Saturday, October 11, 2014

Spectra To Expand Pipeline Crude Oil Capacity Between Guernsey, WY And Patoka, IL -- October 11, 2014

Spectra to expand existing crude oil pipeline capacity from Guernsey, Wyoming, to Patoka, Illinois. Press release here.

Earlier this year RBN Energy had a great post on the congestion at Guernsey -- too much crude arriving; not enough leaving. Unfortunately, the full RBN Energy article is available only to subscribers (I don't subscribe):
The Million Dollar Way (The Bakken Oil Blog): RBN Energy Must-Read: More Pipeline Capacity For Rocky Mountain Region; Canadian And US 
The linked press release mentions Patoka, IL; the RBN Energy post mentions Wood River, IL, both in the same general area near St Louis. From the press release:
Spectra Energy and Spectra Energy Partners today announced a proposed expansion of their oil pipeline network, with service from Guernsey, WY to Patoka, IL. This announcement is in response to strong market demand to move light, sweet, U.S. domestic crude from multiple supply areas, including the Bakken, the Denver-Julesburg Basin and the Powder River Basin, to Patoka, where shippers will be able to access Midwest and Gulf Coast markets. The expansion may enable future access to Eastern U.S. refiners as Spectra Energy continues to explore opportunities to serve those markets as well.
The expansion, which will be in service in 2017 with an initial capacity of approximately 400,000 barrels per day, will provide unprecedented access for shippers to reach markets in eastern PADD 2 and the flexibility to meet light crude refinery demand on the Gulf Coast.
The press release mentions the Powder River Basin. A reader sent this article also, from the Kansas City Star (where Ernest Hemingway got his start?): folks are talking boomtown in Gillette, WY -- Campbell County and just north of Converse County which seems to be the center of Powder River Basin activity (Niobrara).
Campbell County also has solidified itself as the clear leader in oil for the Cowboy State, accounting for 20.5 percent of Wyoming's overall production in 2013 and nearly 25 percent for 2014 through July.
With brisk oil production elsewhere across the United States in places like Oklahoma, Texas and Louisiana — along with the breakneck production in the Bakken in North Dakota, which recently topped the 1.1 million barrels per day mark — 2013 was notable for being the first time since 1995 that the United States produced more oil that it imported.
While nobody predicts Wyoming production will ever approach what the Bakken has become, many in the industry believe the upturn in production will be sustainable for decades.
I'm not sure if the article said anything regular readers did not already know, except perhaps to note that that this is Campbell County, and most of the previous talk in this area had been of Converse County.

Also note: "the upturn in production will be sustainable for decades."


Spectra and Natural Gas: A Flashback to 2010

Completely unrelated to these stories, I suppose, it is interesting to take a look at this post back in 2010 and indications of where the natural gas industry was headed back then.

Kansas City Star

And regular readers know what's coming next:

Kansas City Star, Roger Miller

Read more here:

The Alfred Old Dog Wells Have Been Updated; The Everglades Wells Have Been Updated -- October 11, 2014

Link here for Alfred Old Dog (WPX).

Link here for Everglades (BR).

The Borrud Wells North Of Williston Look Nice -- October 11, 2014

Update on some early Borrud wells:
  • 25562, AB/1,208, Bruin/HRC, Borrud 156-101-2A-11-2H, t8/13; cum 255K 11/17;
  • 22495, 805, Bruin/HRC/KOG/Liberty, Borrud 156-101-1-12-1H, t8/12; cum 407K 7/19;
  • 19048, 705, Bruin/HRC/Petro-Hunt, Borrud 156-101-11D-2-1H, Bakken; t8/11; cum 238K 7/19;
  • 29539, 4,635, Bruin/HRC, Borrud 156-101-1B-12-2H, Tyrone, t7/19; cum 50K over 25 days. I.N.C.R.E.D.I.B.L.E. The cumulative in less than 30 days is incredibly, but look at that IP: 4,635.
  • 29538, PNC, Bruin/HRC, Borrud 156-101-1B-12-3H, Tyrone,
  • 29240, 1,827, Bruin/HRC, Borrud 156-101-2B-11-5H, Tyrone, t4/15; cum 231K 7/19;
  • 29239, 1,802, Bruin/HRC, Borrud 156-101-2B-11-4H, Tyrone, t3/15; cum 241K 7/19;
  • 29238, 1,209, Bruin/HRC, Borrud 156-101-2B-12-3H, Tyrone, t4/15; cum 197K 7/19;
  • 29787, 3,099, Bruin/HRC, Borrud 156-101-1A-12-1TFH, Tyrone, t7/19; cum 24K over 18 days;
  • 33335, 2,871, Bruin/HRC, Borrud 156-101-1A-12-4H, Tyrone, t7/19; cum 30K over 26 days;
  • 33336, 3,047, Bruin/HRC, Borrud 156-101-1A-12-5H, Tyrone, t7/19; cum 33K over 23 days;
  • 35806, 1,390, Bruin/HRC, Borrud 157-100-33C-21-1H3, Tyrone, t7/19; cum 25K over 25 days;
A Note to the Granddaughters

During two successive summers during my high school years, Dr Borrud hired one of my very close friends and me to "pick rocks" on his land. "Picking cotton" can't possibly be any worse than "picking rocks." His farm was just north of Williston, and I assume these are wells on his land.

Dr Borrud lived a block from where we lived; his daughter was in our carpool during middle school years. I believe Dr Borrud moved from Williston to Minneapolis shortly before/shortly after their daughter graduated from high school.

The Natural Gas Tsunami -- Richard Zeits

Over at SeekingAlpha:
The meteoric rise of the Marcellus and Utica natural gas production to over 15 Bcf/d in less than five years of active development looks almost miraculous. This explosive growth would not be possible, however, without the Midstream Industry being able to deliver gathering and takeaway solutions at an equally remarkable pace. The takeaway capacity ramp-up is particularly impressive considering the tedious permitting process and significant lead times for new projects in the Northeast.
In fact, the Marcellus and Utica region may be able to add another 10-15 Bcf a day in production volumes already by 2020.
The resulting 25-30 Bcf a day of potential production in 2020 is an enormous amount of natural gas to produce, gather and take away. It would equate to 20%-25% of all natural gas produced in North America in 2020. While this figure may be difficult to believe in, the forecast has credible underpinnings to support it.
Much of this growth is already detectable in the multi-year contractual commitments for new proposed transportation capacity that is designed to take natural gas out of the basin. Moreover, the existing pipeline systems - that are still in early stages of being reconfigured for the new structure of inter-regional flows - provide sufficient reserve of takeaway capacity to accommodate growing production volumes.
Connecting the Dots -- Saudi v Kuwait

The other day I noted that Kuwait bought into the Canadian shale play -- the Duvernay. Lots of story lines.I was not aware of this story line over at Rigzone: Kuwait and Saudi in price war.

Meanwhile in Baghdad -- Things Not Looking So Good

CNN is reporting that leaders of Iraq's Anbar province now desperate; now requesting US troops on the ground. Won't happen. Airstrikes will need to destroy Anbar to save it. The only thing between Baghdad and ISIL is Anbar.

Baghdad before November? Sort of reads like Patton's race to Berlin, doesn't it? And one has to remember: ISIL is JV; can you imagine what's about to happen if Syria/Iran/Al Qaeda send in the varsity?

Kuwait next?

Dominoes, anyone?

We're Way Beyond "Boots On Ground" Talk

We're way beyond blaming President Obama, or suggesting what President Obama might do or might not do now. I think he's pretty much watching this play out; there's not much else the US can do. We're way beyond arguing whether "troops on the ground" is a possibility. I don't think folks realize how difficult it is for the US Army to turn on a dime. US Marine expeditionary forces are not going to stop ISIL; they might slow ISIL down, but the slaughter would be horrendous and President Obama won't want to watch that on television under his watch.

If the US sends in "the cavalry" now, at best, a Pyrrhic victory. And the US doesn't do Pyrrhic victories on purpose.

It's hard not to imagine the following scenario playing out.
The absolute fear of mass executions and beheadings by ISIS will result in panic in Baghdad.

We will start to get reports of Baghdad residents streaming south out of Baghdad towards Kuwait, where there is still a US presence.

Once refugees start streaming out of Baghdad, the battle for Baghdad is over. It's human nature. The Iraqi leaders will have no buffer, no "human shield" between them and ISIS. 
Air strikes won't stop ISIS. A multi-million dollar cruise missile to take out a Toyota pick-up truck. The math doesn't add up. And it's way too late to put US "boots on the ground." Helicopters are "boots on the ground," (see linked article above) but shoulder-fired ground-to-air missiles will quickly halt US helicopters. Once one US helicopter goes down and ISIS has the video of the helicopter crew, dead or alive, President Obama will have a catastrophic political problem. But the question of sending in more US troops will be off the table. It's too late. That train has left the station.

Oh, all that talk about the oil fields? That's a given once the ISIL-flagged convoy starts streaming into Baghdad.

President Obama is focused on the November elections.

Remember: ISIS Is The JV Team ...

... the coach will send in the A-Team if necessary. 

Week 41: October 5, 2014 -- October 11, 2014

Biggest Bakken story of the week
After months (years?) of rumors, it seems true: OXY shopping its Bakken assets
The "Pronghorn"

Enerplus announces two monster wells in west Antelope oil field
Amber Renee appears to be back on-line
Whatever happened to the Upper Bakken Shale?
Brigham is back; will start drilling Tribal wells
Natural Resources acquires 5,700 net acres in Sanish oil field, $60K/producing acre?
Whitng with two, QEP with four "high-IP" wells

Targa to build 200 MMcf/d natural gas processing plant in McKenzie County 
Update on Phillips (PSX) CBR in North Dakota 
WPX names Bakken as one of its key three plays

Bakken economy
Alexander bypass complete
Alexander to double size of its K-12 school
McKenzie County budget: almost $200 million

Whiting-KOG merger will benefit both companies