How Fitting: One Last Permit For 2013 -- Whiting

Bakken Operations

Wells coming off confidential list today and over the weekend were reported earlier; see sidebar at the right.

One last permit for 2013:

• 24692, loc, Whiting, Faiman 34-33PH, St Anthony, Dunn County

So, "we" finish the year with 2,521 oil and gas permits, though a fair number were canceled. This does not include salt water disposal wells.

Another Graph: What a Great Way To End The Year!

Link  here to CarpeDiem.

In addition to the graph at the link, another graphic and several great stories. And as far as I'm concerned, it all started with the Bakken. Whoo-ah!

Data Points From the December, 2012, CLR Corporate Presentation

CLR corporate presentations can be found here. 

Note: in some cases numbers may be rounded.

The Briefing Begins With The Bakken

Largest Continuous Reservoir of "Unprecedented Magnitude"

Data points:

• for CLR: proved reserves: 610 million bbls of equivalent oil at mid-year, 2012
• current production: >105K boepd
• estimate: almost 60% y/y production growth 2012/2011
• cash margins: >70%

Middle Bakken and First Bench (Upper) of the Three Forks

• full development
• continuous oil field: 15,000 square miles x 640 acres --> 9.6 million acres
• true oil play: in 2010, it was estimated that 24 billion bbls were technically recoverable
• currently less than one (1) well per 1280-acre spacing unit
• full development: 4- to 8- wells per zone for full development

Lower Three Forks

• increases OOIP by almost 60% --> 903 billion bbls
• slide 6: suggests 45 billion bbls recoverable (see MDW calculations below)
• Discusses CLR's exploratory work with the Three Forks (slide 8)
• proved separation of middle Bakken and the upper Three Forks
• theorized four Three Forks benches; proved two; testing a third; plans to test the fourth

CAPEX for Three Forks "produce while exploring" in 2013

• Three Forks accelerated de-risking: $70 million
• 320-acre spacing pilot, two areas; one in southeastern Divide County; one in southeast McKenzie County: $160 million 
• 160-acre spacing pilot, near the Charlotte wells in north-central McKenzie County: $36 million

Single well economics, current (slide 9)

• 10,000-foot lateral; 30 stages
• EUR: 600K
• well costs: single well, $9.2 million; ECO-Pad well, $8.5 million
• rate of return: at $80 oil, 50% RoR; at $60 oil, 20% RoR

Single well drilling vs 6-well pad drilling (slide 10)

• 200 days to drill six single wells; 130 days to drill a 6-well pad
• $30 million to $22 million; $8 million savings

Evacuation capacity (slide 12)

• pipeline and rail through 2017
• currently: 900K bbls committed to pipelines; 900K bbls rails --> 1.8 million bbls; another 1.3 million bbls proposed pipeline

Miscellaneous

• CLR first to send Bakken oil directly to Tesoro Refinery, Anacortes, Washington, September, 2012, rail

Interesting observations, back of the envelope calculations:

• CLR says they lease 10% of the Bakken; with ~ one million acres, that suggests about 10 million acres in the Bakken
• back of the envelope: 8 wells/640 acres. Average EUR of 400,000 bbls. 8x 400,000 = 3,200,000 bbls/640 acres or 5,000 bbls/acre. Ten million acres x 5,000 bbls/acre --> 50 billion bbls. Cross-checking: 1 trillion bbls original oil in place x 5% recovery --> 50 billion bbls; if one cuts this to 8 wells/1280 acres --> 24 billion bbls

 *************************

The Briefing Then Switches To the SCOOP (South Central Oklahoma Oil Province)

A New, High-Impact Resource Play

Data points: SCOOP

• dual reservoir: upper and lower Woodford
• 6x the Cana Field
• 3 of the top oil-producing counties in Oklahoma
• 3 billion bbls of oil produced
• 60 reservoirs

Commanding position in the SCOOP (again, some numbers rounded)

• 100,000 acres at end of 2010 (3% held by production)
• 200,000 acres at end of 2012 (20% held by production)
• 2 billion bbls oil equivalent potential to CLR; based on unrisked, 80-acre spacing
• 50% RoR

Still Looking For Another Proppant Source Closer to Home

Link here to mywesttexas.com.

Today's ceramic proppants come either from overseas -- Brazil, Russia or China -- or from the "kaolin belt" in Georgia and eastern Alabama. That is because they must contain either kaolin or bauxite to work in current formulations.

Austin-based Brownwood Clay Holdings, LLC, (BCH) is announcing the development of a method for making ceramic proppant out of a type of clay found near many of the top shale formations which, if proven commercially viable, could slash the cost and the delivery time for this type of proppant.

The product is currently completing the testing phase, according to Gary Davis, co-operating manager of BCH, and is looking for a partner to manufacture the proppant. Should they find one in 2013, Davis said they could have product ready for delivery by 2015.

The idea has been under consideration for two to three years, starting with the consideration of how to utilize a clay deposit on 476 acres of land BCH owned near Brownwood. BCH consists of a number of owners of this land, some of which have been connected with the property for more than 50 years, others for just a few years. The clay had previously been used for brick and tile, but Davis and his associates were looking for greater uses.

Along with that link, Don sent me a great link to a NDGS article on North Dakota clay. This is a PDF file with great photos. I remember playing on this stuff growing up in North Dakota.

And, y'all knew what video was going to show up:
The Night The Lights Went Out in Georgia, Reba McEntire

Not For Investors Only: Legacy Oil And Gas

Link here to SeekingAlpha.com.

Add this post to the few posts regarding the Spearfish and the companies most involved: Legacy and Surge. Legacy has its own link at the sidebar at the right. (Having noted that, maybe I need to do the same for Surge. But I digress).

First, for investors:

The past nine months have been painful for investors with exposure to the Canadian resource sector. The smaller the company, the greater the pain.

Got that out of the way.

Now, for non-investors. Remember, there are "two" Bakkens: the Williston Basin Bakken, and the Alberta Basin Bakken, farther west.

Williston Basin - Saskatchewan/North Dakota

In the Williston Basin, Legacy has both light oil resource plays (Bakken, Torquay, Spearfish) and conventional Mississippian (Souris Valley, Tilston, Alida, Frobisher, Midale). The production from these plays is a high quality light oil averaging 37 degrees API.

On 242,352 net acres of undeveloped land, Legacy has more than 1,000 (net) drilling locations as follows:

- Bakken - more than 200 net development drilling locations at four wells per section
- Torquay - large resource mapped adjacent to Sinclair Torquay pool
- More than 350 net Mississippian development drilling locations
- Spearfish - more than 440 net locations at eight wells per section

All of these areas are well defined by 3-D seismic and have significant reserve growth potential through the use of waterflooding.

New Year's Eve -- Bakken Notes; Other Links; Top Stories of 2012 Are Posted

Wells coming off the confidential list over the weekend have been posted.

At the link, Hess reports another nice well; OXY USA reports another OXY USA well.

Brett sent in a comment noting the Truax oil field and wondering what field was most productive. The MDW showcases several good fields in various locations. One of them is at the sidebar at the right, the ten oil fields that are of interest, not necessarily simply because of production. One could do a statistical analysis of the various fields but one cannot simply compare overall production. There are just too many variables. Some fields are as small as one section (640 acres); others are as large as two townships (72 sections --> 46,080 acres). 

RBN Energy: this will be a lot of fun. A re-cap of the top RBN blogs this past year. Alert! Alert! Do not read any farther if you do not want to know the #1 RBN blog this past year. This was the #1 RBN post this past year: Bakken pricing. If you are at all interested in the Bakken, I cannot think of a better site than RBN Energy where I would be spending my time.

By the way, the MDW has posted the top stories of 2012. These are not the top posts, but rather the top "news" stories of 2012. Most of them are about the Bakken but a few are not.

Another great story on revival of the steel industry due to hydraulic fracking. Nothing new for regular readers of the MDW. Steel industry, railroad industry, trucking industry....wow, if the EPA shuts down fracking, it shuts down the US economy.

The U.S. shale-gas revolution, which has revitalized chemicals companies and prompted talk of domestic energy self-sufficiency, is attracting a wave of investment that may revive profits in the steel industry. 

Austrian steelmaker Voestalpine ..... may construct a 500 million-euro ($661 million) factory in the U.S. to benefit from cheap gas. Nucor Corp., the most valuable U.S. steelmaker, plans to start up a $750 million Louisiana project in mid-2013. They’re among at least five U.S. plants under consideration or being built that would use gas instead of coal to purify iron ore, the main ingredient in steel.

“That technology has been around 30 years, but for 29 years gas prices in the U.S. were so high that the technology was not economical,” said Michelle Applebaum, managing partner at consulting firm .... “This is how steel will be built moving forward.” 

No links but the winter storms continue: today in Oklahoma, later this week, the East Coast. 

Gulf Coast Oil Being Shipped to Canadian Refineries; US Production Hits Highest Since 1994

"Anon 1" sent this most interesting link. The story stands without need for comment.

At Bloomberg:

Valero Energy Corp. has received approval from the Commerce Department to ship crude from the U.S. Gulf Coast to its Quebec City refinery.

The 235,000-barrel-a-day refinery processes primarily light, low-sulfur crude from Europe and Africa, Bill Klesse, Valero’s chief executive officer, said during the company’s third-quarter earnings call on Oct. 30. Shipping costs from the Gulf Coast to Quebec averaged about $2 a barrel or less, he said. The company hasn’t transported any significant shipments yet, Bill Day, a San Antonio, Texas-based spokesman for the company, said today [December 20, 2012] in an e-mail.

U.S. crude production increased to 6.863 million barrels a day last week, the most since January 1994, Energy Department data show. The production gains have been primarily light, low sulfur crude from Bakken and Eagle Ford shale formations in North Dakota and southern Texas. U.S. crude moving to Canada would displace light, sweet oil from West African nations like Nigeria and Angola, said Amrita Sen, chief oil market analyst for Energy Aspects Ltd in London.

Nothing else to say.

Random Update on Oasis' Kestral Well Southwest Of Williston

About a year ago there was a lot of excitement with the Oasis well that was being drilled almost inside Williston city limits on the southwest side, just south of the frontage road, near Sitting Bull Auction:

• 21150, 3,021, Oasis, Kestrel Federal 5401 43-22H, Todd, t1/12; cum 331K 10/18; a long lateral that runs south, under the river

So, in less than a year, 112,000 bbls of oil. Not bad.

Continental Resources has a similar well, about a mile to the southwest, also a long lateral, running south under the river:

• 21933, 636, CLR, Plano 1-28H, Todd, t3/12; cum 254K 10/18; a bit less production, but not bad; still producing 5,000 bbls/month

Wells Coming Off Confidential List New Year's Eve; A Hess Truax Well Looks Huge; OXY USA With Another Dud?

Active rigs: 187 (steady)

Monday, December 31, 2012: None

Sunday, December 30, 2012:

• 21420, 344, Petro-Hunt, Hokanson 157-99-1A-12-1H, Lone Tree Lake, t9/12; cum 13K 11/12;
• 22210, 1,920, BR, Concord 34-10MBH, Little Knife, t9/12; cum 18K 11/12;
• 22946, 1,122, Hess, SC-Hoving 154-09-1003H-1, Truax, t9/12; cum 52K 10/12;
• 23099, drl, QEP, MHA 2-06-32H-150-92, Heart Butte,
• 23150, 1,089, Zenergy, Peters Road 30-29H, Todd, t9/12; cum 22K 10/12;

Saturday, December 29, 2012:

• 19774, 167, Petro-Hunt, Setterland 159-94-34C-27-1H, East Tioga, t10/12; cum 16K 11/12;
• 20834, 1,563, BR, Wilson 31-6H, Haystack Butte, t9/12; 9K 11/12;
• 21215, 603, WPX Energy, Wounded Face 15HC, McGregory Buttes, t9/12; cum 20K 10/12;
• 21395, 129, OXY USA, State Titos 1-3-10H-142-98, Willmen, doesn't look promising; t6/12; cum 9K 10/12;
• 22116, 270, Whiting, Chitwood 44-36TFH, Ellsworth, not all that promising, t6/12; cum 14K 11/12;
• 22787, 1,161, MRO, Irene Kovaloff 14-7H, Murphy Creek, t10/12; cum 20K 11/12;

Nice well:

• 22946, conf, Hess, SC-Hoving 154-09-1003H-1, Truax, 50K first two months:

Date	Oil Runs	MCF Sold
10-2012	22816	1077
9-2012	27856	0

Note: again, another well in which no flaring after the first month; as well density increases, less and less flaring.

Electric Vehicles: Premature Loss of Capacity in Nissan Leaf Batteries

Don sent this interesting link. MDW has posted issues with electric vehicles including "capacity loss" of the batteries. Apparently that hypothetical is now reality:

Nissan Motor Co. said it will offer to replace some poorly performing batteries on its Leaf electric car and improve warranty coverage for the battery systems for its almost 20,000 U.S. owners.

The move comes as the Japanese automaker closes a year marked by disappointing sales and complaints by some U.S. customers about the Leaf's battery capacity.

Nissan will repair or replace lithium-ion batteries that have fallen under a specified capacity as well as expand the warranty on the battery to cover for lost capacity for the first five years or 60,000 miles.

Meanwhile, regarding sales:

Nissan is falling well short of its goal of doubling Leaf sales in the company's current fiscal year, which runs through March 2013. Demand in the United States is particularly weak, with sales through November down 4.5 percent, at 8,330 cars.

Leaf is not the only electric vehicle to struggle in the U.S. General Motors' Chevrolet Volt plug-in hybrid car has come up short of expectations, previously forcing the U.S. automaker to idle the plant that makes the car. However, Volt sales are 2 -1/2 those of the Leaf this year.

Human Interest Story: Los Angeles City Planner Moves To Williston As City Planner

Link at The Dickinson Press.

While working as a city planner in Los Angeles, Donald Kress kept fielding questions about his booming home state.

So when he saw an advertisement for a city planner in Williston, Kress decided to go where the action is.

“This is a very dynamic place if you’re a planner,” said Kress, a 49-year-old Fargo native. “Planning climates like this don’t come up that often.”

Kress worked as a technical director for community and educational theater in Fargo before deciding at age 41 to go to graduate school in California for city planning.

He then worked for six years planning subdivisions for the Los Angeles County Department of Regional Planning, a department of 180 people.

Kress had a stable job there, but development had slowed. He interviewed for the job of principal planner for Williston, a newly created position, and began working May 29.

Much, much more at the link. 

Flaring

Updates

March 10, 2013: In the most recent Director's Cut:

Additions to gathering and processing capacity are helping with the percentage of gas flared holding at 29%. The historical high was 36% in September 2011.

This is quite impressive. The percent of flaring is dropping even as a) the number of wells being drilled is going up; and, b) production of both gas and oil is increasing. One could improve the number if the NDIC increased restrictions on flaring. The NDIC has to thread the needle with regard to oil production vs flaring.

January 27, 2013: FT has story about US shale --> flaring. Fails to a) provide denominator of new wells; and, b) fails to note that the trend in flaring in North Dakota has been decreasing despite an increase in production of both oil and natural gas.

Original Post

Two links for future reference:

• Global flaring. In 2010, the US did not even make the list. Source: NOAA, provided by EIA.
• Natural gas flaring in the United States in 2012. The US now appears on the list and moves into fifth place according to the linked story. This is a bit dated, having been published in July, 2012, but does provide some nice data points going forward.

Out and About All Weekend: I Apologize For Not Posting

I'm keeping up with some of the news, but not enough time to post. Fortunately there does not appear to be a lot of news.

Don noted that The Dickinson Press is calling "The Bakken" the number one news story for 2012. Just some of the items they noted:

The governor’s proposed $12.8 billion budget for the coming 2013-15 biennium includes $300 million to convert two-lane highways into four-lane ones, starting with U.S. Highway 85 between Watford City and Williston, plus $142 million to help counties and townships repair truck traffic-damaged roads. Under the budget, many new state positions would be added, including more highway patrol troopers, petroleum engineers and inspectors for monitoring drilling and well sites.

In 2012, the term “fracking” overtook “climate change” in Google searches, the word “Bakken” became a hot marketing tool, an LA production company sought oil workers for a planned reality TV show and journalists from both coasts and beyond descended on the area to report on the stories of low unemployment rates and fastest-growing U.S. population here in our midst.

The skyrocketing use of natural gas to produce electricity was projected in the state, even as gas flaring estimates of 30 percent with a loss of $100 million wasted were reported.

There was one word not mentioned in that story that I found interesting. At least I did not see the word and a "search" for the word came up negative. Let me check one more time....nope. The word "crime" was not mentioned. 

Until Later...nothing about the Bakken -- a bit of global warming humor ...

... link here to the teachers' net.

And some global warming updates:

Deep snow at Utah resorts is huge change from last year

Alta and Snowbird have received more than 13 feet of snow this season — more than twice the amount many Colorado resorts were reporting Friday. The Rocky Mountains are enjoying a rebound from one of the worst winters ever for snowfall last year.

Update on a Dry Gas Formation in the Williston Basin: the Ordovician Black Island Formation (Winnepeg Group)

Updates

December 28, 2012: this information was available at the time of the original post, but I wanted to place it here for easy access to this new 2012 well:

• 21235, 0, BTA Oil, Sharon #1, North Taylor oil field, a Winnipeg formation well, a dry gas well; 20K mcf the first month; this is not a "dry" well; the IP for oil was zero, but the IP for gas was 5,000 mcf. 

From a geologist's review:

Well #21235 is a recent dry gas discovery well and is inactive while awaiting a gas pipeline at the time of this publication. This will likely be a very productive well.

Original Post

Link here to a NDIC PDF file.

This is an excellent summary of the formation and includes some monster wells in North Dakota targeting this formation. I have also linked this study at the "Geology" tab at the top of the blog.

A big "thank you" to a reader for sending this in.

Note: This is a dry gas formation, found only in North Dakota and Saskatchewan, and producing only from vertical wells to date:

The total cumulative oil production from these 18 wells is little more than 200,000 barrels. The cumulative gas production, however, is over 115 BCF of dry gas (Table 1). Converting the gas to barrels of oil equivalent (BOE), assuming 5,620 cubic feet of dry gas (methane) equals 1 barrel of oil, over 17 million BOE have been produced from wells that have completed and produced from the Black Island Formation, while the water production total is ~450,000 barrels. Overall, the average Black Island well has cumulatively produced 960,463 BOE with only 24,960 barrels of water. Even after 15+ years of production, Black Island completions produce very little water.

[Note: the "5,620" conversion factor varies based on BTU content of the natural gas; I often use a conversion factor of 6,000.]

At the linked article, one can locate/track individual wells, such as:

• 1231, 168, Hess, Beaver Lodge-Ordovician Unit 1, Beaver Lodge, Ordovician formation, a dry gas well targeting the Ordovician, t6/63; cum 14,924,835 mcf --> 2.7 million boe! Still active as recent as a year ago; almost 50 years of production;
• 1231, 258, Hess, Beaver Lodge-Ordovician Unit 1, Beaver Lodge, Devonian formation, oil, t11/57,  cum 224K 10/12 (IA)

Another well, still active:

• 12432, 1, Hess, Beaver Lodge-Ordovician Unit 9, Beaver Lodge, Ordovician formation, a dry gas well targeting the Ordovician, t9/92; cum 12,116,594 mcf --> 2.16 million boe! Still active in 2012.

Another example:

• 13405, 10, Hess, Brenna-Lacey 1 32, Antelope, Winnipeg/Deadwood, a dry gas well targeting the Ordovician/Winnipeg; t11/92; cum 19,047,919 mcf --> 3.4 million boe! And again, still active.

Random Update of CLR's Burian 1-27H, Three Forks Well in St Demetrius Oil Field; Another 100K+ Well In Less Than A Year

An individual asked for an update of:

• 21806, 854, CLR, Burian 1-27H, St Demetrius, Three Forks well; 30 stage, 3 million lbs proppant; t3/12; cum 116K 10/12:

Note: the well has only been off-line about 7 days since being completed; another great well. And, also no longer flaring.

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2012	30	7236	7558	2398	7967	7967	0
BAKKEN	10-2012	24	6794	6489	2675	4309	4309	0
BAKKEN	9-2012	30	10844	10970	3995	19729	19729	0
BAKKEN	8-2012	31	15357	15212	5932	26204	26204	0
BAKKEN	7-2012	31	14629	14916	4851	17223	17223	0
BAKKEN	6-2012	30	14615	14477	5182	15665	10781	4884
BAKKEN	5-2012	31	13275	13130	5040	12663	0	12663
BAKKEN	4-2012	30	12708	12466	4628	11845	0	11845
BAKKEN	3-2012	31	19735	19872	9250	17294	0	17294
BAKKEN	2-2012	2	644	223	683	37	0	37
BAKKEN	1-2012	0	0	0	0	0	0	0

Week 52: December 23, 2012 -- December 31, 2012

Fracking
North Dakota leads the world in shale oil technology

Rail
Nice update
Huge Washington Post article on Bakken oil to east coast refinery
Rail trumps pipelines for Bakken oil

Water
Water availability for fracking

Economic development
Williston to annex 4,800 acres
Williams County solidly above $1 billion in taxable sales
Dickinson leads state in single family housing permits
North Dakota: fastest growing state in the United States

Mishaps
Oil well blowout five miles west of Watford City, no injuries, capped

Miscellaneous
Bakken distillates pricing at $131/bbl; compares with $127 for WTI

Klondike Kutters: Coast Guard Cutter Caught in Tow Line To Kulluk

Updates

 January 1, 2013: Kulluk rig now runs aground.

Days of efforts trying to guide a mobile offshore drilling rig through stormy Alaska seas hit a crisis Monday night when crew members were forced to disconnect the rig from its last remaining tow line and the vessel went aground on a small island south of Kodiak.

“The first priority was the safety of the people,” said Darci Sinclair, spokeswoman for the unified command of U.S. Coast Guard, Shell Alaska and drill ship owners who had been trying mightily to avoid just such an eventuality ever since the Kulluk rig first ran into trouble Thursday night.

The 266-foot conical drill barge first broke free of its lines last week while being towed back to port in Seattle after a summer season of drilling off the coast of Arctic Alaska. Troubles mounted when the tow vessel, the Aiviq, lost all four of its engines due to possible fuel contamination, and the drill rig was briefly adrift.

Original Post

Link here to LA Times.

Adding to a season full of headaches for Shell Alaska’s debut offshore drilling program in the U.S. Arctic, the company’s Kulluk drilling rig was stuck in monster seas off the coast of Alaska on Friday as its tugboat’s engines failed and the Coast Guard cutter that came to assist became entangled in a tow line.

There were no immediate threats to crew or equipment, but Shell Alaska was rushing additional aid vessels to the scene as the Kulluk, which drilled the beginnings of an exploratory oil well in the Beaufort Sea over the summer, sat without ability to move forward in 20-foot seas about 50 miles south of Kodiak.

Almost makes the Bakken seem like paradise, or a garden of Eden. But wow, our prayers go out for these seamen.

Looks Like OXY USA Will Have A Nice Well in Murphy Creek

21685, conf, OXY USA, Scott 2-7-6H-143-95, Murphy Creek oil field, no IP yet, but produced > 21,000 barrels of oil in first month of production (first month is seldom a full month)

Mambo Italiano, Ysabella Brave

US Petroleum Demand Hits Lowest Level For a November Month in 17 Years; Foreshadowing the Recession of 2013; Other Data Shows US Advantage Relative To Europe

Link here to Oil & Gas Journal.

US petroleum demand remained weak in November, averaging 18.5 million b/d and reaching the lowest level for the month in 17 years, the American Petroleum Institute reported.

Other data points:

• gasoline demand, 8.5 million b/d, fell 0.3% y/y (inconsequential)
• distillate fuel demand, 3.8 million b/d, fell a significant 6.3% y/y (significant)

 Looking toward the Great Recession of 2013:

“The economy has shown modest improvement—in employment, for example – but the fundamentals of fuel demand fail to indicate a strengthening recovery is imminent,” API Chief Economist John C. Felmy said.

“Look at the weakness in distillate deliveries, including ultra-low sulfur diesel fuel, which is critical to shipping just about everything in our economy,” he continued. “It was down 4.5% from November last year.”

But, looking at the advantage the US has over Europe in manufacturing, going forward:

• crude oil and condensate production, meanwhile, climbed 13.3% y/y to nearly 6.8 million b/d
• production of natural gas liquids, an increasingly important element of US oil and gas production because of their role as a manufacturing feedstock, rose 1.5% from November 2012 to 2.4 million b/d

For Investors Only: NOG

Link here to SeekingAlpha.com.

Based on the nine tests that Northern Oil and Gas received on profitability, debt and capital, and operating efficiency, the company achieved five passes and a moot point out of nine. This is a good grade for financial health. Northern Oil and Gas did not pass the debt and capital aspects of the paper. As the company is growing, it is increasing its debt.

This is not necessarily a bad thing, but it is an aspect of the company to be aware of and keep an eye on moving forward.

Looking forward, analysts at MSN money have estimated that NOG will post an EPS of $1.00 for FY 2012 and $1.27 for FY 2013. Overall, the company is showing good results regarding its financial health with five passes and a moot point out of nine.

If the article shows "billions" of outstanding shares, that is an error. The number of outstanding shares is in "millions." Don noted this; by the time you get to the link, it may have been corrected.

Eight (8) New Permits -- The Williston Basin

Bakken Operations

Active rigs: 187 (steady)

Eight (8) new permits --

• Operators:  QEP (4), Baytex (2), Fidelity, and Hess
• Fields: Grail (McKenzie), Stanley (Mountrail), Timber Creek (McKenzie), Whiteaker (Divide)
• Comments: The QEP permits in the Grail are very exciting; this is part of the QEP/Helis deal; see sidebar at the right.

Wells coming off confidential list were reported earlier; see sidebar at the right.

Assuming Monday is a normal business day, there is only one more day in 2012 for issuing new permits. At close of business today, the NDIC had issued 2,520 permits for calendar year 2012 for oil and gas permits (this does not include permits for salt water disposal wells). It appears, assuming Monday is a normal business day, we will end 2012 with 2,545 permits issued for the calendar year. 

Random Update of the Blue Buttes Field: This Really Is An Incredible Well: Look At First Two Months' Production

The Blue Buttes oil field has been updated. BR "owns" the field, but Hess has some wells there, also.

Some of these BR wells are incredible, hitting almost 100,000 bbls in less than three months; others hitting 100,000 bbls in four months.

One example, this is a QEP well acquired in the Helis deal (see sidebar at the right):

• 21564, 2,288, QEP/Helis, Levang Federal 14-21/16H, Blue Buttes, t8/12; cum 97K 10/12:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	10-2012	31	34387	34579	3074	31665	31665	0
BAKKEN	9-2012	29	41980	41809	10280	56811	40292	16519
BAKKEN	8-2012	12	20163	19676	9000	24426	3686	20740

Another First For North Dakota: Longevity For Its Residents

Link here to The Bismarck Tribune.

U.S. Census Bureau data regarding "centenarians" -- people who live to be 100 years old:

• North Dakota ranks No. 1 in the number of centenarians per 10,000 people, at 3.29.
• South Dakota was second at 2.95.

They all want to live that long to see how the Bakken plays out. Hoo-ah!

Nice Update on Crude-By-Rail

Link here to The Bismarck Tribune.

Several story lines, a lot of data points.

The best story line for faux environmentalists: rail less safe than pipe for shipping oil. Irony. The lack of adequate pipeline is not due only to the actions of faux environmentalists, but those actions have certainly contributed to the problem.

The environmental fears carry an ironic twist: Oil trains are gaining popularity in part because of a shortage of pipeline capacity — a problem that has been worsened by environmental opposition to such projects as TransCanada's stalled Keystone XL pipeline. That project would carry Bakken and Canadian crude to the Gulf of Mexico.

Wayde Schafer, a North Dakota spokesman for the Sierra Club, described rail as "the greater of two evils" because trains pass through cities, over waterways and through wetlands that pipelines can be built to avoid.

Some interesting data points:

• better routing can result in more than an additional $700,000 / train in profits
• in 2009: 10,000 train cars carrying crude oil
• in 2012: estimated 200,000 train cars carrying crude oil
• this is just the start: most from the Bakken, but cars soon to be added for Texas, Colorado, and western Canada
• rail will be a long term business for oil because trains are faster than pipelines (I did not know that; it's counterintuitive); reliable; and flexible
• BNSF at one million bbls per day; will increase
• BNSF will invest almost $200 million in track upgrades, other improvements in the Bakken
• BNSF also increasing train lengths from 100 oil cars/unit train, to 118; that's almost a 20% increase
• sounds like a huge industry, but overall, crude oil shipments represent less than 1 percent of all carloads

Also from the linked article:

Oil-loading rail terminals can be built in a matter of months, versus three to five years for pipelines to clear regulatory hurdles and be put into service, ...

The surge comes at the right time for railroads: Coal shipments — a mainstay of the rail industry — have suffered because of competition from cheap natural gas.

In the eastern U.S., CSX and Norfolk Southern railroads haven't seen as much growth because oil from the Marcellus Shale area of Pennsylvania, Ohio and New York is close enough to refineries that trucks haul the crude. [Lots of crude on the highway.]

Yet BNSF is beginning to haul Bakken crude east to Chicago, where it hands off the tank cars to CSX or Norfolk Southern for delivery to Eastern refineries. It has also sent oil to the West Coast, a trend that could increase if Alaska crude production falters, as some industry observers are predicting.

At Least We Now Know Why The President Returned To Washington ....

... to "order" a pay raise for federal workers.

I cannot make this stuff up.

Thank you to a reader who alerted me to this.

It is interesting: the other day I opined why the President was returning to Washington, DC, because I honestly feel things are going exactly his way with the ObamaCliff. There is no good personal, political reason to be in Washington right now, so the question was why he returned. I suggested that it had more to do with the debt ceiling than the ObamaCliff, but it's obvious it had to do with this executive order raising the pay of federal workers. (I hope that works for military retirees, also. Smile.)

Yes, he could have signed the executive order in Hawaii, but everyone loves to get "thank you's" in person. He had to be in Washington to personally bow to and thank well wishers who stopped by to thank him.

Wow, raising the pay of federal works at this moment in time. I can't wait to see the comments of those coming to his defense. If one can defend this action ....

..... I assume one's pension is based on one's pay, and a lot of folks are retiring from his administration and the pay raise is important.... will make a difference...I assume Tim Geithner noticed this first....or possibly Lisa Jackson....or Eric Holder....

Hillary doesn't need the money...

Union Center Oil Field Has Been Udpated

Union Center oil field has been updated at this link.

Remember, this field is less than 6 sections (6 x 640 acres = 3,840 acres minus a hundred acres or so) and is about 3,750 acres all told.

One Graph Says It All -- Please Don't Read The Story -- Just Look At The Graph

Updates

Later, 1:18 pm: US CO2 emissions could drop to levels seen in 1990 by the end of 2012.

The bottom line is that America’s carbon emissions may drop back close to 1990 levels this year. That result would have been thought impossible, even at the end of 2011.

But the shale gas revolution makes a reality many things recently thought impossible.  It was thought impossible to slash carbon US carbon emissions back to 1990 levels by 2012.  It was thought impossible to massively, quickly cut carbon emissions and, at the same time, have lower energy bills.

Shale gas production has slashed carbon emissions and saved consumers more than $100 billion per year.  Truly astonishing!

It looks like the one country that did not sign the Kyoto Protocol will meet or exceed the goals.

• agreed to reduce their greenhouse gas emissions by 5.2% on average for the period 2008-2012, relative to their annual emissions in a base year, usually 1990
• the benchmark 1990 emission levels accepted by the Conference of the Parties ... were the values of "global warming potential" calculated for the IPCC Second Assessment Report

Original Post

Link here to a very neat graph.

This graph should replace all the Farrah Fawcett posters of the 1970's in the dorms of today's college students.

Yeah, like that will happen.

Draco, Euclid, ... Freyr ..... Gandalf the White

What a hoot! Winter storms now being named. We've had Draco and Euclid, and it looks like Freyr could be forming:

Weather Channel meteorologist Guy Walton said a weather pattern with the potential to become Winter Storm Freyr is poised to enter the West Coast on Wednesday and move through the Rockies on Thursday. It could then head for the lower Mississippi Valley, then the Southeast and hit the Northeast on Sunday.

And today, 65 percent of the US is covered by snow. 

Between the widespread swaths of snow delivered by Winter Storm Draco and Winter Storm Euclid, the area covered by snow in the United States was up to 65 percent as of Thursday morning.

This is easily higher than the peak coverage we saw during last year's snow-starved winter, which was 47.7 percent on February 14, 2012.

As we head into the weekend, yet another storm system is taking shape that will likely deliver snow from the Ohio Valley to some of the major cities along the I-95 corridor of the Northeast. This storm could cause some headaches for the abundance of holiday travelers on roads and in the air this weekend.

Ah, yes, evidence of more global warming. Increased precipitation was predicted by global warming.

I've gotten back into my Tolkien phase (yet to see the new Hobbit movie) but I am re-reading Tom Shippey's biography of the 20th century's greatest author. I can hardly wait for Storm Gandalf. Folks might remember in The Lord of The Rings: Gandalf the Grey, and Gandalf the White.

By the way, back to Freyr:

Freyr (sometimes anglicized Frey, from *frawjaz "lord") is one of the most important gods of Norse paganism. Freyr was associated with sacral kingship, virility and prosperity, with sunshine and fair weather, and was pictured as a phallic fertility god. Freyr "bestows peace and pleasure on mortals." Freyr, sometimes referred to as Yngvi-Freyr, was especially associated with Sweden and seen as an ancestor of the Swedish royal house.

This god will be fun to explain to elementary school children. Especially that "sunshine and fair weather" part. Irony is a difficult concept for six-year-olds.

More Friday Links -- Regional: Bowman and Stark Counties

The city of Dickinson sees a need for almost $200 million to provide infrastructure required for all new construction that is envisioned.

The city receives between $5 million and $6 million through the oil impact grant program, but a bill written by Rep. Robert Skarphol, R-Tioga, would increase that amount to $12.7 million each year of the upcoming biennium, City Administrator Shawn Kessel said.

“A nice increase,” he said. “Unfortunately, we have identified needs that far exceed that type of revenue.”

Yes, there is a bit of a delta there.

But for roads, the county is doing well:

While many western North Dakota communities are scrambling to keep funds to keep roads in good shape because of an oil boom, Stark County is $650,000 ahead.

Let's hope global warming doesn't dump a lot of snow on the Stark County roads necessitating a lot of snow removal overtime. Assuming this is all part of the same pot of money, which may be a wrong assumption.

Bowman County preparing for the boom:

After witnessing the housing shortages and rent increases in other western North Dakota communities, Bowman County is attempting to get ahead of the game.

Members of Bowman County Commission reviewed a purchase order agreement Thursday during a regular meeting in Bowman that moves the county another step closer to obtaining the Jesco Apartments from a private interest for close to $500,000.

Located in the Bowman, the apartments offer subsidized low-income family housing, something that Bowman County Commissioner Bill Bowman says could have been put in jeopardy.

Friday Meanderings -- Some Bakken, Some Not; More Great Wells Being Reported

Wells coming off the confidential list today have been posted. BR has two gushers; CLR has a really nice well.  

A reader sent a comment noting a Red River well reported earlier:

• 22750, 455, Whiting, Rieckhoff 44-22, Camel Hump, Red River well, t8/12; cum 36K 10/12; this well is producing 10,000 bbls of oil/month. This is a huge well. The well is in an area where not much drilling is being done, but it is not a wildcat. 

It is in the same section as:

• 19917, 273, Whiting, Maus 23-22, Camel Hump, Red River well; t7/11; cum 62K 10/12;

I mention the "locality" of the well which tends to confirm what I noted yesterday. Both of these wells are still flaring natural gas. Note that the Maus well was tested over a year ago. See comments yesterday about flaring. By the way, the Red River formation will be on the list of top stories for 2012 when I post that list.

I see the EPA has finally done the right thing: calling water a pollutant. Yes, I can't make this stuff up. A reader sent the link. According to the EPA, water can be considered a pollutant. It is interesting to note that the faux environmentalists, however, have not noted that the number one greenhouse gas is water vapor. Water vapor accounts for for 95 to 97% of all green house gases. CO2 accounts for around 3% and a very small amount of that 3% is actually anthropogenic.

RBN Energy: feeding the power burn.

The generation of power from natural gas will be the most important growth sector for the gas industry for the foreseeable future – certainly for producers, but also for the pipelines that provide the transportation service to deliver the gas to power generators.

Handling the infrastructure and service challenges that come with increased power burn is therefore a priority.

This is true for the nation as a whole, but was specifically raised this year by the Midwest Independent System Operator (MISO) in the heart of coal country - where coal-to-gas switching was most significant during 2012.

But back to some great wells. Magnum Hunter is reporting two great wells in the Eagle Ford, Yahoo! In-Play:

Magnum Hunter announced production results from two new Eagle Ford Shale wells operated by the company. Both wells went on production Dec 22, 2012. The Rhino Hunter #1 located in Lavaca County, TX, is producing ~2,033 barrels of oil per day and 1,113 mcf of natural gas (2,218 boe/d) on a 16/64" choke. The Zebra Hunter #1 is also located in Lavaca County, TX, and is producing ~1,995 barrels of oil per day and 898 mcf of natural gas (2,145 boe/d) on a 16/64" choke.

Notice the 16/64" choke.

Back to the EPA. A reader sent in this link: filling her shoes.  Early on, the writer writes:

Following Lisa Jackson's resignation on Wednesday, her successor will inherit the tricky task of regulating a drilling boom that has revolutionized the energy industry but raised fears over the possible contamination of water supplies.

"Regulating a drilling boom?" Give me a break. This is the most regulated industry (except for banks, perhaps) in this country. This is the industry whose CEOs will be criminally charged if one migratory bird, i.e., a duck, is harmed by their drilling. But the wind industry is a) fast-tracked when it comes to approving wind farms; and, b) given 100% immunity on slicing and dicing eagles, hawks, and whooping cranes. 

And "raised fears over the possible contamination of water supplies." Who is raising these fears? Faux environmentalists. Even the BLM is now on record that "we've" been fracking for more than 60 years in California and there is no evidence that fracking is detrimental. At least one agency has the courage to say so, and they said so in a letter, and they will go to court to defend their position. Good for them. Maybe I will find the link later. Too much to do now.

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

Apple / Microsoft

Oh, I almost forgot, the biggest story for me personally, yesterday. I finally got to touch the Surface. Yesterday Miss Daisey and I drove to one of the nicest malls in southern California. The mall has both an Apple store (been there "forever") and a "new" Microsoft store. The two stores are pretty much at opposite ends of the mall. We visited the Apple store first, of course. Miss Daisey had not seen the iPad mini. Then we took the long walk to the Microsoft store and saw the Surface. All I can say, after seeing the Surface, is "wow."

[While writing this piece, I was curious if the Zune was still being sold. I checked Amazon.com. Yes, it appears you can order the Zune. I then checked out the Zune on wiki and found that the Zune had been discontinued in 2011. I missed that. The Zune just quietly died and faded away, I guess. I predict the same for the Surface. Check back in two years. I doubt it will be competitive a year from now, but it will be kept on life support for an additional year, for "pride of ownership" reasons.]

The Microsoft store is a knockoff of the Apple store, but not nearly as high tech. The Apple store uses iPads or iPad minis as "labels" for each product on display. Microsoft used typewritten labels embedded in the display if I recall correctly; I didn't pay attention. It would be difficult to use the Surface the same way Apple used the iPads or iPad minis: the Surface is just too big. It must a be a third longer than the iPad, and twice as long as the mini-iPad. The weight of the Surface is more than notable.

But I digress. Back to the stores. When we walked into the Apple store, it was crowded; shoulder-to-shoulder. We had to wait our turn to even touch an iPad mini, and they had about a dozen on display to "play" with. All ages of customers were using the iPad minis. In striking contrast, the Microsoft store was virtually empty. At the table with six Surfaces, we were the only customers. Later in the day, we walked back past the Apple store. The Apple store was now limiting the number of customers inside the store, and they now started a waiting line for new people wanting to go in. Miss Daisey was blown away: a line forming to limit the number of people in the Apple store. Again, this was after Christmas, there were no specials, there were no new product launches. This was the middle of the week in the middle of the day, and Apple had to hold back customers coming into the store.

This particular Apple store is much smaller than the Boston Boylston Apple store. The mall store was on one floor, and forty, fifty feet wide facing the mall, I suppose (I'm a terrible judge of dimensions). The one on Boylston/Boston is probably half again as wide (store-front) and three floors.  Because of the limited wall space, there was a small selection of Apple accessories.

Is that Apple store selling anything? The "trainer" who talked to us -- who was not a salesman, he pointed out -- mentioned that prior to Christmas the store had sold out every product they had available. I may have misheard, maybe they had sold out every iPad and every iPad mini, but it sounded like he had said, every Apple product they had in the store was sold (Apple does not sell display models).

I was thrilled to have seen the iPad and the Surface almost in a side-by-side comparison. I am officially Apple Fanboy #3 so my comments about the Surface lose objectivity for those who know I am such a fan. I did not mention one thought I had about the Surface to Miss Daisey, but she was very unimpressed. And she is not a techie. Not by a long shot.

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

The photograph at Drudge with the three at the White House is priceless: Harry Reid looking to the left, looking away from the President; John Boehner looking left toward the president, almost a beseeching look; and the President, well, looking ... glum.

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

Update On Availability of Water Necessary to Frack Wells in the Bakken

Metric: amount of water being released from the Garrison dam. Dynamic link.

News item: The US Army Corps of Engineers is looking at allowing 30,000 acre-feet of "surplus" Missouri water be used for fracking.

1.  Back in late 2011, it was estimated that approximately 6 acre-feet of water was used to frack a Bakken well.

In a more recent article the estimate was 1 million to 3.5 million gallons of water is used to frack a Bakken well (see paragraph 3 below). The conversion factor: a acre-foot = 325,851 gallons. Therefore 1 million to 3.5 million gallons converts to 3 acre-feet to 10 acre-feet.

Currently, it is estimated that about 2,000 wells will be fracked each year in the Bakken. That equates to somewhere between 6,000 acre-feet to 20,000 acre-feet of water being required to frack Bakken wells on an annual basis. Again, the USACE is looking at releasing 30,000 acre-feet of water.

2.  Maximum water storage of Lake Sakakawea is 23,800,000 acre-feet. 30,000 acre-feet represents 0.1% (one-tenth of one percent) of the volume of Lake Sakakawea. [Update: in the June 6, 2013, the NDIC stated that the amount of water needed to frack wells for two years in the Bakken equated to the top one inch of surface water in Lake Sakakawea. Bakken Activity Update, June 6, 2013, a PDF file.]

3. From the third link above:

Thanks to the Bakken shale, the state has become the country's second-biggest oil-producer practically overnight. And while the world still runs on oil, with the rise of hydraulic fracturing, or fracking, oil increasingly runs on water. Drillers inject 1 million to 3.5 million gallons of pressurized water into each well to shatter the rock and free the oil. More of the trucks you see are carrying water than anything else, some 400 to 800 truckloads per well.

4. My arithmetic might be off.

5. And, of course, the Missouri is not static. As water is removed for fracking (or for farming for that matter) it is being replaced by additional water flowing downriver.

Bottom line: there is more than enough water for fracking in the Bakken. The US Army Corps of Engineers calls is "surplus" water and says they are considering 30,000 acre-feet to be released for fracking. At the very least, this would be enough water to frack 3,000 wells/year in the Bakken, and currently, about 2,000 wells are being fracked annually.

Lake Sakakawea is probably not the only source of water for fracking in the Bakken. Recycling of water for fracking will also decrease the amount of water required.

Nine (9) New Permits -- The Williston Basin; Hess Has a Great Truax Well; CLR Has Two Nice Wells

Bakken Operations

Active rigs: 187 (steady)

Nine (9) new permits --

• Operators: CLR (4), Petro-Hunt (2), OXY USA, Oasis, Corinthian
• Fields:  Lindahl (Williams), Dublin (Williams), Northeast Landa (Bottineau), Bull Butte (Williams), Murphy Creek (Dunn), Little Knife (Dunn)
• Comments: None

Wells coming off confidential list were reported earlier; see sidebar at the right.

Cancelled:

• 22378, PNC, Helis, G Levang 13-32/29H, McKenzie County

Wells coming off confidential list tomorrow, Friday:

• 20316, 893, CLR, Kellogg Ranch 1-32H, Elidah, 28K in first full month of production; t9/12; cum 31K 10/12;
• 21578, 470, Liberty Resources, Berger 156-101-9-4-1H, Tyrone, t7/12; cum 35K 10/12;
• 22631, drl, BEXP, Marcia 3-10 3H, Last Chance,
• 22755, 2,605, BR, Iron Horse 31-2MBH, Union Center, t10/12; cum --
• 22773, 1,471, CLR, Jensen 2-8A, Chimney Butte, 50K first two full months of production; t9/12; cum 52K 10/12;
• 22814, 2,365, BR, CCU Powell 229TFH, Corral Creek, t10/12; cum 3K 10/12;
• 22861, 1,594, Denbury Onshore, Madson 11-33SH, Charlson, t9/12; cum 9K 10/12;
• 22945, 1,066, Hess, SC-Norma-154-98-0706H-1, Truax, 34K first month of production; t10/12; cum 35K 10/12
• 22970, drl, BR, CCU Golden Creek 33-23PH, Corral Creek,
• 23049, drl, CLR, Chicago 4-26H, Banks,

EPA Head Announces Resignation

Updates

December 28, 2012: filling her shoes. 

Original Link

Link here to the biggest story of the day. I'm surprised it wasn't announced after the news cycle, Friday night, or maybe even New Year's Eve. Hillary. Leon. Lisa. Eric. Tim.

Bakken Links, Other Energy Links Sent in By Readers; A Must-Read NY Times Article

First, from "anon 1": another photo of the Bakken from space. This is one of the better photos: look how far east the flaring goes toward Minot. About halfway between Williston and Minot. And for all the attention Dickinson gets, not much there yet, relatively speaking.

Also, from "anon 1": a story of Bakken oil reaching a Canadian refinery by rail; 90,000 bopd to Irving Oil Corp's Saint John refinery. A great story/a great link. I would like to say more about it, but need to keep moving. Just the following in case the source archives the story at a later day:

Irving Oil Corp. is moving more than 90,000 barrels a day of crude from Alberta and North Dakota by rail to its Saint John refinery, Canada’s largest, and plans to increase those shipments, according to a person familiar with the plans.
Alberta crude is coming by rail directly to the Irving refinery rail terminal in New Brunswick and Bakken oil is moving by rail to a port in Albany, New York, then shipped by marine tanker to Saint John, said the person, who asked not to be identified because the closely held company’s transportation plans are private. 

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

High energy costs in Europe

Another frequent contributor sent this link, perhaps my favorite story of the day, so far. The reader notes: "I can't tell how much of the story is reporting and how much is the writer's opinion, but it does find fault with the EU's renewables subsidies." The article is from the NY Times, but reads as if it was published in the Wall Street Journal. It's an outstanding article and if I had to recommend just one story for the day this would be it.

High energy costs are emerging as an issue in Europe that is prompting debate, including questioning of the Continent’s clean energy initiatives. Over the past few years, Europe has spent tens of billions of euros in an effort to reduce carbon dioxide emissions. The bulk of the spending has gone into low-carbon energy sources like wind and solar power that have needed special tariffs or other subsidies to be commercially viable.

“We embarked on a big transition to a low-carbon economy without taking into account the cost and without factoring in the competitive impact,” says Fabien Roques, head of European power and carbon at the energy consulting firm IHS CERA in Paris. “I think there will be a critical review of some of these policies in the next few years.” 

Many, many story lines in that article. Quite incredible. Bottom line: wind and solar -- the math does not work. To see this article in the New York Times suggests the editors are willing to discuss the issue with a bit more balance. 

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

Local Stories

Dickinson playing catch-up: issued more than $300 million in permits through November, 2012

• in the first 11 months of 2012, Dickinson issued permits for more than $300 million worth of construction in a city trying to catch up with the droves of people coming to the Oil Patch ...
• the largest sector of growth was commercial structures, followed by single-family housing ...
• Williston had the highest permit values of any North Dakota city, with more than $418 million worth of construction permitted as of Nov. 30, ...

Update on a pipeline connection between two pipeline companies. The two pipeline companies: Enbridge and High Prairie Pipeline, LLC. Interconnection: affects Bakken oil at/near Clearbrook, MN. It looks like Enbridge still holds the upper hand, although the tone of the article suggests this was a press release:

On May 18, the FERC denied High Prairie's protest, noting among other things that "it is not clear that Enbridge Energy has actually denied any request from High Prairie for an interconnection" and that "there is no statutory authority, or judicial or Commission precedent that gives the commission jurisdiction to compel Enbridge Energy to interconnect." We continue to believe High Prairie's additional claims are wholly without merit. Enbridge's response is on file with the FERC requesting that the commission dismiss this complaint just as it denied the earlier protest.

Enbridge has successfully worked with a number of third-party pipeline companies, including Saddle Butte Pipeline, LLC, a wholly owned subsidiary of High Prairie Pipelines, LLC, to provide pipeline connections and access to its North Dakota system where it is physically capable of receiving and transporting the crude without causing increased apportionment of its system. Enbridge is seeking a business solution to High Prairie's request and remains open to discussing those options. High Prairie has chosen not to engage in further discussions along those lines.

Lake Sakakawea is 'officially frozen.' As are ObamaCliff talks, apparently.

Thursday Morning Meanderings -- Mostly For The Archives

Good morning. I assume everyone is already up; I'm on the west coast and already three or four hours behind the rest of you.

Some free associating today; some Bakken, some not.

IPs for wells coming off the confidential list today have been posted. I am really impressed with KOG. They are tearing up the Heart Butte and Truax fields with some great wells. [Disclaimer: this is not an investment site; having said that, I own no KOG shares and don't plan to in the near future. By the way, for investors only, it appears there have been four "entry points" for KOG over the lifetime of the company: 60 cents; $6.00; $8.00; and, $10.00. Today, the shares are selling for about $8.65.]

NDIC still needs to fix their calendar over at their "Daily Activity Report Index." [It's been fixed.]

RBN Energy: second of a series of articles on the Louisiana Offshore Oil Port terminal, the LOOP.

There are three converging stories politically: a) the president has returned to Washington, DC; some saying his vacation was cut short, but who really knows; b) the ObamaCliff; and, c) Tim's debt ceiling. I was pretty sure the President was in control of the "cliff" (as in, winning the polls) and expected him to let us go over the cliff. So, his returning to Washington surprised me.

I think the bigger worry is the debt ceiling. Tim forecasts that we will hit the ceiling New Year's Eve. My hunch is that the debt ceiling story is the one that brought the President back to Washington. It was important politically that he be seen back at work as we go over the cliff (Santelli/CNBC suggested as much) but the debt ceiling is the real story over the next few days. As noted before, when we go over the cliff, the dates are all reset: the new date is December 31, 2013 -- pass a bill by then and "they" can make it retroactive to the first of the year.

The LA Times has a front page story today -- in fact, the lead story -- on Senate minority leader Mitch McConnell. There were many story lines, of course, but these two paragraphs caught my eye:

"The president made a strategic miscalculation and overreached," said one GOP aide granted anonymity to discuss party strategy. "He could have worked to reach a fair agreement, but instead he picked a fight, poisoned the well, and now we are likely to have a rather unproductive next four years. The decision he made only hurts himself."

There is little evidence to back up that belief. In a Gallup poll released Wednesday, for example, 54% of Americans responding said they approved of the way Obama had handled the negotiations and 45% said they approved of Democratic leaders in Congress. By contrast, 26% said they approved of Boehner and the Republican congressional leadership.

The Times writer seems to have moved from a news story into an op-ed when she drew that conclusion. The Gallup poll in the second paragraph has nothing to do with the news in the first paragraph. A few days ago I alluded to the tone of the President's reply to the GOP plan and/or to John Boehner's presentation, and this now appears to be the foundation for the news in the first paragraph above.

End of politics for a minute. Except to say, that the media appears to think the election is not over, still trying to score points for one side or the other. I'm not exactly sure what good it does to post polls on "who do you think is to blame for the fiscal cliff?" The voters voted. The election is over. Time for those in control to take control. I just saw a cute little puppy catch a rag that was attached to a wheel on a SUV. Not a pretty sight. Cue up Connie Stevens.

I see the headline: jobs claims drop is huge this past week. But did you notice the little gem at the bottom of the story? The Federal government and many state offices were closed when the data was being calculated. The unemployment numbers for 19 states are nothing but estimates.

President Barack Obama declared Monday a holiday for federal workers and many state offices followed suit and were unable to provide complete data for last week's jobless claims. Data for 19 states was estimated, a Labor Department official said.

Fourteen of those states, including Texas and California, submitted their own estimates, which tend to be fairly accurate because the state officials work with a significant amount of data, the Labor Department official said.

Sure. So, we'll post the numbers (350,000 last week; 365,750 four-week moving average) and see the revised numbers next week. Wanna bet they go up?

"Anon 1" sent in two nice comments, but they deserve stand-alone posts, so will post them later.  

Extemely Minor Error At The NDIC Site --

I assume NDIC will fix this typo by the end of the week.

But this will confuse enquiring minds for a day or two. The NDIC "Daily Activity Report Index" has incorrectly identified Monday as December 23rd; Tuesday as December 24th; Wednesday as December 25th; and Thursday, as December 26th. I assume the NDIC will fix these typos by the end of the week.

Nine (9) New Permits -- Williston Basin; KOG With Another Gusher; MRO & DNR With Two Nice Wells

Bakken Operations

Active rigs: 186 (steady)

Nine (9) new permits (Monday, Wednesday) --

• Operators: EOG (4), Oasis, Whiting, Hunt, Fidelity, Emerald
• Fields: Missouri Ridge (Williams), Camel Butte (Golden Valley), Parshall (Mountrail), Frazier (Divide), Sanish (Mountrail), Foreman Butte (McKenzie)
• Comments:This is Emerald's first permit in North Dakota (at least under this name). VOG acquired Emerald earlier this year, and retained the Emerald Oil name and ticker symbol EOX.

Wells coming off confidential list were posted earlier; see sidebar at right.

Wells coming off confidential list tomorrow, Thursday:
20956, 962, BR, Jair 31-28H, Haystack Butte, t10/12; cum 2K 1012;
21608, 1,525, MRO, Henry Charging USA 41-3H, Reunion Bay, t9/12; cum 43K 10/12;
21817, 2.524, KOG/North Plains Energy, Jorgenson 5-14H, Truax, t9/12; cum 40K 10/12;
22712, drl, BEXP, Holm 9-4 4H, Alger,
22828, 84, WPX, Edward Goodbird 9HD, Heart Butte, t8/12; cum25K 10/12;
22862, 1,532, Denbury Onshore, Madson 11-33SWH, Charlson, t10/12; cum 23K 10/12;

Williston To Annex 4,800 Acres North Of Williston

4,800 acres / 640 --> 7.5 sections.

I'm sure the data is out there somewhere, but looking at the NDIC GIS map, the 7.5 sections would most likely be:

• sections 25 - 27/T153N-R101W
• sections 34 - 36/T153N-R101W
• section 6-T154N-R100W
• and section E2 of 1-T154N-R101W

Highway "2&85" pretty much runs up the middle of these sections, with commercial activity already in place along the highway.

Human Interest Story on CNBC Out of the Bakken: Montana Youth Heading to the Oil Patch

Link here to CNBC.

For most high school seniors, a college degree is the surest path to a decent job and a stable future. But here in oil country, some teenagers are choosing the oil fields over universities, forgoing higher education for jobs with salaries that can start at $50,000 a year. 

It is a lucrative but risky decision for any 18-year-old to make, one that could foreclose on his future if the frenzied pace of oil and gas drilling from here to North Dakota to Texas falters and work dries up. But with unemployment at more than 12 percent nationwide for young adults and college tuition soaring, students here on the snow-glazed plains of eastern Montana said they were ready to take their chances. 

"I just figured, the oil field is here and I'd make the money while I could," said Tegan Sivertson, 19, who monitors pipelines for a gas company, sometimes working 15-hour days. "I didn't want to waste the money and go to school when I could make just as much."

A Throwaway Link But The Story Will Get A Lot Of Attention ...

This is a throwaway story, but it will get a lot of attention so will link it now, get it out of the way.

Regular readers know the "back" story to items mentioned in the story.

Fracking searches on "google" are now outpacing searches for "global warming." Hmmm .. as if there's some connection. I assume searches for "Madonna" outpace searches for both.

Results of Wells Coming Off Confidential List Over The Christmas Period Have Been Posted; Photos of the Drovdal Wall; Heart Butte Field Updated; RBN Energy: 2013 Trends in Hydrocarbon

Five days; link here.

KOG has a gusher. Even OXY USA has a couple of nice wells. Zavanna proves that one doesn't need to report a huge IP to have a huge well.

Photos of the well that "blew" last Friday evening, the Drovdal well, have been posted.

Heart Butte oil field is updated, including these QEP producing wells that have now been reported:

• 21405, 1,766, QEP, MHA 4-06-01H-149-92, t2/12; cum 30K 3/12
• 21551, 2,757, QEP, MHA 3-31-25H-150-92, 2,560-acre; t10/12; cum 8K 1/12;
• 21552, 2,351, QEP, MHA 2-31-25H-150-92, 2,560-acre; t10/12; cum 8K 10/12;
• 21553, 2,202, QEP, MHA 4-31-25H-150-92, 2,560-acre; t10/12; cum 8K 10/12;
• 21554, 2,430, QEP, MHA 1-31-30H-150-91, 2,560-acre; t10/12; cum 19K 10/12;
• 21556, 2,376, QEP, MHA 3-31-30H-150-91; 2560-acre, t10/12; cum 8K 10/12;

RBN Energy: 2013 Trends in Hydrocarbon

A Note To the Granddaughters

Winter storm update. More snow for Ohio. This is of interest to me: the granddaughters flew from Boston to Akron, OH, yesterday, and will drive to Lexington, KY later this week. They will be there for a full week. I'm sure they are hoping for lots and lots of snow.

Comments are fun to read:

• Here in central KY, we haven't seen a good snowstorm in over 14 years. Our last snow came in 1998 when we got 19 inches. I haven't seen a single snowfall over 5" at one time, since then. 
• Let it snow, we have been waiting over a year for a good snowstorm in northern Vermont. 
• Your amounts for northeast Ohio are way too low. Everyone elsde including the NWS says 6-12 inches, your map is incorrect. 
• This storm, just after an article saying climate change was causing white Christmas's to go away. 
• They said major snowstorm for Southern New England, Now its a mix or rain. Winter has for sure changed from the 1970s-80s when it snowed and stayed until spring. 
• First time in 80 years we'll have snow on Christmas day in Little Rock.

Human Interest Reporting on Population Growth in ND -- Previously Reported

Link here to Rigzone. com.

This story was posted earlier -- it's now being reported at Rigzone.com. Nothing new for regular readers but a nice human interest story.

North Dakota was the nation's fastest-growing state in the past year. U.S. Census Bureau data show that North Dakota's population grew 2.2 percent to 699,628 in the year ending July 1, as the oil boom drew workers to the Bakken fields in the western part of the state. 

"We had rural population declining in western North Dakota for decades," said Dean Bangsund, an economist at North Dakota State University in Fargo who has studied the effects of the oil boom. "Now we are looking at growth curves that are just short of astonishing."

The population boom is mostly driven by an influx of people seeking work, he said. The oil fields alone probably account for 40,000 to 50,000 jobs today, compared with about 3,000 to 5,000 jobs early in the last decade, he added. North Dakota's seasonally adjusted unemployment rate in November was 3.1 percent, compared to the nation's 7.7 percent rate. Earlier this year, North Dakota reported 20,000 unfilled job openings. Backman said birth rates also are up because many of the immigrant oil workers are of child-bearing age. Some migrants are bringing families to the state, he said.

The Wind Tax Credit -- The Billings Gazette Two-Part Series

Second part: Link to The Billings Gazette.
First part: Link to The Billings Gazette.

This is the two-part article I referenced earlier about the inexpensive energy in the northwest. This is the first part of the article.

From the first part:

There's quite a bit to the article but this bit on wind is interesting:

Qualifying wind farms get a $22 tax credit for every megawatt hour of power they produce. If the market price of power falls below that amount, they still get the money.

In fact, during the past 12 months, wind-power producers at times have actually paid electricity buyers to take their power, because they could still get positive income on the deal through the tax credit, regional power officials say.

This phenomenon is known as “negative pricing,” when the market price for power has been less than zero during off-peak hours, usually the middle of the night. A wind farm might pay the wholesale buyer $5 per mwh to take the power the farm is producing at off-peak, but, with the tax credit, it still makes $17 per mwh. [Elsewhere, there is a story out of Idaho that requires utilities to buy wind power even when they don't need it, like in the middle of the night. The utilities pass these costs on to the consumers. But I digress.]

“There is no commodity in the world that can be sold for a negative price, unless you’re making money somewhere else,” said David Hoffman, manager of external affairs for PPL Montana. “They’re willing to get less than the full tax credit, if they get a portion of it.”

Coal-fired plants are being mothballed. The champagne is flowing in Hawaii. 

From the second part:

“They go build a wind farm, they’re there for three-to-six months,” said Bob Winger, a union boilermaker from Billings and vocal critic of wind-power subsidies. 

“Coal mines and coal-fired power plants are jobs day-in, day-out. … Who are all of these people (in wind) that they say are employed?” 

 According to figures compiled by the state and the wind power industry, wind projects in Montana have created about 1,300 construction jobs the past seven years — but only 86 permanent jobs. 

Montana coal mines, whose product is burned to produce power, employ about 1,100 people, and coal-fired power plants here employ at least another 400. The wind power production tax credit pays project owners $22 for every megawatt hour (mwh) of electricity they produce. 

In the Pacific Northwest right now, spot-market prices for electricity are averaging $25 per mwh. So, while sellers of other types of power get $25 per mwh, a wind-power plant will get $47 per mwh, with the subsidy. 

Great article.