Saturday, August 30, 2014

Labor Day Weekend, 2014; Return Trip To Grapevine; Not Much About The Bakken

On the road; won't be posting as often, consistently for next few days.

Mama's Broken Heart, Miranda Lambert

I just saw the closing price for Friday, August 29, 2014, for CLR.

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

What else?

North Dakota awash in oil royalties -- collecting way more than forecastThe Dickinson Press is reporting:
North Dakota is poised to collect nearly $9.8 billion in oil tax revenue during the next two years and $2.2 billion more than previously forecast for 2013-15, according to a new outlook released Friday that had elected leaders calling for additional tax relief, greater funding for western counties and more accurate forecasts.
The preliminary forecast from the state Office of Management and Budget assumes that oil production will grow to 1.3 million barrels per day by the end of the current biennium on June 30, 2015, and to 1.4 million barrels per day by the end of the 2015-2017 budget cycle, OMB Director Pam Sharp said.
Gov. Jack Dalrymple noted that the revised projection for 2013-15 shows general fund revenues of $4.88 billion, or about $285 million more than the legislative forecast prepared in February 2013.
The general fund, which covers the general operations of state government, is projected to end the biennium with a balance of $614 million – eight times higher than the $80 million projected in the legislative forecast and $157 million more than an update Sharp presented to state lawmakers in March.
North Platte, NE: I see the local newspaper has this headline: "Russia Outright Lied -- Obama." The story has to do with the Ukraine. "Outright lied." Sort of like ObamaCare -- "If you like your health plan, you can keep your health plan."

Global Warming

Speaking of outright lies (their words, not mine):
Can't make this stuff up. And there's more (must have been a slow news cycle this labor day weekend):

Europe at a tipping point: note the many interesting data points in this article, as reported by Bloomberg:
  • in Europe, it was the coolest August since 2006
  • inventories of heating oil in private homes in Germany at their highest since 2011
  • Germany's solar output is forecast to peak at 20 gigawatts on September 5, 2014 (the record was 24.2 gigawatts on June 6) [Germany and the EU count wood-fired plants as renewable energy; considered "carbon-neutral" -- really?]
So, how fast have global temperatures risen? From the "leaked" UN paper? 0.85 of a degree since 1880. Again, not even a full degree in 135 years. I'm impressed how accurate the "science" of global warming was in 1880. The rise in sea level since that time was measured in millimeters.

From the land of fruits and nuts. California's state Assembly passed a bill requiring railroads transporting Bakken and Canadian oil to inform the state of such movements; meanwhile the same state Assembly rejected a bill to require background check on ammunition buyers. So, apparently nine-year old girls can buy ammunition for their Uzis without a background check. Or at least their parents can.


Russia is one of Germany's major trading partners. I can't imagine Germany being eager to cooperate much with President Obama's call for more sanctions on Russia
... coincide with figures showing annual inflation slowed to 0.3 percent in the euro zone this month. That was the weakest rate of growth since October 2009 and marks 11 consecutive months of prices growing by less than 1 percent.
The deflationary danger policy makers have been denying for months may be upon them.
This adds to the gloomy outlook in Europe. One-, two- and three-year yields are negative in Germany, meaning investors are paying for the privilege of the perceived safety of German debt. A critical money-market rate, the Effective Overnight Index Average -- Eonia for short -- dropped below zero for the first time yesterday, reaching -0.004 percent.

I see the Islamist State has taken a US Embassy residential compound in Libya (news report August 31, 2014). Of course it's not THE "Islamist State of Iraq and Syria (ISIS)." But ISIL's self-proclaimed status as a caliphate it claims religious authority over all Muslims across the world. Whatever. Wasn't it just this past Thursday the president said he would protect US embassies and consulates? No more Bengahzis. Yes, I know, US citizens left the Libyan embassy a month ago or so. A hasty retreat.

Note to the Granddaughters

I stayed overnight with friends in Bowman. Departed about 10:30 a.m. Saturday morning; now in Sturgis. Looks like a mini-motorcycle rally; weather is perfect.

Short stop in Sturgis. 2:03 p.m. Saturday.


Chadron, NE: short stop at 4:45 p.m. Incredibly beautiful countryside; lots of water in the creeks, rivers. Lots of cattle.


North Platte, NE: short stop at 9:25 p.m. Again, a great drive, beautiful countryside, but now, we begin the drive at night. End of scenery.


Salina, KS: short stop at 7:25 a.m. Sunday. Slept west of Hays, KS, during the night. Good rest. Big electrical storm during the night; lots of rain.


Travel center south of Wichita, KS,  9:44 a.m. Sunday. I always stop here. McDonald's has one outlet, wi-fi.


Arrived home safely, about 4:00 p.m. I still enjoy driving through Oklahoma City; I don't know why. I've never stopped in Oklahoma City but there's something about the freeways and the flow of the traffic that make it quite enjoyable. It also means I'm almost home (when returning) and it's the first big city I see when I am heading north. Maybe that has something to do with it.

Friday, August 29, 2014

A Most Haunting Graphic -- August 29, 2014

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.

Yahoo!Finance graph only goes back to 1985, but the line was fairly flat and unchanging for the previous decades also. The challenge: coming up with an explanation for the dramatic "change" -- marked by the red line, from 1993 to 2001:

Random Update On WTI Futures

This past week, very quietly, it appears WTI hit bottom and turned. It's up almost another dollar today, coming off its lows of $93 earlier this week to solidly above $95 at the moment.  Operators who had contracts for $100 oil this past week did very, very well.

Whiting surges. EPD continues its move. CLR is up over 1%. The EPD, CLR stories are interesting. I'm not sure what to make of WLL. Are KOG investors moving to WLL? KOG continues to report great wells. 

Week 35: August 24, 2014 -- August 30, 2014

I'm doing this early because I will be traveling later today/tomorrow, and don't when/if I get to the internet.

Shale operators have positive cash flow; first time since 2008 
Halcon with two "high-IP" wells
Statoil cutting back
Ron Burgundy no longer confidential
September NDIC hearing agenda released

Bakken costs
Transportation costs for fracking sand from Wisconsin

Natural gas
Possibility of mega-natural gas power plant in Emmons County

New CBR terminal proposed; Plaza, ND (near Parshall)
NYT fails to mention the Keystone XL

Wind Ridge Pipeline, one of the largest in decades

Bakken economy
Map of Watford City development, one subdivision
Man-camps going upscale
Port of Vancouver inks deal with North Dakota
Update of new underpass in Williston
Update on Harvest Hills, The Ridge, northeast of Williston

For investors
CLR, EPD to splits shares 2:1

Update On Wind Ridge Pipeline, One Of The Largest Gas Pipelines To Be Built In North Dakota In Ten Years -- August 29, 2014


April 11, 2016: update on this pipeline -- the application for this project has been withdrawn
The application for regulatory approval by the Federal Energy Regulatory Commission for the planned Wind Ridge Pipeline to carry natural gas to near Spiritwood has been withdrawn, according to Tim Rasmussen, public relations manager for WBI Energy Transmission, owner of the project.
The planned 96-mile pipeline would have connected to the Northern Border Pipeline near Zeeland, N.D., and angled to the northeast to near Spiritwood where it was intended to provide natural gas to the planned CHS fertilizer plant. 
Original Post
The problem with blogging on the Bakken, or following the Bakken, or driving around the Bakken, everything becomes a blur. So much is happening, that unless "-est" is in the headline, the story may not catch one's attention.

Wind Ridge Pipeline is just one of a thousand examples. I assume I've come across Wind Ridge Pipeline before, but never paid any attention to it until Steven sent me the link to the story, and I happened to see a word in the lede with "-est" in it.

The Jamestown Sun is reporting:
One of the largest natural gas pipelines in North Dakota in the last decade is in the planning and permitting process, according to Tim Rasmussen, spokesman for WBI Energy, a division of MDU Resources Group.
Rasmussen said Wind Ridge Pipeline LLC will cost an estimated $120 million and will serve the proposed CHS nitrogen fertilizer plant at Spiritwood.
“Construction of the pipeline is contingent on CHS moving forward,” he said. “In order to meet their timelines we had to start the pre-filing process now.”
The pipeline will transfer natural gas from the Northern Border Pipeline near Zeeland, ND, to the CHS plant at Spiritwood for conversion into nitrogen fertilizer. The 95-mile pipeline project will cross Mcintosh, Logan, LaMoure and Stutsman counties with 16-inch pipe.
I have blogged at least twice on the Spiritwood fertilizer plant, but had missed or did not know about the "largest" pipeline that would be built to bring natural gas to the plant.

Other posts regarding the CHS plant:
As Joe Biden would say, this is "a really big freakin' deal."

By the way, going back to all those links brings us back to all those propane-shortage stories. Somehow we weathered that, also.

Meanwhile, Back At Refinery....
The Dakota Prairie Refinery southwest of Dickinson is about 80 percent complete ...

The Dickinson Press is reporting:
With an estimated 20 percent of work still to finish — “the hardest,” said project manager Jeff Rust — the $350 million refinery is on schedule to begin processing roughly 20,000 barrels of crude oil per day later this year. It will produce about 300 barrels of natural gas and 7,000 to 8,000 barrels of diesel per day, much of which will be sent to local wholesalers and sold in the community.

Twelve (12) new permits --
  • Operators: Slawson (7), CLR (4). Hunt
  • Fields: Big Bend (Mountrail), Dollar Joe  (Williams), Parshall (Mountrail)
Seven (7) producing wells completed:
  • 23256, 642, SM Energy, Arnold 16X-12H, Siverston, t4/14; cum 28K 6/14;
  • 23257, 776, SM Energy, Dorothy 16-12H, Siverston, t4/14; cum 55K 6/14;
  • 24476, 1,890, Statoil, M. Olson 20-29 6H, Painted Woods, t7/14; cum --
  • 26212, 1,967, EOG, Wayzetta 40-1424H, Parshall, 1920-acre although it's technically a long horizontal, in fact it really only drains one section (section 23), t3/14; cum 124K 6/14;
  • 26346, 2,384, Statoil, Cvancara 20-17 7H, Alger, t7/14; cum --
  • 26750, 615, SM Energy, Rick 16X-12H, Siverston, t4/14;
  • 27080, 1,070, Arsenal, Allison Ann 10-3H,

Port Of Vancouver (Washington State) Inks Deal With North Dakota Department Of Agriculture -- August 29, 2014; Man-Camps Going Up-Scale

I thought I posted this story linked at another site, but I guess I didn't. I think I wrote it up, and then decided to delete it. There were reasons for deleting it, but now a reader sends me another link on the same story, with a bit more background. The Columbian is reporting:
Aiming to boost trade between North Dakota and the Pacific Rim, the Port of Vancouver has launched a new venture of leasing rail cars to move agricultural products to the West Coast.
The port's executive director, Todd Coleman, traveled to Fargo, N.D., on Wednesday to sign a memorandum of understanding with the North Dakota Department of Agriculture to move the program forward.
Rail cars carrying steel pipe, aluminum ore and other oil-industry equipment from the port to North Dakota now often return to the port empty. Under the agreement, rail cars leased by the port will return west filled with wheat, corn, soybeans and other crops. The rail cars would then be offloaded and put into ships bound for Asia and Latin America.

About five minutes ago, I mentioned that it is literally impossible to keep up with everything going on in the Bakken. There are now weekly periodicals devoted only to the Bakken.

One digression: boy, this is amazing -- I'm blogging from a coffee shop on Main Street in Williston. I mentioned earlier that one of the biggest changes I've seen this visit has been the change in demographics in Williston since my last visit: I am seeing lots of children; young, single women; families; couples. (This would lead to another digression on how the "wild, wild West" was transformed but I can't keep getting off on tangents.) What leads me to this digression: at a nearby table are six women, mostly 25 to 30, but one 40-ish-year-old woman. The group appears to be led by a woman in her mid-20's, possibly late 20's, clearly with an MBA background. Her ethnicity is interesting: she may have a tinge of Asian. They are working some business issues; if they are in the Bakken, it must have to do with oil and gas. A huge truck is now stopped in front of the window, here on Main Street, loaded with 3-inch polyethylene tubing, no doubt for the huge infrastructure project on south Main. Two more young women, individually, have stopped by, gotten their coffee and are heading for work. I do believe there were more women visiting the coffee shop this morning than men.

But back to what I had planned to post. This is from Market Watch  -- and now another young woman enters the coffee shop -- again, this is such a change from last year -- so a national web site notes htis: "Airgas opens new location in Dickinson, North Dakota, to service Bakken shale oil region."
Airgas, Inc. one of the nation’s leading suppliers of industrial, medical, and specialty gases, and related products, today announced that it has recently opened a new location in Dickinson, North Dakota, significantly enhancing its local product and service capabilities for customers in the Bakken shale oil region. 
n addition to core industrial gases, welding-related equipment and safety supplies for in-store purchase or local delivery, customers in the region can now more easily access Airgas’ unrivaled national capabilities at a local level – from Red-D-Arc’s rental welders and power generation equipment to Airgas Specialty Gases’ complex hydrocarbon blends for BTU measurement and process stream analysis to the expertise of Airgas’ product and process specialists. Airgas On-Site Safety Services, which specializes in safety monitoring, certification, and equipment rental services at customer sites in the oilfield and construction industries, also serves customers through Airgas’ new Dickinson location. 
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. 

And now, four people in line for coffee: three women, one man. Yes, the demographics in the Bakken are changing. And they all have smiling faces. Seldom is a discouraging word heard in the Bakken.

It Never Quits

The Bismarck Tribune is reporting:
Due largely to the success of its man camps in places like North Dakota’s Bakken oil field, Reliant Asset Management was named the third fastest growing private business by Inc. Magazine.
Businesses can apply to be part of the magazine’s annual list. Those accepted to the 2014 list had the highest growth in revenue from 2010 to 2013, said Reliant co-founder Barry Roman.

Reliant is based in Arlington, Va., but has eight man camps in North Dakota, as well as camps in Alberta and Texas. Man camps now account for two-thirds of Reliant’s business nationwide and in Canada. The 1,300 beds the company has in the state account for 30 percent of its rooms.
“The crew camps as you know them have really changed in North Dakota,” Roman said. “You’re not going to see 200 to 500 guys sleeping in the same building.”
Roman said many oil related companies are not paying for living and travel expenses like they were two years ago. He said now many are compensating their workers per diem to incentivize them to move and live in North Dakota. Because of this, he said Reliant’s more cabin-like camps are becoming popular.
I noticed the same this trip. The man-camps are a'changing. Going more upscale. 

Independents Have Positive Cash Flow For First Time Since 2008. Does It Matter? August 29, 2014


Later, 8:49 a.m. CDT: from a reader -- Halcon put 18 wells online in 2nd quarter (all Fort Berthold)... all of them exceeded the 801K EUR type curve ... all of their wells now consistently IP over 2,000 with the recent wells all IP's over 2500 .... staggering....
Original Post
I don't know how closely readers follow this story, but when The Oil Drum was up and running, there were several common themes running through that site as well as across other sites as well. One of those common themes was "The Red Queen" and derivatives of "The Red Queen." One of the derivatives of this argument was that drilling the Bakken was so expensive that operators had to drill as fast as they could to maintain a cash flow to keep drilling. I always argued the "seed corn" analogy. (I always hated that phrase, "seed corn," but it certainly works in some cases, but I digress).

Now there's a report out from Reuters being reported over at Rigzone: free cash flow says little about shale.
The independent companies at the forefront of the U.S. shale boom will finally earn enough from selling oil and gas to cover their capital expenditures next year, for the first time since 2008.
Free cash flow, which measures operating cash flow minus capital spending, for the 25 leading independent oil and gas producers is expected to show a surplus of $2.4 billion in 2015, according to a consensus forecast in the Financial Times.
That compares with a shortfall of around $9 billion in 2013 and $32 billion in 2012 ("Shale oil and gas producers' finances lift growth hopes" FT, Aug 27).
During the years of negative free cash flow, independents relied on equity issues, borrowing and asset sales to sustain their drilling programmes.
That led some analysts to conclude the shale boom was unsustainable or even liken it to a Ponzi scheme, which will collapse when fresh capital inflows cease.
"It is not clear that the U.S. independents are profitable," Steven Kopits, managing director of Princeton Energy Advisers, wrote recently for Platts. "An industry can see a boom irrespective of profits or free cash flow if banks and investors are willing to underwrite the promises of future profits. The Internet bubble showed us that" ("Hamilton has it right on oil" July 30).
It's a great, great essay. But the concluding paragraph:
Positive free cash flow will make the shale industry look healthier than it has done in recent years, but in reality it says little about the long-term sustainability of the business model, any more than the losses did between 2009 and 2013. 
I agree completely. But all things being equal, I prefer "positive cash flow" over "negative cash flow" and discussions about "burn rates."

EOG In The Permian

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. 

Over at Seeking Alpha, an update on EOG's prospects in perhaps the best field in America right now, the Permian. I don't think there's anything new in this article that regular readers don't already know. One data point:
One big difference that makes the Leonard play special is its production mix. The average Leonard well produces 50% crude, 26% NGLs, and 24% dry gas. EOG's other 100% ATROR areas tend to have a much heavier crude production mix, like 92% in the core Bakken or 78% in the Eagle Ford and Codell formations, yet the Leonard is just as profitable.
On its 134,000 net acres that are capable of accessing the Wolfcamp intervals, EOG expects to make only a 70% ATROR as the production mix is 31% oil, 33% NGLs, and 36% dry gas. That is still a very strong return, but isn't quite in the triple digit sweet spot. Luckily, EOG's Permian operations could receive a major boost from more NGL export capacity.

Friday, Heading Into Labor Day -- August 29, 2014, 2Q14 GDP 4.2%;

Reposting. This is a huge story. The Bismarck Tribune is reporting:
In what would be major economic and energy development for the central region, Basin Electric Power Cooperative says it is scouting for land in Emmons County to locate a mega-scale power plant fueled by natural gas.
The Missouri River and the Northern Border Natural Gas Pipeline go through both Emmons and Morton counties and each has transmission lines to take the 600-megawatt power load.
2nd Quarter GDP revised upward: 4.2%, up from previous estimate of 4%.
Corporate profits surged last quarter while the U.S. economy posted robust growth, putting the economic expansion back on steady footing headed into its sixth year.Corporate profits surged last quarter while the U.S. economy posted robust growth, putting the economic expansion back on steady footing headed into its sixth year. Gross domestic product, the broadest measure of goods and services produced across the economy, grew at a seasonally adjusted annual rate of 4.2% in the second quarter after accounting for inflation, the Commerce Department said.
RBN Energy: the growing domestic market for LNG.
Say “LNG” and the first thing that comes to mind for most of us is the potential for liquefied natural gas exports to Asia and other overseas markets. One of the hottest LNG markets right now, though, is domestic, and involves super-cooling natural gas into LNG and using it to power drilling rigs and hydraulic fracturing pumps, as well as ships, locomotives, and long-haul trucks. A number of small liquefaction plants have been operating for years in the US – most connected to peak shaving generation facilities but projects with capacity totaling more than 2 million gallons/day are under construction or being planned.  Today we begin a new series examining the increasing use of LNG as a cheaper, cleaner alternative to diesel and shipping fuel, and the LNG production capacity being developed to keep pace with rising demand.
The fuel costs associated with oil and gas drilling and fracking operations are a big deal. On average, a drilling rig uses about 1,750 gallons/day (g/d) of diesel that costs as much as $3/gallon (off-road diesel does not incur the same federal and state taxes as on-road). The pump-related fuel costs for a typical fracking job, meanwhile, can average $125,000 or more. As we will get to, running the engines that power drilling rigs and fracking pumps on a 30/70 blend of diesel and gas from LNG can reduce fuel costs by 30% or more, and running the engines on 100% gas from LNG can save even more. The cost of fuel also is paramount in the transportation sector. A Great Lakes bulk carrier can burn 2 million gallons of marine distillate or marine residual oil (also known as bunker fuel) per year, while a diesel locomotive hauling 3,000 tons of freight 500 miles might burn 3,200 gallons of diesel. (CSX’s locomotives alone used 482 million gallons of diesel in 2013.) A long-haul 18-wheeler, meanwhile, might consume 12,000 gallons of diesel annually (and there are three million 18-wheelers in the US). All could realize substantial fuel-cost savings by switching to all gas or a blend of gas and oil-based liquid fuel.
Active rigs:

Active Rigs195183190201141

The Wall Street Journal

Top story: the president does not plan escalation against Islamic state. Apparently pretty unbothered about the whole thing. Says the US has the strongest military in the world and could wipe ISIL out if it wanted, but they would just come back. That's why I no longer spray for cockroaches; they just keep coming back. Talk about cognitive dissonance. ISIL, or somebody, abducted 43 UN peacekeepers as the insurgents (these were the guys the US was supporting) fought Syrian government forces (these were the guys the US tried to topple) in the Golan Heights area. Goland Heights, UN peacekeepers, ISIL. This can't be good news for Israel.

Ukraine says Russia has invaded. the president does not plan on any military action. Thank goodness. Can you imagine? Estonia is watching closely. Poland is watching closely. The EU is watching weather forecasts for this coming winter.

Dead? Government-bond yields touched new lows in the US and Germany, as investors piled anew into ultrasafe debt.

Blinked? The Obama administration has reached a deal with Republican Pennsylvania governor to expand the state's Medicaid program under ObamaCare.

Fracking? With groundwater levels falling across the state, theCalifornia legislature is considering regulating underground water for the first time.

Minimum wage in Mexico may be raised to $6. In 2015. Per day. Any wonder why folks stream across the border?

Dark roast? Dunkin Donuts to launch first hot dark-roast coffee. As mentioned earlier, the Burger King-Tim Horton deal had nothing to do with taxes.

I just love these 30-second analyses. The headline: yesterday the stock market fell "as renewed tension on the Russian-Ukraine border overrode any enthusiasm for upbeat economic reports." Market futures are up today; I guess traders have moved on, less than 18 hours later. By the way, I first mentioned Helmerich and Payne on June 29, 2010. At the time HP was trading for $36. I see that HP is trading for $103 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. 

The Los Angeles Times

Really? Oil, gas leasing to resume in California after reports OKs fracking. (And, yes, that's how the LA Times spells "fracking.")  This decision comes out days after the biggest earthquake in 25 years in California, in Napa where they don't frack, as far as I know.

Another line in the sand gone? The president said he would act on immigration, on his own, by the end of the summer. Today, the headline: "Obama suggests he'll need more time on immigration policy." Yes, it's only been six years. Unfortunately the talking paper on immigration policy is on top of his white paper on the Keystone XL project.

Cognitive dissonance? Does Antarctic sea ice growth negate climate change? Scientists say "no." LOL. At least they all agree now that Antarctic sea ice is growing. And all these years we were told the biggest risk of global warming was rising sea levels. I guess the Antarctic will suck up all that water. By the way, agricultural reports coming out of North Dakota, Montana suggest global warming certainly hasn't been detrimental in this area.

Enough of this. Time to move on. Good luck to all.

Thursday, August 28, 2014

Three Fund Raisers And A Wedding -- Sounds Like A Movie -- August 28, 2014

East of Williston. I don't really think this video is worth posting -- besides which, it really bounces along. But someone may be interested. This is east of Williston, about five miles east of Williston, I suppose, and one mile north of 1804. Turn the volume OFF.


Did he really say that? We have no strategy "in" Syria. -- President Obama, press conference, August 28, 2014. Then off for three fund raisers, one wedding, and at least one round of golf, this long Labor Day weekend, according to White House spokesperson. But "no strategy in Syria"? The good news: that only supports the price of oil. WTI back of $94 today.

Also during the press conference, the President noted that his administration had been aware of ISIL, the Islamic State, for at least four years. And still "no strategy in Syria." Okay. Sort of explains the dithering on the Keystone XL. If one has four years to explore options and fail to come up with a strategy for Syria over that length of time ....

When I heard that the President had no Syrian strategy, I realized that he isn't even phoning it in any more. It's all about his fund raisers and his golf games. Wow.


Hmmm.. speaking of "birthers" -- which we weren't .. now it turns out that the honorable senator from Louisiana may not even have a home in Louisiana, raising questions on her residency. The Washington Post is reporting:
In Washington, Sen. Mary Landrieu lives in a stately, $2.5 million brick manse she and her husband built on Capitol Hill.
Here in Louisiana, however, the Democrat does not have a home of her own. She is registered to vote at a large bungalow in New Orleans that her parents have lived in for many decades, according to a Washington Post review of Landrieu’s federal financial disclosures and local property and voting records.
That may be true, but if I had a dog in this fight, I would prefer Mary Landrieu to Al Sharpton any day, and it appears both have the same claim to residency in Louisiana. Not much. Whatever happened to Mayor Nagin? Oh, that's right.


Oh, this is cool. I've driven through/past Three Rivers, Texas, more times than I can count -- back when we lived in San Antonio, Texas. The New York Times is reporting:
THREE RIVERS, Tex. — Whenever overseas turmoil has pushed energy prices higher in the past, John and Beth Hughes have curbed their driving by eating at home more and shopping locally. But the current crises in Ukraine and Iraq did not stop them from making the two-hour drive to San Antonio to visit the Alamo, have a chicken fried steak lunch, and buy fish for their tank before driving home to Corpus Christi.
“We were able to take a day-cation because of the lower gas prices,” said Ms. Hughes.
The reason for the improved economics of road travel can be found 10,000 feet below the ground here, where the South Texas Eagle Ford shale is providing more than a million new barrels of oil supplies to the world market every day. United States refinery production in recent weeks reached record highs and left supply depots flush, cushioning the impact of all the instability surrounding traditional global oil fields.
So oil prices — and those at the pump — are easing.With the Labor Day weekend approaching, the national average price for a gallon of regular gasoline was $3.43 on Thursday, according to the AAA motor club, nearly a dime lower than a month ago. Energy and travel analysts project the lowest gasoline prices this holiday weekend of any Labor Day since 2010, and the highest level of motor travel since 2008.
Speaking of gasoline prices, gasoline in the heart of the Bakken, Farmers Union/Cenex, Williston, North Dakota: $4.05. Los Angeles, ARCO, $3.49. The 10% ethanol in the Farmers Union/Cenex is helping keep the price of gasoline down up here in the Bakken.


Reuters is reporting:
U.S. coal-burning power utilities are being forced to turn to barges and more expensive trucks to move coal, desperate to shore up stockpiles left dangerously low by the widespread bottlenecks on rail networks.
The shift in how coal is being delivered to some power plants from mining regions such as Illinois Basin and comes amid persistent railroad delays that began during last year's severe North American winter.
The delays have been perpetuated also by a surge in rail deliveries of crude oil and grain, leaving power producers such as FirstEnergy Corp scrambling for transport alternatives before winter sets in, potentially adding to costs.
About 40 percent of U.S. power is generated from coal-burning plants, and 75 percent of U.S. coal relies on freight railroads to get to power plants, according to Wood Mackenzie, an energy consultancy.

Back to that press conference: President Obama admits there's nothing he can do about Russia and the Ukraine (sanctions don't work). The president says he will visit Estonia to let that country know we stand "shoulder-to-shoulder" to this non-NATO country. He says Russia is violating Ukraine's sovereignty, but in the same breath, POTUS says he won't recognize state sovereignty when it comes to protecting Americans. Geese, gander, whatever.

He also says the will sign a politically-binding global warming treaty which everyone else agrees is clearly illegal. This is getting quite fun to watch. We may be watching, in prime time, a president becoming unglued. He certainly is becoming annoying. And I think if one appreciates that he has become simply that (annoying), it will be easier to ignore him. Was his hair a bit disheveled at the press conference?

Annoying is one step below "irrelevant" when it comes to politics. I think the mainstream media, for example, considered John McCain (when he was running for president), irrelevant, and Sarah Palin (before, during, and after her VP run), annoying.

This Is Getting Very, Very Interesting Very, Very Quickly -- August 28, 2014

For background to this story, see an earlier post. Today, The Bismarck Tribune is reporting:
In what would be major economic and energy development for the central region, Basin Electric Power Cooperative says it is scouting for land in Emmons County to locate a mega-scale power plant fueled by natural gas.
The cooperative will meet with the Emmons County Commission in Linton Tuesday to talk about its plans, though spokesman Curt Pearson emphasized the project is still in its infancy and no firm decisions had yet been made.
On the other hand and as a sign of its interest in going forward, the company is looking for land deals in Emmons County. The site will require about 100 acres of land that would be taken on option and then purchased if the plant goes forward.
“This is at the earliest stage, but since we have people out there talking to landowners, it is time to talk to the (Emmons) county commission,” Pearson said.
The co-op has confined its land search to Emmons County, but Morton County also has potential, Pearson said.
The Missouri River and the Northern Border Natural Gas Pipeline go through both Emmons and Morton counties and each has transmission lines to take the 600 megawatt power load.

Filloon On Diamondback; In The Bakken -- August 28, 2014

It's been a long time since we've heard from Mr Filloon. Over at SeekingAlpha, enjoy; the summary:
FANG still has significant downspacing to perform with 11 possible intervals to target horizontally. 
Production is growing fast, bolstered by acquisitions and improved well design. 
Its acreage is well-suited to pad production, as this area could have some of the tightest spacing in the country. 
The recent pullback in realized oil prices could be an issue, as expectations are for an inventory build at Cushing.
 The lede:
FANG continues to be a top operator in the Midland Basin with very good production rates.  The Permian operators have been very successful in 2013 and 2014. Midland has outperformed other US plays and the west Permian players. There has been a recent pullback affecting the Permian, Bakken, Eagle Ford, etc. We believe this has provided an opportunity, especially in the Midland Basin. We continue to like the northern Midland Basin players including Diamondback, Athlon, RSP Permian, and Parsley. 
These names have outperformed the southern operators like Approach and Laredo. Well results in the northern part of the basin have been significantly better, and the reason these names have seen a much higher stock appreciation. We continue to believe that operators in stacked plays will outperform in 2015. 
These provide an interesting situation for investors, as current intervals are downspaced, while others are tested. There could be significant upside, as acreage values will head higher as locations are added per section. Of these plays, the Permian looks to have the most upside. Not only are there several intervals to prove, but there is significant downspacing in current intervals, like the Wolfcamp.
Pad development continues to be the focus of US operators. We are seeing this in all over the country, including North Dakota, as the middle Bakken has seen the majority of traffic.

The Three Forks has emerged, and although the middle Bakken has produced better, the Three Forks has three benches to target. In mid- and western-McKenzie County, we have seen the lower Bakken silt emerge, but not by drilling the interval. Operators are fraccing into this zone, which has improved recoveries for companies like Triangle  and Whiting. Continental has been the Bakken leader with respect to pad development.
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.

Halcon With Two "High-IP" Wells; KOG With Another Great Irgens Well; 28 August 2014

Active rigs:

Active Rigs195181191199140

Wells coming off the confidential list today:
  • 26183, 649, Oasis, Mallard 5692 21-20 4T, Alger, t6/14; cum 2K 7/14;
  • 26264, 627, Oasis, Lydia 5601 43-24T, Tyrone, t2/14; cum 11K 7/14;
  • 26427, drl, Oasis, Osage 569 43-24T, Alger,
  • 26586, 664, CLR, Honolulu 2-22H2, Indian Hill, t7/14; cum 5K 7/14;
  • 26587, 207, Oasis, Delia 5992 14-30 2T, Cottonwood, t4/14; cum 8K 7/14;
  • 26813, drl, EN-Hermanson-LE-155-93-3501H-3, Robinson Lake,
  • 26832, 1,418, Oasis, Lefty 5200 14-30 4T2, Camp, t4/14; cum 7K 7/14;
  • 27051, 259, Corinthian, Corinthian Backman 12-35 1H, North Souris, a Spearfish well, t5/14; cum 11K 7/14;
  • 27369, 362, American Eagle, Murielle 16-1E-163-102, Colgan, t7/14; cum 12K 7/14;
Ten (10) producing wells completed:
  • 26334, 460, Hess, GN-Frantzick-158-97-1003H-1, New Home, t7/14; cum --
  • 26600, 1,764, BR, Sequoia 24-9TFH, Hawkeye, t8/14; cum --
  • 26709, 1,072, Hess, BW-Arnegard State-151-100-3625H-5, Sandrocks, t8/14; cum --
  • 26797, 2,236, HRC, Fort Berthold 152-94-24D-13-6H, Antelope, t8/14; cum --
  • 26798, 2,295, HRC, Fort Berthold 152-94-24D-13-5H, Antelope, t7/14; cum --
  • 26857, 1,059, Hess, EN-State D-154-93-2625H-7, Robinson Lake, t8/14; cum --
  • 26986,  910, Hess, EN-Dobrovolny-155-93-2128H-6, Alger, t8/14; cum --
  • 27313, 781, Hess, EN-Eva-156-94-1621H-1, Manitou, t7/14; cum --
  • 27490, 1,905, KOG, P Irgens 155-99-3-4-9-13H, Epping, t7/14; cum --
Wells coming off confidential list Friday: none? Wells come off the confidential list at the 6-month mark. Six months ago, there was no February 29, 30, or 31. So, no wells coming off the confidential list August 29, 30, or 31, it appears. The March first wells come off the confidential list September first. Maybe. Don't quote me on this.

Thirteen (13) permits --
  • Operators: Hess (5), Oasis (4), Enduro (2) MBI (2)
    Fields: Alger (Mountrail), Missouri Ridge (Williams), Beaver Lodge (Williams), Rocky Ridge (Slope), Newburg (Bottineau)
  • Comments: see comment below -- the MBI permits are for wells that will test the Tyler but not be producers.

A Note To The Granddaughters

The sound of energy-independent America -- turn the volume up:

Flaring in The Bakken

It's a melancholy evening.

It's my last evening in the Bakken (this trip), and one could not ask for a nicer evening, weather-wise. It's clear, big-sky country; it's currently 87 degrees, having hit a high of 90 degrees earlier today.

Dad wanted to go to the restaurant "on the hill" tonight. He couldn't remember the name (of the restaurant). I had no idea what he was talking about; there are no "hills" in Williston. He said he would give me directions once we started driving. And here we are, well, actually, here I am: at Fuddruckers, at "the top of the hill," overlooking Williston. It's an incredible view; I'm actually eye-level higher than the water tower on the Williston State College campus way off in the distance; one would not see if one did not know where to look. And just beyond that is the wide Missouri, just a few miles downstream from the confluence (where the Yellowstone empties into the Missouri). I can see the bluffs across the Missouri, the bluffs that mark the northern rim of McKenzie County.

It's funny how things work out. Fuddruckers was not the first "new" restaurant to come in during the Bakken boom but it was one of the first. How it happened to pick the site at "the top of the hill," no one will ever know, but it was a stroke of luck or serendipity. This is where the steak house for Bakken millionaires should be located. Far off to the east is the Little Muddy River.

I took Dad out to dinner to this restaurant "on the top of the hill." After dinner, we drove out to the recreation area just above the Little Muddy Bridge/Highway 1804 east of Williston. The boat landing was filled with pick-ups and boat trailers. It appears the boats were down on the Missouri River. At this point, the Little Muddy is very, very wide -- it's about as high as I've ever seen it. Lots of water this year.

Troop 368 is out here in several canoes; they must be earning their canoeing merit badge. There is one swimmer -- and now a "mom" with a stopwatch is coming out to greet him; he must have been looking to earn a swimming merit badge or looking to set some kind of personal swimming record.

I told Dad I was going to the Lewis & Clark Bridge, asking him if he wanted to go. He declined, saying he gets restless and would like to head home; he retires fairly early these days. I dropped him off, took a short drive, and then back up to Fuddruckers. I told the hostess I was only there to have a beverage and use their wi-fi. So here I am.

Back to the canoes and Troop 368. A couple of years ago, Kathy told me that anyone who says they are "bored," should be slapped. I don't think she meant that literally; she seems to be a pretty gentle woman, a quilter. But I know exactly what she means, and on a night like tonight in the Bakken, if anyone says they are bored, they need to get out. I assume many, many roughnecks are not bored, but exhausted tonight. They are putting in some very, very long days with this incredibly good weather and long hours of daylight.

By the way, I will be seeing Kathy tomorrow, on my way back to Texas. 

Before I forget: again, truck drivers are not paid enough. Maybe they are well paid in the Bakken; I don't know, but whatever the average pay for long-haul truck drivers, it's not enough.

One piece of advice for drivers in North Dakota: DRIVE FRIENDLY.

If you are like me, and simply a tourist, exploring the Bakken, drive carefully and drive friendly. If on the back roads, even if have the right-of-way at a intersection with stop signs for cross traffic, and you see a truck coming, slow down, and let the truck go through the intersection. If you stop far enough back, they will know what you are doing and will appreciate the gesture. It's called "driving friendly." But it's also called "Defensive Driving." Some of the truck drivers are new to the area, and do not know which roads are through-ways and which have stop signs at the intersections. Some will simply not have time to stop; they will do what they can, but I would rather have a trucker coast through an intersection while I watch him/her through my windshield, rather than seeing his Peterbuilt hood ornament up close and personal coming through my passenger side window.

So, tomorrow, I head back to Texas. I will stop along the way before I leave North Dakota, but it's going to be a tough day for me, emotionally, to be leaving.

He Rode All the Way to Texas, Dolly Parton, Trio II

Before I leave,  a big "thank you" to Steve for meeting with me at "The Daily Addiction" on Wednesday and Thursday mornings, 7:00 a.m. to 10:00 a.m. He comes up from Texas two or three weeks each month to help folks with their financial planning. It's a long, long story. He's a native of eastern Montana but currently works for an "investment" company, living in Plano, Texas. We both find great joy in sharing stories about the Bakken. He flies into Minot, and then rents whatever SUV they give him. Today, the SUV he had looked like it was about the size of of a Bakken water-hauling truck. A good truck for the Bakken, a Toyota Sequoia. I wouldn't know; when he mentioned Sequoia, I did not even know the manufacturer. I honestly thought it was made by the company with the ignition switch problems. LOL.

A big thanks, also, to Michael, who gave me a great Knife River baseball cap. I will get a photograph of me wearing the cap sometime and post it. It was strictly a social visit, but I learned a lot about road construction in the Bakken.

I spent limited time at "Books on Broadway." I was just way too busy this trip, and my time was really, really limited. However, in a later posting, I will recommend a book that Chuck is featuring; I can't do it tonight because I've sent a letter to the individual who sent me the book, and I want to make sure he gets my "thank you" letter before I talk about it on the blog. It's another long story.

Perhaps more later, but now, back to the business of the Bakken.

$5 Gasoline -- Here We Go Again -- August 28, 2014

Screen shot:

Gasoline prices in Los Angeles in past 24 hours.

The "funny thing" about this: one needs to understand the "geography" of Los Angeles. Yes, one can find "less expensive" gasoline, but folks in Santa Monica are not going to drive to Norwalk to buy less expensive gasoline. The $4.99 price one sees above is what folks are paying for gasoline in Santa Monica. Sure, there will be some competition and some less expensive locations, but these locations (Olympic and Fairfax; Pico and 20th; Wilshire and 26th) are high volume locations.

The ARCO stations offering a lower price are outliers in the sense that they only take cash and the ARCO card (as far as I know; I only know what my wife tells me). My wife only goes to ARCO when she is out in California and only pays cash. ARCO is big in California but by no means the "norm." So, to some extent, one can ignore the $3.99 ARCO prices. I doubt very many folks in California are paying $3.99. The Shell prices are closer to reality.

So, $5 gasoline.

On January 1, 2015, Californians will "absorb" another price increase in gasoline
Californians already pay the nation's second highest gas tax at 68 cents a gallon -- and now it will go up again in January to pay for a first-in-the-nation climate change law.
It's an indirect tax at the pump so no one knows how much it will actually affect the price at the pump. Perhaps it won't affect the price at the pump at all. Perhaps ARCO and Shell will "eat" the cost because they "like" their customers. Perhaps a good old-fashioned "price war" will break out in California dropping gasoline to 35 cents/gallon. Maybe Costco and grocery stores through loyalty programs will knock off $2.00/gallon.

But this is what the analysts say:
Estimates of the cost of the tax vary. The California Air Resources Board, the Golden State's premier anti-pollution agency, predicts the new tax will raise gasoline prices from 20 cents to $1.30 per gallon. A prominent state senator who helped author the bill estimated the cost at 40 cents a gallon. Environmental activists downplay the cost, but hail the impact.
First of all, we all know, gasoline is not going to jump $1.30/gallon on January 1, 2015, in California.

And another 20 cents/gallon -- won't even be noticeable. Even 40 cents/gallon represents only a ten percent increase (based on $4.00 gasoline); I think the US Postal Service has been raising first class postage at a rate exceeding 10 percent. And life goes on.


On another note, the price per gallon is irrelevant. The cost of gasoline as part of a family's entire budget is the issue. If the teen-ager is no longer allowed to use the family car, the family's gasoline expense can be cut dramatically. If the family's wager-earner takes the bus to work, the gasoline expense can be cut dramatically. Farmers/processors/restaurants will simply pass on any increased cost of diesel on to the customer buying avocados at the grocery store/restaurant. Guacamole dip is not the end-all be-all.

Thursday -- August 28, 2014; President To Meet With National Security Council In The Situation Room

News report: vacation over; President Obama will meet with National Security Council in the Situation Room this afternoon. My hunch: a) President Obama thinks they're talking about the Situation Room Wolf Blitzer anchors over at CNN; and/or, b) the President will need help finding the Situation Room. In the big scheme of things, I find it amusing that this is news/headline: that the president is meeting in the "Situation Room." Isn't this sort of standard practice for most presidents to meet in the Situation Room at least once or twice during a four-year term? Is this something so new for this president that it makes headline news? Maybe.

Hey, I gotta go. I will be off the net for several hours. Good luck to all. It's been fun.

Jobs report: 298,000, a decrease of 1,000. The four-week average at 299,750. Nice graph at the linked article.

I track the "big stories" here. Today, Europe at a tipping point. A top story over at Rigzone today -- Germany's energy transition dream at risk of becoming a nightmare.
Wintershall's head of exploration and production warned Thursday that Germany's 'Energiewende' (or Energy Transition) dream of pursuing an economy powered by the wind and the sun is in danger of turning into a nightmare.
Speaking to energy journalists at the ONS exhibition in Stavanger, Norway, Wintershall Executive Director Martin Bachmann said he was concerned about figures recently published by Statistics Norway that showed overall investment in Norway's petroleum sector will drop by EUR 6 billion ($7.9 billion) next year.
"That is actually bad news for Europe's security of supply and I think Germany – as the biggest market in Europe – has played a large part in creating this uncertainty," Bachmann said.

RBN Energy: continuation of the series on Enbridge.
Enbridge is investing close to $9 billion between 2013 and 2016 in its Eastern and Light Oil Market Access initiatives. A major goal is to improve access for Enbridge shippers – particularly shippers of light shale crude from North Dakota, to refineries in the Midwest and eastern Canada. And by the end of 2014 refineries in Illinois, Michigan and Ohio as well as in Ontario will have better access to Enbridge crude. But even when the reversal of Line 9 in Ontario is completed and Enbridge crude can flow as far as Montreal, only about 300 Mb/d will be available for Quebec refineries to process. Today we continue our review of Enbridge eastern expansion plans.
In Episode One of this series, we reviewed the 9 refineries in eastern Canada with combined capacity of 1.3 MMb/d. These refineries mostly process light crude that until recently has come from offshore Atlantic seaboard production and imports, but they are processing growing volumes of US shale oil today. Extensive upgrades, reversals and expansions to the Enbridge network have begun to change the dynamics of these refineries to increase supplies from western Canada and the Bakken.
In Episode Two we began a description of Enbridge expansion plans with the Eastern Access project.
In Episode Three we finished up the Eastern Access project and started on Enbridge’s Light Oil Markets Access  (LOMA) initiatives with the Sandpiper project that will deliver increased supplies of light crude from North Dakota.
In Episode Four we covered the expansion of the Southern Access line to deliver Sandpiper crude to Flanagan and its extension to Patoka that provides a path to Marathon’s Midwest refineries. We also covered the Line 78 project that will increase capacity northeast from Flanagan to Griffith allowing more light crude to flow to Eastern Canada on Line 6B. In this episode we cover planned expansions to Line 6B and how new flows on Line 9 will feed refineries in Ontario as well as Warren, PA.
Active rigs:

Active Rigs194181191199140

The Wall Street Journal

Declining attendance by students at college football games.

CBO: federal budget deficit to be smaller than predicted over next decade; revised GDP estimated downward for 2014.

The Los Angeles Times

Top story: experts see long, tough battle to contain Islamic state.  

Slow news day.

Wednesday, August 27, 2014

KOG, Hess Each With A "High IP" Well; Hess With Several Good Wells; Thirteen (13) New North Dakota Permits -- August 27, 2014

Thirteen (13) new permits Thursday:
  • Operators: Oasis (4), EOG (3), Newfield (3), Samson Resources (2), Hunt
  • Fields: Sand Creek (McKenzie), Blooming Prairie (Divide), Parshall (Mountrail), Todd (Williams), Sioux Trail (Divide)
  • Comments:
Wells coming off the confidential list today were posted earlier; see sidebar at the right.

 Eight (8) producing wells completed:
26334, 460, Hess,
26709, 1,072, Hess,
26793, 1,300, Hess,
26798, 2,295, Hess,
26857, 1,059, Hess,
26986, 910, Hess,
27313, 1,200, Hess,
27490, 2,282, KOG,

Wednesday -- August 27, 2014; EPD Spl - its 2:1; CLR To Spl - it, 2:1

I missed this; a reader sent me the link. CLR will split 2:1:
Continental Resources, Inc. announced August 18, 2014, that its Board of Directors declared a two-for-one stock split of the Company's common stock to be issued in the form of a stock dividend. The additional shares will be distributed on September 10, 2014, to shareholders of record on September 3, 2014. 

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

Wow, incredibly beautiful weather here in Williston today. Someone cut the fiber-optic cable bringing the internet to the city library -- happened late Monday afternoon, I believe. Wi-fi working but library internet is not working. And so it goes in the Bakken. My blogging might be short today.

Active rigs:

Active Rigs195186190200140

RBN EnergyContinuing series on Canadian LNG export facilities.
Heightened worldwide competition among LNG exporters is forcing a reality check on projects. LNG buyers, most of them in the Asia/Pacific region, are pressing for prices that more closely track natural gas value at the source—plus the known or calculable costs of liquefaction and shipping. Projects whose capital costs put their LNG pricing out of the money will not find the buyers they need to make their projects a “go.” The 16 or more LNG export projects under development in Western Canada are going through a winnowing process of sorts right now, largely because all are greenfield efforts and all but the smallest projects require new, expensive pipeline capacity to move their gas to port.  Today in the third blog in our series on Western Canadian LNG exports, we examine the remaining field of contenders, including some floating or barge-based proposals that may gain an edge.
Western Canada needs new markets for both its shale and conventional gas, the Asia/Pacific region needs more LNG, and at least two dozen companies—many of them in joint ventures—are developing export projects in northern British Columbia (BC) to marry those needs. Canada’s National Energy Board (NEB) has approved export licenses for nine LNG export projects in BC that, if all built, would demand a total of up to 16 Bcf/d of Western Canadian natural gas. Still more projects are planned. But the biggest LNG export booster of them all, BC’s provincial government, sees only a few projects with a combined gas through-put of 3.5 Bcf/d (to produce up to 25 million metric tons/year, or MMTA, of LNG) will be online by 2023. So the real questions are, can BC LNG projects compete with projects on the US Gulf and West coasts and, if so, which BC projects are most likely to get off the ground?
For Investors Only

Trading at new highs today: EEQ, EPD, PBR, RAIL, WPX.

The Wall Street Journal

Hamas blinks: unconditional, open-ended cease-fire.

Tim Horton's: everyone's worried about the tax deal; they're missing the story. [Hint: this has nothing to do with ObamaCare; Burger King isn't going away in the US. The story isn't about "inversion/taxes" either. The "tax angle" is simply icing on the cake. This is a much bigger story than the sum of the parts.]

S&P closes above 2,000 for first time.

Something a lot of folks did not think the Chinese could do: China is awash in grain crops.

Heard on the Street: More than most businesses, utilities really do have to spend money to make money. Regulators let them earn a return on all the money spent on new wires, power plants and other equipment.
The Los Angeles Times

California approves $330 million/year in film, TV tax credits.

F-15 crashes in remote mountain region in Virginia; signs of pilot not see; hopefully ejected.

East Porterville, Central Valley, California -- the wells are dry.


I've not seen this in an energy company in quite some time. EPD announces 2:1 split. Enterprise Products Partners says its board approved a two-for-one split of EPD's common units; the additional units will be distributed Aug. 21 to holders of record as of the close on Aug. 14.

It's not as dramatic as this actually. I believe the pre-split share price was about $78. But I could be wrong. I don't follow this one too closely. Actually I don't follow anything closely enough. [Actually, I think the graph is wrong; it should be just the opposite: $80 prior to the split; $40 after the split. But I may be wrong on that, also. Don't trust anything I say regarding the market. LOL.]

Time For Some Music

This was hard to find, but found it (it looks like everyone and his brother covers this song) -- one of the songs on today's Williston area NPR:

Pop a Top, Chris Shiflett & The Dead Peasants

I actually think I like it much better than Alan Jackson's cover, although it sounds like it was recorded in an echo chamber or a really big empty beer hall. Probably the latter. 

Tuesday, August 26, 2014

Coming Off The Confidential List Wednesday -- August 26, 2014

ONEOK announces completion of Garden Creek II natural gas processing facility. I track ONEOK activity here: The press release:
ONEOK Partners, L.P., today announced that its 100-million cubic feet per day (MMcf/d) natural gas processing facility in eastern McKenzie County in North Dakota – the Garden Creek II plant – is now operational. The new plant is part of the partnership's previously announced $7.0 billion to $7.5 billion capital-growth program through 2016.

Active rigs:

Active Rigs195185189200138

Wells coming off the confidential list Wednesday:
  • 24601, 131, Samson Resources, Bonneville 3625-7TFH, West Ambrose, t4/14; cum 22K 6/14;
  • 26328, drl, XTO, Boomer Federal 34X-35D, Lost Bridge, no production data,
  • 26882, drl, Abraxas, Ravin 26-35-7H, North Fork, no production data,
  • 27319, 600, Ballard Petroleum, Fines 24-19, Wildcat; t6/14; cum 3K 6/14;
  • 27593, drl, Slawson, Challenger Federal 3-29-32H, no production data,
Fifteen (15) new permits --
  • Operators: Zavanna (8), Oasis (3), MRO, CLR, Cynosure,
    Fields: Stockyard Creek (Williams), Crazy Man Creek (Williams), Baker (McKenzie), Murphy Creek (Dunn)
  • Comments: 4 of Zavanna's 8 permits are for new wells in Stockyard Creek; 4 in Crazy Man Creek; Cynosure Energy has a permit for a wildcat well in Mountrail County; this is Cynosure's first permit in North Dakota; it's too far east to get too excited; Stockyard Creek is a monster of a field; I track Stockyard Creek here;
One (1) producing well completed:
  • 25542, 1,820, Newfield, Anderson State 152-96-16-4H, Westberg, t9/13; cum 71K 6/14;
National Anthems

The national anthem for the Islamic State and Central American teen-agers:

Coming To America, Neil Diamond
My, how things have changed. Governor Jerry Brown: "You're all welcome in California." The bullet train will take them to San Francisco.

Transportation Costs For Fracking Sand From Wisconsin -- August 26, 2014

From a reliable source, data points, regarding shipping fracking sand to the midwest from Wisconsin, from one dispatcher:
  • a slow week: 60 semi-loads
  • a busy week: 120 semi-loads
  • delivery cost from mid-Wisconsin to northeast Colorado: $175/ton
  • shipping by truck because NO available trains 
The number of semi-loads is irrelevant to the degree of activity in the Bakken; the number of semi-loads is relevant because it provides a large enough denominator/data base to suggest the price of shipping is not an outlier for this dispatcher.

That is the cost to a central delivery and storage point. Additional costs will be incurred for picking up the sand at the terminal and delivering it to the drilling site.

A typical Bakken well uses 4 million lbs of sand, or 2,000 tons = $350,000 for long-haul transportation.

Companies are trying to get average cost of well down from $8 million to $7.5 million, ball-park figures; they vary dramatically, but that gives newbies an idea of cost of drilling/completing a Bakken well. The range is probably $6 million to $13 million/well. This does not include the less expensive wells near the Canadian border. I have no idea what they cost.

Disclaimer: this is all "idle chatter." I cannot vouch for accuracy but it's what I'm hearing, and what I've read. It could be wrong. In fact, some of it probably is. Mostly because folks will disagree on what a "typical" Bakken well is.

Global Warming

Coldest August night on record in Ireland.
Breaks record for the entire month of August.
A new record for the coldest August night was set on the night of 23rd/24th August for Northern Ireland.
The Met Office said temperatures plunged to a bone-chilling -1.9C (28.6F) at Katesbridge, Co Down, beating the previous record of -1.1C at Loughermore Forest in 1964.
Note: This wasn’t just the coldest in Katesbridge, it was the coldest on record across all of Northern Ireland.
At some point ... 

But back in the day, when there really was global warming, it was a hot August night.

Brother Love's Traveling Salvation Show, Neil Diamond

This was nowhere near my favorite Neil Diamond song but it connects with that concert. It was always Neil Diamond for me on the radio driving between Blacktail Dam and Williston, back in 1969.

Northeast Of Watford City -- The Bakken -- August 26, 2014

A random photograph and video of one of the sweet spots in the Bakken, northeast of Watford City.

I forget now, but I think this was on "1806" just north of ND State Highway 23.

"Hunter's Run" is just one of many subdivisions going up northeast of Watford City. It was my impression that the amount of construction / activity in Watford City was similar to what we saw in Williston about 3 - 5 years ago.

One of the "sweetest" spots in the Bakken, northeast of Watford City. Turn the volume OFF:

Northeast of Watford City

A reader was nice enough to take the time to explain exactly where this sweet spot is; see first comment:
The area showing in this video is the very deepest part of the Bakken play. The
top of the Bakken is 9000 feet plus below sea level about 5 miles northeast of Watford.
The formations slope upward and outward in all directions from this area.
The Bakken temperature is 300 degrees (F) and pressures are extremely high.
About 10 seconds into the video you are pointing directly at the "center of the Bakken."

The Continental Wahpeton and Oasis Hagen-White multizone/ increased density wells are in the area where you completed your "pan" to the right about 3/4th the way thru the video.
The temperature is important to note. Can you imagine the quality of the steel needed to managed sub-zero temperatures ( - 40 degrees F) at the surface in February, and then maintain integrity two miles below the surface at 300 degrees F?

Video And Graphic Of New Underpass Under The "Original" Williston Bypass -- August 26, 2014

[See first comment. I accidentally deleted it when trying to post it; I was able to "save" it but had to post under/over my name.]

Turn the volume OFF.

Bypass underpass, west side of Williston
This is really quite impressive, how fast this is moving. The entry to the underpass, from the east ("old Williston)" is just to the north (or the right) of the Williston High School track and football field (the field is geographically separated from the high school), a continuation of 18th Street, a major thoroughfare for that part of town. According to the map below, it looks like it will connect with Bison Drive, one of the "new" parts of Williston.

Tuesday, August 26, 2014 -- New CBR Terminal Proposed -- Miscellaneous -- For Investors Only

I track CBR terminals here

A reader sent me this link, proposing a new CBR terminal:
PLAZA, N.D.-- Dakota Gold Transfer - Plaza, LLC (“Dakota Gold”) announced today that the company plans to develop a crude oil transload facility in Mountrail County, North Dakota. Strategically located on a 350-acre site in the eastern section of the prolific Bakken and Three Forks shale oil producing areas, the Plaza Terminal will provide refiners, marketers and producers with new options for reaching multiple markets across the United States and Canada via rail and pipeline. 
Located on a private rail spur controlled by Dakota Gold under a long-term lease, the state-of-the-art terminal will be served by the Canadian Pacific Railway.
The Plaza Terminal will aggregate crude oil produced in Mountrail and neighboring counties, utilizing gathering pipelines and trucks. The terminal will also provide crude oil storage services through on-site tankage.
The rail facility will have a throughput capacity of 70,000 barrels per day (bpd) and storage capacity of more than 300,000 barrels, with expansion to 600,000 barrels during a planned second phase. The terminal’s design includes two loop tracks with storage for one to two additional trains on the private rail spur, a covered loading barn, a 14-arm system capable of loading a unit train in approximately 14 hours, 15 truck unloading bays and three 103,000-barrel storage tanks.
The Plaza site is large enough to allow for substantial expansions of storage and transload capacity as customer demand increases.
Much more at the link.

When I was out northeast of Watford City over the weekend, I did not realize how close I was to this area. I may have to go back, drive a bit farther east, take a look.

Plaza, ND is about 10 miles east of Parshall, ND -- one of the centers of the activity right now; it's just outside the reservation.  It may be one of the farthest east terminals, and yet it's right at one of the busiest locations. 

Obama Legacy

The headline: Housing market stuck in downward spiral: Shari Olefson. His words, not mine. The "problem" is that all those illegal children coming across the border are not buying new OR existing homes. If we can change that dynamic somehow, that would help. Perhaps the government could buy homes for Guatemala children between the ages of 10 and 16. Government housing for this relatively small, new group of immigrants couldn't possibly cost more than the government healthcare web site. Okay, bad example.

Back to the linked article:
New homes sales fell by 2.4% from June to July, yet July’s new homes sales were up 12.3% from the previous year.
“New construction appears to be up significantly from last year but when you dig beneath the surface what’s up are multifamily homes,” says Olefson. “Single family homes are up by just 1% which defies logic because we’ve had over 3 million single family units that have been converted to residential rentals.”
Some believe that these numbers mean that housing is approaching normal levels, but Olefson disagrees. She sees more potential buyers turning into renters and believes there’s a lack of suitable housing and loan products for what people can afford now.
Part of the problem is that young couples can't find/won't buy "starter" homes.


Burger King to leave the US, over taxes. Warren Buffett, one of the president's BFF's, will finance the merger with the Canadian donut company. It looks like BRK-B may trade at new highs today; if not, awful close.

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. 

Trading at new highs today: ARII, CP, EEQ, EPD, OKE, PBR, PSX, QEP, RAIL, WLL, WPX.

Did He Really Say This?

The Deccan Chronicle is reporting:
White House spokesman Josh Earnest, on Monday, said that Obama has demonstrated his willingness to order military action when necessary to protect American citizens.
"That is true without regard to international boundaries," he said. The White House would not comment on Obama's decision to authorize surveillance flights over Syria.
Oh, well. 

Ever Since Benghazi And The Bergdahl Swap ....

... it seems US intelligence is struggling. It seems to have started with Benghazi, and now news sources are saying US intelligence agencies have very little "intel" on the Islamic State. It's agreed US intel was either unaware of the Islamic State's preparation for "shock and awe" or no one was listening.

But as Hillary says, "What does it matter?"