Whiting's Net Acreage -- 2Q11 Presentation -- The Bakken, North Dakota, USA

It will be interesting to see if there are any significant acreage changes for Whiting when they come out with 3Q earnings and conference call. The updated acreage data is from their October, 2011, presentation.

I don't recall when I last updated Whiting's net acreage, but it appears in the past year there has been significant increases in most prospects:

• Hidden Bench/Tarpon (eastern McKenzie County): 37K now (29K previously)
• Lewis and Clark (southwestern North Dakota; Stark, Billings): 255K (235K previously)
• Big Island (far southwestern corner, Golden Valley): 120K (73K previously)
• Cassandra (northeast of Williston): 14K (12K previously)
• Sanish (used to be called Parshall/Sanish prospect): 83K (85K previously)
• Starbuck (in Montana, directly west of Williams County): 88K (87K previously)
• Missouri Breaks (in Montana, directly west of McKenzie County): 41K (same)

Again, if one looks at the October presentation, slide 19, a couple of things pop up:

• Whiting has four centers of operations
• Sanish: their cash cow
• Northern ops, North Dakota: huge presence in McKenzie County where activity is headed in 2012
• Southern ops, North Dakota: huge presence in southwest corner of the state; Tyler, Lodgepole, TF
• Montana: opposite Williams County and opposite McKenzie County

The second thing one notices is this: the industrial parks west of Williston are perfectly positioned

• Highway 2, west of Williston, practically runs right between the two Montana prospects, Starbuck to the north and Missouri Breaks to the south
• Highway 85, turning south at the 4-mile corner west of Williston takes them directly to their McKenzie prospects, Hidden Bench, and the north half of Lewis & Clark
• Dickinson and Belfield, of course, will be the center of activity for most of Lewis & Clark, and for Big Island

It does not take a rocket scientist to understand why the new industrial park north of the 4-mile corner is going in, almost at breakneck speed.

At one time I was concerned that the Truck Reliever Route emphasized a north-south route when it appeared that an east-west route "thru" Williston was needed. I no longer feel that way at all. Based on the "old" Williston with the "Big 3" (Schlumberger, Sanjel, and Halliburton) all east of Williston, it seemed an east-west route was needed.

With the new Schlumberger complex going up on the west side of town, this eliminates a significant number of trucks going east-west.

Clearly, thinking about a north-south truck reliever route was and is the right idea.

Interestingly, this little observation. Most places I have lived in the country, it seems folks are way behind on building roads. One has to commend the county and the state for what they have done so far. Three observations:

• The current bypass around Williston is a life-saver; put in decades ago, against a fair amount of opposition, Williston would be a "disaster" without it
• The governor's assistance in "widening" US 85 south of Williston was prescient. Lynn Helms must have had the governor's ear telling him that oil activity was moving to McKenzie County and all the oil service companies were located north of Watford City and Alexander. The widening project is essentially complete. A four-lane divided highway is needed between Williston and Alexander but would not have been completed soon enough. The oil activity will explode get exponentially more active in 2012; there was not enough time to put in a 4-lane highway
• The dirt road north of highway 2 just west of the 4-mile corner (where the truck reliever route will begin) is already in pretty good shape, at least for the first few miles. It wouldn't take a whole lot to bring it up to speed.

The two "things" that would do the most to alleviate traffic issues:

• a well-designed intersection at the 4-mile corner to incorporate the truck reliever route
• a water depot south of the river along US 85; the water depot on 2nd Street West, Williston, is the wrong place for a water depot

Wow, I got way off topic. I had planned simply to update Whiting's prospects, but it was too enticing to point out how Whiting's prospects fit into the big picture.