The Midwest/Plains Oil Boom Thread

[Bond James Bond]

Nifty study on potential future oil production in North Dakota - and, even more interesting, how long it'll take to "build out" the development of the formation.

Oil Production Potential of the North Dakota Bakken (PDF)
From pg. 7:

Attention is now turned to an evaluation of North Dakota Bakken oil production rates. Because of the continuous declines in well production over time, new wells have to be brought into production to make-up the production declines in order to maintain a constant oil production level. Based on an average well production profile for wells with a 500 Mbbl EUR, the number of wells to sustain 1.0, 1.5, and 2.0 MMbbl/d oil production rates for thirty years is 27,000 wells, 41,000 wells, and 55,000 wells respectively. The question explored is the timing of when the land development area becomes saturated with well development.

The carrying capacity of the North Dakota Bakken is established above at 38,980 wells. The three oil production scenarios are shown in Fig. 8. The corresponding well counts required for three oil production scenarios are presented in Fig. 9. The graphs in Figs. 8 and 9 terminate on the year when well saturation of the well development area occurs. The year when well saturation occurs is provided in parenthesis on the cumulative labels in Fig. 9.

For a 2.0 MMbbl/d oil production rate, well saturation occurs in 2034. For a 1.5 MMbbl/d oil production rate, well saturation occurs in 2045. For a 1.0 MMbbl/d oil production rate, well saturation occurs in 2065. Policy makers will have to decide which is best for the U.S. economy.

So basically, there's another 22-53 years of development left in this thing.

[Bond James Bond]

Areas in the Midwest with oil aren't the only ones reaping the benefits of the boom!

No slowdown yet for sand mining industry in west-central Wisconsin

A new industry continues to rise — quite literally — from the ground in west-central Wisconsin.

Officials from 12 regional counties reported the area now has a total of 52 silica sand mines that are either operating or approved.

That's up 136 percent from 22 just a year ago and shows just how fast the sand storm is sweeping across west-central Wisconsin, which is home to plentiful deposits of a variety of sand prized in the rapidly growing energy extraction practice known as hydraulic fracturing, or "fracking."

[...]

[usbmfa]

Pittsburgh Rebound Sparked By Spurned Gas Frackers

http://www.bloomberg.com/news/2012-0...-frackers.html

Bond is slacking

[Bond James Bond]

^
Hey now wait just a second there ... Pittsburgh isn't in the Midwest!

[Bond James Bond]

Stark County well’s oil production has CEO gushing

An energy company chief executive is touting a Stark County well’s early oil production, saying it rivals highly publicized wells in Texas.

The Frank well, off state Route 619 in Marlboro Township, is producing 515 barrels of energy equivalents a day — and with a desirable high liquid content and little natural gas, Mark Houser, chief executive of Texas-based EV Energy Partners LP, said in a company report to industry analysts.

He said 40 percent of the equivalents are in light crude oil and 40 percent are in natural gas liquids, including ethane and propane. Low prices for natural gas have resulted in energy companies turning more attention to oil and gas liquids that can produce more revenue.

And if this pans out, watch out.

An industry analyst told an Akron audience Monday that Ohio could become a major oil state thanks to the Utica shale.

Steve Fillingham, of Colorado’s Energy Analysts International Inc., said Ohio could produce 250,000 barrels of oil a day, perhaps as many as 500,000 barrels.

[desertpunk]

North Dakota Towns Balance Oil Boom, Beauty


Williston

North Dakota's still-accelerating energy boom is "one of the best things that's ever happened to this state," says Bismarck-based humanities scholar Clay S. Jenkinson, author of For the Love of North Dakota.

Yet that economic juggernaut, he says, also is creating the "wholesale industrialization" of a subtle landscape often ignored by travelers passing through on Interstate 94 to such marquee destinations as Glacier or Yellowstone national parks.

The area's undulating prairies and furrowed, pockmarked buttes — formations frontier soldiers described as "hell with fires put out" — are an "acquired taste," Jenkinson allows. Many residents of the state's more populated Eastern half (also known as "Greater Minnesota") even dismiss the Western region as "Godforsakia," he jokingly adds.

Now, Jenkinson worries, the lyrical emptiness of "America's Outback" is under seige — and "no one is going to say, 'Gee, honey, let's vacation in the middle of an oil boom.' "

[Bond James Bond]

Delta Airlines bought a refinery near Philadelphia a few months ago, and recently they announced plans to to ship oil from ND to the place, replacing imported oil.

Delta Air Lines to bring N.D. crude oil by train to its Trainer refinery

Who knew that the economic solution for the region's beleaguered oil refineries would arrive on a slow train from North Dakota?

Delta Air Lines, the new owner of the Trainer refinery that is scheduled to reopen later this month, on Thursday became the third fuel producer in the Philadelphia area to announce plans to bring in crude oil by rail from the Bakken oil field in the upper Midwest.

Edward Bastian, the airline's president, told an investor conference in New York that Delta plans to replace some imported oil at Trainer with domestic crude brought in by rail. The cheaper North Dakota crude could enhance the airline's plans to produce its own jet fuel, Bastian said.

[...]

And speaking of shipping oil by railroad, thanks to a recent jump in rail capacity out of ND, Bakken oil is now priced at a premium to WTI. It used to sell at a discount.

Bakken Oil Premium Widens on Expanded Rail Shipping Capacity

Bakken oil traded at the most expensive compared with West Texas Intermediate in four months as Burlington Northern Santa Fe boosted crude rail shipping capacity for the grade to 1 million barrels a day.

The increase of more than 25 percent over the past year covers shipments of crude from the Bakken-producing Williston Basin region in North Dakota and Montana, Krista York-Woolley, a spokeswoman for the railroad owned by Berkshire Hathaway Inc., said in an e-mail.

Bakken strengthened $4 to a premium of $1 above the U.S. benchmark at 3:54 p.m. in New York, according to data compiled by Bloomberg. That’s the most expensive the graded has traded at since May 3.

[Bond James Bond]

This won't be coming just from the Midwest/Plains, but a large portion of it will.

U.S. Crude Oil Production to Rise 74% by 2022

Crude oil production in the United States is projected to grow by 74%, or more than 4.9 million barrels per day (MMb/d), during the next 10 years to an average of 11.6 MMb/d by 2022, according to Bentek Energy®, the energy data analytics unit of Platts, a leading global energy, petrochemicals and metals information provider.

"Not only will the projected record growth in oil production affect North America, it will have dramatic implications for global crude oil markets," said Jodi Quinnell, Bentek oil analysis manager. "We foresee a massive displacement of traditional waterborne oil imports to the United States by 2022, taking them from 45% of U.S. total crude supply to no more than five percent."

[...]

"As could be expected with such a forecast, we also see North American crude oil prices declining versus their global counterparts," said Quinnell.

Bentek analysts say the projected rise in U.S. petroleum production – largely driven by shale oil activity of the Eagle Ford and Bakken plays in mid-western U.S. and parts of Canada – will be accompanied by lower U.S. and Canadian oil prices relative to international oil benchmarks.

For example, as sweeter, lighter sulfur crude oils compete for market share in the U.S. Gulf Coast, Louisiana Light Sweet crude oil is seen disconnecting from those of Brent crude, found near the North Sea, off Europe and Britain. West Texas Intermediate crude is pegged for a price decline of up to $16 per barrel by the end of 2017.

[...]

[Bond James Bond]

North Dakota oil production reaches 701,000 barrels/day in August

This next link includes Pennsylvania, but most, if not all, of the oil portion is in Ohio. That said, this is a very early estimate, I'm not even sure why they did one so soon with just a relative handful of wells drilled so far.

US geologists: Utica Shale formation in Northeast holds 38 trillion feet of gas

Drilling companies beginning to explore the Utica Shale got a piece of good news Friday when the U.S. Geological Survey estimated the rock formation in Ohio, Pennsylvania and other states holds enormous reserves of natural gas and oil.

Releasing its first estimate of the Utica, the USGS calculated the shale formation holds about 38 trillion cubic feet of undiscovered, recoverable natural gas, 940 million barrels of oil and 9 million barrels of natural gas liquids like ethane and propane.

[Bond James Bond]

And guess what? We've got yet another one! This time in southern Oklahoma.

Continental Resources unveils Oklahoma oil field

Continental Resources Inc. on Tuesday unveiled its newest oil field in an area of southern Oklahoma that has produced some of the state's richest discoveries.

The South Central Oklahoma Oil Province, known at Continental as SCOOP, covers much of four counties in south central Oklahoma. The rock is an oil-rich portion of the Woodford Shale that lies beneath oil fields tapped by some of the state's biggest oil names, including Phillips, Noble, Hefner and Skelly.

[...]

Presentation on it here (PDF).

[Bond James Bond]

Be sure to watch Mad Money on Thursday!

‘Mad Money’ host Jim Cramer coming to Ohio for show on Utica shale

[Bond James Bond]

^
Here it is:
Mad Money at the Utica Shale

[desertpunk]

Williston

image hosted on flickr

Oil boom town, Williston, ND by Biketripper, on Flickr

[Bond James Bond]

Thanks in part to the ascendant Midwest oil boom, here are 3 US oil production forecasts for the next 3 years. My own wild-ass-guess is that they'll only reach somewhere around the low case in 2015, but 5-10 years after that they'll reach somewhere around the base or high cases.


LINK

[JohnFlint1985]

all this is nothing short of amazing!!!

[JohnFlint1985]

there are more good news

Energy Department Advances Research on Methane Hydrates - the World's Largest Untapped Fossil Energy Resource

WASHINGTON, D.C. — The Energy Department today announced the selection of 14 new research projects across 11 states that will be a part of an expanding portfolio of projects designed to increase our understanding of methane hydrates’ potential as a future energy supply. Methane hydrates are 3D ice-lattice structures with natural gas locked inside, and are found both onshore and offshore – including under the Arctic permafrost and in ocean sediments along nearly every continental shelf in the world. Today’s projects build on the completion of a successful, unprecedented test earlier this year that was able to safely extract a steady flow of natural gas from methane hydrates on the North Slope of Alaska.

http://www.netl.doe.gov/publications...epartment.html

[JohnFlint1985]

“A new energy reality”

“The growth of unconventional oil and gas production is creating a new energy reality for the United States,” said Daniel Yergin, vice chairman of IHS, in a press release. “That growth has not only contributed to U.S. energy security but is a significant source of new jobs and economic activity at a time when the economy is a top priority.”

“The United States currently has the highest rate of growth in crude oil production capacity in the world and is virtually self-sufficient in natural gas, except for some gas from Canada. This is a stark contrast from when, prior to the unconventional revolution, it was expected that the U.S. would soon become heavily dependent on gas imports,” he added


The future

Unconventional oil and gas is the future. Investors all over the world will be tweaking their portfolios to include companies able to boast both conventional and unconventional reserves.

The energy investment landscape has been altered significantly over the past five years and is certain to change even more moving forward. The key is to embrace this change and be certain to undertake due diligence when investing in companies that are aiming to ride the wave of change that this market is experiencing.

http://oilandgasinvestingnews.com/53...landscape.html

[testdrive]

Are there any articles relative to Michigan and reserves there?

[desertpunk]

New refineries popping up to absorb Bakken oil: http://fuelfix.com/blog/2013/03/29/r...-bakken-shale/

These developments are narrowing the spread between WTI and Brent North Sea crude. If enough US domestic oil reaches refineries and consumers on the East Coast, gas prices may get a ceiling.

[desertpunk]

Oil-Boom Byproduct: Unaffordable Housing

April 4, 2013 - WSJ
In North Dakota's Bakken Region, Real-Estate Prices Surge and Towns Race to Accommodate Moderate-Income Workers



Boom times are bringing rapid growth to the North Dakota towns benefiting from oil shale: tens of thousands of newcomers, thousands of new jobs, new tax revenues—and soaring real-estate prices. And that last is a challenge for some residents who aren't working in the energy industry that is remaking the prairie's economic landscape.

In the 12-county Bakken region—which comprises nine counties in North Dakota and three in Montana—the working population has swollen to 85,000 as of December from 50,000 three years earlier. Most of them are oil-field workers chasing high-paying new jobs, according to the Minneapolis Federal Reserve Bank.

Along with them, listing prices for the few available homes in the region have gone up too, rising by nearly 27% in the past year to an average of $253,000, according to Realtor.com. Some rentals have gone up even more: A one-bedroom apartment in Williston, N.D., that rented for several hundred dollars a month before the boom now goes for $2,000.

[...]