Q & A For A Glass Bluff / Zavanna Well

The following permit was issued today:

#19849 - ZAVANNA, LLC, KEPNER 9-4 1H, SWSE 9-151N-103W, MCKENZIE CO., 220' FSL and 2600' FEL, DEVELOPMENT, GLASS BLUFF, 'Tight Hole', 2121' Ground, API #33-053-03336.

Someone wrote in with several questions about this permit, but the questions are general enough that I will post my reply here which might be of help to others.

Here are the questions:

1. There are several numbers at the end of the official listing of the permit which appear to refer to feet. What do these represent?

2. Is the next step for there to be something filed regarding a spacing unit? Or does that not happen until a well is drilled? Where can I track the spacing unit issue?

3. Any comment on the normal turn-around time in today's climate between issuing a permit and drilling? I think Zavanna has two active rigs at present. Is there any way I can determine how many open permits they currently have?

4. Finally, is there somewhere to track when a well initially started? I know that wells get placed on the confidential list. Is that at the beginning of the drilling process? Is that information also contained on the daily activity reports.

Answers:

1. Starting with the last number. I believe the API stands for "American Petroleum Institute." I'm sure that number is for administrative purposes only.  The "2,121'" number is probably the elevation of the surface of the earth on which the well will sit. The three-digit and the four-digit numbers are feet from the south and east, respectively, of the section line.

2. It is my understanding that once the permit is issued, the company can drill at its convenience. The permit is for an established field, the Glass Bluff field, so spacing has been determined. It is 1,280-acre spacing. You can find spacing by going to the NDIC GIS map server. If you need help using that app, let me know. By the way, this is considered a "Development" well since it is being drilled in an established field.

3. There is no easy way to track the movement of the rig that is likely to drill this well. You say that you think Zavanna has two rigs. Tonight, the NDIC website shows Zavanna with only one active rig. If they have another one, it is moving and not active. However, when I've looked before Zavanna has only had one rig.  Zavanna's rig is Nabors 688 and it is currently in Stockyard Creek, east of Williston, #19328, Earl 1-13H; the permit for that well was issued July 28, 2010, which means they got on that well within 2-3 months after getting the permit.

4. The good news is that Zavanna knows what it has in Stockyard Creek and may be eager to move to Glass Bluff to see what they have there. On the other hand, to save money and time, Zavanna may continue drilling out their permits in Stockyard Creek before moving to Glass Bluss.

5. Zavanna has 18 wells on the confidential list. Zavanna has ten permits from 2009 that have not yet been reported on and seven permits from 2010 that have not been reported on. That doesn't mean they still have 17 wells to drill; some of them have already been drilled and are confidential status. I don't know the specifics.

6. The "confidential" clock is tricky. When this permit was issued, it was granted "tight hole" status which is the same as "confidential" for all practical purposes and will stay in that status until the well is completed. The "confidential" clock doesn't start ticking until the well is complete, and that can vary from operator to operator. Some do not consider a well completed until it has been fracked. Some companies do not frack during the winter. You can see how long a well could remain "tight" or "confidential." Once the well is completed, the "confidential" clock starts ticking which is six months in North Dakota. If it's a really good well, the company or one of its partners on the well could issue a press release early, but it still keeps its original confidential date, because there is additional confidential information that might not be released in the press release. For more information, go to my FAQ tab at the top of the website and search for "confidential."

7. Even after the well is completed and producing, it can be several months before you get the first royalty check. Search "royalty" or "checks" at the Bakken Shale Discussion Group to see much chatter about that issue.

8. The Glass Bluff field is fairly "new" for this boom. Zenergy has several relatively "new" and "older" permits. BEXP has one permit: #18653, Tjelde 29-32 1-H, in section 29-151-102. It had a nice IP, as many BEXP wells do: 2,802 barrels of oil. The Zavanna permit issued today is in section 9-151-103 about 6 miles northwest of the BEXP well.  Go to the NDIC home page, and click on "Well Search" on the sidebar on the left. Use the drop down menu to type in Glass Bluff for field and then "submit." That's all you have to put in to find out what's been going on in the Glass Bluff field. Likewise, clear everything, and place "Zavanna" in the "Operator" field to see what Zavanna is doing overall. Or you can place "Zavanna" and "Glass Bluff" in the same submission and find out only what Zavanna is doing in the Glass Bluff.

9. My hunch is that Zavanna won't get to the Glass Bluff until next spring. If I'm wrong, and it's sooner, great! If I'm wrong, and it's longer, the wait will be excruciating. But Zavanna will eventually get there.

10. Disclaimer: all the above is based on my status as an amateur, only what I've gleaned from public sites elsewhere. I could be wrong in any number of places, and any number of people will comment to point out where I'm wrong. Smile.

11. The folks over at the Bakken Shale Discussion Group would know this much better than I. Many members of that group own mineral rights and many have wells. I do not have any mineral rights. That group is very, very helpful. Check in with them periodically and use the search engine at their site to look for Glass Bluff activity.