Leases May Command Ten-Fold Increase in the Bonus Price -- Bakken, North Dakota, USA

Link here.

The scuttlebutt in the Bakken right now is that "most five-year leases that expire this year are likely to command a ten-fold increase in the bonus price when the land is again leased." -- John Andrist, Crosby, ND, current ND legislator, past publisher of the Divide County Journal, in the March 30, 2011, Journal.

Something tells me there is going to be a lot of drilling going on this summer. Or at least a lot of pads ... and backlogs.

Futures: WTI Oil Up Another Seventy Cents -- Solidly Over $107

I know futures have nothing to do with what happens the next trading day, but when I see WTI oil solidly above $107 (9:15 p.m EST, March 31, 2011) one has to wonder when folks will get excited enough to start writing their congressmen.

By the way, good news for the consumer; I did not know this: President Obama said that every $10 increase in the price of oil only increases price of gasoline by 25 cents/gallon. At $3.50/gallon in our neighborhood, we can still go up 20 more dollars before we hit $4.00/gallon. Pundits say that the  breaking point for the consumer is $4.00/gallon.

I guess that's why there is no change in domestic energy policy.

[Remember, if oil goes over $110 tomorrow, it's April Fool's Day -- probably just OPEC trying to play a joke on us.]

ObamaCare? North Dakota Blue Cross to Raise Premiums As Much as 17 Percent; Lower Than What BC Sought -- Nothing To Do With The Bakken

Link here. (Regional links break often; break early.)

Data points:

• To take effect May 1, 2011
• Won't affect employer groups: Individuals trying to go it alone are in a world of hurt
• Annual rate increases: 2.4 to16.9 percent (based partly on when ObamaCare took effect)
• Premium hikes were lower than those sought by the insurer (translation: wait until next year)

Five (5) New Permits -- Bakken, North Dakota, USA

Producers: Ward-Williston, Hunt, Denbury, Baytex, and Marathon.

Fields: Northwesthope (Bottineau County), Ross, Siverston, Bailey, and a wildcat.

The Baytex wildcat is in Divide County.

Permits for those five operators are few and far between. 

Three recent permits canceled:

• 20352, OXY USA, Reistad, Burke County
• 20175, Samson Resources, Tundra, Divide
• 20176, Samson Resources, Titan, Divide

Other than that, a very unexciting daily activity report.

For Investors: CLR -- A Momentum Stock

Another SeekingAlpha. com article. Continental Resources (CLR), the face of the Bakken, is seen as one of six momentum stocks getting increased attention.

Five of the six companies are oil and gas exploration and production.  There is nothing new written about CLR in that article that hasn't been reported here or elsewhere. 

Ms Chu: WTI Oil Will Be Back to $90 In a Month; Supplies Are Overflowing At Cushing; The President: We Need More US Production

Link here for story about American oil supply at Cushing, Oklahoma, overflowing.

The Bakken is robust at $40/barrel. -- Greg Hill, Hess, January 27, 2010, 4Q09 earnings conference call.

Link here for story about the President saying we need more US production to decrease oil imports. 

US President Barack Obama set a goal of reducing imports of foreign oil by one-third in a little more than a decade, and said that US production will need to rise significantly as a result. That includes adopting incentives to encourage federal leaseholders to begin producing more quickly from tracts they already hold, he said.

“Last year, American oil production reached its highest level since 2003, and for the first time in more than a decade, oil we imported accounted for less than half the liquid fuel we consumed,” he said in an address to students at Georgetown University. “To keep reducing that reliance on imports, my administration is encouraging offshore oil exploration and production—as long as it’s safe and responsible.” 

That and 75 cents will buy you a cup of coffee.

Supply shortfall? Mideast turmoil? Strength of the dollar? 

After following the Federal Reserve's lead for over a decade, the European Central Bank is poised to launch a series of interest rate hikes before the U.S. central bank for the first time in the ECB's history.

The change from the traditional pattern reflects the ECB's greater preoccupation with inflation pressures, as well as its higher level of discomfort with the emergency bond-buying programmes run by central banks.

But the "decoupling" of ECB and Fed policies is also the result of an historic shift in the global economy: the increased influence that Asia, rather than the United States, is having on the euro zone's economy.

US inflation to be serious within months: Wal-Mart's CEO. 

Inflation is "going to be serious," Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY's editorial board. "We're seeing cost increases starting to come through at a pretty rapid rate."

Price of gasoline has doubled under current administration.

Feeling pain at the pump? Gas prices have doubled since Mr. Obama took office. According to the GasBuddy gasoline price tracking web site, the price of a gallon of regular gas was around $1.79 when Mr. Obama took office. Today the national average is $3.58. The lowest average price in the continental United States is $3.31 in Tulsa Oklahoma, the highest is $4.14 in Santa Barbara, CA. Four-dollar-a-gallon gas has arrived on average throughout California, and a number of other states are headed in that direction.

For Investors Only: Motley Fool on BEXP

As noted before, BEXP shows up yet again on another site as a company of interest for investors.

• Earnings expectations this year: $1.14
• Earnings expectations next year: $1.93
• Recent price: $37.
• Next year's p/e: <20 based on recent price and earnings expectations.

By the way, this caught my eye from the same link:

While President Obama recently called on the energy industry to produce more oil and gas so as to decrease the amount of imports drastically, critics have been quick to cite a slow permitting process as a major problem. In addition, while he called out both the Marcellus and Eagle Ford shale plays as areas where he sees our future independence coming from, he was also critical of "fracking," the process of accessing the oil hidden in the rock by hydraulic pressure.

Brigham Exploration and other oil and gas exploration companies have benefited from the hydraulic fracturing process. The President has asked the Secretary of Energy to work with the industry to come up with new techniques on extracting oil and gas.

It should be noted that his Secretary of Energy is a nuclear physicist, and a huge proponent of nuclear power. To the best of my knowledge, fracking has been used for decades, highly regulated, closely watched by the media, and emits no harmful radiation. Nuclear power has been used for decades, is highly regulated and closely watched by the media.

GE's "Not Paying Any Federal Income Tax" This Year Gets Even Worse -- Nothing To Do With The Bakken

Link here.

SSN Provides IP and Update Re: Rodney -- Bakken, North Dakota, USA

Link here.

IP: 1,320.

Rigzone: The President's "New" Energy Policy -- March 30, 2011

Link here.

Speech given March 30, 2011.

March 31, 2011: Price of oil up $2.02, to $106.30, a recent high.

1,000 More Man-Camp Units -- Bakken, North Dakota, USA

People unfamiliar with "the Bakken" have no idea how critical the manpower shortage is.  Actually, people "unfamiliar with the Bakken" have no idea what the Bakken is, but I digress.

The lack of manpower comes partly from lack of places to house them. This is despite any number of man-camps already in place in the region as well as several new long-term motels in Williston.

The Williams County planning commission has approved four more large man-camps which would bring total number of new beds to over 1,000.

The proposal has to be approved by the Williams County Commission.

Black Gold Oilfield Services

• 374-bed facility; 94 units
• Off Highway 2, next to the ATCO Lodge Williston
• Dorm style rooms; not individual units
• Company is based in Fairbanks, Alaska

Target Logistics

• Two requests
• Expand company's current 248-bed facility for an additional 152 beds; total - 400 beds
• Six miles north of Williston
• Also a new facility, located next to the current facility
• Infrastructure is already in; would allow for 1,000-person capacity

Mary and Shane Moran; private individuals

• Mobile home park; "fixed" to ground, so taxed
• 151 units
• West side of Trenton, off Highway 1804

Six (6) New Permits -- Bakken, North Dakota, USA

Producers: Zenergy (3), Hess, Whiting, Continental Resources

Fields: Murphy Creek, North Tobacco Garden, Sanish, Siverston and two wildcats.

The two Zenergy wildcats will be on the same pad in Williams County, Lot 2 4-157N-100W.

It was a huge day for announcing wells that came off the confidential list (24) and two more wells that were completed.

The results of these wells (IPs) are reported elsewhere.

Al Jazeera: I Can't Make This Stuff Up -- Bakken, North Dakota, USA

I skimmed the article; will read it more closely later, but on first glance, pretty good reporting. I'm impressed.

I have to thank a reader for alerting me to this. I don't subscribe to Al Jazeera.  Maybe I will have to start. Smile.

Oasis With Another Great Williston-Area Well -- Bakken, North Dakota, USA

It appears Oasis has another great well, this time west of Williston, in the Squires oil field.

• 18799, Oasis, Stowers 5502 43-8H

Although no IP has been reported yet, February production was reported at 14,838 bbls of oil. There was significantly less oil produced in previous two months (January, 11 days, 2,600 bbls; December, 9 days, 1,500 bbls), so obviously the well was fracked sometime in January.

The well was spudded 5/12/10.

There was some difficulty with this well so it's hard to say when it was ready for fracking. There is a report in the well file that says work on the well was completed (ready for fracking) dated November 23, 2010.

Be that as it may, this looks like a good Oasis well, and it's in an area that seems to be very, very good. I get a kick out of this since this is exactly where I grew up and I always wondered if there was oil west of Williston.

Again, I have been very impressed with the success of BEXP, Whiting and Oasis.

Update: Nuclear Disaster in Japan -- Getting Worse -- Not a Bakken Story

On March 16, 2011, I wrote this:

I wonder when they do the post-mortem on the Japanese reactors, if it will be determined that the disaster was compounded and events ended the way they did when the decision was made early on to try saving the reactor rather than the nation.

Today it is being reported that the operator of the Japanese nuclear reactors damaged by the earthquake/tsunami has admitted that it appears that the reactors are "lost," and will never be used again. This suggests to me that the primary effort all these weeks has been to save the reactors. Yes, I know that is very simplistic thinking and "saving the reactors" and preventing a meltdown or release of radioactivity go hand-in-hand.

But most Americans (I assume), including me, don't understand the fine points (nor the coarse points, for that matter) of shutting down a reactor, but if it turns out that immediate action to "bury" the reactor vessels would have prevented this ongoing disaster, pundits will have a field day.

It's my understanding that radioactive water is now likely to reach the ocean.

I keep thinking of US Secretary of Energy Stephen Chu's comment that "coal is [his] worse nightmare."

This Is Worthy of A Headline? Oil Slips to Near $104 After Jump in Supply Oil Crude

Yup, that was the headline.

I'm sure the story will be gone by the end of the day, and the link broken.

In that group of early-morning Yahoo!Financials, these were the stories that did not get headlines:

• Civil war in Libya; arming the rebels; arming al-Qaeda
• Nuclear disaster worsens in Japan; evidence of meltdown
• Leaked (trial balloon) of President Obama's energy security speech tonight
• Federal budget crisis deadline looms
• GE paid no US federal income taxes in 2010

But at least we all know that oil slipped to "near" $104/barrel.

Investors Only -- Pickens' Picks -- One Surprise -- Nothing To Do With The Bakken

Updates

March 27, 2012: Wow, the news for A123 keeps getting worse. Now, they have a $55 million bill to fix faulty batteries.  Data points from the article:

• 2nd time in three months that A123 found a flaw in its automotive batteries, used in several cars, including hybrid BMWs and the all-electric Karma, manufactured in Finland; Fisker headquarters in Anaheim, CA
• company's stock peaked above $25/share in 2009; now below $1.50
• A123 already shaky after Fisker announced it would be building fewer Karmas; the loss of business there resulted in several hundred Michigan employees being laid off
• Fisker Automotive recent cut off from hundreds of millions in federal funding
• an A123 plan in Livonia, Michigan, received nearly $250 million grant from the government; has not turned a profit since its IPO in 2009
• A123 burning through cash, and probably will need to borrow more money to cover most recent bill

Original Post

At first I was not going to link this article. There were no surprises in the list compiled by an oilman.

Then I took a second look. Look what's missing. There are no -- nada, zip, zilch -- unless I missed them -- no renewable companies in this list. This list was compiled by one of the most vocal advocates for wind energy back in 2008, or whenever it was. No, nothing.

There's a difference between renewables as a significant energy source for the world's needs and the opportunity for a retail investor to make money investing in renewables. It is obvious that renewables will have minimal effect on meeting global energy needs in my investing lifetime, but that doesn't mean investing in small renewable growth companies can't be very rewarding.

So, it's surprising that there are no companies in the renewable energy business on the Pickens list.

One of his very few (only one?) non-oil-related company was A123, and that took a huge hit, down almost 20 percent so far.

A123 is in the electric battery business, particularly for hybrid vehicles. Recently their share price plunged (not my word; "plunged" was used by Motley Fool.com). Motley Fool suggested the plunge was due to financial reasons (dilutive stock offering, and other matters). With 100 million shares outstanding, another 18 million shares is a significant offering. But when oil companies in the Bakken announce a public offering, their share price appreciates as often as not. What Motley Fool failed to note was that simultaneously with the dilutive stock offering, news was coming out of Japan that the automobile industry is in a world of hurt due to rolling blackouts following loss of 30% of their electrical capacity. And correct me if I'm wrong, on top of that, the vast majority of hybrid vehicles are coming out of Japan. And as long as I'm piling on, Motley Fool also failed to note something else (see below).

Incidentally, the headquarters for A123 in Watertown, Massachusetts, is just down the street from where I am typing.

I don't particularly like linking "advertisements" for one's products, but the message in this MarketWatch story is worth the link:

The underlying thesis is that a country in which public unions are starting to strike at the state levels and the federal government is cutting services and welfare for the poor and elderly can no longer afford to subsidize many of these so-called alternative/green companies like A123. And while that thesis continues to play out, one of the other primary tenets behind our bet against A123 specifically is that this Company is nowhere near generating real cash flow and that the Company will have a very hard time surviving without a major dilution or debt raise — or a miracle — in its current iteration. Indeed, on the company’s most recent earnings call, they told analysts to expect their EBITDA loss would widen again this year.

The title of the link from "A123 Headlines" was: "Alternative Energy Is Doomed and How To Profit On the Collapse" and is in the Wall Street Journal.

It will be interesting to hear tomorrow morning whether the president reiterates that oil is yesterday's energy in tonight's energy "security" speech. As one listens to the speech (which I won't hear) keep in mind that his economic czar is the CEO of GE, a huge proponent of wind energy, but a company that has been rapidly diversifying into oil; his Secretary of the Interior formulated the "permitorium" in the Gulf; and his Secretary of Energy is a nuclear physicist who advocates nuclear energy.

Libya and Hess

Of the American companies affected by the "kinetic military action" in Libya, Hess may be the most affected.

One has to wonder how that will affect a) Hess activities in North Dakota; and, b) first quarter earnings.

This may become a bigger story before long.

A three-month comparison between Hess and EOG (share price appreciation) is very informative. In the past three months, EOG's share price has appreciated 30 percent; Hess' share price has appreciated 10 percent.

Hess wells in the Bakken continue to be mediocre at best, and January, 2011, weather will significantly affect production quotas for some Bakken companies.

Wow, Wow, Wow -- Another Natural Gas Story -- Hess

It is amazing what $105 oil and a nuclear disaster will do to fast track fossil fuel interest.

New Jersey fast tracks three new natural gas power plants.

New natural gas-fired power plants proposed by NRG Energy Inc, Hess Corp and Competitive Power Ventures moved closer to reality on Tuesday under New Jersey's long-term capacity pilot program, the New Jersey Board of Public Utilities said.

The three facilities, with capacity totaling 1,949 megawatts, were the first selected to obtain 15-year contracts under a controversial state law designed to encourage new power-plant construction by offering developers long-term, ratepayer-subsidized contracts.

Whatever happened to wind?

Number of Active Drilling Rigs Down Significantly -- Bakken, North Dakota, USA

See first comment in response to this posting: I may be completely off base on this posting. More than likely the decrease in rig count is purely seasonal. Road restrictions in the spring limit truck traffic on muddy roads. I will leave the post up, but it's probably completely wrong.  

********

A few weeks ago North Dakota had 174 active drilling rigs, an all-time high. Since then there has been a steady slide. Today, the number of active drilling rigs is down to 168.

It is not unusual for a fluctuation in rig count. But with better weather, higher oil prices, and smaller companies having added (or planned to have added) more rigs, it is surprising that the slide has occurred at all. One would have expected a rise, not a drop.

Most likely this is just random fluctuation and the number of active rigs will go up again any day now.

It's possible some rigs have moved across the border in to Montana. It's possible that some companies are looking at the Niobrara in Colorado and Wyoming, and even the Eagle Ford in south Texas.

Drilling these wells is not inexpensive. The wells get even more expensive when the price of oil goes up, and the price of wells get more expensive when there is more competition for support services, especially fracking. Add to this that recent wells have had lower IPs, which means that it will take longer to pay off these wells. Operators depend on cash flow to fund future operations.

Is the decline in the number of drilling rigs a canary in the coal mine? Are some companies having a cash flow problem funding their announced CAPEX? Or is it simply random fluctuation? If it's the former we could see additional merger activity, or even buyouts. Publicly traded companies may issue more shares to raise cash; privately held companies may sell out.

*********

See first comment below: I may be completely off base on this posting. More than likely it's purely seasonal. Road restrictions in the spring limit truck traffic on muddy roads. I will leave the post up, but it's probably completely wrong.

How Low Will Price of Oil Go? Brent Won't Go Below $83/Barrel

Due to factors discussed before and which I won't go into again (at least for now), Saudi Arabia has the "power" to raise the global price of oil, but it no longer has the clout it once did to lower the price of oil.

That is a shift from the 1980s when Saudi Arabia had enough oil that it could affect the price of oil going up or coming down. Now, Saudi Arabia can only affect the supply of oil to result in increased price.


It turns out that Saudi Arabia's budget requires that oil stay at least above $83. This is what Saudi feels it requires to distribute enough money across the kingdom to prevent unrest being seen in much of the Mideast.

Many of OPEC’s biggest producers are using the price gains to increase public spending, partly to guard against popular unrest. Saudi Arabia announced a multiyear spending package of $129bn and is expected to spend about $35bn in 2011.

This largesse means the country now needs an oil price of $83 per barrel in order to balance its national budget this year. “The more they earn, the more they tend to spend. So the oil price they need is ratcheted up,” said Leonidas Drollas, chief economist at the Centre for Global Energy Studies in London.

$83. That's an important number to remember. Some time ago, EOG said the Bakken was "robust" at $40/bbl of oil  Based on the current delta, Brent $83 oil translates into about WTI $73 oil.

Investors Only: Yet One More Article Touting Natural Gas -- Wall Street Journal

Analyst: there is not one natural gas exploration and production company that I would recommend that investors stay away from.

That about sums it up.

Flashback: The Bakken Boom Began With Vertical Wells in Elm Coulee (Montana)

This article was published in 2007. It provides a bit of perspective to the current Bakken boom.

The first commercial Bakken well at Elm Coulee was completed in 1981 by Coastal Oil and Gas. Early wells were vertical completions and were often a fall-back position for an unsuccessful deeper well-test. After stimulation, vertical Bakken wells have historically exhibited a respectable initial production, but with high initial declines followed by long-term, low productivity. A typical economic vertical well would initially produce at more than 100 b/d of oil, but would soon decline to approximately 15 b/d to 20 b/d of oil.

Production thereafter exhibited a minimal decline and due to the low production rates, oil price was the major factor in economic operations. Gas/oil ratios were approximately 750 Mcf/bbl, however, no sales outlet was available, and casing-head gas was used on the lease. Superior productivity was dependent upon intersecting local fractures to double or triple the IP and the corresponding long-term productivity rates. The estimated ultimate recovery (EUR) of the typical economic vertical Bakken completion is estimated at 130,000 bbl of oil. Assuming a 30-year project life, however, that results in unfavorable project economics.

The first horizontal, Upper Bakken wells were drilled in Richland County in 1989 and 1990, but few were successful. The EUR rates for these horizontal wells were estimated at 21,000 boe. In 2000, Lyco Energy initiated the current horizontal activity by drilling the Burning Tree State 36-2H using an improved completion technique. The Lyco well’s IP was 196 b/d of oil, 85 Mcf/d of gas and 7 b/d of water, and the EUR is currently estimated at more than 300,000 bbl of oil. 

Although not addressed in this article, early on it was felt by some that horizontal drilling would obviate the need for fracture stimulation. How things have changed!

Enjoy!

Just When I Think I'm Going To Run Out Of Material, Rigzone Comes Through

What a great article to cross my computer screen a few minutes ago! A must read.

Enjoy.

It will be linked under "Publications" later.

The first paragraph:

Maybe you've seen the advertisements from various financial newsletters touting the investment potential of companies involved in developing the Bakken oil shale formation that spreads across North Dakota and Montana and into the neighboring Canadian provinces of Saskatchewan and Manitoba. The claims, which several years ago appeared outrageous, of the Bakken containing eight times the amount of oil as in Saudi Arabia or 21-times the reserves held by Kuwait seem less than fantasy today. 

"World-Class" Ethane Cracker in Louisiana? -- Not a Bakken Story

This is great news for Louisiana, hit hard by the moratorium and now the permitorium.

Chevron Phillips Chemical Company is mulling a "world-class" ethane cracker in Louisiana.

I was going to write what I really thought about this story but I was not ready to absorb all the arrows that would have been shot my way, so I will leave it at that.

I wish the Louisiana folks the best; they certainly deserve a better hand than they've been dealt.

******

On Luck, or Being Dealt a Good (or Bad) Hand

I am re-reading Tom Shippey's J.R.R.Tolkien: Author of the Century for the third time. In this book, Shippey discusses The Hobbit and The Lord of the Rings, as well as other Tolkien works. Shippey has a great section on "luck"and how Tolkien approached it:

As with the ironies of interlace, the logic of luck (or chance, or fate, or fortune, or accident, or even wyrd) seems in Tolkien's view to be this: there is no knowing how events will turn out, and it is certainly never a good idea for anyone to give up trying, whether out of despair or out of a passive confidence that some external power will intervene. 

It seems as if that line could have been written with New Orleans in mind.

IPAA Conference -- New York -- April, 2011

There are about 90 presenters at the IPAA conference next month. You can see the full list here (PDF).

The list is interesting. The following are in the Bakken, or have recently been in the Bakken (or in some cases simply mentioned at this blog).

• Rosetta Resources (Montana/Alberta Bakken)
• Denbury Resources
• Abraxas Petroleum
• Concho Resources
• Whiting
• Chesapeake (SSN/Niobrara)
• Samson Oil and Gas
• MDU Resources Group
• Oasis Petroleum
• US Energy
• SM Energy
• Petrohawk Energy
• LINN Energy
• Triangle Petroleum
• GeoResources
• Northern Oil and Gas
• Baytex Energy
• Kodiak Oil and Gas
• BEXP
• QEP

Six (6) New Permits -- Bakken, North Dakota, USA

Producers: Hess (2), Sinclair, Whiting, Ward-Williston, and Continental Resources.

Fields: Big Butte, Sanish, Park, North Westhope, and Antelope.

The two Hess wells will be on the same pad in Big Butte oil field.

There was no other information (no completed producing wells, for example) in today's daily activity report.

GE Continues to Diversify Into Energy -- Not a Bakken Story

I first posted comments about GE's rapid diversification into oil and gas some weeks ago. That observation has now become the lede in stories about GE investments:

General Electric Co. said Tuesday it will spend $3.2 billion for a controlling stake in French equipment developer Converteam as it continues to position itself as a major player in what's expected to be a 20-year boom in oil and natural gas demand.

Converteam, which serves a variety of industries including oil and gas companies, is the latest of $11 billion in acquisitions by GE's energy business. GE also has acquired Dresser Inc., Wellstream Holdings, Lineage Power Holdings and Well Support in the past six months.

The article goes on to describe GE's bullishness on natural gas.

******

I post about GE's diversification into energy for a couple of reasons. First, it supports my view that natural gas will eventually be a big story for investors. Second, I can't think of anyone who would have more insight into future government policies regarding energy than the president's economic czar. The president's economic czar is GE's CEO. Connecting the dots could be very profitable.

ATT - T-Mobile Deal -- Not a Bakken Story

One can see where this (the ATT/T-Mobile deal) is going.

Both ATT and VZ are up in the stock market. VZ hit a 52-week high today and ATT came within 2 cents of a 52-week high.

During the process, T-Mobile goes into a holding pattern. Both ATT and VZ should benefit during the process.

If the deal does not go through, T-Mobile becomes a niche player, and gradually disappears from the radar scope altogether. Both ATT and VZ win. They will split up the T-Mobile subscribers over time.

If the deal goes through, that allows VZ an opportunity to buy another telecom.

This is not an investment site. I just enjoy following the market, and I have interests outside the Bakken. Smile.

Cottonwood Oil Field Updated -- Bakken, North Dakota, USA

Cottonwood Oil Field has always fascinated me. It was "discovered" by Fidelity (MDU) back in the 2008 time frame.

Fidelity never had any great wells in the Cottonwood and eventually sold their acreage in that field and others to Oasis. It appears that that deal was the beginning of Oasis as a major player in the Bakken.

I just updated the results of all the wells in the Cottonwood oil field.

Since the last update, there has been minimal activity. There are no rigs on site in the Cottonwood (according to the GIS map server) although one well is being completed.

The wells spudded/tested in 2008/2009 have been uniformly unremarkable, with one or two exceptions, but even the exceptions don't live up to Bakken expectations. Some wells are clearly stripper wells, and it appears some wells are kept going just to hold the lease.

The wells spudded/tested in 2010 are significantly better but still unremarkable. Rule of thumb for the Bakken is that the well is on its way to being paid for (at the well head) when it reaches 100,000 bbls of production. None of the wells in the Cottonwood have reached the 100,000-barrel threshhold. The best is about 70,000 bbls.

Overall, the Cottonwood does not yet impress me. 

Thompson Lake Field Update -- Bakken, North Dakota, USA

Thompson Lake oil field is a very small field in the Williston Basin. It is only seventeen (17) sections. It is immediately east of the Cottonwood oil field, fairly north and east as far as the Bakken goes.  It is north of Kittleson Slough and Clear Water oil fields.

Thompson Lake caught my interest on March 28, 2011, when EOG was issued four permits in section 26 of T159N-R91W.

As of today, there are three producing wells in Thompson Lake:

• 17205, 197, EOG, Vanville 1-14H, spudded 9/08; tested 11/08; 60K; short lateral
• 18862, 164, EOG, Vanville 6-25H, spudded 6/10; tested 9/10; 22K; long lateral
• 18483, 110, Petro Harvester, LLC, Kallberg 1H, spudded 12/09; tested 5/10; 23K

Permits pending:

• 20076, EOG, Vanville 15-1102H
• 20662, EOG, Vanville 22-2623H on same pad as 20663, long lateral runs north
• 20663, EOG, Vanville 21-2635H on same pad as 20662, long lateral runs south
• 20664, EOG, Vanville 24-2623H, on same pad as 20665, long lateral runs north
• 20665, EOG, Vanville 23-2635H, on same pad as 20664, long lateral runs south

Comment:
This is another example where initial production numbers don't look all that good, but yet the operator continues to put in more wells. This speaks volumes. Several things I take away from this:

• A reminder that there are "no" dry holes in the Bakken; 
• Even mediocre wells in the Bakken will eventually pay for themselves;
• For EOG, the Bakken was "robust" at $40; oil at $104 looks sustainable;
• Holding leases by production is undervalued; once production established, leases are held for "eternity" -- expectations that Bakken wells will produce 30 years
• Regardless of initial production, analysts still predict EURs of 400,000 for even the most mediocre Bakken wells (at $50/bbl --> $20 million; at $100/bbl --> $40 million);
• Depletion allowances, depreciation amortization, tax considerations, et al, need to be factored in; and,
• There's always a chance for a gusher

COP Ramps Up CAPEX in North America -- Bakken, North Dakota, USA

Investopedia.com link here.

Nice comprehensive update.

With regard to the Bakken:

COP  has 460,000 net acres under lease prospective for the Bakken and plans to drill more wells during the year. Continental Resources is another major operator active in the Bakken; the company drilled 222 gross wells in 2011 on its North Dakota acreage.

If that figure (460,00) is accurate (and I have no reason to doubt it), it means the analyst's estimate of 251,000 on December 31, 2010, was off by quite a bit. I will update the "FAQs" data to reflect this new estimate.

Coates RV: Grand Opening in Williston

Link here. (Regional links break often and break early.)

Coates RV, a Minnesota-based RV, camper, motorhome, travel trailer and cabin dealer, has opened up shop in Williston.

According to the story Coates RV has a new product for oil field workers: an all-season living unit. Apparently it's the first of its kind in the nation.

This is the first time Coates RV has opened a location outside of its home in Minnesota. That's how big the Bakken in. 

1Q11 Earnings Central

News, 1Q11 Earnings, and 2010 Annual Reports at this page.  Scroll down for Earnings and Annual Reports.  For those companies who have not yet published annual reports, the information has been provided to the SEC and is at this bottom of this page.

NEWS

March 28, 2011: First hint that there may be some problems in the oil patch when 1Q11 earnings are reported. HAL is already reporting that weather-related issues and unrest in the Mideast will affect earnings.  Meanwhile rest of industry is very bullish on news that Saudi Arabia may ramp up production significantly, going from 90 rigs to 118.

1Q11 -- EARNINGS -- CONFERENCE CALLS

GMX Resources: reports record production 1Q11; IPAA presentation, April, 2011; 

HAL: April 18; despite the warning above, HAL reported a huge profit in 1Q11; conference call;

SLB: April 21; earnings report here; misses expectations; income up 40%; revenue up 55%; transcript;
NFX: April 21; earnings report here; mixed results; transcript here;

WLL: April 27; IPAA presentation, April, 2011; misses by a nickel;
BHI: April 27; beats expectations, 87 vs 78 cents;
OXY: April 27; earnings up 46%; misses by 5 cents;
COP: April 27; misses on production; earnings up 43%;
HES: April 27; net income up 73%;
QEP: April 27; IPAA presentation, April, 2011;1Q11 earnings okay; raises guidance;

NBL: April 28; beats estimates by 21 cents, but yoy quite a difference;
LINE: April 28; IPAA presentation, April, 2011; misses by 3 cents; acquires more Bakken acreage;
XOM: April 28; beats expectations (surprises analysts); best quarter since 3Q08;
HP: April 28; misses by 4 cents; 

EEP: April 29; earnings and split 2-1;
CVX: April 29; profit up 36%;

SM: May 2; IPAA presentation, April, 2011; mixed but beat expectations when adjusted;
CHK: May 2, beats estimates by 5 cents; 

BEXP: May 3; IPAA presentation, April, 2011; earnings report; 1Q11 Conference Call;
MDU: May 3; great report considering how much weather impacted the quarter; transcript;

CLR: May 4; production and earnings release; transcript;
ENB: May 4; split 2-1, April 29;

DBLE: May 5; IPAA presentation, April, 2011;
EOG: May 5; earnings release; presentation;
WMB: May 5 (company to split; effective May 25 if I remember correctly)
DNR: May 5; IPAA presentation, April, 2011; earnings, lots of expenses this quarter; transcript;

RIG: May 6; earnings, not great; permitorium in Gulf affected results;

EPD: May 10
NOG: May 10; earnings miss;
GMXR: May 10; earnings miss; 

KOG: TBA; IPAA presentation, April, 2011;
OAS: May 11; IPAA presentation, April, 2011; transcript
VOG: TBA
GEOI: TBA, IPAA presentation, April, 2011;
USEG: TBA; IPAA presentation, April, 2011; 
SSN: TBA; IPAA presentation, April, 2011;
AXAS: May 9; IPAA presentation, April, 2011; 
ERF: TBA: older presentation, waiting for IPAA presentation
WHX: June 14

ANNUAL REPORTS -- 2010

BHI /  COP  / DBLE / DNR / EEP: click on annual report
 
ENB  / EOG / EPD
 
HAL / HES / MDU
 
NBL / NFX / OAS / QEP /

SM  / WLL -- need to click on "Annual Report" when you get there

XOM 

SEC INFORMATION IN LIEU OF ANNUAL REPORTS (YET TO BE PUBLISHED)

BEXP / CLR: annual report / CRED: Annual Report /  CVX: Report 10-K

ERF: 2010 Annual Summary / GEOI /

KMI / KOG: click on Report 10-K

NOG: Report 10-K  / PBR /  SSN: click on annual report / TPLM /

TRGL: 10-K / WMB: type in Annual Reports

Eight (8) New Permits -- North Dakota, USA

Producers: EOG (4), SM (2), Sinclair, and Zenergy.

Fields: Elk, Thompson Lake, Glass Bluff, Sanish, and Ambrose.

The four EOG wells will be in the Thompson Lake field: two wells on two separate pads in the same section.

Sinclair has the Sanish permit.

Here Come the Windfall Profits Taxes on Oil Industry -- Is 81 Percent Enough?

It's starting in Great Britain.

The British government’s proposed new tax on the country’s oil and gas industry has come under heavy criticism from a leading trade association, as well as opposition politicians.

“The industry is shocked to now be hit by a tax increase that raises the tax rate to at least 62%, with some of the most mature and therefore vulnerable fields now paying up to 81%,” said Malcolm Webb, chief executive of Oil & Gas UK.

The Norwegians (Statoil) may pull out if the UK tax goes through, taking 40,000 jobs with them. Statoil just found a huge field off Norway and has plenty of work to do without UK's North Sea.

SeekingAlpha Response to Recent "Bear Raid" on NOG

Seeking Alpha.com response here.

Comments later.

Reminder: this is where I track the recent "bear raid" on NOG.

Actually, I've decided no additional comments. Folks with much better understanding of the Bakken and much better financial training have been providing comments pro and con throughout the day, and I've added the links.

I believe I have all the links up to date.

NOG Provides Operational Update and Guidance

This post is still being updated.

Reminder: this is where I track the recent "bear raid" on NOG. 

Lots of information here. I will come back later and clean up the post and add important data points.

Data Points of Recent Press Release

Data points from a very long and a very informative operational update and response to recent "bear raid."

• In first calendar quarter of 2011, acquired 11,100 net acres; average cost -- $1,540/net acre (remember folks; some recent core acreage has gone for $7,000 to $12,000/acre.) 
• NOG says their new acreage is in core Bakken
• Assuming six wells/1280-acre spacing unit -- huge
• Now plans to spud 40 wells in 2011; up from original plans to spud 36 -- again, huge
• Increase in number of wells due to fact more drilling rigs in North Dakota; drilling program accelerating across the board
• NOG partners with others: NOG has had 100% success rate in drilling
• Slawson is one of NOG's major partners
• Slawson recently contracted 1.5 dedicated fracking crews

Comments:

NOG says they are increasing the number of wells that they will spud in 2011 from 36 to 40. This is somewhat misleading. NOG does not spud anything. They have a working interest in wells. They partner with operators. The operators spud the wells. What matters is a) how much money NOG invests in the Bakken this year; and, b) the return on their investment.

NOG will report some huge wells this year. But if their working interest in a huge well is but one percent and their working interest on a poor well is 30 percent, that is not good.

The Press Release (portions of it)

In first calendar quarter of 2011, NOG has acquired another 11,100 net mineral acres at an average cost of $1,540/net acre in its core Bakken and Three Forks prospect areasof North Dakota and Montana.

Northern Oil controls 151,327 net acres targeting the Bakken and Three Forks prospects as of March 28, 2011.  This acreage position will allow Northern Oil to participate in approximately 709 net wells assuming six wells per 1280-acre spacing unit.

The press release continues (same link as above):

Due to accelerating drilling activity and key acreage acquisitions, Northern Oil has spud approximately 9.8 net wells in the first quarter of 2011 year-to-date and now expects to spud approximately 40 net wells during 2011, which represents an increase from previous guidance of 36 net wells.

As of March 28, 2011, Northern Oil has participated with a working interest in 343 successful Bakken or Three Forks discoveries.  Northern Oil is currently participating in 141 gross (14.17 net) additional Bakken or Three Forks wells drilling, awaiting completion or completing.  Northern Oil maintains a 100% success rate in the Bakken and Three Forks play.

According to the North Dakota Industrial Commission, approximately 173 rigs are currently drilling in the North Dakota Bakken and Three Forks play, representing a new record.  The significant rig increase over the past year is driving the continued acceleration of the development of Northern Oil's core acreage position.

Slawson Exploration, Northern Oil's operating partner in the Windsor prospect in southern Mountrail County, North Dakota, has commenced the second well in each spacing unit of that prospect.

Downspacing in the Windsor prospect to six wells per spacing unit has been approved by the North Dakota Industrial Commission.  Slawson Exploration has recently contracted 1.5 dedicated frac crews, which we expect will materially shorten the spud-to-sales timeline in this highly productive prospect.

 Northern Oil is Slawson's largest working interest partner in the prospect.

Depletion and Depreciation Amortization

In light of recent comment about NOG's accounting of depletion and depreciation amortization, this is what NOG had to say:

For the fiscal year ending December 31, 2010, Northern Oil's depletion, depreciation, amortization and accretion expense ("DD&A") on a per BOE basis was $19.22.  For comparison purposes, based on information provided in their respective annual reports on Form 10-K for the fiscal year ending December 31, 2010, Kodiak Oil and Gas reported a DD&A expense of approximately $18 per BOE, Oasis Petroleum reported a DD&A expense of $19.91 per BOE and Brigham Exploration's DD&A expense calculates to approximately $20.47 per BOE.  As such, Northern Oil's 2010 DD&A expense was in the mid-range of its peer group in the Bakken and Three Forks play.  Northern Oil anticipates its DD&A expense for the fiscal year 2011 to remain in-line with this peer group.  

Tracker Has Another Nice Well -- Cedar Creek -- Bakken, North Dakota, USA

Three wells of interest that came off the confidential list today.

A nice Tracker well:

• 19470, 1,274, Tracker Resource Development II, Victor Pohribnak 16-1H,  Cedar Coulee, Bakken, 32K in one month

Another lackluster Hess well:

• 19098, 193 , Hess, AV-Iverson-162-94-2314H-1, Wildcat, Bakken; north of Tioga; fairly inactive area

A fairly good XTO well:

• 19128, 937, XTO, Mondak Federal 24X-12, Mondak, Bakken; no oil produced first two months (weather?)

Even the Government Recognizes the "Lost Decade"

Earlier today I posted excerpts from a great commentary posted by Bruce McQuain at Hot Air.com regarding the "Lost Decade" as I call it.

The individual who alerted me to the article was kind enough to send me some interesting links associated with that commentary. The links are here, but they will be posted at "Data Links" or "Publications" also.

Here are the links:

• This one is most important. Remember, folks, this is our own government which reminds us how huge the energy resources are in the United States, click here or below:
• http://epw.senate.gov/public/index.cfm?FuseAction=Files.view&FileStore_id=04212e22-c1b3-41f2-b0ba-0da5eaead952
• Unless I missed it, the report is undated, but references 2009 data

The following two links have been posted at this site for a very long time. 

• The original Leigh Price, unpublished, article that recognized the potential of the Bakken.
• The much-quoted, seldom-read USGS 2008 survey of the Bakken.

The West Takes the Lead in Natural Gas Conversion

I don't know if the headline is accurate or just a perception based on the selected media that I read on a daily basis. But what I read suggests to me the western states are leading the nation in natural gas conversion. Today there is a report that the Wyoming legislature is taking baby steps to convert state vehicular fleet to natural gas. A spokesman said they wanted to mirror what the state of Utah was doing.

On top of this, UPS reported that it was setting up a natural gas corridor from Los Angeles to Las Vegas and into Salt Lake City for its brown trucks.

Recently XOM touted its changing outlook on natural gas. Of the majors, XOM has always seemed the most strategically focused.

US Energy Policy: Most Incoherent in the World

Updates

July 12, 2015: two comments regarding methane hydrates -- 1) they won't be a big deal in my lifetime; and, 2) this is just one more example why the world isn't going to run out of fossil fuel any time soon (see original post).

Today, OilPrice suggests Japan could move to methane hydrates.

Before the [nuclear] incident, Japan’s 54 nuclear reactors provided more than 30 percent of the country’s electricity requirement. Without nuclear energy, Japan’s domestic energy resources could only meet less than 9 percent of the nation’s energy requirement. 2013 saw the country increase it’s spending on fossil fuel imports by 60 percent when compared to 2010.

Currently, Japan is one of the largest net importers of crude oil, the second largest importer of coal and the largest global importer of liquefied natural gas (LNG). Since Japan imports almost its all of its fossil fuel requirement, it has lost its trade surplus and has become a nation with a rising trade deficit.

Methane hydrates are crystalline ice that is found in lower sediments of deep sea regions and polar regions that have methane gas trapped within them. When melted, methane hydrates turn into water and methane. Methane hydrates offer a truly massive reservoir of natural gas trapped in ice.

In fact, the deposits of this “burnable ice” are so large, ( Japan has around 746 locations in its coastal waters) they could provide Japan with enough natural gas for the next 100 years at least. And there could be much more methane hydrate deposits in the marine sediments off the Pacific Coast of the country. These are big numbers. Japan has also participated in an international research team that successfully produced methane in Canada’s arctic region.

Original Post

Over the weekend, Bruce McQuain posted a great article at HotAir.com:

The United States has the most energy resources in the world AND the most incoherent energy policy

McQuain used one word that caught my eye, the same word I often use on this site. But more on that later. 

McQuain starts with this:

According to a new report requested and paid for by Congress, America's combined energy resources (principally coal, natural gas, methane, and oil) far exceed --- ECLIPSE -- the energy resources of Saudi Arabia (3rd), China (4th) and Canada (6th).

This does not include America's shale oil deposits (such as the Bakken).

This does not include America's potentially astronomic impact of methane hydrates

Data points (some numbers rounded)

Coal:

• Well known to all: US has recoverable coal reserves of 260 billion tons
• Using 1 billion tons/year, US reserves will last centuries
• The US has 30% of the world's coal

Natural gas:

• At current rates of consumption, US has 100 years of natural gas reserves, based on conservative estimates
• Congressional Research Service upped its 2006 estimate of America's enormous natural gas deposits by 25 percent
• This estimate was conservative to begin with and does not include recent shale boom underway in the US

Methane hydrates (natural gas):

• Government estimates of methane hydrates -- one word -- "immense" -- possibly exceeding the combined energy content of all other known fossil fuels
• If just 3 percent of this resource can be commercialized, that level of supply would the US more than 400 years

Oil:

• Congressional Research Services: 163 billion barrels (vs mainstream media's repeated estimate of 28 billion barrels of proven reserves)
• Oft repeated US provable oil reserves represents only 20 percent of total US recoverable oil
• True estimate of US oil is enough to maintain America's current rates of production and replace imports from the Persian Gulf for more than 50 years
• That last statement may be a bit misleading: the US is importing less and less oil from the Midease; US is importing oil from Canada, Latin America, and western Africa

McQuain concludes his article with:

We have no coherent energy plan from this administration.  Instead it seems to have gone to war with the oil industry and is doing everything it can to slow its ability to find and exploit these resources.  19,000 jobs and 1.1 billion in earnings have been lost since the imposition of the administration’s moratorium.  Both former Presidents Bush and Clinton have spoken out against the delays.   And the administration remains in contempt of a court order which ordered them to speed up the permitting process.  As a result the EIA has estimated a loss of 74,000 barrels a day of production due to the moratorium this year.

Oh, yes, the word that caught my eye: myth.

I have long been a fan of JRR Tolkien's concept of myth and quote him often. That concept is my guiding light when it comes to energy. This is an expert's opinion of the US energy policy and how Bruce McQuain concluded his post:

Meanwhile US energy policy persists in pursuing the myth that renewables are the economically viable future, with fossil fuels already, as the president said in January, “yesterday’s energy." With 85 percent of global energy set to come from fossil fuels till at least 2035 no matter what wishful thinkers may prefer, current US energy policy – much like European – is pure political pantomime.

From my perspective: America's energy industry has been Balkanized by special interests, government bureaucracy, and environmental demagoguery. We can't even put in transmission lines for wind turbines in west Texas to get the electricity to urban centers.

Investors Only: The Quarter to Date -- Chevron Leads the Dow

Just reported on CNBC: for the quarter to date (first calendar quarter, 2011) -- Chevron (CVX) is the best performing stock on the Dow.

Up 17%. Feels like a growth company. Just the other day I posted this was going to be a huge quarter for XOM.

Who would have thought?

Overview of Activity in the Williston Oil Basin -- Spring, 2011 -- Bakken, North Dakota, USA -- March 27, 2011

It is extremely difficult to keep track of all the various entities in the Bakken and their plans/strategies but here's a start. This is a work in progress and subject to updates between now and first day of summer. I placed the oil E&P into various categories to help "newbies" better understand all the oil companies operating in the Williston Basin. The tiers are subjective and pretty much based on a) net acreage; b) perceived effectiveness; and, c) frequency one reads about them in the general press with regard to the Bakken.

Major oil exploration and production operators: 

• CLR: the "face" of the Bakken; the most number of rigs by far; the most acreage; goal is to triple the size of their company in five years; operates throughout the Bakken; completed 105 gross wells in 2010 --> more than 10% of all wells drilled; CLR knows the geology of the Bakken probably better than anyone; first in North Dakota Bakken to advocate multi-well pads (Eco-Pads)
• WLL: tied for third (with EOG) for most acreage; Sanish oil field is WLL's cash cow; setting up operations around Belfield (North Dakota) for Three Forks "pinch out"; perhaps second best IPs (second only to BEXP), particularly great IPs in the Sanish
• BEXP: moved from second tier to first tier based on outstanding IPs and very good wells; now at the top of many lists published by analysts following the Bakken; announced "SmartPad" multi-well pad concept in 2011
• HES: second most net acreage (after CLR); lackluster IPs and wells in general (at least that's my impression; not statistically verified); six wells on same pad (or abutting pads); added significant addition to Bakken portfolio when it bought American Oil and Gas (AEZ)
• EOG: third in net acreage (tied with WLL); started off fast in the Parshall oil field, but seems to have lost their touch (again, that's my impression; not statistically verified);

Second tier exploration and production operators:

• XOM: in the Bakken through their subsidiary XTO in southwest area of the reservation
• COP: in the Bakken through their subsidiary BR in various areas of the Bakken; was the largest oil producer in North Dakota leading up to the current boom; has since dropped back
• OXY USA (Occidental): entered North Dakota Bakken by acquiring Anschutz Bakken acreage in 2010 
• NFX (Newfield): fair amount of acreage; generally nice wells
• MRO: fair amount of acreage, but wells mediocre in general
• DNR: see below
• OAS: seemingly came out of nowhere to become a huge player in the Bakken; moved to new level when they bought Fidelity (MDU) acreage back in 2009 time frame
• ERF: second tier but don't hear much about them

Third tier exploration and production:

• KOG: hard to say whether should be in second tier; predominantly in southwest area of the reservation; partnering with XOM, others;
• WMB: acquires 7 percent of mineral rights in the reservation in late 2010; haven't heard much from them yet

Fourth tier exploration and production:

• SSN (Samson Oil and Gas): no rigs; acreage only; partners with operators; currently concentrating its activity in Stockyard Creek,
• GEOI: often partners with Slawson (see below)
• QEP: small player in the Bakken based on acreage
• SM: small player in the Bakken based on acreage

Oil Exploration and Production, Others Not Mentioned Above

• NOG: unique business plan; money and acreage only for working interest in wells; recent controversy;
• Slawson: private company; very, very good wells
• Fidelity: subsidiary of MDU

Fracking Technology

• Packers Plus Energy Services: 60-Stage Frac Technology
  

Tertiary Recovery / Enhanced Oil Recovery (EOR)

• DNR: EOR not yet common in North Dakota, but when/if CO2 injection works, Denbury will be the leader; became major oil exploration and production company when it acquired Encore a year or so ago
• Crescent Point: major EOR (waterflooding) player; based in Calgary, Alberta, Canada

Pipelines

• Enbridge, oil: major pipeline operator in the Bakken; will double takeaway capacity in 2011-2012 time frame; announced in 2011 that it would ship only Bakken light, sweet oil in its system
• ONEOK, NGL: a 600-mile pipeline from ND Bakken to ONEOK's Overland Pass  Pipeline which connects southern Wyoming to Conway, Kansas;$500-million project
• Range Energy (Sugar Land, TX): COLT extender

Spearfish Formation in the Williston Basin

• Legacy Oil and Gas: Canadian company with connections to Surge Energy; Calgary-based
• Surge Energy: recently acquired Ritchie's Bottineau Spearfish wells; Calgary-based
• EOG: but IPs have been very, very poor; minimally active

Fracking

• SLB: huge fracking operations center in Williston, North Dakota
• HAL: made first announcement to have 24/7 frac teams to try to keep up with schedule
• Sanjel: huge fracking operations center in Williston, North Dakota, across the road from SLB

Railroad Oil Shipping/Railports

• BNI: now owned by Warren Buffett's Berkshire Hathaway
• EOG: railroad loading terminals, Stanley
• Savage Companies (Salt Lake City): railport at Trenton, southwest of Williston 
• Kinder Morgan Energy Partners, L.P. (KMEP):  Dore and Stanley, North Dakota
• Range Energy (Sugar Land, Texas): Epping, North Dakota

Natural Gas Gathering and Processing Facilities

• MDU: headquartered in Bismarck, North Dakota; has been in North Dakota "forever"; focused on natural gas and missed the Bakken oil boom
• ONEOK: announced major investment plans for western North Dakota in 2010; subsidiary Bear Paw Energy is operator 

That's it: it's closing time. 

Bottineau Spearfish Wells -- The Canadian Invasion -- More on Relationships Among Involved Oil Companies -- March 27, 2011

Updates

When I started this blog a couple of years ago, I placed the "major" or better known producers that were in North Dakota on this sidebar to try to keep some organization. It hasn't worked out too well; just too much information to keep track of, sort, link, etc.

One of those producers that comes to mind is Crescent Point Energy (every time I type that, I think of "Hotpoint" -- amazing what a trade name will do).

When I remember, I will cross-link Crescent Point Energy stories at this post. A lot of folks write in from Bottineau area asking about the Spearfish; now I have a place to gather that material.

Since I was remiss in leaving Crescent Point off the sidebar so long, I will leave them at the top of this list for awhile, and eventually put them where they belong alphabetically.

News

February 18, 2018: huge waterflooding project in the Viewfield field of the Bakken in southwest Saskatchewan. 

May 27, 2015: acquires Legacy Oil + Gas.

April 15, 2014: Spectacular Three Forks wells just north of Divide County, North Dakota, in Canada.

October 9, 2013: comment from a reader -- "Just noticed that even if Crescent Point isn't drilling right now in ND, they are renewing their permits. They renewed two permits shown in the Oct. 7 NDIC Daily Activity Report."

February 17, 2012: Crescent Point acquires 20,000 net acres from PetroBakken in southeastern Saskatchewan. 

Website

August 31, 2011: Crescent Point Energy acquires more than 78 net sections in North Dakota -- sections, so about 640 acres x 78 = about 50,000 acres, along with 750 boepd production. In conjunction with the acquisition, Crescent Point has entered into a two-year agreement with a "leading US fracture stimulation company with operations in North Dakota to secure access to equipment and services for the Company's expanded development plans in 2012."

Crescent Point is also upwardly revising its 2011 exit production rate to more than 77,500 boepd from 76,500 boepd.

This new acquisition will target lower-risk Bakken and Three Forks zones.

Original Post

As noted earlier, Corinthian Exploration (USA) Corporation acquired Ritchie's Spearfish wells in Bottineau County, North Dakota. I assume Corinthian Exploration (USA) Corporation is related to Corinthian Energy in Calgary, Alberta, Canada.

Corinthian Energy was bought by Surge Energy in 2010 and that's why when you click on http://www.corinthianenergy.ca you are re-directed to Surge Energy.

In addition, Legacy Oil and Gas also has Spearfish wells in Bottineau County.

According to the Surge Energy website, Paul Colborne is the chairman of Surge Energy. He is also the Chairman of Legacy Oil and Gas and serves on the Board of Directors of Crescent Point Energy Corporation. Crescent Point has permits north of Williston in and around the Ambrose field. Crescent Point has said the Alberta Bakken and the North Dakota Bakken may be amenable to waterflooding.

For those interested in more detail regarding the relationship between some of these companies, click here, and read the small print regarding the directors. Very, very interesting, although I prefer watching Lily Allen. She quit producing number one records because she couldn't make any money at it; that was back in 2009. In 2011, she started her own record label. Hopefully she starts charting again.

Friday Night, Lily Allen. If you like this, you might enjoy seeing Lily Allen live on the Porter Wagoner show.

Denbury Onshore, LCC, May Have The Most Productive Well in North Dakota History

In the recent transaction in which Denbury Onshore, LLC, acquired 521wells from Encore, one of the wells included perhaps the most productive well in North Dakota history:

Dinsdale 2-4, original operator -- Trans Texas Gas, (Lodgepole, conventional well)

• Permit/File Number: 14213
• Original Operator: Trans Texas Gas 
•  Current Operator: Denbury Onshore, LLC
• IP: 3,357 bbls/day
• IP Test date: 12/30/1996
• Cumulative oil: 4,737,854 (January 31, 2011) Currently: 5K/month
• Comment: this was a Lodgepole well; inside the city limits of Dickinson; a vertical well. This is a phenomenal story: 4 million barrels oil since spudding, and it continues to average 250 bbls/day. One just has to wonder how big that pool of oil is.

Can you imagine the number of accountants and geologists it took to review the value of those 521 wells, including the value of holding leases by production? My hunch is they used the IBM computer that recently won on Jeopardy!

Incredibly Timely Story: Wiring the Oil Patch

Link here. (Regional links break early and break often.)

Earlier today a reader wrote in explaining why costs for Spearfish wells may have increased in Bottineau County. The writer said part of the increased costs had to do with cost of stringing electrical transmission lines to the remote sites. See comments at this site.

Now, tonight I see the Bismarck Tribune has a story just on this issue.

Incredible timing. Incredible story.

Western North Dakota’s economic growth is built on oil and gas, but the oil boom also runs on electricity.

While oil and gas companies are making big investments in the state’s oil patch, the region’s rural electric cooperatives have had to spend more and more on power lines and substations to keep up with the surging demand.

“Last year alone, we built more miles of line than we built from 2000 to 2007,” said Jason Brothen, general manager of the Burke-Divide Electric Cooperative, based in Columbus and serving the northwest corner of the state. “There’s just miles and miles being put up.”

I am very appreciative  of the information folks send me. It is very useful to me and I assume to everyone else. 

LA Times: There Never Was a Nuclear Renaissance -- Natural Gas is Queen

Two links:

First link here.

An op-ed disguised as economic-based discussion of nuclear vs natural gas, but hidden agenda is political statement. 

The article has some errors, but its overriding theme is accurate: natural gas is "queen" in the world of energy.

The article doesn't mention wind or solar simply because wind and solar will have minimal impact on solving energy needs of the world.

Second link (for investors):  What the demise of the nuclear industry means for the natural gas industry.

Week 12: March 19 -- March 25, 2011

Surge Energy / Corinthian Energy Acquires Ritchie's Bottineau Spearfish Wells

Long vs Short Laterals -- The Canadian Experience Along the North Dakota Border

CLR Completes Public Offering of 10 Million Shares; Raises $600 Million

How to Invest in Slawson -- Bakken, North Dakota, USA

Oil to $140 By June, 2011 -- Bank of American Merrill Lynch

Previously Announced Natural Gas Plants North of Williston Get Approval -- ONEOK, Bear Paw Energy

This Should Be An Incredible Quarter for XOM

An In-Depth Look at the Staggering Whiting Wells in the Sanish

Whiting's Incredible Wells in the Bakken

American Oil and Gas / Hess Wells West of Ray

North Dakota Refinery To Expand -- Tesoro -- Bismarck, North Dakota

Murex Has Another Great Well -- Interesting Production History

Analysts Questions NOG's Valuation

Fourth Opportunity to Invest in the Bakken

Stockyard Creek Oil Field Updated

BEXP Has Another Gusher -- East of Stockyard Creek -- East of Williston

Painted Woods With Extensive Update

Zenergy Has Nice Well Southwest of Williston -- Long Frac Delay

CBS MoneyWatch: North Dakota #1 State

But then "we" all knew that.

Link here.

While many states are confronting severe budget shortfalls and dragging economies, North Dakota has a different sort of problem. It's stuck deciding how best to deal with a budget surplus. Yes, a surplus. North Dakota's balance sheet is so strong it recently reduced individual income taxes and property taxes by a combined $400 million, and is debating further cuts.

That's not exactly what residents of California ($25.4 billion projected budget shortfall for the 2012 fiscal year), Texas ($13.4 billion), New Jersey ($10.5 billion), New York ($10 billion), and 42 more states with projected 2012 budget shortfalls are in line for.

Elidah Field Update

Elidah Field

April 4, 2017: a proposed CLR 5-well pad in Elidah oil field. 

April 4, 2017: is the Elidah oil field trying to tell us something?

March 26, 2017: see this post ---

• northwest McKenzie County
• 46 sections 
• "owned" by BR
• erratic production
• lots of "empty space" on NDIC map of the field
• post-shut-in-production can be substantial
• no named cities/towns in the area
• well removed from the core of the Bakken (#5, #6, #7, #10 in the graphic below)

Heat map of the Bakken (link at the sidebar at the right):

NDIC graphic of the Elidah today: 

Updates

November 23, 2014: random update of a couple of recently-reported CLR wells in Elidah oil field. 

Permits

2017 (none to date, March 26, 2017)

2016 (list is complete)
32507, PNC, BR, Ransom 7-8-31UTFH, as of 11/16;
32428, conf, BR, cum 263K 11/23;
32427, conf, BR, cum 362K 11/23;
32426, conf, BR, cum 244K 11/23;
32425, conf, BR, cum 76K 11/23;

2015 (list is complete)
31773, 1,461, BR, cum 319K 11/23;
31772, conf, BR, cum 306K 11/23;
31771, conf, BR,
31770, conf, BR,
31769, conf, BR,
31768, conf, BR,
31767, conf, BR,
31698, conf, BR,
31661, PNC, BR,
31660, PNC, BR,
31659, PNC, BR,
31658, PNC, BR,
31650, PNC, BR,
31649, PNC, BR,
31648, PNC, BR,
31618, conf, BR,
31616, conf, BR,
31615, conf, BR,
31614, conf, BR,
31613, conf, BR,
31612, conf, BR,
31611, conf, BR,
31610, conf, BR,
31209, conf, BR,
31208, conf, BR,
31205, conf, BR,
31204, conf, BR,
31203, conf, BR,
31198, conf, BR,
31197, conf, BR,
31196, conf, BR,
31003, conf, BR,
30993, conf, BR,
30992, conf, BR,
30973, 2,325, BR, Gudmuri 1-1-26TFH-ULW,  24 stages; 10 million lbs; t12/16; cum 29K in less than 2 months; cum 408K 11/23;
30972, 1,964, BR, Gudmunson 1-1-26MBH; 22 stages, 7.6 million lbs; t12/16; cum 8K 12/16; off-line the whole second month; cum 348K 11/23;
30971, 1.042, BR, Gudmunson 3-1-26MBH; t12/16; cum 6K over 11 days; off-line most of first two months; cum 452K 11/23;
30970, 1,283, BR, Gudmunson 4-1-26TBH, t12/16, 61 stages, 14 million lbs; cum 13K over 20 days; off-line most of first two month; cum 343K 11/23;
30860, conf, BR, cum 161K 11/23;
30818, conf, BR, cum 370K 11/23;
30817, conf, BR, cum 294K 11/23;
30861, conf, BR, cum 82K 11/23;

2014 (list is complete)
30036, PNC, CLR, Omlid 4-7H1,
30035, PNC, CLR, Omlid 3-7H,
30034, PNC, CLR, Omlid 2-7H1,
29171, 1,161, CLR, Nordeng 3-5H, t9/15; cum 223K 1/17; cum 467K 11/23;
29170, 1,126, CLR, Nordeng 2-5H1, t9/15; cum 156K 1/17;
29169, 905, CLR, Kellogg Ranch Federal 3-32H, t9/15; cum 216K 1/17;
29168, 933, CLR, Kellogg Ranch Federal 2-32H1, t9/15; cum 183K 1/17;
29153, SI/NC, BR, Bull Rush 21-10PH-R,
28341, 1,523, BR, Bullrush 2-7-9UTFH, t1/15; cum 199K 1/17;
28336, 2,565, BR, Siverston Rush 1-7-9MBH ULW, t12/14; cum274K 1/17;
28043, DRY, BR, Bullrush 21-10PH, a Birdbear well;
27820, 1,392, BR, Rolfsrud Bull 44-10MBH ULW, 4 sections, t10/14; cum 153K 1/17;
27716, PNC, BR, Bullrush 14-10TFH, TF B1,
27715, PNC, BR, Siverston Rush 14-10MBH ULW,
27709, 1,440, BR, Haydon 44-22TFH-ULW 4 sections, t12/14; cum 110K 1/17;
27708, 1,272, BR, Haymaker 44-22MBH-B, t12/14; cum 126K 1/17;
27707, 1,369, BR, Haymaker 44-22TFH-B, t12/14; cum 67K 1/17;
27706, 1,440/IA, BR, Haymaker 44-22MBH-A, t12/14; cum 91K 1/17;
27701, 1,512/IA, BR, Haymaker 21-15MBH, t12/14; cum 147K 1/17;
27700, 1,200, BR, Haymaker 31-15TFH-A, t11/14; cum 116K 1/17;
27699, 2,232, BR, Haymaker 31-15MBH-A, t10/14; cum 134K 1/17;
27698, 1,403/IA, BR, Haymaker 31-15TFH-B, t12/14; cum 126K 1/17;
27697, 2,325, BR, Haymaker 31-15MBH-B, t12/14; cum 138K 1/17;
27696, 2,204, BR, Haymaker 41-15TFH-A, t11/14; cum 111K 1/17;
27608, 1,440, BR, Bullrush 44-10MBH, t2/15; cum 134K 1/17;
27607, 1,512, BR, Bullrush 34-10TFH-B, t2/15; cum 89K 1/17;
27606, 1,680, BR, Bullrush 34-10MBH-B, t2/15; cum 115K 1/17;
27605, 1,272, BR, Bullrush 34-10TFH-A, t2/15; cum 98K 1/17;
27604, 1,344, BR, Bullrush 24-10TFH, t2/15; cum 138K 1/17;
27603, 1,824, BR, Bullrush 34-10MBH-A, t2/15; cum 121K 1/17;
27585, 1,443/IA, BR, Haymaker 11-15TFH, t1/15; cum 55K 1/17;
27584, 2,525, BR, Shafermaker 11-15MBH-ULW, t1/15; cum 198K 1/17;
27562, 993, CLR, Rolfsrud 2-11H, middle Bakken, t7/14, started lateral May 31; reached TD June 8; background gases as high as 3,216 units; 30 stages; 6 million lbs sand/ceramic; cum 152K 1/17;
27561, 960, CLR, Rolfsrud 3-11H1, Three Forks, gas as high as 9,225 units recorded; 30 stages; 6 million lbs sand/ceramic; t7/14; cum 131K 1/17;

2013
25147, 2,256, BR, Gudmunson 11-26TFH, t6/13; cum 182K 1/17; cum 316K 11/23;
25005, 2,913, BR, Bullrush 44-10TFH, 30 stages; 3.3 million lbs sand/ceramic, TF NOS, t6/13; cum 175K 1/17;

2012
None

2011
21542, 2,978, BR, Ivan 11-29TFH, 30 stages; 3 million lbs sand/ceramic; TF NOS, t7/12; cum 145K 9/16;
21541, 1,202, BR, He 14-20TFH, 40 stages; 3.7 million lbs sand/ceramic; TF NOS,  t7/12; cum 200K 9/16;
20761, 2,196, Oasis/Zenergy, Omlid 18-19HTF, TF3, t4/13; cum 172K 9/16;
20316, 893, CLR, Kellogg Ranch 1-32H, t9/12; cum 279K 9/16;

Original Post

Back in late 2010, the Elidah field was becoming very active; the field was mentioned a number of times in NDIC hearing dockets scheduled for December, 2010.

The Elidah field is only 46 sections, just a bit larger than one township (36 sections). For all intents and purposes, the Elidah field is T151-R97. It is located about 14 miles west of the western border of the Fort Berthold Indian Reservation. The two major players in the field are Burlington Resources and Continental Resources; currently BR has 7 wells (file numbers) and CLR has 13 wells (file numbers).

Except for a couple of wells, IPs to date have not been all that spectacular. Worse, total production has not been that good either. Much of that is due to erratic schedule -- runs being recorded only some days of the month. It almost looks as if there are no pipelines out here and all oil has to be trucked out. Part of the recent erratic history is no doubt due to inclement weather in January, 2011, when many North Dakota wells were shut in. The fewer days of production in January, 2011, suggests the wells were shut in during much of that month. 

The status of the Elidah wells in the current boom:

• 17341, 110, BR, Omlid 1-7H, spudded 8/08; t1/09; cum 123K 1/17; erratic schedule; wow, a very erratic production history: 3 days in 9/11; 1 day in 8/11; 16 days in 7/11; cum 174K 11/23;
• 19388, AB/980, CLR, Nordeng 1-8H, t6/11; cum 282K 1/17; huge jump in production 7/15;
• 19897, 681, CLR, Sivertson 1-9H, t9/11; cum 367K 1/17; cum 519K 11/23;
• 18380, 1,798, BR, Bullrush 24-10H, spudded 11/09; t2/10; cum 443K 1/17; erratic schedule: only 7 days in 9/11; 29 days 8/11; huge jump in production 9/15; cum 541K 11/23;
  
• 18983, AB/494, CLR, Rolfsrud 1-11H, t10/10; cum 266K 1/17; less erratic; cum 349K 6/22;
  
• 18798, 1,659, BR, Haymaker 21-15H, t9/10; cum 310K 1/17; cum 416K 11/23;
• 19586, 539, CLR, He 1-20H; 16K in first month; t2/11; cum 297K 1/17; cum 432K 11/23;
• 19083, 183, CLR, Shafer 1-21H; t10/10; cum 183K 1/17; fracked 4/11; 24 stages; 2.5 million lbs; cum 262K 11/23;
• 19715, 1,068, CLR, Don 1-23H; t6/11; cum 222K 1/17; cum 357K 11/23;
• 19548, 508, CLR, Gudmunson 1-26H; t10/11; cum 194K 1/17; cum 419K 11/23;
• 18472, 364, CLR, Muri 1-27H; t3/10; 50K; cum 143K 1/17; cum 199K 11/23;
• 19357, 441, CLR, Sandie 1-28H; t12/10; cum 148K 1/17; early, erratic; cum 207K 11/23;
• 19712, PA/372, CLR, Ivan 1-29H, t3/11; cum 190K 1/17;
• 19824, 1,683, BR, Ransom 44-31H; t5/11; cum 170K 1/17; cum 234K 11/23;
• 19883, 1,603, BR, Abercrombie 44-12H, t7/11; cum 173K 1/17; cum 257K 11/23;
  
• 19487, 2,108, BR, Cleetwood 11-27H, t6/11; cum 279K 10/15; 237K 1/17; leveled off at 440 bbls/month in 2011; but then 3/14 was fracked, 30 stages; and jumped to 10,000 bbls/month; cum 620K 11/23;
  
• 20316, 893, CLR, Kellogg Ranch 1-32H, t9/12; cum 290K 1/17; cum 437K 11/23;
• 19776, 352, CLR, Rolla 1-33H, t11/12; cum 175K 1/17; cum 283K 11/23;
• 17472, 593, Oasis/Zenergy, Mildred Nelson 4-25H;  t6/09; cum 108K 1/17; very sporadic production and days on-line; this well is in the bull's eye of the Bakken; it should have been a better well; cum 159K 11/23; cum 159K 11/23;
• 17387, IA/203, XTO/Denbury, Nygard 16-36H; t12/09; cum 84K 1/17;leveled off at about 1,000 bbls/month; cum 94K 11/18;
• 20761, 2,196, Oasis/Zenergy, Omlid 18-19H, t4/13; cum 182K 1/17; cum 348K 11/23;
  
• 21541, 1,202, BR, HE 14-20MBH, t7/12; cum 209K 1/17; cum 285K 11/23;
• 21542, 2,978, BR, Ivan 11-29MBH, t7/12; cum 151K 1/17; cum 317K 11/23;
  

As "my" rule of thumb, wells need to get to 100,000 bbls of production to be on their way to paying for themselves. It looks like these wells will take awhile to reach 100,000 bbls, but no doubt they will all make it. The average production for North Dakota wells is about 60 bbls/day (total production/5,331 wells) or about 1,800 bbls/month. These wells that are less than 1,800 bbls/month are dragging down the average.