Friday, July 27, 2012

EPA: Air Safe, Minor Maintenance Issues

That was the headline in today's Williston Herald following the EPA visit to Williston.


I didn't read the article, so I don't know if there was any mention of dust.

Random Update of Williston Development -- The Heart of The Bakken, North Dakota, USA

For newbies, the Williston I grew up in had one or two movie theaters, two or three major / regional grocery stores, one truck stop, three or four motels of any note, and a population of around 10,000.

The following was announced just this week. This comes on top of everything that has been built in Williston since the boom began.

These were originally linked in the Williston Wire.
  • Confluence of Harvest Hills, apartment complex, 42 separate units, pre-fab, Aurora, Nebraska, to open in mid-August
  • MainStay Suites will open this fall; 26th Street; extended stay hotel; 89 units (I've lost count of the new motels/hotels/inns that have opened in Williston since the boom began)
  • Minnesota-based Coborn's will build five (5) grocery stores in western North Dakota
  • New, unspecified retail stores and restaurants will start making their way to Williston, starting this autumn
  • construction to begin soon on new 12-screen movie theater; 10 months to complete;

NDIC Hearing Dockets -- August 22 and August 23, 2012

For more information regarding "Hearing Dockets," please click here.

Miscellaneous Comments Regarding Cases Below

There are a couple of cases regarding the Madison formation. If anyone is interested in a Madison well that has produced more than a million bbls so far and is still producing, click here.

August 22, 2012

18389, Hess et al, proper spacing, Pleasant Valley-Bakken, Mountrail, Williams
18390, BR et al, proper spacing, Lone Butte-Bakken, McKenzie, Dunn
18391, Hess, amend, Blue Buttes. 8 hz wells on each of 17 1280-acre units (136); establish 2 overlapping 2560-acre units, 3 wells on each (6); one 640-acre unit, 4 wells (4); total 146 wells, McKenzie
18392, Hess, establish a 1280-acre unit; 1 hz well; Stark County;
18394, MRO, Twin Buttes and/or Werner-Bakken. Add 6 sections; establish 3 1280-acre units; 4 wells on each, Dunn
17776, cont'd, temporary spacing, MRO, Merlyn Olson, Williams
18395, BR, amend Hawkeye-Bakken; authorize up to 7 hz wells on a 1280-acre unit; 8 hz wells on a 1280-acre unit; establish an overlapping 2560-acre unit for 1 hz well; McKenzie
18396, BR, amend Haystack Butte-Bakken; authorize up to 4 hz wells on each 1280-acre unit (4 units); establish 2 overlapping 2560-acre units for one or more hz wells; McKenzie
17778, cont'd, BR, temporary spacing Red Wing, McKenzie;
18218, cont'd, BR, amend Clear Creek-Bakken, Blue Buttes-Bakken, and Camel Butte-Bakken to establish an overlapping 5120-acre unit for the purpose of drilling up to 2 hz wells between 4 existing 1280-acre units, McKenzie
18220, cont'd, BR, amend Johnson Corner-Bakken and Camel Butte-Bakken, establish an overlapping 5120-acre unit for the purpose of drilling up to 2 hz wells between 2 existing 2560-acre units
18221, cont'd, BR, amend Johnson Corner-Bakken and Pershing-Bakken, to establish an overlapping 5120-acre unit for the purpose of drilling up to 2 hz wells between 2 existing 2560-acre units; McKenzie
18223, cont'd, BR, amend North Fork-Bakken, to establish an overlapping 5120-acre for purpose of drilling up to 2 hz wells between 2 existing 2560-acre units;
18397, Murex, redefine Camel Butte-Red River Pool, McKenzie
17358, cont'd, Murex, temporary spaicng for Reistad, Divide
18398, Petro-Hunt, proper spacing for Powers Lake-Bakken, Mountrail
18399, Petro-Hunt, request to allow Breena to produce at max rate, McKenzie
18400, Oasis, amend Bull Butte-Bakken (Kalil field), to dissovle two 1600-acre units; establish 1 1280-acre unit and drill up to 5 hz wells, and another 7 hz wells; (12 total in one 1280-acre unit), Williams
18401, Oasis, exception to rules for Zaye Federal, McKenzie, Williams
18402, Whiting, nitrogen injectivity test in the Sanish, Mountrail;
17763, cont'd, Whiting, temporary spacing for Cymbaluk, Billings
18028, con'td, Whiting, temporary spacing for Quale, Golden Valley,
18403, Helis, amend Blue Buttes-Bakken, 1 hz well, 1280-acre unit, McKenzie
18404, Sequel, amend Pierre Creek-Bakken, establish a 1280-acre unit; 1 well; McKenzie
18043, cont'd, Sequel, commingling, McKenzie
17779, cont'd, OXY USA, temporary spacing for Spring Creek, Dunn
18034, cont'd, Cornerstone, amend Northeast Foothills-Bakken, establish 6 1280-acre units; Burke
15676, cont'd, XTO, revoke a CLR permit, Carbon, McKenzie
16125, cont'd, XTO, to revoke a CLR permit, Tompkins, McKenzie
18405, QEP, amend Van Hook-Bakken, 4 hz wells in a 640-acre unit; Mountrail;
18406, QEP, amend Van Hook-Bakken, 4 hz wells in a 640-acre unit, Mountrail; 
18407, QEP, amend Heart Butte-Bakken, create 1 2560-acre unit; 12 hz wells; Dunn, McLean; 
17830, cont'd, QEP, see previous dockets, Heart Butte-Bakken, Dunn
18408, Marquis, oil treating and waste processing facility, McKenzie
17588, cont'd, GADECO, exception to rules for Golden, Williams
18409, Sequel, amen Stoneview-Bakken and North Tioga-Bakken, authorize up to 6 hz wells on each of 2 1280-acre units; Divide
18410, Sequel, amend Temple-Bakken, authorize up to 6 hz wells on each of 4 1280-acre units; Williams
18411, Sequel, amend McGregor-Bakken; authorize up to 6 hz wells on each of 2 1280-acre units, Williams
18412 - 18416, Hess, pooling
18417, Hess, amend Wheelock-Bakken, authorize up to 6 hz wells on each of 3 1280-acre units; Williams (18)
18418, Hess, amend Elm Tree-Bakken, authorize up to 8 hz wells on a 1280-acre unit; McKenzie
18419, Hess, amend Westberg-Bakken, authorize up to 8 hz wells on each of 2 1280-acre units; McKenize (16)
18420, Hess, amend Hawkeye-Bakken, authorize up to 8 hz wells on 10 1280-acre units, McKenize (80 wells), McKenzie
18421, Hess, amend Antelope-Sanish, authorize up to 8 hz wells on 6 1280-acre units; McKenzie;  (48 wells) -- These 5 cases: 170 hz wells
18422 - 18423, Petro-Hunt, pooling
18424 - 18427, MRO, pooling
18428, Helis, pooling
18429, Wind River Trucking, SWD
18430 - 18434, American Eagle, pooling
18435 - 18437, KOG, pooling
18438, SM, amend Colgan-Bakken, up to 4 hz wells on 4 1280-acre units, Divide
18439, WaterWorks Killdeer, SWD, Dunn
18440, WaterWorks Killdeer, SWD, Williams
18441, Glenn Aamodt, convert Aamodt 1-19 to a freshwater well; McKenzie

August 23, 2012

18442, BEXP, proper spacing for Avoca-Bakken, Williams,
18443, BEXP, proper spacing for Williston-Bakken, Williams
18444, BEXP et al, proper spacing for Lake Trenton-Bakken, Williams
18445, BEXP, amend Poe-Bakken, flaring, McKenzie
18446, BEXP, amend Squires-Bakken, flaring, Williams
18447, EOG, Parshall well, Parshall-Bakken, commission to review relief granted for water injection well being used as test for water-flooding, Mountrail
18448, EOG, Wayzetta well, Parshall-Bakken, commission to review relief granted for water injection well being used as test for water-flooding, Mountrail
19449, EOG, amend Mandaree-Bakken, establish an overlapping 640-acre unit; 2 hz wells; Dunn
18313, cont'd, EOG et al, flaring, McKenzie, Mountrail
18450, CLR, extend St Demetrius-Bakken, or establish Bakken spacing in the Fairfield Field, create a 1280-acre unit, 1 hz well; Billings
18451, CLR, amend Catwalk-Bakken, create an overlapping 1920-acre unit 1 hz well; Williams
18442, CLR, amend Sadler-Bakken, create an overlapping 2560-acre unit multiple wells; Divide
18453, CLR, amend Hebron and/or Squires-Bakken; create 2 overlapping 1920-acre units, 6 hz wells on each (12 wells); create an overlapping 1920-acre unit, 1 well; create an overlapping 3840-acre unit, 4 wells; create 2 overlapping 2560-acre units, 2 wells on each (4 wells); create an overlapping 2560-acre unit, 14 wells (not a typo); create 2 overlapping 2560-acre units, 12 wells on each (24 wells);  create an overlapping 2240-acre unit, 12 wells; a total of 71 wells?, Williams
18283, cont'd, CLR, amend Cabernet-Bakken, flaring, Dunn,
18454, Corinthian, extend North Souris-Madison, create a 480-acre unit, 3 wells each; Bottineau;
18455, Corinthian, extend Northeast Landa-Spearfish/Madison, create 7 320-acre units; establish approx 160-acre unit; 1 well on each of these units; Bottineau
18456, Corinthian, exception to siting rules, Bottineau
18457, Corinthian, exception to siting rules, Bottineau
18458, Enerplus, amend Heart Butte-Bakken, create a 1280-acre unit, 5 wells; Dunn;
18310, cont'd, amend Mandaree-Bakken, flaring, McKenzie, Dunn
18459, Newfield, extend Haystack Butte or Lone Butte-Bakken, create a 640-acre unit, 7 wells; Dunn;
18460, Newfield, etend Westberg or Clear Creek-Bakken, create a 1280-acre unit, 6 wells; McKenzie
18461, SHD, flaring, Dunn, McLean
18462, Samson Resources, amend Blooming Prairie-Bakken, flaring, Divide
18463, Samson Resources, amend Bluffton-Bakken, flaring, Divide
18464, Samson Resources, amend Juno-Bakken, flaring, Divide
18465, Samson Resources, amend Kimberly-Madison, flaring, Divide
18466, Samson Resources, amend Paulson-Bakken, flaring, Divide
18467, Samson Resources, amend Foothills-Bakken, flaring, Burke
18468, Samson Resources, amend Foothills-Bakken, creast an overlapping 2560-acre unit; 14 wells;
18469, Samson Resources, amend Black Slough and/or Foothills-Bakken, create an overlapping 2560-acre unit, 14 wells; Burke
18292, cont'd, Samson Resources, amend Ambrose-Bakken, create five overlapping 2560-acre units, 14 wells in each unit (70 wells); Divide; these 3 cases -- 98 wells?
18470, Slawson, extend/amend Big Bend or Van Hook-Bakken, create an overlapping 1280-acre unit, 3 wells; Mountrail
18471, Slawson, amend Big Bend-Bakken, create a 1280-acre unit, 6 wells; Mountrail
18472, Slawson, amend Van Hook-Bakken, create a 1280-acre unit, 6 wells; Mountrail
18473, Triangle, amend Otter-Bakken, flaring, Williams
18474, Zavanna, extend/amend Stony Creek and/or Williston-Bakken, or in the alternative establish Bakken spacing in the Springbrook, create 2 1280-acre units; 1 well each; Williams
18475, WPX, amend Bailey-Bakken, alter definition of stratigraphic limits of the pool, Dunn
18476, WPX, amend Bear Den-Bakken, alter definition of stratigraphic limits of the pool, McKenzie
18477, WPX, amend Big Bend-Bakken, alter definition of stratigraphic limits, Mountrail
18478, WPX, ditto, Blue Buttes-Bakken, McKenzie
18479, WPX, ditto, Clarks Creek-Bakken, McKenzie
18480, WPX, ditto, Clear Creek-Bakken, McKenize
18481, WPX, ditto, Corral Creek-Bakken, Dunn
18482, WPX, ditto, Deep Water Creek Bay-Bakken, Dunn, McLean
18483, WPX, ditto, Eagle Nest-Bakken, Dunn, McKenzie
18484, WPX, Four Bears-Bakken, McKenzie, Mountrail
18485, WPX, ditto, Grail-Bakken, McKenzie
18486, WpX, ditto, Hans Creek-Bakken, Dunn
... and this continues through cas 18499
17848, cont'd, Baytex, violation of flaring, Divide
17849, cont'd, Baytex, violation of flaring, Divide
18274, cont'd, G3 Operating, amend Good Luck-Bakken, flaring, Williams
18309, cont'd, Crescent Point et al, amend Little Muddy-Bakken, flaring, Williams
18109, cont'd, Resource Drilling, amend Ross-Bakken, create a 1280-acre unit, 8 wells; Mountrail
1831, cont'd, EOG et al, amend Clear Water-Bakken, flaring, Burke, Mountrail
18305, cont'd, Liberty Resources, amend Tyrone-Bakken, flaring, Williams
18500 - 18510, CLR, pooing
18511, CLR, risk penalty legalese, Milloy, Hebron-Bakken, Williams
18512, CLR, risk penalty legalese, Fasching, Hebron-Bakken, Williams
18513, Denbury, risk penalty legalese, Lund, McKenzie
18514, Denbury, authorize increase density wells, 7 wells in each 1280-acre unit, Arnegard-Bakken, McKenzie
18515, XTO, risk penalty legalese, Willey, Williams
18516, XTO, risk penalty legalese, Arley, Williams
18517, XTO, risk penalty legalese, John, Williams
18518, XTO, 8 wells on each of 9 existing 1280-acre units (72 wells), Temple-Bakken, Williams
18519, XTO, 8 wells on each of 14 existing 1280-acre units (112 wells), Midway-Bakken, Williams
18520, XTO, 8 wells on each of 2 existing 1280-acre units (16 wells), Stoneview-Bakken, Burke
18521, XTO, 8 wells on a 1280-acre unit, Big Butte-Bakken, Mountrail
18522, XTO, 8 wells on an existing 1280-acre unit, Sorkness-Bakken, Mountrail
For these 5 cases, XTO is requesting permits for 216 wells; 
18523, Slawson, risk penalty legalese, Atlas, McKenzie
18524, Slawson, risk penalty legalese, Condor, McKenzie
18525, Slawson, risk penalty legalese Hatchet, McKenzie
18526, Slawon, 6 wells on an existing 1280-acre unit, Van Hook-Bakken, Mountrail
18527, Fidelity, risk penalty legalese, Kevin, Mountrail
18528, Fidelity, risk penalty legalese, Schwartz, Stark,
18529, Newfield, pooling
18530, Newfield, 4 wells on an existing 640-acre unit, Westberg-Bakken, McKenzie;
18531, Newfield, 7 wells on each of 3 existing 1280-acre units, Tobacco Garden-Bakken, McKenzie
18532, Newfield, 7 wells on each of 8 existing 1280-acre units, South Tobacco Garden-Bakken, McKenzie
18533, Newfield, 7 wells on an existing 1280-acre unit, Bear Den-Bakken, McKenzie
18534, Newfield, 7 wells on each of 3 640-acre units, Haystack Butte-Bakken, Dunn
17036, cont'd, Newfield, risk penalty legalese, Sand Creed Federal, McKenzie
18535 - 18539, Samson Resources, pooling,
18351, cont'd, Samson Resources, pooling,
18352, cont'd, Samson Resources, pooling,
18353, cont'd, Samson Resources, pooling,
18354, cont'd, Samson Resources, pooling,
18355, cont'd, Samson Resources, pooling,
18540, Samson Resources, risk penalty legalese, Felton, Burke
18541, Samson Resources, 7 wells on an existing 1280-acre unit, West Ambrose-Bakken, Divide,
18542 - 18549, Liberty Resources, pooling,
18550 - 18554, EOG, pooling
18555, EOG, 3 wells on each of 2 320-acre unit; 3 wells on each of 4 640-acre units; Squaw Creek-Bakken, McKenzie
18556 - 18562, Hunt, pooling,
18563 - 18567, BEXP, pooling,
18568, BEXP, SWD, Williams
18569, Borejaks Energy, SWD
18570, Borejaks Energy, SWD
17883, cont'd, Baytex, flaring, Divide
17884, cont'd, Baytex, flaring, Divide
17885, cont'd, Baytex, flaring, Divide
17886, cont'd, Baytex, flaring, Divide

That's All, Folks

Five (5) New Permits -- Daily Activity Report -- July 27, 2012

New permits: Five
  • Operators: Baytex (3), True Oil, Hunt
  • Fields: Red Wing Creek (McKenzie), Blooming Prairie (Divide), Whiteaker (Divide)
Baytex has a permit for a wildcat in Williams County.

Wells released from confidential list:
  • 20796, 471, Whiting, Ridl, 34-12TFH, Zenith, t1/12; cum25K 5/12;
  • 22154, 637, CLR, Pittsburgh 2-19H, Banks, t4/12; cum 22K 5/12;
  • 22219, WI, Ballantyne Oil, Wiborg 3-5, Southwest Landa, a Madison formation well; 
One producing well reported completed:
21682, 968, Denbury Onshore, Lund 44-8NH, McKenzie

Update From a Reader: Newfield Conference Call

I received the following note from a reader. It has a ton of information, so I am including it in its entirety without editing. Once I have it posted, I may come back and summarize the data points. A huge "thank you" to the read for sending me this.
A few days ago, one of your bloggers noted that Newfield did not mention the Bakken  during their recent conference call.   I listened to the entire call and they did make several mentions of the Bakken and their operations.
Most noteable was the addition of one new "walker rig" and the release of an older standard rig. They will operate three rigs for the remainder of 2012 and plan to add a fourth rig in early 2013.
They currently have three pilot programs running to test the best spacing for Bakken and
Three Forks wells.   Their drilling engineer said they will be releasing more info on these
efforts.  He went on to say "these tests may be pretty revealing." Newfield has two middle Bakken wells (Charlotte 1 & 2, 17-150-99) producing from the Middle Bakken with a separation averaging about only 750 feet.   In May, these two wells produced over 16,000 barrels each! Naturally, it will take several months to get a better indication of well interference.
About 3 miles to the northwest of the Charlotte wells, Newfield has four wells in the west half of section 11-150-99.   Three of these are Middle Bakken and one is Three Forks.  All appear to be good producers but time is needed to determine long term effects.   These Middle Bakken wells have horizontal sections 1000 to 1,060 feet apart.   Anyway, they are challenging the 1,320 foot (ore more) separation theories. 
Newfield operates a micro-seismic array covering about 40 sections in the Watford area.
These monitor all fracking to determine length of frack development, etc.  This is most
certainly tied into their current drilling pilot projects.
If separation of 1,000 feet gives more greater ultimate recovery, it's imperative to know this before drilling wider spacing without leaving any economic way to add smaller spacing infills.
Hess is also doing "science" drilling in the Hawkeye Field north of Keene in McKenzie County. Vertical monitor wells are being drilled between horizontal Bakken and Three Forks wells. Hess also has a similar project in western Mountrail County.   This type of information is invaluable before massive infill drilling programs get too far along.
Finally, directly north of Watford City, SM Energy is drilling the first eight-well, 1,280 acre unit, in the Bakken play. (sections 1/12-150-99)  One unit well has produced 150,000 barrels of oil in it's first year; three wells are currently drilling; and, two drilling pads have been completed for wells 5, 6, 7 and 8 (four Bakken and four Three Forks).   This unit is located between the closely spaced Newfield wells mentioned above. 
Several companies have mentioned 8 well units but to the best of my knowledge this is the first one to be implemented.  Several have multiple wells on one drilling pad but they are drilled into two or three different spacing/drilling units.   
Burlington Resources is drilling out two 7-well units in the Hawkeye, north Keene area.  These units are just west of the recently completed Burlington Llano well, 6,800 barrel-IP.
There was a lot of fascinating information in that note.

First, Newfield was concerned about the cost of Bakken wells in an earlier conference call, and there was some question to their plans in the Bakken. This clears things up immensely. It should be noted that in the past six months or so, Continental Resources (CLR) has acquired some Newfield Bakken assets. I try to note that in the daily activity report when a CLR/Newfield well is reported.

It is interesting to note that Newfield plans to add another rig in 2013.

I've blogged for quite some time that based on the NDIC GIS map server and corporate presentations, that the effective radius of fracking seems to be about 500 feet. Regardless of how it pans out, I am thrilled that my earlier blogging about the effective radius of fracking was not that far off target.

Anyway, lots of information in that note. Enjoy. The NDIC site seems to be up "now," but it will be "down" tomorrow, Saturday.

Natural Gas Primer -- RBN Energy -- A Must Read For Newbies

There is so much thrown at you and me on a daily basis regarding the Bakken, oil and gas, etc., that it is hard to sort out what it worthwhile to read.

If you are a newbie to the oil and gas industry in the Bakken, a couple of quick points. The Bakken is considered an oil field. The natural gas has been considered a by-product. Others may have been interested in this by-product but the company that stands out in my mind with regard to natural gas in the Bakken is ONEOK. Search the site for ONEOK, if interested.

There is the dry natural gas everyone talks about, the natural gas that is selling for $2 to $3 right now due to a huge nationwide glut. Oil and gas companies are switching emphasis from natural gas to oil due to the glut.

However, only recently are "we" learning that the Bakken has a high percentage of wet natural gas (natural gas liquids). A Bentek Energy study commissioned by the NDIC and released earlier this week suggests an impending (wet) natural gas boom in the Bakken. This was a huge story.

I get a lot of questions regarding wet natural gas. RBN Energy provided an outstanding wet natural gas primer today.

In addition to explaining natural gas terminology, RBN Energy also explains pricing of wet natural gas, a question that came up recently at this site:
There’s one more aspect of NGL markets that must have been designed to confuse outsiders, because it certainly does.  NGL quantities are quoted in barrels.  NGL prices are quoted in gallons.  Really.  So I’ll sell you 10,000 barrels of non-TET normal butane for $1.36 per gallon.  It never occurs to NGL people to convert either the quantity to gallons or the price to a per barrel number.  They think of everything multiplied by or divided by 42.  Go figure.  And BTW, propane retail people do think in gallons - but that’s another story.
You can't find any language more clear. That's how every RBN Energy essay is written: very, very easy to understand. 

See also my FAQ page, and specifically questions 57 and 58.

NDIC Announces It Will Be Down Tomorrow

NDIC announced that it will be "down" Saturday, July 28, 2012.

The site appears to be fully functional now.

Bakken Crude Oil by Barge

I first reported this June 29, 2012.

Jeff sent me an update, at this link, from Fox Business:
Barge operator Kirby Corp. (KEX) said Thursday that it is shipping crude from the Bakken Shale to refiners in Louisiana through the Mississippi River.

The Houston-based company is believed to be the first barge operator to use America's most famous river as a highway for oil from the land-locked Bakken, ...

Kirby during last weekend loaded on its barges at St. Louis a unit-train of Bakken oil that had arrived by rail. The barges take a week to travel down the Mississippi River to bring the oil to the Baton Rouge, LA, area, said company spokesman Steve Holcomb.
Go to the link for the full story. 

The Permitorium Continues -- Absolutely Nothing To Do With The Bakken


Later, 1:15 p.m.: The House passes their alternative bill for long-range off-shore drilling; Senate bill is similar. It will be interesting to see if the President vetoes the bill in an election year when most folks perceive they are paying $4.00/gallon of gasoline (or more), and know that the President killed the Keystone XL 1.0. None of this stuff has any effect on the price of oil today, or even the near future, but it sends a message, whether or not these bills are supported.  In addition, it adds fuel to the fire when folks remember the President's remarks: "You did not build it." If the Senate and the House both pass a bill that most Americans think would be good for them in terms of "the gasoline issue" they will know why "you didn't build it." The President killed it.

Original Post
Hastings and other critics of Obama's proposed plan, which was delivered for Congressional review on June 28, have said Obama's plan would keep 85 percent of America's offshore areas off-limits to energy production.
The U.S. Senate also is seeking to overturn Obama's proposed drilling plan. On Wednesday, six senators – which include Lisa Murkowski (R-AK), Jim Inhofe (R-OK), John Hoeven (R-ND), Mary Landrieu (D-La.), Jim Webb (D-Va.) and Mark Warner (D-Va.) – introduced into the Senate the Offshore Petroleum Expansion Now Act of 2012 into the Senate, also to replace the president's proposed offshore lease sale plan.
The House rejected this plan and substituted its own plan. And even the President's Democratic-led Senate are unhappy with his permitorium, as noted by the bi-partisanship above. Hey, even Senator Hoeven has signed on for an alternative bill. Wow, I'm glad I blog so little about off-shore drilling -- absolutely depressing.

Go to the link for the full, unbiased story.

OXY USA Conference Call Comments

Link here.

TransCanada Gets Final Permit for Keystone XL 2.0S -- The Gulf Coast Project; Keystone XL 2.0N In Limbo; The "Gap" Remains

"Final" permits from US Army Corps of Engineers for southern leg, the Gulf Coast Project
TransCanada has received the final of three key permits needed from the U.S. Army Corps of Engineers in order to advance the 485-mile Gulf Coast Project. With the permit from the Fort Worth, Texas Army Corps district added to previously received permits from the Galveston, Texas and the Tulsa, Oklahoma districts, TransCanada is now in a position to start construction of the oil pipeline in the coming weeks.
This was buried deeply in the press release from TransCanada (wow, it took a lot of reading to get to this key paragraph):
The U.S. Department of State is currently reviewing TransCanada's application for a Presidential Permit to proceed with the 1,179-mile (1,897-km) Keystone XL pipeline from Hardisty, Alberta to Steele City, Nebraska and is expected to make a decision in the first quarter of 2013. TransCanada also continues to work with the Nebraska Department of Environmental Quality to finalize a route that avoids the environmentally sensitive Sandhills area of Nebraska.
So, the gap remains. The permitorium continues.

For Investors Only: Chevron Beats, Revs Down; Arch Coal Up "Huge"; HP Beats

Chevron beats forecast; revenues down 7 percent
Chevron's net income fell nearly 7 percent in the second quarter as oil prices and production declined.

The oil giant said Friday it earned $7.21 billion, or $3.66 per share, last quarter. That compared with $7.73 billion, or $3.85, a year earlier. Revenue fell by 9 percent in the quarter to $62.6 billion.
Those results beat Wall Street estimates of $3.23 on revenue of $71.4 billion, according to FactSet. Shares rose by 24 cents to $108.51 in premarket trading.

Chevron Corp., the second-largest U.S. petroleum company behind Exxon Mobil, said production from its global network of oil and natural gas wells fell 2.6 percent in the second quarter. 
CVX, from Yahoo!In-Play, slightly different
Chevron beats by $0.42, beats on revs: Reports Q2 (Jun) earnings of $3.66 per share, $0.42 better than the Capital IQ Consensus Estimate of $3.24; revenues fell 9.2% year/year to $62.61 bln vs the $58.37 bln consensus.  
Arch Coal, from Yahoo!In-Play:
Arch Coal is up huge (+12%) pre-market following earnings results, which is so far giving most the coal group a boost.

Arch Coal beats by $0.08, beats on revs; reaffirms thermal coal sales volume forecast, lowers met coal forecast: Reports Q2 (Jun) loss of $0.10 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus Estimate of ($0.18); revenues rose 7.9% year/year to $1.06 bln vs the $1 bln consensus.
HP, from Yahoo!In-Play:
Beats by $0.22, beats on revs: Reports Q3 (Jun) earnings of $1.38 per share, $0.22 better than the Capital IQ Consensus Estimate of $1.16; revenues rose 27.3% year/year to $819.8 mln vs the $778.73 mln consensus.

Friday Morning Links -- 800,000 BOPD?

Independent Stock Analysis: Shale Underestimated.
The last director's cut: 640,000 bopd.  The production numbers are delayed by about two months.

But then this, with no link to the original source that suggests 800,000 bopd:
Authorities in North Dakota said drillers hit pay dirt in the Bakken formation with nearly every attempt. Production there averages around 800,000 barrels per day, according to some estimates.
Does someone know something the rest of us don't -- 800,000 bopd? Monthly production is increasing by about 5% each month, so 640,000 x 1.05 --> 670,000 bopd (June); then, --> 700,000 bopd (July); and, maybe, --> 740,000 bopd (August). 

Lynn Helms did say that production was going to jump in the next few months due to a number of additional frack spreads being brought to Williams County to try to clear up the backlog of wells waiting to be completed.

I suppose it's possible that we are already near 800,000 bopd in the Bakken, but it seems a stretch. We won't know for several months.


Economy stalls: growth down to 1.5 percent; talk of recession,
The U.S. economy grew at an annual rate of just 1.5 percent from April through June, as Americans cut back sharply on spending. The slowdown in growth adds to worries that the economy could be stalling three years after the recession ended.
Market's response: green. The movers and shakers already knew this


VOG: increases availability of credit facility; up to $20 million

Just a Headline Away From $100 Oil -- Absolutely Nothing To Do With The Bakken

If you came here looking for the Bakken, scroll up or down.

With regard to the "subject line," I posted that link yesterday at this post (we are just a headline away from $100 oil).

Now, tonight at the Drudge Report, a very interesting story in the Jerusalem Post: "Muslim Brothers Plotting Overthrow of Gulf States."
Dubai's chief of police: "The brothers and their governments in Damascus and North Africa have to know that the Gulf is a red line, not only for Iran but also for the Brothers as well."
North Africa: Egypt and Libya. The Arab League?

I can only assume the UAE and Saudi Arabia are watching events in Syria with much concern.

Back on March 24, 2011: evidence that the US was supporting regime change in Syria.  More recently, Saudi's concern about Syria.

My hunch is that this will, too, shall pass ("this" being the civil war in Syria and the saber-rattling by Iran) but there is an interesting confluence of events in which the outcome is completely unpredictable. The movers and shakers have a way of letting things go to the brink, and then, like deus ex machina, rescue adversaries from going over the cliff.

HESS: Data Points From The 2Q12 Earnings Conference Call

Hess beats by $0.20, beats on revs: Reports Q2 (Jun) earnings of $1.61 per share, $0.20 better than the Capital IQ Consensus Estimate of $1.41; revenues fell 5.1% year/year to $9.31 bln vs the $8.82 bln consensus. Oil and gas production increased to 429,000 barrels of oil equivalent per day, up from 372,000 in Q2 of 2011. Oil and gas production from the Bakken increased to 55,000 barrels of oil equivalent per day, up from 25,000 in Q2 of 2011; transcript;

Data points from the earnings conference call:
  • increasing CAPEX, mostly due to the Bakken
  • will fund with internal cash flow; if more needed, assets sale (gas to oil switch)
  • Bakken wells costing $13.4 million; will decrease to under $10 million
  • using costly hybrid (plug-and-perf) for HBP wells; will use less costly sliding sleeve for infill
  • $8.9 million to complete an Eagle Ford well; it was $10.3 million in 2011 (see transcript for discussion of daily production of Bakken wells vs Eagle Ford wells)  
  • completed their CBY facility; in April, shipped an average of 29,000 bopd to higher-value mkts
  • still relatively early in the Bakken
  • 2012 exit rate as high as 68,000 boepd
  • Tioga gas plant to be completed in 2013
"We're nearing the end of HBP mode, what we are doing is we're doing a comprehensive development strategy for the Bakken. So this a long-term development strategy with a goal of maximizing profitability and capital efficiency. And so the results of that study will be used to optimize the drilling program in 2013 and beyond."
This was an interesting exchange:
Q: Do you engage in controlling flowback techniques to increase EURs?
A: In Utica, yes: shut in the well for an extended period of time. The nature of the Utica is quite different from the Bakken. In the Bakken: no.

Enola Gay, Hillbilly Moon Explosion 

See You Round Like A Record, Rocky Horror Show, Little Nell
It's Not Fair, Lily Allen

XOM: 32,000 BOEPD From the Bakken

Not a big deal, but interesting to note that "XOM" is in the Bakken. In fact, it is XTO, a subsidiary of XOM.
Exxon Mobil Corp. (XOM) is producing about 32,000 barrels of oil equivalent from the Bakken Shale, doubling its output from when it entered the area, an executive said Thursday.

"We have moved into a development phase" in the shale located in North Dakota, Montana and Canada, Exxon Vice President of investor relations David Rosenthal said in an earnings call.
From the transcript:
In the Bakken, we have moved into a development phase across our roughly 400,000 net acre leasehold. In the first half of 2012, we turned 40 wells to sales, nearly double the pace of 2011.

In the second quarter of 2012, our gross operated Bakken production increased by 60% over the prior year quarter. Since our entry into the play, we have more than doubled gross operative production to approximately 32,000 oil equivalent barrels per day.
In addition, XOM mentioned the Bakken twice in the short Q&A when unconventional liquids was brought up. This is a big deal for the Bakken. I think it caught everyone by surprise.

I never thought I would see the day that XOM would single out the Bakken as one of its development areas.