Welcome.

If you've come from this page via a "bookmark," I have updated the welcome page here. 

******

[For a very interesting comment about maximizing a pad -- 6 wells, 12 laterals on one pad, see today's comment on the Eco-Pad page. December 16, 2009.] 


I opined not too long ago that 2010 will be a watershed year for the North Dakota oil industry. Today's daily activity report suggests that the new year may have started a bit early.  Ten (10) well files were released from confidential status, including seven (7) by EOG. The average IP for the seven EOG wells was: 1120 boepd.  They were all incredible wells based on their IPs.  In addition, five (5) new permits were granted, including another one for EOG, one for KOG, two for CLR, and one for Marathon. December 14, 2009.

• This is why I'm excited about the Bakken [All "Teegue" links are broken.](Click on the link.) 

• 500,000 barrels of oil in one month (October, 2009) from 43 EOG wells in one county.
• $100,000,000 wellhead production in three months from EOG/Hunt wells in Mountrail County.
  

• KOG just announced a nice well in the Fort Berthold Indian Reservation on December 6, and another nice one December 11, 2009.

• For those who have forgotten "recent history" regarding natural gas, this is a great article.
  

• XOM will buy XTO, a significant player in the Bakken. XOM is now in the Bakken. With one deal, there could be another huge cash infusion into the North Dakota oil industry with XTO having new capital to expedite drilling program. Even CNBC mentioned "the Bakken in North Dakota" right after this deal was announced.
  

WELCOME

December 8, 2009: I am accused of being inappropriately exuberant when it comes to the North Dakota oil industry, but who can blame me when you read the Whiting press release, dated December 8, 2009?  This is an incredible press release. Follow a discussion of this press release here [All "Teegue" links are broken.]

1. WLL announced four wells with the following IPs: 1,970; 2,638; 2,223; and 2,140 boepd.

2. The purpose of the press release: one of the wells was a discovery (wildcat) well (1,970 boepd) targeting the Bakken. This was a re-entry well; a well that had been producing from the Birdbear formation as recently as July, 2009. WLL will drill ten wells in the area and will open up an entire new area for WLL and the Bakken.

3. WLL also announced completion of a new pipeline connecting ALL their wells in the Sanish-Parshall, taking one-third of truck traffic there off the road. This WLL pipeline connects with an Enbridge pipeline. This is a biggie, especially if you use the roads in Mountrail County.

4. The discovery well is  Federal 32-4HBKCE. My guess is that the letters stand for H (horizontal) BK (Bakken) CE (casing exit). 

December 14, 2009: Four dots in the Bakken to connect:

1. October, 2009: Several producers / investors in the Bakken (including BEXP, KOG, NOG) raised large amounts of cash through new share offerings. [In December, BEXP's partner, US Energy (USEG), also raised cash through new share offering.]

2. November, 2009: Record-setting North Dakota state land lease auction. Slawson particularly notable in its bids.

3. December, 2009: record-setting (?) docket on tap for December 17, 2009, North Dakota Industrial Commission hearing.

4. December, 2009: XOM is in the Bakken with its purchase of XTO. 

 ***** 

NEWS

*****

For those who have never visited North Dakota in person, this picture shows you why I love my state. Absolutely gorgeous. Only a white-out (blizzard) would make the picture more exciting!

 *****

BEXP looking good. See Bakken: BEXP. December 16, 2009.

WLL has another big well -- 2,250 bopd, the Rohde 44-1H in Mountrail County, November 27, 2009.

WLL now up to 8 rigs. Total number of active rigs in North Dakota now up to 77. December 16, 2009. 

*****

For those who have read the "welcome" to this site, you may want to skip directly to:

Do I Need to Curb My Enthusiasm? EOG -- 570 more wells in the Parshall?
Whiting's November corporate presentation.
The NEW presentation by Harold Hamm, CLR/CEO.
Things on my mind.
Trends in the North Dakota oil industry.
FAQs about the North Dakota oil industry.
Oil Wells Reporting.
Active rigs now up to 75. From a low of "about 33" summer of 2008.

...it is absolutely incredible how fast "they" can move these rigs in. In less than a week, four new rigs have been moved into North Dakota. Can you imagine how long it would take if this industry was run by the US government?

WELCOME: Background
(Nothing below has changed)

The purpose of this site is educational only. It is an attempt to provide an overview of "the Bakken" and to direct folks to the news stories coming out of the North Dakota oil industry. It is very, very superficial in scope. I probably understand about 1 percent of all that goes on in the industry (if that much). I have a poor memory and often make simple mistakes, but will correct them when I become aware of them. I find myself making more typographical errors as the years go by.

I grew up in Williston, in the heart of the Williston Oil Basin (WOB) and have followed the oil industry my entire life, in a very general way. I invest in publicly traded companies through the stock market, but my investments in WOB are trivial compared to my overall investment portfolio. I own no mineral rights, and have no inside information regarding the WOB. I do talk with people who live there and occasionally receive information second- and third-hand. I do not subscribe to any newsletters or the North Dakota Industrial Commission website tools, although I may do that sometime in the future (subscriptions are relatively inexpensive).

I enjoy following the activity in the WOB, but am not sure that investing in the oil companies in the WOB is the best way to go; there are many other opportunities in the stock market that might be better. At the current time, of the Williston Oil Basin-related companies, I am invested in the following: MDU, BR (COP), CLR, NOG, ENB, EPD, EEP, BNI, SLB. I trade in and out of these companies with others in the WOB. I would never recommend any companies because everyone's investment styles are different. I am often accused of being too exuberant about the WOB, and I admit it. I find the oil activity in North Dakota very interesting. It's easy to be negative about things in life, so I tend to over-compensate in some areas by being too optimistic when it comes to the oil industry.

I am definitely a novice at all this, so if something I say doesn't seem correct, it may not be. There are many ways on the web to cross-check "facts."

The largest continuous oil reservoir in the continental United States.

WELCOME: The Blog

(Nothing below has changed)

The "old" Million Dollar Way was very eclectic: literature, music, "the Bakken," energy in general, and personal musings. Ninety-nine percent of visitors to the site visited only Bakken-related sites, and even then, only one or two specific pages. So, this site will, at least for the time being, concentrate on "the Bakken," more correctly the North Dakota oil industry. I have an emotional interest in "the Bakken." I wear my heart on my sleeve when it comes to "the Bakken." This is where I grew up. I have no background or connection with the oil industry. I own no mineral rights.

I am an investor, but my investments in "the Bakken" are trivial compared to my overall investments. I am more emotionally attached to "the Bakken" than interested in investments. I have no inside information. I do not subscribe to any premium services regarding "the Bakken." I no longer live in North Dakota, but I visit at least once a year and see first-hand what is going on. My information comes primarily from the NDIC website and the internet in general.

Occasionally I will get input third-hand or fourth-hand from someone I know still living in the Williston area. (Williston, North Dakota, USA, is at the center of the Williston Oil Basin, home of "the Bakken.") Bottom line: I'm pretty much a novice at all this. I know I will make many mistakes on this website but will correct them when brought to my attention.

I would not use my site to make investment decisions, although it may be one of several data points to lead you in certain directions. Much of what I write can look factual, when in fact it is opinion or my general understanding of the issue. Over time, I assume this site will evolve, based on reader feedback. As expected, it was hard not to have op-ed pieces, and some have already been added.

The site's name. The friends of the "old" Million Dollar Way know that the name of the site has nothing to do with money -- at least not directly in terms of me or investing. When I was growing up, the road leading out of Williston was known as the "Million Dollar Way" because of the automobile dealerships and businesses related to the oil industry.

The "Million Dollar Way" was my road out of town to an exciting life. This "Million Dollar Way" site is a new road leading me to new destinations.

Profile of Williston, North Dakota, USA.
North Dakota: Most Economically Stable State, November 2, 2009
The Oil Drum's Assessment of the Bakken, November 2, 2009
Harold Hamm's Assessment of the Bakken, December 7, 2009

*****

This blog seems to be optimized for Firefox/MacOS. I find errors in formatting when I check the blog on Internet Explorer browsers; perhaps they are older versions of Internet Explorer.


Last updated: December 14, 2009. Links were updated, November 28, 2014.

December 17, 2009: NDIC Docket

For my use. Summary of cases for the December 17, 2009, NDIC docket (a PDF file). Look at case 11939 down below.


Abbreviations:

Short: request for one 640-acre spaced well.
Long: request for one 1280-acre spaced well.
Pooling: request to pool one specific well.
Flare gas: request to flare gas.
Eco-Pad: request for four wells from one pad.

Case Number, Producer: notes. Oil Field. County.

11852, BTA: 7 longs. Williams.
11853, Fidelity, Murex, Oasis, Sinclair, Slawson, WLL: define the Sanish-Bakken pool.
11854: CLR: Eco-Pad; 8 shorts in all. McKenzie.
11855: CLR: 2 longs. McKenzie.
11856: CLR: 7 longs. Divide.
11857: CLR: pooling. Divide.
11858. CLR: 1 long. Divide.
11859, CLR: pooling. Divide.
11860, CLR: 1 long. Divide.
11861, CLR: 1 long. Divide.
11862, CLR: 1 long. Divide.
11863, CLR: 1 long. Williams.
11864, CLR: 1 long. McKenzie.
11865, CLR: pooling. Divide.
11866, CLR: pooling. McKenzie.
11867, CLR: pooling. Dunn.
11432 (cont'd), CLR: pooling. Bowman.
11722 (cont'd), CLR: pooling. McKenzie.
11868, BEXP: temporary spacing for  Strand 16-9 #1-H. Williams.
11869, BEXP: pooling. Williams.
11870, BEXP: pooling. Williams.
11871, BEXP: 1 long, Painted Woods. Williams.
11872, BEXP: 1 long. Williams.
11873, BEXP: 1 long, McKenzie.
11874, BEXP: salt water disposal.
11783 (cont'd), BEXP: 1 long. McKenzie.
11784 (cont'd), BEXP: 1 long, Painted Woods. Williams.
11778 (cont'd), BEXP: revoke Lario permit.
11779 (con'td), BEXP: revoke Lario permit.
11875, Encore: 4 longs, Charlson. McKenzie, Williams.
11876, Encore: 4 shorts, Charlson. McKenzie.
11877, Encore: 3 shorts, Charlson, McKenzie.
11878, Encore: 2 320-acre spacing. McKenzie.
11879, Encore: 3 longs. Dunn.
11880, Encore: 4 shorts. Dunn.
11881, Encore: 3 longs. Dunn.
11882, Encore, 10 shorts. Dunn.
11883, Encore: 4 shorts. Dunn.
11884, Encore: 4 longs. Dunn.
11885, Encore: 4 shorts. Dunn.
11886, Encore: 1 long. McKenzie.
11887, Hunt: 3 longs. Mountrail.
11888, Hunt: flare gas.
11889, Hunt: 2 longs. Mountrail.
11890, Hunt: 4 longs. Mountrail.
11891, Anschutz: pooling. Dunn.
11892, Anschutz: pooling. Dunn.
11893, Anschutz: pooling. Dunn.
11894, Anschutz: pooling. Dunn.
11895, Anschutz: pooling. Dunn.
11896, Anschutz: pooling. Dunn.
11897, Anschutz: pooling. Dunn.
11898, Anschutz: pooling. Dunn.
11899, Fidelity: 8 shorts. Mountrail.
11900, Fidelity: pooling. Mountrail.
11901, Fidelity: pooling. Mountrail.
11902, Fidelity: pooling. Mountrail.
11903, Fidelity: flare gas.
11904, Fidelity: pooling. Mountrail.
11905, Fidelity: pooling. Mountrail.
11906, Slawson: 2 shorts. Mountrail.
11907, Slawson: 2 shorts. Mountrail.
11908, Slawson: 2 shorts. Mountrail.
11909, Slawson: pooling. Mountrail.
11910, Slawson: pooling. Mountrail.
11911: Slawson: pooling. Mountrail.
11912: Slawson: pooling. Mountrail.
11913, Slawson: pooling. Mountrail.
11914, Slawson: pooling. Mountrail.
11915, Slawson: pooling. Mountrail.
11916, Slawson: pooling. Mountrail.
11917, Slawson: pooling. Mountrail.
11918, Slawson: pooling. Mountrail.
11919, Slawson: pooling. Mountrail.
11920, Slawson: pooling. Mountrail.
11921, Slawson: pooling. Mountrail.
11922, Slawson: pooling. Mountrail.
11923, Slawson: pooling. Mountrail.
11924, Slawson: pooling. Mountrail.
11925, Slawson: pooling. Mountrail.
11926, Slawson: pooling. Mountrail.
11927, Slawson: pooling. Mountrail.
11928, Slawson: pooling. Mountrail.
11929, Slawson: pooling. Mountrail.
11930, Tracker: pooling. Dunn.
11931, Tracker: pooling. Dunn.
11796 (cont'd), Tracker: 1 short. Dunn.
11932, Peak: pooling. McKenzie.
11933, Peak: flare gas.
11934, Peak: flare gas.
11935, Peak: flare gas.
11936, Peak: 1 short. McKenzie.
11937, Peak: 1 short. McKenzie.
11938, Peak: 5 shorts. Dunn
11939, EOG: 570 shorts. Mountrail.
11940, EOG: pooling. Mountrail.
11941, EOG: pooling. Mountrail.
11942, EOG: 1 long. Burke.
11943, EOG: pooling. Mountrail.
11944, EOG: pooling. Mountrail.
11945, EOG: pooling. Mountrail.
11946, EOG: pooling. Mountrail.
11947, Zenergy: 30 longs. McKenzie.
11948, Zenergy: 10 longs. Mountrail.
11949, Zenergy: 5 longs. McKenzie.
11950, Zenergy: 4 longs. Mountrail, McKenzie.
11951, Zenergy: 4 longs. Dunn.
11952, Zenergy: 2 longs. McKenzie.
11953, Zenergy: 8 longs. McKenzie.
11954: --
11955, Zenergy: 2 longs. McKenzie.
11956, Newfield: 3 shorts. Dunn.
11957, Newfield: 1 short. Dunn.
11958, Newfield: 1 short. Dunn.
11578 (cont'd), Newfield: spacing. Divide.
11689 (cont'd), Newfield: 1 short. McKenzie.
11690 (cont'd), Newfield: pooling. McKenzie.
11691 (cont'd), Newfield: 1 short. Divide.
11809 (cont'd), Newfield: 1 short. McKenzie.
11810 (cont'd), Newfield: 1 short. McKenzie.
11786 (cont'd), Credo: 1 long. McKenzie.
11764 (cont'd), Eagle: injection.

Not counting the 570 EOG wells  in case 11939, I count about 241 additional wells. I count about 78 Zenergy wells.  Any thoughts on "pooling" requests by Slawson. I  have my own ideas but won't publish them.

Note: until this month, I had never paid attention to "dockets."  It turns out that a docket with 19 pages is not unprecedented. The July 21, 2009, docket had 19 pages, and in that same month (July 29, 2009), there was another docket with 14 pages, actually a continuation from the 21st.  I counted a request for 323 wells in the July 21st docket, 218 wells on the 29th, making a total of 541 wells for that "one" docket in July, 2009. 

In 2009, there were an average of 18 pages of requests if one excludes the month of July. In July, there were 39 pages of requests, total.  The number of pages by month shows a trend: Jan (16 pages); Feb (14); Mar (13); Apr (14); May (16); Jun (15); Jul (39); Aug (24); Sep (18); Oct (21); Nov (28); and, Dec (29).  This continues to validate my hunch that 2010 is going to be a watershed year for the North Dakota oil industry if oil stays above $70/barrel. CLR has hedged 5,000 bopd for $80 between January and July, 2010.

For investors, I think the pipeline companies are going to be able to charge a surcharge to transport all the oil that will be produced.

Do I Need to Curb My Enthusiasm? -- December, 2009, NDIC Hearing Dockets

Question: is EOG looking at 570 more wells in the Parshall oil field? See below.

Should I curb my enthusiasm? At other discussion groups and through comments to this blog, I am told on a daily basis I need to curb my enthusiasm. Well, ....drum roll... I feel vindicated. Even the NY Times now recognizes that second tier companies have been buying up outstanding stateside acreage while the majors have missed the opportunity, spending their money acquiring and exploring acreage in politically unstable countries overseas. The story was buried deep in the business pages. December 15, 2009.

Question: is EOG looking at 570 more wells in the Parshall oil field?

I have no idea if this is a big deal or not. I have not followed "dockets" for the North Dakota Industrial Commission (NDIC) in the past so I have nothing with which to compare. But the NDIC has released the docket for December 17, 2009.

The December 17th docket is 19 pages long. Repeat: 19 pages long.

Let's look at one case, just one case from that 19-page docket. This is case 11939 from EOG:

1. EOG wants to extend the Parshall or Van Hook-Bakken Pool to include the following:

Sections 12, 13, 19 - 36 in 151N-90W (20 sections); and,
Sections 9, 16, 21 - 28, 34 - 36 in 151N-91W (13 sections); for a total of 33 more sections.

2. EOG also wants permission to drill up to three horizontal wells for each 640-acre spacing unit (that is three wells in each section: one in the upper TFS, one in the lower TFS, and one in the middle Bakken) for the following:

Sections 1 - 36 in 151N-90W (36 sections); and,
Sections 1 - 36 in 152N-90W (36 sections); and, 
Sections 1 - 6, 8 - 17, and 19 - 36 in 153N-90W (34 sections); and,
Sections 1 - 36 in 154N-90W (36 sections); and,
Sections 25 - 28, 31 - 36 in 155N-90W (10 sections); and,
Sections 1, 10 - 15, 23 - 26, and 36 in 151N-91W (12 sections); and,
Sections 1, 2, 11 - 15, 22 - 26, 35, 36 in 152N-91W (14 sections); and,
Sections 5 - 8, 17 - 20, 29 - 32 in 153N-89W (12 sections).

Does this add up to  190 sections? And is EOG asking permission to drill three horizontal wells in each of these sections? If so, that's 570 wells and that's just one case (albeit, perhaps the biggest case).

I may have misread this, or may not understand it, but that seems to be what EOG is requesting.

You can access the full 19 pages of the December 17, 2009, docket at https://www.dmr.nd.gov/oilgas/dockets/2009/docket121709.pdf

I suppose I need to curb my enthusiasm.  I have included a summary of the entire docket here.

Welcome!

THIS PAGE HAS BEEN UPDATED. CLICK HERE FOR MOST RECENT WELCOME.


WLL just releases another big well -- 2,250 bopd, the Rohde 44-1hH in Mountrail County, November 27, 2009

For those who have read the "welcome" to this site, you may want to skip directly to:

Do I Need to Curb My Enthusiasm? EOG -- 570 more wells in the Parshall?

The NEW presentation by Harold Hamm, CLR/CEO.
Things on my mind.
Trends in the North Dakota oil industry.
FAQs about the North Dakota oil industry.
Oil Wells Reporting.
Active rigs now up to 67. XTO now has 4 rigs.

...it is absolutely incredible how fast "they" can move these rigs in. In less than a week, four new rigs have been moved into North Dakota. Can you imagine how long it would take if this industry was run by the US government?

WELCOME: The Blog

The purpose of this site is educational only. It is an attempt to provide an overview of "the Bakken" and to direct folks to the news stories coming out of the North Dakota oil industry. It is very, very superficial in scope. I probably understand about 1 percent of all that goes on in the industry (if that much). I have a poor memory and often make simple mistakes, but will correct them when I become aware of them. I find myself making more typographical errors as the years go by.

I grew up in Williston, in the heart of the Williston Oil Basin (WOB) and have followed the oil industry my entire life, in a very general way. I invest in publicly traded companies through the stock market, but my investments in WOB are trivial compared to my overall investment portfolio. I own no mineral rights, and have no inside information regarding the WOB. I do talk with people who live there and occasionally receive information second- and third-hand. I do not subscribe to any newsletters or the North Dakota Industrial Commission website tools, although I may do that sometime in the future (subscriptions are relatively inexpensive).

I enjoy following the activity in the WOB, but am not sure that investing in the oil companies in the WOB is the best way to go; there are many other opportunities in the stock market that might be better. At the current time, of the Williston Oil Basin-related companies, I am invested in the following: MDU, BR (COP), CLR, NOG, ENB, EPD, EEP, BNI, SLB. I trade in and out of these companies with others in the WOB. I would never recommend any companies because everyone's investment styles are different. I am often accused of being too exuberant about the WOB, and I admit it. I find the oil activity in North Dakota very interesting. It's easy to be negative about things in life, so I tend to over-compensate in some areas by being too optimistic when it comes to the oil industry.

I am definitely a novice at all this, so if something I say doesn't seem correct, it may not be. There are many ways on the web to cross-check "facts."


The largest continuous oil reservoir in the continental United States.

NEWS

North Dakota state official states that in addition to the Bakken, TFS, and Lodgepole, there is now another formation oil producers are targeting: the Birdbear. Actually that is not news. Oilmen have known about this formation for decades and have targeted it in the past. What is new,  is renewed interest in this formation for horizontal drilling and fracture stimulation. November 21, 2009. 

North Dakota state official predicts 90 - 100 oil drilling rigs in North Dakota in 2010, up from 33 in late 2008, and 55 in mid-2009. November 20, 2009.

Continenetal Resources will exit 2009 with seven rigs (currently six rigs) and have 15 rigs in the Bakken in mid-2010. CLR cap ex was projected to be $275 million for 2009; it ended up being $415 million; cap ex is projected to be $650 million in 2010. November 20, 2009.

Hess will double the number of rigs in the Bakken from three in 2009 to six or seven in 2010, and will spend approximately $1 billion/year in capital expenditures for the next four to five years in the Bakken. November 14, 2009.

The excitement continues. Even minor players are announcing major plans for 2010. Another example is GeoResources, Inc. Posted November 12, 2009.

North Dakota reports record oil lease auction. North Dakota holds an auction to lease a portion of state lands every three months. The most recent auction resulted in a record $72 million for the state; the previous high was $30 million in 1980 (but adjusted for inflation, about $80 million). Average lease was $1000/acre with highest rate paid in prolific Mountrail county, about $3000/acre. By the way, almost all the money goes for public schools. Comment: producers don't pay top dollar for leases just to lose them; this record auction suggests a very, very active 2010 drilling program in North Dakota. November 6, 2009.

Buffett Buys Burlington. November, 3, 2009.

BEXP announces another great well. Meanwhile, BEXP announces another great well (with first day production of 1,776 barrels of oil equivalent), this time northwest of Williston, pretty much at the extreme of their acreage. November, 2009.  

Denbury buys Encore. Denbury becomes one of the largest independent oil exploration and producing companies overnight by buying Encore, whose main base is in North Dakota. November, 2009. 

The Grenora "barnburner." And, I'm still waiting to hear how the "barnburner" up by Grenora is doing. October, 2009.



Now, about the blog.

The "old" Million Dollar Way was very eclectic: literature, music, "the Bakken," energy in general, and personal musings. Ninety-nine percent of visitors to the site visited only Bakken-related sites, and even then, only one or two specific pages. So, this site will, at least for the time being, concentrate on "the Bakken," more correctly the North Dakota oil industry. I have an emotional interest in "the Bakken." I wear my heart on my sleeve when it comes to "the Bakken." This is where I grew up. I have no background or connection with the oil industry. I own no mineral rights.

I am an investor, but my investments in "the Bakken" are trivial compared to my overall investments. I am more emotionally attached to "the Bakken" than interested in investments. I have no inside information. I do not subscribe to any premium services regarding "the Bakken." I no longer live in North Dakota, but I visit at least once a year and see first-hand what is going on. My information comes primarily from the NDIC website and the internet in general.

Occasionally I will get input third-hand or fourth-hand from someone I know still living in the Williston area. (Williston, North Dakota, USA, is at the center of the Williston Oil Basin, home of "the Bakken.") Bottom line: I'm pretty much a novice at all this. I know I will make many mistakes on this website but will correct them when brought to my attention.

I would not use my site to make investment decisions, although it may be one of several data points to lead you in certain directions. Much of what I write can look factual, when in fact it is opinion or my general understanding of the issue. Over time, I assume this site will evolve, based on reader feedback. As expected, it was hard not to have op-ed pieces, and some have already been added.

The site's name. The friends of the "old" Million Dollar Way know that the name of the site has nothing to do with money -- at least not directly in terms of me or investing. When I was growing up, the road leading out of Williston was known as the "Million Dollar Way" because of the automobile dealerships and businesses related to the oil industry.

The "Million Dollar Way" was my road out of town to an exciting life. This "Million Dollar Way" site is a new road leading me to new destinations.

Profile of Williston, North Dakota, USA.
North Dakota: Most Economically Stable State, November 2, 2009
The Oil Drum's Assessment of the Bakken, November 2, 2009

*****

This blog seems to be optimized for Firefox/MacOS. I find errors in formatting when I check the blog on Internet Explorer browsers; perhaps they are older versions of Internet Explorer.

Last updated: November 23, 2009.

Archives of Previous Commentaries

These are commentaries that have been removed. The date is the date the commentary was removed, not necessarily the date it was first posted.

Removed January 23, 2010

For a very interesting comment about maximizing a pad -- 6 wells, 12 laterals on one pad, see today's comment on the Eco-Pad page. December 16, 2009. 

I opined not too long ago that 2010 will be a watershed year for the North Dakota oil industry. Today's daily activity report suggests that the new year may have started a bit early.  Ten (10) well files were released from confidential status, including seven (7) by EOG. The average IP for the seven EOG wells was: 1,120 boepd.  They were all incredible wells based on their IPs.  In addition, five (5) new permits were granted, including another one for EOG, one for KOG, two for CLR, and one for Marathon. December 14, 2009.

Removed January 14, 2010 

BEXP announces another gusher! 3,807 bopd!!

Worse prediction of 2009? This links to an analyst's prediction on July 4, 2009.

MY HOME TOWN GETS A GUSHER!
Even California newspapers writing about the Bakken!
More wells in the Williston area! 
North Dakota production record (80 MM bbls in 2009) beats last year's record (62.8 MM bbls in 2008)!

Removed December 18, 2009

I continue to predict that 2010 will be another watershed year for the oil industry in North Dakota, if the price of oil stays above $70.

We should see close to 100 active drilling rigs by mid-2010. That is up from a low of 33 last autumn (2008); the number of active drilling rigs is currently 79 (December 2009).

Fracturing companies are going to be very, very busy. This past year we have seen the norm of one-stage fracturing jump to 18+ stages, and some are opining that we could see upwards of 60-stage fracturing. That seems crazy, but once you have the team and the sand/water on site, you might as well maximize the stages.  Most of the sand/water is recovered, so I assume the cost is mostly is propellant and additives, and man-hours while the team stays on the pad.

The Bismarck Tribune reported that oil companies are now targeting a "new" formation, the Birdbear formation. In fact, this is not "news"; it's always been there and there has been some production from this formation in the past. The difference this time is that companies are applying the new technology to this formation: horizontal drilling and fracture stimulation. The formation is very thin, but it is my understanding that horizontal drilling is so sensitive now that drillers can target these thin formations with success. Note: in Saskatchewan, the Birdbear formation is known as the Nisku.

Removed December 17, 2009

[For a very interesting comment about maximizing a pad -- 6 wells, 12 lateral on one pad, see today's comment on the Eco-Pad page. December 16, 2009.] 

I opined not too long ago that 2010 will be a watershed year for the North Dakota oil industry. Today's daily activity report suggests that the new year may have started a bit early.  Ten (10) well files were released from confidential status, including seven (7) by EOG. The average IP for the seven EOG wells was: 1120 boepd.  They were all incredible wells based on their IPs.  In addition, five (5) new permits were granted, including another one for EOG, one for KOG, two for CLR, and one for Marathon. December 14, 2009.

• This is why I'm excited about the Bakken.  (Click on the link.) 

•  500,000 barrels of oil in one month (October, 2009) from 43 EOG wells in one county.
• $100,000,000 wellhead production in three months from EOG/Hunt wells in Mountrail County.
  

• KOG just announced a nice well in the Fort Berthold Indian Reservation on December 6, and another nice one December 11, 2009.

• For those who have forgotten "recent history" regarding natural gas, this is a great article.
  

• XOM will buy XTO, a significant player in the Bakken. XOM is now in the Bakken. With one deal, there could be another huge cash infusion into the North Dakota oil industry with XTO having new capital to expedite drilling program. Even CNBC mentioned "the Bakken in North Dakota" right after this deal was announced.

December 8, 2009: I am accused of being inappropriately exuberant when it comes to the North Dakota oil industry, but who can blame me when you read the Whiting press release, dated December 8, 2009?  This is an incredible press release. Follow a discussion of this press release here.

1. WLL announced four wells with the following IPs: 1,970; 2,638; 2,223; and 2,140 boepd.

2. The purpose of the press release: one of the wells was a discovery (wildcat) well (1,970 boepd) targeting the Bakken. This was a re-entry well; a well that had been producing from the Birdbear formation as recently as July, 2009. WLL will drill ten wells in the area and will open up an entire new area for WLL and the Bakken.

3. WLL also announced completion of a new pipeline connecting ALL their wells in the Sanish-Parshall, taking one-third of truck traffic there off the road. This WLL pipeline connects with an Enbridge pipeline. This is a biggie, especially if you use the roads in Mountrail County.

4. The discovery well is  Federal 32-4HBKCE. My guess is that the letters stand for H (horizontal) BK (Bakken) CE (casing exit). 

December 14, 2009: Four dots in the Bakken to connect:

1. October, 2009: Several producers / investors in the Bakken (including BEXP, KOG, NOG) raised large amounts of cash through new share offerings. [In December, BEXP's partner, US Energy (USEG), also raised cash through new share offering.]

2. November, 2009: Record-setting North Dakota state land lease auction. Slawson particularly notable in its bids.

3. December, 2009: record-setting (?) docket on tap for December 17, 2009, North Dakota Industrial Commission hearing.

4. December, 2009: XOM is in the Bakken with its purchase of XTO. 

 ***** 

NEWS

*****

For those who have never visited North Dakota in person, this picture shows you why I love my state. Absolutely gorgeous. Only a white-out (blizzard) would make the picture more exciting!

 *****

BEXP looking good. See Bakken: BEXP. December 16, 2009.

WLL has another big well -- 2,250 bopd, the Rohde 44-1H in Mountrail County, November 27, 2009.

WLL now up to 8 rigs. Total number of active rigs in North Dakota now up to 77. December 16, 2009. 

*****

For those who have read the "welcome" to this site, you may want to skip directly to:

Do I Need to Curb My Enthusiasm? EOG -- 570 more wells in the Parshall?
Whiting's November corporate presentation.
The NEW presentation by Harold Hamm, CLR/CEO.
Things on my mind.
Trends in the North Dakota oil industry.
FAQs about the North Dakota oil industry.
Oil Wells Reporting.
Active rigs now up to 75. From a low of "about 33" summer of 2008.

...it is absolutely incredible how fast "they" can move these rigs in. In less than a week, four new rigs have been moved into North Dakota. Can you imagine how long it would take if this industry was run by the US government?

Removed December 8, 2009

Breaking News

It looks like a big day in the Bakken; it's going to take me awhile to update all the pages. Be patient.  Smile. December 8, 2009.

NOTE: Someone has posted a very nice comment about the Lodgepole, pointing out some inaccuracies in my posts and/or putting things into perspective. December 7, 2009.  

NOTE: Three oil companies are pursuing the Bakken as far west as the Rocky Mountains in Montana. December 7, 2009.  

NOTE: This might be one of the best Bakken news sites I've found in awhile. It's always been there; I've just never run across it. 



Posted November 25, 2009 (not yet removed):

I have no idea if this is a big deal or not. I have not followed "dockets" for the North Dakota Industrial Commission (NDIC) in the past so I have nothing with which to compare. But the NDIC has released the docket for December 17, 2009.

The December 17th docket is 19 pages long. Repeat: 19 pages long.

Let's look at one case, just one case from that 19-page docket. This is case 11939 from EOG:

1. EOG wants to extend the Parshall or Van Hook-Bakken Pool to include the following:
Sections 12, 13, 19 - 36 in 151N-90W (20 sections); and,
Sections 9, 16, 21 - 28, 34 - 36 in 151N-91W (13 sections); for a total of 33 more section.

2. EOG also wants permission to drill up to three horizontal wells for each 640-acre spacing unit (is that three wells in each section?) for the following:
Sections 1 - 36 in 151N-90W (36 sections); and,
Sections 1 - 36 in 152N-90W (36 sections); and, 
Sections 1 - 6, 8 - 17, and 19 - 36 in 153N-90W (34 sections); and,
Sections 1 - 36 in 154N-90W (36 sections); and,
Sections 25 - 28, 31 - 36 in 155N-90W (10 sections); and,
Sections 1, 10 - 15, 23 - 26, and 36 in 151N-91W (12 sections); and,
Sections 1, 2, 11 - 15, 22 - 26, 35, 36 in 152N-91W (14 sections); and,
Sections 5 - 8, 17 - 20, 29 - 32 in 153N-89W (12 sections).

Does this add up to  190 sections? And is EOG asking permission to drill three horizontal wells in each of these sections? If so, that's 570 wells and that's just one case (albeit, perhaps the biggest case).

I may have misread this, or may not understand it, but that seems to be what EOG is requesting.

You can access the full 19 pages of the December 17, 2009, docket at https://www.dmr.nd.gov/oilgas/dockets/2009/docket121709.pdf.

I suppose I need to curb my enthusiasm.


November 27, 2009 (removed):

I "tore down" my "old" Million Dollar Way site and am in the process of bringing up a new site, but events are moving along very, very quickly. First it was Denbury buying Encore, then nice wells being reported by BEXP with 28-stage fracturing, and now BNI being bought by Warren Buffett (announced November 3, 2009). I started buying BNI back in the 1980's. In fact, it was one of my first holdings ever; I have never sold it, only accumulated BNI over the years.

I first saw BNI hauling coal when I was having breakfast with my parents in a coffee shop in Grand Forks, ND, in 1982. I remember the year well. I was stationed at the air base in Grand Forks, and I would be moving to Bitburg Air Base, Germany, the following year. It was obvious to me that BNI was going to be hauling coal for a long, long time.I missed on EAC and EOG.

But there are a dozen ways to be involved in the Bakken, even for those who do not own mineral rights. I am convinced that Williston could be another "Tulsa." It won't be another "Tulsa" in terms of people -- the weather is too harsh and the region too remote, but in terms of storage, infrastructure, and production, I don't think I'm too far off. Some of the wells are generating $15 million in cash flow each year.

November 21, 2009 (removed):

Recent wells reporting initial production (IP) have been mediocre by some folks' standards, ranging between 500 and 900 bbls/day. For newbies, a bit of background. In the old days, a 100-bopd well was considered a very good well. Then with horizontal drilling and fracture stimulation, we got used to seeing 1,000 bopd-wells and the occasional 2,000 bopd wells, and the not infrequent 3,000 - 4,000 bopd wells. So, "we" no longer get excited with wells reporting less than 1,000 bopd on initial production. But IPs are beginning to mean less and less to those who have been following the Bakken for some time.

Wells reporting initial production of 500 - 900 bopd are very good wells by any standard.

If you don't believe me, look at the RS-Brady well: its IP was 194 bopd. Not even a year old yet, this well has produced 36,111 barrels of oil, and at $70/barrel, this is slightly more than $2.5 million. In less than a year. Bakken wells are said to cost $5 - $6 million each, but one company says their last Bakken development well was drilled in 16 days for a cost of $2.9 million.

And it is not just horizontal wells that are producing some great wells: a Lodgepole well spudded in 1996 that has produced in excess of 4 million barrels of oil so far is a vertical well, and it continues to produce about 7,500 barrels of oil per month (Dinsdale 2-4, Encore). At $70/bbl, that's $500,000 a month, and that well paid for itself years ago.

Welcome

If you have bookmarked this page, please note that it has been updated. Go to the sidebar on the right and click on "Welcome."  The "Welcome" on the right will always have the most recent update. 

For those who have read the "welcome" to this site, you may want to skip directly to:

The NEW presentation by Harold Hamm, CLR/CEO.
Things on my mind.
Trends in the North Dakota oil industry.
FAQs about the North Dakota oil industry.
Oil Wells Reporting.

...and be sure to comment below if you want to see something on this site that's not here.

WELCOME: The Blog

The purpose of this site is educational only. It is an attempt to provide an overview of "the Bakken" and to direct folks to the news stories coming out of the North Dakota oil industry. It is very, very superficial in scope. I probably understand about 1 percent of all that goes on in the industry (if that much). I have a poor memory and often make simple mistakes, but will correct them when I become aware of them. I find myself making more typographical errors as the years go by.

I grew up in Williston, in the heart of the Williston Oil Basin (WOB) and have followed the oil industry my entire life, in a very general way. I invest in publicly traded companies through the stock market, but my investments in WOB are trivial compared to my overall investment portfolio. I own no mineral rights, and have no inside information regarding the WOB. I do talk with people who live there and occasionally receive information second- and third-hand. I do not subscribe to any newsletters or the North Dakota Industrial Commission website tools, although I may do that sometime in the future (subscriptions are relatively inexpensive).

I enjoy following the activity in the WOB, but am not sure that investing in the oil companies in the WOB is the best way to go; there are many other opportunities in the stock market that might be better. At the current time, of the Williston Oil Basin-related companies, I am invested in the following: MDU, BR (COP), CLR, NOG, ENB, EPD, EEP, BNI, SLB. I trade in and out of these companies with others in the WOB. I would never recommend any companies because everyone's investment styles are different. I am often accused of being too exuberant about the WOB, and I admit it. I find the oil activity in North Dakota very interesting. It's easy to be negative about things in life, so I tend to over-compensate in some areas by being too optimistic when it comes to the oil industry.

I am definitely a novice at all this, so if something I say doesn't seem correct, it may not be. There are many ways on the web to cross-check "facts."


The largest continuous oil reservoir in the continental United States.

NEWS

North Dakota state official states that in addition to the Bakken, TFS, and Lodgepole, there is now another formation oil producers are targeting: the Birdbear. Actually that is not news. Oilmen have known about this formation for decades and have targeted it in the past. What is new,  is renewed interest in this formation for horizontal drilling and fracture stimulation. November 21, 2009. 

North Dakota state official predicts 90 - 100 oil drilling rigs in North Dakota in 2010, up from 33 in late 2008, and 55 in mid-2009. November 20, 2009.

Continenetal Resources will exit 2009 with seven rigs (currently six rigs) and have 15 rigs in the Bakken in mid-2010. CLR cap ex was projected to be $275 million for 2009; it ended up being $415 million; cap ex is projected to be $650 million in 2010. November 20, 2009.

Hess will double the number of rigs in the Bakken from three in 2009 to six or seven in 2010, and will spend approximately $1 billion/year in capital expenditures for the next four to five years in the Bakken. November 14, 2009.

The excitement continues. Even minor players are announcing major plans for 2010. Another example is GeoResources, Inc. Posted November 12, 2009.

North Dakota reports record oil lease auction. North Dakota holds an auction to lease a portion of state lands every three months. The most recent auction resulted in a record $72 million for the state; the previous high was $30 million in 1980 (but adjusted for inflation, about $80 million). Average lease was $1000/acre with highest rate paid in prolific Mountrail county, about $3000/acre. By the way, almost all the money goes for public schools. Comment: producers don't pay top dollar for leases just to lose them; this record auction suggests a very, very active 2010 drilling program in North Dakota. November 6, 2009.

Buffett Buys Burlington. November, 3, 2009.

BEXP announces another great well. Meanwhile, BEXP announces another great well (with first day production of 1,776 barrels of oil equivalent), this time northwest of Williston, pretty much at the extreme of their acreage. November, 2009.  

Denbury buys Encore. Denbury becomes one of the largest independent oil exploration and producing companies overnight by buying Encore, whose main base is in North Dakota. November, 2009. 

The Grenora "barnburner." And, I'm still waiting to hear how the "barnburner" up by Grenora is doing. October, 2009.



Now, about the blog.

The "old" Million Dollar Way was very eclectic: literature, music, "the Bakken," energy in general, and personal musings. Ninety-nine percent of visitors to the site visited only Bakken-related sites, and even then, only one or two specific pages. So, this site will, at least for the time being, concentrate on "the Bakken," more correctly the North Dakota oil industry. I have an emotional interest in "the Bakken." I wear my heart on my sleeve when it comes to "the Bakken." This is where I grew up. I have no background or connection with the oil industry. I own no mineral rights.

I am an investor, but my investments in "the Bakken" are trivial compared to my overall investments. I am more emotionally attached to "the Bakken" than interested in investments. I have no inside information. I do not subscribe to any premium services regarding "the Bakken." I no longer live in North Dakota, but I visit at least once a year and see first-hand what is going on. My information comes primarily from the NDIC website and the internet in general.

Occasionally I will get input third-hand or fourth-hand from someone I know still living in the Williston area. (Williston, North Dakota, USA, is at the center of the Williston Oil Basin, home of "the Bakken.") Bottom line: I'm pretty much a novice at all this. I know I will make many mistakes on this website but will correct them when brought to my attention.

I would not use my site to make investment decisions, although it may be one of several data points to lead you in certain directions. Much of what I write can look factual, when in fact it is opinion or my general understanding of the issue. Over time, I assume this site will evolve, based on reader feedback. As expected, it was hard not to have op-ed pieces, and some have already been added.

The site's name. The friends of the "old" Million Dollar Way know that the name of the site has nothing to do with money -- at least not directly in terms of me or investing. When I was growing up, the road leading out of Williston was known as the "Million Dollar Way" because of the automobile dealerships and businesses related to the oil industry.

The "Million Dollar Way" was my road out of town to an exciting life. This "Million Dollar Way" site is a new road leading me to new destinations.

Profile of Williston, North Dakota, USA.
North Dakota: Most Economically Stable State, November 2, 2009
The Oil Drum's Assessment of the Bakken, November 2, 2009

*****

This blog seems to be optimized for Firefox/MacOS. I find errors in formatting when I check the blog on Internet Explorer browsers; perhaps they are older versions of Internet Explorer.

Last updated: November 20, 2009.

Sections 16 and 36: Origins of Public Education Funding

Updates

January 16, 2012: North Dakota's School Land Permanent Trust Now Reaching $2 Billion

Original Post

The origins of granting sections 16 and 36 of each township to public education.

Early History of North Dakota: Essential Outlines of American History
by Clement Augustus Lounsberry
page 628.

"The idea of assigning a constant share of all United States public lands, for the support of free education, wherever the public domain might extend beyond the limits of the original states, was first engrafted upon this nation, by our Revolutionary forefathers, in the general ordinance for public surveys, passed by Congress May 20, 1785; this great statute devoting section 16 in each township "for the maintenance of public schools within the said township."

"This original benerfaction for education as doubled for the Dakotas and some other states, by subsequent legislation adding section 36, thus granting one-eighteenth of the lands surveyed; and in the newer states of Utah, New Mexico, Oklahoma and Arizona, Congress granted school selection in certain sections additional to the original two."

Bakken: Fidelity (MDU)

Miscellaneous

Sundance Oil & Gas leases for Fidelity (MDU) and possibly Hess.

NEWS

December 29, 2015: MDU will close on sale of Fidelity by year's end (2015); selling 162 wells to five different companies; 

January 9, 2015: due to price slump, MDU will delay shedding Fidelity; is looking at second refinery near Minot; first refinery will come on-line early in 2Q15 (delay due to weather).

December 7, 2014: Fidelity E & P calls it quits.

November 3, 2014: MDU will "market" its Fidelity exploration and production division. Rumors (but then there are always rumors): Oasis could be doing the same thing. Maybe some big operator could scoop up both Oasis and Fidelity. Add Fidelity to the list that includes OXY USA. Scuttlebutt on the message boards is that MDU had financial challenges in Paradox Basin leading to this "forced" sale. 

May 1, 2014: SeekingAlpha  -- 1Q14 earnings transcript. 

February 3, 2014: huge year for MDU. 

May 30, 2013: MDU subsidiary to built $700 million natural gas pipeline. 

July 20, 2012: Knife River's aggregate (cement) contract for the Los Angeles Port and the Long Beach Port. 

July 2, 2012: MDU announces name change -- placing three subsidiaries under one new holding company: MBI. 
May 21, 2012: MDU subsidiary (not Fidelity) purchases half interest in Whiting's natural gas, oil gathering/storage system in Belfield area.

April 25, 2012: Fidelity reports a nice well in Utah.

March 23, 2012, RMOJ: Fidelity stakes five more wells in the Niobrara; east of Cheyenne, Laramie County, Wyoming.

March 12, 2012: MDU press release; new Bakken production record; acquires more acreage;  

March 12, 2012: update on Fidelity permits issued since 2010;

November 1, 2011: from the 3Q11 earnings release:

• The company continues to pursue expansion of facilities and services offered to customers. Energy development within its geographic region, which includes portions of Colorado, Wyoming, Montana and North Dakota, is expanding, most notably the Bakken of North Dakota and eastern Montana. It owns an extensive natural gas pipeline system in the Bakken area. Ongoing energy development is expected to have many direct and indirect benefits to this business.
• Installation of additional compression at the Charbonneau station was completed and placed into service in September, providing additional firm capacity for producers in the Bakken production area. With some additional modifications, this project has the potential of adding a total of 27 MMcf of firm capacity.
• Construction has begun on approximately 12 miles of high pressure transmission pipeline providing takeaway capacity from the Garden Creek processing facility being constructed in northwestern North Dakota. The pipeline project is expected to be completed before year-end.
• Preparations are underway for the construction of approximately 13 miles of high pressure transmission pipeline from the Stateline I and II processing facilities in northwestern North Dakota to deliver gas into the Northern Border Pipeline. The project is expected to be completed by mid 2012.
• The company has three natural gas storage fields including the largest storage field in North America located near Baker, Montana. It continues to seek interest in its storage services and is pursuing a project to increase its firm deliverability from the Baker Storage field by 125 MMcf per day. Commitment on approximately 30 percent of the total potential project has been received. The additional firm deliverability is expected to be available in November.

Aug 26, 2011: analyst's views.

Aug 23, 2011: New corporate presentation.

July 27, 2011: Montana PSC agrees to 5% MDU rate hike, half what MDU was asking, to pay for two wind farms, three abandoned coal-fired generation projects, and two other issues.

July 26, 2011: archived investing stories on Fidelity up to this date. 

April 21, 2011: MDU (Fidelity) adds second rig.

March 14, 2010: New executive named president/CEO of MDU's Resources' Natural Gas and Oil Development division.

July 19, 2010: MDU vs SE.

June 29, 2010: MDU completes two wind farms in North Dakota and Montana.

May 19, 2010: Williston Basin Interestate Pipeline Company (a subsidiary of MDU) announced plans to increase natural gas pipeline capacity by 33 percent. WBIPC will add 30 million cubic feet capacity per day to the current 90 million cubic feet per day. The project will begin in November, 2011.

March 16, 2010: Fidelity (a subsidiary of MDU) is acquiring acreage in the Bakken, the Nibrara and Green River Basin. The Bakken acquisition results in an additional 40,000 net acres, increasing their total Bakken pool to 56,000 net acres.  This acreage is targeting the TFS. If both the middle Bakken and TFS are economic, there is room for 23 net wells for each (a total  of 46 new wells) from the Bakken acquisition. The Niobrara deal will result in an additional 27,000 acres. You can find full press releases at the MDU web site.

November 15, 2009: Some time ago Fidelity (MDU) was successful in getting a new oil field in the Williston Basin designated; it was the Cottonwood, north of the Sanish and the Parshall oil fields. The few Fidelity wells did not seem all that good based on IPs.

Then, all of a sudden, these "Fidelity" wells disappeared; it turns out they were sold/transferred to Oasis.

Now we learn that Oasis and Fidelity are partnering on these permits/leases/wells.

Updated March 16, 2010.

Bakken: HES

Hess Corporate Presentation 
2014 annual shareholders presentation, May 2014

Miscellaneous

Sundance Oil & Gas leases for Fidelity (MDU) and possibly Hess.

News

April 28, 2019: a big year for Hess. Huge earnings in 1Q19. Announces it will expand its Tioga gas plant; it will become the biggest gas plant in ND at 400 million cfpd; its Vantage Pipeline (ethane) to Alberta is still a huge, huge deal.


January 26, 2016: Hess slashes E&P capital, exploratory budget by 20% from October guidance. 
The company is maintaining its October forecast of an average of between 330,000 and 350,000 barrels of oil per day in 2016, it said in a Tuesday release. Bakken net production is still forecast between 95,000 and 105,000 barrels of oil per day.

December 13, 2015: this is a cut and paste sent in by a reader:

Along these lines, in the adjoining Hess properties to the north (see this post), which we have discussed over the last couple years, Hess obtained six EN-Freda permit November 30 as you chronicled last week. Hess also holds four EN-VP and R permits they obtained in May, and four permits for additional EN-Leo wells which were issued in June. Incidentally, the six additional EN-Freda wells are on the same pad with ten producing wells, the EN-Freda 1-7 and EN-Leo 1-3.

August 23, 2015: Hess now deducts a transportation charge from royalty checks. 

July 22, 2015: random update; rigs down from 17 to 8; spud to release from 45 days to 15 days. 

January 27, 2015: due to slump in oil prices, Hess will cut CAPEX 16%; concentrate spending in the Bakken. 

January 12, 2015: EOG, DVN, HES, COP -- all out-perform. -- Barrons.

January 29, 2014: 645,000 acres in the Bakken; to ramp up in the Bakken. CAPEX will stay flat at $2.2 billion in 2014 (same as 2013) but will drill 225 operated wells vs 168; 17 rigs (2014) vs 14 rigs (2013). Will focus on unconventional shale. 4Q13: average well cost, $8 million vs $11 million (2012); forecasts 80K to 90K boepd in 2014; 9 wells for typical 1280-acre unit; will test tighter well spacing; Tioga Plant expansion to be complete 1Q14; forecast 150K boepd (2018) -- represents an increase from guidance of 120,000 boepd (2016).

January 1, 2014: because comments are not google-searchable, I will "copy" the entire contents of a recent comment here:

Hess Bakken Investments II: founded in 2009

http://companies.findthecompany.com/l/32584653/Hess-Bakken-Investments-Ii-Llc-in-Houston-TX

I do not know if the "Ii" is a typo or if this is a different company. Hess Bakken Investments II is the listed operator at the NDIC site.

In November, 2010, Hess acquires 167,000 acres from privately held TRZ (Tracker).

http://themilliondollarway.blogspot.com/2013/10/another-wall-street-recommendation-in.html

News report here:

http://www.b2i.us/profiles/investor/ResLibraryView.asp?ResLibraryID=42013&BzID=1977&to=rl&Nav=1&LangID=1&s=0&Category=1758

At the next site you will see that the name was changed from TRZ to Hess Bakken Investments II (at the site, scroll down to Tracker):

http://www.blm.gov/wy/st/en/resources/public_room/corporate_list/t.print.html

• TRZ Energy, LLC, to Hess Bakken Investments II, LLC, eff 4/913 (North Dakota)
• TRZ Energy, LLC, to Hess Bakken Investments II, LLC, eff 8/27/13 (Wyoming)

It's my impression that a number of large oil and gas corporations with multiple divisions or units, will establish "operating companies" under the corporate umbrella to actually perform specific tasks. In this case, it appears Hess Bakken Investments II, LLC, was established as the E&P operator for the Tracker acreage, and perhaps the Rocky Mountain acreage in general.

This seems to be confirmed at this site:

http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=907455

where it is noted that Hess Bakken Investments II, LLC:

... controls approximately 76,000 net acres in the Goliath Project located in the Williston Basin, North Dakota; approximately 131,000 net acres in the Bigfoot Project situated in the U.S. Rocky Mountain region; and approximately 97,000 net acres in Fetter and Krejci Projects located in the southern Powder River Basin, Wyoming. Hess Bakken Investments I Corporation, through its subsidiary, Tower American Corporation, also involves in oil and gas exploration and production operations in Colorado.

October 6, 2013: Merrill Lynch strongly recommends Hess. 

March 18, 2013: Hess to sell some Eagle Ford assets to Sanchez.
January 9, 2013: Hess sets global CAPEX -- $6.8 billion. 

August 14, 2012:   Shawn alerted me to fact that Hess was now in the Monterey shale, California. Here's a nice link, note the reference to the Bakken, again:

Hess Corp., a $17 billion oil company with offices on six continents, recently set up shop in Bakersfield and already it's buying up property in California.

New York-based Hess doesn't have any operations on the West Coast, but its extensive work in North Dakota's Bakken formation could give the company valuable experience with which to tap the Monterey Shale, a potentially massive reservoir under development here and in other parts of Central California.

July 16, 2012: Hess changing its completion design -- more water, 38 stages. 

June 10, 2012: Hess and ZaZa part ways in the Eagle Ford and in the Paris (France) Basin. Agreements increase net Eagle Ford core land holding six-fold to 72,000 acres and ZaZa to be paid $85 million.
 
December 16, 2011: according to a correspondent, during 2011 Hess transitioned from 18-22 stage to 38 stage fracking.

December 12, 2011: Hess is reporting some nice wells in its East Nesson prospect.

July 26, 2011: archives on investing stories about HES up to this date.

July 23, 2011: Archived -- American Oil and Energy Stories; AEZ Acquired by Hess.

March 22, 2011: Follow the discussion regarding significant Hess activity.

March 1, 2011: Hess has five permits for vertical wells monitoring a long horizontal in Big Butte. 

February 22, 2011: Rig count -- Hess, 7; American Oil and Gas, 9; and Tracker, 4. They are all part of Hess now with Hess acquiring Tracker and AEZ (assuming Tracker = TRZ).

January 18, 2011: Great AEZ well; now it's a Hess well.

November 24, 2010: Another six well multi-pad, the TI-Blesrud and the TI-Hillfren series

November 22, 2010: Hess acquires TRZ LLC, to include 167,000 net acres in the North Dakota Bakken

November 15, 2010: six permits today for one pad, Manitou oil field, NWNE 13-155N-94W, the EN-Ruland and EN-Dubrovolny series;

October 7, 2010: six permits today for one pad, Tioga oil field, SESW 8-157N-94W; the EN-Lokken and the EN-Charles Wood series

August 26, 2010: at least the third time that Hess has permits to drill six (6) wells originating in same section.

August 26, 2010: Hess announcement -- intention to buy AEZ for about $7/share

August 6, 2010: Yet another low-IP Hess well in the Clear Water field.

July 30, 2010: I have noted before that Hess has had less-than-stellar wells; there may be an explanation. Deep in this thread is a long posting by Suzanna Shatto that sheds some light on this.

May 28, 2010: Hess was granted six permits today (19074 - 19079, inclusive) for six wells on one pad, 2560-acre spacing, in Robinson Lake oil field, Mountrail County.

April 23, 2010: Hess was granted three permits today (18850, 18951, 18952) for three wells on one pad. 

They will be the EN-Heinle-156-94-2536H-1, the EN-Heinle-156-94-2536H-2, and the EN-Heinle-156-94-2536H-3.

They are all on the same pad even though the legal description of the first two puts them in the NENE subquadrant whereas the third well will be in the NWNE quadrant. If this is not a typographical error on the daily activity report, it simply means that the pad straddles these two subquadrants.

Big Butte is right next to the very interesting Alger oil field and these particular wells are in the far south of the field where production has been better in the surrounding area. 

January 27, 2010: Dual laterals: Hess confirms that 1 million bbls EUR for dual laterals is a "good number."

January 12, 2010: Two 2560-acre spacing requests and first permits for same.

This is interesting. In the daily activity report dated January 12, 2010, there were six (6) new permits granted. All six permits went to Hess and they were all "development" wells in the Ross oil field. This is an average size oil field in the middle of the Bakken. These six permits are all in one section: section 27. All six are offset from the west line by 542 feet, and they are offset from the south line, respectively: 2201 feet, 2151 feet, 2101 feet, 2051 feet, 2001 feet, and 1951 feet. They will be going to the following total depths, again respectively, 19,603 feet; 19,251 feet; 18,976 feet; 18,231 feet; 19,089 feet; and 18,491 feet.  This would make them all long laterals (1280-acre; two sections). See also NDIC Docket for Wednesday, January 13, 2010, case number 11991: Application of Hess Corp. for an order amending the applicable orders for the Ross-Bakken Pool to establish two 2560-acre spacing units (each unit consisting of 4 sections). January 12, 2010.

From the 3rd quarter, 2009, analyst's call via Bakken Shale Discussion Group, November 13:

Hess will double number of rigs in "the Bakken," from 3 (2009) to 6 or 7 (2010). On March 14, 2010, Hess had five (5) active rigs.

Hess will move toward $1 billion/yr in cap-ex in the Bakken next 4 - 5 years.

But the discussion group noted something much more interesting: lackluster wells.

We have all noted that some producers seem to have lackluster wells compared to others. One of the folks noted that Hess is one of those with less-than-stellar results in North Dakota. But an exception: Hess reported an IP of 1,998 boepd for the RS-Feldman. This was reported in NOG's recent update; NOG also noted that Hess used a 14-stage completion on the RS-Feldman well. That may be Hess's best well to date in the Bakken. (The RS-Feldman well is file # 17696, about 3.75 miles northwest of Stanley.)

Comment: some weeks ago I opined on the Bakken Shale Discussion Group that "in the old days [two months ago]," no one was doing multi-stage fracturing, but now it was becoming the norm. Someone responded, taking me to task, saying that multi-stage fracturing had been around for at least two years. [In fact, multi-stage fracturing has been around for at least two decades.]

I was mis-read. I was using hyperbole; of course I was aware that multi-stage fracuring was being used in the Bakken. The point I was making was that it was my opinion that not all producers were using multi-stage fracturing. It appears I may have been correct.

People who follow the industry much closer than I do were surprised to see Hess using a 14-stage fracture stimulation. Hess has had lackluster results in the Bakken according to some; with the multi-stage fracture stimulation they may have a good well.

The thread also states: Hess drilled a Bakken/TFS stacked lateral (EN-Uran-154-93-1213H-1 / file number 18228). It comes off the confidential list on February 3, 2010. I've added it to my "wells to watch" page.

Fidelity (MDU): same problem?

On another note, I have also been struck by the uniformly poor Fidelity (MDU) wells in the Bakken. My hunch is that they have also been using one-stage fracture stimulation.

Original Post

See: Dakota Candles and Orion Belts. These are really, really cool. In a Hess "Orion Belt," Hess is placing six wells on one site. Three wells will go in one direction, and three wells will go in the opposite direction. For example, the Dolan/Fisher wells will run north-south. The Dolans will run south, and the Fishers will run north. Because there are three wells going in each direction, one can assume the three formations being targeted are the Middle Bakken (MB) and the Upper and Lower TFS.  A Hess "Dakota Candle" is the Shuhart/Nelson group. These are very similar to CLR's Eco-Pads. It would be interesting to learn who first thought of this concept; it does appear that CLR/CEO Harold Hamm was the first to talk about publicly about multiple-well concepts.

Nomenclature: one can identify the general area where Hess wells in North Dakota are located based on their names. The names of their wells are preceded by a two-letter acronym. This is what the letters stand for (check out slide 10 on corporate presentation):

• EN: East Nesson (Sanish, west of Tioga)
• RS: Red Sky (Parshall)
• ST: Stampede (south of Parshall and east of the river)
• IM: Impact (Cottonwood and north-north-west of the Red Sky)
• BL: Beaver Lodge (dead center in the Nesson Anticline; northwest of Parshall, southwest of Tioga)
• GO: Goliath; the new prospect for Hess; the American Oil and Gas acquisition west of Ray
• Other prospects for which I have not yet seen the two-letter designation: Avalanche [north of East Nesson]; Impact [north of Red Sky]; Passport [east of Red Sky]; AEZ [west of the Nesson Anticline].

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