Primary Petroleum -- Montana State Land Auction -- Investors

Updates

February 29, 2012: Primary Petroleum sold 20,000 nets acres at $170/acre in the Williston Basin: specifically Daniels County, northeast of Elm Coulee and far west of where the action is in the Bakken/Williston Basin. I believe this is/was their entire Williston Basin/Bakken play. Primary Pete says they are focusing on their other Montana play (see below).  Discussion about the sale; and, the corporate website on the day of the announcement (I assume the latter link will be lost/changed over time).

Original Post

I don't have time to follow much of anything outside the North Dakota Bakken, but I know some readers are interested in investment possibilities and some have asked me or sent me information about Primary Petroleum.

Today it was announced that Primary Petroleum got the bulk of acres leased in the largest western Montana state land auction to date.

Primary Petroleum acquired 31,286 net acres (49 sections) out of the 45,000 net acres available for auction at the largest Western Montana State Land Sale Auction to date.

Ticker symbol for Primary Petroleum: PIE.V.

CALGARY, ALBERTA--(Marketwire - 03/03/11) - Primary Petroleum Corporation is pleased to announce that it was successful at the March 1st, 2011 Western Montana State Land Sale Auction where it acquired 31,286 net acres (49 sections) out of the 45,000 net acres available for auction at the largest Western Montana State Land Sale Auction to date. The acquired state leases along with Primary's ongoing Land Acquisition Strategy has enabled the Company to accumulate over 242,000 long term net acres (380 sections) in the Southern Alberta Basin Bakken Fairway of Western Montana.

Numbers In: Volts and Nissan Leaves Selling As Fast As They Can Make Them

... or not.

Update

July 20, 2011: Leaf outsells the Volt; both insignificant. 

June 14, 2011: Nissan taking folks off waiting list for the Leaf because they don't have the $2,000 electric plug-in installed in their garage.  $2,000 for an outlet. Can you spell "scam"?

Some customers who have signed up to buy a Nissan Leaf electric car have reported getting the run-around from Nissan. According to Bloomberg, customers have reported being removed from the car’s waiting list and having their estimated delivery dates change wildly.

Bloomberg reports that Nissan is delaying some orders because potential buyers don’t yet have a 220-volt charger installed.

The problem may be due in part to the Leaf’s complicated sales process. Potential buyers must register online, pay a $99 deposit, and have a 220-volt charging station installed in their home. Nissan will then contact the buyer when a Leaf electric car is available. Given the slow rate of production for the car, that could take some time.

June 1, 2011:  Sales smoking. Nissan Leaf -- 1,142; GM's Chevy Volt, flat at 481. The fact that they are powered with coal is of concern for those watching the carbon footprint.

June 1, 2011: The GM Chevy Volt scam. Incredible.  Thank goodness for the internet.

April 16, 2011: Guilt by association. Garage fire may have been started by the Volt. I wonder if overheating electrical wires could be a problem in older homes/garages where Volts are charged? By the way, thank goodness for the internet and Matt Drudge. Without either, we would not have known about this latest Volt story. Interestingly, some folks blame GM's problems on Drudge, who simply links the news, rather than on Government Motrors, but I digress. The overheating of old electrical wires is a very serious problem, and where are electric cars best suited? In high density urban areas where houses are more than 100 years old, like Boston.

April 1, 2011: Chevy Volt doubled their March sales over February -- they sold 608 Volts in March. They have now sold a total of 1,210. This compares with 50,000 Chevy Cruzes sold to date. Interesting car to compare sales with.

Original Post

Remember, one month ago GM spokesman said sales of the Chevy Volt was "red hot."

Well, the numbers are in for the month of February.

• GM sold 281 Chevy Volts in February, LOWER than the 321 sold in January. Wow. 
• Nissan Leaf isn't faring any better: 67 sold in February, LOWER than the 87 sold in January. Double wow.

So, what's the total of ALL coal-powered Volts and Leaves sold to date (same link as above)?

• Volt: 928
• Leaf: 173

Remember, just last month we were told that demand for the Chevy Volt was "red hot." 

And, I still haven't seen any advertisements for the Chevy Volt. [Update: 5:45 a.m., Friday, March 4, 2011: I caught the last second or so of the first Chevy Volt commercial. I had just turned the television on. I believe it was on MSNBC, " Morning Joe." Thoughts on time of day and show? Maybe more on that later.]

For other posts on the Chevy Volt:

• Consumer Reports: the Chevy Volt doesn't make economic sense
• Sales of coal-powered cars up in smoke
• Coal-powered cars not economical until oil is between $174 and $250/bbl
• $Chevy Volt > $Cadillac

Another Great Bakken Blog -- North Dakota, USA

Somehow I have been remiss in adding a great website to the list of external sites at the sidebar on the right. That has been corrected; it is now linked: the Bakken Formation.

I put it at the top of the list of "external links."

Eight (8) New Permits in North Dakota, USA

Producers: CLR (4), SM (2), EOG, and Slawson

Fields: Chimney Butte, Colgan, Antelope, and Van Hook

The four CLR permits are on an Eco-Pad, SESE 9-146N-95W, the Kukla-Canee series.

And just after I mentioned three or four days ago that I had not seen any CLR Eco-Pads recently, here comes CLR with another Eco-Pad. Good for them. 

The two SM permits are in adjacent sections but I don't think they are on the same pads.

A fair number of wells were released from the confidential list which are reported elsewhere.

Just How Busy Has the Oil Industry Been in North Dakota This Past Calendar Year?

Bakkenshale.com alerted us to this YouTube video.

For those who want a visual how active the oil industry has been in western North Dakota this is awesome. The title suggests this is activity only in calendar year 2010:

Time Lapse Review of North Dakota Oil Activity, Calendar Year 2010

Fracturing Question

The effects of fracturing probably extend out at least 500 feet, maybe farther. The fracturing would extend in all directions, all 360 degrees.

If the Middle Bakken and the Three Forks formation are vertically separated by less than 100 feet in many (most cases) one would assume that fracturing in the Bakken formation would affect the Three Forks formation.

There is evidence that the Bakken and the Three Forks formations do not communicate, but one wonders how fracking would affect that "non-communication."

CLR tested the hypothesis whether the formations communicate and what happens to the second formation when the first formation is fracked.

This is the "cut and paste" from the CLR Mathistad study:

Purpose

The purpose of the testing was to determine the degree of communication between the
middle member of the Bakken (MB) and the Three Forks Sanish (TFS) across the lower
Bakken Shale. Understanding the degree of communication is key in determining the
number of wells and where they should be drilled to optimize recovery from each zone.
This work tested whether wells should be drilled directly over or beneath an existing
producer in the Bakken or TFS zones or whether one well would be able to adequately
drain both zones.

Results

The results showed that the #2 fraced into the #1 wellbore in all frac stages but, even
with the well-to-well communication, the #2 is estimated to recover an additional 400
MBO over the base case of only drilling and producing the #1. Pressures measured in the
#1 showed communication from at least 13 of the 14 stages and fluid tracers recovered in
the #1 production showed frac fluid from all 14 of the #2 frac stages.

KOG Earnings 4Q10 and Annual (2010)

Link here.

Annual

• Annual sales: $31 million in 2010 vs $11 million in 2009; 175% increase, company record
• Adjusted earnings: $16 million in 2010 vs $4 million in 2009; 300% increase, company record
• Earnings: net loss of 2 cents/share in 2010; identical to 2009
• Acreage unchanged since last reported at this site
• Will add third rig in 2011

Legacy Oil and Gas: Any Evidence of Activity?

About a month ago I had a stand-alone post updating Legacy Oil and Gas activity in which the company noted they planned to extend their Spearfish play into Bottineau County.

Since then, I haven't heard anything new. Legacy has seven permits in North Dakota. They are all on the confidential list; one has a rig on site; five have release dates from the confidential list. (Updated, corrected after getting first comment below.)

Someone wrote in asking if I knew of any activity with regard to Legacy Oil and Gas in Bottineau County, such as building pads, etc. I did not, but I said I would see if anyone has any information. Thank you in advance.

171: Not a Record, but Back Up to 171 Active Rigs -- Bakken, North Dakota, USA

After days of trending down and stuck at 168 for several days, "we're" back to 171 active rigs today. The record is 172.

Light Sweet Oil Approaching $120

I missed most of this which was just a short report on CNBC a few minutes ago (10:07, March 3, 2011): apparently prices for light sweet oil in certain parts of the United States are above $110, and approaching $120. That certainly is not reflected here.

North Dakota sweet was not mentioned in that report. Alaska sweet was mentioned. I was not even aware there was an Alaska sweet. And obviously there are transportation costs bringing Alaska oil to the lower 48.

North Dakota sweet yesterday was $81 versus $78 the day before. You can follow North Dakota sweet here (same link as above). These are spot oil prices and sets range for new contracts. Remember, most of the oil is sold on contract, and prices were set six months ago for oil being delivered today. At least that's how I understand it. If really off base, I'm sure someone will let me know.

Helis Has a Very Nice Well -- Bakken, North Dakota, USA

Some nice wells coming off the confidential list today:

• 18441, 1,067, XTO, White Federal 34X-34, Grinnell, Bakken, TFS, 17K in 3 months; 18-stage frac
• 17722, 2,068, Helis, Henderson Federal 4-26/35H, Grail, Bakken; TFS, 23K in 22 days; ~ 24-stage frac
• 19158, 333, CLR, Gronfur 1-28H, Brooklyn, Bakken, 19K in first 25 days, 30-stage frac
• 19369, 3,206, BEXP, Bratcher 10-3 1H, Ragged Butte, Bakken, 21K in 19 days; 30-stage frac
• 19088, 629, Anschutz,Wolberg 21-18H, Simon Butte, Bakken, 21K in first 90 days; 30-stage frac
• 19174, 2,090, WLL, Kannianen 43-33H, Sanish, Bakken, 55K in 3.5 months; 22-stage frac

On the other hand, this one was interesting for other reasons:

• 19122, 170, EOG, Liberty 102-01H, Van Hook, Bakken; pump put on 1/11/11, Three Forks target, 15 stage fracture, short lateral, spud 9/3/10 and already on a pump; and this is in the Van Hook -- generally a good field

Comment:
When I transcribe this data from the original source, I see the IP first and do not see the driller. I can almost guess who the driller might be based on the IPs. Helis surprised me today; I would have guessed BEXP or WLL.  XTO is hitting some nice wells.

In the past couple of days I've talked about the "confusion" regarding Bakken and Three Forks nomenclature, especially for newbies. These reports are another good example. Note that the NDIC report shows that all these wells were Bakken, but yet when you go to the well file, one finds some targeted the middle Bakken formation; others targeted the Three Forks (Sanish).

For newbies, the Bakken formations (3: upper, middle, and lower) and the Three Forks formation (2: upper and lower, but maybe more subdivisions) are all part of the "Bakken Pool."

Compare #19369 and 19088: they both produced 21K so far but one did it in 19 days (not even a month; the other took 90 days to get to that point). The Helis well was equally as good: 23K in 22 days. Some nice wells.

By the way, the Helis well was a Three Forks well.

Two More Hotels for Minot -- Bakken, North Dakota, USA

The Candlewood Suites opened August 8, 2010, and now developers plan to complete a second hotel, the Souris Valley Suites, by this summer (2011). The hotels will be located next to each other and both are extended stay.

The Candlewood has 80 rooms; the Souris Valley will have 89. 

Although driven by the oil industry, developers say there are others having difficulty finding places to stay in Minot. The Candlewood Suites has been fully occupied since opening.

"Souris Valley" makes me think of the EOG wells targeting the Spearfish in Bottineau County. Who is going to have the first hotel/motel named the "Bakken Suites"? Next door, of course, would be the "Sanish Suites." 

Link here.

Oil Drops to $101!

Yes, that was a headline earlier this morning.

Oil Falls to Near $101 Amid Libyan Mediation Hopes!

$101! And headline writers are excited! You have got to be kidding! That was a headline. The drop in price was about 70 cents, maybe a $1.50 from the recent high. 

First, with the volatility in the Mideast, if there was a headline every time price of oil changed, headlines would be changing almost continuously.

Second, how did we even get to this, $100 oil when supplies at Cushing are straining storage facilities?

Third, how did we even get to $100 oil when (maybe) a million bbls of oil have been taken out of the system (Libya) but easily made up (some say) by Saudi Arabia?

Last autumn (2010), when oil was falling back toward $60, pundits on CNBC said that fundamentals did not even support a price as high as that. And now, we have a headline that "oil drops to $101!" Who would have thought?

Right now, WTI oil is being quoted at $101.75

And market futures are up significantly.

If nothing else, it gives us something other than the weather to talk about.

**********

[By the way, the 30-second sound bite explaining the drop in the price of oil earlier this morning followed an announcement for a pan-Arab plan to bring peace to Libya. It turns out that the plan was floated by Hugo Chavez, Venezuela, member of OPEC. A pan-Arabian plan to stabilize Libya floated by Chavez. Okay. That was the reporting of one pundit; obviously not verified.]