Wednesday, September 24, 2014

SM Energy Reports A Tyler Well; 2/3 Of Bakken Wells To DRL Status; Fracking Accelerating Fertilizer Plant Expansion -- September 24, 2014

Watch for the weekly natural gas fill rates. Looking for "100" to break even; less than 100 is not a good sign. EIA link here. Next data release, Thursday, September 25, 2014.

Active rigs:

Active Rigs193187188195141

Wells coming off the confidential list Thursday:
  • 23844, 497, OXY USA, Nels Wold 1-36-25H-141-97, St Anthony, t3/14; cum 29K 7/14;
  • 27572, drl, Hess, EN-Jeffrey A-155-94-2734H-7, Alkali Creek, no production data,
  • 27925, drl, XTO, Willey 31X-3H, West Capa, no production data,
Wells coming off the confidential list today were posted earlier; see sidebar at the right.

Fifteen (15) new permits --
  • Operators: Zavanna (4), Oasis (4), Newfield (3), Whiting (3), Mountain Divide
  • Fields: Stony Creek (Williams), Camp (McKenzie), South Tobacco Garden (McKenzie), Glass Bluff (McKenzie), West Ambrose (Divide)
  • Comments:
Five (5) producing wells completed:
  • 11841, 22, SM Energy, Grassy Butte 21X-21F, Tyler, this was an old Madison well which was spud in 1986 and last produced in 1995; the total Madison cum was 61K; proposed stimulation with ~ 3,000 gallons of 15% HCL, if temporary production is successful, will go to permanent production;
  • 27131, 1,162, BR, CCU COrral Creek 31-28TFH, Corral Creek, t8/14; cum --
  • 27499, 666, Slawson, Alamo 8-19-18TF2H, Big Bend, t6/14; cum 21K 7/14;
  • 26892, 905, Slawson, Alamo 5-19-18TFH, Big Bend, t6/14; cum 35K 7/14;
  • 26891, 847, Slawson, Alamo 4-19-18TFH, Big Bend, t6/14; cum 33K 7/14;
In addition to an earlier list of HRC wells transferred to another operator, another eight HRC wells were transferred to Energyquest II, LLC, all in Bottineau County.

From Seeking Alpha: 
Back to OPEC?

  • The going rate for U.S. crude oil could tumble $30 below international benchmarks in the coming decades if U.S. policymakers don’t reverse a ban on exporting crude oil, according to a report by Wood Mackenzie.
  • The falling prices could be made worse by new drilling technology that may double recovery rates and add an additional 1.5M-3M bbl/day of new oil production - as much as 25% more oil than is expected today - the report says.
  • The report is not specific about the kinds of technologies that could draw more oil from the ground, but it cites companies such as EOG Resources that in the early phase of testing new methods now.
Fertilizer Plants

It looks like the Spiritwood investors were ahead of the pack. ChicagoBusiness/Bloomberg is reporting:
Talks to create the largest nitrogen fertilizer company are the latest example of how the boom in natural gas from fracking is transforming not just the world of U.S. energy but other industries too.
Norway's Yara International ASA and Deerfield-based CF Industries Holdings Inc. said yesterday they're in preliminary discussions about a combination. Both make crop nutrients using gas as a raw material. There's more gas than ever in the U.S. as new drilling techniques open up shale deposits.
“Besides the obvious petrochemical investments occurring in North America to take advantage of low cost gas, the rapid development of unconventional energy resources is buoying other industrial markets,” Paul Bjacek, an analyst at Accenture Plc, said yesterday in a blog post.
Cheap gas has spurred more than $124 billion in new factories for chemicals, according to the American Chemistry Council. There's $12.7 billion of fertilizer plants planned to come into production through 2020, Mark Gulley, an analyst at BGC Financial LP in New York, said in a report last week.
Gas is used to capture nitrogen from the air in the Haber process, named after German chemist Fritz Haber who developed the technique in the early 20th century. The advantage of doing that in the U.S. is stark: CF's operating profit margin was 43 percent last year while Yara's was 9.2 percent, according to data compiled by Bloomberg.
While North America accounts for about 16 percent of Yara's revenue, the company is trying to boost that with a planned joint venture with BASF SE in Texas. Yara's desire to lock in cheaper gas was clear when it tried unsuccessfully to buy Terra Industries Inc., said Colin Isaac, an analyst at Atlantic Equities LLP in London.
Yara was trumped by CF's $4.7 billion offer for Terra in a deal that closed in 2010.
“To meet their ambition of being global, Yara needs to have a meaningful business in the U.S.,” Isaac said.

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