Two Very Interesting Bakken Wells On Edge Of The Basin -- June 10, 2014

Updates

February 1, 2015: note the unusual production profile for these two wells at this post.  

Original Post

A reader brought this to my attention the other day. Look at these two wells:

• 25995, 642, Cornerstone, Anderson B-2413-6191, Clayton, t5/14; cum 97K 7/17;
• 26033, 626, Cornerstone, Hinds C-0631-6190, Northeast Foothills, t4/14; cum 95K 7/17;

These are middle Bakken wells.

The Anderson well:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2014	27	14218	13866	46520	3641	3506	0
BAKKEN	3-2014	26	8929	8662	44574	6812	6682	0
BAKKEN	2-2014	5	694	243	8466	103	78	0

The Hinds well:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2014	28	16174	16147	54815	14583	14443	0
BAKKEN	3-2014	24	7218	6919	36202	6655	6535	0
BAKKEN	2-2014	10	2410	1993	16587	2170	2120	0

 Look at the jump in production, as just one story line. One has to assume the frack occurred late in the month of March.

There are a number of things to learn from the frack report, but the sundry forms are not yet part of the NDIC file.

But none of that is the BIG story regarding these two wells.

Here's the BIG story:

One well is located in Northeast Foothills oil field and the other in Clayton oil field, right next to each other. In the overview map, one can see (perhaps just barely, the little red rectangle) that the fields are in the far north edge of the North Dakota Bakken. From everything I've read, and what the reader noted, middle Bakken wells as good as these wells might be were not expected to found this far north. It was expected that Three Forks wells would make the news here, not middle Bakken wells.

It's also interesting that it was Cornerstone who drilled these wells, not "big names" like EOG, Hess, KOG, or WLL.

A lot more needs to be sorted out, which will occur over time.

For newbies: all those singular black dots without horizontal laterals are "old" Madison wells, many (most?) of which are still active.

WTI - Brent Spread Narrowing

After widening for quite some time (the past few weeks), the spread between Brent and WTI oil is starting to narrow, again, as predicted some time ago by RBN Energy. Tonight, the spread is about $5.00:

• WTI: $104.48
• Brent: $109.72
• Delta: $5.24

I track Brent-WTI spread here. 

Wow, Wow, Wow -- Who Needs The Keystone XL North

Reuters via Rigzone is reporting:

A Vancouver-based company said on Tuesday it was planning to build a C$10 billion oil refinery on the north-west coast of British Columbia that could eventually process up to 1 million barrels per day of oil sands bitumen. Pacific Energy Future Corp, which was set up in January, is looking at three potential building sites in Prince Rupert, BC.

The project is the second new refinery proposed for Canada's west coast to process the large quantities of crude oil coming out of Alberta's oil sands and export the refined products. Pacific Energy Future Corp Executive Chairman Samer Salameh said the refinery could be producing products such as gasoline and diesel in about seven years.

The announcement comes a week before a federal government decision on whether to approve Enbridge Inc plans to build a 525,000 bpd pipeline from the oil sands to Kitimat, BC, where crude would be loaded on to supertankers and shipped to international markets. That project, known as Northern Gateway, has run into fierce opposition from environmental and First Nations indigenous groups who say the risk of a crude oil spill is too great.

Musings posted earlier today -- yes, things are moving very, very fast, much faster than many folks realize. 

Now that we are into the sixth year of ObamaDithering on the Keystone XL, any guesses how the Canadian government will decide on this, the Northern Gateway? Regular readers will remember that it was just yesterday that the Canadian Finance Minister (think US' Tim Geithner) said the Canadian economy will be in deep doo-doo (not his exact words) if the country fails to move its western Canadian sands oil.

This will be interesting to watch play out. The link at musings is getting more and more relevant with each passing moment.

OPEC In Disarray -- May Not Raise Productiion -- The AP

The AP is reporting:

All is not well within OPEC as the oil cartel focuses on how much crude to pump for the rest of the year.

Kurds in Iraq are defying the central government and selling their oil directly abroad. Nigeria is hurting due to shale oil production in the United States, its most important customer.

While worrisome for the two countries, such problems may help global supplies. But there is trouble in production, as well.

Sales from Iran, normally second only to Saudi Arabia, are severely crimped by sanctions. And internal conflicts and domestic chaos have slashed Libya's exports. The upshot is that OPEC oil ministers are likely to keep their production targets unchanged at their meeting Wednesday. 

The article fails to mention that things may be changing in Kurdistan now that Al Qaeda has taken Mosul. 

Earlier this evening, oil futures were flat. They are now slightly up. Ah, yes, the musings at the second linked post.

Warren Buffett Continues Investing In His Railroad In The Bakken

The Wall Street Jouirnal is reporting:

BNSF Railway Co. will continue making massive investments to build out rail transport for America's oil boom, Matthew K. Rose, the company's executive chairman said in an interview with The Wall Street Journal.

Mr. Rose said the railroad will open a new 10-mile stretch of track that will double-track—or parallel—existing track in its Bakken Shale region next month, and will build another 10 miles of track after that. The segments of track are $25 million to $40 million projects, part of the $1 billion in capital spending BNSF plans this year to expand service along its Northern Corridor that cuts through North Dakota and Montana and borders the Bakken Shale oil region.

That region is where cold weather and bigger-than-expected grain and coal shipments combined with its new crude oil business to cause massive delays and rail traffic tie-ups this past winter.

These are nice stories for a number of reasons, not least of which it puts into perspective Mr Buffett's investments.

Earlier today it was reported that Mr Buffett was going to invest $15 billion in renewable energy for the tax credits. Fifteen billion dollars sounds like a lot. But here, in one little piece of the Bakken, in a little part of a sparsely-settled state, Mr Buffett is investing in at least $1 billion. And unlike investing $15 billion for tax credits which benefits a few a few BRK investors, investing in the railroad will actually improve the quality of life for hundreds, if not thousands, nay hundreds of thousands of Americans.