North Dakota Is On Track for 1,800 New Permits in Calendar Year 2011

It's really, really early in the year, but just out of curiosity, I looked at the number of  new permits by producer.

As of today, 189 new permits have been issue in North Dakota. Again, it's way too early in the calendar year to be extrapolating, but 189 new permits puts "us" on track for 1,815 new permits this year, well ahead of last year. The NDIC issued 1680 permits last year (2010).

So, who has been active with new permits?

• WLL: 24
• EOG: 17
• Petro-Hunt: 11
• Hess: 10
• OXY: 7
• CLR: 6 (along with many other companies with 3 - 6 new permits this year).

I have said numerous times, I am really impressed with what WLL seems to be doing. It almost looks like Whiting has two divisions in North Dakota: the north (or Sanish) division, and the south, or the Three Forks division.

Nine (9) New Permits in North Dakota, USA

Producers: Whiting (3), EOG (3), XTO (2), and SM.

Fields: Bicentennial, Parshall, Clear Water, Baker, Mondak, Ash Coulee, and two wildcats.

The Whiting wildcat is in a very desolate area: it appears that there is no activity in this area, about 9 miles southwest of Watford City, about a mile west of US Highway 85 at 8.5 miles south of  Watford City.  The other two Whiting permits are in the southwest part of the state, again targeting the Three Forks formation, I would assume (Bicentennial and Ash Coulee fields).

The XTO wildcat is also out in the middle of nowhere, toward the southwest part of the state, but not quite as far south as the Whiting play. 

When I see these permits in areas of "little activity," it tells me two things: a) producers are eager to see what they might have in other areas; and, b) it's a preview of the future, as these "new" areas start to fill in.

EOG is "attacking" the Clear Water field, which has been relatively quiet. EOG was issued two more permits in Clear Water; their third new permit was in Parshall, its cash cow.

SM's new permit already shows up on the confidential list and is directly south of Williston, about two miles south of the river.  Again, very little activity.

In addition to the wells that came off the confidential list and which I reported elsewhere earlier today, there was another well that was reported on today's daily activity report:
19082, 697, Brehm 12-27H, a long lateral in the Sanish oil field.

Spectacular EOG Well; Another Nice BEXP Well -- Bakken, North Dakota, USA

A spectacular EOG well:

• 18825, 951, EOG, Van Hook 8-36H, Van Hook, Bakken, 100K in 5 months -- whoo-hoo!

A very nice BEXP well

• 19198, 2,834, Arvid Anderson 14-11 1H, Alger oil field, Bakken; 50,000 barrels in less than two (2) months. At this pace, it too should go over the 100K mark at six months.

For newbies:

• The IPs only provide one data point; perhaps IPs, at best, begin the discussion
• With regard to production, what really matters, is the ultimate production of each well. Generally speaking, in the better fields in the Bakken, folks are estimating the ultimate recovery from a well to be in the neighborhood of 750,000 barrels
• Some producers are putting in as many as seven, maybe eight, wells in a 1280-acre spacing unit (two sections), in the "core" Bakken
• Horizontal Bakken wells cost in the neighborhood of $7 million to complete
• A Bakken well generally has a fairly significant decline rate, but once they stabilize / level off, some folks feel they could produce oil for 20 years or longer
• But if these wells "pay for themselves at the wellhead" in less than two years, and keep on producing, albeit at a much lower rate, for another 20 years, one can see why folks remain excited with the Bakken

If The Well Is Dry, Why Would One Need an Air Quality Permit for A Well That Will Be Abandoned? Good Question.

This is very clever. The link will be broken soon; a regional newspaper.

The oil and gas industry is arguing air quality permits should not be required until after a well is drilled and strikes oil.  If the well is dry, why would an air quality permit be needed for that well?

Actually, the permits should be granted for an entire field, if not for the entire state, but that's another story. The EPA method "nickles and dimes" the E&P industry into a death by a thousand cuts, as I mix my metaphors.

This reminds me of a personal story about 40 years ago. I was selling books door-to-door in New Jersey for the summer to help pay for college. I was given outstanding training on sales and logistics with regard to my sales territory. The company told me not to apply for a "permit" to sell door-to-door because the city would drag its feet and by the time I got a permit, the summer would be over. Instead, the company told me to begin selling, and that if picked up by the police, at worse I would be jailed overnight (the company would post bail), and, at best, the permit application process would most likely be expedited.

I took that advice.

About a month into selling my books, I crossed a jurisdictional line, into a new suburb that required permits to solicit. It was about 5:00 p.m. when I knocked on the door of the home of a police detective. He asked me if I was selling something. I immediately realized why he was asking and I said I wasn't selling anything unless he bought. Until he bought something, I was only showing my merchandise.

He did not see the humor. I was not being humorous. I was about as scared as I have ever been, looking forward to a night in jail and a criminal record.

After the second or third time, denying that I was selling anything, the police detective told me to get into his unmarked police car. "We were going downtown."

When we got downtown, I was booked, photographed (mug shot),  fingerprinted, asked to fill out a form to apply for a permit, and by 7:00 p.m. that night I had my permit and was back selling books door-to-door. (Interestingly enough, I am not on the "no-fly" list.)

What a hoot. That reminds me of another police story which I will post later. It's too good to pass up.

For those who have put the Super Bowl half-time entertainment on mute, here is something you might enjoy (more "spectacular" than the Super Bowl half-time act and with a much better-looking group).

Spectacular/Moulin Rouge

Unemployment Benefits -- Nothing To Do With The Bakken

I have very mixed feelings about unemployment benefits being extended out to 99 weeks (just short of two years).

There is no question that the extension was the right thing to do in the big scheme of things.

What amazes me is that last month (December, 2010) and again this month (January, 2011) the "talking heads" on television (particularly CNBC) "pooh-poohed" the idea that extending the benefits had any effect on the unemployment numbers; or that it might have some relevancy for the fact that the percent of Americans now in the work force is at a record low.

It tells me that these talking  heads have no understanding of human psychology.

It is my opinion, and I'm probably wrong on this, too, that there is a subset of the American workforce that is not looking for working, or turning down "undesirable" jobs because of the extension:

• One of two spouses who have children who used to work but can now afford to stay home with their children (not necessarily bad)
• Workers who would only be able to find minimum wage jobs; they won't look
• Adult children who had jobs, but now collecting unemployment can get a bit of help from their spouses, or their parents
• State, federal and union workers who are well trained to search the internet for "good" jobs and will turn down or not bother to seek "less than good jobs." I saw civilians in the military who spent an hour or so each day at work on government time looking for a better job; classifications are such that they know exactly what the jobs pay and can sort through them by classification

Again, I have mixed feelings about the unemployment extension. There is no question that the extension was the right thing to do in the big scheme of things, but to deny that it has nothing to do with unemployment numbers or the decrease in overall workforce is denying the obvious.

It is interesting to see that one can get about $800/week in Massachusetts for unemployment benefits. Boston is a high-cost area, but western Massachusetts is much more like the rust belt of mid-America. At $800/week and 40 hours/week, that works out to $20/hour. One can be eligible for as much as $942/week in Massachusetts.