Thursday, July 31, 2014

Off The Net For Awhile ...

... and I just know the August NDIC hearing docket agenda will be released while I'm biking. Drats.

Something I've said repeatedly on the blog: the oil and gas industry, the Bakken boom, is affecting, for the most part, three or four counties in North Dakota: most of McKenzie; most of Williams, much of Mountrail, and a significant portion of Dunn County.

The map at this link pretty much supports that contention.

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Geo-Military-Politics
"War is a mere continuation of politics by other means"

This is really quite interesting. For Hamas, a perfect storm:
  • US-Israeli relationship at an all-time low
  • POTUS has stepped off the international stage; mostly into fund-raising in California
  • Hillary Clinton is no longer SecState
  • Current SecState is ribbonless, threw his military ribbons away, more interested in AGW
  • Israel "shocked" by extent of tunnel system
So, with all of that, the headline news:
  • Israel determined to destroy the tunnels; has pretty much 100% Israeli support (a reader very nicely pointed out he misread this -- he thought I meant the Israelis were 100% responsible for destroying all the tunnels -- no, what this shorthand said: destruction of the tunnels has almost 100% support among Israelis; Egypt is helping to destroy the tunnels. Sorry for the confusion.)
  • Israel calling up 16,000 more reservists
  • Israel asking for more ammunition from the US
We'll see what happens first: more reservists or more ammunition.

"War is a mere continuation of politics by other means."

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At Least We Know Where Algore's Been
Eating Ice Cream in 58-Degree "Weather"

Link here to a CNN anchor who is losing it. I can't make this stuff up.

Free Market Capitalism 101 -- The ONEOK Press Release, July 31, 2014

Updates


August 2, 2014: former CEO of ONEOK makes comments that back up the prescient comments of a reader posted below.

July 31, 2014: see comment below which I brought up here --
http://bismarcktribune.com/bakken/breakout/north-dakota-s-next-big-boom-capitalism/article_1aafdfbe-19bb-11e4-aad6-0019bb2963f4.html

OneOK is sitting on a treasure trove of NGLs and they know it. If they build fractionating plants here, much of their NGLs could go to a chemical complex built along the Missouri. That would catapult OneOK much higher, and set them up as the kingpin for the midstream industry.
Maybe a propane line to southern Minnesota or a natural gasoline (condensate) line to Alberta.
The really big pie in the sky, though, is if someone built a ethane cracker, to make ethylene, which is the building block molecule of the petrochemical complex.
OneOK doesn't recover ethane now (it stays with the methane and is burned) as the Houston market is flooded with ethane (OneOk loses money transporting ethane to Kansas and then Houston).
When OneOK starts recovering ethane, OneOK profits will go through the roof. In 2016, ethane exports begin the same way that LNG is exported. Another option is a $1 billion cracker along the Missouri north or Watford City. Pittsbugh is getting one near where Shell is building, and Pittsburgh considers it an economic salvation.
All kinds of chemical plants will locate near a cracker (polyethylene plastic plants, chemical plants etc).
I'm too tired tonight, but tomorrow, I will post the linked article above as a stand-alone post, so it's not lost. 
 
Original Post

1. Excluding non-profits, charities, and the like, most folks go into "business" to make a profit.
2. Risks vs benefits. Sometimes it's hard to calculate.
3. Favorable regulatory environment.
4. Find a "need"; attempt to meet that need.
5. Get really, really good at what you do.

Hopefully this will help explain ONEOK's announcement yesterday.

This is in response to a reader's comment in which he/she asked:
  • is the flaring crackdown driving ONEOK's investment?
  • does ONEOK have a de facto monopoly on natural gas processing in the Bakken?
  • does the state favor one company building all these new plants?
  • is the utility regulated? 
There are so many story lines in the ONEOK press release, I don't know where to begin.

A very minor story, but one that deserves attention: why are five of eight ONEOK natural gas processing plants located in one county in North Dakota? I've touched on it before; won't go into it again because my feedback was that I was nuts (which I probably am). LOL:
  • Grasslands, Williams, 100 MMcf/d
  • Stateline I, Williams, 100 MMcf/d
  • Stateline II, Williams, 100 MMcf/d
  • Garden Creek I, McKenzie, 100 MMcf/d
  • Garden Creek II, McKenzie, 100 MMcf/d
  • Garden Creek III, McKenzie, 120 MMcf/d -- to be completed in 2015* (ahead of schedule)
  • Lonesome Creek, McKenzie, 200 MMcf/d -- announced July 14, 2014; to be completed in 2015
  • Demicks Lake, McKenzie, 200 MMcf/d -- announced July 30, 2014; to be completed in 2016
Those are all ONEOK plants. I vividly recall the day I drove by Stateline I with my dad, touring the back roads of the Bakken. I had no idea what was being built; the local/regional newspapers were not reporting. It was completely under the radar scope. That was one of just a handful of "things" that really, really piqued my interest in the Bakken. These plants are not trivial in scope. I think there were 200 brand new pick-ups at the job site when Stateline I was being built. I think it took about a year. A lot of great paying jobs.

I was just learning about all this. I was inappropriately excited. A reader wrote me to tell me to settle down; in the big scheme of things, these were very small plants compared to the processing plants in Qatar. LOL. Qatar. Like I want to go there.

Qatar. Pronounced "Kotter." Sort of. Closer to "cutter."

Welcome Back Kotter Theme Song

Answers to those questions:
  • is the flaring crackdown driving ONEOK's investment? No, profits drive ONEOK's investment
  • does ONEOK have a de facto monopoly on natural gas processing in the Bakken? No
  • does the state favor one company building all these new plants? No
  • is the utility regulated? Yes and no ("everything" is regulated; but profits are not regulated for these plants, as far as I know, unless you consider tax burden a type of "regulation")

Williston Airport Traffic Up 250% Over Two Years -- WSJ -- July 31, 2014

The Wall Street Journal is reporting:
Williston, N.D.
A double-wide mobile-home trailer that used to serve as an elementary-school classroom is now the airport terminal. A conference room is the Hertz rental counter. And there is no baggage carousel, just a small counter where baggage workers pile luggage.
Sloulin Field International Airport here wasn't built to be one of the fastest-growing airports in the world, but it is now. Traffic last year was 254% higher than just two years earlier. Airlines fly in with jets weighing twice as much as what the runway was built for. And when the parking lot is full, cars are left in ditches and on the sides of roads.
"It's hard to even call it an airport," said Kenneth Dransfield of White Springs, Fla. "And it's super expensive." He bought a ticket home to Florida seven months in advance and paid $1,200.
The Bakken oil bonanza has brought jobs and wealth to western North Dakota. With that have come workers and airlines to transport them. Small cities that used to have just a handful of turboprop commercial flights now have regional jets in and out all day long, and some have larger Boeing and Airbus planes popping in, too. Planes are packed, fares are high and airports are scrambling to find ways to grow more.
Most U.S. small cities and towns bemoan sharp reductions in airline flights, making it harder for their communities to attract new factories and businesses without jet service. But if there is oil, airlines will find all kinds of ways to get in and out of tiny airports.
The best thing about the Williston International Airport: one can walk to it from the back porch of the house where I grew up. If it still has a back porch. 

It would be nice to see Jane "Yes, There's Some Oil There" Nielson fly out to Williston.

Reason #163 Why I Love To Blog; Natural Gas Fill Rate -- July 31, 2014

Yesterday I posted a link to a story on the natural gas "fill" story.

That post will take you to this link over at Investor Village. (This will save you one click).

Until this week, I had no idea how much natural gas was injected into storage every week, and if the truth were known, I did not care.

But now that I am following the "Road to New England," the natural gas weekly fill rate has become very, very interesting.

It appears, that in round numbers, the industry needs to inject 100 billion cubic feet of natural gas into storage every week to meet this winter's expected demand. Don sent me the number for the most recent week: 88. That's the net change: previous week plus newly injected minus withdrawal.

I don't know. Is "88" good? It's less than 100.

Dynamic link here

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Warning: graphic, probably R-rated.

I can't view this at the moment due to technology issues, so I really don't know what's all in the video. Parental discretion advised.

Crazy 88s, Kill Bill

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A Note for the Granddaughters
 
This is really cool. Four of us went to a very nice Japanese restaurant on Pacific Coast Highway last night. It's a most genuine Japanese restaurant. It has all of six tables, if that, and seats maybe 16 people at tables (another 8 at the sushi bar). It could probably seat one or two more but it would feel really claustrophobic. There were about eleven people at tables plus six at the sushi bar. 

We go there at most once each time we visit Los Angeles. 

I had forgotten, but was reminded, the hostess speaks no English (or very little English -- perhaps as much English as I speak Japanese). The waitress is, I think, fluent in English. Hard to say. 

It reminded me of the real deal, the real mom-and-pop restaurant when I visited Japan many, many years ago. 

When we left the restaurant, I noted two little mounds of what-appeared-to-be salt on small little round dishes, one dish on either side of the door, outside the restaurant. I had not seen those before, and surprisingly none of the others I was with had noticed that before despite frequent visits there. None of us knew the significance.

Google to the rescue: the third paragraph at this link.
Another example of salt in the daily culture was shown to me by our local sushi man when he was cleaning and prepping his restaurant for the day. Standing in the entry way by the sliding door under the noren, Japanese awning, he was splashing water and sprinkling salt liberally on the sidewalk.  I learned that this is an act of purification.  A practice still common today is the little cone-shaped mounds of salt on little dishes on the ground by the threshold of a restaurant, shop or even a residence.  It means the place has been purified and it hopes to attract customers.  This can often be seen at Japanese sushi restaurants not only in Japan but all over the world.  Next time you go to a Japanese restaurant have a look to see if they practice this tradition.  If so, you will know they are authentic!

Williston, Minot, Dickinson (In Reverse Alphabetical Order) Qualify For Oil Funds -- July 31, 2014

The Bismarck Tribune is reporting:
Currently, three cities qualify for the hub city status: Williston, Dickinson and Minot.
Williston is listed as having 63.9 percent oil field employment, 38.9 percent in Dickinson and 12 percent in Minot.
Hub cities are eligible for $375,000 annually for each partial or full percent of its workforce employed in the oil and gas industry. School districts in hub cities are eligible for $125,000 for each partial or full percentage point.
Job Service North Dakota was required to update its numbers as part of House Bill 1358, which passed during the 2013 session. HB1358 includes a formula outlining allocations of oil and gas gross production tax allocations to various political subdivisions.
How in the world Alexander, Parshall, Dore, and Watford City were not named "hub cities," I suppose we will never know. I assume 100% of workers in Dore and Parshall work in the oil industry, except perhaps for those repairing roads and replacing windshields.

And, of course, they would not be needed if it weren't for the oil industry.

Refineries Setting All-Time Records -- July 31, 2014; Breaking News: Blackberry Collaborates With Microsoft

Active rigs:


7/31/201407/31/201307/31/201207/31/201107/31/2010
Active Rigs194180208184143

RBN Energy:
Ever since US crude production began to increase in 2009 after 40 years of decline from its peak in 1970, refineries have been processing higher crude volumes.
This summer (2014) crude processing volumes have been higher than at any time since the Energy Information Administration (EIA) began keeping records in 1982.
Abundant supplies of reasonably priced crude in all regions as well as low refinery fuel costs are giving US refiners good reason to crank up their output. So much so that in the Midwest refinery output reached over 100 percent of capacity early in July. Today we describe the refining bonanza and how things might change in the not too distant future.
During the week ending July 11, 2014, US refineries processed 16.6 MMb/d of crude - the highest level ever recorded by EIA.
This increase in refinery processing comes at a time when domestic demand for refined products produced by refineries has actually been declining due to  two main factors – (1) renewable fuel standards replacing gasoline with ethanol and (2) greater auto fuel economy.
So, where does that leave us? Where are "we" headed? For the rest of the story, go to the linked article. Without question, RBN Energy provides the best education on the oil and gas industry, day in and day out, without requiring a paid subscription, a password. There are no ads at the site. It is quite remarkable. 

I wish such a site existed 40 years ago. Oh, that's right. Algore had not yet invented the internet. My bad.

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Humor for the Day

See if you can find this story on your own through googling. It's such a huge story, I was unable to find it again through googling. I had to go back to where I thought I saw it earlier this morning.
Blackberry: BBM now available for Windows phone users: Co announced a collaboration with Microsoft (MSFT) to bring BBM to Windows Phone 8 and higher.
Savvy investors probably saw this coming. Back on Jun3e, 29, 2012 (yes, two years ago; some things move slowly in Silicon Valley), Business Insider was reporting:
RIM's death throes continue...
Reuters reports hearing from sources that RIM's board is currently weighing several extreme options including switching to Microsoft's mobile operating system (the Nokia move, which has failed), or selling off its network business, a key part of the company.
RIM announced a greater quarterly operating loss than expected on Thursday, and revealed that it is once again delaying the release of the Blackberry 10 phone, this time until 2013.
Now, the company's board is reportedly considering giving up on its own operating system and adopting Microsoft's instead. In fact, Reuters reports that Microsoft's CEO Steve Ballmer recently approached RIM about this idea. For the time being though, RIM is still hoping to develop and release the Blackberry 10 operating system.
I can't make this stuff up.

Wednesday, July 30, 2014

Jobless Report, This Is Not Good -- July 31, 2014; MPC Beats By $0.78; Other Energy Companies Blowing Away Expectation

A reminder: when posts are this long, there will be typographical and factual errors. This blog  is for my personal use only but I post it publicly for anyone to read, but there is no guarantee of any implied accuracy. Read at your own risk.  If I am alerted to factual errors, I fix them as quickly as possible. It is often hard to separate facts from opinions on this site when I post in paragraphs. That's why I try to link all sources. Go to the sources. 

 JOBS REPORT
Well, This Isn't Good

Claims are in-line with expectations, but expectations would not have earned a smiley face emoticon.

Data points:
  • expectations: 300,000 (after last week's "stellar" report -- only 284,000, revised downward to 279,000)
  • actual: 302,000
  • market reaction: the Dow tanks immediately after news; had been trending higher in pre-market futures; down "triple-digits"
Comments: this takes us back to the reported GDP of 4%, yesterday. The media reaction was muted, and the market was not impressed. It makes one wonder to what degree the GDP might have been massaged. Except for a few respondents to my poll, "no one" thought 2Q14 GDP was going to be above 3%; in fact, big-name analysts had lowered expectations from 3.1% to 3.0% the day before the report. And now, the jobs report today. Something feels fishy. Very fishy.

Now, the jobs report. I can understand the number of jobless claims being revised UPWARD but I don't understand (and have never seen [which doesn't mean it hasn't happened] jobless claims revised DOWNWARD. Jobless claims are simply counting the applications that come in. The number should be revised upward because a) some applications will be in the mail; b) some states are slow in reporting data; c) sometimes "they" conveniently miss a stack of applications [which often happens the week before important elections]. But I can't think of a reason why the numbers should be revised DOWNWARD. Did some states double-count applications last week for some reason, and then go back and re-count them? We know that the government has manipulated the jobless numbers [previously posted, citing an impeccable source] before. Something feels fishy. Very fishy.

But let's assume the numbers are right. Back up to 300,000 first time claims. Five years into the recovery and workers are getting nowhere.

For the record:
  • four-week moving average, 297,250. Down 3,500
  • continuing claims climb: 2,539,000, up from last week's revised 2,508,000.
UC Irvine? Really?

Los Angeles Trade-Technical College? Really?

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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.

Reporting today: COP, EEP, HP (flex rigs), KOG, MPC, OXY -- according to Yahoo!Finance.
  • APA: beats by 1 cent, misses on revs
  • American Railcar: beats by 30 cents; nice
  • COP: profit rises 1.5%; profit in-line
  • XOM: beats by 19 cents; huge; revenues rise almost 5%; production declined y/y
  • EEP: after market close
  • HP: beats by 12 cents; wow! revs up 13%
  • KOG: after market close
  • MPC: beats by 78 cents; wow, what happened here; maybe more later; revs also rose almost 5%
  • OXY: beats by 6 cents; profit rises 8%; on a triple-digit down day for the Dow, OXY is up very, very nicely
Enterprise Products executes additional agreement for ethane export terminal; evaluating expansion options: Co announced that it has executed an additional long-term contract to provide ethane storage, transportation, refrigeration and loading services from its new ethane export terminal that is currently under construction on the Houston Ship Channel.
  • With this new agreement, the co now has long-term commitments for approximately 85 percent of the capacity of the ethane terminal

The Wall Street Journal

How GDP of 4% affects the Fed's thinking.

Current sanctions against Russia won't be enough.

Argentina ... going ... going ... gone....

Some US states, such as Colorado and Illinois, are overwhelmed by number of undocumented immigrants seeking licenses. At least in Colorado, they can smoke while waiting.

Biggest casualty of the Ukraine: Russian-German ties. Russia is Germany's #1 trading partner. Oh-oh.

Huge story: US oil exports ready to sail. Tanker of Texas oil heading to South Kore in first sale since 1970s embargo.
How that $40 million shipment avoided the nearly four-decade ban on exporting U.S. crude is a tale involving two determined energy companies, loophole-seeking lawyers, and an unprecedented boom in American drilling that could create a glut of ultralight oil.
The Singapore-flagged BW Zambesi is the first of many ships likely to carry U.S. oil abroad under a new interpretation of the federal law that bars most sales of American oil overseas.
Analysts say future exports appear wide open: as much as 800,000 barrels a day come from just one of the many U.S. oil fields pumping light oil. Though U.S. policy on oil exports hasn't changed, production of this kind of oil, known as condensate, is surging.
This early shipment "is the wedge that's pushing the door open" for more ultralight oil exports, said Daniel Yergin, vice chairman of consulting firm IHS. 
Cash-poor Venezuela weighs sale of Citgo. Warren Buffett is burning the midnight oil, as they say.

Boeing plans to build its flagship, the 787 Dreamliner jet, exclusively at its non-union factory in South Carolina.

XOM starts to sputter.

The Fed's latest statement raises the possibility that a rate increase will come sooner than many expect.

For The Archives, Let's See If They Make It -- July 30, 2014

For background to this story, go to this link: http://www.investorvillage.com/smbd.asp?mb=4288&mn=144363&pt=msg&mid=14041343.

Even if they reach their goal/projection for October, they will be below the average AND the range for the past five years. Even if everything goes right, they will be short. If it's a cold winter, it's gonna be a big story.

If it's a mild winter, no one will know how close they came.

Texas Is Now #8 In The World For Oil Production At 3 Million BOPD -- July 30, 2014

The Dallas Business Journal is reporting:
Texas oil production topped 3 million barrels per day in May, putting the Lone Star state on par with the world’s biggest oil producing countries, according to the Energy Information Administration.
Only Russia, Saudi Arabia, United States, China, Canada, Iran and Iraq produce more oil than Texas, according to international oil production numbers from the EIA. Unlike the national production totals that are from May, the international numbers are from March and include condensate.
This is most interesting:
Texas produced as much oil as the entire continent of Europe, according to the EIA. 
Over at "Big Stories," I have a page, "Europe at a Tipping Point." At that page, the energy news regarding Europe is dismal, and it begins: Europe may be the only continent in the world to depend on imported energy -- EU Council President. When one reads that Texas produces as much oil as the entire continent of Europe that provides a glimpse of how bad things are over there. Remember: France has the huge Paris oil basin; there is all kinds of fossil fuel in eastern Europe; I assume if they wanted, Europe could at least challenge Texas in production. Perhaps, perhaps not.

But Europe has some big decisions to make. The Russian natural gas supply is only one of them.

Wisconson Coal Plant Could Close -- Lack Of Coal -- BNSF Unable To Supply Contracted Coal Due To Rail Backlog; Wasn't Wind Supposed To Take Up The Slack? -- July 30, 2014

Updates

August 3, 2014: The coal-rail supply story is affecting the entire midwest, not just the La Crosse power plant. is reporting that the issue is getting federal attention (these are folks from the political party trying to kill the coal industry in the US and slow down BNSF trains to a 5 mph crawl):
U.S. Sen. Tammy Baldwin, D-Wis., released a statement saying: “Following last winter’s devastating propane shortage, I am committed to ensuring that Wisconsinites do not face another energy crisis as temperatures drop. My staff and I will continue to work with BNSF, the Surface Transportation Board, and Dairyland Power to find a solution to this looming fuel shortage.” [Perhaps he needs to also work with POTUS.]
State Sen. Bob Jauch, D-Poplar, and Democratic state Reps. Janet Bewley of Ashland, Nick Milroy of South Range and Stephen Smith of Shell Lake also sent a letter to the National Surface Transportation Board in Washington D.C. The state lawmakers urged the federal agency to take immediate steps to increase coal shipments to Midwest utilities to avert an energy crisis similar to the propane shortage last winter. [Perhaps they need to write POTUS or meet him on the golf course; the three state reps and POTUS could make a foursome.]
Back to the story:
Midwest Energy Terminal in Superior is experiencing similar issues. The facility which provides coal to several power plants along the Great Lakes and St. Lawrence River, including Minnesota Power, is struggling to get supply.
With supplies down by about 1½ million tons, President Fred Shusterich said this is the time of year his customers are stockpiling coal to prepare for the January-March shutdown of the Soo Locks, which brings most shipping to a halt on Lake Superior. This year, difficult ice conditions persisted into May. Yet the trains that typically bring coal from the west to the Superior waterfront facility are coming only half as often as usual. He said that while a typical 123-car rail shipment has a five-day turnaround, it now takes about 10 days to get the shipment.
Minnesota Power spokeswoman Amy Rutledge said the utility also is dealing with coal shipments that have slowed, but the situation is not critical and their supplies are fine now. They also are working with BNSF railroad.
 My recommendation: Minnesota loves wind power. They need to turn on the turbines.


Original Post

LaCrosse Tribune is reporting:
An ongoing rail backlog that has stranded grain shipments across the Great Plains is now threatening to shut down a La Crosse-area power plant.
Dairyland Power Cooperative says it could run out of coal at its Genoa generating plant by January if the BNSF railroad doesn’t rapidly accelerate deliveries.
Halfway through the summer shipping season, the coal supply has dwindled to “perilous levels” and is falling further behind each week, according to a memo sent last week to lawmakers.
The La Crosse-based utility, which serves about 250,000 mostly rural customers, relies on coal to generate power at plants in Alma and Genoa. Alma is served directly by a BNSF rail line, while coal is shipped to Genoa on barges loaded at a terminal in southeast Iowa.
I assume President Obama is not concerned. It's all part of the plan.

A big thank-you to Steve, tonight; he has sent me a number of stories I never would have seen otherwise. The ONEOK story was particularly interesting. Thank you.

Update On World's Largest Gas-To-Liquid (GTL) Plant In The World -- July 30, 2014

Rigzone is reporting:
In 2008, Shell announced it would partner with Qatar Petroleum and build Pearl GTL in order to produce cleaner-burning diesel and kerosene, base oils for top-tier lubricants, a chemical feedstock called naphtha (used to make plastics) and normal paraffin, which is used to produce detergents.
Today, the plant in Ras Laffan Industrial City, 80km north of Doha, Qatar, is the largest gas-to-liquids plant in the world.
At the peak of construction 52,000 workers from 65 countries were deployed on the site and overall it took the team 500 million man-hours to design and build.
As well as being the biggest, Pearl GTL is also one of the most complex and challenging energy projects in the world – the GTL technology alone has 3,500 patents.
The statistics are staggering: to build Pearl GTL a total of 750,000 cubic metres of concrete was poured. That’s enough to construct two Burj Khalifas (the world’s tallest building).
Pearl GTL draws on gas from Qatar’s North Field, estimated to hold 900 trillion cubic feet of gas. That’s an estimated 13% of the world’s total.

ONEOK: Another Natural Gas Facility (Demicks Lake); Will Expand Two Other Plants; Ahead Of Schedule On Garden Creek III; And May Announce More Projects By End Of 2014

Updates

February 20, 2018: ONEOK recently asked to expand its Bear Creek facility from 80 million cf/d to 175 million cf/d. 

August 12, 2015: small ONEOK pipeline approved

February 25, 2015: ONEOK will temporarily halt work on three natural gas processing plants in the mid-continent due to the slump in oil and gas prices; of the three, only the recently announced Demicks Lake plant in McKenzie County.

October 6, 2014: Targa announces a new 200 mmcfpd natural gas processing plant in McKenzie County. 
 
September 2, 2014: ONEOK may increase capacity at Garden Creek II.  

Original Post
This is a huge story. If you don't read anything else at the blog today, be sure to read this one.

Note: there is a lot of information in this post. I recommend the reader go to the linked ONEOK press release for details (and to make sure I did not make mistakes in summary below).

This is the list of ONEOK natural gas plants in my database for North Dakota:
  • Lignite, Burke County, 6 million cubic feet/day
  • Marmath, Slope County, 7.5 MMcf/d
  • Grasslands, Williams, 100 MMcf/d
  • Stateline I, Williams, 100 MMcf/d
  • Stateline II, Williams, 100 MMcf/d
  • Garden Creek I, McKenzie, 100 MMcf/d
  • Garden Creek II, McKenzie, 100 MMcf/d; completed; announced August 26, 2014;
  • Garden Creek III, McKenzie, 120 MMcf/d -- to be completed in 2015* (ahead of schedule)
  • Lonesome Creek, McKenzie, 200 MMcf/d -- announced July 14, 2014; to be completed in 2015
  • Demicks Lake, McKenzie, 200 MMcf/d -- announced July 30, 2014; to be completed in 2016; in this press release Oneok said more projects might be announced before the end of 2014; appears to have been revised upward to 400 MMcf/d in an article dated December 18, 2014.
  • Bear Creek, northwest Dunn County, 80 MMcf/d -- announced Sept 22, 2014; $300 million; to be completed 2Q16; asked in late 2017/early 2018 to expand this plant from 80 million cf/d to 175 million cf/d;
******************************************

On July 14, 2014, The Bismarck Tribune ran the story announcing the Lonesome Creek facility had been approved by the PSC, with 200 MCF capacity, at a cost of $280 million. The article said this would be ONEOK's 6th plant since 2007 and its 7th plant in the state. (If one doesn't count the very small plants at Lignite and Marmath, the numbers "add up.")

Today, ONEOK announces yet another facility: the Demicks Lake facility. Data points:
  • Demicks Lake facility, $605 - $785 million, 200-million cubic per day facility
  • Demicks Lake facility, northeast McKenzie County; to be completed in 2016
  • brings ONEOK's CAPEX to more than $7.0 billion through 2016 in state of North Dakota
  • Williston Basin natural gas processing capacity to reach 1.1 billion cubic feet/day with new plant
  • *Garden Creek III plant ahead of schedule; to be completed in 4Q14
This announcement: $605 to $785 million between now and end of 3Q16:
  • Build a new 200-million cubic feet per day (MMcf/d) natural gas processing facility – the Demicks Lake plant – and related infrastructure in northeast McKenzie County, North Dakota,
  • Construct additional natural gas compression at the partnership's existing and planned Garden Creek and Stateline natural gas processing plants in the Williston Basin by a total of 100 MMcf/d; and
  • Build approximately 12 miles of natural gas liquids (NGL) gathering pipeline from the Demicks Lake plant to the partnership's existing Bakken NGL pipeline.
ONEOK spokesman:  "The additional 300 MMcf/d in the Williston Basin will increase our natural gas processing capacity to approximately 1.1 billion cubic feet per day (Bcf/d) in the region. Pending board approval, we expect to announce additional Williston Basin natural gas processing capacity by the end of this year."

In addition, the Garden Creek III natural gas processing plant, originally scheduled for completion in the first quarter 2015, is now ahead of schedule and slated for completion in the fourth quarter 2014.
"The completion of this plant, now a 120-MMcf/d natural gas processing facility with the additional capital investment in compression, combined with other ongoing investments in the Williston Basin, will provide the partnership with additional natural gas and NGL volumes while also creating long-term value for our unitholders," said Spencer.
For comparison, with its recent expansion, the Hess plant at Tioga has a capacity of 250 MCF.

Fifteen (15) New Permits -- North Dakota - July 30, 2014; MRO With A "High-IP" Well

Wells coming off the confidential list Thursday:
  • 26762, 99, Corinthian, Corinthian Bowers 9-3 1H, North Souris, a nice Spearfish well, t3/14; cum 8K 51/4;
  • 27136, 1,200, BR, Denali 21-4TFH, Johnson Corner, 4 sections, no production data,
  • 27366, 2,395, MRO, Grover 11-3TFH, Reunion Bay, t5/14; cum 40K 6/14;
  • 27603, drl, BR, Bullrush 34-10MBH-A, Elidah, no production data,
Active rigs:


7/30/201407/30/201307/30/201207/30/201107/30/2010
Active Rigs191181206183143

Fifteen (15) new permits --
  • Operators: Newfield (4), CLR (4), Zavanna (3), Newfield (2), MRO (2),
  • Fields: Briar Creek (Williams), North Tobacco Garden (McKenzie), South Tobacco Garden (McKenzie), Bluffton (Divide), Lost Bridge (Dunn),
  • Comments:
Wells coming off the confidential list today were posted earlier; see sidebar at the right.

Does Whiting Have A New Record IP In The Bakken? -- July 30, 2014

Updates

July 23, 2018: another Tarpon Federal permit, #35183; see below;

January 28, 2017: huge jump in production after neighboring well fracked;

June 15, 2015: random update of the locations of Whiting's fourteen (14) Tarpon Federal wells (Sand Creek and Twin Valley), with graphics.

March 18, 2015: random update of five (5) Tarpon Federal wells still on the confidential list but producing
 
Original Post

More to follow; will clean this up later; from the FAQ page: What is the record IP to date in the Williston Basin? 
More to follow: in 2Q14 earnings report, WLL: Tarpon Well Completed in 2nd Bench of Three Forks Flowing 6,071 BOE/d. Not a record in the Bakken -- see Statoil's #23992. But still, this is huge for the second bench.
Statoil reported an IP of 5,417 on September 26, 2013: #23992, Beaux 18-19 7H, Banks oil field. Based on its IP for natural gas (9,663), this well had an IP of 7,083 boepd. 
Statoil reported an IP of 5,387 on July 19, 2013: #23387, Beaux 18-19 4H, Banks oil field. This might be a new record (this is the IP for crude oil only).  A reader wrote: "I'm not a big fan of IP numbers, but the Statoil Beaux wells are noteworthy. The 4H with the IP of 5,387 barrels of oil also had a gas volume of 9484 MCF. If you value the gas (methane and NGLs) at $6 per MCF and oil at $90 per barrel, the BOE would be 632 making the BOEPD for this well just over 6,000. These wells are just east of the Continental Resources high-density multi-zone drilling units."
The initial production of any well, self-reported by the producer, is becoming less meaningful over time. Having said that, it looks like the record IP for a Bakken well is now 5,200a Newfield well (July, 2011): 18691, 5,200, NFX, Wisness Federal 152-96-4-2H, Westberg, Bakken.
Statoil reported on July 10, 2013: 23385, 5,070, Beaux 18-19 6H, Banks, t6/13; cum -- ; 7 days to drill the lateral; I did not see completion data; 31 swell packers planned; 
Two earlier wells: a Whiting well which had an IP of 4,761 boepd: file #17612, 4,761 boepd IP, Whiting, Maki 11-27H, Mountrail County, Sanish field.  This is still current as of February 20, 2010. Since then, BEXP claims to have set a record with the Sorenson 29-32 1-H, #18654, with a 24-hour flowback of 5,133 bopd. However, the NDIC reported an IP of 2,944. BEXP also reported the Jack Cvancara 19-18 #1H (this site is down) in the Ross project area with a 24-hour flowback of 5,035.
New record in the Bakken, November 3, 2011The Tarpon Federal 21-4H is a Whiting  Petroleum operated well and had a 24-hour initial production (IP) rate of 7,009 barrels of oil equivalent (BOE), setting a new Williston Basin record for a Bakken well.
Whiting said this was a record TFS well at the time, early 2012, file #20526, Smith 34-12TFH, 2,446, 102K in first 4.5 months.

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IPs and production updates for Whiting's Tarpon Federal wells in Sand Creek and Twin Valley oil fields in the Bakken:
  • 35773, loc, Whiting, Tarpon Federal 44-19-2TFHU,
  • 35772, loc, Whiting, Tarpon Federal 44-19-3H
  • 35771, loc, Whiting, Tarpon Federal 44-19-3TFH,
  • 35770, loc, Whiting, Tarpon Federal 44-19-4H,
  • 35769, loc, Whiting, Tarpon Federal 44-19-4TFH
  • 35768, loc, Whiting, Tarpon Federal 44-19-5H
  • 35193, conf--> loc, Whiting, Tarpon Federal 34-20-3H, Sand Creek, 
  • 29200, 2,468, Whiting, Tarpon Federal 44-19-3RTF, Sand Creek, t2/15; cum 133K 5/18;
  • 29199, 3,238, Whiting, Tarpon Federal 44-19-1RH, Sand Creek, 30 stages, 3.7 million lbs, t2/15; cum 181K 5/18;
  • 28496, 2,959, Whiting, Tarpon Federal 24-20-3RTF, Sand Creek, 62 stages, 2.5 million lbs, t1/15; cum 167K 5/18;
  • 28495, 3,606, Whiting, Tarpon Federal 24-20-2RH, Sand Creek, 90 stages, 3.5 million lbs, t1/15; cum 171K 5/18;
  • 28494, 3,125, Tarpon Federal 24-20-2RTF, Sand Creek, sundry form says "Middle Bakken," 30-stage, NOS, producing, strange production profile; 32K first month (12/14); 285 bbls second month; t12/14 cum 143K 5/18;
  • 28493, 3,444, Tarpon Federal 24-20-1RTF, Sand Creek, Three Forks B1, a strange production profile; 32K first month (12/14); 285 bbls second month; t12/14; cum 167K 5/18;
  • 28492, 4,371, Tarpon Federal 24-20-1H, Sand Creek, a strange profile, 42K first month (12/14); 378 bbls second month; t12/14; cum 233K 5/18;
  • 27413, 3,131, Whiting, Tarpon Federal 44-19TFHU, Sand Creek, Three Forks B1, 37 stages, 3.9 million lbs, t2/15 cum 176K 5/18;
  • 22554, 2,274, Whiting, Tarpon Federal 44-19-1RTF, Sand Creek, "R" for revised, not re-entry; sundry form says target is "Bakken," NOS; 30 stages, 3.2 million lbs, t2/15; cum 195K 5/18; off-line much of the time; 
  • 22555, 3,259, Whiting, Tarpon Federal 44-199-2RTF, Sand Creek, one sundry form had Three Forks typed in, but it was inked out and replaced with Bakken, the original permit also showed "Bakken"; 30 stages, 3.5 million lbs, t2/15; cum 151K 5/18; off-line much of the time; 
  • 22556, 2,967, Whiting, Tarpon Federal 44-19-2RH, Sand Creek, 30 stages, 3.9 million lbs, t2/15; cum 328K 5/18; 
  • 27126, 2,894, HRC, Fort Berthold 148-95-23D-14-7, Eagle Nest, 48 stages, 4.9 million lbs; a nice well, choked back?; t2/15; cum 240K 10/16;
  • 22361, 4,971, Tarpon Federal 21-4-3H, t12/12, Twin Valley;
  •  cum 567K 5/18;
  • 22360, 1,394, Tarpon Federal 21-4-1H, t12/12, Twin Valley; t12/12; cum 255K 5/18;
  • 20589, 4,815, Tarpon Federal 21-4H, t10/11, Twin Valley, t10/11; cum 623K 5/18;
These wells are located on two pads about half a mile away from each other; the 5-well pad (28492 - 28496) is located in 20-153-96; the four-well pad is located to the west in 19-153-96. 

Whiting Might Have Another IP Record In The Bakken -- July 30, 2014

Supposedly reporting today (some have already reported):
  • Halcon (HK) -- see below
  • Hess (HES) -- results posted
  • Murphy Oil (MUR) - after market close
  • Phillips 66 (PSX) -- results posted
  • Questar (STR) -- beats by 1 cent; beats on revenue;
  • Southern Company (SO) -- beats by 2 cents; beats on revenues
  • Sprint (S) -- topped estimates
  • Tenaris (TEN.MI)
  • Valero (VLO) -- beats by 2 cents; revenues in-line
  • Whiting (WLL) -- see below
  • Williams Cos (WMB)-- see below
Whiting:
  • Record production reaches 109,760 boepd in 2Q14, up 9.7% over 1Q14, exceeds high end of guidance 
  • Record Bakken/Three Forks production of 80,195 boepd inn 2Q14, up 33% over 2Q13
  • Redtail Niobrara production of 7,235 boepd in 2Q14, up 59% over 1Q14
  • Tarpon well completed in 2nd bench of Three Forks flowing 6,071 boepd
  • Raising mid-point of 2014 production guidance to 20% over 2013 
  • 2Q14 net income available to common shareholders of $151.4 million or $1.26 per diluted share and adjusted net income of $167.9 million or $1.40 per diluted share [Consensus was $1.17]
  •  2Q14 discretionary cash flow totals a record $556.2 million 
Whiting, from Reuters:
Whiting Petroleum Corp posted a better-than-expected quarterly profit on Wednesday as oil and natural gas production jumped across the company's wells in North Dakota and Colorado's shale formations.
Whiting, which is about to become the largest oil producer in North Dakota's Bakken shale with the buyout of a smaller rival, boosted its capital budget by $100 million to $2.8 billion and said 2014 production should beat 2013 levels by 20 percent, citing in part better-than-expected well results.
"We believe we have plenty of running room in the Williston Basin" of North Dakota, Whiting Chief Executive James Volker said in a statement.

Halcon:
Company delivers 44% year-over-year production growth
Full year 2014 production guidance raised
HOUSTON, July 30, 2014  -- Halcon Resources Corporation today announced its second quarter 2014 results.
Revenues for the three months ended June 30, 2014 totaled $327.1 million, an increase of 53% compared to the three months ended June 30, 2013. Production for the quarter came in above guidance and increased 44% year-over-year to an average of 42,055 boepd. Second quarter 2014 production was 85% oil, 7% natural gas liquids (NGLs) and 8% natural gas.
Total operating costs per unit (including lease operating expense, workover and other expense, taxes other than income, gathering and other expense, and general and administrative expense) decreased by 21% to $24.45 per boe in the second quarter of 2014, compared to the second quarter of 2013.
After adjusting for selected items primarily related to the non-cash impact of derivatives, net income was $32.5 million, or $0.07 per diluted share, for the three months ended June 30, 2014. Halcon reported a net loss available to common stockholders of $73.3 million, or $0.18 per diluted share for the quarter. [Consensus was four cents.]
WMB:
  • Expected 2Q14 cash distributions from Williams Partners and Access Midstream Partners totals $509 Million, up 29% vs. 2Q13
  • Adjusted segment profit + DD&A is $742 Million, up 15% vs. 2Q13
  • Adjusted income is $158 million or $0.23 per share, up 22% vs. 2Q13 [Consensus: 23 cents]
  • 2Q 2014 Net Income Is $103 Million or $0.15 per Share 
  • Updating financial guidance primarily to reflect acquisition of additional interests in Access Midstream Partners 
  • Affirming planned dividend guidance: 3Q14 up 32% to $0.56, or $2.24 on an annualized basis; $2.46 in 2015, with follow-on annual dividend growth of approximately 15% through 2017 
  • Williams Partners and Access Midstream Partners evaluating merger as proposed by Williams 
PSX:
  • Phillips 66's Q2 EPS rose 0.7% to $1.51, falling short of views by 19 cents. Revenue climbed 7.2% to $46.3 billion, under estimates for $47.5 billion.
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Two New Human Interest Articles On The Bakken
Sent in by two readers, thank you

First, the Huffington Post:
BELFIELD, N.D. -- Byron Richard's pickup bounces up and down over the washboard gravel road. He clutches the wheel with one hand and points with the other as he passes dozens of oil wells on land where once crops grew and cattle grazed.
A few of the wells are decades old; most are new or under construction. Oil field vehicles of assorted shapes and sizes clog the road in places and kick up thick clouds of dust.
Richard's way of life is changing. He knows that. He accepts that.
But the Belfield, N.D., farmer and rancher says too many of the changes favor the oil industry at the expense of him and other agriculturalists.
"We're not anti-oil. We can co-exist with oil," he says. "But there needs to be more focus on surface rights owners." 
My reply to the reader who sent me this:
Another great article. Thank you. Again, these articles make it sound like the entire state of North Dakota is being take over the oil and gas industry. We're talking about the western third, maybe western fourth of the state, and even so, very little of four or five counties. Cattle are hardly affected. Most ranchers in oil country now have the cash to actually keep farming/ranching. You notice that Willie Nelson is not doing any Farm Aid concerts in North Dakota any more. It's a nice human interest story but that's about it. 
The second article, also from the Huffinton Post:
North Dakota’s Heritage Center makes for a jarring sight in this Midwestern prairie capital. The newly-expanded museum consists of four interlocking cubes of stone, steel and glass, a gleaming architectural statement poking out of the otherwise drab Capitol grounds. Each cube features a gallery devoted to an era of North Dakota’s history, but the state’s present is everywhere.
The legislature approved the dramatic $52 million expansion in 2009, but required the museum to come up with $12 million of that to supplement state money, and more than half has come from energy companies — including a $1.8 million gift from Continental Resources Inc. that put its name on one of the galleries. The gifts have “given us a chance to do some things that we’ve never really had a chance to do,” said Merl Paaverud, director of the State Historical Society.
Oil development has transformed this state to the point where it’s hard to find a place or person that hasn’t been touched by the boom. Energy companies have drilled more than 8,000 wells into western North Dakota’s rugged prairie since the beginning of 2010, quadrupling the state’s oil production. From July 2011 through June 2013, the state collected $4 billion in oil taxes, and is expecting a $1 billion surplus for the current biennium, not including an oil-funded sovereign wealth fund that will approach a balance of $3 billion. North Dakota is in the uncommon position of facing a labor shortage, spurring a state-run campaign to attract workers, paid for in part by Hess Corp.
My reply to the reader who sent me this:
Got it,thanks. These articles make it sound like the entire state of ND is being taken over (geographically) by the oil and gas industry. As you know, it is pretty much confined to three, maybe four counties. The counties along the Canadian border and the counties in the southwestern part of the state have activity but I drive those areas every year, and not much as changed in Stark County or Belfield.
Williams, parts of McKenzie (Watford City area), and parts of Mountrail are really affected but in the big scheme of things that's about it.

Weekly US Petroleum Report -- EIA; Gasoline Production Decreased But Inventories Up Slightly; Crude Oil Imports Increased; Total US Crude Oil Inventories Continue To Decrease -- July 30, 2014

For week ending July 25, 2014.

Some data points:
  • crude oil inputs averaged 47,000 bopd less than previous week (a bigger decline than the previous week, which was 28,000 bopd)
  • refineries operating at 94% capacity -- high capacity (same as last week)
  • gasoline production decreased  (last week increased)
  • crude oil imports up a huge 337,000 bopd (last week down 20,000 bopd)
  • US crude oil inventories decreased by 3.7 million bbls (also decreased last week; decreased by 4 million bbls the previous week)
  • total motor gasoline inventories increased by 0.4 million bbls last week
This is what jumped out at me: The US enters its highest driving month (August) and already gasoline production is dropping (preparing for autumn/winter, already? I don't know but it is interesting).

The other big item: look at the huge increase in crude oil imports -- compared to the previous week (337,000 bopd vs 20,000 the previous week). There is a glut of US oil coming out of the Permian, Bakken, and Eagle Ford, so why would imports increase? Just background variability, no doubt, no big deal, but remember, the US refineries along the Gulf coast need imported heavy oil to mix with all that light oil; the US refineries along the Gulf coast are configured for heavy oil, and with the Keystone XL killed (thank you, Mr Obama), the US needs to import heavy oil from our close, stable, democratic ally, the country formerly led by Hugo Chavez. Disclaimer: I go through the report very quickly and may make typographical errors. That's why I include the link. Also, I may misinterpret what I read. 

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Exactly What Is The UN Doing Storing Rockets In Gaza Schools?

The United Nations Relief & Works Agency For Palestine Refugees (UNRWA) announced Tuesday that another rocket stockpile has been found at one of its schools in Gaza. This instance marks the third time since the beginning of Operation Protective Edge that a weapons arsenal has been found at an UNRWA school in Gaza.
Once: shame on you. Twice: same on me. Thrice: phoning it in.

Once found, the UN returns the rockets to Hamas:
UNRWA has yet to place blame on any individuals or organizations for placing the weapons stockpile within a children’s school. The UN body refused to do so on the past two previous occasions as well.
The UN body, after both previous findings, has handed the rockets it had found back into the possession of “the local police," otherwise known as the terrorist group Hamas.
This week, UNRWA supplies and building materials had been found in Hamas’s tunnel infrastructure, which has been used to smuggle weapons and carry out attacks on the State of Israel.

I Was Off By A Day: I Thought Yesterday Was Going To Be A Big Day -- Posted July 30, 2014; Bloomberg Still Refers To The Bakken As Booming Regardless Of What The Atlantic Monthly Says

... but it looks like today is going to be the big day.

The "big day" actually started just after the market closed yesterday: the SM Energy-Baytex story; the Menard's story; a new AAPL story; and so forth.

The "big day" continues into today.

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.

HES (Hess) soars! Hess soars on quarterly results and Bakken MLP formation.
Hess soared after reporting better-than-expected quarterly earnings and saying it will form a tax-advantaged master-limited partnership to hold railcars, trucking, storage and processing facilities in North Dakota’s booming Bakken Shale region.
Shares of the New York-based oil producer rose 4.2 percent to $103.62 at 9:09 a.m. before the start of regular trading in New York. Excluding one-time items, per-share profit for the second quarter was $1.38, exceeding the average of 24 analysts’ estimates by 20 cents.
Creating a partnership for the Bakken assets would reduce the tax burden, since master-limited partnerships don’t pay federal income tax. Hess is the latest to propose forming such a partnership, known as an MLP, as companies seek ways to cut the 35 percent corporate U.S. tax rate.
With regard to Hess, here's the BIG story, from the linked article:
The new partnership will include a natural gas processing plant in Tioga, North Dakota, as well as railcars and a loading facility for transporting oil from the region. It will also have a propane facility in Mentor, Minnesota. 
Don picked up on this. Does this mean that Hess will have a pipeline from the Bakken to Mentor, MN? Or is it something entirely different. I missed this until today, and Reuters just posted it last month:
As politicians debate the dangers of a massive increase in oil carried by rail in North America, railroads and energy producers are considering the same for natural gas.
Buoyed by the unexpected success of crude by rail, companies are beginning to consider transporting natural gas as remote drilling frontiers emerge beyond the reach of pipelines, executives said. 
Natural gas by rail is years away and likely to face strong public resistance after a series of explosive crude-by-rail accidents. But the potentially multibillion-dollar development could connect gas-rich regions like North Dakota with urban centers, presenting an opportunity for railroads, drillers and tank car makers already cashing in from hauling oil on trains. 
It could also be a cure for environmentally unfriendly flaring, a growing problem in far-flung areas where more than $1 billion of natural gas produced alongside oil is burned off each year for lack of processing plants or pipelines that can take years to build. 
Everything, they said, is years away, in this business.  Mentor, MN, is about 45 miles southeast of Grand Forks, and is on the main BNSF rail line across the northern tier. I don't think this has anything to do with diluent for Canadian heavy oil. Hess ships diluent from its Tioga facility directly north to Canada.

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President Obama Needs to Work on Foreign Policy, Not His Golf Game -- The LA Times
Near Total Collapse of America's Foreign Policy -- Their Words, Not Mine

An LA Times op-ed:
Nero fiddled while Rome burned. On Saturday, President Obama played golf while his foreign policy, and that of the nation he leads, was going up in smoke.
Literally.
Saturday was the day the State Department ordered the evacuation of the U.S. Embassy in Libya. Only three years ago, Obama helped NATO allies overthrow Moammar Kadafi as part of his “lead from behind” doctrine, but he has done little to help the resulting democratic government secure its authority.
Not only did the U.S. not support sending international peacekeepers, it didn't mount a serious program to train a new Libyan army. The predictable result has been utter chaos. In September 2012, U.S. Ambassador J. Christopher Stevens and three other Americans were killed in Benghazi. In recent days, much of Tripoli's main airport has been destroyed in militia fighting. The embassy staff had to be evacuated overland as thick black smoke from the fighting hung over the Tripoli skyline.
In any other circumstances — and especially if the chief executive were a Republican — this would have been a scandal blared across the media. But at a time when we are witnessing the near-total collapse of American foreign policy, it barely registers.
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Another Fine Observation

On July 24, 2014, I wrote:
The next big thing: mobile payments -- and it will be head-to-head, Apple vs Facebook. Apple has the eco-niche: hardware, integrated operating system, a cult-following, a handshake with IBM. But the killer technology Apple has: iBeacon. One won't even have to take one's credit card out or mobile device out to pay for one's purchase. iBeacon's range is measured in meters, and is scalable/flexible/personal. Apple doesn't talk much about iBeacon; it's just there. iBeacon even has its own wiki entry. I talk about "the next big thing" here.   
It took them a bit longer, but Yahoo!Finance noticed the same thing and posted a great story yesterday:
The expected iPhone 6 and iWatch may not be the only big things down the pike for Apple.
The tech giant is reportedly looking at getting into the mobile payment business. According to published reports, Apple is said to be in talks with credit card companies to create a service that would allow users to pay for items with the iPhones acting as credit cards.
But other than that little snippet, it's actually a pretty superficial article. I did not watch the video.

Wednesday: Weekly Petroleum Report Due Shortly -- July 30, 2014; Is This Correct? GDP Surges To 4%? Jobs Numbers Disappointing

GDP: is this correct? Surging to 4.0%. Whatever it is, it will be revised next month, but if this 4% is accurate, it's incredible.

The economy in 1Q14 collapsed (their word, not mine), with GDP collapsing somewhere between 2.1% and 3% -- the numbers vary depending which one you believe. From that post:
And then this, from the CNN business analyst: "don't freak out about a minus 3% GDP (rounded)." The CNN business analyst's summary:
The same old story remains: "This recovery is underway, but it's choppy and still very slow."
But here we are, one quarter later and surging to 4%. A lot of oil is going to be needed to sustain that growth.

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Active rigs:


7/30/201407/30/201307/30/201207/30/201107/30/2010
Active Rigs192181206183143


RBN Energy: takeaway capacity and disappointing "basis" for natural gas in the Marcellus.

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Bloomberg On The Economy (Today)

Bloomberg is reporting:
U.S. stocks rallied and the dollar strengthened to a four-month high as data showed faster-than-expected economic growth and better earnings from Twitter Inc. to Amgen Inc. Treasuries fell, while commodities rose.
The Standard & Poor’s 500 Index climbed 0.3 percent to 1,976.85 at 9:32 a.m. in New York, with Twitter shares surging 23 percent
Oil and copper rallied more than 0.3 percent. Russian stocks and the ruble advanced as some investors saw U.S. and European Union sanctions as milder than anticipated.
Gross domestic product rose at a 4 percent annualized rate after shrinking 2.1 percent from January through March, Commerce Department figures showed.
“If we look at the data around the earnings season, we think it’s very robust. It’s a very favorable environment for stocks.” 
The big story here: that wasn't even a headline, that 2Q14 GDP surged to 4%. The big story was Twitter.

Twitter? Really?

UC Irvine? Really?

LA Trade Tech School? Really?

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Hey, what were the results of the poll regarding the 2Q14 GDP?
  • 2.0% or less: 45%
  • 2.1% to 2.5% (inclusive): 31%
  • 2.6% to 2.9% (inclusive): 10%
  • 3.0%: 7%
  • 3.1% or greater: 7%
I had guess about 2.9%. Way off. We'll see what the revision shows next month.

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Reuters Take On The Economy

Reuters is reporting:
U.S. economic growth accelerated more than expected in the second quarter and the decline in output in the prior period was less steep than previously reported, bolstering views for a stronger performance in the last six months of the year.

Gross domestic product expanded at a 4.0 percent annual rate as activity picked up broadly after shrinking at a revised 2.1 percent pace in the first quarter, the Commerce Department said on Wednesday.
That pushed GDP above the economy's potential growth trend, which analysts put somewhere between a 2 percent and 2.5 percent pace. Economists had forecast the economy growing at a 3.0 percent rate in the second quarter after a previously reported 2.9 percent contraction.
A separate report showing private employers added 218,000 jobs to their payrolls last month, a decline from June's hefty gain of 281,000, did little to change perceptions the economy was strengthening.

A View Of The Bakken From Across The Ocean, And Across The US -- July 29, 2014

The link is at The (London) Guardian. I believe long captions to each of the photographs IS the story.  I don't think any of the photographs are dated. I believe all the photographs have been previously published and most of them, if not all of them, are quite dated.

Having said that, the photographs of "humanity" are absolutely outstanding and the photographer Valery Lyman deserves a huge note of appreciation for sharing. Compare and contrast these photographs with those coming out of the Ukraine, Syria, Detroit, Chicago, the US-Mexico border, and Los Angeles (just for starters). Also, note the ages of most of the folks in the photographs; note their expressions. Note the ethnicity of those photographed. Note: Amtrak. Note no signs of winter. Many of the people in the photographs will simply pass through Williston, just one stop among many in their lives; others will end up staying. Some will become fabulously rich; some will end up homeless, broken physically and mentally. But all will have a story to tell.

It is well worth your time to spend some time getting to know Valery Lyman. Some links:
Much, much more.

In one of Valery's articles she mentioned the dangerous life of the "roughneck."

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The Rapid City Journal recently had an excellent article on roughnecks in the Bakken. The headline: roughneck oil workers are the princes of the fields. 
After a week spent back home in Hot Springs, Kenneth Kiser packed his pickup with groceries, kissed his wife, Sarah, and baby daughter Klayton, and headed seven hours north to Williston, where he'll spend the next three weeks at work on the front lines of America's latest gold rush.
Around the same time, Jo Ji John waved goodbye to his family in Sacramento, Calif., and headed off on a 20-hour drive back to the Bakken. Last year, John was away from his family for 315 out of 365 days.
Both men have worked the Bakken oil fields for three years, where staying busy helps keep their minds off the significant time they spend away from family.
But while on the job, Kiser and John are members of an elite fraternity of skilled workers in the oil fields: they are "roughnecks."
“Roughneck” is a term of endearment worn exclusively by those who work directly on or in an oil rig, very close to the action. Kiser’s forte is the drilling side of roughnecking — making the hole, so to speak. John’s specialty is lining the hole with its final pipe in a process called casing.
And that's just the beginning of a great article. Strong recommendation to read.

Tuesday, July 29, 2014

Random Update Of Some CLR/Oakdale Wells -- July 29, 2014

Updates

December 30, 2017: a reader made this comment at another post regarding the Whitman wells -
Speaking of CLR, remember the Whitman wells in Oakdale field?
2-34H has produced 1.59 million barrels of oil since Sept 2011.
Drilling on 3-34H was stopped due to unsafe pressures and drilling conditions. It has finally been drilled to depth and completed. 61 stages, 14.5 million lbs proppant, 234 thousand barrels fluid. Production to date not impressive. At least not yet. 12,150 BBLS Oil in 21 days. 
Original Post
 
A reader happened to mention that he was not impressed with the Whitman wells and wondered why I didn't post the results of "all" the Whitman wells. I have posted the results of "all" the Whitman wells that have come off confidential list, but that's another story.

What piqued my interest was to hear that the Whitman wells did not impress him/her. So I went back and updated the wells in the general area of the Whitman wells when they were first making news. Here is the result of the update:
  • 17061, 664, CLR/BR, Whitman 11-34H, 34-147-96, Oakdale, AL, t6/10; cum 436K 11/17;
  • 17079, 559, CLR/BR, Carson Peak 44-2H, 2-146-96, Oakdale, AL, t6/08; cum 288K 11/17;
  • 17334, 811, CLR, Morris 1-23H, 23-147-96, Oakdale, AL, t11/08; cum 270K 11/17;
  • 18275, 1,020, CLR, Hawkinson 1-22H, 22-147-96, Oakdale, t2/10; cum 701K 11/17;
  • 18858, 715, CLR, Morris 3-26H, 26-147-96, Oakdale, AL, t5/11; cum 458K 11/17;
  • 18859, 680, CLR, Carson Peak 3-35H, 26-147-96, Oakdale, AL, t5/11; cum 636K 11/17;
  • 18860, 517, CLR, Morris 2-26H, 26-147-96, Oakdale, AL, t5/11; cum 285K 11/17;
  • 18861, 759, CLR, Carson Peak 2-35H, 26-147-96, Oakdale, AL, t5/11; cum 682K 11/17;
  • 20208, 960, CLR, Hawkinson 2-27H, 34-147-96, Oakdale, t9/11; cum 443K 11/17;
  • 20210, 803, CLR, Whitman 2-34H, 34-147-96, Oakdale, 4 sections, t9/11; cum 1.1595 million bbls 11/7
  • 20211, 263, CLR, Hawkinson 3-27H, 34-147-96, Oakdale, 4 sections, t9/11; cum 385K 11/17;
  • 20212, 482, CLR, Whitman 3-34H, 34-147-96, Oakdale, F, t9/11; cum 135K 11/17;(see comment above)
The original post is here: http://themilliondollarway.blogspot.com/2012/09/this-was-sent-to-me-as-comment.html

I generally don't update data in two different locations, so I will probably use the 09/2012 post as the post that will be updated.

To find the other Whitman /Hawkinson / Morris / etc wells, simply use the blog search app to find them. If they have come off the confidential list and reported by NDIC on a daily activity report, the results are posted on the blog. Guaranteed.

For newbies, in case you missed it, one of the Whitman wells has now produced more than 1,000,000 (one million) bbls. Another is up to 600,000 bbls after just four years. In contrast, it took 30 to 40 years for wells from other formations in the Williston Basin to reach these numbers. In addition, there are a lot of DRY wells when targeting other formations in the Williston Basin. There are "no" dry wells in the Bakken (regular readers know why I put the "no" in quotations).

I didn't notice this until now; some of the highly prolific Hawkinson/Whitman wells are still flowing without a pump (AL = artificial lift/pump). Teegue pointed out long ago that some wells listed as still flowing (F) may, in fact, be on a pump; sometimes the paperwork is slow in getting to the NDIC.

It's in the eyes of the beholder whether these are good wells or not.

I hope to repeat another posting regarding this subject -- something I've blogged about before -- if the spirit moves me and I find a slow day in the Bakken. I thought today was going to be a slow day and then everything hit right at the end of the day.

Oh, I had not even noticed that. Look at the IPs when you look at the total production of these wells.

**********************************
Back-of-the-Envelope 
My use only; not for general public

What does a 500K well mean for a mineral owner?

Let's say the mineral owner has 25 acres and the spacing unit is 2560 acres, which many of these are.

Let's say the mineral owner gets 20% royalties on all produced oil (I believe royalties generally run between 1/8th and 3/8ths).

Let's say the average price of oil was $75/bbl. My readers tell me that the better operators are averaging much better than $75/bbl.

So, for 500,000 bbls:

(25/2560) * 20% * $75 * 500,000 = $73,000.

Twenty-five acres is an extremely small holding; it would not be unusual for an original landowner to have one section (640 acres):

(640/2560) * 20% * $75 * 500,000 = $1,875,000.

And this well will keep producing for 30 more years (at a significantly lesser rate).

In addition, the mineral owner would have gotten the "bonus" for leasing the mineral acres in the first place, perhaps $2,000/acre, so before they even drilled a well, the 25-acre mineral owner would get $50,000 for the lease. The one-section owner would get $1,280,000.

Disclaimer: I often make simple arithmetic errors. I used a calculator but did not triple check all results.

Getting Ready For Tomorrow -- Posted July 29, 2014

Will GM need another bailout? Reuters is reporting:
General Motors  was hit Tuesday with a lawsuit brought on behalf of more than 650 people allegedly injured or killed in accidents involving cars that have been recalled this year for faulty ignition switches.
The lawsuit was filed in Manhattan federal court, where dozens of cases against GM over the switch recall have been consolidated. It names a total of 658 plaintiffs, including 29 who are bringing claims on behalf of people who died.
Since the beginning of the year, GM has recalled nearly 15 million vehicles worldwide over potentially defective ignition switches. The company has set up a program, run by lawyer Kenneth Feinberg, to compensate victims of crashes involving about 2.6 million of those cars, mostly Cobalts, Ions and other small cars that it linked to 54 crashes and 13 deaths.
Futures: futures mean "squat," of course, but it's always interesting to see where they stand. The "mini" Dow futures are up 23 points; and, WTI crude oil has stopped its free fall, rising slightly to just above $101. For mineral owners, the higher the price the better (in general), for investors, not necessarily so. One wants the price of oil to be in the sweet spot, near the bottom of the hedge/collar.

The Wall Street Journal

President Obama makes another speech. Headline story.

EU, US expand sanctions on Russia.

Twitter silences naysayers as users surge.

Consumer confidence rises.

Watch for tomorrow's GDP report.

Now that GOP leader Boehner said no more talk of impeachment, President Obama considers fewer deportations.

Highway bill a mess.

The road to New England (and the autobahn to Germany): President Barack Obama's proposed carbon-emissions rule for the nation's power plants will create new cost and reliabiltiy challenges for the US electricity system, according to federal energy regulators.
Now to worry: presidents come and go. Less than 910 days.

Top doc treating Ebola dies. Tragic loss.

Palestine without power after Israel strikes power plant; no one except the press notices.

HUGE STORY: IRS blesses telecom's REIT turn.

President Obama, Nobel Peace Prize winner, is sending more Hellfire missiles to Iraq.

The road to New England / the autobahn to Germany: German lighting manufacturer Osram licht plans to shed roughtly 7,800 jobs at home and abroad to save costs.

Amgen plans to cut workforce by 12% to 15% -- didn't we just see a survey that said American consumer confidence rises. Maybe not so fast.

China's stocks are soaring as investors scoop up investments in one of the world's cheapest markets.

The Los Angeles Journal

Out here in Los Angeles, homeowners are allowed to water their lawns for 8 minutes three nights a week. Golf courses have no restrictions except to water only at night, but unlimited amount of watering. And then a 1921-era water main breaks in west Los Angeles (Hollywood) and spilling more than 5 million gallons/hour. When I last checked, more than 10 million gallons of water had flooded the streets, UCLA's Pauley Pavilion, and nearby schools. Google LA flood for more.

Reporting Tomorrow
 Although some of may have changed their report dates.

Murphy Oil (MUR)
Phillips 66 (PSX)
Questar (STR)
Southern Company (SO)
Sprint (S)
Tenaris (TEN.MI)
Valero (VLO)
Whiting (WLL)
Williams Cos (WMB)

Five-Year-Production-By-Well; Rambling, Random Update Of The Very First 24 Wells That I Reported On, Coming Off The Confidential List -- July 29, 2014

The First 24 -- 1H2010

Since January 25, 2010, I have recorded every well that has been reported in North Dakota. The list starts here (1H10) (click on "the list starts here").

For the past couple of days, I've been updating the very first wells, the wells that were reported in 2010, which correctly or incorrectly I list as 1H10 (which is linked above).

It takes a lot of time to do this manually, but I do it because it gives me a "feel" for the Bakken. I haven't completely finished the list but I've done a lot of it, updating the total amount produced by each well as of 4/14 or 5/15, which at the time of updating was the most recent data available from the NDIC.

If one scrolls through the list, it is incredibly interesting all the things one can note. Randomly, in no particular order or importance attached to any of the data points. These are some things that jump out at me:

1. How incredibly young the Bakken boom is. These wells were all tested (which means they were spud not too much earlier -- 6 months or so) in 2009 or 2010.

2. How incredibly few permits, once issued, were cancelled.

3. How few -- as in almost "none" -- wells were DRY. As I said from the beginning: there are "no" dry Bakken wells.

4. The incredible difference in production among Bakken wells compared to Spearfish wells, compared to Madison wells, compared to wells from other formations.

5. They may not be dry, but are they economical. I've discussed that before also. Even low-producing wells serve a purpose, and in the "old" days any producer "held a lease by production." Not how few -- none -- of the wells are abandoned or plugged. They are all active. 

6. Many of the early wells were short laterals; now the standard is long laterals, twice as long. I don't necessarily buy into it, but some folks suggest that a horizontal well twice as long will produce twice as much oil as a horizontal half the length, all things being equal. Again, these are mostly short lateral wells. I think most of these wells, based on the operator (except for EOG) were long laterals.

7. These wells were drilled when time was of the essence, to save the leases before they expired.

8. The technology back in 2009 and 2010 was definitely much different than the technology in 2014. Regular readers know how much better the technology has become. In the beginning of the boom, we talked about one-stage fracks. Then 8 stages; then 12 stages; now up to 24, and 36, and 60 stages.

9. The decline rates are atrocious, but they are improving over time, as the technology gets better.

10. When these wells were being drilled, the companies were barely into delineating the Bakken. To some extent, these were all "wildcats," although not in the strict definition, but operators were still sorting things out.

11. I have data that goes all the way back to 2006 but that data is on Excel spreadsheets and not posted on the blog; maybe someday I will update data from the beginning of the boom, but manually it takes a long, long time.

12. I don't think it's a stretch to say that every one of these wells might have had three times the production by now had they all been long laterals (and maybe they all were long laterals; I haven't checked); and using all the new technology and better completion methods.

So, scroll through the wells at the link (1H10, above) to get a feeling of what went on back then and the total production to date.

Here are the very first wells I ever recorded at the blog as they were being reported. The names of the wells do not matter. The third column is the oil field; the fourth column is month/year when the well was tested; the fifth column was the month/year when I updated total production; the last column, in 1000's of bbls, is total production to date (fifth column).

These happen to be all Bakken wells. By this point in the Bakken boom, they were not drilling much else. But look at those cumulative production numbers (last column). 


18369 BEXP Rosebud 1/10 5/14 187
18324 BEXP Painted Woods 1/10 5/14 213
18232 Hunt Ross 1/10 4/14 337
18014 Zavanna Stony Creek 1/10 4/14 145
18082 WLL Alger 7/9 4/14 110
17996 EOG Burke 7/9 5/14 20
17972 EOG Parshall 8/9 5/14 297
17933 EOG Parshall 8/9 4/14 250
17828 EOG Parshall 8/9 4/14 132
17727 EOG Sanish 8/9 4/14 149
17984 OXY USA Simon Butte 8/9 4/14 56
18188 Slawson Van Hook 9/9 4/14 222
18153 MRO Big Bend 9/9 4/14 290
18298 Whiting Sanish 10/9 4/14 565
17080 Whiting Sanish 10/9 4/14 369
18209 Murex Sanish 11/9 4/14 443
18233 Whiting Sanish 11/9 4/14 216
17881 Tracker Little Knife 12/9 5/14 189
18214 EOG Ross 12/9 4/14 175
18301 EOG Parshall 12/9 4/14 108
18262 Hess Manitou 12/9 4/14 213
18238 Murex Sanish 12/9 5/14 377
18213 Whiting Sanish 12/9 4/14 446


I consider, right or wrong, that the wells paid for themselves when they hit 100K bbls total production.

You know, seriously, take a look at those wells. They were not cherry-picked. They were the first 23 or 24 wells that were reported at that time (some were reported by the operator and are "out of order" -- in other words, the sequence will not agree with NDIC's database).

But there is nothing cherry-picked; just as I got them and recorded them.

Look at those total production numbers. Remember, the consensus is that Bakken wells will go on producing for 39 years. The oldest well in that list (07/2009) is less than five years old.

A long, long time ago I talked about initial production (the first year or so) and the EURs. I will talk about that in a later post.

But again, these are the very first wells I ever posted as they came off the confidential list back in 2010. Now that the Bakken boom is seven years old in North Dakota, we can start looking at total production and EURs.

Over time, I will continue to post updates, the next 24, the next 24 after that, etc.

*******************************
The First 30 Permits -- 2006

Now compare the wells above with the first 30 permits in 2006. (Remember: the Bakken boom began in 2007 in North Dakota):


16054 XTO/Headington St Demetrius 10/6 5/14 32
16055 XTO/Headington Capa 9/6 5/14 246
16056 Whiting PNC Duperow


16057 Whiting
Red River 4/7 5/14 7
16058 CLR
Tyler 7/6 5/14 23
16059 Petro-Hunt Charlson 10/6 5/14 1444
16060 Whiting PNC Red River


16061 Berenergy
Madison 3/6 5/14 69
16062 Sinclair TA Red River 2/7 5/14 0.9
16063 Whiting
Birdbear 5/6 5/14 117
16064 CLR
Red River 8/10 5/14 42
16065 Onxy Oil Dry Madison


16066 Ballantyne Dry Madison


16067 Petro Harvester Madison 8/8 5/14 60
16068 Whiting Sanish 5/6 5/14 169
16069 Zenergy Dry Madison


16070 Oasis
Madison 4/6 5/14 57
16071 Armstrong
Duperow 1/6 5/14 93
16072 CLR
Midale/Nesson 3/6 5/14 85
16073 Kaiser-Francis PNC Duperow


16074 Jed Oil PNC Juno


16075 XTO
Bullsnake 6/6 5/14 62
16076 XTO
Mondak 6/6 5/14 66
16077 Slawson Loc Madison


16078 Kaiser-Francis
Duperow 5/6 5/14 28
16079 Kaiser-Francis PNC Duperow


16080 Hess
Beaver Lodge 6/6 5/14 28
16081 Whiting PNC Sanish


16082 Petro Harvester  Madison 2/6 5/14 166
16083 Hess
Capa 2/7 5/14 198

Comments:

Of the 30 wells listed above, 20 were non-Bakken wells.

Note how many non-Bakken wells were dry. There are "no" dry wells in the Bakken.

Note how poor most of  the non-Bakken wells turned out to be.

Note the Charlson Bakken well that has produced almost 1.5 million bbls of oil to date. 

*********************************
The First 30 Permits -- 2007

The North Dakota Bakken boom began in 2007. These are the first 30 permits (but again, not all drilled/completed in this order):

Whiting TAO Madison 6/7 5/14 0.1
Eagle
Madison 3/7 5/14 118
CLR
Red River 6/7 5/14 82
CLR
Chimney Butte 6/7 5/14 123
CLR
Corral Creek 4/7 5/14 277
Fidelity IA Pierre 8/7
0
Fidelity NG Pierre 8/7 5/14 0
Fidelity NG Pierre 8/7 5/14 0
Fidelity NG Pierre 8/7 5/14 0
Fidelity NG Pierre 8/7 5/14 0
CLR
Red River 4/7 5/14 84
CLR
Red River 6/1 5/14 118
Whiting Dry Red River


Panamerican Madison 4/7 5/14 28
PDC EXP Madison


OXY/Ansbro Willmen 5/7 5/14 48
OXY/Ansbro Madison 6/7 5/14 38
Hess
Red River 10/7 5/14 2
Whiting PNC Madison


Upton PNC Tyler


Upton TA Tyler

0.3
CLR
Red River 7/7 5/14 185
CLR
Red River 7/7 5/14 222
CLR IA Red River 8/7 5/14 386
Zenergy PNC Madison


BR
Blue Buttes 6/7 5/14 180
EOG
Parshall 7/7 5/14 445
CLR
Red River 6/7 5/14 318
EOG
Parshall 5/8 5/14 366
Nance Dry Madison




Comments:

1. 24 of the 30 were non-Bakken wells.
2. The Red River has some incredibly good wells, and they are much less expensive to drill.
3. EOG is starting to hit on some huge Bakken wells.

*********************************
The First 30 Permits -- 2008

 
17000 CLR
Red River 12/9 5/14 254
17001 CLR
Red River 11/8 5/14 85
17002 CLR
Red River 12/8 5/14 34
17003 Kodiak
Twin Buttes 12/9 5/14 20
17004 CLR
Red River 6/8 5/14 94
17005 EOG
Parshall 7/8 5/14 369
17006 Samson PNC Baukol N


17007 Hess
Ross 5/8 5/14 130
17008 Marathon
Sanish 8/8 5/14 40
17009 Peak
McGregory Buttes 6/8 5/14 163
17010 Hess
Ross 5/8 5/14 132
17011 EOG
Parshall 8/8 5/14 415
17012 Hunt
Parshall 6/8 5/14 286
17013 Prima IA Midale/Nesson 7/8 47
17014 Hess TA/ND Wildcat


17015 XTO IA Manitou 7/8

17016 Armstrong Dry Madison


17017 XTO
Manitou 5/8 5/14 25
17018 Brigham
Alger 6/8 5/14 92
17019 EOG
Parshall 6/9 5/14 410
17020 Hess
Hawkeye 5/8 5/14 315
17021 Tracker
Murphy Creek 6/8 5/14 128
17022 Murex
Sanish 5/8 5/14 247
17023 Whiting
Sanish 5/8 5/14 683
17024 Peak
Mandaree 5/8 5/14 155
17025 PDC PNC Madison


17026 EOG
Parshall 10/9 5/14 50
17027 EOG PNC Wildcat


17028 EOG
Parshall 10/8 5/14 499


Comments:
1. We are now well into the Bakken boom which is just beginning.
2. Even so, 7 of 30 wells were non-Bakken wells.
3. Several of the Bakken wells have done very, very well (286K, 315K, 410K, 415K, 683K).
4. These wells are about 6 years old (as of 7/14).
5. Note again: almost every early Bakken well is still active; if nothing else, even these poorly performing wells hold the lease by production. I am told the rule of thumb in the Bakken is about $20,000/acre lease. If the company holds the lease, they are saving a ton of money.

*********************************
The First 30 Permits -- 2009


17946 Newfield
Fertile Valley 9/9 5/14 34
17947 Timberline Dry Madison


17948 Encore PNC Birdbear


17949 EOG
Stanley 7/9 5/14 51
17950 EOG
Alger 7/9 5/14 111
17951 EOG
Parshall 6/10 5/14 50
17952 SM Energy Siverston 6/9 5/14 149
17953 XTO/Encore Killdeer 4/10 5/14 265
17954 Hess
Manitou 7/9 5/14 84
17955 CLR PNC Wildcat


17956 Hess
Big Butte 8/9 5/14 169
17957 PDC EXP Madison


17958 PDC EXP Wildcat


17959 PDC
Lostwood 7/10 5/14 26
17960 Williston Hunter/Eagle WI Madison


17961 OXY/Anschutz Simon Butte 2/10 5/14 100
17962 Hess
Ross 6/9 5/14 126
17963 Hess
Manitou 5/9 5/14 102
17964 Whiting
Sanish 6/9 5/14 124
17965 CLR
Mary 6/10 5/14 92
17966 Marathon Reunion Bay 6/9 5/14 121
17967 Marathon Dry Murphy Creek

17968 Zenergy PNC Elidah


17969 Baytex (formerly Samson) PNC Ambrose


17970 BR TF Keene 4/9 5/14 146
17971 Marathon Murphy Creek 9/9 5/14 118
17972 EOG
Parshall 8/9 5/14 297
17973 BR IA Camel Butte 11/9 5/14 160
17974 BR TF Keene 6/9 5/14 393
17975 Zenergy
Eagle Nest 7/9 5/14 77

Comments:
1. Although they have been drilling the Bakken for about two years, there is no dramatic change yet.
2. Even so, 4 of 30 wells were non-Bakken wells.
3. Only a couple of the wells are interesting; it shows the tenacity of the operators to keep spending huge amounts of money to figure out the Bakken.
4. These wells are still about 6 years old (as of 7/14).
5. We now see an occasional Three Forks well; surprisingly there was a dry Bakken well.
6. Note again: almost every early Bakken well is still active; if nothing else, even these poorly performing wells hold the lease by production. I am told the rule of thumb in the Bakken is about $20,000/acre lease. If the company holds the lease, they are saving a ton of money.

*********************************
The First 30 Permits -- 2010

18571 EOG
Clear Water 8/10 4/15 82
18572 Tracker PNC Little Knife


18573 XTO
Midway 7/10 4/15 115
18574 Slawson
Big Bend 12/10 4/15 172
18575 Slawson
Big Bend 6/11 4/15 298
18576 BR/Tracker Little Knife 2/11 4/15 139
18577 Hunt
Ross 8/10 4/15 253
18578 Eagle
Madison 7/10 4/15 32
18579 SM Energy Bear Den 12/10 4/15 363
18580 SM Energy Dimmick 5/10 4/15 89
18581 Newfield
East Fork 4/11 4/15 75
18582 BR Conf Corral Creek


18583 XTO EXP Corral Creek


18584 CLR
Wildcat 7/10 4/15 90
18585 EOG
Ross 10/10 4/15 69
18586 CLR
Dolphin  7/10 4/15 134
18587 BEXP
Briar Creek 7/10 4/15 169
18588 Marathon
Bailey 6/10 5/14 111
18589 Slawson
Big Bend 5/10 5/14 407
18590 Slawson IA Big Bend 8/10 5/14 236
18591 Marathon
Murphy Creek 7/10 5/14 105
18592 EOG PNC Clear Water


18593 Oasis
Cottonwood 6/12 5/14 119
18594 EOG
Squaw Creek 9/10 5/14 128
18595 Slawson
Van Hook 7/10 5/14 318
18596 EOG PNC Clear Water


18597 EOG PNC Clear Water


18598 CLR
Hamlet 4/10 5/14 97
18599 Anschutz
Crooked Creek 1/11 5/14 105
18600 Cirque EXP Dimond



Comments:
1. Although they have been drilling the Bakken for about three years, there is no dramatic change yet.
2. However, now operators are drilling the Bakken almost exclusively; one one of the first 30 permits in 2010 was for a non-Bakken well.
3. Like 2009, only a couple of the wells are interesting, and then just barely; it shows the tenacity of the operators to keep spending huge amounts of money to figure out the Bakken.
4. These wells are still about 5 years old (as of 7/14).
5. The operators must be watching their permitted locations more closely; several Bakken permits were canceled.
6. Note again: every drilled Bakken well is still active. If nothing else, these performing wells hold the lease by production. I am told the rule of thumb in the Bakken is about $20,000/acre lease. If the company holds the lease, they are saving a ton of money.

*********************************
The First 30 Permits -- 2011


20247 Newfield PNC Fertile Valley

20248 Murex
West Bank 10/11 5/14 87
20249 Murex Madison Madison 8/11 5/14 7
20250 XTO
West Capa 3/13 5/14 127
20251 CLR/Samson Resources Kinberly 12/11 5/14 67
20252 HRC/Petro-Hunt Eagle Nest 6/12 5/14 80
20253 Petro-Hunt Eagle Nest 6/12 5/14 243
20254 EOG
Parshall 12/11 5/14 215
20255 EOG
Parshall 4/12 5/14 221
20256 CLR
Little Knife 7/11 5/14 135
20257 KOG
Mandaree 4/14 5/14 35
20258 KOG
Mandaree 4/14 5/14 39
20259 KOG
Mandaree 4/14 5/14 16
20260 EOG
Ross 1/12 5/14 295
20261 CLR
Little Knife 8/11 5/14 60
20262 Hunt
Parshall 7/11 5/14 131
20263 Newfield Fertile Valley 9/11 5/14 68
20264 Newfield PNC Bar Butte


20265 CLR
Jim Creek 9/11 5/14 78
20266 SM
Banks 3/12 5/14 82
20267 Slawson Van Hook 9/11 5/14 279
20268 Prima
Rennie Lake 11/11 5/14 44
20269 Petro-Hunt Four Bears 6/11 5/14 241
20270 Petro-Hunt Pronghorn 8/11 5/14 118
20271 QEP
DWCB 12/11 5/14 130
20272 Hess/Tracker Truax 10/11 5/14 166
20273 XTO
Heart Butte 9/12 5/14 153
20274 MRO
DWCB 11/11 5/14 191
20275 Oasis
Wildcat 7/11 5/14 186
20276 Enduro/Sequel Flat Top Butte 4/12 5/14 29

Comments:
1. Although they have been drilling the Bakken for about four years now, maybe, just maybe we are starting to see a trend: consistently good wells, in the 150K - 200K range after three to four years of production. .
2. Operators are drilling the Bakken almost exclusively; one one of the first 30 permits in 2011 was for a non-Bakken well.
3. Be very careful in looking at the total production; this is the first year in which there is a wide disparity when the wells were completed/tested. Two of the wells were completed just a month ago (4/14).
5. DWCB: Deep Water Creek Bay.
6. Note again: every drilled Bakken well is still active. If nothing else, these performing wells hold the lease by production. I am told the rule of thumb in the Bakken is about $20,000/acre lease. If the company holds the lease, they are saving a ton of money.

Wells with permits issued in 2012 are too new to be added to this group yet.