Oil Booms in North Dakota

[star2city]

Highest near-term numbers yet:

Bllomberg: Bakken production likely to quadruple by 2015

Crude oil from the Bakken Shale in North Dakota

[star2city]

Makoti (ND) refinery on hold due to government red tape

Pipe told Ward County commissioners Tuesday that the project is in limbo because they can't get the needed minor source permit since the EPA never developed the regulations.

He said the EPA can't grant the necessary permits because they don't have them. He said when Richard Nixon was president in the 1960s, the Clean Air Act was passed and the EPA has had 40 years to work on regulations but hasn't done it.

Pipe said if the refinery was built off the reservation they could have a permit from the state of North Dakota in about six months. But since the refinery would be built on the reservation, which is federal land, they need the federal permit.

[darell1976]

With all that oil and yet our gas is over 3 bucks a gallon. Venezuela has a lot of oil and their gas is like under a dollar. Nice that the oil tycoons in this country get richer and we get poorer at the gas pump.

http://www.dailyfinance.com/story/gas-prices-around-the-world/19543148/

33. Caracus, Venezuela 6 Cents

[star2city]

With all that oil and yet our gas is over 3 bucks a gallon. Venezuela has a lot of oil and their gas is like under a dollar. Nice that the oil tycoons in this country get richer and we get poorer at the gas pump.

Venezuela, as a militaristic anti-democratic socialist state, subsidizes consumer gasoline. Don't think we want to go down that road. Saudi Arabia has cheap gas too. Maybe if we Sharia Law was imposed here.

Perhaps consider buying stock in any number of smaller oil companies that operate in the Bakken, so you can have a small piece of the action too. Over the past year, many of these smaller companies operating in Bakken have done exceedingly well. Here's a very good investment blog on Bakken. There's certainly no guarantee, but the Bakken story is likely just beginning.

[tho0505]

If anyone is looking for a mutual fund that follows the Williston Basin check out ICPAX.

[WYOBISONMAN]

The one thing that bothers me about the Bakken wells are the decline rates. Brigham Exploration likes to blow their horn about the great IPs on their wells, but when one looks at the first year to year and a half of production, the decline rate is precipitous. It does make me wonder how long the production will hold up. I know the State has estimated that a Bakken well will produce for 30 years, but that is speculation. The oldest Bakken wells are coming up on 4-5 yearsof production. So, who knows. I sure hope it hold up, but there are a lot of unkowns out there.

Here is an example of the first year or so of a Brigham well in Williams County that my family has an intrest in......a large decline. This well had an IP of over 1500 bbls/day. It makes me wonder where it will be in 15 years.....

LEE 16-21 1-H

Pool Date Days BBLS Oil Runs BBLS WaterMCF Prod MCF Sold Vent/Flare BBLS/Day

BAKKEN Nov-10 30 4449 3964 4312 4044 2347 1584 148

BAKKEN Oct-10 29 3450 3471 4108 0 0 0 119

BAKKEN Sep-10 30 3108 3072 3694 1011 842 152 104

BAKKEN Aug-10 27 4222 3765 5878 0 0 0 156

BAKKEN Jul-10 31 3982 4062 5954 0 0 0 128

BAKKEN Jun-10 30 5101 5530 6630 0 0 0 170

BAKKEN May-10 31 5997 6004 6850 4300 0 4300 193

BAKKEN Apr-10 30 6396 6109 6884 6825 0 6825 213

BAKKEN Mar-10 31 7290 7418 8138 5010 0 5010 235

BAKKEN Feb-10 23 6478 6186 8616 4315 0 4315 282

BAKKEN Jan-10 23 8480 9084 9175 5503 0 5503 369

BAKKEN Dec-09 25 11441 10920 14060 5984 0 5984 458

BAKKEN Nov-09 23 14434 13954 36414 12355 0 12355 628

Totals 363 84828 49347 3189 46028 234

(Sorry I can't get the colums to line up, but the final column is bbls/day)

[star2city]

The one thing that bothers me about the Bakken wells are the decline rates. Brigham Exploration likes to blow their horn about the great IPs on their wells, but when one looks at the first year to year and a half of production, the decline rate is precipitous. It does make me wonder how long the production will hold up. I know the State has estimated that a Bakken well will produce for 30 years, but that is speculation. The oldest Bakken wells are coming up on 4-5 yearsof production. So, who knows. I sure hope it hold up, but there are a lot of unkowns out there.

Here is an example of the first year or so of a Brigham well in Williams County that my family has an intrest in......a large decline. This well had an IP of over 1500 bbls/day. It makes me wonder where it will be in 15 years.....

LEE 16-21 1-H

Pool Date Days BBLS Oil Runs BBLS WaterMCF Prod MCF Sold Vent/Flare BBLS/Day

BAKKEN Nov-10 30 4449 3964 4312 4044 2347 1584 148

BAKKEN Oct-10 29 3450 3471 4108 0 0 0 119

BAKKEN Sep-10 30 3108 3072 3694 1011 842 152 104

BAKKEN Aug-10 27 4222 3765 5878 0 0 0 156

BAKKEN Jul-10 31 3982 4062 5954 0 0 0 128

BAKKEN Jun-10 30 5101 5530 6630 0 0 0 170

BAKKEN May-10 31 5997 6004 6850 4300 0 4300 193

BAKKEN Apr-10 30 6396 6109 6884 6825 0 6825 213

BAKKEN Mar-10 31 7290 7418 8138 5010 0 5010 235

BAKKEN Feb-10 23 6478 6186 8616 4315 0 4315 282

BAKKEN Jan-10 23 8480 9084 9175 5503 0 5503 369

BAKKEN Dec-09 25 11441 10920 14060 5984 0 5984 458

BAKKEN Nov-09 23 14434 13954 36414 12355 0 12355 628

Totals 363 84828 49347 3189 46028 234

(Sorry I can't get the colums to line up, but the final column is bbls/day)

Looks like you family has one of the poorer producing wells Brigham has drilled. Considering the well is grossing more than $250,000 / month from which your family is gaining royalties, not sure that condolences are due.

I follow and have invested in a number of Bakken-oriented oil stocks. Of all of them, Brigham is probably my favorite - although the stock has been ahead of itself recently. They do have great IPs which no doubt decline fast, but from a cash flow standpoint Brigham is able to recoup the cost of their wells faster than any other company: After just a few months Brigham has already effectively paid for their wells, so the rest of the oil is gravy for them..

Brigham is a preferred company for larger leaseholders in the Rough Rider and Ross areas. Brigham's IPs in the Ross area are stratospheric relative to other companies. Technically, Brigham seems to understand the Bakken geology and has a better "formula" than its competitors. Brigham is one of the few companies in the Bakken that use more expansive ceramic proppants rather specialized sand or hard polymer-based proppants, and that's supposedly one of their secrets to high IPs.

Have you seen this: BEXP investor presentation

[Oxbow6]

One of the oil companies is storing drilling equipment on family land outside of Parshall. Sounds like this spring they might break ground. My grandfather, who will turn 95 in Feb., always believed he would see the day that oil was found on his land. For his sake, I hope it comes true.

[star2city]

One of the oil companies is storing drilling equipment on family land outside of Parshall. Sounds like this spring they might break ground. My grandfather, who will turn 95 in Feb., always believed he would see the day that oil was found on his land. For his sake, I hope it comes true.

Land near Parshall? Probably about a 99% shot of getting one or more high flowing wells. Hope your grandfather will be able to enjoy his newfound bounty!

[WYOBISONMAN]

Remember though, until a well produces around 100,000 bbls of oil, it has not made a dime. Only time will tell what the Estimated Ultimate Recovery per well is. I have seen several places where the figure is around 350,000 bbls on average per well. Who knows, but given the risks it is not as big of money as one would think. At current oil prices, as a mineral holder, if you had a quarter section (160 acres) under the spacing unit of the Lee well I mentioned above (assuming you had all the minerals), your net royalty check for the month of November would have been around $6,373.00 (assuming 3/16 royalty). Not exactly an amount that makes one a millionaire. It is good money, but nothing that approaches astronomical. And.....you really don't know how long or at what level it will produce.

[star2city]

Remember though, until a well produces around 100,000 bbls of oil, it has not made a dime. Only time will tell what the Estimated Ultimate Recovery per well is. I have seen several places where the figure is around 350,000 bbls on average per well. Who knows, but given the risks it is not as big of money as one would think. At current oil prices, as a mineral holder, if you had a quarter section (160 acres) under the spacing unit of the Lee well I mentioned above (assuming you had all the minerals), your net royalty check for the month of November would have been around $6,373.00 (assuming 3/16 royalty). Not exactly an amount that makes one a millionaire. It is good money, but nothing that approaches astronomical. And.....you really don't know how long or at what level it will produce.

With the well already a year old, it certainly doesn't look like a big money-maker yet for Brigham. But with all the variables in oil drilling, Brigham could very well have been tweeking it's fracking formula with this well.

In a couple of years, it's also possible that Brigham would rework this well based on knowledge they are gaining. Beyond that, the whole concept of secondary recovery is not even in the play book yet.

[star2city]

CNBC: The Land of Plenty

[WYOBISONMAN]

Nice find on CNBC.......thanks.

[star2city]

Nice find on CNBC.......thanks.

Not really that many people, even in North Dakota, get it (the Bakken) yet. The ramp-up is really only starting. OIl would have to drop by 50% to stop it.

Yesterday, Brigham Exploration announced that four wells/section would more or less be standard for most of their leases, which almost doubles their earlier drilling estimates (and doubles their eventual production). Brigham is also reviewing 11 other formations - above, below and in between the Bakken and Sanish-Three Forks - for economic production feasibility. So when all is said and done, there may not just be 4 horizontal wells / section, but perhaps 8, 12, 16 or even more.

By late 2013, the pipeline companies are targeting 1.3 million barrels/day takeaway capacity from the state to keep up with production: that's a three fold increase. By 2015, there may be a need to even double that.

There's also increasing activity around Dickinson, NE Montana, Divide/Burke and even Bottineau Counties. Williston may easily need to triple in population in a decade just to keep accommodate all the activity going on. Minot could grow by 50%, while a lot of the smaller communities (Stanley, Tioga, Ray, New Town, Watford City, Belfied, Killdeer) may be more like the size of Devils Lake.

[WYOBISONMAN]

I hope the transportation infrastructure for moving the oil to market makes some big headway. We are continually getting far below market on our checks because of this. Then there is the whole issue of the huge spread between Brent and WTI oil that has developed. This further penalizes North Dakota oil. I would think that this should get fixed in a few years, but it does take time to build additional pipeline capacity and to get the oil to the places it can be sold for the highest price.

[pistol1257]

http://www.popsci.com/technology/article/2...ne-bottle-water

Pie in the sky, sure.

But who knows, anything that gets us off oil is only a positive.

The pessimist in me says that oil companies are so perversely rich and powerful that they'd just buy any upstart, new technology and burn it or keep it on hold the next 50-100 years until they squeeze every last drop of profit out of fossil fuels for themselves.

Looks like MPLS Bison not only likes to troll the Sioux site, he is also one of those do-good liberals that blames business for everything wrong in a free society.

[WYOBISONMAN]

Looks like MPLS Bison not only likes to troll the Sioux site, he is also one of those do-good liberals that blames business for everything wrong in a free society.

Not that I care to be in the same camp as MPLS, but he is not the only Liberal here.......I am firmly in that camp as well. I just carry a gun....

[star2city]

CNN: Billions of barrels of untapped oil

From 5000 ND oil jobs in 2005 to 100,000 ND oil jobs later this decade? Harold Hamm seems to believe that:

Hamm said the industry now employs 30,000 in the state, and if production does hit a million barrels a day, it could employ over 100,000 people there.

ND could almost certainly pass 700,000 people for the first time in its history, and might hit 1,000,000 people later in the decade if the 100,000 oil jobs becomes reality.

[star2city]

Williston Herald: City-like man-camps approved - over 4500 beds approved in Williams County in total for four man-camps

Since many companies rotate people with two weeks on and two weeks off, the man camps may allow for well over 6000 jobs.

If even half of those job seek long-term housing, housing and retail will be booming in Williston for years.

The size and scope of a proposal by Capital Oil Field Services of Round Rock, Texas, was shocking to commissioners.

The company's proposed Capital Riggers Lodge, near Tioga, would consist of up to 2,500 beds. The first four phases would each consist of 67 buildings, with the final phase being seven buildings. "It's like a whole other town," Commissioner Tate Cymbaluk said.

New York TImes: Tight oil formations could be transformative to US Economy

It's the one thing we have seen in our adult lives that could take us away from imported oil,” said Aubrey McClendon, chief executive of Chesapeake Energy, one of the most aggressive drillers. “What if we have found three of the world’s biggest oil fields in the last three years right here in the U.S.? How transformative could that be for the U.S. economy?”

...

"This is very big and it's coming on very fast,” said Daniel Yergin, the chairman of IHS CERA. “This is like adding another Venezuela or Kuwait by 2020, except these tight oil fields are in the United States.”

In the most developed shale field, the Bakken field in North Dakota, production has leaped to 400,000 barrels a day today from a trickle four years ago. Experts say it could produce as much as a million barrels a day by the end of the decade.

Cheasapeake Energy and EOG both seemed destined to become energy company titans from very modest backgrounds in less than 20 years.

"Experts" also tend toward conservative projections , so considering all Williston Basin formations, one million barrels a day from North Dakota in 2020 may be an understatement..

[The Sicatoka]

This would be a heck of a conversation starter at some cocktail parties:

Everything you've heard about fossil fuels may be wrong.

[Hawkster]

This would be a heck of a conversation starter at some cocktail parties:

Everything you've heard about fossil fuels may be wrong.

Just because it's there doesn't mean this administration in DC will let it be developed. They seem to be "anti" everything regarding energy technology.

[star2city]

Towns that have been declining in population for 80 years may double in population soon:

Major developments planned for small towns in NW ND

A developer building a 54-home and retail complex in Stanley is bringing more construction to area towns, including Columbus, Plaza and Kenmare.

Annabelle Homes, Minneapolis, could have projects under way yet this summer in those towns and is visiting with Tioga, Crosby, Watford City, Velva and Berthold about potential projects.

Annabelle Homes plans to build as many as 100 single-family homes, 48 townhomes, a convenience store and two retail buildings in Columbus, a Burke County town of 133 people. The city has yet to annex the 80-acre parcel south of town. That could come at a special meeting in a couple of weeks, Mayor Scott Kihle said.

The experience of Annabelle Homes in Stanley has been that oil workers want to move their families to North Dakota and settle into permanent housing.

"This is the key step in creating the future economy of this area that goes beyond oil," Dovolis said. "This really is the next evolution. It needs to grow beyond temporary housing.

[NDSU grad]

Towns that have been declining in population for 80 years may double in population soon:

Major developments planned for small towns in NW ND

Annabelle Homes does seem to do things the "right way". They seem to be interested in actually developing a community rather than just putting up cheap housing. I don't have very high hopes for towns like Columbus and Plaza, but this boom could be revitalizing for towns like Stanley, Tioga, and Watford City.

[star2city]

The development that Annabelle Homes has planned for Columbus (population 600 + in 1960 to 119 now ) was unfathomable just a few short years ago, when Columbus was consigned to being a ghost town in another generation.

Columbus development - 150 homes

Columbus is the epicenter of where Sirius Mining/Dakota Salts wants to begin deep well potash mining: Dakota Salts project

[NDSU grad]

The development that Annabelle Homes has planned for Columbus (population 600 + in 1960 to 119 now ) was unfathomable just a few short years ago, when Columbus was consigned to being a ghost town in another generation.

Columbus development - 150 homes

Columbus is the epicenter of where Sirius Mining/Dakota Salts wants to begin deep well potash mining: Dakota Salts project

Wow. That's impressive. When my dad was growing up, Columbus was considered a bigger town. It will be interesting to see if the potash mining comes to fruition. It could be a boom for Bowbells, Lignite, and Columbus.