Monday, May 21, 2012

Random Comment on TNT

Wow, the Oklahoma City Thunder - Los Angeles Lakers was a great game tonight and a great series overall.

I'm not a big basketball fan until the playoffs. With Phil Jackson having graduated from Williston High School, I enjoyed following the Chicago Bulls and the Los Angeles Lakers for many, many seasons. I spent the last seven years of my Air Force career in San Antonio and couldn't help but become a Spurs fan. I have a personal connection with Oklahoma City but that could be a story for another time, so I've enjoyed the playoffs so far this season and look forward to the finals.

But I write all that to lead into this: I am absolutely amazed how TNT seems to have come out of nowhere to be my favorite station. I no longer watch the "majors" (CBS, NBC, ABC, or FOX) -- I can't remember when I last watched something on the major networks, except NASCAR on FOX and an occasional third or fourth round of a golf tournament. But TNT has really found quite a niche, a niche that I enjoy.

I find it incredible that (apparently) the entire Oklahoma City Thunder - San Antonio Spurs series will be on TNT.

Update Case 16110 -- 10 Wells In One Spacing Unit -- The Williston Basin, North Dakota, USA

Back in October, 2011, I posted this case from the NDIC hearing dockets:
Case No. 16110: Application of Hess Corp. for an order amending the applicable orders for the Hawkeye-Bakken Pool to allow up to six horizontal wells and up to eight vertical wells to be drilled in a 1280-acre spacing unit described as Sections 18 and 19, T.152N., R.95W., McKenzie County, ND, and such other relief as is appropriate.
It looks like Hess is drilling these wells in section 18. Here is the status of the older wells and the newer wells in section 18:
  • 1256, 368/PNA, Hess, Hawkeye-Madison Unit E-611, Hawkeye, Madison well; t10/56; cum 335K
  • 1295, PA/288, Hess, Hawkeye-Madison Unit E-613 HR, Hawkeye, Madison well; t1/57; cum 240K 3/13; (went on IA status during latter half of 2012; now active again; inactive, 10/14)
  • 1562, 177/PA, Hess, Hawkeye-Madison Unit D-614, Hawkeye, Madison well; t12/57; cum 76K
  • 17070, IA/783, Hess, HA-Swenson-152-95-1819H-1, Hawkeye, Bakken; t11/08; F; cum272K 1/17; taken off-line 1/17
  • 22415, SI/NC, Hess, HA-Swenson Observation-18-1, Hawkeye,
  • 22417, SI/NC, Hess, HA-Swenson Observation-18-3, Hawkeye,
  • 22367, loc, Hess, HA-Swenson 152-95-1819H-2, Hawkeye,
  • 22416, SI/NC, Hess, HA-Swenson Observation-18-2, Hawkeye,
  • 22420, PNC, Hess, HA-Swenson Observation-18-4, Hawkeye,
  • 22635, 1,114, Hess, HA-Swenson-152-95-1819H-5, Hawkeye, t5/13; cum 214K 1/17;
Three older Madison wells are in section 19.

How Important Was The Bakken?

My world view is that the Bakken boom led the current energy boom in the United States. Others will have their own views, but mine won't change.

One of the reasons I started this blog was to offer another opinion to answer those who said the Bakken was over-hyped.

I can now quit blogging. I have reached the milestone I set for myself: to keep blogging until I saw this headline, or something similar:
"US Unconventional Liquids Production Could Mean Zero Net Oil Import"
Link here.
Production from unconventional liquids plays could result in the US becoming independent from oil imports before 2020, an analyst told attendees at an International Association of Drilling Contractors conference on onshore drilling.

Marshall Adkins, managing director of energy research for Raymond James & Associates, told conference participants, “You guys have gotten too good at getting oil out of the ground, and we are going to see some issues.”

US crude oil production is rising in the face of declining oil demand, Adkins said. He credited horizontal drilling and multistage hydraulic fracturing in North Dakota’s Bakken formation and the South Texas Eagle Ford shale with reversing a nearly 40-year-long decline in domestic oil supply.
Global oil prices look bearish. It looks like US could be energy independent in 6 - 7 years. 

Only two basins were mentioned, and of the two, the Bakken was first.

Anyway, I could quit blogging, but I won't. There are a few other Bakken milestones I want to see first before I quit blogging.

Reminder: Montana Oil Report

Link here.

Data points later, perhaps. Note average hourly wage near end of first story.

She Hasn't Worked a Day in Her Life -- Absolutely Nothing To Do With The Bakken -- All Politics

 So far I have not see one political ad on television -- seriously.

I have only heard about two ads.

First, she hasn't worked a day in her life.

And now, private equity is bad.

It's gonna be an interesting summer.

I haven't seen either ad. 

It seems like a lifetime ago.

Six (6) New Permits -- The Williston Basin, North Dakota, USA

Daily activity report, May 21, 2012 --
Operators: Hess (3), SM Energy (2), Whiting
Fields: Sanish (Mountrail), Hawkeye (McKenzie), Wheelock (Williams), Siverston (McKenzie)

Twelve (12) producing wells reported completions, including:
  • 20829, 3,440, BR, Joel 21-2H, Bully; t1/12; cum 14K; 3/12;
  • 21189, 2,317, BEXP, Safely Trust 28-33 1H, Foreman Butte; t4/12; 
  • 21190, 2,581, BEXP, Lyle 21-16 1H, Elk, t4/12;
  • 21402, 1,309, Hess, BB-Belquist-150-95-95-1011H-2, Blue Buttes; t4/12; southeast of the bull's eye of the Bakken, just outside the reservation
  • 21403, 1,271, Hess, BB-Belquist-150-95-1011H-1, Blue Buttes; t4/12;
  • 21850, 35 (no typo), Thompson 35-26-162-99H, Ambrose; cum 190 ; 3/12;
Fourteen (14) wells released from confidential status (note: back to "confidential" and not "tight hole")
  • 16966, 243, Denbury, TRMU 24X-12H, T.R. oil field; t2/12; cum 9K 3/12; a Madison well;
  • 20215, 2,140, XTO, FBIR Guyblackhawk 24X-27, Heart Butte;  t2/12; cum 1K 3/12; 
  • 21094, 1,583, Whiting, Lee 41-28TFH, Sanish, t11/11; cum 44K 3/12;
  • 21108, 182, Samson Resources, Lido 11-2-162-98H, Blooming Prairie, t4/12; cum 1K 3/12;  
  • 21341, DRL, Hess, EN-Madisyn-154-04-0607H-1, Alkali Creek,
  • 21342, DRL, Murex, Rodney Lynn 4-33H, McGregor,
  • 21389, ? Legacy, Legacy Et al Berge 1-12H, wildcat; Spearfish well, producing 1,500 bbls/month; Spearfish at 3,225 feet; no initial production reported on the sundry report
  • 21476, DRL, BEXP, Dale 20-17 1H, Camp,
  • 21610, 389, G3 Operating, Arnson 1-5-8H, Strandahl, t3/12; cum 4K 3/12;
  • 21622, DRL, BEXP, Strobeck 27-34 7H, Alger, (eighth well in this section)
  • 21637, DRL, Cornerstone, Carpentier 3-34-27H, Flaxton,
  • 21746, 653, Zenergy, Mary 3-10H, Wildcat, t1/12; cum 14K 3/12;
  • 21782, DRL, Enerplus, Hippo 148-94-03A-10-4H TF, McGregory Buttes; 
  • 22734, DRL, CLR, Glasoe 6-19H, Dolphin, 3-well pad;
Note: of the fourteen wells coming off the confidential list, seven wells went to DRL status. I interpret that to mean that 50% of wells are waiting to be fracked. That may not be entirely correct, but that's how I interpret it. And I interpret that to mean that there is still a backlog; and, of course, that may be incorrect also, but still .... fourteen wells come off the confidential list, and seven are awaiting to be completed.

Some comments on these IPs:
1) no statistical analysis, but my gut feeling is that IPs have improved since the Bakken boom began in 2007; the Hess wells above are excellent examples; compare with earlier Hess wells
2) some folks have questioned how good the Three Forks formation is in the Sanish oil field; #21094 seems to have allayed some of that anxiety
3) some folks have been worried if multiple wells in one spacing unit could be detrimental; #21094 is the third horizontal in this spacing unit
4) some folks have been worried if multiple wells in one spacing unit could be detrimental; BEXP's Strobeck well above -- that is the eighth well in that section
5) a lot of BR wells go to DRL or SI before reporting their IPs; BR wells have reported some great IPs
This is interesting, from today's daily activity report:
Transfer of the following from Penn Virginia to Anschutz Exploration.
  • 17708, PNC,  Dvorak 11-1H, Murphy Creek
I thought Anschutz Exploration was no longer in North Dakota after it sold its assets a year or so ago, but it pops up again.

Target Logistics Adding More Units -- The Bakken, North Dakota, USA

Target Logistics soon to have more units available (electronic, paid subscription; no link yet)

Data points:
  • Target Logistics currently has 3,700 beds in North Dakota; most of them in Williams County
  • the company is close to adding two new crew camps
  • Judson Executive Lodge opens in mid-June; US Highway 2 west of Williston; 100 beds;
  • the expansion to Stanley Hotel (in Stanley) opens in mid-July; 335 beds
  • both will feature "Executive" rooms with private baths; daily housekeeping; satellite television, etc
  • brings Target Logistics total to 3,719 (sic) beds; nine crew camps
  • largest is the Tioga Lodge: 1,205 bed
  • 2nd: Bear Paw Lodge, north of Williston: 686
  • 3rd: Dunn County Lodge: 600
  • 4th: Williston North Lodge: 415 
  • the company has an additional 1,000 bed in Texas, Mexico, and Arizona
  • will soon begin construction for 2,000 new rooms in North Dakota and Texas
Target Logistics Ad-Documentary

Readers' Help: Any Visual Info on Mark 4-9, Williston Oil Field, #22384

An individual wrote in to say that he is at week 3 of his 30-day notice to decide whether to participate in this well or not.

If anyone goes by this pad, let us know what you see in terms of tanks on site, truck traffic, etc.
  • 22384, conf, BEXP, Mark 4-9 1H, Williston field, about 3 miles northeast of Williston;

Rambling Comments Monday Morning -- Absolutely Nothing To Do With The Bakken

1. Wow, talk about student debt! The Supreme Court refuses to take the case in which a college student was fined $657,000 for downloading 30 -- thirty -- "3-0" -- songs and sharing them on the net.  But:
The judge will have a new opportunity to look at the case and could again order the penalty reduced, using different legal reasoning.
Ah, yes, the legal system ... "using different legal reasoning."

2. Moments ago the CNBC talking heads made a big deal that Eaton, taking over Cooper Industries, would now be moving another company over to Ireland. In fact, Cooper Industries is already incorporated/headquartered in Dublin, Ireland. Eaton buying Cooper doesn't affect the America-->Irish story as far as I can tell. But, I had not realized how huge Cooper Industries was in the energy field until now. Very interesting.

3. Exactly why are Afghanistan and Pakistan attending a NATO summit? I guess NATO is in Afghanistan, but I did not know NATO was in Pakistan. Except for a few hours when NATO helicopters took out bin Laden.  Pakistan certainly doesn't seem to be fighting on the same side as the rest of NATO. [Update: Apparently someone at the LA Times read this note and answered the question. President Obama invited Pakistan to try to get them to open up highway to Afghanistan. The highway needs to be opened if US is to withdraw from Afghanistan next year. Efforts failed.]

4. Apparently the state of Hawaii continues to slow-roll the folks who are looking to confirm birth records of high level government officials.
The Hawaii attorney general’s office has reportedly told Bennett that there are steps he needs to take in order to confirm President Obama’s birth records.

Those steps include Bennett proving that he legitimately needs confirmation in order to update the records at his office.
So, this is just a procedural issue to the Hawaiians? "... there are steps he needs to take in order to confirm .... birth records."

As long as Arizona is looking into this they need to see if the information from Hawaii jibes with the social security number.

Full-Cost Accounting vs Successful-Efforts Accounting in the Oil and Gas Industry

An interesting look at two types of accounting in the oil and gas exploration and production industries.
"About half of the public E&P companies use the same full-cost accounting procedures as Chesapeake," spokesman Michael Kehs said. "We believe that puts us in good company."

But larger, more established companies—including Exxon and Chevron Corp., as well as some independent producers such as EOG Resources Inc.—tend to use an approach known as successful efforts. U.S. securities rules permit publicly traded oil and gas companies to choose between the two; six of the 10 biggest U.S. natural-gas producers use successful-efforts accounting.

Student Loans -- Colleges and Universities at Risk

Link here.
States/Regions. Areas with more inadequate-capital than adequate-capital institutions and, thus, more exposure to the crisis' effects in Higher Education include: 1) Previously high-growth states Arizona, Florida, Nevada, and Washington; 2) Appalachian states West Virginia, Kentucky, and Tennessee; 3) Rust-Belt states Illinois, Michigan, New York, Ohio, and Pennsylvania., and 4) Two other clusters — Alabama and Mississippi and a final one in Plains States from Iowa to Oklahoma.
Okay. If you look at the states/regions not mentioned, you come up with those not at risk (or as much risk) : North Dakota to Texas renaissance zone (except Oklahoma, for some reason); New England Ivy League; Florida; the Rocky Mountain West; and, the Pacific Coast.

EURs In The Bakken

From Filloon on KOG, May 20, 2012:
Kodiak Bakken EURs in this area are 800 to 900 MBoe. Upper Three Forks EURs are 700 to 800 MBoe, plus there is possible upside to additional benches. Continental and Burlington Resources have both tested the second bench successfully in areas very close to the Koala Prospect. Whiting is also testing the second bench of the Three Forks. There are also two benches below, for a total of four Three Forks benches. Continental has stated the second has been consistent throughout its acreage, but the third and fourth benches have hot spots throughout the Williston Basin.

Filloon: Another Opportunity to Buy KOG

Link here.

Great discussion of KOG and follow-up of BTA and North Plains assets bought by KOG last year.

Disclaimer: this is not an investment site. See disclaimer and welcome. This is not a buy, sell, or hold recommendation for KOG. It is posted to help folks understand the Bakken.

MDU Purchases One-Half of Whiting's Midstream Assets Near Belfield, North Dakota

Updates

June 7, 2012: update from message board thread; from individual who worked on the project.

 
Original Post 

From Yahoo!InPlay:
MDU Resources subsidiary purchases interest in Bakken oil and natural gas midstream assets for $66 mln: through its wholly owned subsidiary, Bitter Creek Pipelines, LLC, announced an agreement purchasing a 50 percent undivided interest in Whiting Oil and Gas Corporation's natural gas and oil midstream assets near Belfield, N.D. in the Bakken area. 
Data points: the deal includes --
  • Bitter Creed paid $66 million at closing; responsible for 60% of future CAPEX
  • a newly constructed, state-of-the industry natural as processing plant and gathering system -- inlet processing capacity of 35 million cubic feet per day (35 MMcfd)
  • plans to tie a natural gas residue line into the Williston Basin Interstate Pipeline Company (MDU)
  • plans to build a crude oil gathering and storage terminal; pipeline to the Bridger Pipeline; oil terminal currently under construction; completion expected 3Q12; storage capacity of 20,000 bbls of oil
  • Whiting will continue to operate the facilities
Win-win for all involved, but I think it demonstrates again the huge CAPEX required for these projects.

***********************

Jungle art / fingerprint art from the younger granddaughter:

Wind: An Inconvenient Truth ----- Meanwhile, Coal: The "New" Alternative Energy

Two interesting stories on the front page of today's Boston Globe.

The one above the fold: regulators looking at noise impact of slice-and-dicers:
Days after state environmental officials found unacceptable noise levels from wind turbines in Falmouth, they are considering new regulations that would require the state to review potential noise issues before wind turbines are built in Massachusetts. [ Update, May 25, 2013: the citizens voted. The wind turbines in Falmouth will continue to turn for now.]
Wind turbines: not one redeeming feature.

************************

The one below the fold: Massachusetts alternative-energy start-up firm inks $1.25 billion deal with China. Alternative energy? Solar? Wind? No, coal.
A Massachusetts alternative energy start-up finalized a $1.25 billion deal Monday to build a plant in western China to convert coal into synthetic natural gas, an agreement that underscores China’s growing hunger for power and the state’s position as a global center for energy technology. The deal, one of the biggest yet for the state’s alternative energy industry, creates a partnership between GreatPoint Energy, a seven-year-old Cambridge firm with just 30 employees, and China Wanxiang Holdings, an industrial conglomerate.
So, coal is now called "alternative energy." I can't make this stuff up.

Seaway Reversal Completed

Link here.
The reversal will initially provide 150,000 BPD of capacity, which is expected to increase to more than 400,000 BPD in the first quarter of 2013 with additional modifications and increased pumping capabilities.
Modifications have been completed; oil will start to flow this weekend. 

Overbuilding Takeaway Capacity in the Bakken? -- RBN Energy

Link here.

Arguments are presented by folks suggesting takeaway capacity is not being overbuilt in the Bakken.