Monday, April 30, 2012

For Investors Only: No Direct Connection to the Bakken -- Schlumberger to Acquire Tesco Drilling For $45 Million

Link here to
Tesco Corporation and Schlumberger announced Monday they have signed a definitive agreement for Schlumberger to acquire Tesco's CASING DRILLING™ division for $45 million in cash.
That's about it.  The biggest thing that caught my eye: I don't know how important Tesco Drilling is for Schlumberger but it cost them about 1 percent of their cash on hand. One percent of the one dollar I have in my billfold is one penny. transcript on merger here

Pace of Development in the Bakken: --> "One New Mall of America Every Month -- Incredible

From the wireline:
Imagine building one new Mall of America every month.  That's the pace of development going on in the booming Bakken region that is quickly transforming western North Dakota into an economic powerhouse.  Minnesota companies are taking notice and sending employees, cash and goods, or buying companies with hopes of getting a slice of the Bakken.  Many Minnesota firms already are there.  Some have big stakes in the oil business, such as Wayzata-based Northern Oil & Gas Inc., which controls about 170,000 mineral acres in the Bakken, and Wayzata-based Black Ridge Oil & Gas Inc., a Minnetonka company that controls 20,000 acres of oil territory. -- Minneapolis/St Paul Business Journal, subscription required.

2560 Acre Spacing -- Kittleson Slough -- The Bakken, North Dakota, USA

This is an interesting bit of trivia and may be an interesting thread to follow over at the Bakken Shale Discussion Group.

The Kittleson Slough field is pretty much spaced at 1280-acre, some 640-acres, but there are eight wells on 2560-acre spacing.
  • 20006, 268, EOG, Lostwood 21-1402H, Kittleson Slough,
  • 20008, 288, EOG, Lostwood 22-1423H, Kittleson Slough,
  • 20009, 407, EOG, Lostwood 6-1102H, Kittleson Slough,
  • 20010, 327, EOG, Lostwood 20-1123H, Kittleson Slough,
  • 19944, conf, EOG, Lostwood 2-1301H, Kittleson Slough,
  • 19945, conf, EOG, Lostwood 19-1324H, Kittleson Slough,
  • 19942, conf, EOG, Lostwood 1-1201H, Kittleson Slough,
  • 19943, conf, EOG, Lostwood 18-1224H, Kittleson Slough,
IPs less than 500 bopd are holding 2,560 acres by production. This is a bit misleading because an owner of any mineral acre in any of the four sections will participate in two four wells, if that makes sense. At least that's how I understand it. I could be wrong. Follow the discussion over at the link.

See first comment to explain the mistake I made (and corrected above). 

MDU's 1Q12 Earnings

Link here.

Rig count reaches 10, up from two (2) a year ago -- nationwide, not just the Bakken.

Oil production grows almost 20 percent.

Earnings: 19 cents/share.


A Letter to the Granddaughters

One of the landmarks that we've enjoyed the past few years in "Boston" was the Curious George store at Harvard Square in Cambridge. But then it closed down about a year ago; we were told that it was due to high rent, yada, yada, yada.

No one was expecting that the store would open again and none of us even noticed any renovation. Then all of a sudden there was a note in the paper that there would be a grand opening (this past Saturday).

Today I had a chance to visit the store. I agree with the comments made in the Boston Globe story today.

I am thrilled that the store is back. I was disappointed that the downstairs area is closed/converted to office space. There is much more room to walk around on the one floor but that's because there is much less merchandise. But most surprising is how small the store really is. One didn't notice the smallness in the previous iteration because the store was so incredibly filled with merchandise, it seemed bigger than it really was.

My hunch is that local parents / families will visit the store once or twice but that will be about it. The store will cater to the tourists who will be in the city just this once anyway.

Regardless of who visits and how often they visit, I am thrilled to see Curious George back at Harvard Square.

Nine (9) New Permits; Twelve (12) Wells Released From "Tight Hole" Status; Eight Producing Wells Completed -- A Big Day In The Bakken (As Far As Reports Go) -- The Williston Basin, North Dakota, USA

Daily activity report, April 30, 2012 --

Operators: Whiting (3), KOG (3), Fidelity (2), CLR

Fields: Banks (McKenzie), Sanish (Mountrail), Medicine Pole Hills (Bowman)

The Banks oil field is in the bull's eye of the Bakken. These are nice permits for KOG.

The Sanish is Whiting's cash cow.

How interesting: just the other day one or both of these permits were reported as expired; today these two permits were renewed:
  • 20764, XTO, Cross Federal 32X-20, McKenzie
  • 20767, XTO, Arlene Federal 44X-11, McKenzie
Twelve (12) wells were released from "tight hole" status (Bakken unless o/w specified):
  • 20428, 1,381, Whiting, Schilke 34-32H,
  • 20548, CLR, Candee 2-9H,
  • 20819, 1,026, Whiting, Uran 12-19TFH,
  • 20861, 599, Hunt Oil, Halliday 2-24-36H,
  • 20957, 299, Hunt Oil, Stocke 1-19-20H 1,
  • 21068, CLR, Irgens Rexall 156-99-19-18-1H,
  • 21181, KOG, Smokey Karen 16-20-17-2H,
  • 21347, Wesco, Gruman 31-18, Stark County, Lodgepole
  • 21403, Hess, BB-Belquist 150-95-1011H-1,
  • 21467, 801, CLR, Dover 1-30AH,
  • 21513, 23 (no typo) KOG, Smokey 3-6-7-14H, 
  • 21550, 378, G3 Operating, Seven 1-4-9H, 
In addition, eight (8) producing wells were completed, all with IPs ranging from a low of 421 to a high of 845. Six of them were Hess wells.

Two wells with name changes which might suggest formation target changes:
  • 22577, BEXP, Gunderson 15-22 4TFH (was Gun....4H)
  • 22578, BEXP, Gunderson 15-22 3H (was Gun...4TFH)

Reminder for Newbies: MagicMaps

I don't know how often satellite images of the Bakken are updated, but often enough to make "MagicMaps" a lot of fun.

I was curious to see how MagicMaps is coming along with new innovations and I decided to check out the Brad Olson pad west of Williston:,-103.81088&daddr=&dirflg=&hl=en

When you go to the link, you can zoom in, and clearly see two pumpers on the pad and two rows of tanks, nine tanks in each row (unless I miscounted, which I am prone to do).

Note to first time users: for some reason when looking for rigs or wells, you need to enter that information twice.

For Investors Only: SeekingAlpha on ATT -- Absolutely Nothing To Do With The Bakken

Link here to the article. 

This is not an investment site; this is not a buy, sell, hold recommendation. I don't hold any shares in ATT but at least one family member does.

Also, this article on itsy-bitsy cell towers at

Meanwhile, somewhat related, this article caught my eye the other day:
Getting online while traveling has never been easier. Getting online for free is still hit-or-miss.

Travelers run into a patchwork of free vs. paid access as they trek from airports to planes to hotels. Speed also varies widely, from fast enough to stream a movie to just enough to send and receive email.

The good news: Free internet at airports is becoming more common. San Francisco, Dallas, and Minneapolis are adding free options after previously charging around $8 for access. Phoenix's international airport has long offered complimentary access.

Still, plenty of airports require travelers to whip out a credit card to get online, including the big ones in New York and Los Angeles. The agency that runs New York's three airports says it has no plans to offer free Wi-Fi. The exception is JFK's terminal 5, where JetBlue offers it. 
Considering one is "held captive" at airports, I find it amazing any airport offers free wi-fi. I was always impressed that SAT (San Antonio) was one of the first to offer free wi-fi; that was no doubt due to the fact that ATT was headquartered in San Antonio at that time (has since moved). 

Interestingly enough, and counterintuitive, ATT is asking its users to use free wi-fi when possible to take pressure off their system.

I don't have a smart phone, but I often pull out my iPad when traveling just to see where I can get free wi-fi. It's become somewhat of a parlour game for me, a treasure hunt as it were. Dunkin' Donuts followed Starbucks here in the Boston area with free wi-fi. Starbucks has more than ample outlets; DD none to very few. McDonald's almost always has free wi-fi, but again outlets are a challenge. The most exciting are public areas with free wi-fi, provided by the city or perhaps the carrier. Merchants benefit. My wife and I use the net all the time to find a particular restaurant or museum. My daughter and son-in-law use the net even more than we do for daily navigation.

But I digress.

At Least Some Of Us Know Who Our Friends Are

When did you first realize you were Canadian?

Kudos to Don for alerting me to the link and noting that the US imports 900,000 bbls of oil from Venezuela on a daily basis and Venezuela is not even mentioned in this article (although I might have missed it).
U.S. imports of what environmentalists are calling "dirty oil" are set to triple over the next decade, raising concerns over the environmental impact of extracting it and whether pipelines can safely transport this Canadian oil.

The United States currently imports over half a million barrels a day of bitumen from Canada's oil sands region, according to the Sierra Club. That number, Sierra Club says is set to grow to over 1.5 million barrels by 2020. That represents nearly 10% of the country's current consumption.

The U.S. Energy Information Administration's overall Canadian oil production numbers are in-line with the Sierra Club's projected pace.
So, from Canada's oil sands region: 500,000 bbls/day; Venezuela, 900,000 bopd.  The YouTube video "If I Wanted America To Fail" has gone viral. Tex Ritter had it right -- see video at bottom of the blog.

My world view: a) photographs of the close friendship between US president and Venezuelan president; b) the US president killing the Keystone XL 1.0; and, c) the president banning all Canadian oil if he could. That's my world view. Opinion. 

I don't think the article mentions that US reliance on "heavy oil" could be minimized if federal government encouraged development of US federal natural resources. But that would be an "inconvenient truth." Again, my world view. Just an opinion.

By the way, this may be one of the best interviews ever. If you don't want to watch the entire interview (you would be missing a lot), at least skip ahead to the 4:45 mark:

Dame Edna and k d lang

For Investors Only -- Nothing To Do With The Bakken -- ETP Will Buy Sunoco

For pipeline, for liquids.

Link here.
Pipeline operator Energy Transfer Partners LP said it will buy Sunoco Inc  for $5.3 billion in stock and cash to get into the more lucrative crude oil transportation business as natural gas prices stay weak.

Oil and gas production from shale formations in the United States has surged over the past two years, creating a scramble to build infrastructure to get supplies to refining hubs.

Sunoco shareholders will receive $25 in cash and 0.5245 Energy Transfer units, or $50.13, for every share they own.

The offer represents a 22.5 percent premium over Friday's close.
M&A activities provide a nice check on the real value of some of these energy companies. Last week a similar announcement affecting a Bakken operator indicated a 25% premium (+/-, I forget the company, and I forget the exact premium). I just remember the premium.

Phil Jackson Not Mentioned

On page 8B of today's Wall Street Journal (no link; hard copy), Jared Diamond writes that Carmelo Anthony of the New York Knicks currently holds the individual record for worst playoff record with a 0.320 win record.

On the flip side, who holds the record for most post-season wins? Michael Jordan.

And then this little nugget: "The rest of the top ten? Nine of Michael Jordan's Chicago Bulls teammates."


Not mentioned in the short article: coach of the Chicago Bulls during their remarkable championship run -- Phil Jackson. Somewhere on the blog I have a photo of his childhood home in Williston, one block from where I grew up.

For newbies: Phil Jackson graduated from Williston High School, played for the New York Knicks, wrote a couple of great books, probably enjoys Leonard Cohen, and recently retired as coach of the LA Lakers.

Trivia: I wonder if Jared Diamond is the same Jared Diamond known for the best-selling books, The Third Chimpanzee (one of my favorites); Guns, Germs, and Steel (did not enjoy as much); and, Collapse (have not read).  If so, watch for a book on the evolution of sports in the not-too-distant future.

For Investors Only: Enbridge Has a Strong Dividend, But Shares "Aren't Cheap" -- SeekingAlpha

Link here.
Enbridge's dividend yield is above average, offering a 2.9% annual payout at recent price levels - for inclusion in our Dividend Growth portfolio we prefer yields above 3%, but if we like the future growth potential of a company's payout, we may make exceptions.
This is not an investment site; this is not a recommendation to buy, hold, or sell. It is simply a story about the Bakken that caught my attention. Enbridge is one of my favorite companies on many levels. I have driven by their operations in the Williston area on numerous occasions and have always enjoyed watching what they were doing.

Interesting Data Point Regarding Mexican Reserves

It is being reported that Mexico is considering private investment in oil exploration and development.

This is the data point I found interesting:
The U.S. Energy Information Administration's International Energy Outlook 2011 reports that Mexico has the third largest oil reserves in the Latin America, behind Venezuela and Brazil. With 10.4 billion barrels the country boasts roughly half the reserves of the U.S. 
Some estimate the Bakken Pool has 24 billion barrels. 

Fracking Unlikely To Cause Unintended Cracking Past 2,000 Feet

The study says that unintended cracking from fracking unlikely to extend farther than 600 meters, but that's close enough to 2,000 feet and put things into perspective in the Bakken where most distances are measured in feet and miles.

Link here.
According to research published in the journal Marine and Petroleum Geology, fracking has well below a 1 percent chance of causing unintended cracks in the ground beyond 600 meters. The research was led by the U.K.'s Durham University and used data from hundreds of both natural fractures and fracking operations in Europe and the U.S. 

If I read the story correctly, the researchers estimate the risk at 1 percent at 350 meters.

I can already see the environmental reply: is any risk acceptable when it comes to our water supply?

On another note, this study also provides some insight into how effective fracking is for the purpose for which it was intended. I've always opined that the distance is a 500-foot radius.

Spokesman-Review: Series of Articles on the Bakken

Link here.
When the oil boom hit North Dakota, Randy Ramsey traded his professional attire for coveralls and a blue-collar job.

He hasn’t regretted the switch.

“I was a white-collar guy. I did sales. I never pictured myself going to work in the oil fields,” said Randy, 36, a former Spokane resident. “I still have my white shirts and ties in my closet, but I never wear them.” Both he and his wife, Dolly, expect to earn six-figure salaries working in the oil industry this year. They’re saving their money, with the goal of retiring in 10 years.
Link sent to me by a reader. Thank you.

RBN Energy: Quick Look at Energy on West Coast

Cheap prices for consumers; little volatility.

California: "nuclear-free" for the moment.

Wind at 90% capacity in the Pacific Northwest. Power prices for consumers at night: $0.00.

Go to the story at the link. Registration might be required.

Sunday, April 29, 2012

Random Dots Looking At Fracking: Is Fracking a Commodity? Simply Pressure Pumping?

Reading about Liberty Resources this past week got me to thinking about fracking, again. I'm not going to post any of my thoughts, but here are some dots that may pique your interest: on CJES. The link to the CJES recent corporate presentation; no indication that CJES is active in the Bakken.

Liberty Resources.

Schlumberger transcript, 4Q11, Q & A:
Well, if you look at pressure pumping pricing levels, as I said, we continue to see downwards pressure on pricing in gas in Q4. The liquid basins, we saw pricing basically being flat, some contracts being up, and some contacts being down. Now how this is going to evolve, I think, is still uncertain at this stage, right? There is obviously a chance that the continued flux of capacity from the gas basins into the liquid basins is going to have an impact on liquids pricing as well. We haven't really seen any downwards trend yet. But clearly, over the past quarter, the pricing has been flat, so that's basically where we stand on that. In terms of our view on North America land, like we said before, we remain committed to the markets.
A horizontal well's production potential:
  • Location: maturity, porosity, permeability, trapping, TOC, thickness, 3-D seismography, arrays
  • Ability of horizontal bore to remain in target zone: 
  • Completion: fracking, drilling fluids, stages, method, sand, ceramics

Random Look at Oasis Wells in the Williston Area

Indian Hill, south of Williston, south of the river: eight wells in one section; Baker oil field; all wells are on 2-well pads; four 2-well pads in one section.
  • 22099, 863, Oasis, Yukon 5301 41-12T/Daphne 5301 41-12B, Baker oil field,  t9/13; cum 104K 9/16;
  • 22100, AB/1,317, Oasis, Achilles 5301 41-12B, Baker oil field, t2/12; cum 187K 1/15;

  • 22220, 1,962, Oasis, Jefferies 5301 43-12B, Baker oil field, t4/12; cum 214K 9/16;22
  • 22221, 1,379, Oasis, Innoko 5301 43-12T/Timmons 5301 43-12B, Baker oil field, t9/13; cum 133K 9/16;

  • 20863, 1,167, Oasis, Foley Federal 5301 43-12H, Baker oil field, t12/11, cum 235K 9/16;
  • 20864, 2,521, Bray 5301 43-12, Baker oil field, t1/12, cum 230K 9/16;

  • 22739, loc, Oasis, Linda 5301 44-12B, Baker oil field;
  • 22740, 3,863, Oasis, Larry 5301 44-12B, Baker oil field; t9/12; cum 229K 9/16;
Southeast of Williston, north of the river; seven Oasis wells in one section, in Crazy Man Creek, one section, 12-153-100; 2-well pads (except for a 22225).

  • 22303, 1,952, Oasis, Thomas S 5300 41-12B, Crazy Man Creek, t10/12; cum 275K 9/16;
  • 22304, 1,364, Oasis, Celia S 5300 41-12T, Crazy Man Creek, t10/12; cum 206K 9/16;

  • 19638, 2,563, Oasis, Davis 5300 42-12H, Crazy Man Creek, t9/12; cum 219K 9/16;
  • 19639, 2,414, Oasis, Cook 5300 42-12H, Crazy Man Creek, t9/11; cum 325K 9/16;

  • 22225, 868, Oasis, A K Stangeland 5300 43-12T, Crazy Man Creek, t9/12; cum 189K 9/16;

  • 22347, 2,621, Oasis, Basey 5300 44-12T, Crazy Man Creek, t9/12; cum 200K 9/16;
  • 22348, 2,661, Oasis, Kovars 5300 44-12B, Crazy Man Creek, t9/12; cum 203K 9/16;

A Closer Look at The Liberty Resources Wells -- The Bakken, North Dakota, USA

In response to earlier postings regarding Liberty Resources, a reader sent in the following:

Section 21-156-100; 18 oil storage tanks; pumping and flaring, East Fork; rumors of 3,000 bopd each well; early production
  • 21045, 3,205, BEXP, Ruth 28-33 1H, middle Bakken, East Fork, t4/12; cum 79K 9/12;
  • 21046, 2,264, BEXP, Jack 21-16 1H, middle Bakken, East Fork,  t5/12; cum 52K 9/12;
Section 18-156-100; 20 oil storage tanks; flaring
  • 21197, 1,100, Liberty Resources, Jackman 156-100-18-19-1H, East Fork, t4/12; cum 83K 9/12;
  • 21198, 961, Liberty Resources, Berger 156-100-7-6-1H, East Fork; t4/12; cum 96K 9/12;
Section 15-156-101; 20 oil storage tanks; being prepped for fracked
  • 22067, 758, Liberty Resources, Sylte 156-101-10-3-1H, Tyrone, t6/12; cum 81K 1/13;
  • 22068, 567, Liberty Resources, Sylte 156-101-15-22-1H, Tyrone,t6/12; cum 72K 1/13;
Other Liberty Resource wells of recent vintage:
  • 21680, 800, Liberty Resources, Nygaard 150-101-28-33-1H, Pronghorn, t9/12; cum 58K 1/13;
  • 21421, 648, Liberty Resources, Fritz 150-101-32-29-1H, wildcat (32-150-101), t5/12; cum 46K 9/12;
  • 22709, conf, Liberty Resources, Gullikson 152-103-31-30-1H, Glass Bluff,
  • 22401, 876, Liberty Resources, Lukenbill 155-101-11-2-1H, Cow Creek, t9/12; cum 67K 1/13;
  • 21141, 1,108, Liberty Resources, Anna 156-100-8-5-1H, East Fork, t8/12; cum 79K 1/13;
  • 22522, 522, Liberty Resources, Nelson 156-100-17-20-1H, East Fork, t8/12; cum 91K 1/13;
  • 20748, 599, Liberty Resources, Lindy 156-100-10-3-1H, East Fork, t5/12; cum 43K 9/12;
  • 20736, drl, Liberty Resources, Jackman 156-100-11-2-1H, East Fork,
  • 22495, 805, Liberty Resources, Borrud 156-101-1-12-1H, Tyrone, t8/12; cum 92K 1/13;
  • 21578, 470, Liberty Resources, Berger 156-101-9-4-1H, Tyrone, t7/12; cum 46K 1/13;
  • 21481, 691, Liberty Resources, Cornabean 156-101-25-36-1H, Tyrone, 7/12; cum 93K 1/13;

200 Days For Federal Permit

200 days to get a permit to drill on federal land.
The Bakken Oil play has taken off like wildfire. But oil companies say there are still several delays at the federal level. So independent oil and gas producers went to Washington to advocate for better policies to enhance drilling in the west.

Two hundred days is the average amount of time it`s taking oil companies in North Dakota to get drilling permits on federal land. That`s just one of the policies the Western Energy Alliance wants to change at the federal level.
I have mixed feelings on this one. With such a huge backlog of wells to be drilled, is 200 days all that important? Are there better issues to fight? Exactly what does the approving agency base its decision on anyway -- for granting a permit? Is 200 days even enough time to do an adequate job? I really don't know. The number of days required to issue a permit is way beyond me.

For Investors Only: XOM Could Increase Its Dividend Again

XOM just announced a 21% increase in its dividends. Some analysts suggest XOM could raise the dividend again before the year is over. Mature companies usually raise their dividends, at best, once a year. This would be quite out of the ordinary for a mature company like XOM to raise its dividend twice in one year.
Deutsche Bank opines that Exxon Mobil could further raise its dividend on top its 21 percent increase of earlier this week. The analyst at DB says that “If Exxon Mobil’s CEO [Rex Tillerson] stays true to his word… and keeps the yield competitive, there should be further dividend increases before next year. We believe shareholder pressure will remain high for this.”
Link is here.

GMXR Corporate Presentation -- Will Report Earnings May 2

Highlights of the corporate presentation, April 17, 2012.

Slide 3:
  • McKenzie County, GMXR, 3 wells, average: 1,973 boepd
  • 2,549, Lange 11-30-1H
    1,953, Neil 24-19MBH
    1,436, Taboo 1-25-36H
  • GMXR Bakken/Three Forks average: 1,420 boepd
Slide 4:
  • Natural gas hedges at $2.60 (2012) and $3.50 (2013)
  • Collars, spreads, etc., for oil: $100/$90
  • Some of their oil revenue from current wells protected with $106.40 swaps
  • signing contracts with ONEOK for natural gas gathering 
  • slide 6 shows how quickly this company is turning to the oil-rich Bakken
  • presentation shows nice history of the Bakken
  • nice graphic of Bakken Pool payzones, including four benches of the Three Forks formation
  • continuity of Three Forks across GMXR's position
  • 1,100, CLR, Charlotte 1-22, 2nd bench
  • 2,549, GMXR, Lange 11-30-1H, middle Bakken
  • 1,436, GMXR, Taboo 1-25-36H, middle Bakken
  • DRL, GMXR, Pojorlie, well cored through Three Forks, 1st bench
  • DRL, GMXR, Evonluk, middle Bakken
  • 1,953, WLL, Kubas 11-13TFH, Three Forks, 1st bench

  • nice graphic of decline curve, and explanation of data points
  • example of sliding sleeve
  • prospects in McKenzie, Billings, and Stark counties

    Minnesota Has Discovered Their Natural Resources Have An "All The Above" Flavor -- A Page From Obama's Playbook on Developing Natural Resources?


    Later, 1:10 pm: Yes, I was correct. The article has been corrected. The Freudian slip in which it was suggested that the environmentalists will "sue," has been changed to the environmentalists "use" this land. That correction didn't take long.
    Original Post

    A most interesting story: it looks like when a state is financially in "deep do-do," even liberal states start to wake up: Minnesota just enacted a new law that will encourage development of their natural resources. Wow.

    First, the "cut and paste" from the link:
    The legislation demands that state managers now put more emphasis on raising money for state education efforts and less emphasis on ecological or recreation concerns.

    The 2.5 million acres, an area larger than Yellowstone National Park .... was given to the state by the federal government 150 years ago with the stipulation that any money made off the land — from logging, mining or land sales — be assigned to a trust fund that doles out money to school districts across the state.

    The land has been managed by the DNR for decades as if it were traditional state forest used by hunters, campers and hikers, ....

    Opponents say the bill effectively takes management of the 2.5 million acres away from the science-based DNR and gives it to lawmakers and a new trust lands czar that will overlook environmental impacts, hunters, hikers and other people who sue the land.
    Teachers and students get at least an equal spot at the table with the Sierra Club. Incredible.

    The reason I was quick to "cut and paste" this portion: my hunch is that the story will be corrected in a moment.

    But before it is, note that last paragraph:
    "...  and a new trust lands czar that will overlook environmental impacts, hunters, hikers and other people who sue the land."
    Or maybe not. That's exactly who will sue to keep the land a private reserve for hunters, hikers, and huggers.

    I can only assume the state of Minnesota looked across the state line to see how NDIC's three-person commission was managing the natural resources of North Dakota and said, "wow."

    Maybe The Top Story of The Year: Why BEXP Has The Best Wells In the Basin

    Link here.

    [For newbies: Statoil bought BEXP.]

    Housekeeping: Updated IPs for 1Q12 Wells

    Periodically I go back through my "New Wells Reporting" pages and update IPs for wells that went to DRL status after coming off the confidential list.

    I have just updated the wells for 1Q12.  About 20 wells were updated; nothing exciting to report. 

    Update On Another Nice Helis Well -- The Bakken, North Dakota, USA

    Helis reports another nice well:
    • 21331, 2,164, Helis, Foreman 5-2/1H, Spotted Horn, Bakken, 
    This was back on April 18, 2012. I'm still getting caught up with reporting new well results after Karen quit posting the data earlier this month.

    Helis has reported some nice wells.

    One WSJ Op-Ed Piece Paid for The Subscripton -- Aubrey McLendon

    I don't know if you can get to this article without a password; hopefully you can it.

    It reminded me how much I enjoy the Wall Street Journal -- but then I'm reminded of that every day.

    In this case, it's an opinion piece by the WSJ editorial staff on CHK's CEO. Actually it's hardly an opinion piece. It's simply a collection of Aubrey's thoughts on energy and politics expressed during a recent visit to the WSJ offices.

    This on the Keystone decision is typical of his comments:
    ...the message the president should have delivered in January when he rejected the pipeline. "What he should have said is: 'OK, so we're not going to build Keystone and you the American people, I just want you to know that this will result in higher gasoline and diesel prices for you for the rest of your lives because I just woke Canada up from a 50-year slumber and I slapped them in the face and they will now build a pipeline to Vancouver. And the Chinese today are celebrating. And as a consequence prices for oil in the U.S. will be higher.'"

    Warming to the topic, he relates with more than a little dismay that after the rejection of Keystone XL "then [Mr. Obama] comes to Oklahoma and stands in front of a bunch of pipe—which I don't think he knew what it was—and says, 'I'm going to greenlight southern Keystone.' It didn't need any presidential decisions to be made. I mean the only presidential decision is the 12 inches at the Canadian border. We needed that."
    And on fracking:
    ...I think we're moving beyond the whole fracking controversy as [the Environmental Protection Agency] kind of systematically takes a step back from all their allegations." Several hours after Mr. McClendon's visit, the EPA announced draft fracking rules that were less onerous than expected.

    Not that he fears a temporary ban in any case. "You want to go ban fracking for a year? Knock yourself out. It would be marvelous for our share price," because the limit on supply would send gas prices soaring. "Essentially every well in the U.S. is fracked," he continues, and therefore a ban on gas production would eliminate the energy on which utilities and their customers rely. "You'll kill tens of thousands of people, freeze them out. You'll starve them out. It's completely unthinkable."
    I hope you can get to the link.

    He didn't mention the Bakken. Or least the WSJ didn't mention it.

    Saturday, April 28, 2012

    Huge Thanks to Carpe Diem -- Williston Wages Compared


    May 6, 2012: at the end of the original post I said: "My hunch is that the average Williston wage earner also pays at the highest federal tax rate."

    At least one reader took issue with that comment and that reader was correct. I did not correctly articulate what I was trying to say. Fortunately today's Boston Globe said what I was trying to say:
    The Buffett Rule - named for billionaire Warren Buffett, one of the measure’s most vocal proponents - would have generated additional revenue by requiring people who earn more than $1 million per year to pay effective federal tax rates of at least 30 percent. Because capital gains on investments, a major source of income for many affluent people, are taxed at just 15 percent, it is possible for high earners to pay lower effective rates than members of the middle class.
    What I should have said below is that it is my hunch that most blue collar workers in the Bakken are paying the highest effective rates for their income level. And if I'm still saying it incorrectly, I assume most folks know what I'm trying to say.

    Original Post

    The other day I linked a story regarding average wages of $71,000 for Williston workers.

    "Anonymous" was curious what the pre-boom wage number was.

    I said I was curious how the Williston wage compares with cities nationwide.

    CarpeDiem provides the answer. A quick search suggests Williston may lead the nation in average wages for workers. This is the link to the original Williston Herald story.

    Go to the link to see the full list, but at $70,000, Williston leads San Francisco (#2) at $65K; and Washington, DC (#3) at $63K.

    There will be a lot of comments about the high cost of housing in Williston. Before we go down that rabbit trail, it ain't exactly cheap to live in San Francisco or Washington, DC, where property taxes and local taxes are additional factors to consider. 

    My hunch is that the average Williston wage earner also pays at the highest federal tax rate.

    Natural Gas Rigs Might Not Be Drilling For Natural Gas

    Isn't this a most interesting story?

    Link here.
    The number of U.S. natural-gas rigs is “misleading” because some are actually drilling for oil and liquids, Pioneer (PXD) Natural Resources Co. Chairman and Chief Executive Officer Scott Sheffield said.

    There are probably only a couple of hundred drilling rigs exploring in pure or “dry” gas fields, Sheffield said in an interview at a Hart Energy conference in Fort Worth, Texas today. In Texas, some rigs are classified as drilling for gas because state rules allow operators to hold more acreage with a gas well, Sheffield said. 
    Something tells me the state regulators will sort this out ASAP.

    Until then, natural gas rigs may be drilling for something other than natural gas: holding leases by production?

    Crazy, Gnarls Barkley

    Data Disconnects -- Oil Prices -- OPEC Production Climbs to Highest Level In THREE YEARS -- Price of Brent Oil Hits Three-Week High

    Earlier this week, a CNBC talking head predicted oil was likely to go under $100 by the end of the week.

    Not only did WTI not go under $100, Brent hit a three-week high.
    Oil rose to the highest level in more than three weeks in New York as the biggest gain in U.S. consumer spending in more than a year and better-than-projected earnings overshadowed lower-than-forecast economic growth. 
    Now this:
    Oil output in April by the Organization of Petroleum Exporting Countries climbed to the highest level in more than three years, a Bloomberg survey showed. Production increased 305,000 barrels, or 1 percent, to an average 31.405 million barrels a day from a revised 31.1 million in March, according to the survey of oil companies, producers and analysts. Output rose to the highest level since October 2008.

    Saudi Arabia, OPEC’s biggest producer, bolstered output by 115,000 barrels a day to 9.82 million this month. The gain left production at the highest level since August
    There's a name for this: -- the Red Queen Race. 

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

    Daily activity report, April 27, 2012 --

    Operators: MRO (3), BEXP (3), Oasis, EOG, XTO

    Fields: Banks (McKenzie), Avoca (Williams), Tyrone (Williams), Parshall (Mountrail), Bailey (Dunn), Dollar Joe (Williams)

    Five wells released from "tight hole" status; three were completed, including:
    • 20124, 802, Whiting, Brueni 21-16TFH, Stark
    • 20992, 490, Petro-Hunt, Sylte Mineral Trust 157-101-25B-36-1H, Dunn
    • 21358, 3,863, BEXP, Clifford Bakke 26-35 2H, Mountrail
    • 20547, DRL, CLR, Kukla 2-16H, Dunn,
    • 21402, DRL, Hess, BB-Belquist-150-95-1011H-2, McKenzie

    No Blogging Until Later -- Several Items Added Yesterday

    Friday, April 27, 2012

    Week 17: April 22 -- April 28, 2012

    GeoReources to be bought out by Halcon Resources

    Update on the awesome Alger field

    Belfield to get new drilling fluids services company 

    Feds give US Army Corps of Engineers $12 million to upgrade the Williston levee

    Another revenue stream for mineral owners: liquid natural gas pipeline, Tioga to Sherwood

    Posted on YouTube back in February, 2012; as recently as week of April 23, 2012, the administration said it couldn't say that gasoline won't reach $9/gallon -- the price some Europeans are paying according to CNBC

    Article on Liberty Resources

    Liberty Resources: eye on fracking; prior connection with CARBO Ceramics

    For investors only: CARBO Ceramics

    Whiting reports a record TFS well in the Sanish 

    Largest refinery in US: joint venture with Saudi Aramco 

    Sionix Mobile Water Treatment technology coming to the Bakken

    A  17-mile pipeline; Stanley to oil rail loading station: $14 million project

    Average wages in Williston: $71,000/year

    EPA gives green light to frackers; until 2015

    More Great News for the North Dakota to Texas Renaissance Zone

    Back on March 25, 2011, I opined that we were starting to see the end of the love affair with Brazil's off-shore oil prospect.

    Now, another data point:
    Exxon Mobil Corp. said Friday it is abandoning its only exploration effort in the Santos Basin, epicenter of Brazil's offshore oil boom, an area where it has obtained mixed results amid tough drilling conditions.

    The block is the Texas behemoth's sole exploration lease in Brazil, which forecasters say is destined to be one of the world's top petroleum producers by the end of the decade thanks to its vast trove of offshore oil and gas.
    Not a good sign. 

    But great news for Bakken investors.

    Wow! One Township With Nine (9) Rigs -- Huge Wells -- Alger Field -- The Williston Basin, North Dakota, USA


    One of the nine is right across the south line in the Sanish field, but it's still quite a sight on GIS map server. I can only imagine what it looks like on the ground there.
    • 21955, 2,972, Statoil/BEXP, Cvancara 20-17 3H, t9/12; cum 237K 10/16;
    • 22007, 2,700, Statoil/BEXP, Panzer 22-23 1H, t6/12; cum 209K 10/16;
    • 22037, 2,026, Statoil/BEXP, Strobeck 27-34 5TFH, t7/12; cum 176K 10/16;
    • 22063, 1,842, Statoil/BEXP, Anderson 28-33 4TFH, t6/12; cum 174K 10/16;
    • 22122, 632, Lime Rock Resources/Fidelity, Emil 14-13H-24, t6/12; cum 154K 10/16;
    • 22170, 551, Slawson, Athena 4-36TFH, t5/12; cum 114K 10/16;
    • 22317, 1,818, Statoil/BEXP, Arvid Anderson 14-11 4TFH, t6/12; cum 167K 10/16;
    • 22599, 289, Sinclair, Martens 3-4TFH, Sanish, t6/12; cum 57K 10/16;
    Examples of other wells in the immediate area (these are huge wells):
    • 18654, 4,335, Statoil/BEXP, Sorenson 29-32 1-H, s2/10; t4/10; cum 458K 10/16;
    • 17355, 3,909, Statoil/BEXP, Cvancara 20-17 1-H, s10/10; t3/11; cum 303K 10/16;
    • 19513, 4,661, Statoil/BEXP, Sorenson 29-32-2-H, s10/10; t3/11; cum 394K 10/16;
    • 18628, 4,357, Statoil/BEXP, Jack Cvancara 19-18 1-H, s3/10; t5/10; cum427K 10/16;
    • 19057, 4,106, Statoil/BEXP, Domaskin 30-31 1-H, s7/10; t10/10; cum 416K 10/16;
    Back in February, 2010, Irish Oil and Gas Company acquired 120 acres in the Alger Field for $7,300/acre which works out to $4.7 million/section. The 120 acres are in sections 11, 12 and 13, T155N-92W.

    Follow-Up: Only One Number I Was Interested In This Week


    April 28, 2012: I posted the original post Friday evening. It was a bit more interesting than I realized as noted by Bloomberg:
    Oil rose to the highest level in more than three weeks in New York as the biggest gain in U.S. consumer spending in more than a year and better-than-projected earnings overshadowed lower-than-forecast economic growth.

    Futures climbed 0.4 percent after the Commerce Department said household purchases increased 2.9 percent, exceeding the most optimistic projection by economists surveyed by Bloomberg. Gross domestic product grew at a 2.2 percent annual rate, missing the 2.5 percent projection.
    Oil rose to the highest level in more than three weeks. It rose to the highest level and a talking head on CNBC earlier in the week predicted that oil was likely to go below $100 by the end of the week.

    Who are these clowns? Whoever they are, they weren't invited back on CNBC at the end of the week -- if they were, we weren't told.

    Original Post

    Earlier this week, Tuesday, I had a post with the subject: "The Only Number I'm Interested In This Week."

    On Tuesday, all day long, on CNBC, the talking heads kept talking about some analyst who said oil would be under $100 by the end of the week. He offered no supporting data to bolster his argument, simply "it is what it will be."

    I don't forecast oil prices any more; it's a fool's game. But oil below $100 this week did not fit my world view; I truly doubted we would see oil below $100 at the end of the week. So, where did oil finish, COB today? A tad above $104. Oil even gained about 25 cents today.

    There was no mention on CNBC today the comments by Tuesday's prognosticator.

    BEXP Has Another Nice Well in the Alger -- The Bakken, North Dakota, USA

    21358, 3,863, BEXP, Clifford Bakke 26-35 2H, Mountrail, Alger; for those interested, I just posted the 38 permits issued for the Alger field so far into 2012;

    Slow-Rolling the Industry; Anything To Kill the Oil and Gas Industry

    Link here.
    Philadelphia area refinery closures will be only the beginning of shutdowns nationwide if the federal government does not change several key regulations, two oil industry officials warned on Apr. 26. Ethanol mandates in the 2007 Energy Independence and Security Act pose a particular threat, they told the US Senate-House Joint Economic Committee.

    “The recent refinery closures that have occurred or are currently pending are the tip of an iceberg,” said Thomas D. O’Malley, chairman of PBF Energy Co. LLC, which operates refineries in Delaware City, Del. (190,000 b/d), Paulsboro, NJ (180,000 b/d), and Toledo, Ohio (170,000 b/d).
    Gasoline needs to get to $9/gallon (see Secretary of the Interior Salazar's comments on $9 gasoline) to make coal-powered cars, wind energy, and solar energy competitive. 

    There are multiple ways to move toward $9 gasoline.

    Average Pay in Williston: $71,000 -- The Bakken, North Dakota, USA

    That's the average.

    Link here (links to regional newspapers break early and break often).

    Did The US Just Blink? -- Nothing To Do With The Bakken


    April 29, 2012: The LA Times takes up the theme. "Now, more than ever, Israel has a go-it alone strategy." Now that the administration has thrown the country under the bus. See original link. Letting Iran develop its nuclear enrichment program is tantamount to President Kennedy telling the Cubans they could continue bringing in Russian missiles, but only at a measured pace.

    April 28, 2012: I wrote the original post on April 27, 2012, but placed it on "draft" status, not sure whether I wanted to post it, or if I did, when.  It turns out that one day after the US blinks with regard to Iran, Saudi Arabia pulls their ambassador to Egypt. If Americans feel a bit uneasy about events in the Mideast, Saudi Arabia is downright scared. This is not a trivial gesture among Muslim allies.

    Original Post

    Did the US just blink?
    In a major concession, Obama administration officials say they could support allowing Iran to continue a crucial element of its disputed nuclear program if the government in Tehran took other major steps to curb its ability to develop a nuclear bomb.
    Did the US just blink?

    I don't think so. The administration plays a great game of "rope a dope."  The administration played this well. They just threw Israel under the bus.

    No, the US did not blink?

    Just a wink.

    Another Oil Services Company to Locate Near Belfield -- Drill Fluids -- The Williston Basin, North Dakota, USA

    Link here.
    Stark County Zoning commissioners gave a Texas-based company the green light to build a drilling fluids plant near Belfield on Thursday, but not before covering multiple bases.

    Dwayne Lejeune represented AES Drilling Fluids LLC during Thursday’s meeting, which took place at the Stark County Courthouse in Dickinson. He said the company needs a conditional use permit to build three miles south of Belfield because it uses hazardous materials.

    Breaking News: WTI Just Went Green

    Research Center in Grand Forks --- Researching Alternative Liquid Fuels for US Military

    The Energy & Environmental Research Center (EERC) in Grand Forks, N.D., is developing alternative liquid fuels for military and commercial applications.

    Link here.
    The Connecticut Center for Advanced Technology Inc. (CCAT) in East Hartford, Conn., awarded EERC a $906,000 contract to develop alternative liquid fuels. The EERC will demonstrate gasification-based technologies for converting nonpetroleum feedstocks, such as coal and biomass, into liquid fuels.

    “The military has been good at developing products that private companies and consumers can benefit from,” he states. “This has the possibility for development of moderate-scale systems that allow distributed production of power and fuels, utilizing coal and regional sources of biomass.”
    I have talked/bloggeda about EERC in the past. In fact, it is linked at the sidebar at the right. It has a huge role in advancing the oil and gas industry in North Dakota.

    Random Look at Entrepreneurial Endeavor in the Williston Basin: Summit Energy Services

    Link here.
    He started Summit Energy Services in April 2010. The company now has an 11,000-square-foot shop on the west side of Williston on 8½ acres in the commercial park. Summit Energy operates more than 70 trucks, 60 pieces of equipment including cranes, skid steers and dozers.

    In two years, the company has jumped from six to more than 100 employees and is still hiring. It has seen a 90,000 percent increase in billings since it was founded. Services include pipeline construction, roustabout services and site maintenance, storm water and erosion management, reclamation services, seasonal services and scoria and water hauling.
    Note: this link is likely to be broken within a month or so. 

    Gasoline To Jump 15+% in May -- SeekingAlpha

    Link here to SeekingAlpha -- headline says it all; nothing else needs to be said; go to link if necessary.

    A note to the granddaughters

    On the way to school today, the 8-almost-9-year-old granddaughter continued her discussion from yesterday afternoon trying to think of a subject on which to write her "research paper." Yesterday it was going to be on "space" but someone else had selected that subject and now she was back to square one. I suggested perhaps a narrower subject than "space." She said that she already had narrowed it down: her first idea was to write on "the universe."

    This morning she said she had finished reading her book on Pearl Harbor/WWII, and had decided that she would write her paper on "submarines." So, she's making progress on narrowing down her subject. She says she can't wait to read "20,000 Leagues Under the Sea."

    Meanwhile, I'm continuing to read Richard Fortey's Horseshoe Crabs and Velvet Worms. I noted in passing a week or so ago that it had been reviewed in both the WSJ and the NYT. I've been spoiled by Stephen J. Gould and Richard Dawkins (despite his baiting). Leafing through Fortey's book, somehow it didn't seem to catch my interest. Because I found it at the Yellow Umbrella Bookstore in Chatham, Cape Cod, is probably the real reason I ended up buying it. I don't care for the rambling style of the author -- he digresses as much as I do -- but when he gets to the nut of his argument in each chapter, it is absolutely delightful. I've learned to skip a lot of his ramblings.

    He introduced me to Rubisco. Rubisco is the most common protein on earth; it catalyzes the primary step of photosynthesis, and, coincidentally, is the rate-limiting step of the Calvin cycle. Years ago for one summer, I participated in a research project under Dr Larry Tieszen, Augustana College, on the efficiency of photosynthesis of Arctic plants. It was either the summer of 1970, 1971, or 1972, I forget. I could narrow it down, I suppose if I gave it a bit of thought or looked at my journals, but....

    It appears researchers were close to identifying Rubisco in the late 1970's and it looks like the paper giving credit to its discoverers was published in 1985. It's hard to believe I was so fortunate (?) to have been part of that global research. At the time, for me, it was mostly drudgery. I had no idea where I fit in the bigger process.

    From wiki:
    Some enzymes can carry out thousands of chemical reactions each second. However, RuBisCO is slow, being able to fix only 3-10 carbon dioxide molecules each second per molecule of enzyme. The reaction catalyzed by RuBisCO is, thus, the primary rate-limiting factor of the Calvin cycle during the day.
    Efforts to increase the efficiency of this cycle could be instrumental in fixing atmospheric CO2. Funny how paths cross in life. God has a sense of humor.

    WSJ: Shell Making Money On Natural Gas; Exxon, Not

    No link; from the print edition, April 27, 2012, p. C10.

    Shell making money on natural gas -- location, location, location.

    Only 5 percent of Shell's natural gas output is from the US; fourteen percent of natural gas produced by Exxon comes from the US.

    From the story:
    "In the global gas game, location is critical. With US gas prices moribund, Exxon's big bet on the fuel vie 2010's purchase of XTO Energy still drags on profits. Gas sol in Europe and Asia fetches much higher prices."

    The XTO deal is hurting XOM's return on capital, and that's why it had to significantly increase its dividend to hold investors.

    Again, a disclaimer. This is simply a data point that caught my eye because of the XTO connection; it is not a buy, sell, hold recommendation.


    In another section in the print edition, is a longer article, same subject. One can find it on-line by googling "Exxon Struggles While Shell Thrives." 

    At the very end, there's a bit on the "North Dakota to Texas Renaissance Zone."

    Oil Buzz in South Dakota: A Random Update

    "Tygar45"sent me this link, thank you.

    Three Forks formation being eyed in northwestern South Dakota.

    This is the kind of link that will break early. It probably won't be here a month from now. The video at the link includes a map of the area under discussion.

    Senate Democrats Close Ranks To Stop Approval of Keystone XL

    Link here.
    President Barack Obama, who has put northern portions of Keystone on hold due to environmental concerns, has threatened to veto any bill containing the pipeline if it included an immediate approval of the entire project.

    Most Senate Democrats are opposed to including the Canada-to-Texas pipeline in the bill, but it would only take two of the Democratic negotiators to join Republicans to move the project another step closer to congressional approval. It now appears as if none will.
    I'm not sure what the writer means by saying the president "has put northern portions of Keystone on hold." The president killed Keystone XL 1.0, the entire pipeline. The company has only recently proposed a new route for Keystone XL 2.0N to Nebraskan legislators (the president has not weighed in on this new proposal to the best of my knowledge). TransCanada is going ahead with XL 2.0S.

    The more accurate way to report this:

    President Barack Obama, who killed the original Keystone XL, has threatened to veto any bill calling for an immediate approval of the entire project.
    Regardless, it's all idle chatter. Come November 8, 2012: the Keystone XL will be approved.  All politics. Folks are getting used to $4 gasoline going into the driving season. At least that's what the tea leaves are telling me.

    For Investors Only: Chevron Reports Today; Ford Sales Slump

    Chevron, TransCanada, Ford, GDP

     Chevron: profits rise 4 percent on higher priced oil in first quarter; expects $3.27 vs $3.09 y-o-y; earnings came in at $3.27

    TransCanada (Keystone pipeline) reports today, also. 

    Ford 1Q12 data points:
    • net income fell by 45 percent
    • earned 35 pennies vs 61 pennies y-o-y
    • half the decrease due to higher tax rate; now paying a 32% tax rate vs 8 % a year earlier
    • Ford moved tax credits and assets taken in 2006 when not earning a profit, back unto the book
    • European sales plummeted; the company paid higher taxes
    • will offer lump sum payments to 90,000 retirees/former employees to cut pension costs; largest such offer in US history; does not know how much plan will cost; depends on number who accept
    How is the market taking this? Shares are trading higher in pre-market trading. Really? Really.

    On another note, GDP plunges! Down to 2.2 percent. Get ready for QE3/Ben. It's not so bad that GDP is down, or that it "plunged" as written in one headline: this is the real story: analysts had forecast a 2.5 percent GDP. Analysts missed estimates on the "wrong" side.

    Wheat: More Than Just Oil in North Dakota, Montana

    For folks interesting in the Asia - Wheat story, the Billings Gazette has a great article.
    The United Grain elevator is big, fast — and Japanese. It holds roughly 1 million bushels of wheat, can load 110 railcar shuttles in 10 hours and represents a growing trend in the globalization of the farm economy. Asian countries with rapidly growing middle classes are buying commodities like never before. And to meet that demand, global corporations are doing whatever it takes, including acquiring elevators in Montana farm country.

    "The game changer is obviously China," said John McEnroe, executive vice president of country operations for CHS, America's largest grain marketing cooperative. "When it's growing at 6 to 9 percent (gross domestic product) each year, and they have a growing middle class, that causes exporters to expand their supply chain. What you see being built is mostly by multinational companies."
    The article provides a nice summary of the wheat elevator-railroad loading facilities in Montana, with frequent mentions of North Dakota.

    Thursday, April 26, 2012

    Another Revenue Stream for Mineral Rights Owners

    Back on September 28, 2011, I posted a story about a new liquid natural gas pipeline stretching between Tioga and Sherwood, North Dakota. At that time, my emphasis was on the need for additional housing for workers needed for all these projects in the Bakken. I wasn't even thinking about an additional revenue stream for mineral rights owners because I was not aware how "valuable" liquid natural gas was compared to dry natural gas.

    Coincidentally, we now have a much better explanation of what this pipeline is all about.

    RBN Energy has posted this story for Friday, April 27, 2012.

    First, the key point from my September posting:
    77-mile natural gas pipeline to be buried between Tioga and the Alliance mainline at Sherwood, North Dakota, on the Canadian border. Aux Sable Liquids Products has a natural gas liquids processing plant in the Sherwood area.
    Now, from the RBN Energy article:
    But there is another way of getting NGLs out of the Bakken.  It is an alternative with significant advantages, but does not seem to get the airplay of some of the other projects.  And that’s because it doesn’t fit neatly into one of the traditional hydrocarbons asset buckets.  It is not an NGL pipeline, but it moves 80,000 barrels of NGLs each day.  It takes wet gas with only superficial processing, but processing is an integral part of the integrated system.   It has one operational lateral already moving product out of Mountrail and Ward Counties, and has another lateral going into the Tioga plant next year.  Of course, this is the Alliance Pipeline - Aux Sable system.

    In June 2011, Alliance Pipeline announced plans to build an 80 mile lateral pipeline and associated facilities connecting Hess’s Tioga, ND gas processing facility to the Alliance Pipeline near Sherwood, ND.  The line will have a capacity of 106 mcf/d and is expected to be in service by July 2013.
    Dry natural gas: < $2.00/MMbtu.
    Liquid natural gas: >$13/MMbtu.
    I do not even recall this in the monthly Director's Cut.

    For Investors Only: Another Look At CRR

    In light of my earlier posts on Liberty Resources, one might be interested in re-visiting CARBO Ceramics (CRR).

    Earnings report.


    5-year chart.

    52-week range: $85 - $185. Today's close: $87, down $2.00.

    Another superficial Motley Fool article, but a viewpoint.

    Human Interest Article From the WSJ -- Williston, North Dakota

    Earlier today I posted a very small opinion piece from the Wall Street Journal. In that opinion piece, the editor notes that the Williston Chamber of Commerce is no longer answering its phone.

    It turns out that a WSJ staff writer had written earlier that the Williston Chamber of Commerce was no longer taking phone calls. Here's the story. A subscription may be required to access the article but generally googling the headline will get you the article: "Oil Fuels Population Boom in North Dakota City."

    There is nothing in the article that regular readers don't already know but it's fun to read the names of local people who were interviewed for the article, names Williston readers will recognize: Chuck Neff, Tim Conlin.

    Highlights From the Newfield Earnings Transcript

    Link here.

    Regarding the Bakken:
    In the Bakken play, our operations are gaining steam after our brief slowdown in late 2011. This slowdown allowed us to reduce the backlog of uncompleted wells and improve our execution in the field. From the beginning of the year, we have completed 8 new wells. The average initial production rate from these wells was more than 2,600 barrels of oil equivalent per day. With the exception of one well, these were all super extended lateral wells. The one 5,000 foot lateral was actually one of the higher IP rates at nearly 3,000 barrels of oil equivalent per day. We expect that our Bakken production will grow about 35% over our 2011 levels.

    Our drilling team is transitioning our operations to pad-based drilling in 2012. About 2/3 of our planned wells in the Bakken will be from multi-well pads. Our most recent laterals, 11,000 feet in total length with up to 40 frac stages, have been drilled in as few as 24 days. This compares to an average of 35 days in 2011 and more than 40 days in 2010. We've also reduced the number of days between rig release and first production, from 62 days in 2011 to about 40 to 45 days year-to-date.
    The very first question: how much is a Bakken well costing Newfield? So in general, I'd say we're sitting at about 640 acres, somewhere around $6.9 million or so completed on a 12 80; 10,000-, 11,000 foot lateral, somewhere around $11 million or so.

    Data Points Regarding Liberty Resources: Linked Article Is A Must-Read

    Liberty Resources: fracking expertise

    I post a lot of stories every day, and don't always get a chance to read everything I link. I finally got back to this story. If you have time to read only one story today, this is the story (at the link below) that I would read. My notes are from the first part of the linked article; much more at the link.

    I'll know you've read the linked article if you can tell me what the breakeven price for a Bakken well is ($/bbl). I think newbies will be surprised.

    The "nut" of the problem/solution:
    While we have great confidence in our ability to design fracture treatments for the Bakken, execution represents a potential problem. The rapid growth in demand for hydraulic fracturing services has led to three things: 1) constricted availability of supply to get wells fractured; 2) high prices for fracturing services; and 3) relatively low service quality. Based on our background in oilfield service and supply, we decided to form a company that could supply these services in a timely fashion with high quality and reliability. In March of this year, we formed Liberty Oilfield Services, which recently began fracturing operations in Williston. Liberty Oilfield Services will be the fracturing entity for the majority of our development. We have had great early success in building the team for this company, starting with hiring two individuals we knew well as our service leadership: our business manager for Liberty Oilfield Services has a PhD in hydraulic fracturing, and our operations manager has a distinguished career in operational excellence. 
    Link to article.

    I blogged about this the other day. I said I would get back to the article if I had time. Here are some data points from the first part of the article. Go to the link for a whole more.
    • Chris Wright wanted to start a new company: felt he could assemble a team with expertise in fracking
    • CEO feels that fracking will be the discriminator in the Bakken (cost and effectiveness)
    • Mark Pearson: former president and CEO of CARBO Ceramics, the world's largest manufacturer of proppants
    • Paul Vitek: was CFO for CARBO Ceramics for more than 20 years
    • Liberty Resources is a portfolio company of Riverstone Holdings: had the resources necessary for the Bakken -- moving too rapidly to rely only on funding from individual investors
    • first land acquisitions with Zavanna, LLC
    • improved Zavanna's well performance by a factor of 2 or 3 times
    • Liberty Resources now has nearly 44,000 net acres in the central basin of the Bakken -- all of this since founding the company in September, 2011
    • who is the operator of these wells? 2 Liberty Resources wells; 2 Zavanna wells; controls drilling and fracturing of all four wells; 20% of our development is non-operated

    Data Points From WLL's Earnings Transcript -- 1Q12

    Data points from WLL's earnings transcript, 1Q12 (some numbers rounded):
    • 1Q11 production at high end of guidance; nearly 15% increase sequentially
    • will raise full year guidance despite conveyance of 4,500 boepd for Whiting US Trust II (WHZ)
    • project 17 - 22% growth increase for 2012 over 2011 (vs forecast of 15 - 20%)
    • reducing long-term debt
    • production now up to 81,000 boepd  
    • the Bakken: >2,500 drilling locations; >10 years inventory at current pace
    • CAPEX: raised to $1.8 billion from $1.6 billion; represents high pace of activity in Williston Basin
    • the Bakken: 701,751 net acres; increased by 20,000 net acres y-o-y
    • Lewis & Clark/Pronghorn: Pronghorn Sand and upper Three Forks, with one (1) wellbore
    • Hidden Bench, Tarpon, Missouri Breaks, Starbuck: dual targets (MB and upper TF)
    • will test WLL's first lower Three Forks at Hidden Bench in May, 2012
    • EURs: 350,000 to 600,000
    • average cost of wells: $7 million
    • very upbeat on Pronghorn; preliminary results suggest similar to Sanish
    WLL continues to lead all Bakken operators in cumulative production
    • 6-month production is 4,000 bbls BOE higher than 2nd-ranked operater
    • 6-month production is 27,000 bbls BOE better than average of the next 25 operators
    Takeaway capacity for the Bakken area: > 1 million bbls by end of 2012; will expand by 412,000 bopd for 2012

    Finance notes
    • some of the best cash margins "in the business": $49
    • for 2012, 45% hedged; $67 floors and $109 ceilings
    • 20% of well head natural gas in excess of $5.40/Mcf
    • Joint Venture? that was the original plan, but results are so good, WLL may not want a partner
    • cost of a completed Niobrara well? drilling, $2 million; completion, $2 million; total: about $4.3 million
    • drilling inventory? in the Sanish, WLL has completed almost all of their middle Bakken wells; maybe 14 more middle Bakken wells in the Sanish to drill; the remainder will be TF wells
    • cost of a WLL well? $6 million Sanish; $7 million elsewhere
    • in the Pronghorn: fewer rigs will be needed, because all wells off of the pad; 2 or 3 wells/pad; save time on moving rigs
    • Pronghorn: could be 100,000 acres de-risked before it's all over
    • Missouri Breaks, the wells don't look so good? correct -- lower IPs, but smaller decline; EURs should be 300,000 to 340,000 boe range; well cost in Missouri Breaks? $7 million; hope to bring it down over time
    • rigs? 19 in Williston Basin
    • 7 rigs in the Sanish; will keep busy for 2, almost 2.5 years; 5 in the Pronghorn; 1 at Lewis & Clark; 2 at Hidden Bench; 2 at Missouri Breaks; and 1 in Starbuck. That totals 18.
    • Robinson Lake Gas Plant: netting $3 million/month (50% interest)
    • ability to acquire any more acreage in the Williston Basin? 60,000 to 80,000 net acres, maybe

    Feds Back Off on New Child Labor Farm Rules

    Link here.

    Just yesterday I posted a note regarding this craziness.
    Under heavy pressure from farm groups, the Obama administration is dropping an effort to prevent children from doing hazardous work on farms owned by anyone other than their parents.

    The Labor Department says it is withdrawing proposed rules that would ban children younger than 16 from using most power-driven equipment. The rules also would prevent those younger than 18 from working in feed lots, grain bins and stockyards.
    This is an incredible story on so many levels. 


    (A number of folks sent in comments that I did not post suggesting that I was making too much out of this story. Hmmm. The comments most likely came from technocrats working for the Department of Labor. The fact that the president himself got involved, suggested this is a bigger story than some realized.)

    KOG: 2012 Sales Volumes; Updates Operations

    Link here.

    Data points (some numbers rounded):
    • averaging 10,578 boepd for 1Q12
    • represents nearly a 500% increase year-over-year; 50% increase sequentially
    • positive comments on reducing flaring
    • six rigs; a seventh by May, 2012
    • will add a second completion crew
    • Skunk Creek 9-2-3-5H, 1,939 bbls oil
    • Pankowski 4-6H, 1,312 bbls oil
    • Grizzly 149-104-15-12-1-2H, 901 bbls oil

    Williston Tables Motion to Ban Living in RVs Inside City Limits

    I guess I forgot to note this earlier. No link.

    Williston had planned to ban living in RVs inside city limits. The city has tabled this motion while studying comments from city residents.

    Three (3) New Permits -- The Williston Basin, North Dakota, USA

    Daily activity report, April 26, 2012 -

    Three new permits --

    Operators: Petro-Hunt (2), Samson Resources

    Fields: Lonesome (McKenzie), Fillmore (Divide)

    Four wells released from "tight hole" status; none of them were completed:
    • 20546, DRL, CLR, Candee 3-9H, Dunn, Bakken
    • 21088, DRL, Hunt, Antelope 1-34-27H, McKenzie, Bakken
    • 21477, DRL, Hess, Johnson 1-3H, McKenzie, Bakken
    • 21579, DRL, Samson Resources, Nomad 6-7-163-99H, Divide, Bakken

    Newfield Earnings

    Link here.
    Newfield Exploration Co. reported a first-quarter profit on Tuesday, reversing a year-ago loss as it increased production of oil and natural gas liquids by 35 percent.

    The earnings beat analysts' expectations, and Newfield slightly raised its 2012 production forecast.

    Net income was $116 million, or 86 cents per share, compared with a loss of $17 million, or 13 cents per share, a year earlier.

    Without a loss on commodity derivatives, the company would have earned 91 cents per share.
    Maybe some data points later.

    Recent Statoil Presentation

    Don suggests looking at slide 8 of the presentation to see the single mention of the Bakken in Statoil's presentation.

    Starbucks? Absolutely Nothing To Do With The Bakken


    Later, 9:00 pm: I see that after all that build-up on CNBC, Starbucks beat by one penny.  It looks like I will go out and celebrate tomorrow morning by having an old-fashioned doughnut and a small, black Tall Blonde at Starbucks on Harvard Square, Cambridge.

    Original Post

    I used to really dislike Starbucks. It's a long story; I won't go through that story again.

    But having discovered the Starbucks at Harvard Square in Cambridge, I love it. I absolutely love Starbucks. At least this particular one. I have never thought about it much but, counterintuitively, the floor plans for Starbucks do not seem as uniform as one would expect in a franchise. When one walks into a McDonald's restaurant, it is, 9 times out of 10, exactly what one would expect. But that does not seem true of Starbucks.

    The floor plans always seem to be different, but the atmosphere, service, and experience always seem to be the same Starbucks experience.

    Having said all that, that I really enjoy Starbucks, is it just me or does CNBC seem to be preoccupied with Starbucks? I had a few minutes between child care responsibilities this afternoon, so I turned into CNBC. And there again, a long segment on Starbucks. Yes, I know that Starbucks is reporting after the market closes, and there's a lot of interest, but it seems between Starbucks and RIMM, CNBC doesn't talk about much else.

    The market is up nicely today, after a nice yesterday, and even oil is up, and yet one would hardly know that. But we certainly know all about Starbucks.

    Except for rare mentions on Jim Cramer, mentions of  any Bakken company on CNBC is a very, very rare event. As mentioned in earlier posts, CNBC seems to be doing its viewers a disservice. Thank goodness for Al Gore and his invention, the internet. Al Gore was appropriately recognized for his achievements by recently being inducted into the Internet Hall of Fame.

    Nice Article On Liberty Resources -- The Bakken, North Dakota, USA

    Liberty Resources

    April 19, 2014: Liberty Resources II, LLC -- re-enters the Bakken in 2014. 53,000 net acres. 


    April 19, 2014: Liberty Resources II, LLC, re-enters the Bakken; that press release was back in January, 2014; then an update on March 19, 2014; and now two items from the NDIC hearing dockets scheduled for April 24, 2014.

    June 24, 2013Mike Filloon's analysis of the Liberty Resources acquisition.

    May 1, 2012: Two wells converted to water injection.

    April 29, 2012: a closer look at some recent Liberty Resources wells

    April 27, 2012: daily activity report -- Paul Rankin transfers operator status fo 35 wells to Liberty Resources, Inc; all wells in Glass Bluff oil field. 

    Original Post

    Link here to Oil and Gas Financial Journal. Link to data points from the article.
    OGFJ's editor, Don Stowers, recently spoke with the management team at privately held Liberty Resources LLC about their company's operations and plans for the coming year. Chris Wright is CEO; Mark Pearson is company president; and Paul Vitek serves as CFO. All three executives have extensive experience in hydraulic fracturing and well completion technology. Denver-based Liberty is a Riverstone Holdings portfolio company.
    The headline:

    Fracturing and completion expertise boosts Liberty Resources in the Bakken

    Data points to follow, if I don't forget. 

    Liberty is followed here; I may have to give it its own page.

    A snapshot of Liberty Resources:

    More Great News for The North Dakota to Texas Renaissance Zone

    Sierra Club will block any attempt to ship liquid natural gas from Maryland.

    I can hear the cheers all along the pipelines from Alberta, to North Dakota, through Oklahoma to Texas and New Orleans.

    Nebraskans may be upset.

    Googling "The North Dakota to Texas Renaissance Zone" suggests this site is the first to use the term, though credit goes to Meredith Whitney for the idea. At the time of the post, googling resulted in exactly one hit -- this blog.

    It looks like ENB hit a 52-week high today.

    Oil Tourism in the Bakken

    Link here to Fargo Forum
    “We explained that you can’t just drive up to some of these rigs,” she said.
    Wasn't it Ronald Reagan who said, "Once you've seen one Bakken well, you've seen 'em all"?

    When we were in England, nocturnal ghost tours were all the rage. I wonder if flare-sighting at night might not be a big draw in western North Dakota?

    Another tourism pastime is filming big rig choreography at corner service stations built with Ford pick-us in mind.

    Another favorite is counting oil tanks on an Bakken multi-well pad.

    Another favorite, but not seen yet possible in the Bakken: counting the number of turbines not spinning when visiting a wind farm.

    SEC Investigating CHK/CEO Holdings In Company's Oil Wells


    Later, 11:00 pm: CHK to terminate "Well Program Pact" early

    Original Post
    Link here.

    Two disclaimers:
    • for investors only; this is not an investment site; I simply post articles of interest to me regarding the Bakken (and a few other subjects) and leave the blog open for others to access
    • I have "no dog in this fight" as they say regarding CHK, but I know a lot of folks, especially around Dickinson, are following the story closely
    Now from the link:
    Reuters reported on April 18 that McClendon, who founded the company, had borrowed as much as $1.1 billion against his 2.5 percent interest in wells that he received under the company's "Founder Well Participation Program."

    The company also said on Thursday that it would end that program in 2015, when the shareholder approval of the program that started in 2005 expires.
    Oh, one other disclaimer: I have no opinion of CHK, good, bad, or indifferent, but in general, I am fond of "Big Oil." Without "Big Oil" it is unlikely I would have been picked up by those who had access to gasoline when I was hitchhiking in my younger days. But I am digressing.

    My 6,667 Stand-Alone Post

    I see that the previous post was my 6,666th post on this blog (my original Bakken blog was deleted in toto some years ago and I started over).

    For newbies, it should be noted that I try to post 5 - 10 new, stand-alone posts every day (when not traveling), so be sure to scroll down when visiting the blog.

    I also update a dozen or so previous posts on any given day.

    Seventy-two percent of my content is driven by readers who alert me to stories I would have have otherwise missed.

    99% of my posts and updates are about the Bakken. One percent of my posts and updates have to do with politics; Apple, Inc; green energy; global warming; etc. Many of my "commentaries" are not Bakken-related. I generally do not post comments to my commentaries. I generally post comments to Bakken posts. Interestingly enough, most comments are in response to my commentaries. I receive minimal feedback to all the Bakken information I post; most of the feedback is to note errors in something I have posted -- which I really appreciate. I want to correct errors as soon as possible.

    I post non-Bakken notes because it helps put the Bakken into perspective. 

    "Dial Williston For Jobs" -- The Wall Street Journal

    From the print edition, page A14, opinion page.

    Under "Review & Outlook" where the WSJ editors post short opinion pieces there is a 2-column, 3-inch piece titled, "Dial Williston for Jobs," with a subtitle: "Would someone please answer if Governor Cuomo calls?"

    The lede:
    The North Dakota shale boom is by now well known -- so much so that the Chamber of Commerce in tiny Williston (population who knows?) in the heart of the Bakken Shale has had to automate its phone system because it can no longer respond to individual calls or emails.
    Someone at the WSJ dialed 701-577-6000 on Wednesday .... to request an information package ... but got a recorded response.

    The opinion pieced noted that New York "still bars hydraulic facturing in the Marcellus Shale lest they offend the Manhattan greens."

    The opinion piece was a request for someone in Williston to send Governor Cuomo an information packet on the Bakken.

    For all it's technology prowess, I'm surprised the folks simply didn't go to the web, or visit my site. Smile.

    Anyway, I'll be cutting out the little opinion piece and posting it on the refrigerator. (By the way, I was quoted in the WSJ some years ago -- what a hoot.)

    For Newbies: Burlington Resources' Midnight Run Wells Are Generating Some Excitiement


    These wells are in/near the bull's eye of the Bakken, the Union Center oil field.

    Gasoline Engines Vs Coal-Powered EVs -- The Wall Street Journal

    From the print edition of the WSJ: engineers cast wary eye on role of electrics (no link; from the print edition, but googling will probably get you to it).

    Data points:
    • from a recent technology meeting in Detroit
    • senior auto executives offered a sharply skeptical view of EVs -- suggesting they will play a marginal role in the US market
    • will most likely remain confined to less than 10% of the market through 2025
    • "By 2025, we wee battery electric vehicles still with too long a payback, and inadequate range," attributed to vice president for powertrain engineering at Ford Motor.
    • GM chartist: comparing the amount of energy delivered by a given volume or mas of fuel -- lithium-ion batteries -- used by the Chevy Volt -- were ranked close to zero compared with gasoline and diesel fuels, which delivered the most energy for the least amount of weight and cost to the consumer
    Chrysler data points:
    • conventional, gasoline-fueled internal combustion engine and transmission: 10% of cost of a $30,000 car, or about $3,000
    • Ford said the battery for the electric Ford Focus  cost $12,000 to $15,000 for a car that is priced at about $40,000, about $15,000 more than a petroleum-fueled Focus
    Honda data point:
    • by 2025, a customer buying a plug-in hybrid could wait 10 years to recover the added upfront costs compared to a 2025 conventional engine
    Other data points:
    • automobile executive focused on meeting new CAFE standards (54.4 mpg by 2025)
    Two comments:
    • they are still talking about lithium batteries; newer technology could change batteries
    • the niche for EVs will likely grow, albeit a small niche
    Remember: the magic number is 200,000

    Note: this story was posted/linked earlier. In that post, the emphasis was first-time unemployment benefits claims: higher than expected.

    This post is from the same story, the same link, but a different emphasis: new jobs.
     Employers added 120,000 new jobs to their payrolls in March, the least since October, after averaging 246,000 jobs per month over the prior three months.

    "We seem to be chasing our tail with the labor market now with seemingly reported declines in weekly numbers coming from persistently higher levels week-after-week," said Andrew Wilkinson, chief economist strategist at Miller Tabak in New York. "Today’s reading also gives the uncomfortable drift upwards in initial claims the feel of a trend rather than aberration."

    Regardless, adding 120,000 new jobs after averaging 246,000/month for the past three months is a dismal data point.