Wednesday, November 27, 2013

Encana To Focus On San Juan Basin In 2014

A big "thank you" to a reader alerting me to this update.

Daily Times/Four Corners Business is reporting:
Encana Corporation announced earlier this month a new company strategy and vision, with much of that strategy being focused on the San Juan Basin where it plans to invest hundreds of millions of dollars in new oil and gas production beginning in 2014.
The announcement has prompted a flurry of speculation among those in the local oil and gas industry that the increased drilling will begin immediately after the first of the year.
In a Nov. 5 news release, the Calgary-based Encana outlined key points of its strategy, the first of which states that it will "focus its capital investment on five oil and liquids-rich resource plays in North America."
The release goes on to state that Encana will "invest approximately 75 percent of its 2014 capital into five high return oil and liquids-rich plays: the Montney, Duvernay, DJ Basin, San Juan Basin and Tuscaloosa Marine Shale."
Two years ago I had not heard of half these oil plays; now I have them all linked on the sidebar at the right. 

Random Update Of A KOG Well East Of Williston

For newbies, just another example of the relevancy of IPs:
  • 23423, 820, KOG, Northern 155-100-30-31-1H, Springbrook oil field, 35 stages; 4.1 million lbs; t12/12; cum 173K 9/13
This well had a very nice, but somewhat unremarkable -- for the Bakken -- IP of 820 bbls. And now, less than a year later, still flowing on its own (no pump noted at the NDIC website -- though reports are often delayed) this well has already produced almost 175,000 bbls of oil. Also note, that it has not been on-line every day most months, some days as few as 18 days pumping:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

One also notes that all natural gas is being flared due to lack of natural gas processing plant capacity. Even if KOG put in the pipeline, there would be no place for the natural gas to be processed.

I could be wrong, but I think I drove past this well a couple of weeks ago: it sits on the northwest corner of a huge sand and gravel pit, which is remarkable for all the temporary housing units co-located at the site. One gets a great satellite view on Google. Zoom in at the corner of 134th Avenue NW and 56th NW, northeast of Williston. Again, I could be wrong but it certainly seems to fit.

As Challenging As Ever -- The Williston Wire

The Bakken boom began in North Dakota in 2007 (in Montana in 2000). Many thought things would slow down a bit, start to level off by this time, but now The Williston Wire has several stories suggesting things are not slowing down:

US Postal Service workers are "burning out" in the Bakken oil patch due to the tremendous work demands.

Former governor, now Senator Hoeven says "Williston will settle down."Wi

Williston mayor appoints panel on affordable housing.

"Can For Can" Challenge is being initiated by Whiting Oil and Gas and IVM Construction to compete in the Bakken to raise canned and non-perishable items for local food pantries.

Hertz Equipment Rental moves into spacious facility in Williston, a 12,720 square-foot building situated on a 5-acre lot in the Missouri Ridge Commercial Park.

Complete Nutrition opened in the new Sand Creek Town Centre.

This is great news: Gaffaney's Total Office Source re-opens after a fire five months ago.

New wellness center opens in Crosby (Divide County), North Dakota.

New middle school will open in Minot next week, December 2, 2013.

North Dakota Leads Region In Federal Oil, Gas Leases

The Bismarck Tribune is reporting:
Developers have bought the oil and gas rights to about three-fourths of the available federal land in western North Dakota, pushing prices to record levels despite industry complaints that the federal permitting process is still too onerous to immediately develop the land.
Federal oil and gas lease sales in the Dakotas and Montana totaled $64.4 million in fiscal 2013, up from $50.1 million the year before, according to the Bureau of Land Management. North Dakota, which has led the three-state region in oil and gas leases for most of the past decade, accounted for the vast majority of sales — $61.4 million — which was up from $44.3 million in fiscal 2012.
Montana tallied $2.9 million in fiscal 2013, down from $4.5 million the year before, and South Dakota fetched about $67,660, down from about $1.3 million in fiscal 2012.
It's a great article. A lot of data points. Helps one interpret the tea leaves.

It confirms that it takes approximately 300 days to get a federal permit approved compared to a state permit of just 60 days.

And this: Despite the demand for the federal development rights, only two of the 187 rigs working in North Dakota's oil patch on Monday were drilling on federal, non-tribal land.

One wonders if there is some relationship between the glacial speed of the federal permitting process and the excessive flaring that occurs on BLM land compared to the rest of the oil patch

[The Williston Wire alerted readers to the story.]

Fourteen New Permits -- The Williston Basin, North Dakota, USA

Active rigs:191

Fourteen (14) new permits --
  • Operators: Oasis (7), EOG (3), BR (2), CLR (2)
  • Fields: Banks (McKenzie), Parshall (Mountrail), Border (Burke), Keene (McKenzie), Cedar Hills (Bowman)
  • Comments: all seven Oasis permits are for wells in section 31-152-98 where there is already a producig well (see below)
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Above, it was noted that Oasis will be placing seven (7) wells in section 31-152-98, Banks oil field:
  • 20731, 1,598, Zenergy, Hagen 31-30H, t11/11; cum 154K 10/13;
It look like Oasis picked up these acres earlier this year in the $1.5 billion deal to acquire 160,000 acres from Zenergy.

Layoffs Easing

The Los Angeles Times is reporting:
Layoffs appear to be easing as the number of people who filed for unemployment claims last week dropped by 10,000 to 316,000, the U.S. Labor Department reported Wednesday. 
The number of initial unemployment claims has decreased in six of the last seven weeks, data show. The four-week moving average, a more reliable measure that irons out weekly volatility, fell by 7,500 to 331,750, the Labor Department said. 
A year ago, the four-week moving average was 401,000.
California recorded the largest drop in initial jobless claims. Not adjusted for seasonality, the data show that claims in the Golden State fell by 4,644, largely due to fewer layoffs in the service industry, state officials reported.

On-Line ObamaCare Enrollment For Small Businesses Delayed For One Year; Obama Dumps Verizon

employer-mandate delayed one full year
small-business on-line enrollment delayed one year
    individual mandate delayed one year 
Politico is reporting:
Marking the latest setback, the Obama administration today will announce a yearlong delay of online enrollment for small businesses looking to purchase health coverage through federal-run exchanges, according to an HHS notice obtained by POLITICO.
Small businesses have been able to apply through paper applications since October 1, 2013, and HHS will announce alternative sign-up methods, like enrolling through an agent or broker or directly through an insurer.
That should help individuals access the website when it is "fixed" and able to handle 80% of users.

Of course, those users should be reminded that the FBI warns of US government breaches by "Anonymous" hackers:
Activist hackers linked to the collective known as Anonymous have secretly accessed U.S. government computers in multiple agencies and stolen sensitive information in a campaign that began almost a year ago, the FBI warned this week.
The hackers exploited a flaw in Adobe Systems Inc's software to launch a rash of electronic break-ins that began last December, then left "back doors" to return to many of the machines as recently as last month, the Federal Bureau of Investigation said in a memo seen by Reuters. 
The memo, distributed on Thursday, described the attacks as "a widespread problem that should be addressed." It said the breach affected the U.S. Army, Department of Energy, Department of Health and Human Services, and perhaps many more agencies.
The website appears to be particularly vulnerable and Consumer Reports recommends that folks avoid this website. 


It's a bit confusing on the whys and wherefores, but Obama is dumping Verizon and embracing Hewlett-Packard. [An aside: earlier this morning:  Wow, H-P's sales drop again. Hewlett-Packard posts weaker fourth-quarter sales, the ninth onsecutive top-line decline, but the computer maker swung to a profit and beat expectation.] CNBC is reporting:
The Department of Health and Human Services has tapped Hewlett-Packard to replace Verizon Communications' Terremark subsidiary as the Web-hosting provider for, the federal health insurance marketplace that has had a troubled rollout since launching in October.
A spokesman for the Centers for Medicare & Medicaid Services division confirmed the move Wednesday but noted that the change in providers had been contracted well before the website launched. [Sure.]
And then this:
"As we think about the overall performance and functionality of the site, redundancy is a critical part of our planning and we are working to ensure it in all aspects of the system," the spokesman said in an email to CNBC. [And now they're thinking of this?]

Montana Update

Don sent me the Montana completions which probably came from The Fairfield Sun Times:

In Daniels County, Apache Corporation,  Lindley 19-9H-B, a Three Forks formation well; TD 11,975 feet. No initial production (IP) numbers were reported.

In Roosevelt County, Oasis Petroleum North America LLC, Long Coulee Federal 2958 42-22H, TD 20,244 feet; Bakken formation, reported an IP of 871 bopd. Not bad for a Montana well.

In Wibaux County, Petro-Hunt, LLC, Nagode 12-61 20D-3-1, Red River formation test well, the Nagode 12-61 20D-3-1, TD 11,350 feet. No IP provided.

North Dakota River Ice Disk Becomes A DrudgeReport Link

The Bismarck Tribune is reporting:
When George Loegering saw a large spinning circle of ice in the Sheyenne River while out hunting with relatives, the retired engineer couldn't believe his eyes.
"At first I thought, no way! It was surreal," Loegering, 73, said Tuesday of the large i
ce disk he witnessed Saturday. "You looked at it and you thought, how did it do that?"
Then his engineering background kicked in. He calculated the disk's diameter to be about 55 feet, took photos and videos of it and then turned to the Internet for more information about what he, his brother-in-law and nephew had seen.
"It's not an unknown phenomenon, but it is relatively rare," said Loegering, who lives in rural Casselton, about 20 miles west of Fargo.
Allen Schlag, a National Weather Service hydrologist in Bismarck, and Greg Gust, a weather service meteorologist in Grand Forks, said a combination of cold, dense air last weekend and an eddy in the river likely caused the disk.
Photos at the link. 

Sheyenne River, North Dakota, 2013

Another Government Metric Looks Suspect: US Oil Demand

This is a most interesting story. Another government metric that is suspect. Who wudda thought?
It seems America is falling back in love with oil -- or at least that is what weekly numbers from the Energy Department show.

But oil demand is a slippery concept. The DOE's latest data show the US burned an average 20 million bbls a day in the four weeks ended November 115. That is up 7.4% year-over-year, a figure more redolent of China than America. It is the fastest pace of growth in oil demand since May, 2010, when the numbers were flattered by 2009's economic malaise. Gasoline demand, meanwhile, was up 3.9%, and growth in October was apparently running at levels higher still, and not seen since late 2006.

Thing is, those growth rates look wrong. And the gap appears to be growing.
The complete story is that the link. Very interesting. It has to do with increasing US exports of refined products to Europe.
U.S. refiners able to process cheap, landlocked domestic crude and export products such as gasoline have an incentive to ship as many barrels overseas as possible. While most U.S. product exports go elsewhere in the Americas, about a fifth head to Europe, according to Sanford C. Bernstein.
Of all sectors of the global oil industry, Europe's refiners are most exposed to the increase in U.S. exports, especially if the real level is understated in the data. Not only do Europe's refiners face weak demand at home and increasing competition from across the Atlantic. They also must deal with new export-oriented refineries opening in Asia and, later this decade, new Brazilian refineries to process that country's rising oil output.

Connecting the dots. We all know that the president is picking and choosing to implement/delay the various pieces of ObamaCare of his choosing. It turns out that Iran will do the same thing with the "new" international agreement. From DrudgeReport: Iran will ignore/reject the "invalid" details of the "nuke" agreement. Ya gotta love it. 

Wednesday: Canadian Sands Oil Selling At $40 Discount Versus WTI

Active rigs: 193

RBN Energy: How are Canadian producers managing all that oil?
Western Canadian producers regularly have to swallow large price discounts for heavy crude versus the US benchmark West Texas Intermediate (WTI). During the first week of November price discounts for heavy Western Canadian Select crude versus WTI came close to $42/Bbl – the deepest since 2007. Since then they have narrowed but are still over $30/Bbl. Today we examine the relationship between storage volumes in Alberta and crude price discounts.
RBN Energy presents Part 2 of their series on Canadian crude oil storage. In Part 1 they looked at increasing Canadian crude oil production and expanding pipeline capacity in the two crude marketing hubs of Edmonton and Hardisty. The two hubs are the staging posts for crude oil exports to the US as well as the distribution point for diluent supplies coming into the oil sands production region. Today we turn our attention to the relationship between Canadian crude pricing, congestion on the crude pipelines leaving Edmonton and Hardisty, and storage inventory.
The Wall Street Journal

Surging NASDAQ hits 4,0000.

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.

Coal's decline hits hardest in the mines of Kentucky.
Unprecedented pressures on the U.S. coal industry and nearly two years of mine closures and layoffs are reshaping the Central Appalachian coalfields in ways that many experts believe could be permanent.
Farm income soars.
Farm incomes in America are expected to hit their highest level in four decades this year thanks to bumper crops of corn and soybeans after two years of drought.
Goalposts moved.
The website won't be fixed by the deadline, but you will never know it. It won't matter. The insurers will know.
Wow, H-P's sales drop again. Hewlett-Packard posts weaker fourth-quarter sales, the ninth onsecutive top-line decline, but the computer maker swung to a profit and beat expectation.

And sales erode at Barnes and Noble.
The company's latest quarterly earnings show an erosion in sales for both print books and e-books, casting a cloud over its long-term prospects.
The bookstore chain on Tuesday reported an 8% drop in revenue for the quarter ended October 26, due to lower sales in its consumer bookstores, college stores and Nook digital business. Cost-cutting, however, boosted net income sharply.
The second-quarter performance highlighted the continuing uncertainty about how the bookstore chain will cope with a steady shift of book buyers online, and to digital formats, where chief rival Inc. is much stronger.

UK Throws In The Towel On Wind Farm Which Was To Be The Largest Offshore Wind Project Ever Built

Regular readers are very familiar with this story. I post updates periodically. But I did not think it would come to this. I never thought the math worked, but ignorance knows no bounds. A major utility will scrap plans for an off-shore wind farm off the west coast of England.

When I first read the story, I thought they were talking about the London Array but it turns out that it was another array, the Atlantic Array. So, I guess the London Array continues.

The Wall Street Journal reports:
A major European utility said Tuesday it would scrap a wind farm that was due to become the largest offshore wind project ever built, a sign of the struggles of the industry to attract investment needed to overcome huge costs and technical challenges.
The Atlantic Array, in the Bristol Channel off the west coast of England, could have generated up to 1,200 megawatts of electricity, almost twice as much as the largest farm already operating in U.K. waters. But RWE said on Tuesday that continuing with the project faced problems that were "prohibitive in current market conditions."
The U.K. has pioneered offshore wind power, maximizing its island status with more turbines than any other country, but risky technology and the huge cash outlay needed for the next phase of development has some investors balking.
Financial investors are essential to offshore wind's future: The U.K. is planning to increase offshore-wind energy production from 3.65 gigawatts now—enough to power 2.5 million homes—to 39 GW in a construction phase stretching out to 2030. But the financial outlay is massive: $60 billion is needed to achieve 16 GW, or less than half the final total, according to Industry body Renewable U.K.