Okay, finally, I think I understand where the Truck Reliever Route, the new bypass around Williston will go.
The interesting thing is that the roads are pretty much all there right now, and once the project starts, it could move along quite quickly. It's a huge project.
So, this is the current proposed route (link is now broken), as I understand it.
Start at the 4-mile corner west of Williston. [This corner is four miles west Williston, where US Highway 2 continues west, and intersects with US Highway 85 running north - south.]
Trucks coming from the south on US Highway 85 will no longer turn east on Highway 2 into Williston. Rather, they will continue straight north. If, indeed, it goes straight north from the 4-mile corner, a new road will have to be built.
Trucks will continue north until they reach County Road 6 where they turn east to cross US Highway 2, also known as the Epping turn-off. Trucks will continue east on County Road 6 toward Springbook/Epping, until they reach County Road 9. Turning south on County Road 9, they will continue until they reach State Highway 1804 east of Williston. This is a few miles east of the huge industrial parks for Sanjel, Halliburton, and Schlumberger. (Schlumberger is building a new complex west of Williston.)
The new truck stop / Bakken Industrial Park will be at the intersection of Highway 2 and the Epping turn-off, which I have blogged about often.
You know, as I write this, it is incredible the number of major projects on the drawing board and/or already in progress.
Below, I reference "men" building things. It should be noted that there are a lot of women working in the oil patch at all levels. I've seen a few driving trucks; I think I mentioned the woman driving heavy equipment widening the road south of Williston. I know there are a lot of women running the family business that started out as a "mom-and-pop" operation and now has expanded beyond anyone's imagination.
But, I digress, here's a laundry list of things I think about ....
1. The new bypass -- huge
2. The new Bakken Industrial Park -- huge truck stop four miles north of Williston -- this alone is going to amaze local residents; a huge man-camp is already there; a lot of the men there will be building the park
3. The Sandy Creek Retail Center with two new hotels, Menard's, convention center
4. The 2,200 unit (or thereabouts) Harvest Hills subdivision northwest of Williston being builtby Kiewit (Granite Peak), Knife River (MDU)
5. The new BHI supersite being built
6. The new Schlumberger complex
7. The new Hexom complex
8. The $150 million northwest water authority project
9. Seven or eight new hotels in past year or so, and more being built
10. The new three-story clinic across the bypass from the hospital
11. The addition to the hospital, currently a new Ambulatory Care Center/Birthing Center, to be followed by a Cancer Center after this project is complete
12. The new hotel next to the hospital
13. The huge new McCody Concrete complex
14. Too many new steel buildings to count
15. The incredibly nice-looking, brand-new series of buildings on the east side of US Highway 85 south of 4-Mile Corner -- whoever put that together deserves a huge thank you from the city of Williston; they present a very attractive impression as folks drive into the area
16. This is the one thing that Williams County is missing -- (as are Dunn, McKenzie, and Mountrail): each county should have huge billboards announcing that folks are now entering "the Bakken. Hardhats required."
17. By the way, just a reminder, Oasis has a permit for an oil well inside city limits on the southwest side, near the Midway Bar
For a list of projects back in the summer of 2010, click here. In hindsight, it's a very small list -- if we only knew then what we know now.....
Thursday, October 6, 2011
2Q11 Taxable Sales Report -- North Dakota, USA
I am not going to link this anywhere else on the blog, but for those interested, this is the link for the 2Q11 taxable sales data for North Dakota.
A big "thank you" to "anon 1" for sending it my way.
A big "thank you" to "anon 1" for sending it my way.
On "Right-To-Work" -- Not a Bakken Story
Update
Pelosi, who has Obama's ear -- and perhaps a few electoral votes in her pocket -- wants the government to shut down the SC Boeing plant.
Original Post
Link here. This link may or may not remain intact; it may require a paid subscription (Wall Street Journal).Globalization has come full circle at Otis Elevator Co.... and Otis moved to a "right-to-work"state.
The U.S. manufacturer, whose elevators zip up and down structures as diverse as the Empire State Building and the Eiffel Tower, is moving production from its factory in Nogales, Mexico, to a new plant in South Carolina.
More startling: Otis says the move will save it money.
What's happening at Otis is part of a broader shift in the way manufacturers tally costs.
Their outlook has been changing as the cost of producing abroad has risen and they have devised more efficient ways to make things close to where they want ...
Some other links related to this story:
The federal government’s attempt to shutter a new Boeing manufacturing plant in South Carolina will have a profoundly negative impact on thousands of hardworking Americans — and the state’s entire economy. Right now, South Carolina’s unemployment rate is 10.9 percent.
This action also has broader implications about the role the Obama administration believes the federal government should play in private enterprise.
The National Labor Relations Board is alleging that Boeing violated labor laws by locating its new 787 Dreamliner facility in North Charleston, S.C. For years, Boeing has operated predominantly in Washington state, where it has invested billions of dollars and created thousands of jobs.
Now, one of the largest U.S. companies — which just invested nearly $1 billion and created more than 1,000 well-paying jobs in South Carolina — is entangled in what is sure to be a drawn-out legal process. They are being punished for investing in America.
Boeing’s expansion to the Palmetto State did not cost a single union job back in Washington state. In fact, Boeing has added 2,000 jobs in Washington since opening its North Charleston facility. At a time when 14 million Americans are out of work, the federal government should be commending this private company for creating jobs — not punishing it.
You have to wonder about a federal agency that sticks it to an American manufacturer creating thousands of good-paying jobs inside the nation's borders instead of overseas.
Fortunately, we hope, you won't have to wonder about it for long. We suspect the end is near for the brief reign of an overbearing pro-union majority on the National Labor Relations Board. That should help to lift an economy in dire need of job creation. It also should lift Chicago's Boeing Corp., the manufacturer targeted in an outrageous NLRB complaint earlier this year.
These Guys Are Good .... Bakken, North Dakota, USA
For various reasons I seem to follow certain fields more than others. The Brooklyn field is one of those.
There's a faithful group of mineral owners who remind me when one of the Brooklyn field wells comes off the confidential list. The Charleston came off today, but it was not fracked and is on DRL status.
But it gave me an opportunity to check in one of those Brooklyn wells:
And this is why I say these guys are good:
In the first full month of production they got 8,000 bbls of oil out of this well, and then, the next month, producing only 24 of those days, it produced almost 11,000 bbls of oil. Yup, these guys are good.
Gronfur, in the same field, is going to be just as good. Tested on January 26, 2011, it has produced almost 75,000 bbls of oil through the end of August -- just seven months of production. Remember, folks, a lot of Madison wells produced 100,000 bbls after pumping for 20 years. The Bakken hits those numbers in 18 - 36 months.
There's a faithful group of mineral owners who remind me when one of the Brooklyn field wells comes off the confidential list. The Charleston came off today, but it was not fracked and is on DRL status.
But it gave me an opportunity to check in one of those Brooklyn wells:
- 19361, 408, Barney 1-29H, tested 3/30/11; 17,000 bbls in first 48 days
And this is why I say these guys are good:
BAKKEN | 5-2011 | 24 | 10730 | 10897 | 3693 | 12728 | 5977 | 6751 |
BAKKEN | 4-2011 | 30 | 8140 | 7954 | 3195 | 11588 | 0 | 11588 |
Gronfur, in the same field, is going to be just as good. Tested on January 26, 2011, it has produced almost 75,000 bbls of oil through the end of August -- just seven months of production. Remember, folks, a lot of Madison wells produced 100,000 bbls after pumping for 20 years. The Bakken hits those numbers in 18 - 36 months.
25-Year Outlook -- Bakken, North Dakota, USA
For folks who are concerned that the current Bakken boom is no different than the previous booms in the boom-bust cycle of the oil industry, this article should be a bit reassuring.
I have seen no evidence that any energy source will take a meaningful bite out of hydrocarbon energy.
There is not enough surface area in the world for solar to make a meaningful dent, and I no long follow, and seldom write about solar energy except when facts and data confirm the obvious (see postings on Solyndra as a case study).
Wind will have a niche role (mostly in killing whooping cranes, bald eagles, and California condors), but wind won't make much difference otherwise.
I really thought that nuclear had a chance, but after the disaster in Japan nuclear is "dead" -- at least in my lifetime and probably in the investing lifetime of my daughters.
Unless there is some energy source that I am missing, that leaves oil and natural gas.
Of all the places to drill for oil right now and the foreseeable decade, I don't see a place anywhere in the world that a) is as safe; b) is as friendly to the oil industry; c) is as politically stable; d) is as inexpensive to live and work, d) has a better infrastructure already in place, than North Dakota.
I'll leave it at that for the moment.
Not surprisingly, liquid oil’s share of world energy consumption is predicted to decrease from 34 percent in 2008 to 29 percent in 2035. The decrease is based on dwindling supplies, which are likely to keep prices high. This will prompt users to switch to alternative fuels whenever possible. As expected, two of the main alternatives expected to flourish in production by 2035 will be petroleum from oil sands and natural gas from shale and other unconventional sources.
According to the EIA, the world’s use of petroleum products, including natural gas liquids, will increase from 85.7 Mb/d (million barrels per day) in 2008 to 112.2 Mb/d in 2035. As you can see from the graph below, 82 percent of the growth will be in the transportation sector, while industrial, building use and power generation should remain nearly constant.
I have seen no evidence that any energy source will take a meaningful bite out of hydrocarbon energy.
There is not enough surface area in the world for solar to make a meaningful dent, and I no long follow, and seldom write about solar energy except when facts and data confirm the obvious (see postings on Solyndra as a case study).
Wind will have a niche role (mostly in killing whooping cranes, bald eagles, and California condors), but wind won't make much difference otherwise.
I really thought that nuclear had a chance, but after the disaster in Japan nuclear is "dead" -- at least in my lifetime and probably in the investing lifetime of my daughters.
Unless there is some energy source that I am missing, that leaves oil and natural gas.
Of all the places to drill for oil right now and the foreseeable decade, I don't see a place anywhere in the world that a) is as safe; b) is as friendly to the oil industry; c) is as politically stable; d) is as inexpensive to live and work, d) has a better infrastructure already in place, than North Dakota.
I'll leave it at that for the moment.
Nine (9) New Permits -- 0/3 Wells Fracked "On Time" -- Bakken, North Dakota, USA
Daily activity report, October 6, 2011 --
Operators: BEXP (4), Oasis (3), Whiting, Petro-Hunt.
Fields: Bull Butte, Painted Woods, Cottonwood, Blue Buttes, Squires, Demores, Camp and a wildcat.
BEXP has permits for a 2-well pad. Petro-Hunt has the wildcat in Williams County. A lot of activity northwest of Williston.
Three wells released from confidential status, and not one of them completed.
Operators: BEXP (4), Oasis (3), Whiting, Petro-Hunt.
Fields: Bull Butte, Painted Woods, Cottonwood, Blue Buttes, Squires, Demores, Camp and a wildcat.
BEXP has permits for a 2-well pad. Petro-Hunt has the wildcat in Williams County. A lot of activity northwest of Williston.
Three wells released from confidential status, and not one of them completed.
Getting Closer to Peak Oil
Not.
Russia's new Arctic reserves effectively doubles the nation's reserves according to the country's natural resources minister, I suppose, the counterpart our own Mr Salazar.
Again, this is not just the Russians saying this, but corroboration by the USGS suggests that it is very accurate.
And while our own Mr Salazar is tweaking regulations to make it more difficult to go after our own resources, the Russians will be constructing three new nuclear and three new diesel-electric icebreakers to go after their Arctic resources. Constructing thes icebreakers would employ thousands of union workers if our administration had strategic vision and pro-growth idealism.
And, for investors, this nuggest embedded in the story:
Russia's new Arctic reserves effectively doubles the nation's reserves according to the country's natural resources minister, I suppose, the counterpart our own Mr Salazar.
According to numerous Russian media reports, addressing a meeting of the sixth media forum of the United Russia Party on 25 September, Russian Natural Resources Minister Iury Trutnev said that the preliminary forecast is that resources in the Russian Arctic shelf are comparable to those in mainland Russia, adding, “Speaking of long-term planning, these reserves could last 100, may be 150 years, but longer is unlikely. Humanity will eventually have to look for new energy anyway. Recently, we completed 40-year talks with Norway, delineated the gray zone, and now obtained another 5 billion tons of fuel equivalent there.”This is quite an incredible story, and folks should go to the link for the "rest of the story."
Trutnev’s new Arctic reserve claims are buttressed by the United States Geological Survey (USGS) 2008 survey, which estimated that 90 billion barrels of undiscovered oil and 1.668 trillion cubic feet of undiscovered natural gas lie beneath the Arctic’s waters and ice, representing 13 percent of the world’s undiscovered oil. Strong oil prices, more advanced offshore equipment and receding sea ice are leading to a growing interest in the Arctic.
Again, this is not just the Russians saying this, but corroboration by the USGS suggests that it is very accurate.
And while our own Mr Salazar is tweaking regulations to make it more difficult to go after our own resources, the Russians will be constructing three new nuclear and three new diesel-electric icebreakers to go after their Arctic resources. Constructing thes icebreakers would employ thousands of union workers if our administration had strategic vision and pro-growth idealism.
And, for investors, this nuggest embedded in the story:
Whether of not the Russians have either the expertise or the necessary cash to exploit the region’s reserves is another matter, as Arctic oil and natural gas exploration is more technically and physically challenging than for any other environment. However, Putin added that Rosneft has a long strategic cooperation agreement with ExxonMobil, and no doubt there will be other international energy companies willing to brave Russia’s tortuous bureaucratic maze for a piece of the action.A big "thank you" to a reader for sending me the link.
2Q11 Taxable Sales with Focus on the West -- Bakken, North Dakota, USA
Last week I posted the state's comments on taxable sales for the second quarter. Today the Williston Herald focuses on Williston and Williams County.
Datapoints (some numbers rounded):
Datapoints (some numbers rounded):
- Fargo, #1: $590 million
- Williston, #2: $535 million
- Cass County, #1: $683 million
- Williams, #2: $675 million
- Increase, Williams County, #1: 82 percent increase (compared to same period in 2010)
- Williston and Williams County ranked first in the first quarter 2011 (I knew the county did; I was not aware that Williston was also #1 in 1Q11)
- Other cities:
- Bismarck: $400 million
- Minot: $340 million
- Grand Forks: $260 million
- Other area cities:
- Stanley: 114 percent increase, to $30 million
- Tioga: 106 percent increase, to 135 million
- Watford City: 67 percent increase to $30 million
- And, drum roll, please for the state of North Dakota: $4.5 billion in the 2Q11 compared to $3.4 billion in 2Q10, a 75 percent increase
Another Sweet Spot in the Bakken -- Sanish Field -- 35/36-153-92 -- Bakken, North Dakota, USA
Wow, when you see a sweet spot like this, as an investor, you wish that price of would stay well below $75 to keep the share price of the operators down, allowing another opportunity to accumulate shares. Oh, well.
If you want to see another sweet spot in the Bakken (of which there must be dozens), look at the above-referenced sections on the NDIC GIS map server.
In a slight arc, extending not more than 1.4 miles, there are no less than twelve (12) wells:
Here they are:
If you want to see another sweet spot in the Bakken (of which there must be dozens), look at the above-referenced sections on the NDIC GIS map server.
In a slight arc, extending not more than 1.4 miles, there are no less than twelve (12) wells:
Here they are:
18869, 947, Whiting, Smith 44-26H, s7/10; t10/10; cum 112 6/12;These are a nice mix of middle Bakken and Three Forks formations, and two different companies to compare.
16833, 1,009, Fidelity, Annala 11-36H, s10/07; t4/08; cum 142K 6/12;
17552, 791, Whiting, Peterson 11-4H, s11/08; t2/09; cum 135K 6/12
18724, 1,251, Whiting, Foreman 11-4TFH, s4/10; t6/10; cum 135K 6/12;
21166, 679, Fidelity, Urho 11-36H, s9/11; t11/11; cum 37K 6/12;
21212, conf, Fidelity, Blessings 11-36H,
20217, 1,755, Whiting, Brehm 41-35XH, s5/11; t7/11; cum 121K 6/12;
19692, 1,719, Whiting, Brehm 42-35H, s12/10; t8/11; cum 106K 6/12;
20031, 868, Whiting, Peterson 43-35TFH, s2/11; t8/11; cum 67K 6/12;
20187, 1,145, Whiting, Peterson 34-35TFH, s4/11; t8/11; cum 76K 6/12;
19555, 720, Whiting, Foreman 21-4TFH, s11/10; t4/11; cum 59K 6/12;
19320, 881, Whiting, Brehm 21-4H, s10/10; t4/11; cum 82K 6/12;
Wells Reporting Today -- Comments on the Fracking Backlog -- Bakken, North Dakota, USA
Of the three wells that came off the confidential list today, only one was completed.
Elsewhere, they opine that the fracking backlog is due to the overhang from the terrible weather North Dakota had in the spring -- blizzard, impassable roads, flooding, etc. That is not the problem. The reason for the backlog is simply not enough fracking crews (or to use the industry's terminology, "fracking spreads").
I started blogging about the backlog well before it (the backlog) was being widely reported. Analysis revealed that one needed one dedicated frack spread for every three actively drilling rigs. Some of the bigger players had as many as five or six dedicated frack spreads, but none reached the 3:1 ratio. You need a 3:1 ratio just to stay in place. But some companies do not frack during the winter which means without an even higher ratio, they will never catch up. But the bigger problem is that most of the players do not have any dedicated frack teams. Some of these smaller players may have only two or three rigs, but without adding dedicated frack spreads to the mix, there are simply not enough teams in the Bakken. I haven't been accumulating the data, but on any given day, if three wells come off the confidential list, it seems that only one well has been completed. Today is another example: three wells come off the confidential list, and two are placed on DRL status. (Updated later; prior to updates, they were on DRL status. Trust me.)
19894, DRL, HELIS OIL & GAS COMPANY, L.L.C. GABBERT 4-2/11H 10/6/2011
20099, 1,080 (updated December 19, 2011), SLAWSON EXPLORATION COMPANY, INC. CANNONBALL FEDERAL 2-27-34H 10/6/2011
20491, 78, CONTINENTAL RESOURCES, INC. CHARLESTON 1-22H 10/6/2011 (updated December 19, 2011 -- they're having trouble with this well; CLR is looking to re-enter this well, based on a sundry dated December 8, 2011.
18981, 2,952 (updated December 19, 2011), BRIGHAM OIL & GAS, L.P. HOLM 9-4 1-H 10/7/2011, 11,902 bbls in August, 2011
19544, 830 (updated December 19, 2011), DENBURY ONSHORE, LLC GILBERTSON 34-26NEH 10/7/2011, 23,000 bbls in July/August 2011
19872, 108 (updated December 19, 2011), CONTINENTAL RESOURCES, INC. MPHU 43-9H 10/7/2011, 10,000 bbls in July/August, 2011; RED RIVER
19449, 1,993 (updated December 19, 2011), , WHITING OIL AND GAS CORPORATION, STATE 12-32H 10/10/2011, 36,000 bbls in four months
Elsewhere, they opine that the fracking backlog is due to the overhang from the terrible weather North Dakota had in the spring -- blizzard, impassable roads, flooding, etc. That is not the problem. The reason for the backlog is simply not enough fracking crews (or to use the industry's terminology, "fracking spreads").
I started blogging about the backlog well before it (the backlog) was being widely reported. Analysis revealed that one needed one dedicated frack spread for every three actively drilling rigs. Some of the bigger players had as many as five or six dedicated frack spreads, but none reached the 3:1 ratio. You need a 3:1 ratio just to stay in place. But some companies do not frack during the winter which means without an even higher ratio, they will never catch up. But the bigger problem is that most of the players do not have any dedicated frack teams. Some of these smaller players may have only two or three rigs, but without adding dedicated frack spreads to the mix, there are simply not enough teams in the Bakken. I haven't been accumulating the data, but on any given day, if three wells come off the confidential list, it seems that only one well has been completed. Today is another example: three wells come off the confidential list, and two are placed on DRL status. (Updated later; prior to updates, they were on DRL status. Trust me.)
19894, DRL, HELIS OIL & GAS COMPANY, L.L.C. GABBERT 4-2/11H 10/6/2011
20099, 1,080 (updated December 19, 2011), SLAWSON EXPLORATION COMPANY, INC. CANNONBALL FEDERAL 2-27-34H 10/6/2011
20491, 78, CONTINENTAL RESOURCES, INC. CHARLESTON 1-22H 10/6/2011 (updated December 19, 2011 -- they're having trouble with this well; CLR is looking to re-enter this well, based on a sundry dated December 8, 2011.
18981, 2,952 (updated December 19, 2011), BRIGHAM OIL & GAS, L.P. HOLM 9-4 1-H 10/7/2011, 11,902 bbls in August, 2011
19544, 830 (updated December 19, 2011), DENBURY ONSHORE, LLC GILBERTSON 34-26NEH 10/7/2011, 23,000 bbls in July/August 2011
19872, 108 (updated December 19, 2011), CONTINENTAL RESOURCES, INC. MPHU 43-9H 10/7/2011, 10,000 bbls in July/August, 2011; RED RIVER
19449, 1,993 (updated December 19, 2011), , WHITING OIL AND GAS CORPORATION, STATE 12-32H 10/10/2011, 36,000 bbls in four months
Biggest News of the Day, National News: Mortgage Rates Below 4 Percent
Link here.
That would be the metric I would like to follow: of those who qualify and of those who are looking to buy, what percent do NOT take advantage of this. One hundred percent of folks seriously looking to buy and qualify, and still do not decide to buy at this point -- there has to be a reason.
Those (of those that qualify, and those looking to buy) not taking advantage of this historic opportunity probably understand two things: a) there is no hurry to jump in (the economy is not going to turn around very soon); and, b) there's always a chance that rates will drop further -- after all, one can buy a $50,000 car for zero percent interest, and in some cases get a rebate. Maybe folks are looking for that zero percent mortgage (farfetched? banks are paying the FDIC to hold way too much cash and are looking for ways to get rid of their cash. I can't remember if I posted that story/link -- it was a few days ago; not worth looking for it again).
The average rate on the 30-year fixed mortgage this week fell below 4 percent for the first time ever, to 3.94 percent.Did you catch two phrases?
For those who can qualify, it's an extraordinary opportunity to buy or refinance. And mortgage rates could fall even further now that the Federal Reserve plans to reshuffle its portfolio of securities to try and lower long-term rates.
On Thursday, Freddie Mac said the average rate on a 30-year fixed mortgage dropped from 4.01 percent last week, the previous low. The average rate on a 15-year fixed loan, a popular refinancing option, dipped to 3.26 percent, also a record.
- "For those who qualify?"
- "First time ever" -- below 4 percent -- "first time ever" suggests something historic, I suppose.
That would be the metric I would like to follow: of those who qualify and of those who are looking to buy, what percent do NOT take advantage of this. One hundred percent of folks seriously looking to buy and qualify, and still do not decide to buy at this point -- there has to be a reason.
Those (of those that qualify, and those looking to buy) not taking advantage of this historic opportunity probably understand two things: a) there is no hurry to jump in (the economy is not going to turn around very soon); and, b) there's always a chance that rates will drop further -- after all, one can buy a $50,000 car for zero percent interest, and in some cases get a rebate. Maybe folks are looking for that zero percent mortgage (farfetched? banks are paying the FDIC to hold way too much cash and are looking for ways to get rid of their cash. I can't remember if I posted that story/link -- it was a few days ago; not worth looking for it again).
From the Drudge Report: The "Kill Panel" -- Absolutely Nothing About the Bakken
Link here.
It's about time that the US has/had such a panel. As RR would have said, "you can run, but you can't hide."
Now, was waterboarding so bad?
From this link:
And this is how a crazy mind wanders. Did someone say there would be "kill panels" under Obamacare? Oh, they were "death panels."
It's about time that the US has/had such a panel. As RR would have said, "you can run, but you can't hide."
Now, was waterboarding so bad?
From this link:
They said targeting recommendations are drawn up by a committee of mid-level National Security Council and agency officials. Their recommendations are then sent to the panel of NSC "principals," meaning Cabinet secretaries and intelligence unit chiefs, for approval. The panel of principals could have different memberships when considering different operational issues, they said.I'm reminded of the movies of the 1960's of the Roman gladiators, when the Roman emperors would give a "thumbs up" or a "thumbs down" on whether an adversary in the arena should be taken out, i.e., killed.
The officials insisted on anonymity to discuss sensitive information.
And this is how a crazy mind wanders. Did someone say there would be "kill panels" under Obamacare? Oh, they were "death panels."
The Rumor Persists -- EOG Could Be Bought Out -- Bakken, North Dakota, USA
Buried in this Motley Fool article, yesterday, October 5, 2011:
This "EOG does a lot of drilling for other companies..." might also account for two other things I've noticed:
EOG Resources, down about 24% over the past year, is another big player in the Eagle Ford shale, and has been shifting its focus some, from gas to oil. It does a lot of drilling for other companies, such as Northern Oil & Gas, and with its strong track record, some speculate that it could be bought out.Another nugget: "EOG does a lot of drilling for other companies..." and that's why I'm not all that concerned with the chatter about Bakken companies might lose their leases because they can't get to them fast enough.
This "EOG does a lot of drilling for other companies..." might also account for two other things I've noticed:
- Relative paucity of EOG wells reporting out of the Bakken (although this might be a stretch)
- And absolutely NO EOG wells in their best Bakken field, the Parshall
At SeekingAlpha.com -- BEXP -- Thursday, October 5, 2011 -- Bakken, North Dakota, USA
Link here.
Whatever.
By the way, another thing about BEXP. It has been through the fire and it succeeded. Remember when cash flow was such that BEXP has to partner with USEG so it could survive. I find it all quite remarkable.
Many other companies operating in the area [i.e., the Bakken] such as Continental Resources and Whiting Petroleum Corporation show similar signs of success and point towards future growth, but neither have the same steady earnings nor the financial growth that Brigham exhibits. Over the past few months, the company has received a slew of price target updates.The following is old news, from the 2Q11 conference call -- remember the horrible spring flooding, the blizzard, the wringing of hands six months ago --
During the latest conference call (2Q11), the company's current success and planned growth was emphasized. The speaker mentioned the key point that Brigham had drilled 79 consecutive North Dakota wells, each with an average IP (initial production) of 2,800 boe/d (barrels of oil equivalent per day). This average is quite impressive for the area, making them a key player. [Comment: understatement.]The point is well taken. But was there a typo in that last paragraph? The writer: "According to numbers released by the company, a 6000 boe/d well...." Six thousand boe per day ---- one doesn't even see 6,000 boe as an IP -- should that have been 6,000 boe per month? Six thousand bbls/month gets you to 72,000 bbls/year which is about right for a Bakken well.
The company also has plans to construct [construct? how about drill?] almost 1400 to 2200 more wells than they already have, which indicates the company is just getting started with exploration, development, and production. According to numbers released by the company, a 6000 boe/d well could gross 8.7 million dollars, provide a rate of return at around 51%, and have a full return on investment in two years, which is much sooner than the life of the well, which is estimated at 25 years. If these numbers are true, then it would mean Brigham's larger wells could be looking at almost 23 years of making a solid profit, without any risk of losing money.
Whatever.
By the way, another thing about BEXP. It has been through the fire and it succeeded. Remember when cash flow was such that BEXP has to partner with USEG so it could survive. I find it all quite remarkable.
For Investors Only -- Five Land Oil Service Companies -- Including BHI, HAL, and SLB -- Bakken, North Dakota, USA
Another look at the oil service companies for investors, from SeekingAlpha.com:
A few things stand out. NOV, SLB, PTEN, and HAL all have double digit Net Profit Margins (ttm). HAL , NBR, and BHI both have 5 yr. EPS Growth Estimates per annum of greater than 22% -- outstanding. Except NBR, all the above stocks have average analysts’ recommendations of less than 2.0. All are BUYS, even NBR. Thus far the trend for analysts’ EPS estimate revisions upward has been strong. All of the current FY2012 EPS estimates are higher than they were 90 days ago. The macroeconomic outlook reviewed above should mean that this trend will continue. The above numbers, rather than being overestimates are very possibly underestimates.The writer throws in a concluding thought on natural gas (at the link, at the end of the story).
Taking Advantage of the Pullback? Oil Will Average $115 Through 2012 -- Forbes
Link here.
I'll believe it when I see it.
Note: a drop below $75 will squeeze profits of Canadian tar sands operators --
By the way, which energy industry gets squeezed the most when oil prices fall? Conventional oil, oil sands, shale, oil service companies, deep sea drilling, US oil industry, non-US oil industry, OPEC?
None of the above.
Renewables. Wind and solar.
I'll believe it when I see it.
Crude oil completely broke down in September, falling more than 10% as investors re-priced the new normal of lower growth and possible recession across several asset classes.This is the important nugget for folks invested in the Bakken:
But underlying fundamentals will put a floor on oil’s possible fall, as producers rebalance supply and demand to keep the market tight, JPMorgan’s commodities research team says.
Looking at past recessions and the price movement in oil, the floor seems to be in the $80 to $95 per barrel range for Brent. A breakdown in prices below that level would occur in the case of a ’09-like crisis, which could push Brent down to the $60 to $70 per barrel range. At that point, cramped investment in alternative production methods like deep sea and ultra-deep sea drilling, oil sand, and other methods would become uneconomical, putting pressure on supply and once again setting markets up for bullish moves.Two points:
- Folks are still talking about another recession close on the heels of the recent recession.
- Drillers can make money in the Bakken at much lower prices -- deep-sea drillers, oil sands, etc., are the ones at risk.
Note: a drop below $75 will squeeze profits of Canadian tar sands operators --
By the way, which energy industry gets squeezed the most when oil prices fall? Conventional oil, oil sands, shale, oil service companies, deep sea drilling, US oil industry, non-US oil industry, OPEC?
None of the above.
Renewables. Wind and solar.
Weeks 39 and 40: September 24 -- October 7, 2011
I still have two more days in this segment to link but I was falling behind ...
Huge story: North Dakota production could double from July to end of year; from 400,000 bopd to 800,000 bopd -- huge
Big story of the month: two more hotels planned for Williston
Map of the Truck Reliever Route / Truck Bypass Around Williston
Short list of projects in and around Williston
The rumor persists: EOG could be bought out
Oil will average $115 through 2012
The Bakken -- a 25-year look into the future
2Q11 taxable sales up date for the state by county and city; and here
Another sweet spot in the Sanish
Samson Resources re-entering a dry TFS well
$3 billion in infrastructure projects in North Dakota just for natural gas
Oasis to drill well inside city limits
Update on Tioga activity -- oil capital of North Dakota
Predictable: $4,000 apartments in Williston
The dockets: we've entered the manufacturing phase in the Bakken
OXY USA ready to "explode" in the southwest
Re-fracs: a case study. Good news
Taxable sales up $1 billion in North Dakota
Enbridge to add 800,000 bopd takeaway at Cushing
KOG acquires 13,500 net acres and a rig
New natural gas pipeline from Tioga to Sherwood (near Canada)
Whiting's record TFS well
CNBC links re: the Bakken
695 Bakken wells that have produced in excess of 100,000 bbls to date
Bakken Industrial Park update
Menard's is mum on move
Widening the road between Williston and Watford City
Huge story: North Dakota production could double from July to end of year; from 400,000 bopd to 800,000 bopd -- huge
Big story of the month: two more hotels planned for Williston
Map of the Truck Reliever Route / Truck Bypass Around Williston
Short list of projects in and around Williston
The rumor persists: EOG could be bought out
Oil will average $115 through 2012
The Bakken -- a 25-year look into the future
2Q11 taxable sales up date for the state by county and city; and here
Another sweet spot in the Sanish
Samson Resources re-entering a dry TFS well
$3 billion in infrastructure projects in North Dakota just for natural gas
Oasis to drill well inside city limits
Update on Tioga activity -- oil capital of North Dakota
Predictable: $4,000 apartments in Williston
The dockets: we've entered the manufacturing phase in the Bakken
OXY USA ready to "explode" in the southwest
Re-fracs: a case study. Good news
Taxable sales up $1 billion in North Dakota
Enbridge to add 800,000 bopd takeaway at Cushing
KOG acquires 13,500 net acres and a rig
New natural gas pipeline from Tioga to Sherwood (near Canada)
Whiting's record TFS well
CNBC links re: the Bakken
695 Bakken wells that have produced in excess of 100,000 bbls to date
Bakken Industrial Park update
Menard's is mum on move
Widening the road between Williston and Watford City
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