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.
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.
Getting online while traveling has never been easier. Getting online for free is still hit-or-miss.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).
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.
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.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.
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.
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.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.
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.
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.
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.
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.
When the oil boom hit North Dakota, Randy Ramsey traded his professional attire for coveralls and a blue-collar job.Link sent to me by a reader. Thank you.
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.
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:
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.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.
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.
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.
2,549, Lange 11-30-1H
1,953, Neil 24-19MBH
1,436, Taboo 1-25-36H
- 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
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.Teachers and students get at least an equal spot at the table with the Sierra Club. Incredible.
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.
"... 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.
...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.'"And on fracking:
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."
...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.I hope you can get to the link.
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."
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.
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.Something tells me the state regulators will sort this out ASAP.
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.
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.There's a name for this: -- the Red Queen Race.
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.
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.Not a good sign.
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.
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.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.
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.
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.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.
“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).
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?
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.
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.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.
“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.”
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.Note: this link is likely to be broken within a month or so.
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.
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.
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.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.
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.
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.
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 article provides a nice summary of the wheat elevator-railroad loading facilities in Montana, with frequent mentions of North Dakota.
"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."
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.Dry natural gas: < $2.00/MMbtu.
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.
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.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.
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.
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.
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.
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.Maybe some data points later.
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.
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:
“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"?
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."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.
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.
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.
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."