Thursday, October 25, 2012

Canadian Pacific Talks About Crude-By-Rail

Link here to SeekingAlpha.com.

Data points or quotes:
In energy, our strategy has delivered our fifth conservative quarter of double-digit revenue growth as our crude-by-rail program gains wider adoption by producers and marketers who are diversifying their supply chains by investing in a rail model. Change is underway at CP, and our focus on creating a better product for our customers and securing full value for our services.

We continue to execute our Bakken expansion strategy and gain traction in the implementation of our crude-by-rail model in both Alberta and Saskatchewan. This strategy will create a diversified mix of origination capability covering light, medium and heavy grades of crude. Crude volumes continue to trend upwards and we will hit the annualized 70,000 carload target in early 2013, more than a year sooner than expected. CP customer expansion plans are proceeding, and we expect to sustain our growth momentum. But I will speak to more about this market at our upcoming Investor Day.

Yes, I think what I would say here is that we've seen this volume in our crude by rail portfolio ramp up rather quickly. I mean, we've been talking before around 13,000 carloads last year, and we've moved ahead our target, the 70,000 carloads, by just about a year. Clearly, we do have franchise capabilities, and we look at that, certainly, marketplace in the Eastern part of the United States, it's a very, very positive market. We started with, certainly with ethanol moving it into that market. We basically filtered our crude by rail model starting -- looking at select locations on the light sweet crude side out of the Bakken. And now we're seeing volumes of this traffic starting to make it [indiscernible] in the East Coast, south of Saskatchewan, and possibly I know we have plans targeted for Alberta as well. So clearly this is a place where you take your franchise opportunities. You basically focus on running the best network and supply chain that you possibly can because that's how you run that play. So we look at that market as one of the areas for growth but again, we also look at the Gulf, we look at the West Coast, and we look at other locations as well because we think there's an opportunity to make our markets. And we feel confident that the product that we're putting there is putting value in the market. And I think the real test that we're seeing is, not only are we providing it to Hunter's point where you're seeing this volume increase, but we're seeing real investments by the customers in crude by rail, in cars and in facilities and in terminals. And that's where we really see the upside in this market.

Another Pipeline Expansion From D-J (Colorado) to Cushing

Link to Oil & Gas Journal here.

Data points
  • operator: White Cliffs Pipeline LLC
  • Platteville, CO, to Cushing, OK
  • expansion of the 527-mile pipeline; D-J basin to Cushing
  • increasing capacity to 150,000 b/d from 70,000 b/d
  • expected to be in service by first-half 2014
  • White Cliffs is owned by subsidiaries of SemGroup; Plains All American, Western Gas Partners LP, and Nobel Energy; SemGroup's MLP, Rose Rock Midstream LP, will continue operating the pipeline

OXY USA: Sounds LIke OXY Will Minimize Ops in North Dakota for the Foreseeable Future -- Transcript

Link here to SeekingAlpha.com.
In the Williston basin in North Dakota, we currently have over 310,000 net acres of significant resource potential, which we estimate to be about 250 million net barrels. Our production in the basin has tripled since we entered the area over 1.5 years ago. We have recently slowed our drilling activity and significantly reduced our rig count in the basin as a result of cost pressures. While well costs have subsequently declined modestly, we will only increase our rig count when costs come down enough to make returns competitive with the rest of our portfolio. We believe that over the long term, our resource base in the Williston basin represents a significant opportunity for the company.
A question (taken out of context):
You've added acreage in the Bakken. You've got a huge acreage position in California. Presumably, it doesn't make sense to just sit on these assets. Asset sales, joint ventures, bringing in others to drill this stuff, is that part of the plan? Or practically speaking, what does it really mean to cut CapEx when you've been building up these big acreage positions over the years?
Answer (taken out of context):
So I view it as sort of a deferral mechanism, rather than just sort of cutting it. But if they can't -- if they can't generate the returns in some of the assets, we might farm some out to people who might operate more efficiently.
***************
Question (taken out of context):
And I think it was a couple of years ago, you were pretty honest about -- classically, you guys are an EOR company, not a shale drilling company. You're now kind of again going after that same operational execution ability. Do you have to acquire a company that can do this stuff for you?
Answer (taken out of context):
No, I don't think so. It was 2 years ago, we had this exact conversation in New York. And I said that, we were shifting the business from a -- for want of a better word, an EOR acquisition company/acquisition company to something that was more operational and more traditional. And I said that was not going to be easy, and I was right. And we've lowered -- I don't know how to say it, the average experience level, I guess is the politically correct way of saying it, of the people. And so some more mistakes have been made than might otherwise have been made. But I think we're getting there, I hope we're getting there. I'm just in a hurry because I'm older than the average.
Go to the link to see the entire Q&A exchange. The analysts seemed concerned about OXY's experience in California. No real questions about North Dakota because OXY was more direct about that. But California leaves one with more questions, I think. 

Daily Activity Report Not Posted Today

Bakken Operations

Active rigs: 188 (steady)

New permits: not posted today
Operators:
Fields:
Comments:



From COP Earnings Transcript at SeekingAlpha.com

Link to SeekingAlpha.com here:
... switching now to the Bakken we have more than 620,000 acres in this liquids rich play that’s all held by production. We exited the quarter with the production rate of 26,000 BOE per day and as a result of incremental capacity from new rail facilities, we’ve ramped up from five to eight rigs and we see the benefit of this increased activity in the fourth quarter and in 2013.
No change in acreage or rig count since 2Q12. 

KOG's 3Q12 Operations Update -- Company Guides Lower End of Production for 2012 (Daily Basis)

Link to press release here.

For the third quarter 2012, Kodiak reported average sales volumes of 15,855 barrels of oil equivalent per day (BOE/d).  This represents a 301% increase over sales volumes of 3,953 BOE/d for the third quarter 2011 and a 25% increase over second quarter 2012 sales volumes of 12,696 BOE/d.  Crude oil accounted for 88% of third quarter 2012 sales volumes.

Data points:
  • eight drilling-rig program now; but seven rigs during the winter
  • two non-operated rigs
  • operated rigs will be moved to multi-well pads located primarily in Polar and Smokey project areas by the end of 2012
  • drilling efficiencies: 11 wells per year vs 10 wells per year, per rig; more wells with fewer rigs
  • two full-time (24/7) frack teams; to remain active through end of 2012
  • each frack crew completes two wells every 8 - 10 days
  • pipelines are being installed ahead of completion efforts
  • projected exit rate for 2012: 27,000 boepd
And then this direct quote from the press release, KOG appears to be guiding lower end of production for this calendar year (2012):
Kodiak now believes its average daily production will be in the range of 15,500 boe/d to 17,500 boe/d for the full-year 2012.  The new range compares to previous disclosure of 17,000 boe/d to 21,000 boe/d average production for 2012.
If I'm reading that correctly, that's a significant change -- the low end vs the high end (15,500 vs 21,000; the delta is about 25 decrease) -- again, if I'm reading that correctly.

Two other data points from the press release:
"Our team is diligently working on well bore down-spacing potential, as well as testing additional Three Forks Formation intervals.  Work has begun to obtain the necessary approvals to commence drilling a multi-well pilot program within a 1,280 acre spacing unit in each of the Polar and Smokey project areas.  The pad design contemplates additional down-spacing of wells drilled in the Middle Bakken Formation and testing of multiple zones in the Three Forks Formation.
"We are particularly pleased about the recently completed third well in our Wildrose block in Northern Williams County. The initial 24-hour average production rate of 1,007 BOE/d represents a significant improvement from the earlier two wells.  The improved performance is attributed to ongoing advancements in our completion techniques.    Since the wells are much shallower than wells drilled in the core of our acreage, and are not in the same pressure regime, we believe we can lower our completed wells costs in this area to $7.5 million per well

Major Electrical Outages in the Oil Patch in 2013 If ....

Link here to the Bismarck Tribune.
A contracting company with strong ties to Coal Country will buy the former Stanton school and remodel it into a hotel for its workers and the public.
Jeff Hammes, spokesman for Industrial Contractors Inc., said the company’s chief executive officer gave the project a green light Tuesday. ICI will move quickly to acquire the building by Oct. 31 and start remodeling so the building is converted by spring, he said.
The project is on a hurry-up track because “everything is lining up for everybody to have major outages,” in 2013, Hammes said.
The company — headquartered in Bismarck — has been a mainstay in plant construction and outage maintenance since the ’60s.
Stanton, ND, is about an hour's drive northwest of Bismarck.

ATT vs Verizon -- AT&T Gets Its Bell Rung as Verizon Widens Market Lead -- WSJ

Google it.

Page C10 of the WSJ today.

But the journal let us down: it showed quarterly subscriber growth for ATT back to 2Q11 (six months of data) but did not include data for Verizon. ATT subscriber growth had an outlier quarter, 4Q11, when subscriber growth was 700,000 vs the usual 150,000 to 3,000. 3Q12 was particularly challenging for ATT: only 150,000 new subscribers (320,000 a year earlier), compared to Verizon adding 1.5 million wireless subscribers in the third quarter.

A Note for the Granddaughters

I can't say enough about Camille Paglia's new book on art: Glittering Images. I've talked about it at both Amazon.com and at my literature blog.  The book takes one through the history of art, from Egypt to Star Wars, in 29 short essays. Each essay is 3 to 5 pages, and each follows a typical format: one to two pages on the cultural/historical setting at the time; one to two pages on the artist; and one to two pages on a description of a representative piece. The book is just the right size for a back pack; not a coffee table art book. I can hardly wait to start reading an essay a night to the granddaughters. But tonight I promised I would read the most recent issue of National Geographic to the older granddaughter. This issue has a pull-out poster of the cheetah. And, wow, one of our favorite subjects: an article title "Launch of the Penguins." I don't know what that one is about, yet.

Supply Boom Upends the Oil Market -- WSJ; Cheap Natural Gas Gives New Hope To the Rust Belt -- WSJ

For the first story on oil: front page, section C (page C1), today's issue.

Google it.

I started the blog for a couple of reasons. One reason was to counter those who said the Bakken was a lot of hype. I suppose.

From the WSJ:
Suddenly, the world is awash in oil.
Forecasters say that in the fourth quarter, global oil output will top demand by more than 630,000 barrels a day (about the amount North Dakota produces). 
The WSJ attributes it all to "changes" in the Mideast, at least in the third paragraph. The article does not mention the Bakken; if it does, I missed it. But then this concluding paragraph:
Ed Morse, global head of commodities research at Citi Global Markets Inc., says the IEA's fourth-quarter estimate for global oil output is too conservative. He estimates the US along could increase production by 600,000 bbls a day. "It's the beginning of a big change," he said.
Yup.

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

For second story, front page, yesterday's issue:
BEAVER COUNTY, Pa.—Three decades after being devastated by the closing of steel mills, this gritty river valley is hoping its revival will come from cheap natural gas.

The hope doesn't rest on drilling rigs, but on a multibillion-dollar chemical plant that Royal Dutch Shell is considering building here because of a flood of domestically produced natural gas.

Community leaders are touting the plant as the first step toward reviving a manufacturing industry many thought was gone for good. "I never would have expected that as a region we'd have a second chance to be a real leader in American manufacturing," Bill Flanagan of the Allegheny Conference on Community Development, a regional business group, told a crowd of locals who came to hear about the chemical plant. "Suddenly we're back in the game."
It isn't just Beaver County reaping the benefits of cheap gas. Plunging prices have turned the U.S. into one of the most profitable places in the world to make chemicals and fertilizer, industries that use gas as both a feedstock and an energy source. And they have slashed costs for makers of energy-intensive products such as aluminum, steel and glass. 
Many, many story lines in this article.  "Suddenly we're back in the game" -- and will be just as suddenly back out of the game if the EPA regulates fracking. They don't have to ban it; just regulate it. And then it's back to coal.

Big Day Today on Earnings Front: Amazon, Apple, and OXY USA; COP Blows Away Estimates; NOV and NBL Also Report

Disclaimer: this is not an investment site. In the "welcome" and the "disclaimer" I explain why I follow earnings. Make no investment decisions based on what I blog. Listen to Jim instead. And Tom, Dick, and Harry.

I can't keep up with all results, but over time, the earnings page will be filled in. If anyone sees anything particularly interesting that I missed, please let me know.

NOV and NBL have reported.

COP blows away earning estimates. From SeekingAlpha.com:
However, the old warhorse COP should not be overlooked. The company is very profitable. It has a sector leading dividend at 4.72%, and has a fundamentally strong asset base.
Q3 results show that COP is beginning to turn the corner. Production began coming back online in Libya and China. Unconventional production in the Eagle Ford and Bakken is up 100% year over year, 102,000 BOE/day vs. 51,000 BOE/day. In Canada, Christina Lake Phase D achieved first production, pushing overall bitumen production to 92,000 BOE/day -- up 28,000 BOE/day over Q3 2011.
Overall production for the first nine months of 2012 was 1.569 million BOE/day, compared with 1.626 BOE/day for the same period in 2011. On the surface, this production decline does not look favorable. However, when asset dispositions, normal field decline, and production interruptions are taken into account, it is clear that new production from major products and drilling programs are beginning to take hold and will drive the production increases of 3%-5%/year that the company has been targeting.
At the end of the day, the earnings speak for themselves. Nine-month earnings were $7 billion, or $5.55/share. Adjusted earnings were $5.1 billion, or $4.09/share.
With COP's asset base, its North American production growth, a dividend yield of 4.72%, and a P/E of 10, the company looks quite undervalued. As the title of my earlier article noted, COP is an unconventional value play with a fat dividend.
OXY USA: income falls, but beats expectations; link to MarketWatch;
3Q12 net income fell 22% on about flat revenue. Earnings declined to $1.38 billion, or $1.69 a share, from $1.77 billion, or $2.17, in the year-earlier quarter. Continuing operations produced earnings of $1.70 a share versus $2.18. Sales were off 0.7% to $5.97 billion from $6.01 billion. A survey of analysts by FactSet Research produced consensus estimates of $1.63 a share of profit on $5.63 billion of revenue. Third-quarter production of 766,000 barreld of oil equivalent a day rose 4% from the year-earlier quarter. Higher volume plus better results in marketing and trading were partly offset by lower prices. 
Amazon: after market close

Apple: after market close. With regard to Apple, one can get the WSJ perspective of Apple's announcements this week by googling: Apple drops an iPad mini on rivals. I'll probably get the iPad mini, wi-fi only version.

Apple, Microsoft Announcements; ICE Ices RIMM

On Tuesday, earlier this week, Apple made a few announcements:
  • a new 7.9 inch iPad mini starting at $329 -- direct challenge to leading eReader (min-tablets)
  • a new 4th generation iPad
  • Lightning Connector for the new iPad (tablet)
  • retina 13" MacBook Pro (laptop)
  • a new Mac mini
  • a significantly thinner iMac (desktop model)
  • a new Fusion Drive" -- flash memory + hard drive memory; not typical hybrid drive
  • new devices will support many new international LTE networks
  • iBooks app with continuous scrolling
  • iBooks "Author" updated with new templates and remote update feature
  • new Apple chip: A6X
Microsoft will announce today:
In other news, from Forbes:
Late yesterday it was announced that over 17,600 users in U.S. Immigration & Customs Enforcement  (ICE) agency are being moved from  BlackBerry devices to Apple’s iPhone.
ICE’s decision to adopt the iPhone comes after evaluating a number of smartphone platforms, including Android, Windows, Symbian, Linux and Samsung’s Bada offering. Android was cast out because the operating systems is open-source and used across a number of manufacturers that ICE feared could lead to modifications to accommodate new features. By comparison, Apple and RIM offer direct control over the devices that implement their operating systems and have measures to detect and disable attempts to modify the operating system.
I believe I heard that some employees of Homeland Security will be also be switching. Regardless, once one government agency switches, the rest will soon follow. 

Global Warming, 2012 - 2013: Early Snow Wallops California; Early Heavy Appalachian Snows


Heavy Appalachian snows, October 29, 2012.
Early snow wallops California; the AP used the word "walloped."

Another Operator in the Bakken; Williston Exploration; Southwest North Dakota

Jeff White sent me this note earlier this week; I was traveling and have not had a chance to post it until now. I've posted a gazillion stories since midnight a few hours ago, but waited on this one, so I could "digest" it, as it were. There are several story lines in the note Mr White sent me. The data points:
  • Williston Exploration has formed a new company: Medora Minerals
  •  Medora Minerals recently bought the North Dakota assets of Penn West (Upton Resources USA). 
  • Medora Minerals will own the assets; Williston Exploration will be the operator
  • the assets include 7,000 net mineral acres and 20 wells; 14 operated; 6 non-operated
  • 3,000 acres in Billings County (Tyler country)
  • the wells target both the Madison and Tyler formations; most of them are horizontal wells
  • the company will focus primarily on the Tyler; secondarily on the Madison
  • the company's newest Tyler well has 9 months of production; Billings County
  • the company's new business office is about 30 miles northeast of where I live in San Antonio: New Braunfels, TX
  • the company will be opening an office in Dickinson; planning to move in 1Q13
I can't say for sure this is the well referenced, but it certainly seems to fit:
  • 18216, 30, Williston Exploration, Vanvig 1, wildcat in Billings County; t7/12; cum 5K 9/12; nine months of production as of October, 2012; spud 7/11; 
An interesting side note found in the well file: the company had to request an extension from the state for its permit for this reason: "We required a permit from the federal government to cross their land and it has not been received to date. We anticipate that it will be granted in late July 2010. " The note does not say when the company requested the permit, so the company may have delayed getting the request in, or the federal government may have been the delay. Perhaps a little of both. It helps put into perspective the delays one should expect if the federal government regulates fracking. This well is about 20 miles southwest of Belfield. It is a vertical well, about 9,000 feet.

The North Dakota Oil Activity and Economic Development Just Won't Quit -- Now Another 123 Single Family Units Proposed for Gladstone, North Dakota

Gladstone is about 15 miles east of Dickinson, just a mile or south of the interstate.
Developers have their eyes set on building affordable housing in Gladstone, which might mean 123 lots could open for residential housing soon.
Roger Glessner with Inland Northwest Consultants, which has operated in North Dakota for about two years and is based out of Dickinson, said multi-family units could be possible as well.
Link to the Dickinson Press

Marcellus, Pipelines, and Ticking Time Bombs -- Do NOT Take That Literally -- It's a Figure of Speech

Updates


August 26, 2018: update here.

October 31, 2017: Marcellus / Utica breaking production records ... again. RBN Energy. 

August 23, 2017: production

April 27, 2017: solving "the Marcellus / Utica problem."

December 23, 2016: Anadarko sells 195,000 net acres in the Marcellus for $1.24 billion; includes operated/non-operated upstream; and, operated midstream assets.

October 6, 2016: the Utica and Marcellus continue to defy the "experts" and the skeptics.

October 6, 2016: at this post, Zeits is linked with an article on the Marcellus.

June 10, 2016: Utica and Marcellus numbers are updated here

March 13, 2016: competing with the Marcellus for eastern Canada.

August 30, 2015: the Utica may be bigger than the Marcellus.  

April 16, 2015: from a comment sent in by a reader -- horizontals are generally about 6,000 feet in the Marcellus, commonly with 50 stages; these are referred to as "Short Stage Laterals" -- SSLs.

April 6, 2015: another look at the incredible potential of the Marcellus / Utica

April 12, 2014: Ohio geologists associate fracking with earthquakes; ban fracking in some areas; strict new seismic monitoring rules. Say good-bye to the Marcellus and the Utica This should be huge for natural gas pricing.

November 14, 2013: the Marcellus accounts for 76% of natural gas production growth in the US, RBN Energy. 

October 29, 2013: An indication why New York State may be ambivalent about fracking. The Marcellus is concentrated in southwestern Pennsylvania; there is not a whole lot of Marcellus in New York.

August 28, 2013: Production of natural gas from Marcellus will octuple (8x) -- RBN Energy.

May 25, 2013: XOM more than doubles its acreage in the Marcellus.

December 26, 2012: link to AP News for an update on the Marcellus -- turned out to be huge.
In March, Shell Oil Co. said a site about 30 miles north of Pittsburgh was its first choice to build a huge new petrochemical plant, which would turn natural gas liquids into consumer products such as plastics and antifreeze. 
Though Shell said it's still a few years away from a final decision to build, the project was sweetened by a huge package of state tax incentives. Corbett, legislators from both parties, and some union leaders supported credits of $66 million a year, which could total about $1.7 billion if the project is built. That would be Pennsylvania's largest financial incentive package ever.
More and more, opponents of fracking appear to be crackpots on the fringe.

Original Post

I just noted, I don't have a link at the sidebar for the Marcellus. The Marcellus, like the Keystone XL, did not interest me when the story first broke. But as time has gone on, like the Keystone XL, the Marcellus has become a huge story, and so I talk about it more than I probably should on a Bakken site, but it's probably closer to the Bakken (subject-wise) than some of my travelogues.

Anyway, here's a SeekingAlpha.com story suggesting that with regard to the Marcellus: we haven't seen anything yet. Wow.

Read the story at the link, and then guestimate how many folks are employed putting in pipelines in Pennsylvania and how many direct and indirect jobs are being generated because of fracking. I have no idea, but this is truly a tectonic shift in the global energy story. If I ever get caught up, it would be "fun" to talk about that, but RBN Energy does a much better job than I ever could, so perhaps I will just let others have all the fun.

And, so, with that, this will be the "home page" for the Marcellus that will be linked at the sidebar at the right.

Jobless Claims: Huge Swings -- One Has To Wonder

Remember: the magic number is 400,000

We generally see swings of 2,000 or so, up or down, so when the number decreases by 23,000, it should catch your attention. And yet Bloomberg practically ignores it. I suppose this is why:
The four-week moving average of jobless claims, a less- volatile measure than the weekly figures, rose to 368,000 last week from 366,500. At the end of September, before the start of the quarter, the average was 375,500. 
But, it is what it is. First time jobless claims dropped 23,000:
Jobless claims decreased by 23,000 to 369,000 in the week ended Oct. 20 from a revised 392,000 the prior period, the Labor Department reported today in Washington. The median forecast of 48 economists surveyed by Bloomberg called for a drop in claims to 370,000. 
It was a bit lower down, but here's the most interesting data point of the article: the "revised 392,000." So what was it last week? It was 388,000; so it was revised upward. This is what is interesting about this: 392,000 is squeakingly close to 400,000, the magic number

Companies are hiring for the holiday surge in sales? Yes, I will eventually get to the Apple story. Microsoft has an announcement today, I believe, also. 

Another Operator in the Bakken (Montana Acreage); a Toofer --- Includes an iPad Story

Link here to Fort Worth's Star-Telegram. (Also in the Billings Gazette.)
A Texas company has bought oil and gas leases on almost 75,000 acres in northeast Montana's McCone County in a move that could portend a significant westward expansion of the Bakken oil patch, government officials and a company representative said Wednesday.
San Antonio-based Donco Inc. paid more than $13.5 million for the leases in a competitive auction held Tuesday by the federal Bureau of Land Management. It marks one of the largest federal lease acquisitions by a single company in Montana in recent years, BLM spokesman Kristen Lenhardt said.
Donco is the parent company of Shale Exploration LLC.
Shale Exploration President Sam Tallis said Wednesday that the company aims to amass leases on roughly 200,000 acres in McCone and neighboring Garfield counties. He said drilling could begin next year.
And in the same story, the iPads:
In April, Shale Exploration donated $130,000 to the Scobey Public Schools in Daniels County to purchase iPads - tablet computers made by Apple Inc. - for all the district's students. A month later, the company donated $20,000 to the Montana Rescue Mission Women's and Family Shelter in Billings.
Tallis said he hopes to establish a similar close relationship with residents of Garfield and McCone counties.
Garfield and McCone counties are well west of North Dakota. Circle (McCone County), MT, I assume, is about 80 miles west of North Dakota. Jordan (Garfield County), MT, I assume is about 160 miles west of North Dakota. This seems well on the edge of the Bakken if not outside it; so, yes, the company will be targeting other formations as well.

From wiki:
Garfield County is noteworthy as the site of the discovery and excavation of four of the world's dozen or so major specimens (as of 1994) of Tyrannosaurus rex within the county.
Neither story was particularly important to post, but together they make an interesting post. Maybe. Thank you to "anon 1" for finding this particular story; I certainly would have missed it.

Bakken Operations; Thirty-Three (33) New Permits; BEXP Reports Another Strobeck Well -- 8th Well in One Strobeck Section; Extent of TF Not Known; Bakken Is Source Rock for Bakken & Three Forks -- NDIC

Updates

 October 27, 2012: look at the incredible Strobeck wells below, all in one section. Now look at the incredible Bakke wells one mile to the east, all in one section:

18896, 4,438, BEXP, Clifford Bakke 26-35 1H, Alger, t10/10; cum 322K 8/12;
21358, 3,863, BEXP, Clifford Bakke 26-35 2H, Alger, t1/12; cum 135K 8/12;
21359, 2,462, BEXP, Clifford Bakke 26-35 3H, Alger, t1/12; cum 93K 8/12;
21804, 2,699, BEXP, Clifford Bakke 26-35 4H, Alger, t2/12; cum 84K 8/12;

Original Post

Bakken Operations

Active rigs: 189 (steady, up slightly).

NDIC: Bakken shale clearly the source rock for Bakken and Three Forks formations; extent of Three Forks not yet known -- NDIC; link to Minot Daily News;

Occasional report from the Montana side of the border, Williston Basin Bakken. Link to Fairfield Sun Times. This might be the one of most interest, in Daniels County:
In Daniels County, Apache Corporation was granted a permit for the Haworth 18-7H-B. The well has an SHL at SE NE 18-36N-48E (2700 FSL/240 FEL) and a Probable Bottom Hole Location (PBHL) of 11,544 feet at SW NW 18-36N-48E (2291 FNL/200 FWL). The well targets the Bakken Formation.
Wells coming off confidential list Thursday:
  • 21630, 1,378, MRO, Waltom USA 43-8TFH, Reunion Bay, t9/12; cum 1K 9/12;
  • 22391, dry, CLR, Willie 2-36H, Battleview, -- this is not DRY in the sense a layman might think; in early drilling there was concern about stability of the land under the rig; the rig will be moved a bit and the well will be re-spud (slightly new location)
  • 22433, drl, CLR, Rodney 2-29H, Cedar Coulee,
  • 22566, 664, Petro-Hunt, Clear Crek 152-96-34-1H, Clear Creek, t8/12; cum 16K 9/12;
New permits in the past two days (Tuesday and Wednesday)
  • Operators: BR (8), Petro-Hunt (7), Whiting (4), Samson Resources (4), Enduro (3), Zenergy (2), BEXP (2), G3 Operating (2), Murex (1), 
  • Fields: Foreman Butte (McKenzie), Sanish (Mountrail), Banks (McKenzie), Corral Creek (Dunn), Climax (Williams), Mouse River Park (Renville), Four Bears (McKenzie), Sandrocks (McKenzie), Clear Creek (McKenzie), Ambrose (Divide), McGregory Buttes (Dunn)
  • Comments: Two more days with no permit for either Newfield or OXY USA; both have had one or two permits since September 27; I believe the Enduro/Mouse River Park wells will target the Madison
On track for 2,642 new permits for calendar year 2012 (oil and gas; does not include salt water disposal wells).
Wells released from confidential status
For Tuesday, posted earlier; see sidebar at the right right. For today:
  • 20561, 1,063, EOG, Fertile 42-3231H, Parshall, F, t5/12; cum 52K 9/12;
  • 21518, drl, CLR, Lawrence 5-13H, North Tioga,
  • 22037, 2,026, BEXP, Strobeck 27-34 5TFH, Alger, t7/12; cum 29K 9/12;
  • 22315, 856, Zenergy, Ledahl 28-21H, Painted Woods, t6/12; cum 19K 9/12; 
In section 27-155-92, Alger Oil Field (a single well pad; one 3-well pad; one 4-well pad):
  • 17724, 1,788, BEXP, Strobeck 27-34 1H, Alger, t7/09; cum 212K 9/12;
  • 21621, 2,551, BEXP, Strobeck 27-34 6H, Alger, t7/12; cum 43K 9/12;
  • 21622, 2,020, BEXP, Strobeck 27-34 7H, Alger, t7/12; cum 38K 9/12;
  • 21623, 2,071, BEXP, Strobeck 27-34 8TFH, Alger, t7/12; cum 27K 9/12;
  • 22034, 2,944, BEXP, Strobeck 27-34 2H, Alger, t7/12; cum 33K 9/12;
  • 22035, 1,962, BEXP, Strobeck 27-34 3TFH, Alger t7/12; cum 21K 9/12;
  • 22036, 1,904, BEXP, Strobeck 27-34 4H, Alger, t8/12; cum 6K 9/12;
  • 22037, 2,026, BEXP, Strobeck 27-34 5TFH, Alger t7/12; cum 29K 9/12;
There are plans for a 12-well pad in the Alger; with another six wells in a 640-acre section (TF1 and TF2) that would take wells down to 36-acre downspacing

Energy Links for the Past Two Days

RBN Energy: confusing condensate export regulations


US oil production surging so fast, could outproduce Saudi Arabia, become world's #1 oil producer -- link here to Bismarck Tribune.
U.S. oil output is surging so fast that the United States could soon overtake Saudi Arabia as the world's biggest producer.
Driven by high prices and new drilling methods, U.S. production of crude and other liquid hydrocarbons is on track to rise 7 percent this year to an average of 10.9 million barrels per day. This will be the fourth straight year of crude increases and the biggest single-year gain since 1951.
The boom has surprised even the experts.
"Five years ago, if I or anyone had predicted today's production growth, people would have thought we were crazy," says Jim Burkhard, head of oil markets research at IHS CERA, an energy consulting firm.
Bloomberg: update on slide in oil prices, link here to Bloomberg -- 
Brent crude rose on evidence of a stronger economy in China, the world’s second-largest oil consumer, and signs that previous price declines were overdone.  
Remember that $27/gallon diesel sold to the US Navy? Don thinks it was this company and it looks like he is correct:
  • SoladieselHRF-76® is renewable diesel for ships. It's currently being used as the base fuel for testing and certification of renewable F-76. To date, Solazyme is the only company to provide the U.S. Navy with fully in-spec SoladieselHRF-76®.
  • Solajet™ is the world's first 100 percent algal-derived jet fuel, for both military and commercial applications. The fuel has been used in a U.S. Navy testing and certification program. Solajet™ meets all military specifications for HRJ-5 jet fuel and all non-petroleum commercial specifications for ASTM D 7566.
RBN Energy: the third in a series of reports on pipelines in the northeast United States, subsequent to the Marcellus

Short video of huge natural gas flare in the Bakken, sent in by Greg (for more information, go to YouTube where it is posted:
Flaring in the Bakken, Whiting's Kannianen 22-32XH

Earnings:
Yesterday, it was noted that four companies of interest would be reporting 3Q12 earnings on Tuesday:
  • Facebook -- Facebook's stock soared more than 20 percent after the social-networking giant reported its revenue surged 32 percent, topping expectations, thanks to gains in mobile. At least four brokerages boosted their price targets on the company, while Citigroup, BofA Merrill and Stifel raised their rating to 'buy.'
  • Nabors (NBR) -- at 42 cents, soared past estimates
  • Newfield (NFX) -- missed expectations; shares slammed; down almost 20%; the conference call will be most interesting
  • Norfolk Southern -- beats by a penny; but earnings down 27% yoy due to decreasing coal shipment
Today, Wednesday, Whiting reported: misses by 3 cents; beats on revenue; production up 
Trinity Industries (TRN): There aren't a whole lot of companies raising guidance for full year 2012. This company is. In addition, the company reports 100% earnings growth in 3Q12. It has seven months' worth of new railcars backordered. This company recently bought OTTR wind turbine manufacturing plant in Fargo; some opine that TRN will be building something other than wind turbines in this plant.

Coal industry still struggling: Peabody coal to layoff more workers; at least one campaign promise seems to be on track

Global warming 2012-2013 news: early snow wallops California; the AP used the word "walloped";

Encana will bring back production after taking if off-line due to low price for natural gas; a PDF file.
During the first half of this year, when natural gas prices were at their lowest in the last 10 years, Encana shut-in or curtailed approximately 500 MMcf/d of production. Beginning in August, Encana began bringing the volumes back online with the goal that all shut-in and curtailed volumes would be back on-stream prior to winter. With production volumes now largely restored, the company re-affirms its 2012 production guidance of 3.0 Bcf/d.

Non-Energy Links For Past Two Days

October issues of North Dakota Business Magazine has been posted: link here.

A subject near and dear to my heart: megaloads moving, again, in Montana over Lolo Pass. Link here to Billings Gazette.
One very large truckload of Alberta-bound water purification equipment is headed Montana’s way over Lolo Pass.
The shipment was slated to start up U.S. Highway 12 from the Port of Wilma near Lewiston, Idaho, Monday night. It’s expected to take four night moves to reach the Montana line.
Barring weather snafus or other delays, the load and an accompanying coterie of pilot and escort vehicles, could start moving through Missoula and Western Montana after dark on Sunday, according to the Montana Department of Transportation.
Duane Williams, administrator for MDT’s Motor Carrier Division, said Montana has yet to issue a permit but has approved a plan for the megaload to travel up the Blackfoot River, over Rogers Pass and into Canada at the Port of Sweetgrass. That’s the same system of two-lane highways over which a district judge barred Imperial Oil/ExxonMobil of Canada from transporting more than 200 megaloads early this year.
The story at the link says faux-environmentalists have agreed to help monitor progress of the megaloads to ensure that traffic is not held up more than 15 minutes, per the agreed stipulation. 

Electrical Demand in WESTERN North Dakota Could Triiiple Over Next 20 Years

Link to Bismarck Tribune.

Data points, results of recent study:
  • electricity demand will rise substantially in western North Dakota over next 20 years
  • from 971 megawatts to more than 3,000 megawatts by 2032
  • mostly in 22 oil-producing counties; rise sharpest in Williams (rise 339%) and McKenzie (rise 232%) counties
  • MDU expanding infrastructure, now in: Williston, Watford City, Ray, Tioga, Stanley, Alexander, and Kenmare
It was reported earlier this week that North Dakota recently received around $370 million in government loans to build out the electrical grid in North Dakota.

This link to Ventura County Star provides a few more data points to the same story:
Over the past six years, North Dakota has risen from the nation's ninth-leading oil producer to its second, trailing only Texas, because of advanced horizontal drilling techniques that opened up the rich Bakken shale and Three Forks formations.
The study projects North Dakota will have between 30,000 and 40,000 oil wells by 2032, up from about 7,700 now. Every well requires the same amount of electricity as three farmsteads, Dale Haugen, general manager of the Mountrail-Williams Electric Cooperative, told The Forum newspaper.
The study also estimates a 52 percent population increase in the region in 20 years.
The only Ventura County I know is in California; I'm not sure why this was picked up by a California local newspaper.