Unfracked Well Producing at 10,000 Barrels of Oil Per Month -- Bakken, North Dakota, USA

Updates

July 13, 2016: #18644 with an update. This well was placed on a pump in August, 2012. There is still no frack report on file (thought it was scheduled to be fracked 3/10) and FracFocus has no report on file that it was fracked.

• 18644, 1,148, Lime Rock Resources/Anschutz, State 1-25-36H-144-97X, Cabernet, t4/10; cum 370K 5/17;

April 11, 2016: there are two new permits on the same pad of these two unfracked wells:

• 30467, loc, Lime Rock Resources, State 4-25-36H-144-97, API: 33-025-02818, Cabernet,
• 30468, loc, Lime Rock Resources, Kary 6-24-13H-144-97, API: 33-025-02819, Cabernet,

April 11, 2016: It appears the sister well on the same pad as the well in the original post, running in the opposite direction has also not been fracked (disclaimer: it's possible these wells have been fracked; that the documentation is simply not there; I don't know):

• 18359, 1,138, Lime Rock Resources, Kary 1-24-13H-144-97, API: 33-025-00984, Cabernet, t4/10; cum 205K 5/17; (as of 5/18/2016 FracFocus had no documentation of any fracking)

April 11, 2016: according to FracFocus, this well (#18644, Lime Rock Resources/Anschutz, State 1-25-36H-144-97X, API: 33-025-01035, and the sundry form says this well was NOT stimulated. First year of production:

BAKKEN	1-2011	27	9721	10527	4	1827	1827	0
BAKKEN	12-2010	31	11949	11356	7	3941	3941	0
BAKKEN	11-2010	30	13031	13299	7	4539	4539	0
BAKKEN	10-2010	31	13440	13299	0	4919	4919	0
BAKKEN	9-2010	30	14480	14442	342	5033	5033	0
BAKKEN	8-2010	31	15854	16452	0	5317	5317	0
BAKKEN	7-2010	31	19578	18897	0	1515	1515	0
BAKKEN	6-2010	30	21083	21500	0	6947	6947	0
BAKKEN	5-2010	31	25940	26032	50	7750	7750	0
BAKKEN	4-2010	16	12868	11704	3244	3244	2712	532
BAKKEN	3-2010	0	0	0	0	0	0	0
BAKKEN	2-2010	1	711	711	0	0	0	0

Most recent 12 months:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	2-2016	29	1095	1163	30	1638	1083	44
BAKKEN	1-2016	31	1216	1156	40	1222	862	49
BAKKEN	12-2015	31	1263	1141	28	1093	755	50
BAKKEN	11-2015	30	1226	1372	33	1448	870	98
BAKKEN	10-2015	31	1266	1127	23	1309	1010	51
BAKKEN	9-2015	30	1231	1331	35	421	8	173
BAKKEN	8-2015	31	1268	1330	28	434	59	127
BAKKEN	7-2015	31	1255	1131	20	430	85	97
BAKKEN	6-2015	30	1266	1310	110	413	154	20
BAKKEN	5-2015	31	1349	1334	37	462	31	182
BAKKEN	4-2015	30	1353	1328	28	465	12	212
BAKKEN	3-2015	31	1466	1534	123	495	0	24

 

Original Post

 

One doesn't see this often in the current Bakken boom (at least to the best of my knowledge):

• 18644, Lime Rock Resources/Anschutz, State 1-25-36H-144-97X, API: 33-025-01035, Cabernet, 24-144-97, 1,148, 370K 5/17;, un-fracked

This well continues to produce at about 10,000 barrels/ month, flowing, not on a pump.

Note, I checked to make sure the link was still good. It is. When I first linked it, the only information was the file report. Since then, the link has a number of very interesting comments from a Bakken expert, comments which I saw for the first time tonight. I highly recommend all folks interested in the nitty-gritty of the Bakken to check out the link. I enjoyed it.

Stripper Wells and Tax Breaks -- Williston Oil Basin, North Dakota

This is very, very interesting.

This is the crux of the story:

Stripper wells are broadly defined in North Dakota as those that produce fewer than 30 barrels of crude daily. The state has a pair of oil taxes that are applied to wells: A 6.5 percent extraction tax and a 5 percent production tax.

In 1980, voters approved an initiated measure to exempt stripper wells from the extraction tax. A year later, the Legislature tweaked the exemption to include the leased area - or spacing - on which the well was located. The spacings can be as high as 1 square mile, enough room for several wells that could meet the tax-exempt designation. Once a well or spacing meets the stripper criteria, it holds the designation indefinitely.

I wouldn't lose a lot of sleep over this. The article says the state is losing $30 million/year over this exemption. I'm sure the number is debatable but even if it's accurate, I understand the oil industry accounts for about $1 billion/year (I could be way off on this; I haven't checked recently) in taxes to the state. This does not include all the taxes paid by individuals employed in the industry, nor all the taxes paid by businesses supporting the drillers.

But, and this is a big, big "but," --- on second thought, I will hold this thought for now.

It is my understanding that the designation of "stripper" well is not automatic, just because the well is producing less than 30 bbls of oil per day. It is my understanding that a driller must apply for stripper well status for a well. The NDIC will make the determination. My hunch is that the NDIC is taking this very issue very seriously. That may be one of the reasons why the legislature is not eager to change the law.

[The bigger question I have: exactly what is the difference between "extraction" and "production"? That's a rhetorical question. I don't expect any answers.]

Just a Gentle Reminder: For Every Gallon of Gasoline, 50 Cents in Taxes; XOM Earns 2 Cents Per Gallon

Link here.

I knew it was lopsided, but I did not know it was this bad.

I continue to recommend Carpe Diem as perhaps the best other blog on the internet.

*************

Flashback

March 28, 2011: After posting the comment about GE not paying taxes this year (as reported by CNBC), someone wrote me saying that XOM had not paid US federal taxes in years. Of course, that was incorrect, and was discussed in the comment section below.  Interestingly enough, CNBC touched on this subject again today, and put up two slides. The first slide listed four Forturne 500 companies that paid less than the statutory corporate tax rate (35%). That slide did not include any oil companies. The second slide had three companies, and the top two were XOM and COP. XOM had an effective 42% US federal tax rate for 2010, and COP had an effective 41% US federal tax rate for 2010, double the average tax rate paid by Fortune 500 companies. The average effective tax rate paid by Fortune 500 companies is 20%.

Here are the notes from the comment section regarding XOM taxes:

That would not surprise me, except that the statement that XOM has not paid federal income tax in years is not accurate.

MotherJones.com confirms that XOM did pay federal taxes in 2009. MotherJones' assertion that XOM did not federal income tax was picked up by many; MotherJones ended up retracting that.

From SeekingAlpha.com:

"Exxon's tax payment in 2007 of $30 billion (that's $30,000,000,000) is a record, exceeding the $28 billion it paid last year. $5 billion of that was US Federal income tax.

By the way, Exxon pays taxes at a rate of 41% on its taxable income." -- Seeking Alpha.com

So that takes care of 2009, 2007, and 2006.

But here's the best source (http://www.stock-analysis-on.net/NYSE/Company/Exxon-Mobil-Corp/Analysis/Income-Taxes):

XOM paid the following taxes below:

US Federal income tax (numbers rounded):

2010: $1.2 billion
2009: ($0.84 billion)
2008: $3 billion
2007: $4.7 billion
2006: $2.9 billion

Total taxes paid by XOM (again, remember, GE paid no taxes in 2010):

2010: $21 billion
2009: $15 billion
2008: $27 billion
2007: $30 billion
2006: $28 billion

In the big scheme of things, XOM's US earnings are small compared to its worldwide activities.

From yet another source:

In 2010, Exxon's total taxes and duties to the U.S. government topped $9.8 billion, making the company one of the largest taxpayers in America, he writes. In the past 5 years, Exxon has paid nearly $59 billion in U.S. taxes.

"Critics often try to ignore these facts by saying the oil and gas industry receives 'subsidies'," Cohen writes. "But what they really mean is that they want to increase our taxes by taking away long-standing deductions for our industry while leaving these same deductions in place for other sectors of the economy."

From yet another source, Carpe Diem.

Also, from same link, speaking of windfall profits tax:

The 6.1% average profit margin for Exxon's industry "Major Integrated Oil and Gas" ranks #112 among all industries for the most recent quarter (data here), so if Obama wants to target "excessive" corporate profits, there are many other industries much more profitable than the oil and gas industry.  For example, the surge in commodity prices has resulted in "windfall profit" margins of 31% for the silver industry, 23% for the copper industry and 19.8% for the gold industry.  Internet providers are capturing 23% in profit margins, cigarette companies more than 21% and periodical publishers are earning a whopping 51.6% profit margin, so perhaps those would be ripe targets for Obama's new lust to confiscate "windfall profits."

The Permitorium Net Widens -- Not Only Offshore, but On-Shore Also

The Bush administration opened up 2 million acres of western Federal land for energy research and development (i.e., horizontal drilling, oil and gas exploration and production) back in 2008.

The current administration put that initiative on hold to restudy the issue.

Again, this was a shovel-ready opportunity to increase oil and gas supplies for the nation -- three years ago.

It's anybody's guess where "we" would be now, three years later, had the projects been allowed to progress. No wonder the President says, when gasoline is $4.00/gallon and oil is $113/barrel, that there are no quick fixes. Of course, there are no quick fixes when solutions keep getting shut down.

This follows in the wake of the EPA shutting down Shell in the Arctic due to an ice-breaking vessel.

Yup, no quick fixes.

(Oil is up almost another dollar tonight -- futures -- closing in on $114. Remember, Bank of America forecasts $120 oil with spikes to $140 possible. The summer driving season has not yet begun; the Mideast situation seems to be escalating; and, the Fed admits inflation is about to pick up. Yup, no quick fixes. One almost wonders if the president sees himself as a deus ex machina: don't let a crisis go to waste.)

CLARIFICATION

Based on an "anonymous" comment sent in earlier, at least one person was apparently confused by this post and another post in which ten new permits were issued today by the state of North Dakota. It took a few minutes to figure out what "anonymous" was saying, but "anonymous" felt that ten new permits issued today was evidence that no "permitorium" exists.

The "permitorium" on this blog refers to the Federal government's delaying action on new permits. The new permits updated daily on this blog have to do with state permits, and nothing to do with Federal permits. The state of North Dakota is doing a fantastic job fulfilling its responsibilities.

Ten (10) New Permits -- Bakken, North Dakota, USA

Operators: Enerplus (5), Oasis (2), Whiting (2), BEXP.

Fields: McGregory Buttes, Bull Butte, North Creek, Zenith, Alger.

Four of the ERF wells will be on the same pad in McGregory Buttes.

The two Oasis wells will be on the same pad in Bull Butte.

Whiting's two permits are in Stark Creek and one is in Zenith field, which was recently highlighted on this blog after a tract was acquired for $9,000/acre. The other permit is in North Creek which is a tiny field (eight sections) right next to Bell field where Whiting is already very, very active. Remember this well in Bell field:

• 9706, 571, New Millennium Resources, Decker 1-32, tested in 1982, still producing at about 2,000 bbls/month; total produced to date (after almost 30 years of producing): 704,519 bbls of oil, very little gas and very little water. Formation? Tyler formation.

Both of the Whiting permits issued today are within 8 miles as the bald eagle flies from the Decker well 

In addition, there were a number of great well that reported out today on the daily activity report.

• 18435, 2,376, Denbury Onshore, Nelson 41-5H, Sanish
• 19318, 2,042, American Oil and Gas, Hodenfield 15-23H, Bakken
• 19745, 2,043, Whiting, Hoover 14-1XH, Bakken

Notice the "X" designation for the Whiting Hoover well.

Apple/iPad/ATT Fan: Nothing To Do With The Bakken

I noticed that Verizon's 4G LTE network is down and out for some unknown reason.

That's not a big deal; these things come and go. What surprised me was what I learned reading some of the comments from Verizon's Thunderbolt users -- the smart phone that uses Verizon's 4G LTE.

It turns out that the battery life of the smart phone is as little as 2.5 hours of "normal" usage.

Batteries are the bane of the early 21st century. Once someone cracks the code on battery technology, an entire new world of mobility will dawn -- including electric vehicles.

Apple Corp. and Steve Jobs got a lot of grief when the original iPad was released because of what it couldn't do or didn't have: a) could not multi-task; b) did not have Flash (YouTube in many cases); c) no still camera; and, d) no video camera. There were a number of reasons for these but a common denominator for all was the strain on battery life each of these "add-on's" impossed.

I have been waiting to see the real-world results for battery life for new smart phones and new tablets competing with Apple products.

I don't know about the iPad 2 yet (Apple says it has the same battery life as the original iPad), but I know that no one, absolutely no one, complains about the battery life of the original iPad. Apple says it will last ten hours under continuous usage and 30 days on standby. It's been my experience that when traveling I can go as much as five days in between charges just using it for essential e-mail.

On another note, now that I am in Boston for awhile, I visit the Apple Store on Boylston Street when I get a chance. On the last two occasions I visited I asked about the availability of the iPad 2. It is the same answer one sees elsewhere: the folks at the Boylson Street Apple Store generally get a shipment of iPads every other day or so, maybe every day for a stretch. They never know ahead of time what they will be getting and it's always a mix of the various models. Customers arrive each day at 9:00 a.m. to find out what has arrived; folks are given numbered tickets and are served in order. The last two times I visited the Apple Store on Boylston Street, about 2:00 p.m. each time, they still had at least one Verizon 3G 64GB model available, but no ATT models.

FYI.

Reiterating Thougts on Price of Oil -- WTI (NYMEX) Oil

I maintain that a "fair  price" for Bakken oil is in the $60 - $80 range.

Prices between $80 and $100 reflect world events (e.g., Mideast tension, global economy, supply and demand, etc.).

Prices between $100 and $120 reflect strength of the dollar.

I have posted that almost verbatim three times in past week or so.

This copied exactly as it shows up from Yahoo!InPlay supports the thesis:

11:47AM Dollar Index slipping back off day session high, seeing some limited recovery in Energy/Commodity -- XLE, OIH, KOL, USO, XLB, MOO, SLV, GLD (UUP) :
11:44AM Precious metals are putting in their own rally along with crude; gold is back above $1510, now at $1510.50 +7.10, while silver is now at $45.35 +0.30 after climbing ~0.8% in the last 15 min (COMDX) :
11:41AM Crude oil is rallying and just broke through the $113/barrel level; now at $113.05 +0.85 (COMDX) 

Remember that earlier this morning (before 11:41 a.m.) oil was pulling back, below $112 and heading toward $110 when oil inventory in US was shown to have increased (although that was balanced by inventory of gasoline falling).

Now, after 11:47, with strength of dollar slipping again, oil is back up to $113.

Update, further supporting my my theory:

1:59PM Crude oil just rallied to new session highs at $113.40/barrel without a notable move in the dollar index. However, the dollar is still weaker against the euro; crude is now at $113.25 +1.04 (COMDX) :  1:57PM Dollar Index slide to new day session low, hovering just above its overnight/multi-low at 73.49 (UUP) : Seeing relative strength in Silver SLV, Gold Miners GDX, Gold GLD, Materials XLB, Energy XLE, Oil Service OIH, Copper JJC, Ag/Chem MOO, Commodity Index in recent trade.

1:55PM Precious metals extend gains and make new session highs; gold is now +$6.30 at $1523.30/oz, while silver is +$1.07 at $47.02/oz. (COMDX)

SeekingAlpha: Oil on Track to Hit $200 By End of 2012

Link here.

The author has a long discussion supporting his $200/bbl thesis.

One of his points: policies by governments around the world suggest the trend will continue, and provides three examples:

• UK recently increased its punitive tax on oil producers to 32% from 20%. This is in addition to the "normal income tax," thereby making it punitive
• New oil production from Canada and North Dakota is bottled up by refusal of the US government to permit a trans-national pipeline improving oil supply to rest of the US
• The permitorium in the Gulf continues 

The author failed to add another:

• The EPA has shut down drilling in Alaska

Oil Companies' Profit on Gasoline: 4%. Government Profit on Gasoline: 15%

I was sent the following.

When oil profits are reported this week, it should be noted that oil companies make a profit of four (4) percent on each gallon of gasoline. Four percent.

The government makes a profit of fifteen (15) percent on the same gallon of gas.

I'm sure everyone has different numbers, but the point is well taken.

The whole thing reminds me of The Little Red Hen, an old folk tale, most likely of Russian origin. Irony of ironies.

UPDATES

April 28, 2011, 11:34 a.m.: Right now on CNBC: XOM profit per barrel rose only 14 percent. CNBC reports it, but I doubt most "get it."

April 27, 2011: This is from Carpe Diem. First, a map of the US showing the taxes on a gallon of gasoline by state: it pretty much averages 50 cents/gallon.

So, how much money does XOM make per gallon of gasoline?

According to this post on Exxon Mobil's Perspective Blog, "For ever gallon of gasoline, diesel or finished products we manufactured and sold in the United States in the last three months of 2010, we earned a little more than 2 cents per gallon. That's not a typo. Two cents."

Hess Net Income Up 73 Percent, 1Q11 -- Bakken, North Dakota, USA

Link here and also at earnings central.

Confidential List: Some Folks Still Have Questions -- Bakken, North Dakota, USA

I see on other boards some folks still have questions have about the confidential list on the NDIC board.

Someone noted that not all wells have dates associated with them for coming off the confidential list. These wells may be "tight holes" at this point, have not yet spudded, and the clock has not started ticking yet. If they are on the confidential list, and don't yet have a date of release, I assume they are "tight holes" and have not yet spudded. 

For other posts regarding the confidential list, note that "ConfidentialList" is a label at the bottom of the blog.

An update, from the FAQ section of this blog:

14. What information is available for a well on the confidential list, what is the definition of a completed well, and how long can a well remain on the confidential list?

The following was taken from the Bakken Shale Discussion Group thread. From the NDIC: "All information furnished to the director on new permits, except the operator name, well name, location, spacing or drilling unit description, spud date, rig contractor, and any production runs, shall be kept confidential for not more than six months if requested by the operator in writing. The six-month period shall commence on the date the well is completed or the date the written request is received, whichever is earlier. If the written request accompanies the application for permit to drill or is filed after permitting but prior to spudding, the six-month period shall commence on the date the well is spudded."

The obvious question is "when is a well considered to be completed?" For wells that will be fracked, the well is considered "completed," when the well has been fracked. This has been the opined explanation for many EOG wells coming off the confidential list in January and February, 2010. EOG typically doesn't put a well on the confidential list until it has been completed.

If a well has not been fracked at the time the well comes off the six-month confidential period, the status remains listed as "DRL." It will remain on "DRL" status until 30 days after it is fracked. Once the well is fracked, the producer has 30 days to test the well and file the report with NDIC. 

The Federal Reserve Bank of Minneapolis: The Bakken -- Bigger and Better

Link here.

This story published back in March. Nice update of the Fed's feeling about the Bakken.

With additional formations below the Bakken that will produce oil, the Fed sees "at least an additional ten to twenty years of intense drilling and development, followed by several more decades of continued petroleum production.”

Remember: the "Basic Analysis of the Bakken" foresees intensive drilling through 2030 and then continued production through 2100. The "Basic Analysis" is linked at the sidebar on the right. 

Talk of Oil Industry Returning to Ohio: Just Talk?

This is not the type of article I expect to find at Rigzone. This is very, very interesting.

Most of northwest Ohio's oil is in a geological area known as the Lima-Indiana Field, characterized by Trenton limestone. The first major field discovered in North America, it runs from almost Toledo to Indianapolis.

Few people today may realize Ohio was America's leading oil-producing state from 1895 to 1903.

John D. Rockefeller, the wealthiest man in the world in 1895, got his start in the Cleveland area with Standard Oil Co. in 1870. Ohio moved past its neighbor Pennsylvania, where Col. Edwin L. Drake drilled the world's first commercially successful oil well, at Titusville, on Aug. 27, 1859.

Meridian, a subsidiary of Burlington Resources, was successful in bringing up more oil from that formation using horizontal hydraulic fracking in 1994, but not enough to make it economical. Meridian is a familiar name to those who follow the Bakken in North Dakota.

Updates

September 20, 2017: the linked Rigzone article above is no longer available, but the story is also here.  

Baker Hughes Beats Expectations -- 1Q11

Beats expectations, 87 cents vs 78 cents.

Earnings Central here.