Sunday, December 30, 2012

Wells Coming Off Confidential List New Year's Eve; A Hess Truax Well Looks Huge; OXY USA With Another Dud?

Active rigs: 187 (steady)

Monday, December 31, 2012: None

Sunday, December 30, 2012:
  • 21420, 344, Petro-Hunt, Hokanson 157-99-1A-12-1H, Lone Tree Lake, t9/12; cum 13K 11/12;
  • 22210, 1,920, BR, Concord 34-10MBH, Little Knife, t9/12; cum 18K 11/12;
  • 22946, 1,122, Hess, SC-Hoving 154-09-1003H-1, Truax, t9/12; cum 52K 10/12;
  • 23099, drl, QEP, MHA 2-06-32H-150-92, Heart Butte,
  • 23150, 1,089, Zenergy, Peters Road 30-29H, Todd, t9/12; cum 22K 10/12;
Saturday, December 29, 2012:
  • 19774, 167, Petro-Hunt, Setterland 159-94-34C-27-1H, East Tioga, t10/12; cum 16K 11/12;
  • 20834, 1,563, BR, Wilson 31-6H, Haystack Butte, t9/12; 9K 11/12;
  • 21215, 603, WPX Energy, Wounded Face 15HC, McGregory Buttes, t9/12; cum 20K 10/12;
  • 21395, 129, OXY USA, State Titos 1-3-10H-142-98, Willmen, doesn't look promising; t6/12; cum 9K 10/12;
  • 22116, 270, Whiting, Chitwood 44-36TFH, Ellsworth, not all that promising, t6/12; cum 14K 11/12;
  • 22787, 1,161, MRO, Irene Kovaloff 14-7H, Murphy Creek, t10/12; cum 20K 11/12;
Nice well:
  • 22946, conf, Hess, SC-Hoving 154-09-1003H-1, Truax, 50K first two months:
DateOil RunsMCF Sold

Note: again, another well in which no flaring after the first month; as well density increases, less and less flaring.


  1. You go to SAT, then this ... coincidence?

    anon 1

    1. Yes, we retired in San Antonio some years ago. Grew up and graduated from Williston High School (center of the Bakken); then ended up retired in San Antonio, and then the Eagle Ford.

      Anyway, if I'm reading this correctly -- Gulf Coast oil going north to Canada!?! Isn't this sort of opposite the proposed direction of the Keystone XL? I must be missing something. Smile.

      Great story. Especially the pricing. Thank you.

  2. Rig decline to come?

    Cash flow, PV10, IRR, EBIDA, and profits, all affect drilling decisions. Weather too. Some may ramp down.

    anon 1

    1. I've been surprised that oil rig count in North Dakota has come off its intro-boom low of 180 and held steady at 187 for so long. It will be interesting to see how this plays out.

  3. Bruce, regarding gas flared vs sold take a look at this EOG well in northern Mountrail Co.;
    #21072, Lostwood 25-1510H. I don't understand it.

    It was one of the more recent wells drilled in that area. So gas has been sold virtually since production began. Yet gas continues to be both flared and sold in the same month. Are the gas pipelines running at capacity limiting how much can be sold, or is something else going on there? I'd welcome any possible suggestions. Thanks.

    1. Folks with more knowledge about the oil and gas industry than I have will have to answer that question.

      However, this is my thesis: it is expensive and time-consuming to get pipelines put in. So, the chokepoint (when it comes to flaring) is getting natural gas pipelines put in. If my thesis is correct, then we can see if it might hold in this case:

      First: look at the NDIC GIS map server and not the level of activity in this area (of the Lostwood well you cite): very little activity compared to much of the rest of the Bakken; averaging well less than one well per every spacing unit (many spacing units with no wells). Currently, there are no rigs in the area.

      Second, look at the wells in immediate area of the well you cite (20006, 21072, 20220, 20709, 17090, and 17445). If it is accurate that this is "remote" and there may not be any natural gas pipelines put in yet, or not enough, then these wells should also be flaring natural gas. Every one of these wells is still flaring natural gas. In fact, #17090 was drilled back in 2008 and it is still flaring all the natural gas it is producing. Thus, my hunch is that there are no natural gas pipelines to some wells in this area, and/or as you suggest, inadequate capacity for others. #20220 continues to flare a significant amount of natural gas compared to how much it produces, for example.

      Besides cost and time consuming, it has to make economic sense for companies to rush to put in natural gas pipelines. How much natural gas is actually being flared from the oldest well in this area? #17090 has produced almost 100,000 bbls of oil, but has flared "only" 12,000 boe, if I did the math correctly, and most of that flaring occurred early on. It has flared only 300 boe total in the past six months -- not even worth putting a pipeline in.

      However, the well has been off-line much of the last six months. I have no idea why. But there rules that wells must cut back on oil production if they continue to flare after six months or so (I forget the exact rules; they are posted at my FAQs page). So, it's possible this well is already being taken off line because of too much flaring.

      Bottom line: smarter folks than I will have to answer the question. This is simply my thought. This area appears to have inadequate natural gas pipelines in place -- even wells almost four years old are still flaring natural gas. Economics (and increasingly, public pressure) determine when and where natural gas pipelines will be placed.

      This is way beyond my "pay grade" as we used to say, so I could be way off in my answer, but the data sure seems to fit.

    2. Thanks for your thoughts on the Lostwood gas flaring situation. The fact any gas was sold indicates a pipeline is there. That is why I didn't understand the continued partial flaring on the Lostwood 25-1510H. Unlike you, I hadn't looked at the surrounding wells.

      The fact several of the wells continue to flare after years of production suggests some combination of; A few wells may not yet be on a pipeline, and those pipelines that are in place can't handle all the gas produced in the area. Yet the gas production isn't so high as to launch a new gathering system. As you note this area is the northern edge of the Bakken and new pipeline construction is more likely focused in the heart of the field rather than on the margins.

    3. Thank you. Yes, it was interesting to look at this area a bit more closely.