Monday, September 10, 2012

Emerald Oil -- Yahoo!In-Play; Update; Acquires 4,500 Net Acres; $3,200/Acre;

VOG is now merged with Emerald Oil and operating under Emerald Oil.
Emerald Oil announces that it has commenced a public offering of 82,000,000 shares of its common stock (EOX): Co announces that it has commenced a public offering of 82,000,000 shares of its common stock. 
Separately:
Emerald Oil announces McKenzie County, North Dakota, operated acreage acquisition and reserve report update (EOX): Co announces it entered into a definitive agreement on September 6, 2012 to acquire approximately 4,500 net operated acres in McKenzie County, North Dakota, which the Company expects to close early in the fourth quarter of 2012. The Company has agreed to pay approximately $14.3 million in cash for this acreage, or approximately $3,200 per net operated acre. The average working interest on this acreage is greater than 60%. As part of the transaction, the Company will also acquire a recently constructed well pad and tank battery at an additional cost of $1.3 million in cash. These drilling and production facilities will allow the Company to drill some of its first operated wells on the acreage. From this well pad, the Company anticipates being able to hold by production three of the approximately nine operated drilling spacing units. Recently, certain offset operators to this acreage have announced wells that have had initial 24-hour production rates of over 3,000 barrels of oil equivalent per day (Boe/d). The initial 24-hour production rates achieved by others may not be indicative of the results the Company achieves from its wells.  [Note for newbies: boepd includes natural gas; a) natural gas tends to decline very, very quickly; and, b) it's not worth that much compared to oil, though wet natural gas is significantly better than dry. Bottom line: the boepd matters less to me than the bopd (oil only).]
June 30, 2012 Estimated Proved Reserves: Emerald recently commissioned a reserve audit by Netherland, Sewell & Associates, on the Company's oil and gas reserves as of June 30, 2012. The results of this audit illustrate the reserve growth Emerald experienced during the first half of 2012 from total estimated proved reserves of approximately 3.5 million Boe with a PV-10 value of approximately $59.6 million at December 31, 2011, to approximately 4.6 million Boe with a PV-10 value of approximately $83.2 million at June 30, 2012.

As of September 4,2012:
DENVER, CO--(Marketwire -09/04/12)- Effective today, Voyager Oil & Gas, Inc. (VOG) ("Voyager"), will be conducting business under the name Emerald Oil, Inc. (EOX). Also effective today, the common shares of the Company will be trading on the NYSE MKT under the EOX symbol.

Spacing in the Bakken -- A Random Note

An interesting spacing unit:
  • 19794, 446, EOG, Ross 34-0533H, Alger; t6/11; cum 80K 7/12; 4-section spacing (2560-acres; 2,704 acres to be exact)
The horizontal cuts across four sections, hitting the SW quadrant of section 5; the NE quadrant of section 6, hardly anything but the far SW corner of section, and the NE quadrant of section 33. The spacing is four section (2560-acres). That means a mineral owner in the far NE corner of section 34 is participating in this well, just as much as the mineral owner in the NE quadrant of section 6. With 640-acre spacing, a lot of mineral owners would be waiting for their well to come in.

Others will see it differently, of course.

Regardless of your thoughts on the spacing, it is what it is, and it is very, very interesting.

When I see some of the questions folks ask at other sites regarding mineral rights, all I can say is I am so glad I don't have any mineral rights. I know that doesn't make sense, but ...

What We'll Be Talking About Tuesday Morning -- Eighteen (18) New Permits -- The Williston Basin, North Dakota, USA

Updates


September 14, 2012: I suggested this strike would end by Friday of the week it started. Looks like I wasn't too far off the mark. I thought the political backlash against the teachers -- despite what they say -- would be too great.

September 11, 2012: 40 percent of Chicago's public school teachers send their children to private schools. They know best. At least we know why these teachers need an increase in pay; the cost to send kids to private schools has increased significantly over the years; public pay is not keeping up.

A Little Perspective Here

I never want to hear that roughnecks and Bakken truck drivers are paid too much. Chicago teachers go on strike because they won't accept a 16% pay raise over four years; they are already the highest paid teachers nationally; their average pay -- average is -- $79,000. Which means some of those teachers are earning well in excess of $100,000 before benefits, and they work 9 months / year, with generous vacation time during the school year: every federal and state holiday; no overtime; Thanksgiving 4 days; Christmas (or whatever they call it now) 2 weeks; spring vacation at least a week, probably 10 days. Their rooms are climate-controlled; I'm sure "snow days" are liberal, and you just know sick leave is very liberal. And I can bet they are out the door at the end of the school day faster than the students. No, don't tell me the Bakken roughnecks and truck drivers are paid too much. Finally, we see some perspective. The Bakken oil patch workers earn every bit of their pay if high school, middle school, and elementary school teachers in Chicago are averaging -- averaging -- $79,000 BEFORE benefits. And they go on strike because they can't accept a 16% pay raise. I sure hope the Chicago property owners enjoy paying their property taxes because they're going to get a chance to pay more.

So, it's either going to be a very, very short strike, or a very, very long one. By the end of the week, we will see whether parents are willing to take the strike in stride or whether they will let their city leaders know they want it over NOW. If the Chicago electorate supports the teachers, this will drag on long enough to possibly result in the loss of an entire school year.

On the other hand, if parents let their city leaders know that they will all be voted out of office if the teachers aren't back to work by Friday, it will be a short strike.

My hunch is the teachers won't be able to take the political heat, the popular backlash. The union leaders will push to keep the strike going but by Friday, they will be back in school "while negotiations continue."

This is a travesty at all levels. If this is still going on during the first presidential debate, it will be interesting if the moderator asks the question of the two nominees. My hunch is that the liberal media bosses won't let the question be asked. The question, of course: do you support the teachers who have gone on strike, who feel that $100,000 annual pay for 9 months work is not enough?

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Bakken Operations

Active rigs: 192

Eighteen (18) new permits:

  • Operators: BEXP (6), BR (6), Fidelity (4), Whiting, CLR,
  • Fields: Dickinson (Stark), Rosebud (Williams), Painted Woods (Williams), Zenith (Stark), Westberg (McKenzie), Alger (Mountrail), Stanley (Mountrail), Ukraina (Dunn), Sanish (Mountrail)

Wells coming off confidential list over the weekend and today reported earlier.

In addition, five producing wells reported IPs:
  • 21142, 1,020, Oasis, Horse Creek Federal 5004 42-35H,
  • 21489, 8,231, CLR, Antelope 4-23H, 
  • 21488, 1,357, CLR, Antelope 2-23H,
  • 21960, 1,220, MRO, Vance Strommetn 21-13H, 
  • 22182, 463, CLR, Opee 1-23H, 
I'm quite sure #21489 is an error; most likely 823 bbls, but we'll see. Unfortunately the well file is not yet available at the NDIC web site that would show the source data. It has to be an error, but on the other hand, the gas units reported were very, very high ( I read very few summaries, but enough to know that these are very high numbers): "Gas shows were consistent through the drilling of the lateral, with background gas averaging 1,400 units at a 9.4 mud weight. Trip gases reached 10,000 units at the end of the lateral. Just below the gamma marker four and a half feet below the target zone was a very small zone that had good shows having background gas reaching nearly 2,600 units.

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Bakken Dispatch

You can find "Bakken Dispatch" at two places on the sidebar at the right for now. It is still down among the "external links," but I have also placed a link near the top of the sidebar for now for easier accessibility. If I have this correct, it used to be linked as "Bakken Zone." If that is incorrect, I'm sure the webmaster will let me know.

Abraxas Activity -- Random Note -- Acquiring a Few Acres in the Eagle Ford

From a SEC filing:
Under the terms of the Agreement, Abraxas retained a 100 percent interest in the Eagle Ford and shallower rights in Jourdanton, Atascosa County (4,401 net acres), a 100 percent interest in Yoakum, DeWitt County (1,868 net acres), a 25 percent interest in WyCross, McMullen County (695 net acres), and a 25 percent interest in Nordheim, DeWitt County (944 net acres).  
The producing wells are currently producing 205 barrels of oil equivalent per day (62 percent oil and 11 percent ngls) net to the interest retained by Abraxas. 
The proved reserves attributable to the Abraxas interests are approximately 2.4 million barrels of oil equivalent (27 percent oil and 25 percent ngls). The probable reserves attributable to the Abraxas interests are 3.7 million barrels of oil equivalent (54 percent oil and 15 percent ngls).  
Abraxas also received a $7 million cash payment, adjusted for various working capital components, and will receive 25 percent of the cash and working capital in Blue Eagle upon its final liquidation. Abraxas, as operator, and its working interest partner will commence a ten well drilling program utilizing one rig in the WyCross area in the near future.  
The first well drilled at WyCross, the Abraxas Cobra #1H has produced over 110,000 barrels of oil equivalent since going on production in March of 2012 and is currently flowing approximately 430 barrels of oil equivalent per day (86 percent oil and 5 percent ngls).
Disclaimer: this is not an investment site; this is for sharing information only.

We Knew It Was Bad -- Just Not This Bad --

Updates

September 24, 2012: more of the same.
GM executives have conceded from the start that they were losing money on the Volt, and that was before the big discounts.  
Now the losses could be even higher. It costs $60,000 to $75,000 to build a Volt, including development, manufacturing and raw materials, estimates Sandy Munro, president of Munro & Associates, a Troy, Mich., a company that analyzes vehicle production expenses for automakers. 
Much of the cost comes from an expensive combination of two power systems — electric and gasoline. With a sticker price of $40,000, minus the $10,000 the company pays in incentives, GM gets roughly $30,000 for every Volt. So it could be losing at least $30,000 per car.  [Plus opportunity cost.]
September 11, 2012: Forbes analysis -- 
I was surprised to read Ben Klayman’s piece on alleged astronomical per-unit losses on the Chevrolet “Volt.” Ben is usually a solid professional who checks his facts.The statement that GM “loses” over $40K per Volt is preposterous. What the “analyst” in whom poor Ben Klayman placed his faith has done is to divide the total development cost and plant investment by the number of Volts produced thus far.  
That’s like saying that a real estate company that puts up a $10 million building and has rental income of one million the first year is “losing” 9 million dollars, or several hundred thousand per renter. 
And, yes, if after one year the building has no tenants and none on the horizon, the real estate company has lost not only $9 million but also the opportunity cost. Opportunity cost: money not allocated to profitable real estate deals. Of course, if the building has some resale value, all is not lost; and there are tax considerations. The same with the manufacturing facilities for the Volt.

It should be noted that GM will shut down the Volt assembly line, temporarily, for production to catch up with demand.

Later, 4:30 pm: wow, for a story that I thought was a throwaway, the Volt story has been all over the news today. Now GM is disputing Reuters numbers, saying that with every Volt sold, the Reuters numbers are "more" wrong. It's going to take a lot of Volts to "average" that $89,000 down to $20,000. Remember, they are leasing some of those cars for less than $5,000/2 years with that monthly $169 lease that was reported earlier.

Later, 4:00 pm: wow, when it rains, it pours. Articles everywhere today about the cost of the Volt. My first link at the original post appears to have been an "abridged" edition of the original Reuters story which contained a lot more information. The comments are as interesting, if not more interesting, that the story itself. I think the new question is how long will GM continue to sell the Volt in its present configuration. Even Apple/Steve Jobs knew when it was time to "kill" the Newton, technology way ahead of its time, but not ready for prime time.

Later, 12:30 pm: I was going to leave this post alone, but I got a great comment from a reader that I wanted to post, but it was inappropriate for language content. For some reason, he thought the EV technology was "great."

I have no dog in this fight. I don't drive electric cars; I don't own electric cars; I don't own shares in GM. All I'm doing is providing a bit of transparency for those who are interested in electric cars.

So, here's a first-hand account of one's experience with charging electric cars.
I've recently had two plug-in cars. The first was a Fisker Karma, a beautiful $100,000 performance-tuned car with 30-mile all-electric driving range, after which it ran on gasoline power. And thank goodness it could.  
The second was a Mitsubishi (MMTOF) i-MiEv, an all-electric car with a roughly 60 mile range. In that case, the headaches started with the car itself. Sorry, Mitsubishi but the i-MiEV is awful. It's ugly, uncomfortable, and it performs like a dog sled in the desert.  
If you live in a city and are thinking about making the leap to a fully electric car, I recommend carrying a large bottle of Tylenol in the center console because your headaches will be epic.
The story at the link is priceless.

Original Post

Link here.
General Motors Co sold a record number of Chevrolet Volt sedans in August — but that probably isn't a good thing for the automaker's bottom line.  
Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, ...  
Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.  
And in a sign that there may be a wider market problem, Nissan, Honda and Mitsubishi have been struggling to sell their electric and hybrid vehicles, though Toyota's Prius range has been in increasing demand.
The all-electric Ford Focus: 76-mile range.

The lease offers refer to $169/month (at the second link above).

Baker Oil Field Update

Baker Oil Field

Baker oil field is an irregularly shaped field southwest of Williston, in McKenzie County, across from the river from Williston. The northwest sections of the field was made "famous" in 2013 timeframe with the CLR 14-well pad that was built on the north side of the river. The fourteen horizontals radiate southeast, under the river.

Updates

August 31, 2013: September, 2013, NDIC hearing dockets, case #20867:
20867, Oasis, authorize, Baker-Bakken; 15 wells on some or all 1280-acre units; McKenzie, Williams. Bakker oil field is where CLR has a 14-well pad, southwest of Williston, on the north side of the river, across the river from the water treatment plant/
November 24, 2012: from a comment sent in, November 24, 2012, to another post:
If this looks impressive you should check out the 14 permits CLR has in section 6 of the Baker Field. They are all located on EcoPads in string like fashion. In the last couple of weeks they spud Atlanta 1 thru Atlanta 4. They have 2 years to complete 14 wells on a 2560-acre spacing unit. When completed they will look like a fan spread out from the north west corner. Alternating from Bakken, Three Forks, Bakken, etc... Should be a couple of very long laterals towards the middle. Almost all laterals go under the river southwest of Williston. These wells have their own salt water disposal well. Very aggressive approach.
Permits

2014

29334, Oasis,
29317, Oasis,
29316, Oasis,
29244, Oasis,
29243, Oasis,
29242, Oasis,
28978, Oasis,
28977, Oasis,
28976, Oasis,
28756, Oasis,
28755, Oasis,
28754, Oasis,
28744, Oasis,
28658, Oasis,
28655, Oasis,
28654, Oasis,
28653, Oasis,
28652, Oasis,
28651, Oasis,
28649, Oasis,
28648, Oasis,
28637, Oasis,
28636, Oasis,
28635, Oasis,
28634, Oasis,
28633, Oasis,
28601, Oasis,
28600, Oasis,
28599, Oasis,
28558, Oasis,
28557, Oasis,
28556, Oasis,
28555, Oasis,
28554, Oasis,
28425, Oasis,
28394, Oasis,
28342, Oasis,
28304, Oasis,
28303, Oasis,
28252, Oasis,
28195, Oasis,
28194, Oasis,
28193, Oasis,
28192, Oasis,
28191, Oasis,
28190, Oasis,

2013
27215, Oasis,
27214, Oasis,
27213, Oasis,
25571, Oasis,
25160, CLR,
25159, CLR,
25158, CLR,
25157, CLR,
25156, CLR,

2012
23372, CLR,
23371, CLR,
23370, CLR,
23369, CLR,
23368, CLR,
23367, CLR,
23366, CLR,
23365, CLR,
23364, CLR,
23363, CLR,
23362, CLR,
23361, CLR,
23360, CLR,
23359, CLR,
23350, CLR,
23230, Oasis,
22740, Oasis,
22739, Oasis,
22731, Slawson,
22249, Slawson,
22221, Oasis,
22220, Oasis,

2011
22100, Oasis,
22099, Oasis,
21796, SM Energy,
21266, SM Energy,
20431, SM Energy,



Original Post

From Mike Filloon's article on September 10, 2012:
Watch Baker Field in southern Williams County. Continental has permitted a 14-well pad in section 6-153-101. Six wells are NENW and the other eight are NWNW. I am unsure how many of these wells are middle Bakken, upper Three Forks, or if this will test the second or third bench. Either way, it's an intriguing development.
More on this field later.

Solar Panel Installation in US is Soaring -- WSJ; Nuclear Waste Plant Construction Slows

Before I get to the energy links below, just a bit of trivia. When I substitute teach middle school and high school (which I love to do), I never make students stand/recite the Pledge of Allegiance. No one told me one way or the other what the rules were, but common sense told me that this would be a non-starter for my school day if I got into that issue first thing in the morning. Well, it turns out -- I did not know this -- "In the 1943 case West Virginia State Board of Education v. Barnette, the court ruled that Jehovah's Witnesses in grade school may not be forced to salute the flag and recite the Pledge of Allegiance." Common sense would suggest this applies to more than just Jehovah's Witnesses. That might be an interesting point of discussion when they come knocking on your door.

By the way, it was also the Jehovah's Witnesses that successfully argued before the US Supreme Court that they could not be forced to carry the state motto "Live Free or Die" on their license plates, New Hampshire, Wooley v. Maynard (1977).

What a great country, or what?

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Link here.  google sun peeks through in solar
The US is on pace to install as much solar power this year as it did in this century's entire first decade; at least 2,500 megawatts, the equivalent of more than two nuclear-power plants. The US added about 742 megawatts of solar capacity in the second quarter, or enough to power about 150,000 homes...
The story is worth reading.

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Also, in today's WSJ -- how would you like a nuclear waste plant in your back yard -- the thought makes an oil pipeline pale in comparison.  Google waste-plant dispute builds

Data points:

  • Hanford, Washington (state)
  • a $12.2 billion project
  • 65 acres for the project
  • sits on the 586-square mile Hanford site which produced plutonium for atomic weapons in WWII
  • Bechtel Corp
  • will house four (4) nuclear facilities
  • it is being designed as it is being built -- repeat, it is being designed as it is being built
  • already leaks have been discovered: the threat of leaks has been a concern for decades

So, there you have it.

Random Update of a Well In Dublin Oil Field

A reader asked for update regarding a particular well (see below).

Information of a more general nature, including IPs of wells that came off the confidential list over the weekend and today, is in the post below. Scroll down.

Now, regarding:

  • 21860, 100, Crescent Point Energy, CPEUSC Paopao 35-26-158N-100W, Dublin, t3/12; cum 28K 7/12; 

Production data:
Completion Data
   Pool: BAKKEN     Perfs: 10543-20517     Comp: 3/8/2012     Status: F     Date: 3/14/2012    Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 27659     Cum MCF Gas: 13806     Cum Water: 22625
Production Test Data
   IP Test Date: 3/14/2012     Pool: BAKKEN     IP Oil: 100     IP MCF: 74     IP Water:1561
Monthly Production Data
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-20123111348115337736659965990
BAKKEN6-20123016311150441488972076465742
BAKKEN4-20120000000
BAKKEN3-20120000000