Western Union Success

I won't print names here (for various reasons) but I want to publicly thank the individual who suggested I link folks who routinely post good comments on other message boards.

I started posting those links on my "Western Union" page and it is amazing how useful this page is.

Two clicks and I can see at a glance what some knowledgeable people are posting across the net.

If there is anyone you would like to see on "Western Union," please let me know.

On a completely unrelated note, the new Apple iPad is incredible. I own no stock in APPL but I travel a lot and want to stay connected to the net. The iPhone is not adequate. The iPad is absolutely incredible. If you do any traveling at all, the iPad is a must. Be sure to get the "wi-fi PLUS 3g" version -- more expensive but a must. The 3g version connects wirelessly (just like your cell phone) and there is no contract: simply $15/month and a specified amount of data; or $30/month and UNLIMITED download.

112!

112 active rigs in North Dakota as of today. This sets yet another record. See "active rigs."

Only 45 Wells Reported in April, 2010

Again, I may be missing something, and I may be missing some reports, but generally on "New Wells Reporting," I report any well that is reported by North Dakota Industrial Commission (NDIC) and any well that I find through a press release. I don't go out of my way looking for press releases, but I bet I don't miss any. If anything, I am more liberal with reporting wells.

Regardless, my methods have not changed, but I only have 49 wells that were reported in the month of April, and unlike previous months, I've included wells that have come off the confidential list even if they have not yet reported initial production numbers.  Only 49 new wells. And some had been reported previously through a press release, so I bet truly new wells with initial production data numbered less than 45 for the month of April. None -- repeat, none -- were reported today by the NDIC. It sure seems like there should be more wells being reported with 111 rigs in the basin.  [Update: 112 today; a new record.]

Halliburton recently announced that their fracking crews will now be working 24/7 in North Dakota. It is obvious fracking is the chokepoint in completing these wells in North Dakota.  But if the price of oil continues to trend up, this may not be all bad news for the drillers.

2010: Record-Setting Year for ND Energy

From the McKenzie Farmer: 2010 to be a record-setting year for North Dakota energy.

Samson Oil and Gas Halts Trading Before Announcing Efforts to Raise Capital

May 2, 2010: Samson to offer shares at 3.4 cents (Australian)/share to raise $4 million (Australian). Go to link to sort it out; US dollars and Australian dollars are near par. Samson's immediate Bakken drilling program will include three wells: Gary 1-20H (31% WI, to spud May 25); Rodney 1-14H (26% WI, to spud in August); and, the Earl 1-13H (31% WI, to spud in September).

Samson Oil and Gas halts trading in anticipation of announcing efforts to raise capital. The halt in trading is expected to last through May 3, 2010.

That News That There is a New Oil Formation in North Dakota -- NOT!

The Associated Press published a story yesterday that is now making the rounds on the net and the blogosphere (including mine). The headline: ND Study: New Oil Formation Rivals Bakken.

I am one of the most inappropriately exuberant observers and commentators on the North Dakota oil industry, and on first glance, "appreciated" this headline.

But I think this is a misleading headline and will be used by investment newsletters to lure the uninformed into making possibly wrong decisions on investing in the oil business in North Dakota.

The AP story refers to the Three Forks Sanish formation. This is not a new formation. I don't know when oilmen first determined that the TFS was an oil-producing formation but I do know that the US Geologic Survey (USGS) accomplished in 2008 was a survey of the Bakken pool which included the Bakken formations (yes, plural) and the Three Forks Sanish.

After that study, there were some oilmen that opined that the Bakken and the TFS were separate formations. Well, geologically, they were always separate formations. What the oilmen meant was this: that the Bakken formations did not communicate with the TFS formations. The first derivative of this theory, was that oilmen could drill into either the Bakken formations or the TFS formations and not disturb the other, or "drain" oil from the other.

[Before going further, this is why I refer to these formations in the "plural": the Bakken has an upper, middle, and lower formation. Early in this boom the wells were reporting production from the upper Bakken, but now the majority -- probably 99% -- of "Bakken wells" are targeting the middle Bakken. Likewise, the Three Forks or the Three Forks Sanish, used interchangeably, has an upper and a lower formation. These five formations are part of the NDIC administrative designation called the "Bakken pool." But even with that it is confusing: on the NDIC website they separate cumulative oil totals from the Bakken and the Bakken/TFS. I assume the latter is the TFS formation, part of the Bakken pool. For complete discussion and additional links to interesting discussion threads, click here.]

The bottom line is this: the AP story headline is incorrect -- this is not a new formation. It has always been there. And the USGS survey in 2008, by its very nature, included both the Bakken formations and the TFS formations.

But and this is a huge "but": the USGS survey is based on production from existing wells, informed scientific input from geologists, likely available technology, etc., in completing their survey. At the time of the survey, almost all of the the Bakken pool wells were in the upper and middle Bakken formations.

Had there been an equal number of wells in the upper and lower TFS formations at the time of the USGS survey, it is likely that their estimates of total and recoverable reserves would have been greater.

One might look at it this way:

2008: based on USGS survey, conservative estimate that 3.0 billion barrels are recoverable from the Bakken pool.

2010: based on above information, conservative estimate that 5.0 billion barrels are recoverable from the Bakken pool.

By the way, one way I look at the "value" of E&P companies working in the Bakken or "value" of their shares: if the value is based only on Bakken formation production, the shares are undervalued; if the value includes conservative -- repeat, conservative -- estimates of TFS formation production, the shares are more likely fairly valued, all else being equal.

Grand Forks Herald story, same subject.
Bismarck Tribune story, same subject.
Minot Daily News story, same subject.
Williston Herald story, same subject.
Discussion thread on Bakken and TFS, read through the entire discussion but be sure to read Teegue's comments on February 25.

ADDED

Some companies estimate that the total estimated ultimate recovery (EUR) from a good "Bakken" well in the better oil fields in North Dakota could be in the range of 700,000 barrels.  Adding a "TFS" well at the same location could add about 400,000 barrels. This is based on published reports late last year (2008) but obviously there are many, many variables. Based on this information, some companies are now placing stacked dual laterals at a single wellsite / single pad, drilling one lateral into the Bakken formation and one lateral into the TFS formation. In the 1Q 2010 conference call, Hess stated that their dual laterals cost them $10 - $11 million and produce, on average, 500 bbls of oil/per lateral, or 1,000 bbls per site. At $10 - $11 million I am not seeing the cost savings I had hoped would be there. A single horizontal well in North Dakota costs anywhere from $4.5 - $6.5 million based on published comments by oil companies working in North Dakota. Efficiencies are pushing the price down, but as the price of oil increases, oil service companies can charge more, pushing prices back up.

Elsewhere I questioned the rates of production that Hess said in their conference call based on the IPs that Hess has reported on their wells, but that's another story.

MDU First Quarter, 2010, Earnings Release

MDU's First Quarter Earnings Report (2010) will be available later today; some have received a summary from the company already.

Financials:
1Q, 2010: 22/share cents gain vs a lost of $1.87/share 1Q, 2009
According to some analysts, this missed estimate by 6 cents

Operations:
MDU has increased acreage in two areas for oil and gas exploration and production
Bakken (North Dakota): total -- 56,000 acres
Niobrara (SE Wyoming and north-central Colorado) -- 80,000

Comment: and this is just my personal thoughts, take it for what it's worth -- as a long term investor in MDU early in my investing career, I always thought MDU was appropriately conservative but also very forward-looking. Having said that, I started becoming disillusioned with MDU about two years ago with regard to their activity in western North Dakota (the Bakken). Despite being headquartered in Bismarck, ND, the company seemed to completely miss what was going on under their feet, and let other companies including EOG, COP (BR), WLL, CLR, BEXP, Slawson, Oasis, and even smaller companies like KOG, NOG, and AEZ take the lead in grabbing acreage. As a utility, they were focused on coal and natural gas, of course, but they did have a division, Fidelity, which calls itself an OIL and gas exploration and production company. It appears they did well with natural gas production but not oil. No one could have predicted the fall in natural gas prices and the growing disparity between prices of oil and natural gas, but  other OIL and gas companies seemed to react more quickly. The majors were a bit slow in seeing this shift, and some majors made significant blunders (COP's purchase of natural gas reserves in the Far East a couple of years ago) according to some analysts. But I can't get it out of my mind that MDU was too close to the forest to see the trees. Or is it too close to the trees, to see that there is a forest there?

JRR Tolkien says we all have our myths, and that's my myth regarding MDU.

It appears MDU is trying to get back into the game by increasing its acreage in the Niobrara.

Its other unregulated divisions are dependent on the economic recovery.

MDU's regulated divisions should perform better than peers simply because of the amount of economic activity in western North Dakota.

Official: TFS May Have as Much as the Bakken

It's official: the Three Forks Sanish formation "holds nearly as much recoverable crude oil as the rich Bakken shale formation above it."  That's the word from Bismarck, ND.

The article states that most folks agree that the Bakken formation has about 2.6 billion barrels of recoverable oil in North Dakota. The North Dakota Industrial Commission (NDIC) estimates that the TFS has about 1.9 billion barrels of recoverable oil in North Dakota.

Others think there is even more recoverable oil: Harold Hamm, CLR/CEO, said two years ago or so that he felt there was as much as 8 billion barrels recoverable oil in the Bakken and the TFS in North Dakota.

My inappropriate exuberance is not misplaced.

[By the way, the Madison Group has produced almost 1 billion barrels of oil since oil was discovered in North Dakota. It's hard to believe that if the Bakken is as big as they say it is, it will only produce 2 1/2 times what the Madison Group produced. I won't live long enough to see, but it is an interesting conundrum.]

BEXP First Quarter 2010

Financials

• Net income: gain of 11 cents/share vs loss of $2.60/share same qtr 2009

Operations

• Avg daily production: 5,420 boe, up 1% from first quarter 2009
• Avg daily crude oil production: up 84% from first quarter 2009
• Average price for crude oil first quarter: $72.39/bbl
• 305,400 net acres in North Dakota and Montana
• Rough Rider: 123,000  acres
• Ross Area: 98,800 acres
• Eastern Montana: 83,600 acres

Drilling operations

• Capital to ramp up to 8 operated rigs by May 2011
• Enough liquidity to ramp up beyond 8 operated rigs
• Conference call to follow

Comments:

• Wow: at first glance that measly increase in daily production volumes from one year ago has to be concerning: up only 1% from a year ago. But there's a very good reason for it: it was all due to less natural gas being produced. Crude oil production jumped 84%; natural gas production dropped by almost half. 
• Crude oil production increased  by 84% from first quarter 2009. 
• There were 46 million shares outstanding a year ago; this year, 101 million 
• Overall, this has to be a very good report by any measure; curious what others have to say
• BEXP has five (5) active rigs according to NDIC today (April 29, 2010). Next month, there could be three more BEXP rigs in North Dakota/Montana
• Compare BEXP's 221,800 net acres in North Dakota compared to Newfield's 400,000 net acres

Hess Conference Call, First Quarter, 2010

Hess Conference Call, First Quarter, 2010

Financials
Net income: $538 million gain vs $59 million one year ago
Higher commodity prices offset weaker refining results

Operations
Bakken: 13,000 boepd
Currently: 5 rigs in the Bakken
Exit 2010: 10 rigs in the Bakken
Completed four dual laterals: cost -- $10 - $11 million apiece
Five dual laterals in stage of being completed
EUR of dual laterals: one million barrels per well
30-day average for dual laterals: 1,000 boepd (500 per lateral)

Greg Hill (Hess) on dual laterals:

So, where are we on the drilling? Our current base plan is to utilize the dual laterals across most of our phase one acreage, and that's because the Middle Bakken and Three Forks are largely present across that phase one acreage. Now, the cost advantage of this approach is clear.

You get one less vertical wellbore, you have fewer downhole equipment, you have fewer surface facilities. So, we really believe that there is dual lateral approach combined with the application of lean manufacturing techniques and pad drilling is going to result in superior returns for us on the Bakken, which is why we're going with that approach. Now, we'll say it's in its early days. As we learn, as we need to, we'll change and modify as appropriate. But right now, we're happy with dual lateral performance.

Source: Seeking Alpha

These are the five wells currently being drilled by Hess and the counties they are located in (based on conference call, all except one should be dual laterals):

• 18201, HA-State-152-95-1621H-1, McKenzie, 16-152-95
• 18602, RS-Nelson Farms A-156-90-2829H-1, Mountrail, 27-156-90
• 18838, EN-Abrahamson-155-93-3019H-1, Mountrail, 30-155-93
• 17196, BL-Dilland-156-96-2536H-1, Williams, 25-156-96
• 18680, Blou 13, Williams, 12-155-96W, a vertical well? Surrounded by vertical wells

Comment: reviewing the IPs for Hess wells for the past year, they have all been below 500 bopd (with maybe one or two exceptions, and yet in the conference call, Hess said their dual laterals were all averaging 500/1000 bopd on a daily basis with their on-going production from dual laterals. If we are all on the same page of music, it would suggest that the production from Hess wells improved after the initial production. 

COP Profits Double; Production Fell 5%

Burlington  Resources is a subsidiary of ConocoPhillips (COP). Burlington, of course, saw its fortunes rise when oil was discovered on its property in North Dakota in 1981. I assume many folks who invested in the Bakken, invested in Burlington Resources (BR at the time) and now hold COP.

Today, COP announced that first quarter (2010) profits doubled, even though its production fell 5%.

You may remember that COP was faulted by many for overpaying for natural gas reserves in the Far East. Warren Buffett had a huge COP holding about this time (I don't remember the specifics, but probably bought before, during, and after the natural gas reserves purchase). Pundits said that Buffett probably lost money on the deal; regardless, he subsequently sold some/all of his COP holdings. (I forget the specifics.)

As JRR Tolkien says: we all have our myths. That's my myth regarding COP, BRK, and BR.

General Info on the Bakken and Specific Info on the Bice Test

Lots of information at this discussion group regarding:

• CLR: Bice 1-29H and Bice 2-29H test
• Zones
• The Bakken pool as a continuous reservoir

The issue of zones seems to be getting into the weeds for most of us but if interested, that link provides a good place to start.

However, the link provides a very nice reminder that it is the Bakken pool that is THE large continuous reservoir in the Williston Basin. Again, it is reiterated that there is no other continuous reservoir in the Williston Basin that approaches the size of the Bakken pool. [The day following this post, the North Dakota Industrial Commission officially announces that the Three Forks Sanish may have as much recoverable oil as the Bakken in North Dakota.]

It should be noted that the Madison group (non-continuous pool, I suppose, or a much smaller continuous reservoir) has produced over 900 million barrels of oil since oil was first discovered in North Dakota (1951). On the other hand, the Bakken has produced almost 120 million barrels of oil. The first horizontal well into the Bakken was drilled in 1987. With that data and the reminder that the Bakken is so much bigger, I don't know if I should be inappropriately exuberant about the Bakken or similarly exuberant about the other fields yet to be fully exploited with new technology, including enhanced oil recovery, which I don't think has been used anywhere in the North Dakota Bakken yet.

Actually, just the fact that it is estimated that it will take 10,000 to 20,000 wells to fully exploit the Bakken and another 10,000 wells for the other work that needs to be done is staggering. In the current boom, there has never been as many as 1,000 wells completed in one year.

In fact, as long as I'm rambling, either my math is wrong or something doesn't make sense. It's my understanding that most sources suggest that the Bakken has about 3.65 billion barrels of recoverable oil. 900 million is pretty close to one billion. It's hard for me to believe that if the Bakken is so much bigger than the other formations, and if the technology has improved so much over the past 60 years, that the Bakken is ultimately going to give up only 3.7 times as much as the Madison Group has given up to date. The "basic analysis of the Bakken" estimates the drilling program will not be complete until 2030, and that production will continue through 2100.

Like I said, my math must be wrong. Someone will correct me on it.

Whiting First Quarter 2010 Financial and Operating Results

Full report here.
Note: some figures are rounded. Typographical errors possible. See original report for specifics.

Highlights

• 59,865 boepd, Q1 2010 compared to 54,320 boepd, Q1 2009
• Bakken production (Sanish / Parshall) increased 23% in March 2010 over December 2010
• Production guidance for 2010: raised to 11.5% to 13% over 2009

Production in Q1 2010 sets record: 5.39 million boe (80% oil)

• Represents a 10% increase over Q1 2009
• The production increases were primarily due to the Bakken play

Financial

• $1.60 per basic share/$1.46 per diluted share vs 2009 $0.92 per basic and diluted share
• First quarter discretionary cash flow of $215 million exceeded $125 CAPEX
• Paid down debt; reduced borrowings from $160 million to $100 million

IPs: 24-hour tests

Operations

Sanish Field

• 15,000 boepd
• Completed 19 wells in this quarter; total of 83 WLL-operated wells in the Sanish
• One of these: TFS, Anderson 11-7TFH, with an IP of 1,262.
• 2010: plans to complete 86 operated wells (48 net wells)
• 76 are planned Bakken; 10 are planned TFS

• WLL completed 17-mile pipeline from Sanish field to Enbridge pipeline at Stanley, ND
• Capacity: 65,000 bbls/day; currently moving 10,000 bbls/day
• Expects to move 2/3rd of its production by pipeline by end of 2010
• Saves $1 - $2/bbl vs truck

Parshall Field

• 6,500 boepd
• Has participated in 116 wells in the Parshall
• 111 are producing; 4 are awaiting completion; and one is being drilled

NOG's Policy Statement on IPs

With all the discussion about IPs, this is a very nice press release from NOG.

Note their comments about IPs, near the bottom of the press release:

"Northern Oil continues to believe that early 24 hour rates are not useful in determining the economics of a well. Northern Oil is focused on well payout, which, in our core Slawson Exploration drilling program, we expect to occur four months on average following commencement of production. As previously guided, Northern Oil will begin to report well flow rates as far out as 60 days, when available."

By the way, if you have an interest in the Bakken, Slawson, or NOG, you should look at that press release: the average flow rates and the number of wells NOG is completing is eye-watering.

I have to thank an "anonymous" reader for alerting me to this press release. There is just too much information to keep track of.

Nitty Gritty on Drilling a Horizontal

If you want to know a bit more about drilling a horizontal well , click here, and scroll down about 2/3rds of the way down, to Apr 21, 5:30 a.m., to see what "Degas" has written about horizontal drilling.

Actually it's quite interesting.

Pure trivia. But I love it.

Samson Oil and Gas Limited (SSN)

NEWS

February 26, 2022: to recomplete an old well, using EOR.

February 20, 2022: closing the loop. Samson Oil & Gas selling Williston Basin assets. Link here. 

June 28, 2013: SSN sells Montana acreage to raise money to develop its Stockyard Creek prospect.

April 16, 2013: SSN to acquire 1,225 net acres to add to its Rainbow Prospect. 

March 22, 2013: Operational update, 2013. Stockyard Creek and north of Minot. Exciting.

January 18, 2013:  Major update; acreage swap makes SSN an operator in the northern half (Northern Tier) of Stockyard Creek; will develop 14 wells at 160-acre spacing.

December 26, 2011: update on SSN. 

November 23, 2011: There was an announcement that the investor group, KKR, is buying into the Bakken. It is important not to get confused by the announcement. KKR is NOT buying the Samson Oil and Gas company (SSN), an Australian oil and gas company that holds acreage in the Bakken but does not operate any of its own wells there. This site is about SSN.  Rather, KKR is buying Samson Investment Company, Tulsa, OK , one of the largest exploration and production companies in the US.

July 28, 2011: SSN finalizes acquisition of 20,000 acres of Williston Bakken in Montana, just across the border. 

July 5, 2011: Motley Fool shows some interest in SSN.

June 24, 2011: Samson Oil and Gas to acquire an additional 90,000 acres in the Williston Basin Bakken. All in Roosevelt County, Montana, just west of Williston, ND.

March 26, 2011: SSN to sell its gas assets in Green River Basin, Wyoming, for $6.3 million.

March 22, 2011: Update on Samson's fracking of Rodney and Everett in the Stockyard Creek.

February 2, 2011:  SeekingAlpha: cautious on SSN. I agree.

January 17, 2011: Updates, regarding recent significant price move.

August 30, 2010: Delay in completing Gary 1-24H, but no suggestion of any long-term problem; well is operated by Zavanna.

July 12, 2010: new corporate presentation.

June 11, 2010: For future reference: an open letter from the president, Samson Oil and Gas, regarding the BP spill in the gulf.

NOTE: Samson Oil and Gas (SSN) is a publicly traded company based in Australia. This is not about Samson Resources, a private company, headquartered in Denver, with international offices in Houston. Samson Resources is a driller/operator in the Bakken. SSN owns controls acreage in the Bakken and has working interests in Bakken wells, but to the best of my knowledge, does not actually operate its own rigs in the Bakken. 

NOTE: some of the information below could be construed as a recommendation to invest in Samson Oil and Gas Limited. This is not the point of this posting. I try very hard not to make recommendations and to remain neutral in "all things Bakken." In this particular case, it is even more important that folks understand this. Samson is a very, very small company, headquartered outside the United States, and has a very small footprint in North Dakota. I assume that most investors would consider Samson a speculative play.  On the other hand, it doesn't take many good wells to change the fortune of these small companies, compared to a very good well for EOG.

One of the reasons for posting this: it helps me keep track of the location and the activity in the various oil fields in North Dakota which is one of the prime reasons I started this blog, just to help me keep track of what is going in my home state.

Samson Oil and Gas Limited (SSN)

Samson is a very small cap Australian company. Its market capitalization is about $40 million. KOG is 10 times that at $400 million, and NOG is about double that at $700 million (April, 2010). (Samson does need to update its website regarding its activity in the Bakken; they reference plans for "the remainder of 2007 and 2008," suggesting they last updated that page in late 2007, which speaks volumes about attention to detail; of course, they may be very, very busy just looking for oil.)

I would normally include Samson among "my other producers" but with the recent announcement of a very successful well, the Gene 1-22 well in Williams County, northeast of Williston (and the fact that someone asked if I would post something about it at this site), I thought now would be a good time to add it to the list of Bakken producers.

I don't know much about the background of this company, yet. According to its Yahoo! profile, its interest is in the US (though it is headquartered in Australia) and specifically in Wyoming, North Dakota,  New Mexico, and Texas. Ex-patriots living the good life in the "outback"? Who knows.

The company has been around since 1980, not much longer than KOG (1972). It has accumulated a very small amount of acreage in North Dakota, about 3,600 net acres, most if not all in the North Stockyard oil field in Williams County, which neighbors the northeastern edge of BEXP's "Rough Rider" prospect.

Zavanna is Samson's drilling/completion operator in the "North Stockyard" oil field. The Gene 1-22H well is on my "new wells reporting" as well as my list of  "high initial production wells."

From "dfwtracker" post:

"...Based on it's location the Gene 22-1 well and Samson's adjacent acreage could have been priojected for excellent results, but the 2,936 boe/d from a short horizontal was well above expectations.

Jakobreith posted that the 2,936 boe/d was a new Bakken record for a short lateral and I can confirm it is by far the best results from a Bakken formation short lateral that I have seen.

Samson has six 640 acre spacing units in this area and management has stated with 320 acre spacing they can drill a total of ten Bakken wells. There is also a good possibilty of just as many Three Fork formation wells on this acreage with comparable results.

Samson and Zavanna plan to drill several wells on this acreage this year and the the immediate cash flow from the Gene 22-1 and these other future Bakken wells will be beneficial in funding the acceleration of Samson's drilling activities and production and reserve growth."

Source: Yahoo message boards.

I suppose now that I've put up a separate post for Samson, I will have to do the same for several other small Bakken producers, such as American Energy. Smile.

By the way, these new IP "records" are subject to much discussion. See comments: apparently this was based on an 8-hour flowback. I generally won't get into discussions on "right/wrong" regarding IPs. I just report them and any additional factual information regarding how they were determined.

Madison Group

Updates

April 15, 2019:

• Red Wing Creek, see this post;
• #35030, a DUC, reported as completed this date; see this post;
• #20240, sister well on the pad...Madison, t6/11; cum 401K 2/19;

September 16, 2017: Oasis to sell off non-core ND/MT assets; mostly Madison wells.

August 17, 2017: two interesting Madison wells; both re-entered wells.

August 12, 2017: there are indications that interest in the Madison is about to pick up  --- not with vertical wells, but with horizontal wells. Petro Harvester is the one to watch. 

May 24, 2017: Sedalia reports a nice horizontal Madison well northeast of Minot. 

April 6, 2012: Note: according to the North Dakota Geologic Society, the Lodgepole formation is part of the Madison Group.

The Madison Group is made up of three formations; the Lodgepole, Mission Canyon, and Charles, in ascending order (Fig. 6). These formations are conformable in the basin center, but exhibit complex intertonguing relationships along the basin margins.

However, according to Teegue:

The Lodgepole is not part of the Madison Pool. Teegue states that the Madison Pool is almost always defined as from the base of the Last Salt to the top of the Lodgepole formation.

And that makes sense, what Teegue says. Interestingly, on the sundry form accompanying the Oasis Clark well in Tyrone oil field north of Williston, the pool was originally typed in as "Bakken" only to be crossed out and inked in with Lodgepole.

Teegue goes on:

[I]t [the Oasis Clark well] will either be placed in the current or amended Bakken pool or a newly established Lodgepole pool.

NEWS 

(Only Significant News)

August 22, 2016: a Madison well -- the first one reported in a long time, north of Minot:

• 31365, SI/NC, Statoil, Topaz 20-17 5TFH, Banks, no production data,
• 32377, IA/36, Prairie Hills Oil and Gas, LLC, McCarroll 1H, Grover, a Madison well, Target Horizon: Sherwood;  320-acre spacing; W2 of section 16-162-66; t3/16; cum 2K 6/16;  drilling plan: true vertical depth, 5,021 feet; TD = 9,446 feet; went inactive 8/16; sundry form received June, 2017, suggests work being done on this well;  PA as of 7/16;  

According to dmr.nd:

The Madison Group has been divided into a number of informal, wireline log-defined intervals. In ascending order, they are the Bottineau, Tilston, Landa, Wayne, Glenburn, Mohall, Sherwood, Bluell, Coteau, Dale, Nesson, Midale, Ratcliffe, and Poplar intervals. Hendricks subdivided the Ratcliffe interval into several subintervals, the Berentson, Alexander, Flat Lake, Charles C, Lustre, and Eggebrecht.

Comments:

This is the only well/permit currently held by Prairie Hills Oil and Gas, LLC. This well is API: 33-075-01484. This company has been mentioned before on the blog and linked this oilpatchdispatch story. It looks like the company is a ND limited liability company that filed on June 2, 2015, with a registered agent in Bismarck, ND, and a principal address in Big Lake, MN.

March 30, 2014: update on wildcat wells 35 miles northwest of Minot which will probably all be Madison wells. 

July 29, 2012: notice comments at this posting regarding the Mission Canyon formation being targeted along the Canadian border:

It does appear that Surge believes Madison/Mission Canyon may be a second target from the Spearfish. Even though NDIC names the Spearfish to be Spearfish Madison, the drilling lands in the Spearfish on the 15 or so wells that EOG, Corinthian and Legacy have drilled since horiz drilling started in 2009 in Bottineau County. Most of the older wells in this area of ND targeted the Madison using vert drilling. These are now stripper or abandoned. It will be interesting to find out more about the Mission Canyon hearings as these are right in the middle of what has been for the last 3 years an attempt to establish a Spearfish play. If the objective is Mission Canyon, then these two wells will be slightly deeper as the Spearfish overlays the Madison in this area. It will also will be interesting to find out if horiz Madison is the objective. Sure seems as tho Surge saw something on the seismic in mc and want a closer look.

January 9, 2012: a million-bbl-Madison well!

January 6, 2012: Some interesting Madison wells transferred from Citation to Oxy Little Knife LLC

December 24, 2011: random look at some Madison wells in the Hawkeye oil field

December 23, 2011: random look at some Madison wells in the Little Knife oil field

December 2, 2011: Finally, others starting to talk about the Madison

November 25, 2011: Taking another look at the Bakken

October 26, 2011: Whiting's Madison wells in Big Stick field (Billings County).

January 31, 2011: A Madison well with an IP>1,000 bbls and 37,000 bbls cumulative after only 3.5 months.

ORIGINAL POST

In addition to the Bakken, there are several other formations of interest in North Dakota. Despite all the attention the Bakken is getting, the primary oil-producing interval in the Williston Basin remains the Madison Group.

Through December, 2009, cumulative totals of oil production for the following formations (data from NDIC):

• Bakken: 119,635,155
• Madison: 905,377,939 
• Red River (all): 217,564,177
• Spearfish (all): 53,667,202 

North Dakota will produce about 100 million barrels of oil this year. Even if that entire production was from the Bakken, and it clearly isn't (there are a lot of legacy wells), it would still take several years for the Bakken to surpass the Madison in total oil output.

The Madison Group is divided into three formations in the Williston Basin: the Lodgepole, the Mission Canyon, and the Charles.

Note that KOG has a rig in the Red River-Mission Canyon play in Montana just across the border and west of Williston. 

Background

In a study published in September, 2005, by the PCO2R Parnership (the federal government's Energy and Environmental Research Center [EERC] and the University of North Dakota), the authors noted:

1. The Madison GSU (aquifer) underlies both the Williston and Powder River Basins. It has the potential to be a significant sequestration unit in the PCOR Partnership region.

2. In the Williston Basin, the Madison is given group status and divided into three formations, which in ascending order are the Lodgepole, Mission Canyon, and the Charles. The Lodgepole and Mission Canyon are carbonates and have porosity; the Charles Formation is dominated by [salts] and lacks permeability.

3. The Madison Group is the primary oil-producing interval in the Williston Basin.  Again, this report was published in 2005.

4. In the Powder River Basin, the Madison is not subdivided, and the equivalent stratigraphic unit is called the Madison limestone. 

Key members of the PCO2R partnership that contributed to this report include Julie A. LeFever, North Dakota Geological Survey; Richard D. LeFever, UND, Geology/Geological Engineering; Lynn D. Helms, North Dakota Industrial Commission; as well as Fischer, Smith, Peck, Sorensen, Steadman and Harju of the EERC.

On another note: here are ways investors can play the CCS game.

Anomalies in Sections from the 1800's Surveying

When you go to this link, scroll down a little more than halfway, looking for a post by "Allen" if you are interested in learning a bit about the history of surveying the midwest back in the 1800's and an explanation for some of the anomalies in the results.

Pure trivia.

20,000 wells in the Bakken?

[While reading the following post, keep a couple points in mind:

• North Dakota is on its way to granting 1200 permits for new wells this calendar year
• With 100 active rigs in state, and 10 wells/year/rig, it should be easy to drill 1,000 wells/year]

Here's the story:
I am often accused of being inappropriately exuberant about the Bakken. I won't deny it.

But if this doesn't "move you," nothing will.

This was in yesterday's (April 26, 2010) issue of the Minot Daily News.com.  The main point of the article has been articulated before, most recently in a basic analysis of the Bakken, but the article in the Minot Daily News breaks down how the numbers were arrived at.

Lead paragraph:

"The head of the state department that oversees mineral resources in North Dakota says it will take 10,000 to 20,000 wells to fully develop the Bakken-Three Forks Formations."

Note: this estimate does not include the Spearfish (currently being developed by EOG) or the other formations in the Williston Basin: Red River, Madison, Lodgepole, and others.

But I digress.

Here is how Lynn Helms breaks down the 20,000 wells to develop the Bakken-TFS formations.  I rounded some of the numbers for easier reading.

Ray-Tioga area:

• 430 to 540 wells per year for 11 to 14 years (5000 wells)
• 4 million gallons of water/day May through December

Williston area:

• 70  to 90 wells per year for eight to 20 years (2000 wells)
• 1 million gallons of water/day May through December

Alexander area:

• 120 to 150 wells per year for 12 to 15 years (2000 wells)
• 2 million gallons of water/day May through December

Watford City - Keene area:

• 250 to 310 wells per year for five to seven years (1500 wells)
• 2 million gallons of water/day May through December

Killdeer area:

• 235 to 290 wells per year for six to eight years (2000 wells)
• 1 million gallons of water/day May through December

Parshall area:

• 375 to 450 wells per year for seven to eight years (3000 wells)
• 2 million gallons of water/day May through December

That's just the half of it


But that is just half the story. Lynn Helms said that other areas would also develop oil and these areas would also require about 20,000 to be fully developed. These areas include: Ward (Minot), Bottineau (Spearfish formation), Burke, Renville, McLean, Bowman, Slope and Stark.

The original timeline remains pretty much on schedule though it has been pushed out one to two years; according to Minot Daily News, Helms said that momentum was lost during the five-month price drop.

(Incidentally: "....momentum was lost during the five-month price drop." That tends to validate those who have noticed a paucity of new wells being reported this month. Are producers waiting for price of oil to trend upwards?)

Halliburton Crews (Fracking) Go To 24 Hours Operations in the Bakken

Halliburton has announced that its fracking crews will now work around the clock (24/7) in the Bakken. Demand has simply outpaced supply.

From other sources, it is my understanding that there can be a six-month wait to get a fracking crew on site to complete a well.

Bismarck (ND) Oil Conference: Largest North of Houston

From the office of the Williston (ND) Economic Development:

"North Dakota's oil industry is getting more and more popular all of the time....oil producers are shifting their focus to shale formations -- like the Bakken. That change is bringing even more growth to North Dakota. More than 2,000 have registered for the Williston Basin Petroleum Conference and Expo in Bismarck next week -- making the oil show the largest one north of Houston."

Of course, between Bismarck and Houston, except for Tulsa, there isn't much with regard to oil. Smile.

Newfield Reports Four New Wells; Two in Sand Creek

This might be old news to some folks, but Newfield Exploration recently issued a press release announcing the completion of four wells:

18267, Clear Creek State 1-36, 3,932 IP; with a 502 boe 30-day average
18122, Arkadios 1-18H, 1,686 IP; with a 457 boe day average
18284, Pittsburg 1-3H, 4,143 IP; with a 1,200 boe day average
18323, Sand Creek Federal 1-21H, 2,568 IP, with a 1,137 boe 30 day average

The Pittsburg and Sand Creek Federal are in the Sand Creek oil field; the Arkadios is in the Haystack Butte oil field; and, the Clear Creek State oil well is in the Westberg oil field, which is south of, and shares a border, with Sand Creek.

Again, with the new ways of determining IPs, it is becoming more and more difficult to know exactly how good these wells are. We will only really know when we get the yearly results.

But can we learn anything from Sand Creek?

Background:

Back in March, 2010, some folks were noting the horrendous decline rate of the Alice Federal 1-28H well (17758), also in Sand Creek. The decline rate issue is nothing new for Bakken wells. Its IP was 617, not bad by historical standards but not exciting by what we've seen in this boom in the Parshall. Worse, by the sixth month, this well was down to 80 barrels/day.

So, what can we learn from Sand Creek now that we've seen two wells come in with IPs of 1,000 to 4,000 boepd (depending on how one calculates IPs) compared to a well that is now producing only 80 bbls/day with an initial IP of 600?

I started to write what I thought we could learn from this, but I felt I was beginning to ramble, and so after quite a bit of writing, just deleted it all.

But this is what is is: the Sand Creek (1,137) well is only one mile due north of the Alice Federal (617); and, the Pittsburg (1,200) is only three miles north of the Sand Creek. The first full month of production for the Alice Federal was August, 2009. I assume the two new Sand Creek wells were completed within the last month or so.

Meanwhile, on another note, Newfield, in a press release, states that it expects its Williston Basin production to increase by 40% in 2010.

KOG Areas of Interest -- Update April 27, 2010

Kodiak Oil and Gas, Inc., has four areas of interest in the Bakken.

According to their current presentation (I don't know if these links break/change over time; this is the April, 2010, presentation),  these are the four areas in the Bakken where Kodiak has leases. Three of the four areas are in North Dakota; the fourth is in Montana, just across the border from ND.

FBIR Bakken / Three Forks / Dunn County, North Dakota

55,000 / 35,000 (gross / net) acres
Bakken producers
Additional producers: TFS
Entirely within the Fort Berthold Indian Reservation (FBIR)
This area is located in the southwest corner of the FBIR
Gross acreage represents almost 10 percent of the reservation (personal estimated observation)
This appears to be KOG's most active area at the present time
Within this area of operations, KOG identifies six "prospects"

Two Shields Butte:  partner XTO (50/50)
Saddle Butte: partner XTO (50/50)
Skunk Creek: partner private company (60/40)
Moccasin Creek: partner private company (60/40)
Charging Eagle:  no partners identified
Tall Bear: no partners identified

Koala (North Dakota)

5,680 / 4,531 (gross/net) acres
Bakken/TFS -- west of Nesson
This is the four-corner area of townships: 152-100, 152-99, 151-100, and 151-99
This is located just south of the river, northeast of Alexander
If I read the various maps correctly, County Road 29 runs right through KOG's immediately south of the river
Acquired in April, 2010: represents about 8 sections total
KOG: "heart of McKenzie County play"

Will ask NDIC for six (6) 1280-acre spacing units
Request two to three well bores per 1280-acre spacing unit
Total: 12 - 18 gross Bakken locations

Red River - Mission Canyon Play / Other Williston Basin / Montana

22,600 net acres
Bakken / TFS potential
Red River / Mission Canyon
In Sheridan County (Montana) and Divide County (North Dakota) -- north of Williams County (Williston)
KOG's acreage appears to be entirely inside Montana, just west of the ND border

I don't follow activity in Montana (I don't have time) but KOG recently took delivery of its second rig. KOG now has one rig in ND and one rig in Montana. The rig in Montana is currently drilling a vertical well into the Red River formation.

Grizzly (Elm Coulee Bakken Trend) / North Dakota

3,907 / 3,419 (gross/net) acres
Existing Bakken producers
Additional Bakken / TFS
KOG's acres within Elm Coulee is on the North Dakota side of the border, McKenzie County, between Sidney, MT, and Alexander, ND
Acquisition in April 2010 increased working interest to 87.5% on 3,900 gross acres
Two existing producing wells

16162, Kodiak Grizzly 13-6H, 6-147-104
16300, Grizzly Federal 1-27H, 27-148-105

Two new wells planned for Q210

xxxxx, Grizzly Federal 13-6H, 6-147-104 (no permit yet)
18923, Grizzly Federal 1-27H-R

Fort Berthold Indian Reservation Update -- April 27, 2010

NEWS

August 2, 2010: Connecting the dots -- the Arrow Pipeline. MHA, SHD, XOM, XTO, KOG, QEP.

April 28, 2010: #18968/#18969, Petro-Hunt, Fort Berthold 148-95-22D-15-1H/Fort Berthold 148-95-27A-34-1H/ new permits, NDIC.  Two wells on same pad. Both wildcats. Interesting.


April 28, 2010: KOG, Moccasin Creek 16-3-11H, #18295, reports 1,260 bopd, NDIC.

ORIGINAL COMMENTARY

It is ironic that the location where "the Bakken" was discovered has been lagging in activity. Until now. See Minot Daily News.

The first "real" horizontal Bakken well was drilled in 2006. The well was inside the reservation and yet it is only now, 2010 and 2011, when the oil activity inside the reservation will finally catch up with activity in the rest of the Bakken outside the reservation.

For the past few months now I  have been posting this little nugget: 2010 should be a watershed year for Fort Berthold Indian Reservation.

It is my impression that FBIR is two years behind the rest of the Bakken, particularly the prolific Sanish ("owned" by Whiting) and Parshall ("owned" by EOG) oil fields, because of (artificial) bureaucratic obstacles in Washington, DC. North Dakota Senator Dorgan is credited with removing those obstacles and it appears the federal regulatory process for granting permits in the reservation now has a similar timeline to that of the state.

It is my impression, based on permits granted, and the number of rigs in the reservation, that 2010 - 2011 will be the time period in which the reservation catches up with the rest of the Bakken.

With that as background, I was thrilled today to see the very lengthy article in Minot's local paper about the activity on-going in the reservation. It is absolutely incredible.  [Update. September 21, 2010: as predicted, this link is now broken. I find it amazing how local newspapers don't archive these articles. Fortunately I posted the main points from the article below.]

You may want to cut and paste pertinent information from this article. Some of these articles are archived after a few weeks and they become hard to find. Some sites only allow access to archives through a subscription, albeit, some are free.

Unless I missed it, the article did not mention the refinery that is still on track for the reservation.

From the article

Activity:

• Producing wells inside the reservation: 41 (seems low, actually; thus, huge potential)
• Active rigs inside the reservation: 20
• Oil companies working inside the reservation: 16. Instead of listing all those inside the reservation, it is easier to note the notable exception: Whiting. Others I don't see: NOG, AEZ, Fidelity. Of course, EOG is there; EOG is everywhere. Companies I associate with the reservation: KOG and its partners, Slawson and XTO. 

Definitions from the article:

• Tribal land: land inside the reservation owned by the Three Affiliated Tribes
• Allotted land: land inside the reservation owned by individual Indians
• Fee land: land NOT held in trust by US government
• Trust land: land held in trust by US government; can be tribal or allotted

Applications for New Permits:

• Applications for new permits: 175 pending (as of date of interview for story)
• Applications approved for new permits: 92 (as of date of interview for story) 
• Compare: in 2008, there were 14 permits (versus 92) approved -- obstacles? Yes.
• For perspective: "we" are on track for 1200 permits to be issued in North Dakota this year (2010); that averages about 3 new permits/day; the most permits granted in one year in current boom was about 950 in 2008; there were about 630 permits granted in 2009

Acreage, Mineral Rights and Management:

• Acres leased in the reservation: 502,862 (total FBIR acreage: slightly less than 1 million)
• Most of the tribes' mineral rights are under water (the lake is controlled by US Army Corps of Engineers) -- somehow that doesn't surprise me -- very, very sad
• Comment: most folks who opine on this issue say that the Corps has been responsive and helpful
• Bureaucratic process: the process to drill a well on federal land in the Bakken is a 49-step process
• The Minerals Registration Act of 1984 returned the minerals under Lake Sakakawea to the Three Affiliated Tribes -- I wonder who made up the ND congressional delegation to right this wrong?
• There are wells being drilled under the lake; south of Parshall and in the Mandaree areas; I assume "they" should have more than enough water for fracking

History:

• First "real" Bakken well: Parshall 1-36, April, 2006, was the first real successful well that utilized horizontal drilling in the Bakken

Issues that affect drilling in the reservation:

• Taxes and wealth distribution
• Federal mandates: encourage self sufficiency of the reservations but maintain their national park-like image

Western Union

I have added a new page called "Western Union" which you can find at the top of my blog. It is an attempt to link those folks who consistently post good information about the Bakken.

Active Rigs -- As of April 27, 2010

This is a summary of the active rigs at the NDIC's active drilling rig list, April 27, 2010.  This may or may not add up to 111. I could have missed a couple one way or the other, but I believe it's pretty close.

My only comment: some may be disappointed with one company who has only one active rig in North Dakota, and yet its parent has been headquartered in North Dakota for decades. Some may ask, "how did they miss this?" The answer: like some others, perhaps their business plan is to minimize risk by acquiring acreage and partnering, but not actually drilling. Buy why any rigs at all, then?

When EOG's 13th rig is active again, the current number of 111 will move to 112, and once load restrictions on North Dakota highways is lifted, the number should increase. Some analysts have said there could be 150 wells by the end of the year (2010); most have said 125. I'm beginning to wonder if fracking crews are the bottleneck and not the number of rigs.

Rigs are needed for two purposes: a) current cash flow; and, b) to hold leases that are about to expire. If one cannot complete a well because fracking crews are not available, it does not make much sense to bring in another rig, unless there is a backlog of leases about to expire.

There is one other unknown: the number of new drillers coming in.

If my reasoning is correct, the list below should remain constant for the rest of the year with the exception that we might be see a few new drillers bring in rigs.

WLL: 11    

EOG: 12 (earlier this month, EOG had 13)

CLR: 12   

BEXP: 5   

Slawson: 5 

BR: 3 

Marathon: 4 

Hess: 6  

Newfield: 3 

St Mary Land: 2    

Petro-Hunt: 4   

Encore: 2  

XTO: 5  

Anschutz: 4  

Cirque: 1  

Zenergy: 4 

Tracker: 3 

Zavanna: 1  

Kodiak: 1 in ND; 1 in MT

Oasis: 3   

Murex: 3

Others: Questar (1), Sagebrush (1), Hunt (2), Ritchie (0), American (1), Eagle (1), Baytex (1), Samson (0), Simray (1), Jayhawk (0), PDC (1), Cornerstone (1), Peak (1), Fidelity  (1), North Plains (1), BTA (2)

May, 2010, Dockets

May 6, 2010

12247: CLR -- legalese, is CLR authorized to recover...Camel Butte-Bakken Pool, 15 and 22, 151-96.

12248, cont'd: CLR -- legalese, is CLR authorized to recover...Johnson Corner-Bakken Pool, 4 and 9, 150-96.

May 13, 2010

12506: BEXP -- to extend Rosebud-Bakken field; two 1280-acre units; sections 1 and 12; 2 and 11, 153-102, Williams and McKenzie Counties.

May 27, 2010

12509: Peak -- proper spacing, etc., for McGregory Buttes-Bakken Pool.
12510: Spacing units in four sections, 149-98, McKenzie County
12511: Newfield -- develop pool discovered with Manta Ray 1-12H, 150-100, McKenzie
12068, cont'd: Newfield -- temp spacing for Chanel 1-33H, 154-100
12512: Sagebrush -- temp spacing for Earl Chrest Jr 1-H, 161-91, Burke County
12513: Samson -- amend field rules for Bluffton-Bakken, 2 wells
12514: Anschutz -- amend field rules for St Anthony-Bakken, 2 wells
12515: CLR -- eliminating setback rules in Elm Tree-Bakken and Antelope-Sanish Pool
12516: CLR -- amending field rules for Antelope-Sanish Pool, 1 well
12517: CLR -- eliminating setback rules in Edge-Bakken,
12518: CLR -- eliminating setback rules in Ranch Creek-Bakken, 6 wells
12519: CLR -- eliminating setback rules in Ranch Coulee- Bakken, 4 wells
12520: CLR - amending field rules for Ranch Creek-Bakken, 6 wells
12521: CLR -- amend field rules for Eidah-Bakken, 1 well
12522: CLR -- amend field rules for 153-101, 6 wells
12523: CLR -- amend field rules for Squires-Bakken, 1 well
12524: CLR -- amend field rules for Alkali Creek/Elm Tree-Bakken, 1 well
12525: CLR -- amend field rules for Hebron-Bakken, 960-acre, 1 well
12526: CLR -- 153-101, 1 well
12527: CLR -- 150-96, 1 well
12528: CLR -- 146-99, 1 well
12447, cont'd: CLR -- redefine Ranch Coulee-Bakken
12140, cont'd: CLR -- develop Oakdale-Bakken
12316, cont'd: CLR -- amend Big Gulch-Bakken, 2 wells
12014, cont'd: CLR -- to develop Traxel 1-31H
12200, cont'd: CLR -- temp spacing for Ole 1-29H
12529: XTO -- revoke BR's Olympian 14-35H, 35-147-94
12530: Sinclair -- amending Knife-Bakken, 2 wells
12531: Slawson -- amend Antelope-Sanish, 1 well
12532: EOG -- amending field rules for Van Hook-Bakken, 3 wells
12533: EOG -- amending field rules for Clear Water-Bakken, 10 wells
12534: EOG -- Clarks Creek-Bakken, 6 wells
12535: EOG -- Thompson Lake-Bakken, 3 wells
12536: EOG -- Kittleson Slough-Bakken, 4 wells
12537: EOG -- Parshall-Bakken, 1 well
12538: EOG -- Clear Water / Ross-Bakken, 1 well
12539: EOG -- 151-95, 6 wells
12540: EOG -- North Souris-Spearfish, multiple wells, 164-77
12541: EOG -- Bottineau County, 1 well
12412, cont'd: EOG -- Clarks Creek-Bakken, 1 well
12414, cont'd: EOG -- 151-95, 1 well
12413, cont'd: EOG -- Antelope-Sanish, 3 wells
12542: BEXP -- Catwalk-Bakken, 1 well
12543: Zenergy -- 152-101, 1 well
12544: Zenergy -- Cartwright-Bakken, 2 wells
12545: Zenergy -- Painted Woods-Bakken, 5 wells, unusual spacing
12546: Zenergy -- Todd-Bakken, 2 wells
12547: Zenergy -- Rosebud-Bakken, 1 well
12548: Zenergy -- 153-103, 1 well
12549: Zenergy -- 153-102, 1 well
12550: Zenergy -- 151-104, 1 well
12551: Zenergy: 151-102, 4 wells
12552: Zenergy -- 150-100, 7 wells
12463, cont'd: Zenergy -- 151-101, 4 wells
12319, cont'd: Cirque -- complete Red Lady 36-4H, 160-91, Burke
12452, cont'd: Fidelity -- Cedar Creek-Eagle Pool, unspecified # of wells
12164, cont'd: Golden Eye -- 153-101, 1 well
12082, cont'd: Prima -- develop MacTavish 32-30, Bottineau County
9465, cont'd: Sinclair -- develop Saetz Federal 6-25, 147-98
12291, cont'd: Tracker -- redefine Saxon-Bakken field
12553: CLR -- revoke Sinclair's Pajorlie 1-2H (#18852)
12554: North Plains -- redefine Truax-Bakken; 3 wells
12555: North Plains -- 153-97, 2 wells
12556: North Plains -- 159-97, 1 well
12194, cont'd: North Plains -- Truax-Bakken, 1 well
12406, cont'd: Questar -- Deep Water Bay field, 4 wells
12557: Cirque -- pooling Dimond-Bakken
12558: Sagebrush -- pools Earl Chrest Jr 1-H
12559: Newfield -- density well in Clear Creek-Bakken
12560: Newfield -- density well in Westbeg-Bakken
12561: Newfield -- density well Sand Creek-Bakken
12562: CLR -- density well, Dolphin-Bakken
12563: CLR -- density well in Hamlet-Bakken
12564: CLR -- density well in North Tioga-Bakken
12565: CLR -- pooling in Upland-Bakken
12566: CLR -- pooling in Upland-Bakken
12567: CLR -- pooling in Upland-Bakken
12568: CLR -- pooling  for Harriet 1-22H in Hamlet-Bakken
12569: CLR -- pooling in Dolphin-Bakken
12570: CLR -- pooling in Dolphin-Bakken
12571: CLR -- pooling in 159-96, any Temple or any other Bakken Pool
12572: CLR -- polling for Stedman 1-24H
12573: CLR -- pooling in Hebron-Bakken
12574: CLR -- pooling in Hebron-Bakken
12575: CLR -- pooling in Hebron-Bakken
12576: CLR -- pooling in Hebron-Bakken
12577: CLR -- pooling in Hebron-Bakken
12578: CLR -- pooling in Squires-Bakken
12579: CLR -- pooling in Squires-Bakken
12580: CLR -- pooling  for Ricky 1-18H in Squires-Bakken
12581: CLR -- pooling in Hawkeye-Bakken
12582: CLR -- pooling for Stortroen 1-13T in Dimmick Lake-Bakken
12583: CLR -- pooling for Nordeng 1-8H in Elidah-Bakken
12584: CLR -- pooling in Elidah-Bakken
12585: CLR -- pooling for Clover 1-3H, in Murphy Creek-Bakken
12228, cont'd: CLR -- pooling for Ole 1-29H
12586: XTO -- pooling for Carus Federal 24X-36 in Lost Bridge-Bakken
12587: Hunt -- pooling for Palermo 1-24-25H in Ross-Bakken
12588: Hunt -- pooling for Palermo 1-13-12H-1, Ross-Bakken
12589: Hunt -- pooling for McGahan 1-18-7H in Ross-Bakken
12590: BEXP -- pooling for Arnson 13-24 1-H in Squires-Bakken
12591: BEXP -- pooling for Sorenson 29-32 1-H, in Alger-Bakken
12592: BEXP -- pooling for Jack Erickson 6-31 1-H, Painted Woods
12593: BEXP -- pooling for Mortenson 5-32 1-H, Painted Woods
12594: BEXP -- pooling for Abelmann-State 21-16 1-H, Camp-Bakken
12595: BEXP -- pooling for Papineau Trust 17-20 1-H in Elk-Bakken
12596: Tracker -- pooling for Crying Tree 8-1H in Little Knife-Bakken
12597: Tracker -- pooling for Wint 9-1H in Little Knife-Bakken
12598: Tracker -- pooling for Olson 3-1H in Little Knife
12599: Tracker -- pooling for Daniele 12-1H in Little Knife
12600: Tracker -- pooling for Dirkach 34-1H, Murphy Creek
12601: Tracker -- pooling for Kudrna 10-1H in Murphy Creek
12602: Abraxas -- pooling in North Fork-Bakken
12603: Slawson -- pooling for Jackal 1-17H in Ross-Bakken
12604: Slawson -- pooling for Wizard 1-35H in Big Bend-Bakken
12605: Slawson -- pooling for Atlantis Federal 1-34-35H in Van Hook
12606: Slawson -- pooling in Big Bend
12607: Slawson -- pooling in Big Bend
12609: Slawson -- pooling in Big Bend
12610: Slawson -- pooling for Tarantula 1-16H, Van Hook
12611: Slawson -- pooling for Tempest 1-14H, Van Hook
12612: Slawson -- pooling for Genesis 1-13H, Van Hook
12613: Slawson -- pooling for Meerkat 1-12H, Sanish
12614: Slawson -- pooling for Meerkat 1-7H, Sanish
12615: Slawson -- pooling for Lunker Federal 1-33-4H, Van Hook
12616: Slawson -- pooling for Bandit 1-29H, Van Hook
12617: Slawson -- pooling in Van Hook
12618: Slawson -- pooling for Voyager 1-28H, Van Hook
12619: Slawson -- pooling in Van Hook
12620: Slawson -- pooling in Van Hook
12621: Slawson -- pooling for Mamba 1-20H, Van Hook
12622: Slawson -- pooling for Nightcrawler 1-17H, Van Hook
12623: Slawson -- pooling for Prowler 1-6H, Van Hook
12624: Slawson -- pooling for Pathfinder 1-9H, Sanish
12625: Slawson -- pooling for Peacemaker 1-8H, Sanish
12626: Slawson -- pooling for Prospector 1-36H, Parshall
12627: Slawson -- pooling for Badger 1-9H, Van Hook
12628: Slawson -- pooling for Sniper Federal 1-6-7H, Big Bend
12629: Slawson -- pooling for Wolf 1-4H, Van Hook
12630: Slawson -- pooling in Van Hook
12631: gap -- see below
12632: EOG -- pooling in Clearwater
12633: EOG -- pooling for James Hill 4-10H, Kittleson Slough
12634: EOG -- pooling for Burke 24-06H, Stanley-Bakken
12635: EOG -- pooling for Burke 4-06H, Stanley-Bakken
12636: EOG -- pooling for Austin 30-13H, Parshall
12637: EOG -- pooling for Wayzetta 101-21H, Parshall
12638: EOG -- pooling for Westgard 1-28H, Parshall
12639: EOG -- pooling for the Van Hook 13-35H, Van Hook
12640: EOG -- pooling for Parshall 100-22H, Parshall
12641: EOG -- pooling in Van Hook
12642: EOG -- pooling for Liberty 6-25H, Van Hook
12643: EOG -- pooling for Fertile 34-31H, Parshall
12644, EOG -- pooling for Fertile 18-30H, Parshall
12645: EOG -- pooling for Fertile 30-28H, Parshall
12646: EOG -- pooling for Fertile 14-17H, Parshall
12647: EOG -- pooling for the Swenson 31-33SWH, Charlson-Bakken
12648: Ward-Williston -- to produce from the Schwartz 1, the A. Chrest 1, the Ellithorpe 1, the Steen 2, the Bryan 1, Northeast Foothills Field, Burke County
12649: Ward-Williston -- to produce from the Beard 1, the Beard 2, the Weinman 2, the Christenson 1, and the Owings 1
12650: Ward-Williston -- to produce from the Schultz 14-28, the Nelson 6-33, and the Haxton 2-33, Dale Field, Burke County
12651: Ward-Williston -- conversion of the SE 3-H well to SWD
12652: Missouri Basin Well Service -- conversion of Sandaker 1, Anderson 1-33 to SWD
12653: Samson -- pooling for the Ness 29-32-163-98H, Blooming Prairie-Bakken
12654: Samson -- pooling for the Almos Farms 1-12-162-99H, Ambrose-Bakken
12655: BEXP, Fidelity, and EOG -- flaring
12656: Cirque - Dimond-Bakken pool for flaring
12657: Slawon, Zenergy -- flaring
12658: Simray, Zenergy -- flaring
12659: Simry -- flaring
12660: Slawson -- flaring
12661: EOG, Hunt, Slawson -- flaring
12662: Sinclair, Slawson, Fidelity -- flaring
12663: EOG, BEXP, CLR -- flaring
12664: EOG, Fidelity -- flaring
12334, cont'd: Baytex -- pooling for Larson 3-162-99H, Ambrose -Bakken
12335, cont'd: Baytex -- pooling for Egge 22-161-98H, Whiteaker-Bakken

May 28, 2010

12631 (out of sequence): KOG -- spacing for Heart Butte-Bakken
12665: KOG -- 151-99 and 152-99, 4 wells
12666: KOG -- 150-103, 1 well
12375, cont'd: KOG -- add a section to Moccasin Creek-Bakken pool
12667: Oasis -- to add two sections to Sorkness or Big Butte-Bakken
12668: Oasis - to add six sections to Bull Butte-Bakken
12669: Oasis -- add two sections to Painted Woods-Bakken
12670: Oasis -- request to maximize production in Squires-Bakken
12671: Oasis -- request for SWD
12672: St Mary -- to revoke a Tracker well, Arnegard State 36-1H
12673: St Mary -- add two sections to Camp-Bakken
12674: St Mary -- add two sections to North Tobacco Garden-Bakken
12675: St Mary -- spacing in MonDak-Bakken, 148N-104W
12676: St Mary -- pooling in MonDak-Bakken
12677: St Mary -- 153-101; 3 wells
12678: St Mary -- 151-100, 3 wells
12679: St Mary -- pooling Dimmick Lake-Bakken
12680: Hess -- 157-90, Clear Water-Bakken, 3 wells
12681: Hess -- spacing in Blue Buttes-Winnipeg/Deadwood Pool
12682: Hess - 162-95, 1 well
12683: Hess -- pooling in Ross-Bakken
12397, cont'd: Hess, 3 wells in Ross-Bakken
12684: Marathon -- Reunion Bay-Bakken, 2 wells
12685: Marathon -- Bailey-Bakken, 1 vertical well
12686: Marathon -- request to maximize production in Big Bend-Bakken thru Dec 2010
12361, cont'd: Marathon -- to develop pool discovered by Paul Rohde 21-29H
12364, cont'd: Marathon -- to add two sections to Spotted Horn-Bakken
12365, cont'd: Marathon -- to add two sections to Moccasin Creek-Bakken
12367, cont'd: Marathon -- 146-95, Dunn County, 1 well
12687: Murex -- additional well in West Bank-Bakken
12688: Whiting -- Sanish, 15 wells, all 1280-acre spacing
12689: Whiting -- Sanish, pooling 15 wells (see previous case)
12690: Whiting -- SWD
12691: American -- 156-98 and 157-97, 15 wells, Williams County
12692: Luff -- Haley-Red River pool; multiple laterals in Red River "B"
12693: Luff -- to enlarge the Amor South-Red River Unit, Bowman County
12694: Roughrider Resources -- spacing in Tobacco Garden-Duperow Pool
12380, cont'd: Cornerstone Natural Resources -- add section to Woburn-Madison pool
12249, cont'd: Gregory Tank -- legalese vs Burlington Resources in Camel Butte
12251, cont'd: Gregorty Tank -- legalese vs Petro-Hunt in Clear Creek-Bakken

May 27, 2010, Supplement

12697: Abraxas -- pooling in North Fork-Bakken pool

May 28, 2010, Supplement

12695: Whiting -- 15 -1280-acre spacing units in Sanish-Bakken pool, 15 wells

New Wells Reporting -- April 26, 2010

Finally, a few more wells reported today. See "new wells reporting."

I've added the "high initial production wells" and numbers to the site.

Although Bice 2-29H had reported earlier (press release), today's daily activity report provides an opporutnity to re-state why this well was on the "wells to watch" list:

Dual-reservoir development (Bakken/TFS)


16943, Bice 1-29H, 516
17884, Bice 2-29H (first of two to report), 1,429*

18352, Omar 2-1H (second of two), 694
17282, Omar 1-1H (first of two), cumulative 137K in about 15 months (huge well), 660

(Omar 1-1H, completed in 3rd quarter of 2008, had produced a cumulative 137,300 boe at year-end 2009. At $60/bbl = $8.25 million.) Omar 1 and Omar 2 were drilled by CLR as a test to see if the Bakken and the TFS were separate formations. The fact that Omar 1 produced a cumulative 137,300 boe even though Omar 2 was drilled parallel to and offset from Omar 1, suggests to some that the two formations, at least in this locality, are separate.) Bice 1-29H (#16943) had an IP of 516.  Folks are wondering what this is all about. I, too, am curious. 

Publish Post

111!

Last night around midnight, Sunday, April 25, 2010, the number of active rigs hit a new record: 110.

That record did not last long. This morning, Monday, April 26, 2010, a new record:  111 active rigs in North Dakota.

See "Active Rigs."

110!

Yup. New record. I just checked at midnight CST and the NDIC website shows 110 active rigs in North Dakota. I didn't think the website was active over the weekend, but someone at NDIC must have come in today (Sunday) and counted the rigs. Smile.

See: Active Rigs.

Drilling Down in BEXP's Rough Rider Prospect

Someone asked me if I could "drill down" (pardon the pun) into the pixels to better clarify BEXP acreage in its so-called "Rough Rider" prospect.

According to its most recent presentation, dated April 20, 2010, BEXP has divided its Bakken acreage into three prospects: a) eastern Montana; b) Rough Rider; and, Ross/Parshall.

The eastern Montana prospect has 83,500 net acres and is, of course in eastern Montana, directly west of Williston. Because it's in Montana I don't follow it.

The Ross/Parshall prospect is 99,200 net acres and is, of course in the Ross and Parshall fields in Mountrail County.

The Rough Rider prospect is in Williams County with Williston at its center, with about 60% of its Rough Rider acreage north of the river and 40% of its Rough Rider acreage south of the river. The Rough Rider prospect has 120,100 net acres.

There are maybe as many as 30 defined oil fields in the Rough Rider prospect; most of them are very small, and not well known.  The larger ones (and some are not very large) include, north of the river: Bull Butte, East Fork, Squires, Stony Creek, Painted Woods, Rosebud, Hebron and Lake Trenton. South of the river, the fields include Briar Creek, Glass Bluff and Elk.

Squires and Painted Woods are the most active. It's hard to believe but there are five (5) rigs on site in the Squires field and two (2) rigs on site in the Painted Woods field, both in the Rough Rider prospect (of course). In addition to these seven (7) rigs, there are several wells on the confidential list.

Hebron is one of the smaller fields, only eight (8) full sections, and "owned" by CLR. CLR has four (4) wells on the confidential list in the Hebron. Eight sections and four wells; that tells you how active this area is.

Just for the fun of it, I tried drilling down into the pixels on slide 18 of BEXP's most recent presentation to see which sections are leased by BEXP. Even zooming in, it is very difficult and there may be better sources, but using their map and zooming in, this is my first draft. If anyone notices obvious errors, please let me know so I might improve the data.

BEXP has colored in whole sections in red. Whether or not BEXP has all the acres in these sections or not, I do not know.  In addition, BEXP has some "red" sections in the far north of the Rough Rider prospect that I have not included below. Those would be in townships 157-102, 158-102, 159-102, and 159-101. I could be wrong on these but I think those are correct. BEXP also has "red" areas that make up less than a section in a small number of areas and I have not included those in the following stats:

T156N-R103W: leases the southern half and bits and pieces of the north half; the south half includes sections 19 - 36 except for 34.

T156N-R102W: BEXP acres are sections 17, 18, 19, 27, 28, 29, 30, 31,32, and 33.

T156N-R101W: no BEXP acreage.

T156N-R100W: BEXP acres are sections 19, 20, 21, 22, 25, 26, 27, and 36.

T155N-R103W: BEXP has all except sections 7, 14, 18, 19, 20, 23, 35, and 36. A star obstructs.

T155N-R102W: BEXP has only sections 6, 8, 9, 16, 17, and 18.

T155N-R101W: BEXP has only sections 14, 15, 18, 19, 22, 23, 24, 26, 27, 33, 34, and 35.

T155N-R100W: BEXP has only sections 25, 28, 31, and 36.

T154N-R103W: BEXP has about half, but not sections 2- 10, 13, 15, 17, and 18.

T154N-R102W: BEXP has all except sections 7, 14, 18, 19, 20, 23, 30, 35, and 36. A star obstructs.  BEXP's very good Olson and Brad Olson wells were in sections 9 and 10 in this township.

T154N-R101W: BEXP has all except sections 2, 11, 12, 13, and 24.

T154N-R100W: BEXP has all except sections 1, 2, 3, 21, 25, 26, 27, 31, 32, and 36.

T153N-R103W: BEXP has sections 1 - 6, 9, 10, 14, 21, and 22.

T153N-R102W: BEXP has sections 1, 11, 12, 36. Most of this section is under water.

T153N-R101W: no BEXP acreage.

T153N-R100W: BEXP has sections 1 - 4, and 9 - 11.

T152N-R104W: BEXP has only sections 29, 30, 31, and 32.

T152N-R103W: no BEXP acreage.

T152N-R102W: BEXP has only sections 3, 4, 5, 6, and 7.

T152N-R101W: BEXP has all sections except 1 - 10, 15, 16, 18, 35, and 36.

T152N-R100W: no BEXP acreage.

T151N-R104W: BEXP has only sections 5, 6, 7, 8, 14, 15, 22, and 23.

T151N-R103W: BEXP has one section 18.

T151N-R102W: BEXP has all except sections 1, 2, 4, 5, 6, 7, 8, 10, 30, 31, and 36.

T151N-R101W: A star obstructs but I see BEXP has sections 2, 3, 4, 13, and 35.

T151N-R100W: BEXP has section 6, 7, 14, 16, 17, 19, 20, 22, 26, 27, 29, 33, 34, 35.

T148N-R101W: BEXP has sections 3 and 11.

When I total all these sections up, I get slightly more than 280 sections which is more than 180,000 acres, which means a) I have counted wrong; b) I misread some of the red squares on BEXP's map; or, c) although the entire section is colored red, BEXP may not have the entire section. My gut feeling is the latter.

Commentary: April 24, 2010

COMMENTARY: April 24, 2010

I remain enthusiastic about the Bakken. These are my observations at this point, to be updated over the next 24 hours based on feedback:

1. For investors, I think share prices of companies working in the Bakken are fair: neither over-valued nor under-valued. Folks have priced in recent events.  There has been a huge run-up in the past month, but I think the run-up is fair, and a new floor is being established. 

2. All things being equal, share prices will follow price of oil. The price of oil appears to be predominantly affected by: a) value of the dollar; b) strength of the global economy; and, c) hedge against inflation. The price of oil has recently trended with the value of the dollar. That will continue but the global recovery / supply and demand will start to play a bigger role. Investing in commodities is often a hedge against inflation.  Share prices are not being affected all that much by share dilution (BEXP, NOG).

3. Everything suggests that the price of oil now has a trading floor of $80 and will gradually trend up. I find it interesting that when oil spiked to $150 a year or so ago, gasoline prices at the pump were not a whole lot different then they are now -- maybe a buck/gallon more in some areas of the country, but folks seemed to manage it. That suggests to me that the price of oil could easily go to $100 by the end of the summer, 2010, without much effect on the economy.

4. If oil hits $100/bbl, a windfall profits tax (disguised as "cap and trade") is all but guaranteed. And, an additional windfall profits tax might be added. 

5. Energy companies in the Bakken are focused on oil and all oil companies have changed their focus from oil & natural gas to predominantly oil.  If the price of natural gas increases significantly, the share prices of all these companies will appreciate significantly.

6. I find it interesting that there has been a paucity of new wells being reported despite number of active rigs jumping to 109. I first noted this in April (this month). Yes, wells can remain on the confidential list for six months and six months ago we had significantly fewer than 109 rigs. However, companies are quick to announce the results if it's a good well. Some folks in the oil patch are opining that drillers are delaying completion of their wells. The Bakken wells are front-loaded (decline rates are horrendous) and the price of oil appears headed higher. If so, it only makes sense to hold off for the time-being in completing these wells. Think about it: in the first month, if a well produces 30,000 barrels and in the third month, the well produces 10,000 barrels, that's a difference of 20,000 barrels. At $80/bbl, 20,000 bbls represents $1.6 million. At $90/bbl, $1.8 million. The well can produce an extra $200,000 at the wellhead just by waiting for price of oil to increase from $80 to $90. Even if oil is not yet selling for $90/bbl, producers are writing contracts (hedging) for future delivery.

7. Backlogs to complete wells are due to fracking. I understand wells are now being scheduled as long as six months out to be fracked. If anyone has actual data, that would be appreciated. 

8. Capacity to ship oil out of the Bakken has caught up with production. North Dakota oil is on par with best ("sweet") oil and sells close to the price one sees on the business network crawlers. There should be little-to-no discount paid for Bakken oil due to transportation costs. 

9. Activity in the reservation was delayed two years compared to activity in the Sanish and Parshall (outside the reservation) due to bureaucratic delays in Washington, DC. Those obstacles have been removed and this year (2010) should be the year in which the reservation (think KOG) catches up. 

10. For folks living and working in western North Dakota, they are in the eye of the hurricane. It may seem calm to many of them, but surrounding them is unprecedented activity. Besides drilling, there is a huge backlog of fracking and companies are working to bring in more crews. There will be more pipeline laid this year, both for local production and for production coming out of Canada on its way to other parts of the US. Interestingly enough, there is even a refinery to be built (in the reservation) and there is a new natural gas gathering and processing plant to be built in eastern McKenzie County. I still think western North Dakota could look a lot like Tulsa, OK, before it's all over, except for the large population centers. The harsh winters and isolation will minimize long-term growth.

11. There was a suggestion some months ago that the center of activity would migrate to Minot for any number of reasons. It appears now that this migration might have been over-emphasized and may not be as great as predicted. Williston and Dickinson remain in the center; Williston more so. But I think Watford City is going to be an interesting city to follow. Stanley has more oil activity than Watford, but as the gateway to the national park, north unit, and being closer to the beautiful Killdeer Mountains (I just love "mountains" and North Dakota in the same sentence) suggests to me that Watford could be the growth story of the year.  Watford City is also the gateway to the western side of the reservation where a lot of activity is occurring.  "Eastern McKenzie County" is also where Oneck Partners is putting a new natural gas gathering and processing plant (CAPEX: $200 million through 2011).

12. It does without saying, but I will say it anyway, this will be the year of the multi-well pad. It will be interesting to see some head-to-head results and some Middle Bakken and Three Forks Sanish results from same pad. EOG and CLR seem to have the lead on multi-well pads.

13. Finally, how could a commentary not include a few comments about initial production (IP) numbers. People have complained that there is not a standard way of calculating IPs across the industry, and that some companies use methods that maximize ("exaggerate") IPs. It now appears that almost all companies are looking at methods to maximize their IPs. This is essential in the cutthroat world to raise capital. It appears that more and more companies will migrate to the initial 24-hour flowback. Having said that, I highlighted a company just a couple days ago that in its conference call said it would continue to use the average of the first 30 days. It spoke volumes to me when CLR said it would go to 24-hour flowback when reporting IPs of its wells.