It's official: the Three Forks Sanish formation "holds nearly as much recoverable crude oil as the rich Bakken shale formation above it." That's the word from Bismarck, ND.
The article states that most folks agree that the Bakken formation has about 2.6 billion barrels of recoverable oil in North Dakota. The North Dakota Industrial Commission (NDIC) estimates that the TFS has about 1.9 billion barrels of recoverable oil in North Dakota.
Others think there is even more recoverable oil: Harold Hamm, CLR/CEO, said two years ago or so that he felt there was as much as 8 billion barrels recoverable oil in the Bakken and the TFS in North Dakota.
My inappropriate exuberance is not misplaced.
[By the way, the Madison Group has produced almost 1 billion barrels of oil since oil was discovered in North Dakota. It's hard to believe that if the Bakken is as big as they say it is, it will only produce 2 1/2 times what the Madison Group produced. I won't live long enough to see, but it is an interesting conundrum.]
Thursday, April 29, 2010
BEXP First Quarter 2010
Financials
Operations
Operations
- Avg daily production: 5,420 boe, up 1% from first quarter 2009
- Avg daily crude oil production: up 84% from first quarter 2009
- Average price for crude oil first quarter: $72.39/bbl
- 305,400 net acres in North Dakota and Montana
- Rough Rider: 123,000 acres
- Ross Area: 98,800 acres
- Eastern Montana: 83,600 acres
- Capital to ramp up to 8 operated rigs by May 2011
- Enough liquidity to ramp up beyond 8 operated rigs
- Conference call to follow
- Wow: at first glance that measly increase in daily production volumes from one year ago has to be concerning: up only 1% from a year ago. But there's a very good reason for it: it was all due to less natural gas being produced. Crude oil production jumped 84%; natural gas production dropped by almost half.
- Crude oil production increased by 84% from first quarter 2009.
- There were 46 million shares outstanding a year ago; this year, 101 million
- Overall, this has to be a very good report by any measure; curious what others have to say
- BEXP has five (5) active rigs according to NDIC today (April 29, 2010). Next month, there could be three more BEXP rigs in North Dakota/Montana
- Compare BEXP's 221,800 net acres in North Dakota compared to Newfield's 400,000 net acres
Hess Conference Call, First Quarter, 2010
Hess Conference Call, First Quarter, 2010
Financials
Net income: $538 million gain vs $59 million one year ago
Higher commodity prices offset weaker refining results
Operations
Bakken: 13,000 boepd
Currently: 5 rigs in the Bakken
Exit 2010: 10 rigs in the Bakken
Completed four dual laterals: cost -- $10 - $11 million apiece
Five dual laterals in stage of being completed
EUR of dual laterals: one million barrels per well
30-day average for dual laterals: 1,000 boepd (500 per lateral)
Greg Hill (Hess) on dual laterals:
So, where are we on the drilling? Our current base plan is to utilize the dual laterals across most of our phase one acreage, and that's because the Middle Bakken and Three Forks are largely present across that phase one acreage. Now, the cost advantage of this approach is clear.
Source: Seeking Alpha
You get one less vertical wellbore, you have fewer downhole equipment, you have fewer surface facilities. So, we really believe that there is dual lateral approach combined with the application of lean manufacturing techniques and pad drilling is going to result in superior returns for us on the Bakken, which is why we're going with that approach. Now, we'll say it's in its early days. As we learn, as we need to, we'll change and modify as appropriate. But right now, we're happy with dual lateral performance.
These are the five wells currently being drilled by Hess and the counties they are located in (based on conference call, all except one should be dual laterals):
- 18201, HA-State-152-95-1621H-1, McKenzie, 16-152-95
- 18602, RS-Nelson Farms A-156-90-2829H-1, Mountrail, 27-156-90
- 18838, EN-Abrahamson-155-93-3019H-1, Mountrail, 30-155-93
- 17196, BL-Dilland-156-96-2536H-1, Williams, 25-156-96
- 18680, Blou 13, Williams, 12-155-96W, a vertical well? Surrounded by vertical wells
Comment: reviewing the IPs for Hess wells for the past year, they have all been below 500 bopd (with maybe one or two exceptions, and yet in the conference call, Hess said their dual laterals were all averaging 500/1000 bopd on a daily basis with their on-going production from dual laterals. If we are all on the same page of music, it would suggest that the production from Hess wells improved after the initial production.
COP Profits Double; Production Fell 5%
Burlington Resources is a subsidiary of ConocoPhillips (COP). Burlington, of course, saw its fortunes rise when oil was discovered on its property in North Dakota in 1981. I assume many folks who invested in the Bakken, invested in Burlington Resources (BR at the time) and now hold COP.
Today, COP announced that first quarter (2010) profits doubled, even though its production fell 5%.
You may remember that COP was faulted by many for overpaying for natural gas reserves in the Far East. Warren Buffett had a huge COP holding about this time (I don't remember the specifics, but probably bought before, during, and after the natural gas reserves purchase). Pundits said that Buffett probably lost money on the deal; regardless, he subsequently sold some/all of his COP holdings. (I forget the specifics.)
As JRR Tolkien says: we all have our myths. That's my myth regarding COP, BRK, and BR.
Today, COP announced that first quarter (2010) profits doubled, even though its production fell 5%.
You may remember that COP was faulted by many for overpaying for natural gas reserves in the Far East. Warren Buffett had a huge COP holding about this time (I don't remember the specifics, but probably bought before, during, and after the natural gas reserves purchase). Pundits said that Buffett probably lost money on the deal; regardless, he subsequently sold some/all of his COP holdings. (I forget the specifics.)
As JRR Tolkien says: we all have our myths. That's my myth regarding COP, BRK, and BR.
Wednesday, April 28, 2010
General Info on the Bakken and Specific Info on the Bice Test
Lots of information at this discussion group regarding:
The issue of zones seems to be getting into the weeds for most of us but if interested, that link provides a good place to start.
However, the link provides a very nice reminder that it is the Bakken pool that is THE large continuous reservoir in the Williston Basin. Again, it is reiterated that there is no other continuous reservoir in the Williston Basin that approaches the size of the Bakken pool. [The day following this post, the North Dakota Industrial Commission officially announces that the Three Forks Sanish may have as much recoverable oil as the Bakken in North Dakota.]
It should be noted that the Madison group (non-continuous pool, I suppose, or a much smaller continuous reservoir) has produced over 900 million barrels of oil since oil was first discovered in North Dakota (1951). On the other hand, the Bakken has produced almost 120 million barrels of oil. The first horizontal well into the Bakken was drilled in 1987. With that data and the reminder that the Bakken is so much bigger, I don't know if I should be inappropriately exuberant about the Bakken or similarly exuberant about the other fields yet to be fully exploited with new technology, including enhanced oil recovery, which I don't think has been used anywhere in the North Dakota Bakken yet.
Actually, just the fact that it is estimated that it will take 10,000 to 20,000 wells to fully exploit the Bakken and another 10,000 wells for the other work that needs to be done is staggering. In the current boom, there has never been as many as 1,000 wells completed in one year.
In fact, as long as I'm rambling, either my math is wrong or something doesn't make sense. It's my understanding that most sources suggest that the Bakken has about 3.65 billion barrels of recoverable oil. 900 million is pretty close to one billion. It's hard for me to believe that if the Bakken is so much bigger than the other formations, and if the technology has improved so much over the past 60 years, that the Bakken is ultimately going to give up only 3.7 times as much as the Madison Group has given up to date. The "basic analysis of the Bakken" estimates the drilling program will not be complete until 2030, and that production will continue through 2100.
Like I said, my math must be wrong. Someone will correct me on it.
- CLR: Bice 1-29H and Bice 2-29H test
- Zones
- The Bakken pool as a continuous reservoir
The issue of zones seems to be getting into the weeds for most of us but if interested, that link provides a good place to start.
However, the link provides a very nice reminder that it is the Bakken pool that is THE large continuous reservoir in the Williston Basin. Again, it is reiterated that there is no other continuous reservoir in the Williston Basin that approaches the size of the Bakken pool. [The day following this post, the North Dakota Industrial Commission officially announces that the Three Forks Sanish may have as much recoverable oil as the Bakken in North Dakota.]
It should be noted that the Madison group (non-continuous pool, I suppose, or a much smaller continuous reservoir) has produced over 900 million barrels of oil since oil was first discovered in North Dakota (1951). On the other hand, the Bakken has produced almost 120 million barrels of oil. The first horizontal well into the Bakken was drilled in 1987. With that data and the reminder that the Bakken is so much bigger, I don't know if I should be inappropriately exuberant about the Bakken or similarly exuberant about the other fields yet to be fully exploited with new technology, including enhanced oil recovery, which I don't think has been used anywhere in the North Dakota Bakken yet.
Actually, just the fact that it is estimated that it will take 10,000 to 20,000 wells to fully exploit the Bakken and another 10,000 wells for the other work that needs to be done is staggering. In the current boom, there has never been as many as 1,000 wells completed in one year.
In fact, as long as I'm rambling, either my math is wrong or something doesn't make sense. It's my understanding that most sources suggest that the Bakken has about 3.65 billion barrels of recoverable oil. 900 million is pretty close to one billion. It's hard for me to believe that if the Bakken is so much bigger than the other formations, and if the technology has improved so much over the past 60 years, that the Bakken is ultimately going to give up only 3.7 times as much as the Madison Group has given up to date. The "basic analysis of the Bakken" estimates the drilling program will not be complete until 2030, and that production will continue through 2100.
Like I said, my math must be wrong. Someone will correct me on it.
Subscribe to:
Posts (Atom)