Upper Rocky Mountain
Spot Crude Oil Prices
Colorado Western: $77.55
CO North Central: $80.12
WB Mixed Sweet: $77.76
ND Light Sweet: $79.58
Wyoming Sweet: $79.79
N Wyo. / S Mont.: $76.81
Spot prices updated Sept. 17
Daily Cash Market
Spot Natural Gas Prices
Watford City, ND: $3.53
NGPL South TX: $3.96
Malin, OR: $4.03
PG & E City Gate, CA: $4.58
Northwest WY: $3.88
Opal, SW WY: $3.96
Ventura, IA: $4.01
U.S. Rig Count
+6 from 9/5/2014
+163 from 9/12/2013
Commission Asked To Resolve Costs
A limited partnership appealed to the ND Industrial Commission for help in resolving a dispute over costs on two McKenzie County wells operated by Oasis Petroleum.
At a Sept. 17 hearing, attorney Josh Swanson, representing GEM Razorback LLC, a non-participating owner, sought an audit after citing differences from Oasis and Zenergy, the company that was the original operator of the two wells.
“We still have questions about the financial data,” Swanson said. “They cannot explain why the overhead costs went up. We have not received what is a satisfactory explanation.”
The wells are the Berquist #33-28H well in sections 28 and 33, T152N-R98W and the Ceynar #29-32H in sections 29 and 32, T152N-R98W.
Swanson said, as an example, that the payout for the Berquist well was $8,903,983 based on information provided by Zenergy, while Oasis said it was $9,208,819.
Swanson also questioned why lease operating expenses increased from $26,932 to $54,140, and why hot oil expenses increased from $5,630 to $11,140.
He said the partnership applied for relief from the commission because there was never an explanation why costs exceeded the AFE (actual fee for expenditure). Swanson said the Berquist well was 36% above cost, and the Ceynar well cost 72% more.
Phillips 66 Plans ND Crude
Oil Rail Loading Terminal
Phillips 66 said it has permits to build a crude oil rail loading terminal on a 700-acre site in Mountrail County, ND, but said the project is still in the planning stage.
This would be the first crude oil rail loading terminal built by a refining company in North Dakota. It could load as much as 200,000 BOPD on outbound unit trains. Phillips 66 is also planning 300,000 barrels of crude storage at the terminal.
“We have permits in hand in engineering to construct a new rail-loading facility,” said CEO Greg Garland. “This is permitted up to 200,000 BPD, but we’ll probably do about 160,000 BPD”.
In addition, Phillips 66 has also ordered 500 new rail tank cars in addition to 3,200 cars that have previously been ordered or delivered. They will primarily be used for unit trains to move crude to its refineries on the East and West coasts.
The company also has a contract with Global Partner, which is moving 50,000 BOPD out of its Columbus, ND facility to the Phillips 238,000 BPD Bayway refinery in Linden, NJ.
Phillips 66 has also contracted with Enbridge Pipelines to move crude oil from its rail terminal at Berthold, ND.
Stark Named As New Continental Resources CEO
Jack Stark, who has been senior vice president of exploration at Continental Resources for the last 16 years, was named president and chief operating officer by the company’s board of directors on Sept. 17.
He replaces Rick Bott, 52, who quit earlier this month.
“I have the utmost respect and confidence in Continental’s management team and our most important asset, our people,” Stark said.
“Jack is a great team leader whose geological contributions have been a key component of Continental’s success over the past 22 years,” said Harold Hamm, chairman and CEO. “He is highly regarded as a pioneer in unlocking unconventional resources in the Rockies, the Bakken, and most recently the SCOOP play in Oklahoma.”
With a master’s degree in geology, Stark joined Continental in 1992 and is a member of the American Association of Petroleum Geologists, Oklahoma Independent Petroleum Association, Rocky Mountain Association of Geologists, Houston Geological Society, and Oklahoma Geological Society.
Public Hearing On Oil ‘Conditioning’ Set For Sept. 23
Rig hands work on setting up Nabors B27 on a new location for Oasis Petroleum, which will drill the McCauley #5601 41-3457 in Sec. 34, T156N-R101W. (Photo by Denis Smith)
Hiland Building Feeder Line To New Town Terminal
The capacity of the line, which is part of a larger system serving five North Dakota counties and two Montana counties, can be expanded to 60,000 BOPD.
“In connecting to the Pioneer terminal on the Canadian Pacific Railway network, we can now offer our clients access to every market outlet in the Bakken,” said Jim Suttle, senior vice president for Hiland Crude.
“The Hiland pipeline is an important link to the western area of the Williston Basin, effectively expanding our supply radius to enable cost effective delivery of oil to the Pioneer Terminal”, said Craig McKenzie, chairman and CEO for Dakota Plains.
The terminal is supplied by two gathering lines and ten unloading stations for crude oil tanker trucks.
Sept. 23 – 25: The ND Petroleum Council will hold its annual meeting at the Astoria Dickinson Hotel and Event Center in Dickinson, ND (see ad below). Registration opens July 29, and can be done through the NDPC website at: www.ndoil.org.
Sept. 29 – Oct. 1: 4th Annual Natural Gas Liquids Conference at the Hilton Houston Post Oak Hotel, Houston, TX. The conference offers high-caliber speakers and excellent information, with the latest NGL project updates and market outlook.
For complete information about the conference, click here.
Oct. 1 – 2: Black Hills Bakken & Investor Conference in Spearfish, SD. The conference will feature keynote speaker Norm Brodsky, who is co-author of Inc. magazine’s “Street Smarts” column.
Other speakers include Dean Purcelli, senior vice president for Stabilis Energy; Patric Galvin, president of South Dakota Proppants; Joel Block, CEO of Bullseye Capital; Mark Anderson, board chairman for Mainstream Investors LLC; and Chris Faulkner, CEO for Breitling Energy Corp.
The SD Oil and Gas Assn. is a co-sponsor of the conference. Early registration starts at $400 and goes up to $600. For more information, call 605-644-6005 or click here.
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