The Bakken: Possibly the Largest Construction Project in the United States -- North Dakota Petroleum Council -- Bakken, North Dakota, USA

On May 4, 2011, I wrote this: I think I think events in North Dakota are bigger than most people comprehend.

Today, I received the June issue of Talkin' the Bakken in the mail. This might be just the best publication on the Bakken out there. Click here regarding the launch of this glossy.

In this issue the editors quote the North Dakota Petroleum Council:

The Bakken is possibly the largest construction project in the United States right now and likely the second largest in North America, behind the Alberta oil sands. There is no question that the next three to five years will be a busy time across the west as Bakken development continues and infrastructure is expanded.

In fact, it would be interesting if anyone can find a construction project going on right now in the United States requiring a 2,500-bed man-camp to keep it going. And that's just one of many man-camps going up in the Bakken industrial park.

For those looking for work in the North Dakota oil patch, here are the advertisers in Talkin' the Bakken. These are just a few of those working in the largest industrial park project in the United States.

Hess
BEXP
XTO Energy
Whiting
Continental Resources
G3 Operating

Diamond B Oilfield Trucking
S&S Sales: Trucking; frack sand hauling; water hauling; 400 bbl rental tank; 500 bbl frac tanks
BNSF Logistics
Jamesway Limited

Halliburton
Sanjel: fracking, cementing, nitrogen
Frontier Wellhead: wellheads, frac rentals, slickline/wireline
Journey Energy Services: completions
WISCO
I.E.S.S.: Industrial Equipment
Grizzly Wire Rope and Chain
Missouri Basin Well Service
Basic Energy Services
Tartan Controls: completions
Wanzek Construction: project execution; compressor stations, crude oil pump stations, loading and unloading terminal, gas storage
B&G Production Service: Roustabouts, tank battery construction, contract pumping
Headwater Lining: pit liners, containment
BTL: liners
Petroleum Services: hot shot, trucking, drill bits
EcoAFS Alternative Fuel Systems: natural gas engines
MDU
McCody Concrete
Well Hawk: security, monitoring
Alltite: total bolting solutions
Border Steel: structural steel and pipe
Badlands Steel
Sullivan Palatek: portable compressors
Parker: hydraulic hoses and fittings
Do-All Metal Fabricating
Ornamental Iron Works: fabrication portable welding
DW Metal Works: custom fabrication for most oil field equipment

LBI Renewable: spill clean-up

NCS: Neset Consulting Service -- drilling production and geology
PLS: geological well site consulting
AE2S: civil engineering, surveying, mapping, GIS, site design, structural and electrical engineering
Badlands Integrity Group: human resources safety and training

KLP: lightning protection

Interstate Power Systems: heavy equipment repair for the oil patch

Pierce Leasing: RV Supercenter, Homes, Portable Offices, Leasing
Stone Creek Homes: "complete home in a one bedroom studio"; delivered to site within 90 days
Heartland Homes and Heartland Village: Dickinson, North Dakota
RDJ Builders: Signature home series; homesites available in Williston
Iseman Homes
Coates RV
University Commons: 60 acres of multi-density development
AgriComm: commercial office and warehouse construction
Furniture and Interior Finishing Group: branches opening soon in Glendive and Williston
Concrete Coatings

Miller Insulation: Commercial, residential
ICS: general contractor
Rhoton Construction Group

Motorola: Communications services, systems

Missouri Flats Inn

M&M Cafe, Sidney, Montana

North Dakota Guaranty and Title Company
Pifer's Auction and Realty
Fredricksen Real Estate, Williston
PCS, LLC: Business Brokers, M&A, Financing, Consulting
Empire Oil Company: leasing, titles, landmen
Irish Oil and Gas
Oil Royalty Buyer

Murphy Motors (Chevrolet, Cadillac, Buick, GMC Truck
Kupper Chevrolet (Mandan, North Dakota)

Badland Truck Sales (Glendive, Montana)

Shane Cymbaluk Trucking
DC&B Hotshot and Trucking
Golden Eagle Trucking

Dan's Tire Service: tire replacement

C&D Water Services: water softener

Today's Tarp and Shoe Repair

Pumps Plus: degreaser cleaner (rigs, trucks, tools)

Western Cooperative Credit Union
American State Bank

Williston Basin/Mid-North America Stock Fund (ICPAX)

Veale Insurance Agency, Grand Junction, Colorado

Mercy Medical Center

Horizon Resources
DAWA Solutions Group

Ritter Brothers Diamond Cutters

Eleven (11) New Permits in North Dakota -- Bakken, North Dakota, USA

Daily activity report, August 2, 2011 --

Operators: Whiting (5), Oasis (3), XTO, Baytex, SM

FIelds: Sanish, Lost Bridge, Mondak, West Ambrose, Poe, Gaylord, Ellsworth, Tyrone, and two wildcats.

Oasis has a multi-well pad in Mondak.

Whiting has another permit in its cash cow, the Sanish, as two wildcats.

Baytex has another permit in West Ambrose. At one time I was quite intrigued by all the activity in Ambrose/West Ambrose. The activity appears to be continuing.

Change of operator:

• Three wells changed operator from Ursa Resources to Samson Resources.

Twenty-two (22) wells on the confidential list were reported as plugged or producing, including:

• Whiting: 5
• EOG: 5
• Denbury: 3
• CLR: 2

This may seem like trivia to report this, but there's a reason I am reporting it. 

Fracking Backlog: Six Wells Released From Confidential List; Only One Completed -- Bakken, North Dakota, USA

The six wells are reported elsewhere; only one was not put on DRL status, and that was a great well:

• 20155, 2,185, Newfield, Barracuda 150-100-2-11-1H, Sandrocks, Bakken

I have repeatedly said that up to 50 percent of wells coming off the confidential list are not completed and go into DRL status. When only one of six actually reports, that certainly proves the point.

I will also suggest that fracking will be a problem for quite some time: fracking needs manpower, and there simply is not enough places for workers to live in the North Dakota oil patch. In addition, if the Bakken does not get the housing situation sorted out, the drillers in Utica, Niobrara, Marcellus, and Eagle Ford are going to "steal" those frack teams. Come winter, some of those workers will elect to stay in Texas when activity picks up there.

Results of the August North Dakota State Land Lease Auction -- North Dakota, USA

Results for the North Dakota state oil and gas lease auction for August, 2011.

A big 'thank you' to "anon 1" for alerting me to this most recent auction. I completely forgot about it.

Highlights of the auction

Hettinger County (southwest North Dakota):

• Classic Petroleum was the lone winner in this county this time: a bit over 2,000 acres for about $1,000/acre.

Slope County (southwest North Dakota):

• Classic Petroleum picked up about 1,600 acres for about $1,600/acre.
• Pacer Energy picked up about 2,000 acres for about $200/acre; as low as $25/acre; as much as $1,500/acre.

McKenzie County (core Bakken):

• KOG picked up the only acres leased here: 320 acres at $7,300/acre.

Divide County (northwest North Dakota; borders Canada):

• Sundance Oil and Gas picked up about 1,600 acres at around $1,200/acre (as little as $310/acre to as much as $1,600/acre).

From this:

From 1998 to 2005, Mr. Wood was a founding member of three NGP-backed oil and gas companies; Classic Resources Inc., Classic Petroleum Inc. and Classic Petroleum Resources Inc. Mr. Wood led all land activities for the Ark-La-Tex focused companies. After Classic Petroleum’s sale to Chesapeake Energy in 2005, Mr. Wood was employed by Chesapeake as an Acquisition Manager for East Texas until June of 2006. Since leaving Chesapeake in 2006, Mr. Wood has served as an Acquisition Consultant for several companies (including Petrohawk Energy, Grand Energy, Peoples Energy, Camterra Resources and Chesapeake Energy) until joining Tanos in August of 2008 as Vice President-Land. 

I'll let others connect the dots.

Slawson: Six Wells on 640-Acre Spacing Unit -- Bakken, North Dakota, USA

Link here.

• 15607, Slawson: Cabernet-Bakken, 6 wells on a 640-acre unit, Dunn County
• 15610, Slawson: Alger-Bakken, 6 wells on a 640-acre unit, Mountrail County
   

Surge Energy Applies to Increase Significantly More Wells in Bottineau County -- North Dakota, USA

Link here.

15505, Surge Energy: extend Northeast Landa-Spearfish/Madison, Souris-Spearfish-Madison, North Souris-Spearfish, and/or North Souris-Madison, creating a dozen new 320-acre spacing units and to drill 12 wells on these units; also it looks like six 180-acre unis with one well on each; Bottineau County

BR, QEP: Looking To Drill 12 Additional Wells in Single 2560-Acre Spacing Units in McKenzie County -- Bakken, North Dakota, USA

I am in the process of transcribing the NDIC hearing dockets for August.

This caught my attention:

• 15373, BR: Dimmick Lake-Bakken; Johnson Corner-Bakken; 12 additional hz wells on a single 2560-spacing unit and increase the stratigraphic definition of the Bakken Pool, McKenzie (this amounts to a well every 215 acres)
• 15374, BR: Johnson Corner-Bakken; Pershing-Bakken; 12 additional  hz wells on a single 2560-acre unit; amend the stratigraphic definition of the Bakken pool, McKenzie
• 15375, BR: Pershing-Bakken; North Fork-Bakken; 12 additional hz wells on a single 2560-acre unit; amend the stratigraphic definition of the Bakken pool, McKenzie
• 15379, QEP: Heart Butte-Bakken, create one 2560-acre unit; 12 hz wells; Dunn, McLean Counties
• 15059, cont'd, CLR: Elidah-Bakken; create a 2560-acre unit; multiple wells; McKenzie County
• 14356, cont'd, CLR: Elm Tree-Bakken; created a 2560-acre unit; up to 4 wells

Comments later.

NDIC Hearing Dockets for August, 2011 -- Bakken, North Dakota, USA

NDIC has just posted 22 pages for the Tuesday, August 30, 2011, hearing docket, and 23 pages for the Wednesday, August 31, 2011, hearing docket. I will spend the rest of the day, summarizing these dockets, and posting as I go along.

Tuesday, August 30, 2011

15335, Oasis: temporary spacing for 5300 44-15H Carriere Federal, Williams County
15336, Oasis: temporary spacing
15337, Oasis: temporary spacing
15338, Oasis: temporary spacing
15339, Oasis: temporary spacing
15340, Oasis, temporary spacing
15341, Oasis: extend
15342, Oasis: Oasis, Bull Butte-Bakken, 3 hz wells on two 1280-acre units, Williams County
15343, Oasis: Squires-Bakken, 4 hz wells on a 1280-acre unit, Williams County
15344, Oasis: Camp-Bakken, 2 hz wells on 2 1280-acre units, McKenzie County
15345, Petro Harvester: Sergis-Madison, 80-acre spacing; also 160-acre spacing, a vertical well, and a horizontal well, Bottineau County
15346, Whiting: temporary spacing for Maus 23-22, Golden Valley, ND
15347, Whiting: temporary spacing
15348, Whiting: amend and correct three spacing units affected by orders 14956, 14957, 16530, and 16603
15349, Whiting: Sand Creek-Bakken, 3 haz wells on two 1280-acre spacing units, McKenzie County
15350, Whiting: extend
15351, Whiting: establish a 1280-acre unit, 1 hz well, Bakken, McKenzie
15352, Whiting: extend

15353, Whiting: Ellsworth-Bakken, 2 hz wells on 3 1280-acre units, McKenzie County
15354, Whiting: extend
15355, Whiting: extend
15356, Cornerstone: temporary spacing
15357, Petro-Hunt: temporary spacing
15358, Petro-Hunt: temporary spacing
15359, Petro-Hunt: temporary spacing
15360, Petro-Hunt: revoke Zenergy's Vallevik 23-14H, Williams County
15361, Petro-Hunt: to allow the Fort Berthold 147-94-1A-12-1H to open to the Lodgepole Formation, Dunn County
15362, Petro-Hunt: Little Knife-Bakken, 7 hz wells on 2 1280-acre units, Dunn County
15363, Petro Harvester: Sergis-Madison, looks identical to case no. 15345 above
15364, True Oil: Red Wing Creek-Madison, to establish a 480-acre unit and 1 hz well, McKenzie
15365, Hess: extend
15366, Hess: extend
15367, Hess: Big Butte-Bakken, to establish a 1280-acre unit; 3 hz wells, Mountrail County
15368, Hess: Clear Water-Bakken, to esablish 2 1280-acre units; 3 hz wells on said units, Mountrail County
15369, Hess: Wheelock-Bakken, 3 hz wells on a 1280-acre unit, Williams County
15370, Hess: Alger-Bakken, 1 hz well on 640-acre spacing, Mountrail County
15371, Hess: Capa-Bakken, 3 hz wells on a 1280-acre unit, Williams County
15372, Hess: extend
15182, cont'd, Hess: revoke CLR permit for Burr 1-19H, Williams County
14935, cont'd, Hess: revoke CLR permit for Foster 1-28H, Williams/McKenzie Counties
15373, BR: Dimmick Lake-Bakken; Johnson Corner-Bakken; 12 additional hz wells on a single 2560-spacing unit and increase the stratigraphic definition of the Bakken Pool, McKenzie (this amounts to a well every 215 acres)
15374, BR: Johnson Corner-Bakken; Pershing-Bakken; 12 additional  hz wells on a single 2560-acre unit; amend the stratigraphic definition of the Bakken pool, McKenzie
15375, BR: Pershing-Bakken; North Fork-Bakken; 12 additional hz wells on a single 2560-acre unit; amend the stratigraphic definition of the Bakken pool, McKenzie
15376, MRO: Deep Water Creek Bay-Bakken, 2 hz wells on 5 1280-acre units, McLean
15377, MRO: extend Lost Bridge; add 4 sections; 640-acre spacing; 1280-acre spacing; 2 wells on each unit, Dunn County
14231, cont'd, SM: revoke a CLR permit for Koeser 1-11H, McKenzie County
14451, cont'd, Sequel: establish 6 1280-acre units, 1 hz well each; McKenzie
15378, North Plains: legalese to recover risk penalty, Williams County
14527, cont'd, North Plains: to revoke a CLR permit for Sharon 1-17H, Williams
15379, QEP: Heart Butte-Bakken, create one 2560-acre unit; 12 hz wells; Dunn, McLean Counties
15380, QEP: to complete MHA 1-01-02H-149-91, Dunn, McLean Counties
15381, Allan G. Lassey: termination of the Glass Bluff-Madison unit, McKenzie, Williams
15192, cont'd, confiscate equipment at Missouri Breaks Unit #1 well, McKenzie
14541, cont'd, Oil for America: temporary spacing for Zastoupil 22-1, Stark County
15193, cont'd, CCS Midstream: to construct a treating plan in Ross Field, Mountrail County
15382, SWD.
15383, Mann Enterprises: SWD
15384, Petro Harvester: SWD
15385, Petro Harvester: SWD
15386, Petro Harvester: SWD
15387 -  15393, OXY USA: pooling
15394 - 15417, Hess: pooling
15418, Hess: SWD
15419, Hess: SWD
15420, Hess: SWD
15421, Oasis: flaring
15422 - 15429, Oasis: pooling
15430, Oasis: flaring
15431 - 15436, Oasis: pooling
15437, Oasis: flaring
15438, Oasis: unrestricted production and flaring until December 31, 2011
15439, Oasis: unrestricted production and flaring until December 31, 2011
15440 - 15442, BTA: pooling
15443 - 15469, Whiting: pooling
15470 - 15472, KOG: pooling
15473 - 15478 , BR: pooling
15479 - 15482, GMX Resources: pooling
15483, Luff: flaring
15484, Luff: flaring
15485, Luff: flaring
15486, Luff: flaring
15487, Luff: flaring
15488, Luff: flaring
15489, Luff: flaring

Wednesday, August 31, 2011

15490, CLR: Hebron-Bakken, proper spacing, Williams County
15491, CLR: temporary spacing
15492, CLR: temporary spacing
15493, CLR: extend
15224, cont'd, CRL: revoke Hess 2WX 7-1H (#20123)
15059, cont'd, CLR: Elidah-Bakken; create a 2560-acre unit; multiple wells; McKenzie County
14356, cont'd, CLR: Elm Tree-Bakken; created a 2560-acre unit; up to 4 wells; McKenzie
14062, cont'd, CLR: temp spacing
14543, cont'd, CLR: temp spacing
15494, EOG: temp spacing
15495, EOG: Spotted Horn-Bakken; create a 1280-acre unit; 3 hz wells; another 1280-acre unit and 2 hz wells on that unit, McKenzie
15496, Renegade: temp spacing
15497, Newfield: Westberg-Bakken, create a 1280-acre unit;5 hz wells; McKenzie
15220, cont'd, Newfield: temp spacing
15498, Crescent Point: extend
15499, OXY: extend
15500, Zenergy: Indian Hill-Bakken; create a 1280-acre unit, 2 hz wells; McKenzie County
15501, Zenergy: extend
15222, cont'd, Zenergy: extend
15502, Samson Resources: extend Baukol-Bakken; establish 2 1920-acre units, 1 hz well each; Divide County
15503, Dakota-3: Eagle Nest-Bakken; establish a 320-acre unit with 1 hz well; a 960-acre unit with 2 hz units; McKenzie County
15504, Triangle:
15505, Surge Energy: extend Northeast Landa-Spearfish/Madison, Souris-Spearfish-Madison, North Souris-Spearfish, and/or North Souris-Madison, creating a dozen new 320-acre spacing units and to drill 12 wells on these units; also it looks like six 180-acre units with one well on each; Bottineau County
15506, Baytex: Ambrose, Whiteaker, Plumer, and/or Burg-Bakken,  extend, to establish 36 1280-acre units; 1 hz well each; Divide County
15507, Baytex: temp spacing
15508, BEXP: Kittleson Slough-Bakken, a 1280-acre unit; 1 hz well, Mountrail
15509, Silver Oak Energy: Cedar Hills-Red River "B", establish 4 640-acre units, 3 hz wells each
15510, GMX Resources: Tree Top-Bakken, exten
15511, Liberty Resources: revoke Newfield permit for Berger 156-100-7-6-1H9#21198)
15066, cont'd, ERF: Eagle Nest-Bakken, extend; establish a 1280-acre unit; 7 hz wells
14081, cont'd, Sinclair Oi: temp spacing
15512, OXY USA: Crooked Creek-Bakken, 6 wells on four 1280-acre units (24 wells)
15513, OXY USA: SWD
15514 - 15525, OXY USA: pooling
15526, Baytex: SWD
15527 - 15530, Baytex: pooling

15531, Newfield: Tobacco Garden-Bakken, 5 wells, on a 1280-acre unit, McKenzie
15532, Newfield: Haystack Butte-Bakken, 5 wells on a 1280-acre unit, McKenzie
15533 - 15534, Newfield: pooling
15535, Fidelity: pooling
15536 - 15555, XTO: pooling
15556, XTO: North Fork-Bakken, 3 wells on a 1280-acre unit, McKenzie
15557, XTO: Capa-Bakken, 3 wells on a 1280-acre unit; Williams
15558 - 15561, CLR: pooling
15562, CLR: legalese on a risk penalty
15563, CLR: legalese on a risk penalty
15564, EOG: legalese on a risk penalty
15565, EOG: legalese on a risk penalty
15566 - 15575, EOG, pooling
15576, EOG: Spotted Horn-Bakken, 2 wells on a 1280-acre unit; and 3 wells on a 640-acre unit, McKenzie
15577, EOG: SWD
15578, Samson Resources: flaring
15579, Samson Resources: flaring
15580, Samson Resources: flaring
15581 - 15582, Samson Resources: pooling
15583 - 15585, Denbury Onshore: pooling
15586, Denbury Onshore: SWD
15587 - 15598, BEXP, pooling
15599, BEXP: Williston-Bakken, 4 wells on 2 1280-acre units, Williams
15600, BEXP: SWD
15601, BEXP: Rosebud-Bakken, 4 wells on 3 1280-acre units, Williams, McKenzie Counties
15279, cont'd, BEXP: flaring
15602, Missouri Basin Well Service: SWD
15603, Dakota-3: Eagle Nest-Bakken, 8 wells on a 1280-acre spacing unit, Dunn County
15604, Dakota-3: Reunion Bay-Bakken, 7 wells each on 2 1280-acre units, Mountrail County
15605, Dakota-3: Van Hook-Bakken, 7 wells each on 2 1280-acre units, Mountrail County
15606, Slawson: Saxon-Bakken, 2 wells on a 1280-acre unit, Dunn County
15607, Slawson: Cabernet-Bakken, 6 wells on a 640-acre unit, Dunn County
15608, Slawson: Four Bears-Bakken, 7 wells on a 1280-acre unit, McKenzie, Mountrail Counties
15609, Slawson: Ross-Bakken, 3 wells on a 1280-acre unit, Mountrail County
15610, Slawson: Alger-Bakken, 6 wells on a 640-acre unit; Mountrail County
15611, Slawson: SWD
15612, Slawson: SWD
15613, Slawson: SWD
15614 - 15617, Silver Oak: pooling
15618, Hunt: commingling
15619, Hunt: commingling
15620, Hunt: commngling
15621, Hunt: commingling
15622, Hunt: commingling
15623, Hunt: commingling
15624, Hunt: commingling
15625, Hunt: commingling
15626, Hunt: commingling
15627, Hunt: commingling
15628, RM Resources: SWD
15629, G3 Operating: SWD
15630, G3 Operating: SWD
15631, Epworth Operating: SWD
15632, Bennett: SWD
15633: Fidelity: Dutch Henry-Bakken, flaring, Stark County
15634, EOG, Zenergy: Squires, flaring and unrestricted production, Williams
15635, Dakota-3, ERF, EOG: Spotted Horn-Bakken, flaring and unrestricted production, McKenzie, Mountrail
15636, BEXP, CLR, EOG, Hunt, Slawson: Ross-Bakken, flaring and unrestricted production, Mountrail
15637, Denbury Onshore, OXY USA: Ragged Butte-Bakken, flaring and unrestricted production, McKenzie
15638, Newfield: Pembroke-Bakken, flaring and unrestricted production, McKenzie
15639, ERF: Moccasin Creek-Bakken, flaring and unrestricted production, Dunn
15640, ERF: McGregory Buttes-Bakken, flaring and unrestricted production, Dunn
15641, Samson Resources: Forthun-Bakken, flaring and unrestricted production, Burke, Divide
15642, Zenergy, Eightmile-Bakken, flaring and unrestricted production, Williams, Mckenzie
15643, Dakota-3, ERF, Slawson: flaring and unrestricted production, Dunn, McKenzie
15644, Denbury Onshore, OXY USA: Crooked Creek-Bakken, flaring, unrestricted production, Dunn
15645, BEXP, Citation, XTO, Zavanna: Buford-Bakken, flaring, unrestricted production, Williams, McKenzie Counties


That completes the cases, but now much needs to be filled in which may or may not occur over the next few days.

More Than Just The Bakken in the Bakken -- North Dakota, USA

Link here.

Magellan Petroleum Corp., Portland, Maine, has signed a letter of intent with Vaalco Energy Inc., Houston, to begin developing the Bakken formation and deeper horizons in the East Poplar Unit and Northwest Poplar field in Roosevelt County, Montana.

This is an old story (July 18, 2011). I thought I had posted it, but if I have, I cannot locate it, so here it is (again?).

This is what I find most interesting about the story and why I wanted to make sure I posted it:

Magellan will retain its current ownership for all formations above the Bakken, including the currently producing Charles and Tyler formations.

Magellan said the partnership with Vaalco is another step, with a strong and experienced partner, toward monetizing the asset not only from the Bakken but also from the Three Forks, Red River, and associated deeper formations.

Reading between the lines of the CHK conference call transcript, I am thinking that CHK may be thinking the same thing. 

Unitization in the Bakken -- Bakken, North Dakota, USA

Updates

January 24, 2020: "rule of capture," and Pennsylvania; Pennsylvania state supreme court.  

Original Post 

I see that folks have been searching "unitization North Dakota Bakken oil."

A "cut and paste" from FAQ #35:

35. What is unitization? This appears to be best the answer from a reliable source [link no longer exists] posted July 1, 2011:

"Basically, under untization, the spacing units disappear and the entire  field boundary lines become a big spacing unit, where all the owner within  the field share in production from the entire field, which is allocated to  the owners by an agreed upon formula. The field becomes one big "spacing  unit," because the oil is being artificially forced across would would have  been the old spacing unit boundaries by the secondary recovery methods  (i.e., waterflood, CO2 etc.).  There will be a hearing or a number of  hearings with the DMR.

The state law requires that 60% of the mineral ownership approve of the  unit, and I believe votes are weighted by amount of acreage owned in the  unit. Most of the larger, older, conventional (i.e., non-Bakken) fields have  been unitized in ND -- Beaver Lodge, Blue Buttes, Fryburg, Big Stick.  The only one I'm aware that was defeated by the mineral owners was in Little  Knife field (Madison pool), and I think most would agree that such action  left a lot of recoverable oil in the ground.

Don't hold me to this, but if you are leased -- and your leases are not currently held by production -- if your leases are included in the unit (and  assuming the unitization plan is approved), they will be considered to be under production, as you will receive royalties pursuant to the formula."

An earlier source said this, which I posted August 2, 2010: Whatever unitization is, it remains a "non-issue" in North Dakota as of 2010. Seriously, here the discussion begins [link no longer exists]. Unitization is similar to pooling, but it occurs when producer(s) are ready to use enhanced oil recovery to maximize production from a common reservoir. With the Bakken being one huge continuous "reservoir" it's  hard to see how unitization could work, unless they do it by field, an arbitrary designation, in my mind, when it comes to the Bakken. Sixty percent of royalty owners (weighted) must agree to unitization before the NDIC will authorize it. To date, unitization has not occurred in North Dakota (August 2, 2010).

The NDIC hearing docket for August, 2011, will consider unitization of Lost Bridge-Bakken.

The writer of the link from August 2, 2010, has raised a very interesting issue. This brings a whole new question regarding "how do I know a neighbor's well isn't taking oil from my site?" The Texas Railroad Commission recently upheld / clarified a ruling that says a neighbor cannot sue for oil production / loss from a horizontal that comes right up to the section line. The commission said that if the neighbor is worried about a neighbor's well taking oil from his/her site, he/she better drill his/her own well. One can argue that the effectiveness of fracking extends only about 500 feet (radius) from the bore hole, and that may be true of the enhanced recovery, but that question will probably be raised. As noted earlier, the Texas Railroad Commission is similar to the NDIC in North Dakota, and most states follow the rules set by Texas regarding oil / mineral rights.

Idle Chatter: Average American Barely Holding On?

Yesterday while at the gas station, noticing several others filling up with -- or at least buying some -- gasoline, all of whom appeared to be average Americans, making average income, not driving really fancy cars, but cars one now expects to see in America, I began to think that, "you know, these folks probably were able to handle $4.00 gasoline for the first few weeks, maybe even the first few months, expecting that over time the price would fall again, but the price hasn't fallen all that much, and it's now been many months, a year? Longer? And I bet a lot of average Americans are truly just hanging on, financially, due to any number of reasons, but certainly the price of gasoline is not helping."

Then today, the top story at Yahoo!Finance: Americans cut spending for the first time in 20 months.

Americans cut back on their spending in June for the first time in nearly two years and their incomes grew by the smallest amount in nine months, a troubling sign for an economy that is barely growing.

Consumer spending dropped 0.2 percent in June, the Commerce Department said Tuesday.

Some of the decline was caused by declining food and energy prices, which had spiked in recent months. When excluding spending on those items, consumer spending was flat.

The article mentions that high gas prices and unemployment have squeezed consumer spending.

It looks like Americans can hang on for about two years when the economy turns. That's an interesting number for me; every time we moved to a new assignment in the military, it took me about two years to recover financially.  Our assignments averaged about 2.5 years over the course of my military career, until I was able to "homestead" at my last assignment. But I digress.

And, just yesterday, I linked this story: the double dip recession is already here.

I posted this on June 19, 2011, with updates periodically, and a major update on July 29. But this was the June 22, 2011, update:

June 22, 2011: The comments to this article are very interesting. It is very, very scary that the Fed chairman was unable to instill any confidence in the investing community. It is clear that he sees a second lost decade, and most of it revolves around lack of a sound energy policy.

Brutally honest, Bernanke admitted that he had no clue what was actually causing the current fragility in the U.S. economic recovery.  While the FOMC statement assigned blame outside of the U.S., pointing at Japan along with rising food and oil prices, Bernanke was put on the spot by a reporter who noted the inconsistency behind that explanation and a lowering of long term forecasts.  Bernanke took the hit, admitting only some of the factors were temporary and that he didn’t know exactly what was causing the slowdown, but that it would persist.  “Growth,” said Bernanke, “will return into 2012.”

I still feel strongly that policies at the top could have prevented this, but I'm probably naive and in the minority.

For Investors: SeekingAlpha Article Comparing Pure Play Bakken Stocks

Article compares BEXP, Oasis, NOG, and KOG.

Nice summary and can't disagree with author's bottom line.

SM: Incredible Second Quarter -- Bakken, North Dakota, USA

This is a great way to start off the week: SM reports outstanding numbers for 2nd quarter (2011); and, raises guidance significantly.

Last year, 2nd quarter, the company reported earnings of 28 cents/share.

This year, 2nd quarter, the company reported earnings of ... drum roll ... $1.86/share.

The Company has scheduled a teleconference to discuss these results and other operational matters on August 2, 2011, at 8:00 a.m. Mountain time (10:00 a.m. Eastern time). 

The call will be webcast live and can be accessed at SM Energy’s website at www.sm-energy.com. An audio recording of the conference call will be available at that site through August 9, 2011.

SM Energy sees production increasing as much as 40% in 2012. Couple that with increasing price of oil, and ...

Very nice analysis by Steve Zachritz at SeekingAlpha.com. With regard to the Bakken:

• 2 rigs running, going to three rigs in 3Q11.
• 204,000 net acres split between Divide, Williams, McKensie, Dunn and Billings Counties, ND along with some Montana acreage as well. Aside from Divide county, much of the rest of its acreage is being or has been proved up by the Bakken players list.
• Focus near term will be Raven (what we normally think of as Rough Rider) and the stuff up in Divide (not sure that I care much for Divide, yet, but time will tell and it is cheaper to drill there due to depth).

 The comment that it is going to 3 rigs in 2011 is "old" news, but specifying the third quarter (which we are now in) is "new" news.