Cottonwood Field Update

News 

May 17, 2014: when the Cottonwood was first "discovered," I was quite excited about it, but quickly it appeared that it would be a mediocre field at best. MDU's Fidelity discovered the field, but quickly sold it to Oasis, and from what I can gather, this field "made" Oasis. This is where Oasis got its start in the Bakken. I could be wrong on that, but that's my "Bakken-view." Be that as it may, a reader notes that the Cottonwood might be turning into quite a nice little field, based on all the multi-well pads being put it. See comments below.  I'm not sure how best to designate wells on a multi-well pad without the blog becoming even more confusing; one can assume if there are four permit numbers in succession in the same time period, they are permits for wells on a multi-well pad.

I updated all the wells (IPs/production) and the permits as of this date (see below). This might be a good field to follow to get a feeling for the North Dakota Bakken in general. I, perhaps, concentrate too much on the sweet spots in the Bakken (northeast McKenzie County, for example) at the cost of ignoring the, perhaps, the more representative North Dakota Bakken. Lynn Helms even mentioned once that there was not much in Burke County, though he might have been speaking of Burke County a bit farther north and a bit farther east than the Cottonwood field.

Again, it looks like wells that produce 100,000 bbls have paid for themselves at the wellhead. I know that's simplistic and there's much more to it than that, but I have to have a data point to at least hang my spurs on. [An apology to all the real cowboys out there: I've worn spurs on rare exceptions.] Maybe a better way to see it: a well that produces 100,000 bbls in the first two years is going to be an economical well for the operator.

Again, it is my policy to NOT change original posts or updates, with one exception: I update IPs and total production as the numbers come in.

April 24, 2013: see comment below asking about new multi-well pad drilling in the Cottonwood. Prior to this 4-well pad, to the best of my knowledge there was only one multi-well pad in the Cottonwood, and I hardly consider it a multi-well pad: just two wells, one horizontal going south and one horizontal going north.

But the 4-well multi-well pad in section 3-157-92 is notable. One rig is one site; two others are on DRL status; and the fourth, LOC:

• 23804, 786, Oasis, Lars 5792 13-3H, Cottonwood, for total production, see below;
• 25135, 720, Oasis, Nels 5792 13-3T, Cottonwood, for total production, see below;
• 25136, 1,180, Oasis, Beth 5792 13-3B, Cottonwood, for total production, see below;
• 25230, 995, Oasis, Sara 5792 13-3B, Cottonwood, for total production, see below;

December 10, 2012: this is a note I received today regarding the Cottonwood field:

Remember when we were discussing  MDU and Cottonwood field prospect, back in 2007/08 they did seismic project?

Today I went to see what one year of time did to an unknown/ not wanted MDU field.

Oasis was MDU's drilling partner at the 2008/09 interval and Oasis ended up buying all of Cottonwood field when MDU bailed in panic in 2009.

The following information is from the NDIC public records and deals with the Cottonwood field only (MDW rounded some numbers).

In September, 2011, OAS had one (1) well on confidential status and that month had runs of 7,000 barrels of oil. Oasis also had 18 producing wells with a production of 20,000 bbls:  runs and production equaled 27,000 bbls of oil for 30 days. (19 wells total )

In September, 2012, OAS had five (5) wells on confidential status and had runs of 37,000 bbls or oil. They also had 29 wells producing 63,000 bbls of oil. So runs and production equaled 100,000 BO for 30 days. (34 wells )

I do not know if every well produced all 30 days, but using that as a number the 2011 average well per day production  was 47.01 bopd.

The 2012 average well production was 97.43 bopd (which is about the current average for the North Dakota oil patch at this time).

I wonder if the execs at MDU realize what they gave away. Compare: 47 bopd then; 97 bopd now.

Talk is one thing, doing is another.

If Oasis had also walked away and had no one picked up this field, a lot of mineral interest owners would have lost a lot of royalty. When one see horse manure, another sees a pony.

March 29, 2011: The results of all wells in the Cottonwood oil field were updated today; see below. For my comments on the update, click here. The data is most recent available at NDIC, as of January 31, 2011.

June 17, 2010: no news. Just this observation. The Cottonwood Field looks a bit dismal. I just took a look at it and there's not much going on there. A couple of wells on confidential; any producing wells have older permit numbers; there are no rigs in the field; and of all the fields I have looked at recently, this field seems to have an inordinate number of cancelled permits: at least 15. This was the field "discovered" by MDU. Oasis subsequently acquired most of MDU's acreage in North Dakota about a year ago or so (I forget exactly when) and I assume Oasis picked up the acreage in Cottonwood Field. Oases went public yesterday/today; haven't seen it listed yet.

Permits

2015
No permits issued for Cottonwood oil field in 2015. This was the year MDU announced it would be selling its oil and gas properties (Fidelity Oil and Gas).

2014
30045, loc, Oasis,
30044, loc, Oasis,
30039, loc, Oasis,
30038, loc, Oasis,
30037, loc, Oasis,
29745, TA, Oasis, State 5792 41-15 12B, Cottonwood,
29744, TA, Oasis, State 5792 41-15 11T, Cottonwood,
29743, TA, Oasis, State 5792 41-15 10B, Cottonwood,
29742, PNC, Oasis, State 5792 41-15 9T2, Cottonwood,
29741, TA, Oasis, State 5792 41-15 8T, Cottonwood,
28764, 421, Oasis, Steven Van Berkom 5993 44-24T, t10/14; cum 81K 12/15;
28491, 115, Oasis, Shaw 6092 11-23 7T, t10/14; cum 31K 12/15;
27991, loc, Oasis,
27990, loc, Oasis,
27989, loc, Oasis,
27988, loc, Oasis,
27987, loc, Oasis,
27645, loc, Oasis,
27644, loc, Oasis,
27643, loc, Oasis,
27467, 111, Oasis, Shaw 6092 11-23 2T, t9/14; cum 60K 12/15;
27466, 177, Oasis, Shaw 6092 11-23 3B, t9/14; cum 47K 12/15;
27465, dry, Oasis,
27464, 103, Oasis, Shaw 6092 11-23 5T2, t10/14; cum 23K 12/15;
27463, 147, Oasis, Shaw 6092 11-23 6B, t10/14; cum 39K 12/15;

2013 (completed list)
27014, 294, Oasis, State 5792 31-15 3B, t9/14; cum 75K 12/15;
27013, IA/200, Oasis, State 5792 31-15 4T2, t8/14; cum 6K 10/15; no production since 10/15;
27012, 177, Oasis, State 5792 31-15 5T, t8/14; cum 45K 12/15;
27011, 162, Oasis, State 5792 31-15 6T2, t8/14; cum 23K 12/15;
26931, 242, Oasis, Manhattan 5792 11-2 3B, t9/14; cum 71K 12/15;
26900, 566, Oasis, Overal 5892 11-30T, t1/14; cum 74K 12/15;
26589, 210, Oasis,Dale Van Berkom 5992 14-30 2T, t4/14; cum 57K 12/15;
26587, 207, Oasis, Delia 5992 14-30 2T, t4/14; cum 54K 12/15;
26585, 205, Oasis, Dale Van Berkom 5992 14-30 3B, t4/14; cum 65K 12/15;
26386, 352, Oasis, Hardy 5892 43-9H, t8/14; cum 61K 12/15;
26383, 302, Oasis, Delia 5992 13-30H, t4/14; cum 54K 12/15;
26320, 262, Oasis,State 5792 11-15 2T, t7/14; cum 8K 7/14;
26264, 627, Oasis, Lydia 5601 43-24T, t2/14; cum 22K 7/14;
26225, 344, Oasis, Foxtail 5892 42-12 1H, t1/14; cum 33K 7/14;
26224, A, Oasis, producing, cum 53K 12/15;
26188, 86, Oasis,Manhattan 5792 11-2 2T, t11/14; cum 28K 12/15;
26187, 635, Oasis, Marit 5892 44-34B, t4/14; cum 66K 12/15;
26186, 90, Oasis,Freya 5892 44-34T, t5/14; cum 30K 12/15;
26038, 212, Oasis, Phazer 5992 12-26T,  t11/13; cum 61K 12/15;
26034, 545, Oasis, t10/13; cum 29K 3/14;
25900, 248, Oasis, t10/13; cum 10K 3/14;
25520, A, Oasis, cum 10K 3/14;
25435, PNC, Oasis,
25310, 1,023, Oasis, t10/13; cum 29K 3/14;
25309, 528, Oasis, t10/13; cum 24K 3/14;
25308, 636, Oasis, t10/13; cum 25K 3/14;
25307, DRY, Oasis, comp 6/13;
25230, 995, Oasis, t8/13; cum 36K 3/14;
25136, 1,180, Oasis, t9/13; cum 41K 3/14;
25135, 720, Oasis, t9/13; cum 36K 3/14;
24995, 93, Oasis, t11/13; cum 18K 3/14;
24923, 759, Oasis, t5/13; cum 53K 3/14;
24780, PNC, Oasis,

2012
24509, 240, Oasis, t5/13; cum 46k 3/14;
24328, 434, Oasis, t5/13; cum 38K 3/14;
23989, 148, Oasis, t5/13; cum 40K 3/14;
23935, 663, Oasis, t5/13; cum 51K 3/14;
23804, 786, Oasis, t9/13; cum 31K 3/14;
23343, 590, Oasis, t12/12; cum 81K 3/14;
22937, 770, Oasis, t8/12; cum 70K 3/14;
22688, 616, EOG, t9/12; cum 121K 3/14;
22643, 1,371, Oasis, t1/13; cum 83K 3/14;
22406, 737, Oasis, t3/13; cum 53K 3/14;
22400, 120, Oasis, t11/12; cum 50K 3/14;
22346, 1,526, Oasis, t8/12; cum 136K 3/14;
22324, 223, Oasis, t6/12; cum 79K 3/14;

2011
22045, 278, Oasis, t4/12; cum 106K 3/14;
22038, 1,025, Oasis, t3/12; cum 103K 3/14;
22000, 1,185, Oasis, t6/12; cum 116K 3/14;
21973, 736, Oasis, t8/12; cum 79K 3/14;
21745, 1,455, Oasis, t5/12;cum 140K 3/14;
21671, 285, Oasis, t1/12; cum 97K 3/14;
21661, 222, Oasis, t2/12; cum 86K 3/14;
21355, 231, Oasis, t9/12; cum 61K 3/14;
21319, 756, Oasis, t2/12; cum 98K 3/14;
21103, 183, Oasis, t3/12; cum 40K 3/14;

2010
19628, 774, Oasis, t7/11; cum 122K 3/14;
19037, 811, Oasis, t10/10; cum 122K 3/14;
18995, 889, Oasis, t9/10; cum 136K 3/14;
18688, 357, EOG, t5/11; cum 66K 3/14;
18657, 696, Oasis, t8/10; cum 138K 3/14;
18593, 763, Oasis, t6/12; cum 112K 3/14;

2009
18562, 509, EOG, t6/10; cum 92K 3/14;
18447, 763, Oasis, t3/10; cum 120K 3/14;
18410, 299, Oasis, t6/10; cum 109K 3/14;
18231, 138, EOG, t10/09; cum 73K 3/14;
18023, 40, EOG, t11/09; cum 81K 3/14;

Original Blog

(Disclaimer: the narrative is based on my understanding of what I saw while this developed; others may have a different perspective, and only the producers and the NDIC know the full story, I suppose. I will gladly update if corrections are in order.)

The Cottonwood field is a new field, a relatively large field. It is rectangular, running north to south. Powers Lake, ND, is right at the vertical midpoint of the field, and sits just outside the field on the west line. North Dakota highway 50, running east-west, splits the oil field into a north half and a south half.  The north half is in Burke County; the south half is in Mountrail County.

The Cottonwood initially caught my interest because it was designated a field during the current "Bakken" boom when Fidelity (MDU) had a producing discovery well. Fidelity requested the NDIC to designate a field that was essentially four sections, based on that well, running north to south, 157-92, 158-92, 159-92, and 160-92. Shortly after the NDIC designated this the Cottonwood Field, "all" Fidelity permits/rights were obtained by Oasis.

I don't follow the Cottonwood wells on my "watch list" because it doesn't look like much of a field. But here are the numbers I have, subject to typographical errors.

One can divide the field in half, the north half ("owned" by Oasis) and the south half (mostly Oasis, but at the far south, near the Alger field, we see some EOG wells). There are two sections in the north, and two sections in the south.

I don't think the south half is all that much better but as one gets closer to the Alger field, the more EOG wells, and the only really two "good" wells of the bunch: #17850 with an IP of 487 (reported Feb 4, 2010) and 17937, 675 (Feb 11, 2010).

All wells are short laterals with a couple of exceptions (one by Hess, and one by Oasis), at the time of original posting.

Looking at the GIS map server, these are the wells, going from north to south (current as of Feb 5, 2010).

(C) = confidential
(NR) = producing, but I have no record of IP
(LL) = long laterals; all others are short laterals
(A) = on the section line bordering the much better Alger field, essentially an Alger well
IPs in red
Updated as of 1/11 

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

The following data will not be updated. Total production numbers will be updated up above.  

North half of field (159-92, 160-92)

18657: Oasis, 696, Ernst 6092 42-31H, spudded 5/10; tested 8/10; 44K; still producing at 8K/month
17447: Oasis, 308, Laumb 11-22H, spudded 9/08; tested 1/09; 48K; producing at 1K/month
17330: Oasis, 88, Weinmann 11-28H, spudded 8/08; tested 10/08; 44K; producing at <700 bbls/month
17278: Oasis, 13, Lucy 11-23H, spudded 6/08; tested 11/08; 24K; producing <300 bbls/month
18593: Oasis, confidential
17369: Oasis, 540, Edwards Federal 5992 44-10H, spudded 12/09; tested 3/10; 112K 4/12; producing at 5K/month
17194: Oasis, 103, Barenthsen 11-20H, spudded 5/08; tested 7/08; 53K 4/12; producing at 750 bbls/month
18410 (LL): Oasis, 299, Barenthsen 6059 44-5H, spudded 1/10; tested 6/10;  71K 4/12; producing at 2K/month
17169: Sequel Energy, 98, t11/08; cum 26K 3/14;
17741: Oasis, 122, Dale Van Berkom 11-18H, spudded 12/08; tested 7/09; 62K 4/12; producing at 1.4K/month
17110: Oasis, 127, Edwards 44-9H, spudded 3/08; tested 6/08; 57K 4/12; producing at 800 bbls/month

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

South half of field (157-92, 158-92)

17358: Oasis, 82, spudded 7/08; tested 1/09; 9K; producing at 200 bbls/month
17109: Fidelity, 166, spudded 6/08; tested 8/08; 20K; producing at 300 bbls/month
17193: Oasis, 118, spudded 4/08; tested 6/08; 39K; producing at 600 bbls/month
17328: Oasis, 92, spudded 6/08; tested 10/08; 18K; producing at 200 bbls/month
17610: Oasis, 180, spudded 10/08; tested 2/09; 38K; producing at 750 bbls/month
17822: Oasis, 1,061, Colbenson 5792 11-6H, t10/12; cum 82K 3/14;
18447 (LL): Oasis, 763, Enerson 5792 44-4H, spudded 1/10; tested 3/10; 62K; 3K/month
17096: Oasis, 228, spudded 3/08; tested 6/08; 38K; 400 bbls/month
17555: Oasis, 62, Thor-Erie 44-18H, t7/09; cum 13K 3/14;
17289: Oasis, 361, t10/08; cum 80K 3/14;
18231: EOG, 138, Cottonwood 7-21H, t10/09; cum 73K 3/14;
17798: EOG, 271, Cottonwood 1-22H, spudded 1/09; tested 8/09; 40K, 1200 bbls/month
18023: EOG, 40, Cottonwood 100-27H; spudded 9/09; tested 11/09; 42K, 1000 bbls/month
17863 (LL): HES, 230, t5/09; cum 104K 3/14;
17850: EOG, 487, Cottonwood 2-35H, t8/09; cum 119K 3/14;
17937: EOG, 675, Cottonwood 5-34H, t9/09; cum 126K 3/14;
18562: EOG, 509, Cottonwood 6-33H, t6/10; cum 92K 3/14;
19628 (LL)(drl): Oasis, Paradise 5892 11-30, t7/11; cum 122K 3/14;
19037: Oasis, 811, Banks 5892 44-34H, t10/10; 122K 3/14;
18995 (LL): Oasis, 889, Manhattan 5792 11-2H, t9/10; 136K 3/14
18688: EOG, 357, Cottonwood 9-28H, t5/11; cum 66K 31/4;

The Bakken is Getting Even More Crowded

UPDATE: Hold onto your hats. This case has gotten a lot more complicated. NDIC has scheduled a hearing on Feb 26, 2010, to hear Hess' plea to suspend/revoke BEXP's permit to drill. BEXP already has a rig on this site. This should be interesting. February 6, 2010.]

[UPDATE, February 9, 2010: Nabors Rig 52 started drilling the Sorenson 29-32 1-H on this date, Feb 9, 2010.] 

[UPDATE, February 25, 2010: recommendation to dismiss Hess's request. If being read correctly, this suggests three laterals in one section!]

BACKGROUND:

The following was posted on/before February 4. The story is not over (see update above.)

This is more complicated than my usual posts, and I could be wrong in my understanding of what is going on. But if I understand this correctly, two different producers ("oil companies") have been granted permits to drill three different wells in the very same 1280 acre area in the fairly prolific Alger oil field.  It's possible they are going to different formations (such as the Bakken AND/OR the Three Forks Sanish).

Operators/producers are starting to request permits to start drilling "infill" wells. These are wells in established fields placed in between wells that are already producing.

One would assume that if the two "outside" wells were operated by "Producer A," then the infill wells would be operated by the same "Producer A."

This appears to be the new wrinkle: it looks like two operators/producers are requesting infill wells in the very same section(s).

Here is an example:

Brigham Oil (BEXP) already has producing wells in the surrounding sections in the area under discussion. 

Today, Feb 4, 2010, after receiving a permit earlier to do this, BEXP [Producer A] is moving a rig to place a long lateral in sections 29 and 32 in T155N-92W.  That rig is MIRU (moving in, rigging up).

[Language: NABORS 52 BRIGHAM OIL & GAS LP SORENSON 29-32 1-H NWNE 29-155N-92W MTL 18654 * MIRU] See NDIC active rig page (this is an ever-changing page; if you access it 30 days from now, it may not show up any more).

Meanwhile, on the same date, today, Feb 4, 2010, Hess [Producer B] was granted two permits to drill from the south, again a long lateral targeting the same sections (29 and 32) in the same township.  [Language: #18685 - HESS CORPORATION, RS-PANZER FARMS-155-92- 3229H-1, SWSE 32-155N-92W, MOUNTRAIL CO., 360' FSL and 2515' FEL, DEVELOPMENT, ALGER, 20337', 9-5/8 " - 2500', 2333' Ground, API #33-061-01259, (Approved: 2/3/2010]

[Language: #18686 - HESS CORPORATION, RS-PANZER FARMS-155-92- 3229H-3, SESW 32-155N-92W, MOUNTRAIL CO., 360' FSL and 2765' FEL, DEVELOPMENT, ALGER, 20354', 9-5/8 " - 2500', 2333' Ground, API #33-061-01260, (Approved: 2/3/2010)]

So, "producer A," BEXP, has moved oil rig Nabors 52 on to section 29 (the northwest quadrant), to drill a long lateral in sections 29 and 32; and, "producer B," Hess, was granted a permit to drill two wells targeting the same two sections but coming from the south, drilling in the southern half of section 32 and extending into section 29.

Doomsday: US Cities

This is Page 1 (no more updates on this page)

Go to Page 2 for updates 

Page 3

Stockton, CA: Doing it again: a “no strings” guaranteed basic income of $500 a month for its residents. 

Chicago, IL: how Chicago pays short-term obligations with long-term bonds....which their grandchildren will end up paying off.

Detroit, MI: Effective Jan.1, retired city workers under age 65 will no longer receive full coverage from the state and will instead receive a $125 stipend to shop in Michigan’s health-care exchange under the newly-rolled out Affordable Care Act. -- Fox Business, October 16, 2013.

Stockton, CA: city council approves plan to exit bankruptcy.  The article certainly didn't say much. October 3, 2013.

Chicago, IL: unfunded liabilities almost double; S&P cut rating. -- September 16, 2013.

San Bernardino, CA: granted bankruptcy protection.

Judge Meredith Jury of the U.S. Bankruptcy Court for the Central District of California ruled that San Bernardino was eligible for Chapter 9 bankruptcy protection despite opposition by the California Public Employees' Retirement System, or Calpers. The $260 billion pension fund is the city's biggest creditor and America's largest pension fund. August 28, 2013.

Harrisburg, PA:  Harrisburg gives the court its plan to pay off $360 million in debt. August  27, 2013.

NYC: the city is in good financial shape, according to Mayor Bloomberg, but there are risks.

Pension benefits for city retirees have risen to $8 billion a year from $1.4 billion in 2002, when he first took office, Bloomberg said. Health insurance, free to most municipal workers, has almost doubled to $6.3 billion, he added.

Gains from a rising stock market won’t increase pension assets enough to offset higher taxpayer costs, the mayor said.

“Just as the financial collapse had only a small impact on our pension bill, as the market improves, it will not solve the problem,” he said. “The idea that our costs can be substantially reduced through increased market returns is a fantasy.”  August 6, 2013.

Detroit is not alone; Chicago, and many others in deep trouble. August 5, 2013. [25 facts about Detroit that will astound you.]

Oakland, Philadelphia and Chicago: Whitney Meredith does not deny or confirm these cities are on her list. See note / link below. July 26, 2013.

Flint, Pontiac, Ecorse, Allen Park, and Benton Harbor, MI: asked what other municipalities might follow Detroit’s lead into bankruptcy, Whitney cited the five other Michigan cities currently under emergency management: Flint, Pontiac, Ecorse, Allen Park and Benton Harbor. She also reiterated her concerns about the states of New Jersey and Illinois. July 26, 2013

Chicago, IL / Detroit, MI -- two peas in a pod, July 24, 2013 --

• Chicago: bond rating downgraded. I think Chicago may be in deeper trouble than Wall Street recognizes.
• Detroit:  for the moment, the bankruptcy case proceeds. Shenanigans halted by US federal court.

Detroit, MI: Some have compared the city’s plight to that of a natural disaster, worthy of federal intervention. -- July 21, 2013.

Detroit, MI: it looks like the city is depending on a Federal bailout; judge "denies" bankruptcy filing; it will be interesting to see how the city plans to pay its bills; -- July 19, 2013.

Detroit, MI: the biggest municipality in the universe declares bankruptcy. Detroit was added to this page on February 25, 2010. -- July 18, 2013.

Detroit, MI: CBS says this will be the week that the decision to declare/not declare bankruptcy will be made. My hunch: the can will be kicked down the road at least another week: the lawyers at $1,000/hour know a good thing when they see it. -- CBS, July 15, 2013.

Detroit, MI: it looks like the lawyers are going to take the money and run, charging $1,000/hour for legal advice; in the end, the city will declare bankruptcy anyway, making the legal advice moot. The emergency manager's former law firm has the contract. -- CBS, July 12, 2013.

Detroit, MI:  Detroit recovery plan threatens muni-market underpinnings -- Bloomberg, June 16, 2013.

Detroit, MI: defaults on $2.5 billion, but has NOT yet filed for bankruptcy. -- June, 14, 2013

Philadelphia, PA: city will layoff 4,000 public school employees:

There’s a pink slip in the mail for about one out of every five Philadelphia school district employees. The district is sending out 3,783 layoff notices to assistant principals, teachers, counselors, noontime aides and others .... the layoffs will save the district $215 million toward its $300 million shortfall. -- June 7, 2013

Detroit, MI: it's worse than "he" thought. $15 billion in long-term debt; an accumulated operating deficit of $325 million. The emergency financial manager appointed by the state has not yet ruled out bankruptcy for the city just yet. That's political speak/trial balloon: filing for bankruptcy is around the corner.

Stockton, CA: Judge clears way for city to file for bankruptcy protection, April 1, 2013.

A judge accepted the California city of Stockton's bankruptcy application on Monday, making it the most populous city in the nation to enter bankruptcy.

Stockton, CA: goes to bankruptcy court Monday (this Monday, next? does it matter?). California's 13th largest city; more than a billion dollars in debt. Every city employee-retiree was given health for life and for one dependent. Will be the country's largest city to "successfully" enter bankruptcy. First made the list about a year ago. March 27, 2013.

Chicago, IL: I think this says it all -- as being reported by CBS Chicago:

“I don’t see any Caucasians being moved, bussed, or murdered in the streets as they travel along gang lines, or stand on the steps of a CPS school,” said activist Wendy Matil Pearson as opponents of the school closing plans protested outside Horatio May Elementary Community Academy in the Austin neighborhood.

What does "Caucasians not getting murdered" have to do with school closings?

Chicago, IL: buzz on the street; 50 Chicago schools slated for closure; March 21, 2013. Update, March 22, 2013: President Obama must have told the mayor, "You are on your own on this one. No money from Washington. Sorry, buddy. But, hey, we're still sending money to the Palestinians. Heh-heh-heh."

San Bernardino, CA: is this crazy or what? Pleading for bankruptcy protections; votes to increase pay of public employees:

The bankrupt city of San Bernardino, California, approved over $1 million in payincreases for police and firefighters despite claims it canbarely make payroll, let alone afford the salary hikes.

Monday night's pay increases, for a city that appears before a federal judge again this week to plead for bankruptcy protection, are a result of its charter. It mandates that pay for safety workers must be tied to salary levels for 10 similar- sized California cities, all of which are wealthier than San Bernardino. March 19, 2013

Detroit, MI: the new financial overseer, a bankruptcy lawyer, tells Detroit unions "don't force me to go to a bankruptcy judge: you won't like it. We will do better if we work together."

Detroit is saddled with a $327 million budget deficit and more than $14 billion in long-term debt - a morass that developed slowly during the decline of the auto industry, the exodus of a quarter million people from 2000 to 2010 and outright mismanagement at City Hall.

At the height of its manufacturing boom, in 1950, Detroit was home to 1.8 million people. The 2010 census put the population at 713,000. Some estimates now place it below 700,000. [$14 billion/700,000 = $20,000/person; or about $100,000 per four-person household. Of course that still leaves the deficit and daily operating costs to run the city.]

Read more here: http://www.miamiherald.com/2013/03/14/3285881/bankruptcy-expert-named-detroit.html#storylink=cpy

Detroit, MI: governor appoints bankruptcy attorney as financial overseer of Detroit; the attorney says the city's issue can be resolved in 6 weeks if all parties cooperate. I hope he has several body guards. WSJ is reporting. March 14, 2013.

Detroit, MI: in the last update below, we were told that Detroit's debt was $14 billion. It is now being reported there is an additional $7.2 billion that was never counted nor tallied.  This is just a story of an audit by a state-sponsored review team; it does not update any information on who is now in charge of the city or what the next step is. The state is on the hook for a huge bill. March 12, 2013.

Atlanta, GA: "Detroit of the South," as Atlanta's suburbs leave Atlanta. March 10, 2013. 

Detroit, MI: two weeks. Where have we heard that before? Within two weeks decision to be made: state-appointed manager vs bankruptcy. Now, debt is $14 billion. ($12 billion back on December 22, 2011). February 26, 2013. 

Detroit, MI: one last mayoral presentation before being taken over by the state; if new city financial manager hired opts for bankruptcy, it would be the biggest ever Chapter 9 municipal bankruptcy in the United States, February 18, 2013 (linked story published February 13, 2013).

Baltimore, MD: $750 million budget shortfall over next ten years, February 18, 2013. 

Detroit, MI: nothing new; just some "fluff"; from CNBC; January 30, 2013.

Philadelphia, PA: the city may close 37 schools at the end of the 2012 - 2013 school year. 

San Bernardino, CA: the city paid out $2 million in "cash-outs"during the three months just prior to declaring bankruptcy; likely to have broken federal laws; clawbacks possible; December 21, 2012

Detroit, MI: state laying ground for managed bankruptcy. Lessons learned from the 29-day GM bankruptcy.

Detroit, MI: how bad is it? Yes, it's that bad.

Detroit, MI: state government considering dissolving Detroit and letting Wayne County absorb it (wow, something tells me Wayne County would not want it), November 28, 2012.

San Bernardino, CA: votes to cut $26 million from the city's budget. Major austerity program isn't going over well in at least one councilman's mind; facing a $45 million budget shortfall. If the city goes bankrupt, the city will be "taken over" by the county. And that would be bad? November 27, 2012.

Detroit, MI: things may be coming to a head. Detroit may have to use unpaid leave to cover cash shortfall:

Detroit plans to put workers on unpaid leave starting January 1 to prevent the city from running out of money if the city council continues to balk at reform measures and the state of Michigan blocks the release of much-needed funds.

The furloughs and other cost-cutting measures outlined by Mayor Dave Bing and top city officials on Wednesday are meant to offset $30 million that Michigan is withholding from the city unless certain conditions are met.

Arizona cities in general: see first comment. A "temporary" sales tax is set to "sunset" in 2013; there was a proposition to extend the "temporary" sales in the 2012 election; it was defeated by a margin of 2 - 1.  A sales tax is most regressive. November 20, 2012.

Detroit, MI: city rejects conditions for cash infusion, November 20, 2012.

Detroit will not get a much-needed $10 million after the city council rejected on Tuesday a contract to hire a law firm that was part of a deal to help the city overhaul its finances.

The state of Michigan and its biggest city, Detroit, announced a deal last week that includes several milestones the city must achieve in the next month to receive the $10 million by Tuesday and another $20 million by December 14.

In a voice vote, the city council rejected a contract for the law firm...the city ran out of cash several months ago...

Los Angeles, CA: shortfall remains at $215 million; mayor looking to put pension initiative on next year's ballot; union plans to be disruptful; it's all about the unions; Los Angeles was first city identified on this post (see below); then it was $204 million; now it is $215 million. As you scroll through the list, see how many times the word "union" shows up. November 17, 2012.

Atwood, CA: up next could be the city of Atwater, where civic leaders will vote Wednesday night on declaring a fiscal emergency, considered by many to be the first step toward bankruptcy. The city may lay off a quarter of the town's 90-person workforce. The city is reportedly facing $95 million in outstanding debt and a current deficit topping $3 million: $3,500 of debt for each of Atwater's 28,000 residents, a city where the estimated media household income is around $40,000. October 3, 2012.

Mammoth Lakes, CA: some cities in California are bankrupt, not because of unions and pensions, but because of huge payouts to plaintiffs in lawsuits over land use (denial of big box stores to build; banning oil companies from drilling). September 9, 2012.

San Bernardino: bankrupt; can't pass budget; firemen's union deal breaker; when the money runs out, the money runs out. September 5, 2012.

Chicago, IL: is it just me, or does it seem that Chicago is beginning to implode? Murders seem to have gotten out of hand; even by Detroit's standard, murders in Chicago seem out of control. And then there's the impending school teachers' strike, right at the beginning of the school year.

Flint City, MI: the Flint City Council is seeking a court injunction to stop the state's appointment of a new emergency financial manager. The manager says he will continue work until/unless a judge orders an injunction. Either way, the writing is on the wall.  Citizens will be able to vote on a ballot measure regarding emergency financial managers this fall. August 28, 2012.

Los Angeles: this was the first city ever posted on this site; it comes up again. Incredibly the article does not provide details of the extent of the deficit. The unions are ready to fight.

Despite years of raising fees, slashing the city workforce and cutting back on everything from swimming pools to sidewalk repairs, Los Angeles officials warn that the city's budget shortfall could top a quarter of a billion dollars next year without additional tax hikes and belt-tightening.

The city's so-called documentary transfer tax would increase to $9 for every $1,000 of the property's sale value, or $4,500 on a $500,000 home.

The tax increase would generate an estimated $100 million for the city. It would give Los Angeles the highest such tax in the region, far surpassing the 55-cents-per-$1,000 rate charged in Glendale, West Hollywood, Burbank and Beverly Hills. [WOW!]

For months, analysts and elected officials have been signaling that both tax increases and an overhaul of the employee pension system will be needed to keep the city afloat.

Buffett: exits the municipal bond market; sees defaults coming. August 21, 2012.

El Monte, CA: on the brink. 

Compton, CA: #4. 

San Bernardino, CA: first time on the list. Files for bankruptcy protection. July 11, 2012. 

Scranton, PA: broke. July 10, 2012.

Stockton, CA: how Stockton went broke, July 8, 2012. 

Stockton, CA: files; largest city in US history to declare bankruptcy. June 29, 2012.

Stockton, CA: one step closer. June 26, 2012. 

North Las Vegas: declared disaster zone; insolvent; will suspend contracts, pensions, pending review; the unions are a big part of the problem, but it looks like there is blame enough to go around to more than just the unions. June 22, 2012. 

North Las Vegas: first time to make the list -- and it appears to be debuting at #1 in terms of how soon it could declare insolvency. Again, the unions.  June 9, 2012.

North Las Vegas, the fastest-growing large city in the U.S. just five years ago, hasn’t shared in the bounty. Nevada’s third-largest city, whose population more than doubled to 217,482 in 2010 from 1999, is on the verge of insolvency. Facing a $33 million budget gap, elected leaders last week declared a state of emergency and gave the city manager unprecedented powers to suspend union contracts.

But not everyone agrees:

The city fell victim to its own shortsightedness, said Jeff Hurley, president of North Las Vegas Firefighters Local 1607, one of the unions that rejected the city’s latest demands for contract concessions and is challenging the assertion of emergency powers.

Detroit, MI: one week.  How often do we see these "deadlines" come and go? June 8, 2012.

Stockton, CA: one step closer to bankruptcy. June 7, 2012.

The city of Stockton moved a step closer to becoming the nation's largest city to declare bankruptcy, authorizing the city manager to file for Chapter 9 protection from creditors.

A 6-1 vote after a tense 4 1/2-hour public meeting Tuesday directed City Manager Bob Deis to file if the current mediation process fails. On March 27, Stockton stopped payments to creditors and  entered a confidential mediation process under AB 506, a California law designed to slow municipal bankruptcies by forcing all parties to the table. 

$27 million in debt as of July 1; population 290,000 (did I do the math correctly: $93/person? Even a six-person family this debt would be less than $600). From an earlier article: 70% of the budget goes to pensions.

San Diego, CA: back from the brink; balanced budget and perhaps surplus going forward. Good for them. April 12, 2012.

Los Angeles, CA: Los Angeles' top budget official raised the specter of bankruptcy on Friday in a sweeping report in which he called for new taxes, major pension reform and possibly layoffs.

Rising employee costs combined with flat-lining revenues have left the city in a precarious position. Even after reducing its workforce by 4,900 positions in recent years, the city faces a $222-million budget shortfall, a number that is expected to rise to $427 million by 2014-15. April 6, 2012. 

Detroit, MI: The Detroit City Council passed a financial consent agreement Wednesday evening with a 5-4 vote, which grants the city the power to void contracts and slash costs but not provide state funding or loans to bail the city out of its financial problems.  Void/rewrite pensions? April 4, 2012.

Detroit, MI: Will run out of cash next month. City council expected to vote today on austere measures; if unable to solve problem, the state can take over. New city manager has free rein on all city expenses including pensions and contracts. April 2, 2012.

Harrisburg, PA: broke. Will skip two debt payments. March 11, 2012.

Pennsylvania's distressed capital city, Harrisburg, will skip $5.3 million of debt payments due next week, the first time the city has defaulted on its general obligation bonds, to ensure there is enough cash to fund vital services.

Pennsylvania's capital of 50,000 people is mired in $326 million of debt due to the expensive retrofits and repairs of its troubled trash incinerator.

Stockton, CA: three months and counting. The city is already "dead." March 11, 2012.

Stockton, CA: largest city in the nation to date ready to announce bankruptcy proceedings. The article does not explain the finances, but a comment says 70% of the city's expenses go to retirement costs. February 29, 2012.

Los Angeles: $72 million in debt. Now another $2 million in debt evicting Occupy Wall Street. December 23, 2011.

Detroit: much worse than expected. December 22, 2011.

The report pegged the city's long-term debt, including unfunded pension liabilities, at more than $12 billion. That's $2 billion higher than Dillon's estimate when he asked for the preliminary review earlier this month.

In 2010, the city had net assets worth $265.1 million and long-term debts of $8.6 billion, according to the report and Treasury officials. This year, the value of the city's net assets is a negative number, and its long-term debt exceeds $12.3 billion.

Last year, Detroit had $33 of long-term debt for every $1 of net assets. That number compares unfavorably to even financially distressed cities such as Flint -- already under an emergency manager -- which has only about 59 cents in long-term debt for every $1 of net assets.

Santa Ana: $30 million deficit; $300,000 in reserves; jettisoning jobs by the dozens to keep its head above water; last year the city paid out $11 million for employee pension costs. And the Democratic governor is demanding that unions pay more. Hmmm.

Detroit: worse than expected -- without draconian steps now, could run out of cash April, 2012; mayor says assumptions allow to April, 2012, but, in fact, likely to run out of cash by December, 201l. November 17, 2011.

Detroit: likely to run out of cash next year. November 3, 2011. A year from now. Give me a break; that's an eternity for these stories; the can will keep getting kicked down the road as long as city leaders are being paid. 

Many cities: draconian cuts. September 27, 2011. 

In Cleveland, the school board was to vote Tuesday night on whether to lay off teachers for the second time this year. The school district says it would have to find more than $10 million in cuts to help balance its budget and save the jobs of more than 300 teachers.

This past summer, the city laid off 319 employees, including 81 police officers.

New Orleans, LA: 1,300 of 1,900 jobs at one manufacturing job supporting will be lost due to end of space shuttle program. For New Orleans, a loss of 1,300 jobs is not trivial. August 2, 2011.

Central Falls, RI: filed for bankruptcy. Smallest city in smallest state. Annual budget, $17 million; debt: $80 million. Due to pensions and health care costs. Sounds like state employees kept getting better and better deals over the years. This town has been on the list since December, 2010. -- posted August 1, 2011. Update: city will pay bondholders first (state law); will guarantee only $10,000 to retired policemen, firemen, other pensioners. August 13, 2011. [Update, April 27, 2012 -- the city could be out of bankruptcy in three months.] [Update, September 2, 2012 -- city given approval to exit bankruptcy; bondholders paid in full; pensions cut.]

Detroit, MI: $155 million budget deficit and a dwindling population. City will ration resources; giving resources to neighborhoods likely to survive; letting others die.  Talk about a dwindling population:

Detroit's population of about 713,000 is down about 200,000 from 10 years ago, according to U.S. Census figures, and has fallen more than 1 million since 1950. Some areas have fewer occupied homes than vacant ones.

Birmingham, Jefferson County, AL: getting ready to file for bankruptcy; $3 billion in debt. July 26, 2011. 

Chicago, IL: Mayor Emanuel lays off number of union employees; many are seasonal workers. Unions failed to negotiate. July 15, 2011. 

Central Falls, RI: Nearing bankruptcy! July 11, 2011 --

Central Falls, one of New England’s most distressed cities, is on the cusp of filing for bankruptcy protection - a relatively rare step for municipalities even in tough financial times. Since 1980, only about 46 cities or towns in the United States have sought such protection, according to James Spiotto, an attorney in Chicago who is an expert in municipal bankruptcies.

Last year, the state took over Central Falls - a city of 19,000 residents with an unadjusted unemployment rate of 15 percent - stripping the mayor of his keys to City Hall and the rest of his authority. That move came after every teacher was fired at the underperforming high school, with most of them rehired later. [Okay.]

As state officials try to dig Central Fall out of its financial hole, negotiations are ongoing with labor unions and retirees and cuts are being sought from every corner of the budget. Without major concessions, bankruptcy is a very real possibility. Bankruptcy can take a toll on a city’s reputation and put stress on neighboring communities, which might have to step in to provide services.

It looks like it's all about pensions and health care.

South Bend, Indiana: Number 8 in Newsweek's list of the top ten "dying cities" in the US.

In June 21, 2011, issue of the Wall Street Journal, William McGurn writes that "When the actual census figures came out a few weeks later, it turned out that the population drop was even more sever than the estimates." Further: "It's considered bad form to notice, but one problem might be that South Bend, like at least of its companions on the dying cities list, Detroit, hasn't had a Republican mayor for four decades. Yes, there are badly run Republican cities, and well-run Democratic ones. South Bend, however, is a classic Democratic city, with a classic Democratic approach to business. And it shows."

Detroit, Michigan: City population has fallen to 1910's population; falling faster than expected. High taxes and failing schools. March 22, 2011. 

Michigan: Governor ready to sign bill giving state emergency powers over cities and school districts facing bankruptcy. Unions will probably take case to state supreme court. March 13, 2011.

St. Louis, MO: population declines eight (8) percent. February 25, 2011.

Providence, RI: Every teacher in the city will receive a letter notifying that he/she will be dismissed effective following the last day of school. The city had a daunting $57 million budget deficit last year; expectations are it will be worse this year ending June 30. February 23, 2011.

Detroit, MI: The state orders Detroit to close half its public schools; will result in school classes going to sixty (60) students in a class. February 21, 2011. [Update: this link is now broken.]

San Francisco, CA: on the verge of bankruptcy; maybe not as soon as rest in this list, but huge debt issues; if around $300 million to $400 million in cuts to employee pension and health care costs are not achieved, the city could face bankruptcy as soon as five years from now. On top of this, Federal stimulus money must be running out. February 18, 2011.

Detroit, MI: May cut number of schools in half, from 142 to 72. January 17, 2011.

Camden, NJ: Cutting half their police force? Then, the very last paragraph, one finds out that the city bulked up its police force some years ago when they received federal funds. January 16, 2011.

Hamtramck, MI: Pleads for bankruptcy; state not ready to accept bankrupt plea. (Hamtramck is "surrounded" by Detroit.) December 28, 2010.

Prichard, AL: Bankrupt due to city pensions. December 23, 2010.

Central Falls, RI: City ready for receivership; $48 million in unfunded pension liability alone; population 19,000; state has poured $604 million into city's school system since 1991 and yet high school was rated one of six worse-performing schools in the state this past year. December 18, 2010.

Harrisburg, PA: Law firm to represent Harrisburg pro bono for Chapter 9 (bankruptcy) filing. Harrisburg has placed freeze on overtime pay for city employees. Harrisburg is being sued for $19 million for missing payments.

Las Vegas, NV: Deepest slide since the 1940s. I assume Nevadans will re-elect Senator Reid anyway. [They did.]

Harrisburg, PA: Bailout! One step closer to bankruptcy. As the stimulus money runs out, is this "the canary in the coal mine"?

Harrisburg, PA: Broke, defaults on bonds; tied to "green energy" facility. September 2, 2010.

Miami, FL: Broke. August 30, 2010.

Camden, NJ: Most impoverished city in the Garden State; will close all libraries; state cut the city's subsidy. August 6, 2010.

Philadelphia, PA: City begins rolling firehouse closures to balance the budget. August 2, 2010.

East St Louis, MO: Cops, firefighters furloughed; city defers $500,000 bond repayment. The money has run out.  [I remember how "bad" this city was in the 1980's; I can only imagine how much worse it's gotten.] August 1, 2010.

Newark, NJ: Four-day-work week for city staff; city swimming pool closures; no toilet paper for city facilities. July 22, 2010.

Harrisburg, PA: Update -- it looks even worse now than in April; no progress; $250 million in debt; tied to "green energy" project. Pennsylvania governor offering advice. June 10, 2010.

Detroit, MI: Detroit demolishing homes; shrinking in size; replace homes with parks and farms. Farms inside city limits? May 14, 2010.

Harrisburg, PA: To consider declaring bankruptcy. May not be an option (legally). Huge debt tied to "green energy" project. April 27, 2010.

Los Angeles, CA: The budget crisis has closed 17 courts and may close another 50 courts in September if cash not found; could throw civil and family court into chaos. Actually, maybe lawsuit-crazy Angelinos deserve this.

Los Angeles, CA: Two months ago, the city's deficit was $204 million. The deficit as of today is now $222 million; council still has no plan in place. April 9, 2010.

Los Angeles, CA: The vultures are circling. April 6, 2010.

Detroit, MI: The city will close 44 of 172 public schools at the end of this school year. This comes on top of 29 schools that were closed last fall. March 17, 2010. [Update: this link is now broken; it's a dynamic link.]

Kansas City, MO: city will close almost half its public schools at the end of the year to save money. March 11. 2010. 

Detroit, MI: mayor has great idea; unfortunately he will be destroyed politically. February 25, 2010. [Update: this link is now broken. The mayor's  plan was to "shrink" the size of the city.]

Harrisburg, PA: bankruptcy is on the table; $68 million in debt. February 4, 2010.

Phoenix, AZ: $241 million in the hole; new 2% tax on food will raise about $60 million. The tax will only be in effect for five (5) years. Yeah, right. (Note: for those who have forgotten Econ 101, ninth grade school subject, sales taxes are the most regressive kinds of taxes).  February 4, 2010.

Los Angeles, CA: $204 million gap; refuses to cut union jobs after members pack council meeting. For those who may have forgotten. February 4, 2010.

FAQs Updated, 18, 19, and 20

Readers of this blog know that I update pages on a regular basis. One of my pages is a "frequently asked questions (FAQs)" page. Early on I had about ten (10) frequently asked questions, but that page has now grown to 20 questions.

Realizing that frequent readers of my blog may not re-visit that site thinking it will not be updated, I will occasionally post new questions/answers in a stand-alone post, when updating the FAQs page.

So, without further ado, here are the three (3) most recently answered FAQs.

18. How long will "the Bakken" last? 

Obviously that question cannot be answered with any degree of certainty. But in January, 2010, analysts suggested North Dakota's oil output will increase to 400,000 bopd by mid-2011, and that level of production will be sustained for 10 - 15 years.

19. What oil fields in North Dakota are "in play"?

I am considering a whole page (or pages) to discuss the various oil fields in North Dakota. For now, I will be brief. The Parshall oil field and the Sanish oil field seem to be the center of attention in this current boom and interest in the Bakken. Other fields that seem to "in play" right now: Big Bend and Van Hook; Clear Water; Little Knife, Jim Creek and Murphy Creek; Alger; Painted Woods, Squires, and Round Prairies.

20. How many active oil wells are there in North Dakota?

For me, this question is irrelevant, but I see it is often asked, so, without attributing the source, or confirming the accuracy, I will answer that my understanding is that there are in excess of 4,000 active wells in North Dakota. How many permits (wells drilled from these permits) are being granted on an annual basis in North Dakota? 2006: 422 (195); 2007: 493 (336); 2008: 916 (645); 2009 626 (168). Obviously the numbers inside the parentheses (wells drilled from these permits) will increase over time.

Off-Shore Drilling in North Dakota

The US Army Corps of Engineers is inviting public comment on the oil industry's request to drill under Lake Sakakawea, which in some places, stretches fourteen (14) miles across.

For folks who do not live in North Dakota, or are not familiar with North Dakota, yes, the lake is that wide in some places.

Of course, drilling under the lake (or the Missouri River, for that matter) is no different from drilling elsewhere when the wells go straight down 9,000 feet before going horizontal for another mile or two, but I'm sure others won't see it the way I do. Oh, well.

There is such a backlog of drilling that if we don't get to Lake Sakakawea for ten years it won't matter in the big scheme of things.

But to give you an idea how big a deal this is: right now the US Army Corps of Engineers can count the number of requests to drill under the lake on the hands of one or two environmentalists. There are indications that the number of requests will soar to hundreds.

Look at the initial production numbers and the total amount of oil produced in the first few months of some of the "Bakken" wells drilled in the past few months and you will understand why the interest to drill under the water.

NOTE: It is technically true that the lake is fourteen (14) miles across at some points. However, that doesn't mean there are not projections of land into the lake from which wells could not be drilled. Some of the widest parts of the lake are smack dab in the middle of the prolific Parshall field, the Big Bend Field, and the Van Hook, and in Fort Berthold Indian Reservation, but even in those areas, there are very few spots that are farther out than two sections from the coast (thus, within reach of a "long lateral").

Bottom line: except for very few locations, the area under the lake can be reached with "long laterals" from shore. I don't think we're going to be seeing "deep water" rigs on the Missouri any time soon. Ever.

Update: An editorial in the Bismarck Tribune supports my opinion. February 14, 2010. 


NOTE: According to a report in 2008, some horizontal wells have already been drilled under the lake.