North Dakota’s Latest Fracking Problem

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The North Dakota Industrial Commission on Tuesday is expected to release plans to limit flaring at existing wells. Shown, excess natural gas is burned off at a Bakken Shale site. Minneapolis Star Tribune/Zuma Press

WATFORD CITY, N.D.—For cattle rancher Vawnita Best, the struggle by North Dakota regulators to keep up with the oil boom strikes close to home: She can see the natural-gas flares of an oil well from her front porch.

“It’s been flaring for nearly a year,” she said amid the rolling hills of her Elkhorn Creek Ranch. “It’s absolutely ridiculous to be so wasteful,” she said. “They’re flaring gas and using diesel to fuel the pumps—it’s like something Homer Simpson would do.”

The well is one of thousands dotting the landscape and producing gas as a byproduct of hydraulic fracturing and horizontal drilling for oil in the Bakken Shale. Because North Dakota lacks adequate infrastructure, drillers are forced to burn off whatever they can’t capture and ship to market. In April alone, such wells burned 10.3 billion cubic feet of natural gas, according to the state, valued at nearly $50 million.

As flaring wells spread like a prairie fire, North Dakota’s regulations have struggled to keep pace. Beyond being an eyesore, burning off natural gas degrades air quality. Critics also say producers aren’t paying all the royalties and taxes owed on the gas that is flared. Energy companies lose out on gas revenue, too, but that is offset by what they generate from Bakken crude oil.

“It’s a failure of regulation. There was an opportunity to do this the right way, but you can’t unring the bell,” said Matt J. Kelly, a lawyer at a Bozeman, Mont., law firm representing Bakken mineral-rights owners claiming unpaid royalties for flared gas.

Stung by criticism that it has allowed oil producers to flare wells indefinitely, the North Dakota Industrial Commission on June 1 adopted rules requiring that gas-capture plans be submitted for companies to get a new drilling permits. The rules require producers to identify gas-processing plants and proposed connection points for gas lines but don’t affect permits that already had been issued.

The commission, which promotes as well as regulates the drilling industry, on Tuesday is expected to announce measures to limit flaring of existing wells. The federal government also is considering new limits on flaring.

In the past five years, North Dakota has climbed from the country’s sixth-largest oil producer to the only state after Texas to produce more than a million barrels of oil a day. That has brought investment and job growth to a state economy once largely dependent on agriculture.

‘It’s not all bad, it’s just poorly managed,’ says Vawnita Best at her ranch in rural North Dakota. Chester Dawson/The Wall Street Journal

But while Texas captures all but 1% of the natural gas produced, North Dakota burns 30% of its output. Oil companies can ship crude, which fetches 20 times more than gas per barrel of oil equivalent, in tanker trucks to pipelines or rail terminals. Transporting natural gas requires a pipeline connection at the source, however, and North Dakota has far fewer of such pipes and less processing capacity than other oil-producing states.

Government and industry officials say they have moved as fast as possible to limit gas burn offs.

“The only problem is the rate of [oil] production is growing faster” than companies’ ability to capture gas, North Dakota Gov. Jack Dalrymple said in an interview. “We have been madly building processing plants and pipelines,” he said.

The industry has said it can cut back flaring to 5% of production volume over the next six years as gas infrastructure is built, responding to public pressure and the prospect of perhaps tougher rules from the state or federal governments.

“It’s not that easy to measure yet, but we’re truly making progress,” said Lynn Helms, the North Dakota Industrial Commission’s director of natural resources. “This has been a really huge sea change in the industry in terms of taking flaring seriously,” he said.

Oil producer Hess Corp. HES +0.73% in May opened an expanded gas facility in Tioga, N.D., that nearly triples the plant’s gas-processing capacity to keep up with Bakken production.

“There was no alternative gas processing available within the state,” said Gerbert Schoonman, Hess’s vice president for the Bakken. “We’re a big international company operating in many countries and we know that it’s not sustainable to have a lot of flaring with your operations.”

Twelve-story-tall drilling rigs, powder-blue fracking water hoses and well pads ringed by barbed wire dominate the land where Ms. Best’s cattle used to roam freely. Like many homeowners in rural Western North Dakota, the fifth-generation resident of McKenzie County doesn’t own subsurface mineral rights and as a result can’t prevent drilling on her land.

She fought plans for a well to be drilled closer than where it is now, at the end of her half-mile long driveway. “At first, they wanted to build one 200 feet from our back deck,” Ms. Best said. Two other wells, also with persistent flares, also are visible from the edge of her property.

Those older wells were drilled three years ago, one by Exxon Mobil Corp. XOM +0.68%unit XTO Energy Inc. and the other by Continental Resources Ltd. CLR -0.32% , according to public filings. XTO flared its Wolff well as recently as April and in all but four months since August of 2011, according to state production records. Continental has flared its Palmer well for as many months as not since September of 2011, including as recently as April.

The state bars operators from flaring after the first year a well is drilled, unless companies get extensions on the grounds that the restrictions are economically unfeasible or the well is connected to a gas line.

Yet two-thirds of the wells that flared gas in April were connected to a system with more gas than it could ship or process. “It’s assumed they will sell the gas if it’s connected,” said Alison Ritter, a spokeswoman for the state Department of Mineral Resources, “but sometimes there’s insufficient infrastructure to do that.”

Flared gas is still subject to royalty. But XTO and Continental haven’t paid either for gas flared at the Wolff or Palmer wells, according to Mr. Kelly, the landowners’ lawyer.

XTO said it doesn’t comment on specific contracts but is working to reduce flaring. Continental declined to comment.

Rancher Ms. Best said the community appreciates the economic boost from drilling. “It’s not all bad, it’s just poorly managed,” she said. “It’s the drilling that’s to come in the future that weighs heaviest on our minds.”



Oil Flat Despite US, China Factory Strength

Posted in: Bakken Labor Staffing News, Bakken Oilfield Financing News, Corpus Christi Financing News, Eagle Ford Shale News, Eagle Ford Shale Staffing Fianncing News, Factoring Companies, fracking, Invoice factoring, Labor News, Oilfield Business Financing, Oilfield News, Permian Basin Financing News, Staffing Factoring, Staffing Financing News- Jul 01, 2014 No Comments

The price of oil held steady Tuesday despite signs that manufacturing activity grew in the U.S. and China, the world’s two biggest oil consumers.

Benchmark U.S. crude for August delivery fell 3 cents to close at $105.34 a barrel in New York. It is the fourth day in a row of declines and the sixth decline in the last seven trading days. The contract closed at a 10-month high of $107.26 on June 20.

Brent crude, a benchmark for international oils used by many U.S. refineries, fell 7 cents to close at $112.29 a barrel in London.

Manufacturing activity in China, the world’s biggest oil importer, grew in June for the first time in six months, according to a private survey. Manufacturing activity in the U.S., the world’s biggest oil consumer, grew in June for the 13th-straight month, though the pace of the expansion slowed from May.

It wasn’t enough to push the price of oil higher, which suggests oil supplies may be ample enough to meet even rising global demand and prices could be headed lower.

“The fact that some positive manufacturing numbers and associated strong gains in the U.S. stock market were ignored reinforces our opinion that some additional price weakening through the next few sessions lies ahead,” wrote independent energy analyst Jim Ritterbusch in a note to investors Tuesday.

Oil prices have risen in recent weeks on concerns that violence in Iraq, OPEC’s second-largest exporter, would cut global supplies. They stabilized late last week as the stunning initial advance by insurgents lost momentum.

In other energy futures trading on the Nymex:

—Wholesale gasoline fell 0.6 cent to close at $3.037 a gallon.

—Natural gas fell 0.6 cent to close at $4.445 per 1,000 cubic feet.

—Heating oil rose 0.3 cent to close at $2.978 a gallon.



40 Percent Of High Risk Oil And Gas Wells Aren’t Inspected As Feds Struggle To Keep Up

Posted in: Oilfield News- Jun 17, 2014 No Comments

NEW CASTLE, Colo. (AP) — Four in 10 new oil and gas wells near national forests and fragile watersheds or otherwise identified as higher pollution risks escape federal inspection, unchecked by an agency struggling to keep pace with America’s drilling boom, according to an Associated Press review that shows wide state-by-state disparities in safety checks.

Roughly half or more of wells on federal and Indian lands weren’t checked in Colorado, Utah and Wyoming, despite potential harm that has led to efforts in some communities to ban new drilling.

In New Castle, a tiny Colorado River valley community, homeowners expressed chagrin at the large number of uninspected wells, many on federal land, that dot the steep hillsides and rocky landscape. Like elsewhere in the West, water is a precious commodity in this Colorado town, and some residents worry about the potential health hazards of any leaks from wells and drilling.

“Nobody wants to live by an oil rig. We surely didn’t want to,” said Joann Jaramillo, 54.

About 250 yards up the hill from Jaramillo’s home, on land that was a dormant gravel pit when she bought the house eight years ago, is an active drilling operation that operates every day from 7 a.m. until sometimes 10:30 p.m. Jaramillo said the drilling began about three years ago.

Even if the wells were inspected, she questioned whether that would ensure their safety. She said many view the oil and gas industry as self-policing and nontransparent.

“Who are they going to report to?” she asked.

Government data obtained by the AP point to the Bureau of Land Management as so overwhelmed by a boom in a new drilling technique known as hydraulic fracturing, or fracking, that it has been unable to keep up with inspections of some of the highest priority wells. That’s an agency designation based on a greater need to protect against possible water contamination and other environmental and safety issues.

Factors also include whether the well is near a high-pressure formation or whether the drill operator lacks a clear track record of service.

“No one would have predicted the incredible boom of drilling on federal lands, and the number of wells we’ve been asked to process,” said the BLM’s deputy director, Linda Lance. Since fracking reached a height in 2009, about 90 percent of new wells on federal land are drilled by the process, which involves pumping huge volumes of water, sand and chemicals underground.

“The current rate of inspections is simply not acceptable to us,” she said.

The agency oversees 100,000 oil and gas wells on public lands, 3,486 of which received the high priority designation.

According to BLM records for fiscal years 2009 to 2012, 1,400 of those high priority wells, spread across 13 states, were not federally inspected. Wyoming had the most, 632, or 45 percent. South Dakota had 1 out of 2 wells uninspected, and Pennsylvania had 1 out of 6.

All the higher risk wells were inspected in six states — Alabama, Michigan, Mississippi, New York, Ohio and Texas.

Many more wells are located on private lands, where state officials take the lead in ensuring they comply with environmental laws, with mixed results. Nationwide, there were nearly 500,000 producing gas wells in 2012, according to Energy Information Administration data. More than 1,800 new wells were being drilled in March alone.

Dennis Willis, a former BLM field officer in Price, Utah, says he routinely provided input on oil leasing and drilling decisions on federal land before his retirement in 2009. He described a situation of chronic underfunding dating to at least the early 2000s, when BLM management made clear that issuing new permits would be a priority over other tasks, according to a 2002 memorandum from supervisors in Utah to field officers. At the time, fracking was becoming more widely used.

“There certainly wasn’t a shortage of spills, leaks, pipeline failures and other problems,” said Willis, who now does consulting work for conservation and other groups.

“It’s a disaster waiting to happen,” he said.

In interviews, BLM officials acknowledged persistent problems in keeping up with inspections, but said they were not aware of any major safety issues to date arising from the uninspected wells.

Lance said BLM field managers are making judgment calls to minimize the risk of potential harm to surrounding communities. The agency also is reviewing whether it needs to slow down the pace of permits to ensure public safety.

Officials noted that money provided by Congress for oil and gas operations has declined since 2007. During that period, the number of wells drilled on federal and Indian lands has increased by roughly one-third.

“We’re trying to do the best we can with limited resources,” Lance said.

If approved by Congress, the BLM’s 2015 budget request of $150 million for oil and gas operations would allow the agency to conduct the bulk of its required inspections over three years, in part by collecting fees from oil and gas companies. Unlike past years, $48 million will be earmarked for inspections. The BLM made similar budget requests the last several years with little success.

The BLM has sought to add inspectors, but that has proved challenging in places such as Utah, where most wells are drilled on federal land. While a petroleum engineer could get a starting salary of $90,000 in the private sector, the BLM typically pays $35,000. This year’s appropriations bill would allow the BLM to increase inspector salaries to around $44,000.

The public concern is evident in Colorado, where increased drilling into suburban and rural areas has led community groups to push nearly a dozen oil and gas local control initiatives for the November ballot. Of the wells drilled from 2009-2012, the BLM designated more than 400 on federal and Indian lands in Colorado as high priority, the third highest behind Wyoming and North Dakota. More than 160 of Colorado’s uninspected high-priority wells are near New Castle, on the edge of the White River National Forest.

Colorado Gov. John Hickenlooper has been seeking a legislative compromise that could satisfy concerns over health and safety impacts of fracking.

Regulators contend that overall, water and air pollution problems from fracking are rare, but environmental groups and some scientists say there hasn’t been enough research on those issues.

Jaramillo said residents in the canyon have mixed feelings about fracking.

“The people that really like it are the people who are getting money out of it,” she said. “The people who don’t are really worried about — Is it going to ruin the water? Is it going to ruin the land? Is it going to ruin the air?”

A neighbor, Kory Kipferl, who owns a 10-acre property adjacent to federal land dotted with active wells on gravel pads. He said he’s accepted what he called a need for domestic drilling — but he’s concerned about the water table.

“Once we start puncturing the water table, that could cause problems, whether you’re drilling for gas, oil, water, whatever,” Kipferl said.

The BLM dataset is more extensive than what was reviewed recently by the Government Accountability Office, and filtered to remove duplicate well entries that yielded an overcount. In a recent report, auditors said the BLM needed to do a better job of coordinating with state regulators. In Pennsylvania, for instance, the one well that went uninspected by the BLM had been checked multiple times by the state.

Still, it’s not clear how willing states are to take up the federal task.

“To say that we’re going to start inspecting federal wells is just above and beyond what we could do,” said John Rogers, associate director of Utah’s Division of Oil, Gas and Mining, pointing to his small staff. He said companies will inspect their own equipment in order to protect their investment, so it’s likely that at least some of Utah’s 200-plus wells that weren’t inspected by BLM are checked by someone.

“We’re certainly not going to second-guess people’s inspections,” Rogers said of the BLM.

(AP Photo/Ed Andrieski)


Oil prices slip as U.S. deploys small force to Iraq

Posted in: Invoice factoring, Oilfield Business Financing, Oilfield News- Jun 17, 2014 No Comments

The price of oil dropped Tuesday after the U.S. said it was deploying a small group of troops to Iraq, which helped soothe fears somewhat over the prospect of a broader conflict that could disrupt crude supplies.

Benchmark U.S crude for July delivery dropped 29 cents to $106.61 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost 1 cent to settle at $106.90 on Monday.

Brent crude, a benchmark used to price international oils, fell 33 cents to $112.61 a barrel on the ICE Futures exchange in London.

 Up to 275 U.S. soldiers are being positioned in and around Iraq to protect the U.S. Embassy and other American interests as President Barack Obama weighs options for dealing with the al-Qaeda inspired militants who have captured a vast swath of the country’s north.

Iraq’s crude oil exports have so far not been disrupted but the conflict raises concern about whether the country can rebuild its oil infrastructure and meet global demand.

“The fact that the U.S. are looking to send a small, yet targeted force into the region has appeased some, although the situation is extremely fluid and the prospect of higher energy prices is still something that could feasibly occur over the coming weeks,” Craig Weston, chief market strategist at IG Markets in Melbourne, said in a report.

In other energy futures trading:

- Wholesale gasoline fell 0.3 cent to $3.04 a gallon.

- Natural gas lost 1.2 cents to $4.70 per 1,000 cubic feet.

- Heating oil fell 0.8 cent to $2.9899 a gallon.



German beermakers look like winning their battle to stop fracking

Posted in: frac, fracking, Oilfield Business Financing- Jun 17, 2014 No Comments

ExxonMobil test drilling makes brewers fear for their livelihoods, but others see fracking as alternative to coal and nuclear energy

Germany is a beer nation: if their beer has no flavour, people will mount the barricades,” says Friederike Borchert. At her family’s brewery in Lünne, Lower Saxony, about 800,000 litres of beer are produced a year: a light pilsner, a dark beer and a buckwheat brew. Borchert, 27, dreams of one day making her own India pale ale, though now fears she may have to put her aspirations on hold.

In spring 2011, US energy group ExxonMobil made a horizontal test drill into shale rock under a field down the road, so far the only one of its kind in Germany.

Many locals are now convinced that Lünne has been earmarked as the country’s first site for fracking, the controversial method of extracting gasby injecting water, sand and chemicals into the rock at high pressure. Earlier this month, a leaked letter by the economy and energy minister, Sigmar Gabriel, hinted at permitting fracking from 2015, apparently confirming their suspicions.

“For brewers fracking could spell the end of our existence,” says Borchert. Water used for brewing has to be “even cleaner drinking water”. The fear alone that chemicals used during fracking might enter the local ground water could ruin the brewery’s reputation. But then Germany is a beer nation, she says, and when brewers speak up politicians tend to listen.

Only a big black valve in a metal cage tells of ExxonMobil’s activities in Lünne. But the horizon illustrates the wider debate around Germany’s energy future: there is a windfarm in the field next door, a coal power station in Ibbenbüren to the south and a nuclear power station in Lingen to the north.

Allowing fracking, some argue, needs to be an acceptable compromise if Lünne wants to switch off the two power stations and boost the wind farms. If this proves as successful as it was in the US, it could help lower Germany’s high energy prices and thus ease the Energiewende project to phase out nuclear by 2022.

Germany consumes 90bn cubic metres of natural gas a year, making it the world’s eighth biggest user. Only 12% of its consumption is home-produced – with 37% imported from Russia, a trade that has been increasingly perceived as a problem as the crisis in Ukraine has escalated. The EU energy commissioner, Günther Oettinger, claimed in March that fracking could free Germany from its dependency on Russian imports “for decades to come”.

Many factors would make Lower Saxony the obvious place to start exploratory fracking. Most of Germany’s shale reserves are located here, and 90% of the natural gas produced in the country is extracted by conventional means in the region. What’s more, only a small percentage of the shale lies in areas that cannot be touched for fear of contaminating ground water.

The Netherlands has already announced it will frack close to its border with Lower Saxony. If you can’t escape the risks, some locals say, why not make some money? Unlike wind power, profits would not go to the farmers who own the land, but to the regional authorities.

“We are not against big energy per se, you can see that from all the power stations here. But there’s a point where enough is enough,” says Markus Rolink, who has been organising protests in Lünne since 2011.

“There has to be a perspective. With the windfarm there’s the perspective that the nuclear power station will eventually get switched off. With shale gas I just see an investor at ExxonMobil pocketing the money and risking damage to our environment in the process.”

Protests in Lünne and around 30 other sites across Germany put companies like ExxonMobil off further exploratory drills two years ago. And in spite of industry lobbying and political tension in the Ukraine, it looks like Germany’s beermakers and anti-fracking protesters may be able to claim victory in the long term too.

Since last summer, its brewers association has been lobbying the environment minister, Barbara Hendricks, to update the water protection law to include even smaller brewers’ wells and private mineral springs, further threatening the commercial viability of fracking in Germany. It appeared to work. A spokesman for the environment ministry said it intended to “considerably tighten” legislation around fracking.

Any fracking-enabling legislation would have to be approved by the Bundesrat, the upper house of the German parliament in which the ruling coalition parties do not hold a majority. The last government tried and failed to pass a similar “fracking law” last year. The draft bill for new legislation, originally scheduled before the summer recess, appears to have already been postponed to the autumn.

Many of the key shale regions are represented by Green party environment ministers who want Germany to follow France’s example and ban unconventional fracking across the country. “We want Germany to have the world’s strictest fracking safeguards,” Lower Saxony’s environment minister Stefan Wenzel says. “If ExxonMobil wants to have a future in Germany, they should invest in renewable energies.”

Were the government to pass legislation that enabled fracking, the relevant region could block planned drills by using local laws, as Wenzel’s counterpart in Schleswig-Holstein, Robert Habeck, told the Guardian he would. On 11 July, he is submitting his own proposal for a nationwide ban to the Bundesrat.

Varying estimates of Germany’s shale resources and concerns about the commercial viability of fracking could play into their hands. ExxonMobil says fracking could allow the country to cover its gas needs for the next 20 to 25 years.

The president of the German Agency for Geoscience and Raw Materials, Hans-Joachim Kümpel, says that while there is enough shale to cover a third of Germany’s gas needs for 40 years, it was “unrealistic” to expect that Germany can achieve complete gas independent .

Other experts suggest that only a billion cubic metres would realistically be frackable every year, covering no more than 1% of the country’s annual use.

The costs for industry remain considerable: even the test drill in Lünne cost ExxonMobil €2.5m (£2m).

Stefan Lechtenböhmer of the Wuppertal Institute for Climate, Environment and Energy says he believes fracking will cover Germany’s gas consumption for nine years at best, and lower gas prices by no more than 1% or 2%. “Fracking won’t solve Germany’s energy dilemmas. It’s a homeopathic measure.”



Facebook Wants To Listen In On What You’re Doing

Posted in: Oilfield News- May 30, 2014 No Comments

Facebook had two big announcements this week that show the company’s wildly divergent takes on the nature of privacy. One announcement is that the company is encouraging new users to initially share only with their “friends” rather than with the general public, the previous default. And for existing users, the company plans to break out the old “privacy dinosaur” to do a “ check-up” to remind people of how they’re sharing. Facebook employees say that using an extinct creature as a symbol for privacy isn’t subtle messaging, but simply an icon to which their users respond well. Meanwhile, Facebook’s second announcement indicated just how comfortable they think their users are in sharing every little thing happening in their lives. Facebook is rolling out a new feature for its smartphone app that can turn on users’ microphones and listen to what’s happening around them to identify songs playing or television being watched. The pay-off for users in allowing Facebook to microphone-lurk is that the social giant will be able to add a little tag to their status update that says they’re watching an episode of Games of Thrones as they sound off on their happiness (or despair) about the rise in background sex on TV these days.

Facebook's animal of choice to represent privacy is an extinct one

“The aim was to remove every last bit of friction from the way we reference bits of pop culture on the social network,” writes Ryan Tate of Wired. Depending on how you feel about informational privacy and/or your friends’ taste in pop culture, that statement is either exhilarating or terrifying.

The feature is an optional one, something the company emphasizes in its announcement. The tech giant does seem well-aware that in these days of Snowden surveillance revelations, people might not be too keen for Facebook to take control of their smartphone’s mic and start listening in on them by default. It’s only rolling out the feature in the U.S. and a product PR person emphasized repeatedly that no recording is being stored, only “code.” “We’re not recording audio or sound and sending it to Facebook or its servers,” says Facebook spokesperson Momo Zhou. “We turn the audio it hears into a code — code that is not reversible into audio — and then we match it against a database of code.”


If a Facebooker opts in, the feature is only activated when he or she is composing an update. When the smartphone’s listening in — something it can only do through the iOS and Android apps, not through Facebook on a browser — tiny blue bars will appear to announce the mic has been activated. Facebook says the microphone will not otherwise be collecting data. When it’s listening, it tells you it is “matching,” rather than how I might put it, “eavesdropping* on your entertainment of choice.”

It reminds me of GPS-tagging an update, but with cultural context rather than location deets. While you decide whether to add the match to a given Facebook update, Facebook gets information about what you were listening to or watching regardless, though it won’t be associated with your profile. “If you don’t choose to post and the feature detects a match, we don’t store match information except in an anonymized form that is not associated with you,” says Zhou. Depending on how many people turn the feature on, it will be a nice store of information about what Facebook users are watching and listening to, even in anonymized form.

Sure, we’re used to features like this thanks to existing apps that will recognize a song for us. But usually when you activate those apps, you’re explicitly doing so to find out the name of a song. Facebook is hoping to make that process a background activity to composing a status update — a frictionless share that just happens, the real-world version of linking your Spotify account to your social media account allowing playlists to leak through. Facebook spent a year honing its audio sampling and developing a catalog of content — millions of songs and 160 television stations — to match against. It’s obvious that it wants to displace Twitter TWTR -4.65% as the go-to place for real-time commenting on sporting events, awards shows, and other communal television watching. “With TV shows, we’ll actually know the exact season and episode number you’re watching,” says Zhou. “We built that to prevent spoilers.”

So the question now is whether people are willing to give Facebook listening powers in exchange for a little Shazam.

* I originally used the word eavesdropping three times in this piece, but have revised given that Facebook isn’t “secretly” listening, but rather doing so with the permission of users. This post has gotten a lot of attention on Reddit and on Hacker News, leading Facebook to provide more information about the feature on its original blog post, refuting “myths” about how it works. “Myth: Facebook is storing the information from this feature indefinitely,” Facebook writes in the blog post, explaining, “If we find a match and you don’t post, we log that a particular song or TV show was matched, but we don’t connect this with your profile in any way. We use this to keep a chart of the most watched and listened to songs and TV shows.” So the information is stored indefinitely, it’s just not associated with your profile.



100 Billion Clues That Small Business Lending Has Turned A Corner

Posted in: Bakken Labor Staffing News, Bakken Oilfield Financing News, Corpus Christi Financing News, Eagle Ford Shale News, Eagle Ford Shale Staffing Fianncing News, Factoring Companies, frac, fracking, Invoice factoring, Labor News, Oilfield Business Financing, Oilfield News, Permian Basin Financing News, Staffing Factoring, Staffing Financing News- May 30, 2014 No Comments

If you pay any attention to the industry press, it sure looks that way. The recent commitment by Wells Fargo Bank to lend $100 billion (and yes, that’s with a ‘B’) to small businesses in the United States by 2018 is a bold move for one of the biggest traditional lenders. It would appear that there are some traditional lenders (Wells Fargo WFC +0.82% for example) for whom the light bulb has clicked on and they’ve remembered the important role small business plays in creating jobs and growing the economy.

I say that because access to capital from traditional sources has fundamentally dried up for small business since the start of the recession. Small business has taken a beating and this news from Wells Fargo is good news in my opinion.

“Right now one of the most important things we can do is grow the small business segment, not just for our bank but from the standpoint of the economy,” said Jim Malcolm, Wells Fargo’s northeast small business strategy director. “This is where we are seeing a lot of growth and where we want to encourage growth and success among smaller businesses that are getting started.”

Wells Fargo isn’t the only traditional lender that is recognizing that the market is changing either; BBVA Compass recently inked a partnership agreement with online alternative lender OnDeck to help borrowers who might not fit their normal loan criteria, but still need to borrow capital. BBVA also recently purchased the online lender start-up Simple to help them streamline the lending process, turn loan applications faster, and help make less-than-perfect borrowers profitable. Along with poaching some of the top digital bankers in the country, BBVA Compass is demonstrating they are serious about small business lending.

“Our goal is to help clients and prospective clients feel more in control of their financial lives,” said Jeff Dennes, the new head of Digital Banking at BBVA.

I recently sat down with Stephen Sheinbaum, President and CEO ofMerchant Cash & Capital (MCC), one of the leading alternative funders, to talk about the trends I think many of us are recognizing within the space. MCC is on the Lendio platform and Sheinbaum is one of the guys whose opinion regarding alternative funding sources and small business financing I’ve come to appreciate over the years.

If you’re not familiar with MCC, since 2005 they’ve funded over $680 million through more than 30,000 transactions—nothing to shake a stick at.

When I asked him about his perspective of the current small business loan market he said, “We’re experiencing the culmination of the last several years where traditional banks have been extremely unwilling or unable to serve the small business community.”

We both agreed that small business is really the job creation engine within the U.S. economy, accounting for roughly 50 percent of jobs and 74 percent of new job creation. To fill a void left by traditional lenders over the last few years, the better financed and more sophisticated non-bank lenders have helped streamline the small business loan process, put millions of dollars into the hands of business owners, and improved the borrowing experience. No wonder traditional lenders like BBVA Compass are leveraging the partnerships and buying the online players they are. They see the writing on the wall.

“What we’re seeing in all this news is free-market forces doing what they’re supposed to be doing,” said Sheinbaum. “Forward-thinking traditional bankers are looking at the platforms that profitably provide great service to the borrower to understand more about the technology non-bank lenders are using and how they (the bankers) can improve their customer experience.”

That said there’s a lot more to the success of non-bank financers like MCC. Sheinbaum suggests traditional lenders and non-bank lenders look at some of the lending fundamentals differently, like:

  • The borrowing experience
  • The way banks and non-banks score borrowers
  • The ability to make quick decisions
  • The more streamlined paper trail associated with a loan application

In fairness to the bank, much of the things small business borrowers dislike about the small business loan process is the result of regulation—restrictive regulation that keeps capital out of the hands of small business owners.

Additionally, Sheinbaum suggests, “Large banks just aren’t nimble enough to do what alternative lenders are doing. Non-bank financial institutions, like MCC and OnDeck are simply able to provide a more expedited experience for the small business borrower. Most transactions at MCC are funded within hours or days as opposed to weeks or months at a traditional bank.”



Shale Boom Lures Developer for $500 Million North Dakota Project

Posted in: Labor News, Oilfield Business Financing, Oilfield News- May 20, 2014 No Comments

A Swiss developer is planning to build a $500 million real estate project in Williston, North Dakota, where a surging energy industry is leading to a population boom and rising property demand.

The two principals of developer Stropiq Inc. are at the International Council of Shopping Centers conference in Las Vegas this week trying to lure retailers to the 219-acre (89-hectare) Williston Crossing project, scheduled to break ground in March. The 1 million-square-foot (93,000-square-meter) project will include retail, entertainment, hotel, office and multifamily buildings.

Stropiq and investors such as KKR (KKR)& Co. are rushing to accommodate a ballooning population of energy workers in Williston, located in the oil-rich Bakken shale formation. The average rent for a small apartment in the western North Dakota town is higher than in New York or San Francisco, according to Apartment Guide. Along with housing, retail offerings in the city are in short supply, Stropiq executives said.

“If you want anything that doesn’t exist in a grocery store or Wal-Mart, you have to drive two hours,” said Terry Olin, a Stropiq principal and graduate of North Dakota State University in Fargo. “We’d like to change that as fast as we can.”

The developers have hired real estate brokerage Jones Lang LaSalle Inc. to market the retail part of Williston Crossing and handle pre-leasing of the project, about 625 miles (1,000 kilometers) fromMinneapolis.

“This is meant to be a retail hub for the market,” said Larry Jensen, a Jones Lang LaSalle executive vice president.

Apartment Construction

Stropiq already has a 93-unit apartment complex under development in Williston, with the first building scheduled to open in July, said Ellen Simone Weyrauch, a company principal.

Weyrauch, who is based in Zurich, was previously a managing director at Eastern Property Holdings Ltd. (EPH) Olin, who is from Minnesota and now based in Geneva, was on the management committee of Eastern Property. He left the Russia-focused real estate investment company in 2013.

The oil boom has helped send North Dakota’s unemployment rate to 2.6 percent in April, the lowest in the U.S., according to the Labor Department. That compares with a national jobless rate of 6.3 percent.

Williston’s population has grown 42 percent since 2000, according to a report outlining adowntown plan for the city. Population estimates range from 25,000 to 35,000, which includes temporary residents. About 18,000 are permanent residents.

Fastest Growth

Williston was the fastest-growing “micropolitan statistical area” in the U.S. in the 12 months ended July 2013, with the population rising 10.7 percent, according to the Census Bureau. A micropolitan area is a region that has an urban area of between 10,000 and 49,999 people.

Demand for apartments and other housing has climbed along with the population. Home prices in North Dakota, the fastest-growing U.S. state, hit a record in the fourth quarter, climbing 11 percent from a year earlier, according to the Federal Housing Finance Agency.

In Williston, a 700-square-foot, one-bedroom, one-bath apartment can cost more than $2,000 a month, according to Apartment Guide, which said the city has the highest rents for small apartments on average in the U.S. A posting on Craigslist advertises a one-bedroom apartment including utilities for $2,150 a month.

KKR Development

The booming economy has also lured other real estate investors, including KKR, developer of a housing development in Williston. Minot, North Dakota-based Investors Real Estate Trust (IRET)is building two apartment projects in Williston, the 44-unit Dakota Commons and the 288-unit Renaissance Heights, both scheduled to open next year.

North Dakota’s economy grew 13 percent in 2012, the fastest rate in the U.S. Petroleum-industry employment totaled 40,856 in 2011, up from 5,051 in 2005, a year before the oilfield expansion began with techniques such as hydraulic fracturing, also known as fracking.

The combination of horizontal drilling and fracking has unlocked supplies from shale formations in the central U.S., including the Bakken, which holds the nation’s second-largest oil supply. The nation’s crude production climbed to a 28-year high earlier this month, data from the Energy Information Administration show.



A safe flight in the Bakken: Oil companies learn about medical helicopter service

Posted in: Bakken Oilfield Financing News, Oilfield Business Financing, Oilfield News- May 20, 2014 No Comments

SOUTH HEART — Oil companies got a closeup look Wednesday at the aircraft getting a lot of business lately because of their industry

The Spirit Lifeline crew presented its helicopter at a safety event Wednesday near South Heart. Employees of RockPile Energy Services, Whiting Petroleum, Petro-Hunt and Fidelity Exploration and Production were present to learn about how the crew operates.

Representatives of the South Heart Fire Department attended, too.

The helicopter can hit 150 mph, crew member Robert Fratti said, and the version at the event, outfitted with all the necessary gear, is worth about $2.8 million.

Fratti said the crew gets calls from western North Dakota, including several near Bowman and Hettinger. It can fly for two-and-a-half hours, allowing it to bring someone from a rig accident in Baker, Mont., to a hospital in Billings, Mont.

After showing off their ride, crew members showed what to do if they ever show up at a worksite, like which way to shine headlights at night, Shirley Buckman said. Buckman and her husband own Team Well Service, a workover rig company incorporated into RockPile last fall.


photo-Press Photo by Katherine Lymn Spirit Lifeline crew member Robert Fratti shows oil industry employees the ins and outs of his company’s helicopter Wednesday near South


Federal judge dismisses 13 of 14 flaring lawsuits filed by N.D. mineral owners

Posted in: Bakken Labor Staffing News, Bakken Oilfield Financing News, Oilfield Business Financing, Oilfield News- May 20, 2014 No Comments

BISMARCK – A judge has dismissed 13 of 14 lawsuits filed against oil and gas companies by North Dakota mineral owners who claim they are owed royalty payments for natural gas illegally flared from oil wells.

U.S. District Court Judge Daniel Hovland ruled Wednesday that the mineral owners failed to exhaust their administrative remedies through the state’s Industrial Commission, and therefore the federal court lacks jurisdiction.

“As long as administrative procedures are prescribed they must be followed before a party seeks judicial relief,” he wrote.

Mineral owners filed 10 class-action lawsuits in state district court in October against oil and gas operators in western North Dakota’s Bakken oilfield, claiming they were owed millions of dollars in royalties for natural gas they allege was illegally flared, or burned off into the atmosphere, from oil wells.

Four additional cases were filed in January and February. All of the cases were moved to federal court except the lawsuit against Marathon Oil Co., which was filed in Mountrail County by Bismarck attorney and former North Dakota agriculture commissioner Sarah Vogel and is pending in state court.

Attorney Derrick Braaten, who is representing the mineral owners, said Friday they were still analyzing Hovland’s ruling and an appeal is possible.

“The judge’s ruling wasn’t really on the merits of the case,” he said.

Ron Ness, president of the North Dakota Petroleum Council, said the ruling was favorable news for the operators.

“But it doesn’t really change much for our efforts … to reach our flaring target goals set by the Industrial Commission,” he said.

In March, the Industrial Commission adopted several steps to curb flaring, including a requirement starting June 1 that companies submit gas capture plans with their drilling permit applications. The measures aim to reduce flaring to 10 percent or lower by 2020.

North Dakota’s gas flaring rate was 33 percent in March, down from a peak of 36 percent but still well above the national average of less than 1 percent.

Hovland, who called flaring “a wasteful, albeit sometimes necessary and unavoidable, practice,” noted that the Industrial Commission has broad authority to regulate oil and gas activities in the state, including determining whether gas is being flared in violation of state law and ordering the payment of royalties and taxes on improperly flared gas.

North Dakota law generally permits flaring for a one-year period from the date of the well’s first production. After that, the Industrial Commission may grant an exemption allowing flaring to continue if the company shows it’s not economically feasible to stop flaring. If gas is flared in violation of the law, the producer must pay royalties to the royalty owner and production taxes to the state.

Hovland wrote that a “clear and comprehensive administrative remedy” is available for those who believe improper flaring is occurring. That right includes provisions for filing a petition, the right to a hearing, reconsideration and the right to appeal to district court, he wrote.

“In this case the Plaintiff has never filed a petition with the North Dakota Industrial Commission asking it to look into her flaring complaints,” Hovland wrote in dismissing the lawsuit against Hess Corp. “Rather, she has elected to bring her claims directly to court.”

The plaintiffs contended that exhausting their options with the Industrial Commission would be futile because the three-member commission – which consists of the governor, attorney general and agriculture commissioner – can’t be forced to exercise its authority, and that even if it did hear their petitions, the administrative remedy would be inadequate.

Braaten said the plaintiffs reviewed “hundreds if not thousands” of Industrial Commission orders and didn’t find a single case in which a royalty owner brought an action to the panel under the flaring statute.

“There really aren’t any established procedures for doing this,” he said.

But Hovland disagreed, writing that a “multitude” of Industrial Commission orders demonstrate that it has the jurisdiction to enforce flaring regulations, “and that it has exercised its authority to do so on numerous occasions.”

“Had the Plaintiff initially brought her claims before the Industrial Commission, the Court has no doubt her petition would have been heard,” he wrote in the Hess case ruling. “Speculation otherwise is unavailing. Futility is not demonstrated by mere speculation or doubt regarding what actions an agency may take to resolve a claim.”

The mineral owners have asked the court to certify a class of all people owning royalty interests who haven’t been paid royalties for illegally flared gas, but the class certification has yet to be addressed, Hovland noted.

In addition to Hess Corp., Hovland dismissed the lawsuits against Hunt Oil Co., Burlington Resources Oil & Gas Co. LP, WPX Energy Williston LLC, Continental Resources Inc., XTO Energy Inc., HRC Operating LLC, Statoil Oil & Gas LP, Crescent Point Energy U.S. Corp., Samson Resources Co., SM Energy Co., EOG Resources Inc. and Kodiak Oil & Gas (USA) Inc.