Tuesday, September 23, 2014

Huge Natural Gas Well In The Utica; Surprisingly, Some Good News Coming From Obama Adminisration On Global Warming -- September 23, 2014

From Mark Perry over at Carpe Diem:
As another example of surging production and ongoing productivity gains for new wells, I learned from an energy industry insider last night in Houston that a prolific, new shale gas well in the Utica Shale region has delivered an initial production volume of 30 million cubic of natural gas feet per day, almost four times the 8 million cubic feet per day new-well average in the Marcellus.
Breitbart is reporting:
Obama ordered all federal agencies to begin factoring “climate resilience” into all of their international development programs and investments. 
This should prevent / slow US federal money being sent overseas while US agencies work on those "climate resilience" factors. Some good news for US taxpayers.

Also, all those CO2 emissions being spewed out over the Mideast with ObamaWar -- do those CO2 emissions count against the US or against the Mideast? Enquiring minds want to know. My hunch is that there will be more CO2 spewed out over the Mideast during this decades-long ObamaWar than anything the Bakken oil producers produce.

By the way, is everyone in Europe and Asia sitting out this new war in the Mideast? I see about five Mideastern countries flying sorties (Bahrain, Qatar, Saudi Arabia, etc) to support the ObamaWar but I didn't see France, Italy, Germany, Spain, Portugal, Switzerland, Albania, or Monaco mentioned. I assume the UK is involved.

And from the Obama administration we got the first civilian body count after 24 hours of aerial bombardment: 0.

I can't make this stuff up.

Technology To Boost Tight Oil Recovery By 25% -- Wood McKenzie

Top story in Rigzone today: Bakken producers resist change.
Hess Corp and other major North Dakota oil producers told the state's top energy regulators on Tuesday that existing field practices used to prepare Bakken crude for rail transport are safe, and tighter standards could do more harm than good. The comments, at a special hearing of the North Dakota Industrial Commission (NDIC), came as federal, state and local officials grapple with how to ensure the safe transport of the state's crude oil.
The matter has come under increased scrutiny after a string of crude-by-rail explosions, including one last year in Quebec that killed 47 people. The NDIC asked companies, academics and others to testify about how regulatory changes could affect the safety of Bakken crude oil and producers' costs. 
The NDIC has not set a timeline for any decisions. Oil producers laid out in detail the methods they say make the transport of North Dakota's oil as safe as possible, and argued that stricter rules were not needed. No pipeline or rail companies signed up to testify at the hearing.
Did you expect them to say something different? To the best of my knowledge, no one has died in the US due to a Bakken crude oil derailment.

Wood McKenzie: US tight oil technology could boost output by 25%.
There continues to be great potential for surprises to the upside in production of U.S. tight oil according to Wood Mackenzie's latest integrated analysis.
"Growth in U.S. tight oil continues to impress as development technology and techniques have yet to mature beyond adolescence," said Phani Gadde, Senior North America Upstream Analyst for Wood Mackenzie.
To better illustrate, Gadde said additional volumes from Enhanced Oil Recovery (EOR) will come on stream after 2020, and could add 1.5 to 3 million barrels per day (mb/d) by 2030, up to 25 percent more oil than is being forecasted today.
These technologies are in early test phase and not commercial yet, but indicators suggest up to a 100 percent increase in recovery rates. There are pilot tests that are underway with operators like EOG testing it out in the Eagle Ford adds Gadde.
"This is going to happen, like horizontal drilling and fracking, leading to another step-change in production technology," added Skip York Principal Analyst, Americas Downstream, Midstream & Chemicals for Wood Mackenzie.
This is going to happen way before we even get to tertiary EOR. 

This should not surprise anyone. Several Bakken operators have said EURs will easily increase by that much with new completion techniques.

News We Will Be Talking About Wednesday -- September 23, 2014

Watch for the weekly natural gas fill rates. Looking for "100" to break even; less than 100 is not a good sign. EIA link here. Next data release, Thursday, September 25, 2014.

Overheard At The WSJ
 Their words, not mine:
European tech is something of an oxymoron these days. To see why, consider events of the past few weeks.

In the U.S., Apple unveiled its latest version of the iPhone along with plans for a new mobile-payment system and a long-awaited smartwatch. Already, in the first weekend the phones were available, they have sold more than 10 million. 
In Asia, meanwhile, Chinese e-commerce giant Alibaba successfully launched one of the largest-ever initial public offerings in U.S. markets, raising about $25 billion. The share sale underscored the fast rise of Alibaba and rivals such as Tencent and Baidu. Those three companies now have a combined market value of more than $400 billion.
And in Europe? The big tech news there has been a continuing attempt, through antitrust channels, to corral Google. Looking at the world's top 20 tech firms by market value, only one European, Germany's SAP, shows up. Besides underscoring the sclerotic economic environment in the eurozone, the impression is of a continent struggling to keep up in terms of innovation and entrepreneurialism.
And it may become the first continent to have to import fossil fuel to stay lit (previously posted).

Wall Street Journal

ObamaWar: first night sorties a huge success. President says war will last decades. Or something to that effect. No "shock and awe" this time around. Official number of civilian casualties after 24 hours of heavy bombardment from the air: 0.

Wow, wow, wow -- this occurred in Germany just a few weeks ago -- now it's in the US -- US Treasury bonds "dip" into negative territory: folks are paying the US government to protect their "cash" assets.  Buy $1000 in bonds and get back $999 when they mature in a few years. Okay.

The ObamaInversion tax: it's a one-time penalty.

Harvard University's endowment reported a 15% investment return for fiscal 2014, a result that exceeded internal goals but trailed gains at some Ivy League rivals.

The Los Angeles Times

Bin Laden's son-in-law sentenced to life in prison, in New York.

NASA's Maven spacecraft enters orbit around Mars.

This will get their fans upset: Seal Beach will start killing coyotes after dozens of pet deaths.

Inversion! -- September 23, 2014

Cadillac is moving its headquarters from Detroit, MI, to the Big Apple.
Cadillac, which has been steadily losing sales to its German rivals, wants to get closer to its ideal buyers. Executives and marketing staffers will set up shop in a loft office in Manhattan's trendy SoHo neighborhood starting next year.
"There is no city in the world where the inhabitants are more immersed in a premium lifestyle than in New York," Johann de Nysschen, the brand's new president, said in a statement issued Tuesday announcing the move. "It allows our team to share experiences with premium-brand consumers and develop attitudes in common with our audience."
NYC luxury car showroom of the early 20th century:

Manufacturing Phase -- Full-Field Development -- September 23, 2014

It is interesting how things work out. Some time ago we started talking about the "manufacturing phase" in the Bakken, but never went much beyond that stage. I was subconsciously following the development of various fields but not really thinking about it as a singular concept, as it were.

Then, out of the blue, Jane Smith asks what appears to be a simple question; coincidentally another reader talks about the progress of some pad drilling he noted in Vern Whitten's photographs, and before you know it, we are off and running.

I have a new tag at the bottom of the blog, "Field_Development" and I also put the link at the sidebar at the right, making it easier for me to find it. That link will take you to a location where I will try to aggregate these stories, if I remember.

Field development can probably be broken down into at least two components: a) operational constraints of pad drilling; and, b) administrative management (unitization, for example).

This has been a great two days with regard to developments in the Bakken. First, there is the issue of fracking (wells waiting to be fracked, shares of CRR plummeting, new completion studies); and, second, the discussion of field development.

The "Latte Salute" -- September 23, 2014

The "Latte Salute"

At least he didn't spill his coffee on the US Marine. Sort of answers whether he can walk and chew gum at the same time.

This may be the first time I leave a YouTube video as a stand-alone post. We'll see.

Less then 850 days until his last "latte salute" as Commander-In-Chief." I remember the grief and the push-back I got when I posted that countdown clock at the sidebar at the right. I can't make this stuff up. By the way, apparently the president uploaded this video to his own site; he has really "checked out" of this presidency. And now he's a war president.

[An anonymous reader writes: put a cigarette in his left hand and we got Sammy Davis, Jr. and the rat pack.]

Packin' Up and Goin' Home; Winter's Coming -- Active Rigs Down To 194 In North Dakota; 5/7 Wells Go To DRL Status Wednesday; Starbucks In Williston? Cash Wise Grocery Coming To Dickinson -- September 23, 2014

This could be the "Bakken Economy" story of the year: there are reports that a Starbucks is coming to Williston. I believe Minot has 1; Bismarck has 4; Dickinson, 0. See comments; it looks like it will be located very near where Applebee's is; perfect location.

The earlier post regarding "field development" and the question Jane Smith asked has been updated with a great explanation to her question. 

Active rigs:

Active Rigs194187185195142

Wells coming off the confidential list today were posted earlier; see sidebar at the right.

Wells coming off the confidential list Wednesday:
  • 25173, drl, WPX, Morsette 35-26HZ, Spotted Horn, no production data,
  • 25174, drl, WPX, Morsette 35-26HD, Spotted Horn, no production data,
  • 26067, 780, Whiting, Oukrop 24-34PH, St Anthony, t3/14; cum 24K 7/14;
  • 26068, 725, Whiting, Oukrop 44-34PH, St Anthony, t3/14; cum 24K 7/14;
  • 26683, drl, HRC, Hagbos 2-25-36H, Stockyard Creek, no production data, in a sundry form received in August, 2014, things seem back on track, but there may have been some hiccups in drilling this well;
  • 27624, drl, SM Energy, Dixie 12X-35H, Camp, no production data,
  • 27910, drl, Hess, LK-M Elisabeth-LW-147-97-1522H-1, Little Knife, no production data,
Six (6) new permits --
  • Operators: XTO (4), Whiting, KOG
  • Fields: Tobacco Garden (McKenzie), Sanish (Mountrail), Poe (McKenzie)
  • Comments: the four XTO permits will be for wells on one pad
One (1) producing well completed:
  • 26407, 1,884, BR, Raider 31-5TFH, Corral Creek, t8/14; cum --
This is interesting: operator transfer, almost a page and a half, from HRC to Energyquest II, LLC. I had not heard of the latter company, but it has been in North Dakota for decades (or at least it has wells dating from decades ago). The transferred wells were all in Bottineau County and Renville County, certainly not in HRC's "prime" locations

Cash Wise Grocery

The Dickinson Press is reporting that Cash Wise will be coming to Dickinson. Cash Wish now has stores in Williston, Tioga, Stanley, Watford City, and Minot.  Cash Wise did not have any stores in this part of the state prior to 2012, prior to the Bakken boom.

Fifth Inning

Extremely poor quality video and audio but great for the memories. Texas Rangers slip by the Houston Astros 4 -3. We were sitting in the "All You Can Eat Corner." The seats were selected by the younger granddaughter -- who is about as slender as one can be -- who had a hot dog, peanuts, some popcorn, a large drink, and Cotton Candy. Their dad, working late that night, watched the first four innings before having to go back to work.

Deep in the Heart of Texas
The highlight of the game was seeing Guilder Rodriguez get his first MLB hit. I knew it was a big deal for the fans last night but did not know it had national interest. It was at the bottom of the national news on both NBC and ABC. ESPN is reporting:
This was a rare treat for a baseball team that's been on hard times for the bulk of the season.
Guilder Rodriguez, a career minor leaguer, got his second big league start on Monday night for the Texas Rangers and delivered for his dad by getting his first big league hit, RBI and run scored in a 4-3 win over the Houston Astros.
Rodriguez, 31, was excited about the opportunity to play because his father, Guillermo, hadn't seen him participate in a baseball game in the States since Low-A ball in 2004.
Yeah, 2004.
The biggest hit of the game came from Rodriguez who singled over the head of shortstop Jonathan Villar for his second hit of the game, breaking a 3-3 tie in the bottom of the seventh inning.
"This is one of the best moments of my life," said Rodriguez, who ended an 0-for-6 spell.
"My first big league hit, my first RBI, my father in the stands, my wife. This is my second-best moment, after my two daughters were born."
Rodriguez has played for just two organizations, Milwaukee and the Rangers. His home ballpark has been in minor league cities such as Helena, Beloit (where his dad saw him), Huntsville, Frisco, Oklahoma City and Round Rock. He's played in the Dominican Republic when the season was over, where his dad would travel from Venezuela to see him.
He was in in the minor leagues for 13 years. 

Pad Drilling And Effect On Fracking -- September 23, 2014; Richardton, ND, Approves Frack Sand Rail Terminal

In August, 2013, about 450 wells were waiting to be fracked.

Slightly less than a year later, in July 2014, 630 wells were waiting to be fracked. 

Most anecdotal reports suggest that there are adequate frack spreads available.

While pondering those figures, think about this: the July, 2014, oil production was up significantly from that in August, 2013.

Meanwhile, In Richardton (North Dakota)

The Dickinson Press is reporting:
The city of Richardton has given final and unanimous approval to the rezoning of 300 acres west of town for a future Halliburton frac sand plant and transloading facility.
More jobs for the city and surrounding area.

Don tells me that only 40 acres is required for a frack sand terminal; a full 300 acres will be a "full" oil services transloading facility -- the whole shebang, not just sand.

Field Development: A Reader Notes The Progression Of Pad Activity / Drilling In Vern Whitten's Photographs -- September 23, 2014


Later, 6:58 p.m. CDT: a look at CLR's approach to full-field development using the Jersey mega-pad as an example; provided by a reader. 

Later, 6:21 p.m. CDT: this is starting to feel like a tennis or ping-pong match, and I'm the net. The earlier reader has come up with a good explanation for what Jane is seeing (see note below):
I believe one of the primary factors the operators consider in their development decisions is "cash flow."  Another is one I think Jane referred to -- gaining an understanding of the geology and reviewing results, before applying completion designs "whole hog."

The 12-well Hess pad in 26-154-94 was planned for 9 EN-Freda wells in the sections 26-35 standup spacing unit and 3 EN-Leo wells in the sections 23-24 lay down spacing unit immediately to the north. Neither of the spacing units had been drilled previously.

The first batch of 3 wells were 2 EN-Freda's and 1 EN-Leo.  One of the EN-Freda's was a Three Forks well, the other two wells Middle Bakken.

The second batch of wells was 2 EN-Leo's.  When Hess started these wells they only had a couple months of data from the EN-Leo H-1, an MB well.  For the EN-Leo H-2 Hess drilled a planned-exploratory bore a couple thousand feet into the Three Forks with whatever equipment they use, and then tripped back out and drilled a MB lateral.  The EN-Leo H-3 was subsequently  drilled in the TF.
I am really embarrassed. I should have known this. After reading all the file reports that I've read,  should have known this. The best, most recent example for me was the MRO-Tyler well. The geology report was a bit equivocal about whether the well might be economic/productive, and said the data would be studied by the "home office" before a decision would be made to complete the well. And in all cases it only seems common sense that the operator would study the geologist's report before completing the well. On top of that, these guys are so busy in the Bakken, it probably takes more time than expected, just to get to all the wells and through all the data.

Yes, this should have been an easy question to answer, and I missed it. Very embarrassed. A big "thank you" to the second reader for answering the question.

September 23, 2014: see comments below. Another reader has made observations regarding Hess -- with minor changes --
Comments about the different approach to field development is really interesting. I have been following Hess's rig movements and have observed how the spud rigs (Noble's) seem to dart all over -- they will be in McKenzie for 6-8 days spudding 2-3 wells in a section and then go to Dunn to do the same thing only to return to do some additional spudding.

I have been closely following the activity in Ellsworth and Cherry Creek. It is curious to see that last November, Hess got permission for 6+ wells on the land they lease in these two fields. In May/June Hess got permits in Ellsworth for 2 new wells in section 12; 3 in section 11; and, 4 in section 10. But they are drilling 2 wells in section 10 and 2 wells in section 15. It is curious that they don't drill out all the wells that they have permission for. One would think it would be more cost effective. However, another observation is that they are getting them drilled -- but not fracked very quickly -- particularly in Cherry Creek.

I have wondered if they are doing this because of the potential for increased production from periodically adding wells and stimulating production in the older wells. It may be that the increased cost of swirling between locations is offset by the potential increase in production.
Your observation about delaying fracking is very, very interesting. One wonders. In the most recent Director's Cut, it was noted that there are now more wells waiting to be fracked than the previous month, and summer should be the most active for fracking. One wonders if you might not be correct.

Publicly traded companies know that analysts focus on quarterly results. If an operator can delay the expense of fracking into the next quarter without significantly hurting production, their quarterly results will look better, all things being equal.

In addition, remember that new flaring rules take effect in October (?). It's very possible operators are purposely delaying completion of their wells until they get the natural gas collection and processing network in place.

A huge "thank you" to the reader for taking time to write. Each little bit of data helps to better understand the Bakken.

Bottom line: right now there are two new developments affecting completion/fracking of wells: a) new flaring rules; and, b) high cost of proppant. To some extent, operators may be studying new completion methods and putting previous plans on hold while they reconsider the completion method to be used. I don't yet think the price of WTI is significantly affecting fracking schedules in the Bakken.

Original Post

This is a long note from a reader who provides much more detail regarding some of the photos in Vern Whitten's most recent set of aerial photographs. It's the kind of thing I would like to do (write a more detailed review of the photographs) but I simply don't have the time. I really appreciate readers providing additional background to the photographs.

I don't have any secondary agenda in posting these notes, or or any secondary agenda talking about Vern Whitten's photos again. Based on the e-mail I get and the "hits" on the blog, it is obvious that a lot of folks like the photos.

Because of the nature of the e-mail thread, it may be a bit hard to follow at first; the specifics are not particularly important. The last paragraph in the long thread below is the "takeaway," but along the way, one gets an explanation of some of the photographs.

So, without further ado, here is part of a much longer note that a reader sent me:
A special aspect of this photo set is represented by slide 13 of Vern Whitten's "Never Ending Winter" set, which was taken February 14, is of the same pad and the same rig featured in "MillionDollarWay back on May 22 [the large rig on that pad was the Nabors B5, which was drilling the EN-Freda H-5 well when the photo was taken August 9]. The Nabors B5 rig was drilling the EN-Leo H-2 well at that time; the completed EN-Freda H-1 and H-2 wellheads can be seen in the lower left corner of the slide.  The completed EN-Leo H-1 wellhead is just out of the picture to the left.

Vern Whitten most appropriately titled his most recent August photo set, "Bakken Sights and Progress."

The comparison of these two "Winter" and "Summer" photos and their companion slides -- 12 and 14 in the "Winter" set and  16 and 17, which you note as "multiple pads along the Lake; stunning" in the "Summer" series -- vividly presents this progress.

The companion "Winter" slides 12 and 14 both show the Hess EN-Freda/EN-Leo pad and Continental's Vachal pad, which is just across the road to the west in NENE 27-154-94.  The recent "Summer" series companion slide 16 looks east and shows the Hess and Continental pads along with White Earth Bay in the distance, as well as four "new" Oasis pads strung further west.  These four Oasis pads are sited along the bottom of 22-154-94, and they are all drilling Helling Trust wells.

The second "Summer" series companion photo, slide 17, looks west from White Earth Bay and presents a closer view of Continental's Vachal pad in the lower left of the picture,  and the four Oasis Helling pads extending in a line to the west.  The current NDIC GIS Map Server, updated August 16, has a rig on each of these four Oasis pads.  Since then, the Active Drilling Rig List shows the Extreme 25 rig has moved off the SESE 22-154-94 Oasis pad, but that the three remaining Oasis pads currently have rigs drilling Helling wells.
This is why this is so interesting, and perhaps important, if one is trying to understand the Bakken:
While Vern Whitten's photography chronicles all types of progress in the Bakken, in this instance progress on a particular pad and increased activity in a specific area, it also provides some insight into the processes various E&P's use in developing their holdings.  Hess performs a "ballet" with their rigs, as they drill small batches of wells, move the rigs off, frack, bring the rigs back, drilling, moving off, fracking....  Oasis, on the other hand says, "we want 15 or 16 wells -- okay, I'll get four pads with 3 or 4 wells on each, and go at them all right now."  Then we have Continental's approach with their "full-field development." 
More to follow in another stand-alone post. 

Tuesday, Tuesday -- September 23, 2014

I've updated the "trending" page.

Active rigs:

Active Rigs195187185195142

RBN Energy: Eagle Ford takeaway capacity, Magellan and Kinder Morgan, 2nd in a series, Condensate Tsunami

RBN Energy: ethane hits record high steam cracker margin.
It’s hard not to be amazed at how much the world of NGLs and U.S. petrochemical production has changed—and the changes keep coming. Just a few years ago, the margins for heavier feedstocks such as naphtha and natural gasoline were higher than margins for lighter feedstocks like ethane and propane.
As a result, steam crackers (a.k.a. petrochemical crackers or ethylene crackers) tended to maximize runs of those heavier feedstocks. Then came the Shale Revolution and lower natural gas prices, which in turn encouraged production of “wet” high-BTU natural gas that ultimately resulted in surpluses of lighter NGLs and low ethane, propane and butane prices. All that has caused a major shift at the 36 steam crackers operating in the U.S., which collectively produce about 60 billion pounds of ethylene per year.
Currently, the feedstock slate of U.S. crackers is about 65% ethane, 20% propane, 7% butane, and 8% a combination of natural gasoline, naphtha and gas oil. As recently as 2008, naphtha and gas oil made up 30% of the steam cracker slate. As new ethane crackers come online in the next few years, the shift toward lighter feedstocks will only increase.  At least that is the expectation.
The relative value of different feedstock margins is the most important factor that influences which feedstocks steam crackers choose to run.  
On Friday when the margin for ethane as a Gulf Coast steam cracker feedstock hit a record 70.4 cents per pound, ethane prices were very low, (24 cnts/gal) and ethylene prices were very high (76.5 cnts/lb). On the same day, the margin for a steam cracker running natural gasoline, a heavier NGL, was only 47.3 cnts/lb--an attractive margin for sure, but only two-thirds of the margin for ethane.
Weekly natural gas fill rates. Soon, the fill rates will return to withdrawal rates. This is over at Seeking Alpha; I assume the link will break soon. The article has short-term relevance.

Siemens Fell A Decade Behind GE By Focusing On Renewables In Germany

The Street is reporting, with regard to the Dresser deal:
Nonetheless, the results of GE's deal-making in the oil patch speak for themselves. GE's Oil & Gas is nearing $20 billion in annual revenue and it is the company's fastest growing business line by sales and profit as it weans itself from financial services. In compression, GE commands over 30% of the market globally and might have even presented an antitrust hurdle in a Dresser Rand bid.
The merits of the Siemens deal are likewise evident. Only a few years ago, Citigroup characterized North America as "the new Middle East" as a result of an onshore energy production boom and the infrastructure investment that would be required to transport oil and gas to terminals and hubs. Industrial giants like GE and Siemens, faced with a lackluster economic backdrop, are eager to bolster their revenue and profits by moving into the fast-growing energy sector.
"I think this simply is a reflection of Siemens' belief that the US market for oil services remains very attractive -- enough for them to invest at this point in the cycle and to pay a high enough multiple that they believe will prevent interlopers from outbidding them. Is it vindication for GE? Only to the extent that a large rival is paying up for an asset in a space where GE had been active for the last decade," Steven Winoker, an analyst at Bernstein Research, said in an e-mail to TheStreet.
Winoker believes GE's oil and gas deals have begun paying off for shareholders within two-to-three years of their close given a trend of rising earnings in the sector.

I have to credit the Los Angeles Times for posting this story. The Los Angeles Times is incredibly liberal; it is probably more liberal than The New York Times, if that's possible. It speaks volumes that The LA Times chose to print this story, and they did so without hiding it:
Naturally occurring changes in winds, not human-caused climate change, are responsible for most of the warming on land and in the sea along the West Coast of North America over the last century, a study has found.
The analysis challenges assumptions that the buildup of greenhouse gases in the atmosphere has been a significant driver of the increase in temperatures observed over many decades in the ocean and along the coastline from Alaska to California.
Changes in ocean circulation as a result of weaker winds were the main cause of about 1 degree Fahrenheit of warming in the northeast Pacific Ocean and nearby coastal land between 1900 and 2012, according to the analysis of ocean and air temperatures over that time. The study, conducted by researchers from the National Oceanic and Atmospheric Administration and the University of Washington, was published Monday by the Proceedings of the National Academy of Sciences.
Again, this is another study sponsored by the NOAA.

I guess the science is not settled.

Example Of CLR's Approach To Full-Field Development Using The Jersey Pad As An Example -- September 23, 2014

Take a look at these CLR wells, currently on confidential status with one rig-on-site. Below the graphic a very, very long note from a reader on "field development."

These are the Jersey wells which I posted back on March 26, 2014.

Note: one Jersey well was reported dry, most likely due to "early" casing problems:
  • 27832, dry, CLR, Jersey 29-6H, Alkali Creek, a 4-section well; no production data, nothing yet in the file report that might explain what happened;
I hope Vern Whitten documents a photographic history of this mega-pad.

Here is the long note from a reader who discusses these Jersey wells:
At Continental's 3Q13 earnings call last November 7, the one where Harold Hamm laid out his "ears pinned back" program, Winston Bott - Continental's then President and COO, stated they intended to insure they get production online as quickly as possible and "don't inventory capital" as they move to larger and larger pads.

Bott indicated Continental would segregate these mega-pads into subareas to enable them to drill, complete and bring 7 or 8 wells online at a time.  He said they would sequentially go through the entire pad this way until it was completely online.  The implication is Continental will perform simultaneous operations whenever possible, as they develop a mega- pad.

This is the basis of my understanding of their full-field development approach.

Continental has 30 Jersey wells sited in the northeast quarter of section 6-153-93.  The main pad has three strings of 7, 7, and 8 wells running basically north-south in SENE - see the graphic above.  A separate pad with two strings of 3 and 5 wells is located close to the north section line.

Five wells on the main pad's furthest east string have been spud this year, and I believe drilling is finished on them.  These wells are:
  • 27828, Jersey 25-6H, spud 7/11
  • 27829, Jersey 26-6H2, spud 5/16
  • 27830, Jersey 27-6H1, spud 5/16
  • 27832, Jersey 29-6H, spud 3/13
  • 28333, Jersey 29-6XH, spud 5/16
The 29-6H was the first Jersey well drilled, and as you recently noted the well came off the confidential list about a week ago, and was reported "dry" due to an apparent issue with the surface casing.  The Jersey 29-6XH is its replacement well. [Note the nomenclature.]

The Cyclone 35 rig has been reported on the main Jersey pad since March.  The Active Drilling Rig List has shown it on the Jersey 25-6H well since July 11, until today when the report shows the rig on the Jersey 1-6H well as of September 12.  This latter well is located on the smaller 8-well pad to the north.  I sense Continental may not bother to provide updated rig information to the NDIC.

Six of the wells on the smaller 8-well pad have recently been spud:
  • 27997, Jersey 1-6H, spud 8/30
  • 27996, Jersey 2-6H2, spud 8/29
  • 27995, Jersey 3-6H1, spud 8/28
  • 28002, Jersey 4-6H3, spud 9/1
  • 28000, Jersey 6-6H2, spud 8/27
  • 27999, Jersey 7-6H1, spud 8/29
Based on the directional information Continental provided last fall, it is likely they will complete the four wells already drilled on the main Jersey pad, as they concurrently proceed with drilling the six wells recently spud on the smaller pad.

The Jersey wells provide a somewhat unique challenge with the Lake and topology.  I believe this forced Continental  to utilize a separate pad to accommodate their operations at this venue, and that they will develop future mega-pads without building separate pads whenever possible.

For your reference I scanned and attached as a pdf Continental's Jersey Wells Array Plan prepared in January of this year, and a Vicinity Map of section 6-153-94, the location of the Jersey wells.  These documents were obtained from the Jersey 29-6H well file.  The eight wells on the separate, smaller pad are not listed on the Vicinity Map.  Also, Continental has since removed "Federal" wherever it appeared in the Jersey well names.
 Here are the two graphics the reader sent me; they should be self-explanatory: