Follow-Up on the NYT Article on Natural Gas Scam

Link here.

In what now seems like the distant past, The New York Times wrote a series of articles suggesting that industry practitioners were raising questions about the economic performance of the gas shale wells and thus whether the extent of the resource was over stated.  Those articles were written in late June and generated a firestorm of reaction within the natural gas industry, but also among Washington politicians. What followed was disclosure that a handful of E&P companies, active in the gas shale business, had received subpoenas from the Securities and Exchange Commission (SEC) for their records of well performance and the economics of behind their reserve calculations. The data was sought to compare with the companies' disclosure regulatory filings and investor presentations of the operational risks, production performance and economics of these gas shale wells. At the time the subpoenas were disclosed, we wrote about it in the Musings (last July), fully anticipating that there would be further disclosures. Since mid-summer, there has been no activity arising from the subpoenas. 

Go to the link for the rest of the story.

Bottom line: SEC has 4,000  employees. They have one geologist.

Random Photos of the New Location and Building for Oasis -- The Bakken, North Dakota, USA

This is located west of Williston, and a bit north of the other industrial parks. This is yet another industrial park, albeit much smaller than the others going in around Williston.

As the road curves around, heading south and then to the east, one ends up at Spring Lake Park area. One can stay on the east side of the highway and drive right up to Wal-Mart.

Update on Scanlan 3-5H -- The Bakken, North Dakota, USA

A reader requested an update on this well.  Tested about one year go, it has reached the "100,000 club."

Production has leveled off at about 4,000 bbls/ month.

NDIC File No: 18770     API No: 33-105-01803-00-00     County: WILLIAMS     CTB No: 118770
Well Type: OG     Well Status: A     Status Date: 9/8/2010     Wellbore type: HORIZONTAL
Location: NENW 5-153-98    
Lateral 1 Start Coordinates 18 S 43 W From Wellhead, End Coordinates 4417 S 6837 E From Wellhead
Current Operator: NORTH PLAINS ENERGY, LLC
Original Operator: NORTH PLAINS ENERGY, LLC
Current Well Name: SCANLAN 3-5H
Original Well Name: SCANLAN 3-5H
Total Depth: 18955     Field: TRUAX
Spud Date(s):  6/4/2010

Completion Data
   Pool: BAKKEN     Perfs: 11381-18955     Comp: 9/8/2010     Status: F     Date: 9/10/2010     Spacing: 2SEC
Cumulative Production Data
   Pool: BAKKEN     Cum Oil: 101341     Cum MCF Gas: 115942     Cum Water: 49750
Production Test Data
   IP Test Date: 9/8/2010     Pool: BAKKEN     IP Oil: 819     IP MCF: 1869     IP Water: 1145

Mining and Longer Laterals in the Bakken, North Dakota, USA

Elsewhere they are talking about EOG infill wells in the Parshall oil field and the Van Hook oil field.

This may become a nice thread for newbies to get a feeling for what's happening in the Bakken.

The new buzz word in the Bakken is "mining." Just weeks earlier, the buzz word was "manufacturing." I don't know who first associated these concepts with the Bakken, but it might have been Harold Hamm.

Regardless, the point is that in several areas of the Bakken, it's no longer about "exploration." Rather, the Bakken is looking more and more like a "mining" operation. I've referred to it as "groundhog day." The trucks start fueling about 6:00 a.m. and the long line of trucks start heading out for the fields about 6:30. If you are on the road later than 6:30, be prepared for long waits at intersections requiring a left-hand turn.

The roads remain busy throughout the day, but activity seems to be a bit quieter near the city. And then starting about 6:00 p.m. the traffic starts increasing again, as trucks head back to the industrial parks.

Another observation at the link above, is the amount of acreage under water. This is not a big deal. I looked at this last year, and it appears all acreage can be reached from dry land, with the longest horizontal having to go maybe 2.5 miles. There could be exceptions. As noted, I do recall having posted a story about some extended long laterals. Here are a couple of those links:

EOG hits total depth with longest horizontal in the Bakken

Based on data at NDIC, EOG should have reached TD for the longest horizontal to date in the Bakken by now: #20037, Liberty LR 17-11H, 25,000 feet with extended long lateral under the river. 25,000 / 5,280 =  4.74 miles.  Vertical is about 10,000 feet, so the horizontal is about 15,000 feet, just under 3 miles. [Update: 790, s1/11; t6/11; cum 92K 11/11; 16K/month]

GMXR plans a 21,151 total depth well in the Bakken

The Company has completed the drilling of its first Three Forks horizontal well. The Wock 21-1-1H in Stark County, North Dakota reached total depth of 21,151’ with a horizontal lateral length of 10,281’, which included drilling a vertical pilot hole and performing additional testing. Oil shows were predominant in the vertical and horizontal lateral while drilling in the Three Forks formation.

The Halliburton Rapid Frac™ sliding sleeve system has been installed with stimulation expected the week of September 26th. The Wock 21-1-1H well is scheduled for a 41-stage completion with oil production expected by October 1, 2011.

Unless there's a typo in the press release, or on the NDIC GIS map server, I am missing something (which wouldn't be the first time). The press released called it the Wock 21-1-1H, and the GIS map server shows only one well with a name that close: the Wock 21-1-1H, file #21002. I know wells are re-named, and I may have missed that. Interestingly enough, the GIS map server does not show the horizontal for this well yet.

Beautiful, Balmy Day in the Bakken -- The Bakken, North Dakota, USA

Wow, what an incredible beautiful day in the Bakken -- 7:48 -- on the road by 6:30 -- balmy, shirtsleeve weather -- I understand there's a huge snowstorm heading for Boston, a cold spell southwest of us in Wyoming, but here in the the land of harsh winters, it's shirtsleeve weather and will warm up throughout the day.

I post this video often, helps me start the day or end the day, it really doesn't matter.

Slim Dusty: one of the best for truckers.


Looking Forward, Looking Back, Slim Dusty

And just for the fun of it:


Under the Spell of the Highway, Slim Dusty