Monday, August 25, 2014

OXY USA To Report A Nice Well Tuesday -- August 25, 2014; Ron Burgundy Comes In With An IP Of 293 BBls

See first comment: reader noticed that Halcon has new permits in Williams County. This goes back to earlier discussion when Halcon said they were going to focus on Fort Berthold wells.

Eighteen (18) producing wells were completed:
  • 25912, 1,162, Zavanna, Bills 5-8 3TFH, Crazy Man, t8/14; cum --
  • 26081, 2,304, BR, Big Bend 11-2MBH, Camel Butte, t7/14; cum --
  • 26082, 1,512, BR, Big Bend 11-2TFH, Camel Butte, t8/14; cum --
  • 26093, 2,170, XTO, Loomer 24X-34A, Tobacco Garden, t7/14; cum --
  • 26125, 822, XTO, Loomer 24X-34E, Tobacco Garden, t8/14; cum -- 
  • 26126, 1,590, XTO, Rita 24X-34E, Tobacco Garden, t7/14; cum --
  • 26127, 1,809, XTO, Rita 24X-34A, Tobacco Garden, t7/14; cum --
  • 26247, 468, SM Energy, Orlynne 2-3H, West Ambrose, t4/14; cum 24K 6/14;
  • 26869, 570, XTO, Cindy Blikre 41X-2D, Lindahl, t8/14; cum --
  • 26870, 888, XTO, Cindy Blikre 41X-2H, Lindahl, t8/14; cum --
  • 26871, 670, XTO, Cindy Blikre 41X-2C, Lindahl, t8/14; cum --
  • 26872, 542, XTO, Cindy Blikre 41X-2G, Lindahl, t7/14; cum --
  • 26910, 630, Triangle, Hagen 149-100-9-4-7H, Ellsworth, t7/14; cum --
  • 26911, 590, Triangle, Hagen 149-100-9-4-8H, Ellsworth, t7/14; cum --
  • 27037, 445, EOG, Parshall 40-1509H, Parshall, ICO spacing, t8/14; cum --
  • 27137, 1,872, BR, Denali 21-4MBH, Johnson Corner 4 sections, t7/14; cum --
  • 27334, 293, Emerald, Ron Burgundy 3-23-14H, Temple, t6/14; cum --
Wells coming off the confidential list Tuesday:
  • 26678, 667, OXY USA, Mildred Sadowsky 3-11-14H-142-97, Willmen, t2/14; cum 24K 6/14;
  • 26993, 1,119, CLR, Wallace 1-6H, Oliver, t7/14; cum --
  • 27186, 54, Hunt, Blue Ridge 159-100-6-7H-1, Green Lake, t5/14; cum 4K 6/14;
  • 27560, conf, MRO, Friederich 34-24H, Chimney Butte, no production data,  
Green Lake: this looks like the first reported Bakken well in this 12-section field in Divide County, well north of Williston. 

Five (5) new permits --
Operators: HRC (3), Oasis, Solutions Energy
Fields: Tyrone (Williams), Black Slough (Burke), Lone Tree (Ward)
Comments: this is the first permit for Solutions Energy; Lone Tree field is in northwestern Ward County; there are about a dozen old Madison wells there; most are no longer producing; it appears the EUR for these Madison wells averages about150,000 bbls

Active rigs:

Active Rigs194184189195138

Wells coming off confidential list over the weekend have been posted; see sidebar at the right.

Funny How Time Slips Away

While looking for a "new" Emmylou Harris song, I happened across this "old" one. I would not have recognized the song had I not taken a cross-country trip from north Texas to the Bakken some months ago. On the trip home, passing through my favorite cross-country city, Oklahoma City, I happened to catch a Lou Reed retrospective, which I touched on some time ago.

So, here's Emmylou Harris:

Pale Blue Eyes, Emmy Lou Harris and Sheryl Crow

... and here's Lou Reed ... who wrote the song ...

Pale Blue Eyes, Lou Reed

I've run out of nickels to keep the internet line open tonight, so in a few minutes, I will be going off the air. If I remember, I will come back to this comment someone posted elsewhere:
Here’s the problem with MSNBC and CNN: predictability. You already know what they’re going to say on any issue. So why watch?
I once knew a piano player in a fancy restaurant I used to go to who could play only one song really well: Moon River. You’d get it fast and slow and reggae and cha-cha and gospel and jazz and blues, but it was still Moon-effing-River. Now if you liked Moon River, you were golden. If you didn’t, go some place else. That’s MSNBC – a “one-note Johnny.”
On the other hand, Fox is unpredictable. Of course they might have a conservative slant, but they bring in far more libs to speak their piece than MSNBC does conservatives. And I like Megyn Kelly a lot. The woman has a mouth on her. You never know what she’ll say next. Ailes allows her to go off-script. You never see that at MSNBC or CNN. Stick to the copy!
By The Way

I am happy to report there were no demonstrations or looting in downtown Williston today. I attribute that to the fact, based on analyses from mainstream media "news" outlets, that there were no militarized police visible during the day in downtown Willison.  Lots of construction workers, but no militarized police. I haven't had the chance to check on Watford City; I'll watch the news tonight.

You know, now that I mention it, when stationed in Turkey, there were militarized policemen everywhere .. and no looting or demonstrations. No rubber bullets either. Real ammo.

Power Plant Costs -- For The Archives -- August 25, 2014; Cost Of Renewable Energy -- Staggering

From an earlier post, March 20, 2014:
  • Solar: $3 million / MW
  • Wind: $2.5 million / MW
  • Natural gas: $865,000 / MW

September 3, 2014: Compare these numbers for the Emmons County (North Dakota) natural gas power plant proposal.

Original Post

A reader sent me a link to a story of Exelon buying a natural gas power plant in Boston; Houston Biz Journal is reporting:
Houston-based Calpine Corp. is buying a natural-gas fired power plant in Massachusetts from Chicago-based Exelon Corp. for $530 million to boost its presence in that area.
The deal — which translates to $655 per kilowatt — is expected to close in the fourth quarter and will increase Calpine’s footprint in the New England competitive wholesale power market.
The plant, Fore River Generating Station, was built in 2003 and is 12 miles southeast of Boston.  
According to wiki: the plant has a rated capacity of 726 megawatts. Exelon says the same thing: 726 megawatts.

$530,000,000 / 726 = $730,000 / MW. Looks like Calpine got a pretty good deal.

Now, let's see if the solar cost is still accurate. In another story sent, the link sent by the same reader, is reporting that Verizon is adding more solar power:
Verizon announced today that it will invest nearly $40 million to expand the on-site green energy program that it launched in 2013. This year, Verizon will install 10.2 megawatts of new solar power systems at eight Verizon network facilities in five states – California, Maryland, Massachusetts, New Jersey and New York. This investment nearly doubles the amount of renewable power generated by solar energy systems installed at six Verizon facilities last year.
To date, Verizon has invested nearly $140 million in on-site green energy. With the 2014 solar investment announced today, Verizon is on target to deploy upward of 25 megawatts of green energy upon completion of the new solar projects.
$40,000,000 / 10.2 megawatts = $3.9 million / MW. Of course, there may be other offsets that are not being reported, but almost $4 million / MW of solar power (when the sun is shining) seems a tad expensive (compared to $750,000 / MW of natural gas), but is in line with earlier figures. As long as Verizon subscribers don't mind paying for this, seems fair. Whatever makes folks feel good. China just brought another huge coal-plant on line today. And they will do so again, tomorrow. And the next day.
Other Miscellaneous Energy News

This will help with the tsunami of oil, natural gas, condensate tsunami hitting the gulf coast. Houston Biz Journal is reporting:
Houston-based LyondellBasell Industries will build a new chemical plant in southeastern Texas that may cost more than $1 billion.
The rapidly growing chemical company plans to produce 900 million pounds of propylene oxide, or PO, and 2 billion pounds of tertiary butyl alcohol, or TBA, and its derivatives annually at the plant.
The specifics do not interest me; the reason for posting the story -- further evidence of the widening gap between US and EU energy industry.

Look at the size of that investment: another $1 billion. 

Clearing Out The E-Mail, August 25, 2014

Two items readers have sent me.

First, oil activity along the North Dakota - Saskatchewan state/province line, as reported by the Prairie Post:
With $48.4 million in revenue raised at Saskatchewan’s August sale of petroleum and natural gas rights, the 2014 calendar year total for land sales is now $158 million, already surpassing land sale revenue totals for both the 2012 and 2013 calendar years with two sales remaining.
The average price per hectare received for the sale was $1,916/hectare, the third highest on record. The April 2008 sale holds the title for highest average price per hectare for a single sale at $2,725/hectare, followed closely by the February 2008 sale at $2,495/hectare.
The Bakken and Shauanvon light-oil plays in southern Saskatchewan are both prone to spectacular single-parcel results that we experienced once again in this sale,” Economy Minister Bill Boyd said.
“However, we’re equally pleased about land acquisitions in the heavy oil-prone areas of the province that are consistent in sale-after-sale, year-after-year. “By any measure, the volume of heavy oil in the province, estimated at 20 billion barrels of heavy oil in place, is impressive, but recovering this oil is a complex and capital-intensive process.
The August sale saw the Weyburn-Estevan area receive the most bids with sales of $43 million. The Lloydminster area was next at $2.1 million, followed by the Swift Current area at $1.8 million and the Kindersley-Kerrobert area at $1.5 million. The highest price paid for a single parcel was $17.1 million. Standard Land Company Inc. acquired the 2,201-hectare exploration licence east of Estevan. The highest price on a per-hectare basis was $10,136. Plunkett Resources Ltd. bid $634,520 for a 62.6-hectare lease southeast of Estevan.
One hectare = about 2.5 acres. I guess that $10,000/hectare works out to about $4,000/acre.

The second item was a pdf: the changing face of world oil markets, Department of Economics, UC-San Diego, July 20, 2014. Five areas of discussion:
  • world oil demand is now driven by emerging economies -- key point -- "China alone accounted for 57% of the global increase in consuption since 2005
  • growth in production since 2005 has come from lower-quality hydrocarbons -- key point -- "oil" is gtting harder and harder to find; all that "boe" is often irrelevant if it's not "oil"
  • stagnating world production of crude oil meant significantly higher prices -- key point -- "if one looks only at field production of crude oil, the picture becomes quite stark. Field production increased worldwide by only 2.3 million bopd between 2005 and 2013. That compares with a predicted increase of 8.7 million bopd from extrapolating the pre-2005 trends in consumption growth for developed and emerging economies, and that's without even taking account of the dramatic acceleration in demand from the emerging economies. ... The actual increase in field production of crude oil was only 3.1%, consistent with a shortfall of 12 million bopd."
  • geoopolitical disturbances held back growth in oil production -- really? Libya, Syria, Iran, Nigeria
  • geological limitations exacerbate world oil production -- key point -- "the overall picture is that the Middle East countries have been devoting ever increasing resources to upstream development and yet have very little additional oil production to show for it." I've talked about that often and fits my world-view. 

The Day Of Reckoning -- RBN Energy, August 25, 2014

Yesterday I made the comment:
I doubt legislators in Bismarck are really paying much attention to the Bakken. Not paying attention to something is how things take us by surprise. I have always been and remain inappropriately exuberant about the Bakken, but there are some realities.  
Today, RBN Energy has an essay on precisely what I was alluding to: the day of reckoning.
Last week RBN co-hosted the “Surviving the Flood” conference with Turner, Mason & Company in Houston. The major theme of the conference was the expected timing and likely impact of a “Day of Reckoning” for the US oil market that could come any time between 2015 and 2020 depending on critical factors influencing market dynamics. If and when the big day arrives, and if export rules don’t change and refinery hardware is not upgraded, Gulf Coast light Louisiana sweet (LLS) crude could be trading at a discount of $15-$20/Bbl to international light sweet benchmark Brent. Today we discuss the day of reckoning and its critical influencers.
The conclusion:
The Day of Reckoning could theoretically come as soon as next year (2015) if all of the factors we have described here do not work in favor of reducing US crude imports and increasing processing of domestic shale. The extent to which some or all of these factors improve the volume of domestic shale crude that US refineries process will delay that DOR – perhaps until after 2020. A significant change to the export rules to permit all crude exports is not expected by either RBN or TMC but it would of course be a game changer that would postpone the DOR for good. The positive news is that the oil industry is responding to the challenge and making progress in pushing back the DOR. We will continue to inform that debate.
Some data points North Dakota needs to keep in mind:
  • there is a tsunami of light oil hitting the market; it already outstrips what refiners can handle
  • North Dakota produces 12% of total US production
  • North Dakota is producing 1 million bopd
  • Texas is likely to increase its light oil production by another 1 million bopd by this time next year
An unchanging trajectory, the math -- actually arithmetic -- is easy.

Monday, Monday -- August 25, 2014; Market Hits New High

As the numbers are posted, the previous post will be updated -- all the wells coming off confidential list today, but while waiting for them, need to move on.

I see the sun breaking through -- looks like it might be a very, very nice day here in the Bakken. I just received two more restaurant recommendations in the area: the Japanese restaurant up the hill, around the corner from Buffalo Wings. My sister took the family out to this restaurant a few weeks ago; raved about it. I will have to take my dad. The other one is Teddy's in Watford City. Again, these are just two of more than a dozen wonderful new restaurants (and old restaurants).

However, if you want the best traditional breakfast in the Bakken, it might be hard to beat the Country Cafe in Alexander. My dad wanted to visit the cafe yesterday; which we did. Wonderful breakfast at 12:00 noon; I don't know how long they serve breakfast, but at least through the noon hour. This is the real deal.

By the way, speaking of Alexander. The bypass around the city is coming along nicely; the north point is about a mile north of the city; it's going to be a nice, gentle curve to the west as you go south. It appears to parallel the city about a mile or so to the west. We couldn't locate where it will end up, but it appears it will be a full three miles south of the city -- which means it must be hooking up on the Sather Road somehow. It will be interesting to see how that sweeping turn at the Sather Road interchange will change. 

The Wall Street Journal

Lead story -- Islamic State captures air base in Syria.

Next story -- presssure builds on Obama to act.

Burger King in talks to buy Tim Hortons. Why is this important? It would allow Burger King to headquarter in Canada -- huge tax savings -- reported by CNBC earlier today.

This is an interesting story: teens need later start to school day, doctors say. Okay.  

Millennials lose taste for McDonald's.

I thought they were already retired. Wow, great story. Air Force wants to retire warthogs -- the A-10s.

Apple's next act for the iPad. Sales have been falling for Apple's pioneering tablet, but the iPad still plays an important role. The biggest problem for Apple and the iPad: they are too good; they last too long; they don't become obsolete fast enough.

The Los Angeles Times

Lead story: Napa Valley earthquake. No fracking connection, as far as I know.

Emmys: tonight. "Aw jeez, 'Fargo' snags 18 nominations, sets FX record.  Requires subscription or payment. But you can see the headline.

For Investors Only

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Seven companies with increased dividend announcements including WMB (from 42.5 cents to 56 cents, and now paying 3.8%); Altria (paying almost 5%).

Trading at new 52-week highs today: AAPL, DIS, EEQ, EPD, NFLX, PSX, RAIL, WPX.

Greeting Card Sweatshop

The quota is 500 greeting cards per day. No lunch or dinner until at least 350 cards are made. 

Just joking.

But this is not a joke: AAPL is now worth $100 billion more than GE and Wal-Mart combined