Thursday, October 23, 2014

Fifteen (15) New Permits -- North Dakota, October 23, 2014; 5-Year Outlook For The Bakken

From the Bakken Magzine, the five-year outlook for the Bakken: The graphics are very user friendly: you can click on the first graphic and then scroll through the rest.

California getting more Bakken crude by barge than by rail. is reporting:
Shipments of Bakken crude oil from North Dakota to California by barge have quietly overtaken those by train for the first time, showing how the state’s isolated refiners are using any means necessary to tap into the nation’s shale oil boom.
While tough permitting rules and growing resistance by environmentalists have slowed efforts to build new rail terminals within California itself, a little-known barge port in Oregon has been steadily ramping up shipments to the state, a flow expected to accelerate next year.
From January through June, California received 940,500 barrels of the North Dakota crude oil from barges loaded at terminals in the Pacific Northwest, the highest rate ever.
Bakken crude transported to California on railcars, which has gained widespread attention after a series of fiery train derailments in North America, accounted for just 702,135 barrels over the same time period.
“We’re seeing marine transport of Bakken crude outpace rail for the first time,” Schrempf said. In 2013, rail shipments of 1.35 million barrels exceeded barge shipments of 1.33 million barrels. The year before, almost no crude arrived by barge.
Bakken shipments by barge and rail may only comprise a tiny portion of the crude California imports, at about 5,200 and 4,000 barrels per day respectively, with Alaska supplying over 20 times as much crude.

Wells coming off the confidential list Friday:
  • 27492, 184, Murex, Shauna Michelle 26-35H, Daneville, t7/14; cum 10K 8/14;
  • 27798, drl, Hess, AN-Evenson-152-95-1003H-9, Antelope, no production data,
  • 27839, drl, MRO, Bears Ghost USA 11-4TFH, McGregory Buttes, no production data,
  • 27916, 362, American Eagel, George 3-1-163-102, Skjermo, t9/14; cum 5K 8/14;
  • 27981, drl, Statoil, Paulson 36-1 2H, Briar Creek, no production data,
Active rigs:

Active Rigs194181181188196

Wells coming off the confidential list today were posted earlier; see sidebar at the right.

Fifteen (15) new permits:
  • Operators: Hunt (4), Enerplus (3), BR (3), Zavanna (2), QEP, HRC, CLR
  • Fields: Werner (Dunn), Ross (Mountrail), Heart Butte (Dunn), Pershing (McKenzie), Stockyard Creek (Williams), Grail (McKenzie), Tyrone (Williams), Banks (McKenzie)
  • Comments:
Four (4) producing wells completed:
  • 27013, 200, Oasis, State 5792 31-15 4T2, Cottonwood, t8/14; cum --
  • 27067, 908, Hess, EN-KMJ Uran 154-93-2734H-5, Robinson Lake, t9/14; cum --
  • 28172, 955, Triangle, Wahlstrom 152-102-34-27-4H, Elk, t10/14; cum --
  • 28173, 836, Triangle Wahlstrom 152-102-34-27-3H, Elk, t10/14; cum -- 
What Some Of Us Will Be Talking About Friday
The Wall Street Journal

Uh-oh. Amazon stumbles on high spending. 

Self-quarantined doctor, breaks his own quarantine, tests positive for Ebola virus. After bowling in NYC. I can't make this stuff up.

At least one indicator is moving in the right direction: activity in China's manufacturing sector rose in October

I didn't see this coming: Microsoft is hot again. Microsoft's sales continue to defy expectations by growing at a much fast clip than those of its business-technology peers.  

OXY profit falls 24%. Previously reported.

Caterpillar posts surprising profit gains. Previously reported.

Nucor announces 66% profit rise on energy boom. Not previously reported.

Uh-oh. Buffetts doubled down on renewables -- and wind power in particular --in his energy strategy.

KKR signaled opportunities ahead, as choppy markets create conditions that can scare off other investors. The private-equity firm said third-quarter profit fell sharply, as its cash haul from deal profits declined.

Dr Pepper tops expectations

Heard on the street: natural-gas bulls: better luck next year.
Cold winter isn't good enough reason to bet on higher gas prices.A bet on the winter starting in late 2015—still risky given the time horizon—could make more sense for one reason: power-plant shutdowns.
Next year will see a swath of coal-fired power plants shut down as a result of tighter environmental standards. Some 30 gigawatts of coal-fired capacity is slated to be retired or at risk of this in 2015, according to Sanford C. Bernstein. That is 60% of the amount expected to close through 2020.
Teri Viswanath of BNP Paribas points out that around 70% of the plants scheduled to close next year are in Midwest and mid-Atlantic states—precisely the regions that relied on those plants during the worst of last winter.
The scheduled start of U.S. exports of liquefied natural gas and continuing construction of export pipelines to Mexico should also add pressure on the demand side.
Does that guarantee a jump in gas prices? No. But it does increase the likelihood of seasonal swings, says Ms. Viswanath. Currently, with the futures curve pretty flat through 2016, this risk isn’t really priced in: The January 2016 contract is a mere 35 cents above the one for October 2015. With a little help from the gods, America’s shifting energy mix could offer gas bulls some delayed gratification.

Stockyard Creek Is Updated; Grail Field Is Updated -- October 23 2014

With four six more Zavanna permits for Stockyard Creek, that field has been updated. The ten most recent permits for Stockyard Creek have been issued to Zavanna.

The Helis Grail field has been updated

Blue Cross Raising Premiums To Keep Health Care Under ObamaCare Affordable -- October 23, 2014

Affordable Care Act update ...

The AP is reporting Blue Cross keeps health care affordable under ObamaCare, aka the Affordable Care Act. Blue Cross of North Carolina will raise premiums only 13 percent for 2015.

Well that's not quite correct. See if you can see my error. From the linked story:
North Carolina's largest health insurer said on Wednesday that 2015 rates will rise by more than 13 percent on average for buyers of individual Affordable Care Act policies.
Blue Cross and Blue Shield of North Carolina discussed the expected rate increases in a teleconference several weeks ahead of the Nov. 15 kickoff for the enrollment period for coverage starting in January
Yes, you caught it. Blue Cross is not raising their premiums 13 percent; they are raising their premiums by more than 13 percent to keep the premiums affordable.

As we always said in North Dakota, it could be worse.

Highlights Of The November, 2014, NDIC Hearing Dockets

Not much new happening.

CLR is starting to increase the number of very large drilling units:
  • 23267, CLR, Hayland, Hamlet, and/or Stoneview-Bakken, establish 2 overlapping 5120-acre unts, 2 wells on each, Divide
  • 23268, CLR, Stoneview-Bakken, establish 2 overlapping 5120-acre units; 2 wells on each; Divide, Williams
  • 23269, CLR, Northwest McGregor, Stoneview, and/or Sauk-Bakken, establih an overlapping 5120-acre unit, 2 wells, Williams
  • 23270, CLR, Sauk, Stoneview, and/or Lindahl-Bakken, establish an overlapping 5120-acre unit, 2 wells, Williams
  • 23271, CLR, Sauk-Bakken, establish an overlapping 5120-acre unit, 2 wells, Williams
The better Bakken:
  • at least 14 wells on 1280-acre units, e.g., #23272, CLR, Catwalk-Bakken, establish 2 1280-acre units; 14 wells on each unit; Williams
  • 8 wells on 640-acre units, e.g., #23262, Newfield, Sand Creek-Bakken, establish 2 640-acre units; 8 wells on each unit; McKenzie;
  • more mega-pads, e.g., #23250, MRO, Deep Water Creek Bay-Bakken, i) 4 wells on one 640-acre unit; ii) 9 wells on each of two 1280-acre units; iii) 10 wells on one 1280-acre unit; iv) 11 wells on 3 1280-acre units; McLean;
Flashback, September, 2014:

September, 17 - 18, 2014, dockets; highlights

  • QEP, Grail-Bakken, 24 wells on all of the 640-acre, 1280-acre, and 2560-acre units in most of Grail. 
I don't know about you, but 24 wells on 640-acre units seems to suggest ... well, suggest something.

The November Hearing Dockets Are Out -- October 23, 2014

Link here. I won't get to them for an hour or so.

A quick glance.

Wednesday, only 6 pages, very, very short. Mostly continuation cases.

Thursday, 20 pages, typical length.
  • XTO with three cases, 12 wells on a 1280-acre unit.
  • Lots of pooling and commingling cases; typical of the manufacturing phase in the Bakken.
Wednesday, November 19, 2014

23094, cont'd
14935, cont'd
23232, Hess, Beaver Lodge Devonian Pool, drill horizontal wells in the Three Forks formation; establish a 1280-acre drilling unit, 5 wells; Williams County
22957, cont'd
22958, cont'd
23233, Hess, Long Creek-Bakken, 9 wells on each of 2 1280-acre units; McKenzie, Williams
23234, Hess, Ellsworth-Bakken, establish an overlapping 2560-acre unit; 1 well, McKenzie
20211, cont'd
23090, cont'd
22640, cont'd
22641, cont'd
23235, Murex, McGregor-Bakken, amend stratigraphic limits; establish a 640-acre unit, 4 wells,  Williams
23236, BR, Bailey-Bakken, establish 2 overlapping 2560-acre units, 1+ wells, Dunn
23237, BR, Killdeer-Bakken, establish 2 overlapping 2560-acre units; 1+ wells; Dunn
23238, BR, Bailey-Bakken, amend stratigraphic limits, Dunn,
23239, BR, Killdeer-Bakken, amend stratigraphic limits, Dunn,
23240, BR, Lone Butte-Bakken, amend stratigraphic limits, Dunn, McKenzie,
23241, MRO, Big Bend and/or Reunion-Bakken, establish an overlapping 2560-acre unit; 1 well; Mountrail
23242: MRO, Deep Water Creek Bay-Bakken, establish 3 overlapping 2560-acre units; 1+ wells, McLean,
23243, MRO, Bailey-Bakken, establish 3 overlapping 2560-acre units; 1 well each, Dunn,
23244, MRO, Murphy Creek-Bakken, establish 8 overlapping 2560-acre units, 1+ wells on each; Dunn
23103, cont'd
22803, cont'd
23245, NDIC, bond hearing
23246, Jayhawk, SWD
23247, Murex, SWD
23248, KOG, SWD
23249, KOG, SWD
23250, MRO, Deep Water Creek Bay-Bakken, i) 4 wells on one 640-acre unit; ii) 9 wells on each of two 1280-acre units; iii) 10 wells on one 1280-acre unit; iv) 11 wells on 3 1280-acre units; McLean
23251, Whiting, pooling,
23252, Whiting, pooling,
23253, Whiting, pooling,
23254, Whiting, pooling,
23255, Whiting, pooling,
23256, Whiting, pooling,
23257, Hess, Tioga-Bakken, 7 wells on each of 2 1280-acre units; Mountrail
23258, Hess, commingling
23259, Liberty Resources, risk penalty legalese

Thursday, November 20, 2014

23260, Newfield, revoke hearing, QEP, Moberg, McKenzie
23261, Newfield, Bear Den-Bakken, establish an overlapping 2560-acre unit; 1 well, McKenzie
23262, Newfield, Sand Creek-Bakken, establish 2 640-acre units; 8 wells on each unit; McKenzie;
23263, Newfield, Westberg-Bakken, establish an overlapping 2560-acre unit, 1 well, McKenzie
22663, cont'd
23264, Abraxas, Siverston and/or North Fork-Bakken, establish 2 2560-acre units; 2 wells each; McKenzie
23265, Abraxas, Dimmick Lake, Fancy Buttes, and/or Pershing-Bakken, establish 2 overlapping 2560-acre units, 2 wells in each; McKenzie
23266, CLR, Frazier-Bakken, create a 2560-acre unit, multiple wells; Divide
23267, CLR, Hayland, Hamlet, and/or Stoneview-Bakken, establish 2 overlapping 5120-acre unts, 2 wells on each, Divide
23268, CLR, Stoneview-Bakken, establish 2 overlapping 5120-acre units; 2 wells on each; Divide, Williams
23269, CLR, Northwest McGregor, Stoneview, and/or Sauk-Bakken, establish an overlapping 5120-acre unit, 2 wells, Williams
23270, CLR, Sauk, Stoneview, and/or Lindahl-Bakken, establish an overlapping 5120-acre unit, 2 wells, Williams
23271, CLR, Sauk-Bakken, establish an overlapping 5120-acre unit, 2 wells, Williams
23272, CLR, Catwalk-Bakken, establish 2 1280-acre units; 14 wells on each unit; Williams
23168, cont'd
21997, cont'd
20926, cont'd
20927, cont'd
20928, cont'd
20929, cont'd
23273, XTO, Lost Bridge, Bear creek, Cedar Coulee, and/or Corral Creek-Bakken, establish one overlapping 1280-acre unit; 4 overlapping 2560-acre units, 2 wells each, Dunn
23274, XTO, Bear Creek-Bakken, establish 1 overlapping 1280-acre units; 2 wells, Dunn
23275, WPX, Squaw Creek-Bakken, alter setback requirements, McKenzie
23276, WPX, Van Hook-Bakken, establish an overlapping 3840-acre unit, 1 well, McLean
23019, cont'd
23277, Corinthian, Souris-Spearfish/Madison, Zone IV, authorizing rather than requiring the drilling of 2 opposing horizontal wells on a 320-acre unit, Bottineau
20658, cont'd
22996, cont'd
23001, cont'd
22997, cont'd
23143, cont'd
23144, cont'd
23145, cont'd
23278, Sinclair, pooling,
23279, Sinclair, pooling,
23280, Sinclair, pooling,
 23281, Sinclair, pooling,
23282, Sinclair, pooling,
23283, XTO, pooling,
23284, XTO, pooling,
23285, XTO, pooling,
23286, XTO, pooling,
23287, XTO, pooling,
23288, XTO, pooling,
23289, XTO, Corral Creek-Bakken, 12 wells on an existing 1280-acre unit, Dunn
23290, XTO, Cedar Coulee-Bakken, 12 wells on an existing 1280-acre unit, Dunn
23291, XTO, Bear Creek-Bakken, 12 wells on a 640-acre unit; 12 wells on each of four 1280-acre units; Dunn
23292, XTO, commingling,
23293, XTO, commingling,
23294, XTO, commingling,
23295, XTO, commingling,
23296, XTO, commingling,
23297, XTO, commingling,
23298, XTO, commingling,
23299, XTO, commingling,
23300, XTO, commingling,
23301, XTO, commingling,
23302, XTO, commingling,
23303, XTO, commingling,
23304, Newfield, pooling,
23305, Newfield, pooling,
23306, Statoil, pooling,
23307, Statoil, pooling,
23308, Statoil, pooling,
23309, Statoil, pooling,
23310, Statoil, pooling,
23311, Statoil, pooling,
23312, Statoil, pooling,
23313, Statoil, pooling,
23314, Statoil, pooling,
23315, Statoil, pooling,
23316, Statoil, pooling,
23317, Statoil, pooling,
23318, Statoil, pooling,
23319, Statoil, pooling,
23320, Statoil, pooling,
23321, Statoil, pooling,
23322, CLR, pooling,
23323, CLR, pooling,
23324, CLR, pooling,
23325, CLR, pooling,
23326, CLR, pooling,
23327, CLR, commingling, 
23328, CLR, commingling,
23329, CLR, commingling,
23330, CLR, commingling,
21375, cont'd
23331, WPX, pooling,
23332, WPX, pooling,
23333, WPX, pooling,
23334, WPX, pooling,
23335, WPX, pooling,
23336, WPX, pooling,
23337, WPX, pooling,
23338, WPX, pooling,
23339, WPX, pooling,
23340, WPX, pooling,
23341, WPX, pooling,
23342, WPX, pooling,
23343, WPX, pooling,
23344, WPX, pooling,
23345, WPX, pooling,
23346, Fidelity, Zentih-Bakken, 4 wells on an existing 1280-acre unit; Stark
23347, Triangle, Ragged Butte-Bakken, 12 wells on two existing 1280-acre units; McKenzie
23348, Emerald, Poker Jim-Bakken, 7 wells each of 3 existing 1280-acre units; McKenzie
23349, Emerald, Burning Mine-Bakken, 7 wells an on existing 1280-acre unit, McKenzie
23350, Emerald, Pierre Creek-Bakken, 7 wells on each of 3 existing 1280-acre units; McKenzie
23351, Emerald, Hay Draw-Bakken, 7 wells on each of 3 existing 1280-acre units; McKenzie
23352, Emerald, MonDak-Bakken, 7 wells on an existing 1280-acre unit, McKenzie
23353, Emerald, Charbonneau-Bakken, 7 wells on an existing 1280-acre unit, McKenzie
23354, Hunt, commingling,
23355, Hunt, commingling,
23356, Hunt, commingling,
23357, Enduro, injection,
23358, Enduro, injection,
23359, Enduro, injection,
23360, Enduro, injection

Active Rigs At Recent High -- 195; CLR With Some Nice Wells In SCOOP; Initial Unemployment Claims Surge; Thursday, October 23, 2014

It's going to be a busy, busy day. The market is up big, which means there must be a lot of news to cover. Headline: GM, CAT earnings drive stocks higher as "biggest day of 2014" gets underway." Apparently CAT "brightens outlook."

UNP surges, hitting a new 52-week high.

AAPL surges to a new all-time high.

Sears closing 100 stores, laying off 5,500 employees. 

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

CLR Press Release: Four New Springer Wells In SCOOP
Short Lateral EURs: Almost a Million BOE
Long Lateral EURs: As Much As 1.6 Million BOE 

From a press release:
The four new wells had an average horizontal lateral length of approximately 4,475 feet. Continental expects estimated ultimate recovery (EUR) of 940,000 gross Boe per well in the oil fairway of the play for a well with a 4,500-foot lateral section. In November 2014 , Continental plans to commence drilling its first extended lateral well in the Springer play, with a planned lateral length of 7,500 feet. The Company expects an average EUR of approximately 1.6 million gross Boe for extended lateral wells of this length, reflecting the 67% longer lateral. Continental reported that the average completed well cost this year has been in line with earlier projected cost of $9.7 million per well. The four newest wells were drilled to an average vertical depth of approximately 12,625 feet and average total measured depth of approximately 17,650 feet.
The UPI talks about the SCOOP here.


Jobs Report

Isn't this an interesting on the jobs report? Was last week's incredible drop to 264,000 an anomaly? What was that all about? Today, the number is back up to 283,000 -- almost as if last week did not happen. Analysts had expected today's number to rise to 281,000. The four-week average, they say, "fell further," to 281,000 from 284,000 last week. Well, of course it did when the number last week unexpectedly plunged to 264,000.

All I can say is "strange," to say the least.

Oh, and this concluding remark from the linked article, in bold: "The labor market is still strong an any slack remaining is just a figment of the Federal Reserve's imagination." I wonder what color the sky is in their universe?


RBN Energy: first in a series on diluent for West.
Demand for diluent range light hydrocarbon materials such as natural gasoline and condensate that are used to reduce the viscosity of heavy Canadian bitumen crude so that it can flow in pipelines, is forecast to increase from 380 Mb/d in 2014 to 685 Mb/d by 2019.
Increasing bitumen crude production in the Western Canadian oil sands region drives that demand.
New large scale bitumen projects in Alberta requires two pipelines – one to ship crude production to market and one to ship in diluent for blending. Today we start a new series detailing the expanding western Canadian diluent distribution network.
RBN has frequently detailed the challenges that producers in the Western Canadian sedimentary basin (WCSB) have faced transporting heavy bitumen crude from the Alberta oil sands formations to market.
Bitumen crude that is not first upgraded by partial refining (to make light synthetic crude oil or SCO) cannot flow in pipelines unless it is diluted by blending with as much as 30 percent of lighter hydrocarbons (known as diluent) or heated up. Heating is used infrequently for short distances but diluent blending is the preferred method for most Canadian producers that ship such heavy crude by pipeline.  Our analysis to date has mostly focused on the longest part of the bitumen crude journey – from pipeline hubs in Edmonton and Hardisty to refineries in the U.S. Midwest and on the Gulf Coast.
 Today's RBN Energy post, by the way, features the Blondie album, "Parallel Lines."


Active rigs in North Dakota:

Active Rigs195181181188196

Earnings On Tap Today

All result in:
  • Amazon, expectations, a loss of 74 cents, after hours; actual, a loss of 95 cents; horrendous; shares plummet; phone flops; predicted;
  • CAT, forecast, $1.36; reported $1.63 with "belt-tightening: but revenue did exceed expectations slightly; shares surge 5%;
  • Edward Lifesciences, forecast 73 cents, after market close: beats by 8 cents; shares surge;
  • Flowserve, after market close, forecast, $1.00; misses by 7 cents; shares down 6%
  • General Motors beats by $0.03, beats on revs 
  • Occidental Petroleum (OXY), forecast $1.57 before market open; misses by a penny; shares up nicely; reports record domestic production of 282,000 bopd
Natural Gas Fill Rate

The magic number is 100. Today's number: 94. See comment below. [Update: the "magic number" of 100 was set several weeks ago; as we get closer to peak withdrawal, the magic number should increase -- we are getting closer to winter and the gap (see graphic below) is not narrowing [if it is narrowing, it is almost imperceptible]. With less time to get back to historical averages, the "magic number" rises.]

At Yahoo!In-Play:
"Natural gas futures spiked to a new session high, and into positive territory, following inventory data."
Update: The quote is theirs, not mine.

See first comment below.

This is what I'm watching: the gap. I lose track of things but it is my impression that things got a bit out of hand last winter when the northeast almost ran out of natural gas. I'm looking at "Last Year" and then comparing "The Gap" going into this year. If it's a mild winter, no big deal. If it's a severe winter, it appears to me, we are entering the season with a relative deficit compared to previous years (5-year historical averages).  I am new to the world of natural gas, and I'm certainly new to the world of natural gas in the northeast, so I am learning as I go along. I find this quite fascinating to be able to watch this play out in "real time."