What's a Brand Worth? How Much Does a Bakken Well Cost? Enquiring Minds Want to Know

This is what blogging is all about.

I would never pay attention to some of these stories if I wasn't blogging.

People talk about the value of a brand name: what Coca-Cola is worth? What is Apple worth? Just the brand name? 

What is the value to an oil exploration and production company to say they are in the Bakken? I have no idea, but a headline story in Rigzone.com today: Magnolia Petroleum Plc announced an update on the two  Eckelberg wells in the Bakken today, suggests that it means something.

Magnolia is participating with Marathon who is the operator of these two wells.

How much participation does Magnolia have in these two wells?  Drum roll....

• Eckelberg 14-23H infill well in Dunn County, North Dakota (0.53367 percent working interest) in partnership with Marathon Oil Company, located in Sections 14 & 23-146N-93W.
• Eckelberg 14-23TFH infill well in Dunn County, North Dakota (0.53367 percent working interest) in partnership with Marathon Oil Company drilling to the Three Forks Sanish Formation using the same pad as the above well.

Yes, that was a cut and paste, so no typographical error: Magnolia has half a percent working interest in each of these two wells. Half a percent interest and it rates a front page story in Rigzone. Am I missing something?

Ok, so that's the value of the "Bakken" name.

But we get a bit more from that article. We learn what a Bakken well costs these days.

• The first well is drilling to the Middle Bakken Sandstone interval and is expected to be completed with a 30 stage frac at a cost to Magnolia of approximately US $43,232.
• The second well is expected to be completed with a 30 stage frac at a cost to Magnolia of approximately US $44,933.

Rounding, that totals $90,000. Rounding, Magnolia has 1 percent interest in these two wells. A 30-stage Bakken well these days is budgeted for $9,000,000.

My third grade granddaughter is learning how to use "estimation" in math; the Bakken is providing a great opportunity to show how rounding makes things easier to follow.