North Dakota Is On Track for 1,800 New Permits in Calendar Year 2011

It's really, really early in the year, but just out of curiosity, I looked at the number of  new permits by producer.

As of today, 189 new permits have been issue in North Dakota. Again, it's way too early in the calendar year to be extrapolating, but 189 new permits puts "us" on track for 1,815 new permits this year, well ahead of last year. The NDIC issued 1680 permits last year (2010).

So, who has been active with new permits?

• WLL: 24
• EOG: 17
• Petro-Hunt: 11
• Hess: 10
• OXY: 7
• CLR: 6 (along with many other companies with 3 - 6 new permits this year).

I have said numerous times, I am really impressed with what WLL seems to be doing. It almost looks like Whiting has two divisions in North Dakota: the north (or Sanish) division, and the south, or the Three Forks division.

Nine (9) New Permits in North Dakota, USA

Producers: Whiting (3), EOG (3), XTO (2), and SM.

Fields: Bicentennial, Parshall, Clear Water, Baker, Mondak, Ash Coulee, and two wildcats.

The Whiting wildcat is in a very desolate area: it appears that there is no activity in this area, about 9 miles southwest of Watford City, about a mile west of US Highway 85 at 8.5 miles south of  Watford City.  The other two Whiting permits are in the southwest part of the state, again targeting the Three Forks formation, I would assume (Bicentennial and Ash Coulee fields).

The XTO wildcat is also out in the middle of nowhere, toward the southwest part of the state, but not quite as far south as the Whiting play. 

When I see these permits in areas of "little activity," it tells me two things: a) producers are eager to see what they might have in other areas; and, b) it's a preview of the future, as these "new" areas start to fill in.

EOG is "attacking" the Clear Water field, which has been relatively quiet. EOG was issued two more permits in Clear Water; their third new permit was in Parshall, its cash cow.

SM's new permit already shows up on the confidential list and is directly south of Williston, about two miles south of the river.  Again, very little activity.

In addition to the wells that came off the confidential list and which I reported elsewhere earlier today, there was another well that was reported on today's daily activity report:
19082, 697, Brehm 12-27H, a long lateral in the Sanish oil field.

Spectacular EOG Well; Another Nice BEXP Well -- Bakken, North Dakota, USA

A spectacular EOG well:

• 18825, 951, EOG, Van Hook 8-36H, Van Hook, Bakken, 100K in 5 months -- whoo-hoo!

A very nice BEXP well

• 19198, 2,834, Arvid Anderson 14-11 1H, Alger oil field, Bakken; 50,000 barrels in less than two (2) months. At this pace, it too should go over the 100K mark at six months.

For newbies:

• The IPs only provide one data point; perhaps IPs, at best, begin the discussion
• With regard to production, what really matters, is the ultimate production of each well. Generally speaking, in the better fields in the Bakken, folks are estimating the ultimate recovery from a well to be in the neighborhood of 750,000 barrels
• Some producers are putting in as many as seven, maybe eight, wells in a 1280-acre spacing unit (two sections), in the "core" Bakken
• Horizontal Bakken wells cost in the neighborhood of $7 million to complete
• A Bakken well generally has a fairly significant decline rate, but once they stabilize / level off, some folks feel they could produce oil for 20 years or longer
• But if these wells "pay for themselves at the wellhead" in less than two years, and keep on producing, albeit at a much lower rate, for another 20 years, one can see why folks remain excited with the Bakken