Upper Rocky Mountain
Spot Crude Oil Prices
Colorado Western: $82.41
CO North Central: $89.48
WB Mixed Sweet: $87.10
ND Light Sweet: $89.57
Wyoming Sweet: $89.63
N Wyo. / S Mont.: $88.19
Spot prices updated April 22
Daily Cash Market
Spot Natural Gas Prices
Watford City, ND: $4.30
NGPL South TX: $4.63
Malin, OR: $4.62
PG & E City Gate, CA: $5.14
Northwest WY: $4.40
Opal, SW WY: $4.57
Ventura, IA: $4.70
U.S. Rig Count
+0 from 4/11/2014
+73 from 4/17/2013
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.
ND Voices Objections To Production Restrictions
To Reduce Flaring
North Dakota oil industry executives voiced objections to production restrictions as a way to reduce flaring, during an April 22 hearing in Bismarck, and instead endorsed an alternate plan where operators would submit gas capturing plans when they apply for drilling permits.
“Punitive measures are not necessary,” said Ralph Casteel, a petroleum engineer for Burlington Northern, during a hearing before the ND Dept. of Mineral Resources.
North Dakota Filter Sock
Disposal Site Shut Down
The ND Dept. of Health issued an emergency order on April 17 to shut down a disposal facility that handles low radioactive filter socks at Killdeer, ND, which is operated by Dyad Environmental LLC. The company had been given a license and had posted a $1.25 million bond.
“In this case, there are serious concerns regarding license compliance such that we felt it necessary to shut this operation down until further notice,” said Dave Glatt, environmental health section chief.
An inspection by the department revealed several violations, including the fact that the company did not store, secure, or place proper warning signs regarding technologically-enhanced, naturally-occurring radioactive materials (TENORM) at the disposal site.
Dyad did not properly track TENORM by signing waste manifests, nor did it hire a qualified radiation safety officer, according to Glatt.
Dyad said that it will be fully compliant with state regulations, and invited the state back to inspect the disposal facility again. The company said it uses ceramic blocks to stabilize TENORM before disposing of the filter socks.
Sinclair Faces $201,000
For WY Refinery Fines
Sinclair Oil faces fines totaling $201,000 for seven violations cited by the Wyoming Dept. of Workforce Services Occupational Safety and Health Administration, stemming from a Sept. 27, 2013 explosion and fire at the refinery in Sinclair.
The agency said violations stem from the company’s failure to properly inspect a valve in the #4 hydro-desulphurization unit, which caused hydrogen to leak and ignite. The control valve head deteriorated from the inside out, which caused the leak and subsequent explosion, the Wyoming OSHA said.
“The OSHA investigation revealed a variety of violations present that could have been prevented if the required internal inspections had been conducted and the necessary safety procedures had been followed,” said Joan Evans, director of the agency.
Sinclair was cited for failing to make hazard analysis of what could go wrong, and was also cited for not having emergency radio communications protocols in place.
Zavanna Partners With GSO
Zavanna LLC of Denver said a partnership formed last year with GSO Capital Partners has spent over $100 million on 30 lease acquisitions, and is a non-operating working interest partner in Zavanna’s $200 million Bakken drilling program.
“Zavanna is a preeminent operator in the Williston Basin, and has consistently demonstrated industry leading well results in the Bakken formation,” said Robert Horn and Tim Murray, managing directors of GSO, which is a division of Blackstone.
“GSO is an experienced and supportive investor, and we are excited to team up with them to form a dynamic entity in the Williston Basin to further develop the largest oilfield in North America,” said Bill Coleman, CEO and founder of Zavanna.
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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