Bakken Well Completions Spike

May 26, 2015 Elizabeth Alford

Bakken well completions rose sharply last month, according to the North Dakota Department of Mineral Resources (DMR). The DMR reports a preliminary completion count for March was 189, up 350% from 42 the previous month.

Related: Bakken Rigs Decrease to 77

Many oil and gas companies who have been hard hit by low crude prices are postponing well completions as a temporary measure in order to wait out the crisis with plans to resume production when oil prices rebound. But oil prices remain unstable, why would North Dakota experience a spike?

Director of DMR Lynn Helms speculates that the increase is likely due to state-mandated time limits and major tax incentives, which forced companies to bring 125 wells online by June to comply with time limits.

Nathan Conway, CEO of Fortis Energy Services, told OAG360 that “In the state of North Dakota, a well can only be left for 12 months after being drilled before it needs to be either completed or temporarily abandoned. Many companies are choosing to complete the wells now rather than plugging them.”

The DMR further reports that at the end of March there were an estimated 880 wells waiting on completion services.

New Bakken Pipeline in the Works

May 21, 2015 Elizabeth Alford

American Midstream Partner announced a strong first quarter and that they are on target to finish a new Bakken oil gathering system by the second quarter of 2015.

In a press release this week, American Midstream Partners reported an increase of nearly 50% over the prior year quarter, with gross margin of $33.8 million and adjusted EBITDA of $15.6 million.

The company’s forecasted growth capital expenditures includes construction of the Bakken crude oil gathering system that consists of a 39-mile pipeline with the capacity to transport up to 40,000 Bbls/d crude oil. This pipeline will serve to provide producers in North Dakota with access to refinery, rail, and pipeline markets.

“Steve Bergstrom, Executive Chairman, President & CEO said that “Commissioning of the fee-based Bakken crude gathering system is underway with startup expected by the end of the second quarter. The project has remained on track despite weather challenges slowing the construction process. We’re in advanced negotiations with several producers to add meaningful truck volumes to the system which will provide producers with access to premium refinery, pipeline and rail markets. Throughput volumes are expected to ramp up to 20,000 barrels per day in the second half of the year.”

New Resources for Bakken Producers

May 20, 2015 Elizabeth Alford

American Midstream Partners announced a strong first quarter and revealed they are in process and on budget to finish a new Bakken oil gathering system by the second quarter of 2015.

In a press release this week, American Midstream Partners reported increases of nearly 50% over the prior year quarter, with gross margin of $33.8 million and adjusted EBITDA of $15.6 million.

“Steve Bergstrom, Executive Chairman, President & CEO said “Commissioning of the fee-based Bakken crude gathering system is underway with startup expected by the end of the second quarter. The project has remained on track despite weather challenges slowing the construction process. We’re in advanced negotiations with several producers to add meaningful truck volumes to the system which will provide producers with access to premium refinery, pipeline and rail markets. Throughput volumes are expected to ramp up to 20,000 barrels per day in the second half of the year.”

Most Americans Aren't Familiar with Keystone

May 19, 2015 Elizabeth Alford

Oil pipeline safety continues to be a huge political issue in Washington, but a recent poll suggests that many Americans aren’t quite so concerned.

An energy poll by the University of Texas found that less than half of the 2000 people surveyed were even familiar with the Keystone XL Pipeline, the controversial pipeline that would carry millions of barrels of crude from Canada to Texas.

Ever since the pipeline was proposed in 2008, it has been a hot-potato topic and a litmus test for President Obama’s concerns on energy and environmental issues. Of particular importance is the issue of climate change, with many environmental groups believing that approving the construction of the pipeline would be bad news for the climate.

Surprisingly, the U.T poll also revealed that only 6% of the Keystone opponents listed climate change as their main cause for opposition. This seems very low, considering that climate change has been a key part of environmental groups opposition to Keystone XL.

“The Washington Post theorized that “many people may view climate change as more distant and feel that most benefits of tackling it wouldn’t arrive for many years. Issues like that may not resonate as much with people as would more direct, immediate, tangible matters like our pocketbooks and the well-being of our local communities.”

BNSF Railway Abandons Plans to Buy Tanker Cars

May 18, 2015 Elizabeth Alford

Citing ‘customer complaints’, the BNSF railway has abandoned plans to buy 5,000 crude oil tankers.

Typically, leasing companies or oil companies own the tank cars that move crude along the tracks and not the railroads themselves. But last year, BNSF requested proposals from railcar manufacturers to produce cars for them that were stronger and safer cars than the current DOT standards. The company had hoped that producing cars with thicker shells, reinforced ends and thermal blankets would reduce the risks of using trains to haul oil.

Over the past two years, BNSF Railway has been involved in a number of incidents including a derailment and fiery crash that caused the evacuation of a small town in North Dakota just last week. The company confirmed that the eight cars that derailed were the unjacketed CPC-1232 models that the federal government would like phased out by 2020 due to safety concerns.

Related: Bakken Crude Train Derails

“A company spokesperson commented about the company’s decision to scrap the plans by saying, “If our customers do not want us in this business, we’ll re-evaluate. We’ll do something else.”

The debate over rail safety is continuing to escalate and just last month, NTSB urged stricter standards due to findings from study of recent train derailment accidents. They concluded that the current fleet of DOT-111 tank cars rupture too quickly and result in spillage and ignition.