Sunday, October 25, 2009

Bakken: WLL

My snapshot of Whiting in the Williston Basin
Originally posted May, 2012
Updated from the 2Q12 conference call


Discovery of Pronghorn and Lewis & Clark Fields -- Whiting, November, 2012.

Snapshots of all producers operating in the Bakken are posted here

I have always said Whiting has two centers of activity in the Williston Basin: northern operations and southern operations. I'm beginning to think I may have to think about Whiting in three geographic areas: a) maturing Sanish/Parshall; b) northern ops -- Hidden Bench prospect, McKenzie County; and, c) southern ops, which will be divided into the Bakken play and the Red River play.

Whiting has almost 700,000 net mineral acres in the Williston Basin.

In their northern operations, Whiting's cash cow is the Sanish oil field and they are drilling the heck out of it. They are moving to four, six, and more wells in some sections. Whereas EOG's premier field, the Parshall, appears to be prospective in only the western half of the field, the Sanish is excellent across the field.  In 2011, Whiting's northern operations gradually moved to the bull's eye of the Bakken, a bit west of the Sanish oil field, the northeast corner of McKenzie County, primarily south of the river.  The Sanish oil field will turn out to be a dual objective payzone: Whiting just reported its highest IP for a company-operated Three Forks well in the Sanish, the Stubstad 14-6TFX.

Whiting does not like to talk about it much, but it appears their Hidden Bench prospect, smack dab in the center of McKenzie County, is going to be huge. The Hidden Bench has 30,000 net acres vs 83,000 net acres in the Sanish/Parshall prospect. They were exploring the Three Forks formation in this prospect, but have "all of a sudden," gotten very, very excited about the Middle Bakken there. They seem to be very excited about the two Chitwood wells (21260 - drl; 22116 - conf), Ellsworth oil field, same section, in McKenzie County, northeast and near Red Wing Creek oil field.

In its southern operations, Whiting's initial emphasis was on the Three Forks pinchout around Belfield, and in 1Q12 the activity in this area has been nothing short of spectacular. But the big story coming out of the southern ops for Whiting is the Pronghorn Sand formation. The Pronghorn Sand formation is, in my mind, synonymous with the lower Bakken in certain parts of the Williston Basin. Specifically, the Pronghorn Sand is prospective in four areas of North Dakota: three areas of Whiting's Lewis & Clark Prospect, and, of course, the Pronghorn Prospect southeast of Lewis & Clark.

The company seems very excited about their Lewis & Clark prospect. In their current corporate presentations, their verbiage is that the Three Forks is the objective in the Lewis & Clark. However, the graphics reveal a very thick Pronghorn Sand in the Elkhorn Ranch area of the L & C Prospect. Regardless, the company constantly reminds us that the Lewis & Clark Prospect is, if I recall correctly, 3.5 times larger than the Sanish oil field. That is incredible when you think about it. Also, remember, the record bonuses paid for mineral acres in North Dakota have been in the Lewis and Clark Prospect.

Initially, there seemed to be some confusion in my mind figuring out exactly what formation some wells Whiting was targeting in the Lewis & Clark and the Pronghorn. Some clarity is now provided by Whiting adding the "P" designation in a well's name which indicates the well is targeting the Prospect Sand formation, just as "TF" designates the Three Forks.

They are not reporting any update regarding Starbuck; it looks like a traditional Red River play; they are still studying it with 3-D. 

In the 2Q12, WLL added 4,000 net acres totheir Missouri Breaks prospect, the only prospect where they added acreage.

Note this about the Bicentennial prospect:
The challenge for us is the size of our acreage position there. We've got a lot of acreage -- I'll be upfront about it, some of that is in federal lands, and it takes a while to get wells permitted there. So the combination of those 2 factors -- it's not moving forward as rapidly as some of the others are. It's just very big and a few complicating factors for getting wells permitted. [Can you say "permitorium"?]
It certainly seems to me that WLL prides itself on being the low-cost producer in the Bakken, trying to keep wells below $7 million/well.  They will keep costs down by using pad drilling (currently about 25% of their rigs are pad-capable; they will be going to 50% by end of 2012); white sand for fracking (no ceramics mentioned); and, sliding sleeve completions. Each rig now drills 12 wells/year rather than 10/year. Their workover to big rig ratio is about 1.5 and they are looking at acquiring 6 more work-over rigs.

Some quotes from the 2Q12 conference call:
Sanish Field is the gift that keeps on giving. We recently completed our highest rate wing well. The Smith 41-12H well, which was drilled in the central portion of the field. It flowed 2,974 BOEs per day from the Middle Bakken. The well's 7,000-foot lateral was fracture stimulated in a total of 22 stages.
When asked if WLL sees foreign competition in the Bakken:
Well, obviously Statoil has come in. We do believe that there are other foreign companies out there thinking actively about it. Yes, a couple of contacted us in various capacities in order to try to gain what I would call a foothold and what a couple of them have described as, at least in their opinion, the best oil play in the United States. So while I can't say that we want or need them as a partner, they do remain active, and they do continue to try to gain a foothold there.
In the Sanish:
We got about 7 rigs there right now and 14 service rigs. And we're using those, as was mentioned earlier, in evermore efficient manner, so that essentially we're drilling more wells with the same number of rigs.
On Hidden Bench:
The first thing I'd say there about Hidden Bench is that's turned out to be the one of the very best projects in the company. We're experiencing ROI -- or, excuse me, IPs there of over 2,000 barrels a day.
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Yahoo!Finance: WLL.

2010 Status and Strategic Plan

For comments regarding investing and WLL, see Investing: WLL.

For investors only: archived articles from before July 23, 2011

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NEWS 

March 31, 2017: Whiting -- comparing Redtail Niobrara with the Bakken

February 18, 2017: a look at Whiting's claim of 1.5 million EURs

January 9, 2017: Whiting's December, 2016, presentation.

December 10, 2016: contributor over at SeekingAlpha doesn't believe Whiting's numbers or projections

January 7, 2016: Whiting will release a video detailing why its completion techniques has significantly improved its results in the Williston Basin.

December 29, 2015: selling 331 wells to five companies

September 21, 2015: Whiting sells 11.5% working interest to Energy 11 LP for approximately 215 existing wells and approximately 262 future development locations in the Sanish oil field. 

September 15, 2015: Whiting can survive on $50 oil; Richard Zeits, Seeking Alpha.

July 29, 2015: CAPEX raised to $2.5 billion for 2015 a couple of weeks ago; today, cut back to $2.15 billion; will stick with a 6- rig program in the Bakken; 2 in the Niobrara; earlier in the month, I counted nine Whiting operated wells being actively drilled.

May 3, 2015: 1Q15 transcript.

May 1, 2015: Whiting would add rigs in the Bakken if oil hit $70; forecasts a 16-rig program.

June 20, 2014: June, 2014, corporate presentation

June 10, 2014: WLL a better buy than CLR (now) -- Fitzsimmons.

May 8, 2014: 1Q14 earnings;

February 16, 2014: WLL is one of five Bakken operators Filloon is bullish on 

October 3, 2013: I won't post this as a stand-alone post (yet); it's too speculative and too "out-of-the-box" for even this blog, but this is a note I just sent Don:
Whiting is the size of company that should follow the market, and with the market down 130 points, and oil falling a bit, WLL should be down at least a bit, and it may still pull back for the day, but it is currently trading at a new high, and up significantly, especially when comparing the overall market. 

It's possible Wall Street finally sees value in this company but I don't believe anything of substance has changed for this company in six months or six weeks or six days (and the surge has been in the last couple of weeks).

My hunch: Statoil is talking to Whiting.

October 2, 2013: Whiting presentation transcript

July 26, 2013: Whiting's second quarter, 2013, including Mike Filloon's look at Whiting's new completion techniques.

February 5, 2013: random data points from Whiting's corporate presentation, February 5, 2013

November 30, 2012: Whiting is worth $15 billion (today, the market cap of WLL is $5 billion) -- SeekingAlpha.com.

November 18, 2012: a horizontal in the Lower Red River "D" formation next year?

July 3, 2012: new corporate presentation and some commentary.

May 21, 2012: MDU subsidiary (not Fidelity) purchases half interest in Whiting's natural gas, oil gathering/storage system in Belfield area.
April 25, 2012, earnings season posts -- record Whiting IP for a Three Forks well in the Sanishawesome earnings report;

April 22, 2012: update of Whiting's Big Island prospect in southwestern North Dakota.

April 14, 2012: Corporate presentation, April, 2012.

March 30, 2012: update of Whiting Sanish oil wells.

March 22, 2012: USA Trust II prices 16 mln unit IPO at $20.00 per unit, at the midpoint of the $19-21 expected range.

January 30, 2012: update on Whiting USA Trust I -- 16 million trust units expected.

November, 2, 2011: Growth, value, and speculation all in one.

August 14, 2011: Motley Fools recommends Whiting, no if's, and's, or but's.

July 28, 2011: Key commentary on 2Q11; also some very interesting tidbits on 2Q11 conference call; Whiting provides additional information about its Lewis and Clark prospect.

February 12, 2011: Fifteen (15) wells in three 1280-acre spacing units; is there room for 24?

December 7, 2010: Whiting's proposed natural gas plant near Belfield is still on track.

September 8, 2010: WLL buys huge amount of acreage in Montana Bakken and reports seven incredible wells in the North Dakota Bakken.

August 22, 2010: Whiting announces four nice wells in the Sanish, including a new record IP for a TFS well.

August 4, 2010: Four outstanding wells; including one that has produced 100,000 in first 90 days. See "New Wells Reporting."

July 11, 2010: Great production numbers.

March 25, 2010: The "X" Factor -- Whiting Nomenclature for Naming New Wells

March 23, 2010: Whiting Targets the Three Forks Sanish in Stark County

February 24, 2010: 2009 Results, Data Points:
Increased proved reserves 15% to 275 million barrels
2009 production up 16%; record 20 million barrels
Replaces 292% of 2009 production
Finding and development cost of $16.96/boe (much more costly than BEXP)
February 1, 2010: 17080, 2,291, Niemi 44-22H.

December 8, 2009: TFS re-entry well -- 1,970 boepd. Press release. This could be a biggie. Lots of information in this press release. Four wells with boepd all about 2,000.  The reason for the special press release -- the one well was a discovery well, and a re-entry well from a well that had last produced oil from the Birdbear formation as recently as July 2009.  This well will open up a whole new area for WLL to explore. The press release also talks about the completion of an important WLL pipeline. Yeah, I'm excited.

November 8, 2009: Whiting announces plans for a 24-stage frac of a Three Forks Sanish well.

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Background

Whiting has had some spectacular wells. How spectacular? See "wells to watch" and scroll down to T154-91 and see the monster wells WLL has. They set record with new well announced in last week of October, 2009.

Also, WLL's Niemi 44-22H, permit 17080, sits right between their record setting well (based on IP) and a Murex well (permit 17263) which might be the best well in the Bakken right now.

WLL was one of my first picks in the Bakken back in 2007 but since then WLL sold much of their acreage to WLL-related trusts.

After a fairly long period without much reporting, WLL reported two nice wells (both wells with IPs around 2,000 bopd) on November 5, 2009: see "new wells reporting," November 5, 2009.

Whiting does have 28 wells on the confidential list (November, 2009).

Whiting has the record for the highest publicly disclosed initial production rate. First it was the Richardson Federal 11-9H produced 4,570 BOE per day during its 24-hour initial test period and now that record well has just been surpassed (October 29, 2009).

The Whiting trust ticker symbol is WHX and currently (October, 2009) pays over 14%.

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