The Reason Everyone's Talking About OXY -- For OXY, It's Not Just the Bakken

Several times in the past couple of days there has been talk about what OXY has in California.

Here's the background story. The story was published in November, 2009.

Eight (8) New Permits -- Bakken, North Dakota, USA

Operators: Petro Harvester (3), Whiting, CLR, BR, OXY, Helis.

Fields: Renville, Sanish, Sand Creek, Alkali Creek, Dimond, Grail.

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Of course the Dimond oil field permit belongs to OXY.

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The Sanish permit, of course, belongs to Whiting.

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The Grail field permit belongs to Helis. Back on March 3, 2011, this was reported:

• 17722, 2,068, Helis, Henderson Federal 4-26/35H, Grail, Bakken; TFS, 35K in 41 days; ~ 24-stage frac

Grail oil field is a 30-section oil field just west of the reservation; it currently has two rigs on site
But this is the "biggie" in Grail, section 17-149-95:

• 18448, 2,429, Helis, Andrecovich 5-17/16H, 24-stage frac; TFS, tested, 9/10; 129K in 4.5 months; 20K/month

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The three Renville permits belong to Petro Harvester. In today's daily activity report, Petro Harvester is also acquiring 26 (+/-) wells from Sagebrush, all in Bottineau County.

I don't know much about Petro Harvester yet, but here are a few data points:

• The CEO: Gareth Roberts, the former co-chairman and CEO of Denbury Resources, the firm he founded in 1990. Mr. Roberts has more than 30 years of experience in the exploration and developmen
  Publish Post
  t of oil and natural gas properties with Texaco, Inc., Murphy Oil Corporation and Coho Resources, Inc.
• COO: Jim Sinclair. Mr Sinclair served as Vice President of Exploration and Geosciences at Denbury Resources.
• Their operations are located in two regions: along the Gulf Coast (where they have most of their experience) and Williston Basin.

This is from their website regarding their operations in Williston Basin:

In January 2011, Petro Harvester acquired a package of producing properties in the Williston Basin. The assets include production and acreage in over 20 fields with most of the current value in four concentrated areas where we have high working interests and operational controls. The acquisition includes interest in 145 wells that produce from depths of 3,000 feet to 6,000 feet. Current production is approximately 2,000 barrels of oil equivalent per day. Identified opportunities include infill drilling, new water flood and enhancement of existing floods, and multilateral drilling. Additional upside potential includes deeper tests, enhanced fracturing techniques, and field extension through 3-D seismic.

The Sagebrush acquisition appears to be all Madison wells in Renville County.

Motley Fool on the Bakken: CLR, GEOI, and BEXP -- Bakken, North Dakota, USA

Link here.

Not much new.

Bicentennial - Beaver Creek - Roosevelt Corridor: A Birdbear Update

I sound like a broken record, but of all the companies drilling in the Bakken, the one I keep coming back to is Whiting. [Someone else agrees with me. At the link, scroll down to "David's posting on April 28, 2011.] What initially got me excited about Whiting was all their activity in the Belfield area. I now refer to Whiting's operations around Williston as "Whiting North" and Whiting's operations around Belfield as "Whiting South."

[This is how "Whiting North" and "Whiting South" would align with Whiting's prospects:

Whiting North (all Middle Bakken, Three Forks)

• Starbuck (Montana) 
• Cassandra 
• Sanish 
• Parshall

Whiting South (various formations)

• Hidden Bench: Middle Bakken "C" Objective
• Lewis and Clark: Three Forks
• Big Island: Multiple Objectives

I am particularly intrigued by "multiple objectives" in the Big Island: Red River, Birdbear, Bakken, Tyler, Lodgepole]

Right now, the drillers are focused on the middle Bakken and the Three Forks, but there are other formations that continue to be just as exciting in the big scheme of things.

It turns out Whiting is also in the Bicentennial-Beaver Creek-Roosevelt (BBCR) trend which is where the drillers have been most successful targeting the Birdbear formation over the years. So, I thought a quick review of the Birdbear activity was in order.

• In 2009 there were 171 wells targeting the Birdbear formation in North Dakota.
• In 2010 there were 171 wells targeting the Birdbear formation in North Dakota.
• The cumulative total of oil produced from the Birdbear through the end of 2009: 18,138,718.
• The cumulative total of oil produced from the Birdbear through the end of 2010: 18,715,505.
• The delta, 2010 to 2009: 576,787.
• Divided by 171 --> 3,373 bbls/well/year --> x $50/bbl --> $170,000/well/this past year.

I was curious to see what some of the Birdbear wells in this corridor looked like. I simply went to the GIS map server, and looked for a well in the BBCR trend that was still producing. The process after that was simply random, looking for active wells in the three fields. First ones I looked at:

• 15752, 227, Whiting, State 41-16H, tested 12/05; cumulative, 104K (Birdbear)
• 11422, 81, Encore, Mesa Federal 1-9 (vertical), tested 7/1997, 114K (Birdbear)
• (By the way, 11422 also drawing oil from the Red River, 104, tested 6/1985; 92K)
• 15412, two pay zones (the third pay zone, the Red River, dry, though it had an IP of 129):
• 15412, ---, Whiting, Federal 32-4HBKCE, tested ---; 53K (Birdbear)
• 15412, 192, Whiting, Federal 32-4HBKCE, tested 2/05; Dry (Red River)
• 15412, 1,835, Whiting Federal 32-4HBKCE, tested 11/09; 112K (Bakken)
• 14976, 662, BTA Oil, 20002 JV-P Agate 1, tested 2000; 800K (Birdbear)
• 6973, two pay zones:
• 6973, 249, Wesco, Hall Federal 2-12 (vertical), tested, 11/79, 484K (Red River)
• 6973, 401, Wesco, Hall Federal 2-12 (vertical), tested 10/00, 267K (Birdbear)

That's where I stopped. I had enough to get a feeling of the potential in the Bicentennial-Beaver Creek-Roosevelt trend.

Note, none of the above are Three Forks wells. So, I went a bit southeast to see who was drilling the new wells in the area. It turned out to be Whiting, and I believe the following will all be Three Forks wells. [Update, August 27, 2011: I was wrong: note #18650 is a Madison well.]

• 19687, 1,919, Whiting, Clemens 34-9TFH, Elkhorn Ranch, just a few miles to the northwest of the BBCR trend; t7/11; cum 88K 6/12;
• 20763, 829, Pride Energy, Beaver Creek State 1-36H, t11/11; cum 70K 6/12;
• 19050, 752, Whiting, Teddy 21-24TFH, Big Stick, t4/11; cum 39K 6/12;
• 19294, Conf, Whiting, BSMU 3605, Big Stick 
• 19370, 17 (no typo), Whiting, BSMU 2905, Big Stick; t4/12; cum 227 bbls (no typo) 6/12; a Madison well
• 18650, 258, Whiting, BSMU 3203v, Big Stick, spacing: U; Madison pool; t3/11; cum 62K 6/12;
• 18652, drl, Whiting, BSMU 3107, Big Stick,

The Big Stick field is a very active field (historically) and now Whiting has new interest with these wells. One can make a case that the Big Stick is continuation of the BBCR trend. In between is Ash Coulee oilfield.

• 12937, 546, Zenergy, Debra Rauch 1-1(H), tested, 11/90; cum 120K 6/12; Ash Coulee, Bakken; it is still producing 80 bbls/month

Note: This is how Whiting breaks down its resource potential in the continental US (slide 14, April, 2011 corporate presentation):

Williston Basin (MB and TF): 127 million bbls oil
Big Tex - TX: 37 million bbls oil
Redtail - CO: 38 million bbls oil
Sulphur Creek - CO: natural gas (which I don't follow)
Other Areas -- CO, MI, ND, TX, UT, WY: 25 million bbls oil

With Whiting breaking out MB and TF separate from other pay zones, my hunch is that the 25 million bbls in "other areas" is significantly understated.

For Julie LeFever's analysis of the Birdbear in North Dakota, July, 2009, click here (same link as above).

Chinese To Build Steel Plant in America -- Corpus Christi, Texas

Link here.

More evidence that the onshore oil boom on non-Federal land is here to stay (as long as the federal government doesn't shut it down).