Credo, Kansas, and Nebraska: Part of the North Dakota to Texas Renaissance Zone

Link here.

Credo Petroleum Corporation, an independent oil and gas exploration and production company with significant assets in North Dakota, Kansas, Nebraska, Texas and Oklahoma, updated its Kansas and Nebraska drilling project.

Michael D. Davis, Chief Executive Officer, stated, "We have recently discovered six new oil fields in Kansas and Nebraska which we expect to have a meaningful positive impact on Credo's reserves, production and cash flow.

"Nebraska is a relatively new oil play for Credo where there is more opportunity to apply our regional concepts to higher potential wildcat drilling compared to the Central Kansas Uplift. For the last three years, we have been working to prove our technical concepts prior to ramping-up drilling to a level similar to our Kansas project.

Obama, Hispanics, and the Keystone Decision

Link here.

President Barack Obama's decision to delay approval of the Keystone Pipeline project is hurting job creation opportunities in the United States, particularly among Hispanics.

"We're disappointed that the current administration doesn't see how this project doesn't add up," said Hispanic Leadership Fund President Mario Lopez during a conference call with reporters, noting that the project appears to be delayed for political reasons. [Well, duh.]

"Four years ago, Obama promised to push unemployment lower and lead us out of the depression," Lopez said. "Approval of the Keystone pipeline would demonstrate to all Americans and to Latinos across the country that he cares about jobs and domestic energy."

WPX Has A New Permit in a Van Hook Section With Four Wells Already -- The Bakken, North Dakota, USA

Locator: 30030WPX.

Section 2-150-92, Van Hook field; currently:

• 18737, 1,034, WPX, Mason 2-11, Van Hook, t2/11; cum 288K 10/16;
• 22129, 196, WPX, Mason 2-11HA,Van Hook, t7/12; cum 146K 10/16;
• 22130, TA-->WPX, Mason 2-11HW, Van Hook, "well bore issues" noted May 3, 2012; temporarily abandoned that date with plans for possible SWD;
• 22131, 502, WPX, Mason 2-11HX, Van Hook, t10/12; cum 222K 10/16;

The new permit issued today:

• 22908, 235, WPX, Mason 2-11HWR, t8/12; cum 293K 10/16;

In less than one year, the first Mason 2-11 well reached 100,000+ bbls. 

Three of the wells (22129, 22130, 22131) are on the same pad. All are in line, running west to east about 255 feet from the north line of the section.

A long lateral just to the north of these five wells:

• 19047, 1,770, Slawson, Revolver 1-35H, t11/10; cum 256K 10/16; 

I remember when I first started blogging about the Bakken, folks were happy with wells with an IP of 350, very excited with wells with IPs of 700, and headlines for wells with IPs of 1,000. I personally have gotten so used to seeing IPs greater than 1,000 that an IP of 1,770 hardly gets my attention, but these are still huge numbers. 

It's going to be interesting to see if IPs are affected much by multiple wells in the same section, especially when we start seeing six to eight wells in a 640-acre spacing unit.

The BEXP "Dry" Well -- The Wanner Well in Mercer County -- The Williston Basin, North Dakota, USA

BEXP reported a "DRY" well yesterday:

• 17623, DRY, BEXP, Wanner 25 1-H, wildcat, Mercer County

Completion Data:

• Pool: Bakken Status: PNC  Date: 10/12/2011
• Pool: Deadwood: Status: TA Date: 2/8/2012

From the geology report, introduction:

The Brigham Oil and Gas, Wanner 25-1 was drilled as a vertical exploration well with the objective to test the production potential of formations drilled. Well is located in SE SE Section 25 Township 143N Range 90W in Mercer County, North Dakota. The well spudded on November 6th, 2011, and reached Total Dept of 12,350" MD on December 1st, 2011, at 4:30 p.m.

Then six pages describing the geology of each formation on the way to total depth.

Conclusion:

The Wanner 25-1 is vertical well meant to test the possibilities of production in the Mercer County, North Dakota. The drilling for the well experienced no difficulties. Only one trip was made for new bit. Core was cut from the lower Lodgepole to the upper zones. Drilling ceased on December 1st, 2011, at 4:30 p.m with TD reached 21,350 MD, 12,348.83' TVD. s/wellsite geologist

On a sundry form, the following formations and markers were noted (only some selected):

•  Charles: 7038
• Mission Canyon: 7533
• Lodgepole: 8034
• Bakken: 8817
• Three Forks: 8861
• Nisku: 9075
• Duperow: 9167
• Red River: 11044
• Deadwood: 11950

I was going to add one line regarding the findings at the important formations but I didn't need the grief from folks writing in asking me where I got my geology degree. So, no opinion on the results. Smile. The report is now available at the NDIC website.

Wow! BEXP Continues to Report Wells With High IPs

Link here.

• 21033, 3,473, Statoil/BEXP, Lloyd 34-3 2H, Sandrocks; t3/12; cum 255K 11/17; inactive as of 12/13; back on-line 8/14;
• 21034, 3,499, Statoil/BEXP, Bugs 27-22 1H, Poe; t3/12; cum 269K 11/17; IA as of 12/13; back on-line 8/14;
• 21105, 1,966, Statoil/BEXP, L & E 9-4 1H, Ragged Butte; t4/12; cum 198K 11/17;
• 21106, 2,289, Statoil/BEXP, Helling 16-21 1H; Ragged Butte; t2/12; cum 209K 11/17;
• 21240, 1,156, Statoil/BEXP, Harvey 15-22 1H, Squires; t3/12; cum 121K 11/17;
• 21509, 3,571, Statoil/BEXP, Forest 26-35 1H, Camp; t3/12; cum 252K 11/17;

OXY USA Manages to Report Another Well With a 2-Digit IP

Updates

January 21, 2018: when OXY departed the Bakken, Lime Rock Resources acquired this well. Note production jump in 4/17 but still not a great well.

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2017	28	1472	1163	5061	460	0	372
BAKKEN	10-2017	31	464	694	3716	152	0	124
BAKKEN	9-2017	30	699	459	4726	461	0	186
BAKKEN	8-2017	31	866	900	4258	519	0	229
BAKKEN	7-2017	31	916	1127	4431	570	0	278
BAKKEN	6-2017	30	1751	1611	4940	803	0	465
BAKKEN	5-2017	31	2108	2090	5436	1004	0	637
BAKKEN	4-2017	30	2048	2168	6571	873	0	517
BAKKEN	3-2017	31	443	505	3803	386	0	125
BAKKEN	2-2017	28	529	257	4110	167	0	135
BAKKEN	1-2017	31	621	764	4609	480	0	118
BAKKEN	12-2016	28	523	487	4296	515	0	143
BAKKEN	11-2016	30	633	461	4604	434	0	164
BAKKEN	10-2016	31	749	921	4902	478	0	194

Original Post 

 

Link here. 

May 8, 2012: OXY USA manages to report another lousy well, based on IP:

• 21089, 75 (no typo), Lime Rock / OXY, Staael 160-90-33-D-1H, Dimond; t11/11; cum 99K 10/16; Lime Rock acquired early 2016; pump failure/replaced with larger pump, October 14, 2015; pump failure/replaced with larger pump, October 25, 2013; pump failure/replaced with smaller pump, August 28, 2012; cum 161K 1/22;
  

For newbies, when you get to the link above, there will be some other links to posts discussing OXY's history of low IPs.

I'm starting to see a bit more discussion on the economics of the Bakken wells in general. Generally, IPs come in at 300 bbls to 3,000 bbls. It is rare to see IPs less than 100; it is even rarer to see a "DRY" Bakken well. But OXY USA keeps drilling these Dimond field wells, and keeps reporting IPs of under 100. I don't get it. I think I blogged about this before and some folks wrote in defending the results. I didn't get it then, and I don't get it now.

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	10-2016	31	749	921	4902	478	0	194
BAKKEN	9-2016	30	657	670	4830	446	0	175
BAKKEN	8-2016	31	679	659	5172	1389	0	1109
BAKKEN	7-2016	31	595	455	4574	501	0	226
BAKKEN	6-2016	30	598	664	4695	504	0	231
BAKKEN	5-2016	31	729	628	5040	1751	0	1483
BAKKEN	4-2016	30	773	881	4823	650	0	355
BAKKEN	3-2016	31	957	989	5551	806	0	488
BAKKEN	2-2016	29	1050	921	5175	1109	0	620
BAKKEN	1-2016	31	1602	1793	6000	1349	0	1047
BAKKEN	12-2015	31	1993	1932	6134	1688	0	1369
BAKKEN	11-2015	30	1805	1842	7363	1530	0	1283
NEW PUMP	10-2015	28	618	609	5662	523	0	307
BAKKEN	9-2015	30	1561	1546	6170	1322	0	1078
BAKKEN	8-2015	31	1748	1588	7813	1482	0	1228
BAKKEN	7-2015	31	2288	2396	5095	1938	0	1681
BAKKEN	6-2015	30	2515	2603	6477	2130	0	1875
BAKKEN	5-2015	31	972	953	5827	824	0	580
BAKKEN	4-2015	30	977	886	5182	828	0	594
BAKKEN	3-2015	31	658	657	4782	576	0	346
BAKKEN	2-2015	28	909	998	4830	754	0	563
BAKKEN	1-2015	31	1679	1634	6893	1445	0	1201

Ten (10) New Permits -- BEXP Reports A Number of Nice Wells -- The Williston Basin, North Dakota, USA

Daily activity report, May 8, 2012 --

• Operators: BEXP (4), CLR (4), WPX, BR
• Fields: Banks (McKenzie), Murphy Creek (Dunn), Glass Bluff (McKenzie), Dollar Joe (Williams), Van Hook (Mountrail), and St Demetrius (Billings)

BEXP has permits for four wells on one pad, Banks oil field, right in the bull's eye of the Bakken. There are currently seven (7) rigs in this field, or right on the boundaries of the field.

Four (4) wells were released from "tight hole" status:

• 19778, 414, EOG, Mont 10-3601H, 
• 21089, 75 (no typo), OXY, Staael 160-90-33-D-1H,
• 21234, 507, Slawson, Barnstormer Federal 1-3-10H,
• 21603, 1,129, MRO, Paulson 34-9H, 

Fifteen producing wells completed, including:

• 21033, 3,473, BEXP, Lloyd 34-3 2H, Sandrocks,
• 21034, 3,499, BEXP, Bugs 27-22 1H, Poe,
• 21105, 1,966, BEXP, L & E 9-4 1H, Ragged Butte,
• 21106, 2,289, BEXP, Helling 16-21 1H, Ragged Butte,
• 21240, 1,156, BEXP, Harvey 15-22 1H, Squires,
• 21288, 1,903, Hess, EN-Thompson Trust-154-94-1930H-1,
• 21509, 3,571, BEXP, Forest 26-35 1H, Camp,

These are nice IPs for BEXP. The consistency is most notable. An IP is only a single data point for any given well, but ....

The IP for the EN-Thompson Trust well is a very nice IP for Hess. A companion well on the same pad:

• 21287, DRL, Hess, EN-Thronson-154-94-2029H-1.

These wells (the Thompson Trust/Thronson) are in the bull's eye of the Bakken. 

In addition, nine wells reported as plugged or producing.

The following well was transferred from Helis to WPX:

• 21217, conf, WPX, Linseth 13-13/12H, 

EOG 1Q12 Earnings and Operations Update

$1.20 vs $0.52 1Q11 -- link here.

From the press release:

In the Williston Basin, EOG posted positive results from its first quarter operations that focused on three distinct areas. In EOG's North Dakota Core Parshall Field, the Wayzetta 156-3329H, 124-3334H and 157-2835H were drilled on 320-acre infill spacing. Completed to sales at rates of 1,393, 992 and 1,083 Bopd with 600, 300 and 300 Mcfd of rich natural gas, respectively, these Mountrail County wells, in which EOG has 51 percent to 61 percent working interest, further confirm the economics and success of infill drilling.

Additionally, production from previously drilled 640-acre offset wells in EOG's Core Parshall Field responded positively to the new downspaced completions.

In McKenzie County, 25 miles southwest of its Core Parshall Field, EOG identified potential in both the Three Forks and Bakken in the Antelope Extension area where it brought a number of wells to sales. Four Three Forks wells, the Clarks Creek 11-0706H, 13-1806H, 14-1819H and 16-0706H, were completed at initial per well rates ranging from 926 to 3,415 Bopd with 1.2 to 3.0 MMcfd of rich natural gas. In this same area, EOG completed a Bakken well, the Clarks Creek 101-1819H, at 2,320 Bopd with 1.4 MMcfd of rich natural gas. EOG has 100 percent working interest in these five McKenzie County wells. On the Montana/North Dakota border, EOG drilled and completed a series of wells in the Stateline and Diamond Point areas that include the Stateline 03-1522H and the Diamond 02-3625H, both in Roosevelt County, Montana, with production rates exceeding expectations. The wells, in which EOG has 80 percent and 93 percent working interest, respectively, were turned to sales at 994 and 1,097 Bopd and began flowing with 400 and 700 Mcfd of rich natural gas, respectively.

On the North Dakota side of the border in Williams County, the Hardscrabble 08-0409H, in which EOG has 39 percent working interest, began production at a rate of 1,693 Bopd with 600 Mcfd of rich natural gas. Recent success in the Montana/North Dakota border areas adds approximately 200 new locations to EOG's extensive Williston Basin crude oil drilling inventory. EOG is testing several different methods to increase the recovery of oil in place on its Williston Basin acreage.

Following encouraging infill drilling results from its Core Parshall Field, EOG plans to test downspaced drilling on certain parts of its Bakken Lite acreage outside the Core area later this year. Additionally, in mid-April EOG commenced two pilot Bakken waterflood projects in its Core Parshall Field to test secondary crude oil recovery methods as another viable way to improve oil recovery.

You may find the EOG discussion of the Bakken interesting to compare with the discussion elsewhere. 

I've noted this, also, in the last few months: operators are identifying new drilling locations with some of their new wells. Note: in the discussion above, EOG says they've identified an additional 200 new locations. This is the follow-on: if one drills two wells north (one in the middle Bakken and one in the Three Forks) and drills two wells south (one in the middle Bakken and one in the Three Forks), is EOG counting that as one drilling location, or four drilling location. The same goes for Hess when it drills six wells from one pad: is that one drilling location or six? I'm not sure if all the analysts know the answer. It makes a huge difference, obviously. From my perspective, 200 drilling locations could result in 800 horizontal wells. Or more. See first comment/answer. One location is one well.

Tough Week for Energy, But ...

....just before CNBC started mentioning it, I noticed that natural gas had gone up 9 cents/Mcf. Just after I noticed that, one of the CNBC talking heads said there was a mini-rally in natural gas today.

By the way, many of the Bakken companies reported losses in derivatives, no doubt due to the high price of spot oil during the past several weeks. It's possible that the price of oil coming down below the ceiling that these companies have set, and the "mini-rally" in natural gas just might be a huge positive for Bakken companies.

Just idle chatter.

Natural gas is up 10 cents on the day (at the moment).

Maximum Production Rate of the Bakken: Oil and Gas Journal; The "Red Queen" Effect

Link here.

A reader sent me this link from the April 2, 2012, edition of the Oil and Gas Journal which explores the maximum production rate of the Bakken.

I don't recall seeing this article, and if I did, I don't recall posting/linking it.

It's a very good article. These are the kinds of links that "break early and break often" so you may want to look at it now before the link breaks.

This is an inconvenient truth, something some readers have reminded me:

The significance of well saturation is the effect on average well production rates. When well saturation occurs, new well drainage areas and new well production rates decrease. This in turn creates an increase in the number of additional wells required to maintain a given production level. At some point, the treadmill created by monthly well production declines is moving too fast for the economics of new well development to keep pace and field production begins to decline.

The linked article makes this interesting observation:

For continuous shale oil fields such as the North Dakota Bakken, the decline rate may not be as steep as those experienced in conventional reservoir oil fields. Upon well saturation of the development area with four wells/sq mile, E&P companies will continue to perform well refracs and drill infill wells as long as well economics are positive.

And concludes with this:

In conclusion, the findings suggest that the North Dakota Bakken has the potential to realize an oil production rate of 1.5 million b/d even if the average well production rate is reduced by 25% and the well development area is reduced by 10%. A 2 million b/d oil production rate may be achievable if the well development area is 12,000 sq miles and the average EUR of 500,000 bbl/well holds for the total well development area.

The North Dakota Bakken will very likely surpass Prudhoe Bay as the nation's largest oil field. This is a major development for US oil production since as recently as 2008 the US Geological Survey placed the Bakken's technically recoverable oil resource base at about 4 billion bbl.

So, we'll see. 

Note: search the blog for "Red Queen." Here is a particularly relevant "Red Queen" post. 

Leadership in the Bakken Needed -- Say Anything Blog

Nice interview with Harold Hamm and commentary by "Say Anything Blog."

I can't add anything that would improve the commentary at the link.

Wow, Even For Well-Seasoned Bakken Observers, This Is Exciting

Updates

August 8, 2012: 

• 20079, 2,760, Whiting, Obrigewitch 21-16TFH, Bell, t2/12; cum 117K 6/12;

Original Post

We are starting to see some clarity with regard to the TFS in southwest North Dakota. From this post earlier:

• 20828, DRL, Whiting, Frank 34-7TFH; Bell; 27K in January; 33K in February; 30K in March, 2012; no IP reported yet;
• 20893, 2,805, Whiting, Mastel 41-18TFH, Bell,  tested11/11; cum 117K 3/12; 30 stages; 2 million lbs;
• 21018, conf, Whiting, Obrigewitch 11-17TFH, Bell; 24K in December, 2011; 21K in January, 2011; 18K in February; 16K in March, 2012; no IP reported yet;
• 21527, DRL, Whiting, Buresh 34-10TFH, Dutch Henry Butte; 21K in February, 2012; 11K in March; no IP reported yet;
• 19623, 1,075, Whiting, Obrigewitch 21-17TFH; 138K, Bell, 7 stages, 7,000 lbs (no typo); s11/10; t4/11; cum 162K 3/12; F

These are huge wells. Then add this one to the mix:

• 19444, 3,106, Whiting, Hecker 21-18TFH, Stark County; 2.4 million lbs, all sand; t3/11; cum 210K 3/12; 

Where are these wells? Go the NDIC GIS map server and search for any of these wells.

The Hecker well (#19444) and the Obrigewitch well (#19623) are book ends for seven Whiting wells all on a line running west to east targeting the Three Forks twenty miles northwest of Dickinson.

Hecker (#19444) is the farthest west, and has produced more than 200,000 bbls in the first year.

Then we have four wells (#20828, 20893, 22167, and 21018) all on confidential list.

Then #22372, a Whiting Frank well, is on DRL status.

And then the bookend on the east: the Obrigewitch well (#19623) which has produced more than 160,000 bbls in less than a year. According to the NDIC it is still flowing (no pump) but it has been suggested by others that operators often delay getting this information to the NDIC (in other words, there may be a pump on this well), though the production history suggests there has been no down-time for a pump to be installed, unless possibly during the six days in December when the well was taken off-line.

East of these wells, on the same line:

• 20795, rig on site, Whiting, 3 J Trust 34-8PH, Bell field,
• 22864, loc, Whiting, Obrigewitch 41-17PH, Bell field,
• 22865, loc, Whiting, 3 J Trust 44-8PH, Bell field,
• 20079, 2,760, Whiting, Obrigewitch 21-16TFH, Bell, t2/12; cum 117K 6/12; 
• 22285, rig on site, Whiting, Buckman 44-9PH, Bell field,
• 22286, loc, Whiting, Buckman 34-9PH, Bell field,
• 22287, loc, Whiting, Obrigewitch 41-16PH, Bell field, 

Farther east, one section over:

• 19891, DRL, Whiting, Cymbaluk 21-15PH, Bell field,
• 22283, DRL, Whiting, Cymbaluk 11-15PH, Bell field, 

I have to quit here, but this line of wells just keeps going to the east. These wells are just a few miles north of Belfield.

It certainly looks like Watford City and Dickinson are sitting in the sweet spot of two different formations (the Bakken formations and the Three Forks formations).

Biggest Mideast Story of the Day -- Nothing To Do With The Bakken

Updates

May 10, 2012: Another report that US President Obama will give in to Iran, allowing some nuclear enrichment.

Recent reports indicated that President Barack Obama is prepared to make a major concession to Iran on uranium enrichment.

According to the reports, the Obama administration now is willing to allow 5 percent enrichment if Iran were to take other major steps to curb its ability to develop a nuclear bomb.”

In that article, the writer confirms that the general consensus is that with the coalition, Netanyahu could attack at any moment. 

Original Post

Link here.

Israeli Prime Minister Benjamin Netanyahu has called off early elections in exchange for the coalition he was looking for.

Mr Netanyahu said their new coalition wanted a "responsible" peace process with the Palestinians and "serious" talks about Iran's nuclear programme.

The move came as parliament debated its dissolution before an election Mr Netanyahu had planned for September.

Kadima is currently the biggest party in the Knesset, but recent polls have suggested the number of seats it holds could be halved.

The coalition will have a majority of 94 - one of the biggest in Israeli history.

Several things to note:

a) anti-incumbent mood even in Israel; see recent Greek and French elections for anti-incumbent mood
b) not a small majority -- but one of the biggest in Israeli history
c) this will allow "serious" talks about Iran's nuclear program; as you all know, the US president has telegraphed his decision to allow Iran to continue with it's nuclear program "with conditions"; something tells me Israel's "serious" talks won't include this same policy

Rasmussen Poll --

Updates

May 12, 2012: Euro officials begin to weigh Greek exit from common currency.  It may or may not stop there, but it won't end the euro's problems.

May 10, 2012: in the original post I note that it is likely that the "haves-have-nots" gap will widen over time. Today this story: nearly half of all Americans are not saving for retirement. And those that are saving are probably not able to save enough. 

Later, 9:00 p.m.: Wow, now even the very respectable Financial Times is talking about Greece leaving the EU. 

Later, 2:00 p.m.: Wow, talking heads getting more and more vocal about the end of the Euro; from early this morning with little mention to now, several hours later, CNBC is talking about the end of the Euro as we know it.  They're only talking aboug Greece, and maybe, Spain, but I wonder if behind closed doors folks are also talking about France joining that group that will break away before it's all over.

Later, 11:40 a.m.: Less than 30 minutes after I posted the note below, perhaps the most knowledgeable CNBC talking head on the Greek issue says that it has become more likely that a) Greece will leave the EU; and, b) Greece leaving the EU won't be catastrophic.  

Original Post

Link here. 

Looking ahead five years, just 44% of Americans believe the nation’s economy will be stronger than it is today.  That’s the lowest level of long-term optimism ever measured. 

Ever measured.

I don't know whether the US economy will be stronger or weaker, but I will suggest two points:

a) the US economy will be the second strongest in the world, right behind China's. Europe will be in huge trouble. The US will be energy independent for all intents and purposes. We may be importing oil but overall our energy ledger will be in the green.

b) the gap between the "haves" and the "have-nots" will widen; though the expansion of the safety nets (health care, social security) will provide a sense of comfort. Remember, this is only five years out.

I wouldn't be surprised if the EU implodes; "they" say it can't happen, but it would not be a surprise. That doesn't mean it would not be a shock. It would be a shock. Just not a surprise. 

Oh, one last thought: the best thing about the French election: we will get another data point to see whether krugmanian economics makes sense. Or whether it will be a kruggerand economy.

COP Selling All African Assets -- CNBC

At Reuters, COP selling all Nigerian assets.

Interesting.

Filloon's Take on OAS and NOG's 1Q12 Earnings

Link here.

Northern Oil and Gas had missed analyst estimates on earnings for four quarters straight. It did the same in the first quarter of 2012, but was much better than in previous quarters. It reported an EPS of 23 cents/share versus the Street's estimate of 24 cents. Revenues came up short as well with a reported $50.5 million versus the Street's estimate of $65.35 million. It reported a $14.7 million loss associated with derivatives. Net income per fully diluted share was 14 cents. All in all, a pretty good quarter.

I noted the same thing, and reported that. I can't get too excited about loses associated with derivatives.

And same with NOG;

Oasis also reported first quarter of 2012 earnings Monday. It looked as though Oasis had a terrible quarter, but this is not the case. Oasis reported revenues of $138.6 million versus the Street's estimate of $127.47 million. It reported earnings of 13 cents/share versus the Street's estimate of 32 cents. This is a bit deceiving, as it had an $18.586 million net loss on derivative instruments. This is equal to 20 cents/share and when added to the 13 cents reported, shows Oasis beat EPS estimates by a penny.

Random Observations From Another Observer Regarding the Parshall Oil Field, The Bakken, North Dakota, USA

David, over at the Bakken Shale Discussion Group, has provided a very nice review and his thoughts regarding the Parshall oil field in the Bakken.

David raises some great points. When I was updating the Stark County data earlier this morning, I had a similar thought: by two to three years, the mineral owner may have seen the best years of royalty payments, until EOR comes on later.

Stark County Wells Have Been Updated

Link here.

Dickinson Studying the Effects of the Boom -- The Bakken, North Dakota, USA

 A Whiting well with 210,000 bbls in one year in the Dickinson area

Updates

June 25, 2012: Wow, these are some good wells; I have been following this area for quite some time. This is a string of wells, running west to east, north of Dickinson area, in the Park and Bell oil fields (some of these wells are reported elsewhere, also).

• 20404, 1,606, Whiting, Pronghorn Federal 21-14TFH, Park, t10/11; cum 52K 4/12;
• 20131, 1,343, Whiting, Pronghorn Federal 34-11TFH, Park, t10/11; cum 50K 4/12;
• 20504, 2,696, Whiting, Pronghorn Federal 21-13TFH, Park, t12/11; cum 79K 4/12;
• 20526, 2,446, Whiting, Smith 34-12TFH, Park, t9/11; Park; cum 132K 4/12;
• 19444, 3,106, Whiting, Hecker 21-18TFH, Bell, cum 210K 4/12; 
• 20828, DRL, Whiting, Frank 34-7TFH; Bell; 27K in January; 33K in February; 30K in March; 19K in April; no IP reported yet;
• 20893, 2,805, Whiting, Mastel 41-18TFH, Bell,  t11/11; cum 135K 4/12; 30 stages; 2 million lbs; 
• 22167, conf, Whiting, Frank 44-7PH, Bell; 18K in Apr 2012; no IP reported yet
• 21018, 1,517, Whiting, Obrigewitch 11-17TFH, Bell; t12/11; cum 93K 4/12; 24K in December, 2011; 21K in January, 2011; 18K in February; 16K in March, 2012; 
• 22372, drl, Whiting 3J Trust 24-8PH, Bell, s4/12;
• 19623, 1,075, Whiting, Obrigewitch 21-17TFH; 138K, Bell, 7 stages, 7,000 lbs (no typo); s11/10; t4/11; cum 169K 4/12; F
• 20795, drl, Whiting, 3 J Trust 34-8PH, Bell,
• 22864, loc, Whiting, Buckman 34-9PH, Bell,
• 22865, drl, Whiting, 3 J Trust 44-8PH, Bell,
• 20079, 2,760, Whiting, Obrigewitch 21-16TFH, Bell, t2/12; cum 117K 6/12; 
• 22285, drl, Whiting, Buckman 44-9H, Bell,
• 22287, drl, Whiting, Obrigewitch 41-16PH, Bell,
• 19891, conf, Whiting, Cymbaluk 21-15PH, Bell,
• 22283, conf, Whiting, Cymbaluk 11-15PH, Bell,
• 22094, drl, Whiting, Lydia 41-14PH, Bell,
• 21655, drl, Whiting, Solberg 34-11PH, Bell,
• 22594, drl, Whiting, Solberg 44-11PH, Bell,
• 18837, 1,780, Whiting, Kubas 11-13TFH, Bell, t9/10; cum 97K 4/12;
• 22169, conf, Whiting, Solberg 14-12PH, Bell,
• 21895, conf, Whiting, Kubas 34-12PH, Bell, 7K (Mar); 2K (Apr)
• 20695, conf, Whiting, Solberg 34-12TFH, Bell, 6K (Mar); 3K (Apr)
• several more
  
• 21527, DRL, Whiting, Buresh 34-10TFH, Dutch Henry Butte; 21K in February, 2012; 11K in March; 8K in April; no IP reported yet;

Original Post

Link here.

It's a fairly long article on the oil boom in the Dickinson area, southwest North Dakota. Much of the article has to do with the issue of housing.

This is my favorite line from the article:

"It will take more than a couple of months to catch up to the housing demand."

Williston has been at the center of the boom for five years now, and a housing shortage persists despite record amount of home building and temporary housing having been added. So, yes, I expect it will take "more than a couple of months" to catch up on the housing demand in Dickinson. The tea leaves tell me the boom is yet to take off in the Dickinson area.

We are only starting to see examples of the wells that will be reported in the Dickinson area such as the one reported yesterday:

• 20672, 2,499, Whiting, DRS Federal 24-24TFH, Park oil field; t11/11; cum 65K 3/12.

Park oil field is about 20 miles due west of Dickinson on I-94. 

Here's another one, in Bell oil field, just east of Park oil field:

• 19444, 3,106, Whiting, Hecker 21-18TFH, Stark County; 2.4 million lbs, all sand; t3/11; cum 210K 3/12;

We've yet to see if the TFS will stand the test of time, but early indications are: the TFS will live up to its hype in some areas of North Dakota -- and it looks like it may center around Dickinson. Yes, I would say that it will take more than a couple of months to catch up with the housing demand.

I have updated permits in Stark County.

Note the incredible number of Whiting wells on DRL status, and then look at these incredible wells that have not yet reported an IP. My understanding was that IPs need to be reported within 30 days of the end of the month in which the well was completed/fracked/tested:

• 20828, DRL, Whiting, Frank 34-7TFH; Bell; 27K in January; 33K in February; 30K in March, 2012; no IP reported yet;
• 20893, 2,805, Whiting, Mastel 41-18TFH, Bell,  t11/11; cum 117K 3/12; 30 stages; 2 million lbs; 
• 21018, 1,517, Whiting, Obrigewitch 11-17TFH, Bell; t12/11; cum 93K 4/12; ; 24K in December, 2011; 21K in January, 2011; 18K in February; 16K in March, 2012;
• 21527, DRL, Whiting, Buresh 34-10TFH, Dutch Henry Butte; 21K in February, 2012; 11K in March; 8K in April; no IP reported yet;
• 19623, 1,075, Whiting, Obrigewitch 21-17TFH; 138K, Bell, 7 stages, 7,000 lbs (no typo); s11/10; t4/11; cum 162K 3/12; F

It looks like the Obrigewitch and the Frank wells will be quite interesting [posted before the IPs were known].

"Coal is crime" -- RFK, Jr

And he ought to know.

Link here.

About a half-dozen proposals would bring coal mined in Western states to ports in Oregon and Washington state, where they would be exported to China.

RFK, Jr, is fighting plans to export US coal to Asia through West Coast ports. 

“We’ve got lots of better sources for jobs,” Kennedy said. “If you were really interested in jobs, let’s build wind farms, let’s build solar plants. Let’s use the marketplace to incentivize good behavior.”

I believe the Kennedys fought the wind farm off the Massachusetts coast, but I could be wrong. It's been a long time. 

So, coal is crime. Junior would make a good running mate with the president if Joe Biden were to step aside.

Random Data Point: Target Logistics Lodges in North Dakota

Minot Daily News provides these data points regarding the expansion of the Stanley Hotel in ... yes, Stanley: :

Located adjacent to the Stanley Cabins, the modular expansion will add an additional 281 beds for workforce housing. Stanley Hotel is located at 913-4th St. SW in Stanley.

Target Logistics, the largest turnkey workforce housing provider in the U.S., currently has nine lodges in the U.S. for a total 3,646 beds. Eight of the lodges are in North Dakota: Bear Paw Lodge at Williston, 686 beds; Dunn County Lodge, near Dickinson, 600 beds – opened in March; Muddy River Lodge at Williston, 158 beds; Stanley Cabins, 96 beds; Stanley Hotel, 54 beds; Tioga Lodge, 1,205 beds; Williston North Lodge, 415 beds; and Williston Cabins, 124 beds. Carrizo Springs Lodge, with 308 beds, opened in Texas in March.

Several additional lodges will open this year in North Dakota and Texas.

And these are just Target Logistics. 

Now, This Is A "Beat" -- Absolutely Nothing To Do With The Bakken -- At Least Directly

Freightcar America beats by $0.48, beats on revs: Reports Q1 (Mar) earnings of $0.81 per share, $0.48 better than the Capital IQ Consensus Estimate of $0.33; revenues rose 203.5% year/year to $219.1 mln vs the $164.81 mln consensus.  The co delivered 2,613 railcars to customers in the first quarter of 2012, of which 2,146 were new cars, 80 were used cars and 387 were leased cars.

I can't remember any estimate so far off.  Earns 81 cents/share; consensus estimate of 33 cents.  The analysts must have underestimated all the unit trains hauling oil out of the Bakken.

Feds Approve Anadarko Plan To Drill in Eastern Utah -- Nothing To Do With The Bakken -- But Worth Noting

Link here.

U.S. officials are expected Tuesday to approve a plan by Anadarko Petroleum Corp. to drill 3,700 natural-gas wells in eastern Utah, capping a yearslong review of a project that will be one of the largest in the region.

Approval for the Greater Natural Buttes project in the Uintah Basin, to be announced by Interior Secretary Ken Salazar, comes as the Obama administration is supporting natural-gas production as a way to create jobs with a cleaner-burning fuel than coal or oil.

The Greater Natural Buttes project is the uncommon case in which an energy company won the support of environmental groups, which are often vocal critics of oil and natural-gas development. Anadarko agreed to pull previous proposals to expand drilling to new areas, including parts of a proposed red-rock wilderness area, said Heidi McIntosh of the Southern Utah Wilderness Alliance, an environmental group.

Instead, Anadarko said in its environmental-impact statement, its wells would be drilled from existing wellpads, using technology that allows the well to curve away from a straight-down path and tap new deposits. 

This will be a nice case study to follow. 

A Fly in the Ointment -- Minot Nixes Major Operations at New Baker Hughes Building

Updates

May 13, 2012: My understanding of the time line:

• BHI was there first
• the flood came
• a school was lost
• a replacement school was moved near BHI
• the Minot fire marshall said "not to worry." BHI operations were safe
• Minot city council: nixes BHI's operations at their new multi-million-dollar facility

I can already see the next episode on "As The World Turns."

Original Post

Link here.

The idea of oil-field chemicals near residences and a proposed school in north Minot didn't sit well with most Minot aldermen Monday.

The Minot City Council voted 8 to 5 to deny a permit to Baker Hughes to store flammable chemicals in a new warehouse that the company is building along the north portion of the U.S. Highway 83 Bypass. The denial doesn't stop the company from storing chemicals but severely limits the quantity to the point where company officials believe operations will be impeded.

"It would have a significant impact on how we could operate out of the Minot facility," Ron Rowbottom, Baker Hughes safety and health officer, told the council just before the vote.

Chemicals were to make up 15 to 20 percent of the activity at the facility, which Baker Hughes is constructing to primarily handle its technology operations. It is to open for operation July 1. The Minot Fire Department had signed off on the chemical permit because of the proposed safety features built into the warehouse.

Walking to "work" today, I thought about a comment I posted yesterday regarding "city council" and master planning. I was second-guessing whether I should have posted that comment. This story tells me I was right on. A reader confirms: the Baker Hughes building was planned well before this school site was proposed. Interesting.

Ethane, Petrochems, and Margins -- RBN Energy

Link here. 

These are the only two U.S. olefin cracking units that run ethane located north of the Texas border. Both are LyondellBasel.  One is the Clinton, IA plant and the other is the Morris, IL plant.  Both run a lot of ethane and some propane.  Both plants probably get supplies from a variety of sources, but let’s assume a portion of their feedstocks come from Conway or are priced at Conway indices.  If you are not familiar with olefin crackers, they make ethylene and propylene out of hydrocarbon feedstocks, here in the U.S. mostly from NGLs.

A few years ago, the operating margin at these plants was in the single digits or worse.  Today ethylene is about 63 cents/pound and propylene is about 70 cents/pound.  Let’s put our Conway ethane in those terms.  At 7.25 cnts/gal, that is equivalent to 2.4 cents/pound.  (There are about 2.97 pounds per gallon of ethane).  The ethylene yield from ethane is 70% to 80%.  So the Lyondell plants could be making 60-something per pound products from a 3 cent/pound feedstock.  Now that’s some serious margin.  Sure there are lots of other costs besides the feedstock, but the margins are still beyond any historical scale.  Even Gulf Coast crackers with 40 cent/gallon ethane are looking at 50 cent/pound margins according to Bentek’s Daily NGL report.  Petchems are happy campers indeed.

A reader noted the same thing yesterday: see this link and first comment. I'm impressed.