Seven Wells Reporting; BR Reports A Huge TF Well; Whiting With Two Nice TF Wells; Helis With Another Huge Well; OXY With Another OXY Well -- October 2, 2012

Active rigs:

• 189 active rigs in North Dakota today. The high was 218.
• 220 - 190 --> 30 rigs. CLR and OXY USA accounted for about 15 of those rigs.
• History and milestones of active rigs in the current Bakken boom.
• Decrease in active rigs between 2011 and 2012, by operator.
• Among 30+ other operators, another 15 rigs were dropped.

Faster drilling, pad drilling, winter coming.

Wells coming off confidential list tomorrow:
21542, 2,978, BR, Ivan 11-29TFH, Elidah, t7/12; cum 95K 6/14;
21844, 140, OXY USA, Keary Kadrmas 1-32-29H-142-96, Russian Creek, t4/12; cum 64K 6/14;
22026, 1,040, Whiting, Stubstad 13-6TFX, Sanish, t4/12; cum 157K 6/14;
22027, 1,969, Whiting, Stubstad 14-6TFX, Sanish, t4/12; cum 173K 6/14;
22375, 814, CLR, Chicago 2-26H, Banks, t6/12; cum 143K 6/14;
21456, 2,014, Helis, TAT 13-35/26H, Grail, t7/12; cum 241K 6/14;
21478, 1,171, MRO, MHA USA 11-4H, Reunion Bay, t7/12; cum 195K 6/14;

Crude by rail: Nice story in Bloomberg BusinessWeek on Bakken, crude-by-rail, barge (reader sent in link, thank you):

Since 2008, Musket has been buying oil from the wellhead in North Dakota and railing it straight to the Gulf Coast refiners.  

“We were probably one of the very first people to make that move,” says Fjeld-Hansen. Initially, Musket sold its North Dakota barrels into Cushing. But Fjeld-Hansen says he hasn’t sold a drop of oil at Cushing in more than a year.  

Recently he’s also been sending it to the East Coast by rail, where refiners are stuck taking more expensive imported oil. He’s up to about 40,000 barrels per day.  

“Why would I sell into Cushing when the price is so depressed there?” he says. “Let’s say it costs me $9 to rail from North Dakota to Cushing, but it costs me $12 to go all the way to the Gulf Coast. If I can get an extra $10 to $15 at the Gulf Coast than what I would get at Cushing, why in the world wouldn’t I just keep going?”  

In an odd step back in time, railroads are moving more crude these days than they have since the early part of the 20th century. In 2009 railroads moved a total of about 7.5 million barrels. In the second quarter of 2012 alone they moved more than 36 million barrels. 

The trend has given a boost to railroad companies such as BNSF and Union Pacific. Rather than sign long-term contracts with pipeline companies, big oil producers such as Phillips 66, Statoil, and Hess are starting to lease and purchase their own rail cars. In a September note to clients, Goldman Sachs Energy analyst David Greely wrote that rail is starting to overtake the reversed Seaway as the biggest means of clearing out the Midwestern oil supply.