Iranian Company In Talks To Build Oil Pipe Factory In Iraq -- Not a Bakken Story

An Iranian company is in talks to build an oil pipe factory in Iraq.

No comment necessary.

Seven (7) New Permits -- Bakken, North Dakota, USA

Drillers: BR (3), Murex, Whiting, CLR, Denbury.

Fields: Glass Bluff, North Creek, Sand Creek, Haystack Butte, Siverston, and two wildcats.

BR has one wildcat in McKenzie County, and CLR has a wildcat in Williams County.

Whiting has another well in North Creek, a very interesting area in the Lewis and Clark Prospect near Belfield and some very productive wells.

In addition to this information, the daily activity report listed several nice wells based on IPs:

• 19246, 1,425, Whiting, Smith 14-29XH, Mountrail County, Bakken
  19208, 800, Slawson, Water Moccasin 4-34-TFH, Mountrail County, Bakken
  18790, 1,773, ERF, Henry Bad Gun 16B-21-1H, Dunn County, Bakken
• 18487, 2,280, DNR, Thompson 31-11NWH, Charlson, Bakken, spudded 10/10;

The Charlson has been a very good field.

Communication Between the Bakken Formation and Three Forks

For newbies, this was an issue of a year ago or so, whether the Three Forks formations (upper and lower) and the Bakken formations (upper, middle, and lower) communicated with each other. Whether targeting and fracking one formation was adequate to drain both formations.

I discussed that in several places but it comes up periodically so I want to establish one page where I can link past and future postings on this same subject.

So, this is not opening up a new discussion on an old subject. It is simply, for me, some blog housekeeping, which I hate to do, but is occasionally necessary.

CLR PowerPoint slide presentation: the Bice and Mathistad experience: click here.
 
The narrative: the Bice and Mathistad experience: click here.

Continental Resources conclusions:

• Neither zone can be adequately drained by completion in another zone
• Limited connectivity will require wells in both zones to adequately harvest the reserves
• Reserves from MB and TFS are similar in magnitude

BEXP: Infill Wells Very Successful -- Bakken, North Dakota, USA

Link here.

BEXP's recommendation based on experience:

Overall, infill drilling results continue to support Brigham's view that at least four wells should be completed per spacing unit per producing horizon in the Williston Basin. 

Notice: "at least four wells per spacing unit." 


Specifically:

Brigham announced the successful completion of the Brad Olson 9-16 #3H and the Erickson 8-17 #3H, both of which are located in Brigham's Rough Rider project area in Williams County, North Dakota. The Brad Olson 9-16 #3H is the third well completed in the spacing unit, and is located, on average, approximately 1,390 feet from the Brad Olson 9-16 #2H, which was completed in November 2010. 

Based on production to date, all three wells in the Brad Olson spacing unit are performing comparably. The Erickson 8-17 #3H is the second well completed in the spacing unit, and is located, on average, approximately 1,790 feet from the Erickson 8-17 #1H.

BEXP has 7 rigs in the North Dakota Bakken; one is operating in Montana; the other six in North Dakota. BEXP will take possession of its eighth rig this month (May, 2011).

With its two dedicated frac teams, BEXP feels it an frac eight wells/month.

BEXP Doubles Production Year-Over-Year

The first line of BEXP's 1Q11 earnings report:

Our average daily production volumes for the first quarter 2011 were 11,314 barrels of crude oil equivalent (boe) per day, up 109% from the first quarter 2010 and down 1% from the fourth quarter 2010.

Apparently BEXP managed to muddle through the terrifically bad weather in January and February. Smile. Doubled their production. Impressive, to say the least.

Differences Between Initial Production Numbers (BOE) in Press Releases Vs Number (BO) Reported at the NDIC Website

In today's 1Q11 earnings release, CLR released early production results for a number of wells. I have added the initial production number for oil (not "oil equivalent) as reported to/reported by the state. Note the difference. When I first started this blog, CLR used a different approach to report initial production numbers but then switched to methods used by other Bakken companies, most often a variation of the 24-hour flowback number.

• Bud 1-19H (70% WI) in Williams Co. – 1,984 boepd; 662 bopd
• Seattle 1-35H (38% WI) in McKenzie Co. – 1,883 boepd; 683 bopd
• Ivan 1-29H (42% WI) in McKenzie Co. – 1,619 boepd; (N/A)
• Gronfur 1-28H (57% WI) in Williams Co. – 1,589 boepd; (N/A)
• Norway 1-5H (38% WI) in McKenzie Co. – 1,435 boepd; (N/A)
• Buelingo 1-20H (52% WI) in McKenzie Co. – 1,417 boepd; 417 bopd
• Missoula 1-21H (94% WI) in McKenzie Co. – 1,403 boepd; 749 bopd
• Hartford 1-19H (85% WI) in Williams Co. – 1,396 boepd; 637 bopd
• Kleist 1-35H (67% WI) in Divide Co. – 1,181 boepd; 765 bopd
• Daniel 1-33H (43% WI) in Divide Co. – 1,179 boepd; (N/A)
• He 1-20H (41% WI) in McKenzie Co. – 1,117 boepd; (N/A)
• Barney 1-29H (71% WI) in Williams Co. – 1,047 boepd; (N/A)

The number reported at the NDIC website must be calculations based on actual "production parameters in the field under 'normal' conditions."

Harold Hamm, CLR/CEO, in the 1Q11 earnings conference call, noted that the 24-hour flowback numbers could have been even higher:

Continental continues to restrict initial production rates on many wells in North Dakota to minimize natural gas flaring and to deliver as much of the rich gas as possible to market. "Some wells have initial flowing tubing pressures of more than 3,000 psi for several days, so they could easily have tested at double or more their announced rates, if we had opened them up," Mr. Hamm said.

CLR Production Increases 34 Percent 1Q11, Year-Over-Year -- Bakken, North Dakota, USA

Link here.

Fifty-three percent increase in earnings.

Continental produced 51,663 barrels of oil equivalent per day (Boepd) for the first quarter of 2011, a 34 percent increase over production of 38,428 Boepd for the first quarter of 2010 and an eight percent increase over fourth quarter 2010 production of 48,034 Boepd.

The Company reported EBITDAX of $268.7 million for the first quarter of 2011, a 53 percent increase over EBITDAX of $175.6 million for the first quarter of 2010 and a 22 percent increase over EBITDAX for the fourth quarter of 2010 of $220.9 million.

SeekingAlpha: A Look At Biggest Leaseholders in The Bakken -- North Dakota, USA

Link here.

I haven't cross-checked my data with his data regarding net acreage; if I get the chance I will do that later.

One cannot compare the companies listed head-on; one would be comparing apples and oranges as they say.

Some are pure-Bakken plays; others target other domestic plays in addition to the Bakken; and others are international companies.

In addition some are clearly "growth" companies, while others are more mature, almost "value" companies. PE's, as such, cannot be compared among the various companies.

In addition, the mix of their production is important: oil vs natural gas. If pure-Bakken, pretty much oil only; but if international, may have significant exposure to natural gas.

North Dakota's Taxable Sales Set Record in 2010

Link here.

Tax Commissioner Cory Fong said 2010 was another record year for taxable sales and purchases in North Dakota.

He said the growth over the previous year was more than 20 percent, pushing the total to more than $14 billion.

BEXP Has Added a Bit of Bakken Acreage Since Last Update -- Two Transactions in Early 2011 -- Bakken, North Dakota, USA

According to BEXP 1Q11 conference call presentation, BEXP now has 371,200 net acres in the Bakken.

And this in the earnings release:

Brigham has completed two acreage transactions during 2011, and currently has approximately 371,200 net acres in the Williston Basin.

Last time I updated this information, BEXP had 364,300 net acres.

Delta: 6,900 net acres.

Magnum Hunter Resources / NuLoch Resources Acquires Additional 5,000 Net Acres -- Bakken, North Dakota, USA

Magnum Hunter Resources acquires an additional 5,000 net acres.

Magnum Hunter Resources Corporation announced this morning that the Company's recently acquired wholly-owned subsidiary, NuLoch Resources Inc., along with certain of NuLoch's existing joint venture partners, have acquired 16,800 gross acres (5,000 net acres) in a "Bolt On" acquisition located in Burke County, North Dakota.

The acquired acreage is in close proximity to a producing Sanish well, the Gustafson #29-32, where NuLoch owns an 18.6% working interest. As previously announced by NuLoch, the Gustafson #29-32 had a peak 24 hour initial production rate of 937 Boe per day from the Sanish formation.

Offer to Buy Surface Land in the Heart of the Bakken -- North Dakota, USA

I don't have a "want ad" or "classified" section so I don't know how best to handle these opportunities and requests, but for now, I will handle them on a case-by-case basis.

I received a note from someone looking for land available for purchase that might be suitable for "a low-impact, high-end temporary employee housing community."  The details follow. I am not associated with the request or the requester, and am posting it only as a service.

Postings like this will be linked over at the "Investors" tab. 

**********

Wanted: 10 - 20 Surface Acres Along A Main Road in the Heart of the Bakken

If you have some vacant land along a main road in the heart of the Bakken, my company may be interested.

We are looking to make an immediate (possibly this week) acquisition or lease on 10 to 20 acres of relatively flat land.

The land will be used for a low-impact, high-end temporary employee housing community.

We will be providing two-bedroom cabins for employees working in the region.

These attractive cabins will help solve the housing crunch there, and will provide you with some immediate or ongoing cash as well.

Though we will consider a variety of parcels, some features that would make your land most attractive would include:

quick access to a major road

electric power

water

sewage

relatively easy to grade

minimal zoning requirements

in an area of high housing demand

I know that few properties fit all these requirements, but if yours fits some, please email me as soon as possible at ptmoore63@gmail.com.  Tell me about your land and why you think it may be a fit.

The owner of my company has already made 3 other recent ND acquisitions, and he is serious about obtaining another piece of land immediately.

Carpe Diem -- "Rust Belt" Fueling Recovery

Link here.

GM Volt Sales Fell in April; Down to Less Than 500 Units; GM Making 'Em As Fast As They Can; Can't Keep Up With Demand

From an earlier post:

GM says they are selling Volts as fast as they can make them. [They must be making them by hand.]

Today's GM news regarding the Volt:

Monthly sales of General Motors Co.'s extended range electric Chevrolet Volt fell in April, as the automaker ramped up distribution of demonstration models to dealers, the company said Monday.

"It's tough to limit the number of Volts for sale to potential customers when demand is so strong, but the Volt has value to the Chevrolet portfolio well beyond incremental sales," said Cristi Landy, Chevrolet marketing director, in a statement.

GM sold 608 Volts in March; it is expected that GM will sell less than 500 in April.

Draw your own conclusions.

GM has said that the company loses money on each Volt it sells. It would make sense to "hide" expenses for the Volt as part of GM's advertising budget.

Chesapeake and the Bakken -- More Dots To Connect in Western North Dakota

Chesapeake's significant entry into the Bakken is a huge story, speaks volumes, and continues to pique my interest. The fact that CHK refused to say anything more about the Bakken other than what they mentioned in their prepared statement suggests they are in discussions for further deals in western North Dakota.

A new comment by "Anon 1" at this link speaks volumes.

I think events in North Dakota are bigger than most people comprehend.

More on that later, perhaps, but for now, check out the comment regarding CHK and the writer's general thesis at the link above.

For more on who owns what where in North Dakota, click here.