Monday, December 17, 2012

Update on Federal Fracking Rules on Federal Land

Link to here.
Republican government officials again asked President Obama to withdraw rules proposed by the Bureau of Land Management (BLM) that would regulate hydraulic fracturing on federal U.S. and Indian lands.
Last week, the U.S. Department of the Interior said it would delay finalizing hydraulic fracturing rules on public lands to allow for more time to address public comments on the proposed rule.
Finalization of the rule has now been pushed back to 2013, the spokesperson said.
Turn out the lights. Cue up Willie's "The Party's Over."


I don't think I've seen a worse game played by a team -- at least not recently. The New York Jets tonight -- five turnovers; numerous opportunities to come back and win. Interceptions and then a fumble in the last minute just 25 yards from a winning score. Knocked out of the playoffs; two years in a row not going to the playoffs. 

No Wells Coming Off Confidential List Tomorrow

Maybe I'm missing something, but I don't see any wells coming off the confidential list tomorrow.

The Niobrara: Does This Sound Familiar?

To get up to speed if you are unfamiliar with the Niobrara, it is linked at the sidebar at the right. From one of the linked stories back in 2010:
The Niobrara formation in the Denver basin contains a mean estimated volume of 40 million barrels of oil, 330 Bcf of gas and 32 million barrels of gas liquids; Power River is estimated at 227 million barrels and 227 Bcf of gas; and the Green River Basin is estimated to hold 104 million barrels of oil, 62 Bcf of gas and 3.7 million barrels of gas liquids.
That was from the USGS, 2010,

The estimates have soared to 3.6 billion barrels.
Houston-based Noble Energy Inc. now believes it can pump the equivalent of 2.1 billion barrels of oil out of the thousands of acres of mineral rights it holds in the basin.
From another source:
The vast Niobrara shale formation, which covers much of northeastern Colorado, Wyoming and Nebraska, is now estimated to be a third bigger than first thought. Two of the largest companies drilling the field, Noble Energy and Anadarko, say the area may be capable of producing as much as 3.6 billion barrels of oil over the next several years. 

Five (5) New Permits; Zenergy Reports A Nice Well, Second Bench of the Three Forks? Denbury With A Dry Wildcat East Side of the Basin

Bakken Operations

See comment: when did one bopd match North Dakota's per capita? August 14.  Which, by the way, is my birthday: August 14. Here's the data:
With regard to one bbl of oil/day per capita:

Let's say the daily oil production of oil was 684,000 bbls of oil on August 14, 2012 (see Director's cut dated October 19, 2012).

See wiki population for North Dakota: 683,932.

So, the one bbl of oil/day per capita: August 14, 2012. Another bit of cocktail party trivia.
Active rigs: 184 (steady, but up nicely)

Five (5) new permits -
  • Operators: MRO (3), Oasis, Whiting
  • Fields: Lonesome (McKenzie), Reunion Bay (McKenzie), Camp (McKenzie)
  • Comments: None
Wells coming off confidential list were reported earlier; see sidebar at the right.

Producing wells completed
  • 22215, 504, WPX Energy Williston, George Evans 11-2HZ, Van Hook, t10/12; cum 13K 10/12;
  • 20689, 1,202, Zenergy, Patsy 5-8H, Siverston, t11/12; cum --
Dry hole:
  • 17466, dry at 12, 305 feet, Denbury Onshore, Shipton 44-21HSES 21-158N-87W, Wildcat, Ward County, Bakken; this was a wildcat seen mostly as exploratory; spud back in February, 2009; no sundry forms showing fracking; most likely not fracked; gas units maxed out at 250; geologist happy to see what they saw, but not particularly promising to begin with; northwest corner of Ward County (northwest of Minot); far outside the Bakken

New Production Record -- Director's Cut: December 17, 2012 -- Less Drilling; Even Less Fracking; More Production; Majority of Bakken Oil Nows Ships by Rail to East Coast, Gulf Coast, West Coast

Transcribed quickly; there could be errors. More to follow.

Original Post
Link here to the NDIC site.

Also, a stunning graph of this production can be found at

  • Oct: 747,239 bopd (preliminary, all-time high)(~ 2.5% increase)
  • Sept: 729,248 bopd
  • Aug: 701,409 bopd
Producing wells
  • Oct: 8,025 (preliminary, all-time high) (93 bbls/day/well)
  • Sept: 7,899
  • Nov: 211 (all-time high was 370 in Oct 2012)
  • Oct: 370 (all-time high)
  • Sept: 273
  • Aug: 261
  • Nov: $81/bbl
  • Oct: $87/bbl
  • Sept: $85/bbl
  • Aug: $81/bbl
Rig count
  • Nov: 186
  • Oct: 188
  • Sept: 190
  • Aug: 198
In October: a decline in drilling, an even greater decline in hydraulic fracturing --> but, an increase in oil production.

Majority of Bakken oil is shipped by rail to east coast, gulf coast, and west coast destinations.

Daily natural gas production did NOT increase from September to October, because: dry gas wells and high gas:oil ratio wells are being shut in.

Construction of natural gas processing plants and gathering systems is now affected by the weatehr.

US natural gas storage is 8% above historic (5-year) average;

Additions to natural gas gathering and processing systems still lags production: gas flared did not change: 30%. Compare with historical high of 36% about one year ago.

Draft BLM regulations for hydraulic fracturing on federal lands have been published; a final rule will not be published until early 2013.

Draft EPA guidance for permitting hydraulic fracturing using diesel fuel has been published; final guidance promised in spring, 2013. Guidance?

Well Density in the Williston Basin

Earlier I posted a note trying to put things into perspective regarding well density in the current boom.

A reader sent in this comment. Again, such a great comment, I moved it to a stand-alone post:
My nomination for the section (640 acres) with the greatest well density is section 23-163-83 in the Haas Field of western Bottineau County.
Since 1961 there has been a total of 25 wells drilled in section 23.

All have been drilled to the same zone, the Glenburn interval of the Madison formation.

In the 1960's thru 1980's a total of 19 vertical wells were drilled; all but one produced oil. Beginning in the mid 1990's and early 2000's, 6 horizontal wells were drilled within the section along with two
wells in adjoining sections which had major portions of their horizontals under section 23.

In addition to this, several of the horizontals had two legs on their laterals for a grand total of 14 legs producing oil from this one section and all from the Madison Glenburn zone.

To date this one secton has produced between 4 and 5 million barrels of oil. The southeast quarter (160 acres) has made about 3 million barrels of oil with 7 wells continuing to produce. Out of the 27 wells of this section, 18 are still producing.

One of the original wells in the southeast corner of this section produced about 750,000 barrels of oil before it was converted to an injection well.

The total production from the Haas Field is some over 10 million barrels of oil. The production depth is 4000 feet and the pay zone is about 60 feet thick in the middle of the field.

Monday Morning Links -- Part I -- Not The Bakken -- Including Politics

Apple sets record in Chinese sale of new iPhone.
Apple Inc sold more than 2 million of its new iPhone 5 in China during the [first] three days after its launch there on Friday, marking China's best-selling iPhone rollout ever, the company said late on Sunday.
"Customer response to iPhone 5 in China has been incredible, setting a new record with the best first weekend sales ever in China," Apple Chief Executive Tim Cook said in a statement.
Apple's latest iPhone, which offers a larger 4-inch screen and 4G capability, was launched in the United States and 30 other countries in September, when the company sold more than 5 million of the devices in the first three days.
There was a lot of chatter over at MacRumors about how the Apple iPhone was receiving poor reception (pun intended) in China. It will be interesting to see comments now. Disclaimer: I do not own any shares in Apple; never have, never will. This is not an investment site; do not make any investment decisions based on what is posted here.

Finally, the truth is starting to leak out: folks on both sides of the aisle have same concerns when it comes to the ObamaCliff. One wonders how much momentum (assuming there was any to begin with) has been lost in the past few days. I will truly be surprised if a deal can be made at this late stage. Again, the law requires spending cuts, one way or the other. The tax issue is just one side of the coin. Everyone is focused on the president and Mr Boehner. But even Mr Obama knows that Harry Reid control the agenda. And we see how serious Congress is about controlling costs: apparently the "Sandy relief" bill is filled with all kinds of goodies unrelated to Sandy.

WSJ Links

Chevron enters shale hunt in South Africa. Very, very interesting. 


[In addition to the WSJ link following, click here for a great source document sent in by a reader.]

"Fossil fuel free" (wind and solar) cannot even keep up with global GROWTH in demand, much less current needs.

WIND: to meet growth demands, mankind would have to install the equivalent of Germany's entire wind industry every year, year after year.

SOLAR: to meet growth demands, mankind would have to install 23 times the solar energy Germany solar industry provides, year after year.

The math does not add up. Wow, I've said that a lot. Another op-ed supporting that view: this time from the Manhattan Institute. "Harvard needs remedial energy math."

Wind and solar power cannot possibly meet the world's growing need for more electricity. Activists now want the world to go "fossil fuel free." Let's do the math:
Let's do the math by considering what will happen if we humans—in the words of the campaign—attempt to "go fossil free" and rely solely on "clean energy." To make the computation simpler still, let's ignore oil altogether, even though that energy source represents about 33% of all global energy use and is indispensable for transportation.
The absurdity of the calls for a "fossil free" future can be illustrated by looking exclusively at the explosive growth in the world's demand for electricity, the commodity that separates rich countries from the poor ones. Since 1985, on a percentage basis, global electricity demand has grown by 121%, which is nearly three times the rate of growth in oil demand. Over the past two and half decades, electricity consumption has increased by an average of 450 terawatt-hours (a terawatt-hour is one trillion watt-hours) per year. That's the equivalent of adding about one Brazil (which used 485 terawatt-hours of electricity in 2010) to the electricity sector every year. The International Energy Agency expects global electricity use to continue growing by about 450 terawatt-hours per year through 2035.
Wind: The world's fleet of turbines produced 437 terawatt-hours of electricity. Therefore, just keeping up with the growth in global electricity demand—while not displacing any of the existing need for coal, oil and natural gas—would require the countries of the world to install about as much wind-generation capacity as now exists, and they'd have to do so every year.
Put another way, just to keep pace with demand growth, the wind industry will need to cover a land area of some 48,000 square miles with wind turbines per year, an area about the size of North Carolina. Even if that much land were available, no humans would want to live on the land because of the irritating noise generated by those turbines.
Solar: Germany has more installed solar-energy capacity than any other country—about 25,000 megawatts. Last year, Germany produced 19 terawatt-hours of electricity from solar. Thus, just to keep pace with the growth in global electricity demand, the world would have to install about 23 times as much solar-energy capacity as now exists in Germany, and it would have to do so year after year.
Remember: these figures are just to keep pace with growth in global energy demand; this has nothing to do with current demand.

The math simply does not add up.




Random update on Iraq's production:

Iraq’s production surged 650,000 barrels a day this year to 3.35 million, the biggest annual gain in 14 years, according to data compiled by Bloomberg, amid assistance from foreign oil companies that are paid a fixed amount per barrel produced, regardless of international price levels.

Monday Morning Links -- Part II

Wells coming off the confidential list over the weekend and today have been reported

Monday morning links, Part I, will be posted later. It's a non-energy post, and generally I don't like non-energy or non-Bakken posts to start out the day. Good luck to all.

RBN Energy: PBF Energy -- It's Toledo, Ohio, refinery.


Chevron enters shale hunt in South Africa. Very, very interesting. But the story seems bigger than reality. First, it's gonna be a long time before we see production; and, b) it's natural gas.
The fracking issue is divisive in South Africa, a country still wrestling with the economic and political legacy of apartheid.
Company's decision comes as temporary ban on exploration is lifted in a country estimated to hold large reserves.
There may be enough natural in South Africa to supply that country's need for 400 years. Right now, South Africa imports 60% of its energy needs.

South Africa was #76 of 191 countries that signed the Kyoto Protocol. The US has not signed; Canada has pulled out of the Kyoto Protocol.


On Sunday night, announced that it sold two million iPhone 5s over launch weekend in China. Two reasons this is significant:
  • One, it makes Apple bulls like Piper Jaffray's Gene Munster, who projects that Apple will sell 4 to 5 million iPhones in China in the quarter, look smarter than the bears. 
  • And two, combined with the news Friday that Walmart is selling the iPhone 5 in the U.S. for $70 off, it strongly suggests that Tim Cook has worked the kinks out of his supply chain and is managing to deliver a flood of iPhone 5s in a crucial quarter.
The crush of pessimistic Apple chatter has been so overwhelming recently that it's hard to remember what the conventional wisdom was three months ago, before Apple's perceived iPhone sales miss, underwhelming quarter, and so on. 

A refresher: Many thoughtful Apple watchers were saying that the holiday quarter was mostly about supply. If Apple could figure out how to deliver enough iPhones and iPads during the quarter, beautiful things could happen with Apple's numbers.