Saturday, March 31, 2012

BLM: Barack's Latest Moratorium

Updates

April 3, 2012: Obama administration announces plans to expedite permitting process -- digital process, rather than pen and ink. Current process averages 298 days to approve a permit.  New digital process should drop average time to 60 days or less. Note: this is an administrative change; it will not affect policies such as fracking (see original post). At least now an operator will know in two months, rather than a year, if the permit is denied.

Original Post

Some months ago there were rumors that the native Americans in North Dakota wanted fracking stopped on their reservations. It turns out this rumor had some basis in fact: but it was not the native Americans in the Bakken, but rather those in the Turtle Mountains.
A tribal grassroots organization that urged their local government to ban hydraulic fracturing from happening on their reservation proved to be successful in their endeavors.

At an open public meeting Tuesday morning, the Turtle Mountain Tribal Council passed a resolution that would ban hydraulic fracturing, or "fracking" on the reservation.
This was a non-story. There is no oil under the Turtle Mountains in North Dakota. [See first comment. I stand corrected. I should have used this link: "The Bureau of Indian Affairs’ Dec. 14 lease sale for 45,000 acres in Rolette County is outside North Dakota’s existing oil patch. State records show no oil has ever been produced in the county, but some tribal members believe advanced horizontal drilling techniques and hydraulic fracturing could spur development on Indian land and threaten water sources."]

But this next story is real. It looks like Barack's latest moratorium (BLM) might soon occur in the Bakken.
The chairman of the Three Affiliated Tribes asked a congressional subcommittee Tuesday to help stop the Bureau of Land Management from implementing its proposed regulations on hydraulic fracturing.

Tex Hall told members of the House Appropriations Committee's Subcommittee on Interior, Environment and Related Agencies in Washington, D.C., that the BLM's proposed regulations on hydraulic fracturing, better known as fracking, will hurt energy development on Indian reservations.

"MHA (Mandan, Hidatsa and Arikara) and every other oil and gas tribe in the country was shocked to learn that the BLM is planning to implement new requirements for oil and gas-related fracturing activities on our reservations, especially in light of the fact that the BLM currently has no staffing for this new activity, no standardized process and no proposed system for processing and approving these plans.

This is exactly the type of federal mismanagement of oil and gas resources that tribes have been complaining about for at least the last four years," Hall told the subcommittee members.

The BLM draft proposed fracking rule has not been released to the public yet.
If the BLM goes ahead with "federal fracking rules" we will have another opportunity for the Bakken to provide a laboratory test. In this case, we will be able to see how BLM fracking rules affect about a fifth of the Bakken activity in North Dakota compared to state rules.

The two most prolific Bakken oil fields are the Sanish and the Parshall. About one-third of the Parshall, EOG-owned, is inside the reservation [changed from original post]. The Sanish, Whiting-owned, is mostly outside the reservation.

I believe nearly 100 percent of WPX's activity in North Dakota is inside the reservation, and that KOG has a significant amount of their activity inside the reservation. The reservation in general has some of the best prospects in the Bakken. [Comment: original posting incorrectly said XTO instead of WPX; that was my error. WPX -- formerly WMB -- bought 7 percent of the reservation, and I think that's where the bulk of WPX activity is in the Bakken -- inside the reservation. A reader caught that error. Thank you. XTO has some activity inside the reservation but most activity outside the reservation. A long, long time ago I blogged about a new pipeline that benefited XTO and KOG in Heart Butte and that's why my mind slipped on XTO vs WPX. Corrected Sunday, April 1, 2012, for those keeping score.]

And so it goes.

BLM: Barack's latest moratorium. Slow-rolling the oil and gas industry.

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

These are the fields with some or most of the field inside the reservation:

Prairie Junction
Parshall (the south 1/3)
Van Hook
Big Bend
Reunion Bay
Four Bears
Antelope
Spotted HOrn
Squaw Creek
Mandaree
Heart Butte
Eagle Nest
Deep Water Creek Bay
McGregory Buttes
South Fork
Centennial
Twin Buttes
Moccassin Creek
Bailey
Wolf Bay

EPA To End Lawsuit Against Innocent Bystander

It's a long, long story. I can't remember if I've blogged about it before, but it's pretty much "guilt by association."

"Fracking" is in play and that's why the EPA went after the oil company.

Turns out out to be another bum rap by the EPA.

Here's the link for those interested. And here's a link to the story in the Wall Street Journal, sent to me by a reader.

And again, it's another story that most would have missed had it not been for the Drudge Report.

New England Utility Rate Payers Well Served By Their Elected Leaders

Coal: 6 cents/KWH
Boston's Cape Wind: 20 cents/KWH --> 30 cents/KWH in the outyears -- at cut rate prices (and probably a loss, at that)

Meanwhile (2nd story below): Minnesota Power looking to put 51 bird killers
 in center of North Dakota's migratory flyway

The lede
Boston utility NStar has agreed to pay a starting price for power from Cape Wind project that is substantially higher than the cost of conventional energy and would add about $1 to customers’ monthly bills in the first year the offshore wind farm generates electricity, according to a 15-year contract filed with state regulators Friday.
The article continues:
The price, 18.7 cents per kilowatt hour, is the same as what National Grid agreed to pay when it signed a contract in 2010 to purchase half the power generated by Cape Wind. NStar’s deal is to purchase 27.5 percent of the wind farm’s total output. Since the Cape Wind power represents only about 2 percent of the energy distributed by NStar, it is expected to have a moderate impact on the average customer’s bill, $1.08 a month. Customers in the Boston area pay about $86 a month.

The utilities currently pay about 8 cents per kilowatt hour for electricity, and NStar originally balked at becoming a Cape Wind customer, arguing the wind farm’s cost was too high. That position changed last month, when, after nearly a year of negotiations, state energy officials agreed to endorse a proposed merger between NStar and Connecticut-based Northeast Utilities if NStar made several concessions, including buying power from Cape Wind.

As with National Grid, the price that NStar pays for Cape Wind’s power will increase by 3.5 percent each year to adjust for inflation. By the end of the contract, NStar will pay just over 31 cents per kilowatt hour.
The $1.08 is inconsequential. This is not the story. The rest of the story:
The NStar contract is a milestone for Cape Wind, providing the project with enough assured sales to attract financing. The 130-turbine wind farm is expected to cost more than $2 billion to build in Nantucket Sound.
And the nut of the story:
“Cape Wind would have a substantial impact in reducing spot market prices,’’ said Mark Rodgers, a Cape Wind spokesman. “That ultimately filters back to all of us electricity consumers in New England.’’
Rio, meanwhile, said he thinks that any such savings would actually be “incredibly minuscule.’’
“I don’t know if you’ll ever be able to make money on this thing,’’ he said. “It’s real fuzzy math.’’
My hunch is that ten years from now: a) no Cape Wind; or, b) the "company" will be asking for subsidies from the state government to stay in business. The Netherlands has pulled the plug on wind energy; it makes no economic sense for the Netherlands, even where natural gas is upwards of $12 for mcf in Europe, compared to $2.40 and falling in the US. 

If natural gas is becoming cheaper than coal, this new deal paying 20 cents/kwh for wind is even more disturbing.

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

Meanwhile, Minnesota Power would like to put 51 bird killers in the middle of the migratory flyway in central North Dakota.  Link at Bismarck Tribune for those interested. Interestingly enough, I hear nothing from the Audubon Society or Ducks Unlimited regarding these travesties.

Drilling a 2 x 2 2560-Acre Unit -- Continental Resources -- The Bakken, North Dakota, USA

Updates

Later: see comments. It's been pointed out that the horizontal "pattern" is not "efficient." It has been generally accepted that the direction of fracture varies from location and is similar within the same spacing unit. This proposed "new" configuration goes against that "rule." If CLR goes ahead with this proposal, we may see how valid this "generally accepted rule" or how important it is.

Original Post

How Continental Resources will drill a 2 x 2 2460-acre unit:






A huge "thank you" to RJ for sending me the graphic showing how CLR plans to drill out a 2 section by 2 section 2560-acre unit. This is very different from a 1 section x 4 section unit in which the pad will be placed midway between the four sections, with four horizontals going in one direction, and four horizontals going the very opposite way (or 6 to 8 going one direction, and 6 to 8 going the other way).

By the way, the technology is awesome. I'm sure you can do this on a PC, but on the Apple it was seamless. The graphic above was sent in a format not recognized by the system; simply adding ".jpg" to the graphic and the "blogger" application recognized it. (Unfortunately I can't get rid of that vertical line, but not a big deal.)

Look at the efficiencies a 14-well pad will provide, least of which is one road to one pad, as opposed to 14 roads to 14 individual pads. CLR introduced the Eco-Pad to the Williston Basin just a couple years ago. Things are moving quickly in the Bakken.

Out and About Today: No Posting Until Later This Evening

Lots of archives for folks to go through, though, if interested.

Friday, March 30, 2012

NDIC's April Dockets

Comments regarding this month's docket hearings:

1. You will see a lot of requests for multiple wells on 2560-acre spacing. 2560-acre spacing is not new. This was being addressed back in March, 2010:
  • 12244: Commission; 2560-acre spacing for all future BAKKEN POOL horizontal drilling
  • 12245: Commission; 1280-acre spacing for standup and / or laydown horizontal drilling
  • 12246: Commission; eliminate/reduce the setbacks currently established for heel and toe of horizontal wells in ND
2. There are scores of pooling cases in this month's hearings. Because I consolidate pooling cases into a single line, it is not as obvious, but there are literally scores of pooling cases, pretty much one of the last administrative steps before drilling.

3. 6 wells on a 640-acre unit. We're used to seeing 6 - 7 wells on a 1280-acre spacing unit, but we don't often see six wells in one section (at this point in the boom; later on it will be routine). One example is case 17434, a request by Hess to place as many as wells in one section in the Manitou-Bakken field. The Manitou field is near the bull's eye of the Bakken; and just west of "ground zero" for the oil industry in North Dakota. Another example is case 17499, in which Hess wants to put 6 wells in a 640-acre unit in Alger field, another very, very good field. By the way, the rumored 12-well pad for $100 million is in Alger field. (You know, when Filloon first rumored this, it seemed like a big deal; no longer such a big deal -- and that was just a week ago or so.)

4. The Lodgepole well north of Williston continues to excite some folks, including me. Case 16897, continued from last month, concerns the Oasis Clark well.

5. Marmon oil field is getting a lot of attention. Petro-Hunt wants the field extended by 18 sections in the township to the west. One section (section 34) is already part of the Otter oil field, so I am not sure how that will work out. Case 17444. Marmon field is about 20 miles west-northwest of Ray, which should end up being a pretty good field.

6. BR wants to put 14 wells on a 2560-acre spacing unit. Case 17446.

7. Some crazy trivia. Petro Uno Resources has one (1) permit in the state of North Dakota, file #15167. Petro Uno has an active well, Beta Race Federal 22-6, drilled back in 2001. In this month's hearing, Petro Uno is asking for temporary spacing for this well. Case 17551. This is a Duperow/Red River well that is producing less than 100 bbls/month; cumulative is about 72K since it was spudded in 2001. Initially targeting the Red River, it last produced from that formation on a regular basis in 2006. It re-entered the Duperow in 2010.

8. Hess is requesting to place as many as 6 wells on 1280-acre spacing units in no less than 16 oil fields in the Willison Basin.

9. I've talked often about the legacy formations (Madison, Red River, Duperow). I've opined often that "they" didn't quit drilling the Madison because it had nothing else to offer; they quit drilling when opportunities got better elsewhere. At $100/bbl, the Madison is looking good again. So, Zenergy is going after the Madison with requests for 17 640-acre units and 8 320-acre units in McKenzie and Williams counties. Cases 17579 - 17581. Petro-Harvester is also going after the Madison, case 17444.

10. More interesting trivia. Zenergy is requesting to create 20 1280-acre units in Foreman Butte. This field is already spaced for the most part as 1280-acre units, and yet almost every well in that field is a short lateral. (It's possible, they were drilled when the field was spaced with 640-acre units and has since been changed to 1280-acre, but I have no idea). Case 17582.

11. This is about as active as I've seen Zenergy in any docket. Zenergy is requesting up to 147 wells in four cases, 17750 - 17753.

12. Remember the Cottonwood field that Fidelity discovered, and then sold to Oasis? Look at case 17456: Oasis is requesting spacing for as many as 54 wells in 9 new 1280-acre units, 6 wells each on those units.

Wednesday, April 25, 2012

17432, BEXP, proper spacing for Sandrocks-Bakken, McKenzie
17433, Hess, designate a 1280-acre unit, 6 wells; South Meadow-Bakken, Williams
17434, Hess, add a 640-acre unit; 6 wells, Manitou-Bakken, Mountrail,
17435, Hess, revoke an OXY USA permit, Dunn County
17436, Hess, violated flaring rule, Ross-Bakken, Mountrail
16899, cont'd, Hess, revoke a CLR permit, Williams County
16890, cont'd, Hess, revoke a CLR permit, Williams County
17437, SM, temporary spacing, Nelson 15-11H, McKenzie
17438, SM, to drill Dahl Federal 2-15H within 121 feet of line, Baker-Bakken, McKenzie
16897, cont'd, Oasis, temporary spacing, Clark 12-13H, Williams; enact special field rules as may be necessary; this is the Lodgepole formation well north of Williston
17439, New Millenium Resources, to terminate the Zenith-Tyler "A" Unit, Stark County
17430, cont'd, New Millenium Resources; injection; Zenith-Tyler "A" Unit, Stark County
17440, Petro Harvester, establish a 960-acre unit; Columbus-Madison Pool, 4 horizontal wells; Burke
17441,  Cornerstone Natural Resources, establish a 1280-acre unit, Northeast Foothills-Bakken, Burke
17442, Sequel Energy, establish a 1280-acre unit, McGregor-Bakken; allow 2 hz wells in Temple-Bakken, Williams
17443, Sequel Energy, establish 6 1280-acre units, one well each, Bakken, McKenzie
17444, Petro-Hunt, include 18 new sections in Marmon-Bakken; 5 hz wells on 3 existing 1280-acre spacing units and 5 hz wells on nine proposed 1280-acre units, Williams
17445, BR, establish 3 overlapping 2560-acre units, one or more hz wells between the existing 1280-acre units; Keene-Bakken/Three Forks, McKenzie
17446, BR, establish a 2560-acre unit, 14 wells; up to 7 wells on an existing 1280-acre unit, Sand Creek-Bakken, McKenzie
17447, BR, 2 wells in 640-acre units, Flat Top Butte-Bakken, McKenzie
17364, cont'd, Oasis, establish 2 1280-acre unit; 1 well each, Bakken, Burke
16634, cont'd, Windsor Energy, establish 5 1920-acre units, Van Hook-Bakken, Mountrail
16125, cont'd, XTO, revoke a CLR permit, McKenzie
15676, cont'd, XTO, revoke a CLR permit, McKenzie
16913, cont'd, Whiting, establish a 1280-acre unit, 4 wells, Billings
17448, American Eagle, amending field rules in Colgan-Bakken, Divide
17372, cont'd, CLR, revoke a Liberty Resources LLC permit, Williams
17449, QEP, create 2 1280-acre unit, 1 hz well each, McLean County
17450, QEP,  4 wells in 640-acre unit; 4 wells in another 640-acre unit, Heart Butte-Bakken, Dunn
17451 - 17454, Petro Harvester, pooling
17455, Cornerstone Natural Resources, pooling
17456, Oasis, 6 wells each on 9 1280-acre units, Cottonwood-Bakken, Mountrail (54 wells)
17457, Oasis, 6 wells on a 1280-acre unit, Sanish-Bakken, Mountrail
17458 - 17488, Oasis, pooling
17489, Hess, 6 hz wells on a 1280-acre unit, Rainbow-Bakken, Williams
17490, Hess, 6 hz wells on 2 1280-acre units, Marmon-Bakken, Williams
17491, Hess, 6 hz wells on a 1280-acre unit, Midway-Bakken, Williams
17492, Hess, 6 hz wells on a 1280-acre unit, White Earth-Bakken, Mountrail
17493, Hess 6 hz wells on a 1280-acre unit, Tioga-Bakken, Mountrail
17494, Hess, 6 hz wells on a 1280-acre unit, Pleasant Valley-Bakken, Mountrail
17495, Hess, pooling
17496, Hess, 6 hz wells on 3 1280-acre units, Sorkness-Bakken, Mountrail
17497, Hess, 6 hz wells on 3 1280-acre units, Tyrone-Bakken, Williams
17498, Hess, 6 hz wells on 2 1280-acre units, Baskin-Bakken, Mountrail
17499, Hess, 6 hz wells on a 640-acre unit, and on a 1280-acre unit, Alger, Mountrail
17500, Hess, pooling
17501, Hess, 6 hz wells on  a 1280-acre unit, Capa-Bakken, Williams
17502, Hess, 6 hz wells on a 1280-acre unit, Alkali Creek-Bakken, Mountrail
17503, Hess, 6 hz wells on a 1280-acre unit, Truax-Bakken, Williams
17504, Hess, 6 hz wells on a 1280-acre unit, Robinson Lake-Bakken, Mountrail
17505, Hess, 6 hz wells on a 1280-acre unit, Banks-Bakken, McKenzie
17506, Hess, 6 hz wells on a 1280-acre unit, Lone Butte-Bakken, Dunn
17507, Hess, 6 hz wells on a 1280-acre unit, Jim Creek-Bakken, Dunn
17508, Hess, 6 hz wells on a 1280-acre unit, Beaver Lodgge-Bakken, Williams
17509, Hess, 6 hz wells on a 1280-acre unit, Big Butte-Bakken, Mountrail
17510, Hess, 6 hz wells on a 1280-acre unit, Dollar Joe-Bakken, Williams
17511, Hess, 6 hz wells on a 1280-acre unit, Lone Tree Lake-Bakken, Williams
17512, Hess, 6 hz wells on a 1280-acre unit, Manitou-Bakken, Mountrail, Williams
17513, Hess, 6 hz wells on a 1280-acre unit, Oliver-Bakken, Williams
17514, Hess, 6 hz wells on a 1280-acre unit, Ray-Bakken, Williams
17515, Hess, 6 hz wells on a 1280-acre unit, Wheelock-Bakken, Williams
17516, BR, pooling
17517, BR, pooling
17518, Petro-Hunt, 5 hz wells on 2 1280-acre units, Dublin-Bakken, Williams
17519, Petro-Hunt, 5 hz wells on 4 1280-acre units, Ellisville-Bakken, Williams
17520 - 17522, Petro-Hunt, pooling
17523 - 17524, BR, pooling
17525, BR, 7 hz wells on a 1280-acre unit, Westberg-Bakken, McKenzie
17526, BR, 7 hz wells on 2 1280-acre units, North Fork-Bakken, McKenzie
17527, MRO, commingling Strommen wells, Dunn
17528 - 17529, American Eagle, pooling
17530, Slawson, Davis Exploration, risk penalty legalese, Mountrail
17531, Slawson, Davis Exploration, risk penalty legalese, Mountrail
17532, KOG, risk penalty legalese, Divide
17533, KOG, risk penalty legalese, Williams
17534, KOG, risk penalty legalese, Williams
17535, KOG, risk penalty legalese, Williams
17536, KOG, risk penalty legalese, Williams
17537, KOG, risk penalty legalese, Williams
17538, KOG, risk penalty legalese, Williams
17539, SBG, SWD
17540, Petro Harvester, SWD
17541, Petro Harvester, SWD
17542, Petro Harvester, SWD
17543, Maverick, SWD
17544, Marquis, SWD
17545, Bosque, SWD
17546, Mann, SWD
17547, SB, SWD

Thursday, April 26, 2012

17548, Fidelity, temporary spacing, Wanner 44-23H, Stark
17549, Slawson, temporary spacing, Condor 1-36-25H, McKenzie
17550, Slawson, a dual lateral in each of 2 640-acre units, Big Bend-Bakken
17210, cont'd, Slawson, establish a 1280-acre unit, 7 wells, Sand Creek-Bakken, McKenzie
17551, Petro Uno Resources, temporary spacing for Beta Race Federal 22-6, Billings
17552, EOG, proper spacing for developemnt of Little Butte-Bakken, Burke
17553, Sinclair, extend and establish a 1280-acre unit, 1 well, Parshall-Bakken, Mountrail
17554, BEXP, temporary spacing, McKenzie
17555, CLR, KOG, proper spacing for Wildrose-Bakken, Divide
17556, CLR, KOG, Newfield, proper spacing for Pembroke-Bakken, McKenzie
17557, CLR, establish a 1280-acre unit, 1 hz well; Antelope-Sanish, McKenzie
17558, CLR, create 4 overlapping 2560-acre units; Brooklyn-Bakken, multiple hz wells; Williams
17559, CLR, create 3 overlapping 2560-acre units; Dollar Joe-Bakken, multiple hz wells, Williams
17560, CLR, create an overlapping 2560-acre unit, Oliver-Bakken, multiple hz wells, Williams
17561, CLR, create 2 overlapping 2560-acre units, Rainbow and Oliver-Bakken, multiple hz wells, Williams
17562, CLR, create an overlapping 2560-acre unit, multiple hz wells, Indian Hill, McKenzie
17563, CLR, create a 2560-acre unit, multiple hz wells, Indian Hill, MeKenzie, Williams
17564, CLR, create an overlapping 2560-acre unit, multiple wells, North Tobacco Garden-Bakken, McKenzie
17565, CLR, create an overlapping 2560-acre unit, multiple wells, Squires-Bakken, Williams
17566, CLR, create an overlapping 2560-acre unit; 2 overlapping 2560-acre units; and, an overlapping 2240-acre unit; multiple wells, Hebron-Bakken, Williams
17567, CLR, create an overlapping 2560-acre unit, multiple wells, Camp-Bakken, McKenzie
17568, CLR, create an overlapping 2560-acre unit, and an overlapping 2880-acre unit, multiple wells; Crazy Man Creek-Bakken, McKenzie, Williams
17569, CLR, create three overlapping 2560-acre units, multiple wells, Banks-Bakken, McKenzie, Williams
17570, CLR, extend, create 2 1920-acre units, 1 well each, Baker and/or Last Chance-Bakken, McKenzie, Williams
17571, CLR, extend, create a 1280-acre unit, 1 well, Little Knife-Bakken, Billings
17572, Encore Energy Partners Operating LLC, create a 640-acre unit, 1 well, Horse Creek-Red River "B", Bowman
17573, Encore, create an overlapping 320-acre unit, 1 well, Buffalo Wallow-Madison, McKenzie
17574, Enerplus, 4 wells on a 1280-acre unit, Eagle Nest-Bakken, McKenzie
17575, Hunt, create  an overlapping 1280-acre unit, 3 wells, Parshall-Bakken, Mountrail
17576, Hunt, create a 1280-acre unit, 1 wells, Bear Butte-Bakken, McKenzie
17577, Hunt, create 2 1280-acre units, 1 well on each, Buffalow Wallow-Bakken, McKenzie
17578, Denbury, alter the stratigraphic limits of the pool, Siverston-Bakken, McKenzie
17579, Zenergy, establish 15 640-acre units; and, 2 320-acre units; 2 wells on each, Nobly Lake, Dore, and/or Assiniboine-Madison pools (34 wells), McKenzie
17580, Zenergy, create 4 320-acre units, 1 well each, Dublin-Madison, Williams
17581, Zenergy, create 4 320-acre units, 1 well each, Marmon-Madison, Williams
17582, Zenergy, create 20 1280-acre units, 7 wells each, Foreman Butte-Bakken, McKenzie
17583, Scott Environmental Services, statewide portable waste treatment
17584, 212 Water Serivces, multiple portable waste treatment plants
17187, cont'd, Chesapeake, temporary spacing for Zent 30-138-95, Stark
15737, cont'd, Legacy Oil, temporary spacing, Bottineau County
16425, cont'd, Zavanna, temporary spacing for Koufax 3-10 1H, McKenzie
17212, cont'd, Liberty Resources, revoke a Zenergy permit, McKenzie
17585, Clean Fluid Solutions, treatment of drilling fluids, Dunn
17586, Sawyer Disposal, portable waste treatment
17587, Atlas Oilfield Construction, operate portable waste treatment
17588, GADECO, complete the Golden 25-13H well, Williams
17213, cont'd, GADECO, establish a 1280-acre uit, 1 well; Williams
17589 - 17619, Slawson, pooling
17620, Slawson, flaring, Ross-Bakken, Mountrail
17621, Slawson, 4 640-acre units, 2 wells each; 2 overlapping 1280-acre units, 5 wells each, Big Bend-Bakken, Mountrail
17622, Slawson, 4 1280-acre units, 6 wells each, Boxcar Butte-Bakken, McKenzie
17623, XTO, pooling
17624, XTO, flaring, Sorkness-Bakken, Mountrail
17625, XTO, 2 1280-acre units, 8 wells each, Bear Creek-Bakken, Dunn
17626, XTO, 2 1280-acre units, 8 wells each, Truax-Bakken, Williams
17627, CLR, risk penalty legalese, Divide
17628 - 17636, CLR, pooling
17220, cont'd, CLR, risk penalty legalese, Divide
17637, CLR, flaring, East Fork-Bakken, Williams
17638, CLR, 3 1280-acre units, 7 wells each, East Fork-Bakken, Williams
17639 - 17640, BEXP, pooling
17641 - 17644, BEXP, flaring
17645, BEXP,  8 wells on a 1280-acre unit, Lake Trenton-Bakken, Williams
17646, BEXP, SWD
17647, BEXP, SWD
17648 - 17689, EOG, pooling
17690, EOG, 3 1920-acre units, 2 wells each, Parshall-Bakken, Mountrail
17691, EOG, flaring
17692, EOG, SWD
17693, EOG, Swd
17694, Arsenal, pooling
17695 - 17697, Triangle, pooling
17698, Hunt, pooling
17699, Hunt, risk penalty legalese, McKenzie
17700, Hunt, risk penalty legalese, McKenzie
17701, Hunt, flaring
17702, Hunt, 3 1280-acre units, 4 wells each, Lake Ilo-Bakken, Dunn
17703, Hunt, 1 1280-acre unit, 4 wells, Bailey-Bakken, Dunn
17704, Hunt, 4 1280-acre units, 4 wells each, Werner-Bakken, Dunn
17705, Newfield, pooling
17036, cont'd, risk penalty legalese, McKenzie
17706 - 17723, WPX, pooling
17724, WPX, a 1280-acre unit, 7 wells, Reunion Bay-Bakken, Dunn
17725, WPX, a 640-acre unit, 3 wells, Spotted Horn-Bakken, McKenzie
17726, WPX, a 320-acre unit, 2 wells, Mandaree-Bakken, Dunn
17727 - 17736, Samson Resources, pooling
17737, Samson Resources, flaring
17738, Samson Resources, commingling Duperow, Red River, and Birdbear pools, Golden Valley
17739, Samson Resources, flaring
17740, Samson Resources, flaring
17741, Samson Resources, flaring
17742, Samson Resources, flaring
17743, Samson Resource, flaring
17744, Baytex, flaring
17745, Baytex, 3 1280-acre units, 7 wells each, Lone Tree Lake-Bakken, Williams
17746, Liberty Resources, flaring
17747, Crescent Point, flaring
17748, Crescent Point, flaring
17749, Zenergy, flaring
17750, Zenergy, 11 1280-acre units, 7 wells each, Banks-Bakken, McKenzie (77 wells)
17751, Zenergy, 5 1280-acre units, 7 wells each, Siverston-Bakken, McKenzie (35 wells)
17752, Zenergy, a 1280-acre unit, 7 wells, Elidah-Bakken, McKenzie
17753, Zenergy, 4 1280-acre units, 7 wells, Painted Woods-Bakken, Williams (28 wells)
17754, Denbury, SWD
17755, Zavanna, SWD
17756, Silver Oak, SWD
17757, Kihle, SWD
17758, Alexander, SWD
17759, Environmentally Clean Systems, SWD
17760, Flatland, SWD
16863, cont'd, Corinthian, commingling, Bottineau

Eight (8) New Permits -- The Williston Basin, North Dakota, USA

Daily activity report, March 30, 2012 --

Operators: Hess (6), EOG (2)

Fields: Alkali Creek, Cottonwood, Parshall

Eight (8) wells released from "tight hole" status; only one (1) was completed/fracked (incredible; still a backlog).

The one well that was completed was Petro-Hunt's Pankake well sited just inside Dublin oil field, but a wildcat, so probably running north of Dublin oil field.

Whiting had four more wells approved for "tight hole" status.

Dublin Oil Field North of Williston Along Divide County Line Is Now A Bit Bigger

Link here.

NDIC April Dockets are Posted

I will work on them over the weekend.

But to whet your appetite: one case requesting 14 wells on a 2560-acre spacing unit.  (Earlier today I mentioned the possibility of CLR putting in 16 wells on one 2560-acre spacing pad, so I wasn't hyping the Bakken potential.)

Also, I might comment on this new story.

But I may not be blogging for the rest of the day.

Good luck to all.

Another Obama First!

Come April 1, 2012 -- this Sunday -- the US will have the highest corporate tax rate in the world.

It is ironic. Who would have thought the country known for free market capitalism now has the highest corporate tax in the world...and then we wonder why our economy is in the shape it's in.

Anyone who tells me taxes need to be raised....well, they probably won't see their comment posted.

Random Discussion on Spacing Units in the Bakken -- The Brooklyn Oil Field, North Dakota, USA

Much has been discussed elsewhere regarding size of spacing units in the Bakken. If you go to that link, you can search for other discussions regarding size of spacing units.

So this is of interest:
March 28, 2012, NDIC hearing dockets; Case No. 17195:  
Application of Continental Resources, Inc. for an order amending the field rules for the Brooklyn-Bakken Pool to create two 2560-acre spacing units comprised of Sections 14, 23, 26 and 35; and Sections 18, 19, 30 and 31, T.155N., R.98W., Williams County, ND, authorizing the drilling of multiple horizontal wells from said well pad within each 2560-acre spacing unit; eliminating any tool error requirements and such other relief as is appropriate.
All spacing units in the Bakken-Brooklyn are currently 1280-acre, according to the NDIC GIS map server; and all units are currently held by production (Continental Resources), including the eight sections noted above in case no 17195.

Unless I am missing something CLR is not asking for larger spacing units as "a land grab" to hold leases by production. The horizontals will continue to be long horizontals (two sections) but mineral owners in any of the four sections will benefit from a successful well.  Obviously CLR can put 8 - 16 wells on one pad with 4 - 8 wells going south and 4 - 8 wells going north.

If nothing else, the oil from all four sections, from the entire 2560-acre unit, can be commingled into one set of tank batteries. It seems this would make the entire operation much more efficient. If trucks are still picking up the oil, one truck can pick up oil from multiple wells; once pipelines are in place, the same thing; one does not have to worry about what oil is coming from which well. Extrapolate this to a unitizing the entire field and one can see the efficiencies. My 2 cents worth. Hopefully someone can provide "professional" insight.

Of course, it goes without saying, all the efficiencies with multiple wells on one pad, but CLR could have done that with the current 1280-acre spacing so that is not an explanation for the request of 2560-acre spacing units.

[August 18, 2012: I missed a big reason why 2560-acre spacing is of value. Heels and toes of horizontal wells must be set back a minimum number of feet from the spacing unit line. If the requirement is 500 feet and the spacing unit is one section (one mile, or 5,280 feet on a side), 500 feet at the heel and 500 feet at the toe = 1,000 feet, or almost 20% of the length of the spacing unit is lost. With 2560-acre spacing, at most the operator loses 500 feet at the toe. Since they are still drilling long laterals, that is 500 feet over two miles (10,560 feet), or less than 5%. This is the reason the operators want larger spacing units with horizontal wells in the Bakken. In one of the polls at the blog I asked whether it was better to have 1280-acre or 2560-acre spacing; the majority said 1280-acre spacing. The majority was wrong.]

Update on the Whiting Sanish Oil Field Wells -- The Early Years

Just how good has the Sanish oil field been for Whiting? Below are the permits/file numbers from 16000 to 17999 that are Whiting wells in the Sanish oil field. We are starting to get data from wells that are five years old (just a few), but even these "old" wells only go back to 2008/2009/2010 for the most part, and thus most are still less than four years old. And these wells will go on to produce for 30 years.

No dry wells. Two permits were canceled.

Anyone doubt that all of these wells have EURs of 750, and some will eventually hit a million bbls? I assume these wells are pretty much paid for by now.

File number, spud month/year; cumulative as of 1/12; current monthly production (for selected)
  • 16068, s6/08, 140K; currently 1,000 bopm
  • 16081, PNC
  • 16092, s3/06, 28K; currently 400 bopm
  • 16463, s12/06, 331K; currently 3,000 bopm
  • 16731, s8/07, 392K, currently 4,000 bopm
  • 16734, s12/07, 156K, currently erratic production; 9,000 bbls/month as recently as 10/11
  • 16780, s9/07, 385K, currently 4,000 bopm
  • 16781, s11/07, 368K, currently 4,000 bopm
  • 16852, 1/08, 313K, currently erratic production; before taken off-line for 5 months, 5K bopm
  • 16871, s3/08, 260K, currently erratic production; last two months, 5K bopm
  • 16902, s2/08, 289K, currently 4,000 bopm
  • 16905, s5/08, 162K, currently 1,800 bopm
  • 16934, s3/09, 214K, currently 4,000 bopm
  • 16938, PNC
  • 17023, s3/08, 506K, currently 1,500 bopm
  • 17032, s2/08, 256K, off line
  • 17035, s5/08, 584K; HUGE; currently as much as 10,000 bopm; Kannianen 11-4H, currently 3.5 wells on this 1280-acre spacing unit, including #17907
  • 17072, s5/08, 395K, erratic; 5,000 bopm most recent month
  • 17080, s8/09, 240K, erratic; 5,000 bopm
  • 17081, s8/08, 496K, erratic; 8,000 bopm
  • 17092, s4/08, 789K, erratic; 10,000 bopm, Behr 11-34H, 34-154-91; currently there are only two wells in this section (the other being #17872; a third is in DRL status); eventually there will be as many as 8 wells in these spacing 1280-acre spacing units; some evidence (but the jury is still out on this) that neighboring wells can affect each other's EURs
  • 17115, s1/09, 203K, 4,000 bopm
  • 17133, s6/08, 350K; off line last few months; prior, 4,000 bopm
  • 17134, s6/08, 331K, 4,000 bopm
  • 17137, s6/08, 168K, erratic, 3,000 bopm
  • 17157, s2/09, 122K
  • 17158, s8/08, 669K, Richardson Federal 11-9H; currently three wells on this spacing unit including #17917; see comments above for #17092
  • 17240, s8/08, 136K
  • 17253, s7/08, 310K
  • 17284, s9/08, 98K
  • 17285, s12/08, 105K
  • 17326, s3/10, 197K
  • 17337, s1/09, 119K
  • 17357, s1/09, 96K
  • 17443, s11/08, 297K
  • 17544, s3/09, 241K
  • 17552, s11/08, 121K
  • 17554, s11/08, 109K
  • 17575, s11/08, 413K
  • 17586, s9/08, 298K
  • 17603, s2/09, 319K
  • 17605, s9/08, 181K
  • 17612, s8/09, 529K
  • 17643, s2/09, 120K
  • 17700, s12/08, 377K
  • 17776, s2/10, 248K
  • 17794, s1/09, 366K
  • 17827, s4/09, 101K
  • 17872, s2/10, 322K
  • 17892, s4/09, 79K
  • 17895, s4/09, 256K
  • 17907, s12/09, 338K
  • 17908, s1/10, 231K
  • 17912, s12/09, 465K
  • 17917, s2/10, 285K
  • 17939, s8/10, 73K
  • 17935, s2/10, 147K
  • 17964, s5/09, 84K
  • 17991, s9/09, 87K
If one does the math, calculating production per acre based on EURs of 500K and 8 wells per 1280-acre spacing unit, the numbers are staggering: 3,000 bbls per acre over the lifetime of a Sanish well. At $50/bbl, $150,000/acre. 

    State to Give Oil Patch $12 Million for Emergency Services and $5 Million for Schools

    Link to Bismarck Tribune here.

    It may be just me, but it certainly seems the state is moving aggressively to assist infrastructure needs in the oil patch (this story) plus the earlier story on the highway projects planned for this summer.

    From the link:
    The state will give strained emergency services in western North Dakota a $12 million boost — $5 million more than initially planned — plus $5 million for fast-growing Oil Patch schools.

    Gov. Jack Dalrymple said the needs for dealing with the oil boom are much greater than anybody thought even a few months ago. The $12 million “will make a significant difference in the delivery of emergency services in oil country,” he said.

    The state Board of University and School Lands unanimously agreed Thursday to add $5 million for emergency services to the initially planned $7 million.
    The additional money for the schools is wonderful news. It was only a few months ago I blogged that the schools needed help. It was amazing the amount of "hate mail" I received for suggesting that the taxpayers should provide more assistance to the schools.  I did not post those comments: vulgar and did not add anything to the discussion. But I was quite surprised. Regardless, this is great news -- the additional state money for the schools.

    Stark County Okays Oil Waste Facility -- But NOT BEFORE HAMMERING THE COMPANY -- Dickinson Press

    Updates

    April 4, 2012: zoning commission receives petition to stop this waste facility.
    A zoning commissioner thinks other Stark County representatives were too hasty in approving an oil waste facility near Belfield, and recommends the North Dakota Department of Health take a closer look at the project.

    Zoning Commissioner Chuck Steffan, who lives near the building site, represented many of his neighbors when he presented Stark County commissioners with a petition opposing the project during Tuesday’s meeting at the Stark County Courthouse in Dickinson. Steffan added that the petition included “at least 125” signatures, and he thinks county representatives should revisit the project.
    Suggestion: put it in Billings or Dunn County. 

    Original Post

    Link here to Dickinson Press.
    Stark County commissioners gave an Oklahoma company the green light to build an oil waste facility near Belfield, but not before hammering the company’s lead representative with questions and hearing out concerns of unsupportive residents.
    And, of course, NIMBY:
    Connie Fulton, who lives east of the building site, said she has a problem with the site’s location, not its existence.
    And then talking out of both sides of his mouth:
    Hoff said he voted against the project, but only because he thought it might have been beneficial to wait to make a decision. However, he believes the facility is a worthy project.

    “I just want to say I do think this is an OK thing,” Hoff said.

    Update on Highway Projects Planned For This Summer in North Dakota's Oil Patch

    Updates

    November 29, 2012: from The Bismarck Tribune -- Williston's truck reliever route just hit a speed bump. Huge speed bump. Back to square one.
    An amazing array of archaeological features ended hopes of building a bypass around northwest Williston preferred by officials because it’s shortest, closest and cheapest.
    The State Department of Transportation built a temporary northwest bypass earlier this year, but a preferred route for a permanent one has been fairly well stopped in its tracks by the discovery of more than 8,000 ancient archaeological features, including burials and cemeteries along both sides of the route.
    This is too big a deal for the DOT to overcome. Oh, well. It looks like the temporary route is going to be a bit more permanent.
     
    November 28, 2012: from The Dickinson Press --
    The widening of North Dakota Highway 22 in north Dickinson is near completion as crews install traffic lights.
    Once the lights are running, control of them will be turned over to the city, Olson said.
    The project, which began May 29, cost $17 million, said North Dakota Department of Transportation spokeswoman Jamie Olson. The paving and addition of three lanes was complete at the end of October.
    “It’s to help control the flow of traffic, there’s an increase of traffic in that area,” she said. “It sounds like that (area) will continue to grow.”
    It is one of many major road construction projects NDDOT began in 2012 in the Oil Patch. Others include improvements to the intersection of U.S. Highway 2 and N.D. Highway 85, N.D. Highway 8, N.D. Highway 23 and developing a truck reliever route for Williston.
    Original Post

    Last summer, the state did a great job widening the highway between Williston and Watford City, but it was an interim fix to the ultimate goal: four-lane, divided highway. The governor says an additional environmental document is needed. No further details were provided in the Bismarck Tribune article.

    The governor also said that plans were afoot to build a new Little Missouri River bridge on Highway 85 south of Watford City.

    The article listed the other projects planned for this summer in the oil patch:
    • rebuilding and additional road repairs to U.S. Highway 2 north of Williston to the U.S. Highway 85 junction and east of Ray
    • widening and adding passing and turning lanes to N.D. Highway 23, east of New Town to N.D. 37.
    • expanding N.D. Highway 22 north of Dickinson to the county line
    • adding turn lanes and passing lanes to N.D. Highway 22, 12 miles north of Killdeer to Lost Bridge
    • widening and adding passing and turning lanes to N.D. Highway 22, from N.D. 73 to N.D. 23
    • developing Williston’s temporary and permanent truck-reliever routes

    Statoil Using Natural Gas to Power Rigs -- Maybe This Will Make The F&C Asset Management Folks Happy -- The Bakken, North Dakota, USA

    Statoil using natural gas directly from the wellhead to power their rigs. For newbies: Statoil recently bought a Bakken pioneer: BEXP.

    Here's the story:
    A new use for natural gas flares is making an entrance in the Williston Basin. Diesel engines are being converted to use a diesel and natural gas mixture instead of straight diesel fuel. Eco Alternative Fuel Systems, Inc (ECO AFS). has installed the bi-fuel system on five Statoil rigs in North Dakota, according to Jeff Anderson, Eco AFS regional manager.

    By doing the bi-fuel system on the diesel engines and also converting their boiler to operate on natural gas, one rig in one year will save approximately $1 million in diesel costs. Not only that it creates better emissions. It’s a cleaner fuel, and we triple the run time of the diesel they have,” Anderson said.

    Anderson said 50-60 percent of the fuel mixture, after conversion, is natural gas. The gas can be piped to the rig from a nearby gas flare or pipeline. It can also be trucked in if no flare is nearby, which will cut down on some of the truck traffic, he said.

    “Right now this gas is just the raw gas coming right out of the Bakken formation,” Anderson said.
    Link here to an Encana initiative to use natural gas to power drilling rigs in the field
    The North American natural gas industry is in search of an environmental and economic solution to address significant fuel use. Because natural gas has potential for widespread applications, it is critical that early adopters within the industry help trigger greater use.

    With testing and improvements, growing infrastructure and industry-wide collaboration regarding natural gas viability, powering rig operations with natural gas is becoming a reality for several operators–paralleling broader trends in the U.S. transportation sector and the growing movement to convert over-the-road trucks and fleet vehicles from diesel and gasoline to natural gas.

    By using this engine technology to fuel drilling rigs, we have the opportunity to make an enormous impact on overall fuel consumption across the United States and on a global level. Encana tested its first natural gas-powered rig in the United States in 2005. With the success of that initial test, we have expanded our portfolio, both in the United States and Canada, with 16 natural gas-powered rigs running this summer in Encana’s field operating areas. Two additional gas-fired rigs are planned by year’s end.

    ­There are two main types of engine technology used to implement natural gas into our operations. Among the natural gas-powered rigs Encana is operating, six use dual-fuel technology and 10 have dedicated natural gas engines. The source or type of natural gas used as a fuel also varies. Twelve of the rigs use field gas produced from the fields in which they are drilling. Four use liquefied natural gas because of limited natural gas distribution availability in the field, or the need to supply fuel that is highly mobile because of frequent rig moves or short drilling cycles. LNG offers the ability to move rigs outside of an area that is using field gas and provides a high-quality and reliable source of fuel.
    Again, new technology being used and studied in the Bakken.

    Hopefully this will help make the folks over at F&C Asset Management happy. I doubt it.

    Thursday, March 29, 2012

    Petro-Hunt Well Near Dublin Oil Field Targeting the Madison Formation -- The Williston Basin, North Dakota, USA

    Remember that string of wells Petro-Hunt is drilling near Dublin oil field, and folks wondering which formation Petro-Hunt is/was targeting? Here's the first well to be reported. Petro-Hunt was targeting the Madison with this well. 

    Brooklyn Field Updated -- The Bakken, North Dakota, USA

    Link here.

    Burlington Resources With Another Midnight Run Permit in Union Center Oil Field -- The Bakken, North Dakota, USA

    This is an opportunity to take another look at Union Center oil field; it's been updated.

    This new well will be the 7th well on section 1-T152N-R96W, and there's room for more. The IPs are 2,000+.

    Nebraska: Quickly Becoming the Laughing Stock of America, The World ...

    Link to AP/Yahoo News.
    A bill that would let Nebraska resume its environmental study of the proposed Keystone XL pipeline won first-round approval from lawmakers Thursday, while critics warned that the state was exposing itself to a legal challenge.

    Lawmakers voted 35-2 on the measure that would allow the stalled review to proceed. President Barack Obama rejected a federal permit for the project in January, but pipeline developer TransCanada has said it will reapply.

    Malcolm Sen. Ken Haar, an outspoken pipeline opponent, said the bill would open the state to a court challenge. Haar said the bill qualified as unconstitutional special legislation that could apply only to TransCanada. He said TransCanada was "a victim of its own machinations" by pressuring Congress to try to force the president's approval.
    If you don't understand this, what the senator is saying is that at some point down the road, he will take this to the Supreme Court of Nebraska, arguing that it is unconstitutional to hold a special legislative session to discuss one issue. So, Nebraska will go down the long road of studying this proposal, spending millions of dollars in the process, going through each painstaking step, knowing that it will be all taken to court anyway. The silver lining in this cloud: it's Nebraskan taxpayers' money.

    You think this is about the aquifer? This has nothing to do with the aquifer. This is about faux-environmentalists who will stop at nothing to stop the Keystone XL 2.0. 

    Approval to get the pipeline through Nebraska will be tied up in court "forever," and TransCanada cannot proceed without this, unless they want to skirt Nebraska completely. Forget about going to the west of Nebraska: Colorado will be even worse. 

    Nope, Obama killed the Keystone XL 1.0, giving unprecedented moral support to faux-environmentalists intent on stopping any more oil activity in Nebraska. This is becoming an international joke,  a sad commentary on American industry today. Meanwhile the faux-environmentalists will ensure that thousands of unnecessary trucks and unit trains will continue carrying oil south from the Bakken.

    The NDIC Reported IP for the G3 Operating Well -- Incorrect -- A TYPO -- The Bakken, North Dakota, USA

    21083, 4,113, 413, G3 Operating, Doris 1-28-33H, s9/11; t1/12; F; cum 6K; a wildcat in the far northwest corner of Williams County, about 22 miles northwest of Williston; target was the Upper Bakken; 30 stage frack with 3 million lbs white sand.

    The original from G3 Operating shows the IP to be 413. The NDIC erred in the transcription.

    Elsewhere, readers have not yet picked up on this error (12:20 a.m., March 30, 2012). 

    Seven (7) New Permits -- A TYPO Affecting a G3 Well -- Another Re-Completed Well -- The Williston Basin, North Dakota, USA

    Daily activity report, March 29, 2012 --

    Operators: OXY USA (2), XTO, Crescent Point, BR, Oasis, CLR

    Fields: Union Center, Alger, Fayette, Brooklyn, and West Capa

    Crescent Point Energy has a permit for a wildcat in Williams County.

    Three (3) wells were released from "tight hole" status; only one was completed/
    fracked, but it was a good one (it must have set some kind of record assuming it's not a typo):
    • 21083, 4,113, 413,  G3 Operating, Doris 1-28-33H, s9/11; t1/12; F; cum 6K; a wildcat in the far northwest corner of Williams County, about 22 miles northwest of Williston; target was the Upper Bakken; 30 stage frack with 3 million lbs white sand; to the best of my knowledge, this is the first time this well has been mentioned on this blog. The IP reported by NDIC is a typo (as noted above, I suggested this might be a typo): G3 Operating reports the IP to be 413 on the original well file.
    One well was recompleted:
    • 7631, Missouri River Royalty Corp, Henry Torstenson 1, McKenzie, From Red River to Duperow

    Obama Wants to End Long-Standing Tax Breaks On Big Oil; Shift Revenue to Solyndra, Algae

    Updates

    January 3, 2012: CarpeDiem's look at "Big Oil" subsidies and tax breaks

    Later, same evening: Senate votes 51-47 to defeat the Obama proposal. Needed 60 votes to pass. Ms Olympia Snowe (R) who complains about difficulty of working with Obama, voted with Obama on this one. Article refers to "depletion allowance" as subsidies. Oil money would have been used for more "Solyndras; for whooping crane killers; and, for coal-powered cars.  [Note: Ms Olympia Snowe gives the president an "F" "in paying attention to Olympia Snowe." -- see second link.]

    Later: White House cannot explain why Obama has flip-flopped on the issue. In 2005, he voted for the energy bill with a lot of tax breaks for the oil and gas industry.

    Original Post
    Link here.
    Many congressional Republicans say cutting the tax breaks would lead to higher fuel prices, raising costs on oil companies and affecting their spending on exploration. Obama couldn't end the subsidies when Democrats controlled Congress earlier in his term.
    He may have better luck this time with rising gasoline prices, but most folks know that increased taxes on "Big Oil" will be passed on to the consumer. This is not rocket science.

    Maybe he's got it all wrong. Make it easier for "Big Oil" to drill, and support lower corporate taxes, and we might actually see lower prices at the pump.

    Investors "Demanding" Drillers Come Clean About Amount of Flaring -- Another McGuffin

    Corporate social responsibility
    Based in London 
    Hours after this story, the oil patch provides an answer

    Updates

    March 29: 2012: Several hours after posting the story below, I came across a story in today's Williston Herald about Statoil (recently bought BEXP in the Bakken) using flared natural gas directly from the well to power the rigs. This should take a bit of the wind out of the F&C Asset Management sails.

    Original Post

    To best of my knowledge, flaring data from North Dakota is freely and easily available from public sources. Regardless, oilmen are working this issue hard in North Dakota and ONEOK has taken advantage of it. At its best (when natural gas was priced a lot higher than it is now), the natural gas produced in North Dakota as a by-product of oil drilling accounted for less than 3 percent of the industry's economic play in North Dakota. Less than 3 percent.

    See Reuters link here.
    Investors representing $500 billion in assets are pushing energy companies in the shale oil rush in North Dakota and other states to disclose the amount of natural gas they burn - a practice they see as a wasteful financial risk.

    "We want to encourage companies to articulate plans for resolving this issue while shale oil production is still in its relative infancy," said Karina Litvack, the head of governance and sustainable investment at F&C Asset Management.

    Litvack is one of 36 investors who sent a letter to 21 oil drillers including Continental Resources Inc, Exxon Mobil, and Chesapeake Energy Corp asking them to disclose the amount of natural gas they are burning off, or flaring, at shale oil operations in North Dakota, Texas, Colorado and Ohio.
    Regular readers know that the "wasteful financial risk" is a McGuffin.  In fact, oil and gas industry investors have much more to lose if a choke hold is placed on the oil and gas industry with regard to flaring. The price of natural gas is dropping fast, and might even go below $1 according to reports yesterday, though most folks don't think it will go much below $2.

    Natural gas is a natural byproduct of drilling for oil and with oil commanding record high prices, the threat of "wasteful financial risk" is an outright lie. It will be interesting to see if we the "real" story behind the headline.

    For more about F&C Asset Management, start with wiki:
    F&C Asset Management Plc is a leading asset management company. Unlike many asset managers which are divisions of large financial firms such as banks, F&C Asset Management (known as F&C) is a standalone publicly-listed asset manager. It is an active shareholder with a strong commitment to corporate social responsibility. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.
    Regardless, this will be a great opportunity for folks to learn more about the great investment opportunities to be had in the Bakken.

    Disclaimer: I was not one of the 36 investors who, along with Litvack, sent any letters to any oil company regarding flaring.

    Initial Jobless Claims -- Fall Less Than Expected

    Remember, the magic number is 400,000

    Updates

    Later: my hunch was correct with regard to "the spin." MSNBC, others, tried to suggest that the jobless numbers were "great." See below. In fact, investors not impressed. Oil down $2, continuing it's free-fall, but much worse, the overall market continues its slide. Folks, the jobs numbers simply are not good.

    Original Post
    Watch the spin:
    The number of Americans seeking unemployment benefits dropped last week to the lowest level in almost four years, adding to evidence of an improving U.S. labor market.

    Initial jobless claims fell 5,000 in the week ended March 24 to 359,000, the lowest since April 2008, the Labor Department reported today in Washington. The median forecast of economists in a Bloomberg News survey called for 350,000 claims. 
    Reuters take:
    Stock index futures extended losses on Thursday after data showed the domestic economy expanded as expected in the fourth quarter while initial jobless claims were slightly worse than expectations.
    Oh, and last week:
    The prior week's figure was revised up to 364,000 from the previously reported 348,000. Economists polled by Reuters had forecast a claims reading of 350,000 for last week.

    Wednesday, March 28, 2012

    Bill O'Reilly -- Fox Cable

    President Obama inaugurated: price of gasoline -- $1.84
    • Moratorium, permitorium in the Gulf
    • No off-shore drilling
    • Arab Spring, the Libyan Ruckus
    • Kills the Keystone XL
    • Sanctions on Iran
    • Tripled the money supply
    Today, price of gasoline -- $3.91

    Just saying.

    (Data for price of gasoline and "tripled the money supply" comment from Bill O'Reilly show this evening. This is the first time I've tuned into Bill O'Reilly in months; the last time was last autumn, but no "Criminal Minds" on tonight. Surfing the channels. Now back to "Seinfeld: The Switch" episode.)

    BEXP Has Another Great Well -- The Bakken, North Dakoa, USA

    21282, 3,219, BEXP, Margaret 5-8 1H, Wildcat, Bakken. The well is about 2 miles northeast of Rawson, between Alexander and Watford City, North Dakota.

    I actually know a person who was raised in Rawson. I believe the population of Rawson is about 11. 

    Again, No Evidence That Saudi Is Going to Make Up the Iranian Shortfall

    Saudi says there is no shortfall; excess oil already sloshing around
    This is different than what was said during the Libyan ruckus

    Updates

    May 20, 2012: Saudi production --
    From a March, 2012 article: 
    Saudi Arabia increased production to 10.047 million barrels a day in November, the highest in at least three decades. The kingdom, the world’s biggest crude exporter, has the capacity to produce 12.5 million barrels a day and will pump about 9.9 million barrels a day this month and in April, al-Naimi told reporters at the Ritz Carlton hotel in the Qatari capital. [In this article, Saudi says it can increase production 25% if necessary.]
    From a May 20, 2012, article
    Saudi Arabia, OPEC’s largest producer, increased daily output to 9.923 million barrels in March, up 0.7 percent to the second-highest level since at least 1980, according to the initiative.
    Moments later: moments after posting the story below, I saw this op-ed by Saudi Arabia's oil minister Ali al-Naimi. The Saudi Minister says here is plenty of oil sloshing around. So why the high price? I don't know, and I don't think anyone else does either. I think part of it has to do with "just-in-time" delivery. Plenty of oil can be sloshing around, but countries are bidding for it as their supplies from Iran are shut off. For all I know Saudi is holding oil in tankers off-shore waiting for a higher bid. Elsewhere I've read there is an excess of ocean-going tankers and it's actually fairly inexpensive to "store" oil offshore. Again, I have no idea. But if there is plenty of oil sloshing around offshore and yet the price of oil is "ridiculously high" there has to be a reason. 

    The price of WTI dropped a couple of bucks today on rumors that the western nations were getting ready to release emergency supplies. The $2 drop was similar to the drop that we saw the day it was first reported that Great Britain and the US had agreed to release emergency oil supplies. When the report was realized to be "premature," the price went back up. A $2 drop in the price of WTI from $107 to $105 is not going to lower the price of gasoline very much at the pump. The risk here for politicians is that if the release of emergency supplies fails to do much at the pump, there is no Plan B.

    Original Post
    Link to Yahoo News
    Saudi Arabian Oil Minister Ali al-Naimi mounted his most direct rhetorical attack against high oil prices on Wednesday, but showed no sign of moving to increase supplies even as France joined the United States and Britain in talks for a release of strategic reserves. [Interesting, huh?]

    Two weeks after Reuters initially reported that Britain and the United States were set to agree on tapping emergency stockpiles, French Energy Minister Eric Besson said the European nation was also in talks with Washington. Le Monde reported that the move could come in a matter of weeks. [Trial balloon: be prepared for release of oil from SPR. It's interesting that there is not a shortage of oil.]

    At the same time, the Financial Times published a rare opinion piece by the head of the world's largest crude oil exporter, who said a feared shortage of oil supplies was a "myth" but reiterated that Saudi Arabia was ready, able and willing to meet any gap in supplies.

    The moves emphasized the growing concern from both sides of the market -- producers and consumers -- about the economic and political impact of the 15 percent jump in oil prices this year. But it also highlighted the different responses they are taking. 
    As I've said many, many times before, I have yet to see evidence that Saudi has the will power and/or ability to increase oil production to affect oil prices in the short term.

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

    Daily activity report, March 28, 2012 --

    Operators: Hess (2), Whiting (2), MRO, Denbury, G3

    Fields: Bailey, Magpie, Sanish, Manitou

    G3 Operating has a permit for a wildcat in Williams County.

    Four wells released from "tight hole" status; only one completed, and as usual:
    • 21282, 3,219, BEXP, Margaret 5-8 1H, McKenzie

    Folks Focused on Personal Gasoline Costs -- But The Bigger Story?

    Our focus on the cost of gasoline and how it affects households may be "costing us" in our investment decisions.

    CarpeDiem.com suggests again:
    The U.S. now enjoys an incredible energy price advantage that not only is transforming industries (for example, it shouldn't be too long before we start seeing cars that run on LNG), but that should be an important source of growth for the entire economy. This could be the best reason to be bullish." 
     

    North Dakota Income Pace Leads Nation

    Link over at CarpeDiem.com.
    North Dakota led the country with the highest gain in state income for 2011 (8.1%), the largest increase in per-capita state income (6.7%), and the highest gain in personal income during the last quarter of 2011 (1.5%).
    Note: net worth is different than net income. I wonder how much per-capita net worth grew in North Dakota in 2011? It doesn't take many new millionaires to affect a state with a low population like North Dakota.

    Enbridge CEO on CNBC's Kudlow Tonight

    Follow existing pipeline corridors.

    6,400 jobs on each. 12,800 total.

    WTI-Brent spread will narrow.

    Nothing new; nothing concerning.

    Kudlow asked the same question: will Enbridge get its new pipeline on-line before Keystone XL 2.0S? Enbridge CEO could speak only to his company's project, not others.

    Majority of Americans Own At Least One Apple Product; AAPL Shoots Through Previous High

    Previous high: somewhere around $617; shot as high as $621 today
    Close: Up a couple of bucks to about $618
    And...oh, one more thing ... the market was generally down today.....

    NBC poll: 51% of all American households own at least one Apple product. The Apple-environment will drive households to increase the number of Apple products. Although one can use an iPad without a laptop or desktop computer, there are reasons to have laptop/desktop when using an iPad.

    Slow-Rolling the Oil and Gas Industry -- 5-Year Moratorium -- Explore But Don't Drill; Smoke But Don't Inhale

    President Obama has learned a lot from President Clinton.

    Link here to Yahoo News.
    The Obama administration today endorsed new oil and gas exploration along the Atlantic Coast, setting the stage for possible future drilling lease sales.

    The announcement by the Interior Department sets into motion what will be at least a five year environmental survey to determine whether and where oil production might occur.

    It also comes as President Obama faces mounting pressure over high gas prices and criticism from Republicans that he has opposed more drilling for oil.
     
    "Making decisions based on sound science, public input and the best information available is a critical component to this administration's all-of-the-above energy strategy," said Interior Secretary Ken Salazar.
    At least a five-year environmental survey to determine w/w oil production MIGHT occur.

    A five-year study: a permitorium or a moratorium? Fair and balanced. You decide.

    So Much For Fast-Tracking Keystone XL 2.0S -- Unmarked Indian Graves "Lying All Over" Will Be Disturbed

    Link here to the Rapid City Journal.
    As President Barack Obama pushes to fast-track an oil pipeline from Oklahoma south to the Gulf Coast, an American Indian tribe that calls the oil hub home worries the route might disrupt sacred sites holding the unmarked graves of their ancestors.

    Sac and Fox Nation Chief George Thurman plans to voice his concerns this week in Washington. He said he fears workers placing the 485-mile Keystone XL pipeline that would run from Cushing to refineries on Texas' Gulf Coast could disturb holy ground without consideration of the tribe. He and another tribe member say the pipeline's route travels through areas where unmarked graves are likely buried.

    "We've been here 171 years," said Sandra Massey, the Sac and Fox Nation's historic preservation officer.

    "We've been living and dying here. We are all over."
    And so it goes. 

    Marathon Announces Twelve (12) Recent Completions

    Marathon announces twelve (12) recent completions; IPs in boepd except where indicated in bopd. BOPD IPS will be lower than BOEPD.
    • 21590, 2,045, MRO, Ostlund 11-14H, Reunion Bay,
    • 21211, 1,026 bopd, MRO, Goodbird USA 44-7H, Deepwater Creek Bay, 
    • 20454, 1,005 bopd, MRO, Goodbird USA 34-7H, Deepwater Creek Bay, 
    • 21243, 1,950, MRO, Everett Fisher USA 31-6H, Reunion Bay, 
    • 20824, 1,229 bopd, MRO, Bears Ghost USA 31-4H, McGregory Butte, 
    • 20685, 1,431, MRO, Ben Reckard 41-27H, Bailey, 
    • 21823, 1,575, MRO, Ben Reckard 44-22H, Bailey, 
    • 21285, 1,000, MRO, Person 24-35H, Murphy Creek, 
    • 21119, 817, MRO, Sheralee Dolezal USA 14-10H, Bailey
    • 20402, 1,367, MRO, Eckelberg 14-23H, Bailey, 
    • 21603, 797, MRO, Paulson 34-9H, Bailey, 
    • 21286, 261, MRO, Vorwerk USA 14-34H, Deepwater Creek Bay, 

    If You Visit the Drudge Report ...

    ... you may want to consider Twitchy.com.

    If you do, be sure to click on the various categories (US politics, global news, entertainment, sports, media): there are different stories under each category.

    Twitchy has different links than Drudge; not a lot of overlap. The "entertainment" module alerts readers to items they might otherwise miss on a very timely basis. It also appears new items pop up more frequently than at the Drudge Report.

    Best "twitch" of the day (it was also there yesterday): CNN's morning ratings have plunged.

    For Investors Only: Triangle, VOG, and USEG -- Emerging Bakken Plays To Consider

    SeekingAlpha.com link here for Triangle.

    The contributor mentions he may initiate a position in USEG in the next 72 hours; he/she must be kicking himself. USEG announces two record IPs and stock shoots up 7 percent in early trading today.

    Last week, the same contributor highlighted USEG. At that time, he said the same thing -- that he/she might initiate a long position in USEG in the next 72 hours. I suppose it's possible, he/she is talking about two "separate" long positions. If he/she did initiate a long position in USEG last week, the comment today should have been "I am long USEG, and am considering adding to it in the next 72 hours." But I may be misreading things; I go through some of these articles pretty quickly.

    If he/she is a trader, a missed opportunity. If an investor, it doesn't really matter in the long run.

    Just my 2 cents worth. This is not an investment site. I am not making any recommendations, simply passing on information and opinion. See disclaimer.

    USGS To Reassess The Bakken

    Link here: USGS to reassess the Bakken; results to be known by late 2013.
    In 2008, the U.S. Geological Survey estimated the Bakken formation could have up to 4.3 billion barrels of recoverable oil. But they've sent a team of geologists and geochemists back to the Bakken to study rock samples from previous drillings. They normally reassess oil formations after about 10 years, but the Bakken isn't a typical oil formation.

    "It's very rare that we reassess this quickly," said Brenda Pierce, the manger of the USGS Energy Resources Program. "The Bakken is such an unusual reservoir and what is technically recoverable really has changed in a short period of time."

    Pierce also said their scientists are learning new concepts from studying the Bakken.
    "I mean I think it's kind of breaking the way for other potential unconventional oil reserves (and) resources," Pierce said. "I mean it really is world class."

    The USGS is using the same methods to survey the Bakken so the results can be more accurately compared to previous assessments. They plan to complete the study by late 2013. 
    I've always said that; it's not the production, it's the lessons learned and ground-breaking technology being tested, studied, and used in the Bakken. 

    Two Successive Record IPs for Zavanna/USEG Announced -- The Bakken, North Dakota, USA

    At Yahoo!In-Play -- item will disappear later today

    8:32AM U.S. Energy announces successive record initial production rates from two zavanna wells in the williston basin: Co reported The Wang 10-3 #1H well was fracture stimulated with 35 stages and had an early 24-hour flow back rate of 2,208 BOE/D on a 36/64" restricted choke during drillout of the plugs. The initial production rate consisted of approximately 1,942 barrels of oil and 1.6 MMCF of natural gas. The Company has an approximate 18% WI and 14% NRI in this well. The Wang well began production on March 15, 2012.

    Yahoo!Finance link here, the press release:
    USEG today reported the initial production rate on the Wang 10-3 #1H well and the Crescent Farms 7-6 #1H well under its drilling program with Zavanna, LLC.
    Williston Basin, North Dakota - Yellowstone Program:
    • 20094, The Wang 10-3 #1H well was fracture stimulated with 35 stages and had an early 24-hour flow back rate of 2,208 BOE/D on a 36/64" restricted choke during drillout of the plugs. The initial production rate consisted of approximately 1,942 barrels of oil and 1.6 MMCF of natural gas. The Company has an approximate 18% WI and 14% NRI in this well. The Wang well began production on March 15, 2012.
    • 20105, The Crescent Farms 7-6 #1H has also been fracture stimulated with 35 stages and had an early 24-hour flow back rate of 2,437 BOE/D on a 36/64" restricted choke during drillout of the plugs. The initial production rate consisted of approximately 2,178 barrels of oil and 1.5 MMCF of natural gas. The Company has an approximate 27% WI and 21% NRI in this well. The Crescent Farms well began production on March 22, 2012 and represents the highest reported IP rate for a Zavanna drilling program well to date.
    The next two wells which have drilled to depth in this program and are scheduled to be fracture stimulated in April 2012 are;
    • 20093, The Skorpil 11-2 #1H well, in which the Company has an approximate 23% WI and 18% NRI.
    • 20000, The CDK 15-22 #1H well, in which the Company has an approximate 32% WI and 25% NRI.
    "We are pleased to announce the successive record IP results of the Wang and Crescent Farms wells with Zavanna. These two higher interest wells coupled with the two additional scheduled for the month of April should add meaningfully to our production for the second quarter of 2012," stated Keith Larsen, CEO of U.S. Energy Corp.
    Locations:
    • The Wang well is located south of the river, southeast of Williston, in Glass Bluff oil field. 
    • The Crescent Farm well is located it the same township. about three miles directly west of the Wang well.The Skorpil well is about one mile due east of the Wang well.
    • The CDK well is just a few hundred feet south of the Wang well, on the south side of the section line. The Wang well runs due north; I assume the CDK will run directly south.
    Zenergy has a fairly nice horizontal Madison well one mile to the west of the Wang/CDK wells:
    15695, 80, Zenergy, Lassey 1-15H, s9/05; t11/05; cum 32K 1/12; short lateral, running northwest to southeast

    National Average for Gasoline: $3.90

    Top story at Yahoo!Finance.
    The price of an average gallon of regular gas surpassed the $3.90 mark Wednesday, moving to within a dime of the $4 threshold. [Comment: I'm glad Yahoo provided this arithmetic calculation; the math can get complicated as one approaches $5 gasoline.]

    The average price rose 1.3 cents to $3.911 in the latest daily survey conducted for the motorist group AAA. The price has risen for 19 consecutive days. [And for Noah, it rained 40 days and 40 nights. Consecutively.]

    The current price compares to just below $3.70 a month ago, and just below $3.59 a year ago. [For all the chatter, this is about a dime's difference and we survived last year just fine.]
    Earlier: my thoughts on average price of gasoline across the nation, and the price that the average American is paying.

    ****************
    Perfect storm:
    • Chinese and Indian imports rising significantly year-over-year
    • Keystone XL killed
    • Iranian sanctions take 2.5 million bopd off the global market
    • analysts unsure Saudi can make up the Iranian shortfall
    • administration continues to slow-roll the domestic oil and gas industry
    • two, maybe three, refineries close in northeast (US), near Philadelphia; accounts for 50% of regional gasoline
    • winter-to-spring transition at refineries (different stories; some say it's already underway; others say bulk of changeover occurs in April)
    • glut at Cushing won't be relieved for months, maybe one to two years
    • Japan shuts down 53 of 54 nuclear reactors; the 53rd shut-down was for maintenance; Japan increased oil imports

    CLR To Purchase 37,900 Net Acres in the Bakken -->953,763 Net Acres in the Bakken for CLR

    From In-Play -- will disappear later today.

    7: 02AM Continental Resources to Purchase 37,900 Net Acres in the Bakken Play With 2.5 MBoe Average Daily Production for $340 mln:The purchase price of $340 mln is anticipated to result in the issuance of between 3.90 mln and 4.25 mln shares of Continental Resources' common stock, subject to customary purchase price adjustments. The number of shares will be determined based on a 20 day average of the daily sale prices prior to closing of the transaction. The average daily price determination will be subject to a floor of $80.00 per share and a ceiling of $87.18 per share. Wheatland's assets include 37,900 net acres in the North Dakota and Montana Bakken play and interests in more than 1,000 gross wells, with net proved reserves of 17 MMBoe (mln barrels of oil equivalent) as of year-end 2011 and production of 2.5 MBoepd (thousand barrels of oil equivalent per day) in December 2011.

    Reuters link here
    The assets include 37,900 net acres in the North Dakota and Montana Bakken play and interests in more than 1,000 gross wells. The assets produced 2.5 thousand barrels of oil equivalent per day as of December 2011.

    Continental said it expects to issue between 3.90 million and 4.25 million shares to fund the purchase price.
    Net acreage approaching 1 million acres in the ND and MT Bakken. 

    Back-of-the-envelope data points:
    • $9,000/acre without the 1,000 gross wells.
    • Based on reserves: $340 million/million bbls --> $20/bbl based on reserves
    • 2,500 boepd * $50/bbl --> $125,000/day on current production (production declines; price of oil varies); one year --> $46 million
    According to Elwood, elsewhere:
    'Wheatland is owned 75% by the Revocable Inter Vivos Trust of Harold G. Hamm, of which Harold Hamm is sole trustee and beneficiary, and 25% by Jeff Hume. Mr. Hamm is Chairman of the Board, Chief Executive Officer and the majority shareholder of Continental Resources. Mr.  Hume is President and Chief Operating Officer of Continental Resources.' 
    Elwood opines (at the link): CLR could be "positioning" for acquisition.

    The question is raised: would Harold Hamm have to put in blind trust/divest of CLR if he takes cabinet position in new administration?

      Tuesday, March 27, 2012

      Flashback: The KOG/BTA Deal -- Looks Like KOG Has A Great BTA Well

      Link here first to flash back to the KOG/BTA deal.

      This looks like a BTA well that's going to be a great KOG well. This well has not reported an IP yet; it is on DRL status. I assume we will see an IP any day now. But note, this well started producing in October, 2011 (21 days) and has already produced 62,000 bbls of oil after only 3.5 months (most recent data 1/12). The well is in the Epping oil field northeast of Williston.
      The KOG/BTA deal looks better and better for KOG.

      39 Seconds --

      For it, against it, indifferent --

      Listen to these 39 seconds ---



      Opening Statement, Opening Arguments, Defending ObamaCare, March 27, 2012

      Then these 49 seconds ---



      Geography Question, Miss Teen USA 2007,

      Maybe a new poll is indicated. One is a highly paid US solicitor general. One is a teenager.

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

      Daily activity report, March 27, 2012 --

      Operators: Enerplus (4), KOG (2), Fidelity, Sinclair, Whiting

      Fields: Alger, Epping, Lone Butte, Mandaree, Green River

      The four Enerplus wells are probably on the same pad in Mandaree oil field, Dunn County.

      Eight (8) wells released from "tight hole" status, including:
      • 20924, 1,299, Hess, EN-Sorenson A-154-94-0211H-2, Mountrail;
      • 21085, 933, Denbury, Satter 24-35NEH, McKenzie; 
      Three of the eight were not fracked/completed.

      Two wells on DRL status reported IPs:
      • 20510, 705, Zavanna, Everett 1-15H, Williams
      • 20994, 1,074, Sinclair, Uran 3-15 TFH, Three Forks, Mountrail

      Random Aerial Photo Of A Watford City, North Dakota, Man-Camp; Aerial Photos of Bakken Wells -- March 27, 2012

      Man-camp, Watford City

      One of many photos Kent sent me from the heart of the Bakken. This is one of many man-camps in the Watford City, North Dakota.

      The Bakken activity is moving to northeastern McKenzie County, between Alexander and Watford City.

      Best part of the photo above: note all the open land.

      Bakken oil pad, North Dakota.

      A random photo of an oil pad in North Dakota. All photos on this page sent to me by Kent.

      Bakken oil pad, North Dakota.

      So you think there's not much drilling left? This is a one-well pad. The move is toward 3-, 6- and 8-well pads in the Bakken.

      Random Comment On AAPL Hitting All-Time High

      Last week one of the "fast-money" talking heads on CNBC said he shorted AAPL at $595. It will be interesting if anyone calls him on his trade.

      I've always said that shorting AAPL is a fool's game.

      AAPL hits an all-time high of $615 earlier today.  That means, on paper, the individual who shorted at $595 is now down $20 for every share he shorted.

      Idle chatter only. I don't invest in AAPL. This is not an investment site.