Three (3) New Permits -- Nine (9) Incredible BR Wells -- The WIlliston Basin, North Dakota, USA

Daily activity report, February 22, 2012 --

Operators: G3 Operating (2), SM Energy

Fields: West Ambrose

G3 Operating has permits for two wildcats, both in Williams County.

BR and Slawson both cancel recently permitted wells: BR's Watchman Peak in McKenzie, and Slawson's Athena in Mountrail.

Nine (9) wells on DRL status were completed, including:

• 19184, 1,281, BR, Tilton 34-7H.
• 19288, 984, BR, Veeder 14-24H,
• 19924, 1,225, BR, Rifle Falls 31-25H,
• 20528, 2,892, BR, Chuckwaon 21-15MBH,
• 20326, 2,083, BR, Midnight Run 31-1TFH,
• 20327, 2,443, BR, Midnight Run 41-1TFH, 
• 20327, 2,064, BR, Berlin 34-14H,
• 20325, 2,846, BR, Midnight Run 21-1MBH,
• 20818, 1,920, BR, Bath 11-35H,

Keystone XL -- Nice Update at Market Watch; Companies Profiting From Demise of Keystone XL 1.0 and 2.0

Link to Market Watch here.

It's a great article considering the writer admits he voted for Obame the first time around will "probably" do so this time. (This tells me that folks are voting for Obama, not for his policies, but for his "million dollar smile.")


Another Market Watch article here: how some companies will profit from the delay (Warren's company is not mentioned, unless I missed it).  But my favorite pipeline company, Enbridge, is.

Very Little Blogging During The Day -- I Will Be Out and About

Eager to see what OAS, WLL, and CLR report today

My hunch: no matter how spectacular the reports, the analysts won't be happy. 

Good luck to all.

Newfield Earnings -- 4Q11

Link here.

Proved reserves (a bit confusing the way it is presented):

At year-end 2011, Newfield’s proved reserves were 3.9 Tcfe and probable reserves were 2.6 Tcfe. This reflects growth of 5% and 4%, respectively, over the prior year. The Company’s proved oil reserves increased nearly 30% during 2011 while proved natural gas reserves declined by 6% as compared to year-end 2010.

If I read this correctly, the increase is not significant compared to others in the Bakken.

CLR, WLL, OAS, NFX Report Later Today? CLR's Most Recent Corporate Presentation

I don't know for sure, but that's what my calendar shows.

CLR's February, 2012, corporate presentation, data points (some numbers rounded):

• 901,098 net acres; down slightly from 2Q11 data -- 901,370 net acres
• 22 rigs in North Dakota; down 1 from previously announced 23
• EUR: 603K boe per well
• 4Q11: 75,219 boepd production
• early January: 80,000+ boepd
• proved reserves: 40% growth yoy; 500 million boe proved reserves
• three Bakken formations: payzone -- generally the middle Bakken
• four Nisku (Three Forks) formations; Charlotte 2-22H; 1st successful test of a deeper TF bench; 1,496 boepd in 1-day test
• 2nd test of this deeper TF bench: Sunline 11-1TF-2SH; 1,023 boepd
• Huge footnote on slide 9: "CLR estimate of recoverable oil and gas (24 billion boe) includes only Middle Bakken and upper Three Forks. Lower TF benches should be additive."
• Montana Bakken: 2-rig program

Well cost:

• Single well: $8 million, 603K EUR
• ECO-Pad well: $7.2 million, 603K EUR

Rate of return:

• $50 oil: 15 - 20 percent
• $70 oil: 25 - 30 percent
• $90 oil: 40 - 45 percent

ECO-Pad: examples (IP per well average for 4 wells)

• Dvirnak-Pletan: 1,838 boepd 
• Bailey-Wiley: 1,105 boepd
• Hamlet-Salo: 811 boepd

Bakken Development Plan

• Original dual-zone plan: 8 wells per 1,280-acre unit; 4 middle Bakken; 4 TF; 603K boe EUR per well
• Additional Three Forks potential: total TF 180 to 270 feet thick
• Words don't do the graphic justice; if serious about the Bakken or CLR, you need to look at this slide yourself

For newbies, a thickness of 250 feet is huge in the "Bakken"

Total cash cost/boe (slide 18)

• 2008: $17.20
• 2009: $15.01
• 2010: $17.12
• 2011 (first 9 months): $19.73 (Newfield is right: it's gotten a lot more expensive to drill in the Bakken)

Remember EOG saying $40 oil is robust in the Bakken some years ago?

Swaps and Collars (oil)

• 4Q11: $80 - $97
• 2012: $80 - $97
• 2013: $80/$95 - $92/$110

Swaps (natural gas)

• 4Q11: $5.40
• 2012: $5.07