Wednesday, May 8, 2013

Random Update Of Whiting's Net Acreage In The Williston Basin Bakken

I'm in the process of going through Whiting's corporate presentation.

I have updated Whiting's net acreage in the Williston Basin Bakken.  The following is a "cut and paste" from the "Snapshot" data link. I don't have time to clean it up right now. The older data is probably from 2Q12 and earlier. The new net acreage data is from their current corporate presentation and is highlighted bold/red.
  • Net Bakken acreage, North Dakota only: 2Q12: 450,000 net acres; net in ND and MT: 703,668 in 2013; as of 12/31/2012, Whiting's acreage cost averages out to $521/net acre
  • According to SeekingAlpha, May 3, 2011: 603,702 net acres; 1Q13: 703,668 net acres
  • Total acquisition cost: as of May 3, 2011 -- $141 million or $243/acre
  • Sanish / Parshall Prospect: 82,533 in 2013; 83,011 net acres and 99 wells in 2010; 106 in 2011; EURs 450 - 950 (middle Bakken) and 400 mboe for upper Three Forks in the Sanish; 2Q12, only 22 stages for best well to date, the Smith 41-12H; initiated pad drilling in the Sanish; costs down $2 million/well --> $7 million/well in Williston Basin; 2Q12 -- maybe 50 more wells yet to drill in the Sanish;
  • Lewis and Clark: 134,861 in 2013; was 128,370 net acres; Lewis & Clark NW of Belfield; 1 rig;
  • Pronghorn: 128,113 in 2013; was 121,403 net acres; Belfield area; TFS Exploration Drilling; Pronghorn is between Belfield and Dickinson;  5 rigs in the Pronghorn. 2Q12: ~ $6.5 million/well;
  • Hidden Bench: 28,556 in 2013; was 30,036 net acres; middle Bakken, TFS. 2Q12 -- "one of the very best projects in the company.
  • Tarpon: 6,265 in 2013; was 6,359 net acres; Watford City area; middle Bakken, TFS; Tarpon Federal 21-4H -- record IP in the Bakken
  • Starbuck: 92,227 in 2013; 91,497 net acres; Montana, west of Williston; Middle Bakken; [prev 88K net acres]; Bakken, Three Forks, Red River
  • Missouri Breaks: 66,095 in 2013; was 62,000 net acres; Montana, west of McKenzie County; EURs - 350,000K
  • Cassandra: 13,816 in 2013; was 13,794 net acres; Ray area, east of Williston; Middle Bakken;
  • Big Island: 122,389 in 2013; 121,673 net acres; Golden Valley County, southwest corner of ND; multiple objectives; earlier presentation 120K; 50 vertical well prospects (2Q12); all successful Madison wells; EURs of 250,000K; completion costs: $3.5 million; now drilling the Red River
  • Other ND & MT: 28,813 net acres in 2013;

Whiting's Analysis Of The Bakken/Three Forks -- Corporate Presentation

Three story lines from the data below:
  • this is data that the USGS did not have at the time of their 2013 survey
  • estimates of the Bakken potential have never decreased; estimates have always increased
  • increased density wells are resulting in increased production from existing wells
I've lost track but how many ever wells you thought Whiting was going to put in their spacing units in any of their prospects, you can starting adding another 3 or 4 wells per spacing unit. In other words, if you thought that Whiting was going to put in 8 wells in a spacing unit, you may have to increase that number to 11 or 12 wells. This is not trivial.

From Whiting's corporate presentation, from Whiting's website, May 8, 2013
Slide 10

Missouri Breaks Upper Three Forks
  • 3 wells per spacing unit
Hidden Bench Lower Bakken Silt/Higher Density Plot
  • Whiting has identified an additional reservoir between the Middle Bakken and the Three Forks
  • high oil in place
  • may significantly increase reserves in this area
  • Whiting will test this zone: Whiting calls it the "Middle Bakken Silt"
  • Whiting will test it by driling 160-acre spaced wells above and below this target zone
  • Whiting will stimulate these wells with large frac volumes
  • Whiting believes that higher density drilling could also improve recovery efficiency in the Middle Bakken reservoir (EOG has proved that higher density wells improve recovery from existing wells)
Cassandra Lower Three Forks
  • the 2nd bench (TF2) has been charged with oil from the Lower Bakken Shale
  • might support an additional 4 wells per spacing unit
Tarpon Three Lower Forks
  • TF2 has been charged with oil from the Lower Bakken Shale
  • might support an additional 3 wells per spacing unit
Pronghorn Sand Higher Density Pilot
  • sufficient OOIP in the Pronghorn/Upper Three Forks to support 6 wells/spacing unit
Sanish Higher Density Pilot
  • extensive core analysis, the Sanish Field has the highest demonstrated OOIP in the Williston Basin; the Sanish field is "owned" by Whiting
  • to date, development has focused on the Middle Bakken "B" and "C" zones
  • volumetric studies indicate that significant additional OOIP exists in the Middle Bakken "D" zone
  • Middle Bakken "D" could potentially support up to 3 additional wells in the Middle Bakken per spacing unit
From Slide 12, prospect, # of wells/spacing unit

Missouri Breaks
  • existing 4P locations: 4
  • new objectives: 3
  • existing 4P locations: 7
  • new objectives: 4
  • existing 4P locations: 7
  • potential high density infills: 3
Hidden Bench
  • existing 4P locations: 7
  • potential high density infills: 8
  • existing 4P locations: 3
  • potential high density infills: 3
  • existing 4P locations: 5
  • new objectives: 3
In other words, if you "have" a well in the Hidden Bench prospect, be prepared to "have" as many as 15 wells before this is all done. 

Slide 13

Pronghorn Prospect
  • well cost: $7.0 million
  • Whiting intends to test a higher density pilot program
  • intends to drill 6 wells per 1280-acre spacing unit, up from the initial plan of 3 wells per spacing unit
This is from the Whiting Corporate Presentation
The list differs slightly from the linked story below. Among other differences, the original list had CLR #1 and WLL #2.  There may be data out that still has CLR #1. The list will vary slightly from other sources, depending on how figures are derived.

Top ten producers in the Bakken, North Dakota, 2012. See story here.
Barrels of oil per day
List updated from Whiting Corporate Presentation 4Q12 
  • 1. Whiting Oil and Gas Corporation, 66,156
  • 2. Continental Resources, 65,141
  • 3. Hess Corporation, 64,657
  • 4. Brigham Oil & Gas, 50,325
  • 5. EOG, 46,091
  • 6. XTO Energy Inc. 33,148
  • 7. Marathon Oil Company, 31,194
  • 8. Petro-Hunt, L.L.C., 25,743
  • 9. Slawson, 21,058
  • 10. KOG, 20,423
  • 11. Oasis, 20,013
  • 12. Burlington Resources, 19,798
  • 13. QEP, 17,521
  • 14. WPX, 17,043
  • 15. OXY USA, 15,187
  • 16. SM Energy, 12,665
  • 17. Zavanna, 10,991
  • 18. Enerplus, 10,568
  • 19. Hunt, 9,955
  • 20. Newfield, 9,437

Don't Fight The Fed: Some Interesting Graphs From The Minneapolis Fed

Sent to me by a reader, and also linked at Carpe Diem, these are some interesting graphs.

Homeland Security And The Immigration Bill

The stories continue to come out about Homeland Security buying ever increasing amounts of ammunition.

I originally posted this on March 25, 2013, as part of another Bakken-related post.

What was not mentioned in the original post below, or at least not given enough emphasis, was how this relates to the immigration bill now winding its way through Congress.

It is very likely that it is a better bill than some are suggesting. Amnesty will not occur overnight; there will be a long path.

However, the "word on the street" from San Antonio and El Paso south into Mexico will be that Mexicans are now guaranteed citizenship in the US. Some have suggested that the border will be literally overrun. That may or may not happen, but the former governor of Arizona knows first hand what that could mean.

I think the dots are starting to connect: when the immigration bill was being fashioned early in the first term, there were brainstorming sessions looking at the risks involved. I am convinced that at least one bullet (no pun intended) on the PowerPoint presentations was exactly that: when the bill is passed the word on the street will result in an open invitation to all those living south of the border to move quickly to take advantage of the new bill. It's very possible, the new bill will even state that to begin the legal path to citizenship will require that one had been in the country in the year in which the bill passed. That would result in a huge influx, literally overnight.

It is not a stretch that the ammunition and armored vehicles being bought by Homeland Security are connected with the immigration bill. It would be interesting to ask Ms Napolitano that question under oath. She would deny it, of course, but at least her answer would be on the record.

Originally Posted March 25, 2013 

Arizona, Napolitano, Ammo, Assault Vehicles
It's All Starting To Make Sense

On a completely different note, there have been several articles of the Department of Homeland Security buying excessive numbers of rounds of ammunition. It is being reported that DHS is not acknowledging the purchases, and is stonewalling Congress when asked about the purchases. I have posted the news items, noting them, but not really getting any feel for the story: whether there might be a reason or simply the government buying lots of ammunition for no particular reason.

Now, these photos, videos, and story from
Footage of hundreds of armored trucks, similar to ones reportedly purchased recently by the Department Of Homeland Security has appeared online, raising more questions over their intended use.
The video was uploaded to YouTube last week by a user who stated that it was shot in the middle of the desert between Hackberry and Peach Springs, Arizona.
It shows hundreds of military style trucks loaded on to a train, presumably in the process of being delivered domestically for law enforcement or military purposes.
I think the dots are starting to connect.
  • The director of Homeland Security is Janet Napolitano. She was the governor of Arizona from 2003 to 2009.
  • The US federal bureaucracy moves very, very slowly. The decision to buy large amounts of ammunition and large number of assault vehicles for domestic use would have taken a fair amount of time from considering the issue to executing the plan.
  • I don't know if folks remember what the big story in Arizona was between 2003 and 2009 that would relate to the subject at hand.
But here's a hint:
  • This article was posted in 2009. I personally don't care for this type of "scare" article. I did not read the entire article, and it is linked here solely for demonstration, to help folks connect the dots.
  • In the 2008 time period and into 2009, the US economy experienced a severe recession; the Mexican economy did not implode; and, there was no mass migration of Mexicans across the border. But I do recall the hysteria was pretty rampant, between 2003 and 2009, about the Mexican economy collapsing, and hordes of Mexicans streaming across the border. 
It wasn't until I saw the videos of the assault vehicles for domestic use that the dots started to connect.

The risk seems to have completely gone away; perhaps it has, perhaps it hasn't. But the bureaucracy moves slowly, and once the plan -- to buy weapons, ammunition, and assault vehicles -- was hatched some years ago, it would have taken a few years to execute.

It all fits very nicely. It doesn't bother me one way or the other. I don't think the arming of Immigration and Customs Enforcement is all that big a deal. I truly doubt arming the ICE is for the purpose of preventing armed revolt in the street by American citizens upset about losing their social security or having to pay for ObamaCare. The dots connect, and if arming the ICE is for the purpose suggested, it sounds more than appropriate. The whole plan seems a bit crazy, but I'm sure the government has done a lot crazier things over the years. But, wow, it sure makes sense. 

Janet Napolitano was governor of Arizona in 2003 - 2009, ground zero (time and place) for impending hordes of Mexicans flooding across the border. She probably lost sleep thinking about the very real possibility. If so, that fear never left her. Once in a job where she could do something about it, she acted with laser-like focus.

WPX Has A Huge Well; Wells Coming Off The Confidential List; All Will Report IPs; Oasis With Three Nice Wells; MRO With A Huge Well; KOG With A Nice Well

23376, 1,722, Oasis, Amelia Federal 5201 41-11B, Camp, t12/12; cum 55k 3/13;
23377, 1,319, Oasis, Hal Federal 5201 41-11T, Camp, t11/12; cum 32K 3/13;
23452, 2,187, WPX, Dancing Bull 16-21HZ, Van Hook, t4/13; cum --
23585, 133, Oasis, Candito 6093 43-28H, Gros Ventre, t11/12; cum 18K 3/13;
23802, 1,588, MRO, Eagle USA 41-5H, McGregory Buttes, t1/13; cum 70K 3/13;
24056, 2,271, KOG, Moccasin Creek 14-11-2-3H, Moccasin Creek,  t1/13; cum 43K 3/13;


 23376, see above, Oasis, Amelia Federal 5201 41-11B, Camp:

DateOil RunsMCF Sold

23377, see above, Oasis, Hal Federal 5201 41-11T, Camp,


 23585, see above, Oasis, Candito 6093 43-28H, Gros Ventre:

DateOil RunsMCF Sold

 23802, see above, MRO, Eagle USA 41-5H, McGregory Buttes:

DateOil RunsMCF Sold

 24056, see above, Moccasin Creek 14-11-2-3H, Moccasin Creek:

DateOil RunsMCF Sold

Bakken's Economic Ripple As Shown At Carpe Diem

Link here to a rather amazing graphic and piece of research.

At that same site, there is an astonishing graphic showing the surge in US oil production in May, 2013. Even considering the turnaround in the past 12 months, the surge in May is quite startling. 

One has to remember that this surge is really the result of only three basins: the Williston Basin, the West Gulf Basin, and the Permian Basin. It is likely that the West Gulf Basin (the Eagle Ford) will swamp the Bakken in terms of output before it's all over.

Production is held back by takeaway capacity and perhaps to some extent to lack of demand.

California is not yet a player.

Alaska is not yet a player.

Texas has yet to show how much it can really do.

Much of the mid-continent is off-limits; in fact, most of this recent upsurge is on private land; once we get an administration that is not afraid of US economic success, federal land will be opened to drilling.

We have yet to see what the Uinta, Niobrara, Mississippi Lime can do.

Off-shore Gulf of Mexico is just starting to come back.

Off-shore California is a non-player with regard to the surge, and, of course, off the Atlantic coast: nil.

And this is just the United States. Throw in Canada and one does have a potential "Saudi America."

Ten (10) New Permits -- The Williston Basin, North Dakota, USA; Statoil Reports Three Nice Wells In Montana; One STO Well With Three Laterals

Active rigs: 185

Ten (10) new permits --
  • Operators: Oasis (3), Hess (3), Statoil (2), Whiting, Fram Operating
  • Fields: Baker (McKenzie), Alger (Mountrail), Camp (McKenzie), Hardin (McKenzie)
  • Comments: Fram has a permit for a wildcat in Renville County
Wells coming off the confidential list were posted earlier; see sidebar at the right.

Producing well completed:
  • 23818, 97, CLR, MPHU 32-10H, Medicine Pole Hills, West Red River well, t1/13; cum 2K 3/13;
  • 23818, 57, CLR, MPHU 32-10H, Medicine Pole Hills, Red River, t1/13; cum 3K 3/13;  
Meanwhile in Montana, The Fairfield SunTimes is reporting Statoil had three completions:
Richland County:
  • Judith 10-3 1H, 2,408, Bakken
Roosevelt County:
  • Willard 19-18, 1,879, Bakken
  • Wilde 30-31 1H, three laterals (18,258 ft; 19,016 feet; 19,920 feet); 2,518; all three Bakken

John Kemp/Reuters On Spacing

A reader alerted me a an excellent John Kemp/Reuters article on spacing.

The article begins:
North Dakota's leading oilfield operators hope to squeeze much more oil from its shale formations by drilling wells closer together - a bold experiment that could raise ultimate recovery by billions of barrels if it succeeds.
Oil and gas wells drain hydrocarbons from a fairly large area, although it is impossible to know the exact extent since the field cannot be observed directly. This poses a tricky problem for operators and regulators.
Drill wells too close together and they interfere with one another, draining oil and gas from the same parts of the formation and reducing their efficiency. Drill wells too far apart, and some valuable oil and gas will be left behind in parts of the formation not near enough to any well bore to be recovered.
The article provides a nice overview of spacing in various states.

A huge "thank you" to the reader for sending me this link.

It is interesting to note that the Bakken as a laboratory continues to move quickly. Re-read the third paragraph in the Reuters story linked above.

Now note this, from an earlier post:
EOG initially drilled wells every 640 acres in its Parshall field in Mountrail County, ND, but recently has been drilling every 320 acres. The initial results showed not only higher production rates from the newer infill wells, but improved recovery from the initial wells.
Unconventional means just that: unconventional.

The Bakken continues to be THE laboratory for tight oil and unconventional oil. Go Bakken. 

Random Answer To A Random Question


Later, 9:45 am: Teegue agrees.

Original Post

Posted elsewhere:
I always enjoy these little bits of cocktail chatter. It helps one understand the Bakken. An enquiring mind is asking if anyone knows whether the horizontals will run north or south with regard to #25328 and #25329. It is said that "25329" is not shown on the map; in fact it is, if one zooms in. Based on how far the wells are set back from the section line, my hunch: both horizontals will run south. If they were going to run north, the wells would have been sited closer to the section line. That's my hunch. For what it's worth.  However, the name of the wells provide the answer. Both #25328 and #25329 are "Tuhy" wells, which means both horizontals will run south; if they ran north, they would be named State Lazorenko wells. #16451, a Gerald Tuhy, well is in the same section as #25238 and 25329, and Gerald Tuhy runs south.

Northern Oil and Gas To Offer $200 Million In Senior Notes

$200 million.

$200 million / $5,000/acre = 40,000 acres

$200 million / $10 million/well @ 5% working interest: participate in 400 wells at 5% working interest

$200 million / $10 million/well = 20 wells

NOG is the 12th largest leaseholder in the Bakken with 180,000 net acres; currently drilling about 160 gross (12 net wells), which works out to be about 7.5% working interest in each. The company says it has the potential to acquire 3,000 to 5,000+ acres/quarter, or 20,000 acres/year.

Two Timely Articles Regarding California; Other Energy Links

Active rigs: 184

RBN Energy asks if it is too expensive to build the Freedom Pipeline to carry crude oil from west Texas (the Permian Basin) to refineries in California.

And, to help answer that question, the federal government has removed four parcels of minerals in California (Fresno and Kern Counties; Monterey Shale) from its May 22, 2013, auction, citing lack of funds necessary to work the fracking issues that would be raised. The lack of funds is due to the federal sequester.

WSJ Links

Section D (Personal Journal):
Section C (Money & Investing):
Section B (Marketplace):
Section A: