DC Rat Extermination Program -- I Cannot Make This Stuff Up -- Absolutely Nothing To Do With The Bakken

Update

January 20, 2012: see first comment below. After that comment, I thought it would be the last of this story. But it appears that Virginia is not the only state worried about the law to place vermin in "halfway houses" before relocating them and their families.

Maryland is just as concerned.

A Republican delegate in Maryland plans to introduce legislation to protect Maryland's borders not from undocumented workers, but from rodents.

Del. Pat McDonough, R-Baltimore, will at an afternoon news conference roll out his Rat Trafficking Act, which would bar the D.C. government “and any other entity from trafficking rats and other vermin into Maryland.”

McDonough’s move will come after a flurry of attacks against the District's Wildlife Protection Act of 2010, which mandates that animal control companies use humane methods when handling animals. Virginia Attorney General Ken Cuccinelli set off the firestorm when he publicly worried that the law would lead to a mass relocation by exterminators of D.C. rats into his state.

Apparently "anonymous" is as confused as the rest of us.

Original Post

This may be the funniest story I have read in quite some time.

The law banning city exterminators from killing rats was bad enough, and requiring that rats must be caught live and "re-located" was about as funny as I thought it could get.

Then, this: rats that are re-located, must be re-located with "their families" if at all possible.

I cannot make this stuff up. Washington, DC. Thank goodness for Drudge. I doubt if I would have seen this in mainstream media.

Cuccinelli said D.C.'s new rat law--the Wildlife Protection Act of 2010 -- is “crazier than fiction” because it requires that rats and other vermin not be killed but captured, preferably in families; no glue or snap traps can be utilized; the rodents must be relocated from where they are captured; and some of these animals may need to be transferred to a “wildlife rehabilitator” as part of their relocation process.

The law does not allow pest control professionals “to kill the dang rats,” Cuccinelli told CNSNews.com. “They have to capture them--then capture them in families. [Not sure] how you’re going to figure that out with rats. And then you have to relocate them. That brings us to Virginia. Now, if you don’t relocate them about 25 miles away, according to experts, rodents will find their way back. Well, an easy way to solve that problem is to cross a river, and what’s on the other side of the river? Virginia.”

These are the same folks that will be defining "diesel" for regulating fracking.

Theme song for the D.C. city pest exterminators (highly recommended that the video actually not be watched to the end):

Ben, Michael Jackson

Another Bit of Global Warming to Hit Tomorrow? -- Seattle -- Nothing To Do With The Bakken

Link here: biggest snowstorm in decades begins -- Seattle, Washington

The snow into Thursday could end up being one of Seattle's biggest snowstorms on record.

The storm and its heavy snowfall have the potential to close passes in the Cascades, clog streets at sea level with tons of snow and slush and force flight delays and cancellations

Perhaps an update tomorrow if warranted.

Six (6) New Permits -- Only 8 of 21 Wells Completed/Fracked -- The Bakken, North Dakota, USA

Daily activity report, January 17, 2012 --

Operators: Samson Resources (2), Corinthian (2), Hunt, Hess

Fields: North Souris, Parshall, Larson

Samson has two wildcats, one in Divide County and one in Williams County.

Corinthian has two permits in North Souris, Bottineau County.

Twenty-one (21) wells were released from the "confidential" list; only eight (8) were completed/fracked, including (for all wells released, click here):

• 20217, 1,755, Whiting, Brehm 41-35XH, Mountrail County; 30 stages; 2.47 million lbs
• 20359, 96, Dakota-3, Bear Den 24-13H2, McKenzie County; 12 stages; 2.73 million lbs
• 20364, 20, OXY USA, Jacobson 160-90-6-P-1H, Burke County
• 19180, 1,272, OXY USA, Lamey 1-30-31H-143-96, Fayette, Bakken, 
• 20753, 231, Hunt, Redwing 1-3-10H 1, McKenzie County, Bear Butte field, 21 stages; 2.3 million lbs sand frac
• 20790, 2,691, (3,691 according to the file report), BEXP, Brown 3-19 2H, Mountrail County; 37 stages; 3.93 million pounds (2.4 million pounds of which were ceramics)
• 20936, 1,481, Denbury Onshore, Loomer 24-34SEH, McKenzie County, 26 stages; 1.9 million lbs sand/ceramics

Most operators use common names of the formations for geologic markers, such as middle Bakken, lower Bakken, Three Forks, etc.

Hunt, among others, uses "abbreviations"; (Denbury uses similar markers). These are the geologic markers used by Hunt in its Redwing 1-3-10H-1 well (and Denbury's Loomer 24-34SEH):

K-P: 1,820    (Denbury: K-P)
K-GH: 4,795 (Denbury: K-GH)
K-M: 5,240   (Denbury: K-M)
K-N:             (Denbury: K-N)
K-IK: 5,650  (Denbury: K-IK)
J-S: 5,980     (Denbury: J-S)
J-R: 6,547     (Denbury: J-R)
                      (Denbury: Duham Salt)
T-S: 7,100     (Denbury: T-S)
PM-MK: 7,592  (Denbury: PM-MK)
                      (Denbury PM-OP)
PM-BC: 7,890  (Denbury: PM-BC)
                       (Denbury PN-T)
                       (Denbury: Otter)
M-BS: 8,400
M-KL: 8,690   (Denbury: M-KL)
M-MD: 8,848
M-DR: 9,420 
M-MDLS: 9,480  (Denbury: M-MDLS)  Base Last Salt?
                     (Denbury: Mission Canyon)
M-MDFA: 9,700  False Bakken (altho False Bkn should be just above the Upper Bakken)
M-MDLP: 10,195  (Denbury: M-MDLP)   Lodgepole?
                    (Denbury: Scallion)
                    (Denbury: MD-B)

Note the extremely low IPs in two of the cases.

Another Indicator That Easterners Underestimate the Bakken and the Bakken Producers -- The Bakken, North Dakota, USA

From the Motley Fool today:

With worldwide oil supply relatively constrained, that will put more pressure on domestic oil companies and offshore drillers outside of the Middle East. Statoil, Whiting Petroleum, Continental Resources, and Kodiak Oil & Gas have more than a million combined acres in the Bakken shale play, the fastest-growing oil production play in the U.S. and higher potential prices could mean even more drilling. 

More than a million combined acres in the Bakken? Technically true, but I believe the combined acreage is solidly above 2 million combined acres in the Bakken.

CLR, by itself, has almost 1 million acres.

The four:

• CLR: 923K
• WLL: 680K
• Statoil: 380K
• KOG: 155K

That's about 2.1 million acres, twice what Motley Fool suggests.

Or if at the Economart, and rounding:

• CLR: 1,000K
• WLL: 700K
• Statoil: 400K
• KOG: 150K

And why Motley Fool did not include Oasis with this group, that included KOG and BEXP and its 300K of net acreage, is anybody's guess.

For Investors Only: North American Production

Link here.

The graphs at the link are striking, particularly production graphs for Norway (I was not aware of this trend) and Mexico (I was not aware it was that steep).

Canadian oil production has been surging for years. American production is undergoing a renaissance. As prices rise due to falling production elsewhere in the world, rising demand, and any consequences of the Iran situation, companies operating in the United States and Canada — especially in rich new shale finds — will be the main beneficiaries.

Companies like Northern Oil and Gas, Oasis Petroleum, Continental Resources, Whiting Petroleum, Petrobakken, and more are already showing how the strength of new North American oil production is translating into financial wealth.

And, most importantly, take a look at the US production graph. A visitor from Mars would have trouble explaining why the Libyan graph looks a lot like the US graph.

Yet Another Motley Fool Post on KOG -- The Bakken, North Dakota, USA

Link here.

As the company itself admits, Kodiak's story is quite simple. All of its operations are in North Dakota, and the company simply needs to execute on its growth strategy of developing its land. The company now has 155,000 net acres in the Williston Basin that have largely been de-risked. Going forward, the company will spend heavily on drilling and completing wells, with the occasional acreage addition.

From the [data presented at the link], you can see that the company's operating cash flow trails its capex quite noticeably. Production has been rising rapidly, but the company has resorted to equity issuances in the past to raise money for drilling, as evidenced by its increasing share count over the past several years. Kodiak's use of equity financing let it have an enviable net cash position as of the third quarter, though the balance sheet has yet to reflect a $650 million senior note offering that was announced in November.

Nothing here that regular readers did not already know.

Director's Cut -- January 17, 2012 -- The Bakken, North Dakota, USA

Link here.

Production hits all-time high in North Dakota (again):
Oct, 2011, oil: 487,724 bopd 
Nov, 2011, oil: 509,726 (NEW all-time high)

Oct, 2011, producing wells: 6,210
Nov, 2011, producing wells: 6,332 (NEW all-time high)

Permitting
Oct, 2011: 201
Nov, 2011: 169 (all time high: 245, 2 Nov 10)

Pricing
Oct, 2011: sweet crude, $83.50
Nov, 2011: sweet crude, $88.54

Director's comments:

"The idle well count is now holding constant at approx 300 above normal. This indicates that fracturing services are now keeping up with drilling activity, but the industry needs to add more crews to catch up."  [Comment: keeping up? Perhaps, but the backlog is staggering and costing companies significantly.]

Crude oil takeaway capacity is "adequate for the near term" but bottlenecks at Cushing has increased the NYMEX-WTI significantly to 14%."

EPA
"EPA regulation of hydraulic fracturing under the safe drinking water act through the diesel fuel provision in the 2005 energy policy act is moving slowly. The proposed guidance document(s) are not under review at OMB. When that review is finished, a 60-day public comment period is planned."

Rigs
20,000-foot capable rigs: over 95% utilization rates
7,000 or less-capable rigs: less than 50% utilization rates

Leasing activityis focused on renewals and top leases in the Bakken-Three Forks with significant activity now south of Dickinson, west of Belfield.

Seismic is very busy.

The number of wells drilling on federal surface in the Dakota Prairie Grasslands is up to 5 (last month = 3).

With regard to flaring:
Little change from previous remarks.

Fracking Backlog Shows No Relief / No Catch Up; OXY USA Reports Another Dud (Based on IP) -- The Bakken, North Dakota, USA

Of the six wells reporting so far today (over the long weekend), only two reported IPs. Of the six, four were not completed/fracked.

Another example of how just bad the fracking backlog is -- four of six not fracked/completed at the end of the six-month confidential period.

On another note, I recently posted that, based on IPs, OXY USA's wells in their Dimond field have been anything but diamonds. Either OXY USA is looking at the long term, and working hard to report low IPs (as someone has suggested), or the Dimond field is a dud. This area of the Bakken in the Williston Basin has never impressed me.

This is the OXY well that reported today:

• 20364, 20 (no typo), OXY USA, Jacobson 160-90-6-P-1H, Dimond, Bakken, 21 stages, 1.11 million lbs; s7/11; 11/11;

Not Another Record, But Finally Back Above 200 -- The Bakken, North Dakota, USA

202 active drilling rigs in North Dakota today.

I had lost the bubble on KOG's rigs. I thought five was some kind of a record, but I'm wrong. KOG has had five operating rigs for some time.  I sure am glad I have this page -- one of the best pages for a quick look.  That page improves with time. I try to keep that particular page up to date, without the page becoming unmanageable.  Four of KOG's rigs are in McKenzie County (regular readers know what this means) and one rig in Dunn County.

Fidelity still has just the two rigs.

Oasis has seven. Oasis has as many as nine (if I counted correctly) back in October, 2011.

Slawson has seven. 

OXY has 15.

Mike Filloon on Williston Basin EURs -- SeekingAlpha -- The Bakken, North Dakota, USA

Link to SeekingAlpha.com:

It is my impression that SeekingAlpha.com does not limit access to past articles, so at great risk of losing access tosome wonderful data, I won't "cut and paste" any of Mike's numbers/data. Go to the link to see some incredible data.

But keep a couple of things in mind when looking at these EURs:

• when the Bakken was first making the news, I remember EURs averaged under 500 million bbls
• EURs continue to increase
• these EURs are, for the most part, limited to either the Bakken formation(s) or the Three Formation(s), although often the EURs encompass the entire Bakken Pool, an administrative designation (at least in my mind) based on geology
• said another way: for the most part, these EURs do not include other pay zones, to the best of my knowledge
• in a Q&A, I believe it was KOG that suggested in some of its de-risked locations, they are looking at EURs of one million
• some "Bakken" wells have reached the "average" EUR in less than three years of production; wells in the Williston Basin, including the Bakken, are expected to produce for 39 years -- not 38, not 40, but 39 years, according to at least one source -- if I can find the link, I will link it later

One million bbls at today's dollar rate and $100/bbl, it's easy to do the math --  eight (8) zeros.

Oh, I forgot, one more thing:

These are EURs per well; in the "poorer" locations in the Williston Basin, there may be only two wells/section; in the better locations in the Williston Basin, there could be upwards of ten (10) wells per spacing unit (5 wells/ section) and maybe more. There are already cases before the NDIC commission to place upwards of ten wells in one spacing unit.

I do not know if multiple laterals per well might influence these numbers. After awhile it gets hazy.

Public Television: General Custer Beyond the LBH -- Nothing To Do With The Bakken

Public television is telecasting a new story of General George Armstrong Custer. When reading the review in the Boston Globe, I am reminded of another George.

The remarkable thing is that it took so long for George Armstrong Custer to lose his luster. He and much of the 7th Cavalry he commanded died at the Battle of the Little Bighorn on June 25, 1876. Despite that, Custer was seen as a hero for nearly a century - a martyr to the cause of settling the American West. Why that was so, and why that view came to change so radically, is examined tonight with skill and insight in “Custer’s Last Stand.’’ The two-hour documentary, written and directed by Stephen Ives, is part of PBS’s “American Experience.’’

Custer cut a storybook figure. Having finished last in his class at the US Military Academy at West Point, N.Y., he was a brigadier general in the Union Army at 23. His courage and flair and leadership qualities on the battlefield were that impressive. General Philip Sheridan wrote to Custer’s wife [Libbie]: “Permit me to say, madam, that there is scarcely an individual in our service who has contributed more to bring about this desired result [of Union victory] than your gallant husband.’’

It looks promising. I will probably miss it.  I will be reading to my granddaughters. Can't wait.

By the way, Libby, Montana, was not named after General Custer's wife (spelled differently; too far away from where the general rode). Libby, Montana, was named after the daughter of an early settler according to the town's website.

For Investors Only: Why One Analyst Would Avoid the 15% Whiting Trust I -- The Bakken, North Dakota, USA

Link here to SeekingAlpha.com:

The Whiting USA Trust 1 will cease operations when the net profit interest has reached 9.11 million barrels of oil equivalent (MMBOE) production and sold from the trust's underlying properties. The 9.11 MMBOE is equivalent to 8.20 MMBOE in respect to the Whiting USA Trust 1's right to receive 90% of the net proceeds.

I recommend avoiding this trust due to the short term potential prior to the trust's termination. As of December 31st, 2010, the trust has produced 3.90 MMBOE of the 8.20 MMBOE maximum.

I was unaware how much more the trust is yet to produce; the trend for the price of oil is ... yup, up.

It's hard to tell, and it's only a snapshot anyway, but it appears the trust is yielding a bit more than 16 percent with interesting and unique tax consequences way beyond my understanding.

For Investors Only: Top 10 Most Profitable Oil/Gas Production Stocks

Be advised of the disclaimer for this site.

Link here to "CN Analyst." Some numbers rounded as is the SOP for this blog.

These are in order of net profit margin.

• Texas Pacific Land Trust: net profit margin -- 60%; operating margin: 90%
• Dorchester Minerals LP: 60%; 60%
• Pioneer Southwest Energy Partners LP: 60%; 60%
• BEXP: 50%; 50%
• KOG: 45%; 30%
• Gulfport Energy Corporation: 45%; 50%
• China North East Petroleum Holding Ltd: 45%; 50%
• Enerplus Corp (USQ): 40%; 50%
• Quicksilver Resources: 40%; 70%
• Vanguard Natural Resources, LLC: 40%; 50%

And, of course, one of these Bakken companies will be off the list in the future.

The analyst that provided this data highlighted that one Chinese company is on the list.

Is The Flaring Problem Moving To Texas -- And Why Is Europe Not Participating? Shale Gas is Everywhere -- Somehow Related to the Bakken, North Dakota, USA

Link here for the Wall Street Journal-Europe via JunkScience.com.

In the U.K. last week, politicians hailed the good news as utilities cut a meagre 5% from their customers’ sky high gas bills. Meanwhile, in the U.S., natural gas has become so abundant and the price so low that a company in Texas was burning the stuff off as a waste product.

In an age where ships carry liquefied natural gas from one side of the globe to the other, surely Europe should expect to see some benefit from this situation? Sadly, the answer is: Not any time soon.

There has been such a surge in production that existing pipelines cannot cope. Goodrich Petroleum has been burning off gas it produces from an oil field in Southern Texas because the nearby pipeline is full and the price of the gas wasted isn’t high enough to justify shutting down oil production.

Sounds like another opportunity for the pipeline companies.