SSN and HAL in the Wyoming Niobrara -- History Repeating Itself

I posted an article earlier today about Samson Oil and Gas partnering with Halliburton to open the Niobrara in Wyoming.

It was a small posting but a huge story.

I was reminded by a reader (who must have the memory of an elephant), after posting that story, that history seems to be repeating itself. The Bakken can be traced back to the Elm Coulee field in Montana. Then, it was a small company called Lyco that partnered with Halliburton to go back into an old field, called Elm Coulee. And the rest is history.

Week 3: January 15 -- January 21, 2011

GMXR: Another Company Entering the Bakken

24 billion barrels: collaborating evidence

GasFrac Energy Services: another investing opportunity

Harold Hamm: the Bakken, fully developed, 24 billion barrels

JayHawk enters the Bakken

TransCanada Keystone XL will ship 65,000 bopd of Bakken oil

ONEOK: $300 million investment for natural gas gathering and processing facility in Williams County

TransCanada's Bison Pipeline complete; connects natural gas pipeline in Wyoming to Northern Border Pipeline in North Dakota

MHR acquires NuLoch Resources -- includes assets in the Bakken

Forbes/Sosnoff predicts $100 oil

Update on ENB infrastructure projects

New ENB projects -- increase of 145,000 bopd for the Bakken takeaway

SeekingAlpha appraisal of the Bakken

Holiday Inn coming to Williston

Texas Hold 'Em

Week 2: January 8 -- January 14, 2011

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

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.

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