Bismarck, N.D. – The failure of the repeal of the Bureau of Land Management’s (BLM) final rules regarding methane emissions on federal and tribal lands is an affront to North Dakota and state primacy, says North Dakota Petroleum Council President Ron Ness.

“The industry supports the goals of capturing greater quantities of associated gas and reducing waste but this duplicative and unnecessary rule comes at an enormous cost to the state’s economy, tax revenues and private mineral owners.

“We are extremely disappointed in Senator Heitkamp’s decision today to vote against the repeal of this rule. Hundreds of energy employees and numerous businesses, chambers of commerce and trade associations wrote to express concern for the rule. Despite this, Senator Heitkamp has chosen to stand with the environmental activists and the Democratic party in Washington rather than the oil and gas workers and people of North Dakota.

“This rule will provide no environmental benefits, will only increase costs for state and federal governments and the industry, and will further burden already overtaxed federal employees and dilute their ability to perform essential duties. Instead, Senator Heitkamp could have been the deciding vote that would have allowed the BLM and other federal agencies to make a larger, more immediate impact on reducing flaring and venting by focusing on fixing permitting, infrastructure and pipeline delays.

“Just yesterday, Senator Heitkamp applauded the U.S. Environmental Protection Agency’s decision to grant the state primacy and regulatory authority over CO2 injection wells and the certainty it would bring for North Dakota energy. Her decision today is a complete reversal of that stance. North Dakota already has some of the most comprehensive regulations addressing flaring and waste in the nation. Over the past two years, North Dakota has adopted a series of strict gas capture targets. At the same time, the industry has voluntarily made huge strides in natural gas capture by investing more than $13 billion in natural gas infrastructure since 2006. As a result, flaring has declined by more than 54 percent in just three years even as natural gas production has increased. This progress will only be threatened by the continued uncertainty and bureaucratic red tape brought on by the BLM rule, discouraging innovation and complicating the process for approving infrastructure that will ultimately ensure the capture of more of our valuable natural gas resources.

“We are grateful for Senator Hoeven and Congressman Cramer’s hard work and support for North Dakota Energy and energy workers. We look forward to working with them to pursue other avenues of rescinding this detrimental rule.”

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About the North Dakota Petroleum Council
Since 1952, the Petroleum Council has been the primary voice of the oil and gas industry in North Dakota. The Petroleum Council represents more than 500 companies involved in all aspects of the oil and gas industry, including oil and gas production, refining, pipeline, mineral leasing, consulting, legal work, and oil field service activities in North Dakota, South Dakota, and the Rocky Mountain Region. For more information, go to www.ndoil.org.

Media Contact:
TESSA SANDSTROM
Director of Communications, NDPC
T. 701.223.6380
EnergyOfNorthDakota.com | NDOil.org

Read more about DAPL: Reflecting on the Dakota Access Pipeline and the Next Chapter for the Bakken, April/May 2017 Issue.

By: Bob van der Valk

The Dakota Access Pipeline (DAPL) route begins in the Bakken shale oil fields in northwest North Dakota and travels in a more or less straight line southeast, through South Dakota and Iowa, terminating at the oil tank farm near Patoka, Illinois. The pipeline is currently under construction by Dakota Access, a Houston, Texas based company and subsidiary of Energy Transfer Partners.

The 1,172 mile pipeline has a permanent easement of 50 feet and a construction right-of-way of up to 150 feet. The 30-inch diameter pipeline is at least 48 inches underground from the top of the pipe or 2 feet below any drain tiles. The map below shows the route and where it intersects with the Standing Rock Indian Reservation in orange.

 

The pipeline is planned to carry 470,000 barrels per day of crude oil “based on contractual commitments to date”. The capacity may be increased up to 570,000 barrels per day.

The company estimated the pipeline would cost $3.78 billion, of which $1.4 billion would be invested in the North Dakota portion, $820 million in the South Dakota portion, $1.04 billion in the Iowa portion, and $516 million in the Illinois portion. Of this, $189 million would be paid to landowners.

Energy Transfer Partners estimates that the pipeline would create up to 40 permanent jobs and 8,200 to 12,000 temporary jobs.

In March 2016, the United States Fish and Wildlife Service issued a sovereign lands construction permit for the DAPL. In late May, 2016, the permit was temporarily revoked in three counties of Iowa, where the pipeline would cross the Big Sioux River and the Big Sioux Wildlife Management Area; historic and cultural sites of the Upper Sioux Tribe, including graves in Lyon County. Also in May, 2016, Iowa farmers filed lawsuits to prevent the state from using eminent domain to take their land.

Citing potential effects on and lack of consultation with the Native American Tribes, most notably the Standing Rock Sioux, in March and April, 2016, the Environmental Protection Agency, the Department of Interior, and the Advisory Council on Historic Preservation asked the USACE to conduct a formal Environmental Impact Assessment and issue an Environmental Impact Statement. However, in July and August, 2016, USACE approved the water crossing permits and issued permissions for all but one necessary for the pipeline construction.

In June, 2016, the IUB voted 2 to 1 (Libby Jacobs and Nick Wagner in favor and Chairwoman Geri Huser against) to allow construction on non-sovereign lands to continue. The Sierra Club said this action was illegal before the US Corps of Engineers authorized the project. In late June, 2016, construction was allowed to resume in Lyon County after plans were changed to route the pipeline 85 feet below the site using directional boring, instead of trenching and disturbing the soil on the surface. In December, 2016, the approval was disputed in the Polk County District Court.

On July 27, 2016, the Standing Rock Sioux Tribe sued the USACE in the United States District Court for the District of Columbia. On September 9, 2016, U.S. District Judge James Boasberg denied the motion for preliminary injunction. On September 10, 2016, the Standing Rock Sioux Tribe filed an appeal which was denied on October 9, 2016.

In September the U.S Department of Justice received more than 33,000 petitions to review all permits and order a full review of the project’s environmental effects. On September 9, 2016, a joint statement was issued by the US Departments of Justice, Army, and Interior temporarily halting the project on federal land bordering or under the Lake Oahe reservoir. The US federal government asked the company for a “voluntary pause” on construction near that area until further study was done on the region extending 20 miles around Lake Oahe. Energy Transfer Partners rejected the request to voluntarily halt construction on all surrounding private land and resumed construction. On September 13, 2016, chairman and CEO of Energy Transfer Partners, Kelcy Warren, responded to the federal government’s request, saying concerns about the pipeline’s impact on the water supply were “unfounded”. Warren said that “multiple archaeological studies conducted with state historic preservation offices found no sacred items along the route”. Warren said that the company will meet with officials in Washington “to understand their position and reiterate our commitment to bring the Dakota Access Pipeline into operation.”

On November 1, 2016, President Obama announced that his administration “is monitoring the situation and has been in contact with the USACE to examine the possibility of rerouting the pipeline to avoid lands that Native Americans hold sacred”.

On November 14, 2016, the USACE announced that “the Army has determined that additional discussion and analysis are warranted in light of the history of the Great Sioux Nation’s dispossessions of lands, the importance of Lake Oahe to the Tribe, our government-to-government relationship, and the statute governing easements through government property.”

Energy Transfer Partners responded by criticizing the Obama administration for “political interference” and said that “further delay in the consideration of this case would add millions of dollars more each month in costs which cannot be recovered.”

North Dakota Governor Jack Dalrymple criticized the decision saying the pipeline would be safe and that the decision was “long overdue”.

Craig Stevens, spokesman for the Midwest Alliance for Infrastructure Now (MAIN) Coalition, called the Corps’s announcement “yet another attempt at death by delay” and said the Obama administration “has chosen to further fan the flames of protest by more inaction.”

North Dakota Senator John Hoeven said in a statement that the delay “will only prolong the disruption in the region caused by protests and make life difficult for everyone who lives and works in the area.”

Speaking to CBS News in November, Kelcy Warren said that it would be “100 percent sure that the easement gets granted and the pipeline gets built” when newly elected President elect Donald Trump came into office in January.

On December 4, 2016, the USACE announced that it would not grant an easement for the pipeline to be drilled under Lake Oahe and was undertaking an environmental impact statement to look at possible alternative routes.

Jo-Ellen Darcy said that “the best way to complete that work responsibly and expeditiously is to explore alternate routes for the pipeline crossing”. Energy Transfer Partners and Sunoco Logistics Partners issued a same-day response saying that the White House’s directive “is just the latest in a series of overt and transparent political actions by an administration which has abandoned the rule of law in favor of currying favor with a narrow and extreme political constituency.” They said that the companies “fully expect to complete construction of the pipeline without any additional rerouting in and around Lake Oahe. Nothing this Administration has done today changes that in any way.”

On January 18, 2017, the USACE filed its formal Notice of Intent to conduct the Environmental Impact Statement process. The notice opened a thirty-day comment on the scope of the EIS, which concerns the crossing of Lake Oahe. The proposed EIS would consider “Alternative locations for the pipeline crossing the Missouri River”, direct and indirect risks, and impacts of an oil spill on the lake, the Standing Rock Sioux’s water supply, and their “water, treaty fishing, and hunting rights”; as well as their treaty rights to the lake. The same day U.S. District Judge James Boasberg denied ETP’s request to delay the EIS process.

President Donald Trump signing the Executive Order to advance the construction of the Keystone XL and Dakota Access pipelines. January 24th, 2017

On January 24, 2017, President Donald Trump signed an executive order to advance the construction of the pipeline under “terms and conditions to be negotiated”. The order would expedite the environmental review that Trump described as “an incredibly cumbersome, long, horrible permitting process”.

On February 7, 2017, the USACE sent to the United States Congress a notice of intent to grant an easement under Lake Oahe no earlier than 24 hours following notification of the delivery of the notification. On February 9, 2017, the Cheyenne River Sioux sued the easement decision, citing an 1851 treaty and interference with the religious practices of the tribe.

On February 22, 2017, the protest site was cleared, as that was the deadline for the camp to be cleared by protesters. Although many left voluntarily, ten people were arrested in conflict of this event. They were given the option to leave voluntarily and even with the arrests, there was no major conflict.

The “fill” of the DAPL with Bakken crude oil is expected to start no later the second quarter of this year.

MPA-MARK-MATHIS

The 2016 annual meeting of the Montana Petroleum Association (MPA) will take place in Billings August 30th and 31st at the DoubleTree Hotel, formerly the Crowne Plaza.

Event highlights include special guest, Congressman Ryan Zinke to speak Tuesday night at Pryor Creek Golf Course during the MPA barbeque. Recent past speakers include former Lt. Governor Angela McLean and Attorney General Tim Fox.

On Wednesday, the morning will commence at the DoubleTree with breakfast speaker Paul Babb of Butte, Community Relations Manager for NorthWestern Energy. Babb is a current member of the REAL Montana Program, a public-private partnership through the MSU Extension office, engaged in educating leaders of Montana on agriculture and natural resource development industries and issues. His presentation will be focused on the importance of “Telling the Story of Our Employees”.

The general meeting of MPA will follow, ahead of three panels which will address subjects including landowner relations, community engagement, methane rules, federal proposals, and collaboration with local government.

mpa_alan-olson“This year, we wanted to tailor our meeting to address Montana-specific issues that appeal to both industry and the general public,” said Alan Olson, Executive Director of MPA. “We’re hosting a good mix of industry experts and the regulators we work with on each of our panels.” (Olson, pictured right with MPA President, Greg Brown, CHS Refinery).

Panelists include Jack King of Billings, longtime landman and former commissioner with the Board of Oil and Gas Conservation; Steve Durrett, current BOGC member and President of August Energy Partners; recent past president of the Montana Association of Professional Landmen, Nicole Bement of Sidney, now with XTO. Each panelist will address how industry can balance public concerns with oil and gas operations by improving communication.

On the Community Engagement panel, speakers will discuss how oil and gas businesses are preparing the next generation of industry leaders, and making lasting investments in the community. Panelists will be Dan Carter, Public and Government Affairs Manager at ExxonMobil; Danette Welsh, Government Affairs Manager at ONEOK, representing the midstream; and Shawna Bonini, Montana Tech grad and past president with the Society of Petroleum Engineers, and former Drilling Engineer for Chevron, and SM Energy in Billings.

A final panel on industry topics will address issues facing the oil and gas sector at the state and federal level, including hotly contested methane rules. Speakers include Tony Lucero, Lead of Regulatory Programs at Enerplus Resources; Karl Christians, Conservation District Specialist, DNRC; and Brian Fakharzadeh, VP of Development and Operations at Western Energy Alliance.

Keynote speaker of this year’s Petroleum Industry Appreciation Day luncheon will be author and filmmaker, Mark Mathis. Mathis has spent most of his career challenging widely accepted ideas that are he describes as “simply untrue”. Mathis’s resume includes a decade as a TV news anchor and reporter, talk radio host, media trainer, founder of Citizens’ Alliance for Responsible Energy, speaker and documentary film producer/director.

In his film, spOILed, Mathis highlighted the public’s ignorance of the central role oil plays in our lives. Mark’s new film, Fractured, exposes how language is used to dangerously deceive us about the most essential component to the function of the modern world—energy.

Registration is available online at montanapetroleum.org, and the public is invited to attend. Press requests and additional questions can be directed to Jessica Sena, 590-8675.

Recently, the U.S. Supreme Court issued a nationwide stay on the Environmental Protection Agency’s (EPAs) new regulations on coal-fired power plants. This decision provides states like Montana – and over half of the states in our nation – relief from these overreaching and misguided regulations while they are being challenged in court.

These latest EPA regulations are part of the Obama administration’s relentless attacks on affordable energy and good-paying Montana jobs. The federal government’s misguided plan would lead our country in the wrong direction – away from being an energy leader—and would destroy thousands of good-paying Montana jobs.

As a member of the Senate Energy and Natural Resources Committee, I’m working to move forward commonsense policies that help secure an all-of-the-above energy solution and push back on job-killing regulations that threaten Montana’s energy future.

By promoting innovation and responsibly developing Montana’s vast resources, we can secure abundant energy that is clean, affordable and reliable.

The 2015 Economic Outlook recently published by the University of Montana Bureau of Business and Economic Research showed how technology and innovation have already revolutionized the American energy industry to make made-in-America energy resources more accessible than ever.

Montana is ranked at the top in U.S. coal deposits, has rich oil and gas deposits including portions of the Bakken and Three Forks formations, has immense hydropower, solar and biomass potential, and is first in wind potential. Montana is truly an example of what an all-of-the-above energy plan can look like and is well-equipped for continued growth.

But despite this encouraging news – and even with the U.S. Supreme Court’s recent ruling to halt the Obama administration’s new regulations— Montana still faces challenges in reaching its full energy potential. We need to work toward comprehensive solutions that encourage innovation, grow our economy and revolutionize how we produce and distribute energy.

That’s why I’m hosting Montana Energy 2016 in Billings from March 29 to 31. Back for its third year, this comprehensive conference will focus on made-in-Montana energy and the good paying jobs it creates.

Montana holds a vital role in securing our nation’s all-of-the-above energy strategy and this conference comes at a vital time when our nation needs leadership. Montana Energy 2016 will bring together energy leaders to help increase innovation and move Montana’s energy opportunities to the next level.

Registration is open, with discounted rates for service members and students. Please visit www.MontanaEnergy.net to learn more and to register. Join me for Montana Energy 2016 so that we can work together to ensure that Montana remains an energy leader for years to come.

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The Northern Plains Resource Council (NPRC) has asked the Board of Oil and Gas Conservation to commence rule making to impose quarter mile (1,320 ft) setbacks of drilling rigs from occupied dwellings. This is a greater distance than the proposal struck down before the legislative Senate Natural Resources committee just months ago, after ample testimony on both sides.

NPRC claims that because other states have imposed setbacks, Montana should follow suit for the benefit of landowners. However, existing statute and administrative rules, along with the structure and function of the BOGC, are a made in Montana solution that works. Using a checklist of out of state rules and regulations to shape policy in Montana is not a good idea. Doing so neglects to take into account those attributes which are unique to Montana.

This Wednesday, at a public meeting before the Board of Oil and Gas Conservation (BOGC), the Montana Petroleum Association (MPA) will be providing comments on how implementation of the proposed rule would negatively impact oil and gas opportunities in Montana, siting that:

  • Montana’s drilling and permitting activity pales in comparison to other states who’ve elected to impose setbacks, especially with consideration to densely populated areas
  • Other states do not have the same protest ability that Montana landowners do with regard to oil and gas drilling
  • The public, including land/surface owners, have considerable access to the BOGC
  • Montana’s BOGC is set up to mitigate concerns on a case by case basis; ensuring responsible and efficient development of mineral resources
  • If imposed, drilling opportunities in Montana would be severely impacted, with many small and exploratory oil and gas operators essentially placed out of business without the ability to drill into small target formations
  • Many claim horizontal wells have greater flexibility in surface placement, however, operators seek to evenly space wells within a DSU (drilling spacing unit)
  • Setbacks would reduce the number of wells there could be in a given DSU (within the same lease), shorten laterals, thereby increasing wasted oil and gas reserves, and lessening both production revenue (including that to the state and counties) and royalty payments to mineral owners, which include universities, hospitals, and charitable organizations
  • Setbacks neglect to recognize that minerals are the dominate estate (under common law) in split estate scenarios.
  • Setbacks act as a taking of mineral owners rights without compensation
  • Correlative rights of mineral owners are compromised by setback rules administered as a “one-size-fits-all” rule
  • Potential legal conflicts exist with regard to treatment of existing leases under setback rules
  • Surface use agreements are currently negotiated between landowner and operator, prior to drilling
  • The BOGC sites less than a handful of cases wherein a surface owner came before the Board with a concern over the placement of a well
  • The BOGC currently has the ability to exercise authority over well placement to mitigate surface owner concerns when necessary, based on potential harms
  • Montana has a longstanding history of environmentally responsible development of oil and gas, without negative impacts on air, soil, or water

The rule would have widespread effects on Montana’s economy and on mineral rights. Mineral owners, royalty recipients, and oil and gas operators with an interest in preserving future drilling opportunities in the Treasure State ought to weigh in at the June 24th meeting at the Board of Oil and Gas Conservation office in Billings, 2535 St. Johns Avenue, at 1:00 pm.

Public hearings will follow at a date TBD, should the Board commence rule making.

Interested parties may contact the Montana Petroleum Association at mpa@montanapetroleum.org to stay updated on the issue, and to be notified of future opportunities for public comment.

Contact: Jessica Sena, 590-8675

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“Economic Contributions” of the Oil and Gas Industry in 2013” Infographic 2013-Economic-Impactv2-1 2013-Economic-Impactv2-2

Bismarck, N.D. – The oil and gas industry has seen its economic output rise by 750 percent to $43 billion since 2005, according to a study conducted by the North Dakota State University’s Department of Agribusiness and Applied Economics. The study also found that the industry directly supported 55,137 full time equivalent jobs and supported another 26,403 secondary full-time jobs. This increase represents the growing importance oil and gas development has on the state’s overall economic health.

“This study helps confirm that the petroleum industry is one of the largest basic-sector industries in North Dakota,” said Dean Bangsund, co-author of the study and research scientist for the department at NDSU. “Although activity is concentrated in the western part of the state, the magnitude of the contributions to both the state and local governments and the sheer volume of secondary economic effects in nearly all sectors of the North Dakota economy would suggest that the economic effects of the industry are felt statewide.”

Because the industry relies on hundreds of contractors and subcontractors, the economic contributions extend beyond the mining and extraction industries. According to the study, retail trade once again saw the largest impact, taking in $11.3 billion of the $43 billion. Households, or personal income, saw the second-largest impact at $9.3 billion, and the Finance, Insurance and Real Estate industry ($4.5 billion) overtook the government ($4.4 billion), which was the third-largest beneficiary in 2011. More than six other industries in North Dakota also benefitted from oil and gas development.

“The positive impacts of oil and gas development extend far beyond just the energy industry, and benefit many of our small and independent businesses in the oil patch and across the state,” said Rae Ann Kelsch, state director of the North Dakota chapter of the National Federation of Independent Business. “This is great news, but what is perhaps more exciting for our organization and members is the fact that the $43 billion only represents 48 percent of the total economic output. That means there is a demand for services within the state that our members can begin taking a look at and capitalizing upon to keep even more of those dollars here in our state.”

Among the study’s key findings:

· The oil and gas industry generated $43 billion for North Dakota’s Economy: In 2013, direct impacts of the oil and gas industry were $17 billion and secondary impacts were $25.7 billion for a total of $43 billion in business activity. For every dollar spent in the state by the oil and gas industry, another $1.43 in additional business activity was generated.

· The oil and gas industry created more than 80,000 jobs statewide: The study reveals that the oil and gas industry’s economic importance to the state includes direct employment for 55,137 full-time jobs and secondary employment of 26,403 full-time equivalent jobs.

· The industry contributed $9.3 billion in economy-wide personal income: The study reveals that the oil and gas industry contributed $9.3 billion in economy-wide personal income, including $1.425 billion in in-state private royalties and $300 million in lease bonuses. This is a 382 percent increase since 2005.

· The oil and gas industry generated $4.4 billion in government revenues: According to the study, the oil and gas industry generated a total of $4.4 billion in government revenues, including:
o $2.9 billion in gross production and severance taxes;
o $654 million in royalties, including $304 million in state royalties, $349 million in federal royalties, including tribal royalties;
o $49.6 million in state lease bonuses, and $4.1 million in federal lease bonuses that were returned to the state;
o $62.6 million in direct sales and use taxes;
o $50.5 million in corporate and personal income taxes;
o $54.6 million in licenses, permits, and fees;
o $12.5 million in charitable donations;
o $322.3 million in indirect state government general tax collections.

· The oil and gas industry supported $28.5 billion in non-industry business activity: The oil and gas industry benefited other industries and sectors statewide, including $11.3 billion in statewide retail sales; $4.5 billion in finance, insurance and real estate; $2.8 billion in business and personal services; $2.3 billion in communications and public utilities; $2.2 billion in professional and social services; $1.8 billion in construction; $1.5 billion in other sectors (various ag and mining); $1.3 billion in manufacturing; and, $838 million in transportation.

The North Dakota Petroleum Council (NDPC) has commissioned the study each biennium since 2005, and economic benefits have risen dramatically. Economic impacts have grown by 750 percent since the first study in 2005. State and local government revenues grew by more than $3.73 billion—or 1,150 percent—since 2005, while industry-wide direct employment grew by 992 percent from 5,051 in 2005 to 56,137 in 2013.

“We’ve seen a dramatic growth in production, and along with it, a dramatic growth in the economic contributions and associated job creation,” said Ron Ness, president of the NDPC. “Obviously, as prices decrease, the benefits previously enjoyed by the state government, households and other industries will be much lower as we work through the current price drop – no doubt impacts many are beginning to feel. We must be cautious to not further hinder these positive economic impacts through onerous or unnecessary regulation.”

The study was conducted by research scientist Dean Bangsund and Dr. Nancy Hodur, Research Assistant Professor at the NDSU Department of Agribusiness and Applied Economics. Bangsund and Hodur surveyed firms engaged in exploration and development, extraction and production, transportation, and processing of crude oil and natural gas. Data that was measured in this study but not included in previous surveys was an assessment of capital expenditures for infrastructure projects. To view the full study, visit http://ageconsearch.umn.edu/.

ATTACHMENT: “Economic Contributions” of the Oil and Gas Industry in 2013” Infographic

Since 1952, the Petroleum Council has been the primary voice of the oil and gas industry in North Dakota. The Petroleum Council represents more than 500 companies involved in all aspects of the oil and gas industry, including oil and gas production, refining, pipeline, mineral leasing, consulting, legal work, and oil field service activities in North Dakota, South Dakota, and the Rocky Mountain Region. For more information, go to www.ndoil.org.

Media Contact:
Tessa Sandstrom
Communications Manager
ND Petroleum Council
701.223.6380
tsandstrom@ndoil.org

INTRODUCTION by Bob van der Valk, Senior Editor  |  Bakken Oil Business Journal

“In October 2014 crude oil barrels went down 4M barrels/day from 1,186,228 to 1,182,174 barrels/day.  The drilling rig count dropped 2 from September to October, an additional 3 from October to November, and has since fallen 5 more from November to today. The number of well completions decreased from 193(final) in September to 134(preliminary) in October. Three significant forces are driving the slow-down: oil price, flaring reduction, and oil conditioning.”

NDIC Department of Mineral Resources Director’s Cut Newsletter
December 13, 2014 – Lynn Helms

Crude Oil production:
Sep Oil 35,586,832 barrels = 1,186,228 barrels/day
Oct Oil 36,647,393 barrels = 1,182,174 barrels/day (preliminary)
1,118,010 barrels per day or 95% from Bakken and Three Forks
64,164 barrels per day or 5% from legacy conventional pools

Natural Gas Production:
Sep Gas 42,400,766 MCF = 1,413,359 MCF/day
Oct Gas 44,317,381 MCF = 1,429,593 MCF/day (preliminary)(NEW all-time high)
Sep Producing Wells = 11,758
Oct Producing Wells = 11,892 (preliminary)(NEW all-time high)
8,406 wells or 71% are now unconventional Bakken – Three forks wells
3,486 wells or 29% produce from legacy conventional pools

Permits issued:
Sep Permitting: 261 drilling and 2 seismic
Oct Permitting: 328 drilling and 1 seismic
Nov Permitting: 235 drilling and 1 seismic (all time high was 370 in 10/2012)

Crude oil pricing:
Sep Sweet Crude Price = $74.85/barrel
Oct Sweet Crude Price = $68.94/barrel
Nov Sweet Crude Price = $60.61/barrel
Today Sweet Crude Price = $41.75/barrel (lowest since March 2009) (all-time high was $136.29 7/3/2008)

Rig Count:
Sep rig count 193
Oct rig count 191
Nov rig count 188
Today’s rig count is 183 (all-time high was 218 on 5/29/2012)
The statewide rig count is down 16% from the high and in the five most active counties rig count is down as follows:
Divide -69% (high was 3/2013)
Dunn -26% (high was 6/2012)
McKenzie -15% (high was 1/2014)
Mountrail -20% (high was 6/2011)
Williams -16% (high was 10/2014)

Comments:
The drilling rig count dropped 2 from September to October, an additional 3 from October to November, and has since fallen 5 more from November to today. The number of well completions decreased from 193(final) in September to 134(preliminary) in October. Three significant forces are driving the slow-down: oil price, flaring reduction, and oil conditioning. Several operators have reported postponing completion work to achieve the NDIC gas capture goals. There were no major precipitation events, but there were 9 days with wind speeds in excess of 35 mph (too high for completion work).

Over 95% of drilling still targets the Bakken and Three Forks formations.

The drillers outpaced completion crews in October. At the end of October there were about 650 wells waiting on completion services, an increase of 40.

Crude oil take away capacity is expected to remain adequate as long as rail deliveries to coastal refineries keep growing.

Rig count in the Williston Basin is set to fall rapidly during the first quarter of 2015. Utilization rate for rigs capable of 20,000+ feet is currently about 90%, and for shallow well rigs (7,000 feet or less) about 60%.

Drilling permit activity peaked in October as operators worked on their summer programs, planned locations for next winter, and adjusted capital budgets.

The number of rigs actively drilling on federal surface in the Dakota Prairie Grasslands is down from 6 to 3.

Activity on the Fort Berthold Reservation is as follows:
28 drilling rigs (11 on fee lands and 17 on trust lands)
386,679 barrels of oil per day (149,547 from trust lands & 237,131 from fee lands)
1,371 active wells (1,044 on trust lands & 327 on fee lands)
172 wells waiting on completion
346 approved drilling permits (306 on trust lands & 40 on fee lands)
1,997 additional potential future wells (1,224 on trust lands & 773 on fee lands)

Seismic activity is slowing down with 5 surveys active/recording, 1 remediating, 0 suspended, and 1 permitted. There are now 3 buried arrays in North Dakota for monitoring and optimizing hydraulic fracturing.

North Dakota leasing activity is very low, consisting mostly of renewals and top leases in the Bakken – Three Forks area.

US natural gas storage is now 10% below the five-year average indicating slowly increasing prices in the future. North Dakota shallow gas exploration could be economic at future gas prices. As you are aware there is some exploration underway in Emmons County. The first well will be on confidential status until 12/23/14.

The price of natural gas delivered to Northern Border at Watford City is down $0.76 to $2.98/MCF. This results in a current oil to gas price ratio of 14 to 1. The percentage of gas flared dropped to 22%. The Tioga gas plant remained below 70% of full capacity due to delayed expansion of gas gathering from south of Lake Sakakawea.
capture percentage was 78% with the daily volume of gas flared from Sep to Oct decreasing 32.8 MMCFD. The historical high flared percent was 36% in 09/2011.

Gas capture statistics are as follows:
Statewide 78%
Statewide Bakken 78%
Non-FBIR Bakken 79%
FBIR Bakken 75%
October 2014 capture target =74%
January 2015 capture target =77%

BLM revised final regulations for hydraulic fracturing on federal and Indian lands were sent to the White House Office of Management and Budget for interagency review on Oct 26 and Department of Interior continues to be committed to their goal of issuing a final rule by the end of 2014. After initial publication in 2012, BLM received over 177,000 comments and withdrew the rule. A new proposed rule was published in the federal register on 5/24/2013 and the comment period ended 8/23/2013. This time BLM received over 1.2 million comments. Thanks to all who provided comments in support of a “states first” policy.
BLM has started the process of new venting and flaring regulations with input sessions in Denver, Albuquerque, Dickinson, and Washington, DC.

EPA published an advanced notice of proposed rule-making to seek comment on the information that should be reported or disclosed for hydraulic fracturing chemical substances and mixtures and the mechanism for obtaining this information. The proposed rule-making is in response to a petition from Earthjustice and 114 other groups who are opposed to the use of the GWPC-IOGCC FracFocus website process of chemical disclosure and any type of trade secret protection for hydraulic fracturing fluid mixtures. These groups are requesting EPA regulation of chemical disclosure under the federal Toxic Substances Control Act.

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North Dakota has pumped up its crude production in August to 914,617 b/d, about 1.1% higher than the revised July output of 904,927 b/d, according to the North Dakota Industrial Commission.

The preliminary July crude output published last month was at 871,459 b/d.

June output was 821,596 b/d, and May production was at 811,262 b/d.

The Bakken crude output makes up more than 90% of North Dakota’s total oil production.

The number of producing wells in August rose to 9,452 from 9,324 in July and 9,096 in June.

North Dakota is the second-largest oil producer in the U.S., with Texas holding on to the No. 1 spot and Alaska third. Bakken crude is playing a growing role in the U.S. coastal refineries’ crude slate as pipelines, rail and ships offer delivery solutions to the once-landlocked crude output.

–Edgar Ang, eang@opisnet.com, www.opisnet.com
Originally published by Oil Price Information Service (OPIS), Gaithersburg, MD. Additional reproduction is strictly prohibited. For more information on other news, contact Scott Berhang, +1 301.287.2332.

The theme of the 2013 conference is New Energy Horizons.

When the very first Williston Basin Petroleum Conference was envisioned back in 1993, it was planned as a meeting where researchers and industry leaders could sit down and discuss the latest technologies and science to help improve oil production in North Dakota and Saskatchewan.  That first conference in Minot, North Dakota – spearheaded by Dr. Malcolm Wilson who at the time worked for the Saskatchewan Ministry of Industry and Mines, as well as colleagues across the border at the University of North Dakota – sent out 70 invitations.  Over 160 people showed up.

From the get-go, Wilson and the original planners knew they’d come across something big.

“What can you say when you get almost triple the number of people you initially invited to the first conference asking to attend?” notes Wilson, now the CEO of the Petroleum Technology Research Centre in Regina, Saskatchewan. “As the conferences progressed – and began to be managed by the North Dakota Petroleum Council, the Saskatchewan Geological Survey and the PTRC – they expanded to include more and more companies.  It developed a significant tradeshow component, but it’s been very important to keep the technical and scientific sessions expanding as well.”

The conference now alternates, in even and odd numbered years, between North Dakota and Saskatchewan respectively.  In 2012 over 4000 people registered and attended the Bismarck incarnation (no mean feat, for hotel owners and restaurants in a city of under 60,000) and the 2013 event in Regina is expected to attract around 2500 attendees.

The exponential increase in numbers at the conference speaks to the rise of Bakken exploration and development – a formation that contains often difficult-to-access but high quality oil.  The Bakken has become the backbone of the explosive growth in oil production in North Dakota and southern Saskatchewan, and holds enormous potential for additional growth in southwestern Manitoba and Eastern Montana.

What’s in the works for the 2013 conference, which runs April 30 to May 2nd at Regina’s Evraz Place?

“We’re excited by the technical presenters, and special guest speakers we have lined up for this year’s conference,” noted Melinda Yurkowski, assistant Chief Geologist at the Saskatchewan Geological Survey, the Government of Saskatchewan group that has been setting the technical program. “Aside from presentations on important emerging technologies, and  the latest in enhanced oil recovery happening in the Williston Basin, our first day of the technical sessions will also report on the latest news from industry and government players.”

To attend the presentations requires registering and paying a fee of 300.00 (this rate goes up on the day of the conference to 500.00, so register early!) but there are also a number of public presentations that don’t require conference registration and are open to everyone.  One of those, on hydraulic fracturing (“fracking”) hopes to provide all the basic information on the technologies employed in this process and discuss in a frank way what it’s all about.  The conference also has two special workshops planned for the conference delegates for a small extra fee – one on core sampling and a second on rock mechanics.  Check out the Williston Basin Petroleum Conference website below for more information.

The some 300 tradeshow booths have been sold out since January, and the tradeshow itself will highlight the best in oilfield technologies.  Special events, a host of receptions, and conference lunches with special-guest speakers will also be provided.

The conference runs April 30 to May 2nd at Evraz Place.  Visit www.wbpc.ca for full information.

Dickinson, ND –

In 2012, North Dakota made oil headlines by taking over as the number two producer in the nation.

While production continues to ramp up daily, there is one part of western North Dakota were the excitement of oil has gone bust.

Chesapeake’s attempt to find the southern edge of the Bakken, is being described as the largest failure in drilling in the state since the 1980’s.

There are a few well sites in western North Dakota that look more like ghost towns than multi-million dollar holes.

Chesapeake secured leases in a large part of the state, south of I-94.

They drilled 8 wells, only 3 produced oil — but at minimal amounts.

So little that all holes have been shut in.

Director of Mineral Resources for the state of North Dakota, Lynn Helms, says “geologically, there were some surprises. We knew that there wouldn’t be any lower Bakken Shale in that area. What surprised us was to find out there’s no upper Bakken Shale in that area.”

Chesapeake’s wells, a bust.

It’s the largest failure in recent oil history in North Dakota.

“That pretty much condemns an area, if you don’t have Bakken present, the risk for finding oil goes way up and you need to have some structure,” says Helms.

The wells are scattered to the south of I-94 between Dickinson and Belfield.

Tanks are there, collecting nothing.

Well heads are in place, abandoned.

And at one site a pumping unit has been partially removed.

Helms says, “there’s only one well that’s made any measurable oil, and it’s about 10 percent oil at best, 90% water.”

Chesapeake was after the chance they may hit oil in this less developed area.

Helms says Chesapeake invested 60 million in the prospect of hitting oil.

That excludes money spent on leases.

“Because all the drilling had been taking place north of there and the geological risk was zero, it made it look too easy. So in terms of the technology of drilling and fracking, well prepared but in terms of geology probably not,” says Helms.

Chesapeake’s risk taking — provided large clues about where the Bakken ends. “It looks like 4-6 miles south of I-94 the Bakken Shale disappears,” says Helms.

Their experimental drilling will also provide answers about what else could be below.

Kathy Neset with Neset Consulting says, “they’re taking that information and they’re studying it. They are going to learn everything they can from those wells.”

Neset provides geology services to oil companies.

She says this is not the end of Chesapeake in North Dakota.

“They’re not going to say, we’re going to drill one well, if it doesn’t work, we are out of here. They have a very committed program in drilling and evaluating, I think we’ll see Chesapeake back here. They may be disappointed right now. But I think they’ll be back,” says Neset.

Maybe back and drilling in another formation.

Both Neset and Helms say there’s potential in the Tyler formation.

Helms says, “the area does lie between two producing Tyler fields and has mature Tyler source rock, so it’s not the end of the story by any means.”

Helms says Chesapeake will be forced to either reenter the well sites or to plug and abandon them soon.

The state only allows a non paying well to stay on the landscape for a year.

Retreived 1-2-2013. KX News.