Friday, November 21, 2014

Week 47: November 16, 2014 - November 22, 2014

List of wells transferred from Baytex to SM Energy
EOG Austin well: almost 400,000 bbls in first year
Several good Halcon wells still in confidential status
Whiting well in Twin Valley: 150,000 bbls in less than four months
Reservation accounts for one-third of North Dakota's oil output

Update on the PSX Sacajawea Pipeline

Update on the PSX Palermo CBR terminal

Musings on current state of affairs re: fracking in the North Dakota Bakken 

Natural Gas
Zavanna to build 45-million cfd natural gas processing plant northeast of Williston

No evidence of ground water contamination despite 75 years of drilling
Halliburton to buy Baker Hughes?
On track for 3,034 oil and gas permits calendar year 2014

Warning -- November 21, 2014

A reminder. All my posts are done quickly and often include typographical errors. There is always the possibility of factual errors.

If the issue is important to you, go to the source.

All of today's posts were done quickly and with little time for review. Additional caution is recommended for items that were posted today.

I will eventually go back through them and correct typographical errors. There is never any intent to intentionally post factual errors. Opinions and factual items, however, are sometimes difficult to separate out in this blog, as is true in most other blogs.

This blog is intended for my use only but it is posted if others want to read it. See disclaimer.

Friday's Daily Activity Report -- November 21, 2014

Active rigs:

Active Rigs191184181202159

For those who follow the daily activity report on a daily basis, this is quite incredible. Generally, a daily activity report is two pages; occasionally three; rarely more than three. Today's report is eight pages long, mostly due to transfer of wells from one operator another operator, but in addition, almost a page of permit cancellations.

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

Seventeen (17) new permits --
  • Operators: BR (6), Statoil (5), SM Energy (4), Denbury Onshore, Slawson,
  • Fields: Banks (McKenzie), West Ambrose (Divide), Cabernet (Dunn), Cedar Hills (Bowman), Big Bend (Mountrail)
  • Comments: I normally associate OXY USA in the Cabernet; it's interesting to see 6 BR permits in the Cabernet
Six (6) producing wells completed:
  • 26103, 547, Slawon, Goldenban 2-2-1MLH, Sanish, t3/14; cum 72K 9/14;
  • 26526, 784, CLR, Jerry 3-8H, Poe, t10/14; cum --
  • 27531, 269, Oasis, Delta 6093 14-15 10T, Gros Ventre, t9/14; cum --
  • 27575, 2,474, Statoil, Barstad 23-14 8H, Alger, t10/14; cum --
  • 27760, 772, Oasis, White 5198 12-6 1T2, Siverston, t10/14; cum --
  • 28121, 634, Emerald, Mary Samsonite 1-16-21H, St Demetrius, t10/14; cum --
Operator Transfer:
  • Baytex Energy USA, LLC, to Baytex ND, LCC: about two full pages of wells from the current boom
  • Baytex Energy ND, LLC, to SM Energy Company: about two full pages of wells from the current boom
  • I did not check each and every well, but it appears all the wells were "ultimately" transferred from Baytex Energy USA, LLC, to SM Energy.
  • See post of July 29, 2014
Sixteen (16) O&G permits were canceled; one disposal permit canceled. Most of the permits were old permits but some were more recent including two Hunt permits in Mountrail County. Operators with little activity that canceled permits: Upton Resources (2), Anschutz (3), PDC (1), Ward-Williston (1), Sagebrush Resources (1), Petro Harvester (1), Open Range (2), Vecta (1).

Link is here.

December, 2014, Hearing Dockets Are Out

As usual, this is my summary, my shorthand. There may be errors; if this information is important to you, go to the source. Here's the link.

The complete list is at this post.

Cases that caught my eye:

23369, Whiting, Sanish-Bakken; 22 overlapping 2560-acre units; 3 wells each, Mountrail, McKenzie
23372, OXY USA, Manning-Bakken, 5 overlapping 2560-acre units; 1+ wells in each, Dunn
23387, KOG, Tyrone-Bakken, 12 wells on each of 4 1280-acre units; Williams
23388, KOG, East Fork-Bakken, 12 wells on each of 7 1280-acre units; Williams
23389, KOG, Epping-Bakken, 12 wells on each of 2 1280-acre units; Williams
23390, KOG, Poe-Bakken, 10 wells on each of 6 1280-acre units; McKenzie
23391, SM Energy, Indian Hill, Hardscrabble, and/or Elk-Bakken, 11 wells on 3 1280-acre units; McKenzie, Williams

23428, WPX, Squaw Creek-Bakken, 5 wells on an existing 640-acre unit, McKenzie
23446, Corinthian, Northeast Landa-Spearfish/Madison, 4 wells on each of 4 160-acre units, Bottineau
23461, Triangle, Sandrocks-Bakken, 12 wells on an existing 1280-acre unit, McKenzie
23462, Triangle, Pronghorn-Bakken, 12 wells on each of 6 1280-acre units; McKenzie
23463, Slawson, Big Bend-Bakken, 13 wells on an existing unit, Mountrail

XTO has a lot of cases.

And that's just a start.

A random look at the 2560-acre unit in which CLR wants to place 28 wells.

Poll: Will We See An Announcement Of "Even" One New Natural Gas Processing Plant On Fort Berthold Indian Reservation In 2015?

The subject line says it all.

Regular readers know the issues.

Not in the mood to write any more about the reason for the poll at this time. Maybe later if the spirit moves me.

And regular readers know what is coming next:

Spirit In The Sky, Norman Greenbaum

And I'm outta here. Good luck to all.

More Pipelines For The Bakken -- November 21, 2014

Phillips 66 Partners and Paradigm Energy Partners announce midstream logistics joint ventures: Co and Paradigm Energy Partners, LLC announce that they have executed agreements to form two joint ventures to develop midstream logistics infrastructure in North Dakota. Consisting of two previously announced projects, the Sacagawea Pipeline and Palermo Rail Terminal, the joint ventures are designed to enhance logistical options for crude oil transportation in the Bakken region.
From an earlier press release:
The Sacagawea Pipeline project is being developed to deliver crude oil from various points south of Lake Sacagawea in and around Johnson's Corner and Keene, in McKenzie County, North Dakota, to destinations with takeaway options for both rail and pipe in Palermo and Stanley, N.D.
SPC has received significant shipper interest in committing to the project, and based on such, anticipates receiving sufficient shipper commitments to proceed with the project.  All potential customers will have an equal opportunity to obtain capacity in the project and must submit binding commitments prior to the conclusion of the open season process.
For newbies: Johnson's Corner is at the intersection of state highways 23, 53, and 73, a few miles east of Watford City, one of the hottest areas in the Bakken. Palermo is on the other side (the north side) of the river, a few miles east of Stanley on US Highway 2.

An earlier post, same subject:
Phillips 66 will build a rail-loading facility permitted to handle up to 200,000 b/d of Bakken crude, the first time a US refiner has directly owned a North Dakota origination terminal. The company will also buy 500 rail cars, bringing its total fleet to 3,700.
"We have permits in hand in engineering to construct a new rail-loading facility. This is permitted up to 200,000 b/d. We'll probably do about 160,000 b/d" and build about 300,000 bl in storage.
I track CBR sites here. I cannot tell, for sure, from the article, but it sounds like this will be a new CBR terminal and not tapping into an existing one. But I could be wrong.

Both the pipeline and terminal should be operational in the first quarter of 2016. 

Zavanna To Build 45-Million CFD Natural Gas Processing Plant Seven (7) Miles Northeast Of Williston; To Be On-Line Before End Of Year (2014) -- November 21, 2014


January 10, 2015: The Bismarck Tribune is reporting:
A temporary exemption from state natural gas flaring rules was granted Friday by the North Dakota Industrial Commission to an operator completing work on a natural gas processing plant and gas-gathering system.
Commissioners unanimously voted in favor of the exemption for Denver, CO-based Zavanna LLC. The company is the majority partner in a joint venture with Westminster, CO-based Flatirons Field Services, called 1804 Ltd
Helms said 1804 Ltd. has nearly completed a natural gas processing plant about 7 miles northeast of Williston. The plant has a 64-mile underground natural gas gathering system in place.
The reason for the exemption, Helms said, is to allow the company to purge its gas-gathering system prior to starting the $90 million gas plant.
Helms said the exemption would allow the company to flare until March 31 or until the plant starts up, whichever comes first.
The plant was originally scheduled to come online by the end of September but delays in the delivery of some parts for the plant pushed back the gathering system purge, according to Helms, who said, once the plant goes online, wells flaring in a six township area around the plant would all be able to connect to the gathering system. The amount of gas being flared in the area is approximately 33 million cubic feet per day.
 Original Post

Somehow I missed this, reported back in October, 2014. Petroleum News is reporting:
Meeting gas capture targets is taking center stage for many oil and gas operators in North Dakota, and one small operator in the Williston Basin chose to tap into a venture to tackle the flaring challenge.
As part of its strategy, Denver-based Bakken operator Zavanna LLC has developed a joint venture with Flatirons Field Services to build a 45 million cubic feet per day gas processing plant seven miles northeast of Williston.
Flatirons Field Services, a midstream company also based in Denver, was formed in 2012 by founders of the former Western Gas Resources which serviced North Dakota when vertical wells were being drilled in the state.
This is Flatiron’s first project in the Bakken and the company expects the plant to be operational by December. Capacity could expand beyond 45 million cubic feet per day based on Zavanna’s processing needs.
As Petroleum News Bakken reported in the Oct. 19 edition, Zavanna is an anchor customer for ARM Midstream’s planned Williston Basin crude oil gathering system.
In August, Zavanna ranked 24th among the top 50 Bakken oil producers in North Dakota for operated, non-confidential wells with an average output of 6,410 barrels per day according to the latest data available from the North Dakota Department of Mineral Resources. 
It's hard to believe that Google has a satellite view of something so recent, so I have my doubts this is it but it is about seven (7) miles northeast of Williston. Based on satellite views  of 100-million cfd NG plants, this seems about the size one would expect for a 45-million cfd facility:

This is on 131st Avenue Northwest, just south of the intersection of 131st Avenue NW and 57th Street Northwest (County Road 6). If you want to explore the map on your own, plug in coordinates: 48.229952, -103.519264.

A big "thank you" to a reader for sending me the link.

For Investors Only

Trading at new highs today: AAPL, BRK.A, BRK.B, EEP, EEQ, UNP.

Watch That First Step (Their Headline, Not Mine) -- Deductibles Will Getcha

The often-steep Obamacare deductibles, which are on top of monthly premiums that customers have to pay to have insurance, can come as a surprise to enrollees. [Especially since many folks a) don't understand insurance [any kind of insurance]; and, b) don't know how to spell or pronounce "deductible."
"You're paying a lot of money for health insurance and then you go to use it, and then you say, 'OK, until this deductible is satisfied, I might be paying completely for doctor and specialist visits?'" he said.
The average deductible for an individual enrolled in a bronze plan in 2015 will be $5,181, or $100 more than 2014 limits. For families in bronze plans, the deductible next year will be $10,545, or $159 more than this year.  
Yes, you read that correctly. A family paying monthly premiums for health care with the "most affordable ObamaCare plan" will have to pay more than $10,000 before their health care kicks in. I haven't read the small print, so there may be different interpretations, but that's how I define a "deductible" and that's what the author of the article suggests.

The good news: it's easy to sign up for ObamaCare. 

ObamaCare's official name, I am often reminded by readers, is the Affordable Care Act.

As noted earlier, investors in health insurance companies are going to do very, very well. This is another article, by the way, that was not published before the election. But mainstream media is now setting the stage to move POTUS off-stage (he's already STAGE LEFT) to make room for the newly annointed.

Remember: This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here or what you think you may have read here. Make no travel plans based on what you read here. I post quickly and frequently; typographical and factual errors are likely. If this information is important to you, go to the source.

It would be interesting know what the deductibles are in the National Health System (British).

Switching Gears

Now that the unnamed autumn 2014 polar vortex is winding down, time to move to the next subject that will last about as long, and generate as many headlines: the Ferguson Fiasco.

And so we begin:
  • FBI sends 100 agents to Ferguson ahead of grand jury decision
  • Prosecutor preparing news conference to announce
  • Safeguards in place to protect identity of jururs
  • School district cancels classes
  • US Attorney General Eric Holder tells "law enforcement to behave"
  • Ferguson protestors erupt, want officer Wilson dead
  • Police families go into hiding
  • Michael Brown's father asks for calm
How long will Ferguson/St Louis burn? Human behavior is fairly predictable. I doubt we've changed much in the past 2,000 years. The Great Fire of Rome was an urban fire that started in the morning of 16th July in the year 64 AD. It caused widespread devastation before being brought under control after six days. Differing accounts either blame Emperor Nero for initiating the fire or credit him with organizing measures to contain it and provide relief for refugees (Wiki).

In the Ferguson case, we already know who will get credit for containing it. 

Active Rigs Back Up To 190 In North Dakota; Black Friday For Wal-Mart -- November 21, 2014

IP results for wells coming off confidential list today have been posted. See this link. Several "high-IP" wells. Even Baytex has a couple of nice wells today.

Active rigs:

Active Rigs190184181202159

 RBN Energy: Ethane rejection.
On Thursday, November 20, the ratio of ethane to natural gas hit its lowest point since 2005 – ethane only 64% of natural gas on a BTU basis.
According to OPIS, the price of ethane in Mont Belvieu was 19.25 cents/gallon while natural gas at Henry Hub was $4.49/MMbtu.
At this level it makes economic sense to reject as much ethane as possible.
All the rest of the ethane that gets produced needs to find a use, a purpose, a home. Demand for ethane as a feedstock for the petrochemical industry will rise considerably as new ethane cracking capacity comes online, mostly in the 2017-19 period.
Even so, ethane rejection is likely to remain commonplace for the foreseeable future. But what about ethane exports, not just to Canada but to Western Europe, Asia and other overseas markets? Today we update developments on the ethane export front.

From a post back in June, 2012:
China works hard to cool off an over-heating economy, but its bigger challenge: keeping its young men employed. China has a one-child rule and Chinese prefer men. The Chinese population is skewed toward young men. Who all want iPhones. And iPhones require money, which, generally, requires a job.

The Chinese cannot afford to let their economy slow, and we saw that with today's Chinese "rate cut." I know nothing about economics when it comes to monetary policy vs fiscal policy but "rate cut" always seems to be a good thing. So, when you see the Chinese trying to slow their economy, and the drop in the stock market, remain calm, take a deep breath. 
[Disclaimer: this is not an investment site.]
The Chinese effort to cool an overheating economy is always short term.
I've posted many times that the Chinese cannot afford to let their economy slow down. A gazillion unemployed men with nothing to do. Not a pretty picture. And the Chinese have a lot of US dollars with which to stimulate the economy.

Overnight, it was announced that China unexpectedly cut interest rates, just before our own US holidays. Result: US stock market surges.

Yahoo!Finance headline from two days ago: Warren Buffett is the world's greatest investor, but Doug Kass is still short Berkshire. Memo to Doug: BRK-B is surging.

China Is Going Green

China is going green. POTUS got the handshake. According to Bloomberg this is what China needs to go green (warning: please be seated when reading the next paragraph):
China, which does nothing in small doses, will need about 1,000 nuclear reactors, 500,000 wind turbines or 50,000 solar farms as it takes up the fight against climate change.
One thousand nuclear reactors. LOL. And POTUS believes them .

Busy, Busy Day
I'll be off the net for most of the morning, maybe afternoon. I will be at the school with our younger granddaughter for "fitness Friday." Then, later for sushi with my wife. Then two back-to-back soccer games tonight. Blogging will be hit and miss.

But before I go, a look at the market (it looks like THE speech last night was pretty a non-event in the big scheme of things).

Right now, the Dow is up 144 points. The list of new "highs" today is going to be quite stunning. Right now, trading at new highs: BRK-B, AAPL, UNP.

This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here or what you think you may have read here. Make no travel plans based on what you read here. I post quickly and frequently; typographical and factual errors are likely. If this information is important to you, go to the source.