Director's Cut -- February 10, 2012

Link here.

Production hits all-time high in North Dakota (again):

• Dec, 2011, oil: 534,880 bopd (NEW all-time high) -- according to a Minot Press story, this ties us with California; if true, North Dakota is now tied for #3 among states for oil production, behind Alaska and Texas
• Nov, 2011, oil: 510,610

• Dec, 2011, producing wells: 6,471 (NEW all-time high)
• Nov, 2011, producing wells: 6,332

Permitting

• Dec, 2011: 180 (all time high: 245, 2 Nov 10)
• Nov, 2011: 169

Pricing

• Dec, 2011: sweet crude, $88.75
• Nov, 2011: sweet crude, $88.54

Director's comments:

"The warm dry weather through the fourth quarter of 2011 increased hydraulic fracturing activity and rapidly increased production. As a result, even with rig count up very slightly, daily production increased another 5%.

"Due to the delayed/non-approval of Keystone XL, the bottleneck at Cushing, OK, is now resulting in a North Dakota Sweet posted price to NYMEX-WTI discount of -18% and a NYMEX-WTI to Brent discount of -19%. This is driving an increasing amount of North Dakota crude oil onto rail transportation where it can reach destinations that pay Brent price."

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." [Unchanged from last report.]

With regard to flaring:

The first of the new very large gas processing systems ame on line January 20, 2012, adding 14% to the processing capacity in the state. This should be reflected in a declining percentage of gas being flared in the coming months.

Here We Go! North Dakota Tied For Third Spot -- Probably in Third Place Alone -- The Williston Basin, North Dakota

If accurate, the Minot Press will get bragging rights for breaking the story first, at least as far as I know. This link was sent to me by Don. (I just checked the Williston, Bismarck, and Dickinson papers and did not see this published yet; thus, the Minot Press has bragging rights.)

It appears that, according to the most recent data available, North Dakota has tied California in oil production (tied for third) and has probably moved ahead if trajectories remained the same. If so, North Dakota would be in 3rd place by itself, behind Alaska and Texas.

North Dakota has tied with California in oil production, leaving it on the verge of leapfrogging "The Golden State."

North Dakota then will become No. 3 in oil production, following only Alaska and the No. 1 state, Texas.
In December 2011, North Dakota produced an all-time high of 535,000 barrels of oil a day, according to preliminary figures, said Alison Ritter, public information officer with the North Dakota Department of Mineral Resources in Bismarck.

North Dakota's oil production tie with California is based on California's October statistic, the most recent one, of about 535,000 barrels of oil produced a day.

North Dakota regulators predicted late last year the state could surpass California in early 2012. They figure North Dakota possibly will surpass Alaska later this year.

I assume the only that could change the trajectories would be the glut of oil at Clearbrook, MN, and Cushing, OK, forcing operators to slow production.

Increased Activity North of Minot? -- The Williston Basin, North Dakota, USA

In case some folks have not seen this comment: a reader writes that for the first time in 26 years, his family has been offered a lease from Ballard Petroleum west of Glenburn oil field. A lot of folks have written me in the past year suggesting they are seeing more activity in Minot than can be explained by the Bakken which is too far west.

Ballard Petroleum does have three permits, including:

• 22205, conf, Ballard Petroleum, LLC, Haskins 11-27, wildcat, 27-157-81
• 22051, conf, Ballard Petroleum, LLC, Backes 23-4, wildcat, 4-158-82

Ballard has one active well:

• 15031, 102, Ballard Petroleum, LLC, Stiletto 21-16, Little Knife, s9/2000 and 1/2004; Duperow; cum 170K 12/11

For a vertical well drilled in 2000, and 2004, a cumulative of 170K is not bad/ 320-acre spacing.

For me, this is exciting.

Good luck to those north of Minot.

For a comment regarding the "Duperow," one may be interested in looking at this post.

Week 6: February 5 -- February 11, 2012

Reminder: new book on the Bakken now available

A Re-Look at the Original Leigh Price Paper

$14,000/acre bonus: most recent North Dakota state land lease sales results

32 long laterals in four adjacent spacing units -- Abraxas

Three Forks may be 200 feet thick in the core Bakken

KOG acquires sixth rig; will get seventh; to eliminate lease expiring issues

Takeaway capacity: the Williston Basin; price collapse

Pronghorn Sands part of the Bakken; Whiting presentation, February 7, 2012

Canadian producer takes oil project off-line: too much oil in the midwest

XOM-Weatherford develop/test sand-control technology

House of cards continues to fall: the Dutch pull the plug on off-shore wind; the Spanish suspend all renewable projcts

Waterflooding schematic for Surge Energy

CHK not honoring leases in North Dakota

Gasoline could hit $5.00/gallon before end of year

What the four TFS benches might mean

Gasoline demand destruction -- incredible. Who woulda thought it?

Things are not as bad in the Bakken as being reported

Canada's Challenge

Link here to the Edmonton Journal -- mentions the Bakken; focuses on Canada's challenge. Some interesting tidbits in the article.

The link comes via The Oil Drum which folks should explore periodically.

Filloon on KOG Challenges: Production Misses and Price Collapse -- The Bakken, North Dakota, USA

Link here to SeekingAlpha.com.

Filloon had another post on KOG the day before, also.