millions of dollars (HAL's $60 million project, or whatever it was; WAWS at $150 million, was it?), but if the majors come in, we might be seeing $billion projects, or certainly $billion deals. CLR has almost a million acres; at $10,000/acre = a "one" with lots of zeroes behind it; CLR's market cap in a depressed market is $9.43 billion.

Right now, the majors have a toehold:

• Chesapeake is already here
• Burlington Resources is a subsidiary of ConocoPhillips, the third largest integrated company in the world and the fifth largest refiner in the world
• XTO is a subsidiary of ExxonMobil, the largest company in the US, by market cap (occasionally bested by AAPL)
• Dakota-3 is a subsidiary of Williams (WMB)
• Baker Hughes is putting in a "SuperSite" in Williston and two other locations (more on this story to follow)
• Halliburton and Schlumberger have huge presence in Williston; Schlumberger building new complex
• Weatherford is consolidating five (?) Williston locations into one location east of Williston

Annabelle Homes Has Its Own Tag (Label) -- Bakken, North Dakota, USA

At the bottom of the blog are tags or labels. Annabelle Homes has its own label now.

So does Baker Hughes, I believe.

Plains Reporter: The County Cannot Keep Up -- Losing Control of Their City, County

There is a great story about Annabelle Homes that I just posted. I have posted several stories about Annabelle Homes (and I think I am the only "Bakken blog" that has this type of information, thank you very much).

I have also just read a great article in the Williston Plains Reporter about how the Williston City commission says it can't keep up with development. (If I can find the story on the web, I will link it.)

I also keep hearing about the road situation.

And I keep blogging about Halliburton's presence.

I don't think it's too late, but it soon may well be, for the right folks to connect the dots.

Wow, Wow, Wow -- The Story Behind the Story -- Annabelle Homes -- Bakken, North Dakota, USA

I posted a story some time ago on Annabelle homes but today I was sent a story on the background to that story.

Awesome.

One day last November, Minneapolis architect and developer Dean Dovolis walked into a pizza shop in Stanley, N.D., owned by city councilman Dennis Lindahl.

"I went right to my pizza-delivery map on the wall and showed Dean what land the city had available," recalled Lindahl. "Dean was the 418th developer who had come to us. I know, because the city coordinator logs them all. Dean sketched out a plan, but he also wanted to listen. He wasn't talking about building houses and what he needed. He was talking about us taking charge of our community, our future, in the middle of this oil boom.''

Lindahl asked Dovolis to come to the city council meeting with him that night.

Nine months later, Dovolis, through his development company Annabelle Homes, broke ground on a $10 million-plus development of more than 50 single-family and town-house units, and a small office-retail complex. It's the single largest development ever in Stanley, a town of about 1,400 in the oil patch of northwestern North Dakota.

Nine months later; sounds like ... and planned at that ....

With 10 Percent Unemployment, Not Exactly The Right Time To Go Out on Strike

Updates

November 25, 2012: Union schedules new vote for December 1, 2012. This will be the fourth vote; American Crystal has not changed its offer since the beginning.  If union members vote it down, it tells me that folks have moved on, have adjusted to life without American Crystal. Now, I'm starting to wonder about the replacement workers. It seems a bit unfair and one would think that the replacement workers are fully trained. I don't know. It will be interesting to follow. If the union votes it down again, one almost wonders if a family member is a replacement worker. 

June 5, 2012: Crystal and union return to negotiating table.  Well, sort of.

Locked-out union workers at American Crystal Sugar Co. are in the middle of a 200-mile trek to the negotiating table, which the company says could be a long walk for a short meeting.

Union members are trying to highlight their cause by hiking and camping between locations in the Red River Valley where the company's sugar beet processing plants are located. The group expects to reach the company’s home base in Moorhead, Minn., on Wednesday.

April 27, 2012: Crystal reaches contract deal with workers at a subsidiary in Montana.  Still a stand-off in North Dakota, Minnesota, and Iowa. Incredible.

Original Post

Offered a 17 percent pay increase over five years, the union voted it down -- saying the contract did not offer enough.

With the lockout of about 1,300 American Crystal Sugar Co. workers entering its second month and no negotiations in sight, the company is ready to start the harvest season with inexperienced replacement workers.

Company officials say it will be business as usual when processing begins this week at plants in Minnesota, North Dakota and Iowa. Union officials question whether it can be done safely - and productively.

"Everybody in North Dakota is a potential replacement (at American Crystal) as far as that goes," said Michael Ziesch, a Job Service North Dakota research analyst. "There's nothing to say that somebody can't move from an existing job into one of those positions."

He added: "It's not like they're trying to find 1,000 neuroscientists. It's not that I'm trying to downplay the positions, but it's not super specific."

Many of the jobs will require someone to push a button to start the conveyor, and stop the conveyor if there's a problem. If there's a problem, the only other requirement will be to pick up the phone and call for maintenance. That was probably the language in the contract that folks objected to. My hunch is that most of the training will be about OSHA-required safety requirements, which are fine with me. Safety is the number one issue in jobs like this.

With national unemployment at 9%, California unemployment at 12% and Nevada unemployment at 12.1%, this is not a good time for workers to go on strike. Sites in Minnesota and Iowa, and even eastern North Dakota might look pretty tempting for someone not working in Alabama or Nevada.

A Feel-Good Story From Killdeer -- Bakken, North Dakota, USA

As readers know, I look through oily-stained-glasses, so I only see "positive" stuff coming out of the Bakken. I guess I should say I see the negative stuff but it is so far outweighed by the positive stuff, I just can't get too excited about the negativity that is sometimes printed.

There's at least one other person that feels the same way: the barber in Killdeer, North Dakota. I skimmed the article, so I don't know if the article mentioned that Killdeer is where Jim Cramer/CNBC/Mad Money set up their "prairie studio" a week or so ago.

Here's the link. Notice the new 64-room motel that is going in.

Guys like Harold Keim, 23, who moved from an Amish community in Wisconsin five years ago, said until Lee moved in either his wife cut his short, black hair or he traveled a half-hour to Dickinson, working it in with other errands.

"I just live up the street," Keim said Tuesday. "Now, I don't have to go to Dickinson." Keim talked while waiting his turn for a cut Lee calls the "High and Tight," which looked neat and handsome when she finished with clippers and comb. There's also a cut called the "Guilty," for which she collects the going $16 for a cut that supposedly makes her feel guilty for taking so little off.

Back to the US Post Office Story -- Penny-Wise, Pound-Foolish -- Not a Bakken Story

Yesterday I posted a short stand-alone on the US Postal Service. A story that was sent to me by "Don" today explains why the story gets me so irritated.

Closing down one of the post offices in South Dakota, specifically the Reva, South Dakota post office, would save the US Postal Service $8,000 per year. Peanuts. This tells me that the US Postal Service is a) penny-wise, pound-foolish; and, b) their financial problems have nothing to do with serving rural communities.

I used to think it was too expensive for the US Postal Service to serve rural communities but when I see that shutting down the Reva, North Dakota, post office would save all of $8,000 per year, one has to wonder.

The U.S. Postal Service says it will save around $8,000 per year over the next decade by closing the post office in Reva, a rural Harding County community.

Residents of Reva, which has four residents in the unincorporated town and around 100 people living in the surrounding ranchland, fiercely oppose the proposal, saying it jeopardizes their community’s future.

But USPS says it will save almost $80,000 over the next decade if it closes the Reva post office and assigns services there to Lemmon, 74 miles away.

As noted in my earlier note on this subject, the financial problems have to do with financial mismanagement and not due to serving rural communities. Even the New York Times got that right:

According to the New York Times: decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.

After posting that yesterday, I received some "hate mail," but "anonymous" was unable to show where the New York Times was wrong. 

My hunch is that folks can come up with any number of ways for the US Postal Service to keep the Reva post office open without detriment to the overall financial condition for the US Postal Service.

Bakken Hitting Its Stride -- Bakken, North Dakota, USA

I don't know if anyone else happened to catch it, but on the NBC Sunday evening news -- last night, out of New York City -- yup, that one -- they had a short video feature on "Boom Town, USA," which of course was Williston, North Dakota.

There was nothing in the piece that we didn't already know but it was another little segment that went nationwide, following the recent Jim Cramer/Mad Money/CNBC production from Killdeer, ND.

Other signs that the Bakken is hitting its stride are seen in a couple of blogs that provide me tips. One is sent to me automatically -- I'm on the mailing list -- but it seldom comes out any more. It is advertising based, and I doubt I see it more than once every two or three weeks. It is time-consuming  to write about the Bakken on a daily basis. There is absolutely so much to keep track of.

Another excellent site which used to provide a huge amount of education about the Bakken has pretty much turned into a "can anyone send me production data" on a given well.

Now that I am back in Williston awhile, I have the opportunity to read the Rocky Mountain Oil and Gas Journal which provides a phenomenal amount of information useful to folks interested in the Bakken.

As a reminder, whether or not I post new stand-alone posts, I continually update previous posts. For newbies, I think you will get a kick out of spending some time at the site, learning more about the Bakken.

I will be in the Williston area for a few more days and if anyone has a specific photo they would like to see, let me know and I will do what I can. I can't promise anything but if I'm out and about, and can do it easily, I would love to do it.

It appears that daily visits to this site have doubled over what the visits were about one year ago.

The site remains very simple in appearance. Many of my readers still have dial-up internet service and or slow connections for various other reasons, and the simpler the site remains, the faster it downloads. Unfortunately (or fortunately), it is optimized for the Firefox browser and on a big-screen Apple computer the site looks very, very nice. The site does not look as good on Internet Explorer (Microsoft) and I am sometimes horrified (okay, to strong a word. How about "greatly disappointed") to see how awful it looks on old versions of Internet Explorer.

Again, as long as I'm rambling, a couple other things: the blog was started as a way for me to keep track of the Bakken and to help me understand what it was all about. I could have kept the site private but then thought others might learn from it.

The "million dollar way" has nothing to do with personal finance, but rather, it is the name of the four-lane divided highway that leads out of Williton on the north side that was my metaphorical way of leaving Williston 30-some years ago. It is the same road that metaphorically brought me back.

I post only those comments that bring some "value" to the site. I generally don't post comments to my stand-alone posts that have nothing to do with the Bakken. I have found that if I post only about the Bakken, it becomes a bit dry; adding my "nothing to do with the Bakken" stories has greatly increased the readership. That was not the purpose of "nothing to do with the Bakken" stories but sometimes unintended consequences are positive.

I hope everyone has a great Labor Day. It looks like a beautiful day in the Bakken. I will be out and about taking photos.

By the way, a huge thank you to those folks who send me tips: Don, Greg over at Four-Fifty Gas, Charley, Neil, Dennis, and a few others.