Voyager Provides Operations Update -- Record-Setting BEXP Well -- Bakken, North Dakota, USA

Link here.

NOTE: another company that estimates six (6) wells per 1280-acre spacing unit.

Datapoints:

• Bakken net acreage now up to 27,000 net acres (last report, 24, 000 net acres) -- ND and MT
• In 2011 (to date) Voyager has acquired 3,133 net mineral acres at an average price of $1,239 per acre in the Williston Basin targeting the Bakken and Three Forks formations
• Assuming six wells per 1,280-acre spacing unit, this acreage position will allow Voyager to participate in approximately 126 net wells

Highlight: VOG participated in a record-setting well (operator: BEXP)

Brigham Exploration, one of Voyager's operating partners, recently announced the results of the Johnson 30-19 #1H well in Richland County, Montana. The Johnson well was reported to produce 2,962 barrels of oil equivalent "BOE" during its early 24-hour peak flow back period. Voyager currently controls approximately 11,000 net acres within 10 miles of the Johnson well including 5 operable sections.

NOTE: in the data points below, it is noted that one of BEXP's new wells, the Johnson 30-19 1H, set a new Montana record of initial production. One can find the location of this Montana well by going to slide 35 of BEXP's April, 2011, corporate presentation. This is a very important well. It is located about 15 miles northeast of Elm Coulee field where the current Williston Basin Bakken boom began back in 2000. This confirms a new area sitting between Elm Coulee and Williston, North Dakota. On that slide, all the green dots in the lower left hand corner are in Elm Coulee.

In the Bakken:

• Voyager has spud 27 gross wells in 2011 bringing the total well count to 45 wells targeting the Bakken/Three Forks formations. 
• Currently, 1.72 net Bakken/Three Forks wells are drilling, completing or producing.
• Voyager expects to participate in 70 gross wells and 6.0 net wells in 2011 targeting the Bakken/Three Forks. 

SeekingAlpha: Eight Bakken Drillers Under $1 Billion Market Cap -- An Update

Link here.

Companies covered: CRED, SSN, GEOI, GMXR, USEG, TPLM, AXAS, and REN.

REN is new (at least to me) in the Bakken. REN controls about 33,000 net acres in Williams County (north of Williston) and McKenzie (south of Williston).

Motley Fool on KOG -- Bakken, North Dakota, USA

Link here. From the article:

Revenue growth in 2010 was up an impressive 175% over the previous year -- from $11.3 billion to $31.0 billion. The compounded annual revenue growth rate over the past five years is perhaps even more impressive, standing at 143%. However, in spite of its aggressive growth cycle, the company has not really managed to convert its revenues into net profit in these five years. While this is a matter of concern, I don't believe this trend will continue.

Looking into the future, because of substantial revisions in its reserves, Kodiak is bound to leave its dismal performance behind. In fact, Kodiak has actually managed to turn around its cash flow in 2010, recording a 20.1% margin in its EBITDA. Consensus estimates show that the company's EBITDA margin will grow even further, to over 70%, by the end of 2011. With no signs of abatement in global oil prices, I believe this level will be maintained for a couple of years more. And that, Fools, is what will begin to reward shareholders.

My hunch is that, in general, what is true for KOG, is true for many of the other Bakken operators. They have not been reporting net profit the past couple of years because they've been "planting their seed corn." 

Note also that the Motley Fool sees "no abatement in global oil prices."

Ohio Oil and Chesapeake Could Be "The Saviors of the Rust Belt" -- Incredibly Interesting Interview

Link here.

Some data points from an interview with an analyst in The Wall Street Journal:

• The analyst thinks the Fed is actually doing a pretty good job "balancing declines in M3 with adding to the monetary base to prop up the money supply."

• "Crude is trading as if the Fed will continue to debase the dollar, and I think that is the most likely scenario going forward."

• The analyst: "If you did nothing but sell master limited partnerships (MLPs) when the VIX is 15 or lower and buy MLPs when the VIX is 25 or higher, you'd make money over time. It's easier said than done, but if you think about it, that is essentially the Warren Buffett investment philosophy, which is very, very patient capital, look for your entry point and buy value." 

• The analyst: "The biggest long-term trend that we're seeing now is the retirement of coal fired power plants in the United States, for actually non-greenhouse gas reasons, although that could potentially be even more additive to that trend over the long term.the third trend is really the explosion of oil and liquids plays in the United States in some pretty weird areas. For example, the most interesting new play prospective - and we'll see - but Ohio could actually become a pretty big producer if acreage held by Chesapeake and EV Energy Partners turns out to be prospective. So we'll see, but I think that oil production in Ohio could be the savior of the rust belt."

Update on High Speed Rail -- Not a Bakken Story

A few days ago I posted a story about the fact that LAX had no rail access. The light rail system came within 2.5 miles, but for various reasons never quite made it to the airport.

For those interested in the administration's goal for high speed rail for the nation, here is an update. It's an op-ed article but it is filled with facts. I was not aware that the recent budget compromise between Congress and the President resulted in loss of all federal high speed rail funding.