Sunday, May 11, 2014

Random Update Of A QEP In The Helis Grail -- EOG Isn't The Only Company With Huge Wells

Just for the fun of it, as I update some "old" wells. The well file for #25186 was for all three Bert wells (#25186, #25187, and #25188):

  • 25186, 2,170, QEP, Bert 1-2-11BH, Grail, t10/13; cum 103K 3/14; 21 miles southeast of Watford City; "the intended targeted reservoir is the Middle Bakken Sandstone and the Three Forks dolomite reservoirs of the Grail oil field." The Upper Bakken Shale (Devonian) was 23 - 25 feet thick; visibly saturated with oil, typical of petroliferous shales. The Middle Bakken (Devonian) the target formation for both the Bert 1-2-11BH and the Bert 2-2-11BH is a siltstone/sandstone unit in the Grail field...with oil took 11 days to drill the lateral for Bert 2-2-11BH and 17 days for the Bert 2-2-11TH .. the well file has the final cross section interpretations for the Bert 1-2-11BH, Bert 2-2-11BH 7 Bert 2-2-11TH. A generalized target zone was generated from the base of the upper packestone shoal to 23 feet below the upper Bakken Shale. This zone as maintained for an estimated 98% of the Bert 1-2-11BH and Bert 2-2-11BH laterals. The Three Forks target in the Bert 2-2-11TH was defined from 18 feet below the top of the Three forks to 33 feet below the top of the Three Forks at the top of the Massive Dolomite. The target zone was maintained for 90% of the lateral with a slight deviation below the target due to ineffective slides. Overall, all three lateral legs averaged 89.65 degrees down dip with minute variations due to the perpendicular  distance between the wells.
Production of Bert 1-2-11BH only:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Could The Market Surge?

I am unable to find it, but several weeks ago I posted my thoughts on the economy this year, from an investor's point of view. Regular readers know I am an incurable optimist. No matter how bad the economic news, I remain bullish on the American economy.

In that post I can't find, I opined that most likely the economy in 2014 would just meander along, not making much movement, but the general trend would be "up" as measured/tracked by the stock market. I said that in "my reality arena" I did not expect a sudden surge or a sudden turnaround.

However, in "my crazy arena" I said there are tea leaves that suggest the economy could jump significantly, taking everyone by surprise.

In the reality arena, the numbers do not look good: the real unemployment numbers, the housing numbers, the debt, the deficit.

But in the crazy arena, there are some interesting things to note. Last quarter's GDP was reported as 0.1 and on revision may come in below zero, a contraction in the economy for 1Q14. But now we are hearing that the GDP for the current quarter, 2Q14 GDP, could approach 4%.

This is what I'm talking about, from MarketWatch:
The U.S. economy has warmed up after a frigid first quarter and there’s no reason to expect it to cool off again anytime soon.
A cluster of economic reports this week, spearheaded by sales at retail stores, are expected to show a faster pace of growth in April and May. And all trends point to the nation’s gross domestic product climbing to a 3%-plus annual clip in the second quarter after hardly any growth in the first three months of the year.
Yet none of these reports, however rosy, will offer much clue on whether the economy will stay on a hotstreak after the second quarter ends.
At the same source, I ran across this headline story at MarketWatch:
Hang on, say some strategists. Rather than a wholesale rout, they expect the retreat in growth stocks to only cap the advance in the mega-cap benchmarks.
“It certainly will be a drag,” said Paul Nolte, portfolio manager at Kingsview Asset Management. “The S&P 500 won’t go significantly higher but you’ll see significant dramatic sideways action.”
Plus, record cash on corporate books may see its way to increased mergers and acquisition activity and investment — and that may replace growth as the next catalyst.
“The next step to that is merger activity,” Nolte said. “ It’s a way to grow business and earnings, where one plus one is greater than two.”
Again, in the reality arena, "the S&P won't go significantly higher," but in the crazy arena, once some big-name M&A stories are told, it's very possible the market could surge. I honestly don't think that will happen, but I won't be surprised if this turns out to be a very, very interesting (and rewarding) year for investors.

While searching for that earlier post, I was reminded of all the energy companies that have increased their dividends this year or have announced that they will be increasing their dividends -- another reason that keeps me so optimistic. Companies don't increase their dividends if they think they are going to have to manage some difficult economic news.

As far as I can tell, all the bad news has been announced and baked into the numbers going forward, most importantly: ObamaCare, the deficit, and the debt.

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here. 

Three Random Observations From EOG's 1Q14 Earnings Conference Call

Link here to SeekingAlpha. The original post on EOG's 1Q14 earnings call was here.

We modeled our Eagle Ford production for the next 10 years. If we increase this year's 520 net wells by a modest amount and hold that number flat through 2024, our Eagle Ford oil volumes increase every year. The Eagle Ford will draw a free cash flow this year and every year through 2024.
In our model, we haven't assumed any improvements in well productivity or well cost. We've maintained the status quo. We’ve talked about the 6,000 net remaining locations on our acreage. 
Third, perhaps the most important comment in the call:
The Company is not so much focused on production growth. We're really focused on capital return, and that is what drives EOG. We're not interested in drilling low return wells to grow production. So we're going to very much stay focused and very much stay disciplined in our CapEx plans. So the plays have to have a very strong rate of return before we're going to spend money on them.

For The Archives: The Expanding Williston Footprint; Global Warming Shuts Down I-80 In Wyoming

When I was growing up in Williston, the boundaries were pretty much:
  • east: University Avenue
  • north: Spring Lake Park
  • west: the bypass
  • south: the railroad tracks
In the graphic below, the blue-outlined rectangle delineates the "Williston" footprint that existed when I grew up. It was approximately rectangular 2.5 sections by 2 sections, and then with a bit of the "Million Dollar Way up to Spring Lake Park included.

Williston has expanded to the west, but the greatest growth has occurred north of Spring Lake Park.  The west has seen the most residential growth but the north is yet to fill in.

Williston Footprint Outlined In Blue Before The Bakken Boom (before 2010)

Rumor: the new airport will be in section 35-155-101 or thereabouts. The rumor comes from an extremely unreliable source and I wouldn't put much stock in it, but it will be interesting to see how this plays out twenty years from now. For the archives.

I-80 Closed Due To Global Warming

Let's see, this is the middle of May. I-80 is closed due to a winter storm. I sure hope Algore wasn't trying to get home from skiiing in the Rockies.

A screenshot (because the link is dynamic):

 At the link, one will see that portions of I-25 are also affected though not yet closed.

Random Look At A Busy Section In The Sanish; Herefords, Buelingoes, And Limousins


December 3, 2015: the Buelingo permits were canceled.
Original Post
I track the CLR Limousin wells here. Regular readers remember my post on CLR's Hereford and Buelingo wells. Now we have the Limousin wells.

May 11, 2014: this is where we stand today in section 3-152-93 in the Sanish:
  • the eight-well CLR Limousin pad (see original post): all wells on confidential; one rig on the pad
  • 17544, 2.164, Whiting, Lacy 11-12H, Sanish, spacing ICO,  t5/09; cum 338K 3/14;
  • 19221, 1,466, Whiting, Ness 21-3H, Sanish, 2 secs; t1/11; cum 148K 3/14;
  • 19222, 1,100, Whiting, Bartleson 21-3H, Sanish, 2 secs; t2/11; cum 124K 3/14;
  • 26411, loc, Whiting, Ness 21-3TFH, Sanish,
  • 26412, drl, Whiting, Hansen 21-3H, Sanish,
A screenshot of the section as it appears today:

And for those wondering about the origin of the "Limousin" as I was:

North Dakota Limousin Auction

I remember my dad taking me to Sitting Bull auction just west of Williston when I was very, very young. I do not recall if Raymond Lee was one of the auctioneers out there or not, but he sure could have been.

And, of course, you all could have guessed what was coming up next:

The Auctioneer Song, Leroy Vandyke

EOG Reports A Huge Well Monday -- The Bakken; The Train Wreck In Slow Motion

Active rigs:

Active Rigs192185209176114

Monday, May 12, 2014
  • 25661, 65, EOG, Wayzetta 25-1617H, Parshall, middle Bakken, 35 feet, 25 stages; 10 million lbs, t12/13; cum 49K 3/14;
  • 26246, 500, CLR, Bildt 1-25H1, Leaf Mountain, t4/14; cum 2K 3/14;
  • 26295, drl, HRC, Fort Berthold 148-94-35C-26-3H, McGregory Buttes, no production data,
  • 26721, 1,268, CLR, Colter 6-14H2, Bear Creek, t3/14; cum 14K 3/14;
  • 26846, drl, Hess, EN-Weyrauch-154-93-1918H-9, Robinson Lake, no production data,
Sunday, May 11, 2014
  • 25862, 1,312, Newfield, Holm 150-98-5-8-2H,  Siverston, t3/14; cum 18K 3/14;
  • 26426, drl, Murex, Brayden Alexander 20-17H, Writing Rock, one day of production,
Saturday, May 10, 2014
  • 25798, drl, CLR, Lannister 1-23H1, Leaf Mountain, no production data, 
  • 26046, drl, BR, Capitol 14-7MBH, Westberg, no production data,
  • 26117, drl, HRC, Pasternak Trust 157-100-19C-18-3H,  Marmon, no production data,
  • 26375, drl, KOG, P Vandeberg 154-99-1-1-12-16H,  Stockyard Creek, no production data,
  • 26461, 1,982, MRO, Skold 34-35TFH, Reunion Bay, t3/14; cum 9K 3/14;
  • 26881, conf, XTO, FBIR Guyblackhawk 24X-27E, Heart Butte, no production data,

25661, see above, EOG, Wayzetta 25-1617H, Parshall:

DateOil RunsMCF Sold

The Train Wreck Continues -- As If In Slow Motion

Politico is reporting:
Nearly half a billion dollars in federal money has been spent developing four state Obamacare exchanges that are now in shambles — and the final price tag for salvaging them may go sharply higher.
Each of the states — Massachusetts, Oregon, Nevada and Maryland — embraced Obamacare, and each underperformed. All have come under scathing criticism and now face months of uncertainty as they rush to rebuild their systems or transition to the federal exchange.
The federal government is caught between writing still more exorbitant checks to give them a second chance at creating viable exchanges of their own or, for a lesser although not inexpensive sum, adding still more states to The federal system is already serving 36 states, far more than originally anticipated.
I remember when we first startied talking about ObamaCare: it was the intent that states develop their own websites. It became somewhat of a joke to watch the ObamaCare apologists tell us that the states opting out were out of the mainstream. Thirty-six states are now completely supported or supported at least to some extent by the federal website. One can assume that four more states will soon join this merry band of thieves.

By the way, this is simply income redistribution, exactly what some folks in Washington, DC, want: redistributing taxpayer's money to those working on websites, many of whom might actually be US citizens. Except for those working in Bangladesh.

Slope County Permits

Note: Slope County is in southwestern North Dakota. Historically there has been very little activity in this county with the exception of the far southwestern corner of the county. The Cedar Hills field extends up from Bowman County; that's where all the Red River activity is located in this area, along the Montana-North Dakota state line.

The interest in the Tyler is at the far northeastern corner of Slope County, north and east of Amidon, the county seat. By the way, a new county courthouse is being built in Amidon; it should be completed this summer. WDAY reported:
A southwestern North Dakota county that has the distinction of being in one of the least populated counties in the country is building a new $4 million courthouse.
Slope County has about 760 residents and 30 of them live in the county seat of Amidon.
I made the mistake of not taking some photographs when I drove through Amidon (twice) on my most recent trip back to the Bakken. 

Permits/Wells In Slope County

26794, 88, MRO, Rundle Trust 21-29TH, wildcat, Tyler, t4/14; cum 158 bbls;
26335, conf, MRO, Powell 31-27TH, wildcat,
26223, dry, MRO, Rundle Trust 11-29TH, wildcat; problems with the well, immediately drilled #26794 above

22702, PNC, Silver Oak, Sonsalla 1-27H, a Red River B well, Cedar Hills,

20950, TA, Silver Oak, Rankin 1-35H, a Red River B well, Cedar Hills, t2/12; cum 5K 9/13

19862, 86, CLR, Flor 24-19NH, Cedar Hills, a North Red River B well, t4/11; cum 94K 3/14;
19507, 336, CLR, Glendive Lodge 21-30NH, a North Red River B well, t11/10; cum 15K 3/14;


17671, 305, CLR, Andrew 11-32H, a North Red River B well, Cedar Hills, t2/09; cum 226K 3/14;
17670, 435, CLR, Andrew 11-32SH, a North Red River B well, Cedar Hills, t5/09; cum 149K 3/14;
17657, 302, CLR, Glendive Lodge 44-30SH, a North Red River B well, Cedar Hills, t12/08; cum 165K 3/14;
17656, 186, CLR, Glendive Lodge 44-30NH, a North Red River B well, Cedar Hills, t4/09; cum 225K 3/14;
17591, 409, CLR, Andrew 22-32NH, a North Red River B well, Cedar Hills, t3/09; cum 391K 3/14;
17589, 507, CLR, Andrew 22-32SH, a North Red River B well, Cedar Hills, t2/09; cum 146K 3/14;
17138, 297, CLR, Andrew 24-32SH, a North Red River B well, Cedar Hills, t11/08; cum 214K 3/14;
17031, 203, CLR, Andrew 24-32NH, a North Red River B well, Cedar Hills, t10/08; cum 352K 3/14;


16289, 140, CLR, Andrew 44-32NH, a North Red River B well, Cedar Hills, t10/06; cum 284K 3/14;
16105, AB/SI, CLR, Masa 1-32, a vertical well, a Pierre well, wildcat, never completed

Human Interest Story On Mountrail County Leaders -- The Hynek Brothers --Retiring

The Bismarck Tribune is reporting:
Brothers whose capable hands helped steer Mountrail County and its biggest city through the Bakken boom phenomenon are going farming and fishing instead.
David and Mike Hynek, with roots four generations deep in the slough-filled, oil-drilled countryside of home, say they've fought the hard fight long enough.
Each has been a valuable public servant, bringing to bear decency and the example of a father who prized work above rhetoric on an industrial growth frenzy that may never be repeated.
David Hynek, 67, will leave the Mountrail County Commission after 17 years. Mike Hynek, 55, will leave the mayor's spot on the Stanley City Council after eight years and four earlier on the council.
Much, much more at the linked article about the challenges in the Bakken. A very, very good article.

I Assume It's Polarized Only When Your Side Loses

The New York Times is reporting:
When the Supreme Court issued its latest campaign finance decision last month, the justices lined up in a familiar way. The five appointed by Republican presidents voted for the Republican National Committee, which was a plaintiff. The four appointed by Democrats dissented.
That 5-to-4 split along partisan lines was by contemporary standards unremarkable. But by historical standards it was extraordinary. For the first time, the Supreme Court is closely divided along party lines. [Really? For the first time? That's hard to believe.]
The partisan polarization on the court reflects similarly deep divisions in Congress, the electorate and the elite circles in which the justices move.
But yes, it was much better when we were getting 9-0 decisions when FDR packed the Supreme Court. Americans at least thought there was agreement somewhere.

And yes, the justices move in very elite circles.

Owning North Dakota Oil Leases For As Little As A Dollar An Acre -- Results Of The May, 2014, Oil And Gas Lease Sales

Link here

Billings County
  • most tracts were 80 acres
  • most went for $150 - $375/acre
  • one tract as high as $650/acre
Bowman County
  • a dollar an acre for many 80-acre tracts
  • many $5/acre tracts
  • about a third of the tracts went for $80 - $120/acre
Burke County
  • in the $400 range/acre for the most part
Divide County
  • one 80-acre tract for $13,100/acre (18-97-145)
  • one 40-acre tract for $2,900/acre
  • most acreage in the $400/acre range; but a lot for under $10/acre
  • NOG took advantage of the cheap acreage
  • Golden Valley
  • you could have gotten in for $1/acre
McKenzie County
  • $14,000/acre
Mercer County
  • $11/acre
Mountrail County
  • one tract only, 50 acres; $170/acre, Irish Oil & Gas
Renville County
  • mostly $35 and under per acre
Stark County
  • $150 to $300 for the most part
Ward County
  • perhaps the most acreage of any county; $30 - $40/acre
Williams County
  • $3,000 to $4,000 with one 40-acre tract going for $12,000/acre, Vitesse Oil
  • a $6,200/acre tract and a $5,100/acre tract

Anschutz To Test The Tyler And The Red River In Slope County? A Random Update Of Some Red River Wells; The World Is Running Out Of Carbohydrates -- SeekingAlpha

Back in 2006, when oil companies were starting to drill a lot of Bakken discovery wells, they were also drilling a number of other formations, including the Red River (very successful in the southwestern part of the state, a few Madison wells, and a few Birdbear wells (not so successful).

In a more recent post, I noted that MRO was looking for two more permits to test the Tyler in Slope County.

This morning a reader wrote me that an operator, possibly Anschutz, plans to drill 12,000 feet into the Deadwood to test the Tyler and the Red River. For the stratigraphic, click here. The Three Forks should also be this far south, but not the middle Bakken. Specifically, this would be in section 29-134-104. I'm trying to remember to use an earlier post to keep track of this activity.

It is my understanding that Anschutz exited North Dakota completely in 2010:
The Anschutz Exploration Corporation (AEC) announced today that it has closed the sale of its remaining operated and non operated producing properties and undeveloped acreage in the Williston Basin of Montana and North Dakota to an undisclosed Canadian oil company for $115 million. 
“With this sale, AEC has now exited the Williston Basin after a successful Bakken and Mission Canyon program that began in 2004. Our continuing focus is on emerging shale oil plays in the U.S. on AEC leasehold of over one million net acres, located primarily in Texas, Montana, Colorado and New York.”
In December 2010, Anschutz sold its principal Dunn County acreage position in the Williston Basin to Oxy USA for $1,400,000,000 and sold its Appalachian Basin position in Ohio and Pennsylvania to Chesapeake Energy Corporation for $850,000,000, and retained its acreage and production in New York. 
However, I wouldn't be a bit surprised if Anschutz resurfaced in North Dakota.  A "well search" at the NDIC web site revealed not less than ten (10) oil companies affiliated with Anschutz over the years.

A Random Look At Some Red River Wells In Southwestern North Dakota

This is by no means a complete list, but I am continuing to go through every well that was drilled in North Dakota in 2006. I track the "monster wells" here. The post above discusses the Red River formation. Here is a partial list of some great Red River wells drilled in 2006 and still active (note the relatively small IPs and the total oil produced approaching one million bbls by some of these wells drilled less than 10 years ago:
  • 15659, 301, BR, CHSU 11D-33SH 15, t2/05; Cedar Hills field, cum 836K 3/14; still producing 3,300 bbls/month; South Red River B well; 
  • 15828, 673, Denbury Onshore, CHSU 13C-11SH 16, Cedar Hills, t12/05; cum 826K 3/14;
  • 15829, 374, Denbury Onshore, CHSU 13C-11NH 16, Cedar Hills field, t10/05; cum 733K 3/14;  South Red River B well;
  • 15837, 634, Denbury Onshore, CHSU 13C-14NH 16, Cedar Hills, t12/05; cum 594K 12/13;
  • 15847, 342, Denbury Onshore, CHSU 24C-14NH 16, South Red River B, t9/05; cum 712K 11/13
  • 15849, 188, Denbury Onshore, CHSU 31B-3NH 26, South Red River B, t8/05; cum 646K 11/13;
  • 15850, 190, Denbury Onshore, CHSU 33B-33NH 26, South Red River B, t8/05; cum 431K 11/13;
  • 15907, 752, Denbury Onshore, CHSU 33C-10SH 16, Cedar Hills, South Red River B, t2/06; cum 1.13 million bbls; still producing 3K bbls / month; 1/14
  • 15939, 773, Denbury Onshore, CHSU 13C-10SH 16, Cedar Hills, t3/06; cum 790K 12/13;
  • 15940, 483, Denbury Onshore, CHSU 13C-10NH 16, Cedar Hills t4/06; cum 552K 12/13;
  • 16008, 329, BR, CHSU 42C034NH 26, s2/06; Cedar Hills field, cum 857K 11/13; 
  • 16120, 383, Denbury Onshore, CHSU 13C-29SH 26, Cedar Hills, South Red River B, t6/06; cum 535K 3/14; 
  • 16122, 155, Denbury Onshore, CHUS 22C-5SH 16, Cedar Hills,  South Red River B, t6/06; cum 610K 3/14;
  • 16123, 349, BR, CHSU 22D-5NH 16, t6/06; Cedar Hills, cum 899K 3/14; 
  • 16125, 199, Denbury Onshore, CHSU 11B-29SH 26, Cedar Hills, South Red River B, t8/06; cum 482K 3/14;
  • 16126, 605, Denbury Onshore, CHUS 33C-5SH 15, Cedar Hills, South Red River B, t8/06; cum 672K 3/14;
  • 16127, 362, Denbury Onshore, CHSU 33C-5NH 15, Cedar Hills, South Red River B, t8/06; cum 664K 3/14;
  • 16149, 410, Denbury Onshore, CHUS 44D-29NH 26, Cedar Hills, South Red River B, t5/06; cum 547K 3/14;
  • 16150, 316, Denbury Onshore, CHUS 44C-29SH 26, Cedar Hills, South Red River B, t5/06; cum 691K 3/14;
  • 16151, 551, Denbury Onshore, CHUS 24C-29NH 26, Cedar Hills, South Red River B, t8/06; cum 556K 3/14;
  • 16152, 37, Denbury Onshore, CHUS 24C-29SH 26, Cedar Hills, South Red River B, t8/06; cum 518K 3/14; 
  • 16155, 120, Denbury Onshore, CHUS 41D-32NH 26, Cedar Hills, South Red River B, t7/06; cum 557K 3/14; 
  • 16156, 231, Denbury Onshore, CHUS 41D-32SH 26, Cedar Hills, South Red River B, t5/06; cum 485K 3/14;
  • 16242, 405, BR, CHSU 11C-5NH 05, t8/06; Cedar Hills, cum 867K 1/14;  still active;
Humor for the Day

From a SeekingAlpha article:
They are amongst the biggest and most profitable companies in the world, the big oil, gas, and (to a lesser extent) coal companies. But whether they're good longer-term bets for investors is very much in doubt. It isn't that the world is running out of carbohydrates, peak-oil keeps ever receding into the future.

Receding INTO the future? 

And that's when I stopped reading the article.

A Well Blow-Out North Of Tioga? Ron Burgundy 3-23-14H


May 13, 2014: the wells is under control. All further updates will be at this post

May 12, 2014: The Dickinson Press is reporting --
State and local officials are responding to a well control incident at an oil and gas well northwest of Tioga, the Department of Mineral Resources said Monday.

Crews reported losing control of the well about 8 p.m. Friday and an unknown amount of oil, gas and water has been released, said Kris Roberts with the North Dakota Department of Health.
The release has been contained to the site, Roberts said.
The well, owned by Emerald Oil, is called the Ron Burgundy 3-23-14H well and is eight miles northwest of Tioga, the Department of Mineral Resources said.  
Original Post

I was sent a note overnight that there might be a well blow-out north of Tioga. Not confirmed.