Miscellaneous Links -- Current Events in the Bakken -- 1st Weekend, August, 2010

I've been sent a number of very interesting links that will take some time to sort through. Not knowing if I will get to all of them before I start traveling tomorrow, I will list the links and then sort through them later, and will place them at the appropriate spots in my blog.

If nothing else, you all should read the 2007 story about CARBO Ceramics, linked below. 

• Newfield (NFX) conference call at SeekingAlpha.com. Note comments also about Alberta shale.
• Barron's: NFX Shares Are Cheap, August 7, 2010.
• Reminder: some nice Newfield wells, my posting.

• KOG: 2Q 2010 conference call notes, August 6, 2010.
  
• Reminder: my posting regarding KOG, XTO, XOM   

• WHX (Whiting Trust) announces quarterly distribution -- $0.740332, August 6, 2010.

• EOG, 2Q, 2010, presentation, slides, August 5, 2010.
• EOG, 2Q, 2010, conference call, August 5, 2010. 
• EOG, 2Q, 2010, earnings conference call, transcript, August 6, 2010.

• CARBO Ceramics, CRR, 2Q, 2010, Earnings Conference Call, July 30, 2010.
• CARBO Ceramics, a look back, November, 2007.

• CLR, 2Q, 2010, Earnings Release, August 4, 2010

• This speaks volumes about unions: in cash-strapped school district in Milwaukee, union leaders fighting to get Viagra coverage back into their pension/health plans. 

I am easily swayed by presentations and earnings reports, but reading the "tea leaves" suggests to me that there are some very interesting things going on in the Bakken. I am accused of being inappropriately exuberant, but I feel even more so going into this next week. If we slip into a double-dip recession and price of oil drops back to below $60, I won't feel so good, but it will be another buying opportunity: a) the bigger companies have hedged their prices; and, b) the long term trend for the price of oil is up, at least in my mind.

Hess and IPs

At least one company in the Bakken doesn't appear to be exaggerating its initial production numbers.

These are the results of the most recent Hess well to come off the confidential list:

• 18524, 67, Hess, RS-Rudolph-157-90-1708H-1, 17-157-90, long lateral, Bakken, Clear Water

Deep in this thread is a possible explanation for these poor results. It has to do with "old well" designs. It should also be noted that this well is in the Clear Water field, which is "owned" by EOG (most of the leases in Clear Water are by EOG; only a couple by Hess). Recent wells in this field that have been reported so far all have IPs well below 400, and generally 200 or less:

• 18096, Hess, 210, RS-State H-157-90-1609H-1
• 18148, EOG, 322, Clearwater 2-01H
• 18150, EOG, 234, Clearwater 3-12H
• 18292, EOG, 148, Sidonia 4-10H
• 18329, EOG, 249, Clearwater 100-19H
• 18337, EOG, 142, Clearwater 17-01H
• 18482, EOG, 110, Kandiyohi 10-33H
• 18524, Hess, 67, RS-Rudolph-157-90-1708H-1

I have no idea if there is any validity to the argument about the "old well" designs. But it appears that Hess is not the only one having difficulty coaxing oil out of the Clear Water.

Having said all that, EOG must think these wells are economical. They were granted two more permits in the Clear Water field yesterday (August 6, 2010), and they both appear to be on the same pad:

• 19381, Crowfoot 36-3018H, NENW 30-158N-89W
• 19382, Crowfoot 35-3031H, NENW 30-158N-89W

They both start in section 30; one lateral will go north, one lateral will go south.

It should be noted that early on, EOG had some success with some Clear Water wells.

In T158-90W, EOG was granted the first permit (17676 -- section 6) in early 2008. It has been drilled and the IP was reported as 1,131 barrels/day, a very good well. 

Back on February 21, 2010, I posted: in just the past few weeks, this section has gotten very, very busy. Almost every section now has a permit or a well being drilled. Two wells are producing; one with an IP of 1,131, and one with an IP of 626.