Friday, October 16, 2015

From The Williston Wire -- October 16, 2015

Another housing project completed:
WILLISTON, ND – Mountain Plains Equity Group (MPEG) celebrated the completion of ParkRidge Townhomes today. The 36-unit development received support from the state’s Housing Incentive Fund (HIF) to ensure the availability of affordable housing in Williston for essential service workers.
“This project has truly been a concerted group effort, with a number of players here that deserve a lot of credit. By working together, this type of public-private partnership has produced a great housing option in Williston – and at a much more affordable price,” said Don Sterhan, MPEG president and CEO.
Eighteen of ParkRidge’s two-bedroom units are rented for $1,000 per month to law enforcement, education and medical facility staff and local and state government employees. To qualify for these units, primary household income must come from such employment. The remaining units in the development rent at market-rate.
Somehow, government incentives to ensure the availability of affordable housing for essential service workers makes more sense than $25,000 tax credits for the wealthy buying $125,000 Teslas. But then, that's just one man's opinion.

************************************ 
2015 Bakken Oil Product & Service Show 
Williston – Best Show Ever Williston , ND, October 14, 2015 – The booths are packed up and the results are in.
Despite a slowdown in oil and gas activity, exhibitors and visitors describe BOPSS 2015 as the best show ever.
Expanded hours, discounted safety training, door prizes, and a Tailgate Cook - Off competition raising money for charity were all welcomed additions to the event. The pull back in craziness allowed over 1,000 people to attend and connect at the event, an increase of more than 25% from 2014.
While some companies are clawing their way through the downturn , some have closed up shop and others are taking market share from competitors, one thing is for certain: the oil and gas business in the Williston Basin is alive and kickin’ and here to stay.

Another Great Example Of State, Pipeline Operators, Surface Owners Working Together To Get Something Done; Talk Of A Bakken Bust Seems Premature; Another $80 Million Project -- Ho, Hum -- October 16, 2015

This story sent to me by a reader. Thank you.

The Bismarck Tribune is reporting:
A year from now up to 100,000 barrels per day of more Bakken crude oil will be moving through pipelines to refineries across the country.
The crude’s movement by pipeline in McKenzie County became a reality Wednesday by a vote of the North Dakota Public Service Commission.
NST Express LLC, which is part of The Woodlands, Texas-based NorthStar Midstream, plans to build a 12-inch diameter crude oil pipeline in McKenzie County. The company’s application was submitted in May. [Submitted in May; approved in October; under a river; four months to review and approve]
“This is a 23-mile pipeline in the heart of the Bakken,” commission chairwoman Julie Fedorchak said. “Everything was pretty straightforward so we were able to turn it around pretty quickly.”
Fedorchak said the pipeline would have a maximum capacity of 100,000 barrels per day of crude oil.
Oil would be transported from a new gathering facility called the NST Express Alexander Facility about 9 miles north of Alexander to its NST Transload East Fairview Facility a half-mile north of East Fairview, near the Montana state line.
Other data points:
  • at 23 miles and a million dollars/mile, I estimated the cost at $25 million; in fact, it will be $60 to $80 million
  • will go under the Yellowstone River; will be at least 50 feet below the river
  • six pipeline interconnects
  • four offload skids for trucks
  • a pump station
  • three crude storage tanks with a capacity of 50,000 bbls each (150,000 bbls total) 
I apologize for being so inappropriately exuberant about the Bakken, but here's another little Bakken project -- only 23 miles long, only 12 inches in diameter, but it's going to move 100,000 bopd out of the Bakken. Not trivial. And it's another $80 million project. When I was growing up in Williston a project this size would have been a big, big deal. In western North Dakota, it's just another footnote.

Now, for the rest of the story -- with photographs. Here's the website for the Northstar Transload East Fairview Facility. When you see the BNSF locomotives, think Warren Buffett. And all those trains going through MSP if the state of Minnesota keystones the Sandpiper.

In case the link is ever broken, here is a snapshot of the transloading facility in East Fairview:
The NorthStar Transloading Bakken terminal is a 400-acre rail-and-truck transportation hub serving the oil and gas industry. It is located outside East Fairview, a town in North Dakota’s McKenzie County that sits on atop the Bakken Shale play. McKenzie is among the most productive oil-producing counties in the United States.

The inbound/outbound terminal receives and stores the crucial incoming dry goods needed for oil-drilling sites, including sand, cement and construction equipment. Abundant unload racks take in crude that has been brought in by trucks from nearby wells. That fuel is then stored in onsite tanks until it can be placed onto awaiting trains. The terminal’s outbound rail services then ships the fuel to market.

Key Services
  • The terminal provides unit and manifest train switching and transloading services. It currently has 14 rail tracks feeding off the main BNSF line to handle all inbound and outbound operations.
  • The terminal’s 12-station truck unloading facility removes fuel from tanker trucks and pipes it into onsite storage tanks.
  • Five onsite storage tanks have a combined net capacity of 515,000 bopd.
  • A planned on-site pipeline interconnect facility will gather fuel from the Alexander Hub, 20 miles away. After fuel is received via the interconnect, it will be transferred over to the terminal for rail shipment. [This is the press release above.]
  • The facility includes abundant indoor and outdoor storage for railcars, sand and other needed materials.
Williston is about 35 miles to the northeast of Fairview. East Fairview is on the North Dakota side of the Montana-ND state line. By the way, the best pizza in the world -- I'm not kidding -- can be found at the Powder Keg in East Fairview. Soft serve ice cream for dessert is free (Facebook).  I had the opportunity to ride shotgun transporting sugar beets during harvesting season some years ago. From personal experience, I know how dangerous that intersection (seen below) is. [Later: see comment below: a reader suggests that this intersection will be re-designed as a large (truck-sized) round-about like the one they have in/near Killdeer -- which, for those interested, can be seen on the Google satellite map]:



Don't let me be misunderstood about my inappropriate exuberance for the Bakken:

Don't Let Me Be Misunderstood, The Animals

One Of The Largest Frack Sand Deposits Lies Just North Of The Bakken; Will Help Relieve Wisconsin's Frack Sand Mining Industry; May Cut Down On Frack Sand By Rail; Great News For Truckers -- October 16, 2015

This should make the NIMBYs in Wisconsin who oppose frack sand mining happy. The press release:
From North America Frac Sand Inc.: on September 9, 2015 we announced the acquisition of North America Frac Sand (CA) Ltd. and its 30,000 acres of leases that are estimated to contain 6.4 million tonnes of recoverable reserves of frac sand, and potential reserves of at least 66 million tonnes.

After the successful sale of their sand deposits in Lloydminster, Alberta; Ray and Dwight Newton began testing some optioned acreage approximately 30 miles east of Saskatoon Saskatchewan. Expenditures of approximately $3 million for exploration, drilling, and analysis later, the testing has proved out 6.4 million tonnes of recoverable reserves of frac sand. Subsequent testing, will prove out a substantial portion of the 100 million tonnes identified.

The three challenges of discovering new frac sand reserves are:
  • meeting all of the API specification with respect to size and shape of the frac sand deposits. Our frac sand deposit contain the three most common sizes 20-40,30-50, 40-70 & 70-140 all of which meet API standards.
  • sufficient contiguous volume and value to be economical. Our frac sand deposit is both of sufficient volume and quality to be economic. We have minimum overburden; we have our mining permits; we are ready to continue to prove up our resource, build our plant, and start shipping.
  • in close proximity to either, oil and natural gas reservoirs, or at least to rail, for cost efficient transportation.
  • are truck-able distance to the major Bakken reservoir in North Dakota, Montana, Alberta and Saskatchewan; as well as the Duvernay, Horn River, Montney, Viking and Cardium reservoirs of Western Canada. Annual requirements are in the millions of tonnes for new drilling and recompletions.
We are strategically located to replace a significant portion of the 70% of the frac sand currently being imported into Canada from Wisconsin.
By trucking directly to our customers, not only do we save 1,500 km shipping costs, we by-pass the current bottlenecks of the supply chain, which are rail car availability; lack of trans-loading facilities and sand storage infrastructure; and improving last mile deliveries.
Additionally, in this short term period of low price oil, we provide a cost efficient solution to deliver the frac sand exactly when and where the drillers require the frac sand.
For the Wisconsin folks who don't like mining in their state, this is exceptionally good news.

Ten (10) New Permits; 32 Wells Sited In One Section -- North Dakota, October 16, 2016

Active rigs:


10/16/201510/16/201410/16/201310/16/201210/16/2011
Active Rigs67189184187195

Ten (10) new permits --
  • Operators: CLR (8), Whiting (2)
  • Fields: Sanish (Mountrail)
  • Comments: the CLR permits will be for an 8-well-pad in section 25-153-93. The CLR wells, based on their names, will run to the west into section 26-153-93. There will be about 32 wells sited in this section with these new wells. See graphic below:


There was one (1) producing well completed:
  • 30182, 41, Enduro Operating, NSCU F-721-H1, Newburg, a Spearfish/Charles well, t10/15; cum --

Random Note About Oil Activity In The Williston Basin -- October 16, 2015

In today's NDIC Daily Activity Report, about fifty (50) older wells were transferred from Whiting to White Rock, LLC. I had not heard of White Rock before but it's been around for a long time. It looks like it takes over smaller-producing, stripper wells, mostly in the southwestern corner of the state but does have wells north of Williston, also.

This is probably a typical example. This well was sold by Whiting to White Rock on May 1, 2015:

NDIC File No: 7562  
Well Type: OG     Well Status: A     Status Date: 2/17/1981     Wellbore type: Vertical
Location: NENW 33-141-100     Footages: 660 FNL 1820 FWL   
Latitude: 46.992713     Longitude: -103.363403
Current Operator: WHITE ROCK OIL & GAS, LLC
Current Well Name: FEDERAL FRANKS 33 2
Total Depth: 9700     Field: WHISKEY JOE
Spud Date(s):  8/19/1980
Completion Data
   Pool: MADISON     Comp: 2/17/1981     Status: AL     Date: 2/17/1981     Spacing: NW
Cumulative Production Data
   Pool: MADISON     Cum Oil: 666,914     Cum MCF Gas: 383577     Cum Water: 2224575
Production Test Data
   IP Test Date: 2/17/1981     Pool: MADISON     IP Oil: 125     IP MCF: 71     IP Water: 356

Last few months or production:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
MADISON8-201531111997053907837520
MADISON7-2015311007104055347066750
MADISON6-20153059754034393113030
MADISON5-201530270414500104960
MADISON4-2015291004103453617116820
MADISON3-2015311036103855283100
MADISON2-2015289301109515415805421010
MADISON1-201531104789156036876560
MADISON12-2014311046135056537867550
MADISON11-201430101068254996566270
MADISON10-2014311029106357127166850
MADISON9-2014301045105055771548581937
MADISON8-2014311080103556898197880
MADISON7-201431123614576184101390973

This was the first year of production:

MADISON2-198228310133634974000
MADISON1-19823135843468764000
MADISON12-19813127912789620000
MADISON11-19813032243801696000
MADISON10-19813142213891899000
MADISON9-198123253624277304000
MADISON8-198131335935389674000
MADISON7-198130293727938459000
MADISON6-198130278427908018000
MADISON5-198131326535199403000
MADISON4-198130260024077488000
MADISON3-198131301930658701000
MADISON2-198113203620365868000