Monday, October 6, 2014

Huge Tax Break For All Americans -- Thank You, Mr Bakken -- October 6, 2014

Carpe Diem is reporting:
According to GasBuddy, retail gas prices in the US have fallen in the last week to an 8-month low of $3.28 per gallon, which is 42 cents lower than the peak of $3.70 per gallon in April (see chart above). How does that price drop at the pump translate into savings for consumers?
According to the Department of Energy, Americans buy 365 million gallons of gasoline every day, so every one cent drop in prices at the pump saves consumers $3.65 million per day, and $1.33 billion dollars over a year. Therefore, the 42 cent drop in prices since April will save US consumers almost $56 billion over the next year compared to what they would have paid if gas remained at $3.70 per gallon.
Some folks suggest a huge plunge in gasoline prices is equivalent to a huge tax cut.

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ObamaCare Will Offset Drop In Gasoline Prices

The Los Angeles Times is reporting:
Diners are discovering an unfamiliar new item when the bill comes for the truffled lobster Bolognese at Melisse and for the crunchy Spanish fried chicken and waffles at AOC — a 3% surcharge for employees' medical insurance.
The charge first appeared at one Los Angeles-area restaurant late last year; by early September, more than a dozen mainly high-end eateries followed suit. The added cost has given some diners heartburn and thrust the restaurants' owners unwillingly into the debate over the Affordable Care Act.
The healthcare surcharge, the restaurant owners insist, isn't a political statement, but a way to offer valuable benefits to employees while maintaining their profits, which are slim even at the most successful establishments.
Something tells me the surcharge "gag" won't last long. 

Wood Mackenzie On The Springer -- October 6, 2014

Remember the CLR presentation on the Springer?

Here's Wood Mackenzie's take:
The Springer shale could produce between 40,000 and 60,000 barrels per day (bpd) within the next five years, but the oil and gas industry must address several challenges before Springer’s full potential can be determined, a Wood Mackenzie analyst told Rigzone. 
Last month, Continental Resources Inc. announced it had made this new oil discovery in the heart of the South-Central Oklahoma Oil Province (SCOOP), located in the southern Anadarko Basin about an hour southwest of Oklahoma City.
Prior to Continental’s announcement, SCOOP – a term also coined by Continental – was mostly associated with the Woodford shale, which oil and gas companies have been drilling over the past decade.
“The Springer shale is exciting in that it shows that south-central Oklahoma province is showing signs of stacked pay potential,” said Brandon Mikael, U.S. Lower 48 upstream analyst, regarding Wood Mackenzie’s initial assessment of the Springer play.
The Springer shale, which sits above the Woodford, is a thick Mississippian aged formation, but unlike the Woodford, is a mix of shale and sandstone. Because of its composition, Continental has suggested the play won’t have all the characteristics associated with some of the shale play – including rapid production decline, a major issue in other shale plays – and will have higher porosity and permeability, Mikael noted.

Kuwait Buys Into The Duvernay -- October 6, 2014

Reuters/Rigzone is reporting:
Chevron Corp said it would sell a 30 percent stake in its Duvernay shale properties in Canada to Kuwait Foreign Petroleum Exploration Co for $1.5 billion.
Chevron's Canadian subsidiary has exploration leases for about 330,000 net acres in the Duvernay shale formation. 
The area is located about 124 miles northwest of Edmonton, Alberta.
The deal also creates a partnership for appraisal and development of liquids-rich shale resources in the Kaybob area of the Duvernay, Chevron said.
Chevron Canada will remain the operator and will hold a 70 percent interest in the partnership following the deal close, expected in November. The deal price includes a portion of Chevron Canada's share of future capital costs for the joint venture.
Duvernay is widely viewed as one of North America's most exciting shale fields. Chevron Canada boosted its holdings in the field in August 2013, buying 67,900 net acres from Alta Energy Luxembourg SARL.
Many, many story lines. An obvious one. I may come back to it later, but will let folks think about it.

Recap -- October 6, 2014

All day it was quiet and then all of a sudden, around 1700, everything started pouring in. I posted so much between 1700 and 2100, I haven't had a chance to look at it. So, let's recap.

This is not an investment side. Do not make any investment, financial, or relationship decisions based on what you read here or think you may have read here. 

The market opened nicely this morning and it looked like it might be a good day for the bulls. Early on the Dow might have been up 70 - 90 points, and oil was down a bit. And then all of a sudden: the Dow drops into negative territory and oil recovers, above $90. What could account for that? How about a nuclear explosion in the Iranian desert? Yup, as crazy as that sounds, .... and it hardly warrants much discussion over at Drudge...pushed off the page by the implosion of the Obama administration -- with a question whether Bill (Clinton) can save the Democratic Party....

Tonight, all the stories that got posted, perhaps in order of least important to more important....most, possibly all, stories were sent to me....

Two stories on ethanol, mostly for the archives. In the big scheme of things, ethanol is a footnote in the North American energy revolution, but it just may affect CBR. Sweet irony. There's a great music video there, of all things.

Super Nova Petroleum announces it will drill another well in the Alberta Bakken, northwest Montana. The importance of the story: it reminds readers that there is a significant geographical difference between the Alberta Bakken (northwest Montana) and the Williston Basin Bakken (north east Montana) in Montana.

Oasis, Halcon, and Statoil each report a "high-IP" well. This is not all that unusual. Day in and day out the roughnecks and petroleum engineers are bringing in good wells. When the Bakken boom began, we got excited with 1,000-bbl IPs; now we see multiple 3,000-bbl IPs over the course of a couple days, and don't give it a second thought.

Phillips (PSX) announces it may build a CBR terminal in North Dakota. The reader reminded me he had sent me the article and had not yet seen it posted. I don't recall seeing it the first time, so I had to do a google search to find the story the reader sent me. Hopefully I got the right one. I'm mostly interested if any reader knows where PSX might be building that CBR terminal. 

This would have been the biggest story of the day had it not been for the OXY USA story (see next story): Targa Resources announces plan to "purchase of a 200 MMcf/d cryogenic processing plant to be located in McKenzie County."

The biggest story: confirmation of sorts that OXY USA is shopping their Bakken assets for about $ billion. I would never be able to find it, but in a recent CLR corporate presentation, CLR noted it had a $2 billion credit facility completely untapped. With Whiting's purchase of KOG, Whiting has bragging rights. 2 + 2 = 4.

Or maybe this is the biggest story: Natural Resources acquires, or Kaiser-Francis sells, a bunch of oil-producing acres in the Sanish oil field for about $60,000/acre.

All those stories came fast and furious. And in the middle of all this, the daily activity report with eleven producing wells that were completed -- including the three wells noted above that were "high-IP" wells.

But there will be more. At least one more story if I have the energy. It's 10:50 p.m. CDT and I need to take a break.

New Well Announced For The Alberta Bakken (Northwest Montana) -- Not The Williston Basin Bakken -- October, 6, 2014

CNN.Money is reporting:
Super Nova Petroleum Corp. reports that it has received information from the management of Augusta Exploration LLCthat the preparation to drill Augusta - Krone Bakken Formation well is complete. 
The well-pad and road has been built, inspected and approved. Montana Board of Oil and Gas has approved and permitted the well. The funds required for the drilling has been deposited in escrow to FX Drilling Co Inc. Subject to weather conditions, the drilling rig will be rigged up by Friday, October 10th, 2014.
This well is located approximately 3-4 miles from Super Nova's Milford Colony land, with its recently drilled BNV Eagle #1 Well, as reported on Oct. 1st, 2014.
The well to be drilled by Augusta is in very close proximity to the historic 1962 Shell Krone Well, which encountered the Bakken formation at approximately 7,000 feet.
Note: this is the Alberta Bakken, northwest Montana, not the Williston Basin Bakken.

This press release provides much more detailed information, dated July 24, 2014. 

Background from that linked story:
The Bakken oil boom began with Elm Coulee oilfield on the Eastern side of Montana in 2000, when Lyco Energy Resources re-entered nine old wells and completed them in the Bakken formation.
In 2006, the Parshall oilfield in North Dakota was discovered by observing an old well log in that area that had Bakken formation which looked very similar to the Elm Coulee logs. North Dakota has since produced 813 MM barrels of oil from the Bakken formation through December of 2013.
The emerging Alberta Bakken play extends from Canada down through the Western side of Montana to where the company has its leased lands. The prolific Williston Basin Bakken play was the Eastern side of a shallow sea. The currently emerging Alberta Basin Bakken play was the Western side of that same sea.
The Shell Krone well was drilled in 1962, before the so called Shale Revolution of the last decade. Thus, while encountered and logged in 1962 by Shell, the Bakken formation was simply ignored then, despite cuttings of the rock showing oil. With the application of modern drilling and completion techniques, the upcoming well may prove the viability of the Southern portion of the Alberta Bakken play.

Update On Phillips (PSX) CBR In North Dakota -- October 6, 2014

A reader reminded me to look at this story. I can't remember if I have previously posted it. Reuters is reporting, September 3, 2014:
Phillips 66 is buying more railcars to eventually move up to 185,000 barrels per day (bpd) of North American crude oil, including output from North Dakota's Bakken shale and Canada, to its refineries on the East and West coasts, Chief Executive Officer Greg Garland said on Wednesday.
The fourth-largest U.S. refiner has already bought, or has on order, 3,200 railcars. Garland said during a webcast of a presentation at the Barclays CEO Energy-Power Conference that the company has ordered another 500 railcars to boost its fleet to 3,700 railcars.
On Aug. 1 the company's 238,000-bpd Bayway refinery in Linden, New Jersey, received its first crude-only train at the plant's newly expanded offloading system. The system can take up to 70,000 bpd, in addition to up to 75,000 bpd from a joint venture with Global Partners.
Phillips 66's 30,000-bpd offloading system at its 100,000-bpd refinery in Ferndale, Washington, is on track to start up in the fourth quarter, Garland said.
Garland said the company was "disappointed" in the lengthy permitting process for a rail offloading project at its refinery in Santa Maria, California, but remained optimistic it would be built.
NorthJersey.com provides this update, published yesterday, October 3, 2014:
Garland also said that Phillips 66 had acquired 710 acres in North Dakota near the oil fields and plans to build a rail facility there that would move as much as 7.8 million gallons of oil [at 42 gallons/bbl = 186,000 bbls] a day to Bayway and its refineries on the West Coast. A Phillips 66 spokesman said the company carries crude oil only in tanker cars with the latest safety features, not in older cars that regulators have called substandard.
The oil business has boomed in North Dakota since a huge reserve was found almost six years ago. The 1 million barrels of crude extracted from Bakken shale each day has been credited with helping reduce oil imports to the lowest level in 29 years along with revitalizing refineries on the East Coast.
Perhaps a reader knows where the 710-acre proposed site is. 

OXY USA Seeking Buyer Of Its Bakken Assets -- October 6, 2014

Bloomberg is reporting:
OXY USA is seeking to sell its North Dakota oil assets as the company restructures to focus on its most profitable regions, people with knowledge of the matter said.
Occidental is working with investment bank Tudor Pickering Holt & Co. to sell about 335,000 net drilling acres in the Williston Basin and may receive as much as $3 billion in a deal, said the people, who asked not to be identified because they were discussing private information. The holdings include a part of North Dakota’s Bakken formation, an area that has been less successful for Occidental because of higher costs, though it’s one of the fastest-growing oil-producing regions in the U.S.
A representative for Tudor Pickering Holt didn’t immediately respond to a request for comment. Melissa Schoeb, an Occidental spokeswoman, said the Houston-based company announced plans last year to “pursue strategic alternatives” for some assets, including in the Williston Basin.

Natural Gas Expansion Plans Continue In North Dakota -- October 6, 2016

Posting this as is; will clean it up later. Money.CNNis reporting:
Targa Resources Partners LP announced today the following expansion plans for its natural gas gathering and processing capabilities in the Permian and Williston Basins.
The Partnership has also approved the purchase of a 200 MMcf/d cryogenic processing plant to be located in McKenzie County, North Dakota in the Williston Basin.
This new gas processing capability, combined with the current 40 MMcf/d expansion expected to be operational at the end of 2014, will increase the Partnership's effective processing capacity when all facilities are debottlenecked up to approximately 300 MMcf/d over time to support the continued success of producers in the Bakken and Three Forks Shale plays.
The additional Badlands plant is expected to be operational as early as the end of 2015.
200 mmcfpd is twice the "standard" ONEOK facility in North Dakota, and comparable to the Hess Tioga plant.

New scrabble word: "debottlenecked." Look that up in your Funk and Wagnalls -- a few pages before "fracking." LOL.

Buck Rogers
I track new natural gas plants here.  Although I may have missed a few.

At the top it was noted that Targa announced projects in both the Permian and the Bakken.
BakkenShale.com is reporting:
The Permian Basin is the oil rig capital of the U.S.
The Permian Basin, which is located in Western Texas and southern New Mexico, is the leader of oil production in the U.S.  Currently, the U.S. is home to 1,591 oil rigs, the majority of those rigs, roughly 554, are located in the Permian Basin.  Some of the remaining rigs are located in Eagle Ford formation which has 202 oil rigs, Bakken having 198 and the Mississippian with 74.  Just in the year 2014 the Permian Basin has added 95 oil rigs in comparison to Bakken adding 13 and Eagle Ford losing four.
Horizontal rigs account for 58 percent, 38 percent are vertical rigs and the last four percent are directional oil rigs.

Update On Ethanol -- October 6, 2014

A reader sends links to these two articles on ethanol.

McClatchyDC is reporting:
Ethanol producers are pushing back hard against new rail safety rules after a federal study found that ethanol poses hazards equal to or greater than crude oil in rail transportation.
An analysis of tank car damage in derailments published last month by the Federal Railroad Administration found that tank cars carrying ethanol were 1.5 times more likely to explode when exposed to fire for prolonged periods. The Renewable Fuels Association dismissed the report, blaming track defects for the explosions.
Like almost everything else that matters, Congress has ceded authority to bureaucrats. It will be interesting to see how this plays out.

When I was in the Air Force years ago -- this would have been back in the late 1980's -- medical care was getting more and more expensive for DOD. There were legitimate concerns whether Tricare would survive. I remember the USAF Surgeon General speaking on numerous occasions telling us that it would be the retirees that would "save" Tricare for military active duty as well as for retirees.

He turned out to be correct. ObamaCare was modeled after Tricare, and Tricare is still around. General Charles Roadman, II, perhaps one of the best surgeons general the Air Force ever had.

*****************************
Food For Fuel

The other story: The StarTribune is reporting that ethanol farmers are having a tremendous year.
It’s shaping up to be one of the best years ever for the ethanol business.
Operating profits for many ethanol makers more than doubled in the second quarter compared with last year, reflecting lower prices for corn and strong demand for the fuel, sustained partly by exports.
Valero Energy, which owns 11 U.S. ethanol plants, including one in Minnesota, reported operating income of 63 cents per gallon, more than double that of the quarter a year ago.
“It’s nice to have that,” said Brian Kletscher, CEO of Highwater Ethanol, a farmer-owned producer in Lamberton, Minn., whose operating profit more than doubled and net earnings rose 64 percent for three months ending in July. “The ethanol industry needed margins like this to stabilize.”
Just two years ago, the nation’s 212 ethanol plants, including 21 in Minnesota, saw profits take a free fall as the price of corn climbed in some regions to $8 per bushel. More than 20 U.S. ethanol plants were shuttered, though many have reopened, including a plant in Buffalo Lake, MN, earlier this month.
Only one minor complaint/concern: 
Transportation also poses a lingering problem. To reach markets, ethanol relies heavily on railroads, which are congested by oil trains, grain and coal shipments and other traffic. Kletscher said some plants, including Highwater’s, have shut down production for a day or more because transport was unavailable and on-site storage tanks were full.
But it's the corn farm states -- Minnesota, Iowa, and Nebraska -- that are killing new pipelines. At the end of the day, these states prefer CBR over pipeline.

Dreamboat, Eleni Mandell

Emerald On A Roll -- Three Permits In Montana; Oasis, Halcon, Statoil, Each Have A "High-IP" Well; Thirteen (13) Wells Coming Off Confidential List Tuesday -- October 6, 2014

Emerald Oil is on a roll. In addition to the great wells reported below, The Fairfield SunTimes is reporting that Emerald has three permits for Bakken wells in Montana.

Active rigs:


10/6/201410/06/201310/06/201210/06/201110/06/2010
Active Rigs191183190194


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

Wells coming off the confidential list Tuesday:
  • 25916, A/no IP, Fidelity, H Reid TTT 33-28H, Stanley, cum 27K 8/14;
  • 26218, 1,328, Emerald Oil, Excalibur 2-25-36H, Boxcar Butte, t4/14; cum 45K 8/14;
  • 26219, 1,020, Emerald Oil, Excalibur 1-25-36H, Boxcar Butte, t4/14; cum 52K 8/14;
  • 26290, 1,615, Whiting, Newton Federal 42-4PH, Bell, t4/14; cum 50K 8/14;
  • 26291, 1,645, Whiting, Newton 41-4PH, Bell, t4/14; cum 67K 8/14;
  • 26535, drl, CLR, Jerry 7-8H, Poe, no production data,
  • 26665, 1,652, Emerald Oil, Ty Webb 3-1-12H, Sheep Butte, t5/14; cum 3K 8/14;
  • 26668, 485, Emerald Coil, Dean Wormer 2-33-28H, Moline, t5/14; cum 20K 8/14;
  • 26669, 946, Emerald Oil, Dean Wormer 133-28H, Moline, t4/14; cum 30K 8/14;
  • 26938, drl, Hess, SC-Norma-154-98-0706H-2, Truax, no production data,
  • 27139, 2,156, MRO, Sloan 34-32H, Reunion Bay, middle Bakken, gas peaked at 2,000 units; 20 - 35' flare, t8/14; cum 25K 8/14;
  • 27723, drl, SM Energy, Almos Farms 1-26HS, West Ambrose, no production data,
  • 27812, drl, Statoil, Maston 34-27 4H, Banks, no production data,
Eleven (11) producing wells completed:
  • 25534, 2,529, HRC, Fort Berthold 148-94-33C-28-3H, Eagle Nest, t9/14; cum --
  • 25677, 3,576, Statoil, Lucy Hanson 15-22 6H, Catwalk, t9/14; cum --
  • 26236, 640, CLR, Madison 7-28H, Dollar Joe, 4 sections, t9/14; cum --
  • 26237, 601, CLR, Madison 6-28H1, Dollar Joe, 4 sections, t9/14; cum -- 
  • 26298, 2,139, Oasis, Oasis Meiers 5692 44-18 3T, Alger, t8/14; cum 6K 8/14;
  • 26799, 693, Hess, SC-Tom-153-98-1514H-4, Truax, t9/14; cum --
  • 26863, 442, XTO, Ruby State Federal 34X-36A, Grinnell, t9/14; cum --
  • 27022, 1,279, Hess, HA-Nelson A-152-95-3427H-5, Hawkeye, t9/14; cum --
  • 27066, 511, Hess, EN-KMJ Uran-154-93-234H-6, Robinson Lake, t9/14; cum --
  • 27090, 53 (no typo), Hess, GN-Alice-158-9-7-1324H-2, 16 days to drill, New Home, t9/14; cum 4K 7/14;
  • 27461, 820, Hess, LK-Bice-147-97-1201H-7, Big Gulch, t9/14; cum 3K 8/14;
Eight (8) new permits --
  • Operators: Hess (4), OXY USA (2), Oasis, Crescent Point
  • Fields: South Meadow (Williams), Ray (Williams), Cabernet (Dunn), Foothills (Burke), Little Muddy (Williams)
  • Comments: Does anyone know the English translation of Las Vegas? The Meadows.
******************************
Update On The Tyler

The Bismarck Tribune is reporting that new drilling isn't telling us much about the Tyler:
Two oil wells drilled farthest into what’s considered the mature Tyler formation don’t reveal much about the formation’s oil potential.
The two Marathon Oil Co. wells — both drilled in an area east and northeast of Amidon in Slope County — have been closely watched as a harbinger for what’s to come both for the county and the formation itself.
Both were drilled horizontally as opposed to straight down vertical wells and recently came off of confidential status.
One, the Rundle Trust well, about 10 miles northeast of Amidon, had initial production of 88 barrels and in the months from March through July, produced an average of 15 barrels per day.
The second well, the Powell well, about 10 miles due east of Amidon, has been drilled, but not hydraulically fractured yet. It’s unknown whether Marathon will proceed with fracking, an expensive piece of well development, based on lackluster results from the Rundle Trust well.
See comments below with regard to the Powell and fracking, this one in particular:
If you go to www.fracfocusdata.org and search for the Powell well you can confirm that the well was fracked in early July. They used approximately 745,000 gallons of water (which is quite a bit less than any two mile long Bakken wells I can remember looking up) and, as a real rough estimate, about 775,000 pounds of sand as proppant. The Powell well was also had hydrochloric acid in the frac fluid, while the Rundle well did not. 
Maybe MRO has not "completed the well" in their opinion and that's why they can leave it on DRL status ... they had an incomplete frack? Yes, I know it's a stretch but if fracked/completed in July, then the first full month would have been August ...

Natural Resource Acquires 5,700 Net Acres In The Sanish Oil Field, North Dakota; Producing Acres At $60,000/Acres -- October 6, 2014

The following was posted earlier. It might take a bit of time to sink in. At this point in time, with the number of producing wells, and the infrastructure in place to take away the oil and process the natural gas, a mineral acre in the Sanish oil field is worth $60,000 acre:

From Yahoo!In-Play:
Natural Resource announces acquisition of additional Williston Basin oil and gas interests for $340 mln; raises rev guidance as result : Co reported that it has signed a definitive agreement to acquire non-operated working interests in oil and gas properties located in the Bakken/Three Forks play of the Williston Basin from an affiliate of Kaiser-Francis Oil Company for $340 million, subject to customary purchase price adjustments. 
And, yes, Kaiser-Francis has been "featured" on the blog before.

The Houston Business Journal is reporting:
The properties are in the Sanish Field in Mountrail County, North Dakota, in the Bakken/Three Forks play of the Williston Basin. They are all held by production and operated by Whiting Petroleum Corp. of Denver.
The approximately 5,700 net acres include 186 producing wells and 10 wells in various stages of development and estimated average current production of approximately 3,100 barrels of oil equivalent per day.
For $340 million, the assets to be acquired:
  • Estimated average current production of approximately 3,100 Boe/d
  • Includes 186 producing wells and 10 wells in various stages of development
  • Approximately 5,700 net acres, all held by production
  • Average working interest of approximately 15%
  • 100% operated by Whiting Petroleum
$340 million / 5,700 net acres (producing) = $60,000/acre?

Other back-of-the-envelope ciphering:
There are 640 acres in one section.

640 x $60,000 = almost $40 million / section.

There are 36 sections in a township.   [$1,440 million = almost $1.5 billion]

The Sanish has about 5 townships. [about $8 billion]

5,700 net acres / 1280 acres = 4.5 drilling units; at a minimum there will be 12 wells/drilling unit = 54 wells; apparently there are currently 186 producing wells in the deal and another 10 wells in various stages of development. 

Note: I often make simple arithmetic errors.

Update On CLR Daniel Well Just Coming Off Confidential List -- October 6, 2014

Updates

October 21, 2018: looked at production numbers for all these wells on this date; nothing exciting; did not update the "cums."

Original Post

This might be a good well to follow to get a better idea of how the "Bakken works." Note that the file report revealed that this CLR well was fracked the "new" high-volume proppant technique but the 24-hour test result was not provided (at the time of the original post; since then the IP has been reported). 
  • 27873, A/see below, CLR, Daniel 4-33H, Stoneview, middle Bakken, 4 sections, stimulated 7/22/14 but 24-hour flow not provide; 40 stages; 7.8 million lbs
This Daniel well is part of a 6-well (two-pad) site in the southeast corner of Divide County:
  • 27872, 625, CLR, Daniel 2-33H, Stoneview,  t10/14; cum 161K 7/19;
  • 27871, 775, CLR, Daniel 3-33H1, Stoneview, TF1, 30 stages; 5.8 million lbs sand; t10/14; cum 139K 7/19;
  • 27873, 639, CLR, Daniel 4-33H, Stoneview, t10/14; cum 192K 7/19;
  • 27868, 476, CLR, Skar 2-28H1, Stoneview, t2/15; cum 129K 7/19;
  • 27869, 476, CLR, Skar 3-28H, Stoneview, t3/15; cum 129K 7/19;
  • 27870, A, CLR, Skar 4-28H1, Stoneview, cum 141K 7/19;
Running from the north, going south, and parallel to these wells:
  • 15642, 307, CLR, Skar 1-21H, Stoneview, t6/08; cum 194K 7/19;

Whiting With Two, QEP With Four "High-IP" Wells -- October 5, 2014

It will be interesting to see if some of the huge Grail wells (and other wells in McKenzie County) will have to be choked back if the natural gas processing plants can't keep up. 

Monday, October 6, 2014
  • 27722, drl, SM Energy, Almos Farms 1B-26HN, West Ambrose, no production data,
  • 27873, A, CLR, Daniel 4-33H, Stoneview, middle Bakken, 4 sections, 40 stages; 7.8 million lbs,
Sunday, October 5, 2014
  • 26536, drl, CLR, Jerry 6-8H, Poe, no production data,
  • 27448, 1,739, XTO, Tuckerman Federal 11X-11F,  Lost Bridge, t8/14; cum 15K 7/14;
  • 27811, drl, Statoil, Maston 34-27 5TFH, Banks, no production data,
Saturday, October 4, 2014
  • 26521, 2,661, QEP, TAT 4-33-28BH, Grail, t5/14; cum 79K 7/14;
  • 26522, 2,709, QEP, TAT 3-33-28TH, Grail, t5/14; cum 66K 7/14;
  • 26523, 2,767, QEP, TAT 3-33-38BH, Grail, t5/14; cum 73K 7/14; 
  • 26524, 2,561, QEP, TAT 2-233-28TH, Grail, t5/14; cum 72K 7/14;
  • 26539, 1,921, Whiting, Bratcher 14-36-2H, Ellsworth, t4/14; cum 55K 7/14;
  • 26540, 2.047, Whiting, Bratcher 14-36H, Ellsworth, t4/14; cum 57K 7/14;
  • 26764, 361, Samson Resources, Baja 2215-7H, Ambrose, t7/14; cum 22K 7/14;
  • 26937, drl, Hess, SC-Norma-154-98-0706H-3, Truax, no production data,
  • 26982, drl, Hess, HA-Nelson-152-95-3328H-7, Hawkeye, no production data,
  • 27440, drl, Hess, GN-Champ-159-98-3239H-1, Big Stone, no production data,
  • 27584, drl, BR, Shafermaker 11-15MBH-ULW, Elidah, no production data,
  • 27721, drl, SM Energy, Almos Farms 1-26HN, West Ambrose, no production data,
  • 27753, drl, BR, CCU Olympian 44-35MBH, Corral Creek, no production data,
  • 27856, 70, Legacy Oil, Legacy Et Al Fett 13-18H, Red Rock, a nice Spearfish well, t5/14;cum 8K 7/14; 
*************************************

27448, see above, XTO, Tuckerman Federal 11X-11F,  Lost Bridge:

DateOil RunsMCF Sold
8-2014141540

26521, see above, QEP, TAT 4-33-28BH, Grail:

DateOil RunsMCF Sold
8-2014104973212
7-2014167303565
6-201418455977
5-2014326040

26522, see above, QEP, TAT 3-33-28TH, Grail:

DateOil RunsMCF Sold
8-2014100432986
7-2014165313620
6-201413973764
5-2014255570

26523, see above, QEP, TAT 3-33-38BH, Grail:

DateOil RunsMCF Sold
8-201488342948
7-2014182703778
6-2014238111348
5-2014218100

26524, see above, QEP, TAT 2-233-28TH, Grail:

DateOil RunsMCF Sold
8-20149127262
7-2014144173118
6-2014198501135
5-2014280180

26539, see above, Whiting, Bratcher 14-36-2H, Ellsworth:

DateOil RunsMCF Sold
8-201477798555
7-201475418504
6-201492449058
5-20141244615792
4-2014173330

26540, see above, Whiting, Bratcher 14-36H, Ellsworth:

DateOil RunsMCF Sold
8-201465778523
7-201473927749
6-201492827857
5-20141458014470
4-2014183070

26764, see above, Samson Resources, Baja 2215-7H, Ambrose:

DateOil RunsMCF Sold
8-201476894475
7-2014100075809
6-201439220

27856, see above, Legacy Oil, Legacy Et Al Fett 13-18H, Red Rock:

DateOil RunsMCF Sold
8-201426670
7-201424520
6-201423770
5-20144520



Producing Acres In The Sanish Field = $60,000/Acre; Monday, Monday -- October 6, 2014; Farley Foods (Wholesale Costco Supplier) To Open Store In Williston

Active rigs:


10/6/201410/06/201310/06/201210/06/201110/06/2010
Active Rigs190183190194151

RBN Energy: reviews the proposed merger of Enterprise Products Partners and Oiltanking.
Last Wednesday (October 1, 2014) pipeline and NGL giant Enterprise Products Partners LP (Enterprise) announced step one of a two step multi-billion dollar deal to merge their assets with competing major liquids storage and terminal partnership Oiltanking Partners (Oiltanking).
If the deal goes according to plan (timing to be determined) Enterprise will absorb all of Oiltanking. Both companies have significant midstream assets in the Houston and surrounding Gulf Coast region that is currently front row center of efforts to process and handle an incoming flood of new crude and natural gas liquids arriving from U.S. shale plays. Today we review the deal.
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From Yahoo!In-Play:
Natural Resource announces acquisition of additional Williston Basin oil and gas interests for $340 mln; raises rev guidance as result (NRP) : Co reported that it has signed a definitive agreement to acquire non-operated working interests in oil and gas properties located in the Bakken/Three Forks play of the Williston Basin from an affiliate of Kaiser-Francis Oil Company for $340 million, subject to customary purchase price adjustments. 
And, yes, Kaiser-Francis has been "featured" on the blog before.

The Houston Business Journal is reporting:
The properties are in the Sanish Field in Mountrail County, North Dakota, in the Bakken/Three Forks play of the Williston Basin. They are all held by production and operated by Whiting Petroleum Corp. of Denver.
The approximately 5,700 net acres include 186 producing wells and 10 wells in various stages of development and estimated average current production of approximately 3,100 barrels of oil equivalent per day.
For $340 million, the assets to be acquired:
  • Estimated average current production of approximately 3,100 Boe/d
  • Includes 186 producing wells and 10 wells in various stages of development
  • Approximately 5,700 net acres, all held by production
  • Average working interest of approximately 15%
  • 100% operated by Whiting Petroleum
$340 million / 5,700 net acres (producing) = $60,000/acre?

Note: I often make simple arithmetic errors.

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The most interesting global energy story is "What will Saudi do?" At the moment, some are reporting that OPEC is in disarray

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From a reader, Farley Foods coming to Williston:
Farley Foods (wholesale delivery for Costco) apparently likes the response they received in Williston during their test of the Williston market. Though not a full size Costco (yet) they apparently are moving one step further by opening up their first store in Williston so Williston shoppers can physically go and shop Costco products. 
See the link belowhttp://www.northdakota.farleysmarket.com/#!grains--pasta/c9km. It's likely this link will go away with time.

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This is not an investment site; do not make any financial, investment, or relationship decisions based on what you read here or think you may have read here.
HP is splitting up. Won't save the company.

S&P 500 spending almost all profits on stock buybacks. Speak volumes for a) the economy; and, b) investors.

Wal-Mart to cash in on ObamaCare. Wal-Mart has studied ObamaCare, knows how to work this. Will open one-stop healthy coverage shopping. With the most employees of any corporation in the universe (with the exception of some "state" entities, I suppose), Wal-Mart has the base on which to study ObamaCare. Very interesting.

Perhaps the most entering iPhone discussions are between the Samsung faithful and the Apple fanboys. I had read earlier today that Samsung might be losing sales to Apple but the source was not reliable. Now Bloomberg is reporting:
Samsung Electronics Co. will spend 15.6 trillion won ($15 billion) building a chip plant in South Korea as it heads for its roughest quarterly result in years amid smartphone competition from Apple Inc. and Xiaomi Corp. 
Samsung, the biggest memory-chip maker, is investing as its smartphone business struggles to stay dominant with Apple introducing bigger-screen iPhones and Xiaomi selling its low-cost devices in more overseas markets. Third-quarter operating profit, due to be released tomorrow, is projected to plunge 47 percent and sales may drop 15 percent in the steepest declines since at least 2009, according to analyst estimates. 
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The Wall Street Journal

And that's the top story in WSJ today: HP to split. And we aren't talking about their shares.

Islamic State proves resiliant. The problem, as I see it: President Obama has not dranw a red line around the Islamic State.

 Beckton Dickinson to buy CareFusion.

GM issues three new recalls. There is talk on the street that with one more GM recall, there will no longer be any traffic problems in Austin, TX.

Overheard on the street:
Amazon was the online price leader in clothing and shoes, electronics, housewares and health and beauty, except when compared with Wal-Mart Stores and Target, according to a study by Wells Fargo and product-pricing data firm 360pi.
This tracked prices of 100,000 items over the past year at 10 retailers including Amazon.
It showed the e-commerce giant’s prices were about 20% below online prices at Kohl’s and RadioShack, 16% below Sears Holdings’ and 14% below those at Macy’s.
But Target’s online prices were about 5% below Amazon’s. And, as of August, Wal-Mart’s were trending 10% lower.
The difference has been growing: Wal-Mart’s online prices were only about 1% lower six months ago, the study found. That comes more as a result of Amazon raising prices than Wal-Mart lowering them. 
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Speaking of Cameras -- Which We Weren't

Folks looking to buy a new camera might want to take a look at Canon's PowerShot SX50 HS -- if you can find them. They are being discontinued, and prices are coming down significantly.  The camera was introduced in 2012, and may simply be one of the best Canon cameras for the buck, especially now that the price has come down significantly.

There may be many, many reasons for this camera to be discontinued, but the biggest reason might be the newer cameras "have" more megapixels. The SX50 has "only" 12 megapixels. The new Canons have 18 megapixels which are recommended if printing pictures bigger than 18 x 24. The largest I have ever done are 8 x 10's and I'm doing a lot more of those now with the granddaughters swimming and playing soccer.

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The Los Angeles Times

Nobel Prize in Medicine goes to "Anglo-American scientist and a Norwegian husband-and-wife" research team.

Vice President Biden will be visiting California where he will no doubt share some new jokes in the 9/11 7-Eleven stores.

For quite some time I've mentioned that I can't take the California drought seriously until they start shutting down golf courses to conserve water. Now, we get this headline in today's Los Angeles Times: California could survive seven (7) decades of drought. That's the headline; based on computer moeling, the same ones, no doubt, used to model global warming. The story suggests traumatic changes would occur but overall, "California has a remarkable ability to weather extreme and prolonged droughts from an economic perspective."

This will be news to Rush: Paul Revere dies at age 76, founded Paul Rever and the Raiers.

Paul Revere and the Raiders, Indian Reservation (Cherokee People)

Tonight on ESPN: Seattle Seahawks will be playing the Washinton Redskins. The new drinking game, apparently, is taking a drink every time the announcer mentions the word "Redskins." Apparently no one is expected to get drunk tonight. It's an interesting story line. I don't get cable television at home -- not entirely true, the only way to get CBS, NBC, ABC in this neck of the woods is with cable or Dish, so I do have cable for four major networks. I may have to go to sports restaurant to see the game tonight.

And with that, I'm out of here. I'm going bike riding. The rain clouds have cleared.

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Sweet Irony

Whether or not President Obama's OPEN BORDERS/OPEN ARMS policy helped spread Ebola to the North American continent, there's no question the "mystery virus" infecting tens of thousands of children, paralysis in some, rare deaths, was brought in from Latin America due to the OPEN BORDERS/OPEN ARMS policy. The CDC epidemiologists will sort this out and the peer-reviewed paper will be published in 2019. Epidemiology takes time. Especially political epidemiology.

I wasn't going to post this until I saw the Los Angeles Times. The editor at the Los Angeles Times must feel the same way I do -- the source of the "mystery virus" in the US. He has an editorial telling us to "quit the blame games" on these viruses -- of course, if this happened under George W. Bush ....