Wednesday, February 29, 2012

Money Tree, Jobs, and Parallel Universes

Ms Jackson needs more money to study safety of hydraulic fracking.
More study is needed to understand the ecological impacts of the drilling technique known as hydraulic fracturing, U.S. Environmental Protection Agency Administrator Lisa Jackson said Tuesday in an effort to get Congress to fund more research into the practice.

The agency is expected later this year to release a draft of a study looking at the drilling technique's impact on water quality. It recently requested about $8 million in additional funding from Congress to work with other government agencies on more research.
Just give her a blank check. It will save time for Congressional staffers.

Meanwhile, in the real world, Utica oil and gas will create 65,000 jobs, $5 billion for the state of Ohio.

It is really, really difficult for me to believe that Congress will let Ms Jackson shut down fracking the oil and gas industry in the United States.  

No wonder Ms Olympia Snowe felt senators were living/working in parallel universes.

An Inconvenient Truth -- Wow, Is It Ever!

President Barack Obama's Secretary of Energy Stephen Chu uttered the kind of Washington gaffe that consists of telling the truth when inconvenient. According to Politico, Chu admitted to a House committee that the administration is not interested in lowering gas prices

Chu, along with the Obama administration, regards the spike in gas prices as a feature rather than a bug. High gas prices provide an incentive for alternate energy technology, a priority for the White House, and a decrease in reliance on oil for energy. 

The Heritage Foundation points out that hammering the American consumer with high gas prices to make electric and hybrid cars more appealing is consistent with Obama administration policy and Chu's philosophy. That explains the refusal to allow the building of the Keystone XL pipeline and to allow drilling in wide areas of the U.S. and offshore areas. 

The consequences of the policy are not likely to be of benefit to the Obama administration. The Republican National Committee has already issued a video highlighting the spike in gas prices and the failure of the administration to address the issue.
Another lost decade. 

Another Blog Being Added to the Webroll

I am adding this blog to the list of websites linked at the sidebar at the right near the bottom.

Earlier today on CNBC a talking head suggests WTI (Bakken light) could "crash" to $80/bbl in the near future. This post provides the same rationale.

The comments to the first linked blog post are as important as the post.

Another SeekingAlpha Article on the Bakken

Updates

February 29, 2012: Chu admits the administration sees high gasoline prices as impetus for "going green."

Original Post

I did not write the linked article, but it sure sounds like I might have.

Sometimes I think my rants are are a bit too harsh coming from someone who did not want to "step on any toes" in this blog, but after reading the linked article, I feel a bit better.

Here's the opening:
Three years ago I wrote an article on Seeking Alpha entitled Energy Secretary Steven Chu Should Be Fired for NatGas Views. His comments on being "agnostic" about natural gas transportation proved he was absolutely clueless about American energy policy. The subsequent Solyndra scandal showed why Chu was agnostic about natural gas - he was too busy figuring out how to funnel tax-payer money to Obama supporters.

But Chu is a minor player and President Obama must ultimately take the blame for his own refusal to fully embrace natural gas transportation. The result is that we now have WTI over $100/barrel, gasoline prices are over $3.50/gallon (and heading higher), we again hear the drumbeat of another war in the Middle East, and of course, the fragile U.S. economy could very well be chopped off at the knees (again) by its nemesis: a reliance on foreign oil.

But worst of all, we still have no alternative to gasoline refined from foreign oil. With oil trading at some 40 times natural gas on an energy equivalent basis, it is simply astonishing that the U.S. government is not developing an energy policy to take advantage of the phenomenal development.
The article goes on to discuss the Williston Basin and mentions some investment ideas.

This may be one of the better "commentaries" from SeekingAlpha in quite some time. Enjoy.

Investment Opportunity in the Bakken

I got a personal note to the effect that a developer has several large tracts in one of the "larger" cities in the Bakken, one of them ready to "build out" and working on several other properties.  The developer asked me to put him in contact with an individual who had written me last April (2011) who was looking to invest in the Bakken.

I have done that.

But based on his note, it sounds like he is interested in partners with serious money (6-figures) who might be interested in partnering with someone ready to develop additional residential (?) property in the Bakken.

You now know as much as I do. If interested, I will forward your e-mail to this individual. 

Nine (9) New Permits -- The Williston Basin, North Dakota, USA

Daily activity report, February 29, 2012 --

Operators: Petro-Hunt (3), Hunt (3), EOG (2), Whiting

Fields: Sanish, Painted Woods, Eagle Nest, Antelope, Antelope Creek, Bear Butte

Petro-Hunt has a permit for a wildcat in Williams County.

Seven (7) wells on DRL status reported an IP, including:
  • 19376, 1,560, XTO, Dakota 42X-36, McKenzie
  • 19621, 949, Hess, EN-Weyrauch A 154-93-2017H-2, Mountrail
  • 21654, 44 (no typo), Baytex, Johnson 31-30-161-99H 1PB, Divide; Three Forks; can't find completion data
  • 21691, 32, Petro Harvester, J Swenson 22-2, Burke, Madison Pool, vertical
Ten (10) wells reported as plugged or producing (in the Bakken, there are " no" dry holes)

An EOG permit in Clarks Creek was canceled (#20602, Clarks Creek 15-0805H, McKenzie)

About forty (40) wells were transferred from North Plains Energy to KOG, including two (2) salt water disposal wells.

A little bit for everyone in this report. Good luck to all.

Now if only someone can explain Baytex' strategy; they consistently get Bakken wells with an IP of about 50 bbls and they keep on drilling in Burke Divide County (see first comment).

Graphic: What Development of the Bakken Will Look Like -- Below Ground

Don sent me this link:

It's a PDF from the NOG corporate website. When you get there, zoom in on the map, so you can see individual wells. I don't know about you, but it absolutely blows me away to see all these wells. One gets the same picture from the NDIC GIS map server, but somehow this PDF gives you an even better WOW factor.  

The legend/key for the map is in the lower left-hand corner.

Wouldn't it be great if every operator did this! I think there's an APP for that.

KOG Reports a Gusher -- Poe Oil Field -- The Bakken, North Dakota, USA

 Update

October 29, 2017: update of Whiting's Koala wells in Poe oil field.

October 29, 2017: a thrice-fracked Koala well.

October 29, 2017: update of an old Koala well

April 5, 2012: SM wells in Poe oil field.

Later: a reader asked about the "H3" designation, suggesting this may mean a Three Forks well. I went back and checked the well files and he/she is exactly correct. All three "H3" wells (not confidential) were Three Forks wells; one can assume the others were middle Bakken wells.



Permits

Note: KOG wells with the "H3" designation: Three Forks 

2018 (as of October 30, 2018)
35671, loc, Zavanna, Stranger ... TFHXE,
35670, loc, Zavanna, Stranger ... H,
35669, loc, Zavanna, Stranger ... TFH,
35668, loc, Zavanna, Stranger ... H,
35667, loc, Zavanna, Stranger ... TFH,
35666, loc, Zavanna, Stranger ... H,
35665, loc, Zavanna, Stranger ... TFH,

2017 (none in 2017)


2016 (list is complete)
32932, 1,161, Whiting, Koala 31-2H, Poe, t3/18; cum 200K 7/19;
32931, 1,980, Whiting, Koala 31-2TFH, Poe, t3/19; cum 130K 7/19;
32930, 3,066, Whiting, Koala 31-2-2H, Poe, t2/18; cum 253K 7/19;
32714, 2,878, Statoil, Patent Gate 7-6-XE-1H, Poe, t2/18; cum 69K 7/19;
32590, 978, Whiting, Koala 21-2TFH, Poe, t2/18; cum 168K 7/19;
32589, 1,412, Whiting, Koala 21-2TFHU, Poe, t2/18; cum 169K 7/19;
32550, 2,092, Whiting, Koala 31-25-3H, Poe, t8/18; cum 208K 7/19;
32549, 4,214, Whiting, Koala 31-25-2H, Poe, t8/17; cum 201K 7/19;
32548, 3,438, Whiting, Koala 31-25-2TFH, Poe, t7/17; cum 171K 7/19;
32547, 3,559, Whiting, Koala Federal 31-25H, Poe, t8/17; cum 224K 7/19;
32546, 2,774, Whiting, Koala Federal 31-25TFH, Poe, t8/17; cum 151K 7/19; (#21303 -- not much of a bump; #20319 -- big bump; #20413 -- huge bump)

2015 (list is complete)
32287, 2,527, Whiting, Koala 44-31-2TFH, Poe, t12/16; cum 205K 7/19;
32266, 2,356, Whiting, Koala 44-31H, Poe, t12/16; cum 132K 6/17;
32265, 1,551, Whiting, Koala 44-31-3TFH, Poe, t1/17; cum 91K 6/17;
32264, 2,024, Whiting, Koala 44-31TFH, Poe, t2/17; cum 94K 6/17;
32075, 2,388, Whiting, Koala 14-32HU, Poe, t12/16; cum 173K 6/17;
32074, 2,025, Whiting, Koala 14-32-2H, Poe, t12/16; cum 125K 6/17;
31409, 2,514, Whiting, Koala 44-5TFHU, t11/16; cum 263K 7/19;
31152, PNC, Whiting, Loomer
31151, PNC, Whiting,
31149, 2,585, Whiting, Loomer 44-33 2H, Poe, t2/17; cum 142K 6/17; 50K+ 3/17;
31148, 3,005, Whiting, Loomer 44-33-2TFH, Poe, t2/17; cum 95K 6/17; 
31108, 2,292, Whiting, Koala 44-5-3H, t11/16; cum 162K 6/17;
31107, PNC, Whiting,
31106, 1,810, Whiting, Koala 44-5-2H, t11/16; cum 196K 12/17;
31105, PNC, Whiting, Koala 44-5H,
31066, 636, Oasis/SM Energy, Rini 1X-16HB, t6/16; cum 74K 6/17; off-line as of 4/17; still off-line, 12/17;
31065, 707, Oasis/SM Energy, Steve 1-16H, t6/1;6; cum 146K 6/17;
31064, 704, Oasis/SM Energy, Rich 1X-16HA, t6/16; cum 130K 6/17;
30891, conf --> loc, Oasis/SM Energy,
30890, conf, Oasis/SM Energy, Stenberg 4X-9H,
30889, conf, Oasis/SM Energy,Stenberg 5-9H,
30791, 348, Oasis/SM Energy, Ashley 13X-9H, t6/16; cum 69K 6/17; a poor well;
30790, 910, Oasis/SM Energy,Stacey 13-9H, t6/16; cum 201K 6/17;

Issued in 2014 (list is complete)
  • 30271, 601, Oasis/SM Energy, Stenehjem 14-9H, t6/16; cum 148K 6/17;
  • 30270, 261, Oasis/SM Energy, Stenehjem 14X-9HA, t7/16; cum 55K 6/17; a poor well
  • 29495, 2,442, Whiting, Koala 13-31-25-1H, t3/15; cum 189K 6/17;
  • 29341, 2,264, Whiting, Koala 13-31-30-4H3, 4 sections, t3/15; cum 113K 6/17;
  • 29340, 2,447, Whiting, Koala 13-31-30-4H, t3/15; cum 201K 6/17;
  • 29339, 1,390, Whiting, Koala 13-31-30-3H3, t3/15; cum 125K 6/17;
  • 28892, 783, Oasis/SM Energy, Stenehjem 15-9HA, t6/16; cum 124K 6/17;
  • 28891, 517, Oasis/SM Energy, Stenehjem 15X-9H, t6/16; cum 67K 6/17;  a relatively poor well;
  • 28201, 545, Oasis/SM Energy, Dallas 2X-13H, t9/14; cum 76K 6/17; a poor well;
  • 28200, 732, Oasis/SM Energy, Calvin 2-13H, t9/14; cum 195K 6/17;
  • 28198, 806, Oasis/SM Energy, Jesse 14X-12H, t7/15; cum 157K 6/17;
  • 28197, 981, Oasis/SM Energy, Luke 14-12H, t7/15; cum 199K 6/17;
  • 28196, 722, Oasis/SM Energy, Phylis 14X-12H, t7/15; cum 149K 6/17;
  • 27825, 2,351, Whiting, Koala 4-4-28-4H3, t12/14; cum 150K 6/17;
  • 27410, 2,444, Whiting/KOG, Koala 4-4-28-3H3, t11/14; cum 193K 6/17;
  • 27409, 1,672, Whiting/KOG, Koala 4-4-28-4H, t3/15 cum 185K 6/17;
  • 27408, 3,272, Whiting/ KOG, Koala 4-4-29-1H, t11/14 cum 205K 6/17;
  • 27407, 2,179, Whiting/KOG, Koala 4-4-31-13H, t9/14; cum 172K 6/17;
  • 27406, 1,988, Whiting/KOG, Koala 4-4-6-4H3, Poe, t9/14; cum 145K 6/17;
  • 27405, 1,682, Whiting/KOG, Koala 4-4-6-4H, t8/14; cum 178K 6/17;

Issued in 2013
  • 26536, 1,302, CLR,Jerry 6-8H, t11/14; cum 211K 6/17;
  • 26535, 811, CLR, Jerry 7-8H, t11/14; cum 169K 6/17;
  • 26531, 903, CLR, Jerry 4-8H, t11/14 cum 121K 6/17;
  • 26530, 999, CLR, Jerry 5-8H, t11/14; cum 156K 6/17;
  • 26526, 784, CLR, Jerry 3-8H, Poe, t10/14; cum 145K 6/17;
  • 26525, 994, CLR, Jerry 2-8H, Poe, t10/14; cum 187K 6/17;
  • 26244, 1,955, Whiting/KOG, Koala 16-32-29-1H, Poe, t6/14; cum 181K 6/17;
  • 26243, 1,88, Whiting/KOG, Koala 16-32-29-2H3, Poe, t6/14; cum 136K 6/17;
  • 26136, 1,041, SM Energy, Elery 1-13H, Poe, t6/14; cum 131K 6/17;
  • 26135, 705, SM Energy, Doris 1X-13H, Poe, t1/14; cum 113K 6/17;
  • 25776, 3,043, Statoil, Bugs 27-22 7H, Poe, t7/14; cum 202K 6/17;
  • 25775, PNC, Statoil, Bugs 27-22 2TFH, Poe,
  • 25519, 846, Oasis/SM Energy, Walla 13-19H, t12/13; cum 203K 6/17;
  • 25518, 655, Oasis/SM Energy, Walla 13X-19H, t11/13; cum 170K 6/17;
  • 25002, 798, Oasis/SM Energy, Annie 12X-18HA, t11/13; cum 189K 6/17;
  • 25001, 907, Oasis/SM Energy, Annie 12-18H, t11/13; cum 176K 6/17;
  • 24957, 894, Oasis/SM Energy, Cade 12-19HA, t11/13; cum 210K 6/17;
  • 24956, 764, Oasis/SM Energy, Cade 12X-19H, t11/13; cum 157K 6/17;
  • 24955, 915, Oasis/SM Energy, Cade 12-19HB, t11/13; cum 175K 6/17;
  • 24696, PNC, Zavanna, Usher 28-21H, Poe; status date 2/25/15;
Issued in 2012
  • 24470, 3,552, Statoil/BEXP, Viking 16-15 3H, Poe, t9/13; cum 203K 6/17;
  • 24469, 2,521, Statoil/BEXP, Viking 16-15 2TFH, Poe, t9/13; cum 161K 6/17;
  • 24156, 1,790, Whiting/KOG, Koala 16-32-29-2H, Poe, t6/14; cum 201K 6/17;
  • 23842, PNC, BEXP, Bugs 27-22 3TFH, Poe, 
  • 23841, PNC, BEXP, Bugs 27-22 $H, Poe,
  • 23673, 895, Whiting/KOG, Koala 2-2-11-15H3, Poe, t11/13; cum 121K 6/17;
  • 23672, 2,642, Whiting/KOG, Koala 2-2-11-15H, Poe, t11/13; cum 260K 6/17;
  • 23671, 1,466, Whiting/KOG, Koala 2-2-11-15H3, Poe, t6/14; cum 141K 6/17;
  • 23670, 1,043, Whiting/KOG, Koala 8-5-6-5H3, Poe, t8/13; cum 175K 6/17;
  • 23669, 2,660, Whiting/KOG, Koala 8-5-6-4H, Poe, t8/13; cum 234K 6/17;
  • 23668, 2,432, Whiting/KOG, Koala 8-5-6-4H3, Poe, t9/13; cum 192K 6/17;
  • 23526, 885, Oasis/SM Energy, Ceynar 4-18HB, Poe, t2/13; cum 201K 6/17;
  • 23525, 1,096, Oasis/SM Energy, Ceynar 4X-18H, Poe, t3/13; cum 149K 6/17;
  • 23524, 1,004, Oasis/SM Energy, Ceynar 4-18HA, Poe, t2/13; cum 191K 6/17;
  • 23119, 3,426, Statoil/BEXP, Cora 20-17 5H, Poe, t5/13; cum 193K 6/17;
  • 23118, 1,563, Statoil/BEXP, Cora 20-17 3TFH, Poe, t5/13; cum 117K 6/17;
  • 23117, 3,251, Statoil/BEXP, Cora 20-17 4H, Poe, t7/14; cum 172K 6/17;
  • 23116, 2,176, Statoil/BEXP, Cora 20-17 6TFH, Poe, t5/13; cum 146K 6/17;
  • 22541, 951, Statoil/BEXP, Cora 20-17 2TFH, Poe, t7/12; cum 166K 6/17;
  • 22328, 927, Zavanna, James 41-3SH, Poe, t10/12; cum 216K 6/17;
Issued in 2011
  • 21992, 2,579, Whiting/KOG, Koala 15-31-30-3H, t5/12; cum 296K 6/17;
  • 21694, 3,347, Statoil/BEXP, Cora 20-17 1H, Poe, t7/12; cum 218K 6/17;
  • 21307, dry, Whiting/KOG, Koala 15-31-30-3H3, Poe,
  • 21306, 2,431, Whiting/KOG, Koala 15-31-30-2H, t5/12; cum 279K 6/17;
  • 21303, 2,227, Whiting/KOG, Koala 2-25-36-16H3, t12/11; cum 226K 6/17;
  • 21258, 962, Oasis/SM Energy, Nora 13-9H, Poe, t12/11; cum 2319K 6/17; see this post;
  • 21034, 3,499, Statoil/BEXP, Bugs 27-22 1H, Poe, t3/12; cum 261K 6/17;
  • 20898, 472, CLR, Jerry 1-8H, Poe, t11/11; cum 201K 6/17;
  • 20383, 2,514, Whiting/KOG, Koala 3-2-11-13H, Poe, t7/11; cum 332K 6/17;
Original Post

Although not a record setter, this looks like a nice well based on its IP:
  • 21303, 2,227, Kodiak, Koala 2-25-36-16H3, Poe, Bakken, Three Forks, 25 stages, 3.3 million lbs; 23 stages using ISP; t12/11; cum 226K 6/17; off-line as of 5/17;
This is nice to see after yesterday's earnings release.

The Poe oil field is an irregularly shaped field, relatively small, only 30 sections or so, right in the middle (or slightly to the west) of the bull's eye of the Bakken. The field is about 7 miles northeast of Alexander, North Dakota. It sits immediately southeast of the Camp oil field and immediately southwest of Banks oil field, two fields that have produced some huge wells.

Which reminds me, but I can't find it, so I guess I haven't done it. Here's a list of the KOG Koala wells:
  • 19301, 2,526, Whiting/KOG, Koala 9-5-6-5H, Poe, Bakken, s9/10; t4/11; AL; cum 284K 6/17; huge jump in production, 12/16;
  • 19651, 1,919, Whiting/KOG, Koala 9-5-6-12H3, Wildcat, Bakken, t4/11; AL; cum 320K 6/17;Three Forks; 22 stages; 2.8 million lbs sand treated with CarboProp; huge jump in production 12/16;
  • 19779, 1,353, Whiting/KOG, Koala 154-97-15-34-27-2H, (was Ursa Resources, Sorenson 34-27 1H); t2/13; cum 157K 6/17;
  • 19961, 2,816, Whiting/KOG, Koala 3-2-11-14H, Poe, Bakken; s12/10; t7/11; GL; cum 399K 6/17;
  • 20020, PNC, Whiting/KOG, Koala 13-36-25-3H, Poe, Bakken, t12/11; cum 2K 4/12; 
  • 20319, 113, Whiting/KOG, Koala 2-25-36-15H, Poe, Bakken, s5/11; t12/11; AL; cum 274K 6/17;
  • 20383, 2,514, Whiting/KOG, Koala 3-2-11-13H, Poe, Bakken, s2/11; t7/11; AL; cum 332K 6/17;
  • 20413, IA/702, Whiting/KOG, Koala 2-25-36-14H3, Poe, Bakken; s7/11; t1/12; AL; cum 58K 1/17; Three Forks; full report not submitted; 18 stages; 2.2 million lbs ceramics;
  • 21303, 2,227, Whiting/KOG, Koala 2-25-36-16H3, Poe, Bakken, s8/11; t12/11; cum 226K 6/17; off-line as of 5/17;
  • 21306, 2,431, Whiting/KOG, Koala 15-31-30-2H, Poe, Bakken, t5/12; cum 279
    K 6/17;
  • 21307, PA/dry, Whiting/KOG, Koala 15-31-30-3H3, Poe, Bakken, 
  • 21308, 2,461, Whiting/KOG, Koala 14-32-29-3H, Banks, Bakken, t9/12; cum 301K 6/17;
  • 21309, 2,027, Whiting/KOG, Koala 14-32-29-2H3, Banks, Bakken, t9/12; cum 238K 6/17;
  • 21468, 2,522, Whiting/KOG, Koala 14-32-29-4H3, Banks, Bakken, t9/12; cum 269K 6/17;
  • 21992, 2,579, Whiting/KOG, Koala 15-31-30-3H, Poe, Bakken, t5/12; cum 296K 6/17;
  • 90200, SWD, Whiting/KOG, Koala 15-31 SWD, Poe, SWD

Enbridge CEO on Jim Cramer's Mad Money Tonight, Leap Day, 2012

CNBC video here.

Sempra Energy -- Absolutely Nothing To Do With the Bakken --

Hitting 52-week high; raises dividend from 48 cents to 60 cents. 

Press release here.
Sempra Energy said its fourth-quarter profit rose 4 percent, as rising utility revenues and lower natural gas prices helped boost income.

Sempra, which operates traditional utility companies and builds energy infrastructure, also said Tuesday it will boost its quarterly dividend by 25 percent as the company's performance in 2011 beat its own financial objectives.

The company said revenue from its utilities rose 28 percent during the quarter, reaching $2.4 billion. That helped offset a decline in revenue from its much smaller segment of other energy related businesses, which fell 55 percent to $215 million. 
Transcript here

Market Watch story here.
Sempra Energy shares rose 1.6% after it said its fourth-quarter profit increased to $292 million, or $1.21 a share, from $280 million, or $1.15 a share, in the year-ago period. Revenue rose to $2.6 billion, from $2.35 billion. Wall Street analysts expected the power firm to earn $1.06 a share, on revenue of $2.35 billion, according to a survey by FactSet Research. The company OK'd a 25% increase to its quarterly dividend 60 cents, from 48 cents a share. [Comment: yield greater than 3% prior to the increase, and as much as 4% earlier it the year.]

20-20 hindsight: Wow! Look what Forbes/analysts were expecting -- $1.06. Analysts were off by a Norwegian mile.

Note: this is not an investment site; see disclaimer at the sidebar at the right. I have owned SRE since I began investing back in 1984, and continue to accumulate shares but will be making no additional purchases based on this quarterly report. 

For Investors Only: First Solar Continues to Collapse -- CNBC -- Connection to Enbridge

Some idle chatter on CNBC at 9:32 a.m. EST, paraphrasing -- First Solar continues to collapse; First Solar has one of the largest investments from Department of Energy.

I see First Solar is down another 10 percent at the open, down about $3 to $33 (numbers rounded).

The 52-week high for First Solar was $160 with a previous 52-week low of $42.

So, although not yet bankrupt, I guess we can add First Solar to the list of companies that got huge cash investment from US DOE and is now in trouble.

By the way, Enbridge is a big investor in solar and wind.  Enbridge has partnered with First Solar on some major solar projects.

Except as a tax loss, and credits for solar investment, it looks like Enbridge misstepped when it ventured into solar energy.

I just keep thinking how well the economy could be doing if the country had an energy plan, other than to a) kill coal; b) slow-roll the oil and gas industry; and, c) funnel money to solar and wind.

Magnum Hunter Beats on Revenues

From Yahoo!InPlay:
Magnum Hunter reports EPS in-line, beats on revs; provides early Q1 production figures: Reports Q4 (Dec) adj. loss of $0.05 per share, in-line with the Capital IQ Consensus Estimate consensus of ($0.05); revenues rose 404% year/year to $49.1 mln vs the $46.27 mln consensus.

Average daily production increased 547% for the three months ended December 31, 2011 to 9,124 barrels of oil equivalent per day (37% oil/liquids) as compared to the 1,410 Boepd reported for the three months ended December 31, 2010.

The daily production rate in Q4 represents a 73% increase over the production rate of 5,270 Boepd reported during Q3, demonstrating success from the co's organic drilling programs in each of its operating regions. The co had a year-end 2011 exit rate in excess of 12,500 Boepd.

The co averaged ~13,000 Boepd for the month of January 2012 and is currently producing above 13,000 Boepd. The co expects to exit 2012 in excess of 16,000 Boepd, with ~55% of the production mix being oil/liquids. Average daily production for fiscal year 2011 was 5,510 Boepd (43% oil/liquids) which represents a 324% increase over the 1,301 Boepd reported for fiscal year 2010. This significant production increase is due primarily to the drilling and completion success achieved with new wells in each of the co's operating regions.

NOG Releases Earnings

Press release link

Let me know if anyone else found it difficult to find earnings/share in the press release. Net income of 65 cents/share in 2011 vs 14 cents in 2010.

Proved reserves, which is most important single data point, all things being equal: increased 200% (some numbers rounded) to almost 50 million bbls of crude oil equivalent
  • More than doubled (120%) production 2011 over 2010; 20% increase qoq in 4Q11
  • Average sales price of crude oil in 2011: $86 (realized price: $76)
  • Average sales price of crude oil in 2010: $68 (realized price: $66)

This was most notable, similar to what other Bakken companies are experiencing, increased expenses:
  • Production expenses per boe, 2011: $6.77
  • Production expenses per boe, 2010: $3.70

Tuesday, February 28, 2012

The Arvid Anderson Wells -- The Very, Very Busy Alger Field -- The Bakken, North Dakota, USA

Elsewhere they are talking about the Arvid Anderson wells. This gives newbies some idea of the infill / development of the Bakken.
  • 19198, 2,834, Statoil/BEXP, Arvid Anderson 14-11 1H, Alger, t11/10; cum 408K 10/16;
  • 22291, conf, Statoil/BEXP, Arvid Anderson 14-11 3H, Alger, t9/12; cum 190K 10/16;
  • 22292, conf, Statoil/BEXP, Arvid Anderson 14-11 2H, Alger, t9/12; cum 139K 10/16;
  • 22317, conf, Statoil/BEXP, Arvid Anderson 14-11 4H, Alger, t6/12; cum 167K 10/16;
Speaking of the Alger, talk about a busy, busy field. Some of the Bakken wells with the highest IPs are located in the Alger field. The following wells are all being drilled, on confidential status, and run in a west-to-east line, no more than about six miles long. They are all multi-well pads, in sections that already have producing wells. Of the six multi-well pads noted below, five have rigs on site (ros).
  • 21769, 3,603, Statoil/BEXP, Domaskin 30-31 3H, Alger, t10/12; cum 212K 10/16;
  • 21770, 4,790, Statoil/BEXP, Domaskin 30-31 2H, Alger, t11/12; cum 266K 10/16;
  • 21771, 3,080, Statoil/BEXP, Jack Cvancara 19 18 2H, Alger, t11/13; cum 256K 10/16;
  • 21772, 2,994, Statoil/BEXP, Jack Cvancara 19 18 3TFH, Alger, t10/12; cum 228K 10/16;
  • 21952, 4,293, Statoil/BEXP, Sorenson 29-32 3H, Alger, t9/12; cum 297K 10/16;
  • 21953, 2,790, Statoil/BEXP, Cvancara 20-17 2TFH, Alger, t9/12; cum 195K 10/16;
  • 21954, 3,078, Statoil/BEXP, Sorenson 29-32 4H, Alger, t9/12; cum 259K 10/16;
  • 21955, 2,972, Statoil/BEXP, Cvancara 20-17 3H, Alger, t9/12; cum 237K 10/16;
  • 21957, 1,779, Statoil/BEXP, Cvancara 20-17 4TFH, Alger, t7/14; cum 116K 10/16;
  • 22061, 1,837, Statoil/BEXP, Anderson 28-33 2TFH, Alger, t6/12; cum 198K 10/16;
  • 22062, 3,371, BStatoil/EXP, Anderson 28-33 3H, Alger, t6/12; cum 276K 10/16;
  • 22007, 2,700, Statoil/BEXP, Panzer 22-23 1H, Alger, t6/12; cum 209K 10/16;
  • 22266, 1,207, Statoil/BEXP, Panzer 22-23 2H, Alger, t1/13;cum 129K 10/16;
  • 21621, 2,551, Statoil/BEXP, Strobeck 27-34 6H, Alger, t7/12; cum 255K 10/16;
  • 21623, 2.071, Statoil/BEXP, Strobeck 27-34 8TFH, Alger, t7/12; cum 177K 10/16;
  • 22034, 2,944, Statoil/BEXP, Strobeck 27-34 2H, Alger, t7/12; cum 228K 10/16;
  • 22035, 1,962, Statoil/BEXP, Strobeck 27-34 3TFH, Alger, t7/12; cum 146K 10/16;
  • 22036, 1,904, Statoil/BEXP, Strobeck 27-34 4H, Alger, t8/12;cum 199K 10/16;
  • 22037, 2,026, Statoil/BEXP, Strobeck 27-34 5TFH, Alger, t7/12; cum 176K 10/16;

EIA Sees More Price Pressure in the Northeast if Another Refinery Shuts Down -- February 28, 2012

Updates

March 26, 2017: WTI at $48.

December 9, 2015: WTI at $37. 

November 27, 2012: well, oil prices haven't gone much higher ... yet. 

Later, later: oil prices could go much higher -- senior energy analyst at Oppenheimer. The video is actually pretty good.

Later: Long Island, New York,  gas station -- $5/gallon; new worry -- $6/gallon (reference to Hofmeister)

 Original Post

Link here here to Oil & Gas Journal.

If another refinery in the northeast shuts down, one can expect an increase in the price of gasoline. Well, duh.
PBF Energy Co. LLC’s October 2011 startup of a previously idled Delaware City, Del., refinery has helped the New England oil products market respond to closures of ConocoPhillips’s Trainer refinery in September and Sunoco Inc.’s Marcus Hook facility in December, the US Energy Information Administration said. But Sunoco’s plans to close its remaining Philadelphia refinery in July could change the situation, EIA warned has warned.

The 335,000-b/d facility accounts for nearly a quarter of the East Coast’s total refining capacity, EIA said. “If the Sunoco Philadelphia refinery shuts down in July 2012, suppliers may need to find 240,000 b/d of gasoline and 180,000 b/d of [ultra-low sulfur diesel fuel] by 2013 in addition to the amounts that have been supplied historically,” it said.

The ULSD gap won’t simply result from lost refining capacity, EIA added. It said New York State plans to require that heating oil meet the same low-sulfur rules as ULSD starting in July, effectively increasing ULSD demand by 70,000 b/d and annual ULSD demand in the Northeast by 20% on average, although the heaviest pressure will occur during the winter heating season.
The entire article is worth reading in its entirety.

Two comments: if this happens it will come in the middle of the driving season AND the national presidential campaign.

Second comment: a phenomenon that I've observed over the years that makes no sense will probably follow if another refinery in the northeast shuts down. This is the phenomenon: if there is a shortage of gasoline, regardless of the reason, the price of oil generally goes up. This, of course, makes no sense, if all things being equal, the reason for the shortage of gasoline has to do with refinery under-utilization, then oil is not the problem. In fact, there would be a relative excess of oil. But still, if there's a shortage of gasoline, generally oil rises in price, regardless of the reason for the shortage of gasoline.

So, if another refinery shuts down in the northeast look for the price of gasoline to go up AND the price of oil to go up.

Ten (10) New Permits -- The Williston Basin, North Dakota, USA

Daily activity report, February 28, 2012 --

Operators: Petro-Hunt (3), Newfield (2), Crescent Point Energy (2), Liberty Resources, Oasis, Whiting

Fields: Clear Creek, South Tobacco Garden, Tyrone, West Ambrose, Missouri Ridge, and Sanish

Absolutely nothing else was reported. 

Another Feel-Good Article on the Bakken -- SeekingAlpha

Don sent me the link regarding China's insatiable need for oil and pointed out the 8th paragraph:
A little-known story that came out within the last couple of weeks is that China, a nation with a voracious appetite for energy of all sorts (from nuclear to coal to natural gas and oil, etc.) has postponed any plans for tapping its shale hydrocarbons for at least a decade. It turns out their shale deposits, which six months ago were believed to be among the most potentially productive deposits in the world, on closer examination are now considered to represent an extremely complex challenge. So far we don’t know the details of China’s decision on this, but if you told us that water was part of the calculation, we wouldn’t be surprised. For the process of hydraulic fracturing requires huge amounts of water. And if there’s anything that could defeat China long-term, it’s much more likely to involve H2O than hydrocarbons.
The writer doesn't cite the source for that "little-known story" but it doesn't surprise me. 

For newbies, water is not an issue for fracking in North Dakota.

Don didn't have to point out this paragraph. Most of us already knew this:
The real promise in this area, and we’ve made this point before and continue to believe it’s true, involves oil fracking. It’s not just gas that’s found in those shale formations; there’s also oil. The major difference between oil fracking and gas fracking is that oil remains an international, not domestic, commodity. As a result, oil prices are many times higher than those for natural gas. And of course, high capital expenditures are much more easily rationalized for higher-priced than lower-priced commodities or products. This is the biggest difference between oil and gas, and it’s a huge one. And it explains why one of our recommendations, Continental Resources, has been soaring and why Whiting Petroleum Company and EOG Resources have also been climbing.
And the closing paragraphs:
But it’s undeniable that more oil and more gas are coming on stream. And in addition to those engaged in oil fracking, other clear beneficiaries here will be those companies which transport and deliver these valuable energy resources. Here we would mention an Income Portfolio recommendation, a master limited partnership ONEOK Partners LP; we also have other recommendations in The Complete Investor that might benefit even more.

And yes, there will be some oil service companies that do well, too. We won’t stray too far out on a limb here in recommending, as we have in the past, Schlumberger Ltd.

Fidelity Has A Nice Well in the Sanish -- The Bakken, North Dakota, USA

21280, 1,165, Fidelity, Arnold 11-14H, Sanish, Bakken,

I post new results here

A Query for Readers: Crude-By-Rail Facilities Around Ross, North Dakota

Back in October I blogged that there was a crude-by-rail facility at Ross, North Dakota.

A reader has sent me a note suggesting there are two oil-loading facilities in/near Ross. If I were in the Bakken I would take a drive out there and check it out, but I'm not. I'm curious if any reader knows if there is more than one oil-loading facility in/near Ross, and if so, where they are located.

Thank you in advance.

Reuters provides a FactBox on crude-by-rail terminals at this link. The first one mentioned:
COMPANY: Plains All American
PROJECT: Build rail-loading facility in Ross, North Dakota
COMPLETION DATE: Fourth quarter 2012
CAPACITY: First phase 20,000 barrels per day of crude and 8,500 bpd of natural gas liquids. Second phase will increase capacity to 65,000 bpd of crude. 
If you do a google search "Ross "North Dakota" crude oil terminals" the third hit down will take you to a PDF (I can't link it) at the NDIC website that will show you where all the current and all the planned terminals are. There is only one CBR terminal at Ross noted in this presentation. 

KOG's Earnings Are Out

Updates

February 29, 2012: Motley Fool's first note after the 4Q11 KOG earnings debacle
Talk about your fast growth rates. Kodiak Oil & Gas generated 10 times the revenue in 2011 that it did just two years ago, buoyed by rising oil prices and a hard-charging expansion strategy that's starting to pay off. Although it missed analyst estimates, Kodiak has been growing so quickly that it should be expected to keep smashing through prior high-water marks throughout 2012 and beyond.
Let's look at the reported numbers, including future estimates, to figure out just how much potential is left for a stock that's jumped more than 3,000% since the end of 2008.
Tale of the tape 
Kodiak's grown tremendously since those dark days, and a lot of it's been fueled by stock issuance, as shares outstanding almost have doubled over that time frame. That's something to keep an eye on as the company continues to drill new wells in the Bakken, but growth has a great way of making dilutive offerings seem less important.
Click on the link to see the numbers that impress Motley Fool.

Later, later: just before earnings were released, The Street picked KOG as one of five companies to "soar" after earnings release. Very, very interesting. 

Later, same evening: for investors only -- Reuters is reporting that most analysts expected a 9-cent profit; instead the company reports a 15-cent loss.  If folks see this as "seed corn" -- growing fast; additional rigs, fine, but a basic tenet on Wall Street is not to surprise the analysts. If KOG had an idea that their report would be significantly different than what analysts were expecting, the company needed to provide more information to the analysts.

Original Post

Press release here.

Some data points:
  • 2011 sales, $120 million vs $31 million in 2010
  • 2011 avg production of 3,922 boepd vs 1,259 ave boepd in 2010
  • 2011 net income, 2 cents/share identical to previous calendar year
  • And again, the derivative loss resulted in a loss of 8 cents/share
Of note:
The largest component of lease operating expense (LOE) in the Williston Basin operations is the disposal of water used in the well completion operations, the majority of which has been transported by truck to third-party disposal facilities.  The Company is actively addressing water disposal costs by connecting wells to third-party pipelines, drilling water disposal wells in producing areas and constructing water gathering systems where appropriate.  As existing and future wells are connected to water gathering systems, LOE is projected to decrease on a per-unit basis.
Earnings conference call tomorrow.

Donald Trump on US Energy Policy -- CNBC

Earlier this morning Donald Trump was on CNBC. His views on US energy policy dovetailed nicely with mine.

You can see a summary of his interview at this link.
The United States is "the Saudi Arabia of natural gas" and has no business buying pricey oil from OPEC producing-nations, says real estate mogul and one-time presidential hopeful Donald Trump.

Supply issues stemming from Middle East unrest coupled with refinery closures in the United States have lifted gasoline prices to a nationwide average of more than $3.70 a gallon, with most experts predicting that figure will easily top $4 a gallon.

The United States shouldn't be in this situation, Trump told CNBC.

The country has ample energy reserves at home, although excessive regulations under the Obama administration are preventing companies from producing oil and natural gas.

"I think it's devastating and much more OPEC than anybody else or anything else. They're sitting around the table and setting the price of oil and laughing at us because we have no leadership," Trump tells CNBC.

President Barack Obama never prioritized energy as an agenda and today, the country is suffering, Trump says.

Interestingly enough the article does not quote Trump on wind. Trump says the same thing I've blogged about wind: there is not one redeeming thing one can say about wind energy; and Europeans are now pulling the plug on wind (including The Netherlands and Spain).

He mentioned that the effect these wind turbines will have on birds is of concern. It was said in passing; I doubt Trump gets really, really excited about birds. But I get very excited about birds.

I am a member of the Massachusetts chapter of the Audobon Society (MassAudubon: Bird Conservation Programs).

I just received from MassAudubon a huge glossy and the "State of the Birds" in Massachusetts.

Here's the blurb on long-distance migratory birds, quoted in full:
Long-distance migratory birds such as the Wilson's Warbler now have to contend not only with the natural hazards of flying thousands of miles to reach nesting and wintering areas, but also with human-caused hazards such as pollution and high-rise buildings.
That's the full quote. What's missing?

Here's the blurb on migratory shorebirds:
In late summer and fall, some beaches and tidal flats harbor thousands of sandpoipers and plovers of many species. Despite significant concentrations, the populations of many of these migratory shorebirds are decreasing.
That's the full quote. What's missing?

The glossy is about 24 inches by 36 inches, full color, with about a dozen photos of colorful birds, and a map of the state of Massachusetts.

There is not one picture of the number one enemy of migratory birds, and not one picture of the enemy: the wind turbines.

And that's the problem I have with a lot of these organizations. I don't think Massachusetts has much of an oil industry, but faux environmentalists in the state have lots of problems with the oil industry. On the other hand, Massachusetts wants to be a lead in wind energy and yet no mention of the problems associated with the entire concept, not the least of which is a) the cost to the consumer; and, b) the cost to migratory birds.

The society points out "high-rise buildings" but never mentions wind turbines, the 800-lb gorilla in the room as far as risk to migratory birds go. So, the society will fight to slow development in Massachusetts, unless it's wind energy, I suppose, at least based on the glossy.

Update on Enbridge's Sanish PIpeline Project: From Tioga Area To Rest of World -- The Bakken, North Dakota, USA

Enbridge launches binding Open Season for Sanish pipeline project and Bakken expansion program: Enbridge Energy Partners (EEP) and Enbridge Income Fund, affiliates of Enbridge, announced a second Open Season for the Bakken Expansion Program in conjunction with an Open Season for EEP's proposed Sanish Pipeline. The Sanish Pipeline will transport crude oil production from Johnson's Corner to Beaver Lodge, North Dakota. The Bakken Expansion Program Open Season will offer pipeline capacity on Enbridge's system from Beaver Lodge into Enbridge's terminal at Cromer, Manitoba where it connects with the Enbridge Mainline System, which offers access to refineries throughout the Upper Midwest, eastern Canada, Mid-Continent and as far as the U.S. Gulf Coast.

From Yahoo!InPlay. No link. 

Schumer on CNBC This A.M. Pleading With Saudi to Produce More Oil

Yes, pleading.

He also made big push for nuclear energy -- saying it was non-polluting. I wonder if he's been to northern Japan lately?

I didn't catch the whole interview, but what I did catch I did not hear the word fracking, which I believe has been banned in his state.

Solid Waste Site Proposed for Dickinson Area -- The Bakken, North Dakota, USA

Link here.

Eighty acres seven miles south of Belfield on US 85.

I could be wrong, but I believe I saw a similarly-sized solid waste "facility" going up south of Williston when I was up in the Bakken last autumn.

For Investors Only: Beware the End Of February

This article reads like an advertisement for an expensive newsletter, but it's kind of fun,

First, it suggests that if history is a guide, investors should beware leap day.

Second, of all the companies it could have mentioned, most of the ink went to CLR. Kind of fun to read.

Note: this is not an investment site. See disclaimer at sidebar at the right. I do not own shares in any company mentioned in the linked story and won't be buying any shares in the near future.

Monday, February 27, 2012

Absolutely Nothing To Do With The Bakken -- Archival -- Bragging Rights

Updates

March 26, 2017: from The [London] Guardian:

The owner of Peugeot and Citro├źn is close to completing a deal with General Motors to buy its European car brands Vauxhall and Opel.
Groupe PSA and GM could announce a deal as early as Monday morning after successful talks between the carmakers.
Negotiations about a potential acquisition were revealed last month and the board of PSA is now understood to have approved the deal.
The announcement of a deal will kickstart an brutal political battle between the governments of France, the home of PSA, Germany, the home of Opel, and Britain, the home of Vauxhall, to protect jobs and plants in their countries.
 Original Post

A reader alerted me to this item:
General Motors Co is in advanced discussions to buy a small stake in French automaker PSA Peugeot Citroen as part of their proposed strategic alliance in Europe, sources familiar with the situation said on Monday.

Under the terms being discussed, GM would likely buy a stake of less than 5 percent in Peugeot, the sources said. A deal could be announced in the next few days, although sources warned that no deal has been reached and talks could still fall apart.
On first blush, this makes absolutely no sense. An investment of 5 percent in Peugeot is "peanuts" for Government Motors. The article provides a boiler plate explanation why Peugeot is involved. So one has to ask, why would GM even be exploring such an investment. Perhaps these two paragraphs help explain:
Analysts said an alliance with Peugeot would allow the companies to pool together resources to develop vehicles. But they added that it could take a decade to fully realize the benefits of the pact and more steps would be needed to overcome the core problem for both automakers in Europe: overcapacity.
"Frankly we believe it will introduce complications at a very delicate time in its own restructuring," Guggenheim analyst Matthew Stover said last week. "In the grand scheme of things, GM has much more to offer PSA than the other way around."
First of all, take the "GM has much more to offer PSA (Peugeot) than the other way around" statement with a grain of salt. These guys don't do business deals out of the goodness of their hearts. GM has an idea; they're thinking outside the box. Remember, their shareholder-in-chief is a Harvard grad.

When I was stationed in Europe back in the 80's, the Citroen caught my eye for two reasons: a) it was downright ugly; and b) it was downright ugly. No actually, the second reason was that it was very small.

I don't know what the Citroen looks like now, and it doesn't matter because "it could take a decade to fully realize the benefits" and over a decade the style could change significantly.

But, if you start with an ugly car, and you start with a small car, what's the first thing that comes to mind? Yup, you got it.

For those who haven't got it yet, think where Government Motors (and all automakers) want to be a decade from now.

The last hint: Peugeot would make a great laboratory outside the eyes of the American press.

The only reason I'm posting this is for bragging rights for the person who alerted me to the article. It's his hunch that the whole thing has to do with using Peugeot has a laboratory for developing a new electric vehicle.

Archival purposes only. Now, how to tag it?

Housekeeping: Blurb on CLR Acquisition -- 35,000 More Acres -- The Bakken, North Dakota, USA

This is an old story; just some housekeeping for archival purposes. [Update, November 18, 2012 -- was the Newfield's Big Valley prospect?]

From a CLR press release:
Continental Resources announced the acquisition of 23,161 net acres in Williams County, North Dakota , associated production of approximately 1,000 net Boepd, and eight wells that are drilled but not yet completed. The transaction was completed in February 2012 for $276 million . Continental will act as operator on 89 percent of the newly acquired acreage, most of which is already held by production. In total, the new acreage represents 29 operated spacing units for Continental.
The Company also announced the acquisition of leases covering an additional 12,017 net acres in February 2012 .
"These acquisitions are a great fit with our current Bakken position and are 100 percent ready to drill," Mr. Hamm said. 
"Our goal is to add to and high-grade our strategic leasehold, concentrating on Bakken acreage where we will have a dominant working interest and operating control.
I assume I blogged about this earlier, but can't remember, and I know there is a lot of interest regarding CLR's new acreage. The 23,161-acre block came from Newfield.

Fracking Backlog Update: Fifty Percent of Recently Drilled Wells Not Completed

Of the ten most recently reporting wells in the Bakken, all ten came off the confidential list over the weekend, only five were fracked/completed, i.e., 50 percent. Part of the reason may be the winter. But we are well into the second or third year of the boom and well past the point where operators said they would be caught up by now.

Reminder: Daytona 500 on Fox Right Now

Seven (7) New Permits -- The Williston Basin, North Dakota, USA -- Clarks Creek

Graphics

October 22, 2019:

Permits

2018 (yes, only one Clarks Creek permit in 2018)
34448, loc, EOG, Clarks Creek 108-0706H,

2017
34395,
34394,
34393,
34392,
34391,
34390,
34389,
34388, 
34387,
34386,
34379,

34378,
34377,
34376,
34375,

34374,
34373,
34372,

2016
33050, 1,703, EOG, Clarks Creek 75-0719HX, Clarks Creek, t6/17; cu 409K 11/18;
32800, 2,615, EOG, Clarks Creek 155-0706H, Clarks Creek, t6/18; cum 244K 11/18;
32799, conf, EOG, Clarks Creek 24-0706H, Clarks Creek; a huge well;
32798, conf, EOG, Clarks Creek 107-0706H, Clarks Creek; a huge well;
32797, conf, EOG, Clarks Creek 72-0706H, Clarks Creek; a huge well;
32796, 2,518, EOG, Clarks Creek 73-0719H, Clarks Creek, t6/17; cum 306K 11/18;
32795, 2,204, EOG, Clarks Creek 110-0719H, Clarks Creek, t6/17; cum 309K 11/18;
32794, 2,382, EOG, Clarks Creek 74-0719H, Clarks Creek, t6/17; cum 335K 11/18;
32793, PNC, EOG, Clarks Creek 75-0719H,
32647, conf, EOG, Riverview 19-3130H,
32646,
32645,
32644,
32643,
32642,
32641,
32640,
32639, PNC,
32638,
32637,
32636, conf, EOG, Riverview 121-3130H,
32491,
32490,
32489,
32488, conf, EOG, Hawkeye 123-2536H,


2015  (complete)
32222, conf, EOG, Hawkeye 145-2536H,
32199,
32198,
32197, conf, EOG, Hawkeye 106-2536H,
32186,
32285, conf, EOG, Hawkeye 137-2536H,
32184
32183,
32182,
32181,
32180
32179,
32178, PNC, EOG, Hawkeye 119-2536H,
32162,
32161,
32160, conf, EOG, Hawkeye 105-2536H,,
32147, conf, EOG, Hawkeye 148-2536H,
32146,
32145,
32144,
32143,
32142, conf, EOG, Hawkeye 141-2536H,
31815, conf, EOG, Riverview 101-3031H,
31814,
31813,
31812,
31811,
31810,
31809,
31808,
31807,
31806,
31805,
31804, conf, EOG, Riverview 26-3031H,
31403, conf, EOG, West Clark 117-0136H, producing, a nice well,
31388, conf, EOG, West Clark 115-0136PNC,
31387,
31386,
31385,
31384,
31383,
31382
31381,
31380,
31379,
31378,
31377,
31376,
31375, conf, EOG, West Clark 132-0136H,
31374, conf, EOG, West Clark 122-0136H,
31257, loc, EOG, West Clark 129-0136H,
31256, loc, EOG, West Clark 128-0136H,
31255, loc, EOG, West Clark 134-0136H,
31254, loc, EOG, West Clark 127-0136H,
31253, loc, EOG, West Clark 126-0136H,
31252, PNC, EOG, West Clark 116-0136H,
31251, PNC, EOG, West Clark 107-0136H,
31250, PNC, EOG, West Clark 106-0136H,
31249, 127, EOG, West Clark 201-01SWD,
31248, 1,272, EOG, West Clark 104-0136H, Clarks Creek, t5/16; cum 185K 11/18;
31247, 1,613 EOG, West Clark 103-0136H, Clarks Creek, t5/16; cum 189K 11/18;
31246, PNC, EOG, West Clark 8-0136H,
31194, SI/NC, Slawson, Jore Federal 1-12H,
31193, SI/NC, Slawson, Jore Federal 13-12TF2H,
31192, SI/NC, Slawson, Jore Federal 12-12TFH, 
31191, conf, Slawson, Jore Federal 15-12TF3H,
31190, conf, Slawson, Jore Federal 13-12TF2H,

2014 (complete)
29964, 713, SHD Oil & Gas, Magnum 36-13-TF2, Clarks Creek, t12/15; cum 65K 11/18; offline much of 2016;
29963, 1,231, SHD Oil & Gas, Magnum 36-12-MB2, Clarks Creek, t12/15; cum 116K 11/18;
29962, 142, SHD Oil & Gas, Magnum 36-11-TF2, Clarks Creek, t12/15; cum 38K 8/16; offline much of 2016;
29755, 1,096, SHD Oil & Gas, Avalanche 36-14-MB2, Clarks Creek, t12/15; cum 49K 8/16; offline much of 2016;
29754, 1,111, SHD Oil & Gas, Avalanche 36-15-TF1, Clarks Creek, t12/15; cum 45K 8/16; offline much of 2016;
29753, 1,082, SHvD Oil & Gas, Avalanche 36-16-MB2, Clarks Creek, t12/15; cum 312K 8/16; offline much of 2016;
29752, 233, SHD Oil & Gas, Avalanche 36-17-TF2, Clarks Creek, t12/15; cum 8K 8/16; offline much of 2016;
29679, loc, EOG, West Clark 06-01M, (the "M" indicates a monitoring well)
28747, 2,592, Slawson, Jore Federal 2-12H, one section, 21 stages, 4.8 million lbs; t9/4; cum 189K 11/18;

2013 (complete)
27041, 1,905, SHD Oil & Gas, Bullet 12-36H, Clarks Creek, t6/14; cum 205K 11/18;
27040, 2,082, SHD Oil & Gas, Thud 12-36H, Clarks Creek, t6/14; cum 184K 11/18;
27039, 1,759, SHD Oil & Gas, Hammer 12-36H, Clarks Creek, t10/15; cum 121K 11/18;
27038, 1,980, SHD Oil & Gas, Canon 12-36H, Clarks Creek, t10/15; cum 110K 11/18;
26811, 1,888, SHD Oil & Gas, Luke 13-36H, Clarks Creek, 11/14; cum 115K 11/18;
26810, 1,274, SHD Oil & Gas, Marc 13-36H, Clarks Creek, t11/14; cum 131K 11/18;
26809, 1,753, SHD Oil & Gas, Mattie 13-36H, Clarks Creek, t11/14; cum 226K 11/18;
26808, 1,636, SHD Oil & Gas, Bucky 13-36H, Clarks Creek, t11/14; cum 176K 11/18;

2012 (not including ones listed before March 29, 2013, below)
  • 22943, PNC, EOG, Riverview 103-3130H, Clarks Creek,
  • 22200, 528, EOG, Riverview 4-3031H, Clarks Creek, t7/12; cum 457K 11/18;
  • 22199, 1,088, EOG, Riverview 100-3031H, Clarks Creek, 2 sections, Three Forks, 39 stages, 5.8 million lbs, t6/12; cum 478K 11/18;
Prior to 2012
  • 20513, 2,365, EOG, Riverview 3-3130H, Clarks Creek, t3/13; cum 716K 11/18;
Updates
August 9, 2015: Mike Filloon's incredible article on EOG's Hawkeye wells in Clarks Creek oil field. Highly recommend you read.

June 19, 2013: two more spectacular EOG Hawkeye wells

March 29, 2013: April, 2013, dockets -- EOG will put 22 wells on one 2560-acre spacing unit: sections 6, 7, 18, and 19 - 151-94.

December 15, 2012: update on EOG's Clarks Creek wells.

November 4, 2012: EOG's plans for 6 wells on a 320-acre spacing unit in this area, in Antelope field;


August 8, 2012: to the five wells mentioned below (20329 - 20334, inclusive) add two more wells in that same section. There are now seven wells being drilled in this one section. Add these two:
  • 22962, 1,093, EOG, West Clark 5-2425H, Clarks Creek, t12/12; cum 289K 8/16;
  • 22963, 1,908, EOG, West Clark 1-2-2413H, Clarks Creek, t10/12; cum 164K 8/16; off-line much of 2016
August 8, 2012:
  • 20888, 3,415, EOG, Clarks Creek 14-1819H, Clarks Creek, t4/12; cum 246K 8/16; 21 stages; 4.1 million lbs; all sand; 4-section spacing (2560-acre); 
Original Post 
Daily activity report, February 27, 2011 --

Operators: EOG (4), MRO, BR, Samson Resources

Fields: Ambrose, Clarks Creek, Camel Butte, Deep water Creek Bay

The four EOG wells will be on one pad, or two neighboring pads.

It looks like it's time for a stand-alone post on Clarks Creek. This is a 12-section field (2x6) lying on the western boundary of the reservation. EOG already has a similar configuration in this field, except three wells each pad, both pads very near each other:
  • 20329, 1,203, EOG, West Clark 4-2425H, Clarks Creek, Bakken, running south; middle Bakken, t5/13; cum 290K 8/16;
  • 20330, 142, EOG, West Clark 3-2413H, Clarks Creek, Bakken, running south; middle Bakken; t6/13; cum 251K 8/16;
  • 20331, 1,251, EOG, West Clark 101-2425H, Clarks Creek, Bakken, running north; Three Forks Samson "E" marker, 30 feet into the Three Forks; gas up to 6,329 units; t4/13; cum 241K 8/16;
  • 20332, 647, EOG, West Clark 100-2413H, Clarks Creek, Bakken, running north; middle Bakken; (permit app said Three Forks; geology report said it targeted the middle Bakken but the conclusion said it was in the Three Forks);  25 stages; 2.8 million lbs; s January 12, 2012; reached total depth on February 1, 2012 (23 days); max gas 1,438 units; t9/12; cum 210K 8/16;
  • 20333, 449, EOG, West Clark 2-2425H, Clarks Creek, t9/12; cum 227K 8/16; running south; Three Forks, 30 feet into the Three Forks; the permit app said Bakken, but the geology report was very clear that they were targeting and in the Three Forks;
  • 20334, 1,324, EOG, West Clark 1-2413H, Clarks Creek, t10/12; cum 199K 8/16;; running north; Three Forks, 30 feet into the Three Forks; the permit app said Bakken but the geology report clearly states Three Forks
And, of course, this renews the discussion on the nomenclature of EOG wells ("100" vs "101") -- which I won't get into, but was huge discussion thread elsewhere two to three years ago. (I think I got the "north" and "south" on the wells correct.)

[Update, March 29, 2013: the nomenclature is very simple. The wells are numbered chronologically or sequentially. Wells 100 and above are Three Forks wells; wells numbered 1 - 99 are middle Bakken wells]

Speaking of nomenclature, here are the new wells:
  • 22484, 2,946, EOG, Hawkeye 102-2501H, Clarks Creek, Bakken, Three Forks; producing, first short month at 17,147 bbls, January, 2013; t1/13; cum 532K 8/16;
  • 22485, 1,926, EOG, Hawkeye 01-2501H, Clarks Creek, Bakken, middle Bakken; producing, first short month at 17,721 bbls, January, 2013; t1/13; cum 590K 8/16;
  • 22486, 2,421, EOG, Hawkeye 100-2501H, Clarks Creek, Bakken, Three Forks, t9/12; cum 709K 8/16;
  • 22487, 67, EOG, Hawkeye 02-2501H, Clarks Creek, Bakken, middle Bakken, t12/13; cum 634K 8/16;
And now for a teaser: wow, there are some good old Madison wells in the immediate area. I will get back to them later.

No IPs reported on today's daily activity report.

Clarksville...Clarks Creek...close enough:

Last Train to Clarksville, The Monkees

Proppants for Sale

This came to me as a comment; in case folks missed it:
Northern White sand, Southern White, ceramic sand, resin coat, guar products and fracking chemicals. Available for Bakken, and beyond. While I don't produce ceramic proppant in North Dakota, I do stock and sell it there.
Again, I have not verified the site, and have no connection to it.

The Discussion Begins Regarding Water Flooding in the Bakken

Updates

February 5, 2015: see updates for these wells at this post
 
Original Post
Link here.

Bakken wells permitted for water injection (I will only post the first 100):
By the way, this should spawn some other discussion. the Parshall 20-03H well was a short horizontal and yet it is 1280-acre spacing.

White House Approves TransCanada's Plan for Keystone Lite -- Literally Praising the Canadian Proposal

The president literally praises TransCanada's proposal to pump $2.3 billion into a shovel-ready job that will put thousands of Americans to work in the southern states going into the 2012 election. Literally praising TransCanada.
President Barack Obama "welcomes" TransCanada's decision to build a pipeline to bring crude oil from Cushing, Oklahoma, to the Gulf of Mexico. "As the President made clear in January, we support the company's interest in proceeding with this project, which will help address the bottleneck of oil in Cushing that has resulted in large part from increased domestic oil production, currently at an eight year high. Moving oil from the Midwest to the world-class, state-of-the-art refineries on the Gulf Coast will modernize our infrastructure, create jobs, and encourage American energy production," the White House said in a statement.
Wow, just think: this pipeline will modernize our infrastructure, create jobs, and encourage American energy production. Wow. Just think what Keystone XL would have done.

Note: this is just the pipeline from Cushing, OK, to the Gulf.

One has to ask why TransCanada didn't do this all along. Once the Canadian-Montana leg is approved after the election, the next fight will be in Texas. My understanding is that the Texas ranches, the Sierra Club and other faux-environmentalists will do what they can to stop the pipeline going through Texas. I believe the proposed pipeline runs perilously close to the Edwards Aquifer underlying the second-largest city in Texas, San Antonio. TransCanada is smart to get this southern route completed.

CNBC Talking Head: Iranian Embargo Does Not Go Into Effect for a Couple of Months

Operation Incredibly Loud and Extremely Close

Updates

May 3, 2012: so where do "we"stand with regard to India and Iran? India says it will cut  back on Iranian oil imports by 15% this financial year. Whoop-de-do. Iran is now exporting at the lowest level since 1990, following the Iran-Iraq war, down 150,000 bbls (in two months) to 3.2 million bbls/day. (At same link.) Is it just me, or does 150,000 bopd out of 3.3 million not seem like such a big deal with Brent oil priced where it is?

May 3, 2012: So much for global sanctions on Iran. India continues to flip-flop. First said it would ignore sanctions; then said it would abide by them; now insuring the Iranian tankers when others won't.

The Indian government has offered to insure as much as $50 million for any "Indian flag carriers" traveling to Iran. This amount falls well short of the actual liability incurred by oil tankers on any given trip, but it comes to more than six times as much as the Japanese government has offered its companies, illustrating India's interest in continuing the flow of Iranian oil.
April 17, 2012: does anyone really think Iran is selling less oil? At PennEnergy:

In the wake of the recent failed missile test in North Korea, cracks are also forming in U.S. and European efforts to contain access to nuclear technology on the other side of the continent.

Reuters reports that Iranian oil tankers have been circumventing sanctions against the country by operating without the normal electronic tracking and identification equipment, allowing them to transport oil to clients secretly.

Of the 39 oil ships that make up Iran's tanker fleet, only nine are currently operating with their black boxes active, allowing the AIS Live tracking system to monitor them.
One hour later after original post: a reader (Don) wrote to tell me that the embargo goes into effect July 1, 2012. I responded:

Three confounding factors July 1:

1) it's always possible, compromises will be worked out that will allow Iran to sell its oil on the open market
2) buyers will have found alternate sources and will have adapted to 3.5 million bbl/day shortfall
3) peak driving season, making it difficult to adapt to the 3.5 million bbl deficit

Oh, yes, one other factor:

4) Operation Incredibly Loud and Extremely Close --- this would be the Israeli attack on Iran. 
Original Post
I missed it, but I think he said the Iranian oil embargo will go into effect in June, 2012.

SeekingAlpha: Six Value Energy Stocks

Link here.

Companies mentioned: Tesoro, EOG, BHI, Nabors, Denbury, Peabody Energy (BTU).

Note disclaimer at sidebar at the right; this is not an investment blog.

Active Rigs Back to 205: Ties Record

Link here. A dynamic link; numbers will change over time.

Sunday, February 26, 2012

For Investors Only -- Stocks to Buy Before Earnings -- SeekingAlpha; NOG: Sneak Preview -- Cramer's List of 10 For This Week

Link here to SeekingAlpha.com: stocks to buy before earnings come out.

The first company mentioned? Drum roll..... KOG.
KOG's likelihood to both exceed expectations and trade higher after earnings are announced. Fellow SA writer Michael Filloon, who covers the industry very well, recently wrote an article regarding the success of Bakken oil producers. I think that KOG will continue the trend of success for companies in this region and will trade higher after it announces earnings on Feb 28.
Along with Autozone, Jazz Pharm, Spectrum Pharm, and HollyFrontier.

Interesting.
*******************

Sneak preview: NOG to announce February 29, 2012.
The average analyst estimate is for profit of 25 cents per share, a rise of 92.3% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from 24 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 25 cents during the last month. Analysts are projecting profit to rise by 112.9% compared to last year’s 66 cents.
*******************

Jim Cramer's 10 earnings to watch this week: the list includes EOG.

Leading Democrat Schumer Begs the Saudis to Increase Production

Updates

February 27, 2012: Today Senator Schumer is pleading. Literally pleading for the Saudis to increase production. 

Original Post

Is it just me, or am I misreading this (link farther down)? Senator "Chuck" Schumer asking the Obama administration to beg -- literally, beg -- the Saudi's to produce more oil?

Why is he not asking the administration (his own party) to work with our own domestic oil and gas industry to do the same thing rather than what President Obama IS doing?

Before reading any further, see the link below to see how much Washingtonians are paying for gasoline:
In Washington, DC, two percent of one's income goes to gasoline.
So, now with that as background (the Obama administration slow-rolling the US oil industry and Washingtonians paying 2 percent of their income on gasoline) we now proceed.

Am I misreading this? Senator Schumer asking the Clinton Obama administration to beg the Saudis to produce more oil.

Didn't Schumer's state ban fracking? Just asking. Need I say more? If so, go back to the first link above. (I believe the Marcellus extends into New York state.)

Anyway, here's the Schumer press release embedded in a television news story:
Dear Secretary Clinton:

As you are aware, due to the worry turmoil in the Middle East and its impacts on oil supplies, American consumers are facing rising gasoline prices, with the national average price of a gallon of regular gas at $3.69. This is nearly double 2009’s average of $1.86 a gallon and the highest prices we have ever seen for this time of year. The price of diesel fuel has also increased reaching $4.02 a gallon. The price of diesel fuel not only affects truck drivers, but it pushes food and transportation costs higher for consumers, too. The combined effect of these energy price hikes drags down our economy, which can undercut our recovery. These skyrocketing fuel prices are directly linked to the global energy market, particularly Iran’s recent efforts to manipulate oil prices and the worry of impacts on supply from an escalation of regional hostilities. To address this situation, I urge the State Department to work with government of Saudi Arabia to increase its oil production, as they are currently producing well under their capacity.

Saudi Arabia, according to the U.S. Energy Information Administration, is averaging around 10 million barrels of oil per day. This is 2.5 million barrels short of their approximately 12.5 million barrel capacity. These lower production levels have a negative impact on global markets. When paired with recent actions by Iran in halting sales to French and U.K. companies, and threatening to stop sales to countries such as Italy, already fragile markets are unduly roiled. These market shifts are now hitting Americans at the pump, reverberating throughout the rest of our economy, and threatening our recovery.
"These market shifts are now hitting Americans at the pump, reverberating throughout the rest of our economy, and threatening our recovery." What? Two (2) percent of their income and folks in Washington are complaining. You have got to be kidding.

First of all, turmoil in the Middle East is a very small factor when it comes to the price of oil right now. Very little US oil comes from the Middle East any more and the US is now a net exporter of oil (source: Public Television business show this morning).

But for argument's sake let me give you that: if it's the turmoil in the Middle East, it's the US that is pressing the Iranian sanctions. It wasn't China, India, or Russia calling for sanctions. Iran calls our bluff and imposes its own embargo shutting off oil to France and the UK.

And so now Senator Schumer is asking Hillary to beg the Saudis to increase production? Am I missing something?

But I guess it's working: Oil futures are down 31 cents now, down to $109.46.

Which brings us to the "nut" of Schumer's request: his argument that Saudi is producing well below its capacity. Not just a tad, not just a little, not just a smidgen, but "well below" its capacity.

If that's accurate, there are only two explanations for their decreased production: either they really dislike the Nobel peace prize recipient or they are unable to increase production. Neither explanation is really very reassuring.

Senator Schumer might want to go back and listen to the former CEO of Shell, Mr Hofmeister, and his discussion of "business as usual."

Speaking of which, "business as usual," did Senator Schumer write a letter to Ms Lisa Jackson, head of the EPA, imploring her to give a "nod and a wink" to the President so he would approve the Keystone XL? Approval of the Keystone XL would not immediately effect the price of oil, but it would send a clear message to the American voter that it is no longer "business as usual"with regard to how the administration will work with the domestic oil industry going forward. That would be reassuring, and I bet the price of WTI-NYMEX would drop $10.

Wow, take the time to read the news story linked above. Read the Schumer letter begging the Saudis to produce more oil. Either they can or they cannot, and if they can, and they aren't, it speaks volumes about our relationship with one of our longest Mideast allies. (Speaking of which, how are things going in Egypt?)

Personally I don't think they can.

Energy Expenditures Per Capita Lowest Since 1995 -- CarpeDiem

Link to source via CarpeDiem.com.
On a per-capita basis , annual real energy spending per person was lower in 2011 than in any year going back to 1995, and about 11% below 2005 when real energy spending peaked at  $494 billion.  Compared to the first year in the series, 1995, real spending on energy per person in 2011 was 7.5% lower.
Posted previously: US government's consumption of gasoline at a 25-year high (in 2010). 

One Canadian's Viewpoint on Killing the Keystone XL -- The President Made His Choice

The Source: Ezra Levant
Who's the big winner after the president killed the Keystone? In his view, it was Venezuela's Hugo Chavez. Very, very interesting.

Wow, it's a very, very interesting video -- especially the embedded video in which the president says he would direct his agencies to get the US off OPEC and Venezuela oil within ten years. I had forgotten that speech.

Another data point:
100 percent of exported Canadian oil -- about 2.2 million bbls/day goes to the US. Compare with 500,000 bbls from North Dakota, with predictions of 1 million bbls by 2016. 
I don't know how much area in Canada is devoted to oil production, but the oil from North Dakota comes from about eight counties.

A big "thank you" to a reader for alerting me to the video which I had not seen.

Saturday, February 25, 2012

"The American People Aren't Stupid" -- "So, Let Me Tell You Why Gasoline Is So Expensive" -- President Obama

The Wall Street Journal link is here.

1. US monetary policy.
Oil staged its last price surge along with other commodity prices when the Fed revved up its second burst of "quantitative easing" in 2010-2011. Prices stabilized when QE2 ended. But in recent months the Fed has again signaled its commitment to near-zero interest rates first through 2013, and recently through 2014. Commodity prices, including oil, have since begun another surge, and hedge funds have begun to bet on commodity plays again. John Paulson says he's betting on gold, the ultimate hedge against a falling dollar.
2.  Slow-rolling the oil industry in the Gulf of Mexico
  • Normally, under President Bush: 7 deep-water permits over three months
  • Under President Obama: 3 deep-water permits over most recent three months

  • Normally: 15 shallow-water permits over most recent three months
  • Under President Obama: 5 shallow-water permits over most recent three months
3. Slow-rolling the oil industry in the Gulf of Mexico
  • Normally, under President Bush: 60 days to get an off-shore permit approved
  • Currently, under President Obama: 90 days

  • Approval average, normally, under President Bush: 75%
  • Currently, nder President Obama: 25%
4. The Keystone XL: killed (no direct effect on current prices, but EMBLEMATIC of the administration's policies regarding the oil industry)

5. The future: "now is the time to raise taxes on oil and gas companies" -- POTUS
He must not believe the economic truism that when you tax something you get less of it, including fewer of the new jobs they've created.
If you don't believe that, look at what has happened to Great Britain's North Sea drilling.

Hofmeister said despite high oil prices/high gasoline prices, it's "business as usual." No, it's not. Current administration is slow-rolling the oil and gas industry and slow-rolling the American public. 

Obama's Green-Car Plan -- Bloomberg -- The US Government Bought One (1) Prius Last Year

In 2010, the most-recent data available, 
the U.S. government’s gasoline use rose to a 25-year high
During a recession.
The US government bought one Prius last year.
"The government must lead by example."

A 25-year high. During a recession. Sounds like the government is not affected by the downturn in the economy. Total US demand for gasoline dropped 6 percent last year, but US government use surged (at least in 2010). 

This is really quite an incredible story.
President Barack Obama’s administration is buying fewer hybrid and electric cars and more vehicles that can consume both ethanol and gasoline to meet 2015 environmental goals, favoring older technology over new.

Obama gave speeches across the U.S. last year touting his twin goals of buying only alternative-fuel vehicles for the U.S. fleet by 2015 and getting 1 million electric vehicles on the country’s roads by that year.

That’s looking more difficult as the federal government learns the same lesson that U.S. car consumers have already figured out: it is tough being green. Rather than leading the way, the government has discovered that the high cost of hybrids and electric cars and their lack of availability often mean it makes more sense to buy cars with fuel-efficient conventional engines. 
Okay, so these are the data points:
First, the government is buying a lot of so-called "green vehicles" because they are able to use E85 fuel -- gasoline with 15% ethanol. The problem is this: E85 refueling stations are hard to find, and so the government drivers simply fill up with regular gasoline. So much for "green vehicles."

Second, the government, for whatever reason started buying more E85 vehicles at the expense of true hybrids and electric vehicles. The government purchase of "true" green vehicles fell 60 percent (some numbers rounded at this blog) so that the government could buy "so-called green vehicles" instead.
And thus:
The problem is that buying and driving ethanol fueled cars solves very little. The GSA, which owns about a third of the federal fleet, said last year that 88 percent of its alternative-fuel vehicles are capable of using ethanol. Still, ethanol fuel pumps are not very common and car owners, including the federal government, often have to use gasoline instead.
The data points:
  • 162,000 refueling stations across the US that sell gasoline.
  • There are only 2,512 ethanol pumps across the entire US -- the article doesn't separate E90 and E85; I don't believe I have ever seen an E85 pump.
  • There are only 6,033 electric recharging stations, which, of course, would only be used in an emergency; most people would re-charge at home.
  • 55% of government drivers were given waivers to use gasoline when ethanol was not available
Government purchases:
  • The US government bought 55,000 vehicles last year
  • It bought 2,600 hybrid, EVs, and fuel-cell vehicles (less than 5% of total purchases)
  • It bought no -- repeat, no -- algae-fuel vehicles
Go to the link to see a break-down of the alternative vehicles the government bought. It is of interest that the government bought one Prius.

I can't make this stuff up.

I assume the GSA couldn't justify the expense of buying the Prius and thus bought one. Hmmmm. It would be interesting to know who bought that Prius. The government did buy 145 Volts, but then, of course, the government owns the company that makes the Volt. Or at least a significant share of the company that builds the coal-burning car.