Saturday, November 26, 2011

Bakken Security System -- Priceless

I couldn't resist.

The cutest little puppy in the Bakken this afternoon - a little Corgi, and he loved to play.

What is it about puppies and dogs that make them man's best friend?

Giving Credit Where Credit Is Due -- The NDIC -- The Bakken, North Dakota, USA

I don't know if NDIC staffs their Bismarck office 24/7, but they certainly must staff it 24/18. I am quite impressed. They must have some of the hardest working, most dedicated employees anywhere in the country.

This is Saturday. Last night, and I think, if I remember correctly, the active rig total was 201 or 200. This afternoon I see the total is back up to 202. I doubt that the data is updated by a computer; it seems it would require a telephone call (or some other method) from the field to the NDIC office to update that information.

The Sanish vs the Pronghorn -- The Bakken, North Dakota, USA


According to Whiting, NDIC recently renamed "Sanish Sand" the "Pronghorn Sand":
On Slide 8, our 2 typical production profiles for non-Sanish field, Bakken or Pronghorn sand/Three Forks wells. Note the NDIC has recently renamed the Sanish Sand the Pronghorn Sand. This is the zone we drill in across Lewis & Clark and Pronghorn. The production profile EURs range from 600,000 BOEs to 350,000 BOEs, which we believe reflects the range of our Lewis & Clark, Pronghorn, Hidden Bench, Tarpon and Cassandra Prospect wells. Average well cost is estimated at $7 million. As you can see, these wells have excellent economics at current oil prices.
I don't find any evidence of this change at the NDIC website yet, but I could have missed something. It will be interesting if we see reflection of this change by end of 2012. My hunch: it will still be confusing. I say that because the statistical data through 2010 shows these six formations as separate formations: Bakken, Bakken/Three Forks, Three Forks, Sanish, Lodgepole/Bakken, and Lodgepole.

I have my own ideas on how to separate out these formations but my opinion will only confuse matters so I will keep them to myself. But when I see the Bakken, Bakken/Three Forks, Three Forks, Sanish, Lodgepole/Bakken, and Lodgepole and then then hear that NDIC has changed "Sanish Sand" (which, by the way, is not even in that list of six) to "Pronghorn Sand" it's anybody's guess how to sort this out.

Original Post

Someone asked earlier how much different is the Sanish Three Forks from the Pronghorn Three Forks, suggesting perhaps that the Pronghorn was just a different name for the Sanish, but in a different geographic area?

This is my take on it, subject to change as more information comes out.

First, the "Sanish" is a confusing term. See this link: a geologist's take on the Sanish, April, 2011.
 The term Sanish is used in several different contexts in North Dakota. Confusion over the name led one local geologist to declare, “The Sanish should vanish,” Sonnenberg said.
Now look at how Whiting separates out the Sanish in their November, 2011, corporate presentation, slide 14.  In their presentation, Whiting looks at four prospects:
  • Sanish Bakken
  • Sanish Three Forks
  • Lewis & Clark Pronghorn
  • Hidden Bench
Based on other sources and this slide, the "Sanish" is not a formation. The "Sanish" is a geographic location, specifically associated with the Sanish oil field, north of the reservation and west of the Parshall oil field.  In that geographic location, in that Sanish oil field, one finds the entire stratigraphic column, including the upper, middle, and lower Bakken formations, as well the upper and lower Three Fork formations.

On the other hand, the Pronghorn is a sub-formation of the Three Forks, located between the lower Bakken and the "upper" Three Forks.

Just as the one, two, three, or possibly four "benches" below the Three Forks are sub-formations, the Pronghorn is a sub-formation of the upper Three Forks.

The Sanish is not an additional sub-formation; it is a geographic area in North Dakota.

The Pronghorn, and the "benches" are new sub-formations, new pay zones. The Pronghorn is not necessarily located throughout the Williston Basin.

The question asked earlier had to do with the geology of the Sanish compared with the geology of the Pronghorn. I don't think that can be asked, based on my very limited understanding of the terms.

For me, bottom line: the Sanish is a geographic term associated with the Sanish oil field; the Pronghorn is a new, oil-producing pay zone. I cannot comment on the geology of the various formations.

Out and About The Bakken, North Dakota, USA

I will be out and about today; not much posting until later. On our way to Alexander for breakfast.

Think Madison. Perhaps one of the big stories yet to come. Again.

Newfield Now Controlling Their Bakken Costs -- The Bakken, North Dakota, USA

Link here.

Quite a story. As my daughter would text, LOL.

Non-Green Energy Jobs Boom -- US Surpasses Russia #1 in Natural Gas -- Seismic Shifts -- All About The Bakken, North Dakota, USA

From the Wall Street Journal via Carpe
"The ironies here are richer than the shale deposits in North Dakota's Bakken formation. While Washington has tried to force-feed renewable energy with tens of billions in special subsidies, oil and natural gas production has boomed thanks to private investment. And while renewable technology breakthroughs never seem to arrive, horizontal drilling and hydraulic facturing have revolutionized oil and gas extraction -- with no Energy Department loan guarantees needed. 

The oil and gas rush has led to a jobs boom. North Dakota has the nation's lowest jobless rate, at 3.5%, and the state now has some 200 rigs pumping 440,000 barrels of oil a day, four times the amount in 2006 (see chart above). The state reports more than 16,000 current job openings, and places like Williston have become meccas for workers seeking jobs that often pay more than $100,000 a year.

I noted in posting yesterday, 2,000 job openings/day in the Williston Basin. I guess I was wrong.

And then this, also from same sources: net oil imports only 45 percent of US consumption; lowest since 1995.
The good news is that the United States is at the center of a global energy revolution. Our development of innovative shale-gas technology offers the prospect of a huge bonanza of natural gas (and some oil as well). It's the most positive event in the country's energy outlook in 50 years. Let's celebrate the achievement before looking at what needs to be done to bring it to fruition.

This kind of seismic shift in the energy landscape is rare. It could bring us back to the time when the US and its neighbors in the hemisphere were self-sufficient and even a major world source of energy. Energy companies have become exporters, as the US has surpassed Russia as the world's leading gas producer.
I did not know that. Did you? That the US has surpassed Russia as the world's leading gas producer.

Unsafe At Any Speed -- the Volt -- Déjà Vu All Over Again -- Nothing To Do With The Bakken

Link here.
New fires involving the lithium-ion batteries in General Motors Co.'s Chevrolet Volt have prompted an investigation to assess the risk of fire in the electric car after a serious crash, the National Highway Traffic Safety Administration said Friday.

One Volt battery pack that was being closely monitored following a government crash test caught fire Thursday, the safety administration said in a statement. Another recently crash-tested battery emitted smoke and sparks, the statement said.

The latest fires are in addition to a battery fire in a crash-tested Volt six months ago.
Of course it was Ralph Nader who coined the phrase, "unsafe at any speed."

Ralph Nader went on to star opposite Jerry Seinfeld as Cramer.

Koch Brothers -- Heavy Oil -- Keystone XL -- And SO Much More -- Not The Bakken

During the Keystone XL debacle, which is still playing out, it was noted that dirty oil was in the liberals' very own backyard, and they were using that gasoline to get to protests against corporate America.

A lot of folks wrote in to point out the hypocrisy.

I purposely avoided that. I don't recall ever posting a story on the dirty oil refinery in Minnesota, although I may have -- and if I did, I completely forget -- I plead the Fifth. Or do I blame it on a fifth.

But now has an incredibly good article on the Koch brothers. Some data points:
  • Koch Industries: second largest privately held company in the US
  • Headquarters in Wichita, Kansas
  • Employs 50,000 Americans
  • Koch Industries: second largest privately held company in the US
  • Oil refinery started in 1940
    Fred's career took off when he developed a more efficient thermal cracking process that turned crude into lighter oils and gasoline. Small, independent oil companies reaped the benefits of this process, which led to bigger yields. However, major oil companies tried to stop Koch by filing more than 40 lawsuits for patent infringement. Fred won nearly all the lawsuits, but the litigation took its toll on his engineering firm, and the company left the U.S. market. 
    Fred regrouped and from 1929 to 1931 built oil refineries in Europe, the Middle East and Asia. But the real money came when the Soviet's contracted Fred to build 15 refineries in the Soviet Union as well as train Soviet technicians under a $5 million contract, which served as a foundation for Fred's future fortune. While it was a lucrative job for Fred, he witnessed communism first hand and feared that the Soviets were conspiring to take control of the U.S. Thirty years after his Soviet experience, Fred published, "A Business Man Looks at Communism," that warned of the Soviet's plans to take over America. 
    Once back on U.S. soil, Fred married Mary Robinson in 1932. Their son Fredrick arrived one year later, followed by Charles in 1935 and twins David and William in 1940. He also started acquiring assets at a a low price in 1933, as it was the height of the Great Depression.
  • Employs 67,000 people in 60 countries
  • Each of the brothers own 42 percent of the company
    Charles attributes his success to his free-market business philosophy, which is directly related to his father's communist fears. His patented "Market-Based Management" (MBM) style of leadership encourages employees to act as entrepreneurs who contribute to a wealthier society, much like the Austrian economic philosophies of Friedrich von Hayek and Ludwig von Mises.
  • One of the brothers, David, is the richest man in New York

First The Saudis, Now Russia: The Bakken Changes Things

I love it.

First it was the Saudis who admitted the Bakken changed things.

Now, it's the Russians. This is really quite incredible. Talk about tectonic shifts.
The U.S. shale gas boom has not only virtually eliminated the need for U.S. liquefied natural gas (LNG) imports for at least two decades, but significantly reduced Russia’s influence over the European natural gas market and "diminished the petro-power" of major gas producers in the Middle East and Venezuela.

According to a study by Rice University’s Baker Institute, "Shale Gas and U.S. National Security", U.S. shale gas has substantially reduced Russia’s market share in Europe from 27 percent in 2009 to 13 percent by 2040, reducing the chances that Moscow can use energy as a tool for political gain.

European customers now have an alternative supply to Russian gas in the form of LNG displaced from the U.S. market. The shale boom also has exerted pressure on the status quo by indexing gas sales to a premium marker determined by the price of petroleum products.

Russia already has had to accept lower prices for its gas and is now allowing a portion of its sales in Europe to be indexed to spot gas markets, or regional market hubs, rather than oil prices.
Re-read that; think about all that is packed into those few paragraphs.

Just that first line: "The US shale gas boom has not only virtually eliminated the need for US liquified natural gas imports for at least two decades, but ...." Two decades. And that's with current technology. At current prices.

Of course, the article is about natural gas, and the Bakken is about oil, but, as far as I'm concerned, my myth is that it was the Bakken that provided the laboratory to make all the rest possible.

Be sure to go to the link: the writer does not refer to it as a tectonic shift, rather a "paradigm shift."

You don't need a weatherman to know which way the wind blows.

Subterranean Homesick Blues, Bob Dylan

Russian Oil Company Starts Drilling in Iraq -- Talk of XOM Being Kicked Out of Iraq -- Nothing To Do With The Bakken

Russian oil company starts drilling in Iraq.

Talk of kicking ExxonMobil out of Iraq.