The post below is from my e-mail to a couple of other folks (all my stuff; no one else's -- so anything wrong is all my fault). It may or may not make sense to anyone else and it certainly isn't ready for "prime time" but it is what it is.
Here goes.
Why are not all wells put on the confidential list?
A writer sent in that question
when he noted that the four (4) most recent KOG wells were reported way ahead of schedule (before the six months were up) and it turned out these wells were never on the confidential list.
I've
always known a "few" wells were not on the confidential list, but never
worried about it. This got me wondering. It turns out that up to 70% of permits/wells may not be getting placed on the confidential list. That means that of the 2,200 wells on the confidential list, there could be as many
3,500 or so locations being drilled or waiting to be drilled in the Williston Basin, North Dakota.
That
makes sense because I've always thought based on # of permits
issued/year divided by 12 months suggests that 200 - 210 wells should be
reported each month; but yet it looks like about 160 - 175 wells
actually "come off the confidential list."
The other wells are mixed in with the group of "producing wells that have been completed" that are also reported most days on the daily activity report. That group includes wells that were confidential and went to DRL status, and it also includes wells that were never on the confidential list.
Here was my answer to the individual who asked about wells not being placed on confidential list:
1. One cannot simply go to the confidential list and assume the missing permit numbers were not put on the confidential list; some may have been on the confidential list and already reported and thus have come off.
However, if you take the most recent permits one can assume they have not been drilled yet.
So, I took the most recent 140 permits, and then plugged in / counted all the missing permit numbers. There were 99 permits "missing." The total came to 239 permits (140 + 99). It appears that 99 permits in this batch were not accounted for.
99/140 = 70.71%.
That means it is likely that as many as 70% of permits/wells are not on the confidential list at the time the application goes in. Of course, any point along the way, the operator can request the well be put on the confidential list.
2. It would be easier to request "confidential" at the time the application is filled out; there's a box in the upper right corner of the application -- form H1 -- requesting/not requesting confidentiality. The operator simply types in "yes" or "no."
So, the question is why would an operator not request "confidentiality." It does not cost anything; no additional fee, as far as I know. If there is, it would be nominal.
3. I think this is the answer. The state wants the industry to be as transparent as possible. The state would prefer nothing be confidential, but of course, that isn't going to happen. So, the state and the oil companies work together, come up with a compromise and agree that "confidentiality" is not just automatic.
There has to be a reason for granting confidentiality. You notice on the daily activity report that there is often a list of permits in which the state authorizes confidentiality.
My hunch is that the state does not automatically grant confidentiality. If an operator wants a well to be confidential, the state has to see a valid reason. Once you start getting to 26 wells in one section, and results of wells in that section and the surrounding sections are well known, it's hard to see the need for confidentiality. As it is, the state seems very, very liberal in granting "confidentiality."
4. But why don't the companies simply check "YES" anyway in the box? I think the risk is that it will slow down the process. If the company checks "YES" the permit won't be granted until the state has a chance to determine the need. Obviously if the permit is for a wildcat, no problem, or for a new formation. But if this is the 26th well in a given oil field, or even in the a given section, the state could really require a lot of paperwork explaining why the operator wants the well to be confidential.
*******************************
29544: conf,
29543: conf,
29542: conf,
29541: conf,
29540: conf,
29539: loc, HRC, Tyrone, north of Williston, [December 23, 2014; still LOC, well file available]
29538: loc, HRC, Tyrone, north of Williston, [December 23, 2014; still LOC, well file available]
29537: conf,
29536: conf,
29535: conf,
29534: conf,
29533: conf,
29532: conf,
29531: conf,
29530: conf,
29529: conf,
29528: conf,
29527: conf,
29526: loc, EOG, Parshall; extremely well-known field; when will this go conf? [December 23, 2014; still LOC, well file available]
29525: loc, EOG, Parshall; extremely well-known field; when will this go conf? [December 23, 2014; still LOC, well file available]
29524: loc, OXY USA; Manning; extremely well-known field; when will this go conf?[December 23, 2014; still LOC, well file available]
29523: loc, QEP; Blue Buttes; extremely well-known field; [December 23, 2014; still LOC, well file available]
29522: loc, Oasis; Missouri Ridge; should see change; [December 23, 2014; now DRL, well file available]
29521: loc, Oasis; Missouri Ridge; should see change; [December 23, 2014; now DRL, well file available]
29520: loc, QEP; Grail, extremely well-known field, [December 23, 2014; now DRL, well file available]
29519: loc, QEP: Grail, extremely well-known field, [December 23, 2014; now DRL, well file available]
29518: loc, Oasis; Missouri Ridge; should see change; [December 23, 2014; still LOC, well file available]
29517: conf,
29516: loc, Liberty Resources, McGregor; should see change; [December 23, 2014; now DRL, well file available]
29515: loc, Liberty Resources, McGregor; should see change; [December 23, 2014; now DRL, well file available]
29514: loc, Liberty Resources, McGregor; should see change; [December 23, 2014; now DRL, well file available]
29513: loc, Liberty Resources, McGregor; should see change; [December 23, 2014; now DRL, well file available]
29512: loc; Liberty Resources, McGregor; should see change; [December 23, 2014; now DRL, well file available]
29511: loc, Liberty Resources, McGregor; should see change; [December 23, 2014; now DRL, well file available]
29510: conf,
29509: conf,
29508: conf,
29507: conf,
29506: loc, Whiting, Glass Bluff, [December 23, 2014; still LOC, well file available]
29505: loc, Whiting, Glass Bluff, [December 23, 2014; still LOC, well file available]
29504: loc, Whiting, Glass Bluff, [December 23, 2014; still LOC, well file available]
29503: conf,
29502: loc, Oasis, Camp, a well-known field, [December 23, 2014; still LOC, well file available]
29501: loc, Oasis, Camp a well-known field, [December 23, 2014; still LOC, well file available]
29500: loc, Oasis, Camp, a well-known field, [December 23, 2014; still LOC, well file available]
29499: loc, Oasis, Camp, a well-known field, [December 23, 2014; still LOC, well file available]
29498: conf,
29497: conf,
29496: conf,
29495: conf,
29494: conf,
29493: conf,
29492: conf,
29491: conf,
29490: conf,
29489: conf,
29488: conf,
29487: conf,
29486: conf,
29485: conf,
29484: conf,
29483: conf,
29482: conf,
29481: loc, a well-studied Brooklyn oil field; [December 23, 2014; now DRL, well file available]
29480: loc, a well-studied Brooklyn oil field; [December 23, 2014; now DRL, well file available]
29479: conf,
29478: loc, CLR, Chimney Butte, [December 23, 2014; now DRL, well file available]
29477: loc, CLR, Chimney Butte, [December 23, 2014; now DRL, well file available]
29476: loc, CLR, Chimney Butte, [December 23, 2014; now DRL, well file available]
29475: loc, CLR, Chimney Butte, [December 23, 2014; now DRL, well file available]
29474: loc, CLR, Chimney Butte, [December 23, 2014; now DRL, well file available]
29473: loc, CLR, Chimney Butte, [December 23, 2014; now DRL, well file available]
29472: conf,
29471: conf,
29470: conf,
29469: conf,
29468: conf,
29467: conf,
29466: conf,
29465: conf,
29464: conf,
29463: conf,
29462: conf,
29461: conf,
29460: conf,
29459: conf,
29458: conf,
29457: conf,
29456: conf,
29455, drl, Triangle, Williston, spud 9/26/14; [December 23, 2014; now DRL, well file available]
29454, drl, Triangle, Williston, spud 9/28/14; [December 23, 2014; now DRL, well file available]
29453, drl, Triangle, Williston, spud 9/30/14; [December 23, 2014; now DRL, well file available]
29452, conf,
29451, loc, QEP, Bear Den, a well-known field, [December 23, 2014; still LOC, well file available]
29450, loc, QEP, Bear Den, a well-known field, [December 23, 2014; still LOC, well file available]
29449: conf,
29448: conf,
29447: conf,
29446: conf,
29445: conf,
29444: conf,
29443: conf,
29442: conf,
29441: conf,
29440: conf,
105 wells
- 3: already on DRL status; unlikely they were ever confidential; DRL status means you can see the file
- 34: loc; did not request confidential status with permit
- 68: requested confidential status with permit
2. Very, very well-known fields; some of the very well-known operators don't ask to put the wells on confidential at the time of the application; the field is already well-known; it will be interesting to see if these wells ever go to CONF
3. I was only surprised by the Liberty Resources wells in McGregor not put on CONF; later I will take a look at the GIS map server to see if there is an easy explanation
4. In the big scheme of things, it seems rare for operators at this point in the Bakken not to put their wells on confidential status at the time of the application. Only after we follow these wells for awhile will we get a sense how rare it is for any well never to be on CONF status.
*************************
30 Sept 14
29555, conf,
29554, loc, CLR, Rattlesnake Point, [December 23, 2014; still LOC, well file available]
29553, loc, CLR, Rattlesnake Point, [December 23, 2014; still LOC, well file available]
29552, loc, CLR, Rattlesnake Point, [December 23, 2014; still LOC, well file available]
29551, loc, CLR, Rattlesnake Point, [December 23, 2014; still LOC, well file available]
29550, loc, CLR, Rattlesnake Point, [December 23, 2014; still LOC, well file available]
29549, loc, CLR, Rattlesnake Point, [December 23, 2014; still LOC, well file available]
29548, conf,
29547, conf,
29546, conf,
29545, conf,
The reason why tight hole is not requested with the permit application is very simple.
ReplyDeleteThe period of time that information is withheld is 6 months starting when confidentiality is requested.
For the first few months of activity, the only info in the file is the permit. Confidentiality is then requested just before the first significant data delivery to ndic. This results in maximizing the time such reports as the drilling and completion reports are withheld from public release. In reality, at this stage of development there is probably not much info that would harm the producer or help a competitor so the need for confidentiality does not appear to be critical in any significant way. With all the equipment and workers in the field and many many contractors it has to be hard to keep any secrets. And the corp presentations go into significant detail about operations.
1. It is my understanding that the confidentiality clock starts when the operator requests it or when the well is spud. (I could be wrong on that; I've posted it elsewhere, but I'm not going to look it up right now). I have read a lot of file reports, and some/many/most of the applications have "YES" in the box -- for confidentiality, well ahead of any data dump from the field.
Delete2. I am now becoming aware of more permits/wells that never go on the confidential list. That is the question: why aren't all wells put on the confidential list? Why don't operators request that all wells be put on the confidential list?
Since it is so easy to simply request that a well be put on the confidential list, a reader wonders why all operators don't put all wells on confidential list somewhere along the way. Some wells in the Bakken appear never to have been on the confidential list -- I've noted it and at least one other reader who has multiple wells and tracks them very closely has noted that also.
This, of course, begs the question: why does an operator need to have permission for a well to go on the confidential list in the first place? That's the real question.
DeleteThere are two issues here: a) what requirements must be met for the state to allow an operator to have a well placed on the confidential list; and, b) the date the "clock" starts ticking. We're not talking about the "clock" in this case; we are talking about the requirements that must be met for a well to be placed on the confidential list and why an operator may/may not choose to request confidentiality for a particular well.
But yes, the original comment is correct: a lot of the "missing" permits will probably show up on the confidential list when the wells are spud.
DeleteI'm just wondering why they ALL don't show up, why all wells don't go on the confidential list at some point.
I just compared the Well Index to the confidential list and there are 1087 OG wells that are not on the confidential list that are in Loc or DRL status of which 501 have no spud date and 482 have a spud date in 2014. The remaining 104 were spudded prior to 2014.
ReplyDeleteWhen I look closer, I can see by the naming convention of some of the companies that these are the 3rd plus wells for that section--which supports your thought that after the first couple wells the rest don't have to be confidential.
Also, there were about 35 wells that are showing confidential status in the Well Index that were not on the Confidential List. They look like their confidential status ended in the last week and haven't been updated.
I suspect that the record keeping for ND Wells is becoming very burdensome!
Wow, what a great note. Yes, I assume there's a 10% paperwork issue (missing paperwork, late paperwork, misfield paperwork, etc).
DeleteI find this absolutely fascinating. It would be too time consuming for me to reconcile "producing wells completed -- sorting out which ones had previously been on the confidential list and which one had not but at least readers know that the confidential list is not a complete list of wells waiting to be drilled/completed.
I think both of us may need to get back on our OCD meds.
If the request for conf accompanies the permit ap or is received prior to spud then the 6 mo period starts on the date of spud.
ReplyDeleteElse, the 6 mo period starts on the date of the request or the date of completion whichever date is earlier.
So the practice is to make the request just before completion or when submitting data that the op wants held up for as long as allowed by the rule.
As for requirement, the only requirement in law or by rule is that the operator makes the request in writing. Ndic has no rules in place to review or potentially deny conf (other than the request date described above).
Yes, it seems most of permits that I've read have "YES" for confidentiality in the application, but I will have to watch that more closely.
Delete