It seems I either read (past tense) or heard Warren Buffett say something to that effect with regard to investing: buy what you know.
That's why my first "individual," retail investment I made was in Burlington Northern railroad back in about 1984. I forget the exact date. I held it and accumulated shares in BNI all those years, until Warren Buffett bought it. Buy and hold is not the best strategy, "they" say, and I "left a lot of money on the table" (a cliche I detest but cliches serve their purpose now and then) over the years, not trading in and out of BNI. But I am not an agile trader, and I prefer to sleep comfortably at night knowing I owned shares in a pretty good company. But that's all over: Mr Buffett bought BNI and I had to move on.
I came to the Bakken a bit late, but not overly late, and I certainly don't have any regrets. But it has been very enjoyable following Mr Buffett's advice these past couple of years. Of course, I might not be writing this if the price of oil wasn't on an upswing, but that's another story for another day, as they say (another cliche).
It's been enjoyable following Mr Buffett's advice because I have learned a lot from investing by posting this blog. That was not the original intent; the original intent was simply educational. I ran across a lot of blogs suggesting the Bakken was a lot of hype when it was first being reported in the middle of the past decade. Maybe it was, maybe it wasn't, but the only way I could find out was to track it a bit more closely.
I could have done it on a word document / spreadsheet for my personal use, but I quickly learned that HTML was a much better way to go. Blogs can be restricted to authors only, or designated readers, but I thought "why not open it up for anyone?" That was the right call. I am impressed with the number of folks that have sent in comments, all of which (with one or two exceptions) I have posted.
Had I not done it this way, I would have missed some opportunities in the Bakken. The biggest opportunity I most likely would have missed would have been the pipelines. Three jump out immediately: Enbridge, ONEOK, and Kinder Morgan.
I know nothing about Kinder Morgan but I see it mentioned on CNBC quite often, and have considered buying some shares. I bought shares in Enbridge early on and continue to accumulate. I don't know if I "know" the company as well as I should (Mr Buffett's advice) but I certainly drove past Enbridge industrial locations often enough to feel comfortable with the company. The one I never would have known about had it not been for the blog is ONEOK. This company has announced several big investments to be made in the Bakken over the next couple of years. I don't own any shares in ONEOK yet, but it certainly appears to be one of those companies that might be of interest to those who "know" the Bakken.
Anyway, I am rambling; some time to fill while waiting for my next class to start. When I get a chance, I might put some links to the above.
Wednesday, February 2, 2011
Tuesday, February 1, 2011
Nine (9) New Permits In North Dakota, USA
Producers: Whiting (3), Murex (2), Anschutz, OXY, Hess, and Oasis.
Fields: Glass Bluff, Willow Creek, Chateau, Burke, Manning, Sanish, and one wildcat.
No multi-well pads.
As usual, Whiting has two new Sanish permits (their cash cow) and a permit elsewhere, in this case Chateau field.
The wildcat is a Murex permit, up in Divide County, about 5 miles southwest of Fortuna. It is a bit distant from the West Ambrose and Ambrose fields which have a history of being fairly active. In the February, 2011, docket, Baytex was looking to put in several new wells in these fields:
Fields: Glass Bluff, Willow Creek, Chateau, Burke, Manning, Sanish, and one wildcat.
No multi-well pads.
As usual, Whiting has two new Sanish permits (their cash cow) and a permit elsewhere, in this case Chateau field.
The wildcat is a Murex permit, up in Divide County, about 5 miles southwest of Fortuna. It is a bit distant from the West Ambrose and Ambrose fields which have a history of being fairly active. In the February, 2011, docket, Baytex was looking to put in several new wells in these fields:
- 14064: Baytex, to establish a 1280-acre unit in Ambrose-Bakken; 1 well
- 14065: Baytex, to create 3 1280-acre units in Ambrose-Bakken; 3 wells on each unit = 9 wells
- 14066: Baytex, create 12 1280-acre units in West Ambrose-Bakken; 1 well on each = 12 wells
KOG: 70,000 Net Acres in the Bakken, North Dakota, USA
The last time I updated the data for KOG's net acreage I saw 61,000 net acres; in KOG's most recent (February, 2011) presentation, KOG shows 70,000 net acres. The increase is in their prospects west of the Nesson anticline. KOG now has approximately 35,000 net acres east of the Nesson and 35,000 net acres west of the Nesson.
(There may or may not have been an actual increase in KOG acreage this past quarter; I may have just missed something, or did not include their acreage in Elm Coulee, Montana, which I am now including.)
KOG's prospects in Dunn County are east of the Nesson.
The company's prospects in McKenzie, Williams, Divide (ND) and Sheridan (MT) counties are west of the Nesson.
For breakdown of acreage by producer, click here.
Other data points from KOG's current presentation:
(There may or may not have been an actual increase in KOG acreage this past quarter; I may have just missed something, or did not include their acreage in Elm Coulee, Montana, which I am now including.)
KOG's prospects in Dunn County are east of the Nesson.
The company's prospects in McKenzie, Williams, Divide (ND) and Sheridan (MT) counties are west of the Nesson.
For breakdown of acreage by producer, click here.
Other data points from KOG's current presentation:
- About net 320 drilling locations
- Will more than double production yoy
- 4Q10 exit: 2,100 - 2,700 boepd
- Average 2011: 5,500 - 6,500 boepd
- Note: the 6,000 boepd is an average; starting at 3,000 at beginning of year
- Will more than double their CAPEX yoy; from $75 to $200 million
- Long lateral EURs: 750 - 850,000+ boe
- Completion costs very high: as much as $9 million; at least $8 million
- All wells in the future will be long laterals
- As many as 3 Bakken and 2 TF long laterals in each 1280-acre unit spacing unit
- Three long laterals in each 1280-acre unit; two Bakken and one TF
Legacy: To Extend Its Spearfish Play into North Dakota
The future of the Spearfish formation in Bottineau Country remains a real mystery.
Early on, NDIC/Director, Lynn Helms, or others, said "we" could see 2,000 to 7,000 wells in a relatively small area along the North Dakota-Canadian border a bit east of the Bakken activity. There were articles that EOG would bring its Saskatchewan experience and success across the border into North Dakota.
But then, after a few wells were drilled, completed, and reported, EOG's activitiy ended. This was about the same time that EOG was shellacked by shareholders after reporting 3Q10 results. Shortly after that I posted a short essay questioning whether EOG had thrown in the towel on the Spearfish in North Dakota.
It didn't take long for readers to point out that I might have been premature in that assessment.
Today, there was a press release in an obscure investors' newsletter -- at least obscure to me -- in which the Spearfish was mentioned again.
For the January, 2011, presentation, click on:
http://www.legacyoilandgas.com/documents/Legacy_CorporatePresentation_Jan13_2011.pdf (a PDF file).
For the website, click here.
For the record, Legacy was issued seven (7) permits by the NDIC in 2010, but none in 2009 or 2008, and none so far in 2011. The seven permits issued in 2010:
According to Legacy Oil and Gas presentation of January, 2011, EOG has drilled ten (10) Spearfish wells in this area.
Early on, NDIC/Director, Lynn Helms, or others, said "we" could see 2,000 to 7,000 wells in a relatively small area along the North Dakota-Canadian border a bit east of the Bakken activity. There were articles that EOG would bring its Saskatchewan experience and success across the border into North Dakota.
But then, after a few wells were drilled, completed, and reported, EOG's activitiy ended. This was about the same time that EOG was shellacked by shareholders after reporting 3Q10 results. Shortly after that I posted a short essay questioning whether EOG had thrown in the towel on the Spearfish in North Dakota.
It didn't take long for readers to point out that I might have been premature in that assessment.
Today, there was a press release in an obscure investors' newsletter -- at least obscure to me -- in which the Spearfish was mentioned again.
Legacy Oil + Gas said Tuesday it has acquired producing oil assets in southwest Manitoba from Molopa Energy Canada for approximately $185.4 million.In that same press release Legacy said it planned on extending the Spearfish play into North Dakota with its current drilling activity in Bottineau County.
The assets, consisting of 800 bopd light oil production, are located in the Spearfish resource play, and provide the company with development drilling opportunities over 40,924 gross acres, expanding its existing footprint in the area.
For the January, 2011, presentation, click on:
http://www.legacyoilandgas.com/documents/Legacy_CorporatePresentation_Jan13_2011.pdf (a PDF file).
For the website, click here.
For the record, Legacy was issued seven (7) permits by the NDIC in 2010, but none in 2009 or 2008, and none so far in 2011. The seven permits issued in 2010:
- 19462, Legacy Et Al Emergy Norm 4-19H, release from confidential list: 5/20/11
- 19567, Legacy Et Al Bliss 13-10H, release from confidential list: 6/15/11
- 19588, Legacy Et Al Berge 12-12H 1-H, rig on site (March, 2011), release, 8/23/11
- 19612, Legacy Et Al Berge 9-1H 1-H, release date from confidential list 8/6/11
- 19613, Legacy Et Al Fett 12-18 1-H, release date from confidential list 7/21/11
- 19682, Legacy Et Al Fett 12-19 1-H, no release date yet
- 20129, Legacy Et Al Bliss 5-10 1-H, no release date
According to Legacy Oil and Gas presentation of January, 2011, EOG has drilled ten (10) Spearfish wells in this area.
Not Much Exciting News For Wells Reporting Today -- Bakken, North Dakota, USA
New wells reporting today have been posted.
Not much remarkable in those reporting today, except another 2,000+ bbl IP for BEXP:
I used to enjoy going out there to bird watch.
[Update: after posting the above, I received an e-mail reminding me it was Cut Bluff Overlook Park, which you can google and find out more about it. At this link, you can see a photo of the area; the story may be out of date, but the photo is a nice reminder of the oil activity in the area.]
Maybe of some interest was a Hess well reporting:
Are they planning on fracking them all at the same time, and these haven't been fracked? I vaguely remember that one of the frustrations with CLR's Eco-Pads is that one had to wait until all four were drilled before the wells were completed (fracked) -- at least that's what I thought I read.
By the way, the "RS" designation refers to Hess' Red Sky prospect, not Ross field. And, for more trivia, these six wells represented the first "Dakota Candle" that I alluded to.
Not much remarkable in those reporting today, except another 2,000+ bbl IP for BEXP:
- 19008, 2,804, BEXP, Brakken 30-31 1H, Catwalk, Bakken
I used to enjoy going out there to bird watch.
[Update: after posting the above, I received an e-mail reminding me it was Cut Bluff Overlook Park, which you can google and find out more about it. At this link, you can see a photo of the area; the story may be out of date, but the photo is a nice reminder of the oil activity in the area.]
*****
Maybe of some interest was a Hess well reporting:
- 18603, 154, Hess, RS-Shuhart-156-90-2726H-1, Ross, Bakken
Are they planning on fracking them all at the same time, and these haven't been fracked? I vaguely remember that one of the frustrations with CLR's Eco-Pads is that one had to wait until all four were drilled before the wells were completed (fracked) -- at least that's what I thought I read.
By the way, the "RS" designation refers to Hess' Red Sky prospect, not Ross field. And, for more trivia, these six wells represented the first "Dakota Candle" that I alluded to.
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