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Wednesday, May 22, 2013

Wednesday Evening Links and News

I'm busy with family for the next few days; in Tucson for a high school graduation, so my blogging will be limited.

I don't like doing it this way, but I don't want to lose these links, so I will post them and then next week come back to some of them if I have time.

Most of these links were sent to me by Don (thank you); some other readers.

First, the Kodiak Oil and Gas Corporation 2013 UBS Global Oil and Gas Conference Call May 22, 2013. -- SeekingAlpha.com.

Second, Minnesota law on fracking sand mining. I think I posted this story from another source earlier. I didn't read this one all the way through but what little I remember from the other source, it sounds like a good compromise, as long as permitting process does not get bogged down.

Third: the Continental Resources, Inc. Presents at UBS Global Oil and Gas Conference, May-21-2013. Some excerpts from this presentation were posted earlier; it's an incredible presentation.

Four: two new ethylene crackers; $400 million for the state of Pennsylvania. 
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Getting A Handle On The Size Of The Bakken

Acreage

Prudhoe Bay: Don reminded me, from wiki:
Prudhoe Bay Oil Field is a large oil field on Alaska's North Slope. It is the largest oil field in both the United States and in North America, covering 213,543 acres and originally containing approximately 25 billion barrels of oil. The amount of recoverable oil in the field is more than double that of the next largest field in the United States, the East Texas oil field. The field is operated by BP; partners are ExxonMobil and ConocoPhillips Alaska.
North Slope, associated with Prudhoe Bay, not developed, everyone is talking about:
  • 500,000 acres leased
The Bakken (most statistics are for North Dakota only)
Obviously, comparing acreage from one one field to another oil field is comparing apples and oranges, but Don pointed out an interesting statistic: Prudhoe Bay: 200,000 acres. In the Bakken (numbers rounded):
  • KOG: 150,000 net acres
  • NOG: 180,000 net acres
  • Oasis: 335,000 net acres 
  • Statoil: 360,000 net acres (ND; additional acreage in MT)
  • COP: 600,000 net acres
  • XOM: 615,000 net acres (DNR deal; XTO) -- Don's estimate
  • Whiting: 700,000 net acres
  • CLR: 1.1 million acres
Production

Prudhoe Bay, again:
  • Cumulative North Slope oil peaked in 1989 at 2 million barrels per day. 
  •  (Greater Prudhoe Bay: 1.5 million barrels per day, but had fallen to 943,000 barrels per day in 2005, while Greater Prudhoe averaged 411,000 barrels per day in December, 2006 and Prudhoe itself averaged 285,000 barrels per day. 
  • Total production from 1977 through 2005 was 11 billion barrels. 
  • As of August 2006, BP estimated that 2 billion barrels of recoverable oil remain and can be recovered with current technology.
The Bakken, North Dakota only:
  • boom started ~ 2007
  • production continues to rise; currently around 775,000 bopd
  • most agree: will peak above 1 million bopd
  • some suggest: will peak above 1.5 million bopd
  • one source: will peak at 2.1 million bopd
Number of wells

Prudhoe Bay: about 1,000 (per wiki)
Bakken, North Dakota: >4,000 (estimate)

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Following the Rollefstad Presentation in Las Vegas in April, 2013, the next speaker, I am told increased the potential. A reader said:
Go to slide 42 of the Rolfstad presentation, it shows 18 wells on the pattern.
The next speaker said (From Bakken Services) that Tom’s presentation only touched on 4 layers of the Three Forks.  He indicated that layers 5 and 6 are being explored.
That would push it the high 20’S.    So 28 wells per spacing unit, 7,000 spacing units 196,000 wells.
32 wells per spacing unit, 7000 spacing units = 224,000 wells
The math is silly but moving up.
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More Than Enough Water For Fracking In The Bakken

Reuters is reporting.
In towns across North Dakota, the wellhead of the North American energy boom, the locals have taken to quoting the adage: "Whiskey is for drinking, and water is for fighting." It's not that they lack water, like Texas and California. They are swimming in it, and it is free for the taking. Yet as the state's Bakken shale fields have grown, so has the fight over who has the right to tap into the multimillion-dollar market to supply water to the energy sector. North Dakota now accounts for over 10 percent of U.S. energy output, and production could double over the next decade. The state draws water from the Missouri River and aquifers for its hydraulic fracturing, the process also known as fracking and the key that has unlocked America's abundant shale deposits. The process is water-intensive and requires more than 2 million gallons of water per well, equal to baths for some 40,000 people.
Just for the record, I've said that from the beginning: there is no shortage of water in the Bakken. That's how the Bakken will differentiate itself from West Gulf (Eagle Ford) where they area about to institute water restrictions in San Antonio, and the Permian (west Texas) where there is always a water issue.
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North Dakota

The amount of water that is released from the Garrison Dam in less than one day in the spring is enough to frack 2,000 wells.

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Colorado River

Future of Colorado River, May 24, 2013: 
Mexico also has a stake in the river, and U.S. and Mexican officials signed a pact in November for new rules on sharing Colorado River water, including a deal that lets Mexico store water in Lake Mead. The deal provides for international cooperation to ensure that river water reaches the Gulf of California for the first time in decades.
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Permian (West Texas)

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West Gulf (Eagle Ford)

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California: Paso Robles

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Miscellaneous News Reports

Peak water is limiting energy production, PrinceGeorgeCitizen, June 7, 2013.
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30+ Wells Per Spacing Unit In The Bakken -- CLR

A reader alerted me to this link, thank you.

SeekingAlpha is reporting:
“So if all 4 of those intervals, plus the Middle Bakken works, you could see you're talking about 30-some-odd wells per spacing interval. And so it's very impactful to try to understand this as you begin to play in your full-field development in terms of being able to drive down cost and ultimately recovering -- optimizing how you recover basis that 32 billion to 45 billion barrels of reserves as efficiently as 1 talks possibly can. So that's a couple of things to watch that are real drivers for us in terms of -- and this is essentially a 2-year program, both of these. So we're going to announce the sort of results quarterly on the productivity project probably towards the end of the year and next year before we have these pilot density projects to be able to announce to you."
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Wednesday's News And Links

Active rigs: 188 (steady, trending down)

RBN Energy: Marcellus production exceeding forecasts by staggering amounts.

Production forecasts for natural gas in the Appalachian Marcellus shale have doubled from 7 bcf/d to 14 bcf/d in less than two years. As a result northeast demand for natural gas will be almost entirely met from local production in coming years. Significant re-plumbing of the US natural gas pipeline distribution system will be needed and in many cases has already commenced. Today we review accelerating changes to US gas flows.
Rigzone: five US states, besides ND and TX, are boosting the nation's production -- 
Production in the Williston Basin in North Dakota and Texas' Eagle Ford play and Permian Basin outpaced other regions. However, gains in other Lower 48 states added up to approximately 320,000 bopd of production from February 2010 to February 2013, including the 290,000 bopd in Oklahoma, New Mexico, Wyoming, Colorado and Utah.
Production in each state rose between 23 percent and 64 percent, EIA noted in its Petroleum Supply Monthly report.  
Oklahoma and New Mexico production averaged over 530,000 bopd in February 2013, roughly the same as California's oil production in February. Production in Oklahoma and New Mexico grew by 51 percent and 46 percent from February 2010 to February 2013, mainly due to production gains in the Anadarko and Permian Basins.
WSJ Links

 Section D (Personal Journal):
Section C (Money & Investing):

 Section B (Marketplace):

 Section A:
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North American Energy Revolution

Observations
Commentaries
US
Canada
Mexico
The Bakken
Marcellus/Utica
  • Reserves updated; staggering
  • Production forecasts for natural gas in the Appalachian Marcellus shale have doubled from 7 bcf/d to 14 bcf/d in less than two years. As a result northeast demand for natural gas will be almost entirely met from local production in coming years. Significant re-plumbing of the US natural gas pipeline distribution system will be needed and in many cases has already commenced. Today we review accelerating changes to US gas flows. - RBN Energy, May 22, 2013 
  • XOM more than doubles its acreage in the Marcellus. -- May 25, 2013
Barnett
Permian
Ramblings
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