If one wants to get an inkling of the magnitude of the deal in which Denbury bought Encore, check out the March 3, 2011, daily activity report.
521 Encore wells were officially transferred to Denbury --- 521 wells. It's a pretty impressive list. That's a lot of wells for just one transaction. That's a of wells for just one basin (the Williston Basin) and Encore was a relatively small company among those in the Bakken.
Due to the comment below (March 16, 2011), I will add this: more correctly, the wells have been transferred to Denbury Onshore, LLC.
Bye the way Bruce if one researches the first and only gulf permit is to Noble Drlg. They own 23% and wait for it BP owns 46%. Imagine that. BTY Whiting has found the sweet spot in the TF.
ReplyDeleteWhat irony: BP owning 46% of the first well to get a permit in the Gulf after the spill. Irony. Shakespeare could not have written a better example.
ReplyDeleteYou have no idea how interesting I find WLL and what it seems to be doing in the Williston Basin.
I'll be on the road for the next 24 hours, but I am looking forward to a stand-alone post on how difficult this 1Q2011 is going to be for analysts (as well as the companies) to predict earnings for the quarter.
Truly "interesting times" we are living through as the Chinese would say.
This is OT, but I saw the latest pessimistic particle from the Oil Drum on the US oil production outlook which included some discussion of the Bakken. The comments on TOD are often just as interesting to read as the articles themselves. That said, it seems quite a few of them seriously underestimate the Bakken's potential and still base everything off of the USGS 2008 survey.
ReplyDeletehttp://www.theoildrum.com/node/7499
I'd be curious to hear your response to it if you find yourself with some free time.
Here's one from Nov. 2009, if you haven't seen it before, that gives you an idea about the author's perception of the Bakken.
Thank you for writing. I needed an excuse to update my thoughts on the Bakken.
ReplyDeleteMy response can be found here:
http://milliondollarway.blogspot.com/2011/03/some-thoughts-on-bakken.html
Bruce,
ReplyDeleteI noticed that they are listed as Denbury Onshore LLC...since it has "LLC" I was wsondering if these wells are not part of Denbury Inc. but rather privately held in some other way?
My hunch is that Denbury Onshore LLC is a wholly-owned subsidiary of Denbury, but I don't know for sure.
ReplyDeleteI was once told that it was common in the oil patch for "LLC's" to actually run operations, for various reasons, rather than by the publicly traded corporation which owns them.
I do know that some "LLC's" with very vague names are "fronts" for publicly traded companies. If the LLC becomes profitable, then at some later date, its assets might be transferred to the publicly traded company and the LLC dissolved. Not having a business background, I don't know the correct terminology for this activity, but I understand the concept.
Enbridge and EEP (a limited partnership) have a similar arrangement, I suppose.