Wednesday, October 30, 2013

Thirteen (13) New Permits; Some Great Wells Reported; Update On A Well That Was Being Re-Fracked

Someone recently asked if I had any update regarding any MRO wells that were going to be re-fracked. Look at the note at the bottom of this post.  

I don't see any wells coming off the confidential list Thursday.

Active rigs: 182

Thirteen (13) new permits --
  • Operators: Oasis (5), Abraxas (4), Slawson (2), OXY USA (2)
  • Fields: North Fork (McKenzie), Camp (McKenzie), Big Bend (McKenzie), Fayette (Dunn), Manning (Dunn)
  • Comments:
Wells coming off the confidential list were posted earlier; see sidebar at the right. 

Six (6) producing wells completed:
  • 25186, 2,170, QEP, Bert 1-2-11BH, Grail, t10/13; cum --
  • 24299, 1,687, HRC, Fort Berthold 148-95-13A-24-3H, Eagle Nest, t9/13; cum --
  • 23505, 2,147, HRC, Fort Berthold 152-93-17D-08-7H, Four Bears, t9/13; cum --
  • 23554, 2,909, HRC, Fort Berthold 152-94-14D-11-4H, Antelope, t8/13; cum 40K 8/13;
  • 25235, 2,285, BR, Everglades 21-3TFH, t8/13; cum --
  • 25279, 2,966, BR, CCU Williams 24-20MBH, t10/13; cum --
There were five well name changes, none seemed significant, except American Eagle's Wade well in Divide County will now be an Olaf well. 

Marathon has temporarily abandoned:
  • 16987, TA/373, MRO, Willard Kovaloff 21-17H, NENW 17-144N-95W,  Murphy Creek, t6/08; cum 102K 8/13; it was taken off-line for all practical purposes in November, 2011.  This wells was fracked with one (1) stage using 543,300 lbs of sand; an open hole frack, 6/16/2008. Then this note dated 5/9/12:  "After fracking the first stage, plug and perf tools were lost in the well at 13,878 feet. Work was done to try and retrieve; to no avail. Frack was stopped at that time. Flowed back some water, but no oil. One stage was fracked using 67,452 lbs of proppant. 

To the best of my knowledge, there is no Bakken operator with the name noted below, so I assume whoever sent me this letter anonymously is, in fact, a figment of one's imagination.

October 29, 2013

From: Bakken's Best Oil & Gas Exploration Company
To: [redacted]

Dear Jim,

As you know, you've been receiving in excess of $80,000/month (on average) in royalty payments for the well drilled in section [redacted] for the past year or so. It is an incredible well and we had hoped to drill several more Bakken and Three Forks wells on that drilling unit. That well is too remote to economically lay a natural gas pipeline.

Based on the NDIC ratio of 80-1, and the amount of natural gas flared from the existing well, you would be receiving about $56/month if we gathered, processed, transported, and sold the "wet" natural gas from that well, in addition to the (average) $80,000/month you have been receiving for quite some time.

As you know, you collect royalties on any flared natural gas after the initial natural gas royalty-free period.

We notice that you have joined the class action suit, claiming that we underpaid you for the natural gas that was flared after the initial natural gas royalty-free period.

Our records show that we made all the correct payments during this time period. It appears we will sort that out later.

For now, however, as you know, operators desire a good working relationship with mineral owners. I assume you are also aware that there are thousands, maybe tens of thousands of well sites that need to be drilled. Many of those sites are located in areas with better prospects than "your" well.

Although we had planned to drill upwards of ten more wells on that spacing unit, netting you untold millions of dollars in royalties, we have decided to move the rig elsewhere and concentrate on wells and areas where natural gas pipelines exist. This has nothing to do with the class action lawsuit, per se. It simply brought to our attention that you want us to be good stewards of the environment. So, we will drill where it makes sense to lay natural gas pipelines, construct natural gas processing plants, and where we have customers for that natural gas (which is becoming more and more difficult to the relative glut of natural gas in the United States).

We don't expect to get back to your area for several years. Off the record, we have learned that the Sierra Group might have found a pair of breeding sage grouse on your land, and it is our expectation that over the next few years, the environmental groups will succeed in their efforts to get this area declared a "safe zone." By that time, the decline rate of a Bakken well will mean that your royalties will .... well, you get the picture.

Sincerely yours,

CEO, Bakken's Best Oil & Gas Energy


Disclaimer: I'm pretty sure the letter above is fictitious. There is no group that I know of by the name, "Sierra Group."The writer probably meant to say "Sierra Club."


Okay, if you've read this far: it is a fictitious letter. Completely made up. Consider it an op-ed piece.

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