The Million Dollar Way (The Bakken Oil Blog)

Tuesday, June 28, 2011

Samson O&G's Rodney 1-14H Producing: 1,439 BOPD

Samson O&G advised that the Rodney #1-14H has been turned to production following the successful fracture stimulation and completion. The work over rig was released on June 25th after all of the fracture isolation plugs were drilled out without incident. The maximum 24 hour measured oil rate during the drill-out operation was 1,439 bopd.

Rigzone: North Dakota Floods Idle Five Rigs, Shut Down 45 Wells

Link here.

Bad weather, flooding and road restrictions are disrupting oil production in North Dakota, shutting down the transportation by rail of 50,000 barrels a day of crude, a state official said.

"No one was prepared to deal with floods that are breaking records set 130 years ago," said Lynn D. Helms, director of the North Dakota Industrial Commission's Department of Mineral Resources said in an e-mail sent late Monday. Helms said the temporary shutdown of the rail transportation will last until it can be re-routed west, but didn't give an estimate as to when that might occur.

The weather has forced the shut in of 45 wells and idled five drilling rigs and is delaying the arrival of service crews to 500 wells waiting to be fractured, Helms said.

Significant, but not overwhelming.

Who Will Buy Boeing's Brand New (Never-Been-Used) Aircraft Factory in South Carolina When The NLRB Rules Boeing Can't Move To South Carolina?

Update

June 30, 2011: Another possibility. Who's to say American Airlines might not just buy the brand new factory for a song, and then lease it out to Airbus and/or Boeing to build American Airlines' new fleet of 250 airplanes in a deal worth $15 billion? AMR would have some leverage: if Airbus wants to be part of the deal, they would have to accept the terms and the new factory.

Original Post

Yes, I know: this has nothing to do with the Bakken, but sometimes I can't resist. I apologize. For those folks who want to read only about the Bakken, please ignore this post.

Now, back to the question: Who Will Buy Boeing's Brand New (Never-Been-Used) Aircraft Factory in South Carolina When The NLRB Rules Boeing Can't Move To South Carolina? Story here.

Answer: Airbus.

And Airbus will buy it for a song.

Airbus and Boeing signed over $25 billion in orders to kick off the Paris Air Show, June, 2011.

Airbus topped the totals, signing orders and commitments for 142 aircraft worth $15 billion.

Rival Boeing countered with more than $11 billion worth of orders and commitments for 56 of its jets, including an order by Qatar Airways for six of its 777 jets in a $1.7 billion deal.

And again, Airbus set a record at the June, 2011, Paris air show, for the most airplanes ever sold at an airshow by any manufacturer, with 730 orders worth over $70 million.

They gotta build those jet planes somewhere, and it's probably cheaper in South Carolina than Germany and France.

A precedent has already been set: BMW has a nice factory in Spartanburg, South Carolina.

Headline Writers At It Again

Here's the headline: "Oil Could Drop to $87 In the Near-Term"

Read the article at the link and decide for yourself if that's the take-home message.

This was the concluding paragraph in the article:

The current retreat [in the price of oil] is an aberration in the fundamentals of demand and supply. The price chart shows the constraints of this policy. A return to the usual demand and supply relationships restores the price activity to its previous behavior and this points the way to a resumption of the uptrend. [Note: on the day this article appeared, WTI oil was up $2.00 from $91 to $93, or thereabouts.]

Elsewhere in the article, the writer says:

The downside target is the long-term support level near $87/barrel. If this fall was triggered by changes in the fundamentals of demand and supply then the chart would also suggest a further downside target near $77/barrel. This is a low probability target simply because the new supply of oil is limited by the size of the stockpiles and the political will power of the IEA member nations.

This is very different from OPEC intervention in the market where their virtually ‘unlimited’ supply allows for the almost infinite increase in production to meet the demand and supply balance. IEA increases in supply are limited by the very nature of the stockpile. This suggests string support around $87/barrel with the development of a consolidation pattern.

I agree with everything in the article (in a general way) except the statement (written as fact) that OPEC has an "unlimited supply [that allows] for the almost infinite increase in production to meet the demand and supply balance." But in the aggregate, a nice analysis.

But even so, the writer of the linked article and I probably agree on OPEC supply as generally defined and understood, but my definition is a practical one; the writer's definition is no doubt a "theoretical" one.

Week 25: June 18 -- June 24, 2011

Several Stories on the Release of Oil From the Strategic Petroleum Reserve (most recent at the top)

Administration Admits to Slow-Rolling the Petroleum Industry: The Permitorium Continues

Rigzone Discussion on Fracking Backlog

Fracking Backlog, Road Restrictions, Flooding Conditions: Taking Toll on North Dakota Oil Industry

Rigzone: North Dakota Booms Into Energy Era
Impact of Oil Industry on Northwest North Dakota

Takeaway Capacity, Oil, Bakken
Enbridge To Build Railroad Oil Loading Facilities: Gains Flexibility
Bakken, Niobrara, Eagle Ford: One Million BOPD Within Five Years

EPA Selects Killdeer, Dunn County, North Dakota, To Test Fracking

Merger, Buyout Action in the Oil Patch: WMB Makes Unsolicited Bid for SUG
Merger, Buyout Action in the Oil Patch: Williston-Based Grizzly Wire Bought by Texas-Based Co.

National Energy Center for Excellence: Bismarck, North Dakota
$4 Million For Oil Field Training -- Williston, North Dakota

Forbes: The Bakken, Natural Gas, CLR, and Oil

The Oil Fields of the Nesson Anticline

Rig Utilization in the Bakken

Hot Spot in the Bakken: McGregory Buttes/South Fork Inside the Reservation

Update on Number of Wells on the Confidential List