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Latest Prices |
CRUDE OIL:
82.67
(NYMEX futures price)
price updated March 12
CO, ND and WY Crude Oil:
Colorado SE: $72.00
CO Western: $66.33
N.D. Sweet: $66.58
WY Sweet: $67.58
SW WY Sweet: $69.08
prices updated March 10
NATURAL GAS:
4.45
(Henry Hub spot price)
price updated March 12
Regional Hub prices:
Chicago CG: $4.56
Malin, OR: $4.59
Opal Hub: $4.22
Ventura, IA: $4.53
prices updated March 11
U.S. Rig Count
1396 as of
3/5/10
+23 from 2/26/10
+226
from 3/6/09
(Courtesy Baker Hughes)
Attorney Predicts “Wild West” For ND Drilling Permits
An attorney predicted drilling permits in North Dakota oilfields would turn into the “Wild West” if operators are not made to follow the rules during a public hearing over a dispute between two producers.
John Morrison, representing XTO Energy, Inc. of Houston asked that the ND Industrial Commission to revoke a drilling permit given to Continental Resources of Enid, OK.
If Continental is allowed to drill the permitted Williams well, Langdalen #1-14H, Morrison said the commission would be opening the door to a deluge of permits with “no control on how operators get permits”.
The paramount deciding factor in these kinds of disagreements is majority ownership, which XTO has in this case. “There would be no control how operators get permits,” Morrison said.
The dispute was aired during a public hearing Feb.4 before the commission’s Oil & Gas Division in Bismarck.
Morrison contended that the law says the producer with the controlling mineral ownership should be allowed to be the operator when these kinds of conflicts come up.
XTO argued that it had majority mineral interest ownership while Continental had just over 39% in the area where the well would be drilled in the NWNE of Sec. 14, T159N-R96W. Complicating the issue was the fact that Continental had already spent $50,000 to build the location and pay surface damages after being granted permit in December 19 by the ND Dept. of Mineral Resources. Continental testified that ......for the rest of this story and more, please read the OIL PATCH HOTLINE newsletter.
ND Waste Oil Plant Okayed After Violation
A company that had erected a waste oil treating plant in North Dakota’s McKenzie County in violation of administrative procedures was given approval to operate the plant and post a $150,000 bond by the ND Industrial Commission Jan. 25.
After admitting that the four-acre site was leveled in violation of a verbal agreement with the commission, Boysani was allowed to have total storage capacity limited to 3,300 barrels.
The treatment facility is located in Sec. 27, T152N-R96W.
The company had proposed an 880-barrel tank and a 1,000-barrel tank for treating, a 1,000-barrel sale tank and a 1000-barrel dirty oil tank.
The facility heat waste oil from tank bottoms, drilling pits, and saltwater disposal tanks to 160 degrees and a demulsifier would be added. The clean oil would be drawn off the top.
The commission banned the burying waste at the site and required Boysani to build dikes around the storage tanks and operate the plant to prevent leaks, spills and fires.
Boysani was also required to submit monthly reports on the sale and disposition of waste oil as well as water and residue waste.
Commissions Stops Drilling Permit
A permit for Newfield Production Co. of Denver to drill a well in McKenzie County was stopped Jan. 25 by the ND Industrial Commission, which gave approval to Burlington Resources Oil & Gas Co LP to drill wells on 1280-acres spacing in sections 33 & 34, T13N-R96W.
Newfield previously gave a permit to drill the Sand Creek Federal #1-34H well in Sec. 27, T153N-R96W. The company had earlier objected to Burlington’s request for the 1280-acre spacing.
Burlington said it plans to spud its well in February to maintain their leases. The company believes that Newfield could get a federal drilling permit in time to spud its Sand Creek well by Feb. 18 but doing so would not maintain Burlington’s leases in Sec. 33.
Burlington asked that the Newfield permit be terminated and argued that better recovery of oil would happen on the 1280-acre spacing with long laterals having 18 to 20 fracs rather than a shorter lateral under 640-ace spacing sought by Newfield.
DCP Buys D-J Basin NGL Line
DCP Midstream Partners, LP said it paid $22 million for a 350-mile natural gas liquids (NGL) pipeline that runs from Denver-Julesburg Basin in Colorado to Bushton, KS from Buckeye Partners, L.P.
Midstream will spend $18 million to integrate the newly acquired pipeline with its facilities. “We believe the acquisition of the NGL people by the Partnership will benefit our customers by maintaining a critical outlet for increased NGL production in the D-J Basin, said Tom O’Connor, chairman, president and CEO of DCP.
The company is investing more in the D-J Basin and is in the process of building a 65 Mmcf natural gas processing plant at Gilcrest CO that will start up next year.
IPAMS Wants Obama To Scrap Tax Plan
The Obama Administration was urged by the Independent Petroleum Assn. of Mountain States to abandoned plans to raise taxes on energy companies.
“With a $1.3 trillion deficit for this year and a myriad of new programs being proposed, we are concerned that the President will once again target our industry with his $80 billion in tax hikes,” said Marc Smith, executive director of IPAMS. “These proposed tax hikes would devastate small American energy companies, known as independents, who produce the clean, affordable, American natural gas that offers a real solution to our pressing economic, energy and environmental challenges.”
Among the proposals are repealing the expensing of intangible drilling costs and repealing the percentage depletion deduction.
“The enormous tax that the President is trying to impose on the natural gas and oil industry, however, will make the development of this American energy source even more difficult and costly,” Smith said.
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