Irving, Tex., independent Breitling Oil & Gas Corp. acquired a nonoperated acreage position in Sand Creek field within the Bakken formation in McKenzie County, ND.The CEO says the Bakken will be a major focus for the company.
Plans call for Breitling to participate in six Bakken and Three Forks wells during 24-36 months on acreage acquired through a joint venture. The operator will be Denbury Resources Inc.
24-36 months – that's like music to our ears! Us folks in the long-term rental industry are always glad to see new workers come in!
ReplyDeleteIf I'm out of order to ask this question I apologize in advance since I love the Million Dollar Way. Whiting has leased some of our land in a de-risked (according to Whiting)spacing unit Whiting describes as non-operated and is drilling on our land that is described as Whiting operated. As a practical matter does non-operated mean that another company makes the drilling decisions? Any thoughts?
ReplyDeleteIt is incredible, isn't it? Just when you think all the companies that could possibly be here, some more announce they are coming.
ReplyDeleteAs usual, comments and replies are out of sequence.
ReplyDeleteThat's a very, very good question (about operators and non-operators). I don't know the answer but my hunch is that the operator is ultimately responsible for all final decisions with regard to drilling and completion.
But it is probably somewhat more complicated; depending on the amount each has at risk, they may actually discuss issues as they drill. But, I assume, at the end of the day, the operator will make the final decisions.
I appreciate your comments about the blog.
The Operator runs the show. Whiting might have been non-op, but became operator later. Traded acreage, bought acreage, or whatever to have most of the unit, maybe.
ReplyDeleteBut, some operators use drilling contractors to drill, and some own and operate their own rigs, while some do some of each. That can make the language unclear. "We operate 6 rigs." Hmmm. Maybe they operate 10 rigs but have 6 of their own, maybe they operate 6, with 3 of their own. ... Hard to tell sometimes. They often don't seem to understand how confusing their language makes it.
Both of these are true:
Chesapeake operates about 170 rigs.
Chesapeake operates about 100 rigs. .... (NOMAC)
(And, in the WB, they own NOMAC, and bought Bronco. They today operate 2 rigs (NOMAC rigs) and own and operate about 10 as a drilling contractor for others. In a year or two they may use all NOMAC rigs and hire other drilling contractors for some wells. They will operate their own rigs and the contractors rigs.
anon 1
Again, an excellent response. Thank you for clarifying this. I will link your response so it is more easily found.
ReplyDeleteAnother thought. There are contract operators. CHK sold a play to BHP, which did not operate onshore in the US. CHK agreed to operate through 2011, for BHP. BHP bought PetroHawk, which operates, filling the gap.
ReplyDeleteSome CHK NOMAC rigs were drilling as drilling contractor, for CHK as contract operator, for BHP.
Some small outfits don't operate. They contract out operations.
anon 1
BTW, another CHK deal.
ReplyDeletehttp://www.chesapeakemidstream.com/Pages/information.aspx
anon 1
...and it certainly spreads the risk.
ReplyDeleteWith regard to CHKM, thank you. I linked that story at the CHK page on this blog; see sidebar at the right, under "Producers."
ReplyDelete