Active Rigs Hit The '90' Mark -- April 22, 2015

The Red Queen is still on the treadmill. Reuters is reporting:

The American Petroleum Institute said U.S. crude stocks rose by 5.5 million barrels last week, higher than the 2.9-million-barrel build expected to a record 480.2 million barrels.

Stocks at the key delivery point of Cushing, Oklahoma rose by 572,000 barrels, the API said. Energy markets intelligence firm Genscape said tanks at Cushing were nearly 80 percent full.

Active rigs, a new low, tracked here:

	4/22/2015	04/22/2014	04/22/2013	04/22/2012	04/22/2011
Active Rigs	90	187	186	210	175

RBN Energy: a great article -- update on US condensate exports.

Natural gas producers are probably turning green with envy: Processed condensate exports out of the US Gulf are strong and getting stronger. Since the Department of Commerce threw the doors open to the export of lightly processed condensate, new loading points have emerged, new target markets have been found, and more companies have become involved. Today we describe how attention is now turning from regulatory and logistical issues to the challenge of finding buyers.

The volume of very light crude oil with an API Gravity above 50 degrees being produced from U.S. shale plays such as the Eagle Ford and more recently the Permian, has expanded beyond the level of domestic demand. We have described the loosening of export regulations implemented by the Department of Commerce Bureau of Industry and Security (BIS) since June 2014, to allow lease condensate produced at the wellhead to be exported provided that it is first processed through a distillation tower and is kept segregated on its journey to export marine docks. Last week we detailed the expansion of Plains All American (PAA) and Enterprise Products Partners (EPD) infrastructure to transport processed condensate from the Permian and Eagle Ford Basins to Corpus Christi and Houston. 

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

From Late Last Night

Readers have sent me a couple of interesting articles, but I'm too tired to post any more tonight. Watch for them tomorrow.

The post at this link was going to be the last for the night; but then I got sent a bunch of stories which I felt compelled to post.  Don't miss that link: it's the real Bakken.

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

Music

I just posted this the other night, but I need to catch a second wind.

Stayin' Alive, The Bee Gees
Hunter S. Thompson:

“Music has always been a matter of Energy to me, a question of Fuel. Sentimental people call it Inspiration, but what they really mean is Fuel. I have always needed Fuel. I am a serious consumer. On some nights I still believe that a car with the gas needle on empty can run about fifty more miles if you have the right music very loud on the radio.” 

Dancing Queen, ABBA

Induced Earthquakes -- April 21, 2015

Over the next few days, there will be a lot of stories about the earthquakes in Oklahoma. Actually, the first story will be written and then it will simply become a meme and will be reprinted ad nauseum in newspapers across the country.

No one will take the time to look at the underlying geology. I mention it in passing, tongue-in-cheek, earlier this month. A reader provided a great link which provides much more information. When you go to the site, note the difference between Oklahoma and Texas / North Dakota when it comes to the geology.

And, oh by the way, it's not the fracking -- it's the injection of the waste water that comes back up after the fracking. This, too, can be solved. But regardless, it's not an issue for the Bakken. And probably not for the Permian. There will, however, be some stories of induced earthquakes in the DFW area this week.

Links added after the original post:

• tweeted link to a "preliminary" map of the faults in Oklahoma

What Goes Around, Comes Around: NDIC Grants Huge Flaring Exemption -- April 21, 2015

I was wrong. I was sure the NDIC would not grant the big, bad oil and gas industry its request. But I was wrong. Apparently "someone" was bigger and badder than the big, bad oil and gas industry. The Dickinson Press is reporting:

The North Dakota Industrial Commission granted relief Tuesday from its natural gas flaring policy after a pipeline project failed to move forward and the alternative will take another year to construct.

Commissioners granted six-month relief from its flaring goals to 105 oil and gas wells owned by XTO Energy that were expected to be connected this year to a natural gas pipeline.

But ONEOK, which proposed the pipeline, halted the project after attempts to negotiate with the Three Affiliated Tribes over a segment of the pipeline route were unsuccessful, Lynn Helms, Director of the Department of Mineral Resources told commissioners.

Now ONEOK plans to construct a different pipeline and gas processing plant but the project will not be complete until 2016, Helms said.

In an effort to reduce flaring, commissioners adopted gas capture targets for the industry to meet. But the commission has been granting some exemptions to the policy for extenuating circumstances.

XTO requested relief from the flaring policy for 143 wells through the third quarter of 2016.

Helms recommended that commissioners grant the relief for six months and require XTO to come back and request an extension at that time.

Much more at the link.

Can't wait to hear tribal leaders opine whine about this. 

So, finally we can close the poll.

The poll asked readers how they would vote:

• the percent of readers who said they would grant the waiver - 49% (49.4%)
• the percent of readers who said they would not grant the waiver - 51% (50.6%)

I'll leave the poll up overnight just to confirm there really was a poll, but votes no longer count. 

Mega-Storage Projects Scheduled For Canada -- April 21, 2015; New MacBook Selling Beyond All Expectations

Mega-storage projects scheduled for Canada. Platts is reporting:

The cost of constructing a crude oil and NGL storage tank in Alberta is about $85/b and $25/b respectively, said Steven Paget, a vice-president of institutional research with First Energy Capital.

At the end of 2014, total capacity at Hardisty and Edmonton (Alberta’s two main storage hubs) was estimated to be 22 million barrels and 15 million barrels respectively, according to Paget.

As a rule of thumb, total storage space in the hydrocarbons industry should ideally be the equivalent of five to eight days of production.

This means given Alberta’s combined oil sands and light oil output of nearly 2.7 million b/d there should be 13.5 million barrels to 21.6 million barrels of storage—well under the existing 37 million barrels.

However, with an ambitious long term forecast to double oil sands production to 4.7 million b/d by 2025, companies are tackling the storage issue with vigor, and cash.

Gibsons Energy is due to start up a new 500,000-barrel crude oil storage tank in Hardisty on the back of another 400,000-barrel tank that it completed in February at the same site. And it recently announced it received enough shipper support for another 900,000 b/d storage facility in Hardisty.

And then there’s the Keyera Energy and Kinder Morgan venture unveiled in late March of a 4.8-million barrel facility near Edmonton expected to start in 2017. The mega project is also expandable by another 1.8 million barrels.

More crude oil storage build-up is also in the works, including TransCanada’s 2.6- million barrel Keystone Hardisty Tank Terminal and another 350,000 barrel facility by Enbridge at Athabacsa.

These new project’s come on the back of Kinder Morgan and oil sands producer MEG Energy completing the construction of their 5.2- million barrel and the 900,000-barrel tank in Alberta in the recent past.

Located in the Canadian hinterland that has one of the world’s largest crude oil storage facilities and with nearly 95% of its output being exported south of the border through a largely uninterrupted and well-established network of delivery systems, construction of major crude oil storage facilities in Alberta had not been on the priority list.

Much more at the link which will probably be archived at the source. 

This tells me that the one-two punch (killing the Keystone and Saudi Arabia's decision to give away their oil at $50/bbl) has resulted in this interesting outcome: Saudi Arabia may be dealing with several years of $60 oil due to their own miscalculations.

Remember: this Canadian storage comes on top of at least a temporary 'maxing out' of capacity at Cushing. Consumers should be the winners. Certainly the refiners.

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

Apple Page

Apple again reiterates its policy on Apple Watch sales but of interest is the word that the new MacBook is selling beyond all expectations.

From MacRumors:

The video also covered the MacBook, which has been highly limited even in first wave launch countries. Ahrendts said the response to the MacBook has been "overwhelming" and that it was one of Apple's best MacBook launches yet.

Demand for the Space Gray and Gold MacBooks was described as "off the charts," and she said MacBooks are rolling out to Apple Stores that do not currently offer them on display.

Both the Apple Watch and the MacBook are in very short supply. Apple Watch orders placed today won't ship out until June or later, and MacBook orders for standard configurations carry shipping estimates of four to six weeks.

The new MacBook is insane. As in insanely interesting. My first look, I said "eventually, but not today." It's slightly ahead of its time. One of the local Apple retail employees I really like said the same thing: he was really, really impressed with the new MacBook, probably his favorite version.

It is so thin, it a) had to give up a bit of battery life (only 9 hours); and, b) gave up every last port, except one which can do everything -- power and accessories. Plus, from that port, one can re-charge one's iPhone. I'm not sure about the Apple Watch but if not, that, too, will come. I rely heavily on the Sandisk port on my laptops so the lack of a Sandisk port on the new MacBook is problematic, but that was all that concerned me.

On another note, I doubt Tim Cook is happy with this huge miscalculation on the Apple Watch. I doubt Ms Ahrendts decided to do this video on her own; my hunch is she got a memo from Tim telling her to get ahead of this huge blunder on Apple's part with regard to the Apple Watch.

The demand/supply issue for the MacBook -- hard to say. I think they can ramp up easily on that -- there are very few choices: a) 3 colors; b) two specs based mostly on flash drive storage = 6 choices. On the other hand, it looks like there are 22 basic watch choices (with countless bands to choose from). 

Pundits, critics, analysts can bad-mouth Apple on the Apple Watch blunder, but its competitors certainly aren't going to point out that Apple can't keep up with demand.

Oh, all those kids that weren't interested in the Apple Watch (reported earlier); they saw the new MacBook -- space grey or gold.

BR Reports Ten (10) High-IP Wells; Fifteen (15) Producing Wells Completed; 6/8 Bakken Wells Go To Drill Status Or Will Be Shut In; Triangle With Two Producing Wells -- April 21, 2015

Active rigs:

	4/21/2015	04/21/2014	04/21/2013	04/21/2012	04/21/2011
Active Rigs	91	184	185	210	176

Five (5) new permits --

• Operators: Whiting (4), CLR
• Fields: Poe (McKenzie, Oakdale (Dunn)
• Comments:

Fifteen (15) producing wells completed:

• 25082, 2,212, Statoil, Field Trust 7-6 6H, Todd, t3/15; cum --
• 26387, 2,112, BR, CCU North Coast 31-25MBH, Corral Creek, t3/15; cum --
• 26389, 1,920, BR, CCU North Coast 41-25MBH, Corral Creek, t3/15; cum --
• 26685, 1,543, Zavanna, Angus 3-10 5H, Long Creek, t3/15; cum --
• 26687, 686, Zavanna, Angus 3-10 7H, Long Creek, t4/15; cum --
• 26954, SI, CLR, Ryden 2-24AH1, no test date, cum --
• 28347, 1,656, BR, Lillibridge 41-27MBH, Johnson Corner, 4 sections, t3/15; cum --
• 28348, 1,920, BR, Copper Draw 41-27TFH, Johnson Corner, 4 sections, t3/15; cum --
• 28354, 2,445, BR CCU Pullman 3-8-7TFH, Corral Creek, t2/15; cum --
• 28363, 2,160, BR, CCU Pullman 5-8-7TFH, Corral Creek, t2/15; cum --
• 28369, 2,766, BR, CCU Pullman 6-8-7MBH, Corral Creek, t3/15; cum --
• 28413, 2,544, BR, Shenandoah 44-36TFH, Keene, t3/15; cum --
• 28414, 2,204, BR, Shenandoah 44-36MBH ULW, 4 sections, Keene, t3/15 cum --
• 28623, 1,857, Statoil, Field Trsut 7-6 8TFH, Todd, t3/15; cum --
• 29217, 2,244, BR, CCU North Coast 4-8-23MBH, Corral Creek, t3/15; cum --

For newbies: look at the number of Three Forks wells; this is a big, big deal. It is also a big deal that the Three Forks is delivering some high-production wells.

Wells coming off the confidential list Wednesday:

• 24417, SI/IA, HRC, Fort Berthold 148-94-17C-08-4H, Eagle Nest, no production data,
• 28510, 412, Triangle, Britt 151-102-4-9-1H, Elk, t11/14; cum 48K 2/15;
• 28511, 600, Triangle, Britt 151-102-4-9-2H, Elk, t11/14; cum 50K 2/15;
• 28919, drl, Hess, BB-Belquist-150-95-1110H-9, Blue Buttes, no production data,
• 29318, SI/IA, Statoil, Folvag 5-8-5H, Stony Creek, no production data,
• 29411, SI/IA, OXY USA, Sharon Rainey 2-17-20H-142-96, Manning, no production data,
• 29468, conf, Enduro, NGMU 12-H1, North Grano, producing,
• 29584, conf, XTO, Satter 21X-1B, Siverston, no production data,
• 29642, conf, XTO, Brian 21X-15A, Tioga, no production data,

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

28510, see above, Triangle, Britt 151-102-4-9-1H, Elk:

Date	Oil Runs	MCF Sold
2-2015	9911	0
1-2015	10981	0
12-2014	8381	0
11-2014	11823	0
10-2014	6310	0

28511, see above, Triangle, Britt 151-102-4-9-2H, Elk:

Date	Oil Runs	MCF Sold
2-2015	9572	0
1-2015	4895	0
12-2014	13542	0
11-2014	15292	0
10-2014	6914	0

President Obama With A Jobs Program For The Oil And Gas Industry ... In Iran -- April 21, 2015

Halliburton announced earlier a huge jobs cut, and now Baker Hughes.

Baker Hughes will cut 10,500 jobs. 

The number of job cuts announced Tuesday amount to 17% of the Houston-based company's workforce and is up from the 7,000 planned job cuts Baker Hughes announced in its fourth-quarter report. The company said it also closed or consolidated approximately 140 facilities worldwide.

Meanwhile, President Obama is doing what he can to help workers in the oil and gas industry in ... Iran. CNBC is reporting:

"Here we are thinking about lifting the sanctions on Iran and letting them export, and yet here we have sanctions in America that we can't export our oil. What's going on?" posited the founder of Continental Resources.

He echoed sentiments expressed by Republican Sen. Lisa Murkowski from Alaska, who spoke before the group on Monday and pledged to introduce legislation this year that would lift the ban on U.S. oil exports, in place since the 1970s.

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

COP Considering Another Asset Sale

Seeking Alpha/Bloomberg reporting:

ConocoPhillips is exploring the sale of some its North Sea assets in Norway, including stakes in the Aasta Hansteen, Alvheim and Grane fields that are operated by other companies.

COP reportedly is running the disposal without advisers and has contacted potential buyers; if sold together, the three stakes could fetch as much as $1B.

A Reuters report last week indicated that COP was looking to sell select U.S. assets. Several U.S. producers have been selling overseas assets to focus on domestic opportunities amid the sharp drop in oil prices.

KMI's 1Q15 Earnings Transcript; Another Great App For The Apple Watch -- April 21, 2015

Remember, this is not an investment site. I follow KMI (and many, many others) to help me understand the US oil and gas industry in general, and the Bakken specifically.

The transcript is at Seeking Alpha. It begins:

Our Board today voted to increase the dividend for the first quarter to $0.48 or $1.92 annualized. That’s up 14% from the first quarter of 2014 when we paid a dividend of $0.42 per share. And it’s a 7% increase from the $0.45 we paid for the fourth quarter of 2014.

This is consistent with our announced intention of declaring $2 per share in dividends for ‘15, the full year of 2015, which would be a 15% increase over full-year 2014. And we are on track to do just that. We also continue to project growth in that dividend of 10% per year off of that $2 base out through 2020.

Our DCF per share was $0.58 for the first quarter, which equates to coverage in excess of our dividend of $206 million. Now, any comparison with the first quarter of ‘14 is a little bit apples to oranges, because of course we didn’t roll up KMP, KMR and EPB until the fourth quarter of 2014.

That said, I think the simplest comparison is this. In the first quarter of ‘14, we had 1.036 billion shares outstanding. We had DCF of $0.55 per share. We declared a dividend of $0.42 per share, which resulted in excess coverage of approximately $138 million.

This quarter we had 2.159 billion shares outstanding. We had DCF of $0.58 per share.

We declared a dividend of $0.48 per share, and that resulted in excess coverage of about $206 million. So we more than doubled the number of shares, we increased the dividend by 14% and we still substantially increased our excess coverage. All in an environment of dramatically lower commodity prices.

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

Apple Page

Another treat app for the Apple Watch: headline news from Associated Press, ABC News, Bloomberg, Breaking News, CNN, CNBC, CBC News, Circa News, Fresco News, De Telegraaf, South China Morning Post, The Economist, The Guardian, The New York Times, The Washington Post, USA TODAY, Yahoo News Digest, and more. This comes just a day after other great apps were announced.

This is really quite interesting. On desktops and laptops, apps, as such, are not needed. Apps on the other hand are quite useful but not necessary on the iPhone. But the Apple Watch: someone could argue that the driver of the Apple Watch was the realization that someone could make money off a device whose sole purpose in life was a) to tell time (hardly needed); and, b) to carry apps.  Apps are to the Apple Watch what tunes were to the iPods.

For Apple, another revenue stream. Perhaps small compared to the profits / profit margin selling iPhones and laptops and notebooks, but a revenue stream nonetheless.  A revenue stream, small as it is, might be big enough to make the Fortune 500 if spun off as its own company. I don't know; just idle chatter.

Camel Butte Oil Field

Camel Butte is an irregularly shaped oil field in / near the sweet spot of the Bakken, about 15 miles northeast of Watford City in McKenzie County. It is only about five miles northwest of the Grail oil field. Currently it is slightly less than 13 sections: twelve full sections and three quarter-sections if I counted correctly.

BR's Teton / Kings Canyon wells are also followed here. Not all pages will be updated at same time. 

Permits

Issued in 2015
None.

Issued in 2014
29467, 1,566, BR, Kings Canyon 6-8-34UTFH, 4 sections, t8/15; cum 12/15;
29466, 2,124, BR, Kings Canyon 7-8-34MBH, 4 sections, t7/15; cum 49K 12/15;
29465, 2,565, BR, Teton 7-1-3TFSH, 4 sections, t7/15; cum 41K 12/15;
29464, 2,525, BR, Teton 6-8-10MBH, 4 sections, t7/15; cum 56K 12/15;
29463, 2,645, BR, Teton 7-8-10MBH, 4 sections, t7/15; cum 54K 12/15;
29462, 2,565, BR, Teton 8-8-10TFSH, 4 sections, t7/15; cum 51K 12/15;
29434, 1,080, BR, Kings Canyon 3-1-27MTFH, 4 sections, t8/15; cum 23K 12/15;
29430, 2,044, BR, Teton 6-8-10TFSH, 4 sections, t7/15; cum 52K 12/15;
29429, 2,124, BR, Teton 5-8-10MBH, 4 sectioins, t7/15; cum 50K 12/15;
29428, 1,844, BR, Teton 3-8-10MBH, 4 sections, t7/15; cum 50K 12/15;
29427, 2,766, BR, Teton 2-8-10MBH, 4 sections, t7/15; cum 56K 12/15;
29426, 2,040, BR, Teton 5-1-3TFSH, 4 sections, t7/15; cum 44K 12/15; 
29425, 1,608, BR, Kings Canyon 5-8-34UTFH, 4 sections, t7/15; cum 24K 12/15; only 26 days in last four months,
29424, 1,200, BR, Kings Canyon 4-8-34MBH, 4 sections, t8/15; cum 44K 12/15;
29423, 1,608, BR, Kings Canyon 4-8-34UTFH, 4 sections, t7/15; cum 40K 12/15;
29051, 2,064, BR, Deking 1-8-34MBH-ULW, 4 sections, t6/15; cum 62K 12/15;
29050, 1,584, BR, Kings Canyon 2-8-34UTFH, 4 sections, t7/15; cum 59K 12/15;
29048, 2,112, CLR, Teton 2-1-3MTFH, 4 sections, t7/15; cum 56K 12/15;
28991, conf, CLR,
28990, conf, CLR, Radermecher 3-22H1,

2013
26092, 1,643, BR, Big Bend 21-2TFH, t6/14; cum 126K 12/15;
26091, 1,723, BR, Big Bend 21-2MBH, t6/14; cum 176K 12/15;
26089, 1,844, BR, Big Bend 41-2TFH, t6/14; cum 111K 12/15;
26082, 1,512, BR, Big Bend 11-2TFH, t6/14; cum 81K 12/15;
26081, 2,304, BR, Big Bend 11-MBH, t6/14; cum 164K 12/15;
26070, 2,902, BR, Big Sun 41-2MBH-ULW, 4 sections, t5/14; cum 155K 12/15;
26069, 1,704, BR, Big Jon 11-2MBH-ULW, 4 sections, t8/14; cum 143K 12/15;

2012
22488, 1,320, BR, Big Bend 31-2TFH, t8/12; cum 169K 12/15; check out production between 6/14 and 7/14;

2011
None.

2010
None.

Prior to 2010 not listed.

US Remains Largest Producer Of Hydrocarbons For Third Consecutive Year; Gap Widening -- April 21, 2015

FuelFix is reporting:

The U.S. was the world’s biggest producer of hydrocarbon fuels for the third year in a row in 2014, according to new government data.

Record natural gas production and a historic crude oil surge widened the gap between the U.S. and its two closest rivals, Russia and Saudi Arabia.

The total U.S. daily output of liquid and gas energy in 2014 was 54.6 quadrillion British thermal units, an increase of 4.8 quadrillion Btu over 2013.

Russia produced 43 quadrillion Btu, while Saudi Arabia produced 27.5 quadrillion.

The increasing gap results both from rising U.S. production in dense rock formations because of technological advances, and from stagnating production in Russia and Saudi Arabia.

Europe’s demand for natural gas fell after a warm winter and a regional economic slowdown, leading Russian gas production to falter. And while oil production in Russia increased in 2014, it grew at its slowest rate in five years — just 0.07 percent.

And oil and gas production in Saudi Arabia has remained relatively unchanged since 2008.

Tuesday's EIA "Energy Cookie" -- April 21, 2015; Update On Cheniere Energy's Sabine Pass

Today's EIA "energy cookie":

In its recently released Annual Energy Outlook 2015 (AEO2015) Reference case, EIA expects U.S. crude oil production to rise through 2020 as oil prices recover from their steep decline, reducing net petroleum (crude oil and petroleum products) imports.

AEO 2015 explores the effects of domestic crude oil production under various assumptions about world oil prices and domestic resource availability. --- EIA

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

Update On Cheniere Energy's Sabine Pass

FuelFix is reporting:

Federal regulators cleared Cheniere Energy to expand its Sabine Pass liquefied natural gas export terminal but construction will hinge on the company’s ability to secure financial backing for the project.

LNG companies may have a difficult time persuading buyers to commit to new long-term contracts amid a global collapse in crude oil prices, Moody’s Investors Services said in a new report. Although U.S. gas remains inexpensive, international buyers now have access to cheap oil and gas products closer to home, making it less attractive to import from the U.S.

In addition, the demand in Asia, which triggered the flurry of new LNG products, no longer appears strong enough to soak up all the excess LNG that could flood the market by 2020. Against that backdrop, Moody’s expects many of the 30 proposed LNG export terminals will get canceled.

Despite the skepticism surrounding LNG projects not yet under construction, Cheniere told investors that it hopes to start work on at least part of the expansion project this year.

More:

The expansion calls for adding two additional LNG production facilities, called trains, to the four-train Sabine Pass terminal, which remains under construction in Louisiana.

Adding a fifth and sixth train would boost the terminal’s authorized processing capacity by half, from 2.76 billion cubic feet per day to 4.14 billion cubic feet per day, according to filings with the Federal Energy Regulatory Commission.

The first phase of the terminal is nearing completion, pushing Cheniere closer to becoming the first large-scale plant in decades to ship LNG from the continental United States. The first train is expected to begin producing LNG this year with shipments going out by early next year.

The company has been cleared to ship to countries with which the United States does not have free trade agreements, but it has not received approval from the Department of Energy to export the full amount that would leave its docks if Sabine Pass LNG gets fully expanded.

Cheniere has already signed contracts to sell liquefied gas produced by the first four trains. That $18 billion project was cleared for construction years ago. However, the company has not yet made a final investment decision on trains 5 and 6.

Interesting how things play out. 

Earnings For Arch Coal And Baker Hughes -- April 21, 2015

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here.

Earnings.

BHI: big miss.

HOUSTON (AP) _ Baker Hughes Inc. (BHI) on Tuesday reported a first-quarter loss of $589 million, after reporting a profit in the same period a year earlier.

On a per-share basis, the Houston-based company said it had a loss of $1.35. Earnings, adjusted for restructuring costs and non-recurring costs, were 23 cents per share.

The results did not meet Wall Street expectations. The average estimate of 17 analysts surveyed by Zacks Investment Research was for earnings of 47 cents per share.

Baker Hughes will cut 10,500 jobs. 

The number of job cuts announced Tuesday amount to 17% of the Houston-based company's workforce and is up from the 7,000 planned job cuts Baker Hughes announced in its fourth-quarter report. The company said it also closed or consolidated approximately 140 facilities worldwide.

Arch Coal: misses by 4 cents.

Arch Coal, Inc. today reported a net loss of $113 million, or $0.53 per diluted share, in the first quarter of 2015 compared with a net loss of $124 million, or $0.59 per diluted share, in the first quarter of 2014. Revenues totaled $677 million for the three months ended March 31, 2015 and adjusted earnings before interest, taxes, depreciation, depletion and amortization ("adjusted EBITDA") was $82 million, a threefold increase as compared to the prior-year quarter.

Enable Midstream Announces Completion Of The Bear Den Crude Oil & Produced Water Pipeline -- April 21, 2015

Business Insider is reporting a press release:

Enable Midstream Partners, LP announced today that its first crude oil and produced water gathering system in North Dakota is fully operational. The Bear Den Crude & Produced Water Gathering System began construction in August 2013 with the initial segments of the system starting service in November 2013. It provides services to producer XTO Energy Inc. in its Little Missouri Field and will have a maximum throughput of 19,500 bpd.

This seems like a small footnote in this chapter of the Bakken but it got widespread play in the media.

To the reader who sent me this, I replied:

Brings back memories. When I first started blogging, I recall XTO and KOG in the Bear Den area -- a very productive and exciting area. I remember the stories on the various pipelines that were going in, in the area. And here it is, XTO and Bear Den in the same article. 

There are at least two YouTube videos of trucking in the Bear Dean, both of which I may have posted earlier. This is one of them:

The Bear Den, North Dakota Bakken

Halcon Production Results For 1Q15

From a Halcon press release:

Operational Update

The Company is currently operating three rigs across its holdings and currently has 23 wells being completed or waiting on completion. Halcón continues to be focused on reducing costs in the current commodity price environment. In the Bakken/Three Forks The Company operated an average of two rigs in the Williston Basin during the quarter. 

The Company also participated in 22 non-operated wells with an average working interest of approximately 1% during the quarter. On average, Halcón-operated wells put online in the Williston Basin continue to outperform the Company's 801 MBoe and 477 MBoe type curves for the Fort Berthold and Williams County areas, respectively.

Downspacing continues to yield positive results. Specifically, during the first quarter of 2015, Halcón brought six Bakken wells online spaced 660' [to] 770' apart drilled from a single pad with a cumulative IP rate of 21,131 Boe/d, one of which was a new Company record at 5,248 Boe/d.

Halcón has made significant progress negotiating lower costs with its service providers and continues to modify its drilling and completion techniques in an effort to improve recoveries and reduce costs. The Company's estimated completed well costs have come down approximately 30% compared to the fourth quarter 2014 average. The current authorization for expenditure (AFE) for wells drilled on its acreage in the Fort Berthold area is averaging approximately $8.0 million, which was previously Halcón's mid-year 2015 target. The Company anticipates well costs will trend down by another 5 - 10% or more in this area by mid-year 2015. 

Halcón continues to increase gas capture in the Williston Basin and is currently selling approximately 83% of its gas production. 

The Company is the operator of 172 producing Bakken wells and 53 Three Forks wells. Halcón currently has 11 Bakken wells and 5 Three Forks wells being completed or waiting on completion on its operated acreage. 

Halcon has one rig in Eagle Ford, Texas.

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

Oh! You Saved Me One.  Thank you.

Tuesday, April 21, 2015 -- Ducks

Active rigs:

	4/21/2015	04/21/2014	04/21/2013	04/21/2012	04/21/2011
Active Rigs	93	184	185	210	176

RBN Energy: getting Permian crude to the coast.

The flood of domestic light shale crude showing up at the Texas Gulf Coast by pipeline in the past two years is not best matched to most refineries in the region that are configured to run heavier crude. But flows across the Gulf Coast to refineries in the Mississippi Delta more suited to process light crude are constrained by a lack of pipeline capacity between Texas and Louisiana. New domestic shale crude has been delivered to eastern Gulf Coast terminals such as St. James by rail but narrowing coastal differentials to inland prices have reduced the CBR advantage. Today we detail how new pipeline projects promise to increase the flow of crude from Texas to the Eastern Gulf.

Last week we described the strong market share of takeaway capacity out of the Permian held by Plains All American (PAA) that is in the process of bringing the Cactus pipeline online linking Permian and Eagle Ford infrastructure (see When Are You Going to Come Down). Earlier this year PAA completed the Sunrise pipeline that facilitates 250 Mb/d of crude flows from Midland, TX to Colorado City, origin of the PAA/Magellan BridgeTex pipeline that now delivers up to 300 Mb/d of Permian crude to Magellan’s East Houston terminal (see Good Day Sunrise). Takeaway capacity out of the Permian has increased in line with growing production – especially in the Midland and Delaware basins as we described in our Come Gather ‘Round Pipelines series last year. Originally Permian crude flowed mainly to the Midwest Cushing, OK trading hub – delivery point for the CME NYMEX West Texas Intermediate (WTI) futures contract.

A surplus of supplies at Cushing led to infrastructure development to deliver Permian crude to the Texas Gulf Coast in the past two years – first from an extension to the Sunoco Logistics (part of Energy Transfer Partners) West Texas Gulf pipeline delivering to Houston and Nederland, TX in 2013 and then from the Magellan Longhorn reversal that now delivers up to 275 Mb/d Permian crude to Houston – joined by the Sunoco Permian Express I (150 Mb/d to Nederland) and then BridgeTex in 2015. A further 200 Mb/d will flow on the Permian Express II out of Colorado City by the end of summer 2015.

Reuters at Rigzone: No Need to Fear US Crude Supply Deluge.

Conventional wisdom holds that come June a pending $5.3 billion tax break in the No. 2 U.S. oil producing state, combined with a modest uptick in oil prices, will unleash a tsunami of new shale crude supply so big that prices may slump again.

Just one problem with that scenario: oil producers say this is not going to happen. The fear of a worsening supply glut, a recurring theme of many industry research reports and conferences over the past two months, is based on a view that U.S. shale producers have built up a heavy backlog of drilled but uncompleted wells (DUCs) that can be turned on quickly.

The assumption is that oil firms will finish work on those wells, known as "ducks" in the industry jargon, once oil prices recover further and North Dakota activates its tax relief in response to a long market slump.

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