Friday, August 24, 2012

Another Truck Stop Going Into the Bakken -- Grassy Butte, North Dakota

Wow, I wish every Wall Street analyst could drive through Grassy Butte, North Dakota. Beautiful scenery. I cannot count the number of times I have been through Grassy Butte.

I see a new truck stop will be going in:
Builders will break ground on a new truck stop targeting oil traffic near Grassy Butte in a few weeks.

Sweet Crude Travel Center will be at the southeast corner of the intersection of Highways 200 and 85. The building will be 13,500 square feet with 12 acres of land for parking, said Brett Narloch, managing partner.
Wow, it never quits (in the Bakken). 

AAPL: Be Ready For A Wild Ride Monday -- Apple Wins Patent Infringement Suit Against Samsung; TransCanada (Keystone XL) Wins in Texas

Link here.
Samsung responded to the verdict in a statement issued from its Seoul headquarters, saying it was "unfortunate that patent law can be manipulated to give one company a monopoly." 
Just a few years ago Dell said "Apple should close shop." I think Apple still has less than 8 percent market penetration of desktop computers. Go into almost any Forbes 500 company (except Apple, of course) headquarters building and the secretaries are all using non-Apple desktops. I know the military almost uses non-Apple exclusively for their computer needs.
"Today's verdict should not be viewed as a win for Apple, but as a loss for the American consumer. It will lead to fewer choices, less innovation, and potentially higher prices," Samsung said. 
Less innovation? Samsung copied Apple's ideas and patents. I don't know what Samsung innovated.

A Texas rebellion over private property rights and a major new oil pipeline has been dealt a setback by a judge in Lamar County, who ruled that the Canadian pipeline company TransCanada has the right to exercise the power of eminent domain to run the Keystone XL pipeline across an opposing landowner’s property.

“What this means is that the lowest-level court has chosen to rule in TransCanada’s favor with a summary judgment, and I find it interesting that it was a 15-word ruling sent from his iPhone. We’ve been in court with thousands of pages of documents and testimony and witnesses and hearings, and it comes down to 15 words on an email form his phone.”
How many words did the plaintiff want? Texans aren't exactly known for excessive talking (LBJ excepted).

Daily Bakken Operations Report; BR Has a Huge Short Lateral (IP - 5,310);

Wells coming off confidential list, Friday, were reported earlier.

In addition, the follow producing wells were completed:
  • 20636, 5,310, BR, Brazos 24-34H, middle Bakken, Charlson, short lateral, t6/12; cum 5K 6/12; the horizontal leg was drilled in four days; 11 stages (?); 1 million pounds sand; half-million pounds ceramic;  the hole was spud 11/7/11 but no drilling was done between 11/17/11 and 11/29/11; they reached vertical depth on 12/2/11; the horizontal total depth was reached in four days; this is essentially an 8-day well.
  • 22139, 1,148, XTO, Christiana 21X-6G, t4/12; cum 20K 6/12;
  • 20062, 1,359, XTO, Christiana 21X-6, t4/12; cum 28K 6/12;
  • 21754, 654, Enerplus, Grouper 149-94-36D-25h TF, t7/12; cum --
Eighteen (18) new permits issued in North Dakota today (includes three salt water disposal wells);
  • Operators: OXY USA, CLR (7), Murex, Fidelity, Triangle (4), G3, Zavanna (2)
  • Fields: Crooked Creek (Dunn), Banks (McKenzie), Upland (Divide), New Home (Williams), Alexander (McKenzie), Green River (Stark), Rawson (McKenzie), Good Luck (Williams)
It looks like CLR has permits for a 5-well pad in Banks oil field.

Land Available For Lease in the Bakken

At this post regarding the airport at Killdeer, there is a comment regarding land for lease.

Helis: A Retrospective -- 100K in Six Months; 28 stages; 100% Ceramics; Three Forks Target; Pronghorn Discussed

My database suggests that Helis was issued its first permit in the current boom in 2007.

Here is the status of wells for permits issued to Helis in 2011. I think the narratives for several of the wells will give one an idea of the well design used by Helis, the formation target, etc.:
  • 20591, 2,656, QEP/Helis, Jones 4-15/22H, Three Forks, Blue Buttes oil field, t4/12; cum 586K 11/17; 28 stages; 3.4 million pounds; 100% ceramics; vertical hole, 137 hours; horizontal, 286 hours; 28 days total; middle Bakken 38' thick here; "recently the NDGS has reclassified the lower approximate 10' of the Lower Bakken Shale as a stratigraphically and litholgically distinct unit. The unit now referred to as the Pronghorn Member is present in Blue Buttes Field. The unit thickness is variable and in some wells the interval has not been observed.... gas show in the Three Forks was encouraging .. 1,000 to 1,500 units .. increased to 4,000 units... then to 6,500 units...10-20' trip flare...."
  • 20780, 2,190, QEP/Helis, Henderson 1-28/33H, Grail, t6/12; cum 495K 11/17;
  • 21052, 1,684, QEP/Helis, Moberg 15-22/15H, Three Forks, Grail, t12/11; cum 298K 11/17; 28 stages; 3.1 million pounds; 100% ceramics; vertical, 132 hours; horizontal, 199 hours; spud August 26; reached total depth on November 6 (the surface was spud August 26; the big rig did not re-enter until October 4), so about 32 days total drilling; Pronghorn about 6' feet thick in this well, but averages 10' in this area; 1,500 units of gas; 3 - 5' flares; 
  • 21054, 1,601, QEP/Helis, Veeder 1-27/34H, Grail, t2/12; cum 345K 11/17;
  • 21331, 2,164, QEP/Helis, Foreman 5-2/1H, Three Forks, Spotted Horn, t1/12; cum 368K 11/17; 28 stages; 3.4 million pounds proppants; 100% ceramics; vertical 144 hours; horizontal, 308 hours; 33 days total; "recently the NDGS has reclassified the lower approximate 10' of the Lower Bakken Shale as a stratigraphically and litholgically distinct unit. The unit now referred to as the Pronghorn Member is present in Spotted Horn and surrounding fields; the Pronghorn is approx 8 feet thick in the Forman well; in the Three Forks, gas units as high as 3,413 units; flares were 2 - 5' in height; a sustained 10 - 15' flare was burned for about 30 minutes near the end."
  • 21437, 2,256, QEP/Helis, Lawlar 16-8/5H, Grail, t4/12; cum 386K 11/17;
  • 21456, 2,014, QEP/Helis, TAT 13-35/26H, Grail; t7/12; cum416K 11/17;
  • 21521, 1,521, QEP/Helis, Dailey 4-12/13H, Spotted horn, t3/12; cum 419K 11/17;
  • 21564, 2,288, QEP/Helis, Levang Federal 14-21/16h, Blue Buttes;  t8/12; cum 649K 11/17;
For newbies: these are huge wells. It looks like many will hit 100,000 bbls in the first three months of production; all should hit 100,000 bbls in the first six months of production, or certainly come close. This is as good a string of wells that I have seen anywhere in the Bakken since I began following it in 2006.

QEP did their homework.

The Permitorium Continues: Great News for the Bakken

Link here to Oil and Gas Journal.
US Sens. Lisa Murkowski (R) and Mark Begich (D) and Rep. Don Young (R) said it would place half of the 23.5 million-acre petroleum reserve under special protection, blocking access to vast oil and gas resources and make it hard to connect future offshore production to existing Prudhoe Bay systems.

When he announced the plan on Aug. 13, Salazar said it balanced meeting US energy needs with preserving wildlife and Alaska Native subsistence culture. The proposal also would not preclude construction of a pipeline from offshore oil fields across NPR-A if necessary requirements are met, he added.
Whatever. 

Keep This On Your Radar Scope: Saudi Arabia

I've talked about this before. "Arab Spring" keeps moving toward Saudi Arabia. Many of the articles have been in Mideast media with agendas. This story is in CNBC.
Saudi Arabia has gone on the offensive against Iran to protect its interests. Its involvement in Syria is the first battle in what is going to be a long conflict that will know no frontiers nor limits.

The Saudis are convinced that Iran is directing the protests and fear that the problems will spill over the 25-kilometer long COSWAY into oil rich Al-Qatif, where the bulk of the Saudi Arabia's Shia are concentrated. So far, the Saudis have not had to deal with demonstrations as serious as those in Bahrain, but success there could encourage the protestors to become more violent.

The customary manner of dealing with a problem by the patriarchal regime is to bury it in money. King Abdullah announced at the height of the Arab Spring that he was increasing the national budget by $130 billion to be spent over the coming five years. Government salaries and the minimum wage were raised. New housing and other benefits are to be provided. At the same time, he plans to expand the security forces by 60,000 men.
Go to the link for update on the Shia Crescent.

Some random data points:
  • Saudi Arabia increased spending on its citizens: a) it will never be enough; b) religious zealots are not interested in money; and, c) those two (a) and (b) are not connected.
  • Muslim Brotherhood is "taking over all" of Egypt
  • Muslim Brotherhood is anchored in the Sunnah (Sunnis)
  • Saudi state religion: Sunni; the Shia sizeable minority
  • Egypt is going to need cash, and a lot of it, to keep the revolution going
Arab Spring.

Airport Re-Opens in the Bakken

The airport at Killdeer, Dunn County -- Williston Basin Bakken -- will re-open next week.

Also, somewhat away from the Williston Basin Bakken but some folks may want to keep this on their radar scope (no pun intended): Hardin, Montana, replacing runway with $6 million airport.

What You Will Be Discussing Friday Morning; QEP Buys Helis, More, For $1.38 Billion; Wells Coming Off Confidential List; Nine (9) New Permits; The Permitorium Continues on Federal Land; Rig Count Down to 188

RIG COUNT DOWN TO 188

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Nothing like a $1.38 billion deal in the Bakken to raise all ships: are all the Bakken stocks up today on marginally higher oil prices? QEP is up 7% -- dynamic; will change; see disclaimer for this site: not investment site; information, education, and entertainment

The Biggest Story of the Year to Date: 
QEP Pays $1.38 Billion for Larger Stake in the Bakken; 
Includes 27,600 net acres in the Heart of the Bakken
Bakken Daily Operations Report

Rig count ends the day at 190 (the low has been 189 on the downward side of the rig count)

Today's list of wells coming off the confidential list were reported earlier.

Coming off the confidential list Friday:
  • 21252, 690, Whiting, S-Bar-11-7TFH, Sanish, t2/12; cum 25K 6/12;
  • 21545, 1,409, GMXR, Akovenko 24-34-1H, Beicegel Creek, 5/12; cum 9K 6/12;
  • 21928, 872, Murex, Junior 10-3H, Sanish, t5/12; cum 31K 6/12;
In addition, the following producing wells are now completed, reported Thursday:
  • 21757, 769, Enerplus, Impala 148-94-03B-10-1H, McGregory Buttes, t7/12; cum 2K 6/12;
  • 22670, 2,563, Whiting, Fladeland 14-27H, Sanish, t6/12; cum --
Nine (9) new permits in the North Dakota
  • Operators: CLR (4), Baytex (3), Whiting, Slawson, 
  • Fields: Sanish (Mountrail), Ambrose (Divide), Skabo (Divide), Chimney Butte (Dunn)
Whiting has a permit for a wildcat in Golden Valley.

Other Energy and Miscellaneous Links
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From Oil and Gas Journal
The transactions are to close by Sept. 27, effective as of July 1, 2012. The properties produce a combined 10,500 b/d of oil equivalent and have 125 million boe of net proved and probable reserves, 81% crude oil, 9% natural gas liquids, and 10% natural gas. The acquisitions also include 27,600 net acres of mostly fee simple mineral leases with 80% average net revenue interest.

QEP will operate 90% of the aggregate net acreage to be acquired. That acreage is presently operated by Helis Oil & Gas Co. LLC, New Orleans. The other sellers include Black Hills Exploration & Production Inc., a subsidiary of Black Hills Corp., Rapid City, SD, and the Unit Petroleum Co. subsidiary of Unit Corp.

The properties have 24 operated spacing units with 85% average gross working interest and 66% average net revenue interest and 27 nonoperated spacing units with 10% average gross working interest and 8% average NRI.

QEP sees above Williston basin-average well estimated ultimate recoveries for both Bakken and Three Forks formations in the contiguous, operated acreage block. For long-lateral wells drilled after January 1, 2010, Bakken EURs average 1.16 million boe and Three Forks EURs average 990,000 boe.
QEP said the Bakken and Three Forks formations are prospective across all of the acreage and will be developed by separate horizontal wells. The properties have 72 gross, 29 net developed locations and 301 gross, 146 net undeveloped locations.