Bloomberg: North Dakota Could Surpass Alaskan Oil Production
Tioga, ND, Investment: $2.3 million crude oil waste processing plan
Hess will increase its number of rigs from ten to fifteen in 2011
61-mile electrical transmission line now operational between Williston and Tioga
COP: Re-Allocating Gulf of Mexico CAPEX to Best Shale Plays
BEXP Well "Passes the Test" for Increased Drilling
GeoResources, Inc., Increases Size of Public Offering
CLR Eco-Pad Results: Bonneville/Bridger
Enbridge Announces It Will Ship Only Sweet Oil, Not Heavy Sands Oil
New natural gas formation found under all of North Dakota
Bakken pipelines update
KOG update: will add a third rig; partners with XOM; 4-well pad to be connected to recently completed Arrow Pipeline
Hess eager to develop newly acquired property in the Bakken
Wednesday, January 26, 2011
Social Security Now Running a Deficit -- Not a Bakken Story
Social Security is now paying out more than it takes in. This was not supposed to happen until 2017 (when I last read about it) but due to the recession, etc., is is now happening. On its own, Social Security fund will be depleted around 2037. By the way, that date has been used for years, along with the 2017 date, suggesting that the "2037" is also bogus, and that the fund, without infusions, will run out sooner.
It is generally agreed that folks currently on social security will not be affected by any changes in social security to help "save" it.
The question is who will be affected by social security changes if Congress changes the benefits (obviously if Congress does not change benefits, everyone will be affected because taxes will be used to shore up social security payouts).
If Congress has the courage to act, it will do the easy things first: annual cost-of-living increases will be scaled back; if nothing else, Congress will figure out a different way to calculate inflation and cost-of-living increases.
Congress will not change benefits to those currently drawing social security (that would be political suicide) but "how close" do they get. Within one year of drawing social security? Within five years? Within ten years? The argument will come down to this: any changes must allow folks to prepare for those changes, and at least five years would be needed for folks to decide whether to add more to their own retirement account, continue working, or go back to school to get back into work force. So, I think within five years of drawing social security at 62. Those currently 57 years old or so should be "safe."
Next on the table will be "means testing." Just like "income tax breaks for the wealthy" which had a threshold of $250,000 annual income, means testing will affect those at a similar threshold prior to retirement or assets commensurate with someone at that income level.
The age at which folks can start drawing social security will probably be moved up just a bit; from 62 to 63 is probably politically manageable. And even to 65 might be okay. And if they can't raise the "62 year" threshold, they can make it more punitive when taking social security early. Perhaps the easiest thing to do in this area would be to require means testing for early withdrawal (at age 62).
I'm guessing that the current Congress won't touch the issue. The Republicans are looking at retaking the Senate and the presidency in 2012 and aren't going to risk it. It goes without argument that the Democrats won't touch it this time around.
Double dipping? One can argue that anyone drawing a federal government pension worth more than a certain amount should not be eligible for social security.
So, the soonest they act on this is 2012. They will rationalize the delay by saying that the reason for the current "social security deficit" is the current recession and once the US gets going again, and the unemployment rate is back down to historical levels, social security will again take in a bit more than it will pay out.
The good news for those "close" to drawing social security is that the politicians have telegraphed they won't change benefits for those already drawing social security. Those who are 62 years or older and holding off on drawing social security until they are 67 or 69 years old might consider drawing it one day before a new law goes into effect. (Sort of like playing "The Price is Right" when the winning bidder often bid one dollar more than the competitors.)
The irony is that it would be better for the government to encourage folks to wait.
It is generally agreed that folks currently on social security will not be affected by any changes in social security to help "save" it.
The question is who will be affected by social security changes if Congress changes the benefits (obviously if Congress does not change benefits, everyone will be affected because taxes will be used to shore up social security payouts).
If Congress has the courage to act, it will do the easy things first: annual cost-of-living increases will be scaled back; if nothing else, Congress will figure out a different way to calculate inflation and cost-of-living increases.
Congress will not change benefits to those currently drawing social security (that would be political suicide) but "how close" do they get. Within one year of drawing social security? Within five years? Within ten years? The argument will come down to this: any changes must allow folks to prepare for those changes, and at least five years would be needed for folks to decide whether to add more to their own retirement account, continue working, or go back to school to get back into work force. So, I think within five years of drawing social security at 62. Those currently 57 years old or so should be "safe."
Next on the table will be "means testing." Just like "income tax breaks for the wealthy" which had a threshold of $250,000 annual income, means testing will affect those at a similar threshold prior to retirement or assets commensurate with someone at that income level.
The age at which folks can start drawing social security will probably be moved up just a bit; from 62 to 63 is probably politically manageable. And even to 65 might be okay. And if they can't raise the "62 year" threshold, they can make it more punitive when taking social security early. Perhaps the easiest thing to do in this area would be to require means testing for early withdrawal (at age 62).
I'm guessing that the current Congress won't touch the issue. The Republicans are looking at retaking the Senate and the presidency in 2012 and aren't going to risk it. It goes without argument that the Democrats won't touch it this time around.
Double dipping? One can argue that anyone drawing a federal government pension worth more than a certain amount should not be eligible for social security.
So, the soonest they act on this is 2012. They will rationalize the delay by saying that the reason for the current "social security deficit" is the current recession and once the US gets going again, and the unemployment rate is back down to historical levels, social security will again take in a bit more than it will pay out.
The good news for those "close" to drawing social security is that the politicians have telegraphed they won't change benefits for those already drawing social security. Those who are 62 years or older and holding off on drawing social security until they are 67 or 69 years old might consider drawing it one day before a new law goes into effect. (Sort of like playing "The Price is Right" when the winning bidder often bid one dollar more than the competitors.)
The irony is that it would be better for the government to encourage folks to wait.
Hess in the Bakken -- Earnings Transcipt -- North Dakota, USA
Some data points:
- Hess with 900,000 acres in the ND Bakken
- Production: 20,000 bopd at end of 2010
- Production: 40,000 bopd average for 2011
- Dual-lateral wells cost $11 - $11.5 million
- Single-lateral wells cost $7 - $7.5 million
- EURs: ~ 500,000 bbls per lateral (thus a dual-lateral well with a EUR of 1 million barrels)
- IPs: 30-day average, 18-stage wells -- 400 - 500 bbls per lateral
- Recently revised their completion design state to 22 stages; IPs will go up
- 18 rigs in the Bakken (due to acqusitions; limited discussion)
- Four dedicated frack crews; will add another frack crew in last half of the year
- Both the American (AEZ) and the Tracker (TRZ) acreage were prospective for Three Forks
- Hess added 274 million bbls of reserves: 160 million in Norway, 70 million in ND -- those were the "two big hitters; also another 30 million bbls in Russia
- A shift from dual-laterals to single-laterals in an effort to "hold-by-production" acreage; will occur over the next two years; planning to meet their target by 2012
- Guidance: 40,000 bbls/day in 2011 in the Bakken, but unable to say what exit rate will be -- still digesting acquisitions
Eight (8) New Permits -- Zavanna Renews Four (4) Permits -- North Dakota, USA
Producers: OXY (2), Hess (2), CLR (2), Petro-Hunt, and Newfield.
Fields: Dimond, Dollar Joe, Siverston, Charlson, Fertile Valley, Little Knife, and one wildcat.
The wildcat is a Hess permit in its Goliath prospect (GO-Vinger-156-98-2116H-1), the area that they acquired when they about American Oil and Gas (AEZ). There is a string/cluster of eight wells in this area, just a few miles west of Ray, North Dakota. It is a very, very active area. It certainly looks like AEZ controlled some good acreage before they sold out to Hess.
Most interesting about the daily activity report today was the number of permit renewals: 13. Zavanna renewed four permits; EOG, 4; and then a number of companies with one or two permit renewals.
The Zavanna wells are ones that I had on my first watch list, and always wondered what was going on with them:
For more on Zavanna and these wells, click here: Zavanna update, November, 2010
Fields: Dimond, Dollar Joe, Siverston, Charlson, Fertile Valley, Little Knife, and one wildcat.
The wildcat is a Hess permit in its Goliath prospect (GO-Vinger-156-98-2116H-1), the area that they acquired when they about American Oil and Gas (AEZ). There is a string/cluster of eight wells in this area, just a few miles west of Ray, North Dakota. It is a very, very active area. It certainly looks like AEZ controlled some good acreage before they sold out to Hess.
Most interesting about the daily activity report today was the number of permit renewals: 13. Zavanna renewed four permits; EOG, 4; and then a number of companies with one or two permit renewals.
The Zavanna wells are ones that I had on my first watch list, and always wondered what was going on with them:
- 18063, Ocelot 1-15H
- 18067, Lion 1-14H
- 18071, Cheetah 1-10H
- 18075, Jaguar 1-22H
For more on Zavanna and these wells, click here: Zavanna update, November, 2010
Super-Long Laterals in the Bakken -- see the BHI Transcript, 4Q10
From the Q&A in the BHI 4Q10 earnings transcript:
Towards the end of the year, we may see some capacity come in and some softness, but we continuously shift towards these oily weather plays, and we're seeing, I mean, very little back off in terms of longer horizontals, longer extension, clients are even pushing out 8,000, 10,000 feet now. That's just involving more fracs, and when you start thinking about it, we're finally starting to see technology hit the U.S. which we've seen overseas for years and years. I mean we've been drilling 35,000 foot-extended rich wells overseas. And just recently, completed a six and eight, 36,000 feet in Saudi, so why won't we continue to see that in the shale plays in the U.S.The bold is mine. I may have taken something out of context and may have misunderstood the conversation at that point, but it is what it is.
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