On Friday, January 28, 2011, just as the Egyptian revolution was making news, USEG announced its highest initial production rate Bakken well to date in the Williston Basin:
- The Lloyd 34-3 #1H, USEG's highest initial production rate Bakken well to date, produced approximately 3,240 barrels of oil and 4.74 mmcf of natural gas or 4,030 boed during an early 24-hour initial flow back period. The well was completed with swell packers and 31 fracture stimulation stages.
- In addition, USEG participated in the following wells, and reported them in the same press release:
- Brad Olson 9-16 3H, Kalil Farms 14-23 1H, and MacMaster 11-2 1H should be completed in February.
- The Hovde 33-4 1H well, the 15th and final initial well under the drilling participation agreement with BEXP, is drilling and should be completed in March. The Hovde is a direct offset to the Lloyd well.
- These are all in the Rough Rider prospect (a BEXP designation).
Wells affected by the Zavanna-USEG agreement:
- Cheryl 14-23 1H, currently drilling
- Olson 8-5 1H, scheduled to drill after the Cheryl well
- Colfax 3-10 1H, following the Olson
- All three wells should be completed in the second quarter
- All long lateral
- Generally about 30 fracture stages
USEG's total in the Williston Basin: 22,400 net acres (includes Montana) with potential for 276 gross drilling locations (both the BEXP and the Zavanna partnership programs).
Great post - any thoughts on the Larsen family's management of the company and the inordinately high admin costs. Private Jet with pilot on the payroll?
ReplyDeleteI generally don't get into those details. I'm more interested in the overall productivity of the Bakken.
ReplyDeleteI started my site as strictly an educational site -- well, that is not quite accurate. I started the site to help me keep track of what was going on. I could have done it with a spreadsheet and a word document, but I found HTML was a better way to do it with all my traveling (iPad won't handle Excel or word documents, so my decision turned out to be the right one).
The blog can be private, for me only, or who I designate, but I thought why not try to educate folks about the oil industry in the area where I grew up.
I had no plans to even talk about investing when I started the blog.
However, it soon became apparent that one cannot easily separate investing from the Bakken. Much of what we learn about the Bakken is in press releases.
I have never given any advice regarding investing in a particular company (if I have, it must have been a long time ago, and I have forgotten).
I am mostly interested in how prolific the Bakken may or may not be; whether it lives up to its hype, and now the other formations that may be pay zones (Spearfish, Tyler, etc). It is also interesting to see the results in the legacy pay zones.
Occasionally, I will point out financial items, such as revenues (top line), expenses, margins, bottom line, etc.
I point out the earnings of the majors to help folks keep track of how oil, natural gas, and refining are doing in general. I also do it because I've been invested in the majors for decades, and it's "fun" to see how they are doing (and sometimes not so "fun").
With regard to investing, it is interesting that based on financial items and my two-year review of every Rocky Mountain Oil Journal I came up with two Bakken companies to invest in back in 2008. Two different people each had "horror" stories about how those two companies were run, and I did not invest in either of those companies. Unfortunately for me, it turned out that I missed investing in two of the best performing companies in the Bakken based on intangibles, rather than what I had sorted out for myself.
So, I don't delve too deeply in the investing aspect on this blog (as it is, I think I spend too much time on the investing side of the Bakken) but as noted above, it's hard to separate "the Bakken" from investing.
So, no, to your answer your question, I am generally not aware of and generally do not care about the personal lives of those running these companies. I am more interested in how the deals are done, how the wells are fracked, how the Bakken in general performs, etc.
More in a second comment that might be enlightening.
With regard to high administration costs, I posed that same concern with regard to another Bakken producer to another individual off-line (a personal note). It was pointed out that for that company, not USEG, that high administrative costs are often seen in the early years (it takes money to make money). Of course, high administrative costs can also mean problems.
ReplyDeleteWith regard to private jet, and pilot on the payroll, I doubt any of us can sort that out; I know I can't. That's what I love about public companies: that information is out there for us to evaluate.
I worked side-by-side with pilots during my 30 years in the Air Force, who talked a lot about careers as a pilot, both in the military and in civilian life. I don't know what salaries are now, but there was an excess of civilian pilots then, and I assume there is an excess of civilian pilots now. If you look at the starting wages of airline pilots for small regional airlines, I think you would be amazed at how little they are paid. My hunch is that the annual salary of one pilot is the least of an oil company's expenses, but I could be wrong. I usually am, but just checking, I see one could have bought USEG for $2 in summer of 2009 and sold it last spring for $7 (just a few months later) or could be holding it now for $6.
I never make recommendations about buying/selling shares in a specific company (again, if I have it must have been a long time ago, and I've forgotten); same with USEG -- I am not making a recommendation for USEG one way or the other. For the record I have never owned shares in USEG, but looking back to 2009, I wish I had, even with that pilot on payroll.
I apologize for so much on this. I guess I had a bit of spare time to write tonight.
And now, to watch the British comedies on public television.
ReplyDelete