Tuesday, November 26, 2013

Fourteen (14) New Permits -- The Williston Basin, North Dakota, USA; BR And WPX Each Have A Good Well

Active rigs: 193

Fourteen (14) new permits -- 
  • Operators: HRC (5), Hess (3), EOG (2), BR, Bakken Hunter, Petro-Hunt, Petro Harvester
  • Fields: Parshall (Mountrail), Haystack Butte (McKenzie), Manitou (Mountrail), Bounty School (Divide), East Tioga (Burke), McGregory Buttes (Dunn), Portal (Burke)
  • Comments: the five (5) HRC permits are for wells on one pad, in McGregory Buttes
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Four (4) producing wells were completed:
  • 23285, 1,398, Statoil, Charlie Sorenson 17-8-3TFH, Alger, t9/13; cum --
  • 24854, 2,101, Statoil, Arvid Anderson 14-11 6H, Alger, t11/13; cum 11 --
  • 25717, 622, Triangle, McCabe 150-101-24-13-1H, Rawson, t11/13; cum --
  • 25718, 633, Triangle, McCabe 150-101-24-13-2H, Rawson, t11/13; cum --
Wells coming off the confidential list Wednesday:
  • 23307, 1,442, WPX, Blackhawk 1-12HZ, Moccasin Creek, t8/13; cum 64K 9/13;
  • 25225, drl, Hess, BW-Sorenson 149-99-1324H-2, Cherry Creek, no production data,
  • 25286, 2,809, BR, Everhorse 41-3MBH, Keene, t8/13; cum 52K 9/13;

23307, see above, WPX, Blackhawk 1-12HZ, Moccasin Creek:

DateOil RunsMCF Sold

 25286, see above, BR, Everhorse 41-3MBH, Keene: 

DateOil RunsMCF Sold

Some Thoughts About The "Rig Count" In North Dakota

Earlier I noted the jump in active rigs in North Dakota.  [I am rushed; so this post needs to be edited later, if I remember; there may be typos, etc. Some additional information needs to be added.]

A reader provided some clarification. The reader's note, heavily edited follows.
  • There are several explanations for the increase in rig count:
  • You are right about EOG. They have added two rigs. Patterson rigs 488 and 134 are new to them. However, on the ND state rig list Nabors B12 is listed twice. 
  • Also, there are 3 rigs drilling salt water disposal wells (SWD).
  • Finally, there are a large number of surface rigs running right now. The Sidewinder, Craig, White Mountain, Major, Noble, Leon Ross, and AES rigs are all surface rigs which drill and set the surface casing only, and then move.
This is a great note.

My edited reply (I'm in a rush, so I will probably edit this note later):
I've run into this problem before.  I simply report the number of rigs as posted at the NDIC site regardless of "type."  The numbers reported earlier (with the "record" of 218 or whatever it was) also included SWD rigs.

Rig count, early on, used to be an important indicator of production going forward, but over time I've learned that the  rig count is less important than what I call "rig effectiveness." I believe EIA calls it rig efficiency, or something to that effect. Whatever they call it, it is a new metric for the EIA. In addition, Baker Hughes has also added a new metric to their weekly rig counts, so everyone is recognizing "things" in the oil patch are changing.

Something no one has talked about -- and this is why "rig count" continues to be important to me -- is that "rig count" reflects almost linearly on "activity" in the oil patch in western North Dakota. The more active rigs there are, regardless of what they are doing -- spud, vertical, horizontal, work over, or salt water disposal, the more activity going on.

The activity I think about: a) more jobs for everyone involved; b) more trucks on the road; c) more road building across farmland/prairie (even SWD wells need access); and, d) more rural electricity needed.

In addition, more active rigs, regardless of the reason, require more material -- especially more pipe, and as noted, electricity (or some other power source).

Active Rigs In North Dakota Take Huge Jump: Up To 193

A reader alerted me to this. Thank you.

I have noted the trend of increasing rig count over the past week, but this is quite a surprise. Two things come to mind: EOG said they were ramping up and some new operators came into the Bakken over the past year.

I track drilling rig milestones here. Although "we" did hit 194 earlier this year for a short period, we really haven't seen a sustained "193" level since one year ago.

For newbies, this is nowhere near the record (218, set back in May, 2012), it is still a very interesting up-tick.  Less than three months ago a new post-boom record low of 177 was set, and now with the onset of winter coming on, the operators are back to 193.

Some of the data points for this calendar year, 2013:
  • November 26, 2013: 193
  • September 16, 2013: 177 (new record, post-boom low; but completing more wells than ever)
  • August 1, 2013: 178 (gradual trend downward over the summer, finally hitting new low)
  • May 15, 2013: 194 (from 191 to 193 first thing in the a.m.; 194 by noon )
  • May 14, 2013: 191 (from 187 to 191)
  • May 3, 2013: 192 (new post-boom record)
  • May 2, 2013: 191 (ties post-boom record)
  • March 11, 2013: 189 -- generally hovering around 185
  • January 27, 2013: 191 -- since hitting 179, the number of active rigs has gradually climbed
  • January 4, 2013: new intra-boom low -- 179

How Bad Is The Flaring On The Reservation? Plans? Is The Problem Of Flaring Worse On BLM? Hmmmm......Twin Buttes: Almost All Natural Gas Is Flared


December 14, 2013: TERO
Original Post

The Bismarck Tribune is reporting:
 About 55 percent of natural gas produced on the Fort Berthold Indian Reservation is being flared, ...
“We’re entirely too high,” [Tribal Chairman Tex] Hall said. [An understatement if I ever one.]
... flaring numbers in more remote areas are much higher. In the Mandaree area of the reservation, 60 percent of natural gas is flared, 67 percent is flared in the Four Bears area and almost all natural gas produced in the Twin Buttes area is flared. The amount of gas produced is rising with the amount of oil produced on the reservation.
So, is the majority of Bakken natural gas flared being done on federal land? Hmmm....sounds like an oxymoron somewhere in "bureau of land managment...."

The Three Affiliated Tribes are planning for a natural gas plant on the Fort Berthold Indian Reservation.
Tribal Chairman Tex Hall said the tribal council is considering potential gas plant locations best for gathering the fuel .... and best size...
Hall said he expects the project to cost between $200 million and $300 million.

California's Bullet Train In Jeopardy

This story was posted earlier.

Now, a more expanded story from The Los Angeles Times:
In a major legal blow to the California bullet train, a Sacramento judge ruled that state officials cannot pursue their plan to tap billions of dollars in voter-approved bond funding for construction, a decision that could cause indefinite delays in the massive $68-billion project.
Superior Court Judge Michael Kenny, ruling Monday in two closely watched cases, found the state officials made key errors and failed to comply with legal requirements as they moved the project toward a long-awaited groundbreaking.
The decisions don't immediately halt the project, but they have thrown its future into doubt and could sharply curtail the state's ability to fund a complete high-speed rail system. State officials said they were assessing their options and exploring ways to keep the project moving ahead.
Kenny ruled that the project's funding plan violates state law and, separately, that the state cannot sell bullet-train bonds because officials failed to follow correct procedures.
Construction of the Los Angeles-to-San Francisco train, more than a year behind schedule, was most recently slated to begin in the second quarter of 2014.
I thought federal funding was contingent on factors that may or may not still be in play.

Willow Creek Has Been Updated

For folks interested in Oasis activities in Willow Creek, the field has been updated (new permits and wells still on confidential have not been updated). This is an incredible field.

Cost-Shifting Under ObamaCare As Reported By Fox News; An Update On Fixing The Website

Sometime ago I wrote that ObamaCare is playing out in several arenas: a) the political arena; b) the emotional arena; c) the business/real-world arena. To some extent, at least for me, there has been an evolution, a migration of sorts, through the various arenas. Although it is hard to keep it in check, the first two arenas interest me very little any more. It is the business/real-world arena of ObamaCare that interests me most. Much of what I wrote when ObamaCare was first being discussed is now being reported in the mainstream media.

I track cost-shifting under ObamaCare here. So, today, it warms the cockles of my heart to see the top headline over at Drudge: SHOCK: almost 80 million could lose employer coverage under Obamacare. The link takes one to FoxNews, the number one news station now. I've not read the story yet, but will do so in real-time as I complete this post.

It will be interesting to see if the story repeats what I've posted over at my "cost-shifting" link. So, let's see.

The report:
Avik Roy of the Manhattan Institute added, "the administration estimated that approximately 78 million Americans with employer sponsored insurance would lose their existing coverage due to the Affordable Care Act."
Last week, an analysis by the American Enterprise Institute, a conservative think tank, showed the administration anticipates half to two-thirds of small businesses would have policies canceled or be compelled to send workers onto the ObamaCare exchanges. They predicted up to 100 million small and large business policies could be canceled next year.
The reason behind the losses is that current plans don't meet the requirements of ObamaCare, which dictate that each plan must cover a list of essential benefits, whether people want them or not. "Things like maternity care or acupuncture or extensive drug coverage," said Veuger.
"And so now the law is going to force them to buy policies that they could have gotten in the past if they wanted to but they chose not to." Some plans already have been canceled and employers are getting sticker shock at the new, higher prices under ObamaCare.
Nope, I completely missed that. I have been talking about the "big corporate" health care plans. So, this is a new wrinkle (although I've linked the same story earlier this month and as recently as yesterday).

So, this is where we stand.  The original goal of ObamaCare was to insure the 30 million or so who were uninsured.

It turns out that many of those 30 million are not eligible for ObamaCare in the first place: one must have income to be eligible. When ObamaCare was passed, I was unaware of that.

So, in the process of trying to cover the 30 million or so who were uninsured, it looks like the Affordable Care Act will throw tens of millions more than the 30 million into "health care hell."

To think that acupuncture coverage is responsible for all this, as well as maternity coverage for all.

Meanwhile, Update On Fixing The Website

Bloomberg is reporting:
With the president’s job-approval ratings down to their lowest point in two years and Democratic lawmakers anxious about the health-care plan’s impact on their re-election prospects next year, the nation is about to find out if the Obama administration is up to the challenge [of fixing the website].
Some in the health-insurance industry are skeptical. Companies continue to see high error rates in enrollment data they receive from the website and executives doubt it will be able to handle a surge in enrollments from people who want to start coverage January 1, 2014, said industry consultant Robert Laszewski of Health Policy and Strategy Associates in Washington.
“The general sense is that healthcare.gov will not be functioning in any way close to what you need for relatively high numbers,” he said. “There is this enormous pessimism that this thing will be fixed enough to handle the flood.”
My hunch is that the president will direct health insurers not to post any information on how the website is working as of December 1, 2013 -- that would be this Sunday. Something tells me this will be the most-watched re-launch of any website ever in the history of the internet.

The East Coast Is Going To Get Hammered With Global Warming -- American Airlines Pilot; It Looks Like The Storm Hits Today

One of the "nice" things about spending time in various locations in the Dallas-Ft Worth metroplex area is the "news" I hear from American airline pilots, active and retired. Right now I am hearing that the winter storm that will hit the northeast this week will be a doozy.

It is confirmed in the media. From MyWayNews:
A winter storm system that hit parts of Arkansas, Oklahoma and Texas swept toward the densely populated East Coast on Tuesday, threatening to disrupt the plans of travelers ahead of the long Thanksgiving holiday weekend.
The large system has already struck parts of Arkansas, Oklahoma and Texas, but with temperatures creeping above freezing the outcome was less dramatic than forecasters had feared as it crossed the nation's midsection. The storm sprung out of the West and has been blamed for at least 11 deaths, half of them in Texas. It limped across Arkansas with a smattering of snow, sleet and freezing rain that didn't meet expectations. [Here in Dallas, the "storm" went almost unnoticed.]
Some of the country's busiest airports - New York, Washington, D.C., Philadelphia, Boston and Charlotte, N.C. - could see big delays at one of the peak travel times of the year.
This holiday will likely see the most air travelers since 2007, according to Airlines for America, the industry's trade and lobbying group, with the busiest day being Sunday, an estimated 2.56 million passengers. Wednesday is expected to be the second-busiest with 2.42 million passengers.
And, finally,
Forecasters were predicting 5 to 8 inches of snow in Buffalo, more in the northern Adirondacks, and a winter storm watch was posted for central New York state with heavy rain expected in parts of the Hudson Valley.
In the nation's capital, federal agencies opened Tuesday though the National Weather Service issued a winter weather advisory for the northern and western suburbs of Washington, D.C., and Baltimore, amid forecasts of a light mix of snow, sleet and freezing rain that could be topped off by heavy rain. The U.S. Office of Personnel Management, which sets leave policies for 300,000 federal workers in Washington, said that while government was open Tuesday, employees could take unscheduled leave or unscheduled telework.
Back here in Dallas, the predicted "storm" was a dud. It hardly got to freezing; no snow, no sleet, hardly any rain. 

By the way, that note above that Sunday was the busiest day for the American airlines is very, very interesting. This is the first school district we have been part of in 40 years, as far as I can recall, that takes off for the entire week. The students have school on some of the other "holidays," including Veterans' Day and that gives them the entire Thanksgiving week off. Having said that, the Veterans Day memorial and activities were the best I've seen at any school, and in any community, perhaps ever, but certainly in a long, long time. One does not have to have a "day off" to honor veterans "correctly."

A Note to the Granddaughters

I have just started reading my heavily annotated copy of Wuthering Heights. This makes about the fifth time that I have read it, and each time I learn something new. Previously I had noted the word "Lascar" in Charlotte's preface to the third edition, nor had I seen the word "Afreet." I updated the wiki entry on "Ifrit" which had no reference to Wuthering Heights. It does now.
In Catherine Brontë's preface to the 1850 edition of Wuthering Heights, she suggests that Heathcliff was a "child neither of Lascar nor gipsy, but a man's shape animated by demon life -- a Ghoul -- and Afreet."
With the shenanigans going on in Iran, the timing could not be more appropriate. What a lark!

Marathon To Be Main Shipper On Enbridge's Sandpiper

This story is being reported at many sources. This one is from Reuters:
Enbridge Inc said on Monday that Marathon Petroleum Corp agreed to take a stake and become the main shipper on the company's $2.6 billion Sandpiper pipeline project, which will take crude oil from North Dakota's Bakken field to U.S. refiners.
Enbridge, Canada's largest pipeline company, said in a release that Marathon will pay 37.5 percent of Sandpiper's cost in exchange for a 27 percent interest in the company's North Dakota system.
From the Fargo Forum:
The North Dakota Public Service Commission, a three-member panel that oversees utility projects, said the pipeline is the biggest project yet to move oil from the rich Bakken and Three Forks formations in the western part of the state.
North Dakota has more than doubled its oil production in the past two years, closing in on a million barrels of oil a day. But due to the lack of pipeline capacity in the state, about 61 percent of the state’s daily oil production is being shipped by rail.
Enbridge operates about 50,000 miles of pipelines in North America, and several hundred miles of pipelines in North Dakota, including one that runs between Minot, N.D., and Clearbrook, Minn. The line, built in 1962, has the capacity to ship 210,000 barrels of North Dakota crude daily, or about 8.8 million gallons.

The Tuesday Before Thanksgiving; Marathon Partners With Enbridge On Sandpiper; Huge Setback For California High Speed Rail

Big story in Clearbrooks News: Marathon agrees to partner on Enbridge's Sandpiper

Important story being reported at Rigzone, from Reuters:
China is likely to see natural gas shortages every winter until the end of the decade as domestic production fails to keep up with demand, a factor likely to drive global liquefied natural gas prices higher, energy consultancy Wood Mackenzie said in a report released on Friday. 
Also, at Rigzone, Baker Hughes resumes operations in Iraq after recent protest; Schlumberger resumed operations last week, or thereabouts.

Active rigs: 187

RBN Energy: it appears that Alaska's once-dominant role in US energy will continue to slip.
Alaska officials, concerned the state’s once-dominant role in U.S. energy production will continue slipping, are taking a fresh look at helping to jump-start a combined natural gas treatment plant, gas pipeline and LNG export project that would free vast volumes of natural gas now stranded at the state’s North Slope. A new study commissioned by the state found that it could make sense for Alaska to take a 20% or higher equity stake in the project, but that there are significant risks the state would need to mitigate. Today we look at whether the 49th state can make a long-stalled plan by producers to move North Slope gas to market a reality by the mid-2020s.
Trouble in the renewable energy arena:
Biofuel Energy issues statement in announced sale of plants: Co confirms that is has been notified by the lenders under its existing senior secured credit facility that they have exercised their right under their Deed In Lieu of Foreclosure Agreement to acquire the Company's ethanol plants. 
The Wall Street Journal

Trouble in the land of fruits and nuts: judge deals setback to California rail project

A judge dealt a blow to California's plan to build the first U.S. high-speed bullet train in two separate rulings Monday, halting the sale of more than $8 billion in bonds and sending the state back to the drawing board on its funding plan. The $68 billion rail line, which would allow travelers to go from Los Angeles to San Francisco in less than three hours, has been in the planning stages for years.
Sacramento Superior Court Judge Michael Kenny ruled in one lawsuit that he could find "no evidence in the record" that it was "necessary and desirable" for the state to issue the bonds.
Completely off my radar scope:
With an average 2.01 children born to every woman, France boasts the highest birthrate in the European Union after Ireland and, in recent years, has been producing babies at rates not seen in the country since the 1970s.
The ratio is a source of national policy pride: While Europe's overall population is projected to decline in the coming decades, France's is expected to grow, providing a more stable group of working adults to help support both the young and old. France has achieved its mini baby boom with some of Europe's most generous subsidies for families, as well as child-care access.
Spending on family policy—including subsidies, tax breaks for parents and state-funded help for housing—equals nearly 4% of the country's gross domestic product, the highest ratio among the Organization of Economic Cooperation and Development's 34 industrialized member countries and nearly double the 2.2% average.
But Bousignies's financial challenges provide a window into the flip side of France's baby surge.
More babies, children and students need nurseries, schools and universities—infrastructure the French government is increasingly struggling to finance off a deficit-ridden budget. Many young adults remain under direct state assistance—through an array of social security allowances— because the country isn't creating enough jobs. A new financial-support program to assist as many as 100,000 unemployed youth is projected to cost up to €600 million a year.
And then this, predictable:
French business confidence stagnated in November as an improvement in recent activity was offset by concerns about the future, France's official statistics agency Insee said. Insee's report on Monday heightens concerns that the performance of the euro zone's second-largest economy will lag behind the fledgling recovery in the currency bloc as a whole.