North Dakota Tax Revenue, 1Q22

Link here.

2021 numbers, link here:

North Dakota Budget Talk -- 2021 - 2023 Biennium

Locator: Outrigger10010.

I normally don't pay much attention to North Dakota legislative activity, but a four-hour flight from Grapevine, TX, to Seattle, WA, gave me an opportunity to spend some time doing just that. 

I was surprised how interesting this all was.

Some data points from Geoff Simon's top ND energy news for the week:

• ND legislative appropriations committee adopted an interim revenue forecast for the 2021 - 2023 biennium;
• income forecast:
• $40 / bbl through the biennium
• production to decline to 1.1 million bpd (2021-2022)
• production to decline to 1.0 million bopd (2022-2023)
• this would add just under $3 billion in oil tax collections over the coming biennium;
• compares to $3.5 billion expected in the current biennium (2019 - 2021)
• expenditures:
• $434 million to western North Dakota (formulaic)
• that would be down about 16% from the $518 million in the current biennium
• Legacy Fund: would realize $780 million in deposits
• from that $780 million:
• Common Schools Trust Fund: $127 million
• Foundation Aid Stabilization Fund: $127 million
• Three Affiliated Tribes: $373 million
• other income:
• sales tax revenue: $1.74 billion
• personal income tax: $816 million
• corporate income tax: $260 million
• motor vehicle excise tax: $260 million

Director's comments with release of Director's Cut:

• monthly crude oil production held steady due in part of 74 new well completions in November
• look at this: in December, 44 wells were completed, most of which were credited to the state's CARES Act frack incentive -- Helms said the number of completed wells in December would have likely dropped to zero without that incentive
• unlikely to see an increase in drilling activity unless prices stabilize above $55/bbl
• the industry continues to meet the natural gas capture target, 93%
• slightly slower on the reservation due to difficulty obtaining right-of-way for construction of gating pipelines (flaring will become less of a problem on federal land if the DAPL is shut down)
• mentioned the completion of Outrigger Energy's Sanderson NGL processing plant 15 miles west of Williston; capacity: 250 million cubic feet of gas per day (42,000 BOEPD?)

DOT:

• proposed budget: $1.8 billion for new biennium
• about $400 million more than current biennium
• that $400 increase possible if bonding (Legacy Fund) proposal accepted
• widening US Highway 85 from Watford City to I-94
• 2021 - 2023 budget includes $50 million to widen US Highway 85 from Watford City south to Long X Bridge
• requires US Congressional support
• phase 2: US Highway 85 from Long X Bridge to state highway 200
• phase 3: US Highway 85 from state highway 200 to I-94

On Track For About 1,500 New Oil And Gas Permits For North Dakota For CY19-- November 17, 2019

As of November 16, 2019, it is projected that there will be a total of about 1,466 new oil and gas permits for North Dakota (99% Bakken permits) for calendar year 2019 based on current permit activity. With permitting possibly slowing down over the holidays, final tally may be around 1,450.

Permit activity for 2019 are tracked here.

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North Dakota Budget

This is "old" news -- reported back in August, 2019, but I can't remember if I posted the data.

Here it is, from this site. Data points:

• North Dakota's 2017 - 2019 budget cycle ended June 30, 2019
• revenues collected was 5.4% ahead of its general fund revenue forecast
• general fund exceeded the March, 2019, legislative revenue forecast by nearly $250 million
• "largely thanks to a larger-than-expected transfer of Legacy Fund earnings and more robust collections of sales and income taxes"
• more than $455 million in Legacy Fund earnings were transferred to the state's general fund in July, 2019
• previously reported: state representatives are asking the public how to spend all this money

I suspect November, 2019, Legacy Fund deposits will be reported this next week. Link here.

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Life on Earth

I get a kick out of the space probes looking for water. It's pretty much universally agreed that life requires water. Period. Dot.

Earth has water. Big deal.

What's impressive is how much water it has. No one ever seems to mention that. Scientists would be thrilled to find an ounce of water on Mars to prove life could exist there (or did exist there). And yet, no one ever mentions how much water there is on earth in these kinds of discussions.

Just saying.

North Dakota's General Fund Revenues Exceeded Forecast; 2017 - 2019 Biennium Closed Out

From The Bismarck Tribune: general fund revenues exceed North Dakota legislature's forecast. Data points:

• last two-year budget cycle came in at 5.4% over the forecast adopted in March, 2019
• most of the overage due to an excess of earnings from the Legacy Fund 
• that's how Warren Buffett describes his Berkshire earnings: as an excess ... LOL
• the 2017 - 2019 biennium ended June 30, 2019, with $250 million in general fund revenues
• $250 million / 800,000 = $300/person
• total collected in the biennium: $4.91 billion
• actual general fund revenues exceeded the 2017 forecast by 13.5%.

See Kiplinger's negative report about North Dakota, January, 2019. It gets tedious.

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The Apple Page

Six years ago, or thereabouts, I decided it was time to buy a new iPad. I was still using an old iPad version 2. I think Apple is well into version 6 or greater, and now with many, many different versions.

Version 2 became available in 2011. Version 3, which we did not buy, became available in 2012. 

I finally bought one -- at Costco. The 12.9" iPad Pro -- the largest available.

I made the decision after my son-in-law commented on how incredible he found the iPad Pro.

Wow, it is incredible. Set-up was 20 seconds; about three steps. Connected seamlessly to remote speakers. Synced automatically with all other Apple devices we have.

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The Book Page

For the weekend, a small little hardcover:

• The Weil Conjectures: On Math and the Pursuit Of The Unknown, Karen Olsson, c. 2019.

Bought unseen after reading a review in WSJ a few weeks ago.

The author:

• author of novels Waterloo; and, All The Houses
• has written for The New York Times Magazine, Slate, Bookforum, and, Texas Monthly
• former editor of the Texas Observer
• graduate of Harvard University with a degree in mathematics
• lives in Austin, TX

Jacket synopsis begins: Karen Olsson's stirring and unusual third book, The Weil Conjectures, tells the story of the brilliant Weil siblings -- Simone, a philosopher, mystic and social activist, and André, an influential mathematician -- while also recalling the years Olsson spent studying math.

North Dakota 2016 Taxable Sales And Purchases

North Dakota 2016 Taxable Sales and Purchases.

Huge, Huge Cattle Auction In Southwestern North Dakota; North Dakota State Budget Hits School Funding -- December 18, 2016

State cuts in public school funding coming to North Dakota. From The Williston Herald, data points:

• oil revenue down
• new budget released by the governor: $13.7 billion; $2 billion less than proposed budget two years ago
• foundation aid makes up 60% of the Williston district's budget; that will be frozen during first year of the biennium
• possibly a 1% rise the following year of the biennium: $9,646/child; up from $9,742/child
  2007 - 2008: 2,100 students
• currently: 3,735 students, a 56% increase, but Rapid Growth funding will be nonexistent in the new budget

North Dakota budget: probably easiest to read is at Ballotpedia.

• Between fiscal years 2014 and 2015, total government spending in North Dakota increased by approximately $1.2 billion—from $6.6 billion in fiscal year 2014 to an estimated $7.7 billion in 2015. This represents a 15.1% increase

A biennium budget always confuses me but I suppose Ballotpedia's 2015 $7.7 billion is one-half the biennium budget. If so, that equates to $15.4 billion vs $13.7 billion this biennium.

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Bowman Auction Market

Updates

 First we had:

• the Chisholm Trail
• the Santa Fe Trail
• the Oregon Trail

Now, we have the Bowman Trail:

Original Post

 

I'm hoping the national press picks up this story. I've sent a note to a reporter over at The Wall Street Journal. I don't follow the cattle "industry" in North Dakota but a reader tells me this is huge. He says that this is the largest livestock auction in Bowman in history, or at least in his history. The announcement is at the Bowman Auction Market. He says there are 4,250 head of cattle to be auctioned. I did not count, but it looks about right.

According to the reader, 4,250 head of cattle works out to fifty-five (55) semi-trucks / cattle trucks. If I see a convoy of a dozen or even two dozen cattle trucks on the road, it would catch my attention. I assume all trucks won't all be full -- different destinations, etc. -- so we could easily see five to six dozen of trucks leaving Bowman on January 9, 2017.

It's almost worth a special trip to North Dakota just to see this.  Maybe Vern Whitten will be flying that day: if so, take an aerial photo of the auction site on January 9, 2017.

In case I forget: can someone send me a note if any newspaper reports the results of this auction?

I was going to post a trucking song but wanted to go with something a bit different:

Cattle Call, Eddy Arnold

Update On North Dakota's Legacy Fund -- October 2, 2016

I track the Legacy Fund here.

Note: deposits do not equal asset value. Through September:

• deposits to date: $3.640 million (through September)
• value of assets (deposits + returns): $4.012 billion (through August)

September, 2016, from The Dickinson Press:

• equity (common stock): 50%
• fixed-income assets: 35%
• diversified real assets: 15% (real estate, 5$; infrastructure and inflation-linked securities, 10%) 
• has generated a return of 2.8% annually since inception
• a revised investment strategy adopted in 2013 set the long-term goat at 4.6%, but returns so far have fallen far short, just 1% for the most recent fiscal year that ended June 30
• lawmakers cannot spend from the Legacy Fund until July 1, 2017; but then in 2017, Legacy Funds must start to be transferred to general fund
• 2017 - 2019, biennium expectations: the Fund should generate about $120 million in earning
• the politicians will start to debate whether / when to start spending that money

Through September 2016, total deposits were $3,640,877,477. Another $31.9 million was deposited in September; slightly above this year's average but below August's deposit of $35.3 million, and a far cry from record high deposit of $117 million in August, 2014 (just before the Saudi surge and Saudi's trillion-dollar mistake)

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A Note For The Granddaughters

Cooking

Sophia's great-grandfather, Carl, is 95-years-old. He is in great health, great physical health, ambulates on his own, and his investment acumen is as good as ever. A couple of years ago he stumbled on the idea of giving a copper pan "as advertised on TV" to family members and friends. But to get one, one must visit him in person.

Our younger granddaughter Laura and I visited him last week. Laura and her husband Tim already had their frying pans, from an earlier visit, but this time, I got one. It took three visits before Dad agreed to give me one. I'm not sure why, but it is what it is.

Today, we (Sophia and I) tried out the pan. As good as advertised.

This was the note that accompanied the movie when I posted it on Facebook:

Great-grandpa Carl might give you a copper pan, but you have to visit him in person. Depending on his inventory, he may or may not have a pan for you. I was one of the lucky ones to get a pan when I visited him in North Dakota last week. Sophia and I had eggs over easy this Sunday morning. 

North Dakota's Triple-A Rating Downgraded A Notch By S&P -- February 23, 2016

From Investor Village:

North Dakota lost its Standard & Poor's triple-A rating because of the impact of oil price volatility on the state's economy.

S&P lowered the state's issuer credit rating one notch to AA-plus late Thursday. The rating agency also lowered the state's appropriation debt rating one level to AA from AA-plus, and the state's moral obligation-backed debt rating by two notches to A-plus from AA. The outlook on all the ratings is stable at the lower level.

"The downgrade reflects our view of increased volatility in the state's economy that has translated into a projected $1.074 billion, or 22%, general fund revenue shortfall for the 2015-2017 biennium," said Standard & Poor's analyst Carol Spain.

"We were dismayed that S&P downgraded North Dakota's AAA rating, especially because the state has planned for possible downturns by building up our reserve funds and protecting the structural balance of our budget by focusing on one-time infrastructure investments verses ongoing operations," said Office of Management and Budget director Pam Sharp. "We believe the financial condition of the state is still very solid."

This month North Dakota dipped into its $572 million budget reserve to the tune of $497 million to help cover a $1 billion shortfall in revenue for the 2015-2017 biennium triggered by falling crude oil prices. The budget forecast assumes West Texas Intermediate crude oil prices of $30 per barrel as of January 2016 that gradually transition to $43 per barrel by June 30, 2017.  [Comment: I think this is way too optimistic.]

The state had already implemented across-the-board budget cuts of 4.05% to make up for the shortfall in a $6 billion general fund budget for the current two-year cycle that began in July 2015. Another $75 million remains in the reserve fund, which is earmarked to provide further relief if the economy hasn't turned around by the state's next revenue forecast, which is scheduled for the summer.

 

S&P had previously cited North Dakota's strong reserves as a credit strength mitigating its vulnerability to oil sector decline. However the February drawdown on reserves increases the state's susceptibility to a downturn in the oil industry.

CLR Lost Almost $700 Million On Bet Price Slump Wouldn't Last Long -- February 1, 2016

Here is the "Bing" poll that was taken before the actual numbers come out tonight, we'll see how good Microsoft search engine is as it pertains to predicting election results:

• Hillary Clinton: 50.1%
• Sanders: 46.8%

• Trump: 39.8%
• Ted Cruz: 30.5%
• Marco Rubio: 12.9% 

Wow, it looks like Bing really blew it with regard to the GOP. The actual numbers:

• Cruz: 28%
• Trump: 24%
• Rubio: 23%

Even on the Democrat side, Bing failed to show how close the Hillary / Sanders race really was: 50 / 50. O'Malley got the other 0%. And calls it quits.

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Chinese Oil Demand Posts Fastest Growth Since 2011

Platts is reporting:

China's apparent oil demand in 2015 grew 5.8% year on year to 11.11 million b/d, the fastest pace since 2011, despite the country's economy growing at the slowest rate since 1990, Platts calculations based on recently released official data showed.

Apparent demand in 2011 expanded at 7.1% on year to 9.62 million b/d.

The strong apparent demand in 2015 was driven by transportation fuels gasoline and jet/kerosene, as well as LPG and fuel oil.

But Platts China Oil Analytics expect the country's oil demand growth to slow to around 2.4% in 2016.

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North Dakota Budget Update

North Dakota facing $1 billion shortfall; governor orders agencies to slash 4% from budgets; link at Dickinson Press.

The new forecast predicts general fund revenues will fall $1.074 billion short of the March forecast that state lawmakers relied upon when crafting a $6 billion general fund budget for the current two-year cycle that began July 1. Revenues were already $215 million below forecast from July through December.

To make up the shortfall, Dalrymple announced across-the-board cuts of nearly $245 million, or 4.05 percent, for state agencies that receive general fund dollars, which is most of the 73 agencies. That’s deeper than the 2.5 percent cut required by state law when an updated forecast predicts that revenues will be 97.5 percent or less of what was projected in the legislative forecast.

Dalrymple also will draw $497.6 million from the state’s Budget Stabilization Fund, leaving roughly $75 million in the rainy day fund for what he called the “unlikely event” that the July revenue forecast would be even worse.

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CLR Update

From Forbes, Harold Hamm Expects $60 Oil, Says America Will Double Output Again --

“Some people didn’t pull back as fast as they should have,” says Hamm. “They are pulling back now.” Hamm’s move represents capitulation of a sort. In late 2014 he decided to sell off all of Continental’s oil price hedges for $400 million, betting that prices would soon recover. They didn’t, and Continental missed out on about $700 million in proceeds that those hedges would have generated. No surprise, he’s even more bullish now. Prices are “unsustainable,” he says. “People aren’t making any money.”

These bad days won’t last. America’s oil output has already turned down from 9.6 million barrels per day to 9.2 million bpd. Hamm, backed up by analysis from his resident team of data eggheads, expects the declines to accelerate as drillers capitulate. Each passing month will shave another 125,000 bpd off U.S. output — adding up to about 1.5 million bpd this year. As it happens, that’s almost precisely the same amount of oversupply currently sloshing around world markets, according to Energy Aspects, a consultancy.

Legacy Fund Through December, 2015 -- December 30, 2015

Through December 2015, total deposits were $3,371,343,566.76.  Up about 3.3% from September 22, 2015; about $4,500 per North Dakota resident.

As a reminder, the bulk of the Legacy Fund comes from oil and gas tax revenue: thirty percent of total revenue derived from taxes on oil and gas production or extraction must be transferred by the State Treasurer to a special fund in the state treasury known as the Legacy Fund.

Let's assume the increase between December and September was all related to oil and gas tax revenue (not from other sources or from investments): the growth was $112,666,378. Thirty percent of what = $113 million? $338,337,471. From September 22, 2015, to "through December" is about two months. $338 million / 2 = about $170 million / month = about $2 billion / year.

State budgets as reported by wiki.

MinnesotaCBS, from January, 2014.

Link here for Legacy Fund numbers.

Previous post: 

• As of September 22, 2015, total deposits were $3,258,677,188.91.

Somewhat related previous posts:

• November 5, 2015: funding the Red River Valley Water Supply Project  
• June 16, 2015: fees 
• October 18, 2014: Legacy Fund ballooning 
• July 17, 2014: Legacy Fund receives biggest deposit to date -- $112 million 
• June 23, 2014: the cash piles up 
• May 30, 2014: strategy for investing Legacy Fund deposits  
• May 22, 2014: fund goes over $2 billion; now averaging $80 million / month in deposits 
• February 12, 2014: North Dakota budget and fund 
• August 29, 2013: update on Legacy Fund 
• April 16, 2013: fund tops $1 billion 
• May 2, 2011: North Dakota budget 

North Dakota's Shortfall Grows -- November 21, 2015

The Dickinson Press is reporting:

North Dakota’s tax revenues fell short of projections by nearly $49 million in October, marking the third consecutive month of lower-than-expected collections and prompting the state budget office to discuss updating the forecast given to lawmakers in March.

Overall tax revenues are $112 million, or 7.5 percent, less than projected for the first four months of the 2015-17 biennium that began July 1.

Depressed crude oil prices and farm commodity prices continue to put a major dent in sales tax collections, which came in about $38 million, or 31 percent, below forecast in October, after being down $23 million in September and $44 million in August.

Back on September 23, 2015, we were first alerted to this.

Legacy Fund

Monthly deposits.

Legacy Fund data here.

Legacy Fund financial statements.       

North Dakota state government site: Legacy Fund.

North Dakota budget: probably easiest to read is at Ballotpedia.

North Dakota state office of management and budget.

Legacy Fund News

Politics, June 18, 2016

 Updates 

May, 2019: annual report; total assets stand at $5.4 billion. Callan Investment doesn't change investment mix. Everyone happy. 

May, 2019: the May, 2019, deposits, up nicely from previous month.

April, 2019: the April, 2019 deposits, down slightly from previous month. 

March, 2019: the March, 2019, deposits recover from the February, 2019, deposits. 

January, 2019: huge drop in deposits, as expected. 

December, 2018: despite significantly lower oil prices, December deposits were greater than the previous month. 

July, 2018: huge jump.

June, 2018: nice recovery.

May, 2018: deposits "recover." May 25, 2018: earnings top $1 billion; Callan Investment doesn't change investment mix. Everyone happy. 

April, 2018: deposits take a surprising drop. 

September 10, 2017: Legacy Fund deposits break through $4 billion (deposits only; not net assets). [Note: actually, this appears to have happened in August, 2016 -- see below.]

November 30, 2016: total deposits (this is not the net asset value) -- $3,700,055,301 through November, 2016. A little over $3.7 billion. It looks like $59 million was deposited in October and November, averaging about $30 million/month; comparable to deposits in September, 2016. OPEC meeting today cut production; price of oil jumped from around $45 to $49.

September, 2016, from The Dickinson Press:

• equity (common stock): 50%
• fixed-income assets: 35%
• diversified real assets: 15% (real estate, 5$; infrastructure and inflation-linked securities, 10%) 
• has generated a return of 2.8% annually since inception
• a revised investment strategy adopted in 2013 set the long-term goat at 4.6%, but returns so far have fallen far short, just 1% for the most recent fiscal year that ended June 30
• lawmakers cannot spend from the Legacy Fund until July 1, 2017; but then in 2017, Legacy Funds must start to be transferred to general fund
• 2017 - 2019, biennium expectations: the Fund should generate about $120 million in earnings
• the politicians will start to debate whether / when to start spending that money

Through September 2016, total deposits were $3,640,877,477. Another $31.9 million was deposited in September; slightly above this year's average but below August's deposit of $35.3 million, and a far cry from record high deposit of $117 million in August, 2014 (just before the Saudi surge and Saudi's trillion-dollar mistake)

At the of August, 2016, assets valued at $4.012 billion.

Through July 2016, total deposits were $3,573,621,493.

Through June, 2016, with June deposits of $28 million, total deposits will go to $3.8 billion. Schmidt said the Legacy Fund will hold $3.8 billion with the June transfer of $28.3 million.

Through March 2016, total deposits were $3,464,584,292.

Through February 2016, total deposits were $3,441,607,729.

Through December 2015, total deposits were $3,371,343,566.76.

November 5, 2015: funding the Red River Valley Water Supply Project
September 22, 2015: $3,258,677,188.91.

June 16, 2015: fees

October 18, 2014: Legacy Fund ballooning

July 17, 2014: Legacy Fund receives biggest deposit to date -- $112 million

June 23, 2014: the cash piles up

May 30, 2014: strategy for investing Legacy Fund deposits

May 22, 2014: fund goes over $2 billion; now averaging $80 million / month in deposits

February 12, 2014: North Dakota budget and fund

August 29, 2013: update on Legacy Fund

April 16, 2013: fund tops $1 billion

May 2, 2011: North Dakota budget

It WIll Make The State Meaner, Leaner -- July 27, 2015

Updates

November 21, 2015: revenue shortfall grows. 

October 4, 2015: The Dickinson Press provides update on metropolitan debt in western North Dakota: 

First, the revenue, the forecasts of the gross production tax revenues drawn from oil industry and allotted to the cities through distributions from the state. Three figures: first figure is the revenue distributed by the state back to the city in surge funding (one-time funding last spring). The second figure is the forecast from the last legislative session in January, 2015. The third figure is uses oil prices from August, 2015 (all figures in million of dollars, and rounded):

• Williston: $64; $38; $36
• Tioga: $11; $4, $3.4
• Stanley: $17; $3; $3
• New Town: $9; $4; $4
• Watford City: $32; $12; $11
• Killdeer: $9; $4; error?
• Dickinson: $44; $22; $20

Now, the debt going into next year:

• Dickinson: $113 million
• Watford City:
• Minot: $85 - $100 million; after bond issue in November, $102 million
• Williston: $131 million (lock box: $70 million for new recreation center to be financed through special sales tax)

Disclaimer: I've never followed very closely nor understand well the budget process in these metropolitan areas. If this information is important to you, go to the source.

Let's put the Williston debt in perspective:

• According to Google, Harold Hamm's net worth in 2015 is: 9.4 billion
• Williston's debt is about $130 million + the $70 million for the rec center (which I think is already paid for through the sales tax, but I could be wrong on that).
• Regardless $200 million (Williston debt) / $9.4 billion (Harold Hamm's net worth) = 2%.
• Harold Hamm could write Williston a $200 million check and not even notice it.

Original Post

The Bismarck Tribune is reporting:

North Dakota’s top oil regulator says the current slowdown in oil drilling “is not a bust by any stretch of the imagination” but will put a strain on state revenues in the next two years.

Really? How bad is it? Only $100 million more than what was projected.

Oil tax revenues helped North Dakota close out the 2013-15 biennium that ended June 30 with a $699.7 million balance in the state’s general fund, or about $100 million more than what was projected when the Legislature adjourned in April, according to preliminary figures from Office of Management and Budget Director Pam Sharp. The final balance will be available next month, she said.

What about flaring?

Department of Mineral Resources Director Lynn Helms also said low crude prices could prevent the state from reaching its goal of reducing flaring to 10 percent by October 2020 because natural gas processing projects have been suspended as the price of natural gas liquids has followed oil prices down. Eighteen percent of the state’s gas was flared in May.

Permitting?

The state is still receiving about 20 drilling permit applications daily, a “fairly rapid” pace.

The monthly dockets?

The state Industrial Commission was hearing about 185 to 200 oil and gas well cases per month in October and is now hearing about 100 cases per month, similar to 2009-2010 levels, while permitting numbers are back to 2011-12 numbers.

You know, awhile back the state paid a lot of money for an outside contractor to study the future of North Dakota based on oil. It's too bad the contractor did not provide data based on $50-oil. I think the contractor used $100-oil as the floor.

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Later: I didn't think I could find that study referred to in the last paragraph above, but here is the study, and the comment I placed when posting that study:

The most glaring short-coming (obviously one can say this in hindsight), KLJ did all their studies based on three price-points for oil: $70/bbl; $85/bbl; and, $100/bbl.

In hindsight, they needed to take this to $50/bbl which is very possible for the next two to three years. (It is very possible but very unlikely.)

$50-oil won't shut down the Bakken but it changes the economic picture and the impact on North Dakota dramatically. In fact, the impact with $50 oil might be greater than if oil goes to $150 for the next five years. The contractor was lucky to complete this study by September, 2014, before the plunge in oil prices.  

Random Update On Busy Area In North Fork Oil Field; Despite Drop In Oil Prices, Bakken Economy Numbers Still Huge -- February 3, 2015

Updates

July 27, 2016: update today shows that all wells either remain on confidential list of have become DUCs. The conf wells that have moved to DUC status since last update:

• 30280 - 30282 (3 wells)
• 25199 - 25202 (4 wells)

I don't see any production numbers from any of these wells (except for the 2009 well (#17291). If the wells on confidential status are producing, folks may be getting royal checks for those wells. I would not know.

Original Post

Random look at busy area in the Bakken, North Fork oil field 

NOTE: Do not update this page. The Merton / Jerome wells are now tracked at this post.

 
In the graphic below (it looks like the "Jerome" wells run south; the "Merton" wells run north):

The first well:

• 17291, 756, BR, Jerome 1-15H, t2/09; cum 312K 3/20;

A 3-well pad on confidential list:

• 30485, 500, Jerome 14-10MBH, North Fork, t4/19; cum 280K 3/20;
• 30486, 178, Merton 14-10MBH, North Fork, t4/19; cum 305K 3/20;
• 30487, 77 (no typo), Merton 14-10TFH ULW (suggests a 2560-acre spaced well), t3/19; cum 326K 3/20;

A 3-well pad on confidential list

• 30280, 3,327, BR, Merton 21-15TFH, North Fork, t9/16; cum 491K 3/20;
• 30281, 3,487, BR, Merton 21-15MBH, North Fork, t9/16; cum 382K 3/20;
• 30282, 2,806, BR, Jerome 21-15MBH, North Fork, t9/16; cum 294K 3/20;

A 4-well pad on confidential list

• 25199, 2,928, Merton 21-15MBH 2NH, North Fork, t8/16; cum 541K 3/20;
• 25200, 1,776, Jerome 21-15MBH 2SH, North Fork, t8/16; cum 491K 3/20;
• 25201, 3,360, Merton 21-15TFH 3NH, North Fork, t8/16; cum 461K 3/20;
• 25202, 1,536, Jerome 21-15TFH 3SH, North Fork, t9/16; cum 357K 3/20;

A 4-well pad on confidential list

• 30221, 566, Merton 41-15MBH, North Fork, t9/18; cum 354K 3/20;
• 30222, 470, Jerome 41-15MBH, North Fork, t9/18; cum 292K 3/20;
• 30223, 378, Jerome 41-15TFH, North Fork, t9/18; cum 275K 3/20;
• 30547, 348, BR, Merton 41-15TFH ULW, Croff, t10/18; cum 363K 3/20;

There were four BR permits in the graphic that were canceled.

The Dickinson Press is reporting:

In previous budget projections, the North Dakota State Water Commission -- the state agency that pays for water projects throughout the state -- was expected to receive an estimated $930 million to put toward water infrastructure.

But with the drop in international oil prices triggering revisions to the state budget, that number could now be down to an estimated $500 million.

The loss in revenue could cause the Southwest Water Authority to reassess its proposed $100 million budget for the 2015-16 biennium.

Prior to the surge in oil development in North Dakota, the Water Commission's budget averaged around $20 million to $30 million.

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Three Important Links For Global Warming Deniers

Three Really Important Links For Warmists (of those warmists who still "believe" in science)

Turns out: the math was wrong: Australia. 

Conclusion: Resolving the discrepancies between the methodology adopted by IPCC in AR4 and AR5 is vital. Once those discrepancies are corrected for, it appears that the impact of anthropogenic global warming over the next century, and even as far as equilibrium many millennia hence, may be no more than one-third to one-half of IPCC’s current projections." The link takes you to a PDF.

And then this: if you read this article closely, you will see that warmists do not simply use the temperatures reported/collected; they pick and choose the temperatures they put into the model (for quality control) and then massage the numbers. As an example, if a scientist reports a temperature for a certain location that "seems" to low to be accurate, the UN modelers will declare that temperature and outlier and not include it in the data. They will exclude outliers. They will very likely include "outliers" if the temperatures on the high side, but will exclude "outliers" if the temperatures are on the low side since those temperatures won't fit their theory. 

Who's Managing North Dakota's Riches; Oops, I Did It Again -- I Started A Joke

Who's managing North Dakota's riches? The Dickinson Press is reporting:

North Dakota has been in the investment game for more than a century, starting with the trust lands established at statehood to support schools and colleges. But it’s only since the latest oil boom began that the state’s really been a major player.

The state Legacy Fund, a lock box for a portion of the state’s oil-tax wealth that was created in 2010, is now worth about $2.2 billion. The state Department of Trust Lands, which leases out North Dakota’s oil-bearing property, has about $4.6 billion — an increase of about 350 percent from fiscal year 2009, when the boom was just beginning.

And that doesn’t include another $7.2 billion in pensions and various other investment funds.

Managing the money:

Two agencies are largely responsible for investing North Dakota’s wealth in the financial markets. The Retirement and Investment Office has most of it, including the Legacy Fund. The Department of Trust Lands has the rest.

At the top of the organizational chart for each agency is a governing board. The RIO is governed by the 11-member State Investment Board with Lt. Gov. Drew Wrigley as chairman, while Trust Lands is governed by the five-member Land Board, with Gov. Jack Dalrymple as chairman.

Some of the advisors:

Some management firms, such as Goldman Sachs and JPMorgan, are well-known. Others, such as InvestAmerica in Cedar Rapids, Iowa, are low-key.

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Last night my only problem was deciding which video of "I Started A Joke," by the Bee Gees, to use.

That problem resolved itself. Tonight, I can upload the other video of "I Started A Joke" by the Bee Gees.

I Started A Joke, The Bee Gees
McClatchyDC is reporting Vice President apologizes for the second time in two days for starting a joke that wasn't very funny.

Labor Day Weekend, 2014; Return Trip To Grapevine; Not Much About The Bakken

On the road; won't be posting as often, consistently for next few days.

Mama's Broken Heart, Miranda Lambert

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I just saw the closing price for Friday, August 29, 2014, for CLR.

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

What else?

North Dakota awash in oil royalties -- collecting way more than forecast.  The Dickinson Press is reporting:

North Dakota is poised to collect nearly $9.8 billion in oil tax revenue during the next two years and $2.2 billion more than previously forecast for 2013-15, according to a new outlook released Friday that had elected leaders calling for additional tax relief, greater funding for western counties and more accurate forecasts.

The preliminary forecast from the state Office of Management and Budget assumes that oil production will grow to 1.3 million barrels per day by the end of the current biennium on June 30, 2015, and to 1.4 million barrels per day by the end of the 2015-2017 budget cycle, OMB Director Pam Sharp said.

Gov. Jack Dalrymple noted that the revised projection for 2013-15 shows general fund revenues of $4.88 billion, or about $285 million more than the legislative forecast prepared in February 2013.

The general fund, which covers the general operations of state government, is projected to end the biennium with a balance of $614 million – eight times higher than the $80 million projected in the legislative forecast and $157 million more than an update Sharp presented to state lawmakers in March.

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North Platte, NE: I see the local newspaper has this headline: "Russia Outright Lied -- Obama." The story has to do with the Ukraine. "Outright lied." Sort of like ObamaCare -- "If you like your health plan, you can keep your health plan."

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Global Warming

Speaking of outright lies (their words, not mine):

• Australian meteorologist: Accused of criminally adjusting data to show “global warming” where none actually exists. [Australia weather bureau admits it tampered with weather data -- September 2, 2014.]
• Myth of Arctic meltdown: satellite images -- a) thicker, and, b) 1.2 million square kilometers more extensive than two years ago; Arctic was to be ice-free by now -- Algore.

Can't make this stuff up. And there's more (must have been a slow news cycle this labor day weekend):

Europe at a tipping point: note the many interesting data points in this article, as reported by Bloomberg:

• in Europe, it was the coolest August since 2006
• inventories of heating oil in private homes in Germany at their highest since 2011
• Germany's solar output is forecast to peak at 20 gigawatts on September 5, 2014 (the record was 24.2 gigawatts on June 6) [Germany and the EU count wood-fired plants as renewable energy; considered "carbon-neutral" -- really?]

So, how fast have global temperatures risen? From the "leaked" UN paper? 0.85 of a degree since 1880. Again, not even a full degree in 135 years. I'm impressed how accurate the "science" of global warming was in 1880. The rise in sea level since that time was measured in millimeters.

From the land of fruits and nuts. California's state Assembly passed a bill requiring railroads transporting Bakken and Canadian oil to inform the state of such movements; meanwhile the same state Assembly rejected a bill to require background check on ammunition buyers. So, apparently nine-year old girls can buy ammunition for their Uzis without a background check. Or at least their parents can.

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Russia is one of Germany's major trading partners. I can't imagine Germany being eager to cooperate much with President Obama's call for more sanctions on Russia. 

... coincide with figures showing annual inflation slowed to 0.3 percent in the euro zone this month. That was the weakest rate of growth since October 2009 and marks 11 consecutive months of prices growing by less than 1 percent.

The deflationary danger policy makers have been denying for months may be upon them.

This adds to the gloomy outlook in Europe. One-, two- and three-year yields are negative in Germany, meaning investors are paying for the privilege of the perceived safety of German debt. A critical money-market rate, the Effective Overnight Index Average -- Eonia for short -- dropped below zero for the first time yesterday, reaching -0.004 percent.

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I see the Islamist State has taken a US Embassy residential compound in Libya (news report August 31, 2014). Of course it's not THE "Islamist State of Iraq and Syria (ISIS)." But ISIL's self-proclaimed status as a caliphate it claims religious authority over all Muslims across the world. Whatever. Wasn't it just this past Thursday the president said he would protect US embassies and consulates? No more Bengahzis. Yes, I know, US citizens left the Libyan embassy a month ago or so. A hasty retreat.

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Note to the Granddaughters

I stayed overnight with friends in Bowman. Departed about 10:30 a.m. Saturday morning; now in Sturgis. Looks like a mini-motorcycle rally; weather is perfect.

Short stop in Sturgis. 2:03 p.m. Saturday.

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Chadron, NE: short stop at 4:45 p.m. Incredibly beautiful countryside; lots of water in the creeks, rivers. Lots of cattle.

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North Platte, NE: short stop at 9:25 p.m. Again, a great drive, beautiful countryside, but now, we begin the drive at night. End of scenery.

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Salina, KS: short stop at 7:25 a.m. Sunday. Slept west of Hays, KS, during the night. Good rest. Big electrical storm during the night; lots of rain.

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Travel center south of Wichita, KS,  9:44 a.m. Sunday. I always stop here. McDonald's has one outlet, wi-fi.

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Arrived home safely, about 4:00 p.m. I still enjoy driving through Oklahoma City; I don't know why. I've never stopped in Oklahoma City but there's something about the freeways and the flow of the traffic that make it quite enjoyable. It also means I'm almost home (when returning) and it's the first big city I see when I am heading north. Maybe that has something to do with it.

Thursday Morning News, Links, And Views -- Part II

Update on North Dakota's Legacy Fund. TwinCities.com is reporting:

A savings account North Dakota created to preserve a portion of its oil and natural gas tax dollars for the future has exceeded growth estimates in its first two years and could swell to $3 billion by the time state lawmakers decide how to spend it.

State officials predicted the Legacy Fund would accumulate about $600 million by this summer. Through August, officials said, the fund has grown to $1.3 billion. It will continue building revenue until June 2017, when lawmakers are allowed under law to begin tapping the account for such things as education. 

“It is growing very fast. It's going to become much bigger,' Republican Gov. Jack Dalrymple told Stateline in an interview. He said the fund added a record $92 million in July.

Maybe this would be a good time to ban flaring, shut down wells that are flaring gas, and let the projection catch up with reality. LOL.

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Photos of the Bakken: 20-photo slideshow -- pretty nice.  In The Fiscal Times. A reader from California who knows very little about the Bakken but is a very, very close, dear friend, sent me the link. I am impressed.  I love the 'Home of Economy' photograph.

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Labor fact of the day, from CarpeDiem: the six US metro areas with the lowest July jobless rates were near shale oil:  Crosby, Alamo, Fortuna, Williston, Watford City, and Dore. Just joking. The six at the link: Bismarck, Sioux Falls, Fargo, Midland (TX), Rapid City, and Billings. Pretty incredible, huh?

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The Bakken is a lot bigger than we thought. Previously reported. Being confirmed.

This is kind of an unusual story. It is nothing new for regular readers. It was first reported back in 2012. Apparently some folks in Dickinson are just now hearing the news. For others it is a nice recap/update of where we are.

For my 30-second soundbite and to make it easier to remember: the Bakken may hold a trillion barrels of oil, five percent of which may be recoverable.

The Dickinson Press is reporting:

Given a recoverable factor of 4 percent — which is how much oil Continental predicts will be able to be commercially produced — the 903 billion barrels would mean roughly 36 billion barrels of oil could ultimately be syphoned from Bakken reserves, according to data presented to Continental investors in October.

Though the estimates are not new, Stark said that 13 of a planned 20 test wells in the deep regions of the Three Forks — including testing zones in Dunn County — have been completed this year with several more scheduled to be finished before 2013’s end. Stark added that Continental isn’t the only oil and gas operator exploring deeper into the vast Bakken play.

“The database for the productivity and the incremental reserve additions that will come from the Three Forks is building daily,” Stark said. “This is a very significant addition to the play and we’re going to continue to assess what impact it ultimately has. What we initially thought was a two-layer reservoir rock is now looking like a five-layer reservoir.”

Essentially what it has found to date, Stark said, is the results from the completed test wells — which are dotted over a 3,800-square-mile swath of the Bakken — have proven to be hard evidence that there is more oil deep in the earth than what was previously thought. A lot more.

Best three words in the article: "a lot more."

By the way, four percent is lowballing the recovery rate. 

North Dakota State Sales Tax Collection Increased by 40% Year-Over-Year for 2nd Calendar Quarter: 40%

Updates

Later, 11:20 pm: As you read the post below, consider this: the Bakken boom started in Montana in 2000. It started in North Dakota in 2007. This is either the fifth year or the twelfth year. Taxable sales and purchases increased by 40% over the previous year. A year ago, taxable sales and purchases were already setting records; in fact in 4Q11 was the first time TS&P increased by 40% you, and now, here "we" do it again. Had it just stayed even it would have been quite a story, but to do it again -- to increase 40% you again -- in a boom year one year ago -- that is the real story. I seriously doubt "we" will see this in 2Q13.

Original Post

This is an incredible story: the sales tax collections across North Dakota. Numbers rounded.

From The Bismarck Tribune, for the 2nd calendar quarter, 2012 (April, May, and June), North Dakota taxable sales and purchases increased by 40% over previous year.

Data points:

• 14 of 15 sectors in North Dakota reported gains year-over-year
• wholesale trade: up $500 million
• transportation and warehousing: up by 90% (sector with greatest growth by percent)
• construction: up 80%
• mining and oil extraction: up 65%
• financial, insurance, real estate, rental: up 50%
• manufacturing: up 50%

Of the 50 largest cities, the biggest sales tax collection increases:

• New Town: up 185%
• Tioga: up 135%
• Cavalier: up 115%
• Watford City: up 75%
• Williston: up 60% -- almost did not make the top 5! 
• Mandan: up 20%
• Bismarck: up 20%

By county:

• McKenzie: up 80%
• Williams: up 75%
• Mountrail: up 65%

Cavalier is certainly an outlier: it is located in the far northeastern corner of the state, a long, long way from the oil patch. Maybe a reader will be able to explain why Cavalier made the top five. I did a short search but could not find any reason. Something going on with the Air Force Station there?

North Dakota's "Legacy Fund" > $535 Million

Link here to the Dickinson Press/Inside Climate News.

The "Legacy Fund":

in existence since August, 2011 (thereabouts); 13 months old according to DP/ICNvoters approved in 2010
accrues from 30 percent of the state's oil tax collections
cannot be spent until 2017
requires two-thirds of Legislature to approve spending
first deposit: September, 2011
most recent deposit: $45 million; growing faster than anticipated

Back-of-the-envelope calculations: 2017 --> 60 months from now x $50 million/month --> $3 billion. My understanding is that the money is invested in money market accounts.

If $45 million represents 30 percent for the most recent month, what was the total? $150 million.

Federal and State Money Flowing to OIl Counties -- $1 Billion For Starters -- Bakken, North Dakota, USA

Money flowing to western North Dakota, some data points (some numbers rounded):

• $610 million for roads (oil counties; $60 million for other counties across the state)
• $150 million for Western Area Water Supply, loan from Bank of North Dakota
• $100 million for oil impact and other projects, grants from Bank of North Dakota
• $5 million of the $100 million specifically designated for schools dealing with rapid expansion

Greatest part of road construction slated to begin spring of 2012

• Construction on Highway 22 north of Killdeer may begin as early as this summer
• Commitments to work on highways 85, 22, and 23

Other projects:

• Williston State College: an extra $100,000 for security
• Dickinson State College: $750,000 for Theodore Roosevelt projects
• Minot Air Force Base: $325,000; to enhance the base to prevent closure
• North Dakota State College of Science: additional $10 million to expand diesel motor mechanics program; program now at capacity; oil industry desperately needs mechanics

For newbies and out-of-staters, how does that $100 million compare with past years?

• For the previous biennium, only $8 million ($4 million/year) was appropriated

Rumors:

• More big box stores and another huge truck stop (in addition to those in Williston)