While I Was Gone

I am gradually going through the daily reports that I saw earlier while I was traveling but did not comment on because of time constraints. As I go through the daily reports, starting with August 6, 2010, if I see anything of interest, I will note it.


August 6: Another lackluster Hess well -- RS-Johnson A-157-90-2128H-1, Clear Water, 67. In addition, the Clear Water field has not impressed me, although there have been some good wells in that field. It seems the southern half of that field is the better half (not surprising -- closer to the Parshall). At this link, scroll down to "suzanne shatto's" comment dated September 1, 2010, for more insight on problems with Hess wells. Very, very interesting.

August 12: Not everything is from the Bakken formation in the Williston Basin in the current boom; production from this well is from the North Red River "B" formation drilled by CLR; file number 18184, Duaine 42-4NH, 191.

August 18: A nice EOG well in the Souris; a Spearfish/Madison well -- Scandia 1-34H, 261.  

August 19: Finally, a great Hess well -- BB-Federal B-151-95-2122H-1, 1,230.

August 20: A nice Fidelity well -- Deadwood Canyon Ranch 44-32H, 904.

August 24: Operator changed from Panther to BEXP, file numbers 17514 and 17755.

August 30: Second EOG/Souris well to report; Scandia 3-36H, 304. 

About the Spearfish formation wells in the Souris oil field

This gives me an opportunity to opine about the Souris wells. Some folks are concerned that because the IPs are low, these are not good wells. These wells are much less expensive to drill than the typical horizontal Bakken. The Souris wells are more shallow, and I originally thought, were going to be vertical. Having said that, one of my first links about the Spearfish, which I had forgotten about, mentioned horizontal Spearfish wells.

Both of these two first EOG wells to be reported in the Souris are very short laterals, extending about 3/4 of a mile, both running east to west. I could be wrong, but I think these are very good IPs, comparing to vertical wells drilled in the 1980's, but I could be wrong. Compared to $6 - $8 million/horizontal Bakken well, these Souris wells targeting the Spearfish are said to be in the neighborhood of $1.5 million to drill.

I assume like the Bakken wells, the Spearfish formation wells will also have a decline rate, but I doubt they will be as severe as a heavily fracked well, and thus I could imagine a Spearfish well leveling off at 100 bopd. At $50/barrel, this would be $1.8 million at the wellhead after one year.

So time will tell how these wells will do. My original link about Spearfish wells in Manitoba (Canada) should be helpful. Also, one section on my blog is devoted to the Spearfish.

Another Climate Change Article That You Won't See in The Mainstream Media (Nothing To Do With The Bakken)

This is as good as it gets, as far as I'm concerned. Unfortunately we won't see it in the mainstream media. And they say the former president lacked intellectual curiosity. Just saying. My rant for the day.

Even climate change advocates agree that the earth's temperature will rise by only 3.5 degrees by 2100. I doubt that number (3.5) is reproducible or statistically significant.

For Newbies: A Look at the Sanish

Folks new to the Bakken may be interested in looking at the Sanish oil field. The original post was written back in February, 2010, but I have updated much of it. I believe the IPs are all updated; I may have missed a few.

Before the current boom, folks got excited about an IP of 300 barrels/day in the Williston Basin. But soon after drillers cracked the code on horizontal drilling and increased fracture stages, they started hitting some big wells in the Bakken, going from IPs of 500 to 1,000.

There has been much discussion about "inflated IPs" and how much they mean, but it's hard to argue with IPs of 2,000 or greater.

Newbies might want to look at the IPs in the Sanish, an oil field pretty much owned by Whiting.

Folks familiar with the Bakken have pretty much become numb to these 4-figure IPs. It should be noted that Whiting is targeting two formations in the Sanish: the Bakken and the Three Forks Sanish. A single "H" in the name suggests a Bakken formation well; a "TFH" in the name means the Three Forks formation.

Is the Bakken Over-Hyped? Are Leases for $5,000/Acre Reasonable?

Earlier, Whiting reported the IP for the TTT Ranch 4-6TFH, file number 18804: 1,561.  It also set a record for a TFS well in the Sanish.

The TTT Ranch 4-6TFH is the fourth well in section 6-153-91.  In fact, two of the wells are on the same lot, lot 4 in that section.

Earlier I posted the file numbers of the other three wells in that section but did not provide other information, due to fact I was traveling and hard to post all of that here. Here are the other three file numbers/wells in that section and their names:

The other three are:

• 17603, producing, WLL, TTT Ranch 11-6H, Lot 4, northwest to southeast
• 18297, 2,762, WLL, TTT Ranch 12-6H, Lot 5, northwest to southeast, 70k bbls < 90 days
• 18876, confidential, Rohde 14-6XH, Lot 7. For a discussion on Whiting's "X" designated wells in the Sanish, click here.

Although two of these are still on the confidential list, it appears that all four wells will be long laterals running from northwest to southeast.

18804, 1,561, WLL, TTT Ranch 4-6TFH, Lot 4, Sanish (record IP for a TFS well in the Sanish); this is the fourth well in this section.

Back-of-the-envelope calculations (I recommend that you disregard the following; it's my personal thinking-out-loud):

Some operators in their corporate presentations suggest that the EUR of wells in the better Bakken sections will in the 700,000 barrel range. If these four wells live up to that "hype," this section could produce upwards of 2,800,000 barrels.  At $50/bbl, this represents $140 million at the wellhead. North Dakota sells at a discount to Texas crude because of shipment costs. Once pipeline takeaway matches production, that delta should decrease. In addition, going forward, the price of oil will probably increase, not decrease, as a general trend.

640 acres * $5,000 = $3.2 million.  (Remember, a section is 640 acres.)
The cost to drill a well at $7 million * 4 = $28 million. 

$5,000/acre represents a very small price when compared to the cost of drilling.

BP Spill Investigation: So Far -- Incredible (Not Directly Related to the Bakken and Somewhat Political in Nature)

I doubt most people will take the time to listen to this video, but it's worth your time. Early investigation suggests a) one or two BP employees the direct cause (BP's own investigation); b) the effects of the deep water drilling moratorium getting worse daily; and, c) this could destroy the deep water drilling program in the gulf for up to two years.

I generally file these links under "anything to destroy the oil industry."

On the other hand, if the drilling program in the gulf is delayed for two years, it bodes well for the Bakken.

I still maintain this is the time to be accumulating shares in oil and oil service companies operating in the Bakken.

By the way, this link has nothing to do with the Bakken, but you might enjoy it, especially those who play cards in Vegas during the winter.

How Times Have Changed: Definition of "Ridiculously Low Unemployment"

The mainstream media has a story with the headline about the ten (10) states with ridiculously low unemployment rates. Only three states are below five percent. The rest are above six percent, except for New Hampshire which comes in at 5.8 percent, for all intents and purposes, also six percent. The three states with unemployment less than five percent: North Dakota, South Dakota, and Nebraska.

North Dakota is the only state below four percent, and has been there for quite some time. I would assume the rate will drop a bit come winter when some of the underemployed, newcomers return to their home states.

Except, maybe for North Dakota, and that's a stretch, I wouldn't call these unemployment rates ridiculously low. During my entire working life, "full employment" was defined as an unemployment rate of four percent.

For Investors: Lots of Data This Week

Every business page headline today says investors are holding back today waiting for slew of economic data to be released this week.

Just for the fun of it, let's follow the headlines as that data is released.

I'm particularly interested because I am as fully invested as I can be, having accumulated a few more shares of CLR and NOG earlier last week.

1. Consumers spend at fastest pace in four months. Reading closely between the lines, the numbers suggest folks may be tapping into savings and/or retirement accounts. The article does state economists are worried that consumers are holding back on purchases due to economic uncertainty. Dow is down 75 points.

2. Japan's factory output unexpectedly rose 0.3 percent in the  month of Japan.

3. August automobile sales in August slowest for that month in 28 years? We will know tomorrow when sales figures released.

4. Unexpected jump in consumer confidence -- August 31, 2010: A report showed confidence climbed more than expected in August, giving traders some hope that the slowdown in the economy might be finding a bottom. Manufacturing activity in the Midwest slowed in August, slightly worse than expected.

5. Home prices rose more than expected in the month of June.

6. Banks made money. Banks overall made $21.6 billion in net income in the April-to-June quarter, the Federal Deposit Insurance Corp. said. It was the highest quarterly level since 2007 and was led by the largest institutions. The industry lost $4.4 billion in the second quarter of 2009.

7. Stock futures surge on signs of overseas growth -- Wednesday, Sept 1, 2010 -- third day of this five day series.  Australia's economy grew by the fastest pace since 2007. China auto sales rebound; grow by 56% in August (recession? what recession?).

8. Joy Global (coal) raises 3Q forecasts. Heinz boosts 1Q earnings due to Asia growth.

9. Ford Canada has best August in 20 years. Enuf said.

10. US manufacturing sector grew in August.

11.  The number of planned layoffs at U.S. firms fell 17 percent in August from the prior month and hit the lowest level in 10 years, a report on Wednesday showed. Employers announced 34,768 planned job cuts last month, down from 41,676 in July, outplacement consultancy Challenger, Gray & Christmas, Inc. said. It was the first month-on-month decline since April, when planned job losses had hit a seven-year low, and the lowest level since June 2000.

12. Pending home sales rose 5.2 percent in July. Even so, home sales remain at the lowest level in a decade.

13. August retail sales slightly better than forecast. This year, the index up 3.2% (forecast: 3%) but it's better than the 2% downturn experienced last August.

14. In general, economic data quieting talk about a double-dip recession.

15. Fewer jobs lost than expected (who are we trying to kid?) -- but it's considered a good report. Unemployment inches up to 9.6%. It appears 10% is the "new normal." Market "happy" if unemployment is less than 10%. Jobs gained this past reporting period not even enough to absorb new entrants into workforce, much less make any dent in the jobs lost in this recession.

BEXP: Conference Presentation

This is the presentation made by BEXP at Enercom conference in Denver last week. The amount of information is incredible; I don't know where to begin. Maybe I'll have time Monday to sort through all this.

However, note that BEXP is suggesting takeaway capacity for oil in North Dakota could be as much as 800,000 barrels/day in 2014 (slide 37, appendix). [Current, reasoned, general expectations are that daily production, currently around 300,000 bopd will level off at 400,000 bopd. June production hit an all-time high of 315,278 bopd. In May, production averaged 298,000 bopd. The increase in June represents a 5.7 percent increase -- in just one month.]

Look at the thickness of the Upper Three Forks Sanish compared to the Middle Bakken, slide 39, appendix).

BEXP estimates as many as 555 wells over 13 years in proven areas with an average NPV of $9.4 million/well (almost $5 billion), slide 34. Regardless of the value of these wells, this is just one company in the Bakken estimating almost 600 wells and drilling for 13 years. This explains all the activity in Williston, suggesting companies plan to be there for a very long time.

A Story Out of the Mideast About the Bakken

This story is from an English website out of the Mideast. Following Enbridge's recent announcement to double capacity, one of their reporters filed this story.

Note: somehow I accidentally deleted this comment. This comment should have been published:

Anonymous has left a new comment on your post "A Story Out of the Mideast About the Bakken":

Bruce, you’re site is so complete, thorough and organized I stopped posting back in June of 2010. Somehow you missed a 08/30/10 blurb about the Bakken Shale oilfield from The National in Abu Dhabi entitled, “A new US oil rush could rock OPEC” that is really old old news, except for this “gem” at the end of the article.

“ The effects of that have rippled around the world, weighing not only on North American gas prices but also on international markets for the liquefied natural gas now shipped across oceans from states such as Qatar. OPEC producers would do well to remember that; the next threat to oil price stability may come not from market speculation or renewable energy but from a new North American oil rush.” tcarlisle@thenational.ae

For the full article see my 8/30/10 post on the IV HES BB at
http://www.investorvillage.com/smbd.asp?mb=4307&mn=253&pt=msg&mid=9458325

Good Luck and Good Investing. HLW3333 08/30/10

 I posted a reply in the comment section below. This whole thing has gotten very confusing. Sorry. I will try to do better in the future. 

Connecting the Potash Dots. Yes, It Involves The Bakken (at least the location)

Here's another set of dots to connect. It starts with Warren Buffett buying the Burlington Northern railroad.

BHP Billiton recently announced plans to build a huge potash loading terminal at the Port of Vancouver, Washington. BHP has also announced intentions to buy Potash Corporation.

Ninety-four (94) percent of all potash produced in North America comes from Canada. However, it was recently announced that the state of North Dakota granted a permit for a potash mine. This is the first potash mine permit issued by the state in three decades (specifically, since 1976). North Dakota's potash reserves are in the Bakken area.

Connecting the dots results in a lop-sided hexagon.

The potash terminal alone is a pretty exciting story, especially for those of us who still remain bullish.

Oh, back to Warren Buffett. BHP accepted proposals from Burlington Northern Santa Fe and Canadian Pacific to carry potash to the port terminal. Who knew that Warren Buffett bought BNI for carrying potash to Vancouver?

By the way, here's another story on Greenbrier for investors.

Resolute Energy: Another Bakken Play

Resolute Energy is yet another energy company that I was unaware of until today's edition of the Oil and Gas Journal which reported joint venture activity between Resolute and Marathon. Resolute is not entirely new to the Bakken; it has previously partnered with GeoResources in North Dakota.

The real question is why a fairly large company (MRO) with a market cap of $21 billion, debt of $7 billion, annual cash flow of $6 billion, and $2 billion cash on hand would partner with anyone, much less a small cap company (REN) with a market capitalization of about $600 million.

I can think of only two reasons. I suppose others can think of a lot more.

Investopedia: Three Forks Sanish

Another great investors' article on the Bakken. This time about companies targeting the TFS and the pipeline companies.

Companies mentioned in this article include five in which I hold (and accumulate) shares: CLR, WHX (WLL), NOG, EEP, and ENB.

Investing: Mergers and Acquisitions

A Wall Street provides three reasons why we will continue to see M&A activity:

• Companies have cleaned up their balance sheets making M & A possible
• Companies are earning "nothing" on their cash due to low interest rates
• In this economy, only way some companies can grow is through acquisitions

The reporter left out at least two more reasons:

• Those low interest rates make deals more inviting
• Depressed stock market has resulted in companies being unfairly undervalued

In the Bakken, there are at least two more reasons:

• High CAPEX and aggressive drilling program can often exceed companies' cash flow
• Operators can lose leases if drilling not begun

Clear Water Field Very Active

Of the ten (10) permits granted in the North Dakota Bakken today (August 26, 2010), eight (8) were in the Clear Water field. The field hasn't impressed me that much, but it may be better than it appears. I suppose time will tell.

Hess Granted Six Permits in Same Section

This is at least the third time Hess has been granted permits for six (6) wells in the same section. These will be long laterals, three running north and three running south, a six-well Orion Belt. The file numbers are 19452 - 19457 and are located in the southeast quadrant of the southwest quadrant in section 15-157N-90W. The section is located in the Clear Water oil field.

The six wells will be located 650 feet from and parallel to the south line and at intervals of 1,560; 1,610; 1,660; 1,710; 1,760; and, 1,810 feet from the west line.

The names of the wells:

RS-Ball-157-90-2227H-1
RS-Ball-157-90-2227H-2
RS-Ball-157-90-2227H-3

RS-Johnson-157-90-1510H-1
RS-Johnson-157-90-1510H-2
RS-Johnson-157-90-1510H-3

AEZ - HES: Nice Story On The Bakken

AEZ - HES: bigger story than just a merger.

Investors: Overview of Companies in the Bakken

A reminder of a nice overview of the Bakken as it relates to investing.

Investopedia: CLR, NOG, AEZ, HES

A nice little analysis of CLR, NOG, AEZ, and HES in an article dated yesterday, August 25, 2010. Coincidentally I purchased a few shares of NOG and CLR today but did not see this article until after making that transaction. Pure coincidence. But with price of oil holding above $60 in this economy, the market must be telling us something.

Another Nice Newfield Well: Bluefin 1-13H --1,869

Another nice Newfield well in Siverston field; an IP of 1,869.

File number 18689.

The Siverston is about 20 miles west of the Fort Berthold Indian Reservation. This is a fairly active area with a number of oil fields often in the news.

Railcars: Another Indication That Things Are Not As Bad As They Seem

Another reason why I remain bullish for the long term.

This is from the print edition of The Oregonian, August 26, 2010.

Greenbrier Companies, one of Portland, Oregon's, mainstay industry employers will hire 260 new employees and shift 175 current employees all for the purpose .... drum roll ..... for building railcars.

Greenbrier has done a fair amount of bidding over the past two years but these are their first new orders in that time. The new work will consist of 1,000 new double-stack intermodal platforms as well as 700 new covered hopper cars. The company will also modify 1,100 double-stack platforms, lengthening them to 53 feet, allowing shippers to increase cargo volumes and better compete with truckers for freight traffic (it should be noted that there is no comparison between trucks and rails for long-haul transport, or for grain and automobile transport).

Earlier this summer I posted that the Port of Los Angeles set a record for railcars loadings ...the historical record for the month of June, not simply a record for past five years or past decade, but the historical record. Yes, there was a Port of Los Angeles during World War Two.

Natural Gas Prices at Low For The Year

Despite wonderfully low natural gas prices -- wonderfully low for the consumer -- there are folks who still want to pay for much higher-priced and government-subsidized ethanol, wind, and solar energy. Whatever.

Meanwhile, great opportunities exist for long-term investors. Shares are very, very cheap for some good companies (not that they might go even lower).

Good luck to all; it seems to be quiet out there for the moment.

Overview of the Bakken

Just a reminder: the "Running With Oil" series is now complete. It is also linked on the sidebar on the right, near the top, as part of this site's "welcome" page.

Definition of Pooling As It Relates to Leases

This may be a good link for those interested in the definition of "pooling" as noted on the NDIC Nearing Dockets.

Salmonella and Eggs: Nothing To Do With The Bakken

The culpability of the federal government in the salmonella-egg recall is stunning and reveals the depth of bureaucratic morass in Washington.

The Brits mandated a "hen vaccine" some years ago which, for all practical purposes, eliminated the risk of salmonella in eggs.

Had the vaccine been mandatory here in the U.S., it would have eliminated the need for a lot of federal food inspectors, I suppose. And so it goes.

My rant for the day. I could also talk about the ineptitude of government analysts but I will let that slide for now.

This has nothing to do with the Bakken except for the fact that federal regulators ....

CAPEX Costs Force Divestiture, Others Get Foot in Door

Several Bakken companies have announced aggressive CAPEX plans this past year. To raise the necessary cash, some companies have had to sell assets in the Bakken.

This provides an opportunity for other companies, not always oil companies, to get a foot inside the Bakken door.

In addition, it provides investors, surface owners, and mineral rights owners an idea of how to estimate value of their holdings.

In this story, SM Energy sold Bakken reserves to a partnership between GE Financial and Sequel Energy LLC.

In this particular deal, SM Energy sold 20 million boe in proved reserves and 3,000 bopped production for $137 million. The buyers got the reserves for $6.85/barrel, and the production for free.

One Million Barrels Per Day?

North Dakota currently produces aboout 300,000 barrels of oil per day, up from 100,000 not long ago. Now some analysts think North Dakota's oil production could soar to one million barrels daily.

I was under the impression that the takeaway capacity was pretty much balanced with the oil production in North Dakota. That may be true, but only because so much of the oil is trucked (which also explains the huge delta between price of Texas crude and North Dakota crude).

Confirming an earlier post of mine, which I think was picked up by a well-known business blog, Enbridge has announced plans for a significant increase in pipeline capacity. Enbridge will add 145,000 bopd takeaway.

This is a huge story for those who still think the Bakken is over-hyped.

This is also a headline story in the Oil and Gas Financial Journal.

North Dakota Seeks Federal Help For Housing, Other Growth Issues

Small communities across western North Dakota are asking for federal help with housing and other growth issues.

North Dakota Lease Sales Hit Record

The state of North Dakota holds lease sales auctions on a quarterly basis. So far this year North Dakota has held three sales.

To date, in those three sales, North Dakota has leased 137,000 acres for $270 million.

In all of 2009 (four quarterly lease sales), the state leased about the same number of acres for $100 million.

Nearly three-fourths of North Dakota's 1.1 million acres in 16 oil-producing counties are leased.

Reminder: New NDIC Director's Cut Has Been Posted

The current Director's Cut is dated July 19, 2010.

It should be noted that even the director references the "risk" of EPA fracking regulations.
 

NDIC Hearing Dockets, September 15 and 16, 2010

I normally post a line-by-line summary of the monthly NDIC hearing dockets but due to the fact I am still "on the road" I don't have time to do that. For now, I will post a few highlights of the September dockets and then do a more complete summary later.

Here are the highlights of the September hearings. There are two scheduled, the first has eight (8) pages of cases, the second hearing has sixteen (16) full pages and one case on the seventeenth page. [Since the original posting, a couple of supplemental cases have been added, but does not materially change the summary below.]

So, here goes. Again, these are personal notes to help keep me abreast of what's going on. If cryptic, see source.

Wednesday, September 15, 2010

13196: Oasis, 2 wells, 1280, Williams
13197: Hess, 3 wells in one 640-acre unit, Williams
13198: Hess, 3 wells in one 640-acre unit, Mountrail
Hess, several 3 wells in 1280-acre units
13209 - 13212: Cornerstone, 3 wells, all 800-acre units (one well each) and 2 640-acre units
13214 - 13233: Helis, pooling, 9 wells
13235: QEP, 30 wells, 640-acre units, Dunn, McLean, Mountrail; see an earlier post of mine connecting the dots with the Arrow Pipeline

Thursday, September 16, 2010

13245: CLR, Eco-Pad, Elm Tree, McKenzie
13246 - 13259: CLR requests to establish multiple 2560-acre and 1280-acre units
13260: Newfield, 15 wells, 1280-acre units, Divide
13261: Samson, 3 wells, 1280, Divide
13262: Samson, 17 wells, 1280, Divide
13274: EOG, multiple wells on a 320-acre unit in Squaw Creek, McKenzie
13275: EOG, 2 wells on one 640-acre unit, McKenzie
13277, EOG, multiple wells on a 320-acre, Squaw Creek, McKenzie
13285 - 13333: CLR, all pooling cases, represents 43 wells, pooling is the last step before drilling
13334: CLR, 7 wells, 1280-acre, Dunn
13335: CLR, 7 wells, 1280-acre, Dunn
13336: CLR, 7 wells, 1280-acre, Dunn
13337: CLR, 7 wells, 1280-acre, Dunn
13340: CLR, 7 wells, 1280-acre, Dunn
13341: CLR, 7 increase density wells, 1280-acre unit, Divide
13342: CLR, 7 increase density wells, 1280-acre unit, Divide
13343: CLR, 7 increase density wells, 1280-acre unit, Divide, Burke, Williams

Ethanol: Nothing To Do With the Bakken, Except Maybe Indirectly

October 21, 2010: government allows 15% ethanol in gasoline blend for automobiles newer than 2007. Today, most companies are reporting increased earnings and higher expectations going forward. One exception: Kellogg.  Kellogg warns again for full year earnings based on lower cereal sales. Corn being used for ethanol ain't gonna help. Also, consumers changing buying patterns: buying breakfast on the run at fast food restaurants; cereal is simply getting too expensive -- over $4.00 a box. I can't afford it any more.

Plain talk about energy, including my favorite: ethanol. "Favorite" as in "favorite scam."

Investing in The Majors

For conservative investors interested in energy, this article will warm the cockles of your heart. I've accumulated shares in several of the majors over the years and have grown to appreciate their dividends more and more every day. That reminds me, what are money market accounts paying now?

Enercom Oil and Gas Conference Kicks Off Today

The 2010 Oil and Gas Conference kicks off today.

Here is the schedule, the presenters, the slides, the audio.

Several of my loyal readers have reminded me to post this.

The URL is: http://www.vcall.com/customevent/conferences/enercom/20100823/webcast.html

Results of Completed Wells From July 1, 2010 To December 31, 2010 -- North Dakota, USA

Results of Completed Wells July 1, 2010 - December 31, 2010
As of October 11, 2010, including additional permit information

Source: NDIC or Press Release (PR)

Data for 4Q13: 4Q13

Data for 3Q13: 3Q13

Data for 2Q13: 2Q13

Data for 1Q13: 1Q13

Data for 4Q12: 4Q12

Data for 3Q12: 3Q12

Data for 2Q12: 2Q12

  Data for 1Q12: 1Q12   

Data for 4Q11: 4Q11 

Data for 3Q11: 3Q11 

Data for 2Q11: 2Q11 

 Data for 1Q11: 1Q11  

 Data for 2H10: 2H10  

Through 1H10: 1H10

For reports prior to July 1, 2010:  visit this link. 

NOTE: when a well is listed as a "Bakken" well, that is the Bakken Pool as defined by the NDIC; some of the recent wells listed as "Bakken" are producing from the Three Forks Sanish formation.  Occasionally it is possible to determine if a well is a Bakken formation well or a TFS well, but it is not easy in most cases. The USGS 2008 survey was based on Bakken formation information only, to the best of my knowledge, and probably underestimated the size of the pool by half had the TFS also been included. That explains why USGS estimates 3 billion barrels recoverable oil; NDIC director estimates 11 billion barrels recoverable oil; and, Harold Hamm estimates 14 billion barrels of recoverable "Bakken" oil.

December 28, 2010

• 19010, 847, Slawson, Armada Federal 1-14-13H, Van Hook, Bakken, t10/10; cum 364K 1/19;
• 18997, TA/30, Boundary 4-27H, EOG, Boundary Creek/Wildcat, Spearfish (not a Bakken); t8/10; cum --

December 27, 2010

• 18674, 436, Hess, EN-Rehak-155-93-0718H-1, Alger, Bakken, t7/10 cum 271K 3/18;
• 18945, 112, Hess, AV-Hansen-163-94-1918H-1, Forthun, Bakken, t9/10; cum 80K 3/18;
• 16327, 786, MRO, Benz 14-21H, Bailey, Bakken, t9/10; cum 260 K3/21;
• 18957, 1,719, SM, Lee 13-8H, Camp, Bakken, t9/10; cum 228K 3/18;
• 18947, 2,595, WLL, Dishman 13-19H, Sanish, t10/10; cum 299K 1/19;
• 18837, 1,780, WLL, Kubas 11-13TFH, Bell/Wildcat, Bakken, t9/10; cum 162K 3/18;
• 18833, 1,832, WLL, Froehlich 44-8TFH, Zenith, Bakken, t9/10; cum 261K 1/19;
• 19063, 281, CLR, McGinnity 2-15H, Stoneview, Bakken, t9/10; cum 123K 3/18;
• 19139, TA/99, Petro Harvester/Sagebrush, Erickson Et Al 1A, Renville, Madison (not a Bakken); t7/10; cum 6K 9/14;
• 18281, 205, Peak North Dakota, Red Tipped Arrow 33-11H, Spotted Horn, Bakken, 11/10; cum 102K 3/18;
• 18972, PA/3 (not a typo), Nadel and Gussman, State 1-36H, Bicentennial, Bakken
• 19043, 314, BR, Manchester 34-9H, Little Knife, Bakken, 2/11; cum 157K 3/18;
• 18994, 562, XTO, Feiring State 31X-16, Big Butte, Bakken, t8/10; cum 152K 3/18;
• 18924, IA/1,361, Slawson, Vixen Federal 1-19-30H, Van Hook, Bakken, t2/11; cum 516K 11/18;
• 18313, 1,052, Petro-Hunt, Fort Berthold 148-94-35D-26-1H, McGregory Buttes, Bakken, t1/11; cum 358K 1/19;

December 21, 2010

• 18804, 1,561, WLL, TTT Ranch 4-6TFH, Sanish, Bakken, previously reported, August 22, 2010, below; this is a record TFH IP; t8/10; cum 295K 3/18;
• 18711, 4,126, WLL, Fladeland 12-10H, Sanish, Bakken, t7/10; cum 502K 1/19;
• 18549, 1,114, WLL, Littlefield 21-7H, Parshall, Bakken; some confusion -- WLL press release said the Sanish oil field; the NDIC report said the Parshall oil field; t7/10; cum 604K 1/19;
• 19099, PA/31, EOG, Boundary 11-20H, Roth, Spearfish/Madison, NOT a Bakken, t8/10; cum 4K 6/12;
• 18800, 1,117, EOG, Fertile 38-20H, Parshall, Bakken, t7/10; cum 208K 3/18;
• 18763, 853, EOG, Ross 15-28H, Alger, Bakken, t6/10; cum 210K 3/18;
• 18609, 379, EOG,  Palermo 2-18H, Ross, t7/10; cum415K 3/18;
• 18147, 952, EOG, Fertile 16-20H, Parshall, t7/10; cum 195K 3/18;
• 17786, 754, EOG, Clearwater 10-03H, Clear Water, t7/10; cum 157K 3/18;
• 18960, 883, CLR, McGregor 2-15H, Lindahl, t12/10; cum 288K 3/18;
• 19034, 2,000, Statoil/BEXP, Lippert 1-12 1-H, Rosebud, t11/10; cum 249K 3/18;
• 19002, 1,721, Satoil/BEXP, Smith Farm 23-14 1-H,  Cow Creek, t10/10; cum 322K 3/18;
• 19032, 604, Zavnna, Hanson 28-33 1H, Stockyard Creek, t11/10; cum 146K 3/18;
• 19038, 440, Petro-Hunt, Forseth 157-100-25B-36-1H, Marmon/Wildcat, t9/10; cum 201K 3/18;
• 18736, 626, MRO, Rosemary Eckelberg 21-26H, Bailey, t9/10; cum 229K 3/18;
• 18890, 721, Whiting/KOG/BTA, 20711 Springbrook 58 1-H, Stockyard Creek, t8/11; cum 365K 3/18;
• 19072, 152, XTO, Big Gulch Federal 41X-16, Haystack Butte, t11/10; cum 195K 3/18;
• 19014, 717, XTO, Klepp 21X-1, West Capa, t8/10; cum 164K 3/18;
• 18815, 853, Oasis/SM, Norby 9-20H, Charlson, t10/10; cum 312K 3/18;
• 18575, 1,007, Slawson, Hunter 1-8-17H, Big Bend, t6/11; cum 564K 1/19; had big jump in production 9/14;
• 19066, 1,779, Hess/AEZ, Hickel 15-35H, Ray, Hess now owns AEZ, t1/11; cum 168K 3/18; 

December 17, 2010

• 19045, 53, CLR, Goodman 1-36H, Squires, t10/10; cum 168K 3/18;
• 19011, 725, CLR, Bridger 3-13H, Rattlesnake Point, 4 sections, t12/10; cum 302K 3/18;
• 19009, 651, CLR, Bonneville 3-23H, Rattlesnake Point, 4 sections, t12/10; cum 330K 3/18;

December 16, 2010

• 18718, 1,348, Tracker, Crying Tree 8-1H, Little Knife, t1010; cum 285K 3/18;
• 18992, 826, Slawson, Stampede 1-36-25H, Painted Woods, t11/10; cum 117K 3/18;
• 18486, 201, MRO, Alton Christensen 21-18H, Lake Ilo, t9/10; cum 51K 3/18;
• 18937, 660, CLR, Glasoe 2-19H, Dolphin, t11/10; Dolphin, t11/10; cum 187K 3/18;
• 18868, 3,745, Equinor/Statoil/BEXP, Abelmann 23-14 1-H, Camp, t10/10; cum 334K 1/19;

December 15, 2010

• 18723, 608, Murex, Lisa Diane 15-22H, Beaver Lodge, t6/10; cum 149K 1/21;
• 19053, 89, CLR, Monte 12-19SH, Medicine Pole Hills, West Red River (not a Bakken), t8/10; cum 147K 1/21;
• 19012, 365, CLR, Bonneville 2-23H, Rattlesnake Point, Rattlesnake Point, t12/10; cum 223K 1/21;
• 18943, 2,169, WLL, Locken 14-9XH, Sanish, t11/10; cum 587K 1/21;
• 18566, 1,204, WLL, Cvancara 11-14H (see also several other Cvancara wells), Alger, t11/10; cum 254K 1/21;
  
• 19025, 1,361, WLL, Moore 11-7H (see other Moore wells), Sanish, t11/10; cum 271K 1/21;
• 19250, 2,686, WLL, Ness 43-21H (see other Ness wells), Sanish, t10/10; cum 495K 1/21;
• 19259, 2,746, WLL, Jones 12-8H, Sanish, t10/10; cum 519K 1/21; off-line 3/18; back on line;
  
• 19174, AB/2,299, WLL, Kannianen 43-33H (see many other Kannianen wells); t10/10; cum 391K 4/19; remains off line 1/21;
  
• 19029, 2,625, WLL, Heiple 11-3H, t10/10; cum 3405K 1/21; intermittent; long periods with no producton;
  
• 19242, 1,914, WLL, Bartleson 12-18H, t10/10; cum 278K 1/21; needs to be re-fracked
• 19044, 2,110, WLL, Anderson 21-7H, t10/10; cum 317K 1/21; needs to be re-fracked
• 18387, 736, Petro-Hunt, USA 10B-2-4H, Charlson, t7/10; cum 409K 11/20; recently off-line; now back on line; small jump in production; off line 12/20;
  
• 18541, 161, CLR, Miles 1-6H, Dimmick, t11/10; cum 188K 1/21; off-line as of 1/18; back on line, then offline 12/20;
• 18728, 32, SM Energy/Baytex, Hansen 13-162-99H, Ambrose, t6/10; cum 103K 1/21;
• 18925, 1,521, Slawson, Phoenix 1-18H, Van Hook, t12/10; cum 429K 1/21; still great production as of 3/18;
• 18984, 1,219, CLR, Olson 2-8H, Edge, t11/10; cum 456K 1/21; see update here;
  

December 14, 2010

• 17701, 63, Prima Exploration, Wildhorse 11-24H, Lakeside, Midale/Nesson pool, t10/10; cum 24K 3/18;

December 13, 2010

• None

December 10, 2010

• 18203, IA/1,154, EOG, Fertile 34-31H, Parshall, t6/10; cum 232K 1/21; off line, 2/20; remains off line 3/21;
  
• 18641, AB/1,856, Newfield, Megamouth 1-8H, Siverston, t8/10; cum 145K 4/17;
• 18909, 674, CLR, Rollefstad 2-3H, Antelope, t8/10; cum 330K 1/21;
  
• 19028, 98, 31 Operating, LLC/Petro Harvester/Sagebrush, Erickson Et Al 3B, Renville, a Madison well, t8/10; cum 36K 3/18; inactive as of 8/15; back online 1/17; intermittent since then;
  
• 19047, 1,770, Slawson, Revolver 1-35H, Van Hook, t11/10; cum 377K 1/21;

December 9, 2010

• None

December 8, 2010

• 18693, 560, MRO, Betty Shobe USA 41-8H, Reunion Bay, t9/10; cum 346K 1/21;
• 19037, 811, Oasis, Banks 5892 44-34H, t10/10, cum 148K 1/21; intermittent production;
  
• 19051, PA, EOG, Eidsvold 1-10H, a Spearfish well, wildcat

December 7, 2010

• 17462, IA/149, CLR, MPHU 24-19H, a Red River well, t8/10; cum 55K 11/20; off line 12/20; remains off line 1/21;
  
• 18790, 1,773, ERF, Henry Bad Gun 16B-21-1H, Moccasin Creek, t10/10; cum 491K 1/21;
  
• 18970, IA/1,106, Slawson, Pike Federal 1-3-2H, Van Hook, t9/10; cum 544K 9/20; off line 10/20; remains off line 1/21; jump in production;
  

December 6, 2010

• 18599, 1,003, Lime Rock Resources/OXY USA/Anschutz, Andrew Schmidt 1-3-10H-143-97, Crook Creek, t1/11; cum 160K 1/21;
• 18770, 819, Whiting/North Plains, Scanlan 3-5H, Truax, t9/10; cum 384K 1/21; jump in production;
  
• 18801, 1,481, Oasis, Contreras 5502 42-7H, Squires, t8/10; cum 384K 1/21; remains off line 1/21;
  
• 18835, 503, CLR, Long 2-5H, Stoneview, t9/10; cum 131K 1/21;
• 18896, 4,438, Statoil/BEXP, Clifford Bakke 26-35 1H, Alger, t10/10; cum 611K 1/21;
• 18897, 584, CLR, Panasuk 1-23H, Hebron, t9/10; cum 151K 1/21;
• 18907, 262, CLR, Lance 1-36H, Upland, t9/10; cum 99K 1/21;
• 18916, 1,999, Oasis, Missouri 5302 44-35H, Indian Hill, t8/10; cum 315K 1/21;
• 18918, 93, Encore, Jorgenson 34-9SWH, Lost Bridge, t9/10; cum 289K 1/21;
• 19042, 280, Cornerstone Natural, Schwartz 4-11H, Customs, Midale/Nesson pool, t8/10; cum 75K 1/21; intermittent since 6/17;
  
• 19735, PNC, Hunt Oil, Halliday 1-19-18H 1,

TO BE COMPLETED AT A LATER DATE (I never did complete this)

December 3, 2010

Enquiring Minds Want to Know: Why the Drop in the Number of Active Rigs?

The high of 143 active rigs was set some weeks ago but has since slowly declined to 134 today. It's great weather, road restrictions have been lifted, and new companies keep moving in. I assume that some of these rigs are moving across the border to Montana. While touring the Bakken last week someone noted that there were seven rigs just across the state line. That would account for much of the delta between 143 and 134. After a couple years of little activity in eastern Montana Bakken, the drillers are going back in. They are going back to where they were a few years ago, plus they are exploring new areas just west of Williston.

But I wonder if there might be something else going on to account for the drop in active rigs. It seems a bit more than I would have expected.

I'm not the only one wondering?

***********

Update, August 27, 2010: never mind. We're back up to 140 today.

Whiting Announces Four New Wells

There is an incredible amount of information that is not included in a press release announcing results of newly completed wells. There just isn't enough space and it might overwhelm the casual reader. However, the big piece of news not mentioned in the press release discussed below is the fact that one of the wells is the fourth well in that one section. More on that later.

Whiting announces four new wells.

My comments and observations are limited due to the fact I'm still traveling, but I think these new wells are starting to show the potential of new wells drilling in a very established area.

For example, the newly reported Carkuff 12-24H, with a reported IP of 3,475 bopd, is the second of two wells in a 1,280-acre unit. The first well in that spacing unit was the Arndt 11-24H with an IP of 1,429. The Arndt was frakked with 10 stages; the Carkuff with 30.

The Carkuff, Fladeland 43-9H (3,027; 22 stages); and Littlefield 21-12H (2,591; 19 stages) are all middle Bakken wells.

The fourth well, the TTT Ranch 4-6TFH set an IP record for a Three Forks Sanish well in the Sanish field with an IP of 1,768 boepd. The previous record was the Whiting-operated Olson 11-14TFH with 1,640 boepd.

For future reference, the file numbers for these wells:
Carkuff - 18570
Fladeland - 18761
Littlefield - 18635
TTT Ranch - 18804
Arndt - 18055


Now,back to that fourth well in one section. The TTT Ranch 4-6TFH is the fourth well in section 6-153-91. The other three are file numbers 17603, 18804, 18297, and 18876. Although two of these are still on the confidential list, it appears that all four wells will be long laterals running from northwest to southeast.

The following is idle chatter but represents a disconnect that I've discussed before. The NDGS estimates the EUR for an individual section in the Bakken be in the range of 400,000 barrels (give or take a 100,000 barrels based on location). Meanwhile, the drillers "advertise" a EUR of 700,000 barrels per well (give or take a couple hundred thousand barrels based on location). So, here we have, so far, four wells in a 1,280-acre spacing unit and I doubt they will be the last.

The Spearfish: Beating a Dead Horse?

I don't want to beat a dead horse but folks continue to ask about the Spearfish formation. I tried to answer questions in the "comments" section but couldn't get the URL's to paste, so I am providing this note as a stand-alone posting.

See the comments at this link.

This site linked the same story I linked earlier, about the potential number of wells in Bottineau County.

These stories suggested that there could be as many as 30 wells in each section, or 30 wells in each square mile. This site shows what that looks like in Manitoba (Canada/Williston Basin), a graphic I had not seen previously.

Take it for what it's worth. I have no dog in this fight. It will simply be interesting to follow.

For more on the Spearfish, click here (or click on "The Spearfish" at the sidebar on the right).

Status of the Bakken, August, 2010

Over at the sidebar on the right, I've posted a permanent link on the status of the Bakken as reported by a pool of North Dakota journalists. This is an excellent series of articles for newbies, and even seasoned veterans of the oil industry in the Williston Basin should find it very interesting.

Two High-Performance Rigs Coming to the Bakken

Two high-performance rigs coming to the Bakken.

This is more than just a story of two high-performance rigs. It speaks volumes about what some folks think about the potential of the Bakken. Note the phrase about this being early in the current cycle.

I sure wish I could be in the coffee shop when the roughnecks come in after working on this rig to hear the stories. Okay, Appleby's and then the local bar.

In case the link is broken in the future:

Last month, Helmerich & Payne (ticker: HP) announced plans to build 16 high-performance rigs, many under multiyear contracts commanding day rates in the mid-$20,000s to service the most promising oil and gas shale basins in the U.S. The latest orders bring the company's total to 19 rigs for this fiscal year, ending Sept. 30.

Two of those rigs are heading for the North Dakota Bakken.

New Tax on Oil Royalty Payments

I'm blogging on my iPad from along the incredible Columbia River gorge.

Some time ago I posted a note about the new "3.8 percent tax on dividends" with the recently passed health care bill. Someone asked what that had to do with the Bakken.

It turns out, "quite a bit."

The 3.8 percent tax will affect oil royalty payments beginning in 2013.

It appears that for simple-minded folks like me, this tax will affect most passive income and was inserted, some claim, to preclude taxing "Cadillac" health plans offered by some unions for some members.

One additional comment: passing the original tax was difficult, but raising it a tenth of a percent periodically to cover ever-increasing health care costs will be comparatively easy. So, one can expect to see a rate increase to 4.0 percent a year or so after 2013 and before you know it, we could see significantly higher rates farther down the road.

For more, click here.

By the way, I happened to catch part of a town meeting somewhere in the US last week, and it appears others are starting to notice this new tax. It's going to affect a lot more than oil royalty payments, but that's how it's connected to the Bakken.

The Bice Wells: Déjà Vu All Over Again

All of a sudden there's interest in these two wells that were part of the study "proving" that the Bakken formation does not communicate with the Three Forks Sanish.

Dickinson Press Insert: The Bakken Today

Special insert on the oil industry placed in various North Dakota papers, over an 8-day period in August, 2010.

CNBC Talks About The Bakken

CNBC: The Bakken is the only proven and successful source of oil from shale.

Activity in Williston

It's interesting to follow the activity in Williston. The easiest spot to hang out while blogging is clearly the McDonald's on Million Dollar Way. Free ATT wi-fi is provided by McDonal's.

This McDonald's is so busy they have just put in a second drive-through, something I had never seen before. There are two identical drive-through lanes from which to order, but they converge back to one lane for the pick-up window. This will help eliminate the long line of cars strtching back unto the street. It will, of course, also give the impression of a shorter line. It will be quite a trick for the employees to keep track of which vehicle belongs to which order.

Again, this is first time I've seen two identical drive-through lines at any fast food restaurant.

Meanwhile, inside the restaurant itself is a steady stream of young men looking for work. The 25-y/o sitting across from me is typical. He drove up from Dallas, arriving in Williston less than an hour ago. He's ordered his Big Mac meal and has now opened up his huge laptop, and is in his cell phone calling to see who is hiring. In the space of five minutes he has already made four phone calls, and identified three local companies, including Nabors, I believe, who are hiring. He either applies on-line or will visit the company in person later. He already has an interview lined up for tomorrow, Saturday.

Jobless Rates Fell in 18 States (Nothing To Do With the Bakken)

According to the Associated Press, the jobless rate fell in 18 states, and rose in 14 states.

For example, in Michigan, the state with the second highest unemployment rate, the rate of joblessness fell from 13.2 percent in June to 13.1 percent in July.

Michigan had held the top spot for unemployment for four years, but this past month Nevada claimed that honor with a jobless rate of 14.3 percent.

Meanwhile, Massachusetts gained 19,200 private sector jobs last month, the largest gain in more than 20 years.

19,200. Well, that's a start. The country has only lost 8 million jobs in this recession.

Meanwhile, for the record, the three states with the lowest unemployment rates were North Dakota, 3.4 percent; South Dakota, 4.4 percent; and, Nebraska, 4.7 percent.

Some Random Photos of Oil Activity West of Bowman, ND (USA)

Random photos of oil activity west of Bowman, North Dakota; area surrounding Marmarth.

These are all Red River wells, and they are fairly old, going back to the mid-1990's.

Yes, here's a 13-turbine windmill farm in the area, providing electricity at 5 to 8 times the cost of electricity produced with coal or natural gas. Whatever. It's an 18.5 megawatt farm owned by MDU; that's enough energy to power about 5,000 homes. Construction began in late 2009. For more on this wind farm, click here.

Buffalo

Elk

My biggest regret: not taking a photograph of the restaurant in Bowman (on southeast side of town; on north side of highway 85/12, if I remember correctly): best hamburgers I have ever tasted, cooked to order.

Aha! I love the internet: here's a photo of "Eats-N-Treats."  If for some reason your browser can't get to it; here's the URL: http://eatsntreats.net/Location.php.

Photos of the Hebron Oil Field: Stedman, Obert, and Others

Some random photos around Hebron oil field, northwest of Williston.

Drive 10 miles west of the 4-mile corner (or 14 miles west of Williston), turn right on the Grenora road (asphalt). Go north seven miles, and turn left on the scoria road. The road will be marked with a Cyclone 10 sign, and then a Continental Resources sign with their six wells in little Hebron field (a newer sign next to this sign includes two more wells, the Fashing and the Milloy):

And then, the Stedman sign:

And the Stedman well (in the photos with two wells, the Obert wells is across the road from the Stedman). The Stedman is the site with the pumper and about two dozen water containers still on site:

                                      

                                       

The Stedman well is off in the distance, on the right, and the Obert well is on the left hand (north) side of the road. This is looking east. The road is on a section line, running due east-west, with four pair of wells on either side of the road, the lateral on the north side running north, and the lateral on the south side running south.

Many of the wells in the Squires and the Painted Woods fields had eight to ten tanks on the pads, whereas the wells in the Hebron oil field (where these are located) had only four tanks. I'm not sure what to make of that. One can think of many reasons why Continental Resources chose to develop the Hebron oil field this way.

These cattle probably haven't seen so much truck traffic in years (of course, the calves all think this is the "norm." They've known nothing else.).

                                      

Scandia Wells Starting to Report

I am not aware of earlier Scandia wells reporting.

18699, 261, EOG, Scandia 1-34H, Souris, Spearfish/Madison
18701, 304, EOG, Scandia 3-36H, Souris, Spearfish/Madison, great well for a Spearfish

Comments on these Spearfish wells.

For newbies: the Spearfish. (by the way, not to toot my own horn but I think my info on the Spearfish is one of the more comprehensive sites on the net, regarding the Spearfish.)

For list of recent EOG activity in the Souris field, click here.

Updates

Update, October 31, 2010: No news coming out of the  Souris.

Huge: Anschutz Up For Sale

This is huge!

 

I never expected Anschutz going up for sale. Smaller companies, yes, but not part of the Anschutz dynasty.

 

This is huge for two reasons:

• Another opportunity to see what the Bakken is really worth
• An opportunity for retail investors to buy into Anschutz

My hunch: XOM adds Anschutz to it's recent XTO purchase.

• Another possibility: Harold Hamm.
• Okay, two more: EOG or Hess.
• BEXP is salivating but doesn't have the cash.

Why is Anschutz going up for sale now?

The Journal speculated that Anschutz, and the owners of several similarly sized companies that are also said to be for sale, may also be trying to beat an expected increase in capital gains taxes next year.

If so, watch for some more mega-deals before the end of the year. For an investor, one might want to look for great small-cap companies hurt by the recent stock market sell-off. Such investors might only have to wait for two or three months to see if these small-cap companies are scooped up by the "big boys."

  

CO2 Injection and Basin Electric: Update

This doesn't interest me a whole lot, but some folks remain interested. I think it's mostly a puff piece by the utility company trying to keep this on our radar scope. And since I linked it, I guess to some extent they have.

Whatever.

New Commentary on The Bakken

This is a recent article on the Bakken, published July, 2010, in Geo News.

In addition to providing an estimate of the potential of the Bakken, it also includes the definition of the Bakken Pool, to include the Lodgepole, the Bakken, and the Three Forks Sanish.

Nothing To Do With The Bakken

This has nothing to do with the Bakken but it is an opportunity to remind readers I enjoy following other news around the world.

In this case, Connecticut's state treasurer says the state has one week's worth of cash. I was aware of California, Illinois, and New York in deep fiscal trouble, but I had forgotten about Connecticut.

Back in June of this year, Connecticut, the wealthiest state in the US (based on per capita income) had to borrow $1 billion to cover a cash shortfall; this time it's only half a billion dollars.

45,000 Barrels in Two Months; An IP of 27 -- More To Follow?

This is very, very interesting. I am waiting for more to comment on this one.

This well reported an IP of 27 barrels per day, but it produced almost 45,000 barrels in the first two days of operation. This is an Encore well: Swenson 31-33SWH , and is a short lateral to boot.
If this is not a typographical error, it says volumes about IPs. It is in the Charlson field, and Charlson wells have been good wells, so I don't doubt the production. I am just curious about the IP.

Another "First" for North Dakota; Microseismic Arrays; The Halo Effect Of Fracking

Largest array: North Dakota has the largest buried microseismic array in the world, Geo News, July, 2010.

Other stories, same subject:

World's largest buried seismic array, Williston Basin, Whiting Oil in MicroSeismic:

Headline: MicroSeismic, Inc. Announces Completion of World's Largest Buried Array in Williston Basin for Whiting Oil & Gas Corporation

Story: HOUSTON - March 10, 2010 - MicroSeismic, Inc., a leading geophysical service company providing 3-D passive seismic imaging for energy exploration and production, today announced that it has completed installation of a Buried Array system in the Williston Basin's Sanish Field for Whiting Oil & Gas Corporation, the wholly-owned subsidiary of Whiting Petroleum Corporation.

This expansive Buried Array spans an area of more than 150 square miles in Mountrail County, North Dakota and uses more than 1200 geophone channels. The Buried Array will enable microseismic monitoring, mapping and analysis of the hydraulic fracturing operations for Whiting's Sanish Field development program. It will also permit Whiting to monitor the primary, secondary and tertiary activity, in a variety of reservoir conditions, for their Bakken and Three Forks Formation wells on a long-term basis.

Real-Time Monitoring Is Fracking's Newest Revolution, aiche.org, June 25, 2012.

MicroSeismic completes buried array in Williston Basin for Whiting Oil & Gas; Exploration and Production Magazine, March 10, 2010. 

Hydraulic fracturing and microseismic monitoring: UNDEERD and multiple Bakken operators, December, 2008

A life of Field Monitoring Array for the Sanish Field, North Dakota, wbpc, undated, abstract only;

For thoughts on this array, click here.

Miscellaneous notes posted since the original note:

• January 11, 2011: short press release on the completion of the largest microseismic hydraulic fracture monitoring program conducted in Canada to date. This occurred in the Horn River Basin in northeast British Columbia, Canada, and consisted of real-time monitoring of 143 fracture stages in eight horizontal wells. 

The "microseismic array" story became more interesting when The Daily Mail referenced a larger array. But these may be two different "animals." The Daily Mail may be referencing a "seismic array," whereas the North Dakota story references a microseismic array.

"Frac Hits": from Bloomberg, April 29, 2017

After drilling 27 gas wells in North Louisiana in the first quarter, Range Resources Corp shut in some production to avoid “frac hits,” or damage that can occur to an older shale well located next to a newer one.

*****************************

Simultaneous Hydraulic Fracturing Treatments in Adjacent Horizontal Wells

From a very interesting paper, geoconvention, 2009: Real-Time Microseismic Monitoring of Simultaneous Hydraulic Fracturing Treatments in Adjacent Horizontal Wells in the Woodford Shale.

Introduction:

The commercial success of horizontal wells drilled in shale-gas reservoirs depends upon the ability to initiate multiple parallel fractures, and/or the presence of complex networks of natural fractures that are connected by induced hydraulic fractures.

Production modeling of horizontal well completions shows that recovery might be improved if the distance between parallel hydraulic fractures can be reduced.

Simultaneous fracturing of two or more adjacent and parallel horizontal wells has been tested in the Barnett Shale to create hydraulic fracture networks more closely spaced than can be achieved from a single wellbore.

Positive results in comparison to wells completed individually were attributed to increased fracture complexity resulting from the interaction of hydraulic fractures initiated in parallel wells. Pressure response while fracturing and radioactive tracer surveys were the primary evaluation tools used. The two previously mentioned references contained an implicit assumption that rock mechanical properties were more or less constant along the length of the horizontal lateral. Evaluation of fracture stimulation treatments in the Barnett Shale that incorporated advanced open-hole logging measurements such as image logs, and borehole-based microseismic monitoring, showed that fracture geometry can be influenced greatly by changes in rock properties along the length of the lateral.

The implications of such heterogeneity cannot be ignored when transferring technology from the Barnett Shale to other gas-shale reservoirs. In this paper, we present the results of a microseismic monitoring camp aign undertaken as part of a drilling and completion program in the Woodford Shale of south-central Oklahoma that included both single-well and simultaneous fracturing treatments.

Two project areas, designated Eastern and Western were selected for live microseismic monitoring during fracturing operations. The project began with a single-well completion in May, 2007 in the Eastern project area. In April, 2008, a four-well simultaneous fracturing treatment was performed in the Western project area. The Eastern project area was finished in June, 2008 and included re-stimulation of the first well completed in May, 2007, a two-well simultaneous fracturing treatment, and the completion of a single well. All treatments were monitored with borehole-based microseismic measurement.

Real-time processing and display of microseismic event locations was provided to the engineering team responsible for the fracture stimulation treatments at the fracturing location.

Conclusion:

Evaluation of the production histories of wells discussed in this paper appears to show that simultaneous fracturing treatments do not necessarily increase well productivity when compared to conventional completions.

Also, where new wells have been drilled in proximity to existing wells there is potential for damage to the completed well by fluids introduced during the stimulation of the new well(s).

The benefits of simultaneous fracturing are most apparent when 3 or more wells are stimulated simultaneously.

In the western project area, the interior wells produce more gas when normalized for lateral length compared to the exterior wells. In the eastern project area, the A4 well, which was completed without simultaneous fracturing, has the highest sustained gas rate and cumulative production. The objective of using microseismic data was to assess the four-dimensional development of the induced fracture systems both in space and time.

Using real-time microseismic monitoring allows adjustments to the pumping schedule while the treatment s take place (i) to improve the effectively stimulated reservoir volume, (ii) to interpret unusual pressure responses, and (iii) to identify contact with potential geohazards.

Microseismic monitoring of the individual-well completions and simultaneous fracturing projects showed that substantive changes in fracture network geometry occurred along the laterals. The change in fracture geometry appears to be in response to structural complexity combined with lithological effects. An important implication of this study is that production improvements or cost savings might be achieved through better integration of surface seismic data, open-hole logs, directional drilling measurements, and borehole-based microseismic monitoring.

Completion engineers can take full advantage of the information available when designing stimulation treatments, and make changes to those treatments during pumping operations when needed. The benefits of this approach have been proven in many shale-gas reservoirs around the world.

Too Much To Post -- This One for Investors

There is, again, way too much to post. I am traveling around western North Dakota, and sneaking bits of time at the local library or on my iPad at McDonald's to update my blog. But it's almost impossible to post all I want.

So, some of this will seem random (it is), but folks who know that I remain bullish on the oil industry will understand (or, at least I hope they will) what I am posting.

From a recent Wall Street Journal investing transcript:

Globally decline rates [of oil production] are in excess of 6% per year, which means the world has to bring online roughly 5 million barrels a day of new production every year simply to keep supply flat. In addition, the recent incident in the Gulf of Mexico is another example of the existing the supply challenges and more evidence that the era of cheap, easy to access oil is truly over.On a specific note, one of the interesting dynamics at play today is that the deepwater Gulf of Mexico represents a very important part of US domestic production.

So, with oil prices down yet again today, this just represents another buying opportunity. I assume one could invest small amounts in the Bakken periodically as the price of oil drops. We will only know the bottom when the time has passed.

Having said that, the short term outlook for oil could be rocky. I do not hold DNR.