Montana oil production tax: Random update of the oil activity in eastern Montana and debate over raising oil production tax, The Missoulian.
Wells coming off the confidential list over the weekend and Monday:
Monday, March 11, 2013
- 22133, 388, OXY USA, Mongoose 1-13-24H-142-95, Murphy Creek, t9/12; cum 15K 1/13;
- 22364, 138, Legacy, Legacy Etal Bernstein 5-17H, Red Rock, t10/12; cum 13K 1/13;
- 22962, 860, EOG, West Clark 5-2425H, Clarks Creek, t12/12; cum 37K 1/13;
- 22963, 1,908, EOG, West Clark 102-2413H, Clarks Creek, t10/12; cum 34K 1/13;
- 23107, 1,213, MRO, T D Steffan 21-27H, Murphy Creek, t11/12; cum 26K 1/13; compare with the OXY USA well above,
- 23400, drl, Crescent Point, CPEUSC Suitor 13-24-158N-101W, Little Muddy, minimal production to date
- 23210, 923, Zenergy, Cayko 22-27H, Dore, t1/13; cum 16K 1/13;
- 23273, 492, Whiting, Froehlich 24-9PH, Bell, on a gas line; t9/12; cum 21K 1/13;
- 23300, 941, Hess, SC-TR Slette 153-98-1819H-3, Truax, t12/12; cum 46K 1/13;
- 23433, 301, MRO, Ivan Hoff 31-28H, Strandahl, t11/12; cum 3K 1/13;
- 23525, drl, SM Energy, Ceynar 4X-18H, Poe, no production data;
- 22884, drl, Hess, LK-Wing 146-97-2215H-2, Little Knife, no production data;
- 22889, drl, Hess, LK-Wing 146-97-2215H-7, Little Knife, no production data;
- 22915, drl, BEXP, Roger Sorenson 8-5 2TFH, Alger, no production data;
- 23291, drl, CLR, Topeka 3-12H, Brooklyn, no production yet;
- 23330, 195, Whiting, Samuelson 23-32, wildcat (Beach oil field); a Red River well; t12/12; cum 10K 1/13;
- 23425, drl, BEXP Roger Sorenson 8-5 6TFH, Alger, no production data;
- 23520, 585, CLR, Jack 3-9H, Murphy Creek, t1/13; cum 7K 1/13;
- 23526, drl, SM Energy, Ceynar 4-18HB, Poe,
************************************
22962, see above, EOG, West Clark 5-2425H, Clarks Creek, already on a gas line:
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 1-2013 | 9352 | 6935 |
| 12-2012 | 27192 | 16142 |
| 11-2012 | 404 | 251 |
| 10-2012 | 26 | 101 |
22963, see above, EOG, West Clark 102-2413H, Clarks Creek, already on a gas line:
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 1-2013 | 6529 | 12238 |
| 12-2012 | 12044 | 20782 |
| 11-2012 | 15063 | 25131 |
23210, see above, Zenergy, Cayko 22-27H, Dore, on a gas line:
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 1-2013 | 13728 | 5877 |
| 12-2012 | 1944 | 0 |
23300, see above, Hess, SC-TR Slette 153-98-1819H-3, Truax, on a gas line:
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 1-2013 | 17096 | 13340 |
| 12-2012 | 28888 | 6091 |
In regards to the MT tax article, I agree that currently there is no boom in Eastern MT, only a few companies drilling random wells in attempts to find the areas real paydirt. The MT legislature needs to enact laws which are favorable incentives for oil companies to venture into the area. As time goes on and ways to cut the drilling cost along with a more developed infrastucture in the MT area, I think drilling operations will increase, especially as more ND leases become HBP. This said, the MT legislature needs to leave attractive tax laws on the table to encourage drilling.
ReplyDeleteI agree, and I think Montana will leave taxes alone.
DeleteIf they cut the tax in half for Cass County, drilling in Cass County will boom to many times the current level.
ReplyDeleteanon 1
...and I suppose if they raise the oil extraction/production taxes in Cass County, the oil companies will move out.
DeleteHeckmann call in interesting.
ReplyDeletehttp://ir.heckmanncorp.com/phoenix.zhtml?p=irol-eventDetails&c=217286&eventID=4918336
anon 1
It's nice to see the Spearfish Wells working out. I did the leasing up there years ago and a part of me thought we were shooting in the dark.
ReplyDeleteYes, it appears the Canadians know what they are doing.
DeleteQuestion for Apparently, where did you do the leases in the spearfish? How far does it extend and what were some of the lease amounts. I have about 1,000 mineral acres north east of Minot. I was offered $50/acre for 3 years and $50 for 2 year extension. My friend has a number of wells south of Stanley said wait for the number of acres I had. In addition, legal council didn't like the lease as well. The land man I worked with said over 20,000 arces were leased in a 50,000 acre 80/sq mile block.
ReplyDeleteSo wondering what lease amounts are in the area and general spearfish thoughts.
My understanding the land has been seismographed in the past flew months.
See surge and Legacy presentations. Each has an event March 13. Audio online.
ReplyDeleteSurge announced info on March 12.
Only the fringe near Canada has been drilled so far, with success. Might not be good South.
See ND map for activity and fields.
I can't copy links from here.
Anon 1
I'll see what I can do tomorrow with the presentations.
ReplyDeleteIt's been years since I worked up there. We leased a very specific small area around Bottineau. If you can get $50,000 that far south, I personally wouldn't get too greedy. I've seen a lot of people walk away with nothing because EVERYONE thinks they are sitting on a massive oil well. Giving a future evaluation to the unknown is incredibly hard. I can't give you legal council, but look at the well activity in your immediate area and be realistic about your odds. If you really think your chances at a decent well are good, focus on royalty. That being said, the investment doesn't make much sense in "the boonies" if the royalty paid out is too high for the operator taking the risk. Good luck.
ReplyDeleteIvan,
DeleteThank you for your reply.
I don't own mineral rights, but I had the very same thoughts as you when I first saw the question. Thank you.
Like most plays, spearfish in bottineau has some interesting twists and turns.
ReplyDeleteThe whole concept was that the spearfish play just across the border around waskada mn extended south into bottineau county ND. Lots of evidence for this as there were/are spearfish Madison wells nw of bottineau that produced in small qty fir 20+ years. The idea was horiz/multi frac would work in spearfish. That's what was/is happening around waskada.
Eog kicked off this latest round by leasing 2.5 townships from right on the border to about 15 or so miles south.
Eog drilled and hit right near the border but their wells further south did not look as good as the wells in Canada. So a combibation of weak results, smaller (in area) productive region and competition for resources within eog (eagle ford was heating up much faster than bottineau) and eog sold.
Only thing I couldn't really understand is why eog Canada division which was and still is active in waskada and knows spearfish as good or better than anyone didn't pick up leases from eog us. Maybe eagle ford tapped eog Canada eng/geo/land resources ? Surge and legacy are experimenting with different length laterals and maybe more up to date frac methods. Eog Canada is still very active north of the border. Surge and legacy are moving forward at a very slow pace one rig just recently added a second so we will see.
As far as leasing, most folks in bottineau gained their minerals via inheritance as it has been known for 50+ years the area has oil so mineral reservations keep rights when the farmland is sold. It is human nature but these folks have no skin in the game and as mentioned they all think they are sitting on a big payout. Folks need to realize that unless there is proven production then it is a big risk. As a mineral owner you can wait and pass on what you consider inadequate terms but that invariablly means delay. May or may not work out.
Excellent post. You had three main areas of discussion:
Delete1) The background to the Spearfish in the cross-border area, Canada and North Dakota.
2) EOG-US and EOG-Canada experience, and thoughts about how EOG-Eagle Ford might have affected their Spearfish play.
3) Folks sitting on mineral rights.
I really, really appreciate your comments regarding #3 -- folks sitting on mineral rights. A long time ago I learned that what made the world go round, as they say, was money moving. Simply sitting on something is generally not particularly exciting nor rewarding (there are exceptions of course). I've seen too many people let life pass them by, waiting for something "big" to happen, or as you might say, waiting for "their big well to come in."
Henry James devoted a whole novel to the subject: "The Beast In The Jungle." I would not recommend this book to anyone in the 21st century; it's way too long. Henry James can take ten pages to describe the outside of a house. But, having said that, he wrote a great novel about a man waiting for something that never happened. There are reasons for sitting on mineral rights, and some of them are very, very good, but simply sitting on them in hopes of a bigger payday, as you say, may or may not work out.
Anyway, thank you for a great comment. Much appreciated. Good luck in all your endeavors.