Monday, April 30, 2012

For Investors Only: No Direct Connection to the Bakken -- Schlumberger to Acquire Tesco Drilling For $45 Million

Link here to
Tesco Corporation and Schlumberger announced Monday they have signed a definitive agreement for Schlumberger to acquire Tesco's CASING DRILLING™ division for $45 million in cash.
That's about it.  The biggest thing that caught my eye: I don't know how important Tesco Drilling is for Schlumberger but it cost them about 1 percent of their cash on hand. One percent of the one dollar I have in my billfold is one penny. transcript on merger here

Pace of Development in the Bakken: --> "One New Mall of America Every Month -- Incredible

From the wireline:
Imagine building one new Mall of America every month.  That's the pace of development going on in the booming Bakken region that is quickly transforming western North Dakota into an economic powerhouse.  Minnesota companies are taking notice and sending employees, cash and goods, or buying companies with hopes of getting a slice of the Bakken.  Many Minnesota firms already are there.  Some have big stakes in the oil business, such as Wayzata-based Northern Oil & Gas Inc., which controls about 170,000 mineral acres in the Bakken, and Wayzata-based Black Ridge Oil & Gas Inc., a Minnetonka company that controls 20,000 acres of oil territory. -- Minneapolis/St Paul Business Journal, subscription required.

2560 Acre Spacing -- Kittleson Slough -- The Bakken, North Dakota, USA

This is an interesting bit of trivia and may be an interesting thread to follow over at the Bakken Shale Discussion Group.

The Kittleson Slough field is pretty much spaced at 1280-acre, some 640-acres, but there are eight wells on 2560-acre spacing.
  • 20006, 268, EOG, Lostwood 21-1402H, Kittleson Slough,
  • 20008, 288, EOG, Lostwood 22-1423H, Kittleson Slough,
  • 20009, 407, EOG, Lostwood 6-1102H, Kittleson Slough,
  • 20010, 327, EOG, Lostwood 20-1123H, Kittleson Slough,
  • 19944, conf, EOG, Lostwood 2-1301H, Kittleson Slough,
  • 19945, conf, EOG, Lostwood 19-1324H, Kittleson Slough,
  • 19942, conf, EOG, Lostwood 1-1201H, Kittleson Slough,
  • 19943, conf, EOG, Lostwood 18-1224H, Kittleson Slough,
IPs less than 500 bopd are holding 2,560 acres by production. This is a bit misleading because an owner of any mineral acre in any of the four sections will participate in two four wells, if that makes sense. At least that's how I understand it. I could be wrong. Follow the discussion over at the link.

See first comment to explain the mistake I made (and corrected above). 

MDU's 1Q12 Earnings

Link here.

Rig count reaches 10, up from two (2) a year ago -- nationwide, not just the Bakken.

Oil production grows almost 20 percent.

Earnings: 19 cents/share.


A Letter to the Granddaughters

One of the landmarks that we've enjoyed the past few years in "Boston" was the Curious George store at Harvard Square in Cambridge. But then it closed down about a year ago; we were told that it was due to high rent, yada, yada, yada.

No one was expecting that the store would open again and none of us even noticed any renovation. Then all of a sudden there was a note in the paper that there would be a grand opening (this past Saturday).

Today I had a chance to visit the store. I agree with the comments made in the Boston Globe story today.

I am thrilled that the store is back. I was disappointed that the downstairs area is closed/converted to office space. There is much more room to walk around on the one floor but that's because there is much less merchandise. But most surprising is how small the store really is. One didn't notice the smallness in the previous iteration because the store was so incredibly filled with merchandise, it seemed bigger than it really was.

My hunch is that local parents / families will visit the store once or twice but that will be about it. The store will cater to the tourists who will be in the city just this once anyway.

Regardless of who visits and how often they visit, I am thrilled to see Curious George back at Harvard Square.

Nine (9) New Permits; Twelve (12) Wells Released From "Tight Hole" Status; Eight Producing Wells Completed -- A Big Day In The Bakken (As Far As Reports Go) -- The Williston Basin, North Dakota, USA

Daily activity report, April 30, 2012 --

Operators: Whiting (3), KOG (3), Fidelity (2), CLR

Fields: Banks (McKenzie), Sanish (Mountrail), Medicine Pole Hills (Bowman)

The Banks oil field is in the bull's eye of the Bakken. These are nice permits for KOG.

The Sanish is Whiting's cash cow.

How interesting: just the other day one or both of these permits were reported as expired; today these two permits were renewed:
  • 20764, XTO, Cross Federal 32X-20, McKenzie
  • 20767, XTO, Arlene Federal 44X-11, McKenzie
Twelve (12) wells were released from "tight hole" status (Bakken unless o/w specified):
  • 20428, 1,381, Whiting, Schilke 34-32H,
  • 20548, CLR, Candee 2-9H,
  • 20819, 1,026, Whiting, Uran 12-19TFH,
  • 20861, 599, Hunt Oil, Halliday 2-24-36H,
  • 20957, 299, Hunt Oil, Stocke 1-19-20H 1,
  • 21068, CLR, Irgens Rexall 156-99-19-18-1H,
  • 21181, KOG, Smokey Karen 16-20-17-2H,
  • 21347, Wesco, Gruman 31-18, Stark County, Lodgepole
  • 21403, Hess, BB-Belquist 150-95-1011H-1,
  • 21467, 801, CLR, Dover 1-30AH,
  • 21513, 23 (no typo) KOG, Smokey 3-6-7-14H, 
  • 21550, 378, G3 Operating, Seven 1-4-9H, 
In addition, eight (8) producing wells were completed, all with IPs ranging from a low of 421 to a high of 845. Six of them were Hess wells.

Two wells with name changes which might suggest formation target changes:
  • 22577, BEXP, Gunderson 15-22 4TFH (was Gun....4H)
  • 22578, BEXP, Gunderson 15-22 3H (was Gun...4TFH)

Reminder for Newbies: MagicMaps

I don't know how often satellite images of the Bakken are updated, but often enough to make "MagicMaps" a lot of fun.

I was curious to see how MagicMaps is coming along with new innovations and I decided to check out the Brad Olson pad west of Williston:,-103.81088&daddr=&dirflg=&hl=en

When you go to the link, you can zoom in, and clearly see two pumpers on the pad and two rows of tanks, nine tanks in each row (unless I miscounted, which I am prone to do).

Note to first time users: for some reason when looking for rigs or wells, you need to enter that information twice.

For Investors Only: SeekingAlpha on ATT -- Absolutely Nothing To Do With The Bakken

Link here to the article. 

This is not an investment site; this is not a buy, sell, hold recommendation. I don't hold any shares in ATT but at least one family member does.

Also, this article on itsy-bitsy cell towers at

Meanwhile, somewhat related, this article caught my eye the other day:
Getting online while traveling has never been easier. Getting online for free is still hit-or-miss.

Travelers run into a patchwork of free vs. paid access as they trek from airports to planes to hotels. Speed also varies widely, from fast enough to stream a movie to just enough to send and receive email.

The good news: Free internet at airports is becoming more common. San Francisco, Dallas, and Minneapolis are adding free options after previously charging around $8 for access. Phoenix's international airport has long offered complimentary access.

Still, plenty of airports require travelers to whip out a credit card to get online, including the big ones in New York and Los Angeles. The agency that runs New York's three airports says it has no plans to offer free Wi-Fi. The exception is JFK's terminal 5, where JetBlue offers it. 
Considering one is "held captive" at airports, I find it amazing any airport offers free wi-fi. I was always impressed that SAT (San Antonio) was one of the first to offer free wi-fi; that was no doubt due to the fact that ATT was headquartered in San Antonio at that time (has since moved). 

Interestingly enough, and counterintuitive, ATT is asking its users to use free wi-fi when possible to take pressure off their system.

I don't have a smart phone, but I often pull out my iPad when traveling just to see where I can get free wi-fi. It's become somewhat of a parlour game for me, a treasure hunt as it were. Dunkin' Donuts followed Starbucks here in the Boston area with free wi-fi. Starbucks has more than ample outlets; DD none to very few. McDonald's almost always has free wi-fi, but again outlets are a challenge. The most exciting are public areas with free wi-fi, provided by the city or perhaps the carrier. Merchants benefit. My wife and I use the net all the time to find a particular restaurant or museum. My daughter and son-in-law use the net even more than we do for daily navigation.

But I digress.

At Least Some Of Us Know Who Our Friends Are

When did you first realize you were Canadian?

Kudos to Don for alerting me to the link and noting that the US imports 900,000 bbls of oil from Venezuela on a daily basis and Venezuela is not even mentioned in this article (although I might have missed it).
U.S. imports of what environmentalists are calling "dirty oil" are set to triple over the next decade, raising concerns over the environmental impact of extracting it and whether pipelines can safely transport this Canadian oil.

The United States currently imports over half a million barrels a day of bitumen from Canada's oil sands region, according to the Sierra Club. That number, Sierra Club says is set to grow to over 1.5 million barrels by 2020. That represents nearly 10% of the country's current consumption.

The U.S. Energy Information Administration's overall Canadian oil production numbers are in-line with the Sierra Club's projected pace.
So, from Canada's oil sands region: 500,000 bbls/day; Venezuela, 900,000 bopd.  The YouTube video "If I Wanted America To Fail" has gone viral. Tex Ritter had it right -- see video at bottom of the blog.

My world view: a) photographs of the close friendship between US president and Venezuelan president; b) the US president killing the Keystone XL 1.0; and, c) the president banning all Canadian oil if he could. That's my world view. Opinion. 

I don't think the article mentions that US reliance on "heavy oil" could be minimized if federal government encouraged development of US federal natural resources. But that would be an "inconvenient truth." Again, my world view. Just an opinion.

By the way, this may be one of the best interviews ever. If you don't want to watch the entire interview (you would be missing a lot), at least skip ahead to the 4:45 mark:

Dame Edna and k d lang

For Investors Only -- Nothing To Do With The Bakken -- ETP Will Buy Sunoco

For pipeline, for liquids.

Link here.
Pipeline operator Energy Transfer Partners LP said it will buy Sunoco Inc  for $5.3 billion in stock and cash to get into the more lucrative crude oil transportation business as natural gas prices stay weak.

Oil and gas production from shale formations in the United States has surged over the past two years, creating a scramble to build infrastructure to get supplies to refining hubs.

Sunoco shareholders will receive $25 in cash and 0.5245 Energy Transfer units, or $50.13, for every share they own.

The offer represents a 22.5 percent premium over Friday's close.
M&A activities provide a nice check on the real value of some of these energy companies. Last week a similar announcement affecting a Bakken operator indicated a 25% premium (+/-, I forget the company, and I forget the exact premium). I just remember the premium.

Phil Jackson Not Mentioned

On page 8B of today's Wall Street Journal (no link; hard copy), Jared Diamond writes that Carmelo Anthony of the New York Knicks currently holds the individual record for worst playoff record with a 0.320 win record.

On the flip side, who holds the record for most post-season wins? Michael Jordan.

And then this little nugget: "The rest of the top ten? Nine of Michael Jordan's Chicago Bulls teammates."


Not mentioned in the short article: coach of the Chicago Bulls during their remarkable championship run -- Phil Jackson. Somewhere on the blog I have a photo of his childhood home in Williston, one block from where I grew up.

For newbies: Phil Jackson graduated from Williston High School, played for the New York Knicks, wrote a couple of great books, probably enjoys Leonard Cohen, and recently retired as coach of the LA Lakers.

Trivia: I wonder if Jared Diamond is the same Jared Diamond known for the best-selling books, The Third Chimpanzee (one of my favorites); Guns, Germs, and Steel (did not enjoy as much); and, Collapse (have not read).  If so, watch for a book on the evolution of sports in the not-too-distant future.

For Investors Only: Enbridge Has a Strong Dividend, But Shares "Aren't Cheap" -- SeekingAlpha

Link here.
Enbridge's dividend yield is above average, offering a 2.9% annual payout at recent price levels - for inclusion in our Dividend Growth portfolio we prefer yields above 3%, but if we like the future growth potential of a company's payout, we may make exceptions.
This is not an investment site; this is not a recommendation to buy, hold, or sell. It is simply a story about the Bakken that caught my attention. Enbridge is one of my favorite companies on many levels. I have driven by their operations in the Williston area on numerous occasions and have always enjoyed watching what they were doing.

Interesting Data Point Regarding Mexican Reserves

It is being reported that Mexico is considering private investment in oil exploration and development.

This is the data point I found interesting:
The U.S. Energy Information Administration's International Energy Outlook 2011 reports that Mexico has the third largest oil reserves in the Latin America, behind Venezuela and Brazil. With 10.4 billion barrels the country boasts roughly half the reserves of the U.S. 
Some estimate the Bakken Pool has 24 billion barrels. 

Fracking Unlikely To Cause Unintended Cracking Past 2,000 Feet

The study says that unintended cracking from fracking unlikely to extend farther than 600 meters, but that's close enough to 2,000 feet and put things into perspective in the Bakken where most distances are measured in feet and miles.

Link here.
According to research published in the journal Marine and Petroleum Geology, fracking has well below a 1 percent chance of causing unintended cracks in the ground beyond 600 meters. The research was led by the U.K.'s Durham University and used data from hundreds of both natural fractures and fracking operations in Europe and the U.S. 

If I read the story correctly, the researchers estimate the risk at 1 percent at 350 meters.

I can already see the environmental reply: is any risk acceptable when it comes to our water supply?

On another note, this study also provides some insight into how effective fracking is for the purpose for which it was intended. I've always opined that the distance is a 500-foot radius.

Spokesman-Review: Series of Articles on the Bakken

Link here.
When the oil boom hit North Dakota, Randy Ramsey traded his professional attire for coveralls and a blue-collar job.

He hasn’t regretted the switch.

“I was a white-collar guy. I did sales. I never pictured myself going to work in the oil fields,” said Randy, 36, a former Spokane resident. “I still have my white shirts and ties in my closet, but I never wear them.” Both he and his wife, Dolly, expect to earn six-figure salaries working in the oil industry this year. They’re saving their money, with the goal of retiring in 10 years.
Link sent to me by a reader. Thank you.

RBN Energy: Quick Look at Energy on West Coast

Cheap prices for consumers; little volatility.

California: "nuclear-free" for the moment.

Wind at 90% capacity in the Pacific Northwest. Power prices for consumers at night: $0.00.

Go to the story at the link. Registration might be required.