Flashback To 2008 -- Coming Full Circle in a Long Day in the Bakken -- The Bakken, North Dakota, USA

While posting this last post for the night, I'll be listening to this:


Yellow River, Christie

Life is funny. Or perhaps I should say surfing the net has its interesting moments.

Earlier today out of the blue I received a nice note from an individual at Cresent Point Energy, just saying "hi." It was a nice note. Nice enough to remind me to put Crescent Point Energy on the sidebar at the right, under the "Producer" section.

Then I was going through the "Feedjit Live" to see what folks were searching for that brought them to the website.

Someone was searching for "zipper fracs." I googled "zipper fracs," and out of the 1,420 hits, there was one that stood out: "The Long road to the Bakken," Oilweek, July, 2008.

If you've followed the Bakken for the past couple of years, you will enjoy the article.

The funny thing: I don't think the article mentions "zipper fracs." But it is full of "fracs" and I'm sure that's what Google hit on.

What a fascinating article. Brings back great memories: Medora Resources, Inc.; Petrobank, Painted Pony Petroleum Ltd., Innova Exploration; StarPoint Energy-Ward, and .... at the very bottom ...  Crescent Point Energy Trust.

I started off the day with a nice note from Crescent Point Energy, and here it is, almost 1:00 a.m., fifteen hours later, and I stumble across, and speaking of stumbling ...


Stumblin' In, Suzi Quatro and Chris Norman

... but I digress.  As I was saying, I started the day off with a nice note from Crescent Point Energy, and I stumble across a 2008 article that ends with a vignette about Crescent Point. What are the odds?

You have to read the article. Here are some "items" from the story:

Southeast Saskatchewan´s Bakken is in the Williston Basin, which extends south into Montana and North Dakota where there is just as much excitement over Bakken exploitation. Production from the Elm Coulee Bakken in Montana began in 2000 and average 53,000 barrels per day in 2003.

Bakken attention south of the border shifted last year to North Dakota from Montana when EOG Resources (which is front and centre in the emerging Horn River shale gas play in northern British Columbia) reported that a single well it drilled into an oil-rich layer of shale near Parshall, ND, is expected to produce 700,000 barrels of oil.

"We can never look back and say, ‘Why didn´t we see those Bakken fields 30 years ago?´ as we drilled through those formations thousands of times," Potter says. "The reason is simply that the technology wasn´t there." [That's why I'm excited about the Tyler.]

And farther down:

Small is beautiful in the Bakken. It seems to attract entrepreneurs. A case in point is Painted Pony Petroleum Ltd., a junior that went public in May 2007. The company started drilling a month later and as of May 2008, had 16 horizontals (5.65 net), producing a total of 325 barrels per day from four net producers. It plans to drill another 40 Bakken horizontals by year-end.

And how one fracking company got started:

Arguably, the play-opener in the Bakken was a frac stimulation technology developed by Packers Plus Energy Services-the StackFrac system. Initially, the industry doubted horizontal wells could be fracturerd using conventional open-hole packers. Less than three years ago, Packers Plus begged and pleaded with a company active in the Bakken to try the StackFrac system, but "they felt they had it figured out," recalls Packers Plus president, Dan Themig.

Then Petrobank stepped forward and gave Packers Plus a chance. For the next six months, while Petrobank used the system but wasn´t required to publish its production information under Saskatchewan rules, Packers Plus still faced an uphill battle selling its idea. Six months and two weeks later, the phone started ringing.

I remember that story; I've either stumbled across this article before and don't recall, or I've read about Petrobank and Packers Plus elsewhere.

Do you remember when we first started talking about the Bakken? I think the USGS said 2 - 3 percent of original oil in place was recoverable, and then I started seeing reports suggesting as much as 8 percent was being recovered.

During last year´s royalty discussions in Alberta, Crescent Point was one of the first companies to voice its dismay with the Alberta government and said it would focus its efforts Saskatchewan. And it followed through.

"We´ve grown our production in Saskatchewan from about 20,000 barrels per day last year to about 28,000 barrels a day," says Scott Saxberg, Crescent Point´s president and chief executive officer. "A good chunk of that growth is through our Bakken development."

Crescent Point production in the Bakken went from 8,000 to 13,000 barrels per day, making it the largest oil producer in southeast Saskatchewan and the dominant player in the Bakken.

It has more than 360 net sections of undeveloped land and 1,050 net development drilling locations. Only 358 of these locations so far have been booked to reserves, while recovery to date at the Viewfield Bakken resource play is scant 0.3 per cent. As of year-end 2007, independent engineers booked a recovery factor of 3.9 per cent and Crescent Point´s Bakken technical team conservatively estimates that a recovery factor of 15 per cent is achievable on primary recovery.

Eight percent was low.

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Earlier this evening I was overwhelmed with all the data coming out of the Bakken the past couple of days, and then the WLL and CLR earnings releases today. I was absolutely overwhelmed. I did not know where to begin. I seriously thought of taking a few days off just to reflect.

I guess I still don't know where to begin with all the data. I'm not going to talk much about the earnings reports; I will let others do that. There is just too much. However, I will post some data points that jump out at me, that others will bury in all the numbers.

So after a long day looking at reports from the Bakken, what's the one data point that comes to mind first? EOG moving some of its rigs to Eagle Ford to secure its leases there.

And the most pleasant sound now, at 1:12 a.m. --- the sound of oil trucks moving down the road. It's a great night for a walk past the second busiest intersection in Williston.

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While proofreading this post, it dawned on me why "EOG moving some of its rigs to Eagle Ford to secure its lease there" was the data point that stuck out the most of all the stuff I read today. That phrase sounds like something out of a US Army manual. I spent a lot of wonderful years with Army folks, and that's how they talked. I guess it's the same in the oil patch. "Boots on the ground" to hold territory. 

Good luck to all. See you in the a.m.