Earthstone in the Bakken -- North Dakota, USA

During the early days of this current boom, I actually invested in a small company called Basic Earth Science System (BSIC), but sold at a loss after holding it for a very short period of time. Every now and then I checked in on Basic Earth but then lost interest and then completely lost the bubble. I always wondered what happened to it.

It turns out that it was renamed Earthstone Energy, Inc. Rigzone provides an operational update of the company.

Three wells are mentioned. IPs have not been announce for any but preliminary data has been provided:

• Fossum 15-35H, SM Energy, Indian Hill field, McKenzie County, $6.4 million cost, expected initial production rate of over 1,000 barrels/day.
• Ceynar 29-32H, Zenergy, Inc., Banks field, also in McKenzie County, $7.0 million cost, no estimates of IP data.
• Mondak Federal 24X-12, XTO Energy, Inc., Mondak field, another McKenzie County well, estimated to cost $6.6 million. Again no preliminary estimate of the IP.

For individuals with mineral rights who have been concerned about paperwork details, this may or may not be comforting. Earthstone noted that XTO notified Earthstone with some great news. It turns out Earthstone has an interest in an XTO well, the Mondak Federal 14X-11 which was completed in February, 2010, and had an IP of 1,175 barrels of oil. To date, the well has produced over 45,000 barrels of oil (at $50/bbl = $2.25 million at the wellhead). Earthstone estimates its share of the cost of the well was $150,000, and that in the last eight months it has received $50,000 for this well, with about a 2.2 percent working interest.

Working backwards, if $50,000 represents 2.2% of the well's production, then the total return to date (eight months of production) must have been about $2.27 million.