Friday, December 14, 2012

Best Music Ever -- Absolutely Nothing To Do With The Bakken

From my music site:
There was an 18-month-period, from late 1968 through mid-1970 that clearly had some of the best music ever.  This was the year of Woodstock. The Beatles were still going strong, but touring less, and would soon stop completely.  Led Zeppelin's first two albums, Zeppelin I and Zeppelin II, were released in 1969. The era of "free love" and the uncertainties of the Vietnam War probably contributed to some of this really incredible music.
If you are at all interested in "pop music," consider just scrolling through the post at the link above. It completely blows me away that all these songs were competing for air time in 1969 or thereabouts, from mid- to late-1968 to early 1970. 

If you came here for the Bakken, look at what KOG is doing: eleven (11) wells in one spacing unit.

Schlumberger Acquires GeoKnowledge

Link to
Schlumberger announced it has acquired GeoKnowledge, a Norwegian-based software company specialized in delivering exploration decision-support solutions for the oil and gas industry.
GeoKnowledge supplies the industry-leading GeoX software suite for exploration prospect risk, resource and value assessment, and is the corporate standard for more than 100 oil and gas companies worldwide.

North America's Oil Fields From Space

Link here to

Week 50: December 9, 2012 -- December 15, 2012

Post of the Month: KOG with permits for eleven wells on one spacing unit

US Army Corps of Engineers will release river water for fracking
UK lifts hydraulic fracking ban
Fracking: good for the economy?
First-ever-LNG-fueled hydraulic fracking operation in North America, Eagle Ford

Economic development
Williston population could soar to 50,000 by 2017
Dickinson: two new hotels, apartment complex
Minot: building permits will set record; > $300 million

Bakken Operations
Slawson blowout reported near Lake Sakakawea; capped overnight; non-event in big scheme of things
Spacing in the Bakken
Random update on the Brooklyn oil field
QEP with some huge 4-section wells
The Daily Beast: one ND ranch overlooks thousands of wells
CLR's 3TF well, a game-changer
KOG with a huge well
Random look at production of an older well when a new well nearby is completed
How big is the Bakken? Compare with new field in Siberia

Red River excitement
Comment from a reader
OPEC: stuck between Damascus and Dakota

Hard spring wheat, durum, and global warming -- study/source

12/14/12: Official Turning Point; Fifteen (15) New Permits -- The Williston Basin; KOG With 11 Wells All In One Spacing Unit; BEXP With Four (4) Gushers; BR With A Huge Iron Horse

Bakken Operations

Official Turning Point -- 12/14/12 -- from the exploration phase to the manufacturing phase in the Bakken.
There has been quite a bit of talk this past year that the Bakken had entered the "manufacturing phase." I was not ready to accept that. Permitting was still generally one permit at a time in any given section, with some up to four permits per section, on average. (That's not well said, but regular readers will know what I'm trying to say.) There were some exceptions (e.g., in the Sanish and the Parshall) but in other oil fields, if sections had more than a few wells,, those wells had been permitted one or two at a time. (Yes, there were exceptions, such as the Eco-Pads.) But the new KOG permitting today (see below) and the huge IPs of the completed producing wells, and a few other data points, lead me to conclude that 12/14/12 is the "official" turning point in the Bakken --> to the manufacturing phase. On top of that, another Whiting permit for a Red River well. And fifteen new permits: it's hard to top this daily activity report. 
Active rigs: 181 (back down to intra-boom low)

Fifteen new permits --
  • Operators: KOG (8), QEP (3), Whiting (2), Oasis (2)
  • Fields: Truax, Camp, Grail, Dickinson, Delhi
  • Comments: This is a very interesting group of permits -- the Truax is in the sweet spot of the Bakken, as are Camp and Grail (QEP bought Helis that had huge wells in the Grail); and Delhi abuts Hoot Owl, which if readers remember: Hoot Owl --> Whiting --> Red River
Wells coming off confidential list were reported earlier; see sidebar at the right.

Producing wells completed:
  • 22711, 2,599, BEXP, Alger State 16-21 3H, Alger, t11/12; cum --
  • 22713, 2,114, BEXP, Alger State 16-21 4TFH, Alger, t11/12; cum --
  • 22645, 1,225, BEXP, Jerome Anderson 10-15 3TFH, Alger, t11/12; cum --
  • 22672, 548, G3 Operating, Pederson 1-18-19H, Little Muddy, t10/12; cum 3K 10/12;
  • 22695, 2,042, BEXP, Ross-Alger 6-7 4TFH, Alger, t11/12; cum --
  • 22754, 2,324, BR, Iron Horse 31-2TFH, Union Center, t11/12; cum --
  • 22328, 927, Zavanna, James 41-3SH, Poe, t10/12; cum 3K 10/12;
With regard to the eight new KOG permits: all eight are in the same section - 27-154-98. There are already three other wells in this section, all on confidential status, which means that there will be eleven (11) wells sited in this section. So, these are the permits for this section:
  • 24374, conf, KOG, P Wood 154-98-3-27-34-14H, Truax,
  • 24375, conf, KOG, P Wood 154-98-3-27-34-14H3, Truax,
  • 24376, conf, KOG, P Wood 154-98-3-27-34-15H, Truax,
  • 24604, conf, KOG, P Wood 154-98-4-27-34-13HB, Truax,
  • 24605, conf, KOG, P Wood 154-98-4-27-34-13H3, Truax,
  • 24606, conf, KOG, P Wood 154-98-4-27-34-13HA, Truax,
  • 24607, conf, KOG, P Wood 154-98-4-27-34-14H3, Truax,
  • 24608, conf, KOG, P Wood 154-98-2-27-34-15H, Truax,
  • 24609, conf, KOG, P Wood 154-98-2-27-34-16H3, Truax,
  • 24610, conf, KOG, P Wood 154-98-2-27-34-16H, Truax,
  • 24611, conf, KOG, P Wood 154-98-2-27-34-16H3A, Truax,
And note that all eleven (11) wells will be long laterals running south into section 34.

There are two wells (coming from the other direction), running south to north, in the spacing unit directly to the west of this 11-well spacing unit:
  • 21822, 3,000, KOG, Thomas 154-98-15-33-28-2H, Truax, t5/12; cum 109K 10/12;
  • 22338, 2,425, KOG, Thomas 154-98-15-33-28-28-1H3, Truax, t5/12; cum 76K 10/12;
On top of all this, there are five (5) rigs currently drilling in Truax oil field. 

I don't want to sound too excited, but this is huge. This will be, to say the least, very, very interesting to follow.

Geology of the Red River

Red River Units -- Continental Resources
from various sources, including CLR 10-Ks

South Dakota Buffalo Red River Units. Three contiguous Buffalo Red River units (Buffalo, West Buffalo and South Buffalo) are located in Harding County, South Dakota, approximately 21 miles south of the MPHU. When we purchased the units in 1995, there were 73 vertical producing wellbores and 38 injection wellbores under HPAI producing approximately 1,906 net Bbls of oil per day. We operate and own an average working interest of 95% in the 32,900 acres comprising the three units. From 2005 to 2008, we re-entered 42 existing vertical wells and drilled horizontal laterals to increase production and sweep efficiency from the three units. Production for the month of December 2007 was 1,945 net Bbls of oil per day compared to an average of 1,162 net Bbls of oil per day for the first half of 2005. We currently plan to drill 5 horizontal extensions of existing wellbores and 25 new horizontal wellbores in the Buffalo Red River units over the next two years. We believe these operations will increase production and sweep efficiency. In 2008, we plan to invest $23 million for drilling in the Buffalo Red River units.


The Cedar Hills West unit (CHWU), in Fallon County, Montana, is contiguous to the northern portion of CHNU. As of December 31, 2007, this 7,800-acre unit contained ten horizontal producing wells and five horizontal injection wells. We operate and own a 100% working interest in the CHWU. 

North Dakota

Cedar Hills North Unit

Medicine Pole Hills Unit

Data points from a presentation provided by a reader.
  • Red River formation; Ordovician period; in southwestern North Dakota
  • over 700 feet thick in the center of the basin, in Dunn County
  • Comment: I haven't really considered Dunn County southwestern North Dakota, but I guess one could characterize it as such
  • like other formations, an "upper" and a "lower" part
  • the upper unit is divided into "A," "B," "C," and "D" zones --increasingly "restrictive"
  • "restrictive" --> anoxic --> excellent for preservation of organic matter --> hydrocarbons
  • "A" zone: laminated dolomite
  • "B" and "C" zones: non-porous; overlying porous dolomite; anhydrite beds prevent loss of hydrocarbons
  • "D" zone: source rock for the Red River; beds of black kerogen rich dolomite, up to 20 cm thick, up to 59% total organic carbon (TOC) [The Bakken is up to 11% TOC]
  • this kerogen-rich dolomite is found throughout the Williston Basin; considered the source rock for the Red River formation
  • hydrocarbons have been produced from all four layers, but particularly from "B," "C," and "D" layers
  • the "B" porosity zone is particularly important: it is laterally pervasive over much of the Williston Basin; production from "B" zone in Bull Run, Williams Creek, and Cash oil fields
  • upper "B" zone might be the preferred to the lower "B" zone: lower porosity, but higher permeability, higher degree of oil saturation
  • in the mid-1990s, horizontal drilling tested the Red River in Bowman County; decline rates were 30% to 45% but many of the better wells had annual decline rates of 5%; natural fracks helped
Source rock:
  • earlier it was stated that the "D" zone likely to be a source to the Red River
  • in addition, the Winnipeg shale, vertically below the Red River, may also be a source rock for the Red River
  • at depths of 9,000, the Red River is thermally mature

Random Look At Six New Samson Resources Permits

Yesterday, NDIC reported six permits for Samson Resources for wells that will be sited in one section in West Ambrose oil field, Divide County.

Based on their legal names, all six should be long laterals running from section 36 into section 25.
There is already one well in this section, a well that is pretty much in between the two 3-well pads for the permits issued yesterday:
  • 19965, 642, Samson Resources, Bonneville 36-25-163-100H, Bakken Pool, Three Forks, t11/11; cum 180K 3/14;
Some immediate comments:
  • in less than a year, over 100,000 bbls (I now consider the "magic number" for Bakken pool wells to be 150,000 bbls, however)
  • from the scout ticket, one cannot tell whether this is a middle Bakken or a Three Forks well
  • the IP was not particularly notable, but it has turned out to be a very good well
  • everyone talks about horrendous decline rates in "the Bakken"; this had a couple huge months in the beginning (13K and 11K) but then dropped quickly to 5K; however, it produced 8K in October, 2012 (the most recent month for which data is available) -- hardly anything to sneeze at, as they say
More on this well:
  • an upper Three Forks well
  • spud: January 4, 2011
  • curve completed: January 11, 2011 (so they reached vertical depth in about six days
  • total depth, drilling completed: February 3, 2011
  • trip gases as high as 3,788 to 7,856 units
The six permits (the first three, in the SWSW quadrant of the section; the last three, in the SESE quadrant of the section):
  • 24596, conf, Samson Resources, Bonneville .... 1TFH;
  • 24597, 261, Samson Resources, Bonneville .... 2TFH; t6/13; cum 55K 3/14;
  • 24598, 203, Samson Resources, Bonneville .... 3TFH; t6/13; cum 36K 3/14;
  • 24601, conf, Samson Resources, Bonneville .... 7TFH;
  • 24602, PNC, Samson Resources, Bonneville .... 6TFH;
  • 24603, conf, Samson Resources, Bonneville .... 5TFH:

Part VI of the Never-Ending Story Has Been Posted

I make light of it, but the writer is doing an awesome job. A big "thank you" to this contributor.

Part VI: Halcon.  --


Part I: NOG
Part II: Goodrich Petroleum and Cabot Oil & Gas
Part III: Emerald, KOG, Triangle
Part IV: Crimson Exploration 
Part V: Magnum Hunter. --

One Last Post Before A Bike Ride -- Nothing About the Bakken Directly -- A Map of The US States In Relatively Good Financial Health

This is a great article: "US states are coming close to the end of a three-year trek back to pre-recession growth."

Just in time for the Great Recession of 2013.

The article noted:
More than half of the states have boosted spending for education and Medicaid, the healthcare program for the poor, this fiscal year, and nearly all, 42, have higher spending levels than in fiscal 2012.
In the same light, fewer states had to close budget gaps this fiscal year than in the last two, and those shortfalls were also smaller than ones they eliminated in fiscal 2011 and 2012.
Total general fund revenues in fiscal 2013 will surpass the pre-recession peaks reached in fiscal 2008, and many states' spending will also be higher than in that fiscal year.
Still, the report noted 21 of the 50 states say revenues will not return to their pre-recession highs this fiscal year, and 24 say spending remains below fiscal 2008 levels.
The article did not list the states in good health, nor was a map provided.

Because I'm in a good mood, I went to the trouble of identifying the states that are in good health and have put them graphically. When you get to the link, the states in good health were put in red

To confirm that I had the correct states, I went through the exercise again, and came up with a graphic that verified the original link. In this link, the states in good health are in blue.

By having one  map with the states in good health in red, and in another map with the states in good health in blue, minimized accusations that the exercise was political.

Plains All American Pipeline Buys Chesapeake's Gathering Assets in the Eagle Ford

I believe "anon 1" sent this link a couple of days ago; if so, it was buried in the comments; time to post it.
Plains All American Pipeline L.P. said it bought crude oil and condensate gathering assets in the Eagle Ford area of South Texas from Chesapeake Energy Corp. for $125 million, expanding the pipeline company's stake in a growing energy region.
The deal marks the second deal Chesapeake inked this week, after the natural-gas producer agreed to sell a substantial majority of its remaining midstream assets for about $2.16 billion in cash to Access Midstream Partners L.P. The sales bring Chesapeake closer to its minimum target of $11.4 billion in total asset sales for 2012 and will help the debt-plagued gas and oil driller to receive financing, said Morningstar analyst Mark Hanson.
Assuming the deal closes this month, Chesapeake will finish the year with about $10.8 billion in proceeds from asset sales, with an additional $425 million worth of deals expected to close in the first quarter of 2013. The Oklahoma City company holds about $10.8 billion of debt on its balance sheet as it makes an expensive shift to oil drilling after natural-gas prices remain and at low levels.
It is absolutely impossible for me to keep track of all these pipeline deals, but maybe that's the real story -- the changing complexion of the US energy industry.

The Wall Street Journal Links

Results of wells coming off the confidential list have been posted; see sidebar at the right.

First of all, before I get to the WSJ links: thank you, to all the readers, who have sent a number of informative comments over the past few days. Generally speaking, all relevant links get posted, though often, they are linked as updates to older posts. It may be hard to find some of those links, but I try to group as much as I can. That's why the sidebar is so useful. But the "search" application is the best way to find "stuff" on the blog. The smartest thing someone taught me two years ago was to include the permit number whenever mentioning a particular well. Searching for information on a well is best done on this site by using the permit number. With regard to comments, this is not a "discussion group"; it's a blog.

Now the WSJ links

Section M (for "mansion"): a month ago, I would have had no idea who Gerard Depardieu was, but I do now. Thanks to blogging. And now, in Section D, I see that Gerard has put his Paris left bank house up for sale, asking $65 million. Now you know why he's moving to Belgium. No link; I won't be reading the story later. [Update: Gerard gives up passport; sends angry letter to government, December 16, 2012.]

Section D ("Arena" -- movie, sports): Tarantino Tackles Slavery catches one's attention. I'm mostly interested in three things: a) critical review; b) mainstream acceptance; and, c) whether Tarantino can live up to his great soundtrack history.

Hobbit: A Middling Middle-Earth. This is the excitement, filmed in "HFR 3-D" (high film rate):
Movies have long been projected at 24 frames per second—fast enough to give the illusion of movement, but not to banish all sensation of flicker; that's why they came to be called flicks. This movie, projected at 48 frames per second, does not flicker; there's a smoothness, almost a creaminess, to the movement. At the same time, though, it feels less like a movie and more like the most elaborate video you've ever seen, a result that's more unsettling than likable. I wish I'd also seen it, for comparison's sake, in 3-D without the high frame rate, because the 3-D is effective. But there wasn't enough time to go back and see it again, and, to be honest, no burning desire to spend another two hours and 49 minutes in Middle-earth.
A couple of nice stories on museums. No links now; falling behind.

Section C: Wow, a great graphic/map of where the Wall Street jobs have gone in the past year or so. If you are actually interested in the graphic, be sure to click on it. It is said to be interactive, but that word is used loosely these days.

Section B:
Nike presses for 40-year tax deal in Oregon: lead story in the section; and that's why I like print over digital for reading the WSJ; placement puts things into perspective.

A long, long time ago I blogged about Toys 'R' Us strategy for shipping to stores for customers to pick up; now a follow-up. Taking up almost the entire front page of Section B: organizing the elves -- at Toys 'R' Us, the logistics of Christmas get more complicated. (I see the WSJ still dares to use the word "Christmas"). Initially I said it wouldn't work, and then I thought differently. It will be interesting to see how the WSJ sees it.

Build-A-Bear considers a new face.

GM amps up truck rivalry.

Rivals -- UPS and FedEx -- escalate holiday shipping war.

Several articles on Yahoo, Google, Apple, Blackberry on the last two pages; no time to link. Apple did lose a patent case.

Section A:
Headline, top story: Rice ends big amid criticism -- no link; easily found all over the net.

Page 3, and we've talked about "page 3" often: costly cancer therapy dinged. Lots of story lines in light of ObamaCare. Proton-beam therapy for prostate cancer no better than radiation.

Op-ed: it's a mad, mad, mad, mad ObamaCare:
For sheer political farce, not much can compete with ObamaCare's passage, which included slipping the bill through the Senate before dawn three Christmas eves ago. But the madcap dash to get ready for the entitlement's October 2013 start-up date is a pretty close second.
The size and complexity of the Affordable Care Act meant that its implementation was never going to easy. But behind the scenes, even states that support or might support the Affordable Care Act are frustrated about the Health and Human Services Department's special combination of rigidity and ineptitude.
To take one example, for the better part of a year states and groups like the bipartisan National Governors Association and the National Association of Medicaid Directors have been begging HHS merely for information about how they're required to make ObamaCare work in practice. There was radio silence from Washington, with time running out. Louisiana and other states even took to filing Freedom of Information Act requests, which are still pending.
This is going to be an unprecedented mess: the execution of ObamaCare. I think the biggest problem for the "family CEO" will be navigating the "federal exchange," a website that will be absolutely lacking of the information needed to make an appointment. My understanding, based at looking at the state exchange that Massachusetts has posted, is simply "information" but no "help in getting anything done." The "federal exchange" must be up and running in 10 months; something tells me that isn't going to happen. But we'll see. Maybe I will be pleasantly surprise. In the meantime, I've updated my end-of-life instructions.

And finally, the end of the line:

The End of the Line, The Traveling Wilburys

I have to admit: I really do miss George Harrison. 'Nuf said.

Winter Is Setting In: More and More Wells Coming Off Confidential List --> DRL Status

All three wells coming off the confidential list today: "drl" status. Earlier in the week, of the seven or eight wells coming off confidential status, about five went to "drl" status. Winter is setting in; less fracking.

RBN Energy: pricing mechanisms needed for the proposed LNG-export terminals along the US coasts. This is not a slam-dunk for the backers. High risk considering the political polarization in Washington.