Fact-Checking: Completion Deadlines? -- April 8, 2015

Back on March 15, 2015, I said that North Dakota requires that wells be completed within a year of being drilled. I did not provide a source but I recall vividly having read that somewhere. A reader has called me on that -- if I had a source for that.

I think my source was a good source, but for all I know it was a comment made by a reader who has a friend who has a sister whose husband works somewhere in North Dakota who made that comment in passing.

Until recently, there was probably no concern about deadlines for completing a well, but it's a good question. So, if anyone knows ... a lot of readers would appreciate it.

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Responses

12:50 p.m. CT, same day:  You asked readers for help in finding information on subject. The only definitive ND official information I have found is at: http://www.legis.nd.gov/information/acdata/pdf/43-02-03.pdf?20150408122852. See Section 43-02-03-55. Abandonment of wells or treating plants - Suspension of drilling.

The pertinent first paragraph reads:

1. The removal of production equipment or the failure to produce oil or gas, or the removal of production equipment or the failure to produce water from a source well, for one year constitutes abandonment of the well. The removal of injection equipment or the failure to use an injection well for one year constitutes abandonment of the well. The failure to plug a stratigraphic test hole within one year of reaching total depth constitutes abandonment of the well. The removal of treating plant equipment or the failure to use a treating plant for one year constitutes abandonment of the treating plant.

Generally speaking, when I review file reports, wells that have not been completed have little to no production. 

Biggest Story Of The Year -- The Brontosaurus Is Back -- April 8, 2015

I would have posted the story anyway, but I am especially happy to be able to post this story for Don, who probably never gave up rooting for the Brontosaurus.

Scientific American is reporting:

Some of the largest animals to ever walk on Earth were the long-necked, long-tailed dinosaurs known as the sauropods—and the most famous of these giants is probably Brontosaurus, the "thunder lizard."

Deeply rooted as this titan is in the popular imagination, however, for more than a century scientists thought it never existed.

The first of the Brontosaurus genus was named in 1879 by famed paleontologist Othniel Charles Marsh. The specimen still stands on display in the Great Hall of Yale's Peabody Museum of Natural History. In 1903, however, paleontologist Elmer Riggs found that Brontosaurus was apparently the same as the genus Apatosaurus, which Marsh had first described in 1877.

In such cases the rules of scientific nomenclature state that the oldest name has priority, dooming Brontosaurus to another extinction.

Now a new study suggests resurrecting Brontosaurus.

It turns out the original Apatosaurus and Brontosaurus fossils appear different enough to belong to separate groups after all.

"Generally, Brontosaurus can be distinguished from Apatosaurus most easily by its neck, which is higher and less wide," says lead study author Emanuel Tschopp, a vertebrate paleontologist at the New University of Lisbon in Portugal. "So although both are very massive and robust animals, Apatosaurus is even more extreme than Brontosaurus."

I always knew they never should have "done away" with Brontosaurus. 

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Beautiful Walk

Yesterday I mentioned the beautiful stroll I took with our youngest granddaughter yesterday. Here is one of the views, just a few blocks from our apartment complex:

Getting Serious In Yemen -- April 8, 2015; Hydrocarbons (2014): US #1; Russia #2; Saudi Arabia #3

Alcoa to report after market close today, I believe.

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Yemen

Getting serious -- sometime ago I mentioned that Yemen was becoming the proxy war between Saudi Arabia and Iran, and perhaps even between the US and Russia.

Over at Fox News there is a story that President Obama will sent weapons to Saudi Arabia as fast as he can -- as long as it doesn't interfere with his golf game, I suppose. Meanwhile, there is a Drudge headline that Iran is sending a ship of some sort to Yemen. WWI started with less.

So, let's see what oil is doing at the opening. Down $1.33 or thereabouts.

On another note, pundits say that if Shell buys BG, it will challenge Exxon for dominance. Deep in the article, based on market cap, Exxon has nothing to fear. However, my hunch: Exxon makes a bid for something before the end of the year. Some folks have been saying that for years; I'm late to the game.

With regard to Shell and BG:

The third-biggest oil and gas deal ever by enterprise value will bring Shell assets in Brazil, East Africa, Australia, Kazakhstan and Egypt, including some of the world's most ambitious liquefied natural gas (LNG) projects.

Shell is already the world's leading LNG company and it would get BG's capacity in LNG logistics -- complex infrastructure that includes terminals, pipelines, specialised tankers, rigs, super coolers, regasification facilities and storage points.

Regardless of how this works, I have opined for years that the 21st century will be the century for fossil-fuel resurgence. Fossil fuel never went away but its new "popularity" is stunning. Remember: EV's run on coal.  Particularly in China.

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EIA Blurb

Yesterday's EIA blurb:

The United States remained the world's top producer of petroleum and natural gas hydrocarbons in 2014.

U.S. hydrocarbon production continues to exceed that of both Russia and Saudi Arabia, the second- and third-largest producers, respectively. For the United States and Russia, total petroleum and natural gas hydrocarbon production, in energy content terms, is almost evenly split between petroleum and natural gas. Saudi Arabia's production, on the other hand, heavily favors petroleum. --- EIA

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Death Watch

Greece: Cuba 2015

CNBC is reporting:

Greece sold over a billion euros worth of short-term treasury bills Wednesday in a bid to scrape together enough cash to meet is debt repayment deadlines, while a visit to Moscow might also give the country a desperately needed financial lifeline.

Greek Prime Minister Alexis Tsipras is due to meet Russian President Vladimir Putin in Moscow Wednesday and as his country apparently approaches economic ruin, analysts are concerned Tsipras could resort to drastic measures to save it from collapse. 

Reminder On MyMinerals.Com -- April 8, 2015

This was posted back in March. I'm not sure if they are still doing "beta-testing" but if you have minerals you may want to check out "myminerals.com":

www.myminerals.com is looking for some folks with minerals to test out their new site. I don't have any minerals, but I have gone to the site and given them my e-mail address and county where I have (fantasy) mineral rights, to help them test their site.

The individuals at myminerals.com are hoping to get a number of folks interested to test the new site. If I understand them correctly, once they have a number of folks interested, they will then poll the "beta testers" to see what functionality (or functionalities) those early testers are most interested in.

I will be "playing" with fantasy minerals to help them develop their site. One of the things I hope to gain from this: apparently their maps load more quickly than Bing or Google maps. Long-time readers might remember a Bakken mapping service that was absolutely incredible, but it was not up very long due to personal health reasons involving the website designer. There are other map sites, none of which I use any more, and to the best of my knowledge, they only "map"; they don't help mineral owners track "their" wells with regard to production. 

The second thing I would be interested in: if the myminerals.com has an "app" that can be accessed through the Apple app store or similar store at an Android/Google site. 

If the site works, I hope they break down production by oil, natural gas, and other produced products.

I don't have any personal relationship with the developers of myminerals.com but they have been in touch with me over the past few months and everything seems to be "on the up and up," as they say. I am not being reimbursed anything for this "shout-out." I just like to see the where these products might take us.

Wednesday, April 8, 2015 -- One Week Before April Fifteenth

Active rigs:

	4/8/2015	04/08/2014	04/08/2013	04/08/2012	04/08/2011
Active Rigs	93	191	185	208	173

RBN Energy: this year's natural gas power burn and the Marcellus.

This year’s natural gas power burn is shaping up as a record-breaker, mostly because gas consumption needs to rise sharply to offset increased production and the power sector is best able to ramp up its gas use. But what will it take, gas-price-wise, for utilities and independent power producers to increase their 2015 power burn by 2, 3 or even 4 Bcf/d this year? And which parts of the U.S. are likely to see the most dramatic coal-to-gas switching? Today we continue our look at this year’s power burn and its significance to Marcellus and other gas producers.

Huge volumes of natural gas will be produced in the Lower 48 in 2015, probably upwards of 75 Bcf/d, or more than 50% higher than 10 years ago. Once it’s injected into a midstream pipeline all that gas will need to find a home and—at least until the first liquefaction units at Sabine Pass LNG come online late this year or early next—there are only two homes available: storage or immediate use (for space heating, power and steam generation, export to Mexico etc.). One challenge gas producers and marketers must grapple with this year is that, while demand for gas from U.S. industrials is on the rise and Sabine Pass and other LNG export facilities are on the horizon, gas storage facilities may not have room to absorb as much surplus gas as they did last spring, summer and fall. (If they did, they’d be pushing their storage limits.)

Power generation is the only gas-consuming sector with the capacity and flexibility to absorb large incremental volumes of gas. Another way to put that is, electric utilities and independent power producers (IPPs) will likely burn a lot of gas in the next nine and a half months (and probably in 2016 too) to keep gas production and consumption (plus storage) in balance.

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Perhaps Hillary Was Right

Russia hacks the White House internet but no word that anyone has hacked Hillary's secret server(s). CNN is reporting:

Russian hackers behind the damaging cyber intrusion of the State Department in recent months used that perch to penetrate sensitive parts of the White House computer system, according to U.S. officials briefed on the investigation.

While the White House has said the breach only affected an unclassified system, that description belies the seriousness of the intrusion. The hackers had access to sensitive information such as real-time non-public details of the president's schedule. While such information is not classified, it is still highly sensitive and prized by foreign intelligence agencies, U.S. officials say.

The White House in October said it noticed suspicious activity in the unclassified network that serves the executive office of the president. The system has been shut down periodically to allow for security upgrades.

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Sweet Spots for "EVs": 18 - 25 Miles (No Typo)

Article over at Seeking Alpha on recent "car show." Highlights:

• current emphasis by major vehicle manufacturers on hybrid plugin EVs, with big emphasis on electric drive range of 15-30 miles
• New York Motor Show commentary indicates a long way to go for fully electric EVs
• Chevrolet and Nissan announce new generation fully electric cars with 200 mile range

The writer notes: 

The recent New York motor show, and the press coverage indicate the US mindset about personal vehicle transport… it still involves an internal combustion engine.

Curious is the claim that the "sweet spot" for an EV is an 18-25 mile range (with a "real" engine to stop being stranded constantly)! In what parallel universe is this a functional EV? Is it just the internal combustion engine car you have when you want to pay lip service to the rise of the EV? Or perhaps a way for the big car companies to extend the life of their cars with engines a little longer, rather than confronting the reality of the change. A lot of manufacturers are doing this. More seriously, perhaps a major motivation for having electric capacity for short trips means that the stated fuel consumption can be brought down to levels required by regulators.

But this may be what explains Tesla:

Norway is to EVs what Germany was to solar PV. 

For an emerging technology that isn't "there" yet, you need action by early adopters that understand that the first steps in a revolution are often hard to justify economically. Norway's commitment was to put 50,000 EVs on Norwegian roads and this will end in success soon. This may be a temporary setback for Tesla, and it may come in the next couple of quarters if the Norwegian government doesn't manage generously withdrawal of the generous subsidies.

In the EV space, the Norwegian experience has not gone unnoticed and some features of the Norwegian incentives are catching on in polluted cities around the world, as well as in environmentally aware California. For example, London exempts plug-in vehicles from its commuter tax. It may be that the way officials restrict cars into crowded and polluted cities is to allow only emission free vehicles, which would be a huge boost for fully electric cars. China seems to be heading in this direction, as are a number of European countries.

Imagine.