Monday, March 10, 2014

Nine (9) New Permits -- The Williston Basin, North Dakota, USA

Active rigs:

Active Rigs191187206172102

Nine (9) new permits --
  • Operators: Whiting (6), Newfield (2), OXY USA
  • Fields: Hay Creek (McKenzie), Sanish (Mountrail), Tobacco Garden (McKenzie), Harding (McKenzie), Crooked Creek (Dunn)
  • Comments:
Wells coming off the confidential list over the weekend were posted earlier; see sidebar at the right. 

Two(2) producing wells were completed:
  • 25973, 1,812, KOG, P Vance 154-97-4-17-20-13H3, Truax, t2/14; cum --
  • 25812, 165, Slawson, Jugard (federal) 6-26-35TFH, Big Bend, t1/14; cum 4K 1/14
Wells coming off the confidential list Tuesday:
  • 22221, 1,379, Oasis, Innoko 5301 43-12T, Baker, t9/13; cum 26K 1/14;
  • 23878, drl, CLR, Juneau 5-11H, Brooklyn, no production data,
  • 24706, 2.062, Oasis, Kristie 5300 13-13B, Willow Creek, t10/13; cum 65K 1/14;
  • 25120, 1,376, Oasis, Annie 5502 43-7B, Squires, t11/13; cum 18k 1/14;
  • 25121, 792, Oasis, Aerabelle 5502 43-7T, Squires, t11/13; cum 10K 1/14;
  • 25309, 528, Oasis, Gasser 5892 21-30T, Cottonwood, t10/13; cum 17K 1/14;
  • 25310, 1,023, Oasis, Harvey 5892 21-30B, Cottonwood, t10/13; cum 21K 1/14;
  • 25535, drl, KOG, P Thomas 154-98-14-33-4H, Truax, no production data,
  • 25559, 338, Oasis, Domino 5002 43-11H, Foreman Butte, t11/13; cum 24K 1/14;
  • 25571, 1,427, Oasis, Colville 5301 44-12T, Baker, t9/13; cum 22K 1/14;
  • 25686, 251, Oasis, Demorrett 5693 43-12B, Alger, t10/13; cum 38K 1/14;
  • 25938, 377, SM Eenrgy, Windfaldet 2-4H, Garnet, t1/14; cum 7K 1/14;
  • 26034, 545, Oasis, Bonita 5992 42-22 2B, Cottonwood, t10/13; cum 15K 1/14;
  • 26287, drl, MRO, Adam Ell 34-33H, Murphy Creek, no production data,
Other Oil News
 American Eagle Energy (AMZG)
American Eagle Energy announces exercise of purchase option and updated 2014 capital budget; Announces offering of 10 mln shares of common stock after giving effect to a 1 for 4 reverse stock split that will occur concurrently with pricing of the offering (AMZG) 2.00 -0.05 : Co announced the exercise of its option to purchase increased working interests in its Spyglass Area and updated its 2014 capital budget. The Company has notified its JV Partner in its Spyglass Area of the exercise of its purchase option to increase its working interests on existing acreage from ~44% to 55% in its total Spyglass Area and from ~51% to 60% in its proved area of Spyglass for total consideration of $47 million.

The Company is also updating its 2014 capital budget to include a continual two rig horizontal drilling program on the Company's ~37,900 pro forma net acres in the Spyglass Area of the Williston Basin. The Company plans on spending $86.1 million on drilling and completion activity. The Company plans to spend $82.2 million to drill 24 gross (13.8 net) operated wells and $3.9 million to participate in 0.6 net non-operated wells by year-end 2014.

Co also announced it intends to commence an underwritten public offering of 10,000,000 shares of the Company's common stock after giving effect to a 1 for 4 reverse stock split that will occur concurrently with pricing of the offering. The Company plans to use the net proceeds from this offering (i) to fund the exercise of its purchase option to acquire a portion of its JV partner's interests in its existing acreage and wells in the Spyglass Area, (ii) to fund a portion of its capital budget for the 12-month period ending December 31, 2014, and (iii) for general corporate purposes, including working capital and additional leasehold acquisitions. The Company has granted the underwriters a 30-day option to purchase up to an additional 1,500,000 shares of common stock. Johnson Rice & Company L.L.C. is acting as sole book-running manager, Northland Capital Markets and Euro Pacific Capital are acting as senior co-managers, and Canaccord Genuity and Wunderlich Securities are acting as co-managers of the offering.
After hours, upon announcement, stock dropped over 10%.

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. 

Catalytic Reformates -- The Impact Of The Bakken

Active rigs:

Active Rigs192187206172102

RBN Energy: catalytic reformates -- the impact of the Bakken.
Reformate is a blending component that makes up about 30 percent of US gasoline supplies. It is also an important source of aromatics used as feedstocks for the petrochemicals industry. Ongoing changes in the US crude oil slate are reducing the volume of heavy naphtha available to feed catalytic reformer units that make reformate. At the same time better economics for lighter ethane feedstock are reducing the volume of aromatics produced as byproducts of olefin cracking. The result is a shortage of the aromatic materials used to produce a number of petrochemical intermediates such as polymers and fibers. But more changes are coming to the reformate market due to reductions in the use of reformate in gasoline.  Today we look at the changing role of reformate.
In fact the shortfall in US supplies of BTX or reformate to make BTX means that imports of these materials are increasing. We don’t have good data on the imports of these aromatics. However we do know that the feedstocks for European and Asian petrochemical crackers are still predominantly naphtha range materials. That means these plants are producing more pygas – from which BTX can be extracted.
As the US crude oil slate gets lighter because of the dramatic increase in lighter crude from shale, refineries are producing less heavy naphtha to make refinery reformate. Although less reformate is being used in gasoline these days, there is increased demand for this intermediate product to make BTX for use by the petrochemicals industry. But without access to heavy naphtha supplies refiners cannot take advantage of higher BTX prices to improve their margins. This situation is likely to get worse as refineries have to process more and more light crude – reducing their ability to run their reformer units.
A reader (DS): BTX = benzene, toluene, xylenes.

Monday Morning -- Welcome News In The Bakken

Tesoro Logistics LP announces that in response to interest from a higher than expected number of potential shippers, it is extending its binding open season for firm priority capacity on the Tesoro High Plains Pipeline system until Apr 4, 2014 at noon central time.

TLLP also announced that to maximize the number of potential shippers on the system, the size of bid tranches would be reduced to 5,000 barrels per day (bpd), for both Phase 1 and Phase 2. As previously announced, the proposed THPP capacity expansion would be executed in two phases:
  • Phase I will provide incremental capacity to transport up to approximately 70,000 barrels per day of crude petroleum from various locations south of Lake Sakakawea, including Johnson's Corner, Keene, Blue Buttes and Charlson Station, to Ramberg Station by July 1, 2014.  
  • Phase II will provide incremental pipeline capacity of up to 90,000 bpd from Ramberg to Stampede, with an expected in-service time frame of second half of 2015.  
  • The in-service time frames are subject to THPP obtaining sufficient commitments from shippers as well as regulatory and internal approvals. Concurrent with the start of the open season, TLLP also announced its proposal to expand the Bakken Area Storage Hub terminal facility.  
  • TLLP is also extending the time for potential customers to submit offers for BASH storage space until April 4, 2014. 
Speaking of Pipelines

Coincidentally, The Minot Daily News has an update on pipelines relevant to the Bakken
Justin Kringstad, director of the North Dakota Pipeline Authority in Bismarck, said in his Feb. 14 report of production and transportation that an estimated 20 percent of the Williston Basin crude oil is transported by pipeline. The report used December 2013 information, the most recent available.
The remainder of the transportation is:
  • 1 percent by truck to Canadian pipelines.
  • 6 percent to the Tesoro Refinery in Mandan.
  • An estimated 73 percent by rail.
Besides the Sandpiper project, the proposed Dakota Pipeline, Vantage Pipeline and Alliance Pipeline are also major pipeline projects in North Dakota.
WBI Energy, the pipeline and energy services subsidiary of MDU Resources Group, Inc. announced on Jan. 30 that it was holding an open season for its proposed Dakota Pipeline, a 375-mile natural gas pipeline from western North Dakota to northwestern Minnesota, according to company information.
The Wall Street Journal

The downed airliner: looks like another "Lockerbie."

The West tries to loosen Russian's natural gas grip. Good luck. All that EU investment in renewable energy certainly looks foolhardy in hindsight. I guess it was a choice between supporting the activist environmentalists and "realpolitiks" and the environmentalists won.
Western officials are scrambling to loosen Russia's energy stranglehold on Ukraine, the latest sign of growing pressure on Moscow to end the crisis.
The options being considered by officials from Brussels to Washington include larger exports of U.S.-made natural gas, reversing the flow of natural gas through pipelines from Western Europe back into Ukraine, and accelerating plans across Europe to buy more energy from countries other than Russia.
"If no solution to this can be found," European countries will "recast their approach to energy and economic links with Russia over time," U.K. Foreign Secretary William Hague said Sunday. Western officials also have threatened sanctions against Russia if the Kremlin continues its occupation of the Crimea region of Ukraine.
The threats have failed so far, with Russian President Vladimir Putin declaring his support Sunday for Crimea's move to secede from Ukraine. The region could join Russia as soon as this month, a Kremlin-backed leader in Crimea said.
I personally don't think the Obama administration can act quickly enough to help the Europeans with natural gas. It's only been six years for him to make a decision on one pipeline, the Keystone. Oh, that's right, he hasn't made a decision on that pipeline either.


It looks like Americans cannot afford to get into the housing market. Developers are turning to building apartments.
The share of new homes being built as rental apartments is at the highest level in at least four decades, as an improving jobs picture spurs younger Americans to form their own households but tighter lending standards make it more difficult to buy.
Residential construction—a pillar of the economy and employment—is starting to ramp up again overall, but in previous years the growth was driven by single-family homes.
Last year, according to census data, construction was started on a little less than one million new residential units, and about one in three of those was a rental in a multifamily building, the highest share since data began in the mid-1970s. Single-family homes accounted for about two-thirds of housing starts last year, down from their peak of 87% in 1993 and about 80% in the years leading up to the recession, the census data showed.

The EPA may not like fracking and the EPA may not like coal, but the EPA can get along with radioactivity. EIEIO.
An Environmental Protection Agency review board was pressured by officials at the agency to soften its challenges to an EPA plan for dealing with a highly contaminated radioactive waste site in this St. Louis suburb, a former board member and other people familiar with the matter said.
In what some saw as a sign of the intensity of the dispute, the EPA turned a 2012 review of the site from a public process to a confidential one. Some people familiar with that move believe it was done to save the EPA the potential embarrassment of the dispute becoming public.
The EPA, in written responses to questions, denied that pressure was put on the review board or that there were attempts to hide its views. The agency said a nonpublic "consultation" on the plan was more appropriate than a full public "review" because it was determined that more sampling and testing needed to be done at the site. It acknowledged, however, that a switch from a review to a consultation had never before happened.