Moreover, [CVX] is expected to strengthen its position in the oil market. In our opinion, the high exposure of the company in deepwater exploration would prove to be instrumental in driving its future growth. The Environmental Protection Agency (EPA) imposed a ban on awarding new contracts in the United States to BP due to the tragic Gulf of Mexico oil spill incident. We believe Chevron is in a good place to win the contracts being denied to BP in the auction expected to take place in March next year. This would help the company obtain some of BP's market share and start supplying oil to the United States government and armed forces."Start supplying oil to the United States government and armed forces." ????
Wednesday, December 12, 2012
Domestic Politics Here?
Link to SeekingAlpha.com.
Spacing In The Bakken -- Idle Chatter Once Again -- But It's So Much Fun
Back on June 23, 2012, the MDW poll asked the question whether a mineral owner would prefer 640-, 1280-, or 2560-acre spacing, or does it even manner with regard to the Bakken boom? I don't remember the results but I seem to recall it was something like 70-30 with the vast majority preferring smaller spacing units.
I am not a mineral owner, so I don't have a dog in that fight, but I was asking the question from the perspective of a 65-year-old male with a desire to see at least one well on "his" land ("his" mineral rights) before he began his Long Rest.
Again, this is just idle chatter. There is no "right" answer.
But this is why I asked.
Now, remember, once there is production in any one well in a spacing unit, there is no urgency to drill another well in terms of losing the lease. If the operator has a producing well, he may or may not be inclined to drill another well any time soon. It is very possible that any mineral owner with just a few mineral acres might be lucky to see one well on his "land." Based on comments, some folks have waited a lifetime for a well on "their land."
In the original post, I included the section and the permit numbers, but I thought that might make it too personal. For that reason, I have removed "identifying data" so as not to bring in the current "owner" of that section.
So, then look at section xx-1xx-9X, in the xxxxx oil field. There is one producing well in that section, #xxxxx, spudded back in 2008 - 2009 time frame on 640-acre spacing. And that's the only well that's been drilled in that section all these years. So, if the original owner had 640 mineral acres in this section, he had at least one well, with royalty checks from one well. And royalty checks which have been decreasing significantly after that first year or so: from 9,000 bbls of oil per month back in April of 2009, to 2,000 bbls of oil per month in October, 2012.
But, then, wait, what's this? Another check, and another check? Sometime between 2009 and 2012, section xx-1xx-9x became part of a 4-section spacing unit. And two more wells, sited in other sections, are providing royalties because they are part of 2560-acre spacing unit. So, now this gentleman who was kinda hoping for just one well before his Long Rest is now bragging about three wells from which he is collecting royalties.
And, not only that, there are seven more permits/wells in that 2560-acre spacing unit that will be drilled in the next six months or so. By the end of 2013, this gentleman can brag about his nine wells. And only two will actually be sited in his section where his farmstead is. All because of that 2560-acre spacing.
Granted, there are other issues like lease bonuses, and percent of each well. But right now, this snapshot in time for this 65-year-old gentleman, he has one producing short-lateral well that was drilled in 2009. If there had been no change in the spacing unit size, it's very possible that's all he would have for the next 'umpteen' years.
Again, with 640-acre spacing, this gentleman has a single producing well, and that's it. With 2560-acre spacing, he will soon be receiving royalties from nine (9) wells. If he's also the surface owner, it's even better: seven of these nine wells will not be on his land. Smile.
I am not a mineral owner, so I don't have a dog in that fight, but I was asking the question from the perspective of a 65-year-old male with a desire to see at least one well on "his" land ("his" mineral rights) before he began his Long Rest.
Again, this is just idle chatter. There is no "right" answer.
But this is why I asked.
Now, remember, once there is production in any one well in a spacing unit, there is no urgency to drill another well in terms of losing the lease. If the operator has a producing well, he may or may not be inclined to drill another well any time soon. It is very possible that any mineral owner with just a few mineral acres might be lucky to see one well on his "land." Based on comments, some folks have waited a lifetime for a well on "their land."
In the original post, I included the section and the permit numbers, but I thought that might make it too personal. For that reason, I have removed "identifying data" so as not to bring in the current "owner" of that section.
So, then look at section xx-1xx-9X, in the xxxxx oil field. There is one producing well in that section, #xxxxx, spudded back in 2008 - 2009 time frame on 640-acre spacing. And that's the only well that's been drilled in that section all these years. So, if the original owner had 640 mineral acres in this section, he had at least one well, with royalty checks from one well. And royalty checks which have been decreasing significantly after that first year or so: from 9,000 bbls of oil per month back in April of 2009, to 2,000 bbls of oil per month in October, 2012.
But, then, wait, what's this? Another check, and another check? Sometime between 2009 and 2012, section xx-1xx-9x became part of a 4-section spacing unit. And two more wells, sited in other sections, are providing royalties because they are part of 2560-acre spacing unit. So, now this gentleman who was kinda hoping for just one well before his Long Rest is now bragging about three wells from which he is collecting royalties.
And, not only that, there are seven more permits/wells in that 2560-acre spacing unit that will be drilled in the next six months or so. By the end of 2013, this gentleman can brag about his nine wells. And only two will actually be sited in his section where his farmstead is. All because of that 2560-acre spacing.
Granted, there are other issues like lease bonuses, and percent of each well. But right now, this snapshot in time for this 65-year-old gentleman, he has one producing short-lateral well that was drilled in 2009. If there had been no change in the spacing unit size, it's very possible that's all he would have for the next 'umpteen' years.
Again, with 640-acre spacing, this gentleman has a single producing well, and that's it. With 2560-acre spacing, he will soon be receiving royalties from nine (9) wells. If he's also the surface owner, it's even better: seven of these nine wells will not be on his land. Smile.
Enbridge: Update On Southern Access Extension
Yahoo! In-Play:
Enbridge launches open season for Southern Access Extension: Co announced a binding open season to solicit commitments from shippers for capacity on the proposed Southern Access Extension pipeline, to be constructed, owned, and operated by U.S. subsidiary Enbridge Pipelines (Illinois) L.L.C. The new pipeline will transport crude oil from Pontiac, Illinois, at Enbridge's Flanagan Terminal, where it will receive crude oil from Enbridge Energy Partners, L.P.'s Lakehead System, to Patoka, Illinois. The 165-mile (265-kilometer), 24-inch diameter pipeline will be constructed as a stand-alone project with an anticipated in service date of early 2015.This is really, really cool. MDW just blogged about this extension a few days ago (December 7, 2012, to be exact):
- a 265 km, 24-in od, Southern Access Extension Pipeline from Flanagan, IL, to Patoka, IL; estimated $800 million; initial capacity will be 300,000 bopd; contract for supply will be Marathon Petroleum
- Enbridge could increase capacity if demand is warranted (additional horsepower or increasing od to 30 inches
- Subtotal: $0.8 billion
Catching Up -- Nothing To Do With The Bakken; ObamaCliff; Interest Rates At Zero Forever; Omaha Steaks
I was gone most of the evening. So much to catch up on. I might just hit the high points; go back and fill it out later. Or not. So lots of disjointed thoughts -- not the Bakken. Those will be in stand-alone posts.
First, the ObamaCliff: It's actually getting to be quite fun to see all these folks making money on the ObamaCliff: a) the accelerated dividends (whoo-hoo); b) Warren Buffett buying $1.2 billion worth of his stock back from a shareholder before that shareholder goes over the cliff next year; and, c) nothing to do with the ObamaCliff directly, but Google stashing $10 billion in tax-free accounts off-shore is just simply priceless. By the way, I can't even keep up with all the corporations accelerating their dividends. And, of course, that's just a "stunt." Will amount to a hill of beans in the end. The bigger story that no one is talking about: DOD sequestration alone is enough to throw the economy into a recession.
Second, more and more "trial balloons" and articles preparing us for going over the fiscal cliff, including this one. Again, the Damocles sword known as DOD sequestration will fall on January 1, 2013. This should be great political theater. Then comes the debt ceiling.
Third, now that it's official -- interest rates will remain at zero until unemployment is below 6.5%, there's no hurry to buy that house. Rates will still be low a year from now. And two years from now. Banks borrowing money at 0.001 percent and charging 19% on credit cards are going to do very, very well.
Fourth, at the current "burn" or "run" rate, Don tells me that US debt will be $25 trillion in 49 months. 49 months --> a new president. In my mind, once the debt hit $8 trillion, I no longer paid attention. It's all become one big joke that no one takes seriously any more. If you can defend $25 trillion debt regardless who you voted for, you are in a different universe than I am.
Fifth, I'm beginning to think Israel is a paper tiger, or as George Bush would say, "all hat, no cattle." After all that sabre (saber?) rattling earlier this year over Iran, things in the Mideast keep smoldering along. And you have to love the White House characterizing the North Korean launch of that .... that .. that .. whatever it was .... as provocative. I was initially upset with that characterization but it's exactly right. Whatever it is, the thing is tumbling out of control. With any luck it will land where we most want it to land.
Sixth, Florida with almost a million permits for concealed weapons, and a Federal appeals court strikes down an Illinois law that barred folks from carrying loaded guns in public. No comment.
And finally, and then all of this and the above will be out of my system: this is the first year in a long time I won't be celebrating Kwanzaa. It was a mandatory event when I was stationed overseas.
Personal notes:
First, gift recommendation (after you donate to the Salvation Army): Omaha Steaks. This is incredible. They have a $49 special. I believe regular price is about $150:
Okay, that's incredible. Free shipping and $50 for a very nice gift for almost anyone, but especially for seniors who no longer need anything to take up space in their homes as they are downsizing.
But if that's all there was, I wouldn't post. When you put that single item in your cart and begin to checkout, Omaha Steaks, gives you an opportunity to buy one or two more items for an even bigger savings. If you take one of those choices, which I did, when you checkout, you are given another option but this time you are given 5 minutes to make a choice (I believe it was lobster tails for less than what I pay in Rockport, Massachusetts; I did not take that choice). And then, at checkout, one last opportunity for another great item at a huge discount.
My daughter got me started on Omaha Steaks about three years ago, and I am very, very impressed.
What a great country. I assume shipping dates are such that there's not much more time if you want your gift to reach its destination by the end of the year. I was surprised at the US Post Office to hear that regular shipping TODAY will not get the package to its stateside destination by December 24th. That's almost two weeks from now and the US Post Office regular shipping can't get it anywhere in the states in that amount of time, now.
First, the ObamaCliff: It's actually getting to be quite fun to see all these folks making money on the ObamaCliff: a) the accelerated dividends (whoo-hoo); b) Warren Buffett buying $1.2 billion worth of his stock back from a shareholder before that shareholder goes over the cliff next year; and, c) nothing to do with the ObamaCliff directly, but Google stashing $10 billion in tax-free accounts off-shore is just simply priceless. By the way, I can't even keep up with all the corporations accelerating their dividends. And, of course, that's just a "stunt." Will amount to a hill of beans in the end. The bigger story that no one is talking about: DOD sequestration alone is enough to throw the economy into a recession.
Second, more and more "trial balloons" and articles preparing us for going over the fiscal cliff, including this one. Again, the Damocles sword known as DOD sequestration will fall on January 1, 2013. This should be great political theater. Then comes the debt ceiling.
Third, now that it's official -- interest rates will remain at zero until unemployment is below 6.5%, there's no hurry to buy that house. Rates will still be low a year from now. And two years from now. Banks borrowing money at 0.001 percent and charging 19% on credit cards are going to do very, very well.
Fourth, at the current "burn" or "run" rate, Don tells me that US debt will be $25 trillion in 49 months. 49 months --> a new president. In my mind, once the debt hit $8 trillion, I no longer paid attention. It's all become one big joke that no one takes seriously any more. If you can defend $25 trillion debt regardless who you voted for, you are in a different universe than I am.
Fifth, I'm beginning to think Israel is a paper tiger, or as George Bush would say, "all hat, no cattle." After all that sabre (saber?) rattling earlier this year over Iran, things in the Mideast keep smoldering along. And you have to love the White House characterizing the North Korean launch of that .... that .. that .. whatever it was .... as provocative. I was initially upset with that characterization but it's exactly right. Whatever it is, the thing is tumbling out of control. With any luck it will land where we most want it to land.
Sixth, Florida with almost a million permits for concealed weapons, and a Federal appeals court strikes down an Illinois law that barred folks from carrying loaded guns in public. No comment.
And finally, and then all of this and the above will be out of my system: this is the first year in a long time I won't be celebrating Kwanzaa. It was a mandatory event when I was stationed overseas.
***********************
Personal notes:
First, gift recommendation (after you donate to the Salvation Army): Omaha Steaks. This is incredible. They have a $49 special. I believe regular price is about $150:
Holiday Favorites Combo 47427GZ 2 (5 oz.) Filet MignonsThe "GZ" must stand for "gift zone.
2 (5 oz.) Top Sirloins
4 (4 oz.) Gourmet Burgers
8 Potatoes au Gratin
1 (16 oz. pkg.) Omaha Steakhouse® Fries Reg. $142.00 | Save $92.01 | Now Only $49.99
Okay, that's incredible. Free shipping and $50 for a very nice gift for almost anyone, but especially for seniors who no longer need anything to take up space in their homes as they are downsizing.
But if that's all there was, I wouldn't post. When you put that single item in your cart and begin to checkout, Omaha Steaks, gives you an opportunity to buy one or two more items for an even bigger savings. If you take one of those choices, which I did, when you checkout, you are given another option but this time you are given 5 minutes to make a choice (I believe it was lobster tails for less than what I pay in Rockport, Massachusetts; I did not take that choice). And then, at checkout, one last opportunity for another great item at a huge discount.
My daughter got me started on Omaha Steaks about three years ago, and I am very, very impressed.
What a great country. I assume shipping dates are such that there's not much more time if you want your gift to reach its destination by the end of the year. I was surprised at the US Post Office to hear that regular shipping TODAY will not get the package to its stateside destination by December 24th. That's almost two weeks from now and the US Post Office regular shipping can't get it anywhere in the states in that amount of time, now.
*******************
Global Warming
Irrefutable facts that global warming advocates never address:
- "man-made" CO2 represents but 3% of all greenhouse gases, even less if you include water vapor. Water vapor is the number #1 "greenhouse gas" by a huge margin; again, CO2 represents but 3% of all greenhouse gases; eliminate all man-made CO2 and one still has 97% of the other gases to deal with, including water vapor
- the increase in atmospheric CO2, from 2010 to 2011, is measured at "nearly two parts per million"; the annual variability of atmospheric CO2 is 3 - 9 parts per million
Eight (8) New Permits -- The Williston Basin
Bakken Operations
Active rigs: 185 (steady, but increasing -- was 181 earlier this week)
Eight (8) new permits --
- Operators: American Eagle (2), OXY USA, Hunt, GMXR, Murex, Petro-Hunt, Whiting
- Fields: Little Tank (McKenzie), Charlie Bob (McKenzie), Otter (Williams), Pleasant Hill (McKenzie), Colgan (Divide), Manning (Divide)
- Comments: Murex has a permit for a wildcat in Divide County;
Producing wells completed:
- 22044, 700, Zavanna, George 19-30 1H, Stockyard Creek, t10/12; cum 33K 10/12;
- 23416, 895, Murex, Jade Brenna 2-11H, Rawson, t11/12; cum --
- 23326, 343, Cornerstone, South Coteau, Opseth 6-29-30H, t12/12; cum --
- 23582, 903, Whiting, Lacey 43-2TFX, Sanish, t11/12; cum --
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