Saturday, July 4, 2015

WhittenLog -- Just For The Fun Of It

Again, a huge "thank you" to Vern Whitten. His address and contact numbers are at most of the links below. Give him a "shout out."

We're having guests over this evening who have never seen the Bakken. This might be the fastest way for them to enjoy what we've enjoyed for years.

This was done quickly and there may be errors and/or broken links. If you see any (errors or broken links), let me know.

June 8, 2015
February 18, 2015
May 2013 -- December 2014
Summer 2014
More summer 2014 
February 2014
November 2013
October 2013
July 2013
June 2013
May 2013
Watford City, May 2013
Dickinson, May 2013
January 2013
November 2012
October 2012
May - June 2012

Summertime 2014

Clarification On Recent Discussion Over At The Discussion Group -- July 4, 2015

Over at the Discussion Group board, a reader clarifies a significant point with regard to "leases" and "permits" with regard to a discussion on expiring permits or leases.

Once a drilling unit has a well, that drilling unit lease is "held by production."

A productive well on a drilling unit will hold that lease by production, and subsequent wells in that same drilling unit will have the same conditions as the original lease. However, new wells still require a permit from the NDIC to be drilled. Permits are good for one year.

However, remember, in North Dakota, two wells could be sited next to each other and one could be on a 1280-acre drilling unit and one could be on a 2560-acre overlapping unit. I do not know if a well on a 1280-acre drilling unit "holds by production" a overlapping unit that does not yet have a well. I would assume that when one leases one's mineral rights, it does not matter the size of the drilling unit, once oil is produced from one's minerals.

At least that's my understanding, of what I know and don't know. I don't own any minerals so I can't say for sure if this is correct, nor can I say whether I have articulated it correctly. Do not make any decisions, financial, investment, travel, or otherwise, based on anything you read at this site or think you may have read at this site. If this information is important to you, go to the source.

Remember: another discussion group that tackles these and similar questions is the "Mineral Rights Forum." If one searches the net, one can find many, many sources; many, many opinions.

Tea Leaves -- July 4, 2015

The tea leaves continue to swirl. I still bet that US gasoline usage will hit an all-time record this August. If it does, it will be interesting if the mainstream media covers the record. It goes against all conventional "wisdom."

Everyone I talk to is quite surprised to hear that we are nearing an all-time gasoline demand record -- despite all the EVs on the road, and Elon Musk delivering a record number of Teslas this past quarter.

And despite the CAFE standards that have been put in place since Abraham Lincoln ran on the "green energy" ticket. And despite all the subcompacts being bought by millions of Americans on both coasts. And despite all the folks taking advantage of the best public transportation system in the world, the Los Angeles Metro.

But I digress.

What made me think (again) about the gasoline demand record possibly being broken this year was this story in the business section of today's Los Angeles Times:
The confrontation between competing tour bus operators on Hollywood Boulevard escalated quickly.
Jeff Napshin, owner of Star Track Tours, was distributing fliers on a busy corner a few months ago when an angry rival approached, ridiculing Napshin. Cellphone video shows Patrick Hickey, owner of Rockin' Hollywood Tours, getting more and more irate.
"Get that phone out of my face," Hickey shouted as he pushed the phone away, sending it crashing to the ground. On the video, Napshin can be heard complaining, "He just hit me. You witnessed it."
The tour bus business on Hollywood Boulevard has become ultra competitive — at times downright hostile. Operators are looking to score big profits from a recent surge in visitors to Los Angeles.
If the surge has already begun, it will only accelerate in August.  I know I'm doing my part, putting a lot of miles on my 2005 Chrysler minivan.

More data points from the article:
The rivalries among tour bus companies have become more heated as tourist numbers have climbed.
Los Angeles set a tourism record last year, with 44.2 million visitors, a 4.8% increase over the 2013 tally.
By the way, most of these tourists stay in motels and hotels and don't give a hoot about water restrictions and the California drought. Just saying.

Los Angeles Destination: Billionaires' Beach

High on my list this summer is to visit Carbon Beach in Malibu. I really doubt I will do it; it's such a pain to drive that far north along the ocean this time of year, but I would be doing my part to keep public access to California beaches a reality.

The Los Angeles Times is reporting:
In the decades-long struggle to make the beaches fronting California's well-heeled coastal communities more accessible to the public that owns them, a mile-long stretch of Malibu known as Billionaires' Beach has been the site of a particularly pitched battle.
And on Tuesday, the commission will officially announce the opening of another path about a half-mile from the Geffen property.
Activists call it an important victory in the fight between homeowners seeking privacy and people eager to expand their right to walk, run, lie and play on the sand, which is public property up to the average high-tide line.
The debate over the new Carbon Beach trail dates back more than a decade. Access proponents have long wondered why property owner Lisette Ackerberg, who supported many conservation causes, fought so hard to keep people off the public beach in front of the home she and her husband, the late Norman Ackerberg, built on the coveted stretch of coast.
If I go I will have to go alone. I would have to park several miles from the access point and take a bus or walk. The family unit traveling with me is unlikely to want to walk that far. I could park at one of my favorite "museums," The Getty Villa, and then walk the 5.8 miles to Billionaires' Beach. Three miles/hour -- two hours. Each way. Or better yet, bike it. I have a bike carrier and a bike out here; park the car at the Getty and bike to the beach. Hmmmm.....a great photo op.

Data Points -- July 4, 2015; My Favorite -- 43 North Dakota Counties Lie Inside The "Oil-Rich Williston Basin" -- The Dickinson Press; Global Warming To Result In Record ND Crops This Year; Hopefully A Milder Winter

I am agnostic apathetic when it comes to wind power. When I first started blogging about wind power I was very, very much against wind power because I felt folks who supported wind power were simply ignorant about the fact that wind power has not one redeeming feature. Now that anyone in positions to decide whether to support wind power should know the non-merits of wind energy, I have become agnostic apathetic on the subject. It's a democracy and if folks want to put up wind towers to feel good, that's fine with me. I don't have a dog in that fight.

A while back I had decided I would not post any more stories on wind energy and if you scroll through the blog you won't find many wind energy posts.

But periodically, it's important to post a story to keep track of the industry, simply out of curiosity.

So, the data points from this article in The Dickinson Press:
  • another out-of-state company wants to put in a wind farm in the middle of the Bakken to help Massachusetts meet its renewable energy mandate
  • one small project in North Dakota more than doubles total amount of renewable energy generated by the state of Massachusetts itself
  • the majority of Tioga-area farmers, ranchers, and neighbors like Massachusetts enough to do this
  • 75 lightning attractors in the middle of an oil field with too much flaring, 150 MW
  • $250 million project
  • $250 million / 150 MW = $1.7 million / MW
  • there are 43 counties in the oil-rich Williston Basin (North Dakota has 53 counties)
  • Williams County Zoning Commission voted overwhelmingly  (4 -1) to deny the project
  • still requires ND PUC okay
This particular wind farm is slightly more expensive than a previously approved ND wind farm. The Antelope Hills Wind Project northwest of Beulah in Mercer County was advertised for the same amount ($240 million, to be exact) for slightly more electricity than what the Tioga project is going to provide (172 MW - Beulah; 150 MW - Tioga). 

As a reminder,

From an August 25, 2014, post, this is 30-second sound bite for "cost of renewable megwatt":

  • Solar: $3 million / MW
  • Wind: $2.5 million / MW
  • Natural gas: $865,000 / MW
Meanwhile, Where It Counts

On a more pleasant note, the reports from the fields are incredible. The Dickinson Press is reporting that global warming has really helped the North Dakota farmers this year. Crops are looking good and two weeks ahead of schedule. A few more years of global warming and ND farmers will be able to put in three crops annually instead of just one or one-and-a-half. From the linked article:
Agronomists and farmers alike agree that spring and early summer weather patterns have created favorable growing conditions thus far in southwest North Dakota.
North Dakota has such a wide variety of crops that like different conditions. As an example, canola plants like cool conditions while corn prefers warmer temperatures.
The best part about the article: the photograph. Enjoy.

Wind Farm Costs In US vs India


July 4, 2015: I have no idea when I posted this story -- I guess it was first written January 31, 2013, based on the date of a linked article -- but I must have put it in draft and forgot all about it. It appears that while spell-checking the blog earlier today, this story was inadvertently posted. I will leave it here, although the data is a couple of years old. Take it for what it's worth: this article and $1.75 will get you a Starbucks in San Pedro, California.

However, since I wrote the article below, I am now aware of the delta between the price of a wind farm being built, and the price a "used" wind farm is sold for. This Indian wind farm below turns out to be so cheap because it's a "used" wind farm.
Original Post

As a rule of thumb, Don uses $2 million / megawatt as the cost to "build" a wind farm. That agrees with other sources. For example, at this source, the range was $1.5 million to $2 million / megawatt for wind farms. At that source, by the way:
Wind-generated electricity has become more economical to produce in the past 10 years, dropping from as much as 30 cents per kilowatt-hour to 4.5 to 7.5 cents, making it more competitive with other energy sources.
The cost to develop and build a wind energy facility is approximately $1.3 million to $1.7 million per megawatt, compared to a cost for gas-fired energy generation of $800,000 per megawatt.
But I digress. Another source:
The costs for a utility scale wind turbine in 2012 range from about $1.3 million to $2.2 million per MW of nameplate capacity installed. This cost has come down dramatically from what it was just a few years ago.
Most of the commercial-scale turbines installed today are 2 MW in size and cost roughly $3-$4 million installed. Wind turbines have significant economies of scale. Smaller farm or residential scale turbines cost less overall, but are more expensive per kilowatt of energy producing capacity. Wind turbines under 100 kilowatts cost roughly $3,000 to $8,000 per kilowatt of capacity. 
So, $2 million / megawatt of wind energy seems to be a good 30-second soundbite.

Don noted this today, a story coming from India:
DLF Ltd. said that it has entered into an agreement to sell a part of its wind power business for 2.82 billion rupees ($53 million) to Bharat Light & Power Pvt. Ltd., as part of its plan to raise money by offloading non-core assets.
DLF, India's biggest real estate company by sales, is selling a 150 megawatt wind power project set up in Kutch in the western state of Gujarat. 
$53 million / 150 MW --> $350K / megawatt, less than 20% what it would in the US.

I assume it has to do with decreased labor costs, lower materiel costs, and the fact that it's a "used" wind farm, not new, probably in need of some deferred maintenance.

But it begs the question of whether the tax credits inflate the value of these wind farms for companies who benefit from the tax credits, perhaps more than from the electricity they sell. But this is well beyond my understanding of the game.

For me, what's important is the 30-second soundbite for the cost of coal-powered facilities and wind turbine farms here in the US.

Update: Hess' Lodgepole Well, Short Lateral, One Mile Northeast Of Tioga, North Dakota -- July 3, 2015

Note: this page will not be updated. This well is now tracked here
  • 26738, 103, Hess, TI-Wao-157-95-14H-1, Tioga, t7/14; cum 16K 1/16.
February 19, 2017: update:

Monthly Production Data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

September 19, 2015: back on ACTIVE status; production profile most recent few months:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare


Update on this well. 

I posted this back on August 17, 2014:
  • 26738, IA, Hess, TI-Wao-157-95-14H-1, Tioga, this is a Lodgepole well; Hess will come back to this well on/about May 7, 2014, to drill this well to TD of 13,693 feet; and then complete it with a multi-stage acid frack; the company will core the upper and the middle Lodgepole; the company will also core the upper, middle, and lower Bakken; the company will core the 1st and 2nd benches of the Three Forks, and the upper 30' of the Three Forks third bench; 640-acre spacing for a Lodgepole well. [Updates: 12/14: no production since early September, 2014; Update: actually produced 60 bbls in one day in April, 2015; also noted that well is now IA (previously TA)]
Update As Of July 3, 2015

This is an important well. 
See notes below the production profile.

Update as of July 3, 2015:

NDIC File No: 26738    
Well Type: OG     Well Status: A     Status Date: 7/18/2014     Wellbore type: Horizontal
Location: NWNW 14-157-95     Latitude: 48.428849     Longitude: -102.923745
Current Well Name: TI-WAO- 157-95-14H-1
Total Depth: 13625     Field: TIOGA
Spud Date(s):  12/6/2013
Completion Data
   Pool: LODGEPOLE     Comp: 7/18/2014     Status: AL     Date: 8/19/2014     Spacing: ONE SECTION (640 acres)
Cumulative Production Data
   Pool: LODGEPOLE     Cum Oil: 7292     Cum MCF Gas: 199     Cum Water: 6520
Production Test Data
   IP Test Date: 7/18/2014     Pool: LODGEPOLE     IP Oil: 103     IP MCF: 0     IP Water: 148
Monthly Production Data
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Note the well is now active.

There were no new sundry forms after the August, 2014 update. The well was put on a pump o/a August 15, 2014.

The original geologist's summary back when the well was first drilled (the following includes direct quotes and paraphrasing, but mostly direct quotes):
  • this is an experimental well testing the production potential of the Middle Lodgepole 
  • thirty-foot lagged samples were caught from 9,568 feet through the end of the lateral section at 13,625 feet [short lateral] in the Middle Lodgepole formation
  • true vertical depth of the target formation: 9,219 feet
  • after the pumps were started gas would peak at 9,568 units (sic) before the gas buster came into use
  • "it should also be noted that the command center faced away from the flare stack and rig"
    "Neset personnel would intermittently leave the command center to look for a flare but none was observed"
  • saltwater based drilling fluid was used throughout the lateral
  • the target window would be ten feet
  • the Lodgepole is a massive body of limestone in the Madison group
Pilot hole core (plans):
Middle Lodgepole
  • 9110' TVD - 9290' TVD for a total of 180 feet of core
  • this core will include 30 feet above the middle Lodgepole, middle Lodgepole, and 30 feet below the middle Lodgepole; all of this core is in the Lodgepole
Bakken-Three Forks
  • 9550' TVD - 9780' TVD for a total of 230 feet of core
  • 20' above the Upper Bakken Shale, Upper Bakken, Middle Bakken, Lower Bakken, Three Forks 1st Bench, Three Forks 2nd Bench, and 30' of the Three Forks 3rd Bench
  • the rat hole for the open hole logs will end up in the Birdbear formation
  • spud rig: December 6, 2013
  • drilling rig: May 13, 2014
  • cease drilling: May 16, 2014 (3 days)
Completion: June 27, 2014
  • 37 stages
  • acid frack; no proppant 

The only other active well in the immediate area:
  • 8257, 176, McRae & Henry, Ltd, Gallagher 43-15, vertical Madison well, t7/81; cum 160K 5/15;
An interesting well in the area:
  • 12790, 242/115, Hess, Pederson 14-33, Silurian/Ordovician, the Silurian was drilled in 1991; before it was abandoned at the end of 2008, cum 814K bbls of oil; 1.4 bcf gas
Note: in a long note like this, there will be factual and typographical errors. I have no formal training in oil and gas exploration and I may have missed important points and/or misinterpreted data. If this information is important to you, go to the source.