Friday, February 6, 2015

Few Williston Stores Rattled By Slump In Oil Prices -- Reuters -- February 6, 2015

Reuters via Rigzone is reporting:
WILLISTON, N.D., Feb 6 (Reuters) – Even as plunging crude oil prices fuel anxiety in North Dakota, small business owners in the No. 2 U.S. oil producing state say they are confident that demand for their products and services will remain strong enough to keep things humming.
North Dakota's oil patch has been one of the faster-growing U.S. regions. Small businesses employ three-fifths of the state's private workforce, about 195,000 people, with food service and construction among the larger employers.
While big oil companies grab the most headlines out of the state, much of the local economy still relies on hotel owners, plumbers, contractors and other small businesses.
"There's a note of caution right now around oil prices, but many know the trends: things go down and things go up," [SBA] Gallagher said. "I haven't found anyone that's alarmed."
New coffee shops, restaurants and health food stores have recently opened or are set to open in Williston, capital of the state's oil boom.
Much more at the link. The story will be archived at the source.

Three stores mentioned in the article that are about to open or have just opened: Culver's (fast food restaurant that competes with McDonald's); Qdoba, Mexican restaurant; and, Red Wing Shoe Store.

Two other local stores mentioned:
Lantern Coffee Company, a niche affair opening Friday with a menu anchored by ristretto and cortado. (This store will close each day at 5:30 because the owner cannot find enough staff.)
At first blush, organic food store Fresh Palate appears out of place in hard-scrabble Williston, selling gluten-free biscotti, dairy-free pepper jack cheese and organic baby powder suffused with probiotics. 
"We saw a need for this type of store here," said co-owner Lacey Dixon, a Williston native who opened Fresh Palate in December. "So I'm not nervous at all about the oil price."

And That's The Way It Is, Friday, February 6, 2015

Bully Oil Field has been updated

Beaver Lodge Oil Field -- the oldest oil field in North Dakota -- has been updated.


March 22, 2016: ISIS attack on Brussels in light of the original post.  

Original Post 

Fathomless Ignorance

In a nutshell: first from The Wall Street Journal:
Every president gets things wrong. What sets Obama apart is his ideological rigidity and fathomless ignorance....
Now turn to Yemen. In 2012, after the Arab Spring, the president singled out Yemen as a model for a prospective political transition in Syria. Mr. Obama was at it again just two weeks ago, citing the fight against al Qaeda in Yemen as the model for the war he intends to wage against the Islamic State in Iraq and Syria.
Whoops. "Over the weekend," noted McClatchy's Adam Baron on Monday, "the growing gap between administration rhetoric and reality came to a head, as the acerbically anti-American Houthi rebels—who American diplomats allege have close financial and military ties with Iran—took control of many areas of the capital, Sanaa, with minimal resistance from the U.S.-supplied Yemeni armed forces."
Keep going around the world. He declared victory over al Qaeda and dismissed groups such as ISIS as "the jayvee team" at the very moment that al Qaeda was roaring back. He mocked the notion of Russia being our enemy—remember the line about the 1980s wanting "its foreign policy back"?—just as Russia was again becoming our enemy.
That was back on September 22, 2014. Read that part about Yemen again. Now this from today, from Al Arabiya:
Houthi rebels on Friday seized power in Yemen and dissolved the country’s parliament as they announced a series of constitutional decrees drafted by the powerful shiite militia,.

The rebels, backed by Iran and influential members of the former regime of President Abdullah Saleh, have also set a two-year period in which the transition of power would be complete.
It just got a bit more tense for Saudi Arabia today. 

And that's the way it is, Friday, February 6, 2015. Only 713 more days (dynamic link).

Fathomless Ignorance

Week 5: February 1, 2015 -- February 7, 2015

Halcon update
Down to 136 active rigs -- record low in current boom
Strata-X quietly cancels all outstanding permits in North Dakota; also, here
OXY USA calls it quits "for now" in the Bakken
Follow-up on a million-bbl Bakken well
EOG, Whiting with some great wells
CLR announces increase in proved reserves
Two new operators in North Dakota

Bakken economy
Clock is ticking ... North Dakota crude oil extraction tax
Williston's Sloulin International Airport named "Airport Of The Year" by TSA
Many oil firms plan no North Dakota layoffs
Mini-boom continues in southwestern North Dakota

Hubber's "Peak Oil" Theory and the North Dakota experience 
North Dakota Senator Jim Dotzenrod proposes "quick take" to help oil and gas companies

Twelve (12) New Permits -- February 6, 2015

Active rigs:

Active Rigs137191182201165

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

Twelve (12) new permits --
  • Operators: Hess (6), Statoil (3), XTO (2), CLR 
  • Fields: Beaver Lodge (Williams), Robinson Lake (Mountrail), Alger (Mountrail), Midway (Williams), Chimney Butte (Butte)
  • Comments:
Three (3) permits canceled including two older Windsor Energy (1) and XTO Energy (1) permits, and one newer Samson Resources salt water disposal well permit.

Five (5) producing wells completed:
  • 27585, 1,443, BR, Haymaker 11-15TFH, Elidah, t1/15; cum --
  • 28327, 1,442, Hess, EN-Freda154-94-2635H-6, Alkali Creek, t1/15; cum --
  • 28524, 315, EOG, Parshall 151-1608H, Parshall, t2/15; cum --
  • 28826, 2,316, Whiting, Skedsvold 21-4H, Pronghorn, t1/15; cum --
  • 29073, 2,373, Whiting, Skedsvold 21-4-5H, Pronghorn, t1/15; cum --
One dry hole: 
  • 29367, dry, CLR, Rader 3-24H1, Avoca -- nothing in well file yet with more background
President Obama Was Disinvited -- Just a Hunch

Dis-invited or told to stay away is my hunch. Reuters is reporting substantial progress in four-way talks among Putin, Merkel, Hollande, and  Poor Ol' Shenko:
The leaders of France and Germany had "substantial and constructive" talks with Russian President Vladimir Putin about the Ukraine crisis on Friday, a French presidential source said.
My hunch is Merkel knew that Putin and Obama detest each other so much it was best to keep the US President on this side of the Atlantic, where he could give a speech on how awful Christians are. 

Netanyahu Won't Address US Congress -- Another Hunch

Last week or the week before, either on the blog or in a personal e-mail, I wrote that Israel's Netanyahu will, in the end, NOT address the US Congress. Here is the first story in which the Israelis will walk back the "invitation." Reuters is reporting:
A senior Israeli official suggested on Friday that Prime Minister Benjamin Netanyahu had been misled into thinking an invitation to address the U.S. Congress on Iran next month was fully supported by the Democrats.
President Obama will again make Mr Boehner look like a fool. Which apparently seems not hard to do. 

Halcon: 2 Rigs In Fort Berthold; 1 Rig In Eagle Ford; Grail Field Has Been Updated -- February 5, 2015; Union Pacific Sees Continued Growth

Active rigs:

Active Rigs137191182201
Link here to see updated Grail oil field.

Union Pacific Sees Further Growth

The Dickinson Press is reporting:
The new top executive of Union Pacific Corp. said on Thursday he felt a sense of momentum at the No. 1 U.S. railroad as it works to improve service amid growth in the U.S. economy, but said the impact of falling oil prices remains an unknown factor.
Altogether, around 4.5 percent of Union Pacific’s freight volumes are related to shale drilling in North Dakota. Only around 1.5 percent comes from hauling the oil itself, while 2.5 percent comes from fracking sand and the rest is related to drilling equipment and pipes.
Fritz, 52, is somewhat of a departure for the company’s chief in command of a major railroad, with a career that included stints at General Electric Co. and Cooper Industries — now part of Eaton Corp.
Fifty-two years old. Pretty impressive.

Halcon Update For Investors
See Disclaimer

Richard Zeits on Halcon over at Seeking Alpha:  
  • Based on my well-by-well aggregation analysis, Halcón’s Q4 2014 Eagle Ford production increased ~22% sequentially (~40% year-on-year).
  • Latest well results are in line with the company’s average well performance in the area. 
Halcón recently announced additional spending reductions in 2015, with the drilling and completions budget now expected to be $375-$425 million. Drilling will be limited solely to the Fort Berthold area in the Bakken and El Halcón in East Texas. In addition, ~$20 million is allocated to leasehold, infrastructure, seismic and other categories.
This is a major spending curtailment relative to 2014. By comparison, in Q3 2014 alone, Halcón spent $322 million on drilling and completions and $11.3 on infrastructure/seismic.
Halcón is planning to operate an average of two rigs in the Fort Berthold area and one rig in El Halcón in 2015. The company does not anticipate any significant lease expirations despite this reduced rig count.
Halcón expects to produce an average of 40,000-45,000 barrels of oil equivalent per day in 2015. By comparison, Halcón produced an average of 43,554 boe/d during Q3 2014. Assuming an average production rate of 45,000 boe/d in Q4 2014. Halcón would need to achieve the high end of its 2015 production guidance in order to avoid a production decline throughout the year. Given the very significant budget cutback, maintaining production flat in 2015 would be challenging, in my opinion, even though Halcón has effectively high-graded its drilling program, focusing the lion's share of is capital spending on the prolific Fort Berthold area.
It is important to note that Halcón is significantly hedged throughout 2015. Based on the midpoint of the 2015 production guidance range, ~88% of the estimated oil volumes (a total of 31,332 bo/d) are hedged at a weighted average price of $87.29 per barrel and approximately 86% of the estimated natural gas volumes are hedged at a weighted average price of $4.00 per MMBtu.
I should also note that, despite the favorable hedge position, the Williston Basin differential that has widened considerably in the past several months may remain a significant headwind for Halcón this year.

Random Update On Amber Renee -- February 6, 2015

Disclaimers apply, as usual: there may be typographical and factual errors in this post. If this information is important to you, go to the source.

Update on Amber Renee (see also the December 3, 2014 entry):
  • 18408, IA/1,945,  Amber Renee 25-36H, Sanish; one mile to the west of the Chandler James; t2/10; F ; 822K 8/14 -- 661K in about two years; no pump; still 9K/month 1/13; IA 1/14;
Sundry report received December 1, 2014: Plan to abandon the original lateral and perform cased hole kick off at 9,300 feet and re-drill this lateral with a parallel wellbore. The Re-Drill Program, Standard Planning Report and Anticollision Report are filed.

The target: middle Bakken.

This is a tight hole. Only designated personnel allow access to rig floor, mudlogging unit and /or other areas where data may be available. Communication with partners will be coordinated from Houston office.

It looks like the original lateral: Amber Renee 25-36H ST01; and the new lateral, just a few feet to the east will be: Amber Renee 25-36H OH.

Production profile from June, 2013:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare


The Chandler James:
  • 17263, 3,124, Chandler James 25-36H, Sanish, s7/08, produced 500,234 bbls in 484 days; still producing 4,000 to 6,000 bbls/month; t10/08; cum 1.0025 million bbls 9/14;  (only on-line 14 days 4/14) ; cum 1.0144 million bbls 12/14; producing about 4,000 bbls/month in 12/14;

TGIF -- February 6, 2015; New Jobs Blow Away Estimates; Unemployment Rate Ticks Up To 5.7%

Tiger Woods withdraws after 11 holes, first round

Job watch: robust job environment -- AP is reporting:
Steady economic growth and consumer spending likely led U.S. employers to hire at a healthy pace in January and extend last year's solid job gains.
Economists have forecast that the economy gained 230,000 jobs in January, according to a survey by FactSet. The unemployment rate is expected to stay at a six-year low of 5.6 percent.
In fact: numbers blow away the estimates - payroll jobs added -- an astounding 257,000 jobs.

Unemployment rate ticks up to 5.7%. In post-Bush era, that's full employment.


Emerald Oil announces the pricing of ~24.55 mln common stock offering of at $1.12/share: The company intends to use the net proceeds from this offering for working capital and for general corporate purposes.

Pandora shares fell sharply before the stock market opened Friday, a day after the music streaming service reported disappointing fourth-quarter results and revenue outlooks as it spent more money on marketing and product development. I've blogged about Pandora often; I was an early adopter with Pandora but quickly lost interest. Apple Radio is now my favorite. It meshes with iTunes so I can easily switch from my iTunes library to Apple Radio. Apple Radio does everything Pandora does, as far as I know, but I haven't listened to Pandora in ages.


Active rigs:

Active Rigs136191182201165

RBN Energy: Natural gas forward curves.
The Dominion South Point strip price for the balance of 2015 (March-December) has been settling consistently under $1.90/MMBtu, while Transco Zone 6 in New York is averaging around $2.80/MMBtu in this week’s forwards market. Meanwhile, Northeast and US gas production remain near record levels. The breakeven price environment and looming oversupply leaves producers and the industry vulnerable to the downside. Where and when will prices bottom out? What, if anything, would trigger a rebound?  Today Part 4 of our Forward Curve Series, focuses on fundamental factors driving Northeast forward curves over the next few years.
In Part 1 of this series we looked at the factors that influence natural gas forward curve prices in the US market, the big five being:  supply, demand, storage, transportation/infrastructure and weather.
In Part 2 and Part 3, we dove into the Northeast gas market, examined the region’s transformation to become a net producer and reviewed the dramatic reshaping of its forward curves. The trigger for this transformation is local production growth from the Marcellus/Utica shales, which tipped the Northeast supply/demand balance in less than a decade from perpetually supply-short to largely self-sufficient and on the brink of oversupply. In the new gas world, Northeast forward curves have shifted from what were historically premium prices (above Henry Hub) to major discounts ($1.00/MMBtu or more below Henry Hub). Given where Henry Hub is trading these days ($2.00/MMBtu and $3.00/MMBtu handles through at least 2021), that means outright prices in the Northeast are skirting breakeven levels for producers for the next few years.
There is no obvious reverse on this bullet train. But where are the curves headed? This time, we look at fundamental factors at play.
Brian Williams: High And Dry In Aftermath Of Hurricane Katrina

The New Orleans Advocate is reporting:
And last year, in an interview with Tom Brokaw, the man he replaced in the anchor chair at NBC, Williams said:
“My week, two weeks there was not helped by the fact that I accidentally ingested some of the floodwater. I became very sick with dysentery, our hotel was overrun with gangs, I was rescued in the stairwell of a five-star hotel in New Orleans by a young police officer. We are friends to this day. And uh, it just was uh, I look back at total agony.”
But the French Quarter, the original high ground of New Orleans, was not impacted by the floodwaters that overwhelmed the vast majority of the city.
A spokesman for NBC did not immediately respond Thursday to questions about those comments, the hotel to which Williams referred, whether Williams stands by the claims or whether the network is reviewing them.
Williams has described his experiences during Katrina as personally transformative, and he has returned to the city and the topic numerous times since.
“I saw fear, I saw death, I saw depravity, I saw firearms being brandished, I saw looting,” he told the Los Angeles Times a year after Katrina made landfall.
He also recalled the danger of the moment in a 2007 interview on C-SPAN.
“We had to have men with guns behind me one night because I was the only source of light downtown, was the lights that were illuminating the broadcast,” Williams said. “We were told not to drink our bottled water in front of people because we could get killed for it.”
Starting to sound like a blog.