Tuesday, October 4, 2011

Why The Bakken Continues to Surprise, Impress -- Haystack Butte -- Bakken, North Dakkota, USA

Elsewhere someone asked whether "19129" was on a pump yet.

The NDIC reports are about two months behind. The current data was probably posted as of August 31, 2011, about six weeks ago, and paperwork getting to NDIC could have been delayed, so it's very possible that "19129" is now on a pump, but as of August 31, 2011, NDIC report, it was still flowing on its own.

And how is "19129" doing? In less than a year, it has produced almost 90,000 bbls of oil. It's operator, Burlington Resources, has a history of shutting in wells early on and this well has produced all 31 days in one month on only one occasion, back in January.

So, although it tested in October, 2010, it has produced only about six full months (202 days to be exact; 6.7 months).
  • 19129, 1,680, BR, Aiden 31-13H, Haystack Butte, Bakken, s7/10; t10/10; 89,000 bbls as of August, 31, 2011 (but as noted: only 7 months of production).
Haystack Butte is in the east-central McKenzie County area which is turning out to be quite a productive area. Here are some exciting fields around Haystack Butte: Siverston, Bear Den, and Little Knife.

By the way, speaking of "Bear Den," if you haven't seen this video, you are in for a treat (I love the music):

The views are spectacular. Imagine how pretty it is during the summer; how dangerous it is during the worst part of winter. If you are impatient, move ahead to 6:00 minute-mark. This should change your view forever about North Dakota's topograph.

These roads, by the way, were built by the oil companies, belong to the oil companies, and are off-limits to the public.

The big trucks in the Bakken: Freightliner, Peterbilt, Kenworth, and Western Star. It seems Kenworth might have the edge, followed by Western Star.

I have a special spot in my heart for Western Star trucks.

For Investors Only -- Bakken Plays Could Result in 100 Percent Returns -- SeekingAlpha

Link here.
WLL, along with it many other holdings, has 680,137 net acres in the Bakken (Williston). In the Sanish (Bakken) field of the Bakken WLL estimates 16-23 MMBOE per 1280 acre unit. In the Sanish (Three Forks) WLL estimates 12-16 MMBOE per 1280 acre unit. It is the second biggest oil producer in the Bakken behind EOG, which has drilled 74 more wells (166 to 92 total wells). The table below gives an idea of WLL’s value as of Dec. 31, 2010. The numbers have significantly improved since then. The chart below has information about WLL’s reserves.
My gut feeling is that production numbers for 3Q11 are going to be huge (Don was the first to suggest that to me. I think he is right.).

But look at those numbers for Whiting in the Sanish: 40 million boe per two sections. That is simply huge.

For newbies: Whiting has a very interesting business plan: maximize drilling in the Sanish to pay for de-risking southwestern North Dakota. Whiting has two operations centers in North Dakota: one centered in the north (west of Parshall) and one centered in the south, near Belfield.

The Permitorium Continues -- Democrats Want It Lifted

Link here.
US Sen. Mark R. Warner (D-Va.) urged participants at the Southern States Energy Board’s Governors Energy Summit to build support for federal legislation aimed at reviving offshore oil and gas projects that the Obama administration shelved following the Macondo deepwater well accident and crude oil spill. “I don’t believe offshore energy exploration can provide the whole solution to our nation’s economic problems,” Warner said at the Oct. 4 meeting, adding, “But it certainly would help.”

Warner noted that the bill introduced by himself and Virginia’s other US senator, Democrat James A. Webb, would move the Virginia federal Outer Continental Shelf lease sale back into the next 5-year OCS program, reversing Sec. of the Interior Ken Salazar’s decision to omit it from the 2012-17 round. The sale was canceled following the Macondo accident and spill. “The notion that we delay it another 5 years seemed too long,” he said.
And here's why they are concerned: drilling returning to the Gulf. Not exactly.
News reports to the contrary, drilling in the Gulf of Mexico still hasn’t staged a full comeback from the Deepwater Horizon oil spill and subsequent drilling moratorium, according to new research by Quest Offshore Resources, Inc.

Quest’s new analysis shows the number of floating rigs in the Gulf is down 37 percent from its pre-moratorium level. At the moment, just 21 floating rigs are operating in the GOM — and, of those, just 18 are actually drilling wells. Before the moratorium, 33 rigs were operational and 29 of those were actively drilling wells. Thanks to the moratorium, 11 rigs left the Gulf and just one has returned. The loss of those rigs translates into nearly 12,000 jobs lost.
I have no dog in this fight, but with storage tanks overflowing at Cushing, it doesn't look like the US misses that Gulf oil very much. I know folks in the Bakken who are getting oil royalties don't want the permitorium to end.

Beautiful, Beautiful, Beautiful Day in the Bakken -- Bakken, North Dakota, USA

Earlier today I took a walk through a bit of downtown Williston, visiting my favorite bookstore en route, Books on Broadway. Chuck is out for the week -- visiting family out of state, I hear. I have three books in his store picked out to buy when he returns. I always enjoy chatting with him about the books I purchase from him. I'll wait until he gets back before I buy the books.

I already own one of the three books, but when traveling, I can't carry my library (and, no, I prefer these books the old-fashioned way, not on a Kindle) and I need to start a small library at the various places I stay when traveling.

But I digress.

It was an incredibly beautiful day. When I started my walk, the bank thermometer said 75 degrees, no wind. About a half -hour later, the temperature on the same thermometer was 77 degrees, and still no wind.

Part of the work took me to the busiest corner on the south side of Williston, where the trucks take a left turn from the industrial park to get on 2nd Stree West to head west out of Williston. At the time I did not know that Oasis would be siting a well inside city limits on this road, just a couple miles west. The city has also put in brand new pumping stations for water trucks to pick up fracking water. And, now, we will soon see a rig right on the edge of Williston. It will be quite a sight (and quite a site).

My mother happened to be in town today. I mentioned to her that I thought traffic was even heavier now that it was even two months ago when I was here the first time this summer. It really is incredible incredible how much traffic there is. I think it could be quite a site (and quite a sight) this winter with hazardous driving conditions even more hazardous.

But today, it couldn't have been prettier.


Many sing this song; none sing it better than Slim Dusty.

"When I'm along at night, I can see through all the triviality, of the day, and I'm okay. I just think of those who are dear to me." -- incredible poety on so many levels.

The President Should Come to North Dakota: Promote $3 Billion Infrastructure Projects -- Shovel-Ready; Help The Environment; Put People to Work -- Bakken, North Dakota, USA

This is an incredible story. Again, a big thank you to "CRC" for alerting me to it.

Link here (I haven't seen this source before, by the way. If I have, I've forgotten).

If I read the story correctly, there are $3 billion worth of infrastructure projects to capture all that natural gas that is being flared.
About $3 billion worth of infrastructure projects are on the drawing boards in North Dakota's Bakken Shale play to monetize the natural gas produced in association with oil, which otherwise would be lost to flaring, operators and state officials said in interviews.

About 134,000 Mcf/d, or almost one third of the gas produced in North Dakota, is flared because of the lack of infrastructure to take the gas away or otherwise monetize it, Bruce Hicks, assistant director of the Oil and Gas Division of the North Dakota Industrial Commission said in an interview Monday.

Hicks said it is currently uneconomical to capture the gas produced in association with Bakken Shale oil production, given the dearth of gas-related infrastructure in the 17,000-square-mile region.
I assume the three (3) CRYO plants that up going up west of Williston are part of these projects, but I don't know.

Dickinson't Press Has A Great Editorial Regarding Recent Man-Camp Debacle -- Bakken, North Dakota, USA

A big "thank you" to CRC for alerting me to this story. I would have missed it.

Link here.
The loss of a 600-person man camp is millions of dollars in the past for the Dickinson area. This includes hundreds of dollars daily from nearly 600 men who would make many purchases of food, gas and any other personal needs, locally. The city also takes a hit on taxes.

Dickinson Planning and Zoning Commission members deserve credit for listening to those who came to a public hearing and voiced their dissatisfaction in the original plan for a location. However, residents need to keep in mind that many people contributing heavily to the number one economy in the nation (North Dakota) need somewhere to go after working long shifts on rigs and doing all that’s necessary to keep the oil flowing.

One commission member was right on when he said, no matter where a man camp is proposed, someone is going to be unhappy.

Dickinson has also turned away people that could become friends and neighbors and take part in this community.
Some of those friends and neighbors would have been the managers of the man-camp. A city does well to create a good feeling between the city residents and the managers of the city. Again, it's easier to police a man-camp inside one's jurisdiction than outside it.

The Dickinson't Press hit every high point; I'm impressed. I especially like the one about increased traffic on the road. All those folks in the Dunn man-camp are going to be driving eight miles down to Dickinson anyway.

I remember a couple of years ago Williston bent over backwards to help out all the workers coming to Williston, including letting them camp out in small one-man tents in local parks. The park board was very forgiving, and looked the other way. Local residents even brougth them homemade dinners.

Now, a completely different story.

Tonight I drove past a number of semis parked side-by-side just a few feet from a local restaurant. It appeared that the men were living in their trucks. Pretty sad. When you see a Weber grill behind a semi, it gives a whole new meaning to tailgate parties.

I Can Post But I Can't Reply To Comments

I'm at the mercy of a Microsoft IE browser and my site is optimized for Firefox. I won't get back to my MacBook until after midnight, so I won't be replying to comments.

Please don't quit sending in comments. I appreciate them.

With regard to the oil well inside Williston city limits, there are now about 10,000 people that will be dividing up royalties. Oasis will need an army of lawyers just to sort out this one well. Ha. (Not, it's not the residents of Williston. It's the grandchildren and great-grandchildren of former residents of Williston.)

Fourteen (14) New Permits -- 1 Out of 7 Wells Fracked "On Time" -- Bakken, North Dakota, USA

Daily activity report, October 4, 2011 --

Operators: OXY USA (3), Triangle, Hess (2), Cornerstone, CLR (3), Oasis, Hunt, Crescent Point, North Plains,

Fields: Ellsworth, Little Knife, Murphy Creek, Flaxton, Hanson, Oliver, Camp, Willmen, Mountrail, Corinth, and Banks.

Crescent Energy has a wildcat in Williams County. CLR has a wildcat in Williams, also.

OXY USA has permits for a two-well pad.

Seven wells came off the confidential list today. Only one was completed, and not a surprise: Whiting. Whiting and BEXP seem to be about the only ones who are getting their wells fracked within the six-month window. I remember all the comments by CEOs at the 2Q11 earnings conference calls: we'll be caught up with fracking by November. I blogged at the time that the numbers didn't add up.

Eight new wells were reported to have reached total depth and are plugged or producing (in the Bakken: they are "all" producing): Oasis reported seven of those eight wells.

Oasis, by the way, has a very good reputation in Williams County. Nine permits were renewed, one of the larger numbers of renewals I've seen in awhile.

Well, This Is Cool -- New Permit For Well Inside City Limits -- Across From a Bar -- Bakken, North Dakota, USA

Link here.
At a special Williston Planning and Zoning Commission meeting held on Monday a special permit use was passed allowing Oasis Petroleum to move forward with a oil well site within city limits.

The location of the site is just off U.S. Highway 2 and 85 close to the Second Street West exit on the southwest edge of Williston. It is south of Midway Bar, just across the railroad tracks.
This is a tough job for a roughneck but someone has to do it.

I will be able to walk past this site every night. Wow. An adrenaline rush when the get ready to frack

Dickinson't Exploring Sites for New Water Depot

Link here.
Two locations have been scoped out by the Southwest Water Authority for a water depot facility, CEO Mary Massad said Monday at the Dickinson City Commission meeting at City Hall. The project is needed, Massad said, and its construction would greatly benefit the area’s industry.
Six acres of land would be needed for the facility. Massad proposed one location east of Roughrider Homes and RVs. The other location would be southeast of Dickinson. That location would be near the fourth water lagoon next to 108th Avenue Southwest.

The new facility would process 18 million gallons a day. The facility would recycle waste water instead of treated water, Massad said, which still meets the conditions for water use on oil rigs.
Based on that last line it sounds like the water will only be used for fracking, not drinking.

For Investors Only -- Denbury Resources (DNR) Getting Very Oversold -- Forbes -- Bakken, North Dakota, USA

Link here.
In trading on Monday, shares of Denbury Resources, Inc., entered into oversold territory, changing hands as low as $10.84 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

In the case of Denbury Resources, Inc. , the RSI reading has hit 29.6 — by comparison, the universe of energy stocks covered by Energy Stock Channel currently has an average RSI of 35.8, the RSI of WTI Crude Oil is at 38.7, and the RSI of Henry Hub Natural Gas is presently 35.2.
I don't follow Forbes' RSI, but I have followed DNR and it is very, very oversold, but so are many, many others in the Bakken.

Thirteen (13) New Permits -- Hess With Several Nice Wells -- Bakken, North Dakota, USA

Daily activity report, October 3, 2011 --

 Operators: BEXP (4), CLR (2), MRO (2), Whiting (2), Petro Harvester, Triangle, Hess

 Fields: Alger, Kuroki, Dutch Henry Butte, Oliver, Bull Butte, Sanish, Reunion Bay, Ellswroth, Little Knife and a wildcat.

 MRO has two permits for two wells on one pad; BEXP, with three on one pad; CLR has the wildcat in Burke County, and Whiting, as usual, has a permit in its cash cow, the Sanish, and a permit in Stark County (Dutch Henry Butte).

Although 6 of 9 wells coming off the confidential list today were placed on DRL status, some completed wells had some nice IPs:
  • 19076, 1,325, Hess, EN-Frandson-154-93-2116H-3, Mountrail
  • 19078, 941, Hess, EN-Trinity-154-93-28-22H-2, Mountrail
  • 19500, 1,006, Hess, Knudson 15-20H, Williams
  • 19887, 714, Hess, AN-Dinwoodie-153-94-2833H-1, McKenzie -- Three Forks Sanish well
  • 20366, 853, Hess, GO-Foss Trust-156-97-3526H-1, Williams