Daily activity report, March 5, 2012 --
Operators: OXY USA (3), Cornerstone (2), BEXP
Fields: Dimond, Carter, Alger
Something is very strange in today's daily activity report. Almost 100 -- yes, 100 -- wells were listed as released from "tight hole" status, but in fact, most, if not all, have been previously released.
I hope NDIC explains why all of a sudden they reported ~ 100 wells released from "tight hole" that had already been released.
Likewise, almost 30 wells were approved for "tight hole" status which is a much longer list than usual. I do not know if these are new or have been previously reported.
Twelve wells were listed as "plugged or producing."
Overall, I don't know what is new on today's report (except for the six new permits) or what has been reported previously.
Bruce: I noticed the same thing. For example, page two lists two Burlington Resources wells (Midnight Run 31-1TFH and Midnight Run 41-1TFH) but you reported on them a couple of weeks back. The only thing I can figure is that they never were on the actual daily reports.
ReplyDeleteAnother question, on which I hope you can help. The initial production figures on the two wells are 2083 bopd and 2443 bopd respectively. But, if you go to those wells on the NDIC website, they both show as having produced oil in December and January, but in total monthly figures much less than the initial production figures would suggest. The first well is reported to have a total production over those two months of 7316 bbls and the second 4036.
Am I missing something about the significance of the initial production figures? Is there something unusual about these numbers?
1. With regard to the 100 wells reported coming off the confidential list: You could be correct -- that these wells were not on previous daily reports. I pull this data from Karen in most cases from the Bakken Shale Discussion Group. She often posts her information prior to the release of the daily activity report, so she either gets the report ahead of the rest of us (unlikely) or she uses the NDIC list of wells coming off the confidential list (more likely). I might check into that but I will wait to see if the NDIC clarifies anything first.
Delete2. Regarding permit/file #s 20326 and 20327, the two Midnight Run wells: yes, isn't that amazing? This happens often but usually not such a huge disparity. Assuming the figures are correct (I cannot verify because the data files don't yet have the completion data), this is what is happening: once the well is completed/fracked, the operator tests the initial production based on the company's established procedures. Most likely it is a 24-hour full flow production, but one could even do an hour's run and multiply by 24 (which I don't think anyone really does). After the unchoked flow for 24 hours, the company chokes back the well for any number of reasons: not enough tanks on site; flaring rules; etc. Anyway, this gets us back to the discussion of IPs.
I pretty much just post the data, and then for the wells with the really "good" IPs, come back six months to 12 months later to see what their cumulative production has been. You've probably noticed that I am starting to include more cumulative data.
But I do agree with you, the disparity between these IPs and the first two months' production is quite remarkable. You did note that one of the wells had no production at all in January, 2012, the first full month following initial production. For some reason, the well was taken off-line for the entire month. Maybe they're shutting it in until WTI/Williston Sweet Light reaches the price of Brent. Smile.
This is written on the fly; typos may be present, and it's just a quick reply. Something may yet come out that explains all this. Possibly the NDIC transcriptionist has simply "lost it" working 24/7 for low wages, had fun writing a bogus report, quit his/her job, and flew to Arizona for the rest of the winter. Just joking. I have the highest regard for the NDIC folks.
Patty: I did get your note/comment, but I did not post it. Thank you very, very much for your kind comments. I wish you the best of luck.
ReplyDeleteBruce, Also noticed that Slawson had Skybolt-2 released b/c permit expired. Just a bit confused as I have working interest in Skybolt-1 on opposite end of section. If one operating well locks entire section for leasing, was curious how peermit could be expired??
ReplyDeleteKeep up the good work. Today's "daily" was a piece of work, eh?
1. Yes, I'm not sure what to make of yesterday's daily activity report. I am not in the mood to double-check/cross-check over a 100 wells.
Delete2. With regard to expired permit. Unless I'm misunderstanding your question, here's my explanation: permitting and leasing are two separate things. The mineral rights have been owned by someone for decades; someone interested in those mineral rights leases them from the owner (generally a private owner in North Dakota). If no oil company is interested in the location, someone paid for leasing but will never see any action.
Step 2. If an oil company is interested in that location, they request permission from the state to drill there; even though the minerals are in private hands, a state permit is required to drill in a specific location. Without permitting, oil companies could drill willy-nilly wherever they wanted, set their own spacing, flaring rules, etc. So, a hearing is held, and if approved, the operator gets a permit. I believe permits are good for one year but easily extended by another year for a $100 filing fee.
So, the spacing unit lease is held by production -- the spacing unit is "locked up" by the particular operator -- but for whatever reason, the operator chose not to drill in a location for which he had a permit. Most likely, things are changing in that area with regard to offset rules, or geologically he has found a better location, or based on local surface owners' requests they want the location moved a few feet one way or the other.
But if there is opportunity for another well in that spacing unit; I'm sure it's just a matter of time for another permit to be requested (and issued).
That would be my first thought.