According to Yahoo!Financial, Samson Oil and Gas has seven employees and controls acreage in New Mexico, Wyoming, Texas and North Dakota. It is headquartered in Australia.
In North Dakota, SSN's acreage consists of slightly more than 3,000 net acres, located around Stockyard Creek oil field.
The North Dakota Bakken is the hottest play in the continental United States right now, so I assume SSN's operations in North Dakota play a significant role in SSN's bottom line. [Note: in some of its press releases, SSN refers to the Bluell formation. The Bluell formation is one of several informal designations of various sub-formations in the Madison Group (Lodgepole, Charleson, Mission Canyon above the Bakken).]
Today, SSN released its annual earnings report for the year ended June 30, 2010. All figures rounded:
2010 net profit after income tax: $800,000
2009 net profit after tax: ($30 million loss) -- (Is it just me, or would you be impressed that a company with seven employees could keep functioning with a $30 million loss?)
2010 net assets: $25 million
2009 net assets: $4.5 million
2010 oil production: 31,000 barrels (25% increase from previous year)
2009 oil production: 25,000 barrels
There was one cryptic statement: "A third and final closing is expected in early October and is estimated to result in co receiving a further $4 mln in proceeds."
Thursday, September 30, 2010
Motley Fool: Big Upgrade for EOG
Subject line says it all. In addition, the article mentions several other Bakken companies, including BEXP and MRO.
For investors only: this one I feel good about. Quite awhile ago when a share of EOG went over $100, I said that if EOG ever went below $90 again, I would invest in EOG. EOG continued to appreciate, over $110, before it dropped back, and yes, when it hit $88, I actually bought as many shares as I could afford at the time. That was my first purchase of EOG stock. EOG has since gone back up to $93 or so, and now this nice article about EOG appears in the Motley Fool. One of the few times the stars all aligned and I was able to buy shares in a company I never thought I would get another chance to own. Kinda funny how things work out.
At SeekingAlpha there's a nice article on "the hybrid model": oil and natural gas. And again, EOG receives prominent billing.
For investors only: this one I feel good about. Quite awhile ago when a share of EOG went over $100, I said that if EOG ever went below $90 again, I would invest in EOG. EOG continued to appreciate, over $110, before it dropped back, and yes, when it hit $88, I actually bought as many shares as I could afford at the time. That was my first purchase of EOG stock. EOG has since gone back up to $93 or so, and now this nice article about EOG appears in the Motley Fool. One of the few times the stars all aligned and I was able to buy shares in a company I never thought I would get another chance to own. Kinda funny how things work out.
At SeekingAlpha there's a nice article on "the hybrid model": oil and natural gas. And again, EOG receives prominent billing.
North Dakota Oil Production
Locator: 1001A.
USA
US to be top producer by 2017; net exporter by 2030 -- New York Times. North Dakota is already a net exporter and has been for several years.
North Dakota
October, 2023, data: link here. Crude oil production down 3.7% m/m. First month in a long time (first time?) when natural gas production did not increase m/m. Big increase in number off wells permitted, m/m; from 59 to 77. At 18,619 producing wells, another new high for the number of producing wells. Crude oill production was down because number of completed DUCs decreased.
September, 2023, data: link here. Producing wells, another new all-time high.
August, 2023, data: link here. Producing wells: new all-time high, this month, August, 2023: 18,179. producing wells. Natural gas capture, statewide, 95%; down from 96% last month. North Dakota “mandate: 91%.
July, 2023, data: link here.
June, 2023, data: link here.
May, 2023, data: link here. Producing wells: new all-time high, this month, May, 2023: 17,913 producing wells.
April, 2023, data: link here
March, 2023, data: link here.
February, 2023, data: link here.
January, 2023, data: link here.
December, 2022, data: link here.
November, 2022, data: link here.
October, 2022, data: link here.
September, 2022, data: link here.
August, 2022, data: link here.
July, 2022, data: link here.
June, 2022, data: link here.
May, 2022, data: link here.
April, 2022 data: link here.
March, 2022, data: link here.
February, 2022: data.
January, 2022: data. Crude oil production down five percent month / month.
December, 2021: data. Crude oil production down two percent month / month.
November, 2021: data. North Dakota crude oil production increased a whopping 4.4% month / month.
October, 2021: data. Production, flat, month / month.
September, 2021: data. With one-third the number of rigs, North Dakota almost edges out New Mexico for second place.
August, 2021: data. An increase in crude oil production by about 3%.
July, 2021: data.
June, 2021: production flat m/m. Lynn Helms says North Dakota retains #2 position.
May, 2021: slight increase month/month, and significant increase year/year. In March, 2021, New Mexico moved to #2; North Dakota dropped to #3.
April, 2021; still #2 in the nation. Appears that may be in accurate. Other sources suggest New Mexico moved to #2 in March, 2021; and, North Dakota dropped to #3.
February, 2013: Director's Cut: new all-time -- 778,176 bopd
January 11, 2013: Director's Cut. First month in a long time with month-over-month production actually decreases; production/well also decreases
December 17, 2012: Director's Cut
November 20, 2012: Director's Cut
October 20, 2012: Director's Cut
September 19, 2012: Director's Cut
August 16, 2012: Director's Cut
July 18, 2012: Director's Cut
June 19, 2012: Director's Cut
April 11, 2012: Director's Cut
March 21, 2012: Director's Cut
February 10, 2012: Director's Cut
January 17, 2012: Director's Cut
December 12, 2011: Director's Cut
*****************************
November 12, 2010: Director's Cut
- August, 2010, Oil: 10,195,061 barrels --> 328,873 bbls/day
- September, 2010, Oil: 10,241,510 barrels --> 341,384 bbls/day -- all time record
- August, 2010, producing wells: 5,115
- September, 2010, producing wells: 5,197 -- all time high
- August, 2010, permits: 138
- September, 2010, permits: 167 -- all time high
- June, 2010, Oil: 9,434,312 barrels = 314,477 barrels/day
- July, 2010, Oil: 9,952,296 barrels = 321,042 barrels/day (all time high)
- August, 2010, Oil: 10,134,368 barrels = 326,915 barrels/day (all time high)
- June, 2010: Producing Wells = 4,977
- July, 2010: Producing Wells = 5,051 (all time high)
- August, 2010: Producing Wells = 5,115 (all time high)
- June, 2010, Permitting: 128 drilling permits
- July, 2010, Permitting: 145 drilling permits (all time high)
- August, 2010, Permitting: 138 drilling
- NDIC Director still voices his concern about EPA regulation.
November 21, 2009: North Dakota state official states that in addition to the Bakken, TFS, and Lodgepole, there is now another formation oil producers are targeting: the Birdbear. Actually that is not news. Oilmen have known about this formation for decades and have targeted it in the past. What is new, is renewed interest in this formation for horizontal drilling and fracture stimulation. Update, November 2, 2010: Marathon's Mylo Wolding 14-11, a Birdbear well, reported an IP of 39 bopd.
November 16, 2009: North Dakota oil production projected to be 350,000 barrels of oil per day in 2010.
November 13, 2009: More on the recent record North Dakota land lease auction. Some acres in Mountrail County were leased for $8,000/acre. Land exploration companies / producers aren't paying $8,000/acre to watch the barley grow. 2010 is going to be an outstanding year.
November 13, 2009: A relatively new concept for frac'ing has been introduced: tri-frac. Initial discussion here; time will tell whether this amounts to anything. This link, in addition, provides some insight into the status of the Elm Coulee field in Montana (where the current Bakken boom began) and Enerplus which hasn't gotten much notice lately.
November 9, 2009: even the Canadians are betting on the Bakken (southwestern Saskatchewan).
November 9, 2009: ND went over 60 active rigs today (61, to be exact). Most since late 2008. [On November 13, 200, NDIC reported 63 active rigs.]
November 8, 2009: This site (the Million Dollar Way) was cited in the opening line of a Grand Forks Herald story today. You may need to sign in to see the article. You can sign in with your Facebook account. You can see a version of the same article at Yahoo News without having to sign in.
November 6, 2009: More evidence that the oil/gas industry continues to expand: Denver company to expand gas plant; sees continued development of the Williston Basin. This regards a facility in Divide County, the Ambrose Gas Plant southwest of Ambrose.
November 5, 2009: North Dakota state land oil lease auction brings in record amount, $72 million. Previous record: $30 million in 1980; adjusted for inflation: $80 million. 59,000 acres; average, $1,214/acre.
November 4, 2009: The Mountrail County Promoter states that North Dakota, already the 4th leading oil producer in the United States, would produce more oil if pipeline capacity was adequate. The writer notes that there is talk of two more pipelines in the Stanley area: one would take oil into Canada and then back into the states through another pipeline; and the second additional pipeline would take oil out of the local area. I have opined elsewhere that one starts to get the feeling that the Williston Basin could become another "Tulsa" over the next two decades.
November 4, 2009: 18 percent more North Dakotans reporting $1 million (or more) in income; 470 (2008) vs 400 (2007; due to oil income. And some said the Bakken was over-hyped; not these folks.
November 1, 2009: With the Lodgepole, 2010 is going to be a big year for oil in ND.
November 1, 2009: DNR will buy EAC. Denbury: a powerhouse of a company.
October 31, 2009: The news is starting to come fast and furious out of North Dakota; there is almost too much news to report.
We are seeing more Three Forks Sanish action. Encore just reported a 1,500 bopd well with a TFS well with a single frac. Now they are going to offset another well at the same location, but accomplish a 22-stage fracture, and then compare a single frac stimulation with multiple stage fracture stimulation. This is getting very exciting very fast.October 28, 2009: ND reported to be #4 in oil production among the US states.ND jumped ahead of Oklahoma few months ago and then past Louisiana in most recent reporting period.
Encore is going to add another rig to North Dakota drilling program. There are currently about 56 rigs in North Dakota and almost every producer has announced plans to add more rigs. I think I remember reading EOG plans to increase its fleet of seven rigs to thirteen.
October 25, 2009: Hess moves to Tioga.Hess moved into their new operations complex in Tioga on October 20, 2009. Spokesman says center of operations for Hess in North Dakota is Tioga and thus the move.
October 25, 2009: EOG to ship oil on railroad tankers. EOG should begin shipping oil out of North Dakota via railroad cars starting February, 2010; the loading terminal was built this past year in Stanley, ND. Pipeline capacity has been exceeded by the Bakken production.
October 25, 2009: Huge Halliburton expansion.Earlier this year Halliburton announced a $20 million project to expand their industrial complex east of Williston. Sanjel's complex was reported to cost $7 million, so local Willistonites can only imagine what a $20 million addition / modification to an existing complex might look like. The link is here. It should be completed in 2010.
October 25, 2009: North Dakota Defies Predictions With Record Oil Production
The state Industrial Commission reports that North Dakota oil wells pumped an average 226,940 barrels a day in July and 231,252 barrels daily in August, the latest figures available because oil production numbers typically lag at least two months. The previous high of 215,637 barrels a day was set in November 2008.North Dakota produced a record 62.8 million barrels last year, up nearly 18 million barrels from 2007.
For Investors Only: OAS
If a picture is worth a thousand words, what's a map like this worth?
This is a rather disjointed note. Again, too many things going on in the Bakken to take time to sort all this out, so just a bunch of data points for investors to consider.
I have followed Oasis ever since it acquired Fidelity's acreage in the Cottonwood field (Bakken, North Dakota, USA) a year or so ago (I now forget when that occurred, but it surprised me when I heard about it).
I don't hold any OAS, but it's high on my list.
The company was founded in 2007; it's headquartered in Houston, and all its holdings (as far as I can tell) are in the North Dakota and the Montana Bakken, and it appears their acreage is in some of the best Bakken. Their strategic vision, it appears, has been to aggressively acquire acreage, and worry about drilling second. Now that they have the acreage, they are drilling. Including a permit for their first two-well pad, to the best of my knowledge, which they got today.
The map linked above shows the three prospects of Oasis: West Williston, East Nesson, and the Sanish. These are very, very good areas in the Bakken.
The Sanish, of course, is known to be one of the best, if not the best, area in the Bakken. It is "owned" by Whiting and sits just west of the Parshall oil field, "owned" by EOG.
West Williston has turned out to be surprisingly good and may be even better going forward, if that's possible, but it may take increased fracturing stages/well.
The East Nesson is good the farther south one goes toward the Sanish, but so far I have not been impressed with the East Nesson further north. This includes the Cottonwood field which has been mediocre, at least in my eyes. But if it's just a matter of improved drilling techniques/increased fracturing stages, maybe the Cottonwood will be more impressive. Or sold for a profit to buy better acreage elsewhere.
OAS has an excellent website, http://oasispetroleum.com/.
At the end of August, OAS was selling for $16.50. Today, it hit a 52-week high of $19.55 and dropped back slightly.
By my calculations, OAS controls 309,000 net acres, some with production. Compare this acreage with that of other Bakken drillers. At $5,000/acre, that's $1.545 billion.
The market cap for OAS is $1.8 billion with no debt, according to Yahoo!Financials. BEXP, which everyone has heard about, has a market cap of $2.2 billion with $160 million in debt.
On the active drilling list, OAS has five rigs. BEXP has six drilling rigs and plans to go to eight. (The numbers change on the active drilling rig list but those are the numbers this evening.)
1. I am inappropriately exuberant about the Bakken.
2. I have no formal financial training.
3. I have no background in the oil industry other than what I learn on my own.
4. This is not a recommendation to buy shares in OAS. It is simply the kind of "idle chatter" one might hear over coffee at the Economart in Williston.
This is a rather disjointed note. Again, too many things going on in the Bakken to take time to sort all this out, so just a bunch of data points for investors to consider.
I have followed Oasis ever since it acquired Fidelity's acreage in the Cottonwood field (Bakken, North Dakota, USA) a year or so ago (I now forget when that occurred, but it surprised me when I heard about it).
I don't hold any OAS, but it's high on my list.
The company was founded in 2007; it's headquartered in Houston, and all its holdings (as far as I can tell) are in the North Dakota and the Montana Bakken, and it appears their acreage is in some of the best Bakken. Their strategic vision, it appears, has been to aggressively acquire acreage, and worry about drilling second. Now that they have the acreage, they are drilling. Including a permit for their first two-well pad, to the best of my knowledge, which they got today.
The map linked above shows the three prospects of Oasis: West Williston, East Nesson, and the Sanish. These are very, very good areas in the Bakken.
The Sanish, of course, is known to be one of the best, if not the best, area in the Bakken. It is "owned" by Whiting and sits just west of the Parshall oil field, "owned" by EOG.
West Williston has turned out to be surprisingly good and may be even better going forward, if that's possible, but it may take increased fracturing stages/well.
The East Nesson is good the farther south one goes toward the Sanish, but so far I have not been impressed with the East Nesson further north. This includes the Cottonwood field which has been mediocre, at least in my eyes. But if it's just a matter of improved drilling techniques/increased fracturing stages, maybe the Cottonwood will be more impressive. Or sold for a profit to buy better acreage elsewhere.
OAS has an excellent website, http://oasispetroleum.com/.
At the end of August, OAS was selling for $16.50. Today, it hit a 52-week high of $19.55 and dropped back slightly.
By my calculations, OAS controls 309,000 net acres, some with production. Compare this acreage with that of other Bakken drillers. At $5,000/acre, that's $1.545 billion.
The market cap for OAS is $1.8 billion with no debt, according to Yahoo!Financials. BEXP, which everyone has heard about, has a market cap of $2.2 billion with $160 million in debt.
On the active drilling list, OAS has five rigs. BEXP has six drilling rigs and plans to go to eight. (The numbers change on the active drilling rig list but those are the numbers this evening.)
*****
Disclaimer
1. I am inappropriately exuberant about the Bakken.
2. I have no formal financial training.
3. I have no background in the oil industry other than what I learn on my own.
4. This is not a recommendation to buy shares in OAS. It is simply the kind of "idle chatter" one might hear over coffee at the Economart in Williston.
CLR's Arthur-Hegler Eco-Pad Reported Out Today
Three of the wells of CLR's Arthur-Hegler Eco-Pad reported out today (CLR presentation):
We'll have to see the cumulative numbers a year from now to really know how good these wells were.
Harold Hamm, CLR/CEO made a special comment on the October 11, 2010, press release regarding the Arthur-Hegler Eco-Pad.
- 18747, Hegler 2-13H, 689 (1,203)
- 18515, Hegler 1-13H, 418 (1,195)
- 18513, Arthur 1-12H, 708 (?)
- 18748, Arthur 2-12H, 1,103, Last of the four to report; this is the farthest east of the four wells on this pad running west to east
We'll have to see the cumulative numbers a year from now to really know how good these wells were.
Harold Hamm, CLR/CEO made a special comment on the October 11, 2010, press release regarding the Arthur-Hegler Eco-Pad.
CLR Eco-Pad Reports / Seven More Permits on Daily Activity Report: "New" Oil Fields
First reports of the highly anticipated / closed watched CLR Eco-Pad:
It appears the Oasis wells will be on the same pad. This might be the first case of Oasis putting more than one well one one pad (I could be wrong on this).
The Oasis permits in Willow and Crazy Man Creeks could be wildcats for all the activity in those fields. Some old vertical wells, but otherwise no activity. Both these fields are very small fields, less than six sections each and located southwest of Stockyard Creek that has been active recently (Zavanna).
So, we'll see how good this Oasis acreage is. Fascinating.
Also, Ritchie Exploration has completed a well in Bottineau County, Spearfish formation. The file number is 1410 which must have been permitted back in the 1950's. Wow. Total depth (vertical well) is 3,084 feet, but no other data released yet.
- 18747, Hegler 2-13H, 689
- 18515, Hegler 1-13H, 418
- 18513, Arthur 1-12H, 708
- Still waiting for the fourth lateral, the other Arthur well on this Eco-Pad
- Crazy Man Creek (first time I've heard of it), Oasis
- Willow Creek (first time I've heard of it), Oasis
It appears the Oasis wells will be on the same pad. This might be the first case of Oasis putting more than one well one one pad (I could be wrong on this).
The Oasis permits in Willow and Crazy Man Creeks could be wildcats for all the activity in those fields. Some old vertical wells, but otherwise no activity. Both these fields are very small fields, less than six sections each and located southwest of Stockyard Creek that has been active recently (Zavanna).
So, we'll see how good this Oasis acreage is. Fascinating.
Also, Ritchie Exploration has completed a well in Bottineau County, Spearfish formation. The file number is 1410 which must have been permitted back in the 1950's. Wow. Total depth (vertical well) is 3,084 feet, but no other data released yet.
NOT the Bakken -- McDonald's and ObamaCare
UPDATE: McDonald's given a pass on ObamaCare. October 7, 2010.
McDonald's might drop health care coverage for it's hourly employees.
Congress needs to act by November when employees are offered opportunity to sign up for the year.
The new law will affect many similar plans.
Maybe there is a connection with the Bakken. While in Williston this past summer, I always had free wi-fi at McDonald's and could catch up on rumors in the oil patch. I sincerely hope Congress can sort this out. McDonald's employees should be the last people caught up in these political food fights. No pun intended.
McDonald's Rap
Addenda:
Wall Street Journal Opinion regarding McDonald's and Obama Care, October 2, 2010
Original Blog Posting
McDonald's might drop health care coverage for it's hourly employees.
Congress needs to act by November when employees are offered opportunity to sign up for the year.
The new law will affect many similar plans.
Maybe there is a connection with the Bakken. While in Williston this past summer, I always had free wi-fi at McDonald's and could catch up on rumors in the oil patch. I sincerely hope Congress can sort this out. McDonald's employees should be the last people caught up in these political food fights. No pun intended.
McDonald's Rap
Addenda:
Wall Street Journal Opinion regarding McDonald's and Obama Care, October 2, 2010
Williston's Growth Continues (Wililston, ND, USA -- Bakken)
Taxable sales in Williston almost doubled during the second quarter of 2010 compared to the second quarter last year. I hate the headline of the linked story: "taxable sales hit a new plateau." A plateau -- leveling off? I don't think so. I think "peak" would have been a better word, but it was probably too short for headline space allotted. If so, why didn't they increase the font? Duh. But "plateau"? A plateau isn't even a butte.
Taxable sales and purchases for the entire state increased to $3.4 billion compared to $2.9 billion (second quarter 2010 vs second quarter 2009). Much of the increase is attributed to the energy sector which almost doubled over the past year.
Meanwhile, Forbes magazine ranked Bismarck number four nationwide in top small locations to do business; Fargo ranked ninth. Fourth! Nationwide. I find that incredible.
For today: watch the stock market action for SSN today. Link to SSN action.
Taxable sales and purchases for the entire state increased to $3.4 billion compared to $2.9 billion (second quarter 2010 vs second quarter 2009). Much of the increase is attributed to the energy sector which almost doubled over the past year.
Meanwhile, Forbes magazine ranked Bismarck number four nationwide in top small locations to do business; Fargo ranked ninth. Fourth! Nationwide. I find that incredible.
For today: watch the stock market action for SSN today. Link to SSN action.
Wednesday, September 29, 2010
Stockyard Creek Update -- Gary 1-24H
UPDATE: here's the press release for the following story. Yippee! Time: 8:30 p.m. EDT, September 29, 2010. The press release also mentions Earl 1-13H, which is one mile east of Gary 1-24H, on the north side of the highway (see note below for more detailed information). Early 1-13H was spudded yesterday and Zavanna expects to reach total depth in 17 days. Gary 1-24H was a 20-stage frack.
I'm being told that "Samson made an annoucement this evening on the Gary 1-24H well (file # 18824) in the Stockyard Creek field. It came in at about 1,600 boepd. And I believe about 2 MMCF per day." I have not seen the "official statement" yet.
I have no mineral rights, and I know the "work" is called "work" for a reason, but I bet the roughnecks drilling this well, and the engineer on site, and the site manager, and everyone else involved, must just have a great feeling when a well comes in. I would think even on the worse North Dakota winter night (and we're not there yet by any means), the workers cheer when a well comes in. Maybe I'm wrong. But I like to think that no one takes all their work for granted.
Congratulations to those involved with Gary 1-24H.
If you want to see it, the well is about 315 feet -- yup, feet -- south of State Highway 1604, about 10 miles east of Williston. I assume there's a flare. You will see some wonderful scenery in the rolling hills; watch out for lights coming over the hill!
I've posted this before, but I felt in the mood to post it again and watch it again. For all the truck drivers:
The Lights On Hill Were Blindin' Me, Slim Dusty (Australia, Outback; not the Bakken)This song was written by wife Joy. They were driving through a rainstorm in the Blue Mountains around Sydney when she got the idea. She put it on tape and Slim later erased it. Joy was furious. Slim reluctantly recorded it, and it was released by his record company after he had gone on tour. When his fans started saying how good his new single was, he was baffled. Until he called his record company to find out what was going on.
ORIGINAL POST (About 9:15 p.m., September 29, 2010)
I'm being told that "Samson made an annoucement this evening on the Gary 1-24H well (file # 18824) in the Stockyard Creek field. It came in at about 1,600 boepd. And I believe about 2 MMCF per day." I have not seen the "official statement" yet.
I have no mineral rights, and I know the "work" is called "work" for a reason, but I bet the roughnecks drilling this well, and the engineer on site, and the site manager, and everyone else involved, must just have a great feeling when a well comes in. I would think even on the worse North Dakota winter night (and we're not there yet by any means), the workers cheer when a well comes in. Maybe I'm wrong. But I like to think that no one takes all their work for granted.
Congratulations to those involved with Gary 1-24H.
If you want to see it, the well is about 315 feet -- yup, feet -- south of State Highway 1604, about 10 miles east of Williston. I assume there's a flare. You will see some wonderful scenery in the rolling hills; watch out for lights coming over the hill!
******
I've posted this before, but I felt in the mood to post it again and watch it again. For all the truck drivers:
*****
By the way, this was the story in Rigzone, regarding Gary 1-24H, back in June, 2010:
Samson O&G updated its prior reports on the exceptional growth in oil production and reserves that it has achieved in the Williston Basin. Having just drilled its third Middle Bakken well (Gary #1-24H), which followed the previously drilled Leonard #1-23H, and Gene #1-22H wells, Samson announced that the next well in the sequence will be the Rodney #1-14H.
As a result of the drilling and fracture stimulation of this sequence of wells, Samson expects to be producing a net 6,000 barrels of oil equivalent a month as at December 2010. The projected December 2010 production rate is based on the data gathered from the Gene 1-22H well projected forward using conservative decline curve methodology. The projection assumes that the other wells making up the sequence perform like the Gene 1-22H well and are drilled and stimulated in a timely manner.
Rodney 1-14H is right across the road from Gary 1-24H, on the north side of the road.
Not The Bakken -- Drudge Report -- CAT Said It Would Hire More Workers if Stimulus Bill Passed -- It Passed -- And CAT Hires More Workers: In China
Yup, I can't make this stuff up.
Caterpillar said it would hire more workers if Congress passed the stimulus bill.
The stimulus bill passed and Caterpillar keeps its word.
CAT is hiring more workers. For its new factory in China.
Caterpillar said it would hire more workers if Congress passed the stimulus bill.
The stimulus bill passed and Caterpillar keeps its word.
CAT is hiring more workers. For its new factory in China.
13 More Permits Today
Thirteen new permits today, thirteen different drillers and thirteen different fields or wildcats:
And this is interesting: Ward-Williston re-entered a dry hole that was drilled back in 1965 with a file number of #3988, Anderson 1 in Bottineau County. It was permanently abandoned in 1984. It was re-spud and completed August, 2010, but was dry. The original well produced slightly less than 28,000 bbls over its lifetime.
- Enerplus, McGregory Buttes
- Encore, Charlson
- Marathon, Bailey
- Continental, Haystack Butte
- Oasis, Cotonwood
- Brigham, Todd
- QEP, Deep Water Creek Bay
- Cornerstone, Wildcat
- G3, Wildcat
- Baytex, Ambrose
- Sagebrush, Wildcat
- Newfield, Wildcat
- Hunt, Parshall
*****
And this is interesting: Ward-Williston re-entered a dry hole that was drilled back in 1965 with a file number of #3988, Anderson 1 in Bottineau County. It was permanently abandoned in 1984. It was re-spud and completed August, 2010, but was dry. The original well produced slightly less than 28,000 bbls over its lifetime.
US Oil Inventories Fall; Increase Had Been Expected
Crude inventories fell 2.4 million barrels last week, the American Petroleum Institute said late Tuesday while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had forecast an increase of 2.2 million barrels. Inventories of gasoline rose while distillates fell, the API said.
The US Energy Information Agency will issue it's own report later today.
The US Energy Information Agency will issue it's own report later today.
Tuesday, September 28, 2010
Taxing Those Earning More Than $250K/Year (This Is NOT About the Bakken)
Now I know why some of the super-rich aren't worried about the administration's plan to increase taxes on those with earned income greater than $250,000.
The following all receive annual salaries of $1.00. Their earned income as CEOs of their companies is one buck.
Apple (AAPL) CEO Steve Jobs
Citigroup (C) CEO Vikram Pandit
Google (GOOG) CEO Eric Schmidt
Yahoo (YHOO) CEO Jerry Yang
Oracle (ORCL) CEO Larry Ellison
Berkshire Hathaway (BRK.A) CEO Warren Buffett.
I wonder if pensions will be considered earned income. Some of the very richest also have nice pensions.
My rant for the day.
Update: the information was taken from another (reliable and trusted) site, but not fact-checked. I know the information is accurate for some, but might not be accurate for all names listed. See comments below, as folks "keep me honest."
The following all receive annual salaries of $1.00. Their earned income as CEOs of their companies is one buck.
Apple (AAPL) CEO Steve Jobs
Citigroup (C) CEO Vikram Pandit
Google (GOOG) CEO Eric Schmidt
Yahoo (YHOO) CEO Jerry Yang
Oracle (ORCL) CEO Larry Ellison
Berkshire Hathaway (BRK.A) CEO Warren Buffett.
I wonder if pensions will be considered earned income. Some of the very richest also have nice pensions.
My rant for the day.
Update: the information was taken from another (reliable and trusted) site, but not fact-checked. I know the information is accurate for some, but might not be accurate for all names listed. See comments below, as folks "keep me honest."
Whiting's Average Cost Per Bakken Acre
There are several good posts today. Don't read just this one. Scroll down to see some very interesting posts, especially the one on the TFS wells by Whiting, announce today.
But I didn't want to lose this little bit of trivia.
Remember the $9,600/acre Enerplus recently paid for acreage in the Fort Berthold Indian Reservation, and the $12,000/acre at a recent North Dakota state lease auction (albeit, a very small tract of land)?
I was checking out the Whiting presentation for recent Enercom 2010 conference. In a footnote, WLL noted the average price it has paid for acreage in the North Dakota / Montana Bakken: ...
.... drum roll .... drum roll .... drum roll ....
... Whiting says they acquired current North Dakota / Montana Bakken acreage at an average price of $168/acre. That is not a typo. The decimal is in the correct location. Less than $200/acre. Whiting has been acquiring acreage since this boom began back in 2006 or thereabouts.
Sure, WLL might have some lousy acres (which I doubt), but WLL practically owns the Sanish, one of the most prolific oil fields in the Williston Basin, where it is putting in four to five wells / section.
But I didn't want to lose this little bit of trivia.
Remember the $9,600/acre Enerplus recently paid for acreage in the Fort Berthold Indian Reservation, and the $12,000/acre at a recent North Dakota state lease auction (albeit, a very small tract of land)?
I was checking out the Whiting presentation for recent Enercom 2010 conference. In a footnote, WLL noted the average price it has paid for acreage in the North Dakota / Montana Bakken: ...
.... drum roll .... drum roll .... drum roll ....
... Whiting says they acquired current North Dakota / Montana Bakken acreage at an average price of $168/acre. That is not a typo. The decimal is in the correct location. Less than $200/acre. Whiting has been acquiring acreage since this boom began back in 2006 or thereabouts.
Sure, WLL might have some lousy acres (which I doubt), but WLL practically owns the Sanish, one of the most prolific oil fields in the Williston Basin, where it is putting in four to five wells / section.
Three Forks Formation Starting to Shine: WLL Announces Two Nice Wells; More On the Way
From a Whiting press release, dated September 28, 2010:
Whiting completed two new producers at its Lewis & Clark Prospect in Stark, Billings, and Golden Valley Counties, North Dakota (USA).
For those who know North Dakota, the Kubas is about 5 miles northeast of Belfield, and the Froehlich is about 1.5 miles southeast of Belfield.
The Froehlich was on the very, very tiny Zenith oil field; the Kubas was a wildcat.
A third well, the Ellison Creek 11-1TFH is currently being completed, located about three miles east of the Federal 32-4TFH well. The results of this well and three other Lewis & Clark wells will be released in mid-November.
WLL has four operated drilling rigs in the Lewis & Clark and plan to add a fifth operated drilling rig by mid-November.
Whiting completed two new producers at its Lewis & Clark Prospect in Stark, Billings, and Golden Valley Counties, North Dakota (USA).
- Three Forks Formation: Froehlich 44-9TFH, 1,832 bopd (24-hour test); 28 fracture stages
- Three Forks Formation: Kubas 11-13TFH, 1,780 bopd (24-hour test); 29 fracture stages
For those who know North Dakota, the Kubas is about 5 miles northeast of Belfield, and the Froehlich is about 1.5 miles southeast of Belfield.
The Froehlich was on the very, very tiny Zenith oil field; the Kubas was a wildcat.
A third well, the Ellison Creek 11-1TFH is currently being completed, located about three miles east of the Federal 32-4TFH well. The results of this well and three other Lewis & Clark wells will be released in mid-November.
WLL has four operated drilling rigs in the Lewis & Clark and plan to add a fifth operated drilling rig by mid-November.
Comment: this was an exciting press release --
- Three Forks formation wells near the WLL discovery well
- One was a wildcat, potentially opening up a whole near TFS area
- Remember: this is very southeast North Dakota, and where the Bakken ends in the southeast, the TFS continues to extend
- WLL has even more wells soon to be announced
- WLL going to add another rig to this area
North Dakota Bakken Acreage
ERF
CLR (total Bakken acreage)
Thoughts on long term investing in the Bakken and acreage.
- 71,500 net acres FBIR, Sept 14, 2010, presentation, includes recent purchase
- + 46,500 acres bought in FBIR, Sept, 2010; $9,600/acre
- EUR: 300 - 500K/well
- Two wells/section
- 70 Bakken/TFS wells
- 4 rigs
- Current as of Sept 27, 2010
CLR (total Bakken acreage)
- 864,559 net acres
- + 47,707 net acres acquired 3Q10
- EUR: 518K/well
- 20 rigs
- Current as of Oct 11, 2010
- 358,000 net acres (includes Montana)
- + 76,000 net acres between December, 2009 - Sept, 2010
- EUR; 500 - 700K/well
- 5 -> 8 rigs
- Current as of Sept 27, 2010
- 428,906 net acres (North Dakota only)
- + 90,174 net acres, Montana, Sept, 2010, purchase, Starbuck
- EUR: 850K/well
- 13 rigs
- Some of the best acreage in the Sanish
- Current as of Sept 27, 2010
- 325,700 net acres (ND and Montana) (by my calculations)
- Includes an additional 16,700 units acquired November 5, 2010
- 5 rigs: four in West Williston; one in East Nesson (November 8, 2010)
- Some of the best acreage in the Bakken, but also some mediocre acreage
- Current as of Sept 30, 2010
- 72,000 net acres
- 2 rigs
- Most acreage in/near FBIR; recent acquisition - exposure north of Williston
- Current as of October 20, 2010; after announcement of acquisition this week
- >100,000 net acres
- 0 rigs; partners with others
- Unique business plan
Thoughts on long term investing in the Bakken and acreage.
Another Orion Belt for Hess, Bakken, North Dakota (USA)
Wow -- today's daily activity report -- thirteen (13) new permits. Three of the permits were for Hess -- multi-well pad in Robinson Lake, Mountrail County:
In addition, Oasis picked up two more permits in Painted Woods, northwest of Williston.
Another incredible day.
"We" are on track for 1,425 permits granted by North Dakota for calendar year 2010.
- 19620, EN-Weyrauch A-154-93-2017H-1, SESW 20-154N-93W
- 19620, EN-Weyrauch A-154-93-2017H-2, SESW 20-154N-93W
- 19620, EN-Weyrauch A-154-93-2017H-3, SESW 20-154N-93W
In addition, Oasis picked up two more permits in Painted Woods, northwest of Williston.
Another incredible day.
"We" are on track for 1,425 permits granted by North Dakota for calendar year 2010.
Thoughts on The Price of Oil and Long Term Investing
Note: updates at the bottom.
This is idle chatter, one might hear over the coffee table at the Economart in Williston. Consider it nothing more than idle chatter, but something I want to throw out there for others to comment on. I'm trying to make sense of the price of oil at $70 per barrel and the price of gold hitting a new high, solidly over $1,300 per ounce.
First, of all, I'm an optimist.
Second, I'm bullish on oil as an investment.
Third, I'm inappropriately exuberant about the Bakken.
Fourth, I do not have formal training in business and am very naive in all areas of finance.
For years, it was my understanding that because oil and gold were both commodities, it was not unusual for the two of them to be priced relative to the dollar. As the dollar went down in value, the price of commodities went up (all things being equal). Of course, "all things being equal," is critical. During perceived shortages (the Hunt brothers' attempt to corner the silver market; the OPEC embargo; etc), supply and demand had a greater impact than the value of the dollar.
For years, it was my understanding that investing in commodities, such as gold and oil, were used as a hedge against inflation.
But, recently, it appears the price of gold and the price of oil have diverged. The general consensus that in the short term deflation is a greater concern than inflation, and thus the ballistic rise in the price of gold is not due to worries about inflation. If gold prices were a reflection of worries about inflation, then one might argue that one should see a similar rise in the price of oil.
So, for reasons other than worries about inflation, the price of gold is rising very quickly. The news that governments have clamped down on domestic banks from divesting themselves of gold will only exacerbate the situation. So, repeating, for reasons other than worries about inflation, the price of gold is rising very quickly.
On the other hand, whatever is causing investors worries, it is not the kind of worry that prompts investors to push the price of oil up in a similar ballistic manner.
I am going to posit that the reason that gold is rising quickly is because there is a perceived shortage of gold as the "gold" standard (no pun intended) for safety. It almost seems like a bunker mentality. Fearing the absolute worse, default of one's government/country (Portugal, Ireland, Italy, Greece, Spain, e.g.), folks are buying gold. I don't know how much gold is out there. But first there is a rush to safety, and as that is bought up, there is a perceived shortage. One sees the same thing with bottled water in the face of an impending hurricane. First, there is a rush to buy it, and then as the bottles come off the shelves, there is a perceived shortage (despite the fact Wal-Mart one state over has trucks of bottled water).
So, let's assume that's were we are now. There was a rush to safety, the initial buying of gold when it went through the $800 $1,200 range. Now there is a perceived shortage and that will take the price of gold to yet new highs, today solidly over $1,300.
Now to the price of oil.
Now, to the price of oil. People flock to gold for safety. They don't flock to oil for safety.
If there is a perception that their governments could default, or that the global economy could go into a depression, folks want gold, not oil.
However, let's say a couple of years go by, and somehow there are no major national defaults, somehow the PIIGS get through this. Let's further imagine that a couple years from now, the global economy has recovered, and there is no longer any threat of another recession, much less a depression.
If the global economy gets back on track, the requirement for energy will increase. I don't think anyone will argue with that.
Now look at the graph I linked a couple of days ago at The Oil Drum/Europe.
Look at the tremendous spike in the price of oil a couple of years ago. Pretty spectacular, isn't it? Now look at the total amount of oil production through all of this. It remained unchanged, give or take a bit of background noise, which I doubt was statistically significant.
Now look at a graph of energy consumption. I apologize for this. It's a PDF and will take time to download, but click on the link: Shale Gas Revolution, International Study/UK, 2010, a "Chatham House Report." As noted, this study was done in Britain, and is very, very up-to-date. When you get to that PDF, go to page 14 of 46 (or page 5 of chapter 1) and take a look at Figure 3: UK Primary Energy Consumption by Fuel, 1965 - 2009.
Figure 3, referenced: This is not ancient history. One could argue that China, today, is where Britain was in 1965. Back in 1965, the UK used "no" natural gas, but as the use of coal decreased, natural gas stepped in to make up the difference. The amount of oil consumed did not change much except for short periods. We can ignore nuclear energy for now.
We now have two graphs, one from The Oil Drum and one from the Chatham House Report. They seem to support each other. In one case, we see that despite the spike in the price of oil, world production did not increase. And in the other report, despite the price of oil, the amount of oil used in the UK did not appreciably change, at least not enough to show up on this graph.
I am not a "believer" in "peak theory of oil" as it is currently posited, but I do think that there is very little slack in available oil as measured in one to two years. If one could predict that "$150 oil" was going to be here starting January 17, 2015 and never retreat, I feel strongly that the oil industry would respond, but the lead time is horrendous, not just for the drilling, but for the infrastructure (pipelines, and tankers). Now, add in environmental controls, and the lead time is even greater.
My hunch is that it's just a matter of time when we see the price of oil do what we're seeing with the price of gold.
Instead of a flight to safety, there will be a real need for increased energy. Look at that UK graph. The population of Great Britain is 61 million; the population of China is 1.3 billion (20 times greater); and, the population of India is 1.1 billion. We can ignore solar, wind, and nuclear power, Coal will remain important. But the need for natural gas will increase exponentially, and the need for oil, likewise.
But that's not to say that the industry will respond.
If given enough time, I think the industry could respond, but the lag time will be measured in two to five years. It's possible the increase will be so severe a reactionary recession or depression could occur, but the point is that when the global economy recovers, there will be a flight to fossil fuels. Like the early phase in the price of gold going through $800, there will be an orderly (or disorderly) rise in the price of oil.
When it is realized that the graph in The Oil Drum is the way it is because the totality of oil reserves is pretty much tapped out, there will be a perceived shortage, just as there is a perceived shortage of gold, pushing the price of gold solidly over $1,300.
Drillers can only drill so fast. Just like the "flash crash" of the stock market on May 6, 2010, which no one can explain, no one has been able to explain the $150 spike in the price of oil. Relative to the long history of oil production, the spike to $150 dropped back as quickly as it rose. No one has offered a good explanation.
For those who are fleeing to safety in the current economy, they are buying gold; for those perceiving a shortage of gold, they are willing to pay $1,300 per ounce.
Why aren't investors fleeing to oil for safety, as they were fleeing to safety (when gold was $800 - $1,200).
Gold and oil are inherently different. At $1,300/ounce it doesn't take much room to store it. Gold is not used up (except for jewelry and some high tech requirements, but people aren't buying gold to turn it into something else).
The only value oil has is when it is turned into energy.
So, for all practical purposes, an investor, or the average person, cannot buy oil, whereas an average person can buy gold, very easily and hold it forever.
So, what is one to do, if one is an optimist, one is bullish on oil, and one is inappropriately exuberant about the Bakken?
Certainly one cannot buy Bakken oil and store it in the garage.
But one can do the next best thing: buy Bakken oil and store it in the ground. And, the best way to do that, is to buy (or accumulate) Bakken acreage. And the best way to do that, for the average retail investor, is to buy (or accumulate) shares in companies (generally oil companies) that are buying up acreage in the Bakken.
All things being equal, I don't think it matters a whole lot whether one buys shares in Continental Resources, Brigham Exploration, Whiting, Kodiak, Oasis, EOG, Hess or a whole host of others in the Bakken. Some will end up being better than the others, and more about that later, but right now, pick your favorite for whatever reason, and start accumulating shares (acreage).
Acreage was being sold for $500/acre less than a few years ago, and there are still acres in some areas of the Bakken that are going for that amount. But, the state of North Dakota sold leases for $12,000/acre in a small area in a recent sale. Within the last two weeks, Enerplus agreed to purchase acreage for an average price of almost $10,000/acre.
In the near term, the amount one is willing to pay for an acre in the Bakken will top out, but once the global economy turns, and there is a perceived shortage of oil (real or not), the price of oil will take off.
As I said earlier, all things being equal, I don't think it matters a whole lot what Bakken driller you decide to invest in. However, if one has to separate it out, I would look at those companies whose stated strategic vision is to accumulate acreage, not just develop what they have.
Some of the acreage that is accumulated will be "outside the core area" as currently defined. But before 2000, none of the Bakken was worth going after. The drillers seem to be getting better at getting oil out of the ground "outside of the core area." If one thinks technology and processes will improve over time, then accumulating acreage outside the core area is a good strategy. Look at the Investopedia article today about drillers going into Montana, clearly "outside the core area" as currently defined by some (not me).A musical interlude: My Wife Thinks You're Dead, Junior Brown
Bottom line: I think at some point there will be a perception that there is a shortage of oil (real or not), and that will result in a spike in oil prices. There will be a tipping point, but once it occurs, the increase in price will come quickly (we've seen it once). First, people will start fleeing to oil (and natural gas) because they need it, and once they start fleeing to oil (and natural gas) because of a perceived shortage, the spike will be remarkable.
Holding Bakken acreage, any Bakken acreage, will be like holding gold.
I'm sure my argument is weak in many, many places, but remember, I'm an optimist, a bull on oil, and inappropriately exuberant about the Bakken. The latter has not disappointed me yet.
Again: This is idle chatter, something one might hear over the coffee table at the Economart in Williston. Consider it nothing more than idle chatter, but something I've been thinking about, trying to figure out why the price of gold and oil have diverged.
October 3, 2010: What Crude Prices Are Telling Us, Seeking Alpha.
October 2, 2010: The (London) Independent, "The Chinese Land Grab."
October 1, 2010: Jim Cramer, CNBC, said price of gold is going up due to increased demand by BRIC citizens (Brazil, Russia, India, China). He says "increased demand"; I say "perceived shortage."
Introduction
This is idle chatter, one might hear over the coffee table at the Economart in Williston. Consider it nothing more than idle chatter, but something I want to throw out there for others to comment on. I'm trying to make sense of the price of oil at $70 per barrel and the price of gold hitting a new high, solidly over $1,300 per ounce.
First, of all, I'm an optimist.
Second, I'm bullish on oil as an investment.
Third, I'm inappropriately exuberant about the Bakken.
Fourth, I do not have formal training in business and am very naive in all areas of finance.
Part The First
For years, it was my understanding that because oil and gold were both commodities, it was not unusual for the two of them to be priced relative to the dollar. As the dollar went down in value, the price of commodities went up (all things being equal). Of course, "all things being equal," is critical. During perceived shortages (the Hunt brothers' attempt to corner the silver market; the OPEC embargo; etc), supply and demand had a greater impact than the value of the dollar.
For years, it was my understanding that investing in commodities, such as gold and oil, were used as a hedge against inflation.
But, recently, it appears the price of gold and the price of oil have diverged. The general consensus that in the short term deflation is a greater concern than inflation, and thus the ballistic rise in the price of gold is not due to worries about inflation. If gold prices were a reflection of worries about inflation, then one might argue that one should see a similar rise in the price of oil.
So, for reasons other than worries about inflation, the price of gold is rising very quickly. The news that governments have clamped down on domestic banks from divesting themselves of gold will only exacerbate the situation. So, repeating, for reasons other than worries about inflation, the price of gold is rising very quickly.
On the other hand, whatever is causing investors worries, it is not the kind of worry that prompts investors to push the price of oil up in a similar ballistic manner.
I am going to posit that the reason that gold is rising quickly is because there is a perceived shortage of gold as the "gold" standard (no pun intended) for safety. It almost seems like a bunker mentality. Fearing the absolute worse, default of one's government/country (Portugal, Ireland, Italy, Greece, Spain, e.g.), folks are buying gold. I don't know how much gold is out there. But first there is a rush to safety, and as that is bought up, there is a perceived shortage. One sees the same thing with bottled water in the face of an impending hurricane. First, there is a rush to buy it, and then as the bottles come off the shelves, there is a perceived shortage (despite the fact Wal-Mart one state over has trucks of bottled water).
So, let's assume that's were we are now. There was a rush to safety, the initial buying of gold when it went through the $800 $1,200 range. Now there is a perceived shortage and that will take the price of gold to yet new highs, today solidly over $1,300.
Now to the price of oil.
Part The Second
Now, to the price of oil. People flock to gold for safety. They don't flock to oil for safety.
If there is a perception that their governments could default, or that the global economy could go into a depression, folks want gold, not oil.
However, let's say a couple of years go by, and somehow there are no major national defaults, somehow the PIIGS get through this. Let's further imagine that a couple years from now, the global economy has recovered, and there is no longer any threat of another recession, much less a depression.
If the global economy gets back on track, the requirement for energy will increase. I don't think anyone will argue with that.
Now look at the graph I linked a couple of days ago at The Oil Drum/Europe.
Look at the tremendous spike in the price of oil a couple of years ago. Pretty spectacular, isn't it? Now look at the total amount of oil production through all of this. It remained unchanged, give or take a bit of background noise, which I doubt was statistically significant.
Now look at a graph of energy consumption. I apologize for this. It's a PDF and will take time to download, but click on the link: Shale Gas Revolution, International Study/UK, 2010, a "Chatham House Report." As noted, this study was done in Britain, and is very, very up-to-date. When you get to that PDF, go to page 14 of 46 (or page 5 of chapter 1) and take a look at Figure 3: UK Primary Energy Consumption by Fuel, 1965 - 2009.
Figure 3, referenced: This is not ancient history. One could argue that China, today, is where Britain was in 1965. Back in 1965, the UK used "no" natural gas, but as the use of coal decreased, natural gas stepped in to make up the difference. The amount of oil consumed did not change much except for short periods. We can ignore nuclear energy for now.
We now have two graphs, one from The Oil Drum and one from the Chatham House Report. They seem to support each other. In one case, we see that despite the spike in the price of oil, world production did not increase. And in the other report, despite the price of oil, the amount of oil used in the UK did not appreciably change, at least not enough to show up on this graph.
I am not a "believer" in "peak theory of oil" as it is currently posited, but I do think that there is very little slack in available oil as measured in one to two years. If one could predict that "$150 oil" was going to be here starting January 17, 2015 and never retreat, I feel strongly that the oil industry would respond, but the lead time is horrendous, not just for the drilling, but for the infrastructure (pipelines, and tankers). Now, add in environmental controls, and the lead time is even greater.
My hunch is that it's just a matter of time when we see the price of oil do what we're seeing with the price of gold.
Instead of a flight to safety, there will be a real need for increased energy. Look at that UK graph. The population of Great Britain is 61 million; the population of China is 1.3 billion (20 times greater); and, the population of India is 1.1 billion. We can ignore solar, wind, and nuclear power, Coal will remain important. But the need for natural gas will increase exponentially, and the need for oil, likewise.
But that's not to say that the industry will respond.
Part The Third
If given enough time, I think the industry could respond, but the lag time will be measured in two to five years. It's possible the increase will be so severe a reactionary recession or depression could occur, but the point is that when the global economy recovers, there will be a flight to fossil fuels. Like the early phase in the price of gold going through $800, there will be an orderly (or disorderly) rise in the price of oil.
When it is realized that the graph in The Oil Drum is the way it is because the totality of oil reserves is pretty much tapped out, there will be a perceived shortage, just as there is a perceived shortage of gold, pushing the price of gold solidly over $1,300.
Drillers can only drill so fast. Just like the "flash crash" of the stock market on May 6, 2010, which no one can explain, no one has been able to explain the $150 spike in the price of oil. Relative to the long history of oil production, the spike to $150 dropped back as quickly as it rose. No one has offered a good explanation.
For those who are fleeing to safety in the current economy, they are buying gold; for those perceiving a shortage of gold, they are willing to pay $1,300 per ounce.
Part the Fourth
Why aren't investors fleeing to oil for safety, as they were fleeing to safety (when gold was $800 - $1,200).
Gold and oil are inherently different. At $1,300/ounce it doesn't take much room to store it. Gold is not used up (except for jewelry and some high tech requirements, but people aren't buying gold to turn it into something else).
The only value oil has is when it is turned into energy.
So, for all practical purposes, an investor, or the average person, cannot buy oil, whereas an average person can buy gold, very easily and hold it forever.
Part the Fifth
So, what is one to do, if one is an optimist, one is bullish on oil, and one is inappropriately exuberant about the Bakken?
Certainly one cannot buy Bakken oil and store it in the garage.
But one can do the next best thing: buy Bakken oil and store it in the ground. And, the best way to do that, is to buy (or accumulate) Bakken acreage. And the best way to do that, for the average retail investor, is to buy (or accumulate) shares in companies (generally oil companies) that are buying up acreage in the Bakken.
All things being equal, I don't think it matters a whole lot whether one buys shares in Continental Resources, Brigham Exploration, Whiting, Kodiak, Oasis, EOG, Hess or a whole host of others in the Bakken. Some will end up being better than the others, and more about that later, but right now, pick your favorite for whatever reason, and start accumulating shares (acreage).
Acreage was being sold for $500/acre less than a few years ago, and there are still acres in some areas of the Bakken that are going for that amount. But, the state of North Dakota sold leases for $12,000/acre in a small area in a recent sale. Within the last two weeks, Enerplus agreed to purchase acreage for an average price of almost $10,000/acre.
In the near term, the amount one is willing to pay for an acre in the Bakken will top out, but once the global economy turns, and there is a perceived shortage of oil (real or not), the price of oil will take off.
As I said earlier, all things being equal, I don't think it matters a whole lot what Bakken driller you decide to invest in. However, if one has to separate it out, I would look at those companies whose stated strategic vision is to accumulate acreage, not just develop what they have.
Some of the acreage that is accumulated will be "outside the core area" as currently defined. But before 2000, none of the Bakken was worth going after. The drillers seem to be getting better at getting oil out of the ground "outside of the core area." If one thinks technology and processes will improve over time, then accumulating acreage outside the core area is a good strategy. Look at the Investopedia article today about drillers going into Montana, clearly "outside the core area" as currently defined by some (not me).
Summary
Bottom line: I think at some point there will be a perception that there is a shortage of oil (real or not), and that will result in a spike in oil prices. There will be a tipping point, but once it occurs, the increase in price will come quickly (we've seen it once). First, people will start fleeing to oil (and natural gas) because they need it, and once they start fleeing to oil (and natural gas) because of a perceived shortage, the spike will be remarkable.
Holding Bakken acreage, any Bakken acreage, will be like holding gold.
I'm sure my argument is weak in many, many places, but remember, I'm an optimist, a bull on oil, and inappropriately exuberant about the Bakken. The latter has not disappointed me yet.
Again: This is idle chatter, something one might hear over the coffee table at the Economart in Williston. Consider it nothing more than idle chatter, but something I've been thinking about, trying to figure out why the price of gold and oil have diverged.
*****
Updates
October 3, 2010: What Crude Prices Are Telling Us, Seeking Alpha.
October 2, 2010: The (London) Independent, "The Chinese Land Grab."
October 1, 2010: Jim Cramer, CNBC, said price of gold is going up due to increased demand by BRIC citizens (Brazil, Russia, India, China). He says "increased demand"; I say "perceived shortage."
Investopedia Update on Bakken Companies
Eric Fox, over at Investopedia, has a new article on the Bakken, dated September 28, 2010. He notes that Bakken companies in the core of the Bakken (North Dakota) are expanding into Montana, and specifically mentions Oasis, BEXP, Continental Resources, and EOG. Eric Fix also mentions Rosetta Resources which has acreage only in Montana; I do not follow Rosetta Resources.
In fact, the current boom in the Williston Basin began on the western side of the Montana-North Dakota state line, in Montana, in Richland County, in Elm Coulee oil field. The drillers took that technology and moved it into North Dakota (I forget which came first: Parshall discovery in North Dakota or Elm Coulee in Montana -- but the boom began in Elm Coulee).
Now, with improved technology -- particularly increased fracturing -- drillers know that they can go back into Elm Coulee as well as open up new areas farther north, again along the Montana-North Dakota border. I doubt any of the original Elm Coulee wells had more than one stage of fracturing.
So, a second boom is occurring in Elm Coulee (to the best of my knowledge; I don't follow the Montana oil industry all that much) and a new (first-time) boom is occurring farther north, directly west and northwest of the city of Williston.
With regard to Rosetta, Fox reports that Rosetta will drill eight (8) vertical wells to better delineate the oil play in Montana. That I don't understand. To the best of my knowledge, the Bakken drillers have drilled very few vertical wells into the Bakken for the purpose of studying the Bakken. It would be interesting to see the source document about the vertical wells to which Eric Fox refers.
I do know that North Dakota has the absolutely best geologic record of the formations in western North Dakota. It is my understanding that nowhere in the world is the geology of any oil basin so well studied. Starting years ago, drillers were required, by las, to send core samples to the state every time they drilled a well, whether it was dry or economic or a gusher. The state (specifically, the North Dakota Geologic Survey) has a phenomenal amount of information, and it's possible this is not as true in Montana, and thus the need for vertical wells for the purpose of studying the geologic formations.
More on this later.
In fact, the current boom in the Williston Basin began on the western side of the Montana-North Dakota state line, in Montana, in Richland County, in Elm Coulee oil field. The drillers took that technology and moved it into North Dakota (I forget which came first: Parshall discovery in North Dakota or Elm Coulee in Montana -- but the boom began in Elm Coulee).
Now, with improved technology -- particularly increased fracturing -- drillers know that they can go back into Elm Coulee as well as open up new areas farther north, again along the Montana-North Dakota border. I doubt any of the original Elm Coulee wells had more than one stage of fracturing.
So, a second boom is occurring in Elm Coulee (to the best of my knowledge; I don't follow the Montana oil industry all that much) and a new (first-time) boom is occurring farther north, directly west and northwest of the city of Williston.
With regard to Rosetta, Fox reports that Rosetta will drill eight (8) vertical wells to better delineate the oil play in Montana. That I don't understand. To the best of my knowledge, the Bakken drillers have drilled very few vertical wells into the Bakken for the purpose of studying the Bakken. It would be interesting to see the source document about the vertical wells to which Eric Fox refers.
I do know that North Dakota has the absolutely best geologic record of the formations in western North Dakota. It is my understanding that nowhere in the world is the geology of any oil basin so well studied. Starting years ago, drillers were required, by las, to send core samples to the state every time they drilled a well, whether it was dry or economic or a gusher. The state (specifically, the North Dakota Geologic Survey) has a phenomenal amount of information, and it's possible this is not as true in Montana, and thus the need for vertical wells for the purpose of studying the geologic formations.
Monday, September 27, 2010
Six Vertical Wells and Three Horizontal Wells in One Spacing Unit
Any guess what Hess is up to with permits for six vertical wells and three horizontal wells in one spacing unit (two sections)? Case 13400, in Big Butte oil field, and case 13405, in Hawkeye oil field. See the October, 2010, NDIC hearings.
Certainly, Hess isn't going to drill six wells to monitor how the other three wells are doing, or are they? Targeting another formation vertically?
Does the seismographic data suggest there are natural fractures that might not require fracturing? It should be noted that water (which is used in fracturing) can disrupt natural fracturing.
And while we're at it, how about that request by Zenergy to drill up to nine (9) wells in one 3840-acre unit in the Van Hook (case 13427)? (One 3840-acre unit equals six 640-acre units.)
And some people accuse ME of being inappropriately exuberant, which I admit I am. Smile.
Certainly, Hess isn't going to drill six wells to monitor how the other three wells are doing, or are they? Targeting another formation vertically?
Does the seismographic data suggest there are natural fractures that might not require fracturing? It should be noted that water (which is used in fracturing) can disrupt natural fracturing.
*****
And while we're at it, how about that request by Zenergy to drill up to nine (9) wells in one 3840-acre unit in the Van Hook (case 13427)? (One 3840-acre unit equals six 640-acre units.)
And some people accuse ME of being inappropriately exuberant, which I admit I am. Smile.
NDIC Hearing Dockets, October, 2010
Wednesday, October 20, 2010
13356: NDIC, spacing in one McKenzie township
13357: BR, revoke North Plains Hellandsaas 16-8H well
13358: BR, up to 7 wells in each 1280-acre unit in the Keene-Bakken/TF Pool
13359: BR, pooling in Westberg
13360: BR, pooling in Elidah
13361: BR, pooling in Hawkeye
13362: BR, pooling in Clear Creek
13363: BR, pooling in Haystack Butte
13364: Oasis, development of Gros Ventre
13365: MRO, temporary spacing to develop Arvid Bangen USA 31-18H
13366: MRO, add sections to either Reunion Bay or Van Hook, as 1280-acre units
13367: MRO, establish 6 1280-acre spacing units; one well each
13368: MRO, up to 4 horizontal wells on one 1280-acre unit; 4 wells total
13369: MRO, up to 4 horizontal wells on two 1280-acre units; 8 wells total
13370: MRO, pooling in Murphy Creek
13371: MRO, pooling in Mruphy Creek
13372: Slover Minerals, legalese re MRO in Mountrail County
13373: WLL, temporary spacing to develop Kubas 11-13TFH
13374: WLL, temporary spacing to develop Froelich 44-9TFH
13375: WLL, up to 6 wells in one 1280-acre spacing
13376: WLL, up to 6 wells in one 1280-acre spacing
13377: WLL, up to 6 wells in Zones VI, VIII, and IX in Mountrail. McKenzie
13378: WLL, establish five 1280-acre units in Sanish with one well each
13379: WLL, pooling in Mountrail
13380: WLL, to add 1280-acre spacing units to Bicentennial
13381: WLL, to add 1280-acre spacing units to Roosevelt
13382: WLL, to add 1280-acre spacing units to Roosevelt
13383: WLL, to add 1280-acre spacing units to Demores
13384: WLL, to add 1280-acre spacing units to Elkhorn or Ash Coulee
13385: WLL, to add 1380-acre spacing units to Ash Coulee
13386: SM, to establish two 1280-acre unit and one horizontal well each
13387: SM, to establish one 1280-acre unit and one horizontal well
13388: SM, to establish three 1280-acre units and one well each
13389: Petro-Hunt, temporary spacing to develop Forseth 157-100-25B-36-1H
13390: Petro-Hunt, up to 7 wells in one 1280-acre spacing unit, Stockyard Creek
13391: Petro-Hunt, one 1280-acre unit and one well
13392: BTA, to establish four 1280-acre units in Little Knife
13393: Cornerstone, to establish two 640-acre units and one well each
13394: Murex, up to 3 wells in one 1280-acre unit
13395: Murex, pooling in McGregor
13396: Murex, pooling in McGregor
13397: KOG, to establish one 1280-acre unit with up to 3 horizontal wells
13398: KOG, pooling in Moccasin Creek
13399: Hess, three 1280-acre units
13400: Hess, up to 3 horizontal wells and six vertical wells in one 1280-acre unit, 2/11-156-94, Mountrail, Big Butte
13401: Hess, to establish two 1280-acre units
13402: Hess, up to 3 wells in one 1280-acre unit, 3 wells total
13403: Hess, up to 3 wells in six 1280-acre units, 18 wells total
13404: Hess, up to 3 wells in two 1280-acre units, 6 wells total
13405: Hess, up to 3 horizontal wells and up to six vertical wells in one 1280-acre unit, 18/19-152-95, McKenzie, Hawkeye
13406: Hess, up to 3 horizontal wells in one 1280-acre unit
13407: Hess, up to 3 horizontal wells in one 1280-acre unit
13408: Hess, up to 3 horizontal wells in one 1280-acre unit
13409: Hess, extend Blue Buttes, and up to 3 horizontal wells on one 1280-acre unit
13410: Hes, pooling in Pleasant Valley
12396, cont'd: Hess, to establish one 2560-acre unit and allow up to six wells; establish two 1280-acre units and allow up to three wells; and a 640-acre unit with up to three wells; total 15 wells
13411: Ursa, to establish one 1280-acre unit and one horizontal well
13412: Ursa, to establish a 1280-acre unit
13413: Ursa, to establish one 1280-acre unit and one horizontal well
13414: Ursa, to establish one 1280-acre unit and one horizontal well
13415: Sequel Energy, enhanced recovery, North Branch 34-42F
13416: Sequel, enhanced recovery, North Branch 22-35
13417: Sequel, pooling in North Tioga
13418: Peak Grasslands, develop Wisness 21-34H
13419: North Plains, flaring
13420: North Plains, to create two 1280-acre units and one horizontal well each
13421: North Plains, pooling Eide 5-13H
13422: Petrogulf, revoking pooling of Anschutz Twist 31-4H and Neal 1-33-28H 144-95
13089, cont'd: Peak, realign two sections from Zone III to Zone II
13423: Peak, realign two sections from Zone V to Zone III
13090, cont'd: Peak, include 2 sections in Zone III and allow one horizontal well
13240, cont'd: Oasis, to establish four 1280-acre units and allow one horizontal well each
Thursday, October 21, 2010
13424: BR, to revoke WLL Tescher Ranch 11-9TFH
13425: EOG, QEP, Slawson, Zenergy, to redefine limits of Van Hook
13426: QEP, legalese re MHA 1-06-01H149-92 and MHA 2-06-01H-149-92
13427: Zenergy, extend the Van Hook and establish a 3840-acre unit and drill up to 9 wells on that spacing unit
13428: Slawson, extend the Bailey and establish a 1280-acre unit and one horizontal area
13429: EOG, temporary spacing for Boundary 4-27H
13430: EOG, to revoke Prima's Gunnison 34-35H permit (#19479)
13431: EOG, modify location of Liberty 3-14H
13432: EOG, establish two 1280-acre units and one well in each, Spotted Hawk
13433: EOG, establish a 1280-acre unit, one well, in Spotted Hawk
13434: EOG, establish three 1280-acre units and one well each, Squaw Creek
13435: Summit, redefine Beaver Creek-Stonewall Pool, Billings and Valley Counties; the Stonewall Formation is deeper than the Bakker but "above" the Red River
13436: Summit, redefine the South Boxcar-Bakken Pool
13437: Zavanna, redefine the Stockyard Creek-Bakken Pool
13438: BEXP, temporary spacing for Sedlacek Trust 33-4
13284, cont'd: BEXP, legalese for Abe Owan 21-16 1H
13439: XTO, modify one 1280-acre rules in MonDak field
13347, cont'd: XTO, pooling for the Sundhagen 31X-3
13348, cont'd: XTO, pooling for the Big Gulch Federal 41X-16
13440: Newfield, extend Fertile Valley to establish three 1280-acre units and one well each
13441: Newfield, extend Siverston and establish two 1280-acre units and one well each
13109, cont'd: Newfield, temporary spacing for Heidi 1-4H
13442: Hunt, extend the Bailey and establish a 1280-acre unit for one well
13443: Hunt, create two 1280-acre units with one well each
13444: Encore, legalese for Klamm 34-9NWH
13445: Encore, legalese for Lundin 14-33NEH
13446: CLR, extend Hebron to establish a 1280-acre unit and drill not more than seven wells on that unit
13447: CLR, amend Stoneview Pool to establish two 320-acre units and one well each
13448: CLR, extend Dolphin and Hamlet, to establish seven 1280-acre units and one well each
13449: CLR, extend Corinth to establish three 1280-acre units and one well each
13450: CLR, extend St Demetrius and establish seven 1280-acre units and one well each
13451: CLR, to extend the Dolphin and/or Hayland, to create one 1280-acre unit with not more than seven wells
13452: CLR, creat a 1280-acre unit and one well
13453: CLR, create a 1280-acre unit and one well
13454: CLR, creat five 1280-acre units and one well each
13259, cont'd: CLR, create a 760-acre unit in Cedar Creek-Ordovician Pool and two wells
12014, cont'd: CLR, temporary spacing for Traxel 1-31H
13114, cont'd: CLR, extending Camp and/or Banks to establish a 1600-acre unit and one well
13157, cont'd: CLR, pooling in Ranch Creek
13455: Abraxas, legalese regarding Ravin 26-35-1H
13456: Tracker, legalese for Kudma 10-1H
13457: Tracker, legalese for Olson 3-1H
13458: Fidelity, legalese for Domaskin 19-30-29H
13459: Fidelity, for Lynn 19-20-29H
13460: QEP, pooling in the Heart Butte
13461: EOG, three wells on two 1280-acre units
13462: EOG, three wells on a 1280-acre unit Clearwater
13463: EOG, two wells on a 640-acre unit in Spotted Horn
13464: EOG, two wells on three 640-acre units, Squaw Creek
13465: EOG, pooling in Van Hook
13466: EOG, pooling in Van Hook
13467: Sagebrush, modify production rules for Johnston 1-22
13468: Sagebrush, convert Cameron 1-14 into a saltwater disposal well
13469: XTO, three wells on a 1280-acre unit in Midway
13470: XTO, three wells on three 1280-acre units in Grinnel
13471: XTO, three wells on a 1280-acre unit in Sorkness
13472: Hunt, pooling in Clear Water
13473: Hunt, pooling in Ross
13474: Hunt, pooling in Ross
13475: Hunt, pooling in Ross
13476: Hunt, pooling in Parshall
13477: Hunt, pooling in Parshall
13478: Hunt, pooling in Parshall
13479: Hunt, Hunt, pooling in Parshall
13480, Hunt, pooling in Dunn County
13481: Hunt, pooling in Lake Ilo
13482: Hunt, pooling in Lake Ilo
13483: Hunt, pooling in Lake Ilo
13484: Encore, pooling in Siverston
13485: Encore, pooling in Siverston
13486: Encore, pooling in Siverston
13487: Encore, pooling in Siverston
13488: Encore, pooling in Siverston
13489: Anschutz, pooling in Little Knife
13490: Anschutz, pooling in Little Knife
13491: Anschutz, pooling in Hungry Man Butte
13492: Anschutz, pooling in Fayette
13493: Anschutz, pooling in Fayette
13494: Anschutz, pooling in Fayette
13495: Anschutz, pooling in Fayette
13496: Anschutz, pooling in Fayette
13497: Anschutz, pooling in Fayette
13498: Anschutz, pooling in Fayette
13499: Anschutz, pooling in Fayette
13500: Anschutz, pooling in Fayette
13501: Anschutz, pooling in Cabernet
13502: Anschutz, pooling in Murphy Creek
13503: Anschutz, pooling in Murphy Creek
13504: Anschutz, pooling in Willmen
13505: Anschutz, pooling Willlmen
13506: Anschutz, pooling Manning
13506: Anschutz, pooling in Manning
13507: Anschutz, pooling in Manning
13508: Anschutz, pooling in Manning
13509: Anschutz, pooling in Manning
13510: Anschutz, pooling in St Anthony
13511: Newfield, three wells in a 1280-acre unit, South Tobacco Garden
13512: Newfield, three wells on a 1280-acre unit, Fertile Valley
13513: Newfield, pooling in Siverston
13514: Newfield, pooling in Siverston
13515: Baytex, pooling in Ambros
13516: Slawon, two wells on a 640-acre unit in Alger
13517: Ballantyne, convert Aus 4-22 to saltwater disposal
13518: CLR, modify production rules for Dromedary 21-8SH, #16630
13519: CLR, pooling in Upland
13520: CRL, pooling in Hamlet
13521: CLR, pooling in Stoneview
13522: CLR, pooling in Johnson Corner
13524: CLR, up to seven wells on one 1280-acre unit in Corral Creek
13525: CLR, up to seven wells on 13 1280-acre units in Jim Creek, 91 wells
13526: CLR, up to seven wells on two 1280-acre units in Little Knife
13527: CLR, increae density wells, up to seven, on each 1280-acre unit in Temple
13528: CLR, increase density wells, up to seven, on each 1280-acre unit in Lindal
13529: CLR, increase density wells, up to seven, on each 1280-acre unit in North Tioga
13530: CLR, increase density wells, up to seven, on each 1280-acre unit in Sauk
13531, CLR, increase density wells, up to seven, on each 1280-acre unit in NW McGregor
13532: CLR, increase density wells, up to seven, on each 1280-acre unit in Battleview
13533: CLR, increase density wells, up to seven, on each 1280-acre unit in Hanson
13534: CLR, increase density wells, up to seven, on each 1280-acre unit in Upland
13535: CLR, increase density wells, up to seven, on each 1280-acre unit in Squires
13536: Hess, modify production from EN-Abrahamson 155-93 3019H-1, 2, and 3
13537: Hess, modify production from EN-Fisher 157-94-2126H-1, 2 and 3
13538: Hess, modify production from EN-Heinle 156-94 2536H-1, 2 and 3
13539: Hess, modify production from EN-Will Trust A-157-94 2734H-1, 2, and 3
13540: Hess, modify production from RS-Nelson Farms A-156-90 2829H-1, 2 and 3
13541: Hess, modify production from RS-Shubart 156-90 2726H-1, 2 and 3
13542: Samson, saltwater disposal
Thursday, October 21, 2010 -- Supplemental
13054, cont'd: EOG, Hess, proper spacing for Clear Water-Bakken
13097, cont'd: EOG, Fidelity, flaring in Cottonwood
13099, cont'd: EOG, temporary spacing for Kandyohi 2-20H
13100, cont'd: EOG, temporary spacing for Boundary 1-11H
13110, cont'd: CLR, temporary spacing for Brockmeier 1-1H
12886, cont'd: EOG, pooling for the Burke 24-08H in Stanley
Friday, October 22, 2010
13354: Ballantye, unitized management of Southwest Landa-Madison, Bottineau
13355: Ballantyne, unitized plan for case number 13354
13356: NDIC, spacing in one McKenzie township
13357: BR, revoke North Plains Hellandsaas 16-8H well
13358: BR, up to 7 wells in each 1280-acre unit in the Keene-Bakken/TF Pool
13359: BR, pooling in Westberg
13360: BR, pooling in Elidah
13361: BR, pooling in Hawkeye
13362: BR, pooling in Clear Creek
13363: BR, pooling in Haystack Butte
13364: Oasis, development of Gros Ventre
13365: MRO, temporary spacing to develop Arvid Bangen USA 31-18H
13366: MRO, add sections to either Reunion Bay or Van Hook, as 1280-acre units
13367: MRO, establish 6 1280-acre spacing units; one well each
13368: MRO, up to 4 horizontal wells on one 1280-acre unit; 4 wells total
13369: MRO, up to 4 horizontal wells on two 1280-acre units; 8 wells total
13370: MRO, pooling in Murphy Creek
13371: MRO, pooling in Mruphy Creek
13372: Slover Minerals, legalese re MRO in Mountrail County
13373: WLL, temporary spacing to develop Kubas 11-13TFH
13374: WLL, temporary spacing to develop Froelich 44-9TFH
13375: WLL, up to 6 wells in one 1280-acre spacing
13376: WLL, up to 6 wells in one 1280-acre spacing
13377: WLL, up to 6 wells in Zones VI, VIII, and IX in Mountrail. McKenzie
13378: WLL, establish five 1280-acre units in Sanish with one well each
13379: WLL, pooling in Mountrail
13380: WLL, to add 1280-acre spacing units to Bicentennial
13381: WLL, to add 1280-acre spacing units to Roosevelt
13382: WLL, to add 1280-acre spacing units to Roosevelt
13383: WLL, to add 1280-acre spacing units to Demores
13384: WLL, to add 1280-acre spacing units to Elkhorn or Ash Coulee
13385: WLL, to add 1380-acre spacing units to Ash Coulee
13386: SM, to establish two 1280-acre unit and one horizontal well each
13387: SM, to establish one 1280-acre unit and one horizontal well
13388: SM, to establish three 1280-acre units and one well each
13389: Petro-Hunt, temporary spacing to develop Forseth 157-100-25B-36-1H
13390: Petro-Hunt, up to 7 wells in one 1280-acre spacing unit, Stockyard Creek
13391: Petro-Hunt, one 1280-acre unit and one well
13392: BTA, to establish four 1280-acre units in Little Knife
13393: Cornerstone, to establish two 640-acre units and one well each
13394: Murex, up to 3 wells in one 1280-acre unit
13395: Murex, pooling in McGregor
13396: Murex, pooling in McGregor
13397: KOG, to establish one 1280-acre unit with up to 3 horizontal wells
13398: KOG, pooling in Moccasin Creek
13399: Hess, three 1280-acre units
13400: Hess, up to 3 horizontal wells and six vertical wells in one 1280-acre unit, 2/11-156-94, Mountrail, Big Butte
13401: Hess, to establish two 1280-acre units
13402: Hess, up to 3 wells in one 1280-acre unit, 3 wells total
13403: Hess, up to 3 wells in six 1280-acre units, 18 wells total
13404: Hess, up to 3 wells in two 1280-acre units, 6 wells total
13405: Hess, up to 3 horizontal wells and up to six vertical wells in one 1280-acre unit, 18/19-152-95, McKenzie, Hawkeye
13406: Hess, up to 3 horizontal wells in one 1280-acre unit
13407: Hess, up to 3 horizontal wells in one 1280-acre unit
13408: Hess, up to 3 horizontal wells in one 1280-acre unit
13409: Hess, extend Blue Buttes, and up to 3 horizontal wells on one 1280-acre unit
13410: Hes, pooling in Pleasant Valley
12396, cont'd: Hess, to establish one 2560-acre unit and allow up to six wells; establish two 1280-acre units and allow up to three wells; and a 640-acre unit with up to three wells; total 15 wells
13411: Ursa, to establish one 1280-acre unit and one horizontal well
13412: Ursa, to establish a 1280-acre unit
13413: Ursa, to establish one 1280-acre unit and one horizontal well
13414: Ursa, to establish one 1280-acre unit and one horizontal well
13415: Sequel Energy, enhanced recovery, North Branch 34-42F
13416: Sequel, enhanced recovery, North Branch 22-35
13417: Sequel, pooling in North Tioga
13418: Peak Grasslands, develop Wisness 21-34H
13419: North Plains, flaring
13420: North Plains, to create two 1280-acre units and one horizontal well each
13421: North Plains, pooling Eide 5-13H
13422: Petrogulf, revoking pooling of Anschutz Twist 31-4H and Neal 1-33-28H 144-95
13089, cont'd: Peak, realign two sections from Zone III to Zone II
13423: Peak, realign two sections from Zone V to Zone III
13090, cont'd: Peak, include 2 sections in Zone III and allow one horizontal well
13240, cont'd: Oasis, to establish four 1280-acre units and allow one horizontal well each
Thursday, October 21, 2010
13424: BR, to revoke WLL Tescher Ranch 11-9TFH
13425: EOG, QEP, Slawson, Zenergy, to redefine limits of Van Hook
13426: QEP, legalese re MHA 1-06-01H149-92 and MHA 2-06-01H-149-92
13427: Zenergy, extend the Van Hook and establish a 3840-acre unit and drill up to 9 wells on that spacing unit
13428: Slawson, extend the Bailey and establish a 1280-acre unit and one horizontal area
13429: EOG, temporary spacing for Boundary 4-27H
13430: EOG, to revoke Prima's Gunnison 34-35H permit (#19479)
13431: EOG, modify location of Liberty 3-14H
13432: EOG, establish two 1280-acre units and one well in each, Spotted Hawk
13433: EOG, establish a 1280-acre unit, one well, in Spotted Hawk
13434: EOG, establish three 1280-acre units and one well each, Squaw Creek
13435: Summit, redefine Beaver Creek-Stonewall Pool, Billings and Valley Counties; the Stonewall Formation is deeper than the Bakker but "above" the Red River
13436: Summit, redefine the South Boxcar-Bakken Pool
13437: Zavanna, redefine the Stockyard Creek-Bakken Pool
13438: BEXP, temporary spacing for Sedlacek Trust 33-4
13284, cont'd: BEXP, legalese for Abe Owan 21-16 1H
13439: XTO, modify one 1280-acre rules in MonDak field
13347, cont'd: XTO, pooling for the Sundhagen 31X-3
13348, cont'd: XTO, pooling for the Big Gulch Federal 41X-16
13440: Newfield, extend Fertile Valley to establish three 1280-acre units and one well each
13441: Newfield, extend Siverston and establish two 1280-acre units and one well each
13109, cont'd: Newfield, temporary spacing for Heidi 1-4H
13442: Hunt, extend the Bailey and establish a 1280-acre unit for one well
13443: Hunt, create two 1280-acre units with one well each
13444: Encore, legalese for Klamm 34-9NWH
13445: Encore, legalese for Lundin 14-33NEH
13446: CLR, extend Hebron to establish a 1280-acre unit and drill not more than seven wells on that unit
13447: CLR, amend Stoneview Pool to establish two 320-acre units and one well each
13448: CLR, extend Dolphin and Hamlet, to establish seven 1280-acre units and one well each
13449: CLR, extend Corinth to establish three 1280-acre units and one well each
13450: CLR, extend St Demetrius and establish seven 1280-acre units and one well each
13451: CLR, to extend the Dolphin and/or Hayland, to create one 1280-acre unit with not more than seven wells
13452: CLR, creat a 1280-acre unit and one well
13453: CLR, create a 1280-acre unit and one well
13454: CLR, creat five 1280-acre units and one well each
13259, cont'd: CLR, create a 760-acre unit in Cedar Creek-Ordovician Pool and two wells
12014, cont'd: CLR, temporary spacing for Traxel 1-31H
13114, cont'd: CLR, extending Camp and/or Banks to establish a 1600-acre unit and one well
13157, cont'd: CLR, pooling in Ranch Creek
13455: Abraxas, legalese regarding Ravin 26-35-1H
13456: Tracker, legalese for Kudma 10-1H
13457: Tracker, legalese for Olson 3-1H
13458: Fidelity, legalese for Domaskin 19-30-29H
13459: Fidelity, for Lynn 19-20-29H
13460: QEP, pooling in the Heart Butte
13461: EOG, three wells on two 1280-acre units
13462: EOG, three wells on a 1280-acre unit Clearwater
13463: EOG, two wells on a 640-acre unit in Spotted Horn
13464: EOG, two wells on three 640-acre units, Squaw Creek
13465: EOG, pooling in Van Hook
13466: EOG, pooling in Van Hook
13467: Sagebrush, modify production rules for Johnston 1-22
13468: Sagebrush, convert Cameron 1-14 into a saltwater disposal well
13469: XTO, three wells on a 1280-acre unit in Midway
13470: XTO, three wells on three 1280-acre units in Grinnel
13471: XTO, three wells on a 1280-acre unit in Sorkness
13472: Hunt, pooling in Clear Water
13473: Hunt, pooling in Ross
13474: Hunt, pooling in Ross
13475: Hunt, pooling in Ross
13476: Hunt, pooling in Parshall
13477: Hunt, pooling in Parshall
13478: Hunt, pooling in Parshall
13479: Hunt, Hunt, pooling in Parshall
13480, Hunt, pooling in Dunn County
13481: Hunt, pooling in Lake Ilo
13482: Hunt, pooling in Lake Ilo
13483: Hunt, pooling in Lake Ilo
13484: Encore, pooling in Siverston
13485: Encore, pooling in Siverston
13486: Encore, pooling in Siverston
13487: Encore, pooling in Siverston
13488: Encore, pooling in Siverston
13489: Anschutz, pooling in Little Knife
13490: Anschutz, pooling in Little Knife
13491: Anschutz, pooling in Hungry Man Butte
13492: Anschutz, pooling in Fayette
13493: Anschutz, pooling in Fayette
13494: Anschutz, pooling in Fayette
13495: Anschutz, pooling in Fayette
13496: Anschutz, pooling in Fayette
13497: Anschutz, pooling in Fayette
13498: Anschutz, pooling in Fayette
13499: Anschutz, pooling in Fayette
13500: Anschutz, pooling in Fayette
13501: Anschutz, pooling in Cabernet
13502: Anschutz, pooling in Murphy Creek
13503: Anschutz, pooling in Murphy Creek
13504: Anschutz, pooling in Willmen
13505: Anschutz, pooling Willlmen
13506: Anschutz, pooling Manning
13506: Anschutz, pooling in Manning
13507: Anschutz, pooling in Manning
13508: Anschutz, pooling in Manning
13509: Anschutz, pooling in Manning
13510: Anschutz, pooling in St Anthony
13511: Newfield, three wells in a 1280-acre unit, South Tobacco Garden
13512: Newfield, three wells on a 1280-acre unit, Fertile Valley
13513: Newfield, pooling in Siverston
13514: Newfield, pooling in Siverston
13515: Baytex, pooling in Ambros
13516: Slawon, two wells on a 640-acre unit in Alger
13517: Ballantyne, convert Aus 4-22 to saltwater disposal
13518: CLR, modify production rules for Dromedary 21-8SH, #16630
13519: CLR, pooling in Upland
13520: CRL, pooling in Hamlet
13521: CLR, pooling in Stoneview
13522: CLR, pooling in Johnson Corner
13524: CLR, up to seven wells on one 1280-acre unit in Corral Creek
13525: CLR, up to seven wells on 13 1280-acre units in Jim Creek, 91 wells
13526: CLR, up to seven wells on two 1280-acre units in Little Knife
13527: CLR, increae density wells, up to seven, on each 1280-acre unit in Temple
13528: CLR, increase density wells, up to seven, on each 1280-acre unit in Lindal
13529: CLR, increase density wells, up to seven, on each 1280-acre unit in North Tioga
13530: CLR, increase density wells, up to seven, on each 1280-acre unit in Sauk
13531, CLR, increase density wells, up to seven, on each 1280-acre unit in NW McGregor
13532: CLR, increase density wells, up to seven, on each 1280-acre unit in Battleview
13533: CLR, increase density wells, up to seven, on each 1280-acre unit in Hanson
13534: CLR, increase density wells, up to seven, on each 1280-acre unit in Upland
13535: CLR, increase density wells, up to seven, on each 1280-acre unit in Squires
13536: Hess, modify production from EN-Abrahamson 155-93 3019H-1, 2, and 3
13537: Hess, modify production from EN-Fisher 157-94-2126H-1, 2 and 3
13538: Hess, modify production from EN-Heinle 156-94 2536H-1, 2 and 3
13539: Hess, modify production from EN-Will Trust A-157-94 2734H-1, 2, and 3
13540: Hess, modify production from RS-Nelson Farms A-156-90 2829H-1, 2 and 3
13541: Hess, modify production from RS-Shubart 156-90 2726H-1, 2 and 3
13542: Samson, saltwater disposal
Thursday, October 21, 2010 -- Supplemental
13054, cont'd: EOG, Hess, proper spacing for Clear Water-Bakken
13097, cont'd: EOG, Fidelity, flaring in Cottonwood
13099, cont'd: EOG, temporary spacing for Kandyohi 2-20H
13100, cont'd: EOG, temporary spacing for Boundary 1-11H
13110, cont'd: CLR, temporary spacing for Brockmeier 1-1H
12886, cont'd: EOG, pooling for the Burke 24-08H in Stanley
Friday, October 22, 2010
13354: Ballantye, unitized management of Southwest Landa-Madison, Bottineau
13355: Ballantyne, unitized plan for case number 13354
Multiple (9) Wells in a Single Spacing Unit (Two Sections)
October NDIC dockets
For full summary, click here.
Multiple wells in one spacing unit
- Case 13375: WLL, up to six (6) wells on one 1280-acre spacing unit.
- Case 13390: Petro-Hunt, up to seven (7) wells on one 1280-acre spacing unit.
- Case 13400: Hess, up to 3 horizontal wells and six vertical wells in one 1280-acre unit, 2/11-156-94, Mountrail, Big Butte
- Case 13405: Hess, up to 3 horizontal wells and up to six vertical wells in one 1280-acre unit, 18/19-152-95, McKenzie, Hawkeye
- Case 13427: Zenergy, extend the Van Hook and establish a 3840-acre unit and drill up to 9 wells on that spacing unit
- Case 13434: EOG, establish three 1280-acre units and one well each, Squaw Creek
- Case 13446: CLR, extend Hebron to establish a 1280-acre unit and drill not more than seven wells on that unit
- Case 13448: CLR, extend Dolphin and Hamlet, to establish seven 1280-acre units and one well each
- Case 13450: CLR, extend St Demetrius and establish seven 1280-acre units and one well each
- Case 13451: CLR, to extend the Dolphin and/or Hayland, to create one 1280-acre unit with not more than seven wells
- Case 13464: EOG, two wells on three 640-acre units, Squaw Creek
- Case 13524: CLR, up to seven wells on one 1280-acre unit in Corral Creek (7)
- 13524: CLR, up to seven wells on one 1280-acre unit in Corral Creek (7)
- 13525: CLR, up to seven wells on 13 1280-acre units in Jim Creek, 91 wells
- 13526: CLR, up to seven wells on two 1280-acre units in Little Knife (14)
- 13527: CLR, increase density wells, up to seven, each 1280-acre unit, Temple (16 *7)
- 13528: CLR, increase density wells, up to seven, each 1280-acre unit, Lindal (3 * 7)
- 13529: CLR, incr density wells, up to seven, each 1280-acre unit, N. Tioga (30 * 7)
- 13530: CLR, incr density wells, up to seven, each 1280-acre unit, Sauk (8 * 7)
- 13531, CLR, incr density wells, up to seven, each 1280-acre unit, NW McGregor (5*7)
- 13532: CLR, incr density wells, up to seven, each 1280-acre unit, Battleview (2 * 7)
- 13533: CLR, incr density wells, up to seven, each 1280-acre unit, Hanson (6 * 7)
- 13534: CLR, incr density wells, up to seven, each 1280-acre unit, Upland (5 * 7)
- 13535: CLR, incr density wells, up to seven, each 1280-acre unit, Squires (32 * 7)
- Case 13435: Summit, redefine Beaver Creek-Stonewall Pool, Billings and Valley Counties; the Stonewall Formation is deeper than the Bakken but "above" the Red River
Squaw Creek Oil Field
Note: with regard to the word "squaw," see this article.
Updates
August 18, 2019: The Rachel Wolf / Wolf wells are tracked here.
June 14, 2017: it was noted that production in Squaw Creek increased 141% month-over-month, March-to-April, 2017. Squaw Creek is noteworthy for the number of 320-acre drilling units it has:
Permits
2017 (as of 4/17)
None.
2016 (list is complete)
32514, 1,355, EOG, Mandaree 31-0706H, t12/16; cum 633K 5/20; off line 5/20;
32513, 1,910, EOG, Mandaree 24-0706H, t12/16; cum 546K 5/20; off line 5/20;
32512, IA/1,505, EOG, Mandaree 30-0706H, t12/16; cum 310K 9/19; remains off line 5/20;
32625, PNC, Petroshale, Petroshale 6
2015 (list is complete)
31942, 848, WPX, Rachel Wolf 27-34HS, Squaw Creek, t8/17; cum 250K 3/20; off line 4/20; remains off line 5/20;
31941, 1,891, WPX, Rachel Wolf 27-34HC, Squaw Creek, t8/17; cum 311K 320; off line 3/20; remains off line 5/20;
31940, 1,285, WPX, Rachel Wolf 27-34HY, Squaw Creek, t8/17; cum 247K 3/20; off line 3/20; remains off line 5/20;
31939, 2,106, WPX, Rachel Wolf 27-34HG, Squaw Creek, t8/17; cum 291K 3/20; off line 3/20; remains off line 5/20;
31938, 1,554, WPX, Rachel Wolf 22HC, Squaw Creek, t8/17; cum 271K 3/20; off line 3/20; remains off line 5/20;
30874, 779, Missouri River Resources ND, LLC, Nation 3W-4H-TF, t7/15; cum 202K 5/20;
30873, 708, Missouri River Resources ND, LLC, Arikara 3W-3H-BK, t7/15; cum 178K 5/20;
30518, 392, Missouri River Resources ND, LLC, Hidatsa 3W-2H-TF, t7/15; cum 132K 5/20;
30517, 695, Missouri River Resources ND, LLC, Mandan 3W-1H-BK, t7/15; cum 186K 5/20;
2014 (list is complete)
28209, PNC, EOG,
27477, 1,328, WPX, Kale Bad Brave 19-18HB, t1/15; cum 238K 4/20; off line 5/20;
27480, 1,461, WPX, Kale Bad Brave 19-18HX2, t2/15; cum 244K 5/20; off line 5/20;
27478, 871, WPX, Kale Bad Brave 19-18HW, t1/15; cum 226K 5/20; off line 5/20;
27479, PNC, WPX,
2013 (list is complete)
26768, 2,054, EOG, Mandaree 28-05HH, t10/14; cum 245K 3/20; off line 3/20; remains off line5/20;
26779, 1,014, EOG, Mandaree 17-05H, t10/14; cum 184K 5/20; off line 5/20;
26778, 704, EOG, Mandaree 110-05H, t9/14; cum 162K 3/20; offline 4/20; remains off line5/20;
26777, 940, EOG, Mandaree 135-05H, t10/14; cum 158K 10/19; offline 10/19; remains off line 5/20;
26769, 526, EOG, Mandaree 134-05H, t10/14; cum 119K 2/20; off-line much of 2016; offline 2/20; remains off lin3 5/20;
Issued in 2012 (list is complete)
24351, 1,007, WPX, Stevenson 15-18HD, t4/13; cum 166K 5/20;
23934, PNC, EOG,
23216, 783, WPX, Corn Stalk 20HC, t1/13; cum 161K 9/19; erratic since 9/19; through 5/20;
23215, 637, WPX, Corn Stalk 20HD, t1/13; cum 175K 5/20; off line 5/20;
22233, PNC, EOG,
22232, PNC, EOG,
Squaw Creek Oil Field
Squaw Creek is another one of those typically small fields in the Williston Basin. It is composed of about 31 sections, not even a full township (as of December 30, 2010). For the most part, Squaw Creek field is T149-R94. It is on the west / south side of the river and not too far west of the very prolific Van Hook field in the reservation. Squaw Creek, itself, is a westernmost field in the reservation. Another field of interest is the Spotted Horn, just north of Squaw Creek, and also just as small (just one township, T150-R94), and also inside the reservation. The Mandaree field is east of Squaw Creek.
As of July 3, 2020, this is the status of activity in Squaw Creek (some IPs updated:
- 20033, 144, WPX, Rubia 16-24H, t11/11; cum 264K 6/19; offline 6/19; remains off line 5/20;
- 20711, 341, WPX, Lucy Lone Fight 16-22H, t9/11; cum 107K 4/17; offline 5/19; remains off line 5/20;
- 18411, 977, EOG, Mandaree 10-05H, t10/10; cum 216K 3/10; offline 3/20;
- 19426: 1,207, 320-acre spacing; EOG, Mandaree 9-04H, t3/11; cum 185K 4/20; off line 5/20;
- 18464: 1,424, EOG, Mandaree 1-10H, t9/10; cum 215K 5/20;
- 18927: 815, EOG, Mandaree 2-09H, t98/10; cum 200K 5/20;
- 19004: 1,440, EOG, Mandaree 12-07H, t11/10; cum 204K 5/20;
- 18594: 105, EOG, Mandaree 7-17H, t9/10; cum 204K 5/20;
- 18774: 526, EOG, Mandaree 5-16H, t10/10; cum 193K 5/20;
- 15689: 47, vertical well, Madison, s12/04; t5/05; AL; cum 64K 5/20; struggling;
- 18697: 927, short lateral, EOG, Mandaree 4-15H, t8/10; cum 280K 5/20; off line 5/20;
- 19881: conf, Peak, Hall 23-21H; remains conf 5/20;
- 18832: PNC, Denbury/Encore, Fettig 31-21H
- 18908: 1,565, 320-acre spacing; EOG, Mandaree 6-20H, t9/10; cum 199K4/20; off line 5/20;
- 19973: 141, WPX/Zenergy, Wolf 27-34H, Wolf 27-34H, t7/11; cum 351K 5/20;
- 18766: 1,392, 320-acre spacing; Denbury/Encore, Fettig 24-22H, t11/10; cum 101K 4/20; see this post, July 3, 2020;
- 20238, 180, WPX/Zenergy, Spotted Horn 26-35H, 26-149-94, t1/12; cum 252K 4/20; see this post, October 30, 2019; huge jump in production;
Original Blog Entry
In the September NDIC docket, EOG requested multiple wells on 320-acre spacing in Squaw Creek oil field.
Maybe I'm just inappropriately exuberant, but I find "multiple wells on a 320-acre spacing" interesting, fascinating, and a bit nebulous, as in "inexact." It's been my experience EOG holds its cards very close to the chest, whereas CLR would have come right out and said, "x number of wells on each 320-acre unit." Idle chatter.
I can't wait to see how this plays out. This is near the best of the Bakken, and "they" say the EUR of a Bakken well is 700,000 bbls of oil, +/- a few hundred thousand.
Squaw Creek is a small oil field, comprising most of one township, T149N-R94W. It is only 23 sections in size. It is located on the west side of the Fort Berthold Indian Reservation, south of Spotted Hawk oil field (also a very interesting play) and west of the Mandaree oil field.
I have to go back and check, but I believe this area is not too far away from the Arrow Pipeline initiative. Currently there are two rigs on site in this very little oil field, one well nearing completion, and several wells still on the confidential list.
Interestingly enough, there are a few sections with 320-acre spacing in this oil field, and the rest is split evenly between 640-acre and 1280-acre spacing.
Am I Missing Something?
I think I do a pretty good job scouring news announcements regarding the Bakken. I know I miss a lot and I do make mistakes.
But in the process of re-looking at the September NDIC hearing docket, I noted the following:
That's 238 wells that CLR requested, and that's just a small part of the overall docket for September. Did I mis-read something; is that really accurate? Is that what the docket is saying? It just seems that with all the reporting that comes out of the Bakken, someone would have noted that, certainly by an analyst. But nothing.
So, let me know if I'm mis-reading this. This is absolutely incredible. It reminds me of the EOG request some months ago requesting in excess of 500 new wells in just a few cases.
[With a EUR of 700,000 barrels, at $50/bbl this works out to $8.3 billion over the lifetime of these 238 wells. CLR's market cap is $7.63 billion today.]
[I thought seven (7) wells on one spacing unit was a lot, now I see up to nine (9) wells on one spacing unit in the October dockets. More to follow.]
But in the process of re-looking at the September NDIC hearing docket, I noted the following:
- 13334: CLR, 7 wells, 1280-acre, Dunn, 2 units; 14 wells total
- 13335: CLR, 7 wells, 1280-acre, Dunn; 2 units; 14 wells total
- 13336: CLR, 7 wells, 1280-acre, Dunn; 1 unit; 7 wells total
- 13337: CLR, 7 wells, 1280-acre, Dunn; 4 units; 28 wells total
- 13338: CLR, 7 wells, 1280-acre, Dunn; 8 units; 56 wells total
- 13339: CLR, 7 wells, 1280-acre, Dunn; 9 units; 63 wells total
- 13340: CLR, 7 wells, 1280-acre, Dunn; 5 units; 35 wells total
- 13341: CLR, 7 increase density wells, 1280-acre unit, Divide; 7 wells total
- 13342: CLR, 7 increase density wells, 1280-acre unit, Divide; 7 wells total
- 13343: CLR, 7 increase density wells, 1280-acre unit, Divide, Burke, Williams; 7 wells total
That's 238 wells that CLR requested, and that's just a small part of the overall docket for September. Did I mis-read something; is that really accurate? Is that what the docket is saying? It just seems that with all the reporting that comes out of the Bakken, someone would have noted that, certainly by an analyst. But nothing.
So, let me know if I'm mis-reading this. This is absolutely incredible. It reminds me of the EOG request some months ago requesting in excess of 500 new wells in just a few cases.
[With a EUR of 700,000 barrels, at $50/bbl this works out to $8.3 billion over the lifetime of these 238 wells. CLR's market cap is $7.63 billion today.]
[I thought seven (7) wells on one spacing unit was a lot, now I see up to nine (9) wells on one spacing unit in the October dockets. More to follow.]
Multiple Wells Per Section
I remember three or four years ago all the excitement when the Bakken boom was moving from the Elm Coulee oil field in Montana to North Dakota. We, in North Dakota, were hearing stories that someday there would be a well in every section in the Williston Basin.
Wow, were we wrong!
Not one well in every section. It will be more like three or four wells in every section before it's all over.
I was just looking at the September NDIC hearing dockets in anticipation of the October schedule now starting to be released.
I was traveling at the time and didn't have time to make many comments on the September dockets, but I had a chance to take a look at the cases over the weekend. This is the trend: a) 1280-acre spacing; and, b) multiple wells on spacing units.
Here's an example:
CLR: seven (7) wells on each 1280-acre unit and multiple units
Squaw Creek oil field:
By the way, Squaw Creek is a small oil field, comprising most of one township, T149N-R94W. It is only 23 sections located on the east side of the Fort Berthold Indian Reservation, south of Spotted Hawk (also a very interesting play) and west of Mandaree. I have to go back and check, but I believe this area is not too far away from the Arrow Pipeline initiative. Currently there are two rigs on site in this very little oil field, one well nearing completion, and several wells still on the confidential list. Interestingly enough, there are a few sections with 320-acre spacing in this oil field, and the rest is split evenly between 640-acre and 1280-acre spacing.
Wow, were we wrong!
Not one well in every section. It will be more like three or four wells in every section before it's all over.
I was just looking at the September NDIC hearing dockets in anticipation of the October schedule now starting to be released.
I was traveling at the time and didn't have time to make many comments on the September dockets, but I had a chance to take a look at the cases over the weekend. This is the trend: a) 1280-acre spacing; and, b) multiple wells on spacing units.
Here's an example:
CLR: seven (7) wells on each 1280-acre unit and multiple units
- 13334: CLR, 7 wells, 1280-acre, Dunn, 2 units; 14 wells total
- 13335: CLR, 7 wells, 1280-acre, Dunn; 2 units; 14 wells total
- 13336: CLR, 7 wells, 1280-acre, Dunn; 1 unit; 7 wells total
- 13337: CLR, 7 wells, 1280-acre, Dunn; 4 units; 28 wells total
- 13338: CLR, 7 wells, 1280-acre, Dunn; 8 units; 56 wells total
- 13339: CLR, 7 wells, 1280-acre, Dunn; 9 units; 63 wells total
- 13340: CLR, 7 wells, 1280-acre, Dunn; 5 units; 35 wells total
- 13341: CLR, 7 increase density wells, 1280-acre unit, Divide; 7 wells total
- 13342: CLR, 7 increase density wells, 1280-acre unit, Divide; 7 wells total
- 13343: CLR, 7 increase density wells, 1280-acre unit, Divide, Burke, Williams; 7 wells total
- 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
Squaw Creek oil field:
By the way, Squaw Creek is a small oil field, comprising most of one township, T149N-R94W. It is only 23 sections located on the east side of the Fort Berthold Indian Reservation, south of Spotted Hawk (also a very interesting play) and west of Mandaree. I have to go back and check, but I believe this area is not too far away from the Arrow Pipeline initiative. Currently there are two rigs on site in this very little oil field, one well nearing completion, and several wells still on the confidential list. Interestingly enough, there are a few sections with 320-acre spacing in this oil field, and the rest is split evenly between 640-acre and 1280-acre spacing.
Sunday, September 26, 2010
Publications Regarding the Williston Basin
Bakken Publications: Geology
Items of Historical Interest
See Comments Below For More Links
- The Leigh Price Paper, Manuscript, Leigh Price, 1999/2000
- Bakken - Three Forks Stratigraphic Nomenclature, Julie LeFever, 2005
- Bakken Formation Reserve Estimates, Julie LeFever and Lynn Helms, 2006
- The Petroleum Geology of North Dakota's Williston Basin, LeFever, et al
- Ryder Scott Update, March - May, 2011
- Shale Gas Revolution, International Study/UK, 2010
Items of Historical Interest
- Seeking Alpha, January 22, 2008, "The Lost Dutchmen Mine of the Oil Patch"
- The Oil Drum, April 26, 2008, "The Bakken: How Much Will It Help?"
- 17th Williston Basin Petroleum Conference, April 24, 2009, Julie LeFever, "Abstract, Three Forks Formation"
- E&P, 2007: History of the Bakken
- EIA, 2006, "Shale Shock! Could There Be Billions in the Bakken?"
See Comments Below For More Links
Saturday, September 25, 2010
Production vs Price: No Correlation?
There is a very interesting graph at The Oil Drum.
It suggests that the price of oil has no influence on world production of oil.
Very, very interesting. And very big implications going forward.
Think about that graph in the link above as you read the commentary by Dave Cohen, November,12, 2009.
I don't accept the "peak theory" as it is currently posited, but I do find these links very interesting.
It suggests that the price of oil has no influence on world production of oil.
Very, very interesting. And very big implications going forward.
Think about that graph in the link above as you read the commentary by Dave Cohen, November,12, 2009.
I don't accept the "peak theory" as it is currently posited, but I do find these links very interesting.
For Investors Only: Another Blog to Check Out
I happened to come across this blog due to a bit of serendipity, perhaps fun to talk about how that happened at the coffee klatsch, but certainly not here.
I am not sure if I will go back to the Calculated Risk blog very often. An initial survey of the site suggests that the global view of its author is different than mine, but the site provides a) some interesting perspectives that I have not considered in the past; and, b) some great charts, which I always appreciate, understanding that there are lies, damned lies, and statistics.
You don't have to bookmark it; I've linked it at my Investors page.
I am not sure if I will go back to the Calculated Risk blog very often. An initial survey of the site suggests that the global view of its author is different than mine, but the site provides a) some interesting perspectives that I have not considered in the past; and, b) some great charts, which I always appreciate, understanding that there are lies, damned lies, and statistics.
You don't have to bookmark it; I've linked it at my Investors page.
For Newbie Investors Only: MDU
Update: a couple hours after posting the note below, I went back and looked at the dividend history. I "knew" what MDU's dividend history was but looking at it on the Yahoo!Financial charts really tells a story. Even when the market imploded in the summer/autumn of 2008, and again in March, 2009 (great buying opportunities by the way), MDU never missed a dividend and continued with their usual practice of increasing dividends. I have to admit, MDU is very, very enticing: a) in past two years, the share price of MDU has had a steady climb going into December (heating bills in the northern tier); b) Fidelity is getting back into looking for oil in the Bakken; c) the last time the dividend was raised was a year ago at this time (paid in December); d) if share price rises, dividend will have to be increased to maintain reasonable yield for a utility; and, e) once MDU starts moving, it could move quickly to $23 or $24 -- not a lot in raw numbers but more than 10% upward movement, with little downside risk.
MDU will announce earnings on October 26, 2010. It's very possible that if there is going to be a pop in MDU's share price it will happen after that announcement. I expect that their outlook will be positive; a lot of negatives are behind them. (A lot of those negatives couldn't get any worse.)
I didn't post this Seeking Alpha story earlier this week because it didn't tell me anything really new.
However, it's the end of the week, and time to wrap a few things up, bring a few open stories to closure.
This is a nice update about MDU for newbies. Folks who have followed the oil industry in North Dakota should know the MDU story very well.
I accumulated shares in MDU for twenty years; it was one of the first companies in which I ever invested. I don't remember exactly when, but I know my investment steps occurred in this order: a) get a job that had a retirement plan; b) life insurance (I was married with a family); c) mutual funds; d) individual stocks. It took me about ten years to get from (a) to (d). Two of my first individual holdings were MDU and BNI. BNI was recently bought out by Berkshire Hathaway. [At the time IRA, Roth IRAs, and 401(k)'s were not available. Had they been, they would have been part of step (a). For me those were added along the way.]
MDU got caught up in the global recession and among the "Bakken companies," MDU seems to be lagging, at least with regard to share appreciation. It's been in a trading range for two years and even, going back five years, hasn't done much. It does pay a nice dividend, and its potential is huge, as noted in this very nice update at SeekingAlpha.
I think MDU is yet to break out of this trading range, but I don't think there's any hurry. For investors, be ready to jump in when a) price of natural gas starts going back up (for a nice discussion, click here); and, b) when we have several months, if not quarters of clear evidence that the global economy has turned. I think the best indicator for the latter is "rail car loadings," a favorite of Warren Buffet's, as long as rail car loadings are not simply a reflection of imports coming from China, which they appear to be right now. In fact, as I say again below, rail car loadings right now could be a contraindicator at worse, a "red herring," at best.
Just out of curiosity, yes, here I go again, off on a tangent, what does the chart on rail car loadings look like? Intermodal traffic is up huge. (Which, by the way, really says volumes about the state of the economy in the US.) Intermodal traffic refers to the movement of containers or vehicles transferred directly between ships and railroad, railroad and truck, or ships and truck.
Wow, now I'm really getting off track. I reported back in July that the largest port in the US, the Los Angeles Port, set a new record in number of cargo containers ever handled in the month of June. An all-time record. Not just a quarterly record, or an annual record. But an all-time record. As noted in that posting, the port was an active port during World War II. The most recent statistics available show that the LA Port did even better in August, 2010, up 25%, the best showing since 2006. (Unfortunately, this is all due to "stuff" coming in from China, and now so much "stuff" going back to China. So, the railroads and the ports are doing well, but that doesn't necessarily mean US economy is doing well. In fact, ... well ... you can see the derivative itself....)
Anyway, enough of this. Back to MDU. I'm not quite ready to jump back into MDU, but for someone new to investing, who might be a bit conservative, or a bit concerned about investing, MDU is a great place to start. The investment will be very safe (MDU is not going to go away); you will receive a dividend far surpassing what a savings account will get you; the dividend is generally increased year-over-year; and, MDU's potential is huge.
MDU will announce earnings on October 26, 2010. It's very possible that if there is going to be a pop in MDU's share price it will happen after that announcement. I expect that their outlook will be positive; a lot of negatives are behind them. (A lot of those negatives couldn't get any worse.)
The Original Post
I didn't post this Seeking Alpha story earlier this week because it didn't tell me anything really new.
However, it's the end of the week, and time to wrap a few things up, bring a few open stories to closure.
This is a nice update about MDU for newbies. Folks who have followed the oil industry in North Dakota should know the MDU story very well.
I accumulated shares in MDU for twenty years; it was one of the first companies in which I ever invested. I don't remember exactly when, but I know my investment steps occurred in this order: a) get a job that had a retirement plan; b) life insurance (I was married with a family); c) mutual funds; d) individual stocks. It took me about ten years to get from (a) to (d). Two of my first individual holdings were MDU and BNI. BNI was recently bought out by Berkshire Hathaway. [At the time IRA, Roth IRAs, and 401(k)'s were not available. Had they been, they would have been part of step (a). For me those were added along the way.]
MDU got caught up in the global recession and among the "Bakken companies," MDU seems to be lagging, at least with regard to share appreciation. It's been in a trading range for two years and even, going back five years, hasn't done much. It does pay a nice dividend, and its potential is huge, as noted in this very nice update at SeekingAlpha.
I think MDU is yet to break out of this trading range, but I don't think there's any hurry. For investors, be ready to jump in when a) price of natural gas starts going back up (for a nice discussion, click here); and, b) when we have several months, if not quarters of clear evidence that the global economy has turned. I think the best indicator for the latter is "rail car loadings," a favorite of Warren Buffet's, as long as rail car loadings are not simply a reflection of imports coming from China, which they appear to be right now. In fact, as I say again below, rail car loadings right now could be a contraindicator at worse, a "red herring," at best.
Just out of curiosity, yes, here I go again, off on a tangent, what does the chart on rail car loadings look like? Intermodal traffic is up huge. (Which, by the way, really says volumes about the state of the economy in the US.) Intermodal traffic refers to the movement of containers or vehicles transferred directly between ships and railroad, railroad and truck, or ships and truck.
Wow, now I'm really getting off track. I reported back in July that the largest port in the US, the Los Angeles Port, set a new record in number of cargo containers ever handled in the month of June. An all-time record. Not just a quarterly record, or an annual record. But an all-time record. As noted in that posting, the port was an active port during World War II. The most recent statistics available show that the LA Port did even better in August, 2010, up 25%, the best showing since 2006. (Unfortunately, this is all due to "stuff" coming in from China, and now so much "stuff" going back to China. So, the railroads and the ports are doing well, but that doesn't necessarily mean US economy is doing well. In fact, ... well ... you can see the derivative itself....)
Anyway, enough of this. Back to MDU. I'm not quite ready to jump back into MDU, but for someone new to investing, who might be a bit conservative, or a bit concerned about investing, MDU is a great place to start. The investment will be very safe (MDU is not going to go away); you will receive a dividend far surpassing what a savings account will get you; the dividend is generally increased year-over-year; and, MDU's potential is huge.
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