Friday, December 9, 2011

QEP Reports Some Nice Wells in Heart Butte Oil Field -- The Bakken, North Dakota, USA

QEP has reported some very nice wells in Heart Butte oil field over the past six months; two more reported IPs after being on DRL status.
  • 20115, 1,211, QEP, MHA 3-05-08H-147-92
  • 20116, 2,533, QEP, MHA 1-05-08H-147-92
  • 20487, 606, QEP, MHA 1-04-03H-149-91; s4/11; t11/11;
  • 20488, 1,571, QEP, MHA 3-04-03H-149-91; s4/11;t11/11;
  • 20490, 2,609, QEP, MHA 1-32-29H-160-91, s4/11;t11/11;
Heart Butte is in the reservation, and close to the bull's eye of the Bakken.

I have updated Heart Butte oil field. QEP and XTO "own" the field but KOG has some acreage in the field.

Eight (8) New Permits -- The Bakken, North Dakota, USA

Daily activity report, December 9, 2011 --

Operators: BEXP (4), Oasis (2), Slawson, Hess

Fields: Alger, Cottonwood, Bull Butte Kittleson Slough. Long Creek

The Bakken will continue to excite: BEXP has permits for a 4-well pad in Alger, a very good oil field.

But fracking backlog continues: only one of the four wells that came off the confidential list was completed/fracked, but it was a good one:

Halliburton Has Huge Operations In Heart of the Bakken -- For Investors Only

Forbes link here.
Halliburton will surge on its North American business, particularly fracking as the U.S. shale play continues to evolve, analysts at RBC Capital Markets argue.  The large oilfield services provider won’t derive much profit from its international operations, but it will see Iraqi production stabilizing and unconventional gas plays develop across the globe, setting it up to benefit in the future.

While exploration and production companies have had a stellar year, with Exxon Mobil and Chevron both showing double-digit percentage gains, oil and gas service providers have substantially underperformed.  Halliburton and Schlumberger, the two largest players, are down 18% and 12% for the year, respectively.

But Halliburton’s luck could begin to change.  With about 75% of its revenues coming from its North American operations, RBC’s equity analysts believes the company is poised to surge on the expansion of shale plays and hydraulic fracturing, or fracking.
For investors only. This is not an investment site. See disclaimer at the right.

Asleep at the Switch -- Elsewhere

Elsewhere, it appears that Dufus is asleep at the switch. A link to a blog was allowed to be posted. It was my understanding that links to other blogs were prohibited. 

Of course, it is okay for links to the SeekingAlpha investment site to be linked to the discussion group if you control the posts. Maybe the discussion group will become an investment club.

Random Note on KOG -- The Bakken, North Dakota, USA

Disclaimer: with this much data; with data taken from various dated snapshots -- there will be errors. See original source documents to fact check.

Reviewing the KOG December, 2011, corporate presentation. Data points that jump out at me:
  • The North Plains Energy acquisition is in the Bull's Eye of the Bakken; this may be the best acquisition in the Bakken since 2010 by any company
  • Current production: about 16,000 boepd; end of 2012: 30,000 boepd (I think this exceeds BEXP; similar to CLR's -- have to check)
  • More and more multi-well pads; doesn't diminish production; 700' wellbore separation
  • 1 million bbls EUR
  • $10 million/long lateral; similar to $5 million for short lateral
  • Will increase # of rigs from 5 to 12 by end of 2012
Bottom line: impressive

From my FAQs page.  Note: the net acreage has been updated; other data may not be current.

Kodiak (KOG)
  • 155,000 net acreage in the Bakken after January, 2012, closing on North Plains Energy, LLC, assets
  • Exit 2011: 17,000 (est December, 2011); 9,000 (est 3Q11) (was 11,000 boepd -- estimate as of October, 2011)
  • Avg-2012: 24,000 (est Nov 11; after North Plains acquisition); exit 2012, 30,000 boepd
  • Five operated rigs; drilling on multi-well pads; 33.4 net producing wells (before January, 2012 acquisition); 6 rigs in January, 2012; 2 more in Q2/Q3 bringing to total of 8 by late 2012
  • JV partner with 2 rigs; 50% WI
  • One dedicated HAL fracking crew as of 1Q12
  • Total Bakken net acres: 155,000 net acres (ND: 150,500 ; MT: 4,500 acres)
  • November, 2011 announcement, acquisition: Divide County, McKenzie County, 50,000 acres
  • Prior to the June 30, 2011, acquisition: Total Bakken net acres: 70,000 net acres (Dunn County: 35K; McKenzie County: 35K) 
Prospects -- new names (older designations)
  • Koala -- McKenzie (Western Trend); 10,000 net acres, bull's eye of the Bakken
    • Koala Prospect: southeast of Williston, south of river, Williams Count (10,000 net acres)
      Smokey Prospect: McKenzie County, 11,742 net acres; between their acreage on the reservation and the newer Koala Prospect area and just to the west of the southern tip of the Nesson Anticline (16,000 net acres)
  • Polar - Williams Country (North Flank Trend); 16,000 net acres
  • Polar Prospect: northern and southern Divide; just north of BEXP's Rough Rider
  • Grizzly - McKenzie County (SW Bakken - TF Trend); 25,000 net acres
  • June 30, 2011 Acquisition -- East Grizzly Prospect: far southeast end of Elm Coulee on ND side (22,000 net acres); previously about 4,000 net acres in this area, the far southeast end of Elm Coulee on ND side
  • FBIR- Dunn County (Eastern Trend); 34,000 net acres
  • Dunn County Core area: northeast Dunn County, south of river (west of river), FBIR (34,000 net acres); birthplace of KOG in the Bakken
  • Smokey - McKenzie County, 16,000 net acres
  • Jan 2012 Acq - Williams and McKenzie; 50,000 net acres
  • (Other Williston Basin: Montana, northwest of Williston, Sheridan County, 4,500 net acres)
Net Acreage
  • Corporate presentation, December, 2011:  155,000 net acres
  • Analyst's number, December 31, 2010: 72,000 net acres 
Lease Positions in Dunn County
  • 34,000 net acres
  • Original 5-year lease terms with 1-2 years remaining on existing leases
EURs in Dunn County
  • 1 million bbls for long lateral Bakken horizontals
  • $10 million to complete a well
  • 700' well-bore separation (this blog was the first to talk about this separation on a regular basis)
IPs for wells with 700' wellbore separation
  • TSB 2-24-12-2H, 1,752
  • TSB 2-24-12-1H3, 3,083

It's Been a Bad Couple of Months for the Canadians

First, it was the US killing TransCanada's Keystone XL.

Then, it was the fracking story coming out of Wyoming affecting Encana.

And, of course, Obama's comments to Stephen Harper which can be summarized in three words: "suck it up." The link takes you to a BBC story, one of the few stories in which the BBC is on the side of the Americans and not on the side of the British Empire.

Interestingly, the price for shares of Encana is up, along with the rest of the energy companies, and the market in general, despite the fracking story, and the fact that the price of oil is down again today.

This is not an investment site; see disclaimer at the right.

Meanwhile the House has attached a requirement to the payroll-tax-cut bill that the president make a decision on the Keystone sooner than later.

Data points:
  • most Americans don't follow the Keystone debate
  • of those who do follow it, most support the pipeline
  • most Americans use oil-related products
  • the project would be financed by non-taxpayer money
  • the shovel-ready project would employ 10's of 1,000's of union jobs
So, the president can kill the perfect jobs bill as well as raise taxes on "real working Americans" with one veto.

This will be interesting to watch.

Seven Oil & Gas Stocks to Buy for 2012 link here.

This was the order:
  • Whiting
  • Chevron
  • Occidental
  • Royal Dutch
  • Statoil
  • Kodiak Oil and Gas

I'm waiting for Mike's analysis in light of the EPA announcement.

This is not an investment site; see disclaimer.

Memo To Self: File Under 'Taking the Fifth' -- Alternate Choices

Lying link here
Rep. James Sensenbrenner asked Holder: “Tell me what's the difference between lying and misleading Congress, in this context?”

Holder's response is a bit Clintonian. “Well, if you want to have this legal conversation, it all has to do with your state of mind and whether or not you had the requisite intent to come up with something that would be considered perjury or a lie," Holder said. "The information that was provided by the February 4th letter was gleaned by the people who drafted the letter after they interacted with people who they thought were in the best position to have the information.”
No comment.