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Oil Booms in North Dakota


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5 hours ago, SiouxVolley said:

Expect oil prices to rise rapidly.  Tensions between Saudi Arabia and Iran are rising rapidly, which could lead to war with worldwide consequences.

Saudi Arabia has cut diplomatic ties with Iran. Hopefully they can get people back in the ND oilfields and keep the prices at the pump low, or else goodbye to 1,2 or maybe 3 dollars a gallon.

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4 hours ago, The Sicatoka said:

Oil prices to jump and stock prices to tank. :(

Now would be a perfect time to buy Bakken stocks.  Iran could close the Hormuz Straight except to Iranian oil, backed by Russia. Both Iran and Russia are desperate for higher oil prices.  If oil doesn't go up in a month or so, sell.  Oil stocks are really low now.

Chinese stocks went down big, and not because of the Persian Gulf.

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5 hours ago, SiouxVolley said:

Now would be a perfect time to buy Bakken stocks.  Iran could close the Hormuz Straight except to Iranian oil, backed by Russia. Both Iran and Russia are desperate for higher oil prices.  If oil doesn't go up in a month or so, sell.  Oil stocks are really low now.

Chinese stocks went down big, and not because of the Persian Gulf.

The problem is picking survivors....

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3 hours ago, 90siouxfan said:

The problem is picking survivors....

Most will survive at least a year.  Triangle Petroleum (TPLM) is down more than 90% to less than $0.75.  If you only hold it less than a 30-60 days, if the mideast situation gets worse and oil goes back to $100, that stock would zoom up again.  Whiting, Continental Resouces, Hess, are all down but not so dire a situation.

Generally like the Permian Basin stocks more because the Permian has an extreme amount of oil - even more than Saudi - and the source rock can now be tapped, not just the reservoirs that were traditionally drained.

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12 hours ago, Cratter said:

Lowest rig count in seven years right now.

True, however, I've been told (by Ron Ness of NDPC) it used to take a rig four to six weeks to drill out a well and that a rig today can do that in two weeks. Even without the "off the cliff" in oil prices, rig counts would be down because of a doubling of drilling efficiency of the rigs. 

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3 hours ago, The Sicatoka said:

True, however, I've been told (by Ron Ness of NDPC) it used to take a rig four to six weeks to drill out a well and that a rig today can do that in two weeks. Even without the "off the cliff" in oil prices, rig counts would be down because of a doubling of drilling efficiency of the rigs. 

That efficiency should help the stronger operators maintain cash flow, since prices will probably remain low for some time, especially with the glut on the markets.  The Saudis are cutting prices to Eurorpe, while OPEC increases or maintains production levels, to cut off Iran's traditional markets, and to undcercut Russia, and the higher cost US outfits. Even with the Saudi-Iran blowup, prices didn't maintain their bump for long. And as long as China's economy slows, overall consumption may remain where it is for the near future.

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3 hours ago, The Sicatoka said:

True, however, I've been told (by Ron Ness of NDPC) it used to take a rig four to six weeks to drill out a well and that a rig today can do that in two weeks. Even without the "off the cliff" in oil prices, rig counts would be down because of a doubling of drilling efficiency of the rigs. 

Many of the latest wells have a higher oil flow than ever due to better fracking techniques, more fracking stages, and more fracking sand.  A bunch of wells are drilled but not fracked, as fracking is a significant cost that the oil companies don't want to include now.  So if oil prices move up, ND will increase production quickly even if the drilling rigs does not increase.

The Saudis and Iranians are in proxy wars throughout the Middle East.  Wouldn't be at all surprised if one event sparks an all out Persian Gulf war.  Oil could move to $200  a barrel or more if Mideast oil was cutoff (gas would be $8 / gall).

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  • 4 weeks later...
  • 1 month later...

Looks like oil has bottomed in price, as it rose to $37 / barrel, and some OPEC countries seem to point to $50.  The prices of oil companies have been very low, but they have gained impressively lately.  Triangle Petroleum, which has operations most in the Bakken, was under $0.50 last week but now trade at $1.45.  It was a $10 stock before oil prices tanked.

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  • 2 weeks later...
On March 24, 2016 at 5:40 PM, SiouxVolley said:

Looks like Meridian Energy will go ahead and build a diesel refinery west of Belfield in Billings County.  The refinery would be larger than the existing one near South Heart.

South Heart also passed an expansion bond for schools.

Hot rumor still that South Heart is attracting enough kids from west Dickinson and they want to leave the sports co-op with Belfield.

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  • 3 weeks later...

Helms predicts oil will come back ‘with a rush’

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“This is going to come back pretty hard and pretty rapidly,” Helms said told members of Williston’s Chamber of Commerce. “And we’ll be back running to stay ahead of it.”

Helms told city leaders he projects Williston will support 40,000 permanent oil jobs by 2050, which could mean a population of more than 80,000. Williston’s current population is estimated to be about 30,000.

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There are many, many people within the oil industry that have been saying, even warning, that the current slump is only temporary. And that North Dakota and the Bakken communities need to be prepared for the second boom that is just down the road.

What this slump has done is created many efficiencies in drilling and production practices. And continued advances in horizontal drilling, equipment, fracking chemicals/techniques have been ongoing. This all leads to the next boom being twice as big and twice as fast. 

This slump, while an overnight financial 180° for the region, was needed from an infrastructure standpoint. But now that everyone has had a chance to catch their breath the state can't just sit here and end up in the exact same position where the Bakken communities fall behind again. North Dakota needs to continue to make investing in western NoDak a priority. It can be done in a financially responsible manner. But it definitely needs to be a top priority. 

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Oil prices might go down in the short term still, as the Saudis and Russians were to agree to a deal that would cap output, but Iran refused to cap, and Saudi-Iranian tensions are high, so Saudi Arabia threw out any plans to limit output.  Meanwhile, China is buying up millions of barrels of cheap oil and building up their national reserves in caves in central China.

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  • 1 month later...

http://www.grandforksherald.com/news/business/4035527-humbling-comedown-north-dakotas-oil-patch

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Williston's 2nd Avenue West, the main thoroughfare nicknamed "Million Dollar Way," is pockmarked with vacant storefronts and empty parking lots. Aaron's Rent-To-Own, a retailer of televisions and video game consoles, shuttered two months ago. Prices for industrial real estate -- warehouses and the like -- have dropped nearly 40 percent in the past year.

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Now, Continental and others have stopped fracking altogether in North Dakota. Statewide, there are only eight crews fracking new wells for the few companies still willing to pay for the service. Two years ago, there were 45, a peak for the teams that pump water, sand and chemicals deep underground to extract oil and natural gas.

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Williston's sales tax receipts fell 47 percent in March from a year earlier, according to the state treasurer.

Moody's Corp, the credit rating agency, downgraded Williston's general obligation bonds in March to junk status, citing the city's reliance on those sales taxes to repay debt.

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 Since last summer, Williston's population has shrunk 16 percent to 26,533

United Airlines ended a direct flight from Williston to global oil hub Houston in early April. Home Depot Inc will close its Williston store this month. FedEx Corp, facing a steep drop in mail volumes, runs one daily delivery plane to Williston, down from three a year ago.

In downtown Williston, near the strip club, a $15 million building with retail, residential and office space opened last March, on St. Patrick's Day. All of the retail spots and more than half of the apartments sit empty.

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At Prairie Pines, an apartment complex in Williston owned by private equity fund KKR & Co LP, nearly half of the 330 units remain empty even after rates were halved in late 2014.

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 The agency hosted a Williston job fair in early April for 375 jobs. More than 1,250 applicants showed up.

 

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Whiting Oil and Gas, the largest oil producer in the Bakken, started fracking again this last Monday. A couple of the other big boys are planning on starting back up or increasing their fracking over the next few weeks. 

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Oil has been pushing $49 / barrel this week.

Would not be surprised if the Williston area is the new home to the multi-billion ethane cracker.   The major ethane producer OneOK has been touting how ethane will be a big money maker on its presentations, and much of it would come from the Bakken.  All the nat gas plants are in that area so an expensive long pipeline would not be necessary.  All the housing would fill rapidly too.  It's how oil towns like Edmonton and Calgary grew, as chemical complexes started providing serious long term employment without the ups and downs of oil.

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The oil prices sadly will not be staying as high as they are now. The huge inventories and production keeping pace with demand will not allow a long term price increase. The wild fires in Canada are the main reason for this price increase and once they start back up we will see the supply rise and prices fall. There are some that say ND may see production fall to 600,000 barrels per day before the price rebounds to stimulate more drilling and fracking. Some are predicting that future nd production may never grow over 1.4 million  per day. This hopefully sustains a healthy oil economy with no booms or busts.

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Williston and minot do need some kind of petroleum or chemical related plants. Neither town has that sort of large industry to support the local economies. Ethane plants or something similar would be a great job generator and help in the slow oil production times. The thing to stay away from is refineries especially the small ones that can't compete with the largest refineries. We are seeing what happens when you build a small refinery in Dickinson that can't produce diesel as cheap as a large refinery. The state already has plenty of supply of refined products and any new refineries will have to be as efficient as those suppliers.

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