Oldtent Archives 2007 - 2008

he asked me to post telling everyone involved in the flintstone project that all equipment is accounted for and operational.

rno

I learned something new yesterday at work, mulicultural words, from Africa. Her stomach is running. = loose stools.

debate and resolve the differing opinions on today’s cost of producing a barrel of oil from the Bakken geological formations.  I simply do not believe the statement attributed to Scott Saxberg, CEO of Crescent Point Energy Trust, that oil can be produced from their area of interest in southeasern Saskatchewan and southwestern Manitoba for $5 per barrel(cited in the article posted by Ike).  However, I also think that there are enough proven successes in various parts of the Bakken formations to indicate that it need not cost $125 to $150 to produce a barrel of oil there under many of the geological strata encountered to date.

The market will resove this ultimately, as will the detective work of knowledgeable geologist who work over the intricacies of this petroleum resource in Montana/North Dakota/Manitoba/Saskatchewan.  I think todays average production costs lie comfortably midway between $5 and $125 per barrel of oil for this petroleum pool.  But that is just my guess, and that is why I am interested in further cost estimates and opinions from the two of you.  Cheers.  Equiz.

Casey Research just put out an excellent piece on peak oil, etc.  Concerning shale oil, they point out that it took a long time to learn to economically extract oil from the tar sands, and there are still problems with it. The problems extracting oil from shale rock are much greater. In their words, shale oil is still on the level of a high school science project. No salvation there.

I think wage increases here in the states are going to be far and few between. In the early 70’s there were still a lot of powerful unions that could demand higher wages……no longer the case. 20 to 30 million illegals within our boundries don’t help either.

Best
Dusty

….But I still wonder sometimes how can unions stand up for wage increases when they see their memberships declining due to loss of millions of manufacturing jobs..

…CEO to Union…..”.Go ahead…you want 4% ?…go strike..we got too much inventory..to last 3 years at projected rates…!…you want a job.?..shaddupayoumouth !!”

.will we really see wage inflation in these peculiar times ?..or will we all just downsize as our steady wages look better than the alternative ?

..Personally I think anyone who Strikes for any reason in these times……has made a mistake.

will be wage inflation.  In the 70’s wages went very quickly from .75 an hour for full time employment  to over $5.00 when house prices doubled and then the savings and loan crisis hit.  This is starting to happen again.  In Canada minimum wages are going up 28 percent over three years.   We already had the first 9 percent upward hike last month.  I don’t think they will be the only adjustments……………………..expect significantly higher incomes across all sectors of the economy………especially the service side.  This will hurt for a bit as adjustments work through but most companies will pass on additional costs……it’s all happening.

to extract–yet the following article gives a totally different picture from yours-are they talking about the same oil fields??

The massive oil reserves in Montana and S.Dakota have been known for over 50 years. Actually, it is the world’s largest known oil reserves (ie even greater than that of the Middle-East)…..BUT:

IMO it will take another 5-6 years and an oil price of at least $150/barrel to make Montana and S.Dakota viable AND ECONOMIC SOURCES OF CRUDE.

Well, “bad-mouthing” GOLD is fast becoming the norm once again amongst many of the pinhead analysts, as seen on CNBS today and as read in many editorials lately. And this is cause for celebration, to say the least, as well as nothing but a bunch of ignorance, hot air…………and music to my ears.

GOLD has a mind of its own and its 300 DMA continues to rise in an orderly and very convincing fashion, imo. Now sitting at $789.45 and at another All Time High.

Cheers!

JBI

Did some research on the upcoming Bakken plays last month.
It’s really been known for 5-6 decades.
Getting the stuff outta’ the ground economically has been the problem.
Beware any P&D newfield plays that are already being touted.

The following article gives most of the “need to know details & data.”
I’d throw in charts and some notations. [in Red or Blue]
(Sorry, don’t yet know the chart post method)

[Colors? Red or Blue] Merely to differentiate from the article.
Nope, that won’t work on the unicolor Tent. ‘Least me don’t know the secret.

October 28, 2006

It took a veteran wildcat geologist to debunk the long-held belief that all the big light-oil pools in the Western basin had been found.

Claudia Cattaneo, Financial Post

Richard “Dick” Findley, a veteran wildcat geologist in Billings, Mont., is an unlikely character to debunk Canada’s long-held belief that all the big, light-oil pools in the Western basin had been found.
Yet that was the outcome of his re-discovery of the vast Bakken oil play just south of the Canada-U.S. border, beneath large parts of Montana and North Dakota, long after large oil companies had given up on it because they thought of it as a poor producer.

Thanks to new technology that made it possible to squeeze oil out of old rock, the Bakken has become so prolific in the United States it’s one of the top onshore fields found in the past half-century.
On the Canadian side, where the formation straddles a big portion of southeastern Saskatchewan and the southwestern edge of Manitoba, companies that imported Mr. Findley’s views during the past three years have been well-rewarded.

The Bakken is shaping up to be the largest light-oil pool discovered in Western Canada since 1957, holding at least one billion barrels of oil, of which up to a quarter is recoverable.

“The guy that deserves all the credit is technology,” Mr. Findley said in an interview. “If I had a contribution, it’s maybe to get people to re-think things. When you take off the blinders and think big, you start to see pretty big regional accumulations of oil. If geologists think big, they will be able to find some bigger things.”

Already, the formation is yielding about 12,100 barrels a day on the Canadian side — 4,000 barrels a day in Saskatchewan and 8,100 barrels a day in Manitoba from about 520 wells, according to Canadian Discovery Ltd., a Calgary-based firm that tracks Canadian exploration activity.

[that’s about 23 Bbl/day, or maybe 1 Barrel/hour]

“For a light oil play, the Bakken is probably the top play in Western Canada,” said Rick Morgan, exploration analyst at Canadian Discovery. “People have started comparing it to the Pembina Cardium, the largest oil pool developed in Western Canada.” Big oil companies, both in Canada and the United States, have stopped exploring for light oil onshore, focusing instead on big unconventional sources such as the oilsands or natural gas resource plays that can produce huge quantities. Many have gone overseas. But exploration for light oil in the Western sedimentary basin is making a comeback among smaller players, emboldened by strong oil prices.

In Saskatchewan, the play is dominated by Mission Oil & Gas Inc. (taken over last month by Crescent Point Energy Trust for $760-million). CPGCF.PK also CPG-UN.TO

Other operators are Tundra Oil & Gas Ltd., Innova Exploration Ltd., Athena Resources Ltd., Advantage Oil & Gas Ltd., Grand Banks Energy Corp., WaveForm Energy Ltd. and Magnus Energy Inc.

In Manitoba, the dominant player is Tundra, the private oil company owned by the Richardson family of Winnipeg through James Richardson & Sons, Ltd. Other Manitoba operators are Rideau Petroleums Ltd., Kiwi Resources Ltd., Grand Banks and Cosens Drilling Ltd. At least one Canadian company is a significant operator on the U.S. side. Enerplus Resources Fund [finance.yahoo.com/q?s=ERF
chart stockcharts.com/h-sc/ui?s=ERF&p=D&yr=1&mn=0&dy=0&id=p22785942134]
last year paid $500-million for the U.S. private company that developed Mr. Findley’s idea, Dallas-based Lyco Energy Corp., and followed up with the acquisition of privately owned Sleeping Giant LLC for $107.2-million, which owned additional working interests in the field.

The Bakken, located in the Williston Basin, has been known to oilmen in both Canada and the United States since the 1950s. But its production back then was minor and it was eventually forgotten.

Then, in 1995, Mr. Findley, owner of Prospector Oil Co., a two-staff independent geology company that for many years had struggled to survive (its business was to generate ideas and sell them to industry), drilled into the silt stone that sits right below the oil-bearing shale, called “the middle member.”

Mr. Findley initially targeted a deeper objective, below the Bakken.
“When we were drilling through the middle member, we encountered a drilling break, which indicated it had storage capacity and we had a large gas show. And so that got me thinking that the oil is not in the upper shale, it’s focused in the middle member. It was kind of a new idea about where the oil was in the Bakken.”

He sold the idea to Lyco, a small private Dallas-based oil company, while keeping an overriding royalty. But oil prices were low at the time, and Lyco looked for ways to get it out of the ground economically. It brought in Halliburton Co., the Houston-based energy services giant, to help it come up with solutions. “That is when we started thinking about the horizontal drilling and the fracture stimulation of the horizontal well bore, and that is really new technology,” Mr. Findley said.

Horizontal drilling involves pushing a drill bit vertically through the earth’s crust for part of the way, then directing it horizontally to capture more of an oil pool. Fracture stimulation involves injecting sand-laden fluids at high pressure to fracture the rock and make it more permeable.
“I identified the large regional accumulation, but it really was a team effort,” Mr. Findley said. “Everybody had their own expertise and put it together to figure out how to make it economic. To be able to frac a horizontal well bore was new technology and it’s what made it work.”

The Bakken now produces, in Montana alone, about 50,000 barrels a day. The success was closely watched on the Canadian side, by companies such as Mission. “We saw what was going on in Montana and looked at Southeast Saskatchewan and recognized there was a similar-looking reservoir, albeit at a much shallower depth,” said Trent Yanko, CEO of Mission.

“We basically levered off that learning curve and we got going and had good success right from the beginning.” The technology had to be adapted to the Canadian formation, which is not as deep as in the U.S., but “we had good success early on,” he said.

Mr. Yanko said discovery of the Bakken in Saskatchewan two years ago, by Mission and Bison Resources Ltd., a junior company it took over, rekindled oil production in a mature region. The activity is drawing people back to the community. The play is centred near Stoughton, a 700-resident farming town known for sitting at the end of the second-longest straight line of rail in the world. This summer, the company was employing 300 people in drilling and facilities’ construction. Before the find, “People were leaving to find jobs. Now they are coming back and they are actually selling houses in Stoughton again, not in a large way, but significant for the size of town,” Mr. Yanko said.

Scott Saxberg, CEO of Crescent Point, an oil-focused trust, expects his company’s volumes from the Bakken following the Mission integration to double or even triple in the next three to five years, from about 4,000 barrels a day. “It’s unique in that it’s light oil, and in our backyard, and it’s low cost,” he said.

He said it’s costing his company $5 to produce a barrel of oil from the Bakken, a bargain next to the costs of oil sands production, which can be multiples of that amount, depending on the project. The play also benefits from being located in Saskatchewan, where the provincial government has implemented a royalty regime that is seen as being even more favorable than Alberta’s to stimulate oil investment, and where the economy is not as overheated. Still, Mr. Saxberg acknowledges that larger companies remain skeptical. The play is still in its infancy, and “there’s an attitude in Alberta that Saskatchewan is where companies start, and then they move to Alberta,” Mr. Saxberg said. “And so the Alberta companies tend to look down on Saskatchewan as a place to make money.”

On the Manitoba side, the field is cented around the town of Sinclair, near the Saskatchewan border, and is a bit different there. Some of the production comes from another zone called Torquay, which is in contact with the Bakken in certain places, Mr. Morgan said. There has been so much drilling there, primarily by Tundra, that oil and gas activity in Manitoba is at a record high. Tundra, a long-time oil producer in the province, started tapping the Bakken in 2003 and uses both horizontal and vertical drilling techniques.

President Roland Moberg didn’t want to talk about his firm’s activities, saying the company is private. To be sure, the Bakken is junior in status next to big projects in the Athabasca oil sands, which are collectively producing one million barrels a day, growing to an expected 3.5-million in the next decade.

Indeed, there are wells in the Middle East and other areas of the world that are producing from one well the same amount as the Bakken is yielding in all of Canada. But if it turns out to resemble the Pembina Cardium, current activity in the Bakken is just scratching the surface. After 50 years of drilling, the Pembina Cardium, near Edmonton, has produced about 1.2 billion barrels from about 6,000 wells, about 4,000 of which still produce. It has estimated reserves of 7.8 billion barrels of oil in place, with about 1.6 billion barrels of that recoverable.

The Bakken will likely require thousands of wells to be exploited effectively, Mr. Morgan said, but the potential is vast and the boundaries have yet to be established.

That is soooooooooooooooooo funny 

I forgot to laugh    

Nikkei 225 jumps 246.86 points to 14587.98 in early minutes and Australia’s All Ordinaries Index is UP stongly as well.

Asia/Pacific Region - UP strong so far, with other players to join later

finance.yahoo.com/intlindices?e=asia

Nikkei 225 Index thru last night’s trading

~ ~ ~ ~

Earlier today in EUROPE……

finance.yahoo.com/intlindices?e=europe

German DAX Composite Index

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And the AMERICAS……

finance.yahoo.com/intlindices?e=americas

Brazil’s Bovespa Stock Index

~ ~ ~ ~

Dow Jones World Stock Index

JBI

21,660,525 . . . . . . . . . . . .

in Montana and S.Dakota and in Alaska to run America for the next 200 years?? Why didn’t Boone Pickens or that “peak oil” guy, Simmons, ever mention it? Are they dumb? I even heard a senator say that if you include the shale and tar sands in the U.S. we have a trillion or 2 barrels–why did it take $135 oil for the media/internet grapevine to suddenly learn of this? Any ideas? Is all this supposed oil just b.s.–?

I haven’t seen gold up after mkt for quite a while!

Aug 08-882.9 880.4 882.3 Jun 05, 18:50 +$6.50