Spearfish -- Legacy, Surge, and Hess -- Bottineau -- Williston Basin, North Dakota

For those following the Spearfish, but confused about which company is drilling where, Surge Energy has a nice slide in their current presentation.

When you get to the presentation, go to slide 16 to see where Legacy, Surge, Hess and EOG are drilling their Spearfish wells.

This is the November, 2011, presentation and it will change in the future, but my hunch is that this map will be kept in the presentation for quite some time.

Petro-Harvester -- Madison Wells -- Bottineau County -- North Dakota, USA

This is why I love the blog and love to blog.

"Anonymous" asked me if I knew anything about some Madison wells that Petro-Harvester is drilling in Bottineau County.  Go back to the Madison wells at Stockyard Creek to see why one might be interested in the Madison.

For newbies:

• Bottineau County is north of the core Bakken; it lies along the Canadian border
• Most folks associate Bottineau County with Spearfish formation
• The Madison formation is a legacy formation; it's been producing "forever"; I believe it still accounts for about 50% of all oil produced in North Dakota; that percentage has dropped quickly over the past two years with the discovery/success of the Bakken
• Having said that, some folks may do very well going back to the Madison, especially if Madison wells don't need fracking, which can now account for 50% of the cost of the well

I will update the post when I get a chance, but here's an example of a Petro-Harvester well in Renville oil field in Bottineau County, North Dakota:

• 19315, AB/1,038, Petro-Harvester, Rice 11, Madison, Renville; t8/10; cum 130K 7/15; last produced 7/15;

History:

• This location was spud 7/31/2010, completed 8/19/2010; tested 8/22/10
• It was drilled to a depth of 6,500 feet; it looks like it was unitized, water flooded
• To date, it has produced 98,000 bbls of oil (as of 12/12)

Production history:

MADISON	11-2011	30	2311	2357	46430	0	0	0
MADISON	10-2011	31	2529	2563	52496	0	0	0
MADISON	9-2011	30	2271	2311	38189	0	0	0
MADISON	8-2011	31	2383	2479	33575	0	0	0
MADISON	7-2011	30	2891	2847	38294	0	0	0
MADISON	6-2011	30	3589	3595	36940	0	0	0
MADISON	5-2011	21	3456	3254	25000	0	0	0
MADISON	4-2011	25	1632	1530	27380	0	0	0
MADISON	3-2011	31	2235	2210	35456	0	0	0
MADISON	2-2011	28	2447	2447	31885	0	0	0
MADISON	1-2011	31	2861	2861	38553	0	0	0
MADISON	12-2010	30	2926	2926	38740	0	0	0
MADISON	11-2010	30	4599	4599	38105	0	0	0
MADISON	10-2010	31	7933	7933	36093	0	0	0
MADISON	9-2010	29	13336	13564	11644	0	0	0
MADISON	8-2010	14	10786	10558	5529	0	0	0

18452, AB/0 (not a typo), Petro Harvester, Glessing 7-16, Madison, Renville; cum 4K 3/12;
20776, DRL --> WI, Petro Harvester, Rice 13, Madison, Renville
21144, PNC, Petro Harvester, Rice 13X, Madison, Renville
20773, PNC, Petro Harvester, Riise 4, Madison, Renville
20963, DRL --> WI, Petro Harvester, Riise 4X, Madison, Renville, t8/10; cum 128K 5/16; last produced 5/16;
20775, DRL --> WI, Petro Harvester, Riise 12, Madison, Renville
19634, DRY, Petro Harvester, Greek 1-2, Madison, 18452

Legacy -- Spearfish -- Producing -- Press Release -- North Dakota, USA

Link here.

Of a dozen accomplishments highlighted by Legacy in their 2Q11 operations and financial results, this was the first item mentioned:

At Bottineau County, North Dakota, three of the five wells drilled and completed in late 2010/early 2011 are on production, with an average 60 day initial production rate of 100 Boe per day, per well. These wells have confirmed the presence of an emerging light oil resource play in the Spearfish Formation and proven the productive potential of a large portion of Legacy’s Bottineau County acreage.

 A big thanks to another "Bruce" alerting me to this. I would not have found it on my own.

Minor Update on Legacy in the Spearfish Formation in Bottineau County -- North Dakota, USA

While I was traveling, I was sent the following update regarding Legacy Oil targeting the Spearfish formation in Bottineau County:

Legacy had a meeting with North Central Electric Co. to get more power lines in the Souris area in July. Legacy has also contacted a gravel company in Arizona to build up 97 miles of road in the Souris area. I've heard that the Fett, Berge and Emery well are doing well. They have shut down the Bliss well because they drilled to deep. The activity is to start in 2012. 

That comment was originally made in reply to my recent entry on EOG and the Spearfish.

Four (4) New Permits -- Update on EOG Spearfish Wells in Bottineau County -- Bakken, North Dakota, USA

Daily activity report, July 29, 2011 --

Operators: Slawson, Crescent Point Energy, Hunt Oil, and MBI Oil and Gas

Fields: Gooseneck, Ross, and two wildcats.

I had not heard of MBI before; they do have a small presence in North Dakota, but this is their permit in quite some time.

Slawson and MBI have the two wildcats, one in McKenzie and one in Stark.


EOG / Spearfish Formation / Bottineau County

Fueling more rumors that EOG has thrown in the towel with regard to the Spearfish, the daily activity report listed six EOG permits in Bottineau County that were believed to target the Spearfish. In addition, six additional EOG wells changed operator from EOG to Surge Energy. 

Other permits canceled:

• #18070 – Zavanna, LLC., Leopard 1-20H., SESE 20-155N-100W, Williams Co.
  #18133 – Zavanna, LLC., Panther 1-16H., SESE 16-155N-100W, Williams Co.
• #19234 – OXY USA, Steve Kudrna 1-32-29H-143-95, SWSE 32-143N-95W, Dunn Co.
• #20299 – OXY USA Inc., Tony Kralicek 1-5-8H-142-95. SWSE 32-143N-95W, Dunn Co.
  #20955 – Continental Resources, Inc., Burr 1-19H., SWSE 19-157N-97W, Williams Co.
  #21049 – North Plains Energy, LLC., Miller 4-14-1H., NWNW 14-157N-97W, Williams Co.
  #21144 – Petro Harvester Operating Co, LLC., Rice 13X., NESW 9-161N-82W, Bottineau Co.
  #20557 – EOG Resources, Inc., Liberty 24-2531W., SWNW 25-151N-91W, Mountrail Co.

Of the eleven new wells that are confidential, but plugged or producing, Whiting, CLR, and MRO each had two.

Legacy, Surge, and an Update on the Bottineau Spearfish Wells -- North Dakota, USA

I still don't have the complete story, but here a few more dots to connect.

First, a story from the Calgary Herald just a couple of days ago, May 30, 2011:

Formation watchers have drawn a bead on the Manitoba Spearfish light oil formation, with a report from FirstEnergy Capital suggesting it may have twice the amount of original oil in place per acre as the storied Saskatchewan Bakken.

"Drilling activity levels and play-wide production volumes have grown exponentially since the winter of 2008-09, with latest public data (current to January 2011) showing Spearfish production approaching the 15,000 barrel of oil equivalent per day range, and likely capable of much more today if it were not for an anomalously wet spring break-up this year," says the report.

"In terms of resource potential, the regional extent of the Spearfish is still being delineated, however, in areas already shown to be prospective, reservoir parameters can suggest potential OOIP to be in the realm of 9.0 to 15.0 million barrels per section, which could represent 2-3 times what the southeastern Saskatchewan Bakken offers on average."

The Spearfish attracted super-looking oilpatch newcomer Legacy Oil + Gas to invest $185 million to buy assets from Molopo Energy Canada Ltd. in February, paying $93 million in cash and issuing 6.18 million Legacy common shares.

EOG Resources and Penn West Exploration are considered the leaders in the play but for maximum exposure, FirstEnergy likes Legacy or Surge Energy, who both have concentrated, low risk, development inventories.

Then this comment sent in to me, and posted at this site:

Looks like Surge energy may have purchased EOG's leases in Bottineau County Spearfish. Appears that Surge now claims a 329 low risk drilling inventory.
http://surgeenergy.mediaroom.com/index.php?s=10448&item=39018
Also check out their May 20 investor presentation and look at the spearfish land map page 14. The land position looks very similar to what EOG had shown in some of its reports. However I haven't seen any public record of sale by EOG? 

The press release at that link says Surge's deal to acquire Spearfish assets in North Dakota has closed:

CALGARY, May 16 /CNW/ - Surge Energy Inc. (SGY) is pleased to provide the results of its third horizontal multi-frac well at Valhalla South and to announce the closing of its previously announced light oil asset acquisition in North Dakota. Surge is also pleased to announce that it has syndicated its bank facility and increased its bank line from $90 million to $120 million.

The press release goes on: 

Surge is pleased to announce that it has closed its second light oil asset acquisition in North Dakota.  As previously disclosed, the first light oil asset acquisition in North Dakota closed on March 31, 2011. The assets from both acquisitions were acquired by Surge Energy USA Inc., a wholly owned subsidiary of Surge Energy Inc. 

Through the two acquisitions, Surge acquired 100 bbl/d (2010 exit rate) of high quality, high netback, light oil production, 6,000 net acres of highly prospective land in the Spearfish light oil resource play and greater than 100,000 acres of high working interest, undeveloped land for total consideration of $21.5 million in cash. The acquisitions added an internally estimated 205 gross (120 net) horizontal Spearfish drilling locations and approximately 126 mmbbls gross DPIIP (discovered petroleum initially in place; similar to US companies "OOIP" -- original oil in place). 

Surge now has approximately 329 gross (231 net) horizontal Spearfish drilling locations in southwest Manitoba and North Dakota and greater than 460 gross (350 net) oil drilling locations in the Company.

For those who have forgotten what/who Legacy is:

Legacy Oil + Gas Inc., an oil and natural gas company (from the BusinessWeek.com site) engages in the acquisition, development, exploration, and exploitation of oil and natural gas properties in Canada. It principally holds interests in various properties located in an area ranging from approximately 130 to 290 kilometers southeast of the city of Regina, Saskatchewan; the Turner Valley property situated in southern Alberta; and the Maxhamish property located in northern British Columbia. The company also owns interests in approximately 44,684 net acres of undeveloped land in Bottineau County, North Dakota; and a 50% working interest in 16,640 net acres of undeveloped land in southern Alberta. In addition, it invests in petroleum and natural gas gathering, processing, and transportation assets. The company was formerly known as Glamis Resources Ltd. and changed its name to Legacy Oil + Gas Inc. in November 2009. Legacy Oil + Gas Inc. was incorporated in 2005 and is headquartered in Calgary, Canada.

So, bottom line: it looks like Surge, Legacy, and EOG have assets in Bottineau's Spearfish formation, but whether EOG sold most/all of its assets to Legacy and/or Surge is still an issue.

Update on Legacy's Bottineau Wells -- Ready for Fracking -- North Dakota, USA

I've been told that Legacy is about ready to frack their Bottineau wells.

The Halliburton coiled tubing crew from Rock Springs, Wyoming, has been in the area for the last few days, but the Halliburton fracking crew coming down from Canada has "been hung up at the border crossing for the last two days!" 

The wells in question, from an earlier note from the company's website, dated March 14, 2011:

"The first two horizontal wells of a five-well program targeting light oil in the Spearfish in Bottineau County, North Dakota, were drilled in the fourth quarter of 2010, with the remaining wells drilled subsequent to year end. Based on drill cuttings, gas detector response and oil shows while drilling, all five wells have now been cased as potential Spearfish oil wells and await completion. Fracture stimulation treatment is dependent on weather and road bans but is anticipated to occur within the next six weeks. The Company has continued to build on its dominant land position in the area which is now in excess of 43,840 net undeveloped acres. No reserves have been assigned to Legacy's interest in Bottineau County in the December 31, 2010, reserves report."

A big thank you from "another" Bruce for providing the update via e-mail.

***********

Update:

Anon 1 provided significant amount of information regarding an earlier question in the comment section below. Because comments don't "link" appropriately, I have "cut and paste" the comment/links here to make it easier to get to the links:

Also see:

http://www.renegadepetroleum.com/

They have a little acreage which might have a shot at Spearfish. But, they don't mention it here:

http://www.renegadepetroleum.com/documents/presentation/RPL-2011-04-29-MayCorpPresent.pdf

They do mention Bakken and Waskada Spearfish.

Also, you have covered:

http://www.surgeenergy.ca/

Together they constitute a renegade surge of Canadians looking for legacy oil.

http://www.legacyoilandgas.com/

A Nice Sagebrush Madison Well in Bottineau County; Five Wells On One Pad -- North Dakota, USA

Update: this is from the first comment below (in the comment section).

#19236, 680, Petro Harvester/Sagebrush, Asheim 2, in the Renville oil field in Bottineau County, is in fact two (2) wells with one lateral each. Both laterals start at the same point and are about three (3) degrees apart; one extends about 2,400 feet and the other about 3,200 feet. The actual formation is the Wayne formation, part of the Madison Group.  According to that link the Spearfish is the youngest oil-producing formation in North Dakota which unconformably overlies the Madison Group across much of eastern North Dakota. The Spearfish Formation is productive where oil has migrated into it from Madison Group strata.

This is another stratigraphic link I have found useful.

Original Posting

Yesterday (Friday, January 14, 2011) I posted my usual update regarding new permits, and highlighted several very nice Newfield and EOG wells, all with IPs around 1,000 or significantly higher.

I purposely left one very good well off the list because its IP paled in comparison to these thousand-bbl IPs and I did not want to get newbies wondering if there was a problem with a well with an IP less than a 1,000.

So, now to make up for that oversight, another great well that was noted in yesterday's daily activity report was #19236, 680, Sagebrush, Asheim 2, in the Renville oil field in Bottineau County.  This has to be one of the best wells in that field. Not only that, this is a) not a horizontal well (if I understand the designation correctly); and, b) not a Bakken well. It is a Madison well.

The obvious question is whether the IP as reported is a 24-hour flowback, or something else. If this is a 24-hour flowback, this is a huge well for a Madison.

For comparison, from my database here are the IPs of other Madison wells that reported in 2010:

• 18612, 25, WLL, BSMU 3602X, Big Stick, Billings County
• 18625, 368, WLL, BSMU 3604, Big Stick, Billings County
• 18738, 50, Jayhawk, Knudsen 1, Crosby, Divide County
• 18740, 30, Jayhawk, Jenks 1, Crosby, Divide County
• 18899, 1, Sagebrush, Busch 2-5, Portal, Burke County
• 18902, 2, Sagebrush, Busch 10-5, Portal, Burke County
• 18962, 55, Sagebrush, Lodoen 11-7H, Kuroki, Bottineau County
• 18986, 59, Sagebrush, Johnston 1-22, Columbus, Burke County
• 19027, 111, Sagebrush, Erickson Et Al 1B, Renville, Bottineau
• 19028, 98, Sagebrush, Erickson Et Al 3B, Renville, Bottineau
• 19062, 37, Sagebrush, Wright 12-12H, Kuroki, Bottineau
• 19139, 99, Sagebrush, Erickson Et Al 1A, Renville, Bottineau
• 19177, 95, Cornerstone, Rawn 4-26H, Wildcat, Burke
• 19194, 37, Sagebrush, Lodoen 11-8H, Kuroki, Bottineau

Others, plugged or producing:

• 18751, Cornerstone, Karpyak 4P-33H, Upper Des Lacs, Burke

By the way, look again at #19139, Erickson Et Al 1A. That is one of five wells that Sagebrush is putting on one pad, SWSE 30-162N-82W:

• 19140, Erickson Et Al 4B
• 19141, Erickosn Et Al 3A
• 19142, Erickson Et Al 4A
• 19143, Erickson Et Al 2B

By the way, I have to thank an "anonymous" reader for calling attention to the Sagebrush well in Bottineau County. Thank you.

2,000 to 7,000 More Wells In Bottineau County

Updates

January 29, 2011: Throwing in the towel on the Spearfish? It appears EOG has quit drilling in Bottineau.

Original Post

The headline is "another Bakken?" 

I don't think so.

But it is exciting. Bottineau County is not one of the counties in North Dakota participating in the Bakken boom. But there is a formation there that is creating quite a stir -- one that I have reported on earlier: the Spearfish formation.

Today there's a story out of Bismarck that Bottineau County, northeast of the current Bakken play could see anywhere from 2,000 to 7,000 wells over the next decade or so.

These are shallow wells that can be drilled in less than a week and as many as 30 wells in a section (one square mile) will be drilled.

Click here for an earlier story.

EOG Drilling Spearfish Wells in Four (4) Days

Updates

January 29, 2011: Is EOG throwing in the towel on the Spearfish; no current EOG drilling in Bottineau.

Original Posting

EOG drilling Spearfish wells in four (4) days. That PDF will take a few seconds to load; then go to slide 27 (if I remember correctly) -- but the whole presentation is worth viewing.

I honestly can't keep up with all that's happening in the Wililston Basin. This is absolutely incredible, and people used to consider me inappropriately exuberant. I still am, but even more so.

I missed this article yesterday (Friday) -- I'm getting behind. Just too much news. Bottom line: EOG releases statement saying the Spearfish is a significant discovery. Although it is relatively small -- estimated at 20 million barrels -- it has  a very high rate of return. They can drill these wells in less than five days for a cost of about $1 million.  The Waskada field north of the border is estimated to be 25 million barrels. EOG says they can get a return on the order of 70 - 100%.  [One hundred percent means one doubles one's investment.]

One begins to wonder how many other formations might be amenable to horizontal drilling.


Pipeline, Stevie Ray Vaughan & Dick Dale