Monday, August 26, 2013

Nineteen (19) New Permits -- The Williston Basin, North Dakota, USA -- KOG With A Nice Well; Others Off Confidential List Are Mediocre At Best

Active rigs: 185 (rising)

Nineteen (19) new permits --
  • Operators: QEP (4), HRC (4), Fidelity (3), Oasis (2), CLR (2), Emerald (2), Slawson, Whiting
  • Fields: Heart Butte (Dunn), McGregory Buttes (Dunn), Tyrone (Williams), Stanley (Mountrail), Alkali Creek (Mountrail), Foreman Butte (McKenzie), Roosevelt (Billings), Sanish (Mountrail)
  • Comments:
Wells coming off the confidential list were posted earlier; see sidebar at the right. 

In a huge airport, if there is a huge line of customers at the check-in counter backed up, and there are flights getting ready to take off, the airline personnel find out which passengers need to be at the boarding gate the quickest, and bring those folks to the head of the line, to get them processed and get them their boarding passes. 

Question: if the Feds were going to come in and take over permitting for BLM land, where should operators and the NDIC focus their attention for the next six months? Yup. 

McGregory Buttes and Heart Butte are both entirely inside BLM-managed reservation.  

Wells coming off confidential list on Tuesday:
  • 23637, 203, Fidelity, SDF 11-30H, Sanish, middle Bakken; 18 stages; 1.5 million lbs;  t3/13; cum 17K 7/13; 
  • 24082, 1,403, MRO, Schmidt 34-32H, Murphy Creek, middle Bakken; 30 stages; 1.4 million lbs;  t5/13; cum 18K 6/13;
  • 24432, 400, CLR, Lindell 4-10H, Stoneview, t5/13; cum 10K 6/13;
  • 24485, 511, Murex, Lori Ann 4-9H, Writing Rock, 37 stages; 3.1 million lbs; gas averaged 1,038 units; 1/11 - 1/30;  t3/13; cum 22K 6/13;
  • 24610, 2,197, KOG, P Wood 154-98-2-27-34-16H, Truax, middle Bakken; no production data;
  • 24972, drl, MRO, Nelson 11-25H, Bailey, middle Bakken; no production data; 
Note the small amounts of proppant used compared to what EOG is now using. 

Monday Evening News, Views, And Links

Active rigs: 185 (rising, but remains within narrow range)

Not the Bakken, but important nonetheless: a 7-part series on the Utica at MarketRealist.

Keystone XL -- regardless of its outcome -- will have little impact on imported oil from Venezuela, according to Bloomberg.
The U.S. last year imported an average of 906,000 barrels of crude per day from Venezuela, a 35 percent decline from a four-decade high in 1997, according to the Energy Information Administration, the U.S. Energy Department’s statistical arm.
The U.S. imported 2.4 million barrels per day of Canadian crude last year, a 1,368 percent increase from the low of 164,000 barrels per day in 1981. Imports from Mexico and Saudi Arabia are down from levels a decade ago, due in part to a boom in U.S. production from formations such as the Bakken formation in the upper Midwest. At the same time, production from Venezuela has fallen.
So, the 30-second soundbite: the Keystone XL capacity was projected to be 850,000 bopd; Venezuela imports to the US about the same amount. It looks like the US wouldn't miss either (either Venezuela's oil or the Keystone XL).

Tea leaves: O'Bama administration supports natural gas; says there is no war on coal. Speaks with forked tongue, kemosabe

New at the newsstand -- nothing about the Bakken. It's pretty obvious that print media is struggling. It's pretty easy to find almost any print article on the internet; sometimes it takes a bit of work but generally one can find it. At worse, a digital subscription. But either way, print media is struggling. However, it looks like some publishers might be coming up with some clever ideas. I'm seeing more examples of print media published special editions, or collector's editions.  For example, Time Magazine might publish a very thick glossy on Martin Luther King. What made me think of this at the moment: my wife just sent me an absolutely wonderful Scientific American collector's edition on quantum physics, with great graphics on subatomic particles. The problem with a typical issue of Scientific American, there are too many articles -- including politically correct articles on global warming -- that don't interest me. Don't ask me why, but I have a subscription to BloombergBusinessweek. Every issue I am almost guaranteed two long articles in the magazine but the rest is filled with fluff, including a regular-occurring page on "what I wear to work." You have got to be kidding. That's the problem with weeklies: a few good stories, but then filled with fluff. But I would be the first to stand in line to pick up a Bloomberg Businessweek glossy with an in-depth special on the oil and gas industry.

Again, Spot On -- A Tesla Update; Outselling Porsche, Jaguar In California; Year-To-Date Has Also Outsold Buick, Ford Lincoln In California

On August 7, 2013, I posted my story that Tesla knew its target audience, and GM would follow.

Today, the numbers out of California validate/confirm that view. CNBC is reporting: Tesla is outselling Porsche and Jaguar in California.
Yes, it's a small share of the California car market, but Tesla Motors sales in the Golden State are supercharging.
In fact, sales of Elon Musk's electric car have surpassed Porsche, Jaguar, Volvo, Land Rover, and Lincoln, according to new figures from the California New Car Dealers Association.
Year-to-date, the luxury carmaker has sold 4,714 cars in California, versus 4,586 for Porsche, 1,254 for Jaguar, 2,982 for Volvo, 4,022 for Land Rover, and 2,230 for Lincoln.
Tesla also outsold Fiat (Milan Stock Exchange: F-IT) (3,898), Buick(4,675), and Mitsubishi (2,939) this year in California.
Very, very interesting. 

Yahoo! In-Play: More Fertilizer Plants In North Dakota?

CHS Inc. and Dakota Plains Cooperative announce the two cooperatives have been in discussions about entering into a merger transaction: Co and Dakota Plains Cooperative, a full-service agribusiness headquartered in Valley City, N.D., announced the two cooperatives have been in discussions about entering into a merger transaction and now seek approval from the members of Dakota Plains Cooperative and the CHS Board of Directors. Integral to this effort is close examination of opportunities to enhance agronomy assets in the east central area of North Dakota. Plans under discussion include constructing three new fertilizer plants within the Dakota Plains trade area to take full advantage of the proposed fertilizer manufacturing facility in Spiritwood, N.D., currently under review by CHS.

Update Of The Spearfish Oil Patch In North Dakota

Today, three Spearfish wells in the North Souris oil field came off the confidential list. One well is a Legacy well and two are Corinthian wells; as regular readers know, I can never remember the relationship among Surge, Legacy, or Corinthian (same link as the Legacy link), and I won't sort those companies out now. I'm just interested in the Spearfish in general at the moment.

I follow the Spearfish here

If I had to provide a 30-second soundbite/data points regarding the Spearfish in North Dakota (see "Welcome/Disclaimer" and purpose of the blog):
  • Canadian operators have the most experience with the Spearfish in this area
  • the Spearfish in North Dakota is north/northeast of the Bakken, straddling the Canadian border
  • Canadian Spearfish wells cost $1.5 million; North Dakota Spearfish wells cost $3 million (vs $7 million or more for a Bakken well)
  • Spearfish spacing is 320-acres or 640 acre (vs 640-acres or 1280-acres for a Bakken well)
  • 200,000 lbs of proppant vs 4 million lbs of proppant in the Bakken
  • total depth of 7,000 feet vs 14,000 feet (short lateral) or 20,000 feet (long lateral) for a Bakken
  • total depth for a Spearfish can be reached in less than a week
  • current Spearfish wells in North Dakota appear to be short laterals for the most part
  • Spearfish oil is somewhat heavier than Bakken oil; and contains sulfur (not good but US refineries are configured for such, and seek sour oil, such as the Spearfish oil)
  • contentious among operators/shippers to mix Spearfish oil with Bakken oil
  • in 2010, NDIC started talking about the Spearfish in the context of the Bakken boom; the North Dakota Spearfish seems to be hitting its stride as of mid-2013
At $50/bbl, a $3,000,000 well would require 60,000 bbls at the well-head to break even. Sort of.

So, some examples of some recent North Dakota Spearfish wells:
  • 23075, 80, Corinthian Exploration,  Corinthian McCullough 13-36 1H, North Souris, 160-acres; TD, 5.8;  t10/12; cum 19K 6/13;
  • 23073, 140, Corinthian Exploration,  Corinthian McCullough 5-1 1H, North Souris,  ICO; TD, 5.8; t2/13; cum 15K 6/13
  • 22964, 139, Corinthian Exploration,  Corinthian Freight 5-36 1H, North Souris,  ICO; TD, 5.8; t10/12; cum 18K 6/13
  • 21951, 157, Legacy Oil,  Legacy Etal Berge 12-31H, North Souris,  320-acres; TD, 7.3; t12/12; cum 16K 6/13
  • 21921, 97, Legacy Oil, Legacy Etal Berge 5-7H, Red Rock,  320-acres; TD, 7.2; t12/12; cum 15K 6/13
  • 21820, 83, Legacy Oil, Legacy Etal Berge 13-6H, North Souris,  320-acres; TD, 7.2; t3/13; cum 4K 6/13
  • 21549, 88, Legacy Oil, Legacy Etal Berge 1-1H, North Souris,  320-acres; TD, 7.2; 25 stages; 200K lbs; spud date: December 2, 2011; TD, December 9, 2011; t4/12; cum 18K 6/13
  • 21504, 126, Legacy Oil, Legacy Etal Berge 5-31H, North Souris,  320-acres; TD, 7.0; t4/12; cum 23K 6/13
  • 21389, 104, Legacy Oil, Legacy Etal Berge 1-12H, Red Rock,  320-acres; TD, 6.6; t12/11; cum 14K 6/13
  • 19612, 95, Legacy Oil, Legacy Etal Berge 9-1H, North Souris,  320-acres; TD, 7.0; t6/11; cum 23K 6/13
An example of what the drilling patter of the Spearfish/North Souris - Red Rock looks like:

It should be noted that Barney and Fred lived in Bedrock and not Red Rock. It should also be noted that The Flintstones was the first American animated show to depict two people of the opposite sex (Fred and Wilma; Barney and Betty) sleeping together in one bed, although Fred and Wilma are sometimes depicted as sleeping in separate beds (source: wiki).

Monday Morning Links, News, And Views -- Part III

Wells coming off the confidential list have been reported. Click here.

It looks like the Nobel-Prize-winning president will dispense with UN mandate, and will strike Syria unilaterally. Just a hunch. Oh, of course, he will say that Great Britain took the lead. I assume the president was not happy with just one war in the Mideast (Afghanistan); now it's Syria. Interestingly, the markets are not concerned: oil is down; the DOW is up; just the opposite that we usually see when we start another war in the Mideast.

CHK and KOG hit new 52-week highs. Disclaimer: this is not an investment site; do not make any investment decisions based on what you read here or what you thought you read here. 

Yahoo! In Play: First Solar sells Canadian Power Plants to GE-Alterra Partnership (GE); Terms were not disclosed.: Co announced today that it has sold a collection of solar projects in Ontario, Canada, totaling 50 megawatts (MW) AC to an investment partnership led by GE (GE) unit GE Energy Financial Services. Terms were not disclosed. It is the first project transaction between First Solar and GE since their solar technology and commercial partnership was announced Aug. 6. The ABW Partnership raised debt for the acquisition, with The Manufacturers Life Insurance Company serving as agent and lead arranger. First Solar has completed construction of the power plants -- Amherstburg (10MWAC), Belmont (20MWAC) and Walpole (20MWAC) -- and has commissioned and energized them so they are providing power to the grid. First Solar will provide operations and maintenance services under long-term contracts.

Colin Powell weighs in on Trayvon -- I agree with him: the case will be forgotten. Breaking news: it already is (forgotten). Breaking news: both suspects in the killing of the 88-y/o WWII veteran have been arrested. Breaking news: Colin Powell has not weighed in on the killing of the 88-y/o WWII veteran. Nor the killing of Australian jogger. Nor about a 1,000 other such murders. And so it goes.

WSJ Links

Barge operators are struggling along the Mississippi:
Mississippi River barge operators and their customers had been hoping business would get back to normal this year after two years of extreme weather that wreaked havoc on the river's bustling freight traffic.
But massive flooding in 2011 and last year's drought have permanently altered some aspects of shipping on the Mississippi and its tributaries, the nation's largest river system and one of its most important commercial waterways.
Even though water levels are more normal this year, businesses that depend on the river are writing protective measures into their shipping contracts, building more flood-resistant port facilities and trying to diversify their revenue streams to offset years of weather-related financial losses. 
Something to watch as the CBR phenomenon continues. 

In case you missed it the first time: front page, above the fold, headline story has photograph taken at Williston, North Dakota. The big story on the US energy revolution begun by the Bakken:
Oil delivered to refineries by trucks grew 38% from 2011 to 2012, according to the U.S. Energy Information Administration, while crude on barges grew 53% and rail deliveries quadrupled. Although alternatives are growing rapidly, pipelines and oceangoing tankers remain the primary method for delivering crude to refineries.
Sounds like North Dakota:
The heavy trucks moving Eagle Ford crude are causing headaches for residents and local officials, ripping up roads and causing traffic tie-ups.
"These are rural roads built for 10 cars an hour, and now it's 100 vehicles an hour, and 75 of them are 80,000-pound trucks," says Tom Voelkel, president of Dupre Logistics LLC. The Lafayette, La., company started hauling crude in Eagle Ford in November 2011 and has more than 100 drivers full time in the region.
And all of this has been made worse by President O'Bama killing Keystone XL. 

But fracking still divides a lot of New Yorkers
New York Gov. Andrew Cuomo, facing a politically fraught decision on whether to allow fracking in New York state, has dispatched top administration officials from coast to coast in the past year in search of advice and information on its health and environmental impacts.
His deliberative approach on hydraulic fracturing, even as neighboring Pennsylvania and other states have quickly adopted such drilling for natural gas, has drawn praise from environmentalists and some communities that oppose fracking. But it has frustrated many upstate New York residents and local officials, who have embraced fracking as a source of energy-industry jobs in a region suffering from population and employment losses.
That discord was on display Friday in economically struggling Binghamton, N.Y., where an appearance by President Barack Obama sparked renewed pressure on his fellow Democrat to address the matter, particularly in light of Mr. Obama's June remarks praising "cleaner-burning natural gas."
My hunch is that the airline industry is a lot tougher on the environment than the fracking industry, but there are no calls to dismantle the airports in and around New York. The hypocrisy abounds.

This is what happens when one does not follow through on threats. Syria does it again; gasses another 1,000 victims. I guess the Obama administration is still sorting this one out. Meanwhile, Assad joins Hussein, Hitler, and Mussolini

Monday Morning Links, News, And Views -- Part II

Awesome! Front page story, top of the fold, headline story photograph taken outside of Williston, North Dakota.  The Wall Street Journal is reporting:
More crude oil is moving around the U.S. on trucks, barges and trains than at any point since the government began keeping records in 1981, as the energy industry devises ways to get around a pipeline-capacity shortage to take petroleum from new wells to refineries.
The improvised approach is creating opportunities for transportation companies even as it strains roads and regulators. And it is a precursor to what may be a larger change: the construction of more than $40 billion in oil pipelines now under way or planned for the next few years, according to energy adviser Wood Mackenzie.
"We are in effect re-plumbing the country," says Curt Anastasio, chief executive of NuStar Energy LP, a pipeline company in San Antonio. Oil is "flowing in different directions and from new places."
U.S. oil production has reached its highest level in two decades, while imports have fallen dramatically. A system built to import oil and deliver it to coastal refineries has become ill-equipped to handle rising production in Texas, North Dakota and Canada's Alberta province.
"All of the pipes are pointed in the wrong direction," says Harold York, an oil researcher at Wood Mackenzie. "We are turning the last 70 years of oil-industry history in North America on its head, and we are turning it on its head in the next 10 to 15 years."
And the naysayers commenting over at CarpeDiem will continue to say that the Bakken is not profitable. Apparently the independent oil companies enjoy transferring money from the wealthy to the railroads. 


The Yahoo! Finance link to oil price is still broken. Oil futures are down 11 cents to $106.31.


Nissan Motor provides update on YTD sales; having its best year on record in the United States: Co announces that with sales of more than 733,000 units through July, Nissan is having its best year on record in the United States, led by strong growth of core models like Altima, Sentra, Pathfinder, Versa and Rogue.
  • Nissan has set monthly records for overall U.S. sales in four of seven months in 2013, with sales up more than 8.5 percent over 2012's record performance.
  • Nissan Division has set monthly records in six of the seven months this year, driving sales higher by more than 10 percent over a record 2012.


So much for all that bad weather predicted by global warming. It is being widely reported that this is the slowest start to a hurricane season on record. Again, not just for the past year or so, or the past decade or so, but for a couple of centuries. The slowest start. But that would be expected. We are in our 17th year of a "pause" in global warming. Meanwhile, Algore  is in his 17th year of magnificent financial splendor living on this scam.


Update to story below regarding tortoises. It turns out the whole story is wrong. Only six (6) tortoises will be euthanized. They have a disease and are failing to thrive. They are the only ones to be euthanized. The writer of the original story must have been incredibly .... whatever. It turns out the six tortoises are suffering from TURDS. I can't make this stuff up.

The following was posted at the time of the original post but is completely wrong. See aforementioned link (TURDS).

Unfortunately the global warming scam -- not global warming -- will probably wipe out the desert tortoises -- another species wiped out by man. I can't make this stuff up. The good news, we can see them in zoos.
For decades, the vulnerable desert tortoise has led a sheltered existence.
Developers have taken pains to keep the animal safe. It's been protected from meddlesome hikers by the threat of prison time. And wildlife officials have set the species up on a sprawling conservation reserve outside Las Vegas.
But the pampered desert dweller now faces a threat from the very people who have nurtured it.
Federal funds are running out at the Desert Tortoise Conservation Center and officials plan to close the site and euthanize hundreds of the tortoises they've been caring for since the animals were added to the endangered species list in 1990.
"It's the lesser of two evils, but it's still evil," said U.S. Fish and Wildlife Service desert tortoise recovery coordinator Roy Averill-Murray during a visit to the soon-to-be-shuttered reserve at the southern edge of the Las Vegas Valley last week.
So, "we" euthanize hundreds of desert tortoises (on the endangered species list since 1990) and oil companies are charged with a felony for six migratory ducks allegedly dying in a waste pond during an unprecedented flood in northwest North Dakota. Don't even get me started.

Monday Morning Links, News, And Views -- Part I

Active rigs: 184 (up slightly)

RBN Energy: Five large-scale rail terminals planned or being constructed in Western Canada will be able to ship up to 550 Mb/d of crude by 2015. Most of that crude will be headed to the Gulf Coast. If crude by rail shipments from Canada are going to compete with pipeline alternatives then the ability to ship bitumen crude raw without diluent will be an important advantage. Yet only about 170 Mb/d of rail terminal capacity is currently built or being developed on the Gulf Coast that can offload raw bitumen using special heating equipment. Today we complete a survey of CN railroad unloading facilities at the Gulf Coast. [Comment: for perspective, the Keystone XL killed by President O'Bama would have carried about 850 million bbls of crude oil/day to the Gulf Coast.]

Update on Crosby, North Dakota: The Dickinson Press is reporting that Crosby continues to grow significantly; Bakken oil patch surprisingly busy in Divide County. 

The Dickinson Press is reporting that Tesla is asking about rules/regulations for a charging station in Mitchell, South Dakota. My initial thoughts:
It looks like Tesla is worried that someone driving from Rapid City to Sioux Falls, won't quite make it on that charge in Rapid City and will need a 20-minute charge in Mitchell to get them the rest of the way to Sioux Falls.
Particularly tough winter? Good news for natural gas futures. CBS News is reporting 
The Farmers' Almanac is using words like "piercing cold," "bitterly cold" and "biting cold" to describe the upcoming winter. And if its predictions are right, the first outdoor Super Bowl in years will be a messy "Storm Bowl."

The 197-year-old publication that hits newsstands Monday predicts a winter storm will hit the Northeast around the time the Super Bowl is played at MetLife Stadium in the Meadowlands in New Jersey. It also predicts a colder-than-normal winter for two-thirds of the country and heavy snowfall in the Midwest, Great Lakes and New England.