A Glut Of Oil At Cushing, the Coast -- Plan "B" -- Release Oil From Strategic Petroleum Reserve Before the Election

Updates

August 17, 2012: from Oil and Gas Journal -- oil prices rise despite talk of SPR release. See note below. 

August 17, 2012: The IEA "bases our actions on data and reality. The market is sufficiently supplied," reporters were told in Houston -- in response to the president's suggestion to dust off "Plan B" -- tap the SPR.

Analysts suggest tapping the SPR will raise prices; we've been through this analysis before. Apparently the White House bases their actions on political data, fantasy, and ideology.

Original Post

Link here.

The White House is "dusting off old plans" for a potential release of oil reserves to dampen rising gasoline prices and prevent high energy costs from undermining the success of Iran sanctions, a source with knowledge of the situation said on Thursday.

U.S. officials will monitor market conditions over the coming weeks, watching whether gasoline prices fall after the September 3 Labor Day holiday, as they historically do, the source said.

It was too early to say how big a drawdown would be from the U.S. Strategic Petroleum Reserve and, potentially, other international reserves if a decision to proceed was taken, the source said.

Oil prices have surged in recent weeks, with Brent crude prices closing in on $120 a barrel, up sharply from around $90 a barrel in July. The United States and other Group of Eight countries studied a potential oil release in the spring but shelved the plans when prices dropped.

Yeah, like that will help. The incumbent. 

By the way, whatever happened to Keystone XL 2.0?

Twelve (12) New Permits -- The Williston Basin, North Dakota, USA; Nameless Oil Field

Coming off confidential list, Friday, August 17, 2012

• 19963, 496, Whiting, Littlefield 12-29TFH, Sanish, t2/12; cum 33K 6/12;
• 20554, 1,802, Zenergy, Nelson 11-2H, Banks, t4/12; cum 36K 6/12;
• 21732, 1,373, XTO, Stromme Federal 14X-10A, Haystack Butte, t5/12; cum 41K 6/12;
• 21780, 705, Hess, SC-David 157-99-2932H-1, Lone Tree Lake, t7/12 cum 11k 6/12;
• 22035, drl, BEXP, Strobeck 27-34 3TFH, Alger, s2/12
• 22063, 1,842, BEXP, Anderson 28-33 4TFH, Alger, t6/12; cum 10K 6/12;
• 22309, 563, G3 Operating (Halcon), Thome 1-6-7H, Strandahl, t5/12; cum 10K 6/12;

Twelve new permits, August 16, 2012

• Operators: BEXP (8), Enerplus (2),Whiting, XTO
• Fields: Hay Creek (McKenzie), Nameless (McKenzie), Spotted Horn (McKenzie), Last Chance (Williams), Capa, Williams

Nameless Oil Field

Nameless oil field: a six-section field two miles west of Alexander.

In section 3-150-102 in Nameless oil field, these four wells:

• 8530, 8, Petro-Hunt, Alexander 3-7, t11/81; cum 508K 6/12; a vertical welll; still producing about 300 bbls/month; spud in 1981, this well has produced for 30 years; a Madison well;
• 14432, 57, Petro-Hunt, Link 3-1, t1/97; cum 162K 6/12; a short directional well targeting the Madison formation; still producing about 250 bbls/month;
• 15759, 115, Petro-Hunt, Romo 3C-2-1H, t11/05; cum 70K 6/12; producing about 450 bbls/month; a short horizontal targeting the Madison formation, also;
• 17743, 533, Petro-Hunt, Focht 3D-4-1H, t8/10; cum 48K 6/12; producing about 1,500 bbls/month; targeted the Bakken; 14 stages; 1 million pounds of proppant; spud June 11 and reached total depth July 7, 2010 -- less than a month; a trip gas of 3,936 units and a 3-foot flare;

In section 34-151-102 in Nameless oil field, this one (1) SM Energy well:

8322, multiple payzones, SM Energy, Link 34-1,

• Duperow, 486, completed, 1986; PNA, 1997: cum 214K bbls
• Madison, 91; completed 1997; cum 160K bbls, produced 566 bbls 6/12;
• Red River, 142, completed, 1981; PNA, 1982; cum 20K bbls
• Silurian, 340, completed 1982; PNA, 1986; cum 207K bbls

Total to date:  > 600K bbls 6/12;

In section 34-151-102 in Nameless oil field, this one (1) SM Energy well:

13556, two payzones, SM Energy, Church 1-2X, a plain vanilla vertical well

• Red River, 186, completed, 1993; cum 124 K 6/12; has not produced since 2006
• Stonewall, 140; completed 1994; cum 268K bbls 6/12; producing about 1,300 bbls 6/12; 

Total to date: > 392K bbls 6/12;

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This is worth watching, but only if you watch it to the end:

Wow, Wow, Wow --- CO2, Market Forces, and All That Jazz

Lowest CO2 emissions from the United States in 20 years.

In a surprising turnaround, the amount of carbon dioxide being released into the atmosphere in the U.S. has fallen dramatically to its lowest level in 20 years, and government officials say the biggest reason is that cheap and plentiful natural gas has led many power plant operators to switch from dirtier-burning coal.

Many of the world’s leading climate scientists didn’t see the drop coming, in large part because it happened as a result of market forces rather than direct government action against carbon dioxide, a greenhouse gas that traps heat in the atmosphere.

The drop occurred despite all the flaring in the Bakken. 

This is not entirely true....that part about "market forces only." The government has put in strict environmental controls. In fact, I assume the president should take credit for this turnaround when he defends his well-known position to kill the US coal industry. 

One of the hottest US summers on record; record drought; and CO2 emissions at a 20-year low.

Just saying.

The story continues:

In a little-noticed technical report, the U.S. Energy Information Agency, a part of the Energy Department, said this month that total U.S. CO2 emissions for the first four months of this year fell to about 1992 levels. The Associated Press contacted environmental experts, scientists and utility companies and learned that virtually everyone believes the shift could have major long-term implications for U.S. energy policy.

Like fracking.

Just saying. 

For Doubting B. Thomas: Apple Hits An All-Time High

From MacRumors:

Apple's stock price closed at an all-time high of $636.34 today, passing the prior all-time closing high of $636.23 set four months ago on April 9th. The next day, April 10th, the stock hit an intraday high of $644 and the company's market capitalization breached $600 billion before falling back. Apple's stock price is up nearly 60% on the year, outperforming the NASDAQ by more than 3:1 and the Dow Jones Industrial Average by more than 6:1. 

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read at this blog. 

Any bet that the iPhone is the #1 smart phone in the Bakken?

For Doubting B. Thomas: Busiest McDonald's, Wal-Mart, and Gas Station in the World

From Williston, the heart of the Bakken, Motley Fool reports:

This summer I visited the Williston Basin twice and had a chance to see first hand the massive boom that was going on there.  I fueled at the busiest gas station in the world.  I ate at the busiest McDonald's in the world.  I bought a T-shirt at the busiest Wal-mart in the world.  All this in the town of Williston with a population of under 100,000 permanent residents. As far away as Devils Lake, we watched heavy truck traffic on the newly repaired U.S. Highway 19 as we hooked Walleye over flooded railroad tracks.

Devils Lake is pretty much 250 miles due east of Williston. 

But that's not why I posted this note. Rather, this:

Among those who follow the energy industry, the Bakken Oil Shale might seem like old news. But for everybody else, it is still only on the periphery of their investing consciousness.  This is good for those who want to establish positions in some of the wonderful companies associated with the Williston Basin oil shale plays as many stocks are not pricing in relatively easy-to-predict future free cash flows. 

That is so true: once one gets east of Minot, the likelihood of finding someone who has heard of the Bakken drops off precipitously. For investors, the "easy money" has been made in the Bakken.

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Disclaimer: this is not an investment site. Do not make any investment decision based on anything you read at this site.

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However, having said that, in the big scheme of things, investments in Bakken-centric equities are no doubt trivial compared to the immensity of the market. As Motley Fool says: for everybody else, the Bakken is still only on the periphery of their investing consciousness. My hunch is that a sizable percentage of folks living in Fargo, North Dakota, could not fully explain the Bakken, much less any one in New York City.

Go to the link to see what Motley Fool has to say.