Dec
14
Posted by bakken
About a year ago I warned that O&G companies should start preparing for backlash against hydraulic fracking and the potential for public perception that it is directly correlated to groundwater contamination. In recent weeks, the EPA issued a report that supposedly found a possible link between groundwater pollution and hydraulic fracturing beneath Pavillion, Wyo. The EPA found chemical compounds likely associated with fracking in the groundwater beneath the small community where residents complain their well water reeks of chemicals. Health officials last year advised residents not to drink their well water after the EPA found low levels of hydrocarbons. The impact could be quite severe if there is suspected contamination in the North Dakota Bakken region.
Lynn Helms, Director of the North Dakota Department of Mineral Resources has said he believes there will be a moratorium on fracking because of the history of many-months moratoriums in Alabama, when the EPA, because of an environmental lawsuit, revoked Alabama’s underground injection program until the state wrote new rules specific to fracking under Class II well standards. Helms recently stated:
“I believe it will be stopped cold for 12 to 24 months. The best case is 15 months and that’s only if we red-lighted everything else and got nothing else done,”
The EPA has since denied a moratorium is imminent, but there is a push underway for drillers to disclose exactly which chemicals they use in fracking. If that comes to fruition, and news of chemicals that are harmful to humans reaches local mainstream media in the regions, the backlash and pressure put on the EPA could be severe. In a worst case scenario, if drilling is stopped for even 6-12 months, “Pure Play” O&G companies in the region could see significant pressure on their stock prices with 50% drops not out of the question. For investors looking to hedge their risk, buying protective puts against stock positions may provide defense against a “doomsday” scenario in the region.
We will continue to keep our eyes out for this as news develops…..Stay tuned.
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Tags: chemicals contamination diesel environmentalists EPA fracking ND
Dec
10
Posted by bakken
We have been lamenting over the last few weeks that the market was having a hard time finding it’s footing and that changed these past 2 weeks with the Dow up about 7% after central banks took steps to free up capital in debt-laden EU countries. In addition, Seventeen nations in the euro zone agreed to sign a treaty that allows a central European authority closer oversight of their budgets. Oil benefited and continues to stabilize near the $100 a barrel mark. The latest Bakken news is below!
- Big Sky Petroleum Corporation and its two partners, FX Energy (FXEN) and American Eagle Energy (AMZG), have completed drilling and casing a horizontal sidetrack of well 14-29, in Toole County, Montana. Good oil and gas shows were noted throughout the drilling of the horizontal section. To date, Big Sky owns a 33.333% working interest in approximately 100,000 net acres in Toole and Glacier counties, Montana.
- US junior American Eagle Energy and its pending merger partner Eternal Energy agreed to sell 75% of their interests in Bakken-Three Forks to a third party for just shy of $14 million. The buyer of the West Spyglass prospect in was listed as “a wholly-owned subsidiary of a publicly traded company with a market cap in excess of $10 billion”
- Dakota Oil Processing, a development company plans to build a $200 milion dollar refinery in the Bakken region. The 20,000 barrel-per-day plant received county zoning approval two weeks ago and now awaits a final state air permit . Once complete, the refinery will lower overhead costs for producers in the region as the oil would not have to be shipped to Texas to be refined.
- The Fracking debate continued to heat up in recent weeks. Environmentalists and others increasingly have raised concerns about the potential impact of “fracking” on water and other resources. The EPA on Thursday announced for the first time that the process may have caused groundwater pollution in a Wyoming community. Ron Ness, president of the North Dakota Petroleum Council, said Friday in Grand Forks that “there has got to be an educational process” to reassure the public about the health and environmental safety of hydraulic fracturing as the process is employed here.
- Oasis Petroleum (OAS: 24.67 -1.32%) was upgraded by equities research analysts at Caris & Co. to an “above average” rating in a research note issued on Friday. In addition, analysts at Morgan Keegan reiterated an “outperform” rating and a $34 price target on shares of Oasis Petroleum in a research note to investors. Oasis Petroleum could be a big winner and a potential acquisition target with a portfolio of high quality acreage in the region.
Until next time, Keep Drillin’
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Tags: Caris contamination fracking OAS Refinery
