Whiting Bills Itself As The Low-Cost Driller -- Now, a Report From Reuters

Updates

Later, 8:34 pm: a reader noted this -- my bad; I missed it. The linked story is over a year old, published by Reuters back in early 2011. I missed that. I apologize to readers. Interestingly, it seems "we" are talking about the same problems, and the costs of drilling seem to be in the same ball park.

Original Post

Link here to Reuters.

For several months now, at their corporate presentations (and perhaps in the earnings conference calls; I don't recall) Whiting advertises itself as the low-cost driller in the Bakken. And now there's a Reuters story that seems to confirm that.

This a great article, sent to me by a reader (thank you).

Just the other day I posted prices of sand, resin-coated sand, and ceramics (from another source which I cited).

When you read the article, focus on two things: cost of prop pants, and cost of trucking. MDW has blogged that EOG has its own sand mines out-of-state.

MDW also posted a link to a story regarding the continuing shortage of truck drivers.

Some data points from the article:

• costs of wells in the Bakken: due to sand -- KOG
• KOG: $9.5 million/well
• WLL: $6 million/well
• WLL: greater use of sand

In some cases, sand has been so difficult to "get," companies have been forced to switch to larger amounts of ceramics (just out of necessity):

As for the ceramics mix, Abraxas Petroleum Corp  CEO Robert Watson said he aimed to use an average of 40 percent ceramics on Bakken wells. But on a recent well, Abraxas was forced to inject 60 percent ceramics because flooding had prevented a shipment of sand from arriving in the region.

And for investors:

Whiting believes it is the largest customer for Halliburton's white sand in the region, since it has their crews committed to its wells, Whiting CEO James Volker told Reuters on the sidelines of the IPAA conference in San Francisco. At $6 million per well, and $80-per-barrel oil, he told investors that Whiting could expect at least a 3-to-1 return.

The Oil Drum folks might want to read this article.