CLR -- Tweaking A Business Model? -- September 28, 2019

I only post the summary of the agenda for the monthly NDIC hearing dockets to simply give me an idea of where the Bakken is headed. It is not posted as a source of information to follow any more specifically than that, if that makes sense. The summary is done quickly; in "shorthand"; and I do not listen to the audio when the cases are heard, nor do I follow up with the results.

But I am curious. Maybe a reader can explain this.

In the September, 2019, hearing dockets:

• Case 27937, CLR, Elm Tree-Bakken, establish an overlapping 2560-acre spacing unit, section 2, 3, 10, and 11-153-94; 26 wells, McKenzie, Mountrail counties

Then, in the October, 2019, hearing dockets:

• Case 28055, CLR, Elm Tree-Bakken, on an existing 2560-acre unit, sections 2/3/10/11-153-94, 27 wells; McKenzie and Mountrail counties

Both cases involved the same sections in Elm Tree oil field. In the first case (#27937) CLR requested to establish a "new" overlapping 2560-acre unit on which to place as many as 26 wells; then, a month later, CLR in case #28055 requested to place as many as 27 wells on that "existing" 2560-acre unit.

It's possible I'm misreading something again, but I've looked at it several time. I would imagine the October case will supersede the September case, but perhaps a reader can explain the difference. 

On another note, other recent "large" CLR cases:

• 28056, CLR, Cedar Coulee-Bakken, on an existing 2560-acre unit, section 20/29/32-147-96; and, section 5-146-96; 22 wells; Dunn County 
• 27961, CLR, Big Gulch-Bakken, 14 wells on an existing 1280-acre unit, section 19/30-147-96; Dunn County
• the Long Creek Unit: upwards of 60 wells on ten sections drilled with two rigs starting in 2H19 and being completed by 2021 or thereabouts

With regard to the subject line suggesting that CLR is "tweaking its business model" I don't have time to go into that now, but it certainly seems CLR is doing something a bit different starting the second half of calendar year 2019. If so, Harold Hamm has telegraphed that several times, either in interviews, or company press releases, or corporate presentations. I am way out in front of my headlights but it gives us something to talk about.

By the way, my definition of an ideal well: an ideal well is one that pays for itself in the first six to twelve months, and then provides steady free cash flow for the next 34 years. The better that free cash flow the "more ideal" that well.

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The Graphic

From above, case 27937: