Wednesday, June 6, 2012

Stunner From Carpe Diem -- US Leads the World in Reducing CO2 Emissions

Because of natural gas.

This comes despite an administration that did everything it could to slow-roll the industry. From what little I know, this reduction in CO2 emissions was due strictly to the private sector and free market capitalism. I am not aware of any government initiative in the past two years that could account for the huge increase in natural gas. In fact, recent studies show fracking, which the EPA is trying to ban, is a significant reason for the decrease in CO2 emissions.

Oh, one more thing: the US is not a signatory to the Kyoto Protocol. Canada has formally withdrawn from the protocol.

Link here to

The link article is full of amazing statistics, most of which will not be re-printed in the New York Times.

Will It Ever Quit? Now, Another Developer -- With Potentially Another 850 Units -- In Williston, the Heart of the Bakken

From a press release:
IRET announces the acquisition, with a joint venture partner, of 40 acres of land inside the city limits of Williston, North Dakota, for a purchase price of approximately $4.6 million. The land has been approved for multifamily development with the potential to accommodate up to 850 units. IRET owns 70% of the joint venture entity.
Folks can do a lot of back-of-the-envelope calculations on this little bit of data.

A huge "thank you" to Don who alerted me to this story. I would have missed it. In fact, readers, I think, alert me to about 75% of stories I link.


Speaking of folks that go unappreciated or under-appreciated, a big "thank you" to Karen over at the Bakken Shale Discussion Group. For a long time, on a daily basis, despite having a real life (unlike me), she posted the results of wells that came off the confidential list on a daily basis.  I couldn't wait for her reports to be posted. It was because of her posts, I finally decided to get my own "Basic Subscription" at the NDIC website. One of the nice things about her postings at the Discussion Group, folks would comment on the peculiarities of various wells.  I learned a lot.

I will thank her again on a stand-alone post -- I hope it doesn't embarrass her -- but a lot of folks really appreciated all she did. She probably did more than anyone else to get me really interested in the NDIC reports. 

She hasn't posted in several weeks now. I assume her BEXP oil well came in with a typical BEXP IP and she is on a Caribbean beach somewhere. It takes a lot of work to post these results every day, and with the manufacturing phase about ready to kick in, it will only get more challenging.

So, thank you, Karen, wherever you are, and I hope you are enjoying the beverage of your choice on that white, sandy beach.

Somewhere Over the Rainbow, IZ

Eight (8) New Permits -- The Williston Basin, North Dakota, USA

Daily activity report, June 6, 2012 --
  • Operators: Whiting (4), CLR (2), Petro-Hunt (2)
  • Fields: Sanish (Mountrail), Stoneview (Divide), Charlson (McKenzie), Bully (McKenzie)
Three of Whiting's permits will be for a 3-well pad, or at least in the same section in Bully oil field.

Whiting canceled two wells:
  • 22320, PNC, Whiting, Stenehjem 21-3H
  • 23029, PNC, Whiting, Talkington 41-26PH
One producing well was completed:
  • 21577, 1,186, MRO, Ernest Charchenko 14-33H,
Four wells released from "tight hole" status:
  • 19877, 600, OXY USA, Louis Sadowsky 1-10-3H-142-96,
  • 20402, 1,263, MRO, Ecklelberg 14-23,
  • 21629, 461, Whiting, Jorgensen 11-27H,
  • 21761, no data, Hess, CA-Halverson-154-95-0409H-2,
Then several wells approved for "tight hole" status but IPs reported (error?):
  • 21334, 755, OXY USA, Kenneth Stroh 2-12-1H-143-97,
  • 21505, 349, OXY USA, State Watkins 1-26-35H-143-95,
  • 22153, no data, Chesapeake, Grenz 26-138-98 A 2H,
  • 22199, no data, EOG, Riverview 100-3031H,
  • 22000, no data, EOG, Riverview 4-3031H,
  • 22262, 352, OXY USA, Little Butte 1-21-28H-160-90,
  • 22369, 499, OXY USA, State Jablonsky B 1-36-25H-142-95,
  • 22498, no data, Oasis, Shepherd 5501 12-5H,  
For a list of other Stroh wells, click here

Fracking Process Question From a Reader

I am told that liquid ring vacuum pumps are employed as part of the fracking process. If true, can anyone tell me how they are used in this application?

XOM Selling Natural Gas Assets in Niobrara; Chesapeake Selling Utica Assets

Link here.

I don't know if this is all of Chesapeake's assets in the Utica or just a percentage.

Also re: XOM and CHK in Wyoming/Colorado --
Recently, the second largest natural gas producer in the U.S., after ExxonMobil Corporation, also announced plans to divest approximately 504,000 net acres of land that includes leases for oil and gas production in the Denver-Julesberg (DJ) Basin of northern Colorado and southern Wyoming. The properties set for sale also comprise 29 operated and producing wells in the southern portion of the DJ Basin as well as Chesapeake's share in 24 non-operated wells. Some of the properties are also situated in the Niobrara shale.

This sale of half a million acres of its holdings in the Rocky Mountains covers Chesapeake's entire holdings in northeastern Colorado. The divestiture will enable it to focus more on the development of its 500,000 net acre Niobrara leasehold in the Powder River Basin located in east central Wyoming.
From CHK's 1Q12 earnings call when CHK said it would focus on its #1 positions:
We've now established #1 position in the Utica, Mississippi Lime, Granite Wash, Cleveland, Tonkawa, Powder River in the Niobrara, Marcellus, Haynesville and Bossier plays. In addition, we have established #2 positions in the Eagle Ford and the Barnett. No one else in the industry has assembled anything close to this scale and quality of an asset portfolio. In short, we've built a very strong foundation of 11 #1 and #2 positions in the nation's best plays.
The Utica was mentioned as a #1 position, which suggested it was not up for sale. The Bakken was not mentioned in that group of 11 plays.

No State Income Tax in Texas -- XOM Moving Out of Fairfax, VA -- Consolidating in Houston

Link here.

New MDU Presenation Discusses Partnership With Whiting -- The Williston Basin, North Dakota, USA

Link here.

Bakken opportunities:
  • water depot projects using natural gas to heat fracking water
  • MDU projects 23,000 new homes in northwest North Dakota
  • typical 2012 Bakken well estimated to produce for 29 years*
  • potential mergers and acquisitions
  • MDU has the most extensive natural gas transportation system in the Bakken play
  • slide 25: "largest storage field in North America"
  • slide 28: details regarding partnership with Whiting on "midstream" assets
  • construction: $35 million Bakken backlog
  • "unprecedented NDDOT budget at $1.73B for 2011 - 2013, --> $800 million more than last biennium"
*I love this "29" number. I don't know who first said it, but I guess if "they" said 30 years, no one would believe them. "29" is more believable, I guess.

Housekeeping: Two Quick Notes

CNBC just noted that Halliburton is warning on 2Q12 margins due to higher costs of guar gum. I blogged about this back in January, 2012.

I've updated IPs and production for Zavanna wells in North Dakota, going back to 2006. I still have some work on NDIC dockets regarding Zavanna.

North Dakota to Texas Energy Renaissance -- Nebraska OIl Overview

As I mentioned to a reader yesterday, I will start posting a few more stories on other energy plays, particularly in the North Dakota to Texas corridor, but I will not approach the granularity I provide regarding the Bakken. Indeed, I can't even follow the Montana Bakken -- just too much to cover. But views of other energy plays help keep the Bakken in perspective.

Don sent me a great link to the energy play in the state that killed the Keystone. The overview in slide 2 is particularly interesting.

How Expensive is Off-Shore Wind Energy -- Europe's Green Energy Suicide

Europe's Green Energy Suicide -- WSJ
Emissions-free solar and wind energy, on which the UK plans increasingly to rely, are expensive. The government estimates that a planned offshore wind farm project ringing the coast will cost ... [the equivalent of $9,000] for everyhousehold in the country. Conventional energy could provide the same amount of energy at 5% of the cost.
A definition of insanity: doing the same thing over and over and expecting a different result. 

Williston Job Fair Attracts 175 People in First Seven Minutes

Link here.

I'm Wrong Again -- 500-Unit Crew Camp In Dunn County -- The Williston Basin, North Dakota, USA


June 7, 2012: Dunn County crew camp could grow to 1,650
Planning and Zoning Commission members approved 400 additional units for Boston-based Target Logistics’ crew camp 10 miles north of Dickinson on Tuesday at a meeting in the Dunn County Courthouse in Manning.

The commission will also review a request next Tuesday from Target Logistics to add 650 units to the facility, bringing the camp’s unit count to 1,650.
Original Post
By my reckoning, the current Bakken boom began in Montana in 2000. The boom began in North Dakota in 2007. So, we are somewhere between five years and twelve years into the boom.

I honestly thought we would see a leveling off in the rate of growth in 2012. Biological growth models typically follow an "S" curve, and I thought we would be near the top of the curve this year. It appears that will not be the case. A reader pointed out yesterday that, to date, building permits (measured in dollars) have almost doubled in Williston over what they were last year. Dickinson just approved a record-breaking 3,000 unit crew camp. And, now, in one of the more mature places in the oil patch, Dunn County has just approved a 500-unit crew camp. And another 400-crew camp permit is pending review.
Five Diamond Industrial Park, which sits on approximately 140 acres on the Dunn/Stark county line immediately northwest of Highway 22, said Brian Hymel of Draper, Utah-based Five Diamond Fund Managers.The lodging facility will be built in two 250-unit phases,... and could be finished as early as late fall this year. FDFM may apply for additional units, depending on the market conditions...
In addition, Target has applied for a permit for a 400-unit crew camp new Joy Haven, eight miles north of Dickinson.

Regular readers know why the crew camps are being sited eight miles north of Dickinson rather than east, west, or south of said city.

The fact that a 3,000-unit crew camp, a 500-unit crew camp, and a pending 400-unit crew camp in this area have all been approved in almost-lightning bolt fashion says two things:
  • the Pronghorn Sand has gotten someone's attention
  • "city fathers" have realized that temporary man-camps use less infrastructure than permanent housing, and temporary man-camps will be removed when the boom ends; new hotels / motels will remain "forever," probably turned into "old age" home for retiring truckers and roughnecks

In Case You Missed It: Black Ridge Oil Did Not Close On Additional ~ 9,000 Acres

Link here to PennEnergy.
Black Ridge Oil & Gas, Inc. (formerly known as Ante5, Inc.) owned, as of June 1, 2012, over 11,000 net mineral acres in the Bakken / Three Forks trends in North Dakota.

The Company did not close on the asset purchase agreement dated March 21, 2012 for the acquisition of over 8,655 net mineral acres ... due to current equity financing market conditions....
Private equity issue, banking lending issue, whatever ...

It would have been interesting to know the ask/bid price.

Wow! Even RBN Energy is Asking Where Canadian Production Will Go

Link here to RBN Energy.

Great Energy Links at Independent Stock Analysis

Link here to ISA.

The links include one to the Canadian oil sands which I talked about last night.