Inappropriately Enthusiastic

General (ret.) Wesley Clark, a former presidential candidate, sees North Dakota as the future energy capital of ..... North America.

These local links are often broken or only available in the future through a subscription (paid/free).

The article doesn't say anything particularly new, but this is what caught my attention these four data points:

Regarding wind, North Dakota went from an installed capacity of less than 5 megawatts in 2003 to 1,300 megawatts now.

There are more than 820 turbines operating in the state, which ranks 10th nationally in installed wind capacity.

North Dakota has five ethanol plants operating and produces more than 350 million gallons per year, a tenfold increase since 2005.

Discussing biomass, Christianson said the state ranks No. 1 in potential for energy crops. 

Kind of exciting.

Similar story here.  Likewise, I expect the link to be broken in a matter of days. 

Prime Time Presidential Speech on Status of Oil Spill

Here we are, with the worst environmental disaster on our hands in the gulf, and the president is talking about a "cap-and-trade" bill that has nothing to do with fixing the current problem. I just don't get it. Not once in his speech did he mention anything about how he would actually plug the hole. There was plenty of talk about holding someone accountable but that won't fix the problem. It seems, for the first time in his political career, he has run into a problem that he cannot fix and he knows it.

Here's another take on his speech, at the LA Times. 

But the good news for those in the Bakken: no indication of backing down on the six-month moratorium on deep-water drilling in the gulf, and the on-going evaluation of shallow-water drilling off shore. If the general economy improves, the price oil should keep going up.

I almost missed it, but natural gas is now above $5.00. EOG is near its high for the year ($114) at $110.

June 18, 2010: here's more from the LA Times.

June 18, 2010: here's Peggy Noonan and the Wall Street Journal; some of the best writing ever.

June 18, 2010: even Germany's Der Spiegel sees it "my" way.

130

Incredible.

130!  130 active rigs in North Dakota.

It was 127 yesterday. 128 early this morning. Shortly after lunch, 129. And now,  mid-afternoon, it's 130. I have not seen anything like this in the Bakken since I first started tracking in 2006.

This evening it's back to 129.

129

New record: 129 active rigs in North Dakota.

This is another opportunity to remind folks how well Slawson is doing; Slawson reports another good well today: Wizard 1-35H, #18416, 849, in Big Bend.  Slawson is private but there are some small publicly traded companies that take part in working interests with Slawson.

128

Even for those who are getting used to "the Bakken," it must be hard for them to contain their enthusiasm when they see the number of active rigs sets yet another record.


Today, another active rig record has been set: 128 active rigs in North Dakota.

THE REST IS A "CUT AND PASTE" OF A PREVIOUS POST

I think the number of active rigs will level off at 130 +/- 5.

Interestingly, one of the most visible Bakken players has not participated in this run-up. During the past nine months or so when the number of active rigs has increased significantly, BEXP has remained steady at five (5) rigs. Continental Resources (CLR), by the way, has increased its number of rigs from five (5) to eighteen (18). I count seventeen active CLR rigs today. I may have miscounted "the 18" -- time will tell.

The point is that BEXP has been reporting some monster wells based on 24-hour flowback numbers but it surprises me that the company hasn't followed through with increasing the number of rigs in North Dakota.  This will keep their CAPEX costs down, and should result in some great near-term quarterly reports.

There are two basic business models in the Bakken: own/lease your own rigs, or take a working interest and partner with an operator. Some do both.

Of the former, WLL, CLR, and KOG are most exciting for me. I own shares in one of these. I can make cases for all three: WLL seems best poised for spectacular results based on its concentration in the prolific Sanish. CLR, as noted above, is putting its money where its mouth is by tripling the number of active rigs -- the most of any Bakken operator. KOG is a little company with greater upside. It is concentrated in the reservation and activity there was delayed due to bureaucratic inefficiency at the Federal level. That has been resolved and KOG should do very well this year and next. American Energy (AEZ; 2 active rigs today) cannot be forgotten either; it is in a period of transition, selling all assets in Wyoming and becoming a Bakken pure play company.

Of those whose business model is as a partner (general term, not legal term), NOG and USEG come to mind.

But don't forget: there are other ways to play the Bakken. MDU is a diversified utility in the Bakken; ENB is an important pipeline play in the Bakken; and then there is the Medora Musical (a great play with lots of energy, but not hydrocarbon).