Random Look At 100 Wells Drilled In 2007

The current Bakken boom in North Dakota began in 2007.

Looking at the first 100 wells starting with permit #16400, tested June, 2007.

Of the 100 wells

• Birdbear: 3
• Greenhorn: 4 (all dry)
• Madison: 28
• Red River: 13
• Spearfish: 1
• Bakken: 51

One Bakken well was inactive; all the rest were active.

The table below:

• The fourth column: bbls of oil in thousands, cumulative (updated 10/14)
• The fifth column: month/year drilled (tested)

16400		127	6/7
16401		197	4/7
16402	madison	dry	10/6
16403	birdbear	14	11/8
16404		47	5/7
16405		20	5/7
16406		64	2/7
16407		48	7/8
16408	madison	14	3/7
16409	madison	0	11/6
16410	spearfish	0.6	3/7
16411		TA	3/7	-- CLR
16412		174	2/7
16413		127	3/7
16414	madison	160	2/7
16415		150	2/7
16416	madison	dry	9/9
16417	madison	192	1/7
16418	madison	36	11/6
16419	madison	10	6/7
16420	red river	69	10/7
16421	red river	33	9/8
16422		114	12/7
16423	red river	624	3/7	IA
16424		510	7/7
16425		92	5/7
16426	red river	28	8/7
16427	madison	137	3/8
16428	madison	6	12/7
16429	red river	181	3/7
16430	red river	6	4/7
16431	madison	60	6/10
16432		227	5/7
16433		168	6/7
16434		273	7/7
16435	madison	38	4/12
16436	madison	dry	1/8
16437	madison	53	5/7
16438		28	9/7	-- CLR
16439		113	9/7
16440		208	5/7
16441		203	5/7
16442		EXP
16443		25	4/7	-- CLR
16444	madison	SI
16445	madison	PNC
16446	madison	80	3/7
16447		26	4/7
16448		104	12/8
16449	birdbear	31	9/8
16450	madison	76	4/7
16451		62	11/7
16452		167	10/7
16453	red river	390	4/7
16454	birdbear	pnc
16455	madison	86	3/7
16456	madison	pnc
16457		431	5/7
16458		26	6/7
16459		201	10/8	-- MRO
16460		200	3/7
16461		460	3/7
16462	madison	0.1	8/7
16463		385	5/7
16464	madison	1	3/7
16465	madison	30	4/7
16466	madison	196	2/7
16467		322	8/7
16468	madison	dry
16469		520	12/7
16470		71	4/7
16471	red river	307	3/7
16472		45	3/7
16473		134	4/7	IA
16474	greenhorn	0	9/7
16475	greenhorn	0	10/7
16476	greenhorn	0	3/7
16477	greenhorn	dry	1/7
16478		73	4/7
16479		64	7/7
16480		244	6/7
16481	madison	108	3/7
16482	red river	269	3/7	IA
16483		523	6/7
16484		445	9/7
16485		377	9/7
16486		367	4/8
16487	red river	120	5/7
16488		135	8/7
16489	red river	190	6/7
16490		156	6/7
16491	red river	266	3/7
16492		157	9/7
16494	madison	263	8/7
16495		193	9/8
16496		PNC
16497		425	6/7
16498		220	6/7
16499	red river	PNC
16500	madison	5	6/7	IA

I did this little exercise because some folks have said the Bakken wells have such a bad decline rate, they will start shutting some of them down after five years. Many of the 51 Bakken wells above appear not to be economic, but as long as they are producing, they hold the lease by production.

In the game of basketball, there are players whose stats (points, rebounds, etc) are very, very poor, but they play an important role on the team for other reasons.

The most interesting thing in this little exercise: how great some of the Red River wells were.

Disclaimer: I went through the data base fairly quickly, and it is very likely there are errors. But the errors are unlikely to change the general results.

Varying Completion Techniques, Varying Results In The Bakken -- Mike Filloon

Mike has another exceptional article at SeekingAlpha: very long, detailed, with a nice summary.

This is the paragraph on COP's completion technique:

COP has been very active in Haystack Butte. This field is to the southwest of Grail. Conoco's production here is a good example of how IP rates can be altered due to operator completion changes. Conoco would frac part of the horizontal and bring to production. It does this three to four times, bringing parts of the lateral to production over time.

The above results are all over the board and first indications are this completion method is not successful. Conoco had the worst production average of all operators in this article. Also, there is no consistency to design. Some of these long laterals used very low amounts of proppant, while others used very large volumes of water. Conoco's well results may have been skewed due to how it reports its IP rates. 

In some of the above wells, it would report production over a larger number of days in the first month than were actually producing. It also shut down production in some of these wells over the winter months. I would guess there isn't pipe in the ground to transport crude, so instead of trying to truck it out, Conoco shuts the well for a few months. Either way, many of these wells did have production problems.

His summary:

We continue to see a large number of economic wells in northeast McKenzie County.

Not only are these wells economic, but we are seeing a larger number with one year pay outs.

Although production per foot is much better with short laterals, tight stages and more water and proppant, we continue to see more operators using long laterals. This has been very good for operators like Kodiak, which has proven its laterals are sound at a two mile length.

We are starting to see a decrease in production to the south of Grail Field in northeast McKenzie County.

The sweet spot is 30 miles north to south from Charlson to Grail Field. From east to west, it covers 20 miles from Twin Valley to Sanish Field.

I excluded Sanish, Parshall and Alger fields, as it is a different type of production. The northeast McKenzie sweet spot has increased natural fracturing and natural gas production. Parshall Field and the surrounding areas have a much larger percentage of crude.

Northeast McKenzie County will not only produce higher EURs, but it will do this in both the middle Bakken and upper Three Forks. This does not necessarily mean these wells will produce larger revenues, as southwest Mountrail County will produce a much larger percentage of crude.

The long article at the link has much, much more information. 

WTI-Bakken Spread Remains Tight Signaling Adequate Takeaway Capacity

To say the least, it's been frustrating that Bloomberg and Platts removed "free" access to daily Bakken spot prices. But it is what it is.

Occasionally we find a site that provides an update (and even analysis, sometimes) regarding the Bakken-WTI spread.

MarketRealist is reporting:

From a short-term perspective, the spread changed by $2.00/barrel over the week (with Bakken moving lower relative to WTI Cushing) which was a negative catalyst for producers in the region.

However, over the medium to long term, increased infrastructure has allowed for differentials to close and stabilize and has even spurred major Bakken operators such as Continental Resources (CLR) to change guidance on its realized differentials to be closer to WTI.

These developments are medium-term positive catalysts for other operators in the region, such as Whiting Petroleum (WLL), Kodiak Oil & Gas (KOG), and XTO Energy (part of Exxon Mobil, XOM) and indeed over the medium-term the spread had closed in to trade around par where it was trading as wide as $10/barrel in October 2012, and as wide as $27/barrel in February 2012.

Much more at the linked article, including a very nice graph. 

Off The Net For Awhile: My Biggest Surprise Today -- So Few Stories On $104 Oil ...

... and unless I missed it, a story about the Bakken crude oil train that exploded in the center of a small Canadian town was not on the front page of the NY Times on-line Sunday edition, but a story on funding for the Texas highway department was.

As we all know, "futures" mean squat, but right now, 1800 EDT, Sunday evening, the price of oil (futures) is up 50 cents, hanging on to gains from last week.

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A Note To The Granddaughters

You know you've found the best hobby store in the world when your granddaughters love it, and your wife is disappointed that it was a "model" store, not a hobby store. 

JD Hobbies, on 6th Street, just off Pacific Avenue, in San Pedro, CA, is one of the best hobby stores I've visited in a very, very long time. This is an "old school" hobby store. Mr Louis Lee is the proprieter; he has had his store for about eleven years, first on Western Avenue, which he outgrew, and then on 6th Street, which he outgrew, and then moved next door to his present location. 

For the most part, yes, it is a model kit hobby store. But one can spend hours looking around, finding hidden treasures. Much of his inventory is purchased from private collectors who have grown old(er) and realize that they will never put together that model they bought 50 years ago. Mr Lee has a huge fan base from all over southern California, and probably farther away than that. He looks for models that customers ask about, and when he finds them, he puts them in the back for three days after notifying the customer who was interested. If the customer does not come in within three days, the item is put on the floor, and it becomes an "Easter egg hunt" to find it. There is some organization to the store, but only in a general sort of way. That is what makes it so inviting to look around. 

I'm used to looking straight ahead, and perhaps down, when looking at "things" inside a store, but at JD Hobbies, it is just as important to look up: maybe a 100 model aircraft are hanging from the ceiling.

Upstairs, he has a library of history books and books on models. It is there that one realizes this is truly his passion; it's the store I always wanted.  He has two brand new sofas upstairs (about the only things not on sale in the store) designed for folks to sit down, read a bit, and rest. It really is quite inviting, and quite incredible. 

Back downstairs, about a third of the front of store is "covered" with a huge US HO railroad layout. Really, really nice reminder of what so many of us did or wanted to do when we were younger. Resting against one of display cases was a vintage slot car racing set; I was tempted to purchase it just to show the grandchildren what I enjoyed so much growing up. In the process I learned a bit about building (or at least maintaining) electric motors.

Back to the HO train set: I have a huge collection of Märklin trains and I've always wanted to set up my own HO railroad layout but it looks more and more like I will never get around to it.

The younger granddaughter couldn't wait to buy a Snap-Tite model. She was introduced to them yesterday and when we went back to the store today, she picked out a 1977 Monte Carlo. She couldn't wait to start putting it together as soon as got back home.

By the way, Mr Lee, about 50 years old, son of Korean immigrants, will soon have his own reality show, either on the History channel or National Geograpic. Watch for "History in a Box." In addition, he did the "lake model" for the Hollywood movie "Evermore" coming out later this year (2013).

JD Hobbies
Incredibly he has Pocher models available. The Rolls Royce will take you more than two years to build, working full time, he says. Looking at the parts, I believe him. It will cost you $1,000.99 for the kit.

An example of a Pocher Model Rolls (Mr Lee had a different version):

Pocher Rolls

Wells Coming Off The Confidential List Over The Weekend, Monday; Murex With a Gusher; OXY Reports A Nice Well; QEP With Two Big Wells

Monday, July 8, 2013

• 24009, drl, Statoil, Paulson 36-1 1H, Briar Creek, no data,
• 24174, drl, Statoil, Panzer 22-23 3TFH, Alger, no data,
• 24343, 2,880, BR, Waterton 34-32TFH, Keene, t5/13; cum 4K 5/13;
• 24616, 2,389, QEP, Hemi 2-34-27TH, Grail, t5/13; cum 9K 5/13;

Sunday, July 7, 2013

• 24109, 623, Murex, Maxwell James 17-20H, Stanley, t3/13; cum 24K 5/13;
• 24257, 4,125, Murex, Albert Skari 35-26H, Sandrocks, t2/13; cum 75K 5/13;
• 24525, drl, True Oil, Hagen Federal 23-25 30-29H, Red Wing Creek, no data

Saturday, July 6, 2013

• 20395, 159, OXY USA, Henry Kovash 1-6-7H-142-95, Manning; t1/13;  cum 29K 5/13;
• 22336, drl, CLR, Columba 2-5H, Dollar Joe, no data,
• 24357, drl, Hess, EN-Hermanson 154-93-0235H-3, Robinson Lake, no data,
• 24431, drl, CLR, Coleter 5-14H3, Bear Creek, no data,
• 24562, drl, Hess, EN-Hermanson-154-93-0235H-5, Robinson Lake, no data,
• 24615, 3,167, QEP, Hemi 3-34-27BH, Grail,t5/13; cum 5K 5/13;

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24257, see above, Murex, Albert Skari 35-26H,  Sandrocks:

Date	Oil Runs	MCF Sold
5-2013	11174	10004
4-2013	13470	23655
3-2013	20652	7690
2-2013	28862	15970

20395, see below, OXY USA, Henry Kovash 1-6-7H-142-95, Manning:

Date	Oil Runs	MCF Sold
5-2013	7485	2519
4-2013	652	21
3-2013	3440	701
2-2013	6595	1604
1-2013	10131	689