A major oil player needs to “get his act together” before he can build a natural gas processing facility near Patterson Lake, said Jay Elkin, Stark County Zoning Board commissioner.
It has been more than a year since Bob Angerer dug up six oil sites near Taylor, Elkin said Saturday, and the developer has yet to close reserve pits that threaten surrounding farmland, livestock and heavily-used water sources.
"A major oil player"? I don't think Mr Angerer / Oil for America has any successful Lodgepole reef wells in North Dakota, but I could be wrong. I've long lost interest in Oil for America. I was surprised to see that he is still making the rounds. Quite a promoter it seems.
Not to be confused with Ken Anger. Although both may have used the same formula: "dream logic."
I remember how excited I was when I first started reading the press releases from Oil for America. And then for the longest time, we heard little from the company, and then when we did hear something, it was not encouraging.
Oil for America's second well released from confidential status is now listed as "shut in" by NDIC:
19272, SI, Oil for America, Wolf 29-1, Wildcat, Lodgepole (not a Bakken)
This was one of those wells looking for a Lodgepole reef.
I don't recall any press release from the company.
The production numbers for Oil for America's first well have not changed:
19258,F, Oil for America, Zastoupil 22-1, Wildcat, Lodgepole (not a Bakken) -- one day of production back in March, 2011, and cumulative -- 75 barrels.
It's listed as "flowing" but, if so, it certainly isn't flowing much.
I went back to these because a Fidelity rig is on site, near the Wolf well -- about 3 miles distant to the east (Fidelity is east of the Wolf well): Fidelity's Wanner 44-23H, a wildcat, and most likely targeting the Three Forks.
Nearby are two Chesapeake rigs:
21143, DRL, Schoch 21-137-97 A 1H
21139, DRL, Zent 30-138-95 A 1H
These are south of Dickinson, in Stark County, but near Slope and Hettinger counties.
Of interest, another "Oil for America" well came off the confidential list, but like all other "Oil for America" wells before it, it remained in DRL status. Considering "Oil for America" wells are vertical wells into the Lodgepole, the fact that they remain in DRL status six months after being spudded, really raises questions.
20195, DRL, Oil for American, Dohrman 14-1, Wildcat, Lodgepole
For those who have lost track or lost sight of "Oil for America" wells, click here for overview and updates. For newbies, the Lodgepole was going to be a huge new producer for Oil for America according to their CEO and geologist after having discovered a "sure-fire" way to tap into the Lodgepole reefs. So far, little news.
This is a surprise; NDIC says the status of the Zastoupil well is "IA" -- inactive or shut-in, but yet it is on the June docket for temporary spacing. I guess I will be learning something new:
June 2, 2011: On the docket for June, NDIC:
14541: Oil for America, temporary spacing for Zastoupil 22-1, Stark; according to NDIC "Well Search" page, the status of this well is "IA" -- inactive or shut-in
Finally, after coming off the confidential list a month ago, Oil for America is reporting production for:
19258, 75, Oil for America, Zastoupil 22-1, Wildcat, Lodgepole
The "75 barrels" is the production for one (1) day in January. My enthusiasm for this well (and the others of this group) has waned, but I am still waiting for another couple months of production to see what "they" have. But the Lodgepole is supposed to be a reservoir (a pool of oil) that is sequestered and if hit will produce flowing oil without fracturing. But 75 barrels on one day is not encouraging.
But I am waiting for a) a few more months of production; and/or b) a press release from the company explaining their results and future plans.
But that's about all the good news. Of the 13 wells that came off the confidential list over the weekend, eight (8) of them only reported "DRL" status. Apparently they are still waiting to be fracked, and no production data is available.
A second "Oil for America" well was released from confidential status over the weekend, but still no production data:
19272, DRL, Oil for America, Wolf 29-1, Wildcat, Lodgepole
The first "Oil for America" released was the Zastoupil:
19258, 75, Oil for America, Zastoupil 22-1, Wildcat, Lodgepole; well status - IA, 3/11.
Interestingly enough, I did not think the Lodgepole wells required horizontal fracking so their delay in releasing production figures is interesting.
From the well file, the Zastoupil was drilled in slightly less than five (5) days. The depth was about 9,651 feet. The NDIC report notes that 75 bbls of oil were produced over one day, in March, 2011. This well is on 160-acre spacing.
Other than the spud date of September 6, 2010, and 160-acre spacing, there was no other pertinent information regarding the Wolf well.
Summary: This small company founded in 1953, with interests in Montana's shallow natural gas, and interests in North Dakota oil (most likely Lodgepole reefs), seemingly dormant for many years, "came alive" in early 2010. With a market cap of $3 million and shares selling for five cents, the question is whether this is a company investors might want to consider. The 8,510 net acres in North Dakota might carry a book value of $42 million at $5,000/acre.
Note: I have no financial connection or agenda with anything posted on this page regarding Coastal Caribbean or Oil for America. Except for "facts" which are fairly obvious and linked to sources, this is mostly personal opinion based on information readily available on the web. The opinions are nothing more than what I might talk about at a coffee klatsch at the Economart in Williston. I do not have the training or education to do a true geologic analysis or a business analysis.
Fourth: I don't find "Coastal Caribbean" or "Coastal Petroleum" listed as one of the operators at the NDIC website, but I do find "Coastal Oil and Gas."
Brief History (all opinion)
It appears to me that this is one of many small oil and gas companies operating in Montana and North Dakota. According to Yahoo!Financial the company was established in 1953. I have no idea how it came to acquire mineral acres in Montana and North Dakota, but my hunch is that a) either in 1953, with the first oil boom in North Dakota, the company was active; and, or b) subsequently, maybe very recently, the company became interested in natural gas in Montana. Remember, back in 2008 (or whenever it was) the price of natural gas did spike and natural gas looked like a great investment. Then, or later, the company bought mineral rights in North Dakota.
Comments
According to the SEC filing in April, 2010, Robert Angerer provided additional funding to allow the company (if fully funded): to develop its Red River formation in North Dakota, to drill three Lodgepole reef wells in Slope County, and to drill six wells on its natural gas prospect in Montana (Starbuck East Shallow Gas Prospect) over the next two years.
Coastal Caribbean appears to have been relatively dormant since 2008; the last press releases posted at its site are dated 2008, and, unless I missed it, it did not include the recent SEC filings. In fact, when you click on the website's SEC filings, it takes you to a blind site.
Considering that 2008 was right at the beginning of the current boom, it was surprising to me to see the activity "start and stop" in that year; my hunch --- directors/partners set it up, then got more interested in other things. Or they set the pot on the back burner, and it's simmering, ready to be brought up to the front any day now.
Analysis
The 800-pound gorilla in this room, is the outcome of the recently drilled wells into the Lodgepole reefs by Oil for America. Rumor has it that the first two wells are producing; there has been no press release to say how successful these wells are. I would assume, in the near term, the information will be tightly held, but it's hard to keep secrets in the Bakken when one can count the number of tanks on a pad and the number of trucks coming and go.
The company has 35,873 net acres in Montana (the Starbuck East Shallow Gas Prospect), according to the 2010 SEC filing. At its 2008 website it had 32,000 acres in Montana, so the company has continued to acquire natural gas acreage.
The company has 8,510 net acres in North Dakota, most of them in the area where the Bakken thins out, the Three Forks is in play, but ... drum roll ... where Oil for America is concentrating on the Lodgepole reefs.
The 8,510 net acres in North Dakota are also near the Anschutz acreage that was recently sold to Occidental for about $8,000/acre.
Forgetting about the natural gas play in Montana (and it's too far west for Bakken oil), we are left with the 8,510 acres near where OXY paid $8,000/acre.
At $5,000/acre (and I don't think any acreage will go for less than that in this part of North Dakota), the 8,510 acres carry a book value of $42,550,000 -- or in round numbers, $40 million.
The company, at five cents a share has a market cap of $3 million.
One can look at the balance sheet, income statement, and cash flow at Yahoo!Financial but I don't think they mean a lot at this point. Whatever value the company has cannot be accurately reflected in these statements. The real value in this company is a) the value of the acreage it holds; and, b) the outcome of the wells it drills in the Lodgepole reefs.
My gut feeling is that folks are paying $5,000/acre in North Dakota for the Bakken and the Three Forks, so even if the Lodgepole reefs do not pan out, the company still holds some nice acreage.
Final Thoughts
I don't invest in speculative or "penny stocks" as we used to call them back in previous oil booms. But if one has a well-diversified stock portfolio and has money he/she is willing to lose, this would be a "fun" company to consider.
The amount of acreage seems to be too small to interest any major player (in other words, another OXY is unlikely to buy this) but drilling is getting more and more expensive and small companies will be squeezed even more in 2011.
My hunch is that Coastal partners with other producers and we won't see any Coastal Caribbean permits; the company will take a working interest in wells drilled on their acreage.
March 10, 2024: from a reader today, with some editing:
Lone Wolf Consulting (Dalton Halgren) was the "Engineer" in this
operation. He
had people convinced that he was (a) petroleum engineer who was
also working with Halliburton when they were trying to plug (the) Deep Water Horizon blowout, part of the Maconda
play off the coast of Louisiana. Eventually, years down the road, it came to light that he was NOT an engineer.
Long
story short, there was another company in NE Montana who pursued these
Lodgepole Walsortian mounds in a much more systematic method, and they
determined that these plays are very much wild cats, hit or miss, with no
good predictors.
20195, DRL, Oil for American, Dohrman 14-1, Wildcat, Lodgepole
June 2, 2011: On the docket for June, NDIC:
14541: Oil for America, temporary spacing for Zastoupil 22-1, Stark; according to NDIC "Well Search" page, the status of this well is "IA" -- inactive or shut-in
June 2, 2011: Another Oil for America well comes off the confidential list, but no data except total depth:
20061, TD = 9,615 feet, Oil for America, Dohrmann 13-1, Stark
May 6, 2011: Another Oil for America well comes off the confidential list, but no data; now on DRL status.
19785, DRL, Oil for America, Froelich 27-2, Wilcat, Lodgepole
April 7, 2011: A fourth Oil for America well comes off the confidential list.
19601, DRL, Oil for America, Wieglenda 23-1, Wildcat, Lodgepole (this is one of five Lodgepole wells in southwest ND with significant personal interest); spudded 10/10
The first Oil for America well that reported, the Zastoupil well had an IP of 75
March 21, 2011: Finally, after coming off the confidential list a month ago, Oil for America is reporting production for:
19258, Producing?, Oil for America, Zastoupil 22-1, Wildcat, Lodgepole; produced 75 bbls of oil on one day in March, 2011
For those who have read the following "Original Posting" below, you may be interested in reading more about the Lodgepole from someone much more knowledgeable, much more credible than me. These are incredibly good links:
In an effort to understand why Oil for America is drilling their wildcats where they are and in an effort to connect various other dots, it is amazing what one finds.
Other dots include Whiting's interest in its Lewis and Clark Prospect, in addition to the Three Forks formation, if any (see below).
First, it probably helps to have a glass of Scotch (which I don't have) and then a some great music (which I do have), and then start searching.
Goodnight Moon, Shivaree, as popularized in Kill Bill 2, Quentin Tarantino
First, who / what is "Oil for America"? Tres amigos.
Robert J. Angerer
Officer since February 2003
Mr. Angerer, age 62, is a partner in Oil For America, an oil exploration business formed in 2002, with operations primarily in North Dakota and Montana. Mr Angerer is also Chairman of the Board for both the Company and Coastal, Coastal Caribbean Oils & Minerals, Ltd. Also, this site, when you get there, scroll down to the 24th comment (I'm not joking).
Jamil Azad, geologist. Consulting geologist to a number of firms over the years.
13791: Whiting, to establish 8 1280-acre units in Golden Valley County; to target the Lodgepole formation
November, 2010 13549: Hess, request to drill a Lodgepole well in Williams County
September, 2010 13244: Halek, requesting a 320-acre spacing unit for Dickinson-Lodgepole Pool
Lodgepole Data Points (according to the Jamil Azad - Robert Angerer article linked above)
Referred to as the "Dickinson Supergiant"
The Lodgepole is conservatively estimated to be under 25,000 acres of surface land, almost all in North Dakota, centered in the Williston Basin
EURs for each well: 800,000 bbls, if dry holes included; 1.4 million bbls, if dry holes excluded
The Bakken shale did not source the Dickinson field, but the Lodgepole formation did
Organic content of the Lodgepole formation: an astounding 13 percent
A Lodgepole reef was accidentally tapped in 1993, and then pretty much forgotten
The Lodgepole is a unique formation; the pools of oil are in mounds, as "thick" as 330 feet
Not amenable to seismography (explains why there may have been as many as 130 dry holes around the Dickinson area following initial discovery)
Non-seismic technology necessary -- see paper for description
The Theory: Working Through the Process (According to the article linked above)
Every producing well hit a reef; every well that did not hit a reef was dry
Oil companies success in hitting oil dwindled between 1993 and 1998
The author says that "seismic is not the answer"
The author introduces new technology to locate these reefs
Technology built on experience gained in Texas
Focused on "Waulsortian mound," the Lodgepole reefs
A1 Analysis
A1 photo-geo-morphological analysis
Theory: the weight of overlying strata compacts the off-reef sediments more than the reef core
Erosion removes surrounding sediment, resulting in a mound (reef)
This technology is not new; evolution of aerial photogeomorphology
AI "constitutes a formidable advance in reef location, but two more technologies are required to optimally locate the reefs
AII Analysis (I have trouble following this; proceed at our own risk)
The mounds then collapse under their own weight/dissolution of limestone into the karst, causing a chimney (karst: a geologic term: A type of land formation, usually with many caves formed through the dissolving of limestone by underground drainage)
Collapse chimneys -- due to collapse -- obviously result in increased natural fracturing
Drilling Experience
"Although the stratigraphic correlations between dry holes worked perfectly in Dickinson, corelation between dry holes (drilled outside collapse chimneys) and producers (drilled inside collapse chimneys) or between producers drilled in different collapse chimneys are chaotic and invlaidate predictions based on formation."
The Mounds and Their Collapse Chimneys are the Outlets of the Real Reservoir
"The new reservoir model of the Dickinson oil field has fractures surrounding a collapse chimney that drain the encasing rocks -- such as the Madison carbonates. This explains how the puny Waulsortian mounds with a 3 - 5% porosity, negligible nonfracture permeability, and holding a maximum of, say, 120,000 bbl of producible oil, in fact may yield more than 4 million bbl of oil.
Fracturing Not Necessary if Theory Holds
"Unlike the Bakken shale play in the Williston Basin that requires hydraulic fracturing, the collapse of the Lodgepole mounds created a natural vertical fracturing across the entire are that can effectively drain the Madison carbonates if wells are placed within the collapses.
Where to Drill In Relationship to the Mound
One needs to look at Figure 10 in the paper to see that the place for the wellbore is right at the base of the mound (not into the mound, but not more than 50 feet from the mound, based on what I see in the figure.
Experience revealed that not all chimneys were equally productive
The question was how to find the most productive chimneys
This resulted in a new (patented) process, which the author refers to as A III Analysis
A III Analysis based on hydrocarbon analysis of microseepages at ground level (not seismic)
Results
Analysis results in finding "best" chimneys
The well must be within 400 feet of the mound/chimney (I was wrong above)
"Only a tiny area of the potential 25,000 square miles of the Dickinson oil field has so far yielded production; this restricts reserve estimates to the category of wild guesses."
"The simplest of these anchors on Eland oil field, said to cover 5.25 square miles and has an EUR of 32 million bbl, which give a recovery of about 6 million bbl/square mile. [A section is one squre mile. Remember, a single well in a section in the core Bakken has a EUR of 700,000 to 900,0000 bbls.]
Bottom line:
"Prorating this figure to the area of the Dickinson supergiant oil field yields a most satisfying -- if highly aleatory -- 150 billion bbl potential and puts it in the category of Alberta's Athabasca tar sands. Dividing this figure by 10 still yields a giant field."
Ta-da. By the way, aleatory means random, by chance. A new word for me.
So, you are asking, as I am, where is the Eland oil field and where is it in relation to activity of Oil for America and Whiting?
The Eland oil field is a very small field, about eight (8) sections total on the southwest side of the city of Dickinson. The center of the Eland oil field is six miles east of South Heart, the center of a significant amount of recent interest. South Heart is, in turn, 10 miles east of Belfield, where Whiting is putting in a new shop / industrial park.
My hunch:
Oil for America is using their patented methods to go after the Lodgepole
Whiting is taking advantage of the Three Forks extension / pinch out in the Belfield-South Heart-Dickinson area to exploit the Three Forks formation (Lewis and Clark prospect), but is watching Oil for America closely, and has, in fact, applied for permits for eight 1280-acre units in Golden Valley County to target the Lodgepole
Where Are the Oil for America Wells?They have six, all wildcats:
19785, Froelich 27-2; 27-138-97, rig-on-site;12 miles southwest of center of Dickinson
19601, Wieglenda 23-1; 23-139-94; 15 miles east-southeast of center of Dickinson
19272, Wolf 29-1; 29-139-95; six miles southeast of center of Dickinson
19258, Zastoupil 22-1; 22-139-97; six miles SW of ctr of Dickinson, just outside Eland field
20061, Dohrmann 13-1; 13-140-94; 15 miles east-northeast of Dickinson
20195, Dohrmann 14-1; 14-140-94; 15 miles east-northeast of Dickinson
History:
When I first heard of the current story, it was the first time I had heard of "Oil for America." I thought it was a new company. It turns out it has been around at least since the beginning of this boom. See this link. This was written back in March, 2004:
Rocky Ridge Petrosearch L.L.C., a wholly owned subsidiary of Petrosearch Corporation, is planning exploratory drilling of Lodgepole reefs on nearly 45,000 acres recently acquired in the Williston basin near Dickinson, North Dakota, under a farm-out agreement with Oil For America (OFA). OFA's proprietary exploration technology indicates the acreage--in northeastern Slope County and southwestern Stark County-could contain as many as 50 new Lodgepole reef exploratory targets, extending Petrosearch's Lodgepole play into a new area.
Note: permit 19705, Wanner 44-23H, Fidelity. This Fidelity wildcat is located in T139-95 (section 23), the same township as Wolf 29-1. If you check out this township at the NDIC website you will find that there have been fourteen (14) wells drilled in this township over the years. All of them have been dry (except possibly one, which is no longer producing, in any event). One was drilled by TransTexas which hit a gusher in the Lodgepole some time ago. Most of these dry wells were drilled between 1996 and 1998, following the accidental "discovery" of the first great Lodgepole well in 1993.
Note: my interest in the Lodgepole was reignited when I saw on the December, 2010, NDIC hearing dockets that Whiting was asking for eight (8) 1280-acre spacing units in Golden Valley County to target the Lodgepole.
