Sunday, February 9, 2014

OXY USA Reports A Nice Well In The Bakken; BR With A "High IP" Well -- The Williston Basin, North Dakota, USA

A reader sent a nice update regarding the MRO Tyler wells

Sunday 6:00 p.m. ET futures show oil holding steady; holding slightly above $100 (WTI). 


Monday, February 10, 2014
  • 23454, conf-->loc, Hess, BB-Budahn-150-95-0506H-3,Blue Buttes, no production data,
  • 25909, drl, BR, CCU Columbian 33-1TFH, Corral Creek, no production data,
Sunday, February 9, 2014
  • 22894, 589, OXY USA, Leiss 3-23-26H-143-96, Fayette, t8/13; cum 56K 12/13;
  • 25890, 2,887, BR, Blue Ridge 44-31TFH, Keene, t1/14, no production data,
  • 25961, drl, BR, Archer 44-25MBH,  Charlson, no production data,
Saturday, February 8, 2014
  • 24835, 1,473, CLR, Bice Federal 3-32H,  Chimney Butte, 4 secs, t12/13; cum 11K 12/13;
  • 25910, drl, BR, CCU Columbian 33-1MBH, Corral Creek,

22894, see above, OXY USA, Leiss 3-23-26H-143-96, Fayette:

DateOil RunsMCF Sold


Million Dollar Man, Lana Del Rey

  It will grow on you. Trust me. 

Blue Cross Blue Shield Refuses Third Party Payments For AIDS Patients In North Dakota, Louisiana

Reuters is reporting:
The only other carrier that is refusing to accept such payments is Blue Cross Blue Shield of North Dakota, according to a CMS official.
North Dakota Blue "restricts premium payment from third parties including employers, providers, and state agencies," said spokeswoman Andrea Dinneen, but "is currently reviewing its eligibility policies with respect to recipients of Ryan White Program funding."
The courts are not going to look kindly on BCBS Louisiana, North Dakota. 

Reader's Request For Help In Finding H&P Rig Schedule For Marathon

A reader is requesting help finding, on the internet, the rig drilling schedule, specifically for H&P with Marathon. 

I know NDIC has a very limited schedule for the next drilling location for actively drilling rigs, but it is very, very limited.

The reader thinks there is a more comprehensive list. Any thoughts?

The Number Of Active Rigs In North Dakota Remain High; Idle Rambling On The Price Of Oil

Active rigs in North Dakota:

Active Rigs19218520316390

 Idle Musings On The Price Of Oil

Going into next week, it will be interesting to see if the price of crude oil continues to melt up;  WTI closed this past week at just around $100/bbl. It was expected that the price of crude oil would rise once the Keystone XL 2.0 South started flowing; it started flowing on January 22, 2014 (though the company started filling it on December 7, 2013), and the price of oil started moving up as predicted, though hardly noticeable in the big scheme of things. It will take awhile for folks to get a feeling for the "new" Cushing. A lot of oil has to go to Cushing to make up for all that the Keystone XL 2.0 South is taking out.

The major factors affecting the price of oil:
  • Mideast politics and hostilities (Syria, Iran, Israel); sabre-rattling
  • strength of the dollar
  • US economy six months out
  • Chinese manufacturing index
  • global economy six months out
Of the five, I think the US economy six months out as telegraphed by the Fed's actions is the most important. On a day-to-day basis, all things being equal (e.g., no report of a war breaking out in the Mideast, it is the strength of the dollar).

If the huge GM and Ford truck inventory is due to the weather, that's one thing; but if the huge truck inventory is due to prospects about the US economy going forward, the huge inventory is very concerning.

Most recent data available, the week ending January 31, 2014, the EIA summary
  • U.S. crude oil imports averaged 6.9 million barrels per day last week, down by 1.2 million barrels per day from the previous week
  • over the last four weeks, crude oil imports averaged over 7.3 million barrels per day, 6.5% below the same four-week period last year
  • U.S. commercial crude oil inventories increased by 0.4 million barrels from the previous week
  • U.S. crude oil inventories are in the upper half of the average range for this time of year
  • gasoline inventories increased by 0.5 million barrels last week
  • gasoline inventories are well above the upper limit of the average range
  • distillate fuel inventories decreased significantly last week
  • distillate fuel inventories are well below the lower limit of the average range for this time of year
  • propane/propylene inventories fell 0.8 million barrels last week
  • propane/propylene inventories are below the lower limit of the average range
  • total commercial petroleum inventories decreased by 5.3 million barrels last week
30-second sound bites:
  • US oil imports are falling significantly
  • crude oil inventories increased despite significantly decreased imports
  • crude oil inventories remain in the upper half of the average range for this time of year
  • gasoline inventories increased last week
That explains why gasoline continues to fall in price. Gasoline is now below $3.00/gallon for the first time in a long time in the Dallas, Texas, area.

Remember all that hand-wringing that US refineries were not able to process light, sweet oil coming out of the Bakken? The fact that imports of crude are decreasing significantly and gasoline inventories are increasing suggest to me that US refineries are doing just fine. It should be noted that the US does continue to import gasoline.

If crude oil inventories continue to remain in the upper half of the average range, I assume we will see a continued fall in imports. I assume some imports are contractually required, and as those contracts are filled/expire, imports will continue to fall.

Weekly Supply Estimates: days of gasoline inventory, US, source:
  • 1/31/14: 23.3 days of inventory
  • 1/24/14: 22.9 days
  • 1/17/14: 22.2 days
  • 1/10/14: 21.8 days
  • 1/03/14: 22.2 days
  • 12/27/13: 22.3 days

CNN pulls Anderson Cooper's AC360 Later from primetime.

KOG's Smokey Wells And CLR's Wahpeton Wells Have Been Updated

KOG's Smokey wells have been updated with screen shot of the horizontals.

CLR's Wahpeton wells have been updated with screen shot of the horizontals.

Banks oil field has been updated.


Regardless of what side of the aisle you are on, this is a great editorial on ObamaCare from the weekend edition of The Wall Street Journal

A bit from a very, very long article:
As the CBO admits, that's a "substantially larger" and "considerably higher" subtraction to the labor force than the mere 800,000 the budget office estimated in 2010.
The overall level of labor will fall by 1.5% to 2% over the decade, the CBO figures. Mr. Mulligan's empirical research puts the best estimate of the contraction at 3%.
The CBO still has some of the economics wrong, he said in a phone interview Thursday, "but, boy, it's a lot better to be off by a factor of two than a factor of six."
The CBO's intellectual conversion is all the more notable for accepting Mr. Mulligan's premise, which is that what economists call "implicit marginal tax rates" in ObamaCare make work less financially valuable for lower-income Americans.
Because the insurance subsidies are tied to income and phase out as cash wages rise, some people will have the incentive to remain poorer in order to continue capturing higher benefits. Another way of putting it is that taking away benefits has the same effect as a direct tax, so lower-income workers are discouraged from climbing the income ladder by working harder, logging extra hours, taking a promotion or investing in their future earnings through job training or education.
The CBO works in mysterious ways, but its commentary and a footnote suggest that two National Bureau of Economic Research papers Mr. Mulligan published last August were "roughly" the most important drivers of this revision to its model. In short, the CBO has pulled this economist's arguments and analysis from the fringes to center of the health-care debate.
For his part, Mr. Mulligan declines to take too much credit. "I'm not an expert in that town, Washington," he says, "but I showed them my work and I know they listened, carefully."
It's hard to read, I suppose, but the bottom line is this: ObamaCare will help America move toward the Greek model of economics -- laid back and enjoying it, relying on immigrants to fill the gaps

From the op-ed:
"When you pay people for being low income you are going to have more low-income people."
And to where do low-income people migrate?

It won't happen overnight, but eventually these folks will move to the south where inexpensive energy will offset rising health care premiums and deductibles. The cost of living has historically been much lower in Florida, Alabama, Mississippi, and Texas compared to New England, New York City, and Baltimore. Folks will enjoy a Mediterranean lifestyle because it will become acceptable. It will be a disincentive to earn more money; earning even an extra dollar at the margins could cost one an additional $20,000 in health care premiums for one's family. Breadwinners will weigh a raise in salary or wages against the increase in taxes and health care expenses. 

Obamacare will keep wages down, and, in fact, immigration will be needed to keep the country functioning. Employers will be the big winners:
  • they can now budget; they will cost shift their employees to a national health care program
  • they won't be pressured to increase wages; it will simply cost their employees more in premiums
  • immigrants have historically accepted lower wages as a condition for living in the United States
Of the three, the ability to budget is absolutely, without question, the most important.

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.

Everything about ObamaCare suggests the gap will widen between the "haves" (investors) and the "have-nots" (the non-investors). 

Comparing Oil Activity In The Williston Basin: The South Red River B In Cedar Hills Vs The Bakken Banks

This is for newbies. With all the talk about the Bakken, it is easy to forget how incredible the North and South Red River B wells are in southwestern North Dakota. Here is a sampling of wells drilled in 2005 and 2006:
  • 15659, 301, BR, CHSU 11D-33SH 15, t2/05; Cedar Hills field, cum 821K 10/13; still producing 3,300 bbls/month; South Red River B well; 
  • 15786, IA/1/,119, Denbury Onshore, CHUSE 24A-18SH 15, Cedar Hills, t9/05; cum 658K 11/13;
  • 15828, 673, Denbury Onshore, CHSU 13C-11SH 16, Cedar Hills, t12/05; cum 817K 12/13;
  • 15829, 374, Denbury Onshore, CHSU 13C-11NH 16, Cedar Hills field, t10/05; cum 726K 12/13;  South Red River B well;
  • 15837, 634, Denbury Onshore, CHSU 13C-14NH 16, Cedar Hills, t12/05; cum 594K 12/13;
  • 15847, 342, Denbury Onshore, CHSU 24C-14NH 16, South Red River B, t9/05; cum 712K 11/13; 
  • 15849, 188, Denbury Onshore, CHSU 31B-3NH 26, South Red River B, t8/05; cum 646K 11/13;
  • 15850, 190, Denbury Onshore, CHSU 33B-33NH 26, South Red River B, t8/05; cum 431K 11/13;
  • 15939, 773, Denbury Onshore, CHSU 13C-10SH 16, Cedar Hills, t3/06; cum 790K 12/13;
  • 15940, 483, Denbury Onshore, CHSU 13C-10NH 16, Cedar Hills t4/06; cum 552K 12/13;
  • 16008, 329, BR, CHSU 42C034NH 26, s2/06; Cedar Hills field, cum 857K 11/13; 
  • 16123, 349, BR, CHSU 22D-5NH 16,s4/06; Cedar Hills field, cum 890K 12/13; 
  • 16242, 405, BR, CHSU 11C-5NH 05, t8/06; Cedar Hills, cum 856K 10/13;  still active;
  • 16916, 385, CLR, JWT 11-34SH, Cedar Hills, North Red River B, t4/08; cum  316K 12/13; still producing 5,000 bbls of oil per month; no decline whatsoever;

All of these wells were drilled in 2005 - 2006 (with the exception of the last one listed); all are still active; many have shown no decline in productivity. Many of these wells will hit one million bbls in less than a decade. And this is just primary production. Operators are still drilling an occasional Red River well.

It's hard to say how much activity we would be seeing in this area today if the Bakken had not been successful. It was at this very time that drillers were starting to test the Bakken in North Dakota more seriously. It took quite a few non-economical wells before the Parshall well in 2007 that started everything in North Dakota.

Using the same overhead zoom, here's what Cedar Hills looks like today compared to a very active Bakken oil field, the Banks oil field, below. First the Cedar Hills (South Red River B):

Now the Banks (Bakken):

Lots of drilling left to do in the Banks.

A Second Nominee For The Geico Rock Award -- A Day For The Birds

It looks like we have a second nominee for the Geico Rock Award: a University of Jamestown biologist. The biologist has concerns about golden eagles in the Killdeer Mountains being electrocuted by a proposed transmission line through the area. This is the first time I have heard concerns for any birds from this North Dakota biologist. North Dakota competes, among the other 49 states, for bragging rights in the number of wind farms that are directly in the fly ways of migratory birds.

The Dickinson Press is reporting:
Biologists are concerned that a proposed power transmission line that would skirt the southern Killdeer Mountains in western North Dakota could disrupt nesting habitat for protected golden eagles.
A research biologist said the eagles around the Killdeer Mountains are of special concern because they exhibit rare paired hunting and group hunting behavior, never before documented in golden eagles.
Marguerite Coyle, an assistant biology professor at the University of Jamestown who has studied the golden eagles since 2002, said placement and construction of the power line could disturb nesting sites. She’s also concerned eagles could be electrocuted or be killed by striking the lines in flight.
Not one mention of all the wind farms in North Dakota. Nada. Nil. Zilch. 

The last line of the article is no longer entirely accurate. The last line:
Eagles have been protected by federal law since 1940.
Not really. Under President Obama, the Interior Department granted 30-year blanket immunity to wind farm developers whose turbines have killed any protected birds.

The hypocrisy is striking. The Geico Rock Award nomination rightly deserved. But the competition is likely to be tough this year. 

As long as we are on the subject of birds flying into wind turbines, the placement of these two headlines in The Los Angeles Times this morning was priceless:

I captured the screen shot at 5:13:13 this a.m. I was reading the iPad in bed when I saw it. I immediately jumped out of bed to get it on the MacBook Pro. I'm glad I did. Sometime between then and now (less than four hours later) the story on whooping cranes has been removed. Even the LA Times editor noted the "problem."

Neither story, by the way, mentioned the controversy over wind farms and migratory birds.