Follow-Up of a Whiting Sanish Well

For newbies, here's why folks remain excited about the Bakken.

This is a follow-up on a Whiting well, #17134,  in the Sanish, the Smith 11-20H, which had an IP of 3,115, back in November, 2008.

• 17134, 3,115, Whiting, Smith 11-20H, Sanish, t11/08; cum 584K 1/20; cum 629K 11/24;

Its first production run was at the beginning of November, 2011. At the end of January, 2011, it had produced a total of 278,728 blbls of oil = $18 million at the wellhead (at $64/bbl).  This well is paid for (again, at the wellhead; I don't know all other costs incurred: royalties, taxes, shipping, water removal, etc.). And now it keeps producing.

Like all Bakken wells, its decline rate was horrendous. It produced about 28,000 barrels the first month but by the fifth month or so was down to half that amount, 14,000 barrels/month. Then, starting in July, 2009, it leveled out, producing anywhere from 6,000 to 10,000 barrels/month.

In the last five months the well produced 7,000 bbls; 5,000 bbls; 7,000 bbls; 6,000 bbls; and, 5,000 bbls (all figures rounded). No one knows how long it will produce.

Folks say these wells will produce for fifteen to twenty years, and it appears this one is holding steady with at least 6,500 barrels/month (again, at $65/barrel = $422,500/month. Costs of this well are now minimal. At $65/barrel, that's over $5 million/year, and all indications are that oil is trending upwards, and with increasing takeaway capacity, the discount for ND oil is decreasing. Bottom line: I think WLL is getting much more than $65/barrel for this oil.)

And that's why folks are still excited about the Bakken and willing to pay $8,600 per mineral acre in the Sanish.

Oh, by the way, at the same link, note that its sister well, the Hansen 12-20H, #18531, has sold a cumulative of almost 146,281 barrels in eight months. The first full month run was 23,000 bbls; it decreased to a low of 11,000 bbls in the fifth month, but is now back up to 15,000 bbls in its eighth month of production. Update: cum 604K 11/24;

The first of these two wells, the Smith, declined by more than 50 percent in the first two months; its sister well has not declined quite as quickly. I have opined that the operators are working hard on solving the horrendous decline rate in the Bakken; is this an indication that they've made some headway?  I don't know. Time will tell.

Whiting Hitting on All Cylinders

This is just a random note without any links or supporting facts except what I sort of remember.

After posting not less than a hundred different posts in the past five days (most of those posts were updates on earlier posts that folks won't see unless they specifically go to look something up using a search application), I have a gut feeling that Whiting is "hitting on all cylinders." Every time I turn around, I find WLL up to something interesting in the Bakken.

WLL will likely end up putting up to seven wells in 1280-acre spacing units in the Sanish.  The Sanish has been a tremendous oil field even by Bakken standards.

WLL has some of the best-producing wells in the Bakken. It's probably a toss-up between EOG and WLL who has the most good wells in North Dakota. 

WLL barely got started in its new Lewis and Clark prospect when it sparked a flurry of activity in the South Heart area. In this month's NDIC hearing dockets, WLL will request to pool forty-four 1280-acre spacing units just west of South Heart.

WLL has a dedicated fracking crew that can frack 100 wells/year.

WLL announces a natural gas gathering and processing plant near Belfield, ND.

WLL has the best corporate presentations, although I have to say BEXP and SM also have some great presentations.

Someone just paid $8,600/acre for 3.34 acres where WLL already has three wells.

WLL has 14 active rigs according to the NDIC website today.

Note: I do not hold any shares in WLL.

Hess will add a tenth rig in the North Dakota Bakken.

EOG has twelve active rigs in NDB.

CLR has twenty ARINDB.

Hess has eleven ARINDB.


It Never Rains in Southern California, .... but, girl, don't they warn ya, it pours, man, it pours.

$8,600/Acre in the Bakken (ND, USA)

Someone paid $8,600/acre for 3.34 acres in the Bakken:

OG1003464

152

93

3

MISSOURI RIVER IN SW4

TRINITY WESTERN

3.34

$8,600.00

That's a "cut and paste" -- but it says that Trinity Western paid a bonus of $8,600.00/acre for 3.34 acres of minerals in section 3 of T152N-R93.

If you look at the GIS map server at the NDIC website, you will see that section 3-152-93 in the Sanish oil field, is mostly under water; maybe 25% land; 75% river, depending on water depth and how accurate the map is.

There is currently a producing well in that section:

• 17554, a long lateral originating in section three and running southeast into section 2
• There is also a rig on site in this section for permit 19221, and there is a well that is almost complete (the rig is off-site), permit 19222. 

So, the three wells in this section:

• 17554, Hansen 21-3TFH, a Whiting Three Forks well, with an IP of 489, that my database showed reported out back in September, 2009, NENW 3-152N-93W.
• 19221, Whiting, Ness 21-3H,  Lot 3 3-152N-93W
• 19222, Whiting, Bartleson 21-3H, Lot 3 3-152N-93W

So, we will see. Only $29,000 for the 3.34 acres (3.34 x $8,600).

Look at that IP. 489. This is one more indication the IPs don't mean a thing. There's something about this particular location that made it worthwhile for somebody to pay a record price/acre, and it wasn't based on the IP.

I thought this was a record, but I think Enerplus still holds the record of nearly $10,000/acre for a much bigger tract.

State Oil Lease Sales, November 2, 2010 -- Results -- $8,600/Acre -- (Bakken, ND, USA)

For the full report, click here and enter county your are interested in (for newbies, select among these counties: Williams, Mountrail, Dunn, McKenzie, to begin your search).

A few tidbits:

Mountrail County, only six leases total (home of the Sanish and the Parshall):

• Slawson paid $6,500/acre for 40 acres in 23-92-151 (total = $260,000)
• Slawson paid $6,200/acre for 80 acres in 23-93-152 (total = $496,000)

Williams County

• Liberty Resources LLC paid $4,250/acre for several 160-acre tracts
• Exterra Resources LLC paid $4,200/acre for several 40-acre tracts
• Petro-Hunt LLC paid $4,000/acre for one 160-acre tract
• There were no tracts greater than 160 acres; and most were 80 acres

McKenzie County

• Trinity Western paid $8,600/acre for 3.34 acres (3-152-93); but not a record
• LSM Energy Inc paid $6,100/acre for two tracts (one 20-acre, and one 80-acre tract)
• LSM Energy Inc paid $5,400/acre for several very small tracts (40 acres each)
• Lewis Oil Company paid $4,000/acre for several 160-acre tracts

Dunn County

• All 34 leases bought by Empire Oil Company; most 40 - 80-acre tracts; most ~ $1,000/acre

Golden Valley County

• Most leases of any county, except perhaps for Williams, but all very low bonuses (under $500/acre and many for $100/acre)
• Almost all of the action by Lewis Oil Company, LLC
• Golden Valley is the center of WLL's Lewis and Clark prospect; coincidence?

Yellow River, Christie

Fifteen (15) New Permits (Bakken, ND, USA)

Operators: XTO (3), Newfield (2), Encore, Anschutz (2), CLR (2), Whiting, Slawson, Hunt, BTA, and EOG.

Fields: Stockyard Creek, Haystack Butte, Lost Bridge, Camp, Murphy Creek, Banks, Van Hook, and two wildcats.

Newfield has joined the group of those putting in multi-pad wells with this list of permits.

The wildcats: Anschutz, west of Ray; Whiting, Golden Valley County in their Lewis and Clark prospect.

On track for 1,587 permits in North Dakota this calendar year.