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Tuesday, May 25, 2010

American Energy Update

Of the first four American Energy (AEZ) wells of high interest, three have now been reported, and all have been very good wells.

The Summerfield 15-15H is in Bear Creek, not a particularly well known field but in a fairly active area. The Little Knife and Rattlesnake Point oil fields are in the area. The Rattlesnake Point oil field recently caught my interest with announcement of a CLR Eco-Pad there as well as another CLR Eco-Pad in the immediate area (Jim Creek oil field). The Summerfield is a short lateral and was fracture stimulated with 14 stages. AEZ owns an approximate 33% working interest in this well.

Ron Viall 1-25H is a wildcat that was clearly in an undeveloped area and was a very nice well, at least based on initial results. Time will tell how good the well really was. But if it turns out to be a good well, we have more evidence that there are still "new" places to go for oil in the Williston Basin. The Ron Viall had a similarly high flowback rate and averaged 1,748 bopd in its first seven production days.

Tong Trust 1-20H is in the Ray oil field.  The town of Ray is near the epicenter of the oil success in the Williston Basin, but it is a small oil field and hasn't been particularly active.

Taken as a whole, it certainly appears that AEZ has staked out some new areas and has been very successful, at least based on initial results.

Again, AEZ tends to report 24-hour flowback rates which are significantly higher than the 30-day average. I assume the 30-day average will be closer to 800 and then further decline over the next 60 days where daily production will start to plateau at 500 barrels/day if they are to remain "good" wells.

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