Pad Drilling Vs Density Drilling

I'm in the middle of a swim meet, so I'm not concentrating as much as I should, so take everything I write this morning with "a grain of salt," as they say.

The Dickinson Press has a story on pad drilling today, something regular readers have known about for two, three, four years -- whenever Harold Hamm (CLR) introduced Eco-Pads, a copyright term, by the way, I believe.

In my mind, there is a difference between pad drilling and density drilling. Perhaps one can think of density drilling being a subset of pad drilling, though technically there would be no reason why density drilling couldn't be done on individual well sites, but that would be a real waste. So, for now, in my simple mind, density drilling is a subset of pad drilling. Another way one could say it, I suppose, is that density drilling is facilitated by pad drilling.

Be that as it may, the linked Dickinson Press article is about pad drilling and not density drilling.

Multi-well pads are becoming bigger and a more common sight in the western North Dakota Oil Patch.

The pads consolidate impacts to nearby landowners and the environment to one concentrated spot, rather than single wells being sprinkled across the landscape.

The wells’ coziness doesn’t extend underground though — horizontal drilling allows the wells to start in one spot but spawn in various directions, to wherever the oil is.

So far this year, 60 percent of the wells permitted were for shared pads, up from about a third from 2011, according to Department of Mineral Resources data.

For Investors Only: AAPL Bears ; ATT Increases Quarterly Dividend By One Penny

From a SeekingAlpha post:

The fact that it's cheaper for Apple to make $1 than for Google and Amazon is an outstanding competitive advantage that isn't eroding despite the commodization of mobile. The company's stagnant R&D spend is offset by low M&A costs.

How accurate that is, I don't know. But it's an interesting observation, if accurate.

There's some "corollary" in the Bakken. It turns out, based on a comment from a reader, that there is a significance difference among the various operators on their ability to run an efficient operation (and, in turn, control costs).

There is some suggestion that some of the less efficient operators (and small Bakken operators) may not be around in 2016.

Disclaimer: this is not an investment blog. Do not make any investment decisions based on anything you read here or think you may have read here. 

ATT increased its quarterly dividend b one penny. 

Petroleum News Has An Update On Flaring Issues In The North Dakota Bakken

Petroleum News is reporting:

The number of applications for flaring exemptions in North Dakota is up two to three times what is typical for the month, according to Lynn Helms, director of the state Department of Minerals Resources Oil and Gas Division.

Most of the flaring-related applications that the North Dakota Industrial Commission will consider in hearings scheduled for Dec. 18 and 19 are for flaring natural gas from wells that are not yet connected to gathering infrastructure and the operators want to continue producing oil at maximum rates beyond the 60 days of unrestricted production allowed under state rules. That comes as no surprise to Helms since the commission has been issuing these types of exemptions for six months at a time and many are due to expire on Dec. 31.

Back on November 23, 2013, I wrote (http://themilliondollarway.blogspot.com/2013/11/trends-noted-in-ndic-hearing-dockets.html):

I've been posting an abbreviated summary of the dockets since 2009 and I don't think I've ever seen so many cases requesting permission/waivers for unlimited flaring as in the December, 2013, hearings.

Petroleum News Update On Well Density In The Bakken; KOG, XTO Leading The Pack; Data To Be Collected

Petroleum News is reporting: 

North Dakota operators continue to increase well densities on Bakken petroleum system spacing units. In applications that the North Dakota Industrial Commission will consider during hearings on Dec. 18 and 19, numerous operators are seeking authority from the commission to drill up to 30 wells on existing 2,560-acre spacing units, up to 16 wells on existing 1,280-acre units, and up to four wells on existing 320-acre units. Those infill efforts will result in spacing unit densities of one well for every 85.3 acres in the 2,560s and an even higher spacing unit density of one well for every 80 acres in the 1,280- and 320-acre units. These are some of the highest spacing unit densities that the commission has ever considered.

“These spacing requests are very significant, in the fact it is some of the highest we have ever seen,” Department of Mineral Resources Assistant Director Bruce Hicks told Petroleum News Bakken in a written statement. “Should the commission approve these cases, it should allow operators the ability to vertically test the stratigraphic limits of the Bakken and Three Forks Formations. It will give operators the chance to review scientific data as to what the best possible well densities should be for a particular area.”

The operators seeking the highest well densities are Kodiak Oil and Gas (USA) and XTO Energy. Kodiak is seeking permission to drill up to 16 wells on two existing 1,280-acre units in the Truax field in southern Williams County. XTO wants to drill four wells on an existing 320-acre unit in the Squaw Creek field in far eastern McKenzie County. In both cases the resulting density is one well for every 80 acres in the spacing unit.

I really have to thank the reader who sent me this story. I never would have guessed KOG and XTO led the pack in density drilling. I thought it would have been CLR, #1 and, then maybe KOG, or even someone else. But XTO (XOM's deep pockets) is interesting; and talk about a feather in KOG's cap to be leading the pack. Good for them.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here.

New Link At The Sidebar: Futures Pricing, CME Group

A big "thank you" to a reader who has provided a much more useful link for crude oil / natural gas pricing. Right now it's near the top, "Futures," but I do occasionally move things up and down on the sidebar, especially during earnings season.

The link will take you to CME Group. When you get to the site, scroll down a bit. Look for "Energy," currently in the top row.

By rolling over the symbol a pop-up will appear telling you what the symbol stands for. Clicking on the symbol will provide more information than most folks would ever need.