Random Update of Two Hess Hawkeye Wells -- The Bakken, North Dakota, USA

Elsewhere, someone asked about production figures for:

• 23071, 1,224, Hess, HA-Mogen152-95-0805H-3, Hawkeye, middle Bakken, 30 stages; 1.5 million lbs; t12/12; cum 39K 12/12;
• 23072, 1,089, Hess, HA-Dahl 152-05-0706H-3, Hawkeye, 30 stages, 1.6 million lbs; t12/12; cum 39K 12/12; 

For newbies, this is a relatively small amount of proppant. Rule of thumb: 100,000K/stage; generally 30 stages --> 3 million pounds.

Wow, there are some good wells in this area:

• 20738, 1,496, Hess, HA-Mogen-152-95-0805H-2, Hawkeye, t12/11; cum 302K 12/12. Note: 300,000 bbls in one year. Takeaway constrained. Plus 82,000 boe.

BEXP Has Another Huge Well; Wells Coming Off the Confidential List Tuesday; Three of Four Wells --> DRL Status

22902, drl, BEXP, Topaz 20-17 4TFH, Banks, 4-well pad; three wells on DRL status;
23034, 2,850, BEXP, Allison 34-14 1H, East Fork, 4-well pad; another one also producing (#23033; 2,888, Jennifer)
23335, drl, QEP, MHA 2-03-35H-150-92, Heart Butte, t11/12; cum 18K 12/12; two 5-well pads;
23390, drl, KOG, P Bibler 155-99-15-31-7-15H3, Stockyard Creek, 4-well pad; another on DRL status;

Note: 3 of 4 wells to DRL status; most likely due to pad drilling; not likely due to weather or frack scheduling

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

23034, conf, BEXP, Allison 34-14 1H, East Fork, on a natural gas pipeline:

Date	Oil Runs	MCF Sold
12-2012	18382	8478

The P Bibler well is on a 4-well pad; two of those wells will run north into the Epping oil field; two will run south into Stockyard Creek.

Two wells in the immediate vicinity:

• 19576, 1,223, KOG/BTA, 20711 Erickson 3130 1H, t 5/11; cum 155K 12/12;
• 19329, 1,261, KOG/BTA, 20711 Bibler 67 1H, t6/11; cum 153K 12/12;

I assume this KOG Bibler well will go to DRL status; there are other wells on the pad that need to be completed.

Of interest: the Erickson well is severely constrained with regard to natural gas. It has been flaring all natural gas since June, 2012, and before that, much of the natural gas was flared. The well was on-line for only two days in December. Here is the production record:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	12-2012	2	136	226	56	156	0	151
BAKKEN	11-2012	30	3625	3612	2510	4620	0	4537
BAKKEN	10-2012	31	6491	6737	4010	7590	0	7503
BAKKEN	9-2012	8	2580	2229	1232	2642	0	2621
BAKKEN	8-2012	28	6227	6510	3468	7638	0	7557
BAKKEN	7-2012	30	7244	7308	4384	8562	0	8474
BAKKEN	6-2012	29	7030	6823	3811	8839	0	8752
BAKKEN	5-2012	31	8391	8706	4516	12530	4063	8376
BAKKEN	4-2012	30	7939	7568	3998	9777	2278	7409
BAKKEN	3-2012	30	10182	10548	4140	12225	0	12136
BAKKEN	2-2012	29	10741	10882	4280	12584	3745	8752
BAKKEN	1-2012	20	3230	2614	2034	3699	1400	2242
BAKKEN	12-2011	16	2662	2932	1113	3154	0	3106
BAKKEN	11-2011	15	2679	2504	1554	3246	0	3126
BAKKEN	10-2011	18	6462	6923	2222	7708	1285	6279
BAKKEN	9-2011	28	10778	10930	3747	12629	4942	7463
BAKKEN	8-2011	28	12577	12475	4624	14948	3496	11228
BAKKEN	7-2011	30	15608	15540	6535	18370	201	17929
BAKKEN	6-2011	25	15356	15681	7502	18414	3039	15175
BAKKEN	5-2011	18	14615	13548	13588	14799	1749	12906

The story is very similar to the Bibler well (#19329).

Two other wells to the east have similar profiles: 150,000 bbls in 18 months; most natural gas being flare.

Gasoline At Historic Highs -- Christian Science Monitor

Don't write me .. write the White House or the Christian Science Monitor .. I'm just passing along the story.

The Christian Science Monitor is reporting that US gas prices have hit an historic high. Cue up Connie Francis. Gee, just a week ago or so, the administration telegraphs that is has no plans to approve the Keystone XL.

I didn't know this until recently, but it is my understanding that different US refineries use two different types of crude oil: heavy and light, but most (?) US refineries use heavy oil. Heavy oil is imported from Canada, Venezuela, Saudi Arabia. So, killing the Keystone XL, means heavy oil deficit will be made up through imports from Venezuela and the rest of OPEC.

Canadian oil is selling at a $30 discount to Brent but killing the Keystone XL ....

If the Keystone XL had been approved two years ago, I wonder how far along it would be by now ...

I digress... back to the CSM story:

A combination of high crude prices, refinery shutdowns, and early speculation has sent gas prices soaring to seasonal highs earlier than usual this year, with no signs of prices at the pump falling until spring, according to recent estimates.

Higher crude prices. This rise, especially overseas, has pushed up prices at the pump, says Michael Green, a spokesman at AAA. [Fact check: "higher crude prices, especially overseas" -- Canadian oil is selling at a $30+ discount and this administration telegraphs no desire to increase Canadian oil imports.]

“This year oil prices are rising with expectations that the global economy will continue to improve,” says Mr. Green. “Gas prices are intimately connected to oil prices, [which are] very much connected to what is going on in other parts of the world. Events overseas have a big effect on prices American motorists pay at the pump.” [Fact check: domestic politics also have a big effect on price American motorists pay at the pump: killing the Keystone, fracking regulation uncertainty.]

In fact, crude oil prices have risen 10 percent during the past two months, and the price of crude accounts for almost 70 percent of the cost of a gallon of gas, according to the US Energy Information Administration. [Fact check: "crude oil prices have risen 10%" - Canadian oil sands oil is selling at a $30+ discount.]

And the second page of the internet story mentions "speculators" -- something we have not seen/read/heard about for the past year or so.

Expect to start seeing more stories about "speculation" going forward.

I did not post the story a reader sent to me yesterday, but folks in Washington want to increase taxes on gasoline / crude oil to pay for more Federal spending -- my hunch is that increasing taxes on gasoline / crude oil will drive up the cost at the pump a lot higher and a lot faster than any of the reasons that the CSM mentions for the current rise in the price of gasoline.  Watch for code phrases/code words for increased taxes on gasoline in the State of the Union Address tomorrow night.

Burlington Northern Update -- Staggering

Background

BNI

BR

Think: a) huge shipping volumes; b) mainline along US Highway 2; c) natural gas processing and refueling station at the Minot BNSF yard; d) a petrochemical plant in Minot because BNSF is there to transport finished products. 

Updates

June 7, 2013: if the BNSF natural gas test is a success, it would be very interesting to see if BNSF might locate a natural gas processing plant at the Minot yard for refueling. It's very possible BNSF could become a much bigger entity in North Dakota before this is all over. So much of this is dependent on an adequate work force, and as jobs become available, fewer young people will leave the state for greener pastures elsewhere.

June 7, 2013: there is talk that Burlington Northern will upgrade its track along US-2 (Williston - Minot - Fargo - Minneapolis - Chicago) to a mainline track. Personal communication. No link.

However, this story in ConstructionEquipmentGuide provides some interesting data points, dated December 22, 2013:

An increase in growth and traffic numbers in Minot, N.D., have made it necessary to create a bypass on the northeast corner of the city starting at County Road 12, just north of Highway 2, an east/west route, and continuing to U.S. Highway 83, a main thoroughfare and north/south route.

The project also includes the construction of an overpass over the Burlington Northern Santa Fe Railroad tracks on Highway 55 between Highway 2 and County Road 12, on the south end of the project.

The project was developed five years ago with the intention to keep major traffic out of the downtown area, said Jeff McElwain, project engineer of Ackerman-Eastvold Engineering, the project coordinator.

Original Post

I grew up with Burlington Northern. I remember "racing" my car through the rail yards / grain elevators on the south side of Williston, to evade ... whatever needed evading.... but that was long ago, in a faraway place ... but I grew up with Burlington Northern ... Great Northern before that... and it was one of the first companies I invested in when I first started buying shares in individual companies back in 1984 .... I'm glad to see BNSF continues to put out press releases.

Don sent me two.

First:

BNSF Railway's economic development team worked with customers and state and local economic development organizations to locate hundreds of new or expanded facilities in communities across BNSF's network in 2012, generating approximately $1.8 billion in new investment and over 6,200 new U.S. jobs in 23 states.

The 194 new and expanding facilities located on BNSF in 2012 included signature rail equipment manufacturing projects in Fort Worth, Texas and Rochelle, Illinois. Efforts in 2012 also included 44 projects to support the agricultural industry in 12 states, including 10 new grain shuttle facilities.

The expanding unconventional oil and gas industry continued as a major source of economic development projects for BNSF. As demand for crude oil from the various U.S. shale formations continues to rise, so do investments in new rail facilities. In response to this demand, last year the BNSF economic development team assisted customers in locating and completing five new crude oil unit train terminals in North Dakota and Montana. In addition, several new destination crude oil facilities were located in Washington, Missouri, Texas and Florida. These investments surpassed $300 million.

“2012 was a record year for BNSF economic development efforts. We broke our all-time job creation and project completion records and attained the second highest level of customer investment in our service territory.

And the second press release:

BNSF Railway Company (BNSF) today announced a planned 2013 capital commitment program of approximately $4.1 billion, approximately a $450 million increase over its 2012 capital spend of $3.6 billion.

The largest component of the capital plan is spending $2.3 billion on BNSF's core network and related assets. BNSF also plans to spend approximately $1 billion on locomotive, freight car and other equipment acquisitions. In addition, the program includes about $250 million for continued installation of federally mandated positive train control (PTC) and $550 million for terminal, line and intermodal expansion and efficiency projects. BNSF's expansion and efficiency projects will be primarily focused on capacity expansion to accommodate Bakken Shale related industrial products growth, intermodal terminal expansion, such as the completion of BNSF's Kansas City Intermodal Facility, and other terminal improvements to enhance productivity and velocity.

“This record capital plan continues our long-term focus on ensuring our network is prepared for the growing U.S. demand for freight rail,” said Matthew K. Rose, chairman and chief executive officer. “We are focused on investing to meet our customers' expectations and to expand capacity where growth is occurring. Given the importance of our low cost supply chain to the U.S. economy, our privately funded rail infrastructure is well positioned to ensure the U.S. ability to compete in global markets.”

Pretty incredible.

Twelve (12) New Permits -- The Williston Basin, North Dakota, USA

Bakken Operations

Active rigs: 183 (steady)

Twelve (12) new permits --

• Operators: BEXP (6), BR (4), Fidelity (2)
• Fields: Corral Creek (Dunn), Alger (Mountrail), Dickinson (Stark)
• Comments: all multi-well pads; three operators, 12 permits

Wells coming off the confidential list were posted earlier; see sidebar at the right.

A producing well was completed:

• 23689, 846, Whiting, Ella Fladeland 12-12TFH, Sanish, t12/12; cum 1K 12/12;