GEOI's headline story was announcing the drilling of their first Eagle Ford well in south Texas.
However, the Bakken update was quite interesting. They are in the process of completing their fourth well. They have just added a second dedicated drilling team, and will be adding a third rig early in 2012.
We recently added a second dedicated drilling rig to our Williams County project area which is now on location and should spud our sixth Middle Bakken well, the Rasmussen 1-25-36H, within the next few days.
We plan to add a third drilling rig to this area shortly after the end of this year. Our intent, similar to our Eagle Ford project, is to accelerate drilling in the second half of 2011 and into 2012. We anticipate a higher level of production from our operated project area in the third quarter of 2011 compared to the second quarter of 2011 due to less downtime on existing producing wells with improved weather conditions and additional production from new well completions. As we proceed in developing this project area, we expect each operated rig to drill 9-11 gross wells per year.
To date, we have acquired approximately 25,000 net acres in our Williams County project area, generally representing a 47.5% working interest, within an area of mutual interest (“AMI”) being developed with industry participants. We are the operator for our group. Assuming full development on 1,280 acre spacing units, our group will have varying interests in 100 units.
I have been watching G-3 Operating very carefully over the past year since they have our mineral acreage leased in Williams County. One problem they have is that a large number of their acreage is expiring in 2012 just as ours will. They are most likely adding additional rigs in order to drill on these expiring leases since a new lease will be costly, both bonus $ and % royalty.
ReplyDeleteI eagerly wait for the 2012, 2013, and 2014 statistics on expiring leases. There's a lot of chatter on expiring leases. My hunch is that the oil companies know exactly what they are doing, and that if they let leases expire, it will be in the marginal locations. In addition, the "fine print" with regard to starting work on a lease that is about to expire is interesting, to say the least.
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