Week 51: December 14, 2014 -- December 20, 2014

Bakken economy -- biggest story of the week? 
New casino west of Williston

Bakken ops -- biggest story of the week?
Sixty (60) wells in one 2560-acre drilling unit

Operations
A random look at how good the Antelope oil field is
Random thoughts on barely missing another production record in the Bakken

Natural gas / flaring
ONEOK to double capacity of proposed new Demicks Lake natural gas processing plant
Hess' approach to curb flaring

Fracking
MRO re-fracking wells

Conditioning Bakken oil
ONEOK to add de-ethanizers at Stateline I and Stateline II

Miscellaneous
KLJ study of the Bakken impact on North Dakota

Traveling -- Blogging Will Be Significantly Delayed -- December 19, 2014

Active rigs in North Dakota at COB, Friday, December 19, 2014:

	12/19/2014	12/19/2013	12/19/2012	12/19/2011	12/19/2010
Active Rigs	181	188	187	201	166

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

Nine (9) new permits --

• Operators: BR (3), Newfield (2), WPX (2), XTO, OXY USA
• Fields: North Fork (McKenzie), South Tobacco Garden (McKenzie), Mandaree (Dunn), Siverston (McKenzie), Cabernet (Dunn)
• Comments:

Four (4) Petro-Hunt permits in Billings County cancelled.

Several well name changes suggesting different targets in some cases.

Big Story Missed By Local, Regional Press? -- December 19, 2014

This link will take you to a pdf: http://williamsnd.com/usrfiles/10.%20October%2020%202014%20minutes.pdf.

Go to the bottom of page 8 at that link or do a word search for "casino" at the document.

The language is pretty clear.

If accurate, I'm amazed the local press or the regional press has not picked up on the story. I got the link from a reader.

Slicers And Dicers -- One Can See Clearly Now -- December 19, 2014; What An Incredible Travesty -- 38 Golden Eagles Killed By Slicers And Dicers In Two Counties

The Billings Gazette is reporting:

Wind farm operator PacifiCorp Energy will pay $2.5 million in fines after pleading guilty to charges in connection with the deaths of protected birds in Wyoming.

The company, a subsidiary of Portland, Ore.-based PacifiCorp, pleaded guilty Friday to two counts of violating the federal Migratory Bird Treaty Act under a plea deal with prosecutors. 

The U.S. Justice Department says 38 golden eagles and 336 other protected birds have been found dead at the company's wind projects in Carbon and Converse counties from 2009 until now. 

The bulk of the fine money will pay for projects to preserve golden eagles.

It's the second prosecution of wind energy company for harming or killing protected birds. Duke Energy pleaded guilty last year to killing eagles and other birds at two Wyoming wind farms.

38 golden eagles.

336 other protected birds: owls, falcons, hawks, ducks, cranes. 

Only Four More Days ... December 19, 2014

.... until maybe something is officially posted.

From the most recent Director's Cut:

US natural gas storage is now10% below the 5-year average; North Dakota shallow gas exploration could be economic at future gas prices. A reminder: there is some exploration underway in Emmons County; the first well is confidential until 12/23/14.

This refers to these four wildcat wells:

• 27235, conf, Strata-X, Rohweder, 1-11, wildcat, about 16 miles east of Linton, Emmons County,
• 27234, conf, Strata-X, Aberle 1-31, wildcat, about 9 miles south of Wishek, McIntosh County (east of Emmons County),
• 27233, conf, Strata-X, Hoff 1-32, wildcat, east of Linton, Emmons County,
• 27232, conf, Strata-X, Just 1-24, wildcat, east of Linton, Emmons County,

This comes from a July 28, 2014, post:

Speaking of natural gas, Strata-X has discovered natural gas in southeastern North Dakota, outside the "limits of the Bakken." This has previously been reported; it is not particularly new news, and much more needs to be done to determine if the source is economical. I would not have posted this because it's been posted before, from a different source, but if I don't post it, I will receive a gazillion comments and e-mails linking me to this site. Regardless, it has a nice map/graphic. 

That link still works as of this posting/date.

 

I'm sure there's more than one reader curious if anyone has anything information. My hunch is December 23, 2014, will come and go with minimal new information. Unfortunately. I hope I'm wrong. Really wrong.

North Dakota Extraction Tax Money At Risk? Poll -- December 19, 2014

Reuters reminds us:

Tumbling U.S. oil markets hit an important if obscure milestone on Thursday, closing for the first time at a price that could trigger a $5.3 billion, two-year tax break for North Dakota oil drillers as soon as next summer.

Under a decades-old law, the state at the heart of the U.S. shale oil boom would waive its 6.5 percent oil extraction tax once the average monthly price of benchmark West Texas Intermediate (WTI) crude at Cushing, Oklahoma, falls below a certain threshold for five consecutive months.

For next year, that price is $55.08 per barrel. 

So, great poll question: Will North Dakota's oil extraction tax be "waived" before the end of 2015?

• Yes
• No

The end of 2015 is a long way off, so I will pull the poll well before then. I don't want to "bias" any voting, but I'm pretty sure I will be correct with my vote. This is what will be interesting for me: what readers think.

I assume the state calculates the "average" WTI price based on the closing price every day WTI is traded.

The Bakken Is Not Going To Go Away; 32 Wells On A 1280-Acre Unit; 60 Wells On A 2560-Acre Unit In Spotted Horn-Bakken -- December 19, 2014

Updates

February 26, 2017: the 2560-acre drilling unit noted in case # 22344 below
 
Original Post
This is really appreciated. I don't have Premium Services, so I don't see most decisions made by the NDIC.

This was sent to me by a reader -- a huge thank you.

Case No. 22344 Order No. 24679

(1) Sections 30 and 31, Township 150 North, Range 94 West, McKenzie County, North Dakota, are hereby established as a standup 1280-acre spacing unit for the exclusive purpose of drilling up to thirty-one horizontal wells within said spacing unit within the Spotted Horn-Bakken Pool and Zone XIII is hereby redefined to include said spacing unit. Existing and future vertical and directional wells drilled within the spacing unit herein established shall not be subject to this order.

(2) Section 31, Township 150 North, Range 94 West, McKenzie County, North Dakota, is hereby established as a 640-acre spacing unit for the exclusive purpose of drilling one horizontal well within said spacing unit within the Spotted Horn-Bakken Pool and Zone II is hereby extended to include said spacing unit. Existing and future vertical and directional wells drilled within the spacing unit herein established shall not be subject to this order. 

(3) Sections 16 and 21, Township 150 North, Range 94 West, McKenzie County, North Dakota, are hereby established as a standup 1280-acre spacing unit for the exclusive purpose of drilling up to thirty-two horizontal wells within said spacing unit within the Spotted Horn-Bakken Pool and Zone XIV is hereby redefined to include said spacing unit. Existing and future vertical and directional wells drilled within the spacing unit herein established shall not be subject to this order. 

(4) Sections 8, 17, 19, and 20, Township 150 North, Range 94 West, McKenzie County, North Dakota, are hereby established as an L-shaped 2560-acre spacing unit for the exclusive purpose of drilling up to sixty horizontal wells within said spacing unit within the Spotted Horn-Bakken Pool and Zone XX is hereby created to include said spacing unit. Existing and future vertical and directional wells drilled within the spacing unit herein established shall not be subject to this order.

IT IS THEREFORE ORDERED

This order was signed on12-12-14. It will be interesting to see the Spotted Horn Field growth. Being on the east edge of the Nesson Anticline with the associated natural fractures shows this field to be an underdeveloped sweet spot.

The 2560-acre spacing unit as it looks today:

The four-well pad:

• 19170, 1,882, EOG, Bear Den 07-17H, Spotted Horn, 15 stages, 2 million lbs sand; 1 section; t1/11; cum 214K 10/14;
• 23064, 459, EOG, Bear Den 108-1708H, Spotted Horn, Three Forks, t6/13; 45 stages; 9 million lbs; 2 sections; cum 259K 10/14;
• 23065, 282, EOG, Bear Den 20-1708H, Spotted Horn, t6/13; 48 stages; 9.7 million lbs sand; 2 sections;  cum 294K 10/14;
• 23066, 261, EOG, Bear Den 102-1708H, Spotted Horn, Three Forks; 51 stages; 10.3 million lbs, 2 sections; t6/13; cum 253K 10/14;

The four-well pad:

• 19157, 1,476, EOG, Bear Den 04-20H, Spotted Horn, 1 section, t3/11; cum 232K 10/14;
• 23061, 1,206, EOG, Bear Den 23-2019H, Spotted Horn, 4 sections, t8/13; cum 232K 10/14;
• 23062, 455, EOG, Bear Den 101-2019H, Spotted Horn, 4 sections, t8/13; cum 219K 10/14;
• 23063, 1,418, EOG, Bear Den 100-2017H, Spotted Horn, 4 sections, t8/13; cum 296K 10/14;

January, 2015, Dockets Are Posted

Link here.

Quick look:

• 25380, Petrogulf, 16 wells on a 1280-acre unit
• 23595, EOG multiple wells on 16 1280-acre units;  multiple wells on 15 1920-acre units (number of units could be off by one or two); Parshall-Bakken oil field
• 23599, Statoil, extend Briar Creek-Bakken to create an overlapping 1920-acre unit, and six overlapping 2560-acre units, for single wells
• 23601, XTO, create 7 overlapping 2560-acre units, 2 wells each
• 23608, WPX, 5 wells on an existing 640-acre unit
• A handful of flaring cases
• Several penalty risk cases, Emerald Oil

Wednesday, January 21, 2015

23517, Evertson Operating, Ray-Red River, proper spacing, Williams
22597, cont'd
22640, cont'd
22641, cont'd
23518, Williston Exploration, Hutzenbiler well, oil pool discovered, temporary spacing, Stark
23090, cont'd
14935, cont'd
23519, Hess, Manitou-Bakken, establish 4 overlapping 2560-acre units; 1 well each, Mountrail
23520, Hess,  Alger and Robinson Lake, 12 wells on a 1280-acre unit; 3 overlapping 2560-acre units; Mountrail
23521, Hess, flaring, Antelope-Sanish
23235, cont'd
23522, Oasis, exception Cornette POW
23523, Oasis, Willow Creek-Bakken, establish an overlapping 2560-acre unit 3 wells, Williams
23524, Oasis, Banks and Elidah-Bakken, establish ten overlapping 2560-acre units, 3 wells each, McKenzie
23525, Oasis, Siverston-Bakken, establish 3 overlapping 2560-acre units, 3 wells each, McKenzie
23374, cont'd
23526, Cornerstone, Northeast Foothills-Bakken, exception one well, Burke
25327, MRO, Bailey-Bakken, exception one well, Dunn
23366, cont'd
23528, Whiting, South Fork-Bakken, 10 wells on each of 3 spacing units, Dunn
23529, Whiting, Heart Butte-Bakken, a) 7 wells on a1280-acre unit; b)8 wells on each of two 1280-acre units; c) 10 wells on each of two 1280-acre units; d) establish an overlapping 2560-acre unit, with 2 wells, Dunn
23530, Whiting, flaring
23531, QEP, Spotted Horn-Bakken, setback rules, McKenzie
23532, BR, Pershing-Bakken, establish 2 2560-acre units, 1+ wells, McKenzie
23533, BR, Blue Buttes-Bakken, 3stablish 3 2560-acre units, 1+ wells, McKenzie
23534, BR, Lone Butte-Bakken, establish a 2560-acre unit, 1+ wells, Dunn, McKenzie
23535, HRC, McGregory Buttes and the Eagle Nest-Bakken, establish 2 overlapping 2560-acre units, 1+ wells, Dunn
23364, cont'd
23365, waste treating plant
22617, cont'd
22950, cont'd
23259, cont'd
23537, SM Energy, pooling
23538, SM Energy, pooling
23538, Petro-Hunt, pooling
23539, Petro-Hunt, pooling
23540, Petro-Hunt, pooling
23541, Samson Oil & Gas, pooling
23542, Oasis, pooling
23543, Oasis, pooling
23544, Oasis, pooling
23545, Oasis, pooling
23546, Oasis, pooling
23547, Oasis, pooling
23548, Oasis, pooling
23549, Oasis, pooling
23550, Oasis, pooling
23551, Oasis, pooling
23552, Oasis, SWD
23553, Oasis, SWD
23554, Hess, pooling
23555, Hess, pooling
23556, Hess, pooling
23557, Hess, pooling
23558, Hess, pooling
23559, Hess, pooling
23560, Hess, pooling
23561, Hess, pooling
23562, Hess, pooling
23563, Hess, pooling
23564, Hess, pooling
23565, Hess, commingling
23566, Hess, commingling
23567, Hess, commingling
23568, Hess, commingling
23569, BR, pooling
23570, BR, pooling
23571, BR, Westberg-Bakken, 8 wells on a 1280-acre unit, McKenzie
23572, BR, pooling
23573, BR, pooling
23574, BR, pooling
23575, Whiting, Mandaree-Bakken, 12 wells on each of two 1280-acre units; Dunn
23576, Whiting, Moccasin Creek-Bakken, 11 wells on a 1280-acre unit; Dunn
23577, Whiting, pool
23578, MRO, Antelope-Sanish, 4 wells on a 2560-acre unit, McKenzie
23579, HRC, commingling
23126, cont'd
23247, cont'd

Thursday, January 22, 2015

23580, Petrogulf, Antelope-Sanish, 16 wells on an existing 1280-acre unit, 25/36-151-94; McKenzie, a look at this drilling unit, June 17, 2015;

23581, Petrogulf, Antelope-Sanish, establish an overlapping 2560-acre unit, 3 wells, McKenzie, Mountrail

23582, Petrogulf, establish an overlapping 2560-acre unit, 3 wells, McKenzie, Mountrail

22803, cont'd

23583, Emerald Oil, risk penalty legalese

23584, Emerald Oil, risk penalty legalese

23585, Emerald Oil, risk penalty legalese

23586, Emerald Oil, risk penalty legalese

23587, Emerald Oil, risk penalty legalese

23588, Emerald Oil, risk penalty legalese

23421, cont'd

22639, cont'd

23143, cont'd

23589, Thunderbird Resources, Boundary Creek-Spearfish, proper spacing, Bottineau

23144, cont'd

23590, Slawson, Trailside-Bakken, proper spacing, McKenzie

23145, cont'd

23591, treating plant

23592, EOG, Spotted Horn and Squaw Creek-Bakken, amending setback rules, McKenzie

23593, EOG, Spotted Horn-Bakken, amending setback rules, McKenzie

23594, EOG, Spotted Horn-Bakken, amending setback rules, McKenzie

23595, EOG, Parshall-Bakken, multiple wells on each of 15 1280-acre units; multiple wells on each of 17 1920-acre units; Mountrail

23596, EOG, Parshall-Bakken, establish a 1920-acre unit, multiple wells, Mountrail

23597, EOG, Parshall-Bakken, administrative relief, siting, Mountrail

23598, Statoil, Sugar Beet-Bakken, establish an overlapping 1920-acre unit; 1 well, Williams

23599, Statoil, Briar Creek-Bakken, extend, establish an overlapping 1920-acre unit; establish 6 2560-acre units; 1 well each; McKenzie, Williams

23600, Statoil, Buford-Bakken, establish 3 overlapping 2560-acre units; 1 well each, Williams

23601, XTO, Tobacco Garden and/or North Tobacco Garden-Bakken, extend, establish 7 overlapping 2560-acre units; 2 wells on each, McKenzie

23602, XTO, West Capa-Bakken, amend, establish an overlapping 2560-acre unit, 2 wells, Williams

23603, XTO, Truax-Bakken, extend, establish an overlapping 2560-acre unit, 2 wells, Williams

23604, XTO, Dollar Joe-Bakken, extend, establish an overlapping 2560-acre unti, 2 wells, Williams

23432, cont'd

23433, cont'd

23605, WPX, Mandaree-Bakken, setback rules, Dunn

23606, WPX, Squaw Creek-Bakken, setback rules, McKenzie

23607, WPX, Squaw Creek-Bakken, setback rules, McKenzie

23608, WPX, Squaw Creek-Bakken, 4 wells on an existing 640-acre unit, McKenzie

23609, Liberty Resources, McGregor-Bakken, terminate a 2560-acre unit; extend, create two overlapping 2560-acre units; Williams

23013, cont'd

23425, cont'd

23426, cont'd

20926, cont'd

20927, cont'd

20928, cont'd

20929, cont'd

23171, cont'd

22553, cont'd

23610, Hunt, flaring

23611, Hunt, flaring

23612, Hunt, flaring

23613, EOG, pooling

23614, CLR, pooling

23615, CLR, Elm Tree-Bakken, 12 wells on each of 2 existing 1280-acre units; McKenzie

23616, CLR, Murphy Creek-Bakken, 12 wells on an existing 1280-acre unit; Dunn

23451, cont'd

23452, cont'd

23454, cont'd

23617, Sinclair, Robinson Lake-Bakken, 8 wells on an existing 1280-acre unit, Mountrail

23618, Slawson, pooling

23619, Slawson, pooling

23620, Slawson, pooling

23621, Slawson, pooling

23622, Slawson, pooling

23623, Slawson, pooling

23624, Slawson, pooling

23625, Slawson, pooling

23626, Slawson, pooling

23627, Slawson, pooling

23628, Slawson, pooling

23629, Slawson, pooling

23630, Slawson, pooling

23631, Slawson, pooling

23632, Slawson, pooling

23633, Slawson, pooling

23634, Slawson, pooling

23635, WPX, pooling

23636, WPX, pooling

23637, XTO, McGregor-Bakken, 10 wells on each of two existing 1280-acre units, Williams

23638, XTO, Midway-Bakken, 10 wells on an existing 1280-acre unit, Williams

23639, Enduro, Stoneview-Stonewall unit, injection

23640, Secure Energy Services, SWD
23348, cont'd
23349, cont'd
23350, cont'd
23351, cont'd
23352, cont'd
23012, cont'd

Friday -- December 19, 2014

Active rigs:

	12/19/2014	12/19/2013	12/19/2012	12/19/2011	12/19/2010
Active Rigs	181	188	187	201	166

RBN Energy:

In the dead of the natural gas winter season when US producers count on strong margins from higher gas prices, the Transco Z6 New York hub is trading on average nearly flat  with U.S. benchmark Henry Hub, LA – the delivery point for the CME NYMEX natural gas futures contract. This is a dramatic departure from historical winter norms in the Northeast market, where prices relative to Henry and just about every other gas hub in the Northeast have traditionally carried hefty premiums in the winter. Moreover, the forward curves indicate these basis levels are the new norm for Northeast pricing. The forward curve for Transco Z6 New York shows basis for 2015 barely above Henry Hub for the year, with several months at more than $1.00/MMBtu discount. Today we look at what’s behind major changes in northeast forward curves.

This is Part 2 in our natural gas forward curve series. In Part 1 we explained natural gas forward markets and defined a forward curve. We clarified that forward curves are not the same as price forecasts because forwards reflect today’s value for future delivery of the gas, and that this value reflects the market’s expectations of supply and demand fundamentals for that future period. We explained that forwards in the gas market transact in terms of differentials to NYMEX Henry Hub, known as “basis,” and that adding the basis to the corresponding NYMEX contract derives the outright value of a forward market. Part 1 also reviewed the concept of seasonality in gas market forward curves. Patterns and trends in forward pricing are driven primarily by longer-term expectations for supply and demand dynamics at a particular hub for that future period. Forward curves within each major region of the US and even individual price hubs have unique characteristics and behave differently, depending on how much supply they receive, how much demand is served, what infrastructure and transportation is available and at what cost.