Upper Rocky Mountain
Spot Crude Oil Prices
Colorado Western: $84.04
CO North Central: $91.11
WB Mixed Sweet: $88.73
ND Light Sweet: $91.20
Wyoming Sweet: $91.26
N Wyo. / S Mont.: $89.82
Spot prices updated April 16
Daily Cash Market
Spot Natural Gas Prices
Watford City, ND: $4.18
NGPL South TX: $4.51
Malin, OR: $4.57
PG & E City Gate, CA: $5.09
Northwest WY: $4.45
Opal, SW WY: $4.52
Ventura, IA: $4.76
U.S. Rig Count
+13 from 4/4/2014
+60 from 4/11/2013
Black Hills Faces
$1 Million In Fines
Black Hills Trucking, Inc. faces fines of up to $1 million from North Dakota state authorities, and one of its drivers, Leo Slemin, is charged with criminal felony violations in connection with illegally dumping salt water on roadways.
If convicted, Slemin could be fined up to $10,000 and sentenced to five years in jail.
According to the ND Dept. of Mineral Resources, the trucking firm, based in Williston, does not have a license to dispose of oilfield waste, and its trucks were seen dumping salt water on Williams County roads.
Surveillance cameras recorded the trucks pouring water from open valves while driving back and forth from a saltwater disposal well. A ND DMR field inspector witnessed Slemin driving a truck on Feb. 14 with the valves open on a county road where there had been several reports of illegal dumping.
“The majority of waste haulers should not have to compete with those few who illegally cut corners,” said Atty. Gen Wayne Stenehjem.
The ND DMR imposes a $12,500 fine for each offense, and it is seeking maximum penalties totaling $950,000 against Black Hills.
Dave Glatt, chief of the environmental health section for the ND Dept. of Health, said a fine of $1,000 a day could be imposed for each day the company operated without a license.
Spend $15 Billion
On Bakken Wells
Williston Basin operators will spend more than $15 billion this year as more than 14,000 new well locations wait to be drilled, according to a new report from consultant Wood Mackenzie Ltd.
“We expect Bakken and Three Forks oil production to average 1.1 million barrels a day in 2014, growing to 1.7 million barrels a day in 2020,” said Jonathan Garrett, a researcher for the company.
Wood Mackenzie estimates that total value of Bakken and Three Forks reserves is $118 billion.
It cited Continental Resources, the largest operator in Montana and North Dakota, as having the greatest volume of remaining reserves estimated to be about 3 billion barrels. Continental also holds leases on 1.2 million net acres.
Wells in the Fort Berthold area have the highest ultimate recovery, at nearly 700,000 barrels per well.
Wood Mackenzie cited the Bakken as one of the “most productive pure plays” in the US, with 30-day initial production rates averaging more than 1,000 BOPD.
The consultant cited lower drilling costs, which now average between $7 million and $8 million a well, down from $10 million in 2011.
Initial Production ‘Heat Map’
North Dakota DMR Wants
Input On Flaring Rules
The ND Dept. of Mineral Resources will be soliciting formal recommendations on implementing North Dakota’s new flaring regulations at a public hearing on April 22.
The hearing gets underway at 9 am in the ND DMR office at 1000 E. Calgary Ave. in Bismarck. Written comments can be emailed to email@example.com by April 21.
The DMR wants specific proposals on applying the rules, which require operators to file a formal natural gas capturing plan and timetable for pipeline connections when they apply for drilling permits.
Specifically, the DMR wants to know the length of times wells should be allowed to produce at the maximum rate while flaring, and what production rate restrictions are appropriate for wells connected to gas lines.
The DMR wants to solicit opinions on what types of administrative approval of exemptions from production restrictions are appropriate, and what consideration should be given to ambient air quality on production rates or restrictions.
“Should production rates and restrictions be adjusted for well economics and percentage of gas captured by well site, field-pool, region, or operator?” the DMR asked. “Should production rates for wells not connected to gas gathering or beneficial uses be reduced in stages, or set at a low rate after payout?”
Despite objections from farmers in the area, the Williams County Commission voted this month to approve the building of a 20,000-barrel tank near the town of Epping, ND that could be used to handle overflows from the COLT terminal in case of emergencies. Meadowlark Midstream Co, a subsidiary of Summit Midstream Partners, LLC which operates the rail terminal, pipelines, and storage facilities, asked the commission for approval. Recent power outages led to leaks in tanks such as the one shown here, and Meadowlark said the new tank will capture crude oil overflow in those situations. It will be located in Sec. 1, T155N-R99W.
Federal Flaring Rules Loom
The White House launched a new effort this month to reduce ethane emissions, which includes proposed regulations from the Bureau of Land Management to restrict flaring on federal lands.
At the same time, the US Environmental Protection Agency will also “assess several potentially significant sources of methane and other emissions from the oil and gas sector”.
The Western Energy Alliance immediately criticized those efforts. “The White House is once again proposing ‘solutions’ for reducing greenhouse gas (GHG) emissions, yet failing to recognize the true source of American success in that regard–natural gas,” said Kathleen Sgamma, governmental affairs vice president for WEA.
She said President Obama is using regulatory powers to go after the very industry that has reduced greenhouse gases through the increased natural gas electrical generation.
April 29 – 30: Refinery Crude Slate Strategies 2014 at the Westin Galleria, Houston, TX.
During this conference, the supply and demand of Bakken crude oil as well as other US crude markets will be evaluated. The conference is designed to help industry leaders capitalize on the increase in light crude production to take advantage of changing market differentials.
For complete information about the conference, click here.
May 20 – 22: 22nd Annual Williston Basin Petroleum Conference at the Bismarck Civic Center, Bismarck, ND.
Topics will range from North American and world energy supply and demand, to highly technical Bakken talks, to managing community impacts and “Bakken Basics” education.
Attendance at this annual event has been growing rapidly, so registering and obtaining accommodations early is strongly recommended.
For complete information about the conference and trade show, click here.
News You Will Read Here First
Many copy our stories, but you will read them first in Oil Patch Hotline. We cover news to keep you informed on what is going on in the Williston Basin and the upper Rocky Mountain region. We supply rig locations and the latest drilling permits issued by state commissions in North Dakota, South Dakota, Wyoming, and Colorado.
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