Data points below not checked for accuracy; typed quickly while listening to the audiocast. Don't use any of the data points as your sole source for research. Feel free to correct me/add "color"
Whiting audiocast: no slides available yet.
Big takeaways for me on this presentation:
- Multiple pay zones
- Pronghorn Sands part of the Bakken formation, not the Three Sands
- WLL location numbers very, very conservative
- Low-cost driller
- Reason for differential at Clearbrook
- 10-year inventory of drilling
- Vertical wells in the Red River, no fracking, almost a sure thing, $3 million each
- Disclaimer: probable and possible reserves published unlike some other companies
- De-risked: definition on the slide (which I don't have)
- 86%, up from 83% last year; the percentage of oil will keep going up
- Rocky Mountain (Bakken), Mid-Continental, Permian (EOR project -- 1 billion bbls)
- Majority of production from the Bakken
- Reserves: 305 boe to 345 boe/ 13% increase yoy
- Per share value on reserves: $61
- Debt: $10/share
- Can get share value to $80/share
- Completed their Belfield gas plant, late 2011; 10 million cfd
- February 1: Lewis and Clark prospect, Pronghorn -- via pipeline
- $136 million budged for new acreage; could change significantly; that's where they are starting
- Sanish is pretty much all booked; 70 locations not yet in proved
- > 1,000,000 gross acres; 680,000 net acres
- Lewis & Clark: Three Forks; a bit of Pronghorn, but very limited in thickness
- Pronghorn: much thicker Pronghhorn Sands
- Pronghorn is definitely part of the Bakken formation, not the Three Forks
- Sanish and Cassandra: B Zone of the middle Bakken; started leasing 6 years ago due to the
- Tarpon, M: moved down one layer; down to the C Bench of the middle Bakken; looks more similar to conventional -- porosity and permeability;
- Hidden Bench: fully de-risked; numerous operators here; great area
- Tarpon: only one well -- 7,000 boepd, record; best well in the Bakken so far
- Missouri Breaks: "de-risked" -- but Whiting had not drilled a well yet; very excited; similar to Hidden Bench and Missouri Breaks; in between Rough
- Starbucks: JV this one; will perform well, EUR 350; just doesn't compete with our other prospects; if no JV, WLL will go it alone
- Lewis & Clark, Pronghorn: middle Bakken doesn't exist; Three Forks and Pronghorn Sands (part of the Bakken formation)
- Big Island: vertical Red River wells; scheduled to be drilled during the winter months; no fracking required; C Zone; $3 million cost; no hyperbolic decline; EUR 400K; the play is working because of 3-D seismic; drilled four; successful on three; first one was unsuccessful -- due to old seismic data -- drill 49 locations; one rig
- No inventory: WLL shows their de-risked locations -- 3+ years drilling in front of them
- WLL gets lots of grief for no growth; "it's all Sanish"; WLL says look at wells for 1280 -- Hidden Bench WLL says 2 wells/1280 -- other operators say 4 - 8 wells/1280 -- if WLL went to 4 - 8 wells/1280 -- 10 year inventory for WLL; possibly 4 wells, but not 8 wells; WLL's location count is very, very conservative
- Missouri Breaks/Starbucks: locations not listed yet; more growth
- Sanish: 350 - 600 EUR boe
- Sanish: 800 boe EUR
- Most other prospects should be at the upper end; some prospects at 350 EUR (all boe)
- 30-, 60-, 90- production: need to see the slides
- This is the one he wants to talk about; a lot of grief about the Pronghorn; analysts say the Pronghorn not that good; WLL disagrees -- Pronghorn wells are very, very good; need to see the slides; Marsh well; Brunei well; they think they are getting great wells with the Pronghorn; they think it will compete with Sanish; most not yet producing for 30 days so no 60-day, 90-day production
- Clearbrook capacity being increased to take ND Bakken
- ND state November production: >500,000 bopd
- January and February: highest differentials at Clearbrook, -$13 from NYMEX; low demand this time of the year; refinery turnaround for this reason; west coast refineries turning around now; demand not there; differential will shrink in the spring
Q: WLL is low cost drill in the Bakken. How to improve?
A: WLL plans to just focus on production big time. Costs: multi-well pads in the Sanish; Pronghorn -- half their rigs at the Pronghorn; many on multi-well pads; $8.8 million/well on multi-well pads -- remember, these are long laterals; the $8.8 million includes completion, buildings, etc. He says actual drilling costs for a WLL well is $6.4 vs $7 million average for others. 17 days to drill a well in Sanish; 23 days outside of Sanish; so they can get six more days off the Pronghorn wells, for example
Q: Opportunities for more acreage in the Bakken at good prices?
A: No.
From the slides: Pronghorn 4Q11 Completions, in BOEPD
- Pronghorn Federal 34-11TFH, 1,645
- Pronghorn Federal 21-14TFH, 1,849
- Brueni 21-16TFH, 889
- Mastel 41-18TFH, 3,218
- Marsh 21-16TFH-R, 2,694
- Obrigewitch 11-17TFH, 1,740
- Pronghorn Federal 21-13TFH, 3,225
- Pronghorn average: 2,184
