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Thursday, August 11, 2011

For Investors Only: CHK To Deduct Expenses From Royalty Checks -- Folks Could See Barnett Shale Royalty Checks Decreased By As Much as 25%

Update


March 12, 2014: royalty owners being charged for transportation costs, post-production costs that exceed value of natural gas. Some say that defies logic. Not really.

August 21, 2011: I first posted the story below on August 11, 2011. Google "Chesapeake deducts 25% royalties" to see the number of posts about Chesapeake's decision.

Original Post


Link here.

This has to be one of the stranger stories I've read in a long time. CHK would hate to see royalty owners get two checks for same well, so CHK decides just to cut royalties by 25%.

Let's see, two options: a) send me two checks for a partial cut; or, b) send me one check with a full cut.

Hmmmm.

Here's the story, as I understand it:
1. Total, the French oil giant, recently paid $2.25 billion for a 25 percent interest in Chesapeake's Barnett Shale operations. 

2. There are costs associated with gathering, processing, and distributing (GPD) natural gas once it comes to the surface.  Chesapeake has historically not charged the royalty owners for the costs associated with GPD.

3. However, Total, the French company has routinely done that (gee, why does that not surprise me?).

4. So, a royalty owner in the Barnett, now has two companies to work with: CHK, which controls 75% and Total, which controls 25% of the natural gas that comes to the surface on their leases. 

5. CHK/Total could work out a deal where royalty owners would get two checks -- one from CHK which would not deduct costs associated with GPD, and one check from Total which would deduct those costs. Or CHK/Total could work out a deal where royalty owners would get a single check: one in which the entire amount would be subject to the GPD costs. 

6. CHK asked themselves: would their royalty owners like two checks for a bit less money, or one check for a lot less money.
Here is the first part of the story in case the link is broken:
About 20,000 royalty owners who have Barnett Shale natural gas leases with Chesapeake Energy will likely see their royalty checks slashed by roughly 25 percent after the company deducts expenses associated with post-production, such as gas gathering, compression and transportation.

The actual percentage and dollar amount decreases in royalty checks will vary monthly based on natural gas prices, post-production costs and output from wells.

Chesapeake is the No. 2 producer in the natural gas-rich Barnett Shale, which underlies more than 20 North Texas counties. 
This is the reason for the single check and 25% cut in royalties:
[A company spokesman] said the company's decision to begin assessing royalty owners for post-production costs was triggered by its agreement with Total, the French oil giant, which paid $2.25 billion for a 25 percent interest in Chesapeake's Barnett Shale operations.

Total was about to begin deducting post-production costs from royalty owners' checks based on its share of the Chesapeake wells' production, so Chesapeake also decided to begin assessing for the costs, Hood said.

Otherwise, payment to royalty owners would have required two separate checks, and "it didn't make any sense to have two different checks from two different companies," [the company spokesman] said. 
This sounds so incredible, I may have the story wrong, but that's how I read it.

If it's accurate, it falls under the category: I can't make this stuff up. 

I don't know how much it costs to find and produce natural gas, but it seems incredible that once brought to the surface, it costs 25% of its value to gather, process, and ship. What makes me think
that buyers of compressed natural gas are also charged for gathering, compressing and shipping?

This is like the potato farmer being charged for the costs associated with "compressing" the potatoes into French fries and for the shipping of the French fries to McDonald's. And, of course, the customer buying those French fries is still paying for the value-added processing from raw potatoes to finished products.

Five (5) New Permits -- Bakken, North Dakota, USA

Daily activity report, August 11, 2011 --

Operators: KOG (4), CLR

Fields: Poe, Banks, and a wildcat

CLR has a wildcat in Williams County.

KOG has two 2-well pad permits.

Denbury reported a nice well
  • 19892, 922, Denbury Onshore, Lawlar 34-10NWH, McKenzie County
Otherwise unremarkable report.

What Is An Oil Well Worth in Terms of Jobs? -- Bakken, North Dakota, USA

About a week ago, I was looking for an article to answer the question, but never got around to completing the search. I have to thank "Don" for sending me the link, not evening knowing I was looking for this information.

How much is an oil well worth in terms of new jobs? You have to extrapolate the data below to get an idea of just the trucking end of the process:
For each new well drilled, approximately 1,200 truckloads of equipment and supplies are needed during the drilling phase and an additional 800 truckloads of product are hauled during the first year of production. With 2,000 new wells expected in 2011 that equates to 4 million trucks across roads in western North Dakota, Kari Cutting, Vice President of the North Dakota Petroleum Council, says.

$1 billion of infrastructure improvements was approved for western North Dakota by the North Dakota Legislature. “The combination of state and industry expenditures combine to make the Bakken possibly the largest development and construction project in the United States right now and likely the second largest in North America, behind the Alberta oil sands,” Cutting says.
With regard to investment, Cutting says:
The next three to five years will see continued growth, development, and further progress in the Bakken,” Cutting adds. “Nearly $4 billion will be invested in oil and gas pipelines, rail facilities, and natural gas processing plants, all of which will reduce truck traffic for moving product from the well sites.”
By the way, this story adds support to the contention by Oasis Petroleum that unconventional drilling is more like manufacturing than drilling

For Investors Only: XOM Is A Steal -- Kind of a Bakken Story (XOM/XTO Tie-In)

Ten reasons to buy XOM.

The only reason I need, of the ten: it's dirt cheap.
XOM is way under analysts’ estimates at just $68 a share. S&P has a price target of $103 a share. Credit Suisse is at $95 and Jefferies is at $80 on Exxon.
I have been accumulating XOM for decades, and continue to do so.  Actually, it's in the portfolio of my older daughter which I started years ago. I remember the story to this day. Many years ago, she was in middle school, or something like that, and I was trying to teach her about investing. I mentioned I bought some Exxon for her portfolio, none of which she understood. I think this is what she heard:
"....blah, blah, blah.....Exxon.... blah, blah, blah, ...... Exxon."

A couple days later, my daughter came home from school. She mentioned that she enjoyed the teacher's discussion of "current events." Then my daughter, asked, "Is Exxon the company that just sunk an oil tanker along the Alaska coast?" I think she even knew the name of the tanker. She probably even knew the name of the ship's captain.

Ya gotta love it.

Child Labor Story -- Not a Bakken Story

My dad loves to tell the story how he raised strawberries on "the farm" when he was growing up in the driest, poorest land in western South Dakota. He says he would grow those strawberries and then truck them to Rapid City where he would sell them for 25 cents/box -- standard size, little boxes, I assume. Twenty-five cents.

He was about eight years old at the time. He contracted with one of his older sisters, who must have been about ten, to pay her five cents for every box of strawberries she picked. I'm not sure about the exact ages, but Dad was the youngest of five children, and it's unlikely a sibling much older than ten or twelve would have agreed to five cents/box.

I tell the story in light of the Drudge Report headline story at the moment. With the Feds shutting down lemonade stands across the country (see map here), I am reassured that we are a long, long way from experiencing the problems that London is experiencing. If "we" have the federal manpower to do this, we are in good shape, as a nation. Not to worry. "Plant a garden, go to jail."

I think the strawberry season must last all of a few weeks, during the summer when school is out. But I could be wrong. Football season is delayed in North Dakota so strapping, healthy, young, happy "boys" can help their dads get the crops in.

The most miserable job I ever had was "picking rocks" north of Williston. I think I was about 15 years old at the time. I never thought I might have been exploited, but, wow, it was awful work. I chose not to ever do it again, but I'm glad I had the opportunity to see what life's options were without an education.

I can tell these stories, now, because I assume statutes of limitation have run out.

Lots of Activity North of the Core Bakken -- Around Wildrose -- West of Powers Lake -- Stoneview Oil Field -- Bakken, North Dakota, USA -- August 11, 2011

A lot of activity is occurring in and around the Stoneview oil field.

Whenever I see increased activity it is fun to check out some of the history of the area, to look at some of the older wells.

Here's one of those Stoneview wells:
  • 2514, 220, BTA, Skarphola A 1, Stoneview, Madison
This well was spudded 11/30/1959 -- yup, not a typo, 1959.

It produced oil until March, 2006, when it was still producing 200 bbls/month, where it had been for the past year. Over the years, it had been shut in for long periods of time, but it was clearly a workhorse for the original operator.

This well produced a cumulative 752,137 bbls of oil. I think the number is phenomenal, but what should really catch one's attention is the fact that this well was productive for 47 years. Forty-seven years.

The Stoneview oil field is an irregularly-shaped, most elongated, running north to south, comprising about 52 sections, and midway between Wildrose and Powers Lake, North Dakota. It straddles the county line where Divide County and Burke County meet, just north of Williams/McKenzie counties.

There is a stretch of conventional (vertical wells) pretty much running down the center of the oil field drilled during previous booms. A fair number of horizontal wells exist, but drilled several years ago.

There are currently a couple of wells on the confidential list, and one rig on site. It appears of the current companies operating in the Bakken, Continental Resources pretty much "owns" the field. Many other Bakken companies do have wells or permits there, however, including Oasis, Sequel, Hunt, and BTA. A quick look suggests Sequel is second to CLR in this field.


East St Louis -- A Microcosm Of What We See in London -- Not a Bakken Story

Link here.

When the state's US senator needs to call in the federal government to protect citizens ...
The public housing complexes on the east side of the river might just be the deadliest places in the country, but efforts are underway to secure the area.

Sen. Dick Durbin (D-Ill.) is bringing in federal law enforcement to help state and local authorities crack down on crime. Figures show that East St. Louis is nearly twice as dangerous as even the worst streets in Chicago.

“You will find that the crime rate here is the worst in the nation,” Durbin says. “The club scene in East St. Louis is a crime scene.” 
This says it all:
Sister Julia Huiaskamp has tutored many kids in the area, and she says opportunities are few.

“We have many, many children who have been cheated by the public schools system here, who do not have the skills they need to get a job, even if there were any jobs to find,” Huiaskamp says.
I assume the reporter did not follow up on what Sister Juiaskamp meant, or the reporter cut out the answer: the public school system failed in terms of providing a moral compass. 

Abraham Lincoln was dirt poor.

Helen Keller had a few strikes against her. I highly recommend adults view Miracle Worker again. One can watch the full movie on YouTube.

Loretta Lynn was a coal miner's daughter. 

Bill Clinton was not born with a silver spoon in his mouth.

Somehow those folks rose above it all. Most of the farmers two generations ago in North Dakota were dirt poor but somehow the state prospered. Poverty is not the problem. How we deal with poverty is the issue.

Eco-Pad Results -- Morris/Carson Peak Eco-Pad -- Oakdale Field -- Bakken, North Dakota, USA

I recently updated the Morris 2-26H well:
  • 18860, 517, CLR, Morris 2-26H, Oakdale, Bakken; t5/11 cum 277K 5/17;
"Anonymous" pointed out that this well is part of a CLR Eco-Pad project. "Anonymous also pointed out this was the "poorest" of the four wells. "Poorest" as in relative to to the others.

Here's the rest of the story:
  • 18858, 715, CLR, Morris 3-26H, Oakdale, Bakken, t5/11 cum 444K 5/17;
  • 18859, 680, CLR, Carson Peak 3-35H, Oakdale, Bakken, t5/11 cum 615K 5/17;
  • 18861, 759, CLR, Carson Peak 2-35H, Oakdale, Bakken; t5/11 cum 660K 5/17;
Two horizontals run south; two run north. 

And that, folks, is why some CEOs say the Bakken is different. No DRY holes, and reaching 100,000 bbls in a year when it took legacy wells in the Williston Basin to reach 100,000 bbls over 10 - 20 years.

No, of course, not all Bakken wells are this great, and they are very, very expensive to put in, and the decline rates are horrendous, and the ....

But most operators say they will pay for these wells in 1 - 3 years, and that these wells will produce for 30 years (albeit at a lower rate), in a safe environment (not a lot of terrorists in North Dakota) and where the infrastructure will keep getting better.

If everything works out, even a bit of global warming will moderate the North Dakota winters.

Going Against Its Own Committee's Recommendation, Full Commission Approves Another Man-Camp North of Williston -- Bakken, North Dakota, USA

Link here.
The Williams County Commission approved a man camp north of Williston on Wednesday morning despite an opposite recommendation from the county’s Planning and Zoning Commission.

Planning and Zoning Administrator Jill Edson outlined the request. Edson said the camp would consist of 216 beds. It would be split up between six 36-bed dormitory-style units.

The camp would be located north of Williston on the acreage where the Target Logistics North Lodge sits. "All beds would be bought up already," Edson said.
The commissioners mentioned that traffic on US Highway 2 & 85 "had reached a critical point." My observation was quite different. (They should see San Antonio, Texas, traffic on a similar road for that city.) Sure, it's busy, but not that busy, and they probably need to put in traffic lights out near the KOA campgrounds, but it's a four-lane divided highway, and very, very manageable.

If they are worried about this new man-camp, I shudder to think about the effect that new HUGE / MAJOR truck stop that is being put in just a few more miles to the north. The man-camp is serviced by buses to transport workers from site-to-site, and those workers are not on the road between 6:00 a.m. and 6:00 p.m. But the traffic generated by the new truck stop north of Williston will be a real game changer.

If traffic increases on US Highway 2 & 85 north of Williston, it won't be because of the new 216-bed man camp.


Why The Bakken Is Different -- Bakken, North Dakota, USA

I forget which CEO said it during the 2Q11 earnings conference call, but you could hear the frustration in his voice, that analysts were misunderstanding the Bakken. It was not Harold Hamm. Actually, now I remember who he was, but I think I will avoid quoting him, afraid of misinterpreting what he said, or putting words in his mouth.

But the takeaway I took from this CEO is that Wall Street analysts are absolutely missing how huge the Bakken is.

He mentioned two things: a) these are monster wells; and, b) there are "no" DRY holes in the Bakken. I have said that many, many times, that the fact there are "no" DRY holes in the Bakken is a huge development.

He also did not mention that technology is improving exponentially, and the wells now being drilled are so much better than wells that were first drilled in this boom in Montana in 2000. Mostly it has to do with completions: in 2000, it was single stage fractures; in 2008 it was 12-stage fractures; now the standard is moving to 32-stage fracture completions. 

Last night, I looked at the well files of 55 consecutive permits isssued back in 1978 / 1979, or thereabouts.

The permit numbers were from #6665 to #6719, inclusive.

That's 55 consecutive permits.

Five of those permits were canceled, so money was spent on 50 of those permits.

Seventeen of those 50 wells drilled were DRY. 17/50 --> a third of all drilled wells in that series were DRY.

Of the 33 wells that did hit oil, most have since been abandoned. 
  • 9 of those wells never reached 50,000 bbls.
  • Another 5 did not reach 100,000 bbls.
  • 9 wells reached 100,000 but did not reach 200,000.
  • There was one great/memorable well: >1.4 million bbls.
So, maybe, of the 50 wells drilled for permits issued in that time period, maybe 19 were good wells; Only a handful were great wells. Now, in comparison:
  • A Bakken well EUR is 603,000 bbls. That's an average.
  • There are "no" DRY Bakken wells.
  • There will be many phenomenal Bakken wells, well above the million-bbl mark.
Total cumulative production of these wells noted above (#6665 - #6719), in order of total production, not drilling order, or permit order, were:
  • 4,000 bbls
  • 7,000 bbls
  • 29,000 bbls
  • 29,000 bbls
  • 29,000 bbls
  • 29,000 bbls
  • 32,000 bbls
  • 35,000 bbls
  • 48,000 bbls 
  • 52,000 bbls
  • 60,000 bbls
  • 74,000 bbls
  • 89,000 bbls 
  • 93,000 bbls
  • 107,000 bbls
  • 108,000 bbls
  • 110,000 bbls
  • 116,000 bbls
  • 117,000 bbls
  • 120,000 bbls
  • 143,000 bbls
  • 145,000 bbls
  • 182,000 bbls
  • 213,000 bbls
  • 232,000 bbls
  • 280,000 bbls
  • 326,000 bbls
  • 384,000 bbls
  • 375,000 bbls
  • 500,000 bbls
  • 1.4 million bbls

Trivial Anecdotal Stories -- Rambling -- Bakken, North Dakota, USA

This site began as an educational site.

Actually, not quite true. I started the site to try to keep track of what was going on in the Bakken. I initially considered "Word" documents, etc., but then realized HTML was the way to go. I decided to share the HTML postings when I first saw two other sites suggest the Bakken was being hyped and I wanted to provide some balance. Actually, not a balance, but a rebuttal, I guess. I certainly wasn't balanced in my enthusiasm for the Bakken. 

I had not planned to post anything about the investing side of the Bakken initially, but it was soon obvious that one could not separate what was happening in the Bakken (geology, technology) without following the investment activity.

I admit I am inappropriately exuberant and have said more than once that my personal financial investment in the Bakken is much more conservative than what the blog might suggest.

Having said that, I have two stories that I cannot get out of my mind. The first story is about an acquaintance (in a certain sense) just like you and me who bought into Medtronic when that company was just starting out and has since become a millionaire many times over.

The second story is about meeting another person on Amtrak, about 40 years old, who has never worked a day in his life, because his father gave the children all the Microsoft stock the father had bought when MSFT was just starting out. (I would not want his life; having never worked in his life, made for a very dull person when we actually started talking.)

But I think about those folks, who literally put their total investment dollars when they first started investing in companies like Microsoft, Apple, Medtronic, IBM, when these companies first started out.

I wonder if we might be seeing the same thing with BEXP, Whiting, CLR, Oasis? Sometimes looking at quarterly statements, daily fluctuation in the price of oil, wild volatility in the stock market results in folks like me forgetting two things: a) oil will become ever more dear over the next 30 years; and, b) CLR has almost 1,000,000 acres in the Bakken, the most incredible oil play in the lower 48, according to some.

It makes me wonder if it would be easier just to put all investment dollars in CLR, Oasis, BEXP, or Whiting, and then forget about following this stuff, and living life, doing something else. I have no doubt these companies are going to look a lot different 30 years from now.

Just rambling, but if one steps back and looks at some of the things going on in the oil patch in North Dakota, it is mind boggling. The link takes you to the wells that I updated today. These are huge wells, and they are literally the tip of the iceberg, as they say.  But a Bakken well producing 100,000 bbls in the first six months and this well is expected to produce for 30 years (yes, I know, at a horrendous decline rate, but it's all about paying off the wells as quickly as possible, and the EURs).

Again, just rambling, but when I see 1,000 point-drops in the stock market and then look at companies like CLR with a million net acres in the Bakken, one can only think of some huge opportunities.

Rig Locations -- Nationwide -- Bakken, North Dakota, USA

Just a reminder.

At my "Data Links" page I have links to where drilling rigs are located:

Update of Wells That Were Placed on DRL Status in 1Q11 -- Now Reporting IPs -- Bakken, North Dakota, USA

One of the problems with the backlog of fracking, we don't see IPs when the wells come off the confidential list. When the wells are finally completed, it is easy to lose track of them.

Periodically, I go back and update wells that were released from the confidential list, and placed on DRL status awaiting completion.

These are a few of the ones that I updated today. These are simply phenomenal. These are wells that were released from the confidential list 1Q11 -- earlier this year.

Look at:

  • 18579, 2,006, SM, Jorgenson 1-30H, Bear Den, Bakken, tested 12/10; 120K by 6/11
120,000 bbls in the first six months; not yet on a pump. That might be the best of the ones updated below, but these are all phenomenal wells.

For newbies, the legacy formations often took 10 - 20 years to reach the 100,000 bbl milestone. In addition, DRY wells were expected when drilling legacy formations (Red River, Madison, etc)., but there are "no" dry wells in the Bakken, and one can expect  Bakken wells to reach 100,000 bbls within three years. The best Bakken wells, and there are a lot of them, will reach 100,000 by the first nine months, some within six months.

So, here are a few wells that I have updated:

  • 19220, 1,057, BTA, 20711 Saccaro 310 1H, Stockyard Creek, Bakken; tested 11/10; 110K by 6/11
  • 19091, 882, Oasis, Horne 5603 44-9H, Bull Butte, Bakken, tested 2/11; 39K in 4 months  
  • 19085, 2,172, BEXP, Brad Olson 9-16 3H, Painted Woods, Bakken, tested 4/11; 30K by 6/11
  • 19308, 1,235, Oasis, Glover 5601 12-17H, Wildcat, Bakken (on same pad as 19307, Devon 5601) (middle Bakken)
  • 19318, 2,042, Hess/American Oil and Gas, Hodenfield 15-23H, Wildcat, Bakken (23-157-98 -- northwest of Ray, where the other AEZ wells have been ); tested 2/11; 45K by 6/11
  • 18538, 885, EOG, Round Prairie 9-3625H, Painted Woods, Bakken; tested 2/11; 43K in 4 months
  •  19049, 1,099, SM, Jorgenson 1X-30H, Bear Den, Bakken; tested 1/11; 93K by 6/11
  • 19110, 2,849, Newfield, Malm 149-98-14-23-1H, Pembroke, Bakken, tested 4/11; 60K by 6/11
  • 18760, 866, BEXP, Brown 30-19 1-H, Alger, Bakken; tested 6/11; 56K by 6/11; 25K in first 26 days; 56K in less than 3 months
  • 19301, 2,526, KOG, Koala 9-5-6-5H, Wildcat, Bakken; tested 4/11; 58K by 6/11
  • 19389, 1,936, BEXP, M. Olson 20-29 1-H, Painted Woods, Bakken,  tested 12/10; 62K by 6/11
  • 18435, 2,376, Denbury, Nelson 41-5H, Antelope, Sanish (Three Forks)
  • 18860, 517, CLR, Morris 2-26H, Oakdale, Bakken; tested 5/11; 33K by 6/11
  • 18579, 2,006, SM, Jorgenson 1-30H, Bear Den, Bakken, tested 12/10; 120K by 6/11
Still not completed:
  • 119087, DRL, Newfield, 1-H Sandhill 25-36, Wildcat, Bakken, no evidence that this well has been fracked yet; 42K as of 6/11 following first production 1/11
  • 18867, DRL, Murex, Joann Marie 13-24H, Beaver Lodge, Bakken; no evidence that this one has been fracked; 52K as of 6/11 (first production 10/10) Beaver Lodge is oldest field in the Williston Basin 

The Nation's Largest Industrial Park -- Bakken, North Dakota, USA

Photos of some construction activity next to Williston's international airport:





Parking area at the airport can no longer handle all the traffic; trucks are spilling out of the parking lot.

Brand new over-sized (for Williston) hangars at the Williston airport:


192 Active Drilling Rigs in North Dakota -- New Record

Dynamic link here.

This the breakdown:
  • CLR: 21
  • Hess: 17
  • Whiting: 16
  • EOG: 11
  • OXY USA: 10
  • Petro-Hunt: 10
  • BEXP: 10
  • XTO: 7
  • BR: 6
  • Slawson: 6
  • Oasis: 6
  • Newfield: 6
  • MRO: 6
  • WMB: 5
  • DNR: 5
  • ERF: 4
  • KOG: 4
  • Fidelity: 1
The day I compiled this list, August 12, 2011, the number of rigs had dropped by one to 191. I don't know which one I missed when it was 192. I do know that Fidelity has had as many as 2; CLR, as many as 22.


Missouri Ridge Field Update -- Bakken, North Dakota, USA

Updates

December 4, 2019: a bit of an update here. Missouri Ridge is now twelve sections in size.

Production as of September, 2019 (confidential production not included in these totals):
  • Missouri Ridge-Bakken: 6,279,497 bbls (43 wells)
  • Missouri Ridge- Birdbear: 1,353,746 bbls
  • Missouri Ridge-Madison: 501,240 bbls
  • Missouri Ridge-Red River: 1,274,401 bbls
  • Missouri Ridge-Stonewall: 764,393 bbls
6 million bbls x 1/8th x $50/bbl = $37.5 million. This does not include the initial bonus for leasing.

Updated graphics:


Original Post 

Missouri Ridge oil field is exactly 3 sections. About as small as a field can be, although there are some one-section fields in North Dakota.

Missouri Ridge is about 5 miles north of Williston. It currently (August, 2011) has one long lateral Bakken well running through it.

It caught my attention because there seems to be a group of old wells in that very small field, about half of which are still active; the other half now abandoned.

Here is how much oil has been taken out of those three sections by formation:
  • Missouri Ridge-Bakken: 79,000 bbls
  • Missouri Ridge- Birdbear: 1,248,034 bbls (yup, million)
  • Missouri Ridge-Madison: 464,857 bbls
  • Missouri Ridge-Red River: 1,274,334 bbls (yup, million)
  • Missouri Ridge-Stonewall: 738,000
That adds up to more than 3.8 million bbls and counting, in this small (3-section) field. As noted, there is only one Bakken well there now, and we know that conservatively there will be 2 wells/640 acres and as many as 4 (some places even more).

At $50/bbl, that represents $190 million. For three sections (1,920 acres). And they say the Bakken is many times better than these other formations. Hmmm. Just the other day a privately-held Canadian company bought an undisclosed number of acres from Anschutz for $115 million. Something tells me it was appreciably more than 3 sections. [Back of the envelope calculations, at $1,500/acre --> 7,500 acres.]