WLL: Current Presentation

Whiting's current presentation is here.

Some data points from others:

• WLL says they will recover eight (8) percent of the original oil in place (OOIP)
• WLL prefers < 30 frac stages
• WLL does not care for Eco-Pad format
• In addition to four to five long middle Bakken laterals in Sanish sections, WLL putting in "wing" wells (short laterals) as well as  long TFS laterals

These are comments sent in by readers commenting on Q & A portion of the presentation.

Recovering eight (8) percent of the OOIP is a huge story; original USGS estimates of recoverable oil in the Bakken was in the range of 1 - 3 percent. (I believe those figures came from USGS but might have come from other analysts after the 2008 USGS report.)

Off-topic but this reminds me of Apple Corporation twenty years ago. Everyone felt Apple Corporation was doomed with only two percent penetration in the PC (personal computer model). No one thought Apple could survive. "Believers" in Apple noted that the corporation would double in size if it only got to four percent penetration. Not an appropriate analogy, but eight percent is four times two percent. That's huge. And that's still only eight percent.

Lario Adds Acreage in the Williston Basin -- ND, USA

From Rigzone.com: Lario Adds Acreage in Bakken, Three Forks

Somehow I missed this from my usual sources.

Lario, "in conjunction with an undisclosed partner," has acquired approximately 23,000 net acres primarily in the Little Knife Field in Dunn and Stark Counties. Lario acquired this acreage from Rocky Mountain Exploration.

Lario's total regional holdings is now more than 250,000 gross and 49,182 net acres in the Bakken and TFS formations in North Dakota, Montana, and Saskatchewan (Canada).

Tracker Resource Development will operate the properties.

Wells, By Producer, On the Confidential List

This was sent in by Rory.

Just for the fun of it, here are the number of wells on the confidential list by producer (the list changes daily, obviously). What I find amazing is all the producers in the Bakken; it is not just seven or eight but literally dozens. If a well costs $6 million, think how much capital these companies have tied up in driling:

CONTINENTAL RESOURCES, INC. 135
EOG RESOURCES, INC. 105
XTO ENERGY INC. 55
BRIGHAM OIL & GAS, L.P. 49
WHITING OIL AND GAS CORPORATION 49
SLAWSON EXPLORATION COMPANY, INC. 48
MARATHON OIL COMPANY 46
PETRO-HUNT, L.L.C. 38
NEWFIELD PRODUCTION COMPANY 34
OASIS PETROLEUM NORTH AMERICA LLC 32
BURLINGTON RESOURCES OIL & GAS COMPANY LP 31
ENCORE OPERATING, L.P. 31
TRACKER RESOURCE DEVELOPMENT II, LLC 25
SAGEBRUSH RESOURCES, LLC 23
HESS CORPORATION 22
AMERICAN OIL & GAS, INC. 21
ZENERGY OPERATING COMPANY, LLC 20
SAMSON RESOURCES COMPANY 18
HUNT OIL COMPANY 17
SM ENERGY COMPANY 17
KODIAK OIL & GAS (USA) INC. 16
ZAVANNA, LLC 16
ANSCHUTZ EXPLORATION CORPORATION 14
FIDELITY EXPLORATION & PRODUCTION COMPANY 13
QEP ENERGY COMPANY 13
HELIS OIL & GAS COMPANY, L.L.C. 12
NORTH PLAINS ENERGY, LLC 12
ZENERGY, INC 11
CORNERSTONE NATURAL RESOURCES LLC 9
PEAK NORTH DAKOTA, LLC 9
TEXAKOTA, INC. 9
MUREX PETROLEUM CORPORATION 8
BTA OIL PRODUCERS, LLC 7
BAYTEX ENERGY USA LTD 6
ENERPLUS RESOURCES USA CORPORATION 6
LEGACY OIL & GAS ND, INC. 6
PRIMA EXPLORATION, INC. 6
SINCLAIR OIL AND GAS COMPANY 6
SUMMIT RESOURCES, INC. 6
CIRQUE RESOURCES, LP 5
ABRAXAS PETROLEUM CORP. 4
G3 OPERATING, LLC 4
WESCO OPERATING, INC. 4
BALLANTYNE OIL, LLC 3
LUFF EXPLORATION COMPANY 3
OIL FOR AMERICA EXPLORATION, LLC 3
PENN VIRGINIA OIL & GAS, LP 3
RITCHIE EXPLORATION, INC. 3
URSA RESOURCES GROUP LLC 3
WARD-WILLISTON COMPANY 3
ARSENAL ENERGY USA INC. 2
FRAM OPERATING LLC 2
NADEL AND GUSSMAN ROCKIES, LLC 2
AMERADA HESS CORPORATION 1
CITATION OIL & GAS CORP. 1
DAKOTA MINERALS, LLC 1
FLATIRONS RESOURCES LLC 1
HALEK OPERATING ND LLC 1
LARIO OIL & GAS COMPANY 1
NOVUS ENERGY COMPANY 1
OXY USA INC. 1
PEAK GRASSLANDS, LLC 1
RED WILLOW GREAT PLAINS, LLC 1
REEDER OPERATING, LLC 1
RENEGADE PETROLEUM (NORTH DAKOTA) LTD. 1
RYAN EXPLORATION, INC. 1
SHD OIL & GAS, LLC 1
TIMBERLINE PRODUCTION COMPANY, LLC 1
ZARGON OIL (ND) INC. 1

Fifteen (15) More Permits Issued Today -- Bakken, USA

Fifteen new permits is about the most I have ever seen in one day in a very, very long time.

These permits include:

• Peak with a 2-well multi-pad, Antelope field, McKenzie County
• Hess with a 6-well multi-pad, SESW 8-157-94W, Tioga field, Mountrail County

Other companies with single well permits: Burlington Resources, XTO, Whiting, EOG, and Fidelity.

"We" are on track for 1,485 new permits this calendar year.

I'm Peddling As Fast As I Can

I apologize. My numbers at the top of the sidebar on the right are lagging and may be incorrect. (I don't even know what the price of oil is today.)

I am substituting as a teacher right now, full time, so I'm getting a bit behind. I generally post after normal business hours, so the numbers at the top can be incorrect.

However, I do want to thank "Rory" for sending me an update on the number of wells on the confidential list.

I do everything by hand (and my computer for posting); and you have no idea how long it takes me to count the wells on the confidential list, so I only do it periodically, maybe once a month. For the longest time, it has held steady at about 950 wells. Rori noted that it is now up to 1,061 and provided a list of operators and number of rigs in the comment section which I will link later if you can't find it now.

Anyway, for now: a) I will be behind, partly because things are moving very, very quickly in the Bakken; and, b) the numbers at the top of the sidebar on the right are frequently delayed, anyway.

New Record: 153 Rigs

Or was that already posted?

I am getting confused. No, I just checked: it was 151 rigs yesterday at 3:15 p.m. Pacific time.

At 5:00 a.m. this morning it was still 151.

Now someone alerted me that it was 153 rigs.

Incredible.

They have to get these wells drilled before EPA regulates fracking.

ObamaCare: An Update on McDonald's (Not a Bakken Story)

Breaking new on ObamaCare and McDonald's.

Peak Oil? Not a Bakken Story, But It Is An Oil Story

Forget the politics of this story. Just look at the numbers.

This city in southern California (within the Los Angeles metropolitan area) wants to drill for oil under 1,280 acres of land.

1,280 acres of land? That's two sections. That's one (1) spacing unit in the Parshall. Or one (1) spacing unit in the Sanish.

From this one spacing unit, the city of Whittier, California, estimates it could get anywhere from $7 million to $70 million per year in oil royalties.

How many wells are we talking about in this one spacing unit?

The Matrix project would include as many as 52 wells, pipelines and truck-loading facilities on land that had been set aside for sensitive species. Most drilling and pumping equipment would be placed in soundproof underground vaults, some of them less than 1,000 feet from homes and an elementary school for children with special needs.

"Our goal," said Matrix Vice President Mike McCaskey, "is to return the field to its level of production in 1991 — about 1,000 barrels a day — which could be achieved with a handful of wells. But if we are wildly successful, and the price of oil stays higher, we could see numbers as high as $70 million per year for the city."

At $1,000/day, at $70/barrel, we're talking about $25 million at the wellhead per year. 

52 wells in one spacing unit. 52 wells on one 1280-acre tract of land in the middle of Los Angeles County. "A handful of wells." His hands must be bigger than Allstate's.

Did I misread the article?

With regard to "...and an elementary school for children with special needs": in my role as a substitute public school teacher, I can tell you that special needs students and their parents have more to worry about than oil wells.

Biennial Budget and Budget Surplus

UPDATE: after posting the "story" below, I had a very nice comment sent in from "Hess342." That comment is posted. I assume there are better sites to see evolving tax situation in North Dakota, but this is probably as good a site as any to start: Tax Foundation.

It appears, at least superficially, the very little time I took to glance at it, the North Dakota legislators are moving at a measured pace in making decisions. I prefer that to making hasty decisions that "we" might regret later.

Everything suggests that the Bakken will continue to do well for quite some time but unforeseen geopolitical events could change things in a hurry.

So, just to make sure everyone understands: I prefer a measured, well-thought-out plan and based on limited information I can support the action of North Dakota legislators.

I still have significant concerns at the federal level.





Original Blog (with one editorial phrase removed) 
It's not easy finding the North Dakota biennial budget numbers. Oh, I suppose it is easy, but every time I go looking for it, it seems I have problems finding it. I wonder why?

Anyway, there was a story back in December/January 2009 that actually put all the necessary information into one sentence, the entire lead paragraph:

Paul Lucy, director of the Division of Economic Development and Finance, North Dakota Department of Commerce, says that after the last biennial budget of approximately $2.5 billion, North Dakota’s projected budget surplus was estimated at $1.2 to $1.3 billion. “That means we don’t need to increase revenues by increasing taxes,” he says.

If I read that correctly, North Dakota's biennial budget is approximately $2.5 billion. Biennial means two. The state will budget approximately about $2.5 billion over two years. 

Current projections are that the state will earn $1 billion / year from oil taxes going forward. Over two years, that would be $2 billion. ($1 billion/year x 2 years = $2 billion). 

Right now the estimated budget surplus is $1.2 to $1.3 billion. 

UPDATES:

October 22, 2010: North Dakota is in the best shape fiscally, as far as I know, and it isn't even in the top five tax-friendly states for retirees, according to Kiplinger. These are the top five tax-friendly states: Alaska, Wyoming, Michigan, Pennsylvania, and Colorado.  

October 11, 2010: State Coffers Swell, Townships Broke -- Headline

Record Rigs Reverberating in the Rockin' Bakken

The record number of active drilling rigs in North Dakota continues to reverberate in the local newspapers. This is the story in the Williston Herald. my hometown newspaper.

Several decades ago, I was editor of the Williston High School paper and worked closely with the Williston Herald which printed our school paper. That was one of the best things I ever did in life.

In other news, Bismarck Tribune, dateline, Cheyenne, Wyoming: "in need of water, oil industry taps city water hydrants."

Dickinson Press: "...estimated the state will generate more than $1 billion a year in production tax revenue going forward."

From that article:

However, the federal government has something in the works that, if approved, could paralyze North Dakota’s oil patch. Hydraulic fracturing, a high-pressure tactic used to extract oil from rock formations, is at the heart of developing the Bakken Formation. Lynn Helms, director of the state’s Department of Mineral Resources, said it has been proposed that the Environmental Protection Agency be put in charge of hydraulic fracturing.

I first started reporting on this one or two years ago. Some folks blew me off as being alarmist. I worked with government bureaucrats for thirty years and I knew that once a federal agency started putting together PowerPoint slides on any issue, it was just a matter of time before we felt major repercussions, some good, some bad. And some really, really bad. Look what the gulf moratorium has done to Louisiana.

In the Minot Daily News, Enbridge and Fort Berthold have resolved zoning issues. It was resolved the usual way. Cash. $275,000. Also here in the Bismack Tribune: the headline uses the word "offer." Other words come to mind.

The only North Dakota newspaper (on-line) where the record number of rigs was not easily found was the Fargo Forum. However, there is a headline story in the Fargo Forum on Bristol Palin, "Dancing With the Stars."  Wasn't there just an editorial in one of the eastern papers about the North Dakota East-West Divide? Smile.

And that's a wrap for the morning.

Slawson Wells As Reported by GeoResources

GeoResources reported on the following Slawson wells in their (GeoResources) most recent update:

• 18170, 1,517, Slawson, Cannonball Federal 1-27-34H,  Parshall
• 18416, 904, Slawson, Wizard 1-35H, Big Bend
• 18495, 1,045, Slawson, Voyager 2-28H, Van Hook
• 18590, 553, Slawson, Alamo 1-19-18H, Big Bend
• 18621, 753, Slawson, Diamondback 1-21H, Van Hook
• 18870, 1,371, Slawson, Moray Federal 1-10H, Van Hook
• 18871, 1,394, Slawson, Neptune 1-15H, Van Hook
• 18749, 921, Slawson, Osprey Federal 1-26-25-30H, Van Hook