Wednesday, December 18, 2013

Thirteen (13) New Permits -- The Williston Basin, The Bakken, North Dakota, USA; Several Good KOG Wells

Active rigs: 188

Thirteen (13) new permits --
  • Operators: Hess (5), Zavanna (4), CLR (2), EOG (2)
  • Fields: Parshall (Mountrail), Big Butte (Mountrail), Noonan (Divide), Catwalk (Williams), Williston (Williams)
  • Comments: Hess has permits for a 5-well pad in Big Butte oil field;
Wells coming off the confidential list were posted earlier; see sidebar at the right.

One canceled permit:
  • 24592, PNC, OXY USA, Henry Kovash 6-7-142-95, Manning,
Five (5) producing wells completed:
  • 25563, 2,140, KOG, P Evitt 154-98-13-12-24-14H3M, Truax, t11/13; cum --
  • 25582, 2,249, KOG, P Evitt 154-98-15-12-24-15H3, Truax, t11/13; cum --
  • 25511, 1,826, KOG, P Evitt 154-98-13-12-1-3H3, Truax t11/13; cum --
  • 25239, 307, Oasis, Metz 6094 13-1H, Viking, t11/13; cum --
  • 25487, 2,148, MRO, Marland 41-14TFH, Reunion Bay, t12/13; cum --
Wells coming off confidential list Thursday:
  • 22111, 631, Petro-Hunt, Fredrickson 160-94-33D-28-4H, North Tioga, t10/13; cum 8K 10/13;
  • 25656, drl, BR, Washburn 43-36MBH, Charlson,
  • 25712, 38, Legacy, Legacy Et Al Bernstein 12-7H, Red Rock, a Spearfish well, t7/13; cum 12K 10/13;

For Investors Only: KOG Announces Billion-Dollar CAPEX For 2014

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

Dividends/distributions:nine companies announce increased dividends, including Boeing. By the way, the tea leaves suggest Boeing is getting ready to announce another move out of Seattle.

In-Play - Yahoo!Finance

Kodiak Oil & Gas Corp. announces 2014 capital budget of $940 mln, co expects to increase production ~45% in 2014, borrowing base increased to $1.35 bln from $1.1 bln:
  • Co announced that its Board of Directors has approved a $940 million 2014 capital expenditure budget allocated solely to Williston Basin oil and gas activities. The 2014 capital program is expected to drive an approximate 45% increase in year over year production volumes. Kodiak's 2014 capital budget is subject to, among other things, market conditions, oilfield services and equipment availability, commodity prices and drilling results. The 2014 capital budget compares to Kodiak's 2013 capital expenditures of ~$1.0 billion. 
  • The Company has allocated $890 million of the 2014 CAPEX budget to the drilling and completion of approximately 100 net wells and $50 million for infrastructure build-out, and small acreage acquisitions. Kodiak expects to fund the 2014 CAPEX budget from existing working capital, operating cash flows, and availability under its existing revolving credit facility. At the contemplated level of investment, Kodiak believes that operational cash flows should closely align with capital expenditures in 2014 based on the current commodity price outlook.
  • The Company's cash flows are supported by an active hedging program. Kodiak currently has 2014 crude oil hedges in place on 26,150 barrels of oil per day at an average price of $93.29 per barrel.

Natural Gas Debacle In New England


December 19, 2013: update as reported by regional newspaper
Original Post

Regular readers know what this is all about

Link here.
Speaking at the N.H. Business and Industry Association Energy Seminar last week in Manchester, Jim Shuckerow, director of energy supply for Northeast Utilities, predicted there would be no new "iron in the ground" into New England until 2020, with natural gas prices expected to continue to rise from their 2012-2013 low-water mark between now and then."Perhaps 2013 will be recalled as the good old days of power-supply pricing," he said.
From the link:
Public Service of New Hampshire announced on Friday that it would ask regulators to approve an energy charge of 9.23 cents per kilowatt hour, effective Jan. 1, an increase of .61 cents per kwh from the current rate of 8.62 cents.

That means the average residential customer, using 500 kilowatt hours a month, would see the energy service portion of his or her bill go from $43.10 to $46.15 per month. Other charges, such as transmission fees, are not expected to change significantly in 2014.

The state's largest regulated utility had predicted in October that it would need an energy supply charge of 8.99 cents for 2014. In the months since, fluctuations on the wholesale energy market and uncertainty about future prices prompted the utility to seek the higher rate in its year-end filing.
A reader sent this link to a "letter to the editor" regarding this debacle:
Winter hasn't officially commenced yet, but the early returns don't bode well for New England's electricity market and its ratepayers.
In the past month, we have seen wholesale electricity prices climb to 30 cents per kilowatt hour for four-hour stretches — and natural gas prices at New England zones have exceeded seven times the national average. On Thursday, the New England Independent System Operator, the organization that manages the region's grid, issued an alert for all of New England due to capacity deficiency. ISO has been saying for more than a year now that New England is becoming too reliant on natural gas for electricity generation and reality has reared its ugly head — in the form of ever-climbing electricity rates for residents and businesses.
For the past week or so, New England's "fuel mix" for electricity generation has seen nuclear and coal plants exceed 100 percent of their capacity, while natural gas plants have been running at less than 50 percent of installed capacity. Some of this can be attributed to seasonal variations — the result of local distribution companies purchasing firm capacity to supply their customers with home-heating fuel to keep their homes warm — leaving the "scraps" and higher prices to generators. LDCs are able to secure contracted pricing for their natural gas, which insulates them from paying the spot market prices that natural gas electricity generators are forced to pay — which has led to wholesale electricity prices exceeding 30 cents per kilowatt hour for extended periods of time.

Flaring Story On Front Page Of New York Times


December 18, 2013: An alert reader caught a problem with The New York Times. 
The quantity of natural gas produced in North Dakota apparently slipped past the fact checkers at The New York Times. The Times reported:
“At the same time, processing plant capacity has doubled since 2010 and six gas processing plants will be either built or expanded in North Dakota in the next few years, increasing processing capacity from a current 1.01 million cubic feet of processing capacity to nearly 1.7 million cubic feet of capacity by the end of 2015."
The correct volumes should be a current capacity of 1.01 BILLION cubic feet per day....going to 1.7 BILLION cubic feet of capacity by the end of 2015.  
With ND oil production nearing 1 million barrels per day, the volume (erroneously) reported by The Times would be equal to a little over 1 cubic foot of natural gas per barrel.  
In reality, the ratio is about 1000 cubic feet per barrel produced.   In the central area of the Williston Basin the ratio is closer to 1,500 to 2,000 cubic feet for each barrel of oil produced.  
The OneOK Garden Creek plant alone processes 100 million cubic feet per day.  Add to that  two plants west of Williston, one southwest of Alexander, the Hess plant at Tioga, Robinson Lake near Parshall, Signal Butte and others. 
 I wish I would have caught that, but I didn't so I guess I shouldn't be too hard on The New York Times but one would think their experts would have caught it.
Original Post

This story, linked at an MDU website, was, in fact, a front page story, front and center, of yesterday's New York Times.

Surprisingly, it's a fairly well-balanced story.

They still have their facts wrong about that "famous" NASA photograph from space regarding flaring in North Dakota. The vast majority of those "lights" were lit-up rigs and well sites; very few were actually due to flaring.

The NY Times failed to mention that flaring on North Dakota state land is not the problem. The problem rests with flaring on BLM-managed land in Dunn County, the reservation.

But all in all for The New York Times, a pretty well-balanced article. I was surprised to see it front-and-center, front page.

Montana Update; Statoil Reports Two New Wells; CLR Cancels One; EOG Permit Expires

Reported by Fairfield Sun Times:

Statoil reported the completion of two Bakken Formation wells. 
  • The Shannon 2-35 1H, 20,367 feet, an IP of 1,893 bopd.
  • The Breaks 17-20 1H, 20,370 feet, an IP of 920 bopd. 
CLR to abandon a Bakken well after drilling to only 2,000 feet; the Maria HSL well.

The EOG permit for a Richland County Bakken well expired, the Candee 4-0405H.

Wells Coming Off Confidential Wednesday; BR WIth A Big Well

Active rigs: 186

RBN Energy: Survey of Utica condensate and natural gasoline takeaway.
Next year (2014) RBN Energy expects Utica natural gas processing plants to produce 43 Mb/d of natural gasoline – more than 3 times 2013 production.  Local demand will only soak up 17 Mb/d – leaving 26Mb/d needing transport to markets outside the region. Midstream companies are building infrastructure to accomplish this – by pipeline, rail, truck or barge. Today we conclude our survey of Utica Condensate and natural gasoline takeaway.
Wells coming off confidential list, Wednesday:
  • 22948, 886, True Oil, True Federal 21-16 16-21H, Bully, t11/13; cum 2K 10/13;
  • 23720, 318, EOG, Bear Den 8-1621H, Ambrose, 4 sections, t5/13; cum 33K 10/13;
  • 24463, 1,592, WPX, Adam Good Bear 15-22HD, Van Hook, 16 stages; 3 million lbs, t6/13, cum 52K 10/13; comment: 16 stages = 31 equivalent stages
  • 24802, drl, CLR, Rollefstad Federal 10-3H-2, Antelope,
  • 24988, drl, Statoil, Domaskin 30-31 7TFH, Alger, 
  • 25282, 957, Samson Resources, Strom 2536-2H, Ambrose, 4 sections, t9/13; cum 31K 10/13;
  • 25301, drl, XTO, Louise 31X-T15, North Tobacco Garden, 
  • 25328, drl, MRO, Judy Tuhy USA 31-4H, 27K in 39 days;
  • 25388, 2,832, BR, Cleo 21-1MBH, Croff, 2 sections, t9/13; cum 15K 10/13;
  • 25690, 100, CLR, Park 1-22H, Juno, t9/13; cum 8K 10/13;
The Wall Street Journal

Low inflation tests world's central banks.
Inflation is slowing across the developed world despite ultralow interest rates and unprecedented money-printing campaigns, posing a dilemma for the Federal Reserve and other major central banks as they plot their next policy moves. U.S. consumer prices rose just 1.2% in November from a year earlier, according to Labor Department data released Tuesday. The subdued price data came as the Fed opened a two-day policy meeting at which the fate of its $85 billion-a-month bond-buying program—an effort to hold down long-term interest rates and drive up the value of homes, stocks and other assets—is a central focus. -- One question: why taper?
Goal of robust growth eluded Bernanke. EPA regulations, ObamaCare, NLRB.

The Los Angeles Times

District judge's ruling effectively decriminalizes plural marriage (polygamy) in Utah.  

From readers

Clean energy coal plant scuttled.
More than seven years after making public its plans to construct a major coal-fired power plant in Rogers Township, Wolverine leaders have given up.
Faced with years of government red tape and what backers of the project agree were unreasonable regulations, the cooperative admitted investing more than $25 million to jump through constantly moving hoops set up to block construction of new power plants.
What started as a promise for as many as 2,000 construction jobs and 100 permanent jobs is now off the table.
And Mr Bernanke wonders why "robust growth eluded him." See linked story above.