Monday Night, August 31, 2015

Tweeting now: US weekly gasoline price ($2.51/gal) lowest heading into a Labor Day in 11 years.

Who would have ever thought?

XTO's Propsed Five-Well JMB Pad In Capa Oil Field -- August 31, 2015

XTO has five new permits in Capa oil field, Williams County.

I'll come back to this later, but note the triple lateral about a mile away to the southeast. The Bakken never fails to surprise.

I already know how the roughnecks will refer to this 5-well pad. 

Alberta In Deep Doo-Doo -- August 31, 2015; Also, Steam-Assisted Gravity Drained Oil In Alberta

CTV news is reporting:

Alberta's finance minister says the province is on track for a record $5.9-billion deficit this year as the oil crunch hits families and businesses.

And Joe Ceci says the worst may not be over if low oil prices persist and the province continues in recession.

"If current conditions continue, the final deficit will be in the range of $6.5 billion," Ceci said Monday as he released first-quarter figures for the 2015-16 fiscal year which began April 1.

More:

Opposition Wildrose finance critic Derek Fildebrandt calculated the hit to Alberta's treasury is actually $9 billion when $3 billion drained from the contingency fund and new borrowing for capital projects are added in.

"This is the largest hit that our province has taken to its net wealth in the history of the province, and that should be concerning," said Fildebrandt.

Monday's numbers are based on the budget introduced, but never passed, by former Progressive Conservative premier Jim Prentice's government before it was defeated by Rachel Notley and the NDP in May. That budget estimated a $5-billion deficit.

It looks like the Canadian dollar is now around 75 cents/dollar.

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Some Good News Coming Out Of Alberta

This is really a great example of high-CAPEX projects that were started years ago, and despite the slump in oil prices, were allowed to be completed. Too much money had already been sunk in the project to cancel it.

At Seeking Alpha:

• ConocoPhillips says it has safely delivered its first barrels of oil at its Surmont 2 in-situ oil sands facility in Canada that has been under construction for five years
• COP says the project in northwestern Alberta will extract heavy oil buried too deep to mine using steam to heat up the thick crude to allow it to flow; the company says Surmont is the largest steam-assisted gravity drainage system in the world
• It is COP's second and larger phase of a 50/50 joint venture in the Canadian oil sands with Total; the two projects combined are expected to bring up 150K bbl/day, with the second facility building up production to 118K bbl/day through 2017.

Of course, new projects are being delayed or canceled. It will be interesting to see if maintaining production is cost-effective.

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EIA Update

The EIA sends this note:

With the release of today's Petroleum Supply Monthly, EIA is incorporating the first survey-based reporting of monthly U.S. crude oil production statistics.

Today's Petroleum Supply Monthly (http://www.eia.gov/petroleum/supply/monthly/) includes estimates for June 2015 crude oil production using new survey data for 13 states and the federal Gulf of Mexico, and revises figures previously reported for January through May 2015.

EIA estimates U.S. crude oil production in June 2015 at 9.3 million barrels per day, a decrease of approximately 100,000 barrels per day from the revised May 2015 figure.

"These survey-based estimates of U.S. oil production represent a significant improvement over our previous method of estimation" said EIA Administrator Adam Sieminski. "Domestic oil production has become an increasingly important part of energy supply in the United States, and this change in data collection gives the country a better way to assess the contribution of this resource."

Some comments later if I remember. 

Another Poll -- August 31, 2015

Results of the poll in which we asked whether President Obama would show any support for Alaska's economic lifeline, it's Trans-Alaskan Pipeline. To recap, the pipeline needs at least 300K bopd to remain operational. Without any change in production on the North Slope, it is likely that production will fall below that threshold by 2024. President Obama had already opened the Arctic to drilling, but could more be done? The answer appears to be "YES." He will commit to another military icebreaker to be working the Arctic by 2020, two years earlier than expected.

The poll results:

• Yes: 5%
• No: 24%
• He will avoid the subject: 46%
• If asked, he will waffle: 24%

Updates

September 3, 2015: the EIA tweeted -- Alaska had the largest decline in natural gas and crude oil  proved reserves in 2013.

Original Post

From Seeking Alpha:

• President Obama - visiting Alaska this week - agreed earlier this month to allow Royal Dutch Shell to resume Arctic oil exploration, yet Alaska officials say it may not be enough to save the 800-mile Trans-Alaska Pipeline System, the state’s economic lifeline for the past 40 years.
• Volume on the pipeline, which funnels crude to Valdez in the south from Prudhoe Bay in the north, has declined along with North Slope oil production during the past three decades; flows are dropping ~5%/year and slid to 513K bbl/day in 2014 from a peak of 2M in 1988.
• Alaska projects North Slope crude production to fall to ~320K bbl/day by 2024, and officials say a drop below 300K would trigger a “fundamental change” in operations and perhaps make the pipeline unfeasible.

When it rains, it pours. This is a perfect opportunity for another poll. Will President Obama show any support for Alaska's economic lifeline, the Trans-Alaska Pipeline?

There are a lot of implications. This, I think, is the biggest one: Californians, with the exception of Hawaiians, are paying the highest price for gasoline of anyone in the United States. The high price in California is not trivial, either; the price Californians pay for gasoline is quite significant, almost twice what some are paying elsewhere in America.

California relies heavily on imported foreign oil and oil from Alaska. It obtains some oil from the Bakken but that source is problematic due to logistics. Survival of the Trans-Alaska Pipeline is critical for Alaska and critical for California. It was also a technological marvel and the loss of that pipeline would speak volumes.

To remain ideologically consistent, killing the Keystone XL, requires that he also kill the TAP. It will be an interesting story to follow.

Eight (8) New Permits -- North Dakota; XTO Reports High-IP Well; Notes High Background Gas

Active rigs:

	8/31/2015	08/31/2014	08/31/2013	08/31/2012	08/31/2011
Active Rigs	76	194	185	192	201

Eight (8) new permits --

• Operators: XTO (5), Hess (3)
• Fields: Capa (Williams), Blue Buttes (McKenzie)
• Comments: the proposed location for XTO's five wells in Capa oil field are at this post.

No wells coming off confidential list over the weekend or today.

Two (2) producing wells completed:

• 29054, 613, EOG, Van Hook 34-1319H, Parshall, t8/15; cum --
• 30216, 2,195, XTO, Thompson 44X-20EXF, Three Forks, expanded the Blue Buttes oil field, Blue Buttes, gas units max at 10,000 units, target was 20 feet thick; t8/15: cum --

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Halcon and Restructuring The Debt

Richard Zeits over at Seeking Alpha. 

Monday, August 31, 2015 -- Part II; WPX Monetizing Some Of Their Midstream Assets In The Bakken; Another New Natural Gas Discovery Overseas; Quantum Tunneling Explains Everything

Press release, Ares Management, LP, will acquire the Van Hook Gathering System in North Dakota in an agreement with WPX, for $185 million:

Ares Management, L.P. announced today that a fund managed by its Ares EIF Group has entered into a definitive agreement with WPX Energy, to acquire the Van Hook Gathering System in North Dakota in a transaction valued at $185 million. 

The acquisition consists of pipeline systems that currently gather approximately 11,000 barrels of oil, 6,500 million cubic feet of natural gas, and 5,000 barrels of water per day from WPX Energy’s Bakken shale oil assets.

WPX Energy will continue to operate the Van Hook Gathering System.

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More Natural Gas

This Time Off-Shore Great Britain

Last week, ENI announces a "supergiant" natural gas field off-shore Egypt. Today, it's Britain's turn. Penn Energy is reporting:

The offshore development of the largest new field discovered in the UK North Sea for a decade has been approved by the UK Oil & Gas Authority. The Maersk Oil operated high pressure, high temperature (HPHT) Culzean field in the UK Central North Sea is expected to produce enough gas to meet 5% of total UK demand at peak production in 2020/21. Culzean is also the largest gas field sanctioned since East Brae in 1990.

Discovered in 2008 by Maersk Oil and its co-venturers, the gas condensate field has resources estimated at 250-300 million barrels of oil equivalent. Production is expected to start in 2019 and continue for at least 13 years, with plateau production of 60,000-90,000 barrels of oil equivalent per day.

Maersk Oil and its co-venturers, JX Nippon and BP (Britoil) are investing around USD 4.5 bn in the development, with more than 50% committed to investments in the UK.

The Culzean field aligns with the UK’s commitment to increased gas-fired electricity generation and is expected to support an estimated 6,000 UK jobs and create more than 400 direct jobs.

Again, the numbers are staggering, but let's see what we can do. Somewhere between 20 trillion and 30 trillion cubic feet defines a "superfield," apparently.

If this article mentioned "trillion cubic feet," I missed it. The only number I saw was "boe."

Working backwards from 250- 300 million boe, we get 1.7 trillion cubic feet of natural gas.  That sounds about right considering production is expected to last only about 15 years.

Something tells me intermittent energy, particularly wind energy, is dead in Great Britain, except for niche projects.

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Notes to the Granddaughters

It was on page 51 of Nick Lane's book, The Vital Question: Energy, Evolution, and The Origins of Complex Life, that I finally had an epiphany: bacteria don't have species.

All that taxonomy I learned in high school and college is wrong. Bacteria, like all other life forms, are given genus/species names, but by definition, bacteria can't be separated into species.

From page 51 of Nick Lane's book:

Yet [eukaryocytes] did not accrue this complexity in an obviously predictable way: they came up with a whole series of traits, from sex and ageing (sic) to speciation, none of which have ever been seen in bacteria or archaea.

Googling bacteria do not have species reveals a paucity of links -- only one in fact in the first few pages, and for some reason that link did not download last week for me. Finally today the link downloads:

• "Bacteria Don't Have Species," October 9, 2006

Googling among bacteria species do not exist, the hits are not much better, but there two:

• "Population Genomics and the Bacterial Species Concept," March 22, 2010; and,
• "Population Genomics: How Bacterial Species Form and Why They Don't Exist," June 5, 2012

Unfortunately, the method of naming bacteria is too entrenched -- as Lynn Margulis says in the article at the first link -- to change now, so you, our granddaughters, will be learning the "species" of bacteria just as we did 40 years ago.

In the first linked article, Lynn Margulis also mentions Carl Woese and his contribution to the discussion. Nick Lane suggests there were "three major revolutions that have wracked our view of life in the past half century": a) Lynn Margulis' discovery; b) Carl Woese's discovery; and c) the third revolution currently going on trying to accommodate both Margulis and Woese because their theories seem to be at odds with each other, and not by just a little bit.

However, the fact that the way "we've" been teaching bacterial taxonomy all these years is wrong is really, really neat. We learn there is much more to explore behind this "closed door."

On the hand hand, the science of global warming is not to be discussed; it is complete; we understand it all. Don't question it; just believe it.

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Tunneling

Fox News is reporting that authorities are perplexed how secret information from the federal government got on to Hillary's server because the two systems are/were not connected. The government's secret server was/is not connected to Hillary's server and yet information appears to have gotten from one system to the other.

This is not hard to understand. It happened the same way the Whitewater papers showed up in the White House bedroom after being "lost" for years.

The answer: tunneling.

More specifically, quantum tunneling:

Quantum tunneling refers to the quantum mechanical phenomenon where a particle tunnels through a barrier that it classically could not surmount.

Q: Did you wipe your server clean?"
A: With what, a cloth?

Q: How did classified information get on your private server?
A: Quantum tunneling.

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Rumors From The Land Of The Ice And Snow

There are rumors that President Obama will announce a huge federally-funded solar farm project for Alaska's North Slope to offset the carbon footprint from his decision to okay Shell drilling in the Arctic.

The Alaskan Solar Set-Up (or ASS for short) would be active only during those times when the Arctic's sun does not set. According to the EIA, Alaska’s energy demand per person is the third-highest in the nation. President Obama will be able to announce that due to his ASS initiative, energy costs will be lowered for the average Alaskan. Living north of the Arctic circle. At least for a day or two.

There were plans to call the project the Alaskan Solar System but he thought folks might confuse that with the "original" solar system. 

The Immigrant Song,Karen O with Trent Reznor & Atticus Ross

Monday, August 31, 2015

I don't think there are any wells coming off the confidential list today.

RBN Energy: natural gas supply / demand balance keeps prices in a tight range.

Canadian Oil Sands Ltd halts crude oil production at oil-sands giant Syncrude: fire has damaged euqipmetn at is synthetic crude oil processing facility. According to the WSJ, the incident adds to the woes of a company that has struggled with unplanned equipment outages at Syncrude and a slide in crude oil prices to six-year lows.

Flashback! Clip from ABC's 2009 special in which it was predicted that the US would be a changed planet by 2015 due to global warming.  I wonder when this will be re-telecast? Maybe at the next DNC convention.

Another free market success. Grain trains in abundance. North Dakota grain crops may set new records. I wonder if there will headline stories in the nation's media how diversified North Dakota's economy is? BNSF should be publicly praised for what they have been able to do over the past few years. The Bismarck Tribune is reporting:

Just in time for what the U.S. Agriculture Department expects to be near-record corn and soybean harvests, grain train cars are in abundance. The reversal is attributed to unprecedented spending on track upgrades, political pressure from politicians in agriculture-rich states and a drastic decrease in trains hauling crude and freight to and from the oil patch.

"There had been some uncertainties, but it has gradually gotten better," said Josh Mardikian, grain manager at the South Central Grain Cooperative elevator in Sterling. As he spoke, a train was being loaded with 24 million pounds of spring wheat, much of which would be used for a national pizza chain's dough. Grain trains had been running late by as much as 45 days in the past 18 months, Mardikian said, but in the past week, mile-long, 110-car trains had shown up some four days earlier than expected.

Oil activity in North Dakota was partly to blame for the widespread shortage and backlog of rail cars from North Dakota and Montana down to Kansas and east into Illinois, National Farmers Union President Roger Johnson said.

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NIMBYs In Dayton's Backyard

I would assume imposing moratoriums on solar farms in Minnesota would make them Neanderthals.

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NIMBY's In Maine

Bangor Daily News is reporting:

Renewable power developer SunEdison has withdrawn plans for a wind farm in Hancock County, saying it needs more time to respond to issues raised by environmental regulators.

John Lamontagne, spokesman for SunEdison, wrote in an email to the Bangor Daily News that the company plans to refile the application for the 73-megawatt, 23-turbine project at some point in the future.

“We’re disappointed we won’t be moving forward with this project as soon as we’d like, but we remain confident that this is an excellent clean energy project,” Lamontagne wrote.

The Department of Inland Fisheries and Wildlife in June came out in opposition to the project out of concern it would kill migrating birds and bats.

Most likely SunEdison will look at wind farms in eastern North Dakota where regulators aren't as concerned about eagles or other birds.

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Coming In Threes

Oliver Sacks.
Wes Craven.
Wayne Dyer.

Reason #5: Why I Love To Blog -- Back To South Africa; Apple: Another Game Changer -- August 30, 2015

This is so incredibly cool. On August 21, 2015, I posted a "completely unnecessary post" but I learned a lot in the process. I had no idea that little bit of trivia would show up on the radar scope so soon.

This is the bit of trivia from the "completely unnecessary post":

VTTI started building a new facility in Cape Town in July; South Africa has emerged as an increasingly important way station for oil, with traders able to easily flip bbls east and west from that location depending on regional demand.

Now, Sunday evening, August 30, 2015, this tweet:

South African govt official says country intends to import LNG from Iran and resume purchase of crude oil for its new refineries, IRNA reports.

IRNA is the official news agency of Iran.

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Fortunately CO2 Does Not Cross International Boundaries

I Wonder If Governor Dayton Would Dare Call South Africans Neanderthals?

AFP is reporting:

President Jacob Zuma inaugurated on Sunday the first unit of a massive new coal-fired power plant in South Africa, hailing it as a step away from the country's energy woes.

The Medupi power station, situated north of Johannesburg, is to produce 4,800 megawatts of electricity by 2019, when it is expected to be operating at full capacity.

South Africa has suffered through rolling blackouts, known as load shedding, as the state-owned utility Eskom has sought to ease pressure on its stable of ageing and poorly-maintained power stations.

South Africa last new gas-fired power plant opened in 2013, while a new coal-burning plant has not come online since 1996. 

The new plant's first unit began operating in March and its 749 megawatts of electricity should help ease the stress on the country's troubled electrical grid.

Another coal-fired plant is under construction in Kusile, east of Johannesburg, and it is expected to pump out a flow of electricity similar to Medupi, but that project has also been hampered by major delays. 

If it ever gets up to capacity (4,800 MW), this new power plant will be among the top ten (maybe the top five) largest coal plants in the world. China has one 5,000 MW coal plant.  Unless I missed it, the US has no coal plants that size. And, yes, South Africa was one of the first countries to sign the Kyoto Protocol.

I think the big story here is not what is going on in South Africa, but think about this: the population of South Africa is around 50 million. India: 1.3 billion. 

50 million / 1,300,000,000 = 4%.  

Talk about all the intermittent energy (wind and solar) that you want, but at the end of the day, it's going to be King Coal for India, China, and probably most of the entire sub-Saharan African continent. 

Fortunately:

• President Obama's term ends in less than two years; and, 
• CO2 does not cross international boundaries.

 Meanwhile, the EPA is going after methane leakage in the natural gas industry.

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Ad Blocking

On small screens on mobile devices like smart phones and tablets, there's not a lot of room. Ads can take up a lot of that real estate.

In addition, fancy, colorful, video ads can slow the re-fresh rate.

All-in-all, most folks probably don't care for ads on their smart phone or their tablets. Wouldn't it be great to download an app that eliminate those ads?

Well, it's coming, and it's coming from Apple. Since Apple relies on little to no advertising revenue, unlike Google that depends on advertising revenue, this is huge.

The Wall Street Journal reports.

Ad blockers have long been available for Web browsers on personal computers, and have attracted a small but loyal following. Users can surf the Web without seeing banner ads, advertised links on search results or commercials before online videos. Apple permits ad blockers on its Safari browser for PCs.

About 6% of global Internet users employ ad blockers, according to an August report by PageFair and Adobe Systems Inc. That report said 198 million users ran ad blockers in June 2015, up 40% from a year earlier. Wells Fargo analyst Peter Stabler estimates that ad blockers will reduce spending on Internet ads by $12.5 billion world-wide in 2016.

“The ad-blocking problem is real and growing, and ad-blocking on iOS is only going to accelerate it,” said Jason Kint, CEO of Digital Content Next, an association of digital publishers.

Apple isn’t powering the ad-blocking software itself. Instead, it is allowing outside developers to write programs to work with the browser in its iOS 9. That means users must find an ad-blocking app and install it, an extra step that may deter some people. 

Let the fun begin.

Apple doesn't refer to this ad "ad blocking," but rather as "content blocking." Whatever.

BR's Shenandoah Wells

BR's Shenandoah wells in Keene oil field:

• 28073, 1,512, BR, Shenandoah 14-36TFH, no test date, almost no production since first production, 1/15; re-drill; see below; t11/15; cum 363K 1/21; cum 371K 7/21; cum 379K 5/22;
  
• 28074, 1,643, BR, Shenandoah 14-36MBH ULW, Keene, 4 sections, t1/15; cum 274K 1/21; off line 1/20; back on line 6/21; nice production; cum 286K 12/21; off line 1/22;
  

• 28287, 2,285, BR, Shenandoah 24-36MBH, Keene, t1/15; cum 302K 1/21; cum 314K 7/21; cum 328K 1/22; off line;
  
• 28288, 1,844, BR, Shenandoah 24-36TFH, Keene, t4/15; cum 189K 1/21; cum 195K 7/21; cum 204K 5/22;
  
• 28289, 1,643, BR, Shenandoah 24-36MBH, Keene, t2/15; cum 340K 1/21; cum 346K 7/21; cum 356K 5/22;
  

• 20559, 1,675, BR, Shenandoah 34-36TFH, Keene, t12/11; cum 344K 1/21; cum 351K 7/21; cum 360K 5/22;
  

• 17974, 1,068, BR, Shenandoah 34-36H, Keene, t6/09; cum 582K 1/21; cum 587K 7/21; cum 596K 5/22;
  

• 28413, 2,544, BR, Shenandoah 44-36TFH, Keene, t3/15; cum 314K 1/21; cum 320K 7/21; cum 342K 5/22;
  
• 28414, 2,204, BR, Shenandoah 44-36MBH ULW, 4 sections, t3/15; cum 557K 1/21; cum 566K 7/21; cum 603K 5/22;
  

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Re-Entry? Re-Drill?

September 29, 2019: I see an "R" has been added to this permit number:

• 28073, 1,512, BR, Shenandoah 14-36TFH-R, Keene, t11/15; 329K 7/19;

Let's see what the file report says:

• a sundry form dated July 16, 2015: 1280 Extended Reach Lateral -- Sidetrack / ReDrill
• purpose: sidetrack off the existing upper Three Forks lateral and drill a parallel lateral 100 feet east, then complete with a 4-1/2" open hole liner
• "due to issues with the liner hanger and the inability to produce this well, BR is requesting approval to redrill the lateral section...request to rename the well the Shenandoah 14-36TFH-R -- July 27, 2015
• September 22, 2015: this well successfully reached TD on 9/22/2015; awaiting completion
• First Frack: tested, November 18, 2014 -- 5 stages; less than 500,000 lbs proppant
• Second Frack: tested, October 11, 2015 -- 35 stages; 7.3 million lbs

Production following the new frack:

BAKKEN/THREE FORKS	6-2016	30	17202	17208	8068	40086	40067	0
BAKKEN/THREE FORKS	5-2016	31	15370	15375	6090	29819	29650	148
BAKKEN/THREE FORKS	4-2016	30	18903	18892	5887	33386	33367	0
BAKKEN/THREE FORKS	3-2016	31	21915	21888	6297	35480	35461	0
BAKKEN/THREE FORKS	2-2016	18	13976	13976	3248	20531	20516	0
BAKKEN/THREE FORKS	1-2016	11	6352	6385	2736	10485	10471	0
BAKKEN/THREE FORKS	12-2015	31	17782	17664	4748	27973	25380	2562
BAKKEN/THREE FORKS	11-2015	7	3636	3636	1642	7253	287	6953

No Wells Coming Off The Confidential List This Weekend, Monday? -- August 30, 2015

Six months ago it was the end of February. Wells come off the confidential list after six months, but it is done by the "date" of the month. So, wells coming off the 28th of August were put on the list the 28th of February. Since there was no 29th of February, no 30th of February, and no 31st of February this year, there should be no wells coming off the confidential list Monday, or over the weekend.

Upper Devonian Burket / Geneseo Shale

Note: the Upper Devonian Burket / Geneseo shale is tracked at "the Upper Devonian."

Oil: The middle Bakken, the upper Three Forks, and then the benches of the lower Three Forks, in the Williston Basin.

Natural gas: The Marcellus, the Utica, and now the Burket / Geneseo Shale in the Appalachian Basin.

From Gas And Oil Mag.com, May 14, 2015, this is the study recommended by a reader for those interested in the natural gas plays in the Appalachian Basin (archived):

The Marcellus Shale has dominated the energy headlines for news coming out of the Appalachian Basin for the last 8 years or so and for good reason – its vast natural gas resources and production have almost single-handedly transformed the entire energy marketplace in North America.

The Utica Shale has also garnered a lot of attention for continuing consistent success in the wet gas window and some recent eye-popping initial production rates in the dry gas window.

Flying under the radar is Appalachia’s 3rd resource shale play, the Burket/Geneseo Shale. Less flashy, with lower initial production numbers, the shale is unlikely to challenge the other “Big 2” shales for size of resource potential, although total reserves may be significant.

It is likely that the play will benefit from its “stacked pay” potential that allow companies to decrease drilling and production costs through utilization of existing well pads and infrastructure, liquids-rich production in some areas and possible flat decline rates. As of mid-April, 2015 a total of 85 Burket/Geneseo horizontal wells have been completed as productive in Pennsylvania (64 wells) and West Virginia (21 wells).

How much?

Technically recoverable reserves in the Southwest Core of the Core are projected to be 29 TCFe with another possible 52 TCFe if the remaining core areas prove viable. These numbers are likely to expand if the flatter decline is confirmed, leading to increases in EURs.

To put 29 TCFe (trillion cubic feet) + 52 TCFe (almost 100 TCFe) in perspective, it was reported today:

The Italian energy company Eni discovered a "supergiant" natural gas field off Egypt, describing it as the "largest-ever" found in the Mediterranean Sea.

Eni said the discovery — made in its Zohr prospect "in the deep waters of Egypt" — could hold a potential 30 trillion cubic feet of gas over an area of 38.6 square miles.

A natural gas play in the Appalachian Basin my be three times larger than the "largest-ever" found in the Mediterranean Sea, which was described as a "supergiant" -- just one step lower than a "monster-supergiant." (I made that last part up.)

BR's 22-Well Proposal For A 2560-Acre Standup In Pershing Oil Field, August 30, 2015

From the September, 2015, NDIC hearing docket agenda:

• Case 24462, BR, Pershing-Bakken, 22 wells on a stand-up 2560-acre unit, 2 wells on an overlapping 2560-acre unit; McKenzie; 18/19/30/31-150-96; 

Peak Oil? What Peak Oil? Okay, This Is Natural Gas; As Big As The Mighty Marcellus Is, The Utica May Be Bigger -- August 30, 2015

Updates

Later, 11:50 a.m. Central Time: see first comment.

If you wish to get get additional perspective on this stuff, especially the size of the US - specifically the Appalachian Basin - natural gas resources, I would refer you to Wrightstone Energy's recent presentation on the Burket/Geneseo formations which are located above the Marcellus. They are said to contain OVER 30 trillion cubic feet RECOVERABLE! 

The Burket and Geneseo are only two (the largest) of several hydrocarbon formations collectively known as the Upper Devonian.

EQT recently said they were going to shift their development program AWAY from the UD to focus on the much larger, emerging Utica, which is deeper than the Marcellus.

How big is the Utica? Well, Consol just said they may re-priortize their plans and now target the Utica ahead of even the Mighty Marcellus.

You know, when you read this stuff, one gets the feeling that the switch from coal to natural gas in the US is a slam dunk, and even more importantly, when you listen to folks who want to move to intermittent energy (wind, solar), they are so living in the late 20th century when we thought we were running out of fossil fuel. Unfettered, America will have the least expensive energy for decades (centuries?) to come.

Original Post 

Yahoo News has an in-depth story on a huge natural gas find off the coast of Egypt. Because it's such an important story, I will post the story in its entirety:

Italian energy giant Eni says it's found the largest-ever gas field in Mediterranean off Egypt.

LOL.

Fortunately, US News provided a bit more information:

The Italian energy company Eni SpA announced Sunday it has discovered a "supergiant" natural gas field off Egypt, describing it as the "largest-ever" found in the Mediterranean Sea.

Eni said the discovery — made in its Zohr prospect "in the deep waters of Egypt" — could hold a potential 30 trillion cubic feet of gas over an area of 38.6 square miles.

The discovery well is 190 kilometers (about 120 miles) from the Egyptian coast, and is at a depth of 1,450 meters ( 4,757 feet) in the Shorouk Block, the company said.

I honestly don't know what to make of "30 trillion cubic feet." Back on June 30, 2014, I struggled with the same issue. 

So, quick review. How many remember how much natural gas a country must have to be said to have "massive" amounts? The answer, apparently, is 20 trillion cubic meters. At least that's how Turkey's natural gas reserves are described, or more exactly, potential reserves. That's an easy number to remember. 

I said I was confused, but right or wrong, I suggested:

• Turkey might have 20 trillion cubic meters of natural gas reserves, which is considered "massive"
• the US apparently has about 210 trillion cubic meters
• the Brits might have 40 trillion cubic meters
• the Scots have a lot but probably not 1333 trillion cubic meters

As long as I've gone this far, I might as well see what a conversion might do:

• 30 trillion = 5 x 10^12 boe

At another source, 30 trillion cubic feet of natural gas works out to about 5 billion boe crude oil.

I often make simple arithmetic errors. You may assume I have made errors above. If this information is important to you, go to the source.

A township in North Dakota is generally six miles x six miles = 36 square miles.

Oh, that pesky cubic feet vs cubic meters.

Egypt story: 30 trillion cubic feet = 850 billion cubic meters which is way above the 20 trillion cubic meters of natural gas to be considered "massive."

And, then, of course, how much of this is recoverable.

Whatever. It looks like Egypt could be self-sufficient in energy if the country got its act together.

NDIC September, 2015, Hearing Dockets, Summary

Nothing new here; simply doing some housekeeping.

The NDIC September, 2015, hearing dockets. I provided the highlights awhile back but never provided the full summary. The summary follows but it is not particularly interesting. I no longer include the "continued" cases, only the new cases. A couple of pages of supplement hearings have been added but they are all "continued" cases.

Disclaimer: these summaries are for my personal use only; you are free to read them; don't quote me on them; there will be typographical and factual errors.  If this is important to you go to the source. Link here.

Dockets are tracked here.

Highlights of the September, 2015, hearing agenda.

Wednesday, September 16, 2015

24445, NDIC, bond requirement for Gadeco to operating in McKenzie County
24446, True Oil, Bowline-Bakken, proper spacing, McKenzie
24447, Hess, Manitou-Bakken, establish an overlapping 2560-acre unit, 2 wells, Mountrail
24448, Whiting, Heart Butte and/or Mandaree-Bakken, establish an overlapping 3840-acre unit, 1 well, Dunn
24449, Whiting, Moccasin Creek-Bakken, establish a 1280-acre unit, 2 wells; establish 2 overlapping 2560-acre unit, 1 well on each, Dunn
24450, BR, Westberg, Twin Valley and/or Banks-Bakken, establish five 2560-acre units; one well on each, McKenzie
24451, BR, Dimmick Lake, Edge, and/or Elidah-Bakken, establish four 2560-acre units, one well on each, McKenzie
24452, MRO, SWD, Reunion Bay, Mountrail
24453, Oasis, SWD, Siverston, McKenzie
24454, SM Energy, pooling,
24455, SM Energy, pooling,
24456, SM Energy, pooling,
24457, Hess, Tioga-Bakken 13 wells on a 1280-acre unit, Williams
24458, Hess, pooling,
24459, PEtro-Hunt, Charlson-Bakken, 4 wells on an exsiting 1920-acre unit, McKenzie
24460, BR, pooling,
24461, BR, Blue Buttes-Bakken, 2 wells on an overlapping 2560-acre unit, McKenzie
24462, BR, Pershing-Bakken, 22 wells on a stand-up 2560-acre unit, 2 wells on an overlapping 2560-acre unit; McKenzie; 18/19/30/31-150-96;
24463, HRC, Antelope-Sanish, 13 wells on a 1280-acre unit, McKenzie
24464, Legacy Reserves, commingling

Thursday, September 17, 2015

24465, Zavanna, Stockyard Creek-Bakken, establish an overlapping 1280-acre unit, establish an overlapping 1920-acre unit, multiple wells on both units, Williams
24466, Zavanna, Stony Creek-Bakken, establish four overlapping 1280-acre units, multiple wells on each, Williams
24467, Statoil, Banks-Bakken, reduce setback rules, Williams, McKenzie
24468, Statoil, Stony Creek and Avoca-Bakken, reduce setback rules, Williams
24469, Statoil, Cow Creek and Todd-Bakken, reduce setback rules, Williams
24470, Statoil, Williston and Catwalk-Bakken, reduce setback rules, Williams
24471, XTO, exception for an individual well, #29436, Sorenson 14X-33EXH, McKenzie
24472, XTO, exception for an individual well, #28887, Sorenson 14X-31EXH, McKenzie
24473, XTO, Siverston-Bakken, reduce setback rules, McKenzie
24474, XTO, North Tobacco Garden-Bakken, reduce setback rules, McKenzie
24475, XTO, flaring,
24476, XTO, flaring,
24477, XTO, flaring,
24478, XTO, flaring,
24479, XTO, flaring,
24480, XTO, flaring,
24481, XTO, flaring,
24482, XTO, flaring,
24483, XTO, flaring,
2484, WPX, Mandaree-Bakken, establish an overlapping 1280-acre unit, 14 wells; establish an overlapping 2560-acre unit, 1 well, Dunn
24485, WPX, Antelope-Sanish, establish an overlapping 2560-acre unit, 1 well, McKenzie
24486, Newfield, Sandrocks-Bakken, establish two overlapping 2560-acre units, 1 well each, McKenzie
24487, Newfield, South Tobacco Garden-Bakken, establish four overlapping 2560-acre units; one well each, McKenzie
24488, Newfield, Siverston-Bakken, establish tree overlapping 2560-acre units, 1 well each McKenzie
24489, Newfield, Sand Creek-Bakken, establish an overlapping 1280-acre unit, one well, McKenzie
24490, Liberty Resources, McGregor-Bakken, establish an overlapping 3200-acre unit; 1 well, Williams
24491, CLR, Antelope-Sanish, 13 wells on an existing 1280-acre unit, McKenzie
24492, CLR, flaring,
2493, CLR, flaring,
24494, Fidelity, pooling,
24495, XTO, pooling,
24496, XTO, pooling,
24497, XTO, pooling,
24498, XTO, pooling,
24499, Citation, SWD, Stinson Field, Bottineau County

News From Other States -- August 30, 2015

From today's Los Angeles Times: taxpayers have never paid more for public worker pensions but it is still not enough. The good news: the state is working on a plan to help insure the state's pension program remains solvent. Guess how they plan to do that:

• they are going to move more of their equity holdings into bonds
• bonds do not provide as much return, but they tend not to be as volatile

If the return is not as good as the return they are now getting, how does the state plan to make up the difference?

The plan would increase payments from taxpayers even more in coming years with the goal of mitigating the severe financial pain that would happen with another recession and stock market crash.

Under the proposal, CalPERS would begin slowly moving more money into safer investments such as bonds, which aren't usually subject to the severe losses that stocks face.

Because the more conservative investments are expected to reduce CalPERS' future financial returns, taxpayers would have to pick up even more of the cost of workers' pensions.

Will the folks who are actually going to get the pensions have to pay more? Of course not. I cannot make this stuff up.

Most public workers would be exempt from paying any more. Only those workers hired in 2013 or later would have to contribute more to their retirements under the plan.

Actually, that's a bit disingenuous. All new hires would pay more and then we would have people working side-by-side paying different amounts for their pension. That hardly seems fair. LOL.

And, of course, the state is rationalizing all this by saying, "well, that's how others are doing it":

The changes would begin moving CalPERS — which provides benefits to 1.7 million employees and retirees of the state, cities and other local governments — toward a strategy used by many corporate pension plans. For years, corporate plans have been reducing their risk by trimming the amount of stocks they hold.

One reason for the current cash shortage:

The large hike in pension benefits that state legislators voted to give public workers in 1999 when the stock market was booming.

Anyway, so that's California.

Meanwhile the governor of Minnesota calls folks in North Dakota "Neanderthals" because they still use coal for electricity. 

A reader noted that "name-calling" usually begins when the individual has lost the intellectual argument.

Meanwhile, North Dakotans just go on about their business, providing food and energy for the rest of the nation and asking for nothing in return.

By the way, bad, bad news for Alaska. Here's the photo op that President Obama is trying to achieve when he visits Alaska. Being reported in the Los Angeles Times but it looks like he won't be able to get to this island. It looks like President Obama will work to achieve his environmental goals for the Lower 48 on the backs of Alaskans by barring access to natural resources.

US Ceding The Arctic To The Russians -- New York Times -- August 29, 2015

This was my "headline" back on May 11, 2013, more than two years ago: "Gold Rush" In The Arctic; US Unlikely To Participate; US Will Let The Russians, Canadians, Norwegians, Danes Take The Lead; Heaven Forbid The President Could Make A Decision That Fast.

I posted that little nugget on May 11, 2013. Today, more than two years later, the New York Times finally gets it: US Is Seen As Laggard As Russia Asserts Itself In Warming Arctic. Well, at least part of that statement is correct.  

Russia talks exploration, exploitation.

President Obama talks global warming. I can only imagine what he will suggest for the Arctic. 

Top Oil-Producing Counties In The US -- August 29, 2015

A reader sent me the top ten list. This is the new list for July, 2015. These are the top oil-producing counties in the US. Note that Williams County, on last month's top-ten list has dropped off the list this last month.

The dynamic link is here. 

Current rank (last month's rank), county, state

1 (2) McKenzie County, North Dakota
2 (3) Karnes County, Texas (Eagle Ford)
3 (5) DeWitt County, Texas (Eagle Ford)
4 ( - ) Weld County, Colorado (the Niobrara)
5 (1) Midland County, Texas (Permian)
6 (10) Dunn County, North Dakota
7 (8) Reeves County, Texas (Permian)
8 ( - ) Lea County, New Mexico (Permian Basin)
9 (6) La Salle County, Texas (Eagle Ford)
10 (7) Mountrail County, North Dakota

It surprised me to see Weld County on the list. 

North Dakota Continues To Be In The News, Saturday's Notes Continued, Part II -- August 29, 2015

Update

September 2, 2015: we can close the poll in which we asked whether Ms Heitkamp will back Obama or back the Bakken. It is now moot. Her vote does not count. Obama has his 34th vote to block any attempt to scuttle his Iran plan.

Results of the poll:

• she will support Obama, as a loyal Democrat, that supersedes her NoDak roots: 55%
• she will support the Bakken: 23%
• she will vote "present": 19%
• won't vote: 3% 

Original Post

 

I'm paging through this weekend's edition of BloombergBusiness. I assume it's the last issue I will get for my introductory subscription, $10 for the year. BB has sent me several notices telling me my subscription ended some weeks ago, but someone keeps dropping off the current edition at my front door every Saturday morning. Almost tempted to renew at full subscription price. The key word is "almost."

As I was saying, I was paging through this weekend's issue of BB. There, on page 27, a full-page story (almost full page, about 5/6 of the page) is the story about the pressure on Heidi Heitkamp, the Democratic Senator from North Dakota to vote against the Iran nuclear plan. I always said it was a mistake for North Dakotans to vote a Democrat senator into office and now we will find out. It would be ironic if the Senate fails by one vote to override the Obama veto to save his Iran nuclear deal. When Iran dumps 1 - 3 million bopd on the global market, it's nothing but bad news for the Bakken.

I haven't done a poll in a long time. This is a great poll. Will Ms Heitkamp support Barack or will she support the Bakken? The poll is at the sidebar at the right; it's been such a long time, I almost forgot how to put up a poll. I'm betting she will not support the GOP on this one.

Speaking of North Dakota, the state is on a roll.

First, with the president's Clean Power initiative, North Dakota is going to have an entire new industry converting coal plants to natural gas plants. This will result in a gazillion investment dollars and a lot more jobs. And there will no longer be any worry about all that natural gas ONEOK is gathering, processing, and transporting.

Second, there is still some discussion on pros and cons regarding wind energy, but at the end of the day, there will be additional wind farms going up in North Dakota. As long as they put the farms up near Bismarck, Dickinson, and Fargo, it's fine with me, just NIMBY.

Third, I see Bobcats wherever I go when traveling cross-country. And now I read that Bobcat in North Dakota is expanding. Do you remember all those dire predictions and all that hand-wringing when a South Dakota Korean company bought the Bobcat company? Widely read Farm Equipment
is reporting the story:

Bobcat Co. and parent organization Doosan have broken ground on a $9.5 million company headquarters expansion in West Fargo, N.D.

The current headquarters — built in 2000 — houses individuals within several departments of business administration, as well as product development and marketing communications for Bobcat Co. and Doosan, a heavy equipment brand.

The expansion will double square footage and employee capacity, and Bobcat and Doosan will pursue LEED certification for the facility in both design and construction.

Last year, Bobcat and Doosan opened the exciting new Acceleration Center in Bismarck, N.D., a facility focused on engineering, R&D, training and product testing. Other North Dakota Bobcat and Doosan facilities have undergone renovations over the last two years.

That's in West Fargo. Fargo/West Fargo is one of the fastest growing smallish communities in the US. Despite the winters. By the way, my hunch is that a lot of that growth is coming from Minnesotans moving across the state line to escape taxes.

More news from North Dakota, previously reported: the FAA gave the state final approval to test drones at night. Of the six drone-testing sites in the US, only North Dakota got the nod. Some other dots to connect.

• Amazon uses drones
• Amazon has a customer-services center in Grand Forks, ND (one of the very few nationwide)
• Amazon now delivers alcohol and promises one-hour delivery
• North Dakota leads the nation in beer consumption on a per-capita basis
• most people drink beer at night
• folks in Fargo are upset about the "Fighting Sioux" thing and have a reason to drink
• winter is coming; it starts getting dark about 2:30 p.m. in West Fargo, about an hour earlier than in Fargo

I'm not sure about the complete accuracy of those four five six seven bullets, but I do believe they are "almost" correct. This is not a beer-drinking recommending site. Do not make any beer drinking decisions based on what you read here. If this information is important to you, have another beer, and look up the source next week on your company's computer.

Incidentally, rumors that Amazon will ship the first month's delivery free of charge, through a grant from the North Dakota Women's Temperance Society is just that, simply a rumor. 

For the moment that taps out (pun intended) the news from North Dakota.

Saturday Notes Continued, Part IV -- August 29, 2015

See "continued notes, Part III" to explain this note.

I skimmed through this article over at Seeking Alpha on the break-even prices in the Bakken, but articles like this don't interest me a whole lot -- at least not any more. I'm not sure why. They may have interested me at one time. What does interest me is the comments on articles like these, and in this case, no different. Some of the comments are priceless. My pet peeve is when anyone asks how long a typical Bakken well will last when trying to sort out the economics. We've discussed that so many times; so irrelevant.

By the way, that MacKenzie graph from Seeking Alpha was posted on the blog (or if not posted, linked) back in October, 2014. I had not seen that graph in a long, long time, but it is way out of date, at least for the Bakken.

On another note, the Casper Star Tribune is reporting that an ethanol plant in Torrington, Wyoming, is closing down. The article talks about how efficient this ethanol plant was (at least compared to others), but one needs to get deep into the article to learn that the plant was no longer financially viable when the state ended the 40-cent per gallon tax credit for ethanol this past June.

A spokesman said the tax credit's expiration came as crude prices fell, driving down what the plant could fetch for its ethanol. The combination proved fatal. There are many, many story lines but it is not worth the effort. I am just amazed that an ethanol plant as efficient as this one could not survive without a 40-cent/gallon tax credit. Holy husks of corn. This is a credit we're talking about, not a deduction. A full-fledged tax credit. For every dollar the company owes in taxes, they send the state only 60 cents; what a great deal. If I had been asked what the credit had been without knowing, I might have guessed three to five  cents, certainly not 40 cents.

The other story line, of course, is how many more such plants will announce closure over the next 24 months. One wonders about the new Spiritwood ethanol plant in Jamestown, ND.

I assume as more ethanol plants get shut down, we will see a rise in wind / solar energy projects where there are still tax incentives to build those. Here's another example of these intermittent energy projects being financed simply for the tax credits. The Casper Tribune reports that a New York-based hedge fund is trying to kick-start a wind farm project that was dying on the vine.

Saturday Notes Continued, Part III -- August 29, 2015

I've really covered most of the news in Part I and Part II, but my contract requires a certain amount of blogging each week. To meet contract obligations, the notes continue. That does not mean you have to read them. I only have to post them. The contract only says I have to mention the Bakken; the contract does not say I have to blog about the Bakken.

The definition of "is," is?

I've mentioned the Bakken (three times now) but I doubt there will be anything in this post about the Bakken (ka-ching, #4). If you came here looking for the Bakken (ka-ching, #5), I apologize. Scroll up or down, or go to the sidebar and you will come across sme Bakken (ka-ching, #6).

My favorite: William Herbert Hunt is a billionaire once again. Hunt became a billionaire by selling some of his Bakken (ka-ching, #7) acreage to Halcon back in 2012. The story begs the question: could William Herbert Hunt buy back his acres from Halcon?

After the Bakken (ka-ching, #8) and energy related issues, my favorite subject is ObamaCare. So many stories came out this past week about ObamaCare co-ops failing (and being compared to Solyndra) and ObamaCare premiums increasing 20, 30, 40 and dare we say 50%? Probably not 50%. CNBC reported this story Friday afternoon when most reporters had already called it a week, and had already left for the bars, so none of you probably saw it until now (send a thank you note to Don):

Bigger might be better, but it can also be pricier—at least when it comes to Obamacare.
A new analysis found that the largest insurer in each of the states served by HealthCare.gov raised their prices in 2015 much more sharply—by an average of 10 full percentage points—than smaller competitors on that federal Obamacare marketplace.

Those steeper price hikes for monthly premiums didn't seem warranted by the level of health claims made by customers of those bigger plan.

They also stand in contrast to the belief that economies of scale will result in lower prices.

"On average, the largest issuers raised rates by 23.9 percent, while the other issuers only raised rates by 13.7 percent," the authors wrote.

That means the largest issuer in each state had, on average, a 75 percent higher premium increase compared to other insurers in the same state, the report found. 

It's a pretty lame story, but it sort of rounds out a sort of lousy week.

The unemployed in St Louis are about to welcome some new members. KMOV is reporting:

St. Louis' governing board has approved a compromise measure that raises the city's minimum wage to $11 by 2018. 

Every study in the history of the world says raising the minimum wage in St Louis will result in more unemployment. I guess that's why the call-sign for that particular news station is "KMOV" -- folks are MOVing out as fast as they can. Especially after Ferguson. My hunch is that the discussion to raise the minimum wage revolved around Ferguson to a great extent. A lot of guilt assuaged. (That's the first time I've ever used that word on this blog.)

By the way, speaking of which, I mentioned the other day I was reading a very, very long article on a failed high school in Queens, NYC. I was hoping to come away from that article with some pithy comments on what it all meant, but all I came away with was a real feeling of depression. I guess I can say this: money is not the answer. Nor are Harvard-trained social scientists who thought up the whole busing thing.

Quick! What city is the most segregated school system in the US?

• Birmingham, AL
• Montgomery, AL
• Selma, Al
• Jackson, MS

That was a trick question. Actually the question was not a trick. The given answers were a trick. The answer was not given. From the linked article in The New Yorker:

Last year (2014), a study by the Civil Rights Project at UCLA found that New York City has the most segregated school system in the country, a reflection of the persistence of the housing patterns that Arthur Levitt talked about in 1954 but also of the failure of the integrationist ideal that was intended to address it.

So there you have it. And I thought it was Montgomery, AL, all these years. 

Week 34: August 23, 2015 -- August 29, 2015

The big story, of course, was the market meltdown due to concerns about China, and the accompanying decline of the price of WTI oil to well below $40. By the end of the week, things had quieted down, the market bounced back a bit, but oil surged 10%, closing well above $40/bbl. While China implodes, the US reports 2Q15 GDP of 3.7%. Whether anyone "believes" that number is another story, but all agree that the number for 2Q15 is unlikely to presage the 3Q15 number.

Gasoline demand this past week was particularly interesting to follow: are California refineries having a tough time meeting demand?

Some things are happening in the Mideast. McDermott, an oil services company, received a record contract and record lump sump from Saudi Aramco for work in fields offshore Saudi Arabia.

There are rumors that President Obama will officially announce he is denying the Keystone XL pipeline a permit. 

Schlumberger will buy Cameron for almost $15 billion.

Utility rates may be up as much as 88% along the US East Coast.

Operations
Update on the Whiting Obrigewitch wells in Stark County
Excess crude oil storage along the Gulf Coast?
Missouri River Resources is on the board
Zavanna, seeming to be on a roll lately, has seven (7) more permits in Foreman Butte oil field
Zavanna, reporting some nice wells
Random look at Zavanna's "old Nelson" well after gas life
What do you get when you cross a great operator (Whiting) with great sites (KOG)? Huge wells. 
NDIC's September, 2015, hearing docket agenda posted

CBR;
East coast refinery no longer taking Bakken CBR

Bakken 101
NDIC's "break-even" points for the Bakken
Rig productivity
The Bakken is changing

Miscellaneous
North Dakota gets FAA approval to test night-flights for drones
Hess now deducts a transportation fee from royalty checks

Investors
There are indications this is close to the "end" for Halcon in its present form 

Family Commitments -- August 29, 2015

I apologize for not posting much in the past 24 hours. I had family commitments last night and then again this morning, taking me through much of the day, into the afternoon.

I also felt I needed to take a bit of a break from the internet. 

But I will be back to "normal" by this evening, hopefully.

What fascinates me most today? Hurricane Erika. This site now doesn't even show a hurricane, simply calling it "remnants of Erika." And the winds in the Caribbean don't seem all that much stronger than what blows through North Dakota on a typical day. But wow, look at those winds in the north Atlantic, especially the whirling dervish smack dab right in the middle between Iceland and Ireland. And on the west side of Greenland, it ain't a whole lot better. There's another whirling dervish off the northeast coast of Alaska. One wonders what this is doing to the ice pack?

Seven (7) New Permits; XTO Reports Two High-IP Wells -- North Dakota, August 28, 2015

Active rigs:

	8/28/2015	08/28/2014	08/28/2013	08/28/2012	08/28/2011
Active Rigs	76	195	181	191	199

Seven (7) new permits --

• Operators: Hess (5), HCR (2)
• Fields: Beaver Lodge (Williams), Antelope
• Comments: 

Two (2) producing wells completed --

• 30215, 2,622, XTO, Thompson 44X-20B, Blue Buttes, t8/15; cum --
• 30217, 2,353, XTO, Thompson 44X-20A, Blue Buttes, t8/15; cum --

With An IP Of "5" This Well Turned Out To Be Pretty Good -- August 28, 2015

This is a South Red River B well in the southwest corner of North Dakota. It turned out to be a pretty good well, despite the IP and the fact the well was not stimulated:

• 28264, 5, Denbury Onshore, CHSU 24-23NH 15, Cedar Hills, unitized, a South Red River B well, not fracked/not stimulated (form: "No stim treatments were performed."), drilling unit, 54,799 acres, KOP 8,790 feet; TD, 9,352 feet (lateral about one mile long), t8/14; cum 17K 6/15;

Previously NC/SI, Abraxas reported a nice well a while back:
28323, 917, Abraxas, Stenehjem 27-34-4H, North Fork, t12/14; cum 105K 11/14;

******************************

21st Century Crime

Earlier this morning I happened to read an op-ed in the Los Angeles Times about the 20% increase in crime in the Los Angeles area over the past year or so. I forget the particulars. The usual list of reasons was provided.

I was reminded of that op-ed while reading a very, very long article in The New Yorker, "Class Notes," discussing "what really happens" when a school closes. It has to do with Jamaica High School in Queens, NYC, which closed in 2014. At one time, Jamaica High School was the largest high school in the United States. The article doesn't say (at least as far as I've read) when the school opened  but it says the school, as it exists "now," was designed in the 1920's so I assume it opened early in the 20th century.

In 2011, the NYC Department of Education announced that the school would be closed, citing persistent violence and a graduation rate of around fifty percent.

Early in the article, the writer, a graduate of Jamaica High School, writes:

[F]or much of its time, Jamaica was a gemstone of the city's public-education system.

In 1981, the schools chancellor, Frank Macchiarola, decided to take on the additional role of an interim high-school principal, in order to better appreciate the daily demands of school administration.

He chose Jamaica, and was roundly criticized for picking such an easy school to lead.

Four years later, the US Department of Education named it one of the  most outstanding public secondary schools in the nation. Alumni include Stephen Jay Gould (one of my "heroes"), Attorney General John Mitchell (one of RMN's "heroes" until things went badly), Representative Sheila Jackson Lee, Walter O'Malley, Paul Bowles and three winners of the Pulitzer Prize: Gunther Schuller, Art Buchwald, and Alan Dugan. Bob Beamon, who set a world record for the long jump in the 1968 Olympics, graduated with the class of 1965.

Sheila Jackson Lee, an alumnus,  is the U.S. Representative for Texas's 18th congressional district, serving since 1995.

Walter O'Malley, another alumnus, went to Jamaica High School from 1918 to 1920 before completing high school and graduating from Culver Academy. O'Malley brought professional baseball to the West Coast, owning the Brooklyn / Los Angeles Dodgers from 1950 to 1979.

It will be interesting to see if The New Yorker writer ruminates on how Jamaica High School went from one of the most outstanding public secondary schools in the nation to a school that needed to be closed due to persistent violence and a graduation rate of around fifty percent. If he does, it will be interesting under what mayor this occurred and maybe a bit of background of the chancellor and the leadership of the city's department of education.

ObamaCare Co-Op Failure(s) Compared To Solyndra -- August 28, 2015

It's funny how things turn out. This morning I posted a story I happened to come across in The Boston Globe about the huge health care premium increases scheduled for Massachusetts in 2016, after huge increases already in 2014 and 2015.  I didn't know if I really wanted to post it / link it but in the end decided to do so. Now, I get this link from Don: another ObamaCare co-op "bites the dust," this one in Harry Reid's backyard. Investors.com is reporting:

On Wednesday, the Nevada Health Co-Op announced that it will go out of business at the end of the year. This is the third out of the 23 ObamaCare-created nonprofit health plans to fail, but it isn't likely to be the last.

After getting $69.5 million in government-sponsored startup loans, Nevada's co-op saw enrollment come in far lower than expected, and claims costs far higher, resulting in a $15 million loss last year.

The co-op was seeing the same dismal results this year, making it impossible to provide "quality care at reasonable rates."

Democrats who designed ObamaCare created these nonprofit co-ops in the belief that they could provide price competition in ObamaCare exchanges. To get them off the ground, the federal government pumped more than $2.5 billion in startup loans and $355 million in solvency loans when things started to turn sour last year.

More:

Before calling it quits, Nevada's co-op was asking for hikes as high as 27.53%.
A recent audit found that enrollment in most of the state co-ops was significantly below expectations, and costs were far higher. All but one of the 23 co-ops lost money in 2014 — more than half saw losses that were higher than Nevada's.

Earlier this year, CoOpportunity — which served members in Iowa and Nebraska — ceased operations, and the Louisiana Health Cooperative announced it would close its doors at the end of the year. Tennessee's coop had to freeze enrollment this year amid mounting losses.

The three failed co-ops received a total of $310 million in federal startup and solvency loans. Overall, $2.9 billion in federal loans is at risk.

For perspective, Solyndra — the solar panel company that famously failed early in the Obama administration — cost taxpayers $500 million.

Anyone who doesn't think the current president will go down in history as the worst US president since WWII simply isn't paying attention. 

That Was Easy -- Federal Judge Blocks EPA's Water Rule -- August 28, 2015

Being reported everywhere, but this is from The Hill:

A federal judge in North Dakota acted late on Thursday to block the Obama administration’s controversial water pollution rule, hours before it was due to take effect.

Judge Ralph Erickson of the District Court for the District of North Dakota found that the 13 states suing to block the rule met the conditions necessary for a preliminary injunction, including that they would likely be harmed if courts didn't act and that they are likely to succeed when their underlying lawsuit against the rule is decided.

The decision is a major roadblock for the Environmental Protection Agency (EPA) and the Army Corps of Engineers, who were planning on Friday to begin enforcing the Waters of the United States rule, expanding federal jurisdiction over small waterways, like streams and wetlands. 

But the Obama administration says it will largely enforce the regulation as planned, arguing that the Thursday decision only applies to the 13 states that requested the injunction.

Those who snooze, lose.  The 13 states (sort of like the original 13 colonies): Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota and Wyoming.

Notable states that failed to join the original 13: Minnesota, Texas, California, Washington, Oregon, Florida, IowallinoisIndiana (think pig farmers who probably started this entire "mess"), Vermont, New Hampshire, and Maine.

"New Kind Of Storage Of Crude Oil In The Bakken" -- Not Really; Folks Are Simply Catching Up With Reality: DUCs -- August 28, 2015

This is cool. We've talked about this many, many times. Now it's being tweeted:

Wells underground in ND, TX & CO can be brought on line in few days are new kind of storage, says Dave Ernsberger.

Regular readers have known this for ... like forever....

Random Look At Source Of Oil Production In The US -- August 28, 2015

Updates

Later, 11:52 a.m. Central Time: the story in Oil & Gas Journal -- a fascinating article with timeline of hurricanes and tropical storms and how they affected oil production in the Gulf of Mexico, from 2005 to 2015. In 2005, for example, pre-Katrina, 1.5 million bopd; trough due to Katrina, 0.5 million bopd, returning to baseline of 1.3 million bopd through 2008. Hurricane Gustave dropped production to 0.3 million bopd, subsequently rebounding to 1.75 million bopd and then waxing and waning to current 1.5 million bopd today. Hurricane Ida (2009), TS Bonnie (2010), Tropical Storm Lee (2011), Hurricane (barely) Isaac (2012), and Tropical Storm Karen (2013) resulted in very little disruption. No production was affected during the 2014 (last year's) hurricane season.

Original Post

 

This little nugget helps me immensely -- see the EIA "energy cookie" below. I assume off-shore oil for the US comes from West Coast (problematic); East Coast ("none");  Gulf Coast (decreasing); and, Alaska (stable to decreasing). (Actually the data was easily retrievable elsewhere -- the EIA note today didn't tell anything we didn't already know, but it gave us a chance to look at the tea leaves going forward.)

Alaskan North Slope oil production is decreasing, at best stable. California -- the tea leaves suggest production is not going to increase significantly. At $45 oil, operators are circling the wagons to focus on only the best plays (the Bakken, the Permian, and the Eagle Ford).

So, when I put this all together, it looks like bulk of US oil production comes from the three shale plays and the Gulf of Mexico. There's not a lot of slack.

Now the EIA "energy cookie":

Hurricane-related risk to total U.S. crude oil and natural gas production has decreased over recent years as the share of total U.S. production originating in the Gulf of Mexico has declined sharply. In 2003, 27% of the nation's crude oil was produced in the Gulf of Mexico; by 2014, that share had declined to 16%. The Gulf of Mexico's share of natural gas production has also declined from a high of 26% in 1997 to 5% in 2014. --- EIA

If I did the math correctly, the US produces about 8.7 million bopd (2014).

The Bakken produces about 1 million bopd which works out to about 11% of total US production. Which isn't a whole less than the 16% that comes from the Gulf of Mexico.

The Bakken, it seems is sort of the Tesla in the oil and gas industry: from almost "0" in 2007 to over 10% of the nation's production some seven or eight years later.

For The Archives: Random Update On President Obama's Clean Power Program -- August 28, 2015

For the archives, the StarTribune is reporting that Minnesota and North Dakota must work together to meet President Obama's Clean Power Program.

If one get past the emotion and politics, this is an incredible opportunity for North Dakota.

Some data points:

• states required to start cutting greenhouse gas emissions by 2022
• states must comply by 2030
• compliance standards vary from state to state
• North Dakota: cut CO2 emissions by 40% from coal-fired generators (from projected 2020 levels)
• Minnesota: a 27% drop (but Minnesota has a "cleaner energy mix" already)
• details still being worked out
• states have until 2018 to submit plans; otherwise EPA will step in and "help them"
• North Dakota will get an opportunity to see how things might go in a case currently being appealed by Minnesota with regard to a Minnesota law that bans imports of "new" coal-based electricity (North Dakota won the first round in a lower federal court, but it is now before the Eighth US Circuit Court of Appeals)

As this plays out, there will be winners and losers, as there always are, but the Federal government is giving  us three years to sort out who the winners / losers might be.

It's buried in the article, but it appears that investment in wind farms in the short term is most problematic due to uncertainty in the new regulations. 

But this is where it gets very exciting. Look at the shift in the source of electricity production between 2004 and 2015. I think the oil and gas industry in North Dakota is likely to come out a winner when it's all said and done.

Random Note On Refined Products From Crude Oil -- August 28, 2015

I don't know if I interpreted this note correctly from a reader, but it appears he sent me an update of what refiners are getting from a barrel of oil, or what consumers are paying for barrel of oil after it's been refined. The figures come from the EIA.

From one barrel of crude oil, as an example:

• 30%: 12.3 gallons of gasoline = $35.67
• 19%: 8 gallons of jet fuel = $14
• 23%: 9 gallons of diesel = $27
• 22%: 8.5 gallons of fuel  oil = $21.25

Total, 94% = $97.92 of refined product per bbl of crude oil.

The other 6% is "petroleum coke" and "fuel gases."

Gasbuddy also provides a breakdown of refined products.  I assume the percent of refined products varies significantly based on many, many factors.

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Seeing Stars

I see Buzz Aldrin, age 85, is working on a master plan to colonize Mars by 2040. I assume Elon Musk will be joining the staff at the new Buzz Aldrin Space Institute, Florida Institute of Technology, as soon as he figures out how he can get the federal government to fund the entire institute.

Buzz says they will get to Mars using "cycling pathways." Bike paths to Mars.

The Whiting Obrigewitch Wells In Stark County

Original Post (production numbers are updated)

 

I see Whiting has a rig working in Bell oil field, Stark County.

Three Forks (Pronghorn Member) is often the way the payzone for these wells is described. The Pronghorn is the upper portion of the Three Forks. Note the very small amount of proppant used for one of these wells back in 2011 (#19623 below).

Whiting Obrigewitch wells in southwestern North Dakota:

• 31907, 616, Whiting, Obrigewitch 24-9PH, Bell, t5/17; cum 230K 10/20;
  
• 31160, 584, Whiting, Obrigewitch 44-19PHU, Bell, t3/16; cum 194K 10/20;
• 31159, A, Whiting, Obrigewitch 24-20PH, Bell, t -- ; cum 368K 10/20;
• 31158, 1,097, Whiting, Obrigewitch 11-29PHU, Bell, t2/16; cum 233K 10/20;
• 31157, 855 , Whiting, Obrigewitch 21-29-2PH, Bell, t4/16; cum 148K 10/20;
• 31153, 975, Whiting, Obrigewitch 31-29PH, Bell, t3/16; cum 188K 10/20;
• 30640, 457, Whiting, Obrigewitch 44-8PHU, Bell, 4 sections, 45 stages, 5.1 million lbs, t6/17; cum 229K 10/20;
• 30634, 1,362, Whiting, Obrigewitch 34-20PH, Bell, t3/16; cum 405K 10/20;
• 30343, 985, Whiting, Obrigewitch 44-20PHU, Bell, 14 days, t11/15; cum 365K 10/20;
• 30342, 1,536, Whiting, Obrigewitch 41-29PHU, Bell, 14 days, t11/15; cum 276K 10/20;
• 22864, 1,890, Whiting, Obrigewitch 41-17PH, Bell, t11/12; cum 229K 10/20;
• 25454, 1,614, Whiting, Obrigewitch 11-29PH, Bell, 30 stages, 2.3 million lbs, t9/13; cum 142K 10/20;
• 25453, 2,027, Whiting, Obrigewitch 21-29PH, Bell, t9/13; cum 179K 10/20;
• 25452, 1,171, Whiting, Obrigewitch 41-29PH, Bell, t9/13; cum 147K 10/20;
• 23468, 1,244, Whiting, Obrigewitch 11-16PH, Bell, t12/12; cum 226K 10/20;
• 22864, 1,890, Whiting, Obrigewitch 41-17PH, Bell, t11/12; cum 229K 10/20;
• 22287, 1,738, Whiting, Obrigewitch 41-16PH, Bell, t11/12; cum 317K 10/20;
• 21018, 1,517, Whiting, Obrigewitch 11-17TFH, Bell, t2/11; cum 305K 10/20;
• 20079, 2,760, Whiting, Obrigewitch 21-16TFH, Bell, t2/12; cum 388K 10/20;
• 19623, 1,075, Whiting, Obrigewitch 21-17TFH, 7 stages, 6,848 lbs (no typo), Bell, t4/11; cum 284K 10/20;

The graphic: