Tuesday, February 19, 2013

Newfield's Fourth Quarter and Full Year (2012) Financial and Operating Results

From the press release:

Williston Basin

Newfield's net production in the Williston basin averaged 10,500 BOEPD in the fourth quarter of 2012. To date, the company has drilled 93 wells in the basin, of which approximately half are super extended laterals (SXLs). The table below details all Newfield-operated Williston basin development wells completed from 2008 through today:

Well Type
# Wells
Avg. Gross IP
Avg. Gross
30-Day Cum
Avg. Gross
60-Day Cum
Avg. Gross
90-Day Cum
XL (< 5,000 ft)
2,009 BOEPD
19,552 BOE
31,995 BOE
41,290 BOE
SXL (> 5,000')
2,560 BOEPD
29,060 BOE
47,492 BOE
62,296 BOE

Newfield continues to perform well in the field, with "spud to total depth" on its SXL wells averaging about 25 days. Completed well costs continue to reflect efficiency gains and the company estimates that its 2013 wells can be drilled and completed for about $10 million gross. Recently, a record well was drilled and completed for approximately $9.2 million.

Newfield expects to invest approximately $230 million in its Williston basin drilling program in 2013. As a result, about 46 wells are planned and production is expected to grow 15% over 2012 levels. Three operated rigs are running today and a fourth rig will be added in March 2013. The company has approximately 41,000 net acres under active development along the Nesson Anticline and areas immediately west of the Nesson. The company is drilling SXL wells from pad locations in the Bakken and Three Forks formations. Additional exploration potential exists in deeper benches throughout the basin.

Boeing's "Business As Usual" Is ... Well, Maybe Not

On January 31, 2013, I suggested that Boeing's "business as usual" attitude with regard to the flaming batteries would come back to haunt them.
Boeing plays down 787 woes; net falls 30%. The company says it is "business as usual." Something tells me they will regret that "que sera sera" attitude. Oh, by the way, from CNBC this a.m.: the term for Boeing 787  lithium batteries that start on fire: "non-passive failures."
So, tonight this story, Reuters is reporting:
A month after the global fleet of the carbon-composite jets were grounded as U.S. and Japanese regulators carry out investigations into overheating batteries, the parked airliners are a stark symbol of deepening problems this is causing Boeing.
At Paine Field in Everett, Boeing plans to move some of its other planes around to make room for new 787s coming off its two production lines, and says it has room to store all the 787s it is making.
But Boeing is finding it increasingly difficult to convince Wall Street that its balance sheet is not going to be strained by the crisis. Until the Dreamliner is cleared to fly again, which could be several months, Boeing will be starved of delivery payments but still has to keep producing and maintaining the 787s it is making.
The world's largest planemaker is being hit on a number of financial fronts, as well as suffering potential damage to its brand image. It is unable to deliver the five Dreamliners being produced per month, missing out an about $200 million in final cash payments from customers every month the 787 is grounded, while it has to pay out millions of dollars to clean, maintain and insure the parked planes. The delay may also force Boeing to postpone plans to double production by the end of this year.
And Boeing engineers, this week, are voting whether to go on strike. 

Exxon Adds Reserves But Just Barely, And Due to Bakken and Woodford

Rigzone is reporting:
Exxon Mobil Corp. said Tuesday that in 2012 it added in reserves slightly more oil and gas than it produced, with the majority of the new reserves coming from oil-rich assets in North America.
The world's largest publicly-traded oil company said it added proven reserves totaling 1.8 billion oil-equivalent barrels, of which 1.4 billion barrels consisted of petroleum and other liquids, a sign that Exxon has been emphasizing oil exploration at the expense of its less profitable natural gas business.
Also, Exxon said it added more than 750 million oil equivalent barrels from the oil-rich Woodford and Bakken shale areas in North Dakota, which are among the fastest-growing oilfields in the world. About 600 million barrels of oil equivalent came from additions in Alberta and in offshore Canada.
The fact that most of the newfound energy padding the company's reserves comes from unconventional assets in North America underscores how the technological unleashing of massive resources from U.S. shale to Canada's oilsands has prompted global giants to shift their attention away from riskier overseas prospects.
For newbies: the Woodford is in Oklahoma, not North Dakota as the article suggests. 

Gusher Has Attention Of NDIC

5,000 bopd.

That's about all the information authorities can share. CRC sent the link; The Bismarck Tribune is reporting:
A gusher of an oil well in McKenzie County has the attention of regulators in North Dakota.
A well producing 5,000 barrels of oil per day northwest of Watford City was highlighted by Department of Mineral Resources director Lynn Helms during his monthly web cast last week.
The well is on confidential status so public information is restricted. The county also has 58 rigs drilling there now, so new producing wells are almost an everyday occurrence.
However, Helms did say the well's dramatic number may be related to the quality of proppant material used during the multiple hydraulic fracture stages.
And that's all the "specific" information we get.

"Northwest of Watford City" covers a lot of area, but there are very few wells on confidential status northwest of Watford City right now. Three fields are possible: Tobacco Garden, North Tobacco Garden, and Siverston.

In Tobacco Garden:
  • 24526, 1,729, Newfield, Loomer State 150-99-5-8-2H, Tobacco Garden, t6/13; cum 249K 10/17;
  • 24527, PNC, Newfield, Loomer State 150-99-5-8-10H, Tobacco Garden,
  • 24528, 1,558, Newfield, Loomer State 150-99-5-8-3H, Tobacco Garden, t6/13; cum 255K 10/17;
In North Tobacco Garden:
  • 23536, 2,315, Slawson, Gabriel 2-36-25H, North Tobacco Garden, t12/12; cum 221K 10/17;
  • 23556, PNC, Slawson, Gabriel 1-36-25H, North Tobacco Garden,
  • 24518, PNC, Slawson, Gabriel 6-36-25TFH, North Tobacco Garden,
  • 24519, PNC, Slawson, Gabriel 5-36-35TFH, North Tobacco Garden,
  • 24520, PNC, Slawson, Gabriel 4-26-25H, North Tobacco Garden,
In Siverston:
  • 24996, 1,541, Newfield, Lawlar 150-98-18-19-2H, Siverston, t7/13; cum 216K 10/17;
  • 24997, 1,820, Newfield, Lawlar 150-98-18-19-10H, Siverston, t7/13; cum 204K 10/17;
  • 24998, PNC, Newfield, Lawlar 150-98-18-19-3H, Siverston,
  • 23256, 642, Oasia/SM Energy, Arnold 16X-12H/Holm 16X-12HA, Siverston, t4/14; cum 124K 10/17;
  • 23257, 776, Oasis/SM Energy, Dorothy 16-12H/Holm 16X-12HB, Siverston, t4/14; bcum 206K 10/17;
  • 23121, 758, Oasis/SM Energy, Holm 14X-12HA, Siverston, t2/13; cum 154K 10/17;
  • 23122, 791, SM Energy, Holm 13-12HA, Siverston, t2/13; cum 237K 10/17;
Of the ones on "conf" status, only #23536 has a release date (March 30, 2013).

Based on the limited description in the article with regard to location, the SM Energy Holm wells look most likely, but past Holm wells have not been that outstanding.  The file reports for the two wells on "drl" status do not suggest these are very big wells. Of all the rest of the wells, only one, #23536, has a release date from the confidential well list (March 30, 2013). So, I really have no idea what well Mr Helms might have been talking about. I didn't hear the webcast; maybe he provided more information.

So, we'll see.

Random Update of Two Huge Wells in Big Bend Oil Field, The Bakken: Slawson's Sniper (Federal) and MRO's Pearl

Big Bend is a "huge" oil field; it has been updated. Look at all the Bakken wells with 300,000 bbls cumulative, and only since 2009.

21427, 1,502, Slawson, Sniper (Federal) 2-6-7H, Big Bend, t10/12; cum 50K 12/12;

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

22911, 1,538, MRO, pearl 41-13H, Big Bend, t10/12; cum 51K 12/12;

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Gasoline Could Hit All-Time Record Highs -- Policy Decisions Coming Home To Roost

Canadian oil sands oil, $60/bbl: NO.

Venezuela oil, $120/bbl: YES.*

It's not that simple, it never is. But that's the 30-second sound bite and those are the numbers, plus or minus a few bucks.

And now USA Today is reporting:
After sending consumers into sticker shock the past month, how much more can gasoline prices climb?
Another 20 to 50 cents a gallon — a level that could propel the cost of gasoline, now $3.75 a gallon, to all-time highs, some experts say.
Gasoline prices typically climb from February to Memorial Day on expectations of rising consumption and costlier summer-blend gas. But so far this year, prices are surging sooner and faster than ever before — up 45 cents since mid-January.
Let's see if the article has any suggestions why the price of oil is soaring so early?


*For explanation, click here

Cue up Connie Francis.

For the faux environmentalists who stopped the Keystone XL, the CO2 profile of Canadian oil ($60/bb) is the same as the CO2 profile of Venezuelan oil ($120/bbl). In addition, the Keystone XL would have employed tens of thousands of union members to lay the pipeline. And American money for heavy oil would be going to an ally, not to OPEC. One can only wonder about Americans who can argue it makes sense to buy OPEC oil and not Canadian oil.

GMXR In The News -- Share Price Drops Significantly -- For Investors Only

Yahoo! In-Play
GMX Resources provides 2012 year-end reserves; an update on its oil and gas hedge portfolio and a liquidity update; estimated proved reserves were 35.6 million BOE: Co reported:
  • Bakken PDP reserves of 1.7 MMBOE, up 430%; PDP PV-10 of $38.7 million, up 295%
  • 2012 PUD reserves of 7.1 MMBOE, up 1,321%
  • 2012 PUD PV-10 of $50.4 million, up 1,020%
  • 21.5 net Bakken PUDs in 2012 vs. 1.85 in 2011
  • 2012 total proved reserves of 8.9 MMBOE, up 971%
  • Bakken 2012 total PV-10 of $89.1 million, up 523%
The Company's available cash at year-end 2012 was $46.0 million and includes $16.8 million reserved and paid in connection with the maturity of the Company's 5% Convertible Senior Notes due in February 2013.
No link. This is at a dynamic link which will be changed by tomorrow morning.

GMXR closed at $3.29. Down $1.67. Dynamic, no link.

This is the key data point in the company's press release:
The Company's available cash at year-end 2012 was $46.0 million and includes $16.8 million reserved and paid in connection with the maturity of the Company's 5% Convertible Senior Notes due in February 2013. The Company has recently sought indications of interest for certain debt and equity liquidity alternatives, but not received sufficient support for all of its liquidity needs or plans. The Company is continuing to explore and evaluate options for its capital needs, as well as continuing to evaluate and finalize its 2013 budget for capital expenditures based on its available liquidity. In connection with its evaluation, the Company plans to retain a financial advisor to assist the Board and senior management in its ongoing exploration of a variety of financing alternatives, including a potential restructuring of the Company's balance sheet in light of its current liquidity and cash needs.

Delta Airlines Flying High on Bakken Oil

Don sends the link; KXNET is reporting:
The next time you travel with Delta Airlines, you'll might be flying high on Bakken oil.
That's because Delta just received it's first shipment of Bakken crude at its refinery in Pennsylvania.
Delta purchased the refinery last year to get control of its fuel costs.
Now that North Dakota oil is being transported, not just in pipelines, but by rail, Bakken crude is helping release the tether that binds east coast refineries to overseas crude.
In fact, rail transport is opening up the entire U.S. to Bakken crude.
Justin Kringstad, Director, ND Pipeline Authority: "Within the continental U.S., yes, we can reach, essentially, all corners of the U.S. And it's really exciting, again, those new markets that are opening up for North Dakota production, so the rail has worked out very well."
Refineries are configured to run certain types of crude -- and Bakken crude is an especially good fit for east coast facilities. 
The most important data point in that story: "Refineries are configured to run certain types of crude...."

And that's the whole point of the current poll asking whether the policy decision to kill Keystone XL 1.0 is the single most important reason for the soaring price of gasoline? The price of gasoline is now at all-time highs for this time of year, and has risen 32 days in a row. No links; easily found.

The Gulf Coast refineries configured to run heavy oil are paying $120/bbl for Venezuela oil. Canadian oil sands oil, with the same CO2 profile of Venezuela oil, is selling at $60/bbl.

And KXNET is noting that. Refineries are configured to process different types of crude oil. 

Wells Coming Off The Confidential List Wednesday

23038, 515, Hess, EN-Horst S-154-93-1003H-4, Robinson Lake, t12/12; cum 9K 12/12;
23106, 1,047, MRO, Schmalz 34-22H, Murphy Creek, t11/12; cum 17K 12/12;
23275, 2,102, Newfield, Darlene Federal 152-97-13-24-2H, Westberg, no production data;
23280, DRY, Whiting, Kittelson 32-27, wildcat, a Deadwood well; target was the Red River C (Duperow); now a SWD
23332, drl, QEP, MHA 3-03-34H-150-92, Heart Butte, no production data;
23431, 1,461, XTO, Flatland 11X-2E, Sand Creek, t11/12; cum 13K 12/12;
23508, 669, Samson Resources, Nomad 0607-1H, West Ambrose, t12/12; cum 9K 12/12;

Ten (10) New Permits -- The Williston Basin, North Dakota, USA

Williston Basin Operations

Active rigs: 182 (steady)

Ten (10) new permits --
  • Operators: Hess (6), Slawson (2), Whiting, Liberty Resources
  • Fields: Big Bend (Mountrail), Alkali Creek (Mountrail), Glass Bluff (McKenzie), Little Knife (Dunn), Cartwright (McKenzie)
  • Comments:
Wells coming off the confidential list have been posted; see sidebar at the right.

Producing well completed:
  • 23758, 630, Whiting, Lillian Viola 14-12TFX, Sanish, t1/13; cum --

French May Be Getting Creative To Tap Into America's Energy Largesse

The Wall Street Journal is reporting (Don alerted me to the link, via the Yahoo! DNR message board):
Cheap stuff attracts buyers, and gas is no different. French utility EDF has announced plans to develop floating barges that could liquefy North American gas to be shipped overseas. In theory, this could offer a cheaper, faster way to get U.S. gas on the high seas than some land-based projects.

Europe needs the help. Its power stations are burning more U.S. coal these days, which has been displaced by cheap gas at home. That helps with costs but does nothing for Europe's carbon-emissions targets. Alistair Buchanan, who runs the U.K.'s energy-market regulator, warned again this week that the country's reliance on imported gas to power its electricity grid looks set to intensify, raising energy bills.

Another Faux Environmentally Success Story: Grassland to Corn to Fuel For SUVs in NYC

The Bismarck Tribune is reporting, link provided by Don:
A new study documents a loss of 1.3 million acres of grassland over a five-year period in the Western Corn Belt — a rate not seen since the 1920s and 1930s.
The research by Christopher Wright and Michael Wimberly of the Geographic Information Science Center of Excellence at South Dakota State University said a recent doubling in commodity prices has created incentives for landowners in South Dakota, North Dakota, Nebraska, Minnesota and Iowa to convert grassland to corn and soybean cropping.
"Historically, comparable grassland conversion rates have not been seen in the Corn Belt since the 1920s and 1930s, the era of rapid mechanization of US agriculture," the authors wrote.
.... corn and soy production has expanded onto marginal lands with high potential for erosion and drought. The authors compared the land use change rate in the Western Corn Belt to the deforestation of Brazil, Malaysia, and Indonesia, but Wright said it's over a much smaller area.
So there you have. Another faux environmentally success story. Grassland to corn to SUV fuel.

Back To The Concern Over Mining in Minnesota

The following was sent in by a reader. If a citation or credit for the note is desired, I will do that. But again, this is from a reader:
As indicated by the number of bars to the left, I have tried to amuse a few others, from doctor to dog catcher, this day and I expect the article you currently link to, on Minnesota lawmakers taking up silica sand mining . . . may be your first exposure, also, to "silica sand" but, hopefully, not our last to either silica or sand.

For verification that this usage is actually the ridiculous redundancy I presumed it to be I did some mining.

I found that the compound known as silica occurs naturally as quartz, the granular form of which is sand. That it is, after oxygen, the second most abundant component of the earth's crust. That it is actually a compound of oxygen and silicon (silicon dioxide). And, thus allied with oxygen, it is present in 90% of the minerals in the earth's crust.

One can fairly say silica is as common as the air we breath. That is not to say it would be a safe component of the air we breath. The intentional penning of a redundancy such as "silica sand" has the effect of marking sand with a skull and crossbones by exploiting the association of silica with a disease that already has a label. That would be silicosis. Danger! A potentially fatal disease could be as near as the air you breath and the ground you walk on. Now you really have something to keep you awake nights! Sand is everywhere.

Danger thus lurks in a trip to the beach. At the gulf course. You'll want to stay well clear of Silicon valley, where there are sure to be high concentrations. Sand is in the dust we raise while jogging, tilling our fields or working in the garden. In the truckloads of gravel and sand we encounter on our roadways. Heaven forbid that we allow them to actually spread it on the roads themselves, on ice-slickened highways (or that we ourselves should actually put it in a box for our children to play in). Or in powdered foods and drugs we consume or cosmetics we apply (makes them flowable).

Surely it's not that sand mining or sand itself was suddenly rendered dangerous by the newfound use for it (to prop open the artificially created fractures in oil-bearing rock formations through a process called hydraulic fracturing).

Let's see the call for a moratorium on mining sand for what it is. ---- An absurd extension of a radical, irrational assault on the economy, on the oil industry generally and "fracking" in particular. The "frackers" were already importing sand from China where it was both found naturally and being manufactured to their specifications before domestic deposits and suppliers could rise and meet the sudden demand.

Environmentalists, indeed! It's as if, in their time zone, dust masks have yet to be invented. How much more would they really be willing to see added to the price of oil and gasoline, batteries, electric cars, solar panels, wind turbines, or for the services and all the other products we use and need every day, as a result of compliance with their demands? How much energy would be wasted, unnecessarily consumed, to transport sand from China to American oil and gas fields, when there are ample deposits of the desired grade of this second most abundant mineral on earth in far closer and even direct proximity to the fields where needed?
I do believe a Minnesota icon, 3M, is "Minnesota Mining and Manufacturing.

Tuesday Morning Energy Links -- Link to Wells Coming Off Confidential List; OXY USA Bakken Well With An IP of 10

After six months, this OXY USA well has produced as much oil as many Bakken wells produce in one month; many Bakken wells produce twice this much oil in the first month of production. OXY must be stressing asset (oil-in-the-ground) management:
  • 22519, 10 (no typo), OXY USA, Ward Lake 1-5-6H-160-91, Dimond,  an extension of the Dimond field; Three Forks well; 21 stages; 2.1 million lbs;  t6/12; cum 8K 12/12;
Data for all wells coming off confidential list over the long weekend and today have been posted. Some very nice wells

In today's WSJ: How Obama might OK Pipeline; unfortunately, it's a typical WSJ response and offers no real path for the president to approve the Keystone; simply a speech saying he's making headway on the environment and that a year-long delay helped will not be enough. The "editorial" is interesting to read, but not very enlightening. The comments show the lack of understanding of the issue. Canadian heavy oil: $60/bbl; Venezuelan heavy oil: $120/bbl

It just got more expensive to buy gasoline in California -- thank the faux environmentalists. From RBN Energy, today:
On January 1st, 2013, California’s cap-and-trade program for Greenhouse Gas emissions (GHG) went live and West Coast energy markets entered a whole new world.  Wholesale electricity prices in California increased 20% as a result and other energy markets have felt the impact.  For example, the new rules pushed up the average cost of refining oil by $0.78/bbl.  For companies subject to the regulations, the bottom line is that if you generate GHG, you pay.  But exactly who pays, how much you pay, and when you pay are all subject to a dizzying array of rules and regulations.  Today we’ll navigate the turbulent and uncharted seas of California cap-and-trade markets.
WSJ Links

Section R (Health Care): I did not read.

Section D (Personal Journal): Music ability helps reading.

Section C (Money & Investing):
The pitfalls of dividend yield in the oil patch, in heard on the street.

Section B (Marketplace):
ObamaPhone subsidy concerns grow

Google works on launching retail stores

Section A:
Gas prices rise for 32nd day in a row; no link; the story is everywhere; cue up Connie Francis

How Obama might OK Pipeline

If you like drones targeting Americans, there are two op-ed pieces in the WSJ. I may link them later on. Too busy; need to move on.