Megaloads -- XOM Subsidiary -- Montana - Idaho -- Update

Link here.

The Missoulian brings us up to date.

As of December 26, 2011:

As the latest Year of the Big Rigs draws to a close in Montana, it's kind of quiet out there, is it not?

Oh, they're still making noise in Idaho, where Moscow bristles with each new convoy of Imperial Oil/Exxon Mobil megaloads that rolls through town.

And big rigs still rumble through Missoula in the night. Nickel Brothers recently finished moving the last of 23 Alberta-bound loads of Weyerhauser pulp mill equipment down U.S. Highway 12 and up the Blackfoot on Montana Highway 200.

Mammoet and Imperial Oil/Exxon Mobil continue to empty docks at Lewiston, Idaho, and Pasco, Wash., of those large and controversial loads of processing equipment for the Kearl Oil Sands in northeastern Alberta. The 205 modules the companies originally proposed to haul over the same two-lane route that Nickel Brothers followed have been sliced and diced to something close to 300 loads.

And so it goes. The chronology here.

Week 5: January 29, 2012 -- February 4, 2012

Highlights of the February dockets

MonDak Motorsports moves from Sidney to Williston

OXY USA to re-deploy some rigs out of the Williston Basin

Chesapeake to leave the Dickinson area; may leave the Williston Basin

ND active drilling rig number hits record: 205

A monster well -- 160,000 bbls in four months -- CLR's Whitman 2-34H

Dickinson building permits -- a new record, second year in a row

Williams County Commission with another big well

CCS gets permit to build waste treatment facility near White Earth

Bridger Pipeline commissioned -- New Town, ND, to Baker, MT

No warming in last 15 years

$700 million to improve Williston waste water plant

New man-camp in Williston

Why XOM Is Pursuing Natural Gas

Only a few days ago I wondered why XOM continued to focus on natural gas when the real money is being made in oil.

This might be the answer:

Exxon Mobil Corp.'s decision to leave its U.S. natural-gas output untouched despite low commodity prices may push some smaller producers out of the business, force consolidation in the industry and make the oil company an even more powerful force in the oilpatch.

The biggest U.S. natural-gas producer puzzled some analysts and investors Tuesday when during its earnings report, it said it had no plans to curtail its output despite that a glut has driven the price of the commodity to its lowest level in more than a decade. Other companies including Chesapeake Energy Corp., the second-largest U.S. natural-gas producer, recently have announced drilling cutbacks as natural-gas production in some areas becomes a money-losing business.

The Irving, Texas, company argued although it is doing its best to switch drilling to oil-rich areas, it still needs to keep drilling for natural gas to meet previously agreed-to contractual terms that let it retain expensive land leases. Raising some market observers' eyebrows, it also said drilling for natural gas in some areas is still profitable even at current prices.

This will be fun to watch.

Meanwhile, Navistar (a truck company) is partnering with Boone Pickens (a natural gas guy):

Navistar International Corp. has struck a partnership with oil and gas magnate T. Boone Pickens Jr. as part of a broad strategy to speed the shift of big rigs to natural gas.

The Lisle-based truck maker, which has been under pressure by activist investor Carl Icahn, will adapt its existing line of medium- and heavy-duty trucks to burn liquid natural gas. It will work with Clean Energy Fuels Corp., which will provide a national system of fueling stations for them. Mr. Pickens is founder, chairman and the largest shareholder of Seal Beach, Calif.-based Clean Energy.

“Natural gas has clearly emerged as the most realistic alternative fuel option for the trucking industry,” Navistar Chairman and CEO Dan Ustian said in a statement.

Clean Energy plans to have 150 stations, many of them located in Pilot-Flying J Travel centers, with 70 stations open by the end of the year.

Navistar makes the announcement as the Environmental Protection Agency prepares to fine it $1,900 per engine later this month for failing to meet federal emissions regulations. The company has been using credits to comply with the standards but could run out by the end of the month, according to a report in Transport Topics.

One almost gets the feeling the "big guys" have been meeting and formulating a strategy. XOM, T. Boone, and Navistar, just for starters.

Data Points from the February, 2012, NDIC Hearing Dockets -- The Williston Basin, North Dakota, USA

Here are some of the data points from the February, 2012, hearing dockets that got my attention (see the full list -- transcribed/summarized at this link):

Normally, I see 10 - 20 requests for flaring. There were only two requests or so this month.

The Bakken is in the manufacturing stage, here are just some of the Hess requests, and others:

• 16875, Hess, Ray and Dollar Joe-Bakken; establish 2 2560-acre units; up to 12 hz wells; up to six hz wells on each of 9 1280-acre units (24 wells + 54 well --> 78 wells), Williams
• 16876, Hess, Big Butte-Bakken, 6 hz wells on a 1280-acre unit, Mountrail
• 16877, Hess, Manitou-Bakken, 6 wells on each of 6 1280-acre units, Mountrail (36 wells)
• 16878, Hess, Alger-Bakken 6 hz wells on 7 1280-acre units (42 wells), Mountrail
• 16883, Hess, Alkali Creek-Bakken, 6 hz wells on each of 8 1280-acre units (48 wells), Mountrail, McKenzie)
• 16884, Hess, Robinson Lake-Bakken, 6 hz wells on each of 12 1280-acre units (72 wells), Mountrail
• 16898, Oasis, Bull Butte-Bakken, 6 hz wells on 2 1280-acre units; Williams (12 wells)
• 16899, Oasis, Squires-Bakken, 6 hz wells on 3 1280-acre units; Williams (18 wells)

As many as seven or eight wells in one section:

• 16887, Hess, Bear Creek-Bakken, 7 hz wells on a 640-acre unit; Dunn, 

Madison wells: as many as 2 wells/160 acres

• 16905, Petro Harvester, South Coteau-Madison, establish 2 160-acre units; 2 hz wells in each, Burke
• 16906, Petro Harvester, Coteau-Madison, a 160-acre unit, 2 hz wells, Burke
• 17011, WPX Energy Williston, amend Mandaree-Bakken, create 2 320-acre units, 2 wells on each unit, McKenzie

The norm is becoming 7 wells per 1280-acre spacing unit; too many examples to list; or 8 wells per 1280-acre unit, even by smaller companies:

• 17146, Triangle, Rawson-Bakken, 8 wells on a 1280-acre unit; McKenzie

BR is requesting more and more 2560-acre units; 12 wells on each; CLR is requesting 2560-acre units, "multiple" wells from each pad

• 16924, BR, Union Center-Bakken, a 2560-acre unit, 12 wells, McKenzie
• 16925, BR, Berg, Keene, and Clear Creek-Bakken, a 2560-acre unit; 12 hz wells, McKenzie
• 16926, BR, Clear Creek-Bakken, a 2560-acre unit, 12 hz wells, McKenzie
• 16927, BR, Dimmick Lake-Bakken, a 2560-acre unit, 12 hz wells, McKenzie
• 16928, BR, Pershing-Bakken, 2560-acre unit, 12 hz wells, McKenzie
• 16929, BR, North Fork-Bakken, a 2560-acre unit, 12 hz wells, McKenzie
• 17003, CLR, amend Chimney Butte and Murphy Creek-Bakken, 2 2560-acre units; multiple wells from each pad within each unit, Dunn
• 17004, CLR, amend Chimney Butte-Bakken, create a 1 2560-acre unit, multiple wells from thepad, Dunn
• 17005, CLR, amend Rattlesnake Point and Jim Creek-Bakken, create a 2560-acre unit; multiple wells from the pad, Dunn
• 17006, CLR amend Cedar Coulee and Rattlesnake Point-Bakken, to create a 2560-acre unit; multiple wells from the pad, Dunn
• 17007, CLR, amend Corral Creek and Jim Creek-Bakken, to create a 2560-acre unit, multiple wells from the pad, Dunn

When I first started the blog,  I was in good company that suggested we would see one well per section. How about four wells/section?

• 16953, QEP, amend Heart Butte-Bakken, 4 wells on a 640-acre unit; 4 hz wells on another 640-acre unit, Dunn

Eye-popping:

• 16765, cont'd, Dakota-3, extend Van Hook or Deep Water Creek-Bakken, create a 3840-acre unit, 22 wells on that unit (3840/640 --> 22 wells on 6 sections), McLean

Legacy: 90 wells?

• 17015, Legacy, amend North Souris-Spearfish, create ~ 21 320-acre units, 4 wells on each spacing unit (84 wells); 3 180-acre units and 2 wells on each unit (6 wells) --> about 90 wells, Bottineau

New business ventures:

• 17019, Dakota Maxum Partners, water recyling plants throughout the area; for fracking; potable

Pooling lists keep getting longer:

• 17056 - 17092, EOG, pooling (~36 wells)
• 17093 - 17133, Zavanna, pooling (~41 wells)

New operator? WPX is the spin-off from Williams Companies, traditionally a pipeline company.

• 17142, WPX Energy,  Reunion Bay-Bakken, 7 wells on a 1280-acre unit, Dunn
• 17143, WPX Energy, Squaw Creek-Bakken, 7 wells on a 1280-acre unit, McKenzie
• 17144, WPX Energy, Mandaree-Bakken, 7 wells on a 1280-acre unit; 4 wells on each of 2 640-acre units; 3 wells on a 640-acre unit; 2 wells on a 320-acre unit, Dunn, McKenzie (20 wells)
  

NDIC Hearing Dockets -- February, 2012 -- Can You Say "Manufacturing" -- Look At Those Hess Requests

The high points of this long list can be found at this link.

Tuesday, February 28, 2012
16870, Hess, flaring
16871, Hess, Ross-Bakken, 3 hz wells on a 640-acre unit; 3 hz wells on a 1280-acre unit, Mountrail
16872, Hess, Tioga-Bakken, 3 hz wells on 1280-acre unit, Williams, Mountrail
16873, Hess, Cottonwood-Bakken, 3 hz wells on 1280-acre unit, Mountrail
16874, Hess, Kittleson Slough-Bakken, 3 hz wells on 1280-acre unit, Mountrail
16875, Hess, Ray and Dollar Joe-Bakken; establish 2 2560-acre units; up to 12 hz wells; up to six hz wells on each of 9 1280-acre units (24 wells + 54 well --> 78 wells -- oh, yeah), Williams
16876, Hess, Big Butte-Bakken, 6 hz wells on a 1280-acre unit, Mountrail
16877, Hess, Manitou-Bakken, 6 wells on each of 6 1280-acre units, Mountrail (36 wells)
16878, Hess, Alger-Bakken 6 hz wells on 7 1280-acre units (42 wells), Mountrail
16879, Hess, Alger-Bakken, 3 hz wells on 2 1280-acre units, Mountrail
15370, cont'd, Hess, Alger-Bakken, 1 hz well on a 640-acre unit, Mountrail
16880, Hess, to drill the EN-Thronson as close as 14 feet of the north line, Mountrail
16881, Hess, Truax-Bakken, another two sections; 6 hz wells on each of 6 1280-acre units (36 wells), Williams
16882, Hess, Hoffland-Bakken, 6 hz wells on a 1280-acre unit, Williams
16883, Hess, Alkali Creek-Bakken, 6 hz wells on each of 8 1280-acre units (48 wells), Mountrail, McKenzie)
16884, Hess, Robinson Lake-Bakken, 6 hz wells on each of 12 1280-acre units (72 wells), Mountrail
16885, Hess, Banks-Bakken, 12 hz wells on a 2560-acre unit; or 2 1280-acre units, 6 wells each, Williams, McKenzie
16886, Hess, Antelope-Bakken, eliminate the 1220-foot setback rule, McKenzie
16887, Hess, Bear Creek-Bakken, 7 hz wells on a 640-acre unit; Dunn, REPEAT 7 hz wells on a 640-acre unit
16888, Hess, Little Knife-Bakken, 7 hz wells on a 1280-acre unit, Dunn
16889, Hess, revoke a CLR permit, Williams
16890, Hess, revoke a CLR permit, Williams
16891 - 16896, Hess, legalese; violation of excess flaring, various fields
16897, Oasis, temporary spacing, Williams
16898, Oasis, Bull Butte-Bakken, 6 hz wells on 2 1280-acre units; Williams (12 wells)
16899, Oasis, Squires-Bakken, 6 hz wells on 3 1280-acre units; Williams (18 wells)
16900, Oasis, Sanish-Bakken, add 2 sections; 1 hz well on the 1280-acre unit; Mountrail
16901, Oasis, Camp-Bakken, 6 hz wells on a 1280-acre unit, McKenzie
16902, Cornerstone, Stony Run-Madison; add one section; 1 hz well on the unit, Burke
16903, Cornerstone, Carter-Midale/Nesson; to allow the toe of a hz well to be drilled in adjoining unit; Burke
16904, Petro Harvester, injectivity testing in the Wayne-Madison, Bottineau
16905, Petro Harvester, South Coteau-Madison, establish 2 160-acre units; 2 hz wells in each, Burke
16906, Petro Harvester, Coteau-Madison, a 160-acre unit, 2 hz wells, Burke
16907, Petro-Hunt, Battleview-Bakken and North Tioga-Bakken, establish a 1280-acre unt; 5 hz wells, Burke
16908, KOG, Truax-Bakken, establish a 1280-acre unit, 7 hz wells; Williams
16909, KOG, Ranch Creek-Bakken, 2 hz wells on a 1280-acre unit; McKenzie
16597, cont'd, Whiting, temporary spacing, Golden Valley
16910, Whiting, allow a well to drill farther into the toe
16911, Whiting, Sioux-Bakken and Lonesome-Bakken, establish a 1280-acre unit; 4 hz wells, McKenzie
16912, Whiting, Morgan Draw and Roosevelt-Bakken, to establish a 1280-acre unit; 4 hz wells, Billings
16913, Whiting, Roosevelt-Bakken, to establish a 1280-acre unit; 4 hz wells, Billings
16914, Whiting, Cooks Peak and Roosevelt-Bakken; establish a 1280-acre unit, 4 hz wells, Billings
16915, Whiting, Roosevelt-Bakken, 4 hz wells on each spacing unit in Zone VI of that field; Billings, Golden Valley
16916, Whiting, Morgan Draw-Bakken, 4 hz wells on each spacing unitin Zones V and VI of that field; Billings, Golden Valley
16917, Whiting, extending either St Demetrius-Bakken or Park-Bakken; 2 1280-acre units; 4 hz wells on each, Billings
16918, Whiting, 4 hz wells in Zones VIII and IX of Bicentennial-Bakken, Golden Valley, McKenzie
16920, Whiting, Chateau-Bakken, 4 hz wells on each spacing nit, Billings
16921, Whiting, Zones V, VI of DeMores-Bakken; 4 hz wells on each spacing unit; Billings
16922, Whiting, Big Stick-Bakken, 4 hz wells on each spacing unit
16923, Whiting, 4 hz wells on each spacing unit, Zones III, IV, Tree Top-Bakken, Billings
16924, BR, Union Center-Bakken, a 2560-acre unit, 12 wells, McKenzie
16925, BR, Berg, Keene, and Clear Creek-Bakken, a 2560-acre unit; 12 hz wells, McKenzie
16926, BR, Clear Creek-Bakken, a 2560-acre unit, 12 hz wells, McKenzie
16927, BR, Dimmick Lake-Bakken, a 2560-acre unit, 12 hz wells, McKenzie
16928, BR, Pershing-Bakken, 2560-acre unit, 12 hz wells, McKenzie
16929, BR, North Fork-Bakken, a 2560-acre unit, 12 hz wells, McKenzie
16930, BR, MonDak-Bakken, a 1280-acre unit, McKenzie
16931, BR, MonDak-Bakken, 4 1280-acre units; McKenzie
16932, BR, Poker Jim-Bakken, 4 1280-acre units, McKenzie
16933, BR, Covered Bridge, Pierre Creek, and Cinnamon Creek, 3 1280-acre units; McKenzie
16934, BR, Pierre Creek-Bakken, 2 1280-acre units, McKenzie
16935, BR, Flat Top Butte-Bakken, 1 1280-acre unit, McKenzie
16936, BR, Flat Top Butte, Rough Rider, and Devils Pass fields, 2 1280-acre units, McKenzie
16937, BR, Rough Rider-Bakken, 4 1280-acre units; McKenzie
16938, BR, Bicentennial-Bakken, 4 1280-acre units, Golden Valley
16939, BR, a 1280-acre unit, 1 hz well, Bakken, Billings
16940, BR, Four Eyes and Elkhorn-Bakken, 2 1280-acre units, Billings
16941, BR, 7 1280-acre units, Bakken, 1 wells each, Golden Valley
16942, BR, establish 5 1280-acre units; 1 hz well each, Bakken, Stark
16943, Helis, Spotted Horn-Bakken, 3 hz wells on a 1280-acre unit; 4 overlapping 1280-acre units and a single hz well on each overlapping unit, McKenzie
16944, True Oil, Red Wing Creek-Madison, a 276.84-acre unit "more or less," and 1 hz well, McKenzie
16945, OXY USA, Willmen-Bakken, establish either 2 1280-acre spacing units or 2 1280-acre drilling units, 6 hz wells on each, Billings
16946, OXY USA, a 1280-acre unit, 6 hz wells, Billings
16947, MRO, create 5 1280-acre units, 1hz well each, Slope
16634, cont'd, Windsor, extend Van Hook-Bakken, establish 5 1920-acre units, Mountrail
16285, cont'd, Triangle, revoke a Zenergy permit, McKenzie
16125, cont'd, XTO, revoke a CLR permit, McKenzie
15676, cont'd, XTO, revoke a CLR permit, McKenzie
16948, North Plains, amend Midway-Bakken, establish a new Zone IV, 7 hz wells per 1280-acre unit, Williams
16949, North Plains, legalese risk penalty, McKenzie
16950, North Plains, legalese risk penalty, McKenzie
15690, cont'd, CLR, revoke a BEXP permit, McKenzie
16323, cont'd, CLR, designating CLR operator of the Peterson well, Williams
16322, cont'd, Vecta, legalese risk penalty, Banner-Madison, Mountrail
16951, QEP, amend Heart Butte and/or Van Hook-Bakken, create 6 spacing units: 1 3200-acre unit/12 hz wells;  1 2560-acre unit/10 hz wells; 1 1920-acre unit/10 hz wells; 1 1280-acre unit/6 hz wells; 2 640-acre infill spacing units/2 hz wells; Dunn, Mountrail (42 wells)
16952, QEP, amend Deep Water Creek-Bakken, create 2 infill 640-acre units; 2 wells each; McLean
16953, QEP, amend Heart Butte-Bakken, 4 wells on a 640-acre unit; 4 hz wells on another 640-acre unit, Dunn
16954, Gadeco, amend Four Bears-Bakken, create a 1280-acre unit, 3 hz wells each; McKenzie
16955, Landtech, SWD, West Bank Field, Williams
16956, Landtech, SWD, Chama Field, Golden Valley
16957, Landtech, SWD, Bell Field, Stark
16958, OXY USA, SWD, Dimond Field, Burke
16959, MRO, SWD, Sanish, Mountrail
16960, MRO, pooling
16961, MRO, pooling
16962, Hess, SWD, Forthun Field, Burke
16963, Hess, pooling
16673, cont'd, Hess, pooling
16964 - 16966, Oasis, pooling
16967, Petro-Hunt, pooling
16968 - 16985, KOG, pooling
16986, BR, pooling
16987 - 16991, Helis, pooling
16992 - 16998, OXY USA, pooling

Wednesday, February 29, 2012

16999, Slawson, temporary spacing, McKenzie
17000, BEXP, temporary spacing, McKenzie
17001, G3 Operating, temporary spacing, Williams
17002, CLR, temporary spacing, Burke
17003, CLR, amend Chimney Butte and Murphy Creek-Bakken, 2 2560-acre units; multiple wells from each pad within each unit, Dunn
17004, CLR, amend Chimney Butte-Bakken, create a 1 2560-acre unit, multiple wells from the pad, Dunn
17005, CLR, amend Rattlesnake Point and Jim Creek-Bakken, create a 2560-acre unit; multiple wells from the pad, Dunn
17006, CLR amend Cedar Coulee and Rattlesnake Point-Bakken, to creat a 2560-acre unit; multiple wells from the pad, Dunn
17007, CLR, amend Corral Creek and Jim Creek-Bakken, to create a 2560-acre unit, multiple wells from the pad, Dunn
15949, cont'd, CLR, extend Juno, Upland, and/or Wildrose-Bakken; create 7 1280-acre units; 1 hz wells on each, Divide
17008, Newfield, extend Banks-Bakken, create a 1280-acre unit; 7 wells on that unit, McKenzie
15754, cont'd, Newfield, extend Cartwright-Bakken (or others), create 10 1280-acre units, 1 hz well on each, McKenzie
17009, Fidelity, amend Dutch Henry Butte-Bakken, create 2 1280-acre units; 1 hz well on each, Stark
17010, Fidelity, amend Dickinson-Bakken, create 2 1280-acre units; 1 hz well on each, Stark
17011, WPX Energy Williston, amend Mandaree-Bakken, create 2 320-acre units, 2 wells on each unit, McKenzie
16765, cont'd, Dakota-3, extend Van Hook or Deep Water Creek-Bakken, create a 3840-acre unit, 22 wells on that unit (3840/640 --> 22 wells on 6 sections), McLean
17012, Encore Energy, amend Horse Creek-Red River; create 2 640-acre units; 1hz well on each; Bowman
17013, Enerplus, amend Antelope-Sanish, create a 640-acre unit; 4 hz wells, McKenzie
17014, Corinthian, amend North Souris-Spearfish, create 3 160 acre units; and 6 wells on each unit, Bottineau,
17015, Legacy, amend North Souris-Spearfish, create ~ 21 320-acre units, 4 wells on each spacing unit (84 wells); 3 180-acre units and 2 wells on each unit (6 wells) --> about 90 wells, Bottineau
17016, Samson Resources, amend Ambrose-Bakken, create a 1280-acre unit, 7 wells; Divide
16777, cont'd, Missouri River Royalty, recomplete the Henry Torstenson well to the Duperow Formation, McKenzie
16425, cont'd, Zavanna, temporary spacing, McKenzie
15747, cont'd, Credo Petroleum, revoke a Helis permit, McKenzie
15496, cont'd, Renegade Petroleum (ND), temporary spacing, Renville County
16184, cont'd, Crescent Point Energy, temporary spacing, Divide
17017, Debra K Ganske legalese against Golden Eye Resources, Williams
17018, Newalta Environmental, construct a treating plant, Williams
17019, Dakota Maxum Partners, water recyling plants throughout the area
17020 - 17022, Slawson, pooling
17023, Slawson, Ross-Bakken, 5 wells on 640-acre unit, Mountrail
17024, Slawson, Ellsworth-Bakken, 7 wells on a 1280-acre unit, McKenzie
16785, cont'd, Slawson, Big Bend-Bakken, 7 wells on a 1280-acre unit, Mountrail
17025 - 17026, Samson Resources, pooling
17027, Samson Resources, Ambrose-Bakken, 7 wells on each of 12 1280-acre units (84 wells), Divide
16840 - 16841, cont'd, Samson Resources, flaring
17028 - 17029, Denbury Onshore, pooling
17030, Denbury Onshore, legalese for risk penalty
17031, Denbury Onshore, legalese for risk penalty
17032, Newfield, Siverston-Bakken, 7 wells on each of 4 1280-acre units (28 wells), McKenzie
17033, Newfield, Sand Creek-Bakken, 7 wells on each of 2 640-acre units (14 wells), McKenzie
17034, Newfield, Keene-Bakken, 7 wells on a 1280-acre unit, McKenzie
17035, Newfield, Sandrocks-Bakken, 7 wells on a 1280-acre unit, McKenzie
17036, Newfield, legalese for risk penalty, McKenzie
15861, cont'd, Newfield, Epping-Bakken,  7 wells on each of 3 1280-acre units (21 wells), Williams
17037 - 17040, CLR, pooling
17041, CLR, SWD, Bowman
17042 - 17047, CLR, risk penalty legalese, various counties
17048, Arsenal Energy, pooling
17049 - 17054, Fidelity, pooling
17056 - 17092, EOG, pooling (~36 wells)
17093 - 17133, Zavanna, pooling (~41 wells)
17134 - 17141, WPX Energy, pooling
17142, WPX Energy,  Reunion Bay-Bakken, 7 wells on a 1280-acre unit, Dunn
17143, WPX Energy, Squaw Creek-Bakken, 7 wells on a 1280-acre unit, McKenzie
17144, WPX Energy, Mandaree-Bakken, 7 wells on a 1280-acre unit; 4 wells on each of 2 640-acre units; 3 wells on a 640-acre unit; 2 wells on a 320-acre unit, Dunn, McKenzie (20 wells)
17145, WPX, Van Hook-Bakken, 4 wells on a 640-acre unit, Mountrail
16858, cont'd, Dakota-3, Reunion Bay, flaring, McKenzie, Mountrail, Dunn
17146, Triangle, Rawson-Bakken, 8 wells on a 1280-acre unit; McKenzie
17147 - 17154, BEXP, pooling
17155, BEXP, Williston-Bakken, 8 hz wells on each 1280-acre unit within Zones II and III, Williams
17156 - 17165, Baytex, pooling
17166 - 17170, ERF, pooling
17171, Zenergy, poolig
17172 - 17174, Hunt, pooling
17175, Borejaks Energy, SWD, Rawon
17176, Missouri Basin, SWD, McKenzie
17177, Missouri, Basin, SWD, Divide
17178, OXY USA, SWD, Dunn
17179 - 17181, CCS Midstream, SWD, Mountrail
17182, Ballantyne Oil, Spring Coulee-Madison, commingling, Bottineau

Analysis to follow

Three (3) New Permits -- The Williston Basin, North Dakota, USA

Daily activity report, February 3, 2012 --

Operators: Hess (2), Denbury

Fields: Charlson, Ray, White Earth

Four (4) wells were released from the "confidential list"; only one was completed/fracked:

• 20342, 1,430, Petro-Hunt, USA 153-95-4B-9-1H, McKenzie,

It is not unusual to see permits renewed, but these two caught my eye:

• 18036, conf, Texakota, H Borstad 3-6, Williams County, issued February 19, 2009
• 18037, conf, Texakota, Hemsing 3, Williams County, issued February 19, 2009

Texakota has about 30 permits in the Williston Basin going back to 1957; most of them Madison wells in the West Tioga field. The company has re-entered some of their old Madison wells and drilled horizontal Bakken wells.

Great Human Interest Story -- MonDak Motorsports Moves From Sidney to Williston

I drove by this business location almost every day when I was back in the Bakken last autumn. The new owner was putting a lot of time and money into refurbishing this building.  It looked incredible going up, the renovation. I was quite impressed.

Here's the story of the grand opening in the Williston Herald.

MonDak Motorsports, 413 2nd St. W., is now open for business in what used to be the Bingo Barn building. It opened early last week after construction delays pushed back the opening date. Originally, it was planned to open in early December.

Manager Josh Kringen said that there has so far been a lot of interest in cruiser-type motorcycles as well as equipment such as generators. Also for sale are dirt bikes, jet skis, ATVs, side by sides, snow blowers and other recreational and work equipment.

Random Snapshot of Data Points for MRO in The Bakken -- Look at BOEPD Increase Year-Over-Year

Random note, a snapshot -- see link for most of the companies operating in the Bakken.


MRO (Marathon Oil)

• Early 2012: 406,000 acres in the Bakken
• 2011: 391,000 acres in the Bakken
• 375,000 acres in the Bakken (SeekingAlpha, June 27, 2011) 
• Operating 6 rigs; up to 7 rigs in 2Q12
• Odysseus: north, Divide County (no longer shows up on presentation)
• Cassandra: east of Williston (no longer shows up on presentation)
• Cazador: just north of the reservation in the Nesson anticline
• Myrmidon: northwest corner of the reservation
• Marfa: MRO's largest area; southwest of the reservation; borders the reservation, Dunn County -- Marfa DOES NOT show up on most recent presentation
• Hector: eastern area of Marfa, just outside of the reservation, Dunn County
• Ajax: continuation of Marfa, southwest of Marfa, Dunn County
• Blacktail: very, very small area west of Ajax (no longer shows up in presentation)
• Paris: west of Marfa, in Williams County, about same size as Ajax
• Diomedes: northwest Williams and eastern Montana (Sheridan County) (new)
• Menelaus: very small prospect in west central McKenzie (new)
• Aeneas: northwest corner of McLean, east of river (new)
• Helen: very small, scattered acres north of Hector (Helen)
• Elk Creek: very small, scattered acres west of Helen (new)
• Analyst's number: 365,000 net acres (December 31, 2010) 
• 2011 average boepd: 24,000
• 2010 average boepd: 10,000

Global Warming Hits Colorado: Weather Forecast and Advisory

If the blizzards move through the entire mid-continent, truck traffic could be affected, aggrevating the food shortage in Williston.

Link here. 

This is the advisor/weather alert:

A Winter Storm Warning is in effect in many areas of Colorado. Blizzard conditions and heavy snow east of Denver with snow accumulations possible of 12"-24". High winds are likely. Denver/Front Range area will see continued snow Friday into early Saturday, accumulations vary depending on location.

This is the closure advisory: 

I-70 Eastbound Closed Between Denver and Limon and Burlington to Denver for Westbound traffic. NO ESTIMATED REOPEN but this is likely to be an overnight closure. Adverse weather conditions and high winds.

CNBC: House and Senate Considering Ending Wind Energy Credits

I didn't see that CNBC segment but learned of it through an e-mail.

If tax credits, subsidies for wind come to an end, one can only assume the big corporations, the big Congressional donors have maxed out their credits and need to move on to "the next big thing."

The individual also said CNBC said electricity rates have risen 2.5 cents/kwh, on average, due to wind energy costs. For rule of thumb, conventional electricity rate runs about 7 cents/kwh. A 2.5-cent rise is not trivial, especially when much of the expense is borne by the taxpayer through subsidies and grants.

In Massachusetts, signing up for wind energy means monthly utility bills to increase 15 to 30 percent -- link to that story posted earlier.

Melissa Francis, formerly CNBC Host, Now With Fox Business

I sure hope Fox Business can out-fox CNBC.


Link here for biography. Andrew Ross Sorkin -- if I have the name correct -- is more about promoting his books and talking politics than business.

NDIC Hearing Dockets for February Posted

I will transcribe them later.

Link here for the NDIC.

EU Bracing For Another Potential Energy Crisis -- AP -- Due To Global Warming in Russia

Link here.

The European Union is bracing for another potential energy crisis in the dead of winter as Russian gas supplies to some member states have suddenly dwindled by up to 30 percent.

The European Commission put its gas coordination committee on alert Friday, but insisted the situation had not yet reached an emergency level as nations have pledged to help each other if needed and storage facilities have been upgraded.

Commission spokeswoman Marlene Holzner said Russia was going through an extremely cold spell and needed more gas to keep its citizens warm. 

Meanwhile, I just posted, just moments ago, while the EU is bracing for this newest potential energy crisis (didn't they go through this last year, also?), the US has such a glut of energy, the president can kill a huge pipeline that would have brought Canadian oil to US refineries and Gulf coast terminals. In the mind of faux environmentalists it makes more sense to burn that excess diesel in thousands of trucks and Buffett trains transporting that oil. The US is truly blessed to be such a resource-rich republic. The Chinese must think we're nuts. I know the freezing Europeans do.

Mike Filloon: 4Q11 Production for KOG, OAS, WLL -- The Williston Basin, North Dakota, USA

Link here for SeekingAlpha.com.

Investopedia has similar story: two Bakken companies that missed production goals -- KOG and OAS. 

I Seldom Do This, And I Know I Shouldn't But I Cannot Resist ...

As you all probably know, the San Onufre nuclear plant is off-line/shut down due to a small radiation leak (partial shutdown).

Today, in the news:

Authorities say a worker fell into a reactor pool at the San Onofre nuclear power plant in San Diego County last week but he didn't receive a significant radiation dose.

Southern California Edison spokesman Gil Alexander says the man was leaning over to retrieve a flashlight when he lost his balance and fell into the Unit 2 reactor pool on Jan. 27.

The man's name was not released but his son was quoted as saying, "Yeah, dude, it was Homer."


D'oh

Global Warming Hits Rome; Eastern Europe in Freezer -- Thank Goodness for the Drudge Report

Italy crippled by winter storm; snow as far south as Naples.

A winter storm battered much of Italy, bringing arctic temperatures to the north and snow as far south as Naples, disrupting transport and commerce across the country.

Rome got between six and eight inches of snow, the most in more than a quarter century, downing trees, snarling traffic and leaving shops shuttered. Some vehicles were trapped for 10 hours on the ring road that surrounds the capital and trucks were forced to pull off highways in much of the center and north of the country, SKYTG24 reported.

Temperatures at Malpensa Airport outside Milan dropped to minus 18 Celsius (0.4 degree Fahrenheit). The average low for February is 2 Celsius with a high of 8 degrees, according to data compiled by Bloomberg.

Snow falls in Rome for first time in 26 years -- MailOnline.

Snow fell in Rome today for the first time in 26 years as freezing temperatures took the death toll across Europe to more than 150.

The Italian capital is usually blessed by a moderate climate but the snowfall prompted authorities to stop visitors from entering the Colosseum, the Roman Forum, and the Palatine Hill, the former home of Rome's ancient emperors.

The last substantial snowfalls in Rome were in 1985 and 1986, though there have been other cases of lighter snow since then, including in 2010.

Global warming temperatures across Eastern Europe send deaths (due to freezing weather) to 150. The military is on alert in the United Kingdom as temperatures drop and heavy snow fall predicted.

Those predictions of a worse winter than usual appear to be holding true, albeit in the wrong part of the world. Those furry caterpillars must not have gotten the memo.

Reuters is posting the same thing: huge chill in central, eastern Europe.

At least 139 people have died across Eastern Europe and Germany since the cold snap began, interrupting what had been an unusually mild European winter.

In the Hungarian village of Farkaslyuk, people clambered up a 30-metre spoil heap from a disused mine to scrape together enough coal to heat their homes and cook for a few days.

Meanwhile, in the states, we have it so good that we can afford to ban Canadian oil via a proposed pipeline. We can use all that excess diesel to fuel thousands of trucks and Buffett trains rather than pipe it.  We are truly blessed to be such a resource-rich republic.

Miscellaneous notes:

Whenever I post that 0.6 degree increase in average global temperature over the next 90 years is neither reproducible nor statistically meaningful, I get a note from "anonymous" telling me that, in fact, 0.6 degrees over 90 years is incredibly significant. Am I missing something?

But, what I find most amusing is that no one is able to tell me a) the perfect average temperature for the earth; and, b) who set the thermostat in the first place, before natural forces and then man reset it, apparently.  

In the October, 2011, issue of National Geographic there is an interesting article, "World Without Ice: 56 million years ago a mysterious surge of carbon into the atmosphere sent global temperatures soaring. In a geologic eyeblink life was forever changed."

It was during that warm spell that modern mammals appeared. And then this quote: "But the lesson is that animals can evolve fast in a changing environment. When he first drove into the Bighorn four decades ago, it was precisely to learn where horse and primates came from. He now thinks that they come from [this time period] -- that those three orders of odern mammals acquired their distinctive characteristics right then, in a burst of evolution driven by the burst of carbon into the atmosphere." -- p. 109, National Geographic, October, 2011.

OXY USA To Re-Deploy Some Rigs Out of the Bakken; COP -- A Different Story?

In January, 2012, I counted 15 OXY USA wells at the NDIC active drilling rig site.

Today, I counted 13.

And then this from Occidental's 4Q11 transcript:

In the Midcontinent and other operations, we plan to spend about 14% of our total capital. In the Williston, we have increased our acreage in 2011 from 204,000 acres to 277,000 acres. We expect that our rig count will be about 6 at the end of 2012. Additional capital that could reasonably be deployed here has been shifted to higher-return opportunities in California and the Permian. This may also encourage Bakken well costs to decline. 

Maybe someone can clarify that. I suppose the "13" to "15" wells listed as OXY USA rigs could be contracted and the "6" that the transcript refers to are the company's own rigs, but I certainly interpret that paragraph to say that OXY is re-deploying to areas (like California) with higher return potential.

Maybe I'm misreading something. But OXY has always been focused on California.

This comes on top of the CHK story I just posted.

On the other hand, COP seems to like the Permian and the Bakken:

So now I'll shift to our progress in growing our liquids-rich shale business in North America. That's the Eagle Ford, the Bakken, the Permian and the Cardium plays. First, at Eagle Ford, we are currently running 16 rigs in the play. We expect to maintain a 16 rig count average and drill about 180 wells in 2012. Production in late December was around 50,000 BOE per day, and we continue to see some impacts from curtailments related to infrastructure constraints as a result of the higher well volumes and the increasing liquid content and just our ongoing development activity. We would anticipate that average production from the Eagle Ford should grow to around 100,000 BOE per day by the end of 2012. In the Permian, in the Bakken, we are running a total of 12 -- 10 rigs and expect to increase this by as much as 50% during 2012. The fourth quarter production at the Permian and Bakken averaged 50,000 BOE per day and 18,000 BOE per day, respectively. 

The New Norm: A Wider Spread Between WTI and Brent?

Wasn't it just a few weeks ago folks were talking about the gap between WTI and Brent narrowing?

Never mind, see link.

Just this week the Brent/WTI spread has widened from just under $12 on Monday to at one point Thursday around $16 per barrel. Besides overseas refiners locking in supplies ahead of the July embargo with Iran, the DJ-UBS Index was recently rebalanced with one-third of the contracts shifted to Brent from WTI. Additionally, relief due to oversupply at Cushing (WTI's hub) is not expected to dissipate until late 2012, at the earliest. All of these factors reflect favorably when comparisons between crude grades are considered.

Peak Oil? What Peak Oil?

Link here: BP forecasts western hemisphere to be pretty much energy sufficient by 2030.

And, Bakken to contribute significantly to 2012 US production growth. 

The dramatic rise in Bakken shale production had a notable impact on the market in 2011 and will continue to comprise a significant portion of domestic energy production growth in 2012, according to Ernst & Young's (E&Y) quarterly oil and gas update.

E&Y anticipates further growth and transaction activity in the Bakken shale oil shale in North Dakota in 2012 as more undeveloped property comes online and begins to produce.

"Long thought of as an oil producing region in terminal decline, the combination of strong prices and improving technology has turned the U.S. into a growth area," E&Y said in a statement. "The application of shale gas technology to shale oil resources is largely to thank for a turnaround in U.S. production."

Other key events and trends in 2011 will continue to shape the oil and gas industry in 2012. The U.S. shale gas boom has elevated U.S. gas production to its highest level in nearly 40 years, despite supply and demand imbalance and continued uncertainty around shale production's impact on air, water and geologic formations.

I remember the naysayers back in 2007 and 2008 saying the Bakken was over-hyped, and one of the reasons I started this blog: to post an alternate reading of events. 

.... and Pinocchio's Nose Just Got a Bit Longer ...

The EPA say it did not condemn fracking in its draft report on the shenanigans in Wyoming.

“We make clear that the causal link to hydraulic fracturing has not been demonstrated conclusively, and that our analysis is limited to the particular geologic conditions in the Pavillion gas field and should be assumed (sic) to apply to fracturing in other geologic settings,” James B. Martin, EPA’s Region 8 administrator in Denver, told the House Science, Space and Technology Committee’s Energy and Environment Subcommittee.

“It should be noted that fracturing in Pavillion is taking place in and below the drinking water aquifer and in close proximity to drinking water wells—production conditions different from those in many other areas of the country,” he added.

Is there a "not" missing in that first quote, or I am misreading that sentence?

But, yes, I suppose one could argue that the EPA did not "condemn" fracking -- but then, the agency doesn't need to condemn something to halt it. Just saying more study is needed can be enough to place a moratorium on fracking. 

And, yes, I did note the way the Oil and Gas Journal spells "fracking" in headlines: "fracing."

Best Schematic of the Week -- The Nation's Pipeline System

Thank goodness "we" aren't building the Keystone XL.

The first thing to check out is all the pipelines running through the Ogallala Aquifer.

CNBC To Air "Series" on The Bakken -- The Williston Basin, North Dakota, USA

Link here.

I don't plan to watch it, so if anyone sees anything new that has not been posted, let me know.

Chesapeake Makes Dickinson Press' Day -- Says It Will Probably Leave the Dickinson Area -- The Williston Basin, North Dakota, USA

Updates

February 5, 2012: Teegue provides his thoughts on this issue at this thread.

Original Post

Link to Bismarck Tribune. 

[Chesapeake] says it's taking a time-out to analyze results from six confidential wells.

The company has the attention of people living in the New England, Regent and Mott areas, who are waiting to see if it will drill another 12 wells that have been permitted, including a new one just last week in Hettinger County.

CHK has leased at least 100,000 mineral acres in Hettinger County alone, Resner estimated. 

[A company spokesman] denies talk that the company is pulling out of its southwestern North Dakota probe.

Link here to Dickinson Press.

I can only assume they are opening the champagne bottles in the Dickinson Press newsrooms:

Chesapeake Energy, a major oil company with work sites south of Dickinson, is uprooting two rigs and could possibly move out of North Dakota, said Kelsey Campbell, coordinator of corporate development and government relations for the company.

“We’re moving our rigs out of the area for the time being and not drilling anymore wells until we have a better idea of where we want to continue our exploration in the future,” Campbell said Thursday."

The company is not sure when the rigs will be moved. Campbell said “there hasn’t been as much activity in the southern area as there has been up north near Williston” and they are looking to collect core samples in other areas.

I was alerted to this in a comment/e-mail (I now forget) about two months ago, but chose not to post until confirmatory reporting. I may have posted one of the notes; I forget. The writer said that Chesapeake had pulled its landmen out of Hettinger County. In fact, that might have been a news story. I've forgotten.

Regardless, not a big deal in the big scheme of things. This will take some pressure off the Dickinson folks for which they seem to want.

But Chesapeake has huge opportunities elsewhere and it can be a nuisance to manage two outlying rigs if not a lot is happening. 

As I have noted since late last fall, the center of activity will most likely be around Watford City in 2012.

Fracking -- Spelling

I was sent an e-mail regarding the spelling of "fracking.'

This is my unedited response, so it's not very pretty, but I have a lot of catching up to do, so I don't have a lot of time to dress things up.

Thank you for taking time to write.

It is, indeed, very possible that the faux environmentalists have co-opted my spelling.

And, it is the norm, as you suggest that in the oil patch, it is spelled the way you have it.

However, as noted, I was using "my" spelling long before the faux environmentalists and if anything, they have co-opted it. I think that I have been most consistent with spelling since the beginning, and it took awhile for mainstream media to agree.

I have talked about the "correct" spelling of fracking on several posts.

This was one of them:

http://milliondollarway.blogspot.com/2010/08/fracking-regulations-in-senate-bill.html

At this post, I noted that Forbes magazine misspelled bureaucrats, but spelled fracking correctly:

http://milliondollarway.blogspot.com/2011/11/forbes-what-me-worry.html

Here's Texas spelling it as "fracking" and the domestic oil industry usually follows the lead of the Texas Railroad Commission:

http://milliondollarway.blogspot.com/2011/07/texas-first-state-to-require-fracking.html

I think the AP has made "fracking" the preferred spelling.

If anyone confuses me for a rogue environmentalist, they have not read much of my site.

I am an environmentalist, but not a faux environmentalist. And I strongly believe CEOs like Harold Hamm are environmentalists also.

Faux environmentalists prefer thousands of trucks on the road instead of a pipeline; environmentalists prefer a pipeline.

Thank you for taking time to write.

By the way, I think Watford City is going to be center of activity in 2012.

Williston Exploration -- The Williston Basin, North Dakota, USA

It's funny how things work out. One of my "30-Second Activities" I do with my 8-y/o granddaughter is "word of the day." It started a few weeks ago when we got up early to see snow falling in Boston. It was pre-dawn, just before she would see the "rose fingers of dawn" which is one of her favorite phrases. The barren trees were black against grey hills covered with about an inch or so of new snow. That was when I introduced her to "surreal" and "surrealistic."

A chemistry experiment introduced her to "siphon."

Two days ago it was "serendipity." (There must be something about "s" words.)

I say all that to finally get to the story. The following is an example of serendipity, I suppose. Not perfect, but close enough.

A couple days, while posting the summary of the January 27, 2012, daily activity report, I saw an entry for Williston Exploration. I was not familiar with the company (I had forgotten that I had posted a permit back in 2009 for American Exploration), so I was going to look it up, and then forgot.

This morning I got a note from a reader that reminded me I needed to look up Williston Exploration.

According to the NDIC (well search function) Williston Exploration has one permit:

• 18216, DRL, Williston Exploration, Vanvig 1, wildcat, section 28-138-102; according to the scout ticket, this well is targeting the Tyler formation in Billings County and will be a vertical well. It was spud 7/27/11. 

Somewhere on this blog I have a commentary about how one well can make the difference for some companies. This would be one of those examples. Wishing the company good luck.

Speaking of "s" words, I will have to see if my granddaughter is familiar with supercalifragilisticexpialidocious.

Which I believe has something to do with expedited fracking of huge California wells. Or not.

Nine (9) New Permits -- The Williston Basin, North Dakota, USA

Daily activity report, Thursday, February 2, 2012 --

Operators: Oasis (5), OXY USA (2), Slawson, EOG

Fields: Cottonwood, Crazy Man Creek, Bonetrail, Squires, Willmen, Boxcar Butte, and Alger

Wow, only one well released from "confidential" list and it was not completed/fracked.

Three Whiting permits cancelled (17188, 17238, and 17236)

Unexciting report.