A forty-year independent oil entrepreneur with a conservative financial streak, [Whiting Petroleum] Chairman James Volker's data points:
- 8.4 million acres as providing for 39,000 wells on a spacing of six for each 1280 acre unit
- A mid-range 300,000 barrel reserve for each well, almost 12 billion barrels recoverable
- Comparable in size to the Prudhoe Bay discovery that made Alaskan oil famous
- USGS survey, 2008: 4 billion barrels recoverable
- Harold Hamm, CEO, CLR: 20 - 24 billion barrels recoverable (Three Forks + Bakken)
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The rest of this posting is just back-of-the-envelope doodling. Just playing around with the figures. I don't recommend anyone reading past this section; it's just for my benefit, sort of like imagining that I'm playing the lottery. Smile.
Another way of looking at Mr Volker's data:
3 wells/section (640 acres) * 300,000 bbls/well * $100/bbl --> $90 million/section or $140,000 acre.
20 acres at $10,000/mineral acre would cost $200,000. Those 20 acres will generate $2.8 million over the course of 30 years (at the wellhead, with lots of tax angles) at $100/bbl using 300,000 as the EUR.
Will a $200,000 house investment pay you $2.8 million over the course of a lifetime? And this assumes oil stays at the $100/bbl range.
I don't see much mineral acreage going for as much as $10,000. And a lot of the core Bakken wells will get double to triple 300,000 bbls over 30 years.
$200,000 x 0.06 = $1,000/month interest. 20/640 = 3%. Three wells leveling off at 1,200 bbls/month --> 1,200 bbls/month * 3% * $100/month --> $3,600/month.
i just returned from dickinson, i see now that WLL has rigs/ or wells 4 miles south of belfield, nd. were as of late oct/nov there was only 1 well about 1 mile south of town.
ReplyDeleteI always like to think that WLL has a "Whiting South Division" (Belfield area) and a "Whiting North Division" (Mountrail, Sanish oil field).
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