Tuesday, November 8, 2011

Further "Proof" the Global Warming Data Contrived -- Nothing To Do With The Bakken

Link here.
A report to be published today by the Global Warming Policy Foundation includes a graph of world average temperatures over the past ten years, drawn from the project’s data and revealed on its website.

This graph shows that the trend of the last decade is absolutely flat, with no increase at all – though the levels of carbon dioxide in the atmosphere have carried on rising relentlessly.

‘This is nowhere near what the  climate models were predicting,’ Prof Curry said. ‘Whatever it is that’s going on here, it doesn’t look like it’s being dominated by CO2.’

Thank Goodness for the Internet and the Drudge Report -- Absolutely Nothing To Do With the Bakken

Update

Look at the bias in this report:
Document of the day: The Federal Register Thursday carries a notice from the U.S. Department of Agriculture formally withdrawing the proposed 15-cent federal surcharge on fresh Christmas trees.

Just last week, critics pounced on the fee, labeling it as a 'Christmas tree tax.' In pre-election, rapid-response mode, the Obama administration did a same-news-cycle about-face on the fee, which was set to take effect on November 9—just in time for the holiday season. The administration "indefinitely stayed" the new charge, which was technically not a tax but an agricultural promotion assessment designed to encourage the purchase of live trees at Christmastime.
"Just last week, critics pounced...."

If a surcharge is not a tax, what is it?

"Technically not a tax but an agricultural promotion...." oh, give me a break.

"Designed to encourage the purchase of live trees at Christmastime" as opposed to some other time?

I cannot make this stuff up.

Fifteen cents/tree -- at a minimum, it would cost the govt $2.00 / tree to run this program. -- November 17, 2011
 

President Obama put on hold the "Christmas tree tax" of 15 cents per tree. I had several folks tell me I did not understand the importance of this tree tax but I did not post their comments. Their reasoning appeared to be unbalanced. Interestingly I had planned an additional comment on this issue, but for now, can hold off. -- November 9, 2011.

Original Post
Link here.

Does anyone really think the mainstream media will run this story? The president has placed a 15-cent tax on Christmas trees to fund a commission to enhance marketing of Christmas trees. Yes, the same trees that are banned by civil liberty union groups on the basis that it promotes Christianity.

My hunch is that it will cost the government more than 15 cents/tree to administer the program. Wow. Fifteen cents. Where in the world do they come up with this stuff? 

Wow, I can't make this stuff up.

OPEC Raises Price Preference --

Link here.

Concerned about a weakening global economy, OPEC says it has no plans to increase oil production for the next few months.

OPEC has also raised its price target for oil: $85 to $95, ten dollars over the 2010 target.

How to FInd Fracking Information at the NDIC Website -- The Bakken, North Dakota, USA

A reader asked how to find the frack information for a specific well at the NDIC website.

Example:

Go to NDIC web site.
Click on "Basic Services" on the menu on left sidebar.

Enter password. Basic services subscription costs $50/year and is well worth it.

Enter a file number. For this example, I typed in "20335." You will see why I picked this one.

When the well file comes up, click on "Get This Well File" on the left hand menu. It may take awhile for the PDF to download.

Normally, you are not so lucky to get the "Well Completion Report" right at the top. It's often buried under the first five or six sheets, but you get good scrolling through those sheets to find the "Well Completion Report."

But in this case, the report was the first thing to show up (which, as noted, is very rare).

The first page will show IP at the bottom; the second page will show the formation depths and the target; and the third page, at the top, is the frack information, in this case, 38 stages and 4 million pounds of sand.
Another example: 20538. In this case, the fracking information is about five pages down, but it's there.

In some cases, you have to scroll to the bottom to find the information. In some cases, I can't find the information no matter how hard I look.

Feel-Good Story in the Bakken -- North Dakota, USA

This is a great feel-good story.

I understand that there are folks who are frustrated by the Bakken boom. But there's just something about folks who handle adversity with a good attitude that impresses me.

In today's Williston Herald, above the fold, there is a photo of a young woman in her tiny green cabin, a photo taking up the whole upper half of the paper.

The young woman is a teacher in Grassy Butte, North Dakota, population 252, southeastern McKenzie County, perhaps some of the most remote country in the Dakotas. But incredibly beautiful.

I wonder how many folks upset about the traffic and noise in Williston would be willing to switch places with this teacher.

This is the link for tiny green cabins for anyone who might want to "practice."

Op-Ed Piece in Financial Times Re: Potential Oil Price Speak With Turmoil in the Mideast

Link here.
European crude oil inventories plunged in August, the last data available show, to their lowest in almost nine years due to a series of “supply-side factors”, according to the International Energy Agency. Among those production factors were the loss of Libyan supplies, North Sea production outages, pipeline sabotage in Nigeria and “the gradual redirection of Russian crude flows towards Asia."

Crude oil stocks are also low in Asia, and have fallen recently below the five-year average in the US.

The supply glitches continue to plague the market. Although Libya’s oil output has recovered to about 550,000 b/d, it remains well below the prewar level of 1.6m b/d. At the same time, oil production in Yemen and Syria has dropped by a combined 200,000 b/d due to unrest in both countries. In addition, production is running below the expected level in the North Sea, Nigeria and Azerbaijan. 
The story above says "crude oil stocks have fallen recently below the five-year average in the US." I must be reading the graph wrong, but it appears to me, crude oil stocks in US have never been higher.  I don't know about the rest of the data, and like I said, I'm probably wrong. But the graph suggests otherwise.

Eleven (11) New Permits -- The Bakken, North Dakota, USA

Daily activity report, November 8, 2011 --

Operators: CLR (7), Zavanna (2), Crescent Point Energy, BEXP

Fields: St Demetrius, Dublin, Squires, Alkali Creek, Foreman Butte, Boxcar Butte, and Ranch Creek

CLR has permits for a 4-well Eco-Pad.

CLR reported two wells coming off "tight hole" status and both were fracked and completed. 

Connecting the Dots -- The Bakken, North Dakota, USA

The dots:

Incredible -- It Never Quits -- Another Renewable Energy Program Financed by DOE -- Failing

Link here.

And if you don't read to the very last line in the article, you would never know that this debacle was specifically designed to carry wind energy.
The Western Area Power Administration should stop approving loans for energy transmission projects until it determines how a Montana-to-Canada transmission line that received a $161 million loan became so far behind schedule and over budget that it was in danger of failing, the U.S. Department of Energy's Office of Inspector General said in a new report.

The report was issued Friday as a "management alert" because WAPA had committed $25 million in development money to the proposed $3 billion TransWest Express transmission line from south-central Wyoming to southern Nevada [Senator Reid's home state], inspector general Gregory H. Friedman wrote. WAPA might be asked to approve up to $1.5 billion in federal loans to the project.
Enbridge is now taking over the financing of this debacle.

And like any good joke, the last line is the punch line:
The line is proposed to carry wind energy.
I cannot make this stuff up. 



ND Governor's Press Release -- Hess To Donate > $25 Million to Enhance North Dakota Education -- The Bakken, North Dakota, USA

Link here.

Press release, November 8, 2011 --

Hess will donate more than $25 million to fund "Succeed 2020," a statewide education project aimed at helping North Dakota students become better prepared for college and careers.

The project is designed for middle and high school students, beginning with next year's fifth graders, or the graduating class of 2020.

Goals: increase ACT scores; decrease developmental or remedial education, and increase the number of students who complete high school and college programs on-time.

Considering North Dakota already has one of the strongest education programs in the nation, this is pretty exciting.

North Dakota already ranks 14th in the nation on ACT scores and tests "all" students. The states in the top ten do not test all students, but rather about 60 - 70 percent.

Director's Cut -- November 8, 2011 -- The Bakken, North Dakota, USA

Link here.

Production hits all-time high in North Dakota (again):
Aug, 2011, oil: 444,142 bopd
Sep, 2011, oil: 464,122 (preliminary, all time high)

Aug producing wells: 5,951
Sep producing wells: 6,071 (all-time high)

Permitting
Aug, 2011: 207
Sep, 2011: 176 (all time high: 245, 2 Nov 10)

Pricing
Sept, 2011: sweet crude, $83.50
Aug, 2011: sweet crude, $81.43
Jul, 2011: sweet crude, $90.60

Back of envelope calculations:
Sept, 464,122 x $83.50 =  $38.754 million
Aug, 444,142 x $81.43 = $36.166 million
July, 423,550 x 90.60 = $38.373 million
June 384,809 x 91.69 =$35.283 million.

Director's comments:

Rig count remained steady, but production increased 4 percent due to high levels of frack activity. Bowman County Red River production was stable at about 27,000 bbls with one well drilling. The idle well count increased again to 762 wells, approximately 300 above the normal 450, indicating that drilling continues to outpace fracturing services and a need to add approximately 10 crews.

EPA
The efforts to regulate hydraulic fracking under the safe drinking water act are increasing with EPA now looking at using the diesel fuel provision in the 2005 energy policy act.

Rigs
20,000-foot capable rigs: over 95% utilization rates (last month >90%)
7,000 or less-capable rigs: less than 50% utilization rates

Permitting is below record levels. As fall approaches and the rig count rises permit activity is expected to increase so locations can be built prior to winter weather.

The number of wells drilling on federal surface in the Dakota Prairie Grasslands is down to 3.

With regard to flaring:
Daily natural gas production is up; processing plant and gathering system construction activity is very high. North Dakota shallow gas exploration is not economic at the current price. The oil to gas ratio is 26 to 1, but the BTU ratio is 6 to 1. The Bakken play gas has been flared at record levels in order to promote the resource to the natural gas gathering and processing industry and demonstrate the size and potential of this resource. The result is a plan presented by industry to invest over $3 billion in natural gas gathering and processing infrastructure in western North Dakota in 2011, 2012, and 2013.

Random Selection of Recent Wells With Frac Data -- The Bakken, North Dakota,USA

Raw data; no analysis.

20538, 352, CLR, Calhoun 1-3H, Pembroke, Bakken, 24 stages; 2.3 million lbs (640K ceramics)
19968, 757, CLR, Peltan 2-18H, Jim Creek, Three Forks; 24 stages; 2.2 million lbs (588K ceramic)
20373, 2,812, BEXP, Alger State 16-21 1H, Alger, Bakken,34 stages; 4 million lbs (2.5 mill ceramic)
19499, 1,264, Fidelity, TTT Ranch 33-28H, Stanley, Bakken; 30 stages; 2.7 million lbs (not specified)
20335, 2,370, Newfield, Holm 150-99-13-24-1H, Siverston, Bakken; 38 stages; 4 mill lbs (not specified)
20552, 682, G3 Operating, Muller 1-21-16H, Climax, Bakken, 38 stages, 4 million lbs non-sand proppant
19528, 810, EOG, Van Hook 16-35H, Van Hook, Bakken, short lateral, 9 stages, 2 million lbs sand only
20460, 1,195, Zenergy, Lawlar 26-35H, North Tobacco Garden, Bakken, 26 stages, 2 mill lbs, sand
19444, 3,106, Whiting, Hecker 21-18TFH, Stark County; 2.4 million lbs, all sand
19332, 1,105, XTO, Lonnie 31X-3, Hofflund, Three Forks, 24 stages; 2. million lbs sand
19390, 175, SM, Broderson 13-35H, Siverston, Bakken; 2 stages (not a typo); 300,000 lbs sand
17263, 3,124, Murex, Chandler James 25-36H, Bakken, 10 stages; 1.2 million lbs sand (a monster well)

Look at the SM well, 19390, Broderson 13-35H: problems with fracking; they will go back in and complete the frack.

With regard to the others, I'm reminded of a Herb Caen column in the 1980's, San Francisco Chronicle in which he wrote:  "There is no difficulty finding a good wine; the trick is finding a good wine at an inexpensive price."

Back to 200 Active Drilling Rigs -- One Short To Tie the Record -- The Bakken, North Dakota, USA

Dynamic link here.

They're Frackin' in California -- Nothing To Do With The Bakken Except Compare

Link here.
Zodiac Exploration Inc., Calgary, plans to apply a multistage frac to the Kreyenhagen formation in California’s San Joaquin basin in the third week in November, subject to equipment availability.

The company has successfully drilled a 2,647-ft horizontal wellbore in the Upper Kreyenhagen formation at its 1-10 well in Kings County and set a downhole liner assembly with packers and frac ports in preparation for the job. The lateral is an average vertical depth of 14,551 ft.

Effectively drilling the lateral at these depths and high pressure “is a key first step in proving the potential of the Upper Kreyenhagen formation, which is one of several primary plays identified on our acreage to date,” the company said.
The thickness of the source rock in this formation is 3,000 to 4,000 feet, compared to the Bakken, measured in 50 to 150 feet, I believe.

The total organic carbon (TOC) in this California formation averages about 3 percent with as much as 5.5 percent in some areas. The TOC in the Bakken averages about 11 percent.

As noted, the Tyler formation in North Dakota is upwards of a thousand feet thick in places and has a TOC of 10 percent in the upper Tyler shale and as high as 30 percent in the lower two shales in the Tyler.

Random Video of BHI SuperSite and Industrial Park -- The Bakken, North Dakota, USA

This video shows the status of the Baker Hughes super site west of Williston.

The video starts at the north end of the Baker Hughes complex and then goes south, eventually turning west at the intersection where the road is really torn up -- right where Hexcom is located. This is a huge project: road, water, etc. I think they've been working on it for about a month, and it looks like it will be another month or so before they are completed.

For newbies, this is just one of several industrial parks west of Williston. This footage does not include the new Schlumberger complex, and it does not include the huge new industrial park a bit farther to the west.


Update, BHI Industrial Park Area West of Williston

Burke Lodge -- New Man-Camp -- 110-Units -- Opens Today -- The Bakken, North Dakota, USA

About 2.5 miles north of Williston, at intersection of US Highway 2 and 56th Street Northwest.

US Won't Stop Fracking -- "Frack and Trade" -- The Bakken, North Dakota, USA

The US, I believe is about $15 trillion in debt. I could be wrong; I thought I heard the other day that we would soon be approaching that number.

Be that as it may, the ultra-super-secret committee (USSC -- I was unable to find a synonym for "committee" that started with an "r") on resolving the debt is proposing saving $6 billion over 10 years by replacing paper money with coins (won't happen).

Two points: first of all, I doubt I am the only one that finds it ludicrous that the USSC is spending time on $6 billion over ten years when we're looking at $15 trillion in debt that is growing.

Second: the US collected more than $11 billion from energy royalties in 2011, and that was despite the permitorium in the gulf, decreased drilling in Alaska, and slow-rolling the oil and gas industry on federal land. $11 billion in one year from one industry. For perspective, GE paid no income taxes in 2010; and I believe GM was coming out of bankruptcy. I doubt Solyndra paid much in taxes.

So, no, the US is not going to shut down the oil and gas industry, especially in fly-over country. But, the government will extract more money from the shale oil industry through "frack and trade."

Here's Your Chance to Become Part of the Bakken -- On-Line Auction for Dunn County Mineral Acreage -- The Bakken, North Dakota, USA

Link here.
EnergyNet is pleased to announce that the state of North Dakota has retained EnergyNet's services to develop and host an online auction for the state's offering of oil and gas leases in Dunn County, North Dakota.

All tracts will be posted on the EnergyNet website on November 8th, 2011 at 10:00 AM CST. A 23 day due diligence period begins for all tracts on November 8th, 2011 at 10:00 AM CST. The one-week online auction bidding period for all tracts will begin at 3:00 PM CST on December 1st, 2011 and close between 3:00 and 3:15 PM CST on December 8th, 2011. Specific opening and closing times for each tract will be listed on the website.
The information is at this site.


Again, the data points:
  • view tracts beginning November 8, 2011, on-line
  • 23-day viewing period
  • one-week auction begins December 1, 2011, 3:00 p.m. CST
  • one-week auction ends December 8, 2011, 3:15 p.m. CST

Hundreds Seek North Dakota Employment Following Rock Central -- Brian Williams Report -- The Bakken, North Dakota, USA

Link here.
Last week’s story about the oil boom in Williston, N.D., led to a surge of phone calls, e-mails, job applications, and even some hires.

Matt Grimshaw, the CEO of Mercy Medical Center, says the response was incredible: within minutes of the broadcast, the medical center’s job website began receiving a higher volume of applications.

“In a normal week we would have 100 applicants, in the past week we have had 800 submitted applications.” Grimshaw told NBC News.

Since last Monday, Mercy Medical Center has conducted 40 phone interviews with candidates from all over the country and has hired six applicants who applied after learning about Rock Center’s report.
My advice: Williston is saturated for the moment with regard to housing (lack of housing).

Folks looking for work in North Dakota should look for opportunities in Bismarck, Fargo, Minot, Dickinson, and Calgary,, in that order.

[Just joking about Calgary: for newbies, Calgary is not located in North Dakota. It's a bit northwest of here, in Alberta, Canada.]


Four Strong Winds, Ian and Sylvia


By the way, this will be the theme song if EPA shuts down fracking in North Dakota:
But our good times are all gone,
I'm bound to moving on.
I'll look forward to if I'm ever back this way.

Think I'll go out to Alberta
Where there's good weather in the fall
I've got some friends who I can work for.
Still ND wishes the EPA would change its mind
If only ND would ask you one more time.
But we've been through that 100 times or more.
But our good times are all gone.

Dynegy Files For Bankruptcy -- Nothing To Do With the Bakken

Link here.
Dynegy Inc. said Tuesday that one of its subsidiaries is seeking bankruptcy protection as part of a plan that will force bondholders to take heavy losses while shielding major investors including billionaire Carl Icahn.

The Houston power company, which serves utilities in the Midwest, Northeast and the West, made the decision after struggling for years with lower electricity prices, falling credit ratings, and infighting among investors over competing takeover offers.
I have no idea what is going on at Dynegy. I have never followed the company. However, when I see "struggling for years with lower electricity prices," and remembering President Obama's goal to destroy the coal industry, it gives me pause to reflect. 

It also makes me consider revisiting the North Dakota - Minnesota argument over electricity produced from coal, but perhaps that will be for another day.

IPs -- Again -- The Bakken, North Dakota, USA

Gary sent in a comment to me that took me back to earlier discussions on IPs.

Before going further, re-read Mike Filloon's comments on IPs with regard to 3Q11 earnings:
When looking over these results, my focus was on 60-day average production for four of Kodiak's most recent Koala wells and 90 day initial production for two of those wells. For those unfamiliar with initial production rates, the further out in days, the more accurate an estimated ultimate recovery. EURs basically are an estimated amount of resource believed to be pulled from the well over its lifetime.
Brigham not only had better IP rates than Whiting  and EOG Resources , but had better long-term rates as well. Because of Brigham's results, its wells are the best suited for comparison to Kodiak's Koala wells. I chose wells that had very high IP rates in Brigham's Roughrider, because of this it had a higher average than Kodiak by more than a thousand Boe/d. When the 60-day IP rate is used for those same wells, Kodiak produces more than a hundred Boe/d, than Brigham's. Those hundred barrels of oil equivalent per day over sixty days produce over six thousand barrels more than some of the best Brigham Roughrider wells.   
Mike opines, and I agree, that the 60-day rate IP is a much better prognosticator of the well's estimated ultimate recovery than a 24-hour flowback rate.

But having said that, some reminders:

When I first started this site (the second time) back in 2009 or 2010, I forget exactly when, I do remember the big discussion seemed to be about IP rates. I'm doing this from memory and am not doing any checking so don't hold it to me, but I believe folks were "accusing" BEXP of inflating their IPs. It took me awhile to figure out what was going on, but it makes sense to me now. That doesn't mean I can explain the IP for an individual well, but in the big picture, I feel I have a good feeling for IPs.

When oil is brought up from the ground, it has to be put somewhere. Well, duh. But if the well wasn't hooked up to a pipeline, or if the pipeline was already at capacity from other contracted production, and there was limited on-site storage capacity, obviously it was difficult to get a real 60-day maximum rate of production.

And that was Continental Resources' argument. They said that they were having trouble getting full production into the pipelines due to lack of capacity. Remember, this was back in 2009/2010 when takeaway capacity was the second-most talked about issue.

So, finally Continental  Resources made an announcement that they, too, would be reporting IPs based on 24-hour production. I don't know if all companies use the same standard for reporting IPs at this point, but for the most part, it appears that companies are using 24-hour flow for the IP number.

Now, back to Mike Filloon's argument (with whom I agree): an IP calculated over the first 60 days has more relevance than a 24-hour flowback rate. However, having said that, we may be back to the original problem. What happens if pipeline capacity is full, and a great well is impacted lack of capacity.

So, one can't simply take 60-day production at face value. With all the CBR oil-loading facilities coming on line, and understanding that it is still cheaper to ship by pipeline, it suggests to me that pipeline capacity is all of a sudden, an issue again.

Okay, so that's just one factor, pipeline capacity.

But are there other factors?

Let's say uncontracted oil is coming on line at a time when the price of oil is depressed and futures suggest that the price of oil could rise over the next six months. Would an operator maximize production during those first 60 days to get bragging rights to a great 60-day IP or would she choke back the well and wait for better prices.

Then throw in the weather. Something tells me some potentially great wells last January and February would have had lousy 60-day production numbers.

Sometimes wells are taken off-line during the first 60 days due to problems with the well that need to be corrected at that time, and cannot wait. Sometimes it's simply a matter of scheduling conflicts. Burlington Resources appears to be routinely shutting in their wells for the first several months after reaching total depth. 

So, again, the 60-day numbers, all things being equal, are better than 24-hour rates, but the "all things being equal" can't be overlooked.

**************

By the way, I used to post wells with high initial production (IP) numbers at this page. I initially posted any well with an IP greater than a 1,000, but that became pretty common, so I moved the threshold to 2,000, and considered moving the threshold to 3,000. It is interesting that I haven't been posting much to that site. Part of the reason is I have simply been forgetting to do it, but also because there just aren't that many wells with IPs of 2,000 or more any more. The threshold is now 2,800 before I will post to "high initial production."

So, without even much reflection one can think of several reasons why 60-day numbers may not be all they suggest. What makes this exciting is this: the important thing is to get the well in and completed. Just as the Bakken is evolving, so each individual well is evolving. At the end of 30 years, each well will have had its own particular story. The well may have been put in during less than optimal conditions; there may have been problems with drilling; there may have been problems with fracking; there may have been a shortage of sand (and that's been a real problem recently); so on, and so on.

But these wells will have work-over rigs come in and optimize what they already have, but even more exciting is re-fracking.

New Company in Williston -- C Company -- The Bakken, North Dakota, USA

At least they are new to me. Perhaps they have been here longer than I realize. Whatever.

It was a real pleasure yesterday to run into some folks from C Company, a general contractor from Fairbanks, Alaska, with emphasis on oilfield services. Some of their folks have literally arrived in the last 48 hours and I'm sure there are more coming, but you will already see their trucks around Williston.

You go to their homepage and in big letters, they have their Alaska phone number, and now, they've added their North Dakota phone number: 701-500-7188. They have made it very, very easy to reach them: their home page invites you to e-mail them.

I think it was as recently as yesterday that I posted a story about Cruz Construction coming down from Alaska to North Dakota. Drilling activity had slowed to a crawl up there due to tax issues.

I knew folks were coming in from Idaho and Michigan, but I was somewhat surprised to hear Alaskan companies coming down here. Absolutely wonderful. To say the least, they will appreciate the balmy weather we have here in Williston.

FRAC-CHEM in the Bakken -- The Bakken, North Dakota, USA

Greg alerted me to this. I have no idea how he knew this before I did. Smile.

I spoke briefly about "green" fracking fluids some time ago -- very, very briefly, with link to a Halliburton story -- but have not said much lately.

Greg noted that Frac-Chem now has an office in Williston. I don't know any more than that for the moment.

Local contact numbers, click here

From their home page:
Mindful of the potential impact of hydraulic fracturing chemicals on the environment, FRAC-CHEM has invested considerable resources in developing a line of completely "green" products composed of many food-grade and biodegradable materials. Much of the chemistry found in our product line can be found in standard household items. We offer complete transparency in terms of the basic chemistry that makes up our product line.
Halliburton noted the same goal. 

Way TOO Much to Blog Today -- I Will Do the Best I Can -- The Bakken, North Dakota, USA

There are several items that I need to post, and there is a risk that I might forget, so, in no particular order, some things that I need to talk about today.

Fracchem

Superstars in the Bakken (wells, not personalities)

Gary's comments on my comments on Mike Filloon's comments on IPs

New company in Williston