Saturday, April 26, 2014

Another EOG Clarks Creek Well Has Been Added To Monster List Of Wells

See first comment below: This is a lower bench Three Forks well. There is an extreme structure in that area due to a fault, making some of the wells very prolific.

Another EOG Clarks Creek well has been added to the monster list of wells:
  • 20513, 2,365, EOG, Riverview 3-3130H, Clarks Creek, 49 stages; 9.8 million lbs, all sand; middle Bakken, seam about 40 feet thick; t3/13; cum 354K 2/14;
In less than a year this well has produced more than 350,000 bbls of crude oil; it continues to produce almost 20,000 bbls of crude oil per month (at $90/bbl = $1.8 million/month; at $75/bbl = $1.5 million/month). Some say these wells are costing $7 to $8 million to drill/complete.

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Baker Hughes To Disclose Fracking Components; Halliburton Studying Baker Hughes' Decision

Rigzone is reporting:
The U.S. Department of Energy said Friday that it welcomes the decision by oil and gas industry supplier Baker Hughes to disclose all chemicals in hydraulic fracturing fluid.
But Halliburton, a major competitor in the field, isn't committing to such disclosure.
Deputy Assistant Energy Secretary Paula Gant said that Baker Hughes' move "is an important step in building public confidence" and the department "hopes others will follow their lead."
The oil and gas industry has said the fracking chemicals are disclosed at tens of thousands of wells, but environmental and health groups and government regulators decry a loophole that allows companies to hide chemical "trade secrets."
Houston-based Halliburton said Friday that it's studying the move by Baker Hughes, which is also based in that city. Halliburton said it had an interest in protecting "our intellectual property and the substantial investment it represents" and will examine the new Baker Hughes format for its ability to protect such investments.
Baker Hughes said it now believes it's possible to disclose 100 percent "of the chemical ingredients we use in hydraulic fracturing fluids without compromising our formulations," to increase public trust.
Fodder for activists. 

Hope Springs Eternal

Reuters via Rigzone is reporting that Canada still bets that the US approves the Keystone:
Canada remains confident Washington will ultimately approve the Keystone XL pipeline to the U.S. Gulf Coast, two prominent cabinet ministers said on Friday, adding that the latest U.S. delay is political and not based on environmental concerns.
In his first public remarks on the controversial project, the country's new energy minister, Greg Rickford, said he hoped the Obama administration will "depoliticize" its decision on Keystone XL and give it the green light.
"On the Keystone, we're still very hopeful ... that this will go ahead sooner rather than later, and it will simply add to the economic benefits of pipeline transmission of energy products," Rickford told reporters after a speech in the Toronto suburb of Mississauga on Friday.
"Obviously we hope sooner rather than later that this is depoliticized, if you will, and that the communities along the pipeline, which include Canada and the United States, can reap the tremendous economic benefits of Keystone," he said. 
This must have been an extremely slow news day over at Reuters

"The sooner the better"? It's been six years.

Does anything else need to be said?

Oil Firms Bringing In The Big Guns To Extend The Life Of The North Sea Oil Fields

Reuters via Rigzone is also reporting:
Smaller oil producers are teaming up with engineering and oil services companies in Britain's North Sea to squeeze extra drops from aging facilities before rising costs force them to close.
Improving "wrench time" - hours spent at work sites rather than on assessments and form-filling - and bringing in specialist teams to boost recovery rates, will help prevent early decommissioning, industry participants say. Oil services companies are competing to take on "late life" asset work, providing the expertise that smaller producers lack. 
Peak Oil, anyone?

Brazil Looking To Chinese For More Investing

Reuters via Rigzone is reporting:
China might be slowing economically but it still wants to buy more oil from Latin America and invest in infrastructure in the region, with a presidential visit planned for July, Chinese and Brazilians officials said on Friday.
As host of the 2014 soccer World Cup, Brazil is hoping Chinese President Xi Jinping, who is known to be a fan of the sport, will attend the final game on July 13 in Rio de Janeiro's legendary MaracanĂ¡ stadium.
Brazilian President Dilma Rousseff recently said Brazil's partners in the BRICS group of leading emerging nations asked for the summit that she will host be rescheduled for two days after the World Cup so their leaders could attend. Chinese Foreign Minister Wang Yi, on a one-day visit to Brasilia on a Latin American swing, did not confirm Xi would accept Brazil's invitation to attend the World Cup final.
Wang reinforced China's interest in setting up a fund to increase investment in infrastructure that is lacking in Latin America, where China gets much of its raw materials, such as iron ore, oil and soy beans.

Electricity Rates May Be Going Up For Good; So, How's That Renewable Energy Working Out?

I posted this story earlier, without the link. It was the top story in the Los Angeles Times today. The story is now going viral as they say. Here it is, being re-reported in Chicago Tribune. For all I know this is where it was originally published. Machts nichts. The mainstream press is reporting:
As temperatures plunged to 16 below zero in Chicago in early January and set record lows across the eastern U.S., electrical system managers implored the public to turn off stoves, dryers and even lights or risk blackouts.
A fifth of all power-generating capacity in a grid serving 60 million people went suddenly offline, as coal piles froze, sensitive electrical equipment went haywire and utility operators had trouble finding enough natural gas to keep power plants running.
The wholesale price of electricity skyrocketed to nearly $2 per kilowatt hour, more than 40 times the normal rate. The price hikes cascaded quickly down to consumers. Robert Thompson, who lives in the suburbs of Allentown, PA, got a $1,250 bill for January.
The bill was reduced to about $750 after Thompson complained, but Susan Martucci, a part-time administrative assistant in Allentown, got no relief on her $654 charge. "It was ridiculous," she said.
The electrical system's duress was a direct result of the polar vortex, the cold air mass that settled over the nation. But it exposed a more fundamental problem. There is a growing fragility in the U.S. electricity system, experts warn, the result of the shutdown of coal-fired plants, reductions in nuclear power, a shift to more expensive renewable energy and natural gas pipeline constraints. The result is likely to be future price shocks. And they may not be temporary.
One recent study predicts the cost of electricity in California alone could jump 47% over the next 16 years, in part because of the state's shift toward more expensive renewable energy.
"Consumers switch to renewable energy." And there it is, in black-and-white: all those naysayers who keep telling us wind is free and solar is free and even if they aren't, they are less expensive than fossil fuels, and even if it won't make a difference because China is building a new coal-fired plant, on average, every day, if it makes us feel good, we should switch to solar.   

But if you don't mind $1,200-monthly utility bills, renewable energy will be just fine. If nothing else, it will make you feel good.

Seriously, I find it interesting the mainstream media is starting to report what regular readers knew all along.

Global Warming Climate Change Extreme Weather Global Cooling IceAgeNow  Whatever

Russian Urals experiencing worst spring snowstorm in 123 years.

A Little Something For Dickinson

The Dickinson Press is reporting:
A Singapore-based investment company has set its sights on Dickinson for its next project, a high-end, 280-acre residential and retail development slated for construction in 2015.
Barons Group of Companies released conceptual plans earlier this week for Barons Vista, billed as a “retail garden mall and community lifestyle development” on the south side of Interstate 94 Exit 59. It would be situated between the Dickinson Hills Shopping Center and West Ridge developments.
The ambitious design includes up to 700 housing units, an indoor mall, hotel, amphitheatre, a family friendly park and a 15-story tower to act as a “lighthouse to travelers arriving in Dickinson,” which, once completed, would be tallest building in North Dakota.
The only thing missing would be putting the Obama Presidential Library here. 

I particularly like the "family friendly park" as opposed to a "family unfriendly park."

It will be interesting to see if the city approves the concept. LOL. A "lighthouse" beaconing and beaconing" Americans to visit the Bakken is exactly what the city needs. LOL.

Be sure to visit the link to see the artist's drawing of the proposed "lighthouse."

I'm not sure what tag to use to track this story. Staggering?

Later in the story:
He said the company might continue building around the area, with talks of a hotel-adjacent restaurant and convenience store.
I'm thinking maybe in Grassy Butte, north of Belfield.

Afternoon Tea

Lemon poppy bread and honey from the Grapevine (Texas) Farmers' Market. Rose tea -- one of the best teas I've ever had -- from the Grapevine Tea and Spice Exchange on Main Street. The chocolate cake? Olivia won it at "playing" the "Cake Walk" at their school's "Spring Fling" last night.

More Bakken Development Projects

I'll write more on this later.

The pdf is here:

Teapot Dome, Wyoming, Poised For CO2 EOR is reporting:
Teapot Dome is about 30 miles north of Casper.

The 9,500-acre oil field, which produced 28 million barrels, still has 300 million barrels of oil in place, said Meagher Energy President Matt Meagher.

"Of course, not all that is recoverable," he said. "It is a good candidate for enhanced oil recovery."
Operators probably would pump carbon dioxide gas into the field to boost production.

Saturday Morning Musings On The Bakken

This is, without question, the best time of the year, at least as I remember it, looking forward to summer. Mornings can still be cold, frightfully cold, in northwestern North Dakota, but compared to February, it is time for short sleeves to start showing up. I imagine the mud from the spring thaw is a real mess in the Bakken, but this, too, will get better. It is unlikely that the Bakken will see any more snow unlike northern Minnesota which is still getting snow this weekend.

I was not surprised to see the number of active rigs decline this past week which I attributed to road restrictions during the spring thaw, but it was disheartening to hear that the word "on the street" (at least one street, I suppose) is that the number of rigs will remain down or continue to decline this summer in the Bakken as operators move assets to other shale plays in the United States. The Permian and the Eagle Ford (or as they say down here, the "eagelferd") in Texas and the Bakken in North Dakota are the three big shale plays in North America. Texas and North Dakota are now producing more oil than the entire country of Canada. Is that a typo? I don't think so. I think I read that over on Carpe Diem.

But it was not the "rig story" that caught my attention. It was the housing story.

Some weeks ago, Williston, North Dakota, made international news when it was widely reported that Williston had the highest average rent for apartments in the United States. That's pretty impressive, but not what we like to hear.

For every action, there's a reaction.

I was impressed how quickly the reaction came. Unfortunately it should have come two years ago. But that's another story.

The reaction to the fact that Williston holds the record for rent? The first story was reported in The Wall Street Journal on April 23, 2014: man camps gain ground in the Bakken.
Target Logistics, a Boston-based builder and operator of dormitory-style housing, recently landed a nearly $30 million contract to provide lodging for hundreds of oil-field workers in North Dakota over the next three years. The deal is the latest example of rising demand for professionally managed "man camps," sprawling barracks that house mostly male workers at American and Canadian oil sites.
The second story came from a personal conversation about a new 700-unit development project underway north of Williston.

Those were huge stories. 

For newbies, I truly thought we were well past the era of man-camps in the Bakken. Even polls from quite some time ago suggested most folks reading the blog and voting in the polls, thought we had seen the peak with regard to man-camps. So, when I saw a single $30-million contract for Target Logistics for new and continued man-camp projects, I was quite stunned.

But that was nothing compared to hearing that a brand new 700-unit development was already under construction north of Williston (at least I think it's under construction). If I understood correctly, folks were already out there and buying lots or homes. [Later: I am not sure if this development is the "North Star Center" or a separate entity. Machts nichts.]

That would have been enough to suggest to me that the Bakken boom was not over. I think a lot of folks equate the boom with drilling, and once The Atlantic Monthly suggested drilling had reached its peak in the Bakken, the boom was over. I don't think folks understand all the work that goes into maintaining those wells. One has to remember, that for the most part, the oil and gas industry was pretty quiet in North Dakota after the 1980's. Not much was done. No infrastructure going in. Really nothing.

Then the drilling boom. But the infrastructure is still far behind. The story about the tremendous amount of natural gas being flared on BLM-land in the reservation tells us how much work is left to be done. They say it will take five years just to cut the flaring in the reservation by half, and that will still be too high. In a mature field, about 3% of natural gas produced should be flared. They are flaring almost 50% of produced natural gas in the reservation; cutting that in half still brings us only to 25%. Cutting that in half gets us to 15% and so it goes. The story was all about the federal bureaucracy in getting pipeline easements but that suggests to me that folks don't understand natural gas. Neither did I when I first started blogging and I still probably understand about 1% of all that goes on with natural gas, but I do know that one needs to "gather and process" natural gas before it is put into the national grid. Processing natural gas required processing facilities that look a lot like, and cost a lot like, small oil refineries. ONEOK announced a flurry of new natural gas facilities some months ago (more than a year ago? I lose track of time), most of the around Watford City, a couple west of Williston, but since then, no new announcements.

Back in 2011, when I stumbled on the first natural gas processing plant I ever saw being built, I was amazed at all the pick-up trucks on site. There must have been 200. Maybe I'm exaggerating. Maybe it was only 100. But it was a lot, and I think the project took about a year, from first dirt being moved to coming on-line. (I think the Hess expansion in Tioga probably brought the unit off-line for six months, maybe less.) The point is that there is still a lot of work to be done, just with natural gas.

For newbies, the Bakken is 95% oil. If there is all this work to be done with just natural gas in a boom that is an oil boom, not a natural gas boom, imagine all the work yet to be done in the oil arena.

I think about that a lot.

But yesterday's announcement that Williston had approved more than 2,000 residential units for one development was beyond the pale. It is being reported in The Williston Herald. [By the way, based on close reading of the article, one starts to see why Williston was so slow to respond to the severe housing shortage. Greed.]

We are eight years into the Bakken boom in North Dakota, fourteen years after it started across the state line in Montana. This one development will have more units than all the units approved by Williston all of last year. That is simply incredible.


When the boom first began, there was a lot of talk about how families would not move to Williston, they would not settle in Williston.

I talked about that one one or two occasions based on my experiences in the military.  Folks who thought girl friends and wives and families would not follow their husbands to Williston did not understand the strong nuclear force that holds families together, something that always impressed me during my military career.

So, that happened.

And then something else happened, which was also predictable. Newly arrived families wrote back home and said things weren't so bad in Williston. And that brought more families.


We might have gotten a hint that this was all yet to come. The tea leaves began to swirl on Monday, April 14, 2014, when there were numerous stories that more construction workers were needed for the Bakken. On April 17, 2014, there were rumors that a shortage of welders could impact the Bakken.


By the way, near the beginning of this post I mentioned that the "word on the street" was that some operators would be moving some of their assets to other shale plays in the US. That may very well be, but four things need to be noted: 
  • new operators are moving into the Bakken
  • some operators have said they will increase the number of rigs in the Bakken this year
  • some operators are operating only in the Bakken (KOG, Oasis, come to mind)
  • some operators have operations elsewhere, but the Bakken is their focus (CLR, comes to mind, possibly WLL)
One might add some minor points:
  • the drilling environment in North Dakota remains one of the best for the oil and gas industry
  • it is unlikely California will do much this year with regard to new shale operations
For newbies, the number of rigs, for me, represents "activity" and jobs. The number of rigs has become less important over time with regard to overall production. The new rigs are more effective (I purposely use the word "effective" and not "efficient" for reasons I've discussed before). Drilling times have decreased and down time between drilling wells has decreased. IPs have increased, and decline rates are decreasing. 

The number of active rigs also represents the amount of truck traffic. A decrease in the number of rigs in the Bakken is not necessarily a bad thing. For me, setting new records in the Bakken (with regard to production, for example) no longer matters. I think most folks would like to see orderly and steady improvement in the quality of life in the Bakken more than they would like to see new production records.

Week 17: April 20, 2014 -- April 26, 2014

Top story of the week: Williston approves more than 2,000 new residential units; more than number of residential permits approved all last year (2013)

Top "humor" of the week: will it be "fracked" natural gas?

Update on declining number of active rigs in the Bakken
Liberty Resources II, LLC, back in the Bakken

Main problem with flaring in the Bakken is on BLM-managed land in the reservation

Frackers using water to drain unwanted sloughs; will comply with state water commission

New mobile railcar repair service company announced focused on the Bakken

Man-camps gain ground in the Bakken
Random update of the boom with video 
Six North Dakota post offices to get new technology, including Watford City
Bank of North Dakota sets profit record for 10th straight year

For investors
Richard Zeit on CLR's aggressive move in the Bakken
COP in the Eagle Ford; compare to the Bakken
Nighthawk Energy in the D-J Basin at $860/acre

Monthly NDIC hearing; I have not heard if the big Slawson case was heard 
The Washington Post calls Obama's dithering on the Keystone embarrassing; tells Obama to approve the pipeline and move on
Paradigm shift: Big Oil + Big Coal = Big Energy --> Big Rail
Big drug problem in North Dakota began in 1998; probably less of a problem on a per capita basis now

Top Story Of The Week: Williston Approves More Than 2,000 Units

This story squeaks in. Arrived last night, but I didn't have time to post it. Don sent it to me this morning. The Bismarck Tribune is reporting:
Williston's City Commission has approved plans for a 535-acre development that will bring 2,024 residential units to the housing-strapped city.
Colorado-based LAI Design's North Star Center residential and commercial project was approved Tuesday.
Okay, so last year the city approved  1,637 units last year (2013) for the entire year. This one development will add 2,024 residential units surpassing, by far, the entire number of units approved last year.

Memo to self: write The Atlantic Monthly -- the boom is not over.

Can you imagine the number of electricians it is going to take to get this done?

The Williston Herald has more on the story, some data points (some numbers rounded):
  • North Star Center; to break ground this summer
  • 535-acre development (more than half the site will be commercial; less than one-half residential, quality of life)
  • 2,024 residential units near 56th Street Northwest
  • 1,349 apartment units, 94 single-family lots and 176 twin homes
  • north boundary is the new bypass
  • project was submitted in the fall of 2013
  • revised due to the intended route of the truck bypass that originally bordered the northern boundary of the property, where North Star was intended to intersect with County Highway 6
  • the truck route will take about 21.1 acres away from the project site
  • 225 acres of commercial space will be developed into hospitality, entertainment, strip-center retail, medium-box retail and automobile dealerships
  • 62 of heavy commercial property includes warehousing, contractor shops and yards and truck and heavy equipment dealerships, but excludes oilfield activities.
  • 105 acres is designated for parks and open space
  • 50-acre park platted for the development of baseball diamonds and supporting facilities
  • 15 phases for development
  • Members of the commission board voted 4-0 in approval
  • Commissioner Tate Cymbaluk, real estate business, abstained from the decision

Saturday Morning -- April 26, 2014

Top story, Los Angeles Times: Electricity Prices May Be Going Up For Good

Why? Coal-fired plants are being shut down. Nuclear power is reduced. "Consumers switch to renewable energy." And there it is, in black-and-white: all those naysayers who keep telling us wind is free and solar is free and even if they aren't, they are less expensive than fossil fuels, and even if it won't make a difference because China is building a new coal-fired plant, on average, every day, if it makes us feel good, we should switch to solar.  

The Wall Street Journal

That "final" warning to Russia? Not so fast. Friction between allies delays more Russia sanctions. As posted earlier in musings: a) companies won't be coming back to Russia any time soon if they leave; and, b) could be a cold, cold winter in Poland. US president has little support.

Man-made fibers set to topple King Cotton.

Here it comes: California looking at financing high-speed bullet train with cap-and-trade program on carbon emissions. If you thought $4.85/gallon gasoline was expensive, we haven't seen anything yet.

 Portugal set for clean bailout exit.

This really caught me by surprise. It demonstrates what a country can do with the right leadership. Germany considers tax cuts amid rapid rise in revenue. Never, never expected that.

This is interesting. It looks like the Filipinos really did like us after all. The Nobel-Peace-Prize president ready to send US troops back to the Philippines.

Michigan basketball start Mitch McGary is entering the NBA draft. Caught smoking marijuana during the NCAA basketball tournament, he would have face a one-year suspension had he returned to college.

Oil futures sag on record supplies.

Ford profit drops almost 40% on higher costs.

The Los Angeles Times

Favorite story: crying over a 40-year sentence for a non-fatal shooting on USC campus. Gang-banger going to prison; threw temper tantrum on defense table when sentence read, crying that he wasn't a gang-banger. Actually left the party on campus to go home, get his gun, return to the college party (he was not a student at the college) and then fired to shoot his arch enemy, missing, wounding four others in the melee. I infer that Sandy thinks the sentence was too harsh, writing "... our tough-on-crime statutes don't weight the humanity or the potential of criminals."

What, the potential of criminals. He has forty years to work on his potential. He could become a great novelist.

The columnist: "I considered the courtroom scene [i.e., the temper tantrum by a grown man and gang banger] a cautionary message ... You could spend the rest of your life in prison over a stupid vendetta and a single violent act." Something tells me this was not his first run in with the law. Could be wrong, probably am. But in general, most folks don't go to prison after one offense.

Anyway, enough of this, time to get back to the Bakken.

Don't Take Your Guns to Town, Johnny Cash