Tuesday, March 6, 2012

Magic Maps: Currently Off-Line

NOTE: MagicMaps is currently off-line and may/may not be back. In addition to NDIC GIS maps server, North Dakota Rigs Map is also available. 

Mini-Bakken in Montana's Heath Formation?

One of the problems with a "Bakken blog" there is absolutely so much information posted, one cannot easily keep track of everything.

The "Data Links" page (a tab at the top of the blog) has scores of great links. Back in December, I mentioned a great application for finding any well or any rig in the Bakken:
In addition, there is a way to combine this application with Google Earth:
Currently Magic Maps maps the Bakken wells and rigs. The developer says that in the near future he will be adding Montana wells to the application. If everything goes as planned, the Montana database should be on-line around April 1, 2012. 
  • See comments for updates and details.
With indications that oil activity is increasing in Montana, this is great news. There are three areas to be aware of in Montana.

We already know about the North Dakota Bakken on the Montana side of the state line.

In addition, there is the Alberta Bakken in north-central Montana.

Earlier today, a reader mentioned to me that Halliburton has acquired space in/near Lewistown, Montana, and there are reports that drillers will soon be targeting the Heath formation somewhere between Lewistown and Jordan, Montana. The story was covered in the Missoulian back on February 5, 2012.
Talk of a "mini Bakken" beneath this windswept plain has the 350 people of Jordan talking big.

"My daughter thinks we're going to be the next Williston," said Janet Sherer. "I hope not. I'm not ready for that."

Williston, the western North Dakota community at the heart of the Bakken oil boom, has become the town to which everyone points when discussing a potential central Montana oil play. The North Dakota community was a quiet farm town until petroleum engineers cracked the combination to oil trapped in a shale formation thousands of feet below. The once seemingly played-out region now rivals Alaska's oil production. Locals fortunate enough to have coveted mineral rights are awash in royalties. The black gold rush is on.

Central Montanans from Lewistown to Jordan also have a seemingly played-out oil field. "The Heath" as it's called in these parts, is a shale formation 250 miles wide from east to west and 150 miles from north to south.
Completely unrelated to these three oil plays, there is a huge natural gas industry in Montana; I do not know if these wells will be in the Magic Maps database.

Fracking Companies in the Bakken

If anyone wants to run through my list and comments regarding fracking companies in the Bakken, it would be very much appreciated.

Bakken fracking companies here.

When I went through the list, I learned that Complete Production Services was acquired by Superior Energy Services as of February 12, 2012. Whether they are fracking or not in North Dakota, I do not know.

For Investors Only: On Days Like This, Look At What Was "Green"?

At the sidebar at the right, I have a number of stock market tickers that I follow. I scrolled through the lists very, very quickly. It appeared that every last stock ticker listed was a red, down arrow. Pretty discouraging, unless one sees it as a buying opportunity.

This is not a buy recommendation (or a sell recommendation) for anything. It is simply idle chatter one might hear at the Economart. See disclaimer for the blog.

Oh, there was one exception. One stock ticker had a green, up arrow: GEO Resources (GEOI). Here is the link to a GEOI press release today:
Here is an earlier GEOI press release on 2011 data points:
Abraxas coincidentally also released end-of-year production today, stating they increased their proved reserves by 45%. 

Request for Help -- Permit Information -- The Williston Basin, North Dakota, USA

A reader has requested information for which I cannot provide a simple answer.

We all know how to find permitting information at the NDIC website for drilling oil, gas, and salt water disposal wells, but is there a similar site for finding information for permitting pipelines, crude-by-rail terminals, storage sites, natural gas gathering and processing plants like the recently announced ONEOK projects (Garden Green, Stateline I and II), or even the diesel refineries (one projected near Trenton, and one being considered near Dickinson)? 

My hunch is that there are multiple agencies involved. I've been following the activity in the Bakken pretty closely for two years and I think if there was an easy answer to the question, I would have stumbled across it by now. I assume most of the oil- and gas-related facilities must involve the NDIC, but I've never run across

I only find this information through press releases that, in most cases, has/have been sent to me.

Perhaps the best place to start: North Dakota State Public Service Commission.  When you get to the site, look at the sidebar at the left.

The North Dakota Pipeline Authority was established in 2007.

ProgressiveRailroading.com appears to be one of the better sites for keeping on top of CBR permitting, particularly if one is willing to sign in and become a member of its social network. Even if not interested in the original question, you may find this link on railroading in the Bakken as particularly interesting.

For refineries and natural gas processing plants, I would assume contact with investor relations at the various corporations and public utilities would be a start, but there is probably a better answer. The federal government and the EPA are permitting agencies involved in the process, but not the final agencies, but perhaps the most critical.

Of course, the good news is there are only about a dozen counties in North Dakota and a request to each of the county commissions to be sent an agenda should be feasible.

Smaller Companies in the Bakken

Elsewhere someone wanted to know the names of the "smaller" companies operating in the Bakken.

The first reply? KOG.


I doubt anyone has a better list of "all" companies operating in the Bakken than this blog. A big "thank you" to all the readers who have alerted me to some of these smaller companies over the past few years. The more prominent names are listed by name on the side bar at the right; the others are listed in the "Other Producers" page where more than 50 companies are listed.

In addition, I have a page listing the ten top fracking companies (and, in fact, many more than ten now, and this does not include the operators that have their own dedicated teams).

The Economart Banner!!

I was checking out the links on Drudge Report, when I saw a link to Ron Paul "eyeing" North Dakota.

When I clicked on the link I was surprised to see the "Economart banner."

Yup, the link was to a story in the Williston Herald. Wow, Drudge Report seems to have "eyes" everywhere.
Ron Paul hoped a speech to North Dakota Republican caucus goers in Fargo could bring him the first state victory of his presidential campaign Tuesday. Rivals Mitt Romney and Rick Santorum waited to see whether their own North Dakota campaigning would pay dividends.

North Dakota Republicans prepared to visit one of 59 caucus sites Tuesday night to hear presentations about Romney, Paul, Santorum and Newt Gingrich, and to vote for one of them. All but Gingrich have campaigned in North Dakota.

Eleven (11) New Permits -- The Williston Basin, North Dakota, USA

Daily activity report, March 6, 2012 --

Operators: Hess (3), Enerplus (2), Whiting (2), CLR, OXY USA, EOG, Hunt

Fields: Eagle Newst, Sanish, Dimond, Painted Woods, Parshall, Sather Lake, Wildrose

Hess has a permit for a wildcat in Mountrail County.

There was no explanation for yesterday's (March 5, 2012) daily activity report, so apparently this was accurate, the day that ~ 100 wells were released from "tight status," though most information had been previously released.

There was one correction, but that had been corrected on this blog long ago.

In today's daily activity report, six wells were released from "tight hole" status, including:
  • 20949, 1,062, Whiting, Lilly Peterson 13-4TFH, Mountrail, Bakken, 
Of the six wells released from "tight hole" status, only one was not completed/fracked.

Hunt oil canceled four permits in Mountrail County; three in T153N-R89W and one in T154N-R89W.

Another Minnesota Company Sets Up Shop in North Dakota

For background to this story, and my reason for posting it, see this link.

Well, it turns out another Minnesota company is going to set up shop in North Dakota, this time in Devils Lake.
A Minnesota-based manufacturer of "green" food service products plans to open a wheat straw pulping and molding factory in Devils Lake, creating at least 100 jobs in the North Dakota city within two years.

CEO Mack Traynor, of Plymouth, MN-based Ultra Green, says the company hopes to eventually expand to as many as 400 jobs.

Ultra Green sells more than 100 products, from pizza pans to bakeware. 
It would have been interesting to hear the reasons why. My hunch: taxes, regulations, and work force.

GEO Resources Ups 2012 Guidance

Link here. Perhaps more to follow.

For investors, GEOI was up today despite an otherwise down market.

This is not an investment site. See disclaimer.

Canadian Pacific CBR At Van Hook, North Dakota -- The Bakken, North Dakota, USA


Dickinson Press story here. Data points:
Pasadena, Texas-based U.S. Development Group LLC is building the terminal near the ghost town of Van Hook, about a dozen miles south of New Town in southern Mountrail County.

Canadian Pacific has been moving small shipments of crude from the facility since last month.

U.S. Development Group spokeswoman Meg Martin said the facility is slated for completion this summer and will have the capacity to load 30 unit trains per month. The mile-long unit trains typically consist of up to 104 railcars, with each car containing about 650 barrels of crude.

The company said the terminal’s initial capacity is about 35,000 gallons daily, or about half the capacity of a typical unit train.

Canadian Pacific is the only railroad using the facility and most of the shipments will be bound for U.S. Development’s terminal in St. James, La., some 1,800 miles away.

Original Post

Canadian Pacific expands Bakken crude-by-rail origination capability on North Dakota network: The Van Hook, North Dakota, facility, to be developed by U.S. Development Group, will handle crude oil and related products from the Bakken formation and will have initial capacity to handle up to 35,000 barrels per day at eight automated truck-unloading positions.

From Yahoo's InPlay. Perhaps more later.

The Pickens - CNBC interview

For those who missed it, here is today's video at CNBC with Boone Pickens. (Don't be confused by the opening comments by Gingrich; ignore; that was the CNBC teaser.)

He is correct about OPEC controlling the price of oil.

Remember: Saudi Arabia says the cost of their oil (their "floor" for cost) is $87/bbl.

KXNews Has Clip on Fracking

Link here (these links usually break early).

The link was sent to me by a reader. I believe I posted most of this information on an earlier post, but don't recall for sure. I do know that the early post (if posted) did not include video, so this should be new to most readers.

If the link is broken, search/google for Neset at this blog and you will find the story. The tag/label "Neset" at the bottom of the blog should also take you to most posts regarding Kathleen Neset.

New Data Point Regarding $5 Gasoline -- Data Collection, Perception, Movers and Shakers


August 13, 2012: why more states may see gasoline above $4.00/gallon -- CNBC. This article supports my view regarding what 75% of Americans actually pay for gasoline, or think they pay for gasoline.
"I think [the price of gasoline is] biased to the upside for the next three weeks, but it's biased to the downside after that," OPIS oil analyst Tom Kloza said. "I'm not talking about going back to the April highs of $3.93 (nationally). I'm talking about a few sore spots, like California, Chicago, and New York. It's not going to be the apocalyptic move many people fear...first of all, you have a very high price of gasoline which motivates refiners to produce as much as they can."
Like "California, Chicago, and New York."  That's a huge percent of the US population. Regular gasoline is now $4.93 in downtown Los Angeles. In my book, that's $5-gasoline. Does it really matter what the "average" price of gasoline is in North Dakota, South Dakota, or Wyoming when one city in California has a larger population than those three states combined.

Original Post
This is a very interesting article, providing insight to another data point regarding statistics. The current national average for gasoline is quoted by AAA to be $3.76.
A spike to $5 a gallon for the national average by the summer would mean that the rise in gas prices over the next few months would have to exceed the 8 percent climb we've seen over the past four weeks.

Is it possible? Perhaps. Inevitable? Not really.

"There's nothing inevitable about it," says IHS chief economist Nariman Behravesh, speaking on the sidelines of the CERAWeek Energy Conference in Houston. "To a large extent it depends on what happens in the Middle East." 

Prices are already at $4.25 a gallon or higher in some parts of the country. 

The statewide average price for a gallon of regular gasoline in Alaska, California and Hawaii has topped the $4 mark. Gas prices in Connecticut, New York and Washington, DC are almost there too. 

Some stations in the New York City area are charging nearly $5 a gallon for premium gas. Some Florida drivers are reportedly shelling out almost $6 a gallon. 

But at under $3.25 a gallon, gas prices in Colorado, Wyoming and other mid-continent states helping to reign in the national average. 

Plus, gasoline consumption continues to fall at a dramatic pace. Last week, the four-week average for U.S. retail gasoline demand posted a year-over-year decline for the 49th straight week, according to a report from MasterCard SpendingPulse, falling nearly 6 percent compared to the same period in 2011. 

Even former Shell CEO John Hofmeister, who has forecast gas prices will hit $5 by the end of the year, has qualified his assertion, saying there's only a "better than 50 percent chance" of gas prices hitting that mark.
Do you see the important data point that folks aren't talking about? The national "average" is based on all states, of course. The problem with this is that, unless I'm misinterpreting the method of data collection, the "national average" is not weighted based on population. 

The national average is held down by the states with the small populations: North Dakota, South Dakota, Montana, Wyoming, Oklahoma, and Colorado. But if the average was based on what the general population is paying, I suspect the average would be significantly higher than $3.67. 

And if collecting data based on populations/zip codes is too difficult, simply throw out the outliers at both ends, the $6 gasoline in Florida, and the "under $3.25 gasoline in the Midwest. 

For me, it's not what the national average is so much as what 75 percent of Americans are actually paying at the gas pump. 

And actually, it's worse than that, it's not what 75 percent of American are actually paying at the gas pump, it is their perception of what they are paying at the gas pump. For all practical purposes, I think 75% of the US population feels they are paying $4.00/gallon. 

Maybe even worse, from a policy point of view, the movers and shakers are in Washington, DC, and the price of gasoline there is among the highest in the nation.

And for diesel, it is even worse.

TransCanada CEO on CNBC This Morning: Southern Leg This Year


March 8, 2012: Here's a link relating to the story below. Full of data points worthy of a comment, but it's beating a dead horse.

Original Post
TransCanada CEO said in an interview on CNBC about 10:50 a.m. EST, March 6, 2012, that the company will separate the north leg of the Keystone XL from the south leg. This was previously announced about a week ago.

The south leg is from Cushing, Oklahoma, to the gulf coast. Early in this interview, this throw-away line by the interviewer that was not addressed by the CEO nor was the question/comment re-made by the interviewer: this will narrow the delta between WTI and Brent. (I would have been interested in a) if that was likely; and, b) which way the delta would narrow.) Note: crude oil cannot be exported overseas from the Gulf but refined products can be.

The CEO said there were a "couple of permits" still needed for the southern leg. He was not concerned about the permits still needed, and continued to speak as if the permits were a done deal. His chutzpah concerns me, and probably resulted in the company misreading the American political environment when the XL was originally announced.

The CEO said that he expected work to begin early this summer (in about four months).

The interviewer asked whether there was enough oil to supply Enbridge's Seaway (the flow of which will be reversed this summer) and the Keystone 0.5XL South Leg: the CEO said that analysts project another 2 million bbls/day in the Cushing area (from the Permian and the Bakken) within the next few years, if I caught that correctly, more than enough to supply the two pipelines.

Judicial Decision Affecting (Positively) Surface Rights Owners -- The Williston Basin, North Dakota, USA

Link here to NorthDecoder.com, a site with which I am not familiar. A reader alerted me to it.
In a 33 page decision issued yesterday, February 29, 2012, North Dakota federal district court judge Dan Hovland clarified some important North Dakota legal issues that will have significant implications for North Dakota surface rights owners, especially those in the Bakken oil field. Landowners and oil developers will likely have to consider Judge Hovland's decision in negotiating damages payments for allowing drilling rigs on land with severed mineral rights. 

By way of background, there is a federal court case pending in the North Dakota federal district courts that originated out of a disagreement between a Bakken-area surface rights owner and Enron Oil & Gas (EOG), an oil company that does a lot of business in the Bakken. 

Conoco: "10 in 12"

Conoco will sell $10 billion in assets in 2012.

The spin-off, Phillips 66, will become effective April 12, 2012, for "when-issued" trading. Phillips 66 will be the downstream business.

India Forced To Cancel Iranian Oil Shipment On Pressure From EU

Based on recent stories coming out of India, I would not have expected this. This is huge. The ante has just been raised.
An oil tanker from India has been forced to cancel a planned shipment from the Iran in an early sign of the potential impact of the new sanctions on the Middle Eastern nation, according to Reuters.

The U.S. and Europe have both announced new sanctions against Iran for its continued pursuit of a nuclear program many in the West believe could be put toward developing weapons.

The E.U. intends to cut off all imports from Iran in the coming months, but it also announced new restrictions preventing insurers from covering any contracts made with Iran after a January 23 deadline. 
These are the data points I derive from this newest wrinkle:
  • insurance is a bigger issue than the diplomatic drop-dead date
  • the diplomatic date for oil sanctions was July 1, 2012 
  • India now has to find another source of oil to replace Iranian oil
  • Iran now has a tanker full of oil with no place to go (China?)
  • if Iran can find a buyer for this oil, the buyer (China?)should get it at "fire-sale" prices 
  • Iran, already hurting from sanctions and economy in general, cannot afford loss of oil income
  • Iran has two choices: blink or "damn the torpedoes, full speed ahead"
  • North Korea provides a good model for Iran if it chooses the first choice (to blink)
  • I am waiting for that 3:00 a.m. phone call (probably automatically forwarded to SecState Hillary) if Iran chooses the second alternative
  • my hunch is we won't have to wait until July 1, 2012, to see the chain of events play out.
I'm probably reading too much into this story. I see the market is "correcting" as they say based on worries about Greece (will that story every end?). And oil is following the market down, worried more about the global economy than the Mideast. Hmmm. The week is not yet over.

Huge Development Proposal for South Heart -- Dickinson Area -- The Williston Basin, North Dakota, USA

Link to the Dickinson Press here.
If an out-of-state developer gets his way, South Heart will see an RV park, assisted living center, restaurant, convenience store and two hotels built within the next four years.

Tom Davidson, president of Centerra Development, based in Denver, stood up in City Hall during a council meeting Monday and told council members he wants to invest in their town.

“We want to work with the town, and we want to do a quality project here,” Davidson said.

Davidson’s proposal arrives a month after William Matson, a representative of Waterfront Homes LLC, proposed building 25 12-unit apartment complexes in South Heart.
The commissioners sounded accommodating, but the limiting factor appears to be water.

The assisted living center is a very interesting idea.

In addition to water, the RV park has the commissioners concerned. If they are worried about the trailer park becoming "junky," the commission needs to put in strict language, rules, regulations regarding trailer parks and then assess a very, very high bond that would make it unlikely that less-than-serious developers with inadequate financing would come in. The bond would be held in escrow and used to keep the park in compliance if the developer fails to do so, and would be used to close the park if/when it is no longer needed. I don't think the commissioners use bonds enough to cover their risks/concerns.

The Williams County commissioners now require bonds for man-camps, if I recall correctly, although there is concern that the original bonds were not high enough to cover clean-up once the man-camps are brought down. If the operators are reputable, the bonds would be relatively cheap, and the cost passed on to the residents, regardless.

My three cents worth.


Back to 207 Active Drilling Rigs in North Dakota -- Ties Record Set This Past Weekend

After dropping back to 206 or 204 or whatever it was (I forget), I see we are back to 207 active drilling rigs this a.m -- the record that was set this past weekend. The link is dynamic and the number changes on the fly (it is not updated, for example, at the same time very day).

Travelocity's traveling gnome, I believe, is in charge of calling in changes to the NDIC. I certainly can't imagine the roughnecks, as busy as they are, to pull out their cell phones, hit speed dial, and tell the NDIC that steel is spinning. As the weather improves, oh, how enjoyable it would be to tour the Bakken.

Notes to the Granddaughters

This note to my granddaughters is really not needed except as archival material. My older granddaughter, 8.6 years old, is fascinated by the Iditarod dog sled race, Anchorage to Nome, this time of the year, every year. Last year her second grade class followed the race very closely. Each student picked a musher to track.

As I noted to a friend, the race is a bit slower than a NASCAR race, but the scenery infinitely more spectacular. 

This year, she and I are doing our own tracking. Of the 66 mushers, sixteen of them are women (by my count). My older granddaughter selected three women to follow and I chose another three women (all chosen randomly).

The lead mushers are now at the Rohn checkpoint. Two of the mushers that we have selected are currently placed #23 and #26, but those rankings are dynamic as new mushers arrive. There is an official Iditarod website, but somehow we got started here and this is where I go first to check up on the race.

But and this is a huge "but": the first place and second place leaders are both women: Aliy Zirkle and Kelley Griffin. Kelley is 52 years old, originally from Minnesota; and Aliy is 41 years old, and originally from New Hampshire.

My daughter would be thrilled if any woman won. She followed Paul Gebhardt last year and was distraught when he ran into some problem; she told me the problem, but I now forget. If I remember, I will ask her when I pick her up from school later today.