Sunday, December 16, 2012

A Well to Watch -- The Williston Basin

Updates

December 26, 2012: still on confidential; drilling may be complete. Possibly targeting the Lodgepole. 


Later, 11:01 pm: I was pretty excited when I saw this rig and tying it to oil service activity in Minot, but readers have suggested I may be a bit excessively exuberant in my connecting the dots this time. Smile. It wouldn't be the first time of seeing too much. See the comments; they are very, very good. And much appreciated.

Original Post

A reader alerted me to a well that I had completely missed.

The reader noticed a rig a couple of miles east of Voltaire, North Dakota.  Voltaire is about 23 miles southeast of Minot. This is significantly east of the current boom, and significantly east of any known oil activity in the Williston Basin.

This is a good time to take a look at the location of Minot / Voltaire, North Dakota.

Now, re-familiarize yourself with the oil-producing locations in North Dakota.

Overlay the second map over the first map. Oil production in this area? Oil activity in this area? Nada. Nothing. Zilch.

Now, go to the NDIC GIS map, locate Voltaire, Minot, and the local area. Over the last twenty or thirty years, there have been a half-dozen wells drilled a bit to the west and/or south (all dry) and even fewer drilled farther east (again, all dry). Those dry wells, were for the most part, were targeting the Madison formation.

The rig/permit east of Voltaire; southeast of Minot:
  • 24329, conf, Cambridge Production Inc, Larson 1, Wildcat. A vertical.  
This is their first permit in North Dakota according to the NDIC site.

And it's a genuine wildcat. Nothing in that area.

Cambridge Production is an oil and gas company located in Amarillo, Texas. Some of their permitting activity can be found at this site:

http://search.amarillo.com/fast-elements.php?type=standard&profile=amarillo&querystring=%22CAMBRIDGE%20PRODUCTION%20INC.%22
The company appears not to be publicly traded, so it will be hard to find out much about them.

Hold that thought.

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Baker Hughes built three mega-complexes in the past couple of years: one each in Dickinson, Minot, and Williston. There has been some speculation why Baker Hughes would build such a large complex in Minot. Minot seems a bit east of the current oil activity to warrant a complex of this size. I have not been to Minot recently, but apparently there is more oil service activity in the city than activity in the local area would seem to warrant (e-mail from folks living/working there). [And, of course, the huge, new airport to be built in Minot.]

It's possible that all this oil services activity in Minot is there because a) Williston was simply getting too expensive/too crowded to locate there (but this would not explain a third Baker Hughes complex, the one in Minot; they were already in Williston); and/or, b) the Spearfish activity north and northwest of Minot.

But what if after thirty years or so, the oil industry has newer data that suggests there is recoverable oil southeast of Minot? This would explain the Cambridge wildcat and all the oil service activity in Minot.

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Perhaps just idle rambling, but a vertical well east of Voltaire is a very interesting development. And I have to thank a reader for alerting me to this rig east of Voltaire. I completely missed it.

18 comments:

  1. There seriously are not a lot of oil service companies in Minot. The ones that are located there, are smaller versions of the Williston locations.

    Halliburton's Minot complex is about 1/5 the size of Williston; Weatherford has a small office-warehouse in Minot, but there are 4 Weatherford locations in Williston...not to mention the new "mega" complex Weatherford is building southeast of Halliburton in Williston.

    Baker Huges layed off 84 employees in Minot a few months ago. I think it was related to the city commission voting to not approve the chemical storage that was originally approved. But I think the Minot commission has since approved it again, so not sure where Baker Hughes is sitting for employees to date. But the Baker Hughes facilities in Minot and Dickinson are much smaller than the Williston campus.

    Not sure if you'be been to Baker Hughes in Williston lately, but they are building a new office complex (larger than their current office building) accross the road. It is the same funky design, just larger.

    Not saying Minot doesn't have any oil service companies, but they don't have many, and not very many employees employed in the oil industry in Minot or Ward county according to Job Service ND statistics. I'm sure most of the companies that located in Minot are branch offices to service the eastern edge of the Bakken, and there was high hopes for the Bottineau area. Which hasn't been as successful as the rest of the Bakken to date.

    Minot will be a limited-service city, but it will never be the oil hub town many of the city fathers were hoping. I think Williston's explosive growth (possibly will surpass Minot in population according to the NDSU study) is an indication where the oil industry has decided to expand and grow.

    Minot lured a few companies to Minot by giving them tax breaks and Magic City funds...Williston doesn't do that.

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    1. Wow, great note, thank you. That really brings me up to speed.

      I had forgotten about Baker Hughes new building across the road from their present (brand-new facility). That is absolutely incredible. No, I haven't seen the new facility going up (nor the brand-new one after it was completed). I eagerly wait the opportunity to get back to the Bakken.

      I had also forgotten how big Weatherford's footprint has gotten.

      So, you've taken the wind out of my sail with regard to the Voltaire well. Sad face. I am just amazed by how much is going on in Williston. I haven't seen it in the past year and have missed a lot.

      Wow, thank you for writing. Appreciate it very, very much.

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    2. In a private communication (e-mail), a reader suggests that the comment about BHI laying off 86 personnel was incorrect; that may be true of another oil service company, but not BHI, according to that e-mail. Of course, I don't know.

      That e-mail did suggest there have been cutbacks in oil service-related jobs in Minot over the past year, but that's not unexpected, with the number of rigs decreasing, etc.

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  2. I don't think anyone has every said Minot would be the oil service hub for the bakken, but with out question Minot is become a service and staging area for the bakken. You can't really compare Minot to Williston because they were different 5 years ago at the start of the boom and they will be different five years from now as different resources move to the city.

    We can talk about the oil activity and around the city. Land is being leased and seismographed. We are talking next to the city. Will it lead to oil production next to the city, I don't know. But that isn't what is going on in Minot. Yes Halliburton, Hess, Baker have built, for Minot, large facilities. Do the employees work on or in the Minot or Ward County oil patch? No they drive to the oil work. You talk to people in Bottineau, they say its full of white Haliburton trucks during the week, no different than Watford or Tioga five years ago. These people are living in Minot and driving to the work.

    Five years ago Minot built 30 new homes. 2012, over 1,200 housing units were permitted. Total construction permits are up 10 fold in that time period. It is not all flood related either. Per flood minot activity for a variety of reasons was picking up.

    But getting back to its support role to the oil boom. Take Menards for example. The Minot store is the busiest in the country. They are suppling materials to build the bakken housing. Williston as of this time is not going to get a Menards. That project for whatever reason was on hold, and Menards was offered 5 million in tax breaks to build there. Crane Johnson lumber a Fargo company opened locations in Surrey, 8 miles east of Minot, with the intent of hauling supplies into the bakken.

    The port of ND is a logisitical center being developed. Not oil for oil and gas but grain and other products shipping. A big difference between Minot and Williston is who you can get to live there. Williston growth has targeted workers in the oil patch, Minots focus is on the family unit. Engineers, civil, petroleum. Lawyers, accountants, and related support are moving to Minot.

    Minot is no different than Williston in that no one knows exactly what is there and what is coming. If oil production starts around Minot that is just another element to Minot growth.

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    1. Thank you. Very nice points.

      I'm just trying to sort out whether the oil companies knew several years ago there is significant amounts of recoverable oil east and southeast of Minot that would explain the oil service development we've seen in Minot over the past few years ....

      ... or whether the growth in Minot is simply due to support of the oil patch in the Bakken where we "know" it is today; overflow as it were.

      I am suggesting that if the Voltaire well is promising, there may have been reasons for the growth in Minot that we were not aware of. Again, I have always been interested in the Baker Hughes footprint in Minot and still not sure what to make of it.

      With regard to Minot and Williston and the oil patch, they are different: Williston sits in the middle of or near some of the best sweet spots of the Bakken; that's a given. The question I have: is there scientific evidence that Minot sits in the middle of or near sweet spots that we are not yet privy to? I honestly don't know.

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    2. I do not agree with the comment that Williston targets different types of oil workers. Williston has new families moving in daily as homes and apartments are opened up. Blue color, single guys to Williston. Sophisticated, degreed and well to do families to Minot? I doubt it. The same engineering firms in Minot have now opened up offices in Williston. Same goes for law firms out of Fargo, Bismarck and Montana having opened up Williston offices.
      As far as "no one has ever said Minot will be the service hub of the Bakken"...the Mayor of Minot has said this in several occasions.

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    3. Again, don't get me wrong. I'm not trying to make comparisons between Wiliston and Minot. I was just trying to connect dots between growth in oil service companies in Minot and lack of relative "new" drilling activity compared to the sweet spots in the Bakken.

      It is interesting to note that some of the folks who moved to Minot, for whatever reason, are now setting up offices in Williston. I appreciate that data point.

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    4. http://www.minotdailynews.com/page/content.detail/id/515729/Tioga-becomes-the-official--Oil-Capital-.html

      See comment below.

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  3. As Bruce and I have e mailed previously, the activity around Minot is very different than that of Williston. To the northeast of Minot near Glenburn are 100's of wells drilled in the 60's and 70's. These are shallower wells than in the bakken and the oil quality isn't as good. Further north is the current activity in Bottineau county. Again, shallower wells, and less expensive than than bakken. I hear they are working on drilling techniques to figure out the formation, much like the experimentation that occurred in the bakken. Legacy and Surge Oil in one of there presentation talked about 1,500 wells in the Bottineau area in their plans.

    If you look at the esser maps you will see there has been quite of bit of drilling east of minot. I remember in the late 70's a number of wells drilled east of highway 83. We farmed in this area. No wells were put in, and information was tight.

    Recently as last July I was contacted to lease my mineral rights in an 80 square mile area starting just north of Minot and running 20 miles north. My understanding is the land has been seismographed in the past couple of months. I did not lease at this time. Someone had indicated that 12 wells will be drilled potentially in this 80 square mile block. Whether it happens or not, this is the talk. In addition, the wells would be at a depth of up to 8,000 feet. Again, not as deep as the bakken, nor as expensive. I have seen the surge wells in Bottineau county "only" cost about 2 million to drill and a depth of 5k feet. So again entirely different economies and plays playing out.
    kent

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  4. Airports- Again I have not been able to find an answer to this. Minot is receiving a large amount of federal funding to build a new terminal. I want to say $40-50 million. The feds typically don't just give money away from projects like this, but city needs to prove need. Thus the fact they are getting this money indicates a need if projected. Is it because of the bakken, another field or other growth, driving this I don't know. But something is happening to justify a new terminal. Minot in addition to the commercial carriers landing at the commercial terminal, and the private planes I mentioned earlier, also has many different flights from Oklahoma bringing in crews. These are 737 sized planes that fly through the private FBO versus the commercial terminal. So I don't believe these are included in Minot's numbers. These planes are usually in and out on Tuesday's and Thursday's. With over 100 workers coming and going. From Minot they are transported west.

    Williston and need to confirm is limited on airport expansion, so I know there is talk of a new airport being built. I believe that runway expansion is difficult in Williston to allow for larger commercial jets to land. If some has information on this and if true it would support the need for an expanded terminal in Minot, to move Bakken traffic west.

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    1. I have not kept up with Williston's plans (if any) for airport expansion. The present location is constrained. I can still walk to the airport from where I grew up in Williston.

      (Interestingly, I also walk to and from the San Antonio (Texas) airport from my apartment in San Antonio where I now live when not traveling. It takes about 40 minutes.)

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  5. I agree about Minot not being an oil hub city and probably never will be. As far as Minot going from 30 homes being built to 1,200. The poster failed to mention Minot had a flodd that destroyed or damaged 4,000 homes. Rebuilding these damaged and destroyed homes will obviously reflect in the number of building permits. The construction boom in Minot is related more to the results of the flood and the huge increase of new air force personal and their families, not so much the oil boom.

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    1. Yes, I remembered the flood and its effects with regard to the building boom, but had forgotten about the Air Force influx. Thank you for reminding us.

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  6. Here is the link where Mayor Z declared Minot the new Oil Capital of ND. Tioga had to fight back!

    http://www.minotdailynews.com/page/content.detail/id/515729/Tioga-becomes-the-official--Oil-Capital-.html

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    1. Awesome. I vaguely remember the story; I did not recall the outcome.

      Very similar to "fight" between Santa Cruz and Huntington Beach for "Surf City" trademark. Huntington Beach currently owns the trademark.

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  7. On KYFR tv, there was a news clip out of Minot suggesting by the Minot Area Development leaders that Minot is expected to grow to over 100,000 people within 10 years. There was no explanation as to why the Minot Area Development leaders are expecting this. No statistics from any survey or study. They just apparantly decided Minot will grow to over 100,000 people within 10 years. So apparantly because Minot leaders say so, Minot will be the largest city in North Dakota within 10 years.??? I'm wondering if they decided this because of the recent study that came out last week by NDSU that suggests Williston will reach 50,000 within 5 years? Kind of a coincidence if you ask me.
    http://www.kumv.com/News_Stories.asp?news=60985

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    1. I assume this is the reason for the projected growth of Minot: the governor will move in three wings of Air Force fighters; four to six US Army Patriot battalions; and a Coast Guard cutter on the Mouse/Souris River to protect the North Dakota oil fields from the EPA.

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