Update on DKRW's Outlook on Natural Gas

April 9, 2010: Still no response from DKRW.

March 21, 2010: Update: I have not heard back from DKRW after asking about their outlook for natural gas which is the first thing one sees on their home page:

"The most conservative estimates of North American natural gas supply demonstrate a serious shortfall in production for the foreseeable future. With short supply driving prices higher, we are now seeing some of the highest natural gas prices in the world here in the Southwestern United States and Mexico. With so much of our energy infrastructure and industry tied directly to natural gas, it is necessary to identify and deliver more competitive supply options in order for the US and Mexican economies to grow."

March 16, 2010: I sent my inquiry to DKRW on March 15, 2010. On that same date they acknowledged receipt; to date no response.

 
Hangin' On the Telephone, Blondie / ABBA

*****

Is it just me or do others find this opening statement at their home page by DKRW confusing?

"The most conservative estimates of North American natural gas supply demonstrate a serious shortfall in production for the foreseeable future. With short supply driving prices higher, we are now seeing some of the highest natural gas prices in the world here in the Southwestern United States ..."

Everything I read suggests just the opposite, specifically: North America is swimming in natural gas; and, the price of natural gas continues to deteriorate.

Just after I posted the above, I came across this link: energy companies moving away from natural gas.

"IPs Don't Mean Anything"

I have to chuckle. I don't know how many times I have read on other sites that "IPs don't matter."

Today, EOG reported that Wazyetta 102-02H, the Parshall field, #18301, had an initial production (IP) of 68 barrels of oil per day. I wonder if those who have mineral rights associated with this well agree that IPs don't matter.

There are at least four EOG wells within half a mile of this well, with IPs in red:

17028, 2,207, Wayzetta 14-02H, Lot 4 2-153-90
17078, 1,706, Austin 25-35H, SESE 35-154-90
17281, 1,797, Wayzetta 13-01H, Lot 4 1-153-90
18301, 68, Wayzetta 102-02H, Lot 2 2-153-90 (reported today)

Different formation? Was this a Three Forks Sanish? Was this an exploratory well of some sort to be turned into a saltwater disposal well? Note the "102" designation. It's been reported to be a TFS well. EOG has opined that they don't expect TFS to be particularly productive in the Parshall, and there is also a possibility that the driller missed the target -- these are narrow formations.

Regardless, I still think IPs have some relevance. As Mark Twain used to say, "All things being equal, I would rather have a well with an IP of 5,133 bopd rather than zero (0) bopd."


No Milk Today, Herman's Hermits -- looks like no oil today, either, for Wayzetta 102-02H -- "the end of my hopes, the end of all my dreams"

BEXP Share Offering Over-Subscribed: 16 million new shares

BEXP share offering over-subscribed. Initial offering was 13 million; then to 14 million. An additional 2 million sold: total -- 16 million+.


MONY, MONY, Tommy James and the Shondells -- or is it, "Money, Money"?

Slawson Puts Third Well on Pad; Targets the TFS

Things are in a steady state right now in the Bakken; not a lot of news, just a lot of drilling and lots of infrastructure being put in place.

With that in mind, not much to report, but I found an interesting story in the Big Bend oil field, where Slawson has lots of "snake eyes" (two wells on one pad).

I originally posted this on my "wells to watch" page. This was the original post:

18792, Slawson, Jericho 2-5H-TF, new permit, Mar 9, 2010 (NOG)

Comment: 18792 will be drilled beneath the Jericho 1-5H, to target the TFS, to see if the two formations communicate.

Update:

As noted above, Slawson was granted the new permit March 9, 2010, and less than a month later they had a rig on site.

On April 8, 2010 (less than a month after being granted a permit), I noticed that Slawson had a rig on #18792, Jericho 2-5H-TF. This well is on the same pad as two other Slawson wells: Jericho 1-5H is a short lateral that goes straight south, and Coyote 1-32H is a short lateral that goes straight north. Both of these wells targeted the Middle Bakken. The Jericho 2-5H-TF is obviously targeting the Three Forks Sanish, and will parallel the Jericho 1-5H, going straight south. Exciting, but we may not know anything for 6 months.

Some have opined that the TFS will be as prolific as the Bakken formation. The USGS continues to call the Upper-, Middle-, and Lower-Bakken, and the Upper TFS and the Lower TFS as the Bakken pool. The Bakken pool is an administrative term encompassing five geologic formations.

EOG Drilling Spearfish Wells in Four (4) Days

Updates

January 29, 2011: Is EOG throwing in the towel on the Spearfish; no current EOG drilling in Bottineau.

Original Posting

EOG drilling Spearfish wells in four (4) days. That PDF will take a few seconds to load; then go to slide 27 (if I remember correctly) -- but the whole presentation is worth viewing.

I honestly can't keep up with all that's happening in the Wililston Basin. This is absolutely incredible, and people used to consider me inappropriately exuberant. I still am, but even more so.

I missed this article yesterday (Friday) -- I'm getting behind. Just too much news. Bottom line: EOG releases statement saying the Spearfish is a significant discovery. Although it is relatively small -- estimated at 20 million barrels -- it has  a very high rate of return. They can drill these wells in less than five days for a cost of about $1 million.  The Waskada field north of the border is estimated to be 25 million barrels. EOG says they can get a return on the order of 70 - 100%.  [One hundred percent means one doubles one's investment.]

One begins to wonder how many other formations might be amenable to horizontal drilling.


Pipeline, Stevie Ray Vaughan & Dick Dale