Tuesday, July 31, 2012

For Investors Only -- CVX Links

Disclaimer: this is not an investment site. Do not make any investment decisions based on something you read at this blog.

Of all the companies I have been most interested in over the years, two stand out: BNI and CVX.

I've talked about BNI before; it was one of the first, if not the first, company in which I bought shares when I started investing more than 30 years ago. And then Warren Buffett bought the company.

I first bought shares in Texaco when it filed for bankruptcy back in 1987, and have accumulated shares in that company over the past 25 years. I remember when it was the most despised major oil company. I don't remember the specifics, but it stands out because ... well, I forget why it stands out except to say that it's been interesting to watch companies fall in and out of favor. And it seems CHX has fallen out of favor more often than not.

Right now, kind of decompressing for the evening, the grandchildren are in bed after a long, exhausting day, I took a look at CVX at the Yahoo Finance site. Here are the headlines (okay, the links):
Except for the "Lianzi production" story I have not read any of stories, and I won't. I have simply linked them. I have not checked to see if any of the links work. If they don't, simply go to Yahoo Finance, and check out "CVX."

Next week, we'll probably see a series of headlines telling us why CVX is a dog and needs to be sold. But tonight, I'm feeling pretty good. Let's see what another long-term holding, XOM, is doing. I started buying shares in Exxon just weeks before the Valdez incident.

CVX is selling near it all-time high and pays a dividend of 3.3% and significantly more to some buyers depending on when they bought their shares.


A Note for the Granddaughters

Yesterday, with out-of-town guests, we were exploring the Pacific Coast along the Palos Verdes peninsula, the southernmost peninsula of the Los Angeles metropolitan area.

About 3:00 p.m., the granddaughters were getting hungry and we wouldn't be eating dinner until about 6:00. We were close to Starbucks and to Subway (and to The Yellow Vase) at Golden Cove, along the coast, on Palos Verdes "road" along the coast. We considered either Starbucks or Subway, but one of the out-of-town guests had never seen a Trader Joe's. What a great opportunity. I pretty much let the grandchildren pick whatever they wanted (mostly fruit) and then we went outside to find a place to eat. There really wasn't anything in the immediate area. I considered (briefly) the bus bench; buses tend not to run very often in this part of the neighborhood and my hunch was we could have sat there for an extended period without confusing any bus driver. But then I spied an American flag, and a building down along the coast, and remembered there was a whale-viewing area and a "whale" museum in that area. Wow.

We jumped in the van, and drove the two minutes down to Point Vicente Interpretative Center. This was on a Sunday. There was parking. There was a green park with empty picnic tables. There were a fair number of people, but not too many. It could not have been more perfect.

We ate our fruit and yes, some potato chips for me, and then went over to the interpretative center. It turns out this has been their best year in ten years (based on the 10-year average) for whale sightings.

And, then, we heard that there were about six blue whales off the point, easily seen without binoculars but better with "spyglasses." I ran back to the van; got the glasses, and the six of us enjoyed watching the six of them (the blue whales). They were blowing from their spouts every few seconds. Earlier in the day, folks said they had seen a sperm whale, quite unusual, they say, for this point, this time of the year. We only saw blue whales. At 5:00 p.m. the museum closed, and I guess they "brought in" the whales.

So, if you find yourself hungry anywhere along the Palos Verdes "road," stop at Trader Joe's, pick up some very inexpensive items, and then head over to the Point Vincente Interpretative Center. I'm sure everyone in the area has been doing this for years, but some of us are just catching on.

For Investors Only: One-Year Comparison Of ATT, KOG, and MSFT

Link here.

Of course, you can pick and choose your own time frame. I looked at several different time frames and chose the one-year mark because it presented a biased story from a biased blogger.

ATT pays about 5% (significantly greater for those who have held ATT for awhile); MSFT pays 2.7%; KOG does not pay a dividend.

Disclaimer: this is not an investment site. Do not make any investing decisions based on what you read at this site.

Monday, July 30, 2012

Another "Human Interest" Story on the Bakken in the Chicago Tribune News

Link here.

Simply another story on the energy revolution within the US.

Twelve (12) New Permits -- Hess Has a Nice Well Coming Off Confidential List Today -- Earnings For MHR, EEP, and MPC; Williston K-12 Grades To Double Enrollment?

Magnum Hunter reports that it achieved average production rate of 12,893 barrels of oil equivalent per day (Boepd) during the second quarter of 2012 (MHR) 3.76 : Co announced an operational update on each of its upstream unconventional resource plays for the second quarter of 2012 which includes (i) the Eagle Ford Shale, (ii) the Williston Basin, and (iii) the Appalachia/Marcellus/Utica Shales. Additionally, the co provided an operational update for its midstream division, Eureka Hunter Pipeline. Magnum Hunter achieved a record average production rate of 12,893 barrels of oil equivalent per day ("Boepd") during the second quarter of 2012. This represents a 161% increase from the production reported for the second quarter of 2011. Although second quarter 2012 production only represents a 2% increase on a Boepd basis as compared to first quarter 2012 production, the Company's oil/liquids production increased 32% to 5,862 Boepd in the second quarter of 2012 from 4,454 Boepd in the first quarter of 2012. This substantial growth in oil production is consistent with the Company's strategic shift in its focus as it relates to its capital budget program. Second quarter 2012 production includes only a partial quarter of production from the Williston Basin acquisition closed on May 22, 2012. Second quarter production pro forma for a full quarter of production from the Williston Basin acquisition would have been 13,400 Boepd.

Marathon Petroleum beats by $0.07, beats on revs (MPC) 47.47 : Reports Q2 (Jun) earnings of $2.53 per share, $0.07 better than the Capital IQ Consensus Estimate of $2.46; revenues fell 2.6% year/year to $20.26 bln vs the $19.27 bln consensus. "With our refining capacity balanced almost evenly between the Midwest and the U.S. Gulf Coast, we were able to take advantage of strong crack spreads and increasing production of Canadian and unconventional crudes.

Enbridge Energy beats by $0.04, misses on revs (EEP) 29.07 : Reports Q2 (Jun) earnings of $0.33 per share, $0.04 better than the Capital IQ Consensus Estimate of $0.29; revenues fell 34.6% year/year to $1.55 bln vs the $1.77 bln consensus. Additionally, declares a cash distribution of $0.5435 per unit, as 2.1% increase, payable August 14, 2012 to unitholders of record on August 7, 2012.

Wells coming off confidential list on Tuesday, July 31, 2012:
  • 21609, 138, WPX/Dakota-3, Corral 1-36HD, Mandaree, t5/12; cum ---
  • 21810, 770, Hess, CA-E Burdick 155-95-2932H-2, Capa, t6/12; cum 4K 5/12;
  • 22042, drl, Cornerstone, Ingerson 2-12-1H, Woburn, s1/12;
Twelve (12) new permits in North Dakota:
  • Operators: EOG (2), Denbury (2), Hess (2), Whiting (2), Zenergy, Fidelity, Murex, Liberty Resources
  • Fields: Siverston (McKenzie), Rawson (McKenzie), Stanley (Mountrail), Manitou (Mountrail), Bell (Stark), Painted Woods (Williams), Rosebud (Williams)
Liberty Resources has a permit for a wildcat in Williams County.

One producing well completed:
  • 21085, 933, Denbury Onshore, Satter 24-35NEH,

No link; the Williston Herald is reporting that school enrollment for grades K-12 will nearly double this coming school year. It sounds like the districts are ready. The largest increases will be seen in the early grades, particularly grades K-2.


MarketWatch is reporting a housing shortage in North Dakota's oil patch that is "dire."  I have to admit: about the only thing bothering me in the North Dakota oil patch is the housing situation. Everything else I could "live with" (dust, traffic, hectic pace). Sad situation.  And, yes, there is gouging, at least by a definition of the word used by a few folks.


Considering what's going on in Syria (not to mention North Korea, and about a dozen other countries), this pales in comparison but it's still a travesty.  Rows and rows of empty seats at the Olympics. Quite incredible. It appears the only ones getting in are the security forces. That's one way to prevent a terrorist event inside a stadium, I guess.


Energy links at Independent Stock Analysis

Drought --> water levels dropping --> affecting fracking?  To the best of my knowledge this is not an issue in western North Dakota oil patch, the Bakken.

Sunday, July 29, 2012

OXY Reports Two Nice Wells; KOG, WLL, and Hess Also With Nice Wells -- Monday Morning Links (Starting Sunday Evening) -- Including Wells Coming Off Confidential List This Weekend/Monday

RBN Energy: Part II, pricing, NGLs, propane today


Via Carpe Diem, the latest op-ed piece from Harold Hamm, CEO of CLR.
As the oil industry completes its infrastructure design phase and enters its full development phase in 2012 and 2013, there’s good news for residents, officials and community leaders in the oil communities experiencing this remarkable growth. Soon, nearly all of the infrastructure needed to develop the Bakken will be in place, and western North Dakota is settling into a period of steady growth.

We appreciate North Dakotans’ cooperation and patience in tackling the challenge of infrastructure in the Bakken. Now that the area of the oil field is defined, the objective going forward is to optimize production and improve efficiency over the lifespan of the field, which is projected to be longer than 30 years.
There are 115 words in the quote above. The most interesting word: "longer." Last sentence. As in "longer than 30 years."

Monday's Daily Activity Report

Wells coming off confidential list over the weekend, and Monday:
  • 21646, drl, Hess, LK-State 146-98-3526H-1, Ranch Coulee, t 5/12; cum ---
  • 21811, 871, Hess, CA-E Burdick 155-95-2932H-3, Capa, t3/12; cum 38K 512;
  • 21993, 1,280, MRO, Milton Guenther 14-9H, Bailey,
  • 22024, 316, Petro-Hunt, Lee 158-94-22A-27-1H, East Tioga, t4/12; cum 11K 5/12 ;
  • 22132, DRY, BEXP, M. Ellis 4-9 1H, Williston, problems with the drilling, not the Bakken;
  • 20159, drl, BEXP, Field 18-19 2H, Todd,
  • 21318, 1,132, Fidelity, Lance 21-22-27H, Sanish, t4/12; cum 56K 5/12;
  • 21527, 2,060, Whiting, Buresh 34-10TFH, Dutch Henry Butte, t2/12; cum 51K 5/12;
  • 21813, 1,331, MRO, Garry Sampson 24-32H, Murphy Creek, t4/12; cum 28K 5/12;
  • 20349, 742, OXY USA/Anschutz, Edward Polensky 1-13-24H-142-97, Willmen, t1/12; cum 38K 5/12;
  • 22329, 747, CLR, Colfax 1X-19H, Oliver, t4/12; cum 22K 5/12; 
  • 22247, 953, Slawson, Magnum 1-36-25H, Baker, t4/12 cum 24K 5/12; 
There were six producing wells reported as completed:
  • 20563, 1,710, KOG, P Peterson 155-99-2-15-22-15H, Epping, t6/12; cum ---
  • 21009, 608, WLL, Miller 43-10TFH, Sanish, t6/12; cum ---
  • 22127, 1,824, WLL, Miller 41-10H, Sanish, t6/12; cum ---
  • 21037, 684, Hess, Gene 8-1H, Truax, t6/12; cum ---
  • 21469, 1,014, Hess, SC-Foster 153-99-2932H-1, Crazy Man Creek, t7/12; cum ---
  • 22172, 528, OXY USA, Havelka 1-19-18H-142-95,  Manning, t7/12; cum ---
There was only one permit issued today: 
  • Operator: Samson Resources
  • Field: West Ambrose (Divide)
One permit was cancelled:
  • 19425, PNC, Hess, BB-Stonewall-150-9509H-1, McKenzie

Tired of Flaring? North Dakota Selected as Practice Range for Drones in Anticipation of Civil Unrest During Election

Link here. I've not read the story. Rushed. My subject line could be in error. More later. [Or not.]
North Dakota's Air National Guard this fall will begin operating a practice range for drone aircraft, which will give pilots more practical training than they can get from simulators, the unit's commander said.

The Federal Aviation Administration has established blocks of restricted airspace for the training, located up to 10,000 feet above a spot near Camp Grafton South, between Devils Lake and Jamestown. The airspace is above about 9,300 acres of ground area.

Col. Rick Gibney, commander of the 119th Wing of the North Dakota Air National Guard, said he expects flights to begin in late September or early October.
The story lines are endless.

The background for drone practice? Department of Homeland Security will use drones for "public safety."
Surveillance drones have a new mission.

According to the Department of Homeland Security (DHS) they will be used for “public safety.” Janet Napolitano, Secretary of the DHS, told a House Committee meeting on Homeland Security that the more than 30,000 drones that will be deployed into American skies are just arbitrarily watching out for US citizens.

NDIC Website Coming Back Up


July 29, 2012, 6:10 p.m.: NDIC site is back up; some things yet not quite right, it appears, see comments. 

Original Post

I think the NDIC website is still down. I have intermittent internet access, so it could be my system, but I can get all other websites. I use a bookmark -- I assume the URL has not changed.

NBC, Michael Phelps, The Olympics, The Embargo, and All That Jazz -- Absolutely Nothing To Do With The Bakken


July 29, 2012: Reuters reporting lots of open seats at the Olympics. It's starting to look a bit like NASCAR attendance.

July 29, 2012: see first comment. Wow, did I blow it. I can tell time. I'm just dyslexic or something. Sorry. NBC has it right. I was wrong. The part about not missing television is accurate.

Original Post 
I haven't watched cable television in several weeks now and don't miss it. So I was unaware that the most anticipated Olympic event was not shown live until I saw the headline at the Drudge Report.

That is truly incredible. That would be like delaying the video of landing on the moon in 1969 until prime time. Had this been a weekday, perhaps. But even if this was the first event of the day, at 8:00 a.m. in London, it would have been early afternoon on a Saturday in the United States, a perfect time for showing a live event that everyone was anticipating.

And "they" say Steve Jobs was a control freak.

Saturday, July 28, 2012

For Investors Only: Companies Increasing Dividends -- Friday's Announcements

The WSJ is reporting that twenty-nine (29) companies raised their dividend/distribtion Friday, including: ONEOK Partners (OKS), SandRidge Miss Trust II (SDR), and Marathon Petroleum (MPC). SDR and MPC were pretty significant increases.

Again, the disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read on this blog.

Administration: Scope of Coal-Fired-Utility-Planned Shutdown Is Unprecedented

From President Obama's own administration:
Facing declining demand for electricity and stiff federal environmental regulations, coal plant operators are planning to retire 175 coal-fired generators, or 8.5 percent of the total coal-fired capacity in the United States, according to an analysis by the Energy Information Administration (EIA).

A record-high 57 generators will shut down in 2012, representing 9 gigawatts of electrical capacity, according to EIA. In 2015, nearly 10 gigawatts of capacity from 61 coal-fired generators will be retired.

While many of those coal plants are old and relatively inefficient, the scope of this new planned shutdown is unprecedented.

“The coal-fired capacity expected to be retired over the next five years is more than four times greater than retirements performed during the preceding five-year period,” EIA noted in the analysis.

Killing A Golden Goose of Jobs

According to the linked article: "Most of the coal-fired generator retirements will occur in the Mid-Atlantic, Ohio River Valley and the Southeast."

Week 30: July 22, 2012 -- July 28, 2012

Human interest stories:
Oil field updates

Saturday Morning Link; Clarification Re: "800,000 BOPD From the Bakken"

So far, just one, and I will be out and about with granddaughters for breakfast in a few minutes, so don't expect to do much blogging until later.

Link here to Independent Stock Analysis.

One clarification: the "800,000 bopd from the Bakken" may refer to Bakken oil production from both North Dakota and Montana, but the source is not clear. But if it includes the entire Bakken, then that's a very reasonable number.

Nice Human Interest Story From Wisconsin: Fracking Sand

Link here to Leader-Telegram, Eau Claire and Chippewa Valley, sent in by a reader. Thank you.

The headline: no slowdown yet for sand mining industry in west-central Wisconsin.

The story includes a great map of the sand mines.
A new industry continues to rise — quite literally — from the ground in west-central Wisconsin.
Officials from 12 regional counties reported the area now has a total of 52 silica sand mines that are either operating or approved.
That's up 136 percent from 22 just a year ago and shows just how fast the sand storm is sweeping across west-central Wisconsin, ...
Go to link for rest of story.

There are a number of interesting data points at the link. This caught my interest: earlier, officials thought that supply/demand for fracking sand was narrowing in Wisconsin, but lately, they've not seen that to be true. Applications for additional sand mining operations continue to come in. 

Nice Human Interest Story in the Dickinson Press

Link here.
... a recent scan of the Walmart parking lot in Williston showed license plates from 25 states.
.... the North Dakota Department of Commerce provides a glimpse into which states’ residents seem to be most attracted to North Dakota.

In the first six months of this year, the state’s relocation program added nearly 2,700 names into a database of people potentially interested in moving to North Dakota....

Minnesotans topped the list of interested movers (242) followed by Californians (195), Washingtonians (169) and Floridians (159). North Dakota’s relocation program was contacted by someone in every U.S. state and ...
Go to the link for the full story. 

Hebron Update: August NDIC Hearing Dockets -- The Williston Basin, North Dakota, USA

Elsewhere there was a query about the Hebron field; I was curious myself.   

Timing is everything. See the August 22 - 23, 2012 dockets --
Case 18453, CLR, amend Hebron and/or Squires-Bakken; create 2 overlapping 1920-acre units, 6 hz wells on each (12 wells); create an overlapping 1920-acre unit, 1 well; create an overlapping 3840-acre unit, 4 wells; create 2 overlapping 2560-acre units, 2 wells on each (4 wells); create an overlapping 2560-acre unit, 14 wells (not a typo); create 2 overlapping 2560-acre units, 12 wells on each (24 wells);  create an overlapping 2240-acre unit, 12 wells; a total of 71 wells?, Williams County.
For newbies: In the original query, the individual noted that CLR had canceled a number of permits. Early on in the Bakken boom a lot of folks were concerned when they saw a permit canceled. In most cases, a canceled permit did not mean anything other than the operator coming back with a new permit for the same location with some minor changes to the application for a permits. In other words, in most cases, a canceled permit doesn't mean much in the big scheme of things.

I may have miscounted, but it looks like CLR is looking for permits for up to 70 or so wells in the very small Hebron field. This is an example of what the "manufacturing" or "mining" phase of the Bakken is all about. You can also assume that this field is likely to have its infrastructure in place to minimize flaring and expedite movement of oil to regional pipelines when they start drilling all these wells.

Friday, July 27, 2012

EPA: Air Safe, Minor Maintenance Issues

That was the headline in today's Williston Herald following the EPA visit to Williston.


I didn't read the article, so I don't know if there was any mention of dust.

Random Update of Williston Development -- The Heart of The Bakken, North Dakota, USA

For newbies, the Williston I grew up in had one or two movie theaters, two or three major / regional grocery stores, one truck stop, three or four motels of any note, and a population of around 10,000.

The following was announced just this week. This comes on top of everything that has been built in Williston since the boom began.

These were originally linked in the Williston Wire.
  • Confluence of Harvest Hills, apartment complex, 42 separate units, pre-fab, Aurora, Nebraska, to open in mid-August
  • MainStay Suites will open this fall; 26th Street; extended stay hotel; 89 units (I've lost count of the new motels/hotels/inns that have opened in Williston since the boom began)
  • Minnesota-based Coborn's will build five (5) grocery stores in western North Dakota
  • New, unspecified retail stores and restaurants will start making their way to Williston, starting this autumn
  • construction to begin soon on new 12-screen movie theater; 10 months to complete;

NDIC Hearing Dockets -- August 22 and August 23, 2012

For more information regarding "Hearing Dockets," please click here.

Miscellaneous Comments Regarding Cases Below

There are a couple of cases regarding the Madison formation. If anyone is interested in a Madison well that has produced more than a million bbls so far and is still producing, click here.

August 22, 2012

18389, Hess et al, proper spacing, Pleasant Valley-Bakken, Mountrail, Williams
18390, BR et al, proper spacing, Lone Butte-Bakken, McKenzie, Dunn
18391, Hess, amend, Blue Buttes. 8 hz wells on each of 17 1280-acre units (136); establish 2 overlapping 2560-acre units, 3 wells on each (6); one 640-acre unit, 4 wells (4); total 146 wells, McKenzie
18392, Hess, establish a 1280-acre unit; 1 hz well; Stark County;
18394, MRO, Twin Buttes and/or Werner-Bakken. Add 6 sections; establish 3 1280-acre units; 4 wells on each, Dunn
17776, cont'd, temporary spacing, MRO, Merlyn Olson, Williams
18395, BR, amend Hawkeye-Bakken; authorize up to 7 hz wells on a 1280-acre unit; 8 hz wells on a 1280-acre unit; establish an overlapping 2560-acre unit for 1 hz well; McKenzie
18396, BR, amend Haystack Butte-Bakken; authorize up to 4 hz wells on each 1280-acre unit (4 units); establish 2 overlapping 2560-acre units for one or more hz wells; McKenzie
17778, cont'd, BR, temporary spacing Red Wing, McKenzie;
18218, cont'd, BR, amend Clear Creek-Bakken, Blue Buttes-Bakken, and Camel Butte-Bakken to establish an overlapping 5120-acre unit for the purpose of drilling up to 2 hz wells between 4 existing 1280-acre units, McKenzie
18220, cont'd, BR, amend Johnson Corner-Bakken and Camel Butte-Bakken, establish an overlapping 5120-acre unit for the purpose of drilling up to 2 hz wells between 2 existing 2560-acre units
18221, cont'd, BR, amend Johnson Corner-Bakken and Pershing-Bakken, to establish an overlapping 5120-acre unit for the purpose of drilling up to 2 hz wells between 2 existing 2560-acre units; McKenzie
18223, cont'd, BR, amend North Fork-Bakken, to establish an overlapping 5120-acre for purpose of drilling up to 2 hz wells between 2 existing 2560-acre units;
18397, Murex, redefine Camel Butte-Red River Pool, McKenzie
17358, cont'd, Murex, temporary spaicng for Reistad, Divide
18398, Petro-Hunt, proper spacing for Powers Lake-Bakken, Mountrail
18399, Petro-Hunt, request to allow Breena to produce at max rate, McKenzie
18400, Oasis, amend Bull Butte-Bakken (Kalil field), to dissovle two 1600-acre units; establish 1 1280-acre unit and drill up to 5 hz wells, and another 7 hz wells; (12 total in one 1280-acre unit), Williams
18401, Oasis, exception to rules for Zaye Federal, McKenzie, Williams
18402, Whiting, nitrogen injectivity test in the Sanish, Mountrail;
17763, cont'd, Whiting, temporary spacing for Cymbaluk, Billings
18028, con'td, Whiting, temporary spacing for Quale, Golden Valley,
18403, Helis, amend Blue Buttes-Bakken, 1 hz well, 1280-acre unit, McKenzie
18404, Sequel, amend Pierre Creek-Bakken, establish a 1280-acre unit; 1 well; McKenzie
18043, cont'd, Sequel, commingling, McKenzie
17779, cont'd, OXY USA, temporary spacing for Spring Creek, Dunn
18034, cont'd, Cornerstone, amend Northeast Foothills-Bakken, establish 6 1280-acre units; Burke
15676, cont'd, XTO, revoke a CLR permit, Carbon, McKenzie
16125, cont'd, XTO, to revoke a CLR permit, Tompkins, McKenzie
18405, QEP, amend Van Hook-Bakken, 4 hz wells in a 640-acre unit; Mountrail;
18406, QEP, amend Van Hook-Bakken, 4 hz wells in a 640-acre unit, Mountrail; 
18407, QEP, amend Heart Butte-Bakken, create 1 2560-acre unit; 12 hz wells; Dunn, McLean; 
17830, cont'd, QEP, see previous dockets, Heart Butte-Bakken, Dunn
18408, Marquis, oil treating and waste processing facility, McKenzie
17588, cont'd, GADECO, exception to rules for Golden, Williams
18409, Sequel, amen Stoneview-Bakken and North Tioga-Bakken, authorize up to 6 hz wells on each of 2 1280-acre units; Divide
18410, Sequel, amend Temple-Bakken, authorize up to 6 hz wells on each of 4 1280-acre units; Williams
18411, Sequel, amend McGregor-Bakken; authorize up to 6 hz wells on each of 2 1280-acre units, Williams
18412 - 18416, Hess, pooling
18417, Hess, amend Wheelock-Bakken, authorize up to 6 hz wells on each of 3 1280-acre units; Williams (18)
18418, Hess, amend Elm Tree-Bakken, authorize up to 8 hz wells on a 1280-acre unit; McKenzie
18419, Hess, amend Westberg-Bakken, authorize up to 8 hz wells on each of 2 1280-acre units; McKenize (16)
18420, Hess, amend Hawkeye-Bakken, authorize up to 8 hz wells on 10 1280-acre units, McKenize (80 wells), McKenzie
18421, Hess, amend Antelope-Sanish, authorize up to 8 hz wells on 6 1280-acre units; McKenzie;  (48 wells) -- These 5 cases: 170 hz wells
18422 - 18423, Petro-Hunt, pooling
18424 - 18427, MRO, pooling
18428, Helis, pooling
18429, Wind River Trucking, SWD
18430 - 18434, American Eagle, pooling
18435 - 18437, KOG, pooling
18438, SM, amend Colgan-Bakken, up to 4 hz wells on 4 1280-acre units, Divide
18439, WaterWorks Killdeer, SWD, Dunn
18440, WaterWorks Killdeer, SWD, Williams
18441, Glenn Aamodt, convert Aamodt 1-19 to a freshwater well; McKenzie

August 23, 2012

18442, BEXP, proper spacing for Avoca-Bakken, Williams,
18443, BEXP, proper spacing for Williston-Bakken, Williams
18444, BEXP et al, proper spacing for Lake Trenton-Bakken, Williams
18445, BEXP, amend Poe-Bakken, flaring, McKenzie
18446, BEXP, amend Squires-Bakken, flaring, Williams
18447, EOG, Parshall well, Parshall-Bakken, commission to review relief granted for water injection well being used as test for water-flooding, Mountrail
18448, EOG, Wayzetta well, Parshall-Bakken, commission to review relief granted for water injection well being used as test for water-flooding, Mountrail
19449, EOG, amend Mandaree-Bakken, establish an overlapping 640-acre unit; 2 hz wells; Dunn
18313, cont'd, EOG et al, flaring, McKenzie, Mountrail
18450, CLR, extend St Demetrius-Bakken, or establish Bakken spacing in the Fairfield Field, create a 1280-acre unit, 1 hz well; Billings
18451, CLR, amend Catwalk-Bakken, create an overlapping 1920-acre unit 1 hz well; Williams
18442, CLR, amend Sadler-Bakken, create an overlapping 2560-acre unit multiple wells; Divide
18453, CLR, amend Hebron and/or Squires-Bakken; create 2 overlapping 1920-acre units, 6 hz wells on each (12 wells); create an overlapping 1920-acre unit, 1 well; create an overlapping 3840-acre unit, 4 wells; create 2 overlapping 2560-acre units, 2 wells on each (4 wells); create an overlapping 2560-acre unit, 14 wells (not a typo); create 2 overlapping 2560-acre units, 12 wells on each (24 wells);  create an overlapping 2240-acre unit, 12 wells; a total of 71 wells?, Williams
18283, cont'd, CLR, amend Cabernet-Bakken, flaring, Dunn,
18454, Corinthian, extend North Souris-Madison, create a 480-acre unit, 3 wells each; Bottineau;
18455, Corinthian, extend Northeast Landa-Spearfish/Madison, create 7 320-acre units; establish approx 160-acre unit; 1 well on each of these units; Bottineau
18456, Corinthian, exception to siting rules, Bottineau
18457, Corinthian, exception to siting rules, Bottineau
18458, Enerplus, amend Heart Butte-Bakken, create a 1280-acre unit, 5 wells; Dunn;
18310, cont'd, amend Mandaree-Bakken, flaring, McKenzie, Dunn
18459, Newfield, extend Haystack Butte or Lone Butte-Bakken, create a 640-acre unit, 7 wells; Dunn;
18460, Newfield, etend Westberg or Clear Creek-Bakken, create a 1280-acre unit, 6 wells; McKenzie
18461, SHD, flaring, Dunn, McLean
18462, Samson Resources, amend Blooming Prairie-Bakken, flaring, Divide
18463, Samson Resources, amend Bluffton-Bakken, flaring, Divide
18464, Samson Resources, amend Juno-Bakken, flaring, Divide
18465, Samson Resources, amend Kimberly-Madison, flaring, Divide
18466, Samson Resources, amend Paulson-Bakken, flaring, Divide
18467, Samson Resources, amend Foothills-Bakken, flaring, Burke
18468, Samson Resources, amend Foothills-Bakken, creast an overlapping 2560-acre unit; 14 wells;
18469, Samson Resources, amend Black Slough and/or Foothills-Bakken, create an overlapping 2560-acre unit, 14 wells; Burke
18292, cont'd, Samson Resources, amend Ambrose-Bakken, create five overlapping 2560-acre units, 14 wells in each unit (70 wells); Divide; these 3 cases -- 98 wells?
18470, Slawson, extend/amend Big Bend or Van Hook-Bakken, create an overlapping 1280-acre unit, 3 wells; Mountrail
18471, Slawson, amend Big Bend-Bakken, create a 1280-acre unit, 6 wells; Mountrail
18472, Slawson, amend Van Hook-Bakken, create a 1280-acre unit, 6 wells; Mountrail
18473, Triangle, amend Otter-Bakken, flaring, Williams
18474, Zavanna, extend/amend Stony Creek and/or Williston-Bakken, or in the alternative establish Bakken spacing in the Springbrook, create 2 1280-acre units; 1 well each; Williams
18475, WPX, amend Bailey-Bakken, alter definition of stratigraphic limits of the pool, Dunn
18476, WPX, amend Bear Den-Bakken, alter definition of stratigraphic limits of the pool, McKenzie
18477, WPX, amend Big Bend-Bakken, alter definition of stratigraphic limits, Mountrail
18478, WPX, ditto, Blue Buttes-Bakken, McKenzie
18479, WPX, ditto, Clarks Creek-Bakken, McKenzie
18480, WPX, ditto, Clear Creek-Bakken, McKenize
18481, WPX, ditto, Corral Creek-Bakken, Dunn
18482, WPX, ditto, Deep Water Creek Bay-Bakken, Dunn, McLean
18483, WPX, ditto, Eagle Nest-Bakken, Dunn, McKenzie
18484, WPX, Four Bears-Bakken, McKenzie, Mountrail
18485, WPX, ditto, Grail-Bakken, McKenzie
18486, WpX, ditto, Hans Creek-Bakken, Dunn
... and this continues through cas 18499
17848, cont'd, Baytex, violation of flaring, Divide
17849, cont'd, Baytex, violation of flaring, Divide
18274, cont'd, G3 Operating, amend Good Luck-Bakken, flaring, Williams
18309, cont'd, Crescent Point et al, amend Little Muddy-Bakken, flaring, Williams
18109, cont'd, Resource Drilling, amend Ross-Bakken, create a 1280-acre unit, 8 wells; Mountrail
1831, cont'd, EOG et al, amend Clear Water-Bakken, flaring, Burke, Mountrail
18305, cont'd, Liberty Resources, amend Tyrone-Bakken, flaring, Williams
18500 - 18510, CLR, pooing
18511, CLR, risk penalty legalese, Milloy, Hebron-Bakken, Williams
18512, CLR, risk penalty legalese, Fasching, Hebron-Bakken, Williams
18513, Denbury, risk penalty legalese, Lund, McKenzie
18514, Denbury, authorize increase density wells, 7 wells in each 1280-acre unit, Arnegard-Bakken, McKenzie
18515, XTO, risk penalty legalese, Willey, Williams
18516, XTO, risk penalty legalese, Arley, Williams
18517, XTO, risk penalty legalese, John, Williams
18518, XTO, 8 wells on each of 9 existing 1280-acre units (72 wells), Temple-Bakken, Williams
18519, XTO, 8 wells on each of 14 existing 1280-acre units (112 wells), Midway-Bakken, Williams
18520, XTO, 8 wells on each of 2 existing 1280-acre units (16 wells), Stoneview-Bakken, Burke
18521, XTO, 8 wells on a 1280-acre unit, Big Butte-Bakken, Mountrail
18522, XTO, 8 wells on an existing 1280-acre unit, Sorkness-Bakken, Mountrail
For these 5 cases, XTO is requesting permits for 216 wells; 
18523, Slawson, risk penalty legalese, Atlas, McKenzie
18524, Slawson, risk penalty legalese, Condor, McKenzie
18525, Slawson, risk penalty legalese Hatchet, McKenzie
18526, Slawon, 6 wells on an existing 1280-acre unit, Van Hook-Bakken, Mountrail
18527, Fidelity, risk penalty legalese, Kevin, Mountrail
18528, Fidelity, risk penalty legalese, Schwartz, Stark,
18529, Newfield, pooling
18530, Newfield, 4 wells on an existing 640-acre unit, Westberg-Bakken, McKenzie;
18531, Newfield, 7 wells on each of 3 existing 1280-acre units, Tobacco Garden-Bakken, McKenzie
18532, Newfield, 7 wells on each of 8 existing 1280-acre units, South Tobacco Garden-Bakken, McKenzie
18533, Newfield, 7 wells on an existing 1280-acre unit, Bear Den-Bakken, McKenzie
18534, Newfield, 7 wells on each of 3 640-acre units, Haystack Butte-Bakken, Dunn
17036, cont'd, Newfield, risk penalty legalese, Sand Creed Federal, McKenzie
18535 - 18539, Samson Resources, pooling,
18351, cont'd, Samson Resources, pooling,
18352, cont'd, Samson Resources, pooling,
18353, cont'd, Samson Resources, pooling,
18354, cont'd, Samson Resources, pooling,
18355, cont'd, Samson Resources, pooling,
18540, Samson Resources, risk penalty legalese, Felton, Burke
18541, Samson Resources, 7 wells on an existing 1280-acre unit, West Ambrose-Bakken, Divide,
18542 - 18549, Liberty Resources, pooling,
18550 - 18554, EOG, pooling
18555, EOG, 3 wells on each of 2 320-acre unit; 3 wells on each of 4 640-acre units; Squaw Creek-Bakken, McKenzie
18556 - 18562, Hunt, pooling,
18563 - 18567, BEXP, pooling,
18568, BEXP, SWD, Williams
18569, Borejaks Energy, SWD
18570, Borejaks Energy, SWD
17883, cont'd, Baytex, flaring, Divide
17884, cont'd, Baytex, flaring, Divide
17885, cont'd, Baytex, flaring, Divide
17886, cont'd, Baytex, flaring, Divide

That's All, Folks

Five (5) New Permits -- Daily Activity Report -- July 27, 2012

New permits: Five
  • Operators: Baytex (3), True Oil, Hunt
  • Fields: Red Wing Creek (McKenzie), Blooming Prairie (Divide), Whiteaker (Divide)
Baytex has a permit for a wildcat in Williams County.

Wells released from confidential list:
  • 20796, 471, Whiting, Ridl, 34-12TFH, Zenith, t1/12; cum25K 5/12;
  • 22154, 637, CLR, Pittsburgh 2-19H, Banks, t4/12; cum 22K 5/12;
  • 22219, WI, Ballantyne Oil, Wiborg 3-5, Southwest Landa, a Madison formation well; 
One producing well reported completed:
21682, 968, Denbury Onshore, Lund 44-8NH, McKenzie

Update From a Reader: Newfield Conference Call

I received the following note from a reader. It has a ton of information, so I am including it in its entirety without editing. Once I have it posted, I may come back and summarize the data points. A huge "thank you" to the read for sending me this.
A few days ago, one of your bloggers noted that Newfield did not mention the Bakken  during their recent conference call.   I listened to the entire call and they did make several mentions of the Bakken and their operations.
Most noteable was the addition of one new "walker rig" and the release of an older standard rig. They will operate three rigs for the remainder of 2012 and plan to add a fourth rig in early 2013.
They currently have three pilot programs running to test the best spacing for Bakken and
Three Forks wells.   Their drilling engineer said they will be releasing more info on these
efforts.  He went on to say "these tests may be pretty revealing." Newfield has two middle Bakken wells (Charlotte 1 & 2, 17-150-99) producing from the Middle Bakken with a separation averaging about only 750 feet.   In May, these two wells produced over 16,000 barrels each! Naturally, it will take several months to get a better indication of well interference.
About 3 miles to the northwest of the Charlotte wells, Newfield has four wells in the west half of section 11-150-99.   Three of these are Middle Bakken and one is Three Forks.  All appear to be good producers but time is needed to determine long term effects.   These Middle Bakken wells have horizontal sections 1000 to 1,060 feet apart.   Anyway, they are challenging the 1,320 foot (ore more) separation theories. 
Newfield operates a micro-seismic array covering about 40 sections in the Watford area.
These monitor all fracking to determine length of frack development, etc.  This is most
certainly tied into their current drilling pilot projects.
If separation of 1,000 feet gives more greater ultimate recovery, it's imperative to know this before drilling wider spacing without leaving any economic way to add smaller spacing infills.
Hess is also doing "science" drilling in the Hawkeye Field north of Keene in McKenzie County. Vertical monitor wells are being drilled between horizontal Bakken and Three Forks wells. Hess also has a similar project in western Mountrail County.   This type of information is invaluable before massive infill drilling programs get too far along.
Finally, directly north of Watford City, SM Energy is drilling the first eight-well, 1,280 acre unit, in the Bakken play. (sections 1/12-150-99)  One unit well has produced 150,000 barrels of oil in it's first year; three wells are currently drilling; and, two drilling pads have been completed for wells 5, 6, 7 and 8 (four Bakken and four Three Forks).   This unit is located between the closely spaced Newfield wells mentioned above. 
Several companies have mentioned 8 well units but to the best of my knowledge this is the first one to be implemented.  Several have multiple wells on one drilling pad but they are drilled into two or three different spacing/drilling units.   
Burlington Resources is drilling out two 7-well units in the Hawkeye, north Keene area.  These units are just west of the recently completed Burlington Llano well, 6,800 barrel-IP.
There was a lot of fascinating information in that note.

First, Newfield was concerned about the cost of Bakken wells in an earlier conference call, and there was some question to their plans in the Bakken. This clears things up immensely. It should be noted that in the past six months or so, Continental Resources (CLR) has acquired some Newfield Bakken assets. I try to note that in the daily activity report when a CLR/Newfield well is reported.

It is interesting to note that Newfield plans to add another rig in 2013.

I've blogged for quite some time that based on the NDIC GIS map server and corporate presentations, that the effective radius of fracking seems to be about 500 feet. Regardless of how it pans out, I am thrilled that my earlier blogging about the effective radius of fracking was not that far off target.

Anyway, lots of information in that note. Enjoy. The NDIC site seems to be up "now," but it will be "down" tomorrow, Saturday.

Natural Gas Primer -- RBN Energy -- A Must Read For Newbies

There is so much thrown at you and me on a daily basis regarding the Bakken, oil and gas, etc., that it is hard to sort out what it worthwhile to read.

If you are a newbie to the oil and gas industry in the Bakken, a couple of quick points. The Bakken is considered an oil field. The natural gas has been considered a by-product. Others may have been interested in this by-product but the company that stands out in my mind with regard to natural gas in the Bakken is ONEOK. Search the site for ONEOK, if interested.

There is the dry natural gas everyone talks about, the natural gas that is selling for $2 to $3 right now due to a huge nationwide glut. Oil and gas companies are switching emphasis from natural gas to oil due to the glut.

However, only recently are "we" learning that the Bakken has a high percentage of wet natural gas (natural gas liquids). A Bentek Energy study commissioned by the NDIC and released earlier this week suggests an impending (wet) natural gas boom in the Bakken. This was a huge story.

I get a lot of questions regarding wet natural gas. RBN Energy provided an outstanding wet natural gas primer today.

In addition to explaining natural gas terminology, RBN Energy also explains pricing of wet natural gas, a question that came up recently at this site:
There’s one more aspect of NGL markets that must have been designed to confuse outsiders, because it certainly does.  NGL quantities are quoted in barrels.  NGL prices are quoted in gallons.  Really.  So I’ll sell you 10,000 barrels of non-TET normal butane for $1.36 per gallon.  It never occurs to NGL people to convert either the quantity to gallons or the price to a per barrel number.  They think of everything multiplied by or divided by 42.  Go figure.  And BTW, propane retail people do think in gallons - but that’s another story.
You can't find any language more clear. That's how every RBN Energy essay is written: very, very easy to understand. 

See also my FAQ page, and specifically questions 57 and 58.

NDIC Announces It Will Be Down Tomorrow

NDIC announced that it will be "down" Saturday, July 28, 2012.

The site appears to be fully functional now.

Bakken Crude Oil by Barge

I first reported this June 29, 2012.

Jeff sent me an update, at this link, from Fox Business:
Barge operator Kirby Corp. (KEX) said Thursday that it is shipping crude from the Bakken Shale to refiners in Louisiana through the Mississippi River.

The Houston-based company is believed to be the first barge operator to use America's most famous river as a highway for oil from the land-locked Bakken, ...

Kirby during last weekend loaded on its barges at St. Louis a unit-train of Bakken oil that had arrived by rail. The barges take a week to travel down the Mississippi River to bring the oil to the Baton Rouge, LA, area, said company spokesman Steve Holcomb.
Go to the link for the full story. 

The Permitorium Continues -- Absolutely Nothing To Do With The Bakken


Later, 1:15 p.m.: The House passes their alternative bill for long-range off-shore drilling; Senate bill is similar. It will be interesting to see if the President vetoes the bill in an election year when most folks perceive they are paying $4.00/gallon of gasoline (or more), and know that the President killed the Keystone XL 1.0. None of this stuff has any effect on the price of oil today, or even the near future, but it sends a message, whether or not these bills are supported.  In addition, it adds fuel to the fire when folks remember the President's remarks: "You did not build it." If the Senate and the House both pass a bill that most Americans think would be good for them in terms of "the gasoline issue" they will know why "you didn't build it." The President killed it.

Original Post
From Rigzone.com:
Hastings and other critics of Obama's proposed plan, which was delivered for Congressional review on June 28, have said Obama's plan would keep 85 percent of America's offshore areas off-limits to energy production.
The U.S. Senate also is seeking to overturn Obama's proposed drilling plan. On Wednesday, six senators – which include Lisa Murkowski (R-AK), Jim Inhofe (R-OK), John Hoeven (R-ND), Mary Landrieu (D-La.), Jim Webb (D-Va.) and Mark Warner (D-Va.) – introduced into the Senate the Offshore Petroleum Expansion Now Act of 2012 into the Senate, also to replace the president's proposed offshore lease sale plan.
The House rejected this plan and substituted its own plan. And even the President's Democratic-led Senate are unhappy with his permitorium, as noted by the bi-partisanship above. Hey, even Senator Hoeven has signed on for an alternative bill. Wow, I'm glad I blog so little about off-shore drilling -- absolutely depressing.

Go to the link for the full, unbiased story.

OXY USA Conference Call Comments

Link here.

TransCanada Gets Final Permit for Keystone XL 2.0S -- The Gulf Coast Project; Keystone XL 2.0N In Limbo; The "Gap" Remains

"Final" permits from US Army Corps of Engineers for southern leg, the Gulf Coast Project
TransCanada has received the final of three key permits needed from the U.S. Army Corps of Engineers in order to advance the 485-mile Gulf Coast Project. With the permit from the Fort Worth, Texas Army Corps district added to previously received permits from the Galveston, Texas and the Tulsa, Oklahoma districts, TransCanada is now in a position to start construction of the oil pipeline in the coming weeks.
This was buried deeply in the press release from TransCanada (wow, it took a lot of reading to get to this key paragraph):
The U.S. Department of State is currently reviewing TransCanada's application for a Presidential Permit to proceed with the 1,179-mile (1,897-km) Keystone XL pipeline from Hardisty, Alberta to Steele City, Nebraska and is expected to make a decision in the first quarter of 2013. TransCanada also continues to work with the Nebraska Department of Environmental Quality to finalize a route that avoids the environmentally sensitive Sandhills area of Nebraska.
So, the gap remains. The permitorium continues.

For Investors Only: Chevron Beats, Revs Down; Arch Coal Up "Huge"; HP Beats

Chevron beats forecast; revenues down 7 percent
Chevron's net income fell nearly 7 percent in the second quarter as oil prices and production declined.

The oil giant said Friday it earned $7.21 billion, or $3.66 per share, last quarter. That compared with $7.73 billion, or $3.85, a year earlier. Revenue fell by 9 percent in the quarter to $62.6 billion.
Those results beat Wall Street estimates of $3.23 on revenue of $71.4 billion, according to FactSet. Shares rose by 24 cents to $108.51 in premarket trading.

Chevron Corp., the second-largest U.S. petroleum company behind Exxon Mobil, said production from its global network of oil and natural gas wells fell 2.6 percent in the second quarter. 
CVX, from Yahoo!In-Play, slightly different
Chevron beats by $0.42, beats on revs: Reports Q2 (Jun) earnings of $3.66 per share, $0.42 better than the Capital IQ Consensus Estimate of $3.24; revenues fell 9.2% year/year to $62.61 bln vs the $58.37 bln consensus.  
Arch Coal, from Yahoo!In-Play:
Arch Coal is up huge (+12%) pre-market following earnings results, which is so far giving most the coal group a boost.

Arch Coal beats by $0.08, beats on revs; reaffirms thermal coal sales volume forecast, lowers met coal forecast: Reports Q2 (Jun) loss of $0.10 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus Estimate of ($0.18); revenues rose 7.9% year/year to $1.06 bln vs the $1 bln consensus.
HP, from Yahoo!In-Play:
Beats by $0.22, beats on revs: Reports Q3 (Jun) earnings of $1.38 per share, $0.22 better than the Capital IQ Consensus Estimate of $1.16; revenues rose 27.3% year/year to $819.8 mln vs the $778.73 mln consensus.

Friday Morning Links -- 800,000 BOPD?

Independent Stock Analysis: Shale Underestimated.
The last director's cut: 640,000 bopd.  The production numbers are delayed by about two months.

But then this, with no link to the original source that suggests 800,000 bopd:
Authorities in North Dakota said drillers hit pay dirt in the Bakken formation with nearly every attempt. Production there averages around 800,000 barrels per day, according to some estimates.
Does someone know something the rest of us don't -- 800,000 bopd? Monthly production is increasing by about 5% each month, so 640,000 x 1.05 --> 670,000 bopd (June); then, --> 700,000 bopd (July); and, maybe, --> 740,000 bopd (August). 

Lynn Helms did say that production was going to jump in the next few months due to a number of additional frack spreads being brought to Williams County to try to clear up the backlog of wells waiting to be completed.

I suppose it's possible that we are already near 800,000 bopd in the Bakken, but it seems a stretch. We won't know for several months.


Economy stalls: growth down to 1.5 percent; talk of recession,
The U.S. economy grew at an annual rate of just 1.5 percent from April through June, as Americans cut back sharply on spending. The slowdown in growth adds to worries that the economy could be stalling three years after the recession ended.
Market's response: green. The movers and shakers already knew this


VOG: increases availability of credit facility; up to $20 million

Just a Headline Away From $100 Oil -- Absolutely Nothing To Do With The Bakken

If you came here looking for the Bakken, scroll up or down.

With regard to the "subject line," I posted that link yesterday at this post (we are just a headline away from $100 oil).

Now, tonight at the Drudge Report, a very interesting story in the Jerusalem Post: "Muslim Brothers Plotting Overthrow of Gulf States."
Dubai's chief of police: "The brothers and their governments in Damascus and North Africa have to know that the Gulf is a red line, not only for Iran but also for the Brothers as well."
North Africa: Egypt and Libya. The Arab League?

I can only assume the UAE and Saudi Arabia are watching events in Syria with much concern.

Back on March 24, 2011: evidence that the US was supporting regime change in Syria.  More recently, Saudi's concern about Syria.

My hunch is that this will, too, shall pass ("this" being the civil war in Syria and the saber-rattling by Iran) but there is an interesting confluence of events in which the outcome is completely unpredictable. The movers and shakers have a way of letting things go to the brink, and then, like deus ex machina, rescue adversaries from going over the cliff.

HESS: Data Points From The 2Q12 Earnings Conference Call

Hess beats by $0.20, beats on revs: Reports Q2 (Jun) earnings of $1.61 per share, $0.20 better than the Capital IQ Consensus Estimate of $1.41; revenues fell 5.1% year/year to $9.31 bln vs the $8.82 bln consensus. Oil and gas production increased to 429,000 barrels of oil equivalent per day, up from 372,000 in Q2 of 2011. Oil and gas production from the Bakken increased to 55,000 barrels of oil equivalent per day, up from 25,000 in Q2 of 2011; transcript;

Data points from the SeekingAlpha.com earnings conference call:
  • increasing CAPEX, mostly due to the Bakken
  • will fund with internal cash flow; if more needed, assets sale (gas to oil switch)
  • Bakken wells costing $13.4 million; will decrease to under $10 million
  • using costly hybrid (plug-and-perf) for HBP wells; will use less costly sliding sleeve for infill
  • $8.9 million to complete an Eagle Ford well; it was $10.3 million in 2011 (see transcript for discussion of daily production of Bakken wells vs Eagle Ford wells)  
  • completed their CBY facility; in April, shipped an average of 29,000 bopd to higher-value mkts
  • still relatively early in the Bakken
  • 2012 exit rate as high as 68,000 boepd
  • Tioga gas plant to be completed in 2013
"We're nearing the end of HBP mode, what we are doing is we're doing a comprehensive development strategy for the Bakken. So this a long-term development strategy with a goal of maximizing profitability and capital efficiency. And so the results of that study will be used to optimize the drilling program in 2013 and beyond."
This was an interesting exchange:
Q: Do you engage in controlling flowback techniques to increase EURs?
A: In Utica, yes: shut in the well for an extended period of time. The nature of the Utica is quite different from the Bakken. In the Bakken: no.

Enola Gay, Hillbilly Moon Explosion 

See You Round Like A Record, Rocky Horror Show, Little Nell
It's Not Fair, Lily Allen

XOM: 32,000 BOEPD From the Bakken

Not a big deal, but interesting to note that "XOM" is in the Bakken. In fact, it is XTO, a subsidiary of XOM.
Exxon Mobil Corp. (XOM) is producing about 32,000 barrels of oil equivalent from the Bakken Shale, doubling its output from when it entered the area, an executive said Thursday.

"We have moved into a development phase" in the shale located in North Dakota, Montana and Canada, Exxon Vice President of investor relations David Rosenthal said in an earnings call.
From the transcript:
In the Bakken, we have moved into a development phase across our roughly 400,000 net acre leasehold. In the first half of 2012, we turned 40 wells to sales, nearly double the pace of 2011.

In the second quarter of 2012, our gross operated Bakken production increased by 60% over the prior year quarter. Since our entry into the play, we have more than doubled gross operative production to approximately 32,000 oil equivalent barrels per day.
In addition, XOM mentioned the Bakken twice in the short Q&A when unconventional liquids was brought up. This is a big deal for the Bakken. I think it caught everyone by surprise.

I never thought I would see the day that XOM would single out the Bakken as one of its development areas.

Thursday, July 26, 2012

Montana: On Pace To Set Record For Oil Permits; Natural Gas Drilling At Standstill

Full story at Rigzone.com.

The Bakken Never Fails To Surprise --


July 29, 2012: in addition to notes in the original post from the conference call, this exchange was recorded from the conference call and posted at another site:
Steve, you did mention some bolt-on acreage acquisitions in the Williston, can you just talk about where your position is now? I know, you dropped some rigs, and I think, you’ve been less enthusiastic but where are you acreage-wise now in the Williston?

Stephen I. Chazen – President and CEO: I think we’re north of 300,000 acres.
If OXY does indeed have more than 300,000 acres in the Bakken, that is significant. Early in 2011, they had 200,000 acres; at end of 2011 they had 277,000 net acres in the Bakken. So, going from 200,000 to 300,000 net acres in the Bakken this past year is noteworthy. [OXY entered the Bakken by purchasing Anschutz 188,000 net acres in 2010.]

Original Post
For quite some time I have questioned the "poor" initial production (IPs) numbers recorded by OXY USA.

Occidental, itself, is on record as saying that the Bakken is expensive, it has better prospects, and, although it won't be leaving the Bakken, it will be cutting back in the Bakken.

And, then yesterday, or today, I forget, I posted a stand-alone suggesting that OXY's IPs are improving.

Then this, tonight, it is being reported that the OXY chairmen, Steve Chazen is quoted as saying:
".... much of the company's increase in production, which was at a record level in the second quarter, came from the Bakken Shale."
Wow, who would have guessed? As noted, the Bakken never fails to surprise.

I find it impressive that he even mentioned the Bakken. In the last conference call, I don't think it was even mentioned, until the Bakken came up in Q&A, and then it was pretty much avoided. It certainly sounded like the Bakken was the poor stepdaughter for this company.

OXY is a $70 billion (market cap), international company.  If "much of the company's increase in production, which was at a record level in the second quarter, came from the Bakken Shale" what does that say about the Bakken-centric companies like CLR (market cap: $12 billion) and WLL ($5 billion). OXY has about 200,000 net acres in the Bakken; CLR, almost a million; and, Whiting, around 700,000 net acres.  The numbers are changing, but in 2011, Whiting and OXY each had about 15 active rigs; CLR, 24 active rigs, in North Dakota.

So, I was pretty much blown away by OXY's CEO saying that much of OXY's record production can be attributed to the Bakken.

The source of the comment is at Rigzone.com. Other data points:
  • the company will decrease total number of rigs from 75 to about 70
  • pace of drilling will not slow down; they will drill as much as they have with fewer rigs
  • they plan to increase CAPEX for 2012 more than planned
  • CAPEX will increase about a billion dollars, from $8.3 to $9.2; a little more than half of the increase will go toward the Al Hosn Shah gas project
  • don't expect any M&A activity; they have time to wait; in no hurry
The Al Hosn Shah gas project is a $10 billion project shared by Abu Dhabi and Occidental, announced last year.

The Bakken Never Fails to Surprise: Which Company CEO Said ...

"... much of the company's increase in production, which was at a record level in the second quarter, came from the Bakken Shale."

Answer at end of an earlier post.

Proposed Pipeline Regulations Move Very, Very Slowly

From the Dickinson Press/InsideClimate News.com: it reads more like an op-ed piece than a news story.
Efforts to beef up oversight of the nation's oil pipelines are progressing so slowly that it's unlikely any additional safeguards will be in place before construction begins on thousands of miles of new pipelines, including the proposed Keystone XL. 
Reporter listed as: Guest Writers.

The Keystone XL 1.0 pipeline is dead

Now we don't even know who writes these articles, unless of course that's his/her real name, which is possible.

Flurry of Permit Activity Continues in Heart Butte; New Permits Announced for Today; Wells Coming Off Confidential List Tomorrow

The flurry of activity continues in Heart Butte with another three (3) permits for wells in that field, this time for XTO, as noted at the daily activity report for July 26, 2012. Regular readers of the blog probably have an idea why this flurry of activity.

For tomorrow, the following wells come off the confidential list:
20796, conf, Whiting, Ridl 34-12TFH, Zenith,
22154, conf, CLR, Pittsburg 2-19H, Banks,
22219, conf, Ballantye Oil, Wiborg 3-5, Southwest Landa,

Wow, Thirteen Companies Announced Increased Dividends

... including Baxter, by a significant amount. Baxter is not an energy company.

Disclaimer: this is not an investment site; do not make any investment decisions based on anything you read at this site.

When I first started investing on my own, about 40 years ago, I remember following dividend announcements in the WSJ on a regular basis. About the only financial news I had on a regular basis was that of the print edition of the WSJ. Wow, have times changed.

I missed this one yesterday: Apple increased its dividend from 12 cents to $2.65/share. OK.

Note: first comment -- actually fourteen (14) companies announced dividend/distribution increases.

A Nice Early Comparison Between Eagle Ford and The Bakken

Link here to Oil and Gas Journal.

This is my favorite line, validating what I've been blogging for quite some time (that part in bold):
The IHS Herold Eagle Ford Regional Play Assessment said typical well performance as well as peak-month production of the Eagle Ford’s best wells exceeds wells drilled in the Bakken formation, often considered the tight oil standard.
Note the price they are paying for acre in the Eagle Ford:
The Eagle Ford’s favorable outlook is reflected in a competitive merger and acquisition environment, with implied deal values averaging $14,000/acre for Eagle Ford acreage in 2011 and top prices approaching $25,000/acre, IHS said.
It's my understanding that the Eagle Ford play is much thicker than the Bakken. How this all plays out has to do with the economics of each well. Period. Dot.

Apple's New Store in Barcelona, Spain -- And, Yes, Absolutely Nothing To Do With The Bakken

Photos of Apple's new store in Barcelona.

Apple's first retail store was at Tysons Corner, Virginia, in 2001. After more than ten (10) years, I am not aware of any retail technology store that approaches the phenomenal success of the retail Apple stores. The stores are simply incredible.

Microsoft got back into the retail store business in 2009, after an aborted start back in 1999 - 2001, run by Sony. I have not yet been in a Microsoft store, and doubt that I ever will. I noted in an earlier post that Microsoft will soon be opening a store in a downtown mall across the street from Apple's flagship store in Boston.

I have to chuckle. I went to the Apple store a few days before my cross-country trip to buy a charger for one of my Apple products. They were not on display. The Apple employee told me they have them in stock, that they were in back, and if I wanted, they would bring it out for me to purchase. I suggested that I just wanted to see it. The employee said that it was simply a charger, not much to look at. He was correct, but it was an interesting take on the situation. I ended up buying it sight unseen.

Yes, it was not much to look at. Simply a white charger.



July 27, 2012: Twenty (20) hours after the request was posted elsewhere, no one had yet answered at that site. Interesting. 
Original Post
.... a reader is asking for IPs for:
  • 21734, drl, Chesapeake, Olson 12-139-104 A 1H, wildcat, Golden Valley County, s12/11; cum 0 bbls;
  • 21143, drl--> IA, Chesapeake, Schoch 21-137-97 A 1H, wildcat, Stark County, s12/11; cum 0 bbls;
  • 21885, drl, Chesapeake, Grenze 26-138098 A 1H, wildcat, Stark County; s12/11; cumulative oil: 1 bbl (no typo: one bbl of oil)
Two of the three bbls remain on "drill" status, while the third one is now listed as "IA": inactive.

See first comment:
  • 21139, 0, Chesapeake, Zent 30-138-95-A 1H, wildcat, Stark County, t12/11; cum 2,263 bbls 5/12; producing about 700 bbls/month past three months 

Wow -- ONEOK To Increase Investments in the Bakken


May 22, 2017: announces completion of new Bakken offices in Sidney, MT.
March 1, 2017: very upbeat 4Q16 and full year report.

December 2, 2016: one year ago,  shares trading at $20; today, shares trading at $55.

January 15, 2015: corporate presentation, January 8, 2015.

January 14, 2015: ONEOK increases dividend

December 15, 2014: ONEOK to add de-ethanizers at their two NG plants west of Williston, Stateline I and Stateline II.

July 30, 2013: update on projects in the Bakken for 2Q13.

January 17, 2013: ONEOK announces it will build a fifth natural gas gathering and procession plant in North Dakota, to be named Garden Creek III. 

December 10, 2012: public hearing on Garden Creek II, to be co-located with Garden Creek 1, ten miles northeast of Watford City; 100 million cubic feet/day of natural gas; 

November 27, 2012: ONEOK will not go forward with Bakken Crude Express Pipeline.

October 22, 2012:  Link to Oil & Gas Journal here, re: ONEOK, update:
Data points:
  • ONEOK announces "open season" for previously announced Bakken Crude Express Pipeline
  • 1,300 mile crud oil pipeline
  • from Williston Basin to Cushing hub
  • 200,000 bopd
  • construction to begin in early 2014; completion by mid-2015
September 24, 2012: Earnings forecast; dividend increase; outstanding report; 

September 7, 2012: ONEOK's presentation at Barclays. SeekingAlpha.com transcript here.

September 5, 2012: ONEOK presents at Barclays; transcript.

September 2, 2012Update on the ONEOK Bakken NGL Pipeline; problems in Crook County, Wyoming

Original Post
A huge "thank you" to a reader for sending me this note; I would have missed it.

The other day, in a series of comments regarding natural gas and ONEOK, I came very, very close to suggesting it was just a matter of time before ONEOK would announce another natural gas gathering and processing plant. Wow, I wish I had posted that, but I have become so well-known for my bias regarding the Bakken, I have backed off adding comments about what I think we might see in the Bakken.

Here's that story from Yahoo!Finance:
ONEOK Partners, L.P. today announced plans to invest approximately $980 million to $1.1 billion between now and 2014 to:
  • Build a new 75,000 barrel-per-day (bpd) natural gas liquids (NGL) fractionator, MB-3, at Mont Belvieu, Texas, and related infrastructure;
  • Build a new 100 million cubic feet per day (MMcf/d) natural gas processing facility – the Garden Creek II plant – in eastern McKenzie County, N.D., in the Bakken Shale in the Williston Basin, and related infrastructure;
  • Increase capacity on the Bakken NGL Pipeline to 135,000 bpd from 60,000 bpd; and
  • Build a new 40,000 bpd Ethane/Propane (E/P) splitter at Mont Belvieu, Texas.
This is an incredible announcement coming when it does -- regular readers have been treated to a series from articles from RBN Energy, ISA, and from readers talking about the coming natural gas boom in North Dakota.

And don't forget this Forbes article that Don sent me some time ago and I linked: natural gas is headed to $8.00.

Earnings Out Today: LINN, NBL, NOV, XOM

XOM, at Bloomberg:
Second-quarter net income was $15.9 billion, or $3.41 a share, compared with $10.7 billion, or $2.18, a year earlier, Irving, Texas-based Exxon said in a statement today. Excluding one-time gains that accounted for almost half of the quarter’s profit, per-share income was $1.80, or 15 cents lower than the average of 15 analysts’ estimates compiled by Bloomberg.

Exxon fell short of estimates for the second straight quarter amid a widening production decline that Chairman and Chief Executive Officer Rex Tillerson is attempting to reverse with $37 billion in capital spending this year. The company pumped the equivalent of 4.15 million barrels of crude a day during the April-to-June period, the lowest in two years. 
NOV, transcript:
Investors like results; share price up almost 10%.
NBL, from In-Play:
Noble Energy misses by $0.26, misses on revs: Reports Q2 (Jun) earnings of $0.77 per share, excluding non-recurring items, $0.26 worse than the Capital IQ Consensus Estimate of $1.03; revenues rose 14.7% year/year to $966 mln vs the $1016.75 mln consensus.  "The second quarter was another good quarter for Noble Energy. Production and operating costs were in line with our expectations, and we brought online our second major project at Galapagos. The growth of crude oil and liquids continues to be a key driver of our results as they accounted for nearly 50 percent of production and 85 percent of revenue for the quarter. Galapagos, as well as the horizontal programs in both the DJ Basin and Marcellus Shale, will make significant contributions to our production growth in the second half of the year. We continue to make excellent progress on our major international developments, which will extend our growth profile into 2013 and beyond. Exploration activity will move forward into the second half of the year, as we test and appraise several sizable opportunities in our key offshore basins." 
LINN, at Bloomberg:
Oil and gas company Linn Energy reported a lower-than-expected quarterly profit on weak natural gas liquids (NGL)prices.

Linn said weak NGL prices would hurt its 2012 earnings, but recent acquisitions and a shift to oil drilling are expected to mitigate the weak prices.
Again, this is not an investment site. Do not make any investment decisions based on what you read at this blog. I include this information to help me keep the Bakken in perspective as to what is happening in the oil and gas industry at large.

During earnings seasons I am overwhelmed with data, so I depend on readers to send in links that might interest others and to make comments. 

Incredible Post at Politico.com: US Could Become Energy Exporter

A huge "thank you" to a reader. I would have missed this story at Politico.com:
We have the potential to become the world’s swing supplier of energy. For the U.S. economy and its North American neighbors, Mexico and Canada, the reality is nothing short of revolutionary.

This felicitous scenario is now possible because the energy world has been turned upside-down. While policymakers globally have focused on alternatives to hydrocarbons, from solar and wind to plant matter, the game-changing technologies that have emerged are in the traditional sectors — unleashing staggering quantities of natural gas, oil and coal.
Politico.com is a politic-centric blog. Why the following:
In hydrocarbon-friendly states, tax coffers are bulging and job markets are booming, largely from production on private and state-controlled lands. Ohio alone stands to reap 200,000 new jobs by 2015 and $22 billion in economic growth. In the Western states, a mere few dozen proposed oil and gas projects could generate 120,000 jobs and $400 billion cumulative benefits over 15 years.
It turns out that Ohio is the #1 swing state for the November presidential election. Google it and you will find that Ohio is the state most visited by President Obama. Then google "ohio-Obama-oil" and see what you get.

Ohio is mentioned on the first page of the story; the Bakken is not mentioned at all. Huh? What? Maybe I missed it.
There have indeed been real technology gains in alternatives. But many analysts act as if the hydrocarbon industries operate in a parallel universe — where two decades of profound advances in information and materials sciences never took place. For it’s with hydrocarbons that new technologies have been transformative.

With these advances, the U.S. has emerged as the world’s fastest-growing producer of oil and natural gas. Production growth these past few years has reversed a 40-year decline. All this has happened in an environment either hostile to or, at best, neutral toward hydrocarbons.
That in bold? I've been saying that for years. I've shortened it to "permitorium."  Can you imagine where the US would be if there was some common sense in the White House to offset ideology?

Are OXY USA Wells Getting Better? IPs Seem To Be Improving

From today's daily activity report:
  • 21264, 509, OXY USA, Emil Veverka 2-1-20H-143-95, Murphy Creek, t1/12; cum 14K 5/12;
  • 21635, 681, OXY USA, State Dukart 1-24-13H-143-95, Murphy Creek, t5/12; cum10K 5/12;
Those are pretty IPs for the Bakken, although generally, I associate Murphy Creek with better IPs, but I could be wrong. If I have time, I will check later.

Answer to the question posted at 10:52 p.m. EDT, July 26, 2012: Occidential (OXY USA).

Thursday Morning Links -- CLR Putting Oil in Storage; Crude-by-Rail 40%; XOM Earnings Surprise; NYT in Williston; ATT On a Tear

See disclaimer and welcome: this is not an investment blog; make no investment decisions on what you read at this blog. 

Continental Resources (CLR) posts 2Q12 production results: production up 76% yoy, and 11% over 1Q12.

From Yahoo InPlay:
Continental Resources reported 76% production increase YoY in Q2 of 2012: Co announced that expects to report record total production of 94,852 barrels of oil equivalent per day (boepd) for the second quarter ended June 30, 2012, a 76 percent increase over production of 53,984 boepd for the second quarter of 2011.

During the quarter, production exceeded sales by 147,000 barrels of oil as a result of the Company placing oil in storage in anticipation of higher prices. The Company expects to report an average realized oil price of $80.56 per barrel and an average realized natural gas price of $3.51 per Mcf for the second quarter of 2012, yielding an average realized price of $61.69 per Boe (barrels of oil equivalent). 
At Independent Stock Analysis, this one caught my eye, but there are several others:
“North Dakota Department of Mineral Resources director Lynn Helms says as much as 40 percent of the state’s oil exports are being shipped by train” at Fuel Fix.  
With recent comments from "anon 1" about the Eagle Ford, this should be interesting from RBN Energy:  The Eagle Ford Crude Story, Part II.
For investors only, from Yahoo In-Play: 
Exxon Mobil clarification: Large Q2 earnings beat included special items: Earlier we reported Q2 EPS of $3.41 (net income of $15.91 bln) beat the $1.96 consensus, however that included a $7.5 bln net gain associated with divestments and tax related items. Backing out that $7.5 bln gain, Q2 EPS was closer to ~$1.80, below consensus. Our original earning comment has been edited.

XOM popped to ~$87 on the headline "beat" but subsequently sold off the the $84 level after the release was parsed. The stock is currently just below the $85 level (-0.3%) in the premarket.
Comment: one has to chuckle. Too hard to explain.

Will it ever end? I thought the EPA testing at Dimock, Pennsylvania, was complete. Hardly. It is being reported that the EPA has concluded ALL water testing at Dimock. The story does not explicity say (although I read through it quickly and could have missed it) that this testing had nothing to do with fracking. This time it had to do with non-fracking chemicals:
Overall during the sampling in Dimock, EPA found hazardous substances, specifically arsenic, barium or manganese, all of which are also naturally occurring substances, in well water at five homes at levels that could present a health concern. In all cases the residents have now or will have their own treatment systems that can reduce concentrations of those hazardous substances to acceptable levels at the tap. EPA has provided the residents with all of their sampling results and has no further plans to conduct additional drinking water sampling in Dimock.  
No further plans to conduct additional drinking water sampling in Dimock. I guess even the EPA gets tired of some of this craziness.  I assume the EPA has moved on to North Dakota.

The New York Times went to Williston and this is all they could find on the downside due to the boom: traffic, housing challenges, and dust. That was it. Traffic, housing challenges, and dust. What they did not find: terrorists; roadside bombs; civil war with threat of chemical agents; starvation; empty shelves; lack of water, sewer, electricity; joblessness; gouging at the grocery stores; problems with fracking; oil spills; derailments; lack of shelter. All they found was traffic, housing challenges, and dust. My hunch is the journalist never really went to Williston; she posted her story from Ohio. Had she actually been in Williston, she would have mentioned mosquitoes.
[NY Times reported a loss...again.
The net loss was $88.1 million, or 60 cents a share, compared with a net loss of $119.7 million, or 79 cents a share, in the period a year earlier, when the company wrote down the value of its regional newspapers, which it later sold.]
By the way, speaking of traffic: I haven't been in NYC recently, but my hunch is that traffic in NYC is much, much worse than anything in Williston. When in Williston I only have two rules: a) avoid left hand turns at all costs; and, b) if in a left hand turn lane, stop as far back as possible to allow trucks to make that challenging left turn. Of course traffic is worse in Williston than it once was: hello!

Oh, and this. The Bakken boom began in Montana in 2000; in North Dakota in 2007. The Bakken boom may be the biggest energy story of the decade (2000 - 2010), and it took five years, or 12 years, depending on where you want to start, for the NY Times to travel that far west of the Hudson. Incredible. 

Actions have consequences. By killing Keystone XL 1.0, the President has made it easier for the Chinese to get another foot in North America's energy-resource door. Great article/link at the WSJ sent to me by a reader. Thank you.
President Obama may not want to exploit the energy buried in Canada's Alberta oil sands, but China sure does. Think of Monday's $15.1 billion offer by China's state-owned Cnooc to buy Canadian energy giant Nexen as a post-Keystone XL Pipeline bid to replace the U.S. as Canada's biggest energy investor and market.
For investors only, at Forbes, ATT on a tear:
Data continued to be AT&T’s primary growth driver, with revenues from wireless data and U-Verse broadband and video services growing respectively by 19% and 38% over the year-ago quarter. More importantly, however, the carrier saw discipline in meting out handset subsidies and operational efficiency return to its ranks as wireless EBITDA margins came in at 45% and operating margins at a best-ever 30.3%.

On the subscriber additions front, AT&T was able to add 320,000 postpaid connections during the quarter, a sequential increase of more than 70% as the new iPad bolstered net additions despite a saturated wireless market. Increasing competition from rivals Verizon and Sprint in an increasingly saturated wireless market is gradually causing subscriber growth to slow, and the availability (or not) of LTE in certain markets could be key to attracting new subscribers as well as retaining old ones from hereon.
I have used Sprint forever, and am still a Sprint customer, but ATT has nothing to fear from Sprint.  ATT is up a staggering $1.00 today, a new 52-week high (one of many this year) and still pays over 5%. Compare that to US Treasury bonds.
Meanwhile, for those interested in US-owned companies, GM hits a new low.
General Motors Co. stock fell 1.2 percent Wednesday, closing at $18.80, down $0.22, on worries about Europe — the first time the Detroit automaker's stock has closed below $19 a share since its initial public offering.

The Detroit automaker has seen its share price tumble by more than 52 percent since it reached a high closing price in January 2011 of $38.90, just after going public in November 2010. The company has shed more than $30 billion in market capitalization over the last 18 months, and now is worth about $29 billion.
And GM is still $42 billion in the hole; President Obama says otherwise. 

WOW! What is the capital of Israel? I thought it was Tel Aviv, but I guess it's much more complicated.