Wednesday, September 10, 2014

Projected Permits -- Calendar Year 2014 As Of September 10, 2014

As of September 10, 2014, and the two previous years:

Calendar year, 2014
  • Permits to date: 2,028
  • Projected permits for the year at this point: 2,926
Calendar year, 2013
  • Permits as of September 10, 2013: 1,736
  • Projected permits for the year at this point: 2,505 
Calendar year, 2012
  • Permits as of September 10, 2012: 1,575
  • Projected permits for the year at this point: 2,272 
See tags for previous projections.

The Wall Street Journal

Captain America lays out the plan for the world's best military to join forces with the rest of the world to destroy ISIL. Apparently, the strongest military in the world "will rely on local forces in Iraq" to destroy ISIL, the same forces that have been so successful to date in holding back ISIL.

West Nile virus slams California; due in part to the severe drought. The risk, of course, is that West Nile virus could jeopardize building the bullet train, just as malaria jeopardized the Panama Canal. Well, maybe that's a stretch.

Looks like Syria used weapons of mass destruction (chlorine) .... we've seen this movie before.

The Ukraine president says that most Russian troops have been withdrawn from eastern Ukraine.

France lowered its growth forecast again and warned it will need more time to bring its public deficit in line with European Union rules. Oh, boy.

Several stories on Scotland going its own way; the vote is September 18, 2014.

Growth in the cost of health care coverage appears to be slowing; perhaps up only 3% this year, pushing the average annual premium for a family plan to just under $17,000. Well, that's good news.

Charles Munger defends Warren's recent deals.

The Los Angeles Times

Top story: Captain America vows to hunt ISIL militants "whever they exist." Except, of course, if they are coming through our southern border, along the Texas, Arizona, California borders. There his OPEN BORDERS policy takes priority, I suppose.

Time for Roger Goodell to be sacked. Like that will happen.

Siverston Oil Field Has Been Updated -- September 10, 2014

Siverston oil field has been updated.

Back in the July, 2013, NDIC hearing dockets, XTO requested sites for up to 300 more Bakken pool wells. Newbies may enjoy seeing how the Siverston field is playing out, looking at the high IPs XTO is reporting, and comparing the wells of various operators in that field.

Brent Below $100, Saudi Cuts Production

Rigzone is reporting:
Top oil exporter Saudi Arabia told OPEC it reduced its oil output in August by 400,000 barrels per day (bpd), a cutback coinciding with a drop in oil prices towards the kingdom's preferred level of $100 a barrel.
In a monthly report issued on Wednesday, the Organization of the Petroleum Exporting Countries also cut its forecasts for demand for OPEC crude this year and next, pointing to a supply surplus of more than 1 million bpd in 2015 if OPEC keeps output at current levels. Oil prices have slid due to concern about weakening demand and ample supplies, raising the question of whether Saudi Arabia, holder of the world's largest spare output capacity, will curb output.
Brent crude fell below $100 on Monday for the first time in 14 months. Riyadh, supported by Kuwait and the United Arab Emirates, has boosted supply informally to cover for unplanned outages in other OPEC members in recent months including in Libya, which is now seeing its production recover.
Saudi Arabia told OPEC that it produced 9.597 million bpd in August, down from 10.005 million bpd in July. Still, analysts noted its output often falls when domestic demand for air conditioning declines from its summer peak and lower production does not necessarily mean lower exports.
"I think we can be pretty sure the Saudis are cutting," said Samuel Ciszuk, analyst at the Swedish energy agency. "But maybe the crude burning has come down a bit and I'm skeptical that they have reduced exports by as much as 400,000 bpd."

Biggest Story Of The Year For The Bakken? September 10, 2014; KOG, Whiting Report Several Big Wells; Nineteen (19) New Permits


Later, 6:41 p.m. CDT: see comments below. I mentioned this project a year ago in an earlier post. I had completely forgotten about it. I'm surprised no one wrote and asked for an update on this project. I have visited the Bakken three (or maybe four) times since September, 2013, and I have driven past that location every time, multiple times with my dad and never mentioned it to him, which means I had completely forgotten about it.

Original Post

This might be the biggest story of the year (so far): huge rail terminal to be built east of Williston. A reader sent the link. Thank you. The is reporting:
New Frontier LLC, a Williston, N.D.-based developer has announced plans for a $250 million transload facility called the East Valley Rail Project. Jason Everett, lead developer for the company, announced the project at the recently held Williston Economic Development Summit. Once complete, the facility will provide inbound storage and handling of several energy related products, ranging from frack sand to tubular goods.

The new facility, to be located east of Williston, will help centralize the oil activity in one location, says the company. The terminal will be located just east of the Halliburton-Sanjel complex east of Williston, just east of the 1804 Little Muddy Bridge, near the old salt mine.

“We looked at the location and determined that the rail only crosses the highway at four different spots between Montana and Minot, this [Williston] being one of the main areas that it crosses a major public road,” said Everett.

This project will be the first rail facility with public water and sewer and all utilities available to it. And according to Everett, designing the facility to be large enough to take on multiple tenants and with having most of the oil companies and oil field service companies having their main headquarters for the Bakken in Williston makes it “the opportune spot to be the logistical advantage from their home-base.”

The facility will be able to store about 160,000 tons of frack sand, will have a pipe and casing yard of about 30 acres, and will have an extra 90 additional acres of storage for things like large tanks or rail car storage.
I can't remember if I posted this or not, but I sent e-mail to another reader a few days ago: wit the problem they are having getting fracking sand to the Bakken, my hunch is we are going to see increased sand shipped during the relatively slower periods in the winter and then stored locally. This certainly looks what we might be seeing here.

More from the article:
This facility is the first unit train facility in western North Dakota approved by the BNSF, which allows them to land a full train and once those cars are needed, the facility will be able to switch cars internally verses waiting for the railroad to switch them.
“Right now, if you have 40 cars and can only get five cars switched per day, it takes eight days to unload them, but we’ll be able to do all of the 40 cars in about seven hours,” said Everett.
Eastern Valley Rail will be able to hold 18 to 20 tenants and Everett said they’ve already begun selecting clients for the facility.
Much more at the linked article including Google satellite map.

How fast could we see this? The company hopes to break ground this fall, and have first shipments by March, 2015 -- that's only about 7 months from now. And much of that construction during the legendary, frigid, North Dakota winter.

Daily Operations Report

Wells coming off the confidential list Thursday:
  • 27578, drl, BR, Sequoia 31-4TFH, Hawkeye, no production data,
  • 27618, drl, Slawson, Whirlwind 3-31H, Big Bend, producing,
Wells coming off the confidential list today were posted earlier; see sidebar at the right.

Nineteen (19) new permits --
  • Operators: CLR (6), MRO (5), Hess (4), QEP (3), Whiting
  • Fields: Avoca (Williams), Brooklyn (Williams), Big Stick (Billings), Grail (McKenzie), Baskin (Mountrail), Bailey (Dunn)
  • Comments:
Five (5) producing wells completed:
  • 26763, 2,125, KOG, P Irgens 155-99-2-4-9-14H, Epping, t8/14; cum --
  • 26765, 1,903, KOG, P Irgens 155-99-2-4-9-15H3A, Epping, t8/14; cum -- 
  • 26767, 1,398, KOG, P Irgens 155-99-2-4-9-15H3, Epping, t8/14; cum --
  • 28035, 1,199, Whiting, Ness 41-21-3XH, Sanish, t8/14; cum --
  • 28343, 1,414, Whiting, Perry State 11-25-2H, Sanish, t8/14; cum -- 
Active rigs:

Active Rigs199184192199141

McGregory Buttes Oil Field Is Updated -- September 10, 2014

With the incredible wells Halcon is reporting in McGregory Buttes, it was time to update that field. Here are the most recent Halcon wells reported in McGregory Buttes:
  • 25596, 2,706, HRC, Fort Berthold 147-94-2B-11-5H, McGregory Buttes, t8/14; cum 1K 7/14;
  • 25597, 2,750, HRC, Fort Berthold 147-94-2B-11-4H, McGregory Buttes, t8/14; cum 1K 7/14;
  • 26295, 2,569, HRC, Fort Berthold 148-94-35C-26-3H, McGregory Buttes, t8/14; cum 7K 7/14;
  • 26294, 2,567, HRC, Fort Berthold 148-94-35C-26-4H, McGregory Buttes, t8/14; cum 6K 7/14;
  • 26293, 2,769, HRC, Fort Berthold 148-94-35C-26-5H, McGregory Buttes, t8/14; cum 7K 7/14;  
Well, That's Embarrassing

It looks like even the professionals have problems with their graphics. Quick, see if you can spot the error in this Deutsche Bank graphic:

This is no surprise to regular readers of the blog. I talked about this at least a year ago. I believe I was the first amateur blog that has no advertising that discussed this issue.  In the graphic above, the arrow to the right is definitely in the wrong position, and the arrow to the left is in a less-than-optimal position (is the arrow on the left pointing to the British Empire -- dark blue -- or the USA (light blue)? Not only that, the chart doesn't even show "2010" on the x-axis. I think this is an old graph; the lower left-hand corner has a 2001 date. Wow.

For Investors Only

Trading at new highs: BTU, MDR, RIG.

Henry Blodget on Apple.  A customer and shareholder, but obviously not a fanboy. LOL.
Chaos Theory

Some readers, I suppose, are familiar with chaos theory in which some say the flapping of a single butterfly's wings on one side of the world can eventually lead to a hurricane on the other side. Wiki even uses the same "analogy."

Hold that thought.

Today, there's an "op-ed" of sorts in The Telegraph:
There is a Russian proverb: “If you can’t face the wolf, don’t go into the forest.” The West has blundered into the Ukrainian forest and enraged the Russian wolf, only to discover that we cannot face him. We should now be looking for the path out.
Western policy has been built on two false premises. The first is that we must stop a revanchist Russia. As this narrative runs: yesterday Russia took Crimea; today Eastern Ukraine; tomorrow – who knows – Estonia, Poland? This precisely mirrors the Russian nightmare of predatory Nato expansion; yesterday Poland and Estonia, today Georgia, tomorrow – who knows – parts of Russia itself? The mutual suspicions of 1914 spring worryingly to mind.
In fact, before what the Russians (with some justification) saw as a Western grab last February for control in Kiev, there was no evidence of Russian revanchism. Those who point to Georgia are wrong – it was the Georgians who started the 2008 war. Meanwhile, Ukraine is a uniquely sensitive case for Russia; the countries are bound by deep social, cultural, and historical ties. Kiev is known as the “mother of Russia cities”. And even in Ukraine the Russians want influence, not actual territory.
The “we must stand up to Putin as we did to Hitler” line is pure schoolboy politics. Putin, of whom I saw a fair amount as UK ambassador to Moscow, is not an ideologically driven fanatic, but much closer to Talleyrand – the calculating, pragmatic rebuilder of his country’s status in the world. Certainly the seizure of Crimea was illegal and destabilising. But it was a panicky response to a unique set of circumstances, not the start of an attempt to rebuild the USSR. Of course we are right to reassure those who feel most threatened – as Nato has done with its decision to create a “spearhead force.”
We are right to condemn the destruction of MH17, which a report confirmed yesterday was almost certainly shot down. But the idea that sabre-rattling is necessary to convince Russia of Nato’s seriousness is ridiculous. If the Russians didn’t take the NATO security guarantee seriously, why would they be so worried about Ukraine joining? 
Regardless of how this all started, once it began, Vladimir Putin had to make decisions based on what he knew about President Obama. And he had to make those decisions quickly.

Now, hold that thought.

One thing that Putin knew about President Obama: the latter is a deep thinker. He takes time to make his decisions. He won't react quickly. The president even describes himself or his administration as "No Drama Obama."  He's a Harvard graduate, among the best and the brightest. President Obama studies issues "to death." He wants to see Harvard-quality well-thought-out university case studies on his desk before making a decision.

The butterfly that flapped the wing that ultimately led to where we are in the Ukraine might be traced as far back as July, 2010, when the Obama administration effectively killed the Keystone XL. It was at that moment Putin realized that President Obama was a deep thinker, not quick to making hasty decisions. Since then, over and over, Putin has seen a dozen (or dozens) of examples when President Obama delayed a decision, or drew a "red line" in the sand (or the water) and then let it blow away (or wash away). The news that he will delay his immigration "decision" is just one more example.

Chaos theory and the butterfly effect.

On another note, as Germany falls deeper and deeper into another recession, to some degree exacerbated by the sanctions placed on Putin over his handling of the Ukraine, Ms Merkel will probably come back to read this article in The Telegraph. Even she has heard of another proverb: "don't cut off your nose to spite your face."

Testing The Tyler? A Random Update Of The New MBI Permits -- September 10, 2014


November 16 2014: see first comment, reply.

November 16, 2014: a reader provides this update --
Current drilling rigs list shows a rig on location since October 9, 2014, for this Tyler well:
  • 29280, conf, MBI, Bahley 31-1, 
since 10-09-14.  
This is the second of two permitted,  the other being the Wolberg 18-1--located at--08-136-99, in the Rocky Ridge field. 
On that location (Wolberg) they moved in, drilled, plugged, and moved out in about one week. 
Oilfield friend told me MBI was after Tyler cores, didn't expect to be completing either of the wells. Could be it's a smaller drilling rig and is waiting for a location somewhere else or could be MBI ran into something better than expected.  
October 7, 2014: a reader drove past #29279 --
They were drilling north of the Rundel Well 1 mile north and 1/2 mile west. They were finished today: all rigged down and the 8 oil tanks are already on the location ready to be set up. 
Original Post
Testing the Tyler? A reader says the recent permits by MBI will be testing the Tyler, but does not expect to produce from some/all of these wells:
  • 29279, conf, MBI, Wolberg 18-1, Rocky Ridge, almost midline on a diagonal from Bowman to Dickinson,
  • 29031, conf, MBI, Hueske 30-1, wildcat, a rig is on site as of September, 2014, 30-142-92, about 25 miles northeast of Dickinson; 
  • 29280, conf, MBI, Bahley 31-1, wildcat, about 20 miles southwest of Dickinson, just north of the Wolberg
Again, it is very easy to locate these wells on Google maps; simply place the GPS coordinates, separated by a comma in the "search" box. For example: 46.730032-103.102913.

Closing Out The Poll -- Active Rigs At 199 -- September 10, 2014; One Shy Of 200; Ties Record For This Date; California Caves - Agrees To Take Bakken Crude By Rail; Mining Bitumen Without Strip Mining

Active rigs:

Active Rigs199184192199141

The Poll:

Wiki defines summer for the northern hemisphere as the full three months of June, July, and August. By that definition, summer has ended.

The autumn equinox falls on September 23.

This is the first time I looked at the poll results, so it will be a surprise to me how it comes how. 

The poll:
  • we will reach 200 rigs by the end of summer: 61%
  • we will NOT reach 200 rigs by the end of summer: 39%
Regardless how you voted, I think we can consider this a win-win for everyone. 199 is very, very close to 200 (and if we reach that number by September 22/23, I will say we hit the 200 mark this summer, though 39% of you will cry foul). But today's 199 ties the record, last set in 2011. And, the rigs are much more powerful and the roughnecks much more efficient in 2014 than they were in 2011.

Quite remarkable to say the least.

California Caves

This is also quite remarkable. California approves a new CBR off-loading terminal and will accept Bakken crude oil.
The first substantial oil-by-rail project at a California refinery won approval on Tuesday despite a last-minute push for more scrutiny by some environmental groups.
The facility at Alon USA Energy Inc's shuttered Bakersfield refinery in Kern County, home to about 65 percent of California's heavy oil output, will push crude offloading capacity to as high as 150,000 barrels per day (bpd) from the current 13,000 bpd.
The Kern County Board of Supervisors approved the $100 million project after a lengthy environmental review. Alon Chief Executive Officer Paul Eisman told the board the project could start up by the third quarter next year.
At least someone can make a decision, even if President Obama cannot.

By the way, California may not have had much choice. It is my understanding (posted a long, long time ago), California is like Hawaii in that the state has no crude oil pipelines running to it. Again, if I recall correctly, I believe I read somewhere, no crude oil pipelines run to California. That makes sense due to the tectonic movement in that state; the fact that California had its own (almost?) self-sustaining oil and gas industry; and, c) it had ports on the ocean to take Alaska oil. 

"Mining" Oil Sands Bitumen Without Strip Mining

This is a great article; the link sent to me by a reader. I did not know this. More than half of that Alberta, Canada, oil sands bitumen is being produced in-situ, with steam, without disturbing the surface through strip mining. The Economist is reporting:
Many operators now extract the bitumen without strip mining. “In-situ” production, as it is called, involves injecting high-pressure steam, heated to more than 300°C, into deep boreholes. The steam, emerging from millions of slits in a steel borehole liner, liquefies the bitumen and allows it to be pumped out.
Using steam extraction means that nine-tenths of the land above a reservoir can be left intact. There is no need for waste ponds because the sand is left underground and most of the water recovered from the bitumen can be cleaned with distillation for reuse. Steam can also produce bitumen from a reservoir half-a-kilometre underground, whereas strip mining is only economical for deposits less than 70 metres or so from the surface.
The proportion of bitumen produced with steam now stands at 53% and will continue to grow, says the Alberta Energy Regulator (AER), a government agency. One of the newer methods, steam-assisted gravity drainage (SAGD), has proved particularly effective, says Ken Schuldhaus of the AER. SAGD involves drilling two horizontal wells through an oil-sands reservoir, one about five metres below the other. Steam is then released from the top well and over a few weeks can melt bitumen as far as 50 metres above and to the sides of the bore. The bitumen then percolates down and into the lower well, from which it is pumped to the surface.
 Much, much more at the linked article.

Hawaii Energy

RBN Energy: LNG in Hawaii