The Million Dollar Way (The Bakken Oil Blog): 05/25/20

Monday, May 25, 2020

See You All Tomrrow -- Good Luck To All -- May 25, 2020

Notes From All Over -- Late Evening Edition -- Memorail Day -- 2020

NASCAR: wow, this is quite incredible. NASCAR Coca-Cola yesterday; NASCAR XFinity series tonight; truck series tomorrow night, and then Wednesday, NASCAR Cup Series at Charlotte again, tomorrow night. Wow! Hard to believe. NASCAR taking advantage of this lull in live sports. Good for them. I don't miss the fans at the track at all.

Eighteen laps to go in tonight's race. Kyle Busch in fourth, second row on the re-start. This could be quite a finish. On the re-start, Kyle moves to third. Crash before the first lap after the re-start is completed; ninth caution. Kyle will still be in the second row on the next re-start.

Twelve to go on the re-start. Cindric-Gragson-Kyle. Kyle moves ot second, now takes the lead. Kyle leads with ten to go. It was the new tires. Another caution with eight to go. Amazing how good these guys are. A single car near-spin; driver saves the car; and, no one hits him. Pretty amazing. Kyle was pulling away; had there been no caution, Kyle would have taken this race by several car lengths. Now, a re-start.

Four to go on the re-start. Kyle-Cindric-Gragson-Burton. Overtime? Very likely.

Yeah, there it is. Great re-start. For about four seconds. Fairly big crash; several cars taken out, including Gragson. It will be quite awhile clearing up the track. Then, green flag, white flag, checkered flag, finish.

Holy mackerel. Re-start. Cindric takes the lead over Kyle Busch. The latter fights back; really, really aggressive. Busch wins. Cindric third. Daniel Hemric second.

Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.

Futures: look really, really good. Maybe Governor Cuomo will have something good to say.

Wuhan flu: say what you want, but these numbers are really looking good -- ranked in order of "new deaths" yesterday.

Geico: a new Geico television commercial has an actor couple that looks very, very much like the Sussex Royals. Wow, I wish Geico would make this a new series -- like Flo (Progressive) and the "caveman" (Geico). A Sussex-Royals-lookalike-couple would be pushing the "advertising" envelope. I saw, "go for it." See spot here.

Got Covid? The fatalities will all be tested for corona virus, I assume, and if positive ....

MAGA -- more opportunities:

No comment:

A CLR Simmental Well With Jump In Production -- May 25, 2020

The well:

18138, 1,161, CLR, Simmental 1-21H, 2 secs, 20k in 30 days, Elm Tree (first reported Jan 13, 2010); t12/09; cum 367K 3/20;

Production period of interest:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	31	3301	3307	1806	6318	5741	160
BAKKEN	2-2020	29	3398	3192	2424	6759	5964	205
BAKKEN	1-2020	31	4036	4210	2951	7485	6606	254
BAKKEN	12-2019	31	4540	4623	2898	7649	6907	106
BAKKEN	11-2019	29	4941	4945	3307	7769	6891	310
BAKKEN	10-2019	20	2446	2140	1808	2912	2037	608
BAKKEN	9-2019	24	1397	1631	646	2039	1324	370
BAKKEN	8-2019	31	1720	1618	533	2617	1598	404
BAKKEN	7-2019	12	1221	1208	356	1683	0	1438
BAKKEN	6-2019	27	4501	4768	2906	6641	285	5837
BAKKEN	5-2019	31	8467	8683	4722	13084	1172	11305
BAKKEN	4-2019	30	9165	8974	8211	12871	1957	10299
BAKKEN	3-2019	15	4646	4291	8249	6215	2521	3410
BAKKEN	2-2019	0	0	0	0	0	0	0
BAKKEN	1-2019	0	0	259	0	0	0	0
BAKKEN	12-2018	31	1382	1381	413	3050	2340	93
BAKKEN	11-2018	30	1394	1285	374	2921	2199	107

A Rimrock Moccasin Creek Well Has Just Gone Over 500K -- May 25, 2020

The well:

18295, 1,260, Whiting/KOG, Moccasin Creek 16-3-11H, 1 sec, t2/10; cum 501K 3/20;

Recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	31	1044	987	514	2285	0	1546
BAKKEN	2-2020	29	1085	1058	608	2116	0	1425
BAKKEN	1-2020	31	1226	1291	1064	2172	39	1394
BAKKEN	12-2019	14	517	372	620	1354	590	440
BAKKEN	11-2019	17	225	240	147	399	0	15
BAKKEN	10-2019	31	432	451	27	739	0	0
BAKKEN	9-2019	30	239	263	19	728	0	13
BAKKEN	8-2019	31	506	548	153	796	0	57
BAKKEN	7-2019	31	572	588	207	778	0	39

An MRO Bailey Well Has Just Gone Off Line -- May 25, 2020

The well:

18196, 376, Marathon, Andi Schollmeyer 41-5H; t4/10; cum 149K 2/20;

Recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	0	0	96	0	0	0	0
BAKKEN	2-2020	26	442	556	514	378	49	156
BAKKEN	1-2020	31	562	561	664	476	35	225
BAKKEN	12-2019	31	586	691	663	596	13	363
BAKKEN	11-2019	30	569	495	652	582	8	361
BAKKEN	10-2019	31	596	594	688	608	171	215
BAKKEN	9-2019	30	582	550	673	578	320	43
BAKKEN	8-2019	31	611	653	713	627	388	18
BAKKEN	7-2019	31	631	643	724	647	381	42

Graphic:

A Whiting Kannianen Middle Bakken Well Has Come Back On Line -- May 25, 2020

The well:

18298, 3,422, Kannianen 44-33H (Whiting); t1/10; cum 702K 3/20; off line since 4/19;

Recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	5	111	110	123	184	183	1
BAKKEN	2-2020	0	0	0	0	0	0	0
BAKKEN	1-2020	0	0	0	0	0	0	0
BAKKEN	12-2019	0	0	0	0	0	0	0
BAKKEN	11-2019	0	0	0	0	0	0	0
BAKKEN	10-2019	0	0	0	0	0	0	0
BAKKEN	9-2019	0	0	0	0	0	0	0
BAKKEN	8-2019	0	0	0	0	0	0	0
BAKKEN	7-2019	0	0	0	0	0	0	0
BAKKEN	6-2019	0	0	0	0	0	0	0
BAKKEN	5-2019	0	0	0	0	0	0	0
BAKKEN	4-2019	20	694	754	370	1357	1321	0
BAKKEN	3-2019	21	1003	1033	53	2239	2198	0
BAKKEN	2-2019	28	1176	1137	138	2701	2645	0
BAKKEN	1-2019	31	1483	1465	197	3210	3148	0

A Whiting Odgen TFH Well Has Come Back On Line -- May 25, 2020

The well:

18233, 1,239, Ogden 11-3TFH, TFS (Whiting), Sanish, t11/09; cum 278K 3/20; off line 7/19; back on line 3/20;

Recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	22	591	588	639	424	350	74
BAKKEN	2-2020	0	0	0	0	0	0	0
BAKKEN	1-2020	0	0	0	0	0	0	0
BAKKEN	12-2019	0	0	0	0	0	0	0
BAKKEN	11-2019	0	0	0	0	0	0	0
BAKKEN	10-2019	0	0	0	0	0	0	0
BAKKEN	9-2019	0	0	0	0	0	0	0
BAKKEN	8-2019	0	0	17	0	0	0	0
BAKKEN	7-2019	10	234	229	145	336	316	0
BAKKEN	6-2019	30	601	612	576	844	633	151
BAKKEN	5-2019	30	491	504	440	846	663	124
BAKKEN	4-2019	30	572	559	423	783	724	0
BAKKEN	3-2019	25	520	527	415	705	656	0

A New Wrinkle In The Bakken -- May 25, 2020

Updates

From a reader regarding the original post.

First regarding the Madison well --

A lease is ‘HBP’ [held by production], whether it is a Madison well OR a Bakken [or any other formation—Red River [Bowman/Slope has lots of those]].

The difference as to the lease being held may be whether the lease is within a spacing unit for the Madison [generally a smaller spacing unit but not always anymore] or within a Bakken spacing unit.

There are a lot of variables depending on the lease wording. Further comment: Many of the more current leases have a ‘force majeure’ clause. Force majeure is ‘an act of God’ in general BUT has expanded.

Now, the first reply regarding this note, which came in a comment:

Answering the lease question. Most companies or leases are based on a 12 month non-production clause to nullify the lease (Of course each lease is potentially different.) This is the trigger to give the lease back to the original owner. Many companies will, to maintain a lease, produce every ten to eleven months a small amount of oil, market said oil, and that resets the clock. Thus keeping the lease under their control.

If you wish to get your lease back, it would be best to seek council, This would also set in motion the requirement to plug the old well and reclaim site.

I think before all is said and done that many sites will be Tier one and Two, for five to seven layers so getting better terms may be in the best interest of owners.

Force majeure: the reader also provided this:

Companies have been known to take a very liberal approach to defining force majeure if it fits their purposes. Some companies will send a letter to the mineral owners whose leases are declared by them to be extended by ‘force majeure’.

I don’t know if it is required to notify by letter—once again depends on the lease language and/or company policy.

The ‘Bakken Owner’ comment about seek ‘counsel’ is really a mineral owner’s best bet—however, once again THAT means finding an attorney ‘well versed in oil and gas law’. That is a challenge—another whole different discussion!!!

I have seen some leases wherein ‘low prices’ [with no definition of what is low price] are recited as a force majeure event.

Keep in mind that NDIC rules of one year, etc, are not necessarily sufficient to cause a lease to be extended when there is a lack of production.

NDIC rules do NOT affect a lease as to whether it is extended or not when there is no production—lease extension without production depends on the lease language

This discussion could go on and on as to this or that occurrence and/or interpretation.

Summary: breaking a lease by a mineral owner will require $, persistence, and determination—and will seldom succeed -- IMO.

Comment: I agree completely. It will take a lot of money, persistence, time, to "win" this case. The oil companies have been at this a lot longer than any of the rest of us and have certainly seen "it all."

Original Post

This is well beyond my "pay grade." I have never followed the "language of leases" in the Bakken. I don't think I've ever seen a lease except maybe a long, long time ago when I was visiting Williston. I never paid much attention if I did.

Some basics:

the concept of "lease held by production";
early on, operators put in a at least one producing well to hold their leases;
as more wells came in, there was less chance of losing a lease due to lack of production;

However, and here's the wrinkle:

now that the Bakken is shutting down, there are a few "loners" out there;
"loners": where a single well is still holding a lease (generally a drilling unit of 640 acre or 1280 acres) all by its "lone self";
what happens if that "loner" shuts down?

I don't know. Maybe readers can enlighten me.

I know the state has rules about how long a well can be inactive before it must be plugged and abandoned. At that point, if it's a "loner," does the operator lose its lease?

My understanding is that the state is quite lenient in the length of time a well can be shut down, and waivers can be awarded.

But what about contracts or leases between the operator and the leaseholder? A reader informs me that his lease on "a loner" says that if there is no production in 120 days, the lease is null and void. His "loner" has not had production in well over a 120 days.

The reader wonders how this affects the lease on that drilling unit?

Again, this is well beyond my "pay grade." I don't follow mineral leases; I don't visit social media sites for mineral owners. The answers may be obvious. I don't know. A reader brought it to my attention. It's not something I'm generally interested in regarding the Bakken but it seems to be an interesting question.

More than likely, I'm missing something obvious.

But I'm always learning something.

One last thing: there is a Madison well in that section that is still producing. I don't think a "Madison" well holds a lease by production for a "Bakken" well but again, I've long forgotten (or never knew).

***************************************

Here's A Great Example
Of A "Loner"

Why hasn't EOG permanently abandoned this well? This well was drilled back in 2009; more than a decade later it has produced less than 30,000 bbls, and yet it remains active.

17996, 58, EOG, Burke 9-10H, Stanley, t7/09; cum 30K 3/20;

Recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	Vent/Flare
BAKKEN	3-2020	15	105	139	318	154	3
BAKKEN	2-2020	29	105	100	582	294	0
BAKKEN	1-2020	31	90	99	634	314	0
BAKKEN	12-2019	31	110	108	657	314	0
BAKKEN	11-2019	30	106	106	610	304	0
BAKKEN	10-2019	31	124	119	636	314	0

Production dates of interest:

2/18 - 6/18: off line / no production for 113 days;
7/13 - 9/13: off line / no production for 63 days;
otherwise, has never gone a month without no production

The graphic:

***************************************

Another Example Of A "Loner"

The well:

17946, 86, Koda Resources/Newfield, Trigger 1-31H (1 sec), Fertile Valley/wildcat near Grenora; on my watch list; this is too bad; the rumor was that this was a "good" well; 47K 3/20;

Recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	Vent/Flare
BAKKEN	3-2020	28	174	229	288	12	12
BAKKEN	2-2020	26	149	237	258	2	2
BAKKEN	1-2020	31	203	220	227	1	1
BAKKEN	12-2019	31	178	219	358	170	0
BAKKEN	11-2019	30	185	0	348	305	5
BAKKEN	10-2019	31	223	465	453	313	3
BAKKEN	9-2019	23	240	0	414	340	124
BAKKEN	8-2019	12	82	238	141	115	0
BAKKEN	7-2019	31	266	218	512	310	0

The graphic:

Michigan

Baseline for Michigan, as of May 25, 2020:

New York:

Louisiana:

Initial Production Data For Wells Coming Off Confidential List This Week -- May 25, 2020

This is remarkable -- the initial production for wells coming off confidential list this week. Work has essentially come to a stop in the Bakken, literally "overnight."

The wells:

37047, conf, CLR, Simmental Federal 10-16H, Elm Tree, no production data,
36157, conf, Nine Point Energy, S Missouri 152-103-9-11-12H, Eightmile,

Date	Oil Runs	MCF Sold
3-2020	17389	0
2-2020	15701	0
1-2020	26216	0
12-2019	30245	0
11-2019	19	0

35192, conf, XTO, Zane Federal 21X-6B, Siverston, no production data,
33838, conf, Crescent Point Energy, CPEUSC Tami 9-8-5-157N-99W, Lone Tree Lake, no production data,
36471, conf, Slawson, Periscope Federal 2-10-11-12H, Big Bend, no production data,
33839, conf, Crescent Point Energy, CPEUSC Tami 4-8-5-157N-99W TFH, Lone Tree Lake, no production data,
36208, conf, XTO, FBIR Baker 34X-25D, Heart Butte, no production data,
34256, conf, Crescent Point Energy, CPEUSC Tami 3-8-5-157N-99W MBH, Lone Tree Lake, no production data,
33840, conf, Crescent Point Energy, CPEUSC Tami 10-8-5-157N-99W TFH, Lone Tree Lake, no production data,
36209, conf, XTO, FBIR Baker 34X-25H, Heart Butte, no production data,
36961, conf, WPX, Meadowlark 6-34HQL, Heart Butte, no production data,
36472, conf, Slawson, Periscope Federal 4-10-7TFH, Big Bend, no production data,
36210, conf, XTO, FBIR Baker 34X-25C, Heart Butte, no production data,
33841, conf, Crescent Point Energy, CPEUSC Tami 5-8-5-157N-99W TFH, Dublin, no production data,
37203, drl/drl, Crescent Point Energy, CPEUSC Tami 11-8-5-157N-99W-LL TFH,
36962, conf, WPX, Meadowlark 6-34HA, Heart Butte, no production data,
36599, conf, Whiting, Erickson 14-23 2H, Glass Bluff,

Date	Oil Runs	MCF Sold
3-2020	17935	0
2-2020	16755	444
1-2020	8282	1408
12-2019	27826	3244
11-2019	644	115

36129, conf, Whiting, Evan TTT 41-4HU, Sanish,

Date	Oil Runs	MCF Sold
3-2020	25474	18508
2-2020	26430	0
1-2020	28882	0
12-2019	27666	0

36963, drl/drl, WPX, Meadowlark 6-34HW, Heart Butte, no production data,
36211, drl/drl, XTO, FBIR Baker 34X-25G, Heart Butte, no production data,
36964, drl/drl, WPX, Meadowlark 6-34HB, Heart Butte, no production data,
36792, drl/drl, Sinclair, Harris Federal 3-32H, Lone Butte, no production data,
36598, 2,376, Whiting, Erickson 14-23-3H, Glass Bluff, t12/19; cum 73K 3/20;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	30	15999	16113	2158	9834	0	9450
BAKKEN	2-2020	29	16043	15866	4659	9465	456	8642
BAKKEN	1-2020	25	15298	15486	6005	15575	2710	12396
BAKKEN	12-2019	23	24894	24403	7150	21606	2924	18328
BAKKEN	11-2019	4	458	457	6539	371	15	338

36358, drl/drl, Slawson, Gunslinger Federal 2-12-1H, Sand Creek, no production data,
34259, drl/drl, Crescent Point Energy, CPEUSC Tami 6-8-5-157N-99W-LL TFH, Lone Tree Lake, no production data,
36597, 1,968, Whiting, Erickson 44-35HU, Glass Bluff, t12/19; cum 75K 3/20:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	31	15535	15542	1661	21924	0	21273
BAKKEN	2-2020	29	15533	15725	7297	17845	656	16576
BAKKEN	1-2020	31	19269	19260	8673	19635	2660	16292
BAKKEN	12-2019	30	23180	23870	1957	24834	3916	20243
BAKKEN	11-2019	5	1946	653	8716	1644	277	1271

36357, drl/drl, Slawson, Gunslinger Federal 9-12-1TFH, Sand Creek, no production data,
36132, 1,102, Whiting, Ed TTT Federal 43-4H, Sanish, t11/19; cum 111K 3/20;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2020	31	23454	23463	6504	21171	20475	0
BAKKEN	2-2020	29	25415	25721	8322	18827	18240	0
BAKKEN	1-2020	31	29046	29355	15884	12529	12094	0
BAKKEN	12-2019	31	25806	25103	19311	18689	11218	6828
BAKKEN	11-2019	8	7045	6852	7697	6282	0	6021

34258, drl/drl, Crescent Point Energy, CPEUSC Tami 2-8-5-157N-99W MBH, Lone Tree Lake, no production data;

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Monday, May 25, 2020