Tuesday, June 18, 2013

In The Eye Of The Beholder


June 10, 2013: earlier this morning, I dropped off my bicycle to have some routine maintenance done. I had to wait ten minutes before someone was able to assist me. They were not much busier than usual for a Monday morning.

June 10, 2013: the more I think about the article linked below, the more it validates my feelings about the Bakken. Note: not one word about:
  • CLR's 14-well Atlanta pad next to the river southwest of Williston
  • Statoil's 4-well Pyramid pad northwest of Williston with 38 tanks on the pad
  • ONEOK's natural gas gathering and processing plants northwest of Williston, northeast of Watford City
  • the Chicago hot-dog stand outside of Alexander; was there a line there?
  • the BNSF yard in Minot
  • any of the 22 CBR terminals
  • whether he stopped at any RR crossing waiting for a 120-unit oil train to pass (and whether he counted the cars)
  • the huge industrial parks west of Williston; the huge industrial parks east of Williston
  • Crosby
  • the incredible housing developments going up around Watford City
  • having a great steak dinner at the bank-restaurant in Watford City
  • about the "new" highways in the area, and the biggest ND highway budget coming this summer
  • the water depots all over the oil patch
But I will always remember that he waited ten minutes for a waitress to serve him. The story continues to add validity to my opinion that even the local folks really have no idea how big the Bakken story is. It is incomprehensible and that's why people end up writing about the traffic.

Original Post

The Bakken as seen by the managing editor of The Dickinson Press.
Williston? Well, for those who haven’t been there in a while, it is what you’ve heard it is. Streets are packed, you seat yourself in sit-down restaurants and wait 10 minutes to get a waitress.
Walmart was crazy for 2 p.m. on a Thursday, though not the end-of-times, barren shelves scene many of us have heard it was. Yes, they have a Buffalo Wild Wings now for those of you who are still upset Dickinson didn’t get one first. Though a man told me it had to close in mid-afternoon a few days back because it ran out of food.
In small towns along Highway 2, I get a sense that things are beginning to settle down as infrastructure begins to catch up and rigs get replaced by pump jacks.
See the packed streets at this video, posted Memorial Day weekend, 2013, Williston, North Dakota.

We need more photojournalists. Compare this article with what Mail On-Line might provide. I'm not talking about the content. I'm talking about how photos, graphics, and maps add so much more to the story. It would have been great to have some glossies embedded in the linked article above of the road trip. 

Ten minutes for a waitress. Rosa Parks should have been so fortunate.

Forty-Eight (48) Wells Per Spacing Unit In The North Dakota Bakken -- Director, NDIC

Yesterday it was noted that Lynn Helms had said that in the better Bakken, it might take 48 wells per spacing unit. I had not seen the source for that statement.

Another reader was gracious enough to provide the link (see below). This is an incredible briefing provided back in January, 2013. I am amazed that the regional print media did not pick up on this. If any of them did, I missed it. Forty-eight wells/spacing unit in the better Bakken is simply staggering, and when this does not get a headline in the regional media it speaks volumes about local coverage of the Bakken. It really does appear that most folks are focused on that 10-minute wait for a waitress to meet and greet them at a coffee shop.

It's a very, very long presentation, and one can start anywhere to pick up on incredible / staggering data points.

Lynn Helms on the Bakken, EGC, 2013

But start at 22:40 for some interesting data points. At this point, Mr Helms is addressing fracking concerns, and shortly after that he will discuss pilot projects this summer to test 24 wells and 48 wells/spacing unit (disclaimer: there may be typos in the notes below -- listen to the video to confirm; not verbatim throughout; being provided for a couple of reasons):

".... we have essentially infinite capacity for wastewater in the Dakota formation. The only place that we have ever seen the pressure increase in the Dakota (formation) was in Glenburn  and that was after we had put in over 20 million barrels of water into a single well...

.... beneath that ... nine layers of pure salt...

... and then the Bakken ... one cannot fracture the salt formations ... physically impossible to fracture the salt formations...

... earthquakes ... our water disposable is three miles above the earthquake zone... elsewhere they were pushing water into layers at the earthquake zone ... those states (Arkansas and Ohio) learned and have quit those projects ...

.... 640-acre spacing in the Parshall ... 1% of the surface area....have gone from 10% of surface area required for vertical wells to less than one-half of 1% for horizontal wells in the Bakken

.... surface locations on east-west corridor ... using less than one-half of 1% of the landscape....

.... Sanish field...that's the future of North Dakota oil industry ....

... the pattern ...

... the future....

... five productive layers .... middle Bakken and four benches in the Three Forks....

... in "much" of the Bakken, each one of those layers needs to  have 4 to 5 wells placed in it ...

... one operator this summer, first test, two 1280-spacing units and put 24 wells in EACH spacing unit, off one pad, if possible, at most, two pads, with 24 wells on it. The busiest pad right now is a 14-well pad southwest of Williston ... imagine four rows of six wells on one pad ... 8 - 10 acre pad ...

... also the possibility, it may require 48 wells/spacing unit in some of the better Bakken ... this summer another test ... drill out two pads on a 24-well spacing unit (1280) and then go into the middle of another one and drill it out on a 48-well spacing ....

...  you easily get out to 50,000 wells and more than likely well beyond that .... at a minimum,  four to eight wells/spacing unit up to 24 wells/spacing unit, 200 rigs for 21 years....today's rig count ... a constant 190 to 210 rigs for the next 21 years ...

....IN PROGRESS -- I'm not sure how much I will transcribe/paraphrase/summarize, but we will see how the day goes.....

The Geologic Column Above The Bakken In North Dakota

January 30, 2013
Energy Generation Conference
Lynn Helms, Director, NDIC
YouTube source: http://www.youtube.com/watch?v=NcrEdX348qQ

Paraphrasing, some direct quotes. See linked video tube for source.

Disclaimer: there will be errors in my notes below. I post these for my benefit for a couple of reasons. They are not meant for the general public. The general public should listen to and view the YouTube video, not read my notes.

Geologic column:
Geology has been very, very good to the state of  North Dakota. The state has the entire sedimentary column from the Pre-Cambrian, all the way up to the Cretaceous Age and into the Tertiary Age. Essentially the whole column is still there. This is very unique. It does not exist in Pennsylvania; it does not exist in Colorado; it does not exist in California.
Diamond exploration in North Dakota also mentioned. Red River area. Think Fargo.

At/Near The Surface

One of the most exciting opportunities: clay deposits in southwest North Dakota and natural gas in the Bakken --> proppants.

Proppant: on average 2 million lbs of sand and 2 million lbs of ceramics for each well. Sand comes from Minnesota and Wisconsin; ceramics comes from China.

Next: coal. ND has an 800-year supply of lignite. But coal production in ND decreasing; a concern. ND is the first state to complete its coal inventory. It represents only about 5 to 10% of our total coal deposits. Coal gasification discussed.

Geothermal energy: installations spiked in 2010/2011, but then dropped in 2012 because natural gas was so inexpensive.

Uranium: thorium reactors discussed. ND uranium deposits include thorium and molybdenum.

A little bit deeper into the column

Natural Gas: Pierre, Niobrara, Carlile, and Greenhorn formations.

Shallow methane deposits.

Methane in drinking water? A baseline has been established; the study was completed four years ago. An anecdote regarding 5% methane in drinking well water north of Fargo on the far east side of the state. Naturally occurring methane (this does not come from fracking).

Some really exciting biogenic deposits of methane in the Red River. Not economic to produce it now.

Waster water going into the Dakota Group formations. Only one spot where the Dakota Group comes to the surface: north of Grand Forks. Permitting 10 wells/month for salt water disposal into the Dakota Group. We will need about 1,600 (3/township) disposal wells in the Bakken.  $2 - $3 million to drill a well; payback in one year; last 50 to 60 years. Do the math. Huge economic driver in the Bakken. Will be placed about every ten minutes apart.

EOR. Will finalize CO2 storage rules this year, and then go to the EPA for primacy. Companies already waiting and ready to go. North Dakota could be a national sink for CO2. One thousand years worth of CO2 storage space.

Spearfish formation: currently on the back burner; still active; but quiet. Canadians are happy with the results, but not the well costs; the Bakken is pricing them out. Mostly exploratory now, but sitting back, waiting, expecting to be fully active in 3 - 5 years, at hundreds of wells/year. One small area in Bottineau County will have 2,400 wells; 24 wells/square mile. Biggest concern: providing electricity to all these wells.

Tyler formation: a bit farther out in the future. One company cored the Tyler in 2012. The "next big thing" after the Bakken/Three Forks. Estimating one billion bbls recoverable. So, if Spearfish is 3 - 5 years and the Tyler is later, think about 5 - 7 years from now for the big breakthrough.

Mission Canyon: historically the biggest; looking for a "renaissance;"maybe fracking the Mission Canyon will be in the offing. Hard to say.

Then, at 19:45: he moves into the Bakken.

One comment for the cocktail hour tonight: not one dry hole in 2012. Eight-five percent of the wells returned a 10% or greater return for investors. There is no better investment.

Global Warmed Dropped A Bit Of Snow On Napoleon, North Dakota Last Night

Yes, this is June 18, 2013, about three days from the summer solstice.

And this is Napoleon, North Dakota, today. If the link is broken, it is simply a photo of Napoleon, ND, with a bit of snow on the ground -- June18, 2013.

KOG's Bibler Wells

23390, 1,521, KOG, P Bibler 155-99-15-31-7-15H3, Stockyard Creek, t1/13; cum 46K 4/13;
23389, 1,630, KOG, P bibler 155-99-15-31-7-16H, Stockyard Creek, t1/13; cum 53K 4/13;
23113, 1,896, KOG, P Bibler 154-99-1-5-8-15H, Stockyard Creek, t5/13; cum --
23112, 1,991, KOG, P Bibler 154-99-1-5-8-16H3, Stockyard Creek, t51/3; cum --
23111, 1,657, KOG, P Bibler 154-99-1-5-29-2H, Epping, t5/13; cum --
23110, 1,984, KOG, P Bibler 154-99-1-5-29-1H3, Epping, t5/13; cum --
22661, 1,769, KOG, P Bibler 154-99-15-31-30-2H3, Epping, t1/13; cum 41K 4/13;
22660, 1,554, KOG, P Bibler 155-99-15-31-30-2H, Epping, t1/13; cum 60K 4/13;

KOG's P Wood Wells

The first P Wood wells (permitted some time ago): all eight are in the same section - 27-154-98. There are already three other wells in this section, all on confidential status, which means that there will be eleven (11) wells sited in this section. So, these are the permits for this section:
  • 24374, conf, KOG, P Wood 154-98-3-27-34-14H, Truax,
  • 24375, conf, KOG, P Wood 154-98-3-27-34-14H3, Truax,
  • 24376, drl, KOG, P Wood 154-98-3-27-34-15H3M, Truax,
  • 24604, conf, KOG, P Wood 154-98-4-27-34-13HB, Truax,
  • 24605, conf, KOG, P Wood 154-98-4-27-34-13H3, Truax,
  • 24606, conf, KOG, P Wood 154-98-4-27-34-13HA, Truax,
  • 24607, conf, KOG, P Wood 154-98-4-27-34-14H3, Truax,
  • 24608, conf, KOG, P Wood 154-98-2-27-34-15H, Truax,
  • 24609, conf, KOG, P Wood 154-98-2-27-34-16H3, Truax,
  • 24610, conf, KOG, P Wood 154-98-2-27-34-16H, Truax,
  • 24611, conf, KOG, P Wood 154-98-2-27-34-16H3A, Truax,
Later, two more P Wood wells were added:
  • 24649, conf, KOG, P Wood 154-98-3-27-34-14H, Truax, 
  • 24650, conf, KOG, P Wood 154-98-3-27-16-3H, Truax, (running north)
And then later, three more P Wood wells sections 26/35:
  • 25177, conf, KOG, P Wood 154-98-4-26-35-13H, Truax,
  • 25178, conf, KOG, P Wood 154-98-4-26-35-13H3, Truax,
  • 25179, conf, KOG, P Wood 154-98-4-26-35-14H, Truax

Seven (7) New Permits -- The Williston Basin, North Dakota, USA -- KOG With Three Nice Wells

Active rigs: 184 (whew; was trending down; back up a couple of rigs today)

Seven (7) new permits --
  • Operators: True Oil (4), BR (2), Slawson
  • Fields: Bowline (McKenzie), Corral Creek (Dunn), Van Hook (Mountrail)
  • Comments: Hmmmm.....True Oil....
Wells coming off the confidential list were posted earlier. Scroll down for results.

Six (6) producing wells were completed:
  • 24185, 414, Mountain Divide, Leininger 3-10-1H,
  • 23900, 470, Mountain Divide, Wigness 5-8-1H,
  • 23110, 1,984, KOG, P Bibler 154-99-1-5-29-1H3,
  • 23112, 1,991, KOG, P Bibler 154-99-1-5-8-16H3,
  • 23113, 1,896, KOG, P Bibler 154-99-1-5-8-15H,
  • 25164,768, Whiting, Hauge 41-3H,