Friday, November 4, 2011

Absolutely Nothing To Do With The Bakken -- California Governor Moonbeam Fires State Oil Regulators

Link here.
Gov. Jerry Brown has fired the state’s top two oil and gas production regulators.

On Thursday, Derek Chernow, acting director of the California Department of Conservation, and Elena Miller, head of the Division of Oil, Gas and Geothermal Resources, received pink slips from the administration.

The ousters, first reported by the Bakersfield Californian, come as the oil industry spars with state regulators over delays in the permitting process for new drilling projects. According to Bloomberg, the state has granted permits to 14 projects this year out of 199 applications received.
'bout time.

Fox News -- Williston's Housing Shortage

The file footage of Williston is very, very old. I find it incredible how poor the coverage can be.

Video here.

Again, the stock question was asked: "are you worried about the boom/bust cycle." If folks actually looked at the four previous booms in the Williston Basin and compared that history with what is going on now, and if these folks would actually look at the building that's going on now, the question about the boom/bust cycle would go away.

Somehow we need to move from "are you worried about a bust?"  Why would there be a bust?

The Bakken is the biggest continuous oil field in the continental United States. There are least two more formations in addition to the Bakken, and one of them may be bigger than the Bakken. Nothing suggests to me that the price of oil is headed down. Nothing suggests to me that the US will use less oil going forward. Nuclear power is dead in Japan, Germany, and now Mexico. Solar and wind are nothing more than niche energy plays. 

The big question is when will "boom" become "ka-boom" or have we already seen it? I don't think so. I think 2012 will be bigger than 2011 in terms of news events in the Bakken: production, number of active rigs, fracking, mergers, buyouts.

Except for building permits, I think all other metrics in the Williston Basin in 2012 will surpass those of this year.

Absolutely Nothing To Do With The Bakken -- Let the Guessing Begin --

What international major energy company will form a joint venture with Chesapeake Energy Corp. and acquire a 25% interest in 650,000 net acres in the wet natural gas area of the Utica shale play in eastern Ohio?

I assume one can consider ExxonMobil an international energy company. CNOOC? Based on relationships in Eagle Ford, that's my guess.

This was almost two years ago to the day:
Chesapeake Energy Corp.and CNOOC Ltd. have closed on the project cooperation that gives CNOOC International Ltd. a 33.3% undivided interest in Chesapeake's 600,000 net oil and natural gas leasehold acres in the Eagle Ford Shale in South Texas.

GDP Back -- And I'll Wager It's Due In Part To Cell Phones

Link here.
GDP has made a complete recovery and is above its pre-recession level for the first time -- 3Q11 and unemployment is still almost 7 million below pre-recession peak.

In other words, according to Carpe Diem, the US is producing more output now than ever before in U.S. history, but we're doing it with 6.6 million fewer workers than it took to produce roughly that same output in Q4 2007. 
I've said more than once the unemployment is due to tectonic shifts in the way America does business. I would wager that cell phones are a huge component of why America's productivity is greater than ever despite huge unemployment. 

At Some Point ....

The approaching $15 trillion debt milestone is not even the only piece of bad economic news for the country. The jobs report for October – released this morning – showed that U.S. employers added an estimated 80,000 jobs to their payrolls last month, worse than economists expected. The unemployment rate decreased to 9.0 percent, down from 9.1 percent a month earlier, small consolation for a nation still struggling to recover from a severe recession.
Earlier today it was reported that the rate ticked down (from 9.1 to 9.0) because more folks found jobs. The numbers don't add up. The rate ticked down because fewer people said they were looking for jobs. They've given up and as we approach the holidays, who wants to be looking for jobs that don't exist? Except in North Dakota. The unemployment rate in Williston is 0.9 percent. No doubt that is a record.

Four (4) New Permits -- The Bakken, North Dakota, USA

Daily activity report, November 4, 2011 --

Operators: Baytex, (2), CLR, and Eternal Energy

Fields: Indian Hill, Garnet, Ambrose

Eternal Energy has a wildcat in Divide County.

Three wells released from "tight hole" status and all three fracked/completed. All three were very nice wells:
  • 19325, 896, BEXP, Stanley Larson 8-5 1H, Williams
  • 20519, 983, Zenergy, Link 12-1H, McKenzie
  • 20642, 1,137, MRO, Good Bear USA 21-14H, Dunn
I remain impressed with MRO.

OIl Boom Spurring Bismarck Building Boom -- The Bakken, North Dakota, USA

Link here.

Because there is not enough housing in Dickinson, Minot, or Williston, some workers are moving their families as far away as Bismarck.
Oil patch action in the western North Dakota might be driving a home building spurt here.

Chad Wachter, vice president of Wachter Development, started dirt work this fall for the 100-plus acres of the Heart Ridge Addition, north of Mandan's Fort Lincoln Elementary School. It is designed to hold a mix of 123 single family and multi-family homes. He is starting by cutting road for 40 single family lots there. "I have a list of contractors who want to buy them," he said. The company also is also building 70 new homes in northeast Bismarck and south of the Bismarck.

Lot sales have at least doubled in the last three years, Wachter said. He estimates as much as 40 percent of his jump in lot sales are due to mounting demand from people working in energy industry.

"I've got a lot of people working in Williston and Dickinson that can't find housing andare having their families live here," he said. "Some residents in Dickinson and Williston are selling their houses to people who need it more and moving here."
This is truly incredible. 

Mike Filloon Has Posted Parts VII and VIII on Small Caps in the Bakken -- North Dakota, USA

Link here.

Marmon Oil Field -- The Bakken, North Dakota, USA

No permits in 2015, as of August 3, 2015

No permits in 2014

2013 (list is complete)
  • 27198, loc, HRC, Pasternak Trsut 157-100-19C-18-4H,
  • 27002, loc, HRC, Nelson 157-100-25A-36-4H,
  • 27001, loc, HRC, Nelson 157-100-25A-36-3H,
  • 27000, loc, HRC, Nelson 157-100-25A-36-2H,
  • 26373 conf, HRC, Stromme Trust 157-100-4B-9-3H,
  • 26372, conf, HRC, Stromme Trust 157-100-4b-9-2H,
  • 26211, 1,188, HRC, Moline 157-100-20D-17-3H, Marmon, 35 stages, 4.1 million lbs, t2/14; cum 111K 6/15; 15 days in 6/15
  • 26210, drl, HRC, State 157-100-29A-32-3H, 35 stages, 4.1 million lbs, t2/14; cum 130K 6/15;
  • 26119, 901, HRC, Pasternak Trust 157-100-19C-19-8-2H, 35 stages, 4 million lbs, t3/14; cum 104K 6/15; 5 days in 6/15;
  • 26118, 2,023, HRC, Grev 157-100-30B-31-2H, 34 stages, 4.1 million lbs, t5/14; cum 137K 6/15;
  • 26117, dry, HRC, Pasternak Trust 157-100-19C-18-3H; from the well file: "Operator pre-set surface casing in anticipation of a larger drilling rig moving in location. Plans changed and the well was plugged at surface per NDIC requirements. Operator plans on re-drilling this well when drilling activity picks up in the field."
  • 26116, 1,785, HRC, Grev 157-100-30B-31-3H, 35 stages, 4.1 million lbs, t3/14; cum 118K 6/15; 17 days in 5/15;
  • 25793, 1,119, HRC, Njos 157-100-28B-33-2H, Marmon, t8/13; cum 142K 6/15;
  • 25499, 707, HRC, Moline 157-100-20D-17-2H, Marmon, t2/14; cum 86K 6/15; not full months lately;
  • 25498, 1,551, HRC, State 157-100-29A-32-2H, t2/14; cum 122K 6/15; not full months lately;
  • 24825, PNC, HRC, Berg 157-100-7C-6-2H,
  • 24824, PNC, HRC, Pasternak Trust 157-100-18B-19-2H,
  • None
  • 21159, 774, Hess, Lloyd 27-1H, Marmon, t5/12; cum 121K 3/14;
  • 20708, 1,352, Oasis, Nelson 24-13H, t8/13; cum 25K 3/14;
  • 20604, 649, Oasis, Santa 23-14H, t11/13; cum 68K 3/14;
  • 20063, 1,504, HRC, State 157-100-32C-29-1H, t4/13; cum 91K 3/14;
  • 19950, 221, HRC, Grev 157-100-31D-1H, t7/12; cum 71K 3/14;
  • 19547, 207, HRC, State 157-101-21C-16-1H, t8/11; cum 79K 3/14;
  • 19103, 382, HRC, Njos 157-100-28A-33-1H, t9/10; cum 91K 3/14;
  • 19041, 287, Hess/fracked by Petro-Hunt, Njos 157-100-26B-35-1H, 31 stages, 2.6 million lbs, t3/11; cum 132K 5/15;
  • 19038, 440, HRC, Forseth 157-100-25B-36-1H, Three Forks, open cased hole, 2.6 million lbs, t9/10; cum 155K 6/15; off-line recently; 

Original Post

An individual sent me this query: We have this to go by: township 157 range 100 and section 20. Can you give us any information on this well? Thank you.

Looking at the NDIC GIS map server, you can go to Marmon oil field. The field is 24 sections, about 3/4th of T157N-R100W. The Marmon oil field is about 20 miles WNW of Ray, just north of some pretty good wells. Over time these wells will probably do okay.

There are five producing wells in that field, four of them long horizontals, all Bakken (one Three Forks):
  • 19547, 207, Petro-Hunt, State 157-100-21C-16-1H, Marmon, Bakken, 8/11, cum 44K 9/12; 25 stages; 3 million lbs;
  • 19103, 382, Petro-Hunt, Njos 157-100-28A-33-1H, Wildcat, Three Forks; t9/10; cum 66K 9/12, this was only Three Forks well in this field; 32-stage frack; 2.6 million pounds sand frack
  • 19041, 287, Hess, originally Petro-Hunt, Njos 157-100-26B-35-1H, t3/11; cum 71K 9/12;
  • 19038, 440, Petro-Hunt, Forseth 157-100-25B-36-1H, s6/10; t9/10; cum 98K 9/12; 32 stages; 2.6 million lbs;
The fifth producing well is a vertical well:
  • 7903; s1980; three formations -- Madison, cumulative 83K; Dawson Bay, cumulative 3K; Red River, cumulative 96K. The Madison had an IP of 27 and the Red River had an IP of 168. Only the Madison is still producing, at about 200 bbls/month
In addition to these wells, there are seven wells in this field on the confidential list. There are no wells sited in section 20-157-100.

However, one confidential well, #20614, is likely to be a long lateral, sited in section 17 and going south to include the section you inquired about, section 20, based on the configuration of other wells in this field, and the name of the well: 
  • 20614, 411, Petro-Hunt, White 157-100-17B-20-1H, t8/11; cum 47K 9/12; 24 stages; 2.7 million lbs;

90,000 Troops Coming Home From Iraq: Here Is Where They Need To Go Next -- Absolutely Ntohing To Do With The Bakken

Half of the 180,000 troops in Afghanistan and Iraq will will be out of those countries by 2012.

This is where they need to go next: Detroit.
People who catch the bus in Detroit may be waiting a while Friday morning. About 100 Detroit Department of Transportation bus drivers are at work, but are refusing to drive their buses.

WWJ’s Scott Ryan spoke with Henry Gaffney, spokesman for the D-DOT bus drivers union AFL-CIO Local 26, who said this was not an organized maneuver by the union. Gaffney said it’s a matter of  bus drivers fearing for their safety, citing an incident that happened Thursday afternoon.

“Our drivers are scared, they’re scared for their lives. This has been an ongoing situation about security. I think yesterday kind of just topped it off, when one of my drivers was beat up by some teenagers down in the middle of Rosa Parks and it took the police almost 30 minutes to get there, in downtown Detroit,” said Gaffney.
Thirty minutes: intolerable.

Update on ONEOK's Garden Creek, Stateline I and II Natural Gas Processing Plants -- The Bakken, North Dakota, USA

First, this link, the record well in northeastern McKenzie County, just across the river from Williston:
The Tarpon Federal 21-4H is a Whiting Petroleum operated well and had a 24-hour initial production (IP) rate of 7,009 barrels of oil equivalent (BOE), setting a new Williston Basin record for a Bakken well.  The Tarpon Federal produced 4,815 barrels of oil and 13,163 Mcf of natural gas on October 17, 2011 after being fracture stimulated with 30 stages.
13,163,000 cubit feet of natural gas translates roughly into  2,000 barrels of oil equivalent.

Elsewhere, a writer updates the progress of ONEOK's Garden Creek natural gas gathering and processing plant.

The location of the ONEOK's three new processing plants can be found at this map. It appears that the processing plant that I am taking photos of west of Williston is most likely Stateline #1. With one red triangle designating "Stateline I and II Plants," perhaps the two "Stateline" plants will be collocated.

According to the link above:
  • the new well is being referred to as a "real torch"
  • Garden Creek is about to go on-line
  • Garden Creek is located about 12 miles directly south of the Tarpon well
  • a new Bear Paw compressor station is just a couple of miles away from Garden Creek
  • several other strong wells in this general area are producing significant amounts of wet gas after longer term production
One word: exciting.

North Dakota's Unofficial State Holiday -- Implications for The Bakken, North Dakota, USA

I know this cannot possibly be the reason.

Earlier I mentioned that there were absolutely no vehicles at the Cenex station at the second busiest intersection inside Williston city limits, until four pickups pulled in, but absolutely no big oil trucks. None. It's never that quiet at the Cenex. I mentioned that no one could explain it.

And then this.
Schools, offices and other workplaces will be conspicuously quiet today - almost as if it were a holiday.

For many it is - it's the opening day of deer gun season.

And for hunting in North Dakota, it's No. 1 as far as participation in season openers.

School districts around the state can set their own calenders, and many choose to pencil in the first Friday in November as a day off.
I did not know that. In Boston, they pencil in "snow days." In North Dakota, they ink in "opening day for deer gun season."

There's no way this explains the lull in traffic at the Cenex station, but one wonders.

For Investors Only -- Spotlight on Williams Cos -- The Bakken, North Dakota, USA

Readers know that one of my favorite sectors is "pipeline." And in that sector, I accumulate shares in Enbridge and Williams. I won't be making any new purchases of either in the foreseeable future. All my discretionary / disposable income -- whatever -- is going to wife, daughters and granddaughters. Smile. Maybe next year.

So, this posting is simply because I enjoy following the pipelines. (My favorite sector, by the way, might be railroads, but again, I digress.)

From Barron's, "Tap Into the Unlocked Value of Williams." (This link may break.)
With the proliferation of U.S. natural-gas land drilling in landlocked terrain, gas pipelines are a hot asset, as witnessed by Kinder Morgan's planned $21 billion purchase of rival El Paso to form the powerhouse among America's pipeline operators.

Left in the dust following the mid-October deal: Tulsa, Oklahoma-based Williams Companies, an undervalued energy play that operates pipelines, processing and an exploration-and-production business that -- with its focus on low-priced natural gas -- looked less sexy than El Paso's assets.

But Williams, with a market capitalization of roughly $18 billion, has two striking attributes. First off, it sports a rising dividend, boosted by tax-deferred pipeline profits wrapped in a master limited-partnership structure. Then there's the pending tax-free spinoff of its E&P business to shareholders, which should unlock the value of both the E&P and pipeline businesses.

The spinoff will highlight the pipelines' reliable earnings from long-distance fees. The MLP, Williams Partners (WPZ), controls interstate pipelines and gas-gathering assets, and has a market capitalization of almost $17 billion. 
The rest of the article is worth reading. I read the article, not so much with WMB in mind, but the entire natural gas gathering and processing industry. Something just tells me that this will be the decade of energy for the US (2011 - 2021). 

SeekingAlpha Transcripts for Several Bakken-Related Oil Companies -- The Bakken, North Dakota, USA

A big thank you to Don for sending these my way; makes it easier to move along more quickly. These, of course, will also be linked at "Earnings Central" on the sidebar at the right.

Of the four below: DNR is the most exciting in that I understand it least. No, I "get" the company, I just have trouble sorting out how much the different pieces contribute to the overall bottom line. But DNR keeps showing up on those lists of  "5 Stocks You Must Own" or "Ten Stocks Poised to Pop."

CLR and WLL seem pretty straightforward by comparison. I think folks who follow CLR will be in for quite a pleasant surprise 3Q12 based on comments in the Q&A for 3Q11 -- more on that later.

And EOG -- simply huge.

Now, the links:


Two of My Favorite Words If Used Together: Commodities Boom -- The Bakken, North Dakota, USA

This morning on the way out the door, I saw the subject matter on CNBC Squawk: "Commodities Boom" with file footage of railroad cars -- black oil tank cars, and the distinctive orange and black BSNF locomotives. See Carpe Diem's recent posting.

This a..m., one of the Yahoo!Financial headlines: oh, the headline changed -- the original headline was "Oil Nears $95 With Signs of Improving US Economy." Now the headline is: "Oil Hits 3-Month High After Greek Vote Scrapped." I did not read the article.

And I forgot it was Friday until it was mentioned on the radio. And, yesterday someone said we change our clocks this weekend.

It is an incredibly balmy Friday morning here in the Bakken. I can't tell if the skies are clear because it's pitch black -- I guess I could have looked for the stars, but forgot. But the Cenex station at the second busiest corner in Williston was empty of 18-wheelers. Not one big truck was at the pumps. In fact not one vehicle. While getting my coffee, three pickup trucks pulled in but no oil trucks. The men at the coffee klatsch had no explanation.

When I see "commodities boom" as the CNBC subject matter on a Friday, one can't help but get excited. I told someone last night, "you know, at $93, for all intents and purposes, that's 100-dollar oil and folks seemed to have gotten used to price at the pump. There are mixed signals about the strength of the economy, but it appears that in the aggregate, companies reporting their earnings for 3Q11 have done very, very well.

Even Starbucks surged on "loyal sales."
Starbucks Corp.'s fiscal fourth-quarter profit jumped 29% as the coffee giant benefited from continued loyalty among U.S. customers and its expansion overseas.

Starbucks said its U.S. stores saw more traffic and higher bills per customer. Overall, U.S. same-store sales rose 10% in the fiscal quarter ended Oct. 2, outpacing Dunkin' Brands Group Inc.'s 6% growth in Dunkin' Donuts' U.S. same-store sales in its third quarter ended Sept. 24.

Helping Starbucks's U.S. stores has been a new loyalty program, which allows users to load money on a Starbucks card and use it like a debit card.
Just for the record, I prefer Dunkin' Donuts. And when I get back to Boston, the first coffee shop I will visit will be the one just down the street from our granddaughters.

Okay, enough of this. Back to sorting through comments to the blog.

Little Darlin', The Diamonds
1957: I was six years old. We lived in a new subdivision. I remember them paving the road, and a kid on a bike almost getting run over by a "grader."  I would never have heard this song then. I was listening to country music if I was listening to anything. Williston was "booming" then, too, I suppose, though on a smaller scale and I really don't the details or remember much more. Except the huge piles of snow during the winter that the graders would leave at the corner by our house. The video? It was sent to me yesterday. The individual who sent it to me would have had no idea it was my wife's birthday yesterday; purely coincidental. Funny how things show up in one's mailbox completely unexpected.