December 17, 2009: NDIC Docket

For my use. Summary of cases for the December 17, 2009, NDIC docket (a PDF file). Look at case 11939 down below.


Abbreviations:

Short: request for one 640-acre spaced well.
Long: request for one 1280-acre spaced well.
Pooling: request to pool one specific well.
Flare gas: request to flare gas.
Eco-Pad: request for four wells from one pad.

Case Number, Producer: notes. Oil Field. County.

11852, BTA: 7 longs. Williams.
11853, Fidelity, Murex, Oasis, Sinclair, Slawson, WLL: define the Sanish-Bakken pool.
11854: CLR: Eco-Pad; 8 shorts in all. McKenzie.
11855: CLR: 2 longs. McKenzie.
11856: CLR: 7 longs. Divide.
11857: CLR: pooling. Divide.
11858. CLR: 1 long. Divide.
11859, CLR: pooling. Divide.
11860, CLR: 1 long. Divide.
11861, CLR: 1 long. Divide.
11862, CLR: 1 long. Divide.
11863, CLR: 1 long. Williams.
11864, CLR: 1 long. McKenzie.
11865, CLR: pooling. Divide.
11866, CLR: pooling. McKenzie.
11867, CLR: pooling. Dunn.
11432 (cont'd), CLR: pooling. Bowman.
11722 (cont'd), CLR: pooling. McKenzie.
11868, BEXP: temporary spacing for  Strand 16-9 #1-H. Williams.
11869, BEXP: pooling. Williams.
11870, BEXP: pooling. Williams.
11871, BEXP: 1 long, Painted Woods. Williams.
11872, BEXP: 1 long. Williams.
11873, BEXP: 1 long, McKenzie.
11874, BEXP: salt water disposal.
11783 (cont'd), BEXP: 1 long. McKenzie.
11784 (cont'd), BEXP: 1 long, Painted Woods. Williams.
11778 (cont'd), BEXP: revoke Lario permit.
11779 (con'td), BEXP: revoke Lario permit.
11875, Encore: 4 longs, Charlson. McKenzie, Williams.
11876, Encore: 4 shorts, Charlson. McKenzie.
11877, Encore: 3 shorts, Charlson, McKenzie.
11878, Encore: 2 320-acre spacing. McKenzie.
11879, Encore: 3 longs. Dunn.
11880, Encore: 4 shorts. Dunn.
11881, Encore: 3 longs. Dunn.
11882, Encore, 10 shorts. Dunn.
11883, Encore: 4 shorts. Dunn.
11884, Encore: 4 longs. Dunn.
11885, Encore: 4 shorts. Dunn.
11886, Encore: 1 long. McKenzie.
11887, Hunt: 3 longs. Mountrail.
11888, Hunt: flare gas.
11889, Hunt: 2 longs. Mountrail.
11890, Hunt: 4 longs. Mountrail.
11891, Anschutz: pooling. Dunn.
11892, Anschutz: pooling. Dunn.
11893, Anschutz: pooling. Dunn.
11894, Anschutz: pooling. Dunn.
11895, Anschutz: pooling. Dunn.
11896, Anschutz: pooling. Dunn.
11897, Anschutz: pooling. Dunn.
11898, Anschutz: pooling. Dunn.
11899, Fidelity: 8 shorts. Mountrail.
11900, Fidelity: pooling. Mountrail.
11901, Fidelity: pooling. Mountrail.
11902, Fidelity: pooling. Mountrail.
11903, Fidelity: flare gas.
11904, Fidelity: pooling. Mountrail.
11905, Fidelity: pooling. Mountrail.
11906, Slawson: 2 shorts. Mountrail.
11907, Slawson: 2 shorts. Mountrail.
11908, Slawson: 2 shorts. Mountrail.
11909, Slawson: pooling. Mountrail.
11910, Slawson: pooling. Mountrail.
11911: Slawson: pooling. Mountrail.
11912: Slawson: pooling. Mountrail.
11913, Slawson: pooling. Mountrail.
11914, Slawson: pooling. Mountrail.
11915, Slawson: pooling. Mountrail.
11916, Slawson: pooling. Mountrail.
11917, Slawson: pooling. Mountrail.
11918, Slawson: pooling. Mountrail.
11919, Slawson: pooling. Mountrail.
11920, Slawson: pooling. Mountrail.
11921, Slawson: pooling. Mountrail.
11922, Slawson: pooling. Mountrail.
11923, Slawson: pooling. Mountrail.
11924, Slawson: pooling. Mountrail.
11925, Slawson: pooling. Mountrail.
11926, Slawson: pooling. Mountrail.
11927, Slawson: pooling. Mountrail.
11928, Slawson: pooling. Mountrail.
11929, Slawson: pooling. Mountrail.
11930, Tracker: pooling. Dunn.
11931, Tracker: pooling. Dunn.
11796 (cont'd), Tracker: 1 short. Dunn.
11932, Peak: pooling. McKenzie.
11933, Peak: flare gas.
11934, Peak: flare gas.
11935, Peak: flare gas.
11936, Peak: 1 short. McKenzie.
11937, Peak: 1 short. McKenzie.
11938, Peak: 5 shorts. Dunn
11939, EOG: 570 shorts. Mountrail.
11940, EOG: pooling. Mountrail.
11941, EOG: pooling. Mountrail.
11942, EOG: 1 long. Burke.
11943, EOG: pooling. Mountrail.
11944, EOG: pooling. Mountrail.
11945, EOG: pooling. Mountrail.
11946, EOG: pooling. Mountrail.
11947, Zenergy: 30 longs. McKenzie.
11948, Zenergy: 10 longs. Mountrail.
11949, Zenergy: 5 longs. McKenzie.
11950, Zenergy: 4 longs. Mountrail, McKenzie.
11951, Zenergy: 4 longs. Dunn.
11952, Zenergy: 2 longs. McKenzie.
11953, Zenergy: 8 longs. McKenzie.
11954: --
11955, Zenergy: 2 longs. McKenzie.
11956, Newfield: 3 shorts. Dunn.
11957, Newfield: 1 short. Dunn.
11958, Newfield: 1 short. Dunn.
11578 (cont'd), Newfield: spacing. Divide.
11689 (cont'd), Newfield: 1 short. McKenzie.
11690 (cont'd), Newfield: pooling. McKenzie.
11691 (cont'd), Newfield: 1 short. Divide.
11809 (cont'd), Newfield: 1 short. McKenzie.
11810 (cont'd), Newfield: 1 short. McKenzie.
11786 (cont'd), Credo: 1 long. McKenzie.
11764 (cont'd), Eagle: injection.

Not counting the 570 EOG wells  in case 11939, I count about 241 additional wells. I count about 78 Zenergy wells.  Any thoughts on "pooling" requests by Slawson. I  have my own ideas but won't publish them.

Note: until this month, I had never paid attention to "dockets."  It turns out that a docket with 19 pages is not unprecedented. The July 21, 2009, docket had 19 pages, and in that same month (July 29, 2009), there was another docket with 14 pages, actually a continuation from the 21st.  I counted a request for 323 wells in the July 21st docket, 218 wells on the 29th, making a total of 541 wells for that "one" docket in July, 2009. 

In 2009, there were an average of 18 pages of requests if one excludes the month of July. In July, there were 39 pages of requests, total.  The number of pages by month shows a trend: Jan (16 pages); Feb (14); Mar (13); Apr (14); May (16); Jun (15); Jul (39); Aug (24); Sep (18); Oct (21); Nov (28); and, Dec (29).  This continues to validate my hunch that 2010 is going to be a watershed year for the North Dakota oil industry if oil stays above $70/barrel. CLR has hedged 5,000 bopd for $80 between January and July, 2010.

For investors, I think the pipeline companies are going to be able to charge a surcharge to transport all the oil that will be produced.

Do I Need to Curb My Enthusiasm? -- December, 2009, NDIC Hearing Dockets

Question: is EOG looking at 570 more wells in the Parshall oil field? See below.

Should I curb my enthusiasm? At other discussion groups and through comments to this blog, I am told on a daily basis I need to curb my enthusiasm. Well, ....drum roll... I feel vindicated. Even the NY Times now recognizes that second tier companies have been buying up outstanding stateside acreage while the majors have missed the opportunity, spending their money acquiring and exploring acreage in politically unstable countries overseas. The story was buried deep in the business pages. December 15, 2009.

Question: is EOG looking at 570 more wells in the Parshall oil field?

I have no idea if this is a big deal or not. I have not followed "dockets" for the North Dakota Industrial Commission (NDIC) in the past so I have nothing with which to compare. But the NDIC has released the docket for December 17, 2009.

The December 17th docket is 19 pages long. Repeat: 19 pages long.

Let's look at one case, just one case from that 19-page docket. This is case 11939 from EOG:

1. EOG wants to extend the Parshall or Van Hook-Bakken Pool to include the following:

Sections 12, 13, 19 - 36 in 151N-90W (20 sections); and,
Sections 9, 16, 21 - 28, 34 - 36 in 151N-91W (13 sections); for a total of 33 more sections.

2. EOG also wants permission to drill up to three horizontal wells for each 640-acre spacing unit (that is three wells in each section: one in the upper TFS, one in the lower TFS, and one in the middle Bakken) for the following:

Sections 1 - 36 in 151N-90W (36 sections); and,
Sections 1 - 36 in 152N-90W (36 sections); and, 
Sections 1 - 6, 8 - 17, and 19 - 36 in 153N-90W (34 sections); and,
Sections 1 - 36 in 154N-90W (36 sections); and,
Sections 25 - 28, 31 - 36 in 155N-90W (10 sections); and,
Sections 1, 10 - 15, 23 - 26, and 36 in 151N-91W (12 sections); and,
Sections 1, 2, 11 - 15, 22 - 26, 35, 36 in 152N-91W (14 sections); and,
Sections 5 - 8, 17 - 20, 29 - 32 in 153N-89W (12 sections).

Does this add up to  190 sections? And is EOG asking permission to drill three horizontal wells in each of these sections? If so, that's 570 wells and that's just one case (albeit, perhaps the biggest case).

I may have misread this, or may not understand it, but that seems to be what EOG is requesting.

You can access the full 19 pages of the December 17, 2009, docket at https://www.dmr.nd.gov/oilgas/dockets/2009/docket121709.pdf

I suppose I need to curb my enthusiasm.  I have included a summary of the entire docket here.

Welcome!

THIS PAGE HAS BEEN UPDATED. CLICK HERE FOR MOST RECENT WELCOME.


WLL just releases another big well -- 2,250 bopd, the Rohde 44-1hH in Mountrail County, November 27, 2009

For those who have read the "welcome" to this site, you may want to skip directly to:

Do I Need to Curb My Enthusiasm? EOG -- 570 more wells in the Parshall?

The NEW presentation by Harold Hamm, CLR/CEO.
Things on my mind.
Trends in the North Dakota oil industry.
FAQs about the North Dakota oil industry.
Oil Wells Reporting.
Active rigs now up to 67. XTO now has 4 rigs.

...it is absolutely incredible how fast "they" can move these rigs in. In less than a week, four new rigs have been moved into North Dakota. Can you imagine how long it would take if this industry was run by the US government?

WELCOME: The Blog

The purpose of this site is educational only. It is an attempt to provide an overview of "the Bakken" and to direct folks to the news stories coming out of the North Dakota oil industry. It is very, very superficial in scope. I probably understand about 1 percent of all that goes on in the industry (if that much). I have a poor memory and often make simple mistakes, but will correct them when I become aware of them. I find myself making more typographical errors as the years go by.

I grew up in Williston, in the heart of the Williston Oil Basin (WOB) and have followed the oil industry my entire life, in a very general way. I invest in publicly traded companies through the stock market, but my investments in WOB are trivial compared to my overall investment portfolio. I own no mineral rights, and have no inside information regarding the WOB. I do talk with people who live there and occasionally receive information second- and third-hand. I do not subscribe to any newsletters or the North Dakota Industrial Commission website tools, although I may do that sometime in the future (subscriptions are relatively inexpensive).

I enjoy following the activity in the WOB, but am not sure that investing in the oil companies in the WOB is the best way to go; there are many other opportunities in the stock market that might be better. At the current time, of the Williston Oil Basin-related companies, I am invested in the following: MDU, BR (COP), CLR, NOG, ENB, EPD, EEP, BNI, SLB. I trade in and out of these companies with others in the WOB. I would never recommend any companies because everyone's investment styles are different. I am often accused of being too exuberant about the WOB, and I admit it. I find the oil activity in North Dakota very interesting. It's easy to be negative about things in life, so I tend to over-compensate in some areas by being too optimistic when it comes to the oil industry.

I am definitely a novice at all this, so if something I say doesn't seem correct, it may not be. There are many ways on the web to cross-check "facts."


The largest continuous oil reservoir in the continental United States.

NEWS

North Dakota state official states that in addition to the Bakken, TFS, and Lodgepole, there is now another formation oil producers are targeting: the Birdbear. Actually that is not news. Oilmen have known about this formation for decades and have targeted it in the past. What is new,  is renewed interest in this formation for horizontal drilling and fracture stimulation. November 21, 2009. 

North Dakota state official predicts 90 - 100 oil drilling rigs in North Dakota in 2010, up from 33 in late 2008, and 55 in mid-2009. November 20, 2009.

Continenetal Resources will exit 2009 with seven rigs (currently six rigs) and have 15 rigs in the Bakken in mid-2010. CLR cap ex was projected to be $275 million for 2009; it ended up being $415 million; cap ex is projected to be $650 million in 2010. November 20, 2009.

Hess will double the number of rigs in the Bakken from three in 2009 to six or seven in 2010, and will spend approximately $1 billion/year in capital expenditures for the next four to five years in the Bakken. November 14, 2009.

The excitement continues. Even minor players are announcing major plans for 2010. Another example is GeoResources, Inc. Posted November 12, 2009.

North Dakota reports record oil lease auction. North Dakota holds an auction to lease a portion of state lands every three months. The most recent auction resulted in a record $72 million for the state; the previous high was $30 million in 1980 (but adjusted for inflation, about $80 million). Average lease was $1000/acre with highest rate paid in prolific Mountrail county, about $3000/acre. By the way, almost all the money goes for public schools. Comment: producers don't pay top dollar for leases just to lose them; this record auction suggests a very, very active 2010 drilling program in North Dakota. November 6, 2009.

Buffett Buys Burlington. November, 3, 2009.

BEXP announces another great well. Meanwhile, BEXP announces another great well (with first day production of 1,776 barrels of oil equivalent), this time northwest of Williston, pretty much at the extreme of their acreage. November, 2009.  

Denbury buys Encore. Denbury becomes one of the largest independent oil exploration and producing companies overnight by buying Encore, whose main base is in North Dakota. November, 2009. 

The Grenora "barnburner." And, I'm still waiting to hear how the "barnburner" up by Grenora is doing. October, 2009.



Now, about the blog.

The "old" Million Dollar Way was very eclectic: literature, music, "the Bakken," energy in general, and personal musings. Ninety-nine percent of visitors to the site visited only Bakken-related sites, and even then, only one or two specific pages. So, this site will, at least for the time being, concentrate on "the Bakken," more correctly the North Dakota oil industry. I have an emotional interest in "the Bakken." I wear my heart on my sleeve when it comes to "the Bakken." This is where I grew up. I have no background or connection with the oil industry. I own no mineral rights.

I am an investor, but my investments in "the Bakken" are trivial compared to my overall investments. I am more emotionally attached to "the Bakken" than interested in investments. I have no inside information. I do not subscribe to any premium services regarding "the Bakken." I no longer live in North Dakota, but I visit at least once a year and see first-hand what is going on. My information comes primarily from the NDIC website and the internet in general.

Occasionally I will get input third-hand or fourth-hand from someone I know still living in the Williston area. (Williston, North Dakota, USA, is at the center of the Williston Oil Basin, home of "the Bakken.") Bottom line: I'm pretty much a novice at all this. I know I will make many mistakes on this website but will correct them when brought to my attention.

I would not use my site to make investment decisions, although it may be one of several data points to lead you in certain directions. Much of what I write can look factual, when in fact it is opinion or my general understanding of the issue. Over time, I assume this site will evolve, based on reader feedback. As expected, it was hard not to have op-ed pieces, and some have already been added.

The site's name. The friends of the "old" Million Dollar Way know that the name of the site has nothing to do with money -- at least not directly in terms of me or investing. When I was growing up, the road leading out of Williston was known as the "Million Dollar Way" because of the automobile dealerships and businesses related to the oil industry.

The "Million Dollar Way" was my road out of town to an exciting life. This "Million Dollar Way" site is a new road leading me to new destinations.

Profile of Williston, North Dakota, USA.
North Dakota: Most Economically Stable State, November 2, 2009
The Oil Drum's Assessment of the Bakken, November 2, 2009

*****

This blog seems to be optimized for Firefox/MacOS. I find errors in formatting when I check the blog on Internet Explorer browsers; perhaps they are older versions of Internet Explorer.

Last updated: November 23, 2009.

Archives of Previous Commentaries

These are commentaries that have been removed. The date is the date the commentary was removed, not necessarily the date it was first posted.

Removed January 23, 2010

For a very interesting comment about maximizing a pad -- 6 wells, 12 laterals on one pad, see today's comment on the Eco-Pad page. December 16, 2009. 

I opined not too long ago that 2010 will be a watershed year for the North Dakota oil industry. Today's daily activity report suggests that the new year may have started a bit early.  Ten (10) well files were released from confidential status, including seven (7) by EOG. The average IP for the seven EOG wells was: 1,120 boepd.  They were all incredible wells based on their IPs.  In addition, five (5) new permits were granted, including another one for EOG, one for KOG, two for CLR, and one for Marathon. December 14, 2009.

Removed January 14, 2010 

BEXP announces another gusher! 3,807 bopd!!

Worse prediction of 2009? This links to an analyst's prediction on July 4, 2009.

MY HOME TOWN GETS A GUSHER!
Even California newspapers writing about the Bakken!
More wells in the Williston area! 
North Dakota production record (80 MM bbls in 2009) beats last year's record (62.8 MM bbls in 2008)!

Removed December 18, 2009

I continue to predict that 2010 will be another watershed year for the oil industry in North Dakota, if the price of oil stays above $70.

We should see close to 100 active drilling rigs by mid-2010. That is up from a low of 33 last autumn (2008); the number of active drilling rigs is currently 79 (December 2009).

Fracturing companies are going to be very, very busy. This past year we have seen the norm of one-stage fracturing jump to 18+ stages, and some are opining that we could see upwards of 60-stage fracturing. That seems crazy, but once you have the team and the sand/water on site, you might as well maximize the stages.  Most of the sand/water is recovered, so I assume the cost is mostly is propellant and additives, and man-hours while the team stays on the pad.

The Bismarck Tribune reported that oil companies are now targeting a "new" formation, the Birdbear formation. In fact, this is not "news"; it's always been there and there has been some production from this formation in the past. The difference this time is that companies are applying the new technology to this formation: horizontal drilling and fracture stimulation. The formation is very thin, but it is my understanding that horizontal drilling is so sensitive now that drillers can target these thin formations with success. Note: in Saskatchewan, the Birdbear formation is known as the Nisku.

Removed December 17, 2009

[For a very interesting comment about maximizing a pad -- 6 wells, 12 lateral on one pad, see today's comment on the Eco-Pad page. December 16, 2009.] 

I opined not too long ago that 2010 will be a watershed year for the North Dakota oil industry. Today's daily activity report suggests that the new year may have started a bit early.  Ten (10) well files were released from confidential status, including seven (7) by EOG. The average IP for the seven EOG wells was: 1120 boepd.  They were all incredible wells based on their IPs.  In addition, five (5) new permits were granted, including another one for EOG, one for KOG, two for CLR, and one for Marathon. December 14, 2009.

• This is why I'm excited about the Bakken.  (Click on the link.) 

•  500,000 barrels of oil in one month (October, 2009) from 43 EOG wells in one county.
• $100,000,000 wellhead production in three months from EOG/Hunt wells in Mountrail County.
  

• KOG just announced a nice well in the Fort Berthold Indian Reservation on December 6, and another nice one December 11, 2009.

• For those who have forgotten "recent history" regarding natural gas, this is a great article.
  

• XOM will buy XTO, a significant player in the Bakken. XOM is now in the Bakken. With one deal, there could be another huge cash infusion into the North Dakota oil industry with XTO having new capital to expedite drilling program. Even CNBC mentioned "the Bakken in North Dakota" right after this deal was announced.

December 8, 2009: I am accused of being inappropriately exuberant when it comes to the North Dakota oil industry, but who can blame me when you read the Whiting press release, dated December 8, 2009?  This is an incredible press release. Follow a discussion of this press release here.

1. WLL announced four wells with the following IPs: 1,970; 2,638; 2,223; and 2,140 boepd.

2. The purpose of the press release: one of the wells was a discovery (wildcat) well (1,970 boepd) targeting the Bakken. This was a re-entry well; a well that had been producing from the Birdbear formation as recently as July, 2009. WLL will drill ten wells in the area and will open up an entire new area for WLL and the Bakken.

3. WLL also announced completion of a new pipeline connecting ALL their wells in the Sanish-Parshall, taking one-third of truck traffic there off the road. This WLL pipeline connects with an Enbridge pipeline. This is a biggie, especially if you use the roads in Mountrail County.

4. The discovery well is  Federal 32-4HBKCE. My guess is that the letters stand for H (horizontal) BK (Bakken) CE (casing exit). 

December 14, 2009: Four dots in the Bakken to connect:

1. October, 2009: Several producers / investors in the Bakken (including BEXP, KOG, NOG) raised large amounts of cash through new share offerings. [In December, BEXP's partner, US Energy (USEG), also raised cash through new share offering.]

2. November, 2009: Record-setting North Dakota state land lease auction. Slawson particularly notable in its bids.

3. December, 2009: record-setting (?) docket on tap for December 17, 2009, North Dakota Industrial Commission hearing.

4. December, 2009: XOM is in the Bakken with its purchase of XTO. 

 ***** 

NEWS

*****

For those who have never visited North Dakota in person, this picture shows you why I love my state. Absolutely gorgeous. Only a white-out (blizzard) would make the picture more exciting!

 *****

BEXP looking good. See Bakken: BEXP. December 16, 2009.

WLL has another big well -- 2,250 bopd, the Rohde 44-1H in Mountrail County, November 27, 2009.

WLL now up to 8 rigs. Total number of active rigs in North Dakota now up to 77. December 16, 2009. 

*****

For those who have read the "welcome" to this site, you may want to skip directly to:

Do I Need to Curb My Enthusiasm? EOG -- 570 more wells in the Parshall?
Whiting's November corporate presentation.
The NEW presentation by Harold Hamm, CLR/CEO.
Things on my mind.
Trends in the North Dakota oil industry.
FAQs about the North Dakota oil industry.
Oil Wells Reporting.
Active rigs now up to 75. From a low of "about 33" summer of 2008.

...it is absolutely incredible how fast "they" can move these rigs in. In less than a week, four new rigs have been moved into North Dakota. Can you imagine how long it would take if this industry was run by the US government?

Removed December 8, 2009

Breaking News

It looks like a big day in the Bakken; it's going to take me awhile to update all the pages. Be patient.  Smile. December 8, 2009.

NOTE: Someone has posted a very nice comment about the Lodgepole, pointing out some inaccuracies in my posts and/or putting things into perspective. December 7, 2009.  

NOTE: Three oil companies are pursuing the Bakken as far west as the Rocky Mountains in Montana. December 7, 2009.  

NOTE: This might be one of the best Bakken news sites I've found in awhile. It's always been there; I've just never run across it. 



Posted November 25, 2009 (not yet removed):

I have no idea if this is a big deal or not. I have not followed "dockets" for the North Dakota Industrial Commission (NDIC) in the past so I have nothing with which to compare. But the NDIC has released the docket for December 17, 2009.

The December 17th docket is 19 pages long. Repeat: 19 pages long.

Let's look at one case, just one case from that 19-page docket. This is case 11939 from EOG:

1. EOG wants to extend the Parshall or Van Hook-Bakken Pool to include the following:
Sections 12, 13, 19 - 36 in 151N-90W (20 sections); and,
Sections 9, 16, 21 - 28, 34 - 36 in 151N-91W (13 sections); for a total of 33 more section.

2. EOG also wants permission to drill up to three horizontal wells for each 640-acre spacing unit (is that three wells in each section?) for the following:
Sections 1 - 36 in 151N-90W (36 sections); and,
Sections 1 - 36 in 152N-90W (36 sections); and, 
Sections 1 - 6, 8 - 17, and 19 - 36 in 153N-90W (34 sections); and,
Sections 1 - 36 in 154N-90W (36 sections); and,
Sections 25 - 28, 31 - 36 in 155N-90W (10 sections); and,
Sections 1, 10 - 15, 23 - 26, and 36 in 151N-91W (12 sections); and,
Sections 1, 2, 11 - 15, 22 - 26, 35, 36 in 152N-91W (14 sections); and,
Sections 5 - 8, 17 - 20, 29 - 32 in 153N-89W (12 sections).

Does this add up to  190 sections? And is EOG asking permission to drill three horizontal wells in each of these sections? If so, that's 570 wells and that's just one case (albeit, perhaps the biggest case).

I may have misread this, or may not understand it, but that seems to be what EOG is requesting.

You can access the full 19 pages of the December 17, 2009, docket at https://www.dmr.nd.gov/oilgas/dockets/2009/docket121709.pdf.

I suppose I need to curb my enthusiasm.


November 27, 2009 (removed):

I "tore down" my "old" Million Dollar Way site and am in the process of bringing up a new site, but events are moving along very, very quickly. First it was Denbury buying Encore, then nice wells being reported by BEXP with 28-stage fracturing, and now BNI being bought by Warren Buffett (announced November 3, 2009). I started buying BNI back in the 1980's. In fact, it was one of my first holdings ever; I have never sold it, only accumulated BNI over the years.

I first saw BNI hauling coal when I was having breakfast with my parents in a coffee shop in Grand Forks, ND, in 1982. I remember the year well. I was stationed at the air base in Grand Forks, and I would be moving to Bitburg Air Base, Germany, the following year. It was obvious to me that BNI was going to be hauling coal for a long, long time.I missed on EAC and EOG.

But there are a dozen ways to be involved in the Bakken, even for those who do not own mineral rights. I am convinced that Williston could be another "Tulsa." It won't be another "Tulsa" in terms of people -- the weather is too harsh and the region too remote, but in terms of storage, infrastructure, and production, I don't think I'm too far off. Some of the wells are generating $15 million in cash flow each year.

November 21, 2009 (removed):

Recent wells reporting initial production (IP) have been mediocre by some folks' standards, ranging between 500 and 900 bbls/day. For newbies, a bit of background. In the old days, a 100-bopd well was considered a very good well. Then with horizontal drilling and fracture stimulation, we got used to seeing 1,000 bopd-wells and the occasional 2,000 bopd wells, and the not infrequent 3,000 - 4,000 bopd wells. So, "we" no longer get excited with wells reporting less than 1,000 bopd on initial production. But IPs are beginning to mean less and less to those who have been following the Bakken for some time.

Wells reporting initial production of 500 - 900 bopd are very good wells by any standard.

If you don't believe me, look at the RS-Brady well: its IP was 194 bopd. Not even a year old yet, this well has produced 36,111 barrels of oil, and at $70/barrel, this is slightly more than $2.5 million. In less than a year. Bakken wells are said to cost $5 - $6 million each, but one company says their last Bakken development well was drilled in 16 days for a cost of $2.9 million.

And it is not just horizontal wells that are producing some great wells: a Lodgepole well spudded in 1996 that has produced in excess of 4 million barrels of oil so far is a vertical well, and it continues to produce about 7,500 barrels of oil per month (Dinsdale 2-4, Encore). At $70/bbl, that's $500,000 a month, and that well paid for itself years ago.

Welcome

If you have bookmarked this page, please note that it has been updated. Go to the sidebar on the right and click on "Welcome."  The "Welcome" on the right will always have the most recent update. 

For those who have read the "welcome" to this site, you may want to skip directly to:

The NEW presentation by Harold Hamm, CLR/CEO.
Things on my mind.
Trends in the North Dakota oil industry.
FAQs about the North Dakota oil industry.
Oil Wells Reporting.

...and be sure to comment below if you want to see something on this site that's not here.

WELCOME: The Blog

The purpose of this site is educational only. It is an attempt to provide an overview of "the Bakken" and to direct folks to the news stories coming out of the North Dakota oil industry. It is very, very superficial in scope. I probably understand about 1 percent of all that goes on in the industry (if that much). I have a poor memory and often make simple mistakes, but will correct them when I become aware of them. I find myself making more typographical errors as the years go by.

I grew up in Williston, in the heart of the Williston Oil Basin (WOB) and have followed the oil industry my entire life, in a very general way. I invest in publicly traded companies through the stock market, but my investments in WOB are trivial compared to my overall investment portfolio. I own no mineral rights, and have no inside information regarding the WOB. I do talk with people who live there and occasionally receive information second- and third-hand. I do not subscribe to any newsletters or the North Dakota Industrial Commission website tools, although I may do that sometime in the future (subscriptions are relatively inexpensive).

I enjoy following the activity in the WOB, but am not sure that investing in the oil companies in the WOB is the best way to go; there are many other opportunities in the stock market that might be better. At the current time, of the Williston Oil Basin-related companies, I am invested in the following: MDU, BR (COP), CLR, NOG, ENB, EPD, EEP, BNI, SLB. I trade in and out of these companies with others in the WOB. I would never recommend any companies because everyone's investment styles are different. I am often accused of being too exuberant about the WOB, and I admit it. I find the oil activity in North Dakota very interesting. It's easy to be negative about things in life, so I tend to over-compensate in some areas by being too optimistic when it comes to the oil industry.

I am definitely a novice at all this, so if something I say doesn't seem correct, it may not be. There are many ways on the web to cross-check "facts."


The largest continuous oil reservoir in the continental United States.

NEWS

North Dakota state official states that in addition to the Bakken, TFS, and Lodgepole, there is now another formation oil producers are targeting: the Birdbear. Actually that is not news. Oilmen have known about this formation for decades and have targeted it in the past. What is new,  is renewed interest in this formation for horizontal drilling and fracture stimulation. November 21, 2009. 

North Dakota state official predicts 90 - 100 oil drilling rigs in North Dakota in 2010, up from 33 in late 2008, and 55 in mid-2009. November 20, 2009.

Continenetal Resources will exit 2009 with seven rigs (currently six rigs) and have 15 rigs in the Bakken in mid-2010. CLR cap ex was projected to be $275 million for 2009; it ended up being $415 million; cap ex is projected to be $650 million in 2010. November 20, 2009.

Hess will double the number of rigs in the Bakken from three in 2009 to six or seven in 2010, and will spend approximately $1 billion/year in capital expenditures for the next four to five years in the Bakken. November 14, 2009.

The excitement continues. Even minor players are announcing major plans for 2010. Another example is GeoResources, Inc. Posted November 12, 2009.

North Dakota reports record oil lease auction. North Dakota holds an auction to lease a portion of state lands every three months. The most recent auction resulted in a record $72 million for the state; the previous high was $30 million in 1980 (but adjusted for inflation, about $80 million). Average lease was $1000/acre with highest rate paid in prolific Mountrail county, about $3000/acre. By the way, almost all the money goes for public schools. Comment: producers don't pay top dollar for leases just to lose them; this record auction suggests a very, very active 2010 drilling program in North Dakota. November 6, 2009.

Buffett Buys Burlington. November, 3, 2009.

BEXP announces another great well. Meanwhile, BEXP announces another great well (with first day production of 1,776 barrels of oil equivalent), this time northwest of Williston, pretty much at the extreme of their acreage. November, 2009.  

Denbury buys Encore. Denbury becomes one of the largest independent oil exploration and producing companies overnight by buying Encore, whose main base is in North Dakota. November, 2009. 

The Grenora "barnburner." And, I'm still waiting to hear how the "barnburner" up by Grenora is doing. October, 2009.



Now, about the blog.

The "old" Million Dollar Way was very eclectic: literature, music, "the Bakken," energy in general, and personal musings. Ninety-nine percent of visitors to the site visited only Bakken-related sites, and even then, only one or two specific pages. So, this site will, at least for the time being, concentrate on "the Bakken," more correctly the North Dakota oil industry. I have an emotional interest in "the Bakken." I wear my heart on my sleeve when it comes to "the Bakken." This is where I grew up. I have no background or connection with the oil industry. I own no mineral rights.

I am an investor, but my investments in "the Bakken" are trivial compared to my overall investments. I am more emotionally attached to "the Bakken" than interested in investments. I have no inside information. I do not subscribe to any premium services regarding "the Bakken." I no longer live in North Dakota, but I visit at least once a year and see first-hand what is going on. My information comes primarily from the NDIC website and the internet in general.

Occasionally I will get input third-hand or fourth-hand from someone I know still living in the Williston area. (Williston, North Dakota, USA, is at the center of the Williston Oil Basin, home of "the Bakken.") Bottom line: I'm pretty much a novice at all this. I know I will make many mistakes on this website but will correct them when brought to my attention.

I would not use my site to make investment decisions, although it may be one of several data points to lead you in certain directions. Much of what I write can look factual, when in fact it is opinion or my general understanding of the issue. Over time, I assume this site will evolve, based on reader feedback. As expected, it was hard not to have op-ed pieces, and some have already been added.

The site's name. The friends of the "old" Million Dollar Way know that the name of the site has nothing to do with money -- at least not directly in terms of me or investing. When I was growing up, the road leading out of Williston was known as the "Million Dollar Way" because of the automobile dealerships and businesses related to the oil industry.

The "Million Dollar Way" was my road out of town to an exciting life. This "Million Dollar Way" site is a new road leading me to new destinations.

Profile of Williston, North Dakota, USA.
North Dakota: Most Economically Stable State, November 2, 2009
The Oil Drum's Assessment of the Bakken, November 2, 2009

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This blog seems to be optimized for Firefox/MacOS. I find errors in formatting when I check the blog on Internet Explorer browsers; perhaps they are older versions of Internet Explorer.

Last updated: November 20, 2009.