Wednesday, October 2, 2013

Six Wells Coming Off Confidential List Thursday -- The Williston Basin, North Dakota, USA

21857, 590, Hess, LK-Esther-146-97-3328H-1, Little Knife, 17K first month, t8/13; cum 17K 8/13;
24177, 15, Legacy, Legacy Etal Wall 4-34H, Wildcat, a Spearfish well, 34-163-76, up near Red Rock field, up near the Canadian border, pretty far east; t6/13; cum --
24461, conf, WPX, Adam Good Bear 15-22HC, Van Hook, 11K first month, t8/13; cum 12K 8/13;
24636, conf, American Eagle, Axel 2-2N-163-101, Colgan, t7/13; cum 9K 8/13;
24739, conf-->loc, HRC, Fort Berthold 152-94-15B-22-5H, Antelope, no production data,
25030, drl, Hess, EN-Sorenson A 154-94-0211H-3, Alkali Creek, no production data,

Wordy Rappinghood, Tom Tom Club

Update On Some Shale Operators -- Mike Filloon

At SeekingAlpha.

Not really my cup of tea, but posted for the archives, and there is some nice information on the Permian.

New Poll

The results of the current poll in which we asked whether it would be "business as usual" in Washington, DC, or non-essential personnel would be told to stay home starting October 2, 2013?
  • Business as usual: 28%
  • Non-essential workers will be told to stay home: 72%
I would have been in the "business-as-usual" camp. I am impressed with the 72% predicting this.

So, time for a new poll, in which we will poll: the US government shut-down is:
  • a) a BIG deal,
  • b) NOT a BIG deal
Yes, it's very subjective and one can interpret it many, many ways. But, however you "see" the shutdown, do you think it's that big a deal or not?

Eight (8) New Permits -- The Williston Basin, North Dakota, USA

Active rigs: 186 (steady)

Eight (8) new permits --
  • Operators: EOG (5), OXY USA (2), MRO
  • Fields: Parshall (Mountrail), Fayette (Dunn), Van Hook (Mountrail), Stanley (Mountrail)
  • Commentators: OXY USA has permits for two "new" Stroh wells in Fayette oil field; I believe these are the first "new" Stroh wells since 2010; the Stroh wells were among the reasons I decided to post a blog on the Bakken
Wells coming off the confidential list today were posted earlier; see sidebar at the right.

Eleven (11) producing wells reported as completed:
  • 23437, 610, Statoil, Macklin 15-22 2TFH, Cow Creek, t8/13; cum --
  • 22967, 2,242, BR, CCU Burner 21-26MBH, Corral Creek, t8/13; cum 4K 8/13;
  • 23184, 680, Hess, SC-Tom 153-98-1514H-1, Truax, t8/13; cum 13K 8/13;
  • 24870, 662, Hess, EN-Fretheim A 155-93-3334H-7, Robinson Lake, t8/13; cum 13K 7/13;
  • 23501, 828, Hess, BB-Burk-151-95-0718-4, Blue Buttes, t9/13; cum 14K 8/13;
  • 24725, 1,400, Hess, HA-Nelson 152-95-3328H-2, Hawkeye, t9/13 cum 13K 8/13;
  • 23413, 2,400, XTO, Hegg 21-29SH, Siverston, t7/13; cum 23K 8/13;
  • 24553, 502, EOG, Van Hook 24-1415H, Parshall, t7/13; cum 40K 8/13;
  • 23655, 2,021, XTO, Hegg 11-29SWH, Siverton, t8/13; cum 8K 8/13;
  • 23787, 1,604, XTO, Thorp Federal 11X-28B, Little Knife, t9/13; cum --
  • 23788, 1,905, XTO, Thorp Federal 11X-28F, Little Knife, t8/13; 

Predicted -- Government Shutdown To Affect Fort Berthold Oil Patch

The Dickinson Press is reporting:
A federal government shutdown would further stall oil development on federal lands in North Dakota and would stop oil and gas management activities on the Fort Berthold Reservation.
While a government shutdown would affect some oil and gas activities in North Dakota, the majority of the state’s drilling activity is on private or state-owned land and would not be affected.
A lapse in federal appropriations would mean that the Bureau of Land Management “will not process applications for permits to drill and will only maintain minimal staff for inspections and enforcement on currently producing wells,” Jessica Kershaw, spokeswoman for the Department of Interior, said in a statement.
Lynn Helms, director of the North Dakota Department of Mineral Resources, said the shutdown would be one more impediment on drilling in the Dakota Prairie National Grasslands and Fort Berthold areas.
Already, operators have been avoiding drilling on federal lands due to a lengthy permitting process.
The MillionDollarWay said as much on October 1, 2013. But a huge part of the story was missed: it sounds like oil drilling operations on the reservation have to actually stop because there would be no Federal regulators to inspect and enforce. Wow. 

When I think of the reservation, I think of WPX and KOG.

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here.

Price Of Oil Up Almost $2.00 Today; Weaking Dollar Or Completion Of Southern Leg Of Keystone XL

A reader just sent me this interesting story as reported by Reuters:
The construction of the southern leg of the Keystone XL crude oil pipeline is expected to be completed by the end of October, Corp executive Les Cherwenuk said on Wednesday, according to Bloomberg News.
The 700,000 barrel per day pipeline will carry crude oil from Cushing, Oklahoma, delivery point of the U.S. crude oil future contract, to the Gulf Coast. Cherwenuk said the company would start filling the line shortly after construction is completed, the Bloomberg report said.
If I understand this correctly, about 35 million bbls of crude oil is currently stored at Cushing, OK

The initial fill for the Keystone XL pipeline that runs south from Cushing to the Gulf Coast will be about 5 million bbls, and then after that about 5 million bbls/week from Cushing to the coast (700,000 bbls x 7 days = 4.9 million bbls).

Until we get used to those new numbers, it might surprise us to see a sudden drop in storage at Cushing. Sudden drops in storage generally move the oil market. But, again, this is way beyond my comfort level and I could be interpreting things incorrectly.

But it is interesting that the price of oil is up almost $2.00 today, which I originally thought was due to the weakening dollar.

A Growing Consensus: The Permian Basis May Hold Much More Oil Than Ever Estimated In The Past -- 100 Years Of Drilling?

247WallStreet is reporting:
The Permian Basin in West Texas is truly a story of the Phoenix rising from the ashes. Since its discovery, the oil-rich region has had its ups and downs, with activity sloping downward through the 1960s and early 1970s, reviving with higher oil prices in the late 1970s and 1980s, dwindling again in the 1990s and then roaring back in the 2000s. Now there is a growing consensus that the region may hold much more oil than was ever estimated in the past.
In a new research report, the oil exploration and production analysts at Wunderlich make it very clear they like the Permian for the variety of stacked pays offered. They also think that producers are just starting to understand the full potential of the resource plays in the region. They estimate that there is the potential for more than 100 years of production and that the region could have well over a billion barrels of oil. Due to the incredible resource size, most of the major exploration and production companies are there, in addition to the large integrateds.
Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here.
The companies that would benefit:
  • Anadarka
  • Apache
  • Chevron
  • ConocoPhilips
  • XOM
  • EOG
  • OXY
The big boys have a decided edge in the Permian Basin. They have the financial firepower to cover the costs associated with working in far West Texas. They also provide investors with the security of longevity and success. That bodes well for the future of a portfolio with these top names.
These Permian Basin companies are poised to increase American oil production significantly. Currently the number stands at about 7 million barrels per day. One way the United States may be able to fight out of its current economic malaise is to become a net exporter of energy, both oil and natural gas. With the possibility of over a billion barrels of oil in the region, new exporting may be a reality sooner rather than later.

Two Big Data Points You Will Be Reading About If Shutdown Lasts More Than Two Weeks

1. This story was posted earlier. Without the bureaucrats in place and without the staff support, no work is being done on the debt ceiling bil that needs to be addressed sometime this month. The original date was October 17, 2013, when the government would run out of "cash on hand" to pay the bills. But with 800,000 furloughed federal workers that date could be pushed a bit to the right. But at some point, even with 800,000 less folks to pay and billions in government contracts that will not be pad, at some point the government will run out of "cash on hand" to pay its bills. It will be in default. It's very possible, Congress could focus on the "drop dead" date and miss an earlier deadline when the bill to raise the debt limit must be written and start the process of working its way through Congress. I doubt Congress will simply show for a voice vote on "October 17, 2013" to raise the debt limit.

2. The second story you will be reading about if the shutdown lasts more than two weeks. I would wager that there is only one group more powerful than the NRA (the National Rifle Association) and that would be the military veterans, which manifests its strength through the Veterans Administration. Funding the VA may be the tipping point with regard to see who blinks first. Opening the national parks, I do not believe, will be a rallying call for this shutdown to end.


I was getting ready to post those two stories when I lost wi-fi connectivity and had to ride my bike to another wi-fi location. When I signed back on, I found this story:
The "panic point": what will drive Congress to make a deal.
I didn't view the video, but based on the teaser I know where the discussion was going. I agree with the analyst. What concerns me are missing deadlines. I still think that the president does not want his legacy to be the first president to let the US default, but I wouldn't put that past him to make a point.

Later, there are already signs some traders are starting to bet on a debt ceiling not being raised .. at least right away. 

USDA To Loan New Bowman Hospital $15 Million

The Dickinson Press is reporting:
Representing a significant chunk of the total cost for the project, the United States Department of Agriculture on Monday announced that $15 million in financing has been secured for a new hospital and clinic in Bowman.
The money — in the form of a low-interest loan — represents more than half the cost of a project that is expected to have a price tag of $25 million and is set to include a new Southwest Healthcare Services facility for the growing community, said Southwest Marketing Director Allison Engelhart.

Oasis Pricing Oil Between $90 And $105 For 2014

Has risk for $70 covered.

The Denbury Transcript -- Presence In North Dakota Is Quite Notable

Link at SeekingAlpha:
We either have current EOR floods or future EOR floods or we have assets that produce CO2, and those are basically that’s our portfolio.
So, because it all relates to EOR as you would expect or highly weighted toward oil, 94% oil and you can see various numbers now. The PV-10 here on this slide has not been adjusted for the acquisition we closed on end of March, the ConocoPhillips purchase of Cedar Creek Anticline. So, that was about a $1 billion transaction. So you could add about a $1 billion to that number.
If you’re not familiar with Denbury, we basically traded the Bakken to Exxon for cash, two oilfields we could flood and some of the CO2 assets and then we took that cash and the like kind of exchanged and purchased ConocoPhillips Cedar Creek Anticline assets. So, it was about $4 billion of transactions, about $2 billion of sales and about $2 billion of purchases.
So we closed on the last piece of that March 31st and so therefore the second quarter was the first full quarter where you had a production contribution from the assets that we traded. And if you look at it, we ended up roughly in the same place on a production basis after you get through all the trades. But there were a couple of quarters there was a little different.
The Cedar Creek Anticline:
We picked up Hartzog from the Exxon trade. We picked up additional interest at Cedar Creek Anticline from ConocoPhillips. So Cedar Creek Anticline is our single biggest flood that we plan to do and it’s also our biggest current producer. Like sometimes people kind of overlook that but CCA is producing 19,000 barrels a day of conventional oil production, so it is by far our biggest field.
This was the news story on that DNR - Cedar Creek purchase earlier this year:
Denbury Resources Inc. agreed to acquire producing property interests in the Cedar Creek anticline of Montana and North Dakota from a wholly owned subsidiary of ConocoPhillips for $1.05 billion cash.
The assets to be purchased include additional interests in Denbury’s existing operated fields in Cedar Creek anticline along with operating interests in other fields within the structure. Cedar Creek anticline is 110 miles north of Denbury's Bell Creek field, which Denbury plans to start flooding with carbon dioxide in the first half of 2013 using the recently completed Greencore pipeline to deliver CO2 from central Wyoming.
Denbury is designing a CO2 development plan for Cedar Creek that will include the properties being acquired from ConocoPhillips. The company estimates a CO2 flood of the to-be-acquired properties could recover 60-80 million bbl of oil.
All total, including the assets to be acquired, Denbury estimates a CO2 flood of its Cedar Creek assets could recover 260-280 million bbl of oil.

Cheap US Energy Luring Overseas Companies -- Big Story In The Wall Street Journal

The U.S. boom in natural-gas production is luring investment from foreign manufacturers eager to tap a cheap, abundant supply of fuel and feedstocks.
Companies from the U.S. and abroad have invested or are planning to invest billions of dollars through the rest of the decade in plants that would churn out chemicals, fertilizers, plastics, metals and fuel from gas. Many foreign companies, alone or in joint ventures with U.S. partners, are taking advantage of gas that costs a fraction of what it does in Europe or Asia to expand production in the U.S.
Boston Consulting Group estimates that international companies will invest at least $50 billion through the end of the decade on projects that take advantage of low-price natural gas.
And more:
Linde AG, a German gas-and-engineering company, recently said it would spend $200 million to build a new air-separation unit in La Porte, Texas, that would provide synthetic gas for the petrochemical industry. The investment "is directly tied to the price and availability of natural gas," said spokesman Uwe Wolfinger. "Five or seven years ago, this type of investment would have been far more likely elsewhere in the world."
The U.S. gas bonanza, fueled by the widespread adoption of new drilling techniques such as hydraulic fracturing, has already given a boost to domestic manufacturers. When natural-gas prices were high a decade ago—about twice as high as they are today—Dow Chemical Co. invested in new petrochemical facilities in the Middle East, where energy was less expensive. Today, Dow and other energy-intensive firms are investing heavily in the U.S.

The Newspapers: 150,000 Massachusetts Folks Will Need To Re-Enroll Due To ObamaCare Rules

Government shutdown: day 2. "Capital digs in for long haul." 800,000 folks packing up and heading home.
The Environmental Protection Agency, which sent home more than 90% of its 16,000 workers, emailed employees a short checklist: First, check email and read the bad news. Second, program voice mail and email to say: "I am out of the office for the duration of the government shutdown. I will not be checking messages, but will return your call upon my return to the office." Third, be sure sensitive work documents aren't left in the open. Fourth, shut off government computers and smartphones; and fifth, fill out a final timecard, with no more than four hours of work on shutdown day.
I'm trying to find the downside to this, which The Dickinson Press is reporting:
The U.S. Environmental Protection Agency will take one of the biggest hits of any federal agency if the government shuts down this week, operating with under 7 percent of its employees, according to guidance issued by the agency.
Among those furloughed would be most workers at the Office of Air and Radiation, which is in charge of writing and implementing most of the EPA's major air pollution rules. The clock would also stop, for now, on the EPA's eagerly-awaited proposal on renewable fuel volume standards for 2014.
The EPA said its plan for dealing with a shutdown would classify 1,069 employees, out of 16,205, as essential. These employees would continue to work if Congress fails to secure a budget deal by midnight Monday to avoid disruption to federal funding.
Taking the air and radiation unit off the grid will tighten timelines to meet certain court-imposed deadlines, said one expert.
"People are not going to be able to be working on these rules at home," said Dina Kruger, an environmental regulation consultant and former climate change director at the EPA, who worked at the agency when the government shut down in 1996.
In their guidance to employees, agencies have been clear: government-issued equipment should be returned to home base and work cellphones are not to be used.
The Fed probably won't take a sanguine view of the shutdown.
Investors are using the back-to-back U.S. government shutdowns of the mid-1990s as a guide to how markets and the economy will behave this time around. The Federal Reserve isn't.
The Fed's decision against reducing bond purchases when it met two weeks ago hinged on a variety of factors. But the now-realized potential of a shutdown over funding the 2010 health-care law, as well as the coming battle over raising the nation's borrowing limit, clearly played a role.
"I think that a government shutdown—and perhaps, even more so, a failure to raise the debt limit—could have very serious consequences for the financial markets and for the economy, and the Federal Reserve's policy is to do whatever we can to keep the economy on course," Chairman Ben Bernanke said at his post-meeting news conference in mid-September.
Contrast that to the Fed's behavior around the two government shutdowns that occurred in late 1995 through early 1996. Not only did the Fed refrain from commenting on these publicly, transcripts from its December 1995 and January 1996 minutes show policy makers weren't at all worried that the budget standoff between then-President Bill Clinton and Republican House Speaker Newt Gingrichmight hurt the economy. That stock market wasn't worried, either; the S&P 500 gained 4% during the period spanning the shutdowns.
Health exchanges couldn't handle 1 million "hits" spread across fifty states and one federal government. Apple sells 9 million iPhones in a weekend. One company.

Maybe the best story in The WSJ today:
Sue Cobey sums up the local dating scene in a single word: brutal.
The entomologist is speaking of honeybees, bee mating being her specialty, and she knows the dauntingly steep odds drones, the males, face in fulfilling their urge to spawn.
"There can be something like 25,000 drones out there waiting for virgin queens to fly by," says the 59-year-old scientist, known to local bee folk as "The Queen of Queen Bees" and "The Bee Whisperer."
Her life's work has been to improve the success rate—and thereby the viability—of North America's fragile honeybee stock. She brings queens and drones together where romance has the best chance: under a microscope.
In a laboratory behind her husband's tool room, she knocks a queen out with a blast of carbon dioxide, then works the sedated patient into a plastic tube. She injects the queen with a syringe bearing germplasm, or sperm, that comes from donor drones raised from colonies Ms. Cobey has nurtured for many years.
Florida sues Georgia over water use. Case goes to Supreme Court.


Massachusetts officials try to keep new ObamaCare rules from curbing enrollment: folks may leave Massachusetts health care system to seek Federal sites. 
As open enrollment for the U.S. health law kicks off nationwide, the state that helped inspire the law is trying to avoid a potential pitfall: watching its own coverage numbers slip.
Massachusetts, where a 2006 law created a marketplace where uninsured people could shop for coverage, sometimes with state subsidies, estimates 97% of its 6.6 million residents have insurance. But because of different federal rules, roughly 150,000 people who got coverage through the state's exchange marketplace will have to re-enroll to avoid losing coverage next year, state officials said. Until now, their coverage automatically carried over.
One word: trainwreck.

Starbucks: evolution of a food menu.
Starbucks is beginning to kick some regulars out of its coffee shops.
In recent months, Starbucks has replaced pastries it used to carry with baked goods made from recipes from La Boulange, a San Francisco bakery Starbucks acquired last year.
The company also has been swapping out Kind granola bars, Peeled fruit snacks and Naked Juice in favor of products made by Evolution Fresh, a juice brand that Starbucks acquired in 2011. Under Starbucks, Evolution Fresh branched out and now produces Evolution Harvest snack bars and freeze-dried snacks.
Starbucks has long paired its coffee offerings with food from outside suppliers. But the resulting experience was inconsistent, turning some customers off, analysts said. Starbucks says just 30% of transactions at its stores include food purchases.
At one time I couldn't stand the food choices at Starbucks, but their menu is now surprisingly good.

 September US auto sales fall 24% but Ford has a good month: Ford Motor posted a nearly 6% rise in its U.S. sales last month while other auto makers including General Motors, Toyota, Nissan and VW posted declines in part due to holiday shift and fewer selling days.


Some say the government shutdown could be the tipping point for JC Penney and Blackberry
BlackBerry Ltd. announced last month that it signed a preliminary $4.7 billion deal to go private. But for now, the company is still public and is still facing the grim realities of its shrinking smartphone business.
In a filing with the Securities and Exchange Commission published Tuesday that expands on the company's second-quarter earnings report issued last week, BlackBerry sharply revised already bleak restructuring charges and acknowledged in more depth the challenges it is facing, even in areas it still professes to dominate.
BlackBerry said it expects to incur charges of $400 million through the rest of the fiscal year, up from $100 million, as part of a broad cost-cutting initiative that includes the reduction of 40% of its workforce and a nearly $1 billion write-down in unsold phone inventory. Those charges could increase as the company looks to cut even more costs this year and next, it acknowledged in the filing. 
Might it file for bankruptcy before it files to go private?


Trainwreck After Trainwreck After Trainwreck

The government shutdown: the government has money in the bank; the government simply doesn't have authorization to spend it.

October 17, 2013: the government won't even have any money left in the bank.

Well, actually, that was the "old" date. That date could slip a bit to right now that 800,000 government workers are not being paid. But at some point....

... and I don't see folks talking about this yet. The bureaucrats that are furloughed are the ones that actually write the language, that actually write the bills that Congress votes on. If the majority of support staff have been furloughed, I doubt much work is being done to craft the bill to raise the debt ceiling. At some point, Congress will simply run out of time to even consider raising the debt limit. They won't have to worry about voting on it; no one will be around to write the bill to get it to the floor.

There is great risk the commander-in-chief is going to let this spiral out of control.

EPD Announces Construction Of Another LPG Export Terminal On The Gulf Coast; Widened Panama Canal Will Cut Transportation Costs For LPG

Enterprise Products announced the construction of a new liquefied petroleum gas (LPG) export terminal on the Gulf Coast :
Co announced the construction of a new liquefied petroleum gas (LPG) export terminal on the Gulf Coast. The facility will have the capability of handling up to VLGC (very large gas carriers) class ships. The initial loading rate for export grade propane or butane service is expected to be approximately 11,000 barrels per hour, which would equate to approximately 6 million to 6.5 million barrels per month.

Following the completion of the site evaluation at potential locations in Louisiana and Texas, this new LPG marine terminal is expected to be in service in the fourth quarter of 2015. Upon completion of the new terminal, and the recently announced expansion of the partnership's existing terminal on the Houston Ship Channel, Enterprise will have aggregate capacity to load ~15 million to 16 million barrels per month of low-ethane propane and/or butane at its LPG marine terminals.
Along those same lines, Bloomberg is reporting:
The widened Panama Canal will cut costs to ship U.S. cooking and heating gases to Asia by shortening voyages, effectively lowering tanker demand just as yards build more of the ships, according to Joachim Grieg & Co.
The canal expansion scheduled to finish in 2015 will shorten U.S.-to-Asia voyages for very large gas carriers to 25 days from 42 days going around Africa, said Steve Engelen, Oslo-based head of research at the shipbroking company whose clients include Europe’s largest producers. At the same time, yards will construct the most new vessels since 2008, according to data from Clarkson Plc, the world’s largest shipbroker.

U.S. terminal operators are expanding to take advantage of record exports of liquefied petroleum gases, a byproduct of surging domestic oil and natural-gas output. The wider canal will require fewer ships for shorter voyages, eliminating the premium for tankers loading in the U.S. even as it stokes trade, Engelen said.
“LPG globally will become cheaper, which incites more trade and is always positive for shipping volumes,” Engelen said. “The amount of ships being delivered is too much even with the big step up in demand, and the market will get worse and then basically collapse.”
Motley Fool is reporting that four companies are betting on increased LNG exports:
Kitimat LNG; Apache; Chevron; and, Exxon.

Status of US LNG-export terminals.
Exxon is the largest natural gas producer in the United States, and plans on being able to turn a profit off of its natural gas assets in a few years. If natural gas prices rise to $5-6 when the US starts exporting LNG in 2015 then ExxonMobil will see a strong headwind pushing profits up as it will fetch almost double the price it currently is selling natural gas for. 

Exxon owns a 30% stake in the Golden Pass terminal facility in Sabine Pass, Texas. Qatar Petroleum International owns the other 70%. So far the terminal has the right to export 15.6 million metric tons of LNG to nations with free-trade agreements and ones without one, making it one of the four LNG export terminals to be able to do so.
19 others are still seeking approval, so Exxon is ahead in the LNG export game. This will enable Exxon to fetch profitable prices for its natural gas.

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

From CarpeDiem:
The Energy Information Administration (EIA) released new data yesterday on international energy production for the month of June. For the eighth straight month in a row starting in November last year, total petroleum production (including crude oil and other petroleum products like natural gas plant liquids, lease condensate, and refined petroleum products) in “Saudi America” during the month of June at 12.02 million barrels per day (bpd) exceeded petroleum production in Saudi Arabia at 11.74 million bpd. 
Also for the eighth month in a row starting last November, “Saudi America”: a) took the top spot as the No. 1 petroleum producer in the world in June, and b) produced more petroleum products in June than the combined petroleum output of all of the countries in Europe, Central America, and South America (11.73 million bpd)
This is more evidence that America’s shale energy revolution is taking us from “resource scarcity” to a new era of “resource abundance” as the US now consistently produces more petroleum products than Saudi Arabia, and for eight straight months has led the world in petroleum production and has produced more petroleum than all of the countries in Europe, Central America, and South America.
And I don't think Americans understand what this means. It really is huge.


Canadians using American-made natural gas vehicle fueling systems. The press release:
Seeking to meet the demand for natural gas used for fueling vehicle fleets, Chelsea Natural Gas Ltd. purchased 20 GE Oil & Gas CNG In A Box™ fueling systems as part of the Canadian energy company's efforts to develop the country's natural gas fueling infrastructure. This order marks the first entry of GE's compressed natural gas (CNG) fueling solution into Canada .
Chelsea Natural Gas, a leader in Canada's CNG industry, specializes in expanding public use of natural gas as a transportation fuel as an abundant, reliable and cleaner-burning source of energy alternative to diesel or gasoline. The company plans to use GE's CNG fueling stations in a semi-private "card lock" format to address the need in Canada for shared fueling stations by smaller fleet owners, ensuring the conversion to natural gas vehicles makes sense economically.

Acute Housing Situation In Killdeer, North Dakota, Oil Patch Being Addressed

The Dickinson Press is reporting:
With the oil development in the area, Killdeer lately has just been trying to catch up — and these developments will help, he said Monday at the groundbreaking for the town’s third hotel.
He said he hopes a nearly 80-acre residential and commercial development a half-mile east of town will offer affordable housing.
But Reading Overstreet of developer ParcGate says that’s out of the question, at least for the first of two apartment complexes going up on the site.

Overstreet said the 200- to 250-unit furnished and unfurnished apartments will serve employees of industries growing because of the boom — like teachers — as far as 50 to 60 miles from Killdeer.

One Montana Bakken Completion Reported

The Fairfield SunTimes is reporting:
In Richland County:
  • Whiting Oil and Gas Corporation, Sundheim Federal 24-35-1H, Bakken, TD, 20,440 feet; 506.

KOG Presentation Transcript

At SeekingAlpha.

Also, DNR and WLL transcripts from same conference have been posted

From the KOG transcript:
  • everything in North Dakota; divested all Montana acreage; everything in North Dakota
  • 195,000 net acres
  • seven rigs
  • CAPEX: $1 billion in 2013
  • production guidance: 30 - 34,000 bopd 
  • Dunn County EURs: 850,000 - 1,000,000 (one million bbls)
  • Koala, Smokey, Polar EURs: 650 to 850,000 bbls
  • periphery EURs: 350 to 450,000 bbls (but lower drilling costs)
  • costs, still high, maybe push down to $9 million
  • anticipate a realized price of $95/bbl
  • discusses downspacing
With regard to the Three Forks:
When we looked at the Three Forks, we tried to look at this a little bit different. Again, that 800 feet horizontal separation, we chose to alternate them between the middle and the upper Three Forks. Our interpretation of the Three Forks quite frankly is that, we believe that when we frac the well, and the middle member here that we are seeing communication into the upper member. We look at this as kind of one large tank of oil. I don't believe it really differs from a lot of industry statements. There are some people that talk more of these, be in different benches, separate reservoirs. We don't feel that way. We don't think it really matters at the end of the day, because you are going to need more wells to drain the same amount of oil.
I'm not sure if this is out of context:
We believe our best reservoir, the Three Forks, lies in these upper two members. This has been all of our work today. We drilled a number of wells prior to 2013 in the middle member, several in the upper. We drilled a number of our wells down through, what we call the TF3 marker, which is a separation between the two intervals. And in that case, we seem to get the best penetration rates from a drilling standpoint.
The reason I was confused, because of this that follows:
When we look at the Three Forks, again, we believe they are a little bit inferior to the Bakken wells. You know, are they 10% less 15? We don't believe that's far from the truth. At the same time, clearly this is one of the best wells in the 12 well group. We probably got in some natural traction there, and it's a real horse. So it just gives you a little bit of indication, I think of where we are trending here, and we are pretty excited moving forward.
Finally, we will talk about capacity build out. Again, most of our oil -- south of wellhead, we are going to continue south of the wellhead, we have not taken capacity on either rails or pipelines. A lot of our oil has moved to Tesoro, who is our largest purchaser. We know a lot of that oil is going to the west coast, and a (inaudible) facility out in the Seattle area. I think the total build out in the basin is about 1.5 million barrels for rail. I think again today, probably 500,000 to 600,000 is moving by rail. So there is plenty capacity in that regard.
Much more at the link.

Early Snowstorm Predicted For Much Of The Midwest

And yes, it's just the first week in October.
The Brainerd Dispatch is reporting: reports the storm recently responsible for heavy rain in the Northwest will take aim at the northern Plains and Upper Midwest, bringing not only the first snowfall of the season, but also the potential for a major storm.
Dry, tranquil weather over the Central states now will not hold through the end of the week.
Lingering warmth, colliding with a push of cold air from Canada and moisture will bring snow, rain and perhaps a severe weather outbreak.
Global cooling:
Heavy snow could fall with gusty winds, from the Black Hills of South Dakota eastward to parts of northern Minnesota by week's end. Travel along I-90 in South Dakota could be especially difficult late in the week if the storm develops to its full potential.
Accumulating snow may reach just north and west of Denver, Colo. Snow is likely in Cheyenne, Wyo.
If even a mere inch of snow falls in northern Minnesota, it would be unusual for the first week in October. The average first measurable snowfall in Duluth, Minn., is not until Oct. 24.
Measurable snow would not be unprecedented, however. The earliest measurable snow for a season in Duluth occurred on Sept. 18, 1991.
And so it goes. I assume Algore is getting ready for some skiing this winter. 

Williams Companies In The News: More Marcellus Natural Gas Pipeline Capacity; New LPG Export Facility In Louisiana

Williams to increase natural gas pipeline capacity from the Marcellus (Pennsylvania) to the southeast United States. The press release
Williams Partners L.P. announced today that its Transco natural gas pipeline has filed an application with the Federal Energy Regulatory Commission (FERC) to expand its existing Leidy Line in northern Pennsylvania and its mainline from New Jersey through Alabama by 525,000 dekatherms of natural gas per day to serve growing natural gas markets along the system. The project is fully subscribed by shippers with long-term contracts.
This application is made as another major expansion project on the Leidy Line nears completion. The Northeast Supply Link project expands Transco’s existing system connecting the Marcellus Shale production region to the New York market by 250,000 dekatherms per day. Williams placed a portion of the project’s capacity (125,000 dekatherms per day) into service in August 2013 and the remaining portion of the $390 million expansion is on schedule to be placed into service in November 2013.
The Leidy Southeast expansion project is being designed to serve the growing needs of gas consumers along the Atlantic Seaboard and throughout the southeastern United States. Once the expansion is complete in late 2015, the Leidy Southeast project will provide enough natural gas to serve the equivalent of approximately two million households.
Williams also involved in LPG export facility project in Louisiana. The press release:
Williams and Boardwalk Pipeline Partners, LP  today announced they have executed joint venture agreements to continue developing a liquefied petroleum gas (LPG) export facility in the Lake Charles, La. area. The proposed Moss Lake LPG Terminal would be located on the Calcasieu River and serve tanker ships transporting LPG to Asian, Latin American and European markets.
The terminal is being designed to store 900,000 barrels of fully refrigerated propane and butane with a load-rate of 25,000 barrels per hour.  Williams and Boardwalk are currently working with a number of parties to reserve off-take capacity at the terminal.  

Wednesday -- News, View, And Links; FERC Nominee Withdraws

Active rigs: 187

RBN Energy: the continuing series on the fuel oil industry along the Gulf coast:
The US Gulf Coast is perceived by midstream operators to offer a growing opportunity for the export of fuel oil left over from refinery processing. The US does not produce as much residual fuel oil as European refiners and the largest market is in Asia. But the US Gulf is ideally positioned to import fuel oil from Europe or Latin America to blend with domestic production and export to Asia. New terminal infrastructure is coming online to meet growing demand for storage and blending facilities. Today we look at the Gulf Coast’s largest fuel oil terminal.
This is the second installment in our series covering fuel oil infrastructure on the Gulf Coast. In the first episode we provided definitions for some of the many types and grades of fuel oil. We discussed the main markets for fuel oil as a feedstock for refineries and as bunker fuel for ships. There is also demand for fuel oil or its derivatives in manufacturing industry and power generation.
Wow, this is incredibly good news.... the president's nominee to head the FERC withdraws his name ahead of the vote. Rigzone reportedRegular readers were aware of the story. Today:
“I’ve never seen this before,” Wiggins, who had 25 years of experience working with FERC, said.
“Confirmations for the FERC head are generally not divisive.”
The nomination of Binz quickly generated criticism from fossil fuel groups, and particularly the coal industry. Critics said Binz was out of the mainstream, and they were particularly bothered when Binz suggested that natural gas might be a “dead end” fuel.
Binz was also criticized for misleading the panel regarding his support of the coal industry while he was serving as the head of Colorado’s Public Utility Commission (PUC). Binz reportedly told the Senate Committee that he had approved the largest coal power plant in Colorado. However, Binz was not with the Colorado PUC until 2007, and the power plant was approved in 2003.
Also in The Wall Street Journal.


And more interesting news: Brazilian judge dismisses oil spill case against Chevron, Transocean, reported in Rigzone

A word search for "Syria" in the on-line edition of the front section of today's WSJ turned up empty.