Welcome to the "new" Million Dollar Way

The news coming out of North Dakota oil patch is almost coming too fast to keep up.

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. Although the well is in a designated oil field (the Bull Butte), it might as well be a wildcat as remote and lonely as it is. We've gotten spoiled in the Bakken oil patch. We are no longer surprised by wells producing greater than a thousand barrels the first day; they only hit the headlines when they approach 4,000 barrels. Oh, well. By the way, this was a 28-stage frac.

Denbury announcing a couple days ago that it was buying Encore was the top news story almost everywhere; it was certainly the top news story in the oil patch. Denbury becomes the fourth largest independent oil exploration and producing company overnight by buying Encore, whose main base is in North Dakota. Denbury's assets are primarily located in Mississippi; Denbury now goes nationwide on the shoulders of the Bakken and the Three Forks Sanish.

If you think "the Bakken" is over-hyped, check out "monster wells." Remember, the list of monster wells is only the tip of the iceberg, as they say.

What's not to love: a) oil back to a new, higher trading range; b) the major oil companies losing money or reporting lower earnings (forestalls talk of windfall profits tax, driving Congress nuts); and, c) a well in the Bakken at almost 5,000 boepd on initial production -- a new record (reported this week). At $50/barrel, that is $250,000 a day. That's more than a million dollars a week. If I'm wrong on my math, someone will correct me. Yes, the Bakken has severe production declines but let's see what this well is doing a year from now. And, I'm still waiting to hear how the "barnburner" up by Grenora is doing.

And now, another monster well, the Chandler James, in production for one full year, producing at a rate of 35,000 barrels/month, which at $50/barrel, is $19 million/year. Yeah, I'm excited.

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

Last updated: November 2, 2009.