Wells Coming Off The Confidential List Friday; Statoil With Permits For Seven More Wells In One Section Just East Of Williston

Active rigs: 187

Coming off the confidential list:

• 21059, DRY, Petro-Hunt, State 150-104-3A-10-1HA, Nelson Bridge, no production data;

Today's daily activity report (May 23, 2013)

Ten (10) new permits --

• Operators: Oasis (4), Hess (4), CLR, Corinthian
  Fields: North Souris (Bottineau), Alger (Mountrail), Robinson Lake), Cherry Creek (McKenzie), Juno (Divide)
• Comments:

Wells coming off confidential list were reported earlier; see sidebar at the right.

From yesterday's daily activity report (May 22, 2013):

Statoil has permits for seven more wells to be sited in one section east of Williston. There are already two wells sited in that section and producing. The Lucy Hanson and Larsen wells will be sited in NENW 15-154-100. These wells impressed me enough the first time I saw them I posted a photograph of the original Lucy Hanson/Larsen wells.

• 20842, 2,743, BEXP, Larsen 3-10 2H, Catwalk, Bakken; s5/11; t7/11; F; cum 147K 3/13; on the same pad as 20013; runs north;
• 20013, 3,771, BEXP, Lucy Hanson 15-22 1H, Catwalk, Bakken, middle Bakken, it looks like it was a 36-stage frack; 1.3 million pounds sand; 2.7 million pounds ceramic. Lucy Hanson is about 3.5 miles east on 1804 out of Williston, and one mile north of the highway; s4/11; t8/11; cum 172K 3/13; runs south;

Grim Report For Canada's Oil And Gas Sector

This note is worthy of a stand-alone post. I posted it earlier with other links, but it needs to be highlighted. 

News from Canada -- for Canada -- does not look good (a PDF file -- you might get a dialog box asking you to link to another website; if you do, that's fine, no problem, but of no use either. I would just cancel that link.)

It's going to be a long haul for those in the oil and gas sector in the North (Canada) with the Conference Board of Canada predicting continued decline in the industry.

A four-and-a-half per cent decrease in the sector every year until 2025 is the grim forecast and the reason is a lack of wells moving into production in the foreseeable future.

And that begs the question, "why?"

I didn't have time to do the math, but from Don:

At an annual 4% decrease for 12 yrs: assume 100% at end of 2013, then with a 4% compounded  yearly decrease, one arrives at 61% at the end of 2025.

The word "grim" might be an understatement. 

Bakken Residence Suites Up For Sale: Owner Selling To Focus On Other Properties In The Bakken -- May 23, 2013

Property for sale in the Bakken.

This is a pretty big deal. I have no interest in this. I am simply providing the information.

Bakken Residence Suites is up for sale. The owner is selling in order to concentrate on other property in the Bakken. 

This property is located near Watford City, probably the most active area in the Bakken right now and literally in the sweets spots of the Bakken.

ONEOK has just announced that it will be building Garden Creek III in the Watford City area. My hunch is that the decision to sell this property was made before it was known that ONEOK would be building yet another natural gas processing plant in the area. It should also be noted that a huge North Dakota highway spending bill has been passed and most of the spending will be done in the oil patch.

The sale will be by auction. The auction is being held on July 17th. The auctioneer's website and phone number are www.Bakken.SheldonGood.com and 800-962-0930.

According to the owner:

The auction presents investors with the opportunity to acquire a high-end stabilized employee housing facility and future development land in the heart of the Bakken. The property generates substantial income, $2,453,957 NOI (2012) and $2,617,992 projected NOI (2013).

In addition to the revenue generated by Bakken Residence Suites, the auction provides an opportunity to acquire two different parcels. The first parcel is a total of 30+ acres, which includes: the employee housing facility on approximately 15-acres, a 5-acre commercial development site with highway 85 frontage and a 10.9-acre development site for additional employee housing. Parcel two is an additional contiguous 44-acres that will be available to the winning bidder for $968,000 ($22,000 per acre).

Fracking WITH Natural Gas

Oil & Gas Journal is reporting:

Cabot Oil & Gas Corp. said it is using natural gas from the Marcellus shale in Susquehanna County, Pa., to fracture wells via dual-fuel technology in a process that can displace as much as 70% of the diesel fuel traditionally used to operate hydraulic fracturing equipment.

The dual-fuel technology involves engines operating on a mixture of natural gas and diesel. The effort was a partnership with FTS International (FTSI) and Caterpillar Global Petroleum, Cabot said.

Benefits are said to include:

• Reduced air emissions for a cleaner environment, due to a reduction in diesel usage.
• Reduced truck traffic when field gas at or near the well site is used due to a reduction in the transportation of diesel fuel to site.
• Reduced costs, as natural gas can be a less expensive fuel option than diesel, providing potential cost savings for industry and consumers.

PetroBakken Renamed Lightstream Resources

Oil & Gas Journal reporting. PetroBakken renamed Lightstream Resources.

The company’s main interests are light-oil properties in the Bakken play of Saskatchewan and Cardium play of Alberta.

The company was spun off last year from Petrobank Energy Resources Ltd., of which it had been a 56%-owned subsidiary.

Really Cool: Two Articles In Seeking Apha: Rate Of Production Slowing In The Bakken (So What?) Vs Need To Slow Down Rate Of Drilling In The Bakken (We Do?) -- COMMENTS PENDING

I hope I have some time in the near future to comment about these two articles in SeekingAlpha on the Bakken. [I've decided not to say more about these two articles than I already have; there are simply too many story lines to consider.]

• Maybe it's time to slow down in the Bakken. (We do?)
• Maybe production in the Bakken has already slowed down. (So what?)

Thank you, Don, for alerting me to these articles; many story lines to consider. 

ONEOK To Build Another Natural Gas Processing Plant: Garden Creek III Northeast of Watford City

The Bismarck Tribune is reporting:

The Public Service Commission Wednesday gave a natural gas processing plant near Watford City the green light to go ahead with construction.

Commissioners unanimously approved a certificate of site compatibility for ONEOK’s Garden Creek III plant in McKenzie County.

Commissioner Julie Fedorchak said the 100 million cubic feet per day processing plant would be located on the site of an identical facility already under construction.

The first processing plant, known as the Garden Creek I plant, opened in January 2012 northeast of Watford City.

Garden Creek II and Garden Creek III will be located on an 80-acre site adjacent to the first plant. The second plant is already under construction and is set to be completed in 2014 and the plant given the green light Wednesday is expected to be completed in 2015.

Fedorchak said the $160 million project would create nearly 40 jobs.

Is this number 6 for ONEOK since the Bakken boom began?

Back on April 26, 2013, the question was asked where the next natural gas processing plant would be built. The opinions then:

• northeast McKenzie County, in Watford City area: 36%
• on the Fort Berthold Indian Reservation: 12%
• just off the reservation, to the west: 10%
• western Mountrail County, in the Stanley area: 24% (MDW voted this choice)
• in Whiting's Pronghorn Prospect, Stark County: 17%

Thursday Links -- No WSJ Links Today

RBN Energy: tank cars. CBR.

Petroleum News:  Pushing margins. CLR continues successfully testing Three Forks benches and downspacing. A huge "thank you" to a reader for sending me the link. Much is said in this article, but this is of interest:

As is the trend in the Williston Basin, Continental is exporting most of its crude oil from the basin via rail.

Bott said in the first quarter of 2013, approximately 80 percent of the crude oil from its operated wells were railed out of the basin, and said the narrowing of the price spread between Brent and West Texas Intermediation has brought rail transport into “rough parity” with pipeline transport, but he added that the company is keeping its options open in terms of future commitments.

“If Brent/WTI spreads continue to converge, we will look at pipeline evacuation opportunities and we’ll need to see rail carriers reduce their costs to stay competitive.”
Bott added that Continental is also evaluating how it sells it oil.

“We have also begun to diversify how we sell our oil, balancing spot, selling with short-term agreements to commit set volumes of oil to specific refining customers,” he said.

Hamm said that production in the basin simply grew too fast and pipeline capacity couldn’t keep up as price differentials “blew out” some 15 months ago. Not only did Continental see opportunities with rail transport, but also advantages of east and west coast markets rather than always taking oil to the Gulf.

News from Canada -- for Canada -- does not look good (a PDF file -- you might get a dialog box asking you to link to another website; if you do, that's fine, no problem, but of no use either. I would just cancel that link.)

It's going to be a long haul for those in the oil and gas sector in the North (Canada) with the Conference Board of Canada predicting continued decline in the industry.

A four-and-a-half per cent decrease in the sector every year until 2025 is the grim forecast and the reason is a lack of wells moving into production in the foreseeable future.

And that begs the question, "why?"

I didn't have time to do the math, but from Don:

At an annual 4% decrease for 12 yrs: assume 100% at end of 2013, then with a 4% compounded  yearly decrease, one arrives at 61% at the end of 2025.

The word "grim" might be an understatement. 

Initial Jobless Claims Decreased By 23,000; Red States Vs Blue States Data Provided

After last week's stunning number (an increase in initial claims by 32,000), today's number is reassuring that things have not gotten completely out of control.

Initial jobless claims decreased by 23,000 to 340,000. The forecast had been for a drop to 345,000.

Bloomberg is reporting:

Fewer Americans than projected filed applications for unemployment benefits last week, a sign that the job market is sustaining recent gains. 

After last week's number, I'm not sure what they really mean by "sustaining recent gains." Whatever.

Last week's "bad" number of 360,000 actually was revised a bit worse to 363,000.

The four-week moving average held almost steady, 339,500 compared to 340,000 earlier.

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

Don noted this very interesting article from IBD  -- on the economy, "red" beats "blue" -- by a huge margin:

Texas outperformed every other state in the nation on jobs and growth over the past decade, according to the latest annual report on state economic performance released Thursday by the American Legislative Exchange Council. Michigan came in dead last.
The rankings are based on state GDP growth, population shifts, and changes in non-farm payroll jobs between 2001 and 2011.

The ALEC report also finds that Utah has the best economic outlook this year, and Vermont the worst.

Not surprising.

Wells Coming Off Confidential List Thursday

20458, 555, G3 Operating, Fort Berthold 152-93-17C-08-3H, t1/13; Four Bears, cum 26K 3/13;
22287, 1,738, Whiting, Obrigewitch 41-16PH, Bell, t11/12; cum 67K 3/13;
22606, drl, Statoil, SCHA 34-34TFH, Alger,
23205, 948, Sequel, ND State 24-16H-0916-15895-TF, McGregor, t3/34; cum 24K 3/13;
23430, 647, CLR, Missoula 4-21H, t4/13; cum --
24385, drl, XTO, Carter 14X-32D, Grinnell,

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

23205, 948, Sequel, ND State 24-16H-0916-15895-TF, McGregor, t3/34; cum 24K 3/13:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2013	29	24125	23472	26777	31547	0	31358