Connecting the Dots: Cushing, Bakken, Rail

Don sent this article. Great article. Connects more dots.

Stubbornly high inventories at the Cushing, Oklahoma, .... are a ticking time bomb that could blow out the spread between WTI and Brent futures.

[The October spread] has jumped more than $3 a barrel since early July to hit $14 a barrel,....

Similarly the gap between the January 2013 contracts is only $12 a barrel, .....

With only seven weeks remaining in the summer peak refinery operations season, there is precious little time for the industry to pare back the overhang at Cushing before refinery turnaround season is upon the market.

Indeed, the dismal showing this summer at Cushing, where stocks have built since the start of May, portends a surge in inventories to a fresh record in the fall.

This is a great article; read the rest at the link at Reuters. 

"... portends a surge in inventories to a fresh record in the fall."

Two comments:

a) That's why rail is so important for the Bakken;
b) That's why Enbridge pipelines to the east are so important; and,
c) if "we" know it, certainly the operators know it, and maybe that's why there is a slowdown in oil activity in the Bakken -- if indeed there is a slowdown. The jury is still out on that, but we are down to 208 active rigs in North Dakota, down another 1 from yesterday, and down from the record high of 218.

Okay, three comments.

If you have a company, you didn't build it. Someone else did ...

... and if it was the federal government, it probably went broke. Yup, another federally-backed solar power company just called it quits.

The Amonix solar manufacturing plant in North Las Vegas, subsidized by federal tax credits and grants, has closed its 214,000-square-foot facility about a year after it opened. [Yup.]

Officials at Amonix headquarters in Seal Beach, Calif., have not responded to repeated calls for comment this week. The company began selling surplus equipment, from automated tooling systems to robotic welding cells, in an online auction Wednesday. [Did not answer the phone; so much for transparency.]

A designer and manufacturer of concentrated photovoltaic solar power systems, Amonix received $6 million in federal tax credits for the North Las Vegas plant and a $15.6 million grant from the U.S. Department of Energy in 2007 for research and development. [Tax credits and grants; not obstacles and EPA restrictions.]

I've lost count, but this probably the 4th major solar company to have filed for bankruptcy despite being backed by the deep pockets of the federal government.

No More Posting Until Later Tonight At The Earliest

"Takeaways" for today?

Chesapeake area southeast of Dickinson not yet encouraging.

Hints of slowdown in drilling in the Bakken until fracking costs come down.

Huge BR well in the Charlson -- is this for real? Two more wells nearby nearly complete -- we will see.

Both QEP and WPX now blowing out the numbers with number of permits in same section: in the reservation.

A reader had encouraging news on price of Bakken oil shipped by rail.

The President supports "safe" sex fracking. 

Another multi-acre development project in Williston.

Industrial revolution in the oil patch.

Shale gas secret in the WSJ.

Divide County keeps getting more interesting.

And all free.

This Is NOT an NDIC Typo

Updates

November 7, 2012: this post has been updated.

Original Post

The well file confirms that BR is reporting this as a 6,800-bbl IP.

Interestingly, BR doesn't label it as a "sand frack," but as "other," though it appears it was simply sand and ceramics. 5-stage fracture, short lateral in the Charlson.

There is an "old" vertical well in the immediate area that has targeted and produced from four payzones over the years; and has produced a cumulative of almost 400,000 bbls from non-Bakken "legacy" formations.

There is also another old Silurian vertical that has produced about 170,000 bbls of oil over the years, and is now producing oil from the Bakken. It is displayed as a vertical well with no horizontal leg on the NDIC GIS server map. Very, very fascinating.

The Charlson has always fascinated me.

If this IP "holds" -- I expect to see a bit of discussion regarding this one. Thank goodness for the Bakken Shale Discussion Group.

There are two more short lateral wells in the same section that are nearing completion.

#4: Compton, California, May File For Bankruptcy

Following Stockton, Mammoth Lakes, San Bernardino ...

The City of Compton, a city of 93,000 people located on the outskirts of Los Angeles, must decide by September 1 whether to seek bankruptcy, according to its two most senior financial officials. Such a move would see it join a growing number of deficit-hobbled California cities that have used the filing to restructure onerous debt loads.

Compton, which has anaccumulated $43 million deficit and has depleted what had been a $22 million reserve, will run out of cash to make its payroll on September 1 at its current cash consumption rate, city comptroller Steven Ajobiewe told the city council during a July 17 meeting.

I think we are seeing the trailer for the California movie to be released in early 2013, tentatively titled: "Too Big To Fail."

But at least we are starting to see how this will all end.