101 - things going on including CHKM. Wonder if SSN may be venturing out also. Wery quiet these days.
Bob
Chesapeake Midstream Partners announced Wednesday it has agreed to acquire Appalachia Midstream Services, the wholly owned subsidiary of Chesapeake Midstream Development, that holds its Marcellus Shale midstream assets, for total consideration of $865 million.
Chesapeake Midstream Development is a wholly owned subsidiary of Chesapeake Energy Corporation. The addition of the Marcellus assets makes CHKM the industry's largest gathering and processing master limited partnership as measured by throughput volume.
Through acquiring AMS, CHKM will own approximately 47 percent of an integrated system of assets that consist of approximately 200 miles of gathering pipeline in the Marcellus Shale, including the liquids-rich Marcellus South region.
Throughput for these assets at Dec. 15 was just over one billion cubic feet per day. AMS operates the assets under 15-year fixed fee gathering agreements with leading Marcellus natural gas and liquids producers. The gathering agreements include significant acreage dedications and annual fee redeterminations that target a mid-teens return on all invested capital in the acquired assets.
Chesapeake has committed to generating EBITDA of not less than $100 million in 2012 and $150 million in 2013 from the Marcellus assets for the benefit of CHKM.
The acquisition, which is expected to close by Dec. 30, will be financed by $600 million of cash drawn from CHKM's revolving credit facility and equity consideration of $265 million (9.8 million CHKM common units), increasing Chesapeake's limited partnership ownership of CHKM to 46.1 percent from 42.3 percent. On Dec. 20, CHKM completed an amendment of its credit facility that increased total borrowing capacity to $1 billion.
Terms of the transaction were unanimously approved by the Board of Directors of CHKM's general partner and by the Board's Conflicts Committee, which is comprised entirely of independent directors. The Conflicts Committee engaged Tudor, Pickering, Holt & Co. Securities, Inc. to act as its financial advisor and Richards, Layton & Finger, P.A. to act as its legal advisor
EARL
The Earl well in Stockyard Creek field in Williston County North Dakota has been Samson Oil and Gas most prolific well averaging 544 BOD over 8 months. The first few months the Natural Gas was flared off or the rate would have been higher. Currently it is averaging 330 BOD and came of a rework to a pump that finished up in October 10, 2011. Expect an improved month in the November results being released by Zavanna (our JV partner) after the Holiday weekend. Here’s the November projection based upon a smooth month of production.
These are Zavanna numbers at 100%.
Well Name / # Date Days BBLS Oil MCF Sold BOE BOD
Earl / 19328 Nov-11 _ 30 _ 9,900 _ 12,000 _ 11,969 _ 330.00
Earl / 19328 Oct-11 _ 21 _ 6,983 _ 8,092 _ 8,378 _ 332.52
Earl / 19328 Sep-11 _ 18 _ 6,072 _ 10,054 _ 7,805 _ 337.33
Earl / 19328 Aug-11 _ 31 _ 14,861 _ 21,173 18,512 _ 479.39
Earl / 19328 Jul-11 _ 31 _ 15,866 _ 83 15,880 _ 511.81
Earl / 19328 Jun-11 _ 25 _ 16,881 _ 71 16,893 _ 675.24
Earl / 19328 May-11 _ 28 _ 13,470 - 13,470 _ 481.07
Earl / 19328 Apr-11 _ 8 4,163 _ 4,163 _ 520.38
Earl / Total SUM 2011 _ 162 _ 88,196 _ 51,473 97,071 _ 544.42
Bakken Oil Fields Creating Energy
by Jan Falstad, Lee News Service
The Bismarck Tribune
Wednesday, December 28, 2011
When logging fell off around Kalispell, Brenda and Vance Birkey, natives of western Montana, moved 550 miles away to Sidney to work in the Bakken field, perhaps the biggest oil find in modern U.S. history.
Screwing plywood skirts around their small trailer to prepare for snow and 40-below temperatures, the Birkeys, like thousands of others, traded in the comforts of their home for a fresh start in this region's Klondike fever for oil.
When western Montana's recession destroyed his livelihood, Birkey said he traded in the mountains and his chain saw for the steering wheel of a scraper.
"We came for the jobs. Now we're out here where the buffalo roam. It's different," he said.
Richland County surrounding Sidney sported Montana's second-lowest jobless rate in October, 2.8 percent. That compares with 14.6 percent in Big Horn and 14.4 percent in Sanders counties, the state's highest rates.
The vortex of real and wished-for riches from the oil patch is sucking in workers and products and services and gushing the boom money out across Montana.
Knife River's Yellowstone Division is grading and hauling gravel to a railroad loading facility being built north of Fairview where crude oil will be loaded into 100-car tanker trains.
"The Bakken work is huge. It's massive. It's extraordinary," said division general manager Hal Fuglevand.
More than 50 Billings businesses are chasing the estimated $1.5 billion a month being spent drilling oil wells in the Bakken, straddling the Montana-North Dakota border. There are more than 200 rigs, and each one can drill a well a month at an average cost of $7 million per well.
Montana's Bakken produces roughly $1.2 billion worth of oil per year.
A steady stream of trucks haul food, gravel, scoria, sand, natural gas, crude oil, pipe, asphalt, concrete, fresh water and liquid nitrogen to keep the rigs drilling and the wells pumping.
The Bakken business has jumped eight-fold in two years at Billings' Whitewood Transport Inc.
"And we haven't even tried. It's crazy," president Mike Wilson said.
Last year, The Sage Corp. of Billings set up a special team to train more oilfield drivers, including for Canadian-based Sanjel Corp., which recently opened a Billings office.
In just three years, the Bakken has tripled sales at Aspen Air US Corp. of Billings, which hauls liquefied nitrogen. Sales at RDO Equipment Co., which sells heavy equipment, are up one-third in two years.
"Thank God it's going on because there's not much work going on in the rest of Montana," Knife River's Fuglevand said.
Last year, Big Sky Economic Development officially started marketing Billings as an energy hub and is setting up "speed dating" events to connect oil executives with local businesses.
Executive director Steve Arveschoug said he tries to envision this large-scale development five to 10 years from now.
"It's not just the Bakken, it's coal and natural gas," he said.
The first unit-train hauling crude to Louisiana left Dickinson, N.D., on Nov. 9.
Within a 35-mile circle around Bainville, oil companies are investing $500 million to $1 billion to build two oil loading facilities and a natural gas loading plant, according to Bainville Mayor Dennis Portra.
The unprecedented growth leaves Portra happy, but wary.
The 52-year-old native has lived through two previous oil booms and busts. He remembers when crude prices plummeted in the 1970s and the drillers immediately dropped pipe and left town.
But this boom feels different, Portra said, because of all the infrastructure being built, including a proposed small refinery over the state line near Trenton, N.D., where explorers Meriwether Lewis and William Clark once camped.
"You don't build a railroad siding for short-term gain," he said. "It costs really serious money."
Somewhere to stay
Don't chase the oil boom money or jobs unless you have a place to stay. Rents have doubled and tripled in the Bakken's boomtowns.
Hotel rooms are booked solid months in advance, forcing travelers to drive on and on to Glendive or even Bismarck, N.D. Companies must rent or buy trailers or RVs and scramble for a place to park them. A parking spot with no water or sewer hookups in Froid costs $1,000 a month.
For the first time in its history, Billings-based Stockman Bank may have to provide housing for its workers in Sidney so the two loan officers being hired have a place to live.
Century Companies Inc. of Lewistown has built and paved roads in eastern Montana for nearly three decades, but this boom has doubled its oil field business.
"There are people from every state now. They are swarming the place," said Century president Tim Robertson, who has hired 30 more workers.
The boom is spreading west along the Hi-Line.
"Wolf Point has never seen this activity. It's crazy," said Rick Isle, the city's public works director.
With 350 oil companies working the Williston basin, the demand for services seems endless.
• Double-Tree Inc., of Bozeman, is building a sewage treatment plant north of Tioga, N.D., and is talking to three eastern Montana cities about expanding their sewage lagoons.
• Man camps have popped up at virtually every turnoff or farm yard.
• Blaine Rogers' Door Bust'n Portable and Septic Service in Sidney now delivers and maintains 428 toilets, five times more than three years ago.
• Sidney has three motels and is building three more. But before contractors can start building the Microtel Inn & Suites, they have to build a dormitory for the builders.
• High wages attract workers and drive up pay at other businesses. Most shops along Sidney's main drag are closing early due to a scarcity of workers.
• Since October, McDonald's in Sidney routinely closes its lobby, so the minimal staff can handle all the drive-up orders.
• Hoogie's Car Wash in Billings has seen its business triple.
Industrial cleaning of tankers and oil field equipment now provides 75 percent of the work at Hoogie's. Last year was the best in 31 years, said owner Don Haugan. By June of this year, he'd topped that record.
An Illinois trucking friend told him there are more trucks rolling through Williston, N.D., now than in downtown Chicago.
"Casper (Wyo.) used to be the king of the oil industry, but I think Billings serves that role now," Haugan said.
Copyright 2011 The Bismarck Tribune, a division of Lee Enterprises. All Rights Reserved
