Another Motley Fool Article on KOG -- Bakken, North Dakota, USA

Link here.

When exploration and production companies sense that they are doing well, they go for the kill through expansion efforts. Kodiak, for its part, is planning on doing precisely that. The company plans to increase its acreage position in Williston Basin by 36%. Clearly, the company sees lots of opportunity ahead. 

The Denver-based company will acquire 25,000 net mineral acres in McKenzie County, North Dakota for $85.5 million in cash and stock. As a result, the company will also acquire working interest in two active wells, which are currently producing 200 net barrels of oil equivalent per day. However, that's just the small picture.

At the end of the first quarter this year, Kodiak had a two-rig drilling program in the Williston Basin. Today, the company is currently mobilizing its third rig, and has contracted for a fourth. Now, with the completion of this transaction, a fifth rig gets added to the company's arsenal.

When I first blogged this story, I did not do the math. A thirty-six percent increase in Bakken holdings is huge. Huge. And going from two rigs to five rigs is a pretty big jump, also. Now, they need to get a dedicated frack crew, unless they have one, and I missed it (or forgot).

Goldman Forecasts -- Again, and Again, and Again

Wasn't it a Goldman Sachs forecast that started the freefall in WTI oil prices from $115 to $95 recently?

I honestly forget. It is impossible for me to keep up with Goldman Sachs forecasts, but like the weather, their predictions will eventually come true. Just wait long enough. This was back on May 24th (2011).

Oil also got a boost from reports by Goldman Sachs, J.P. Morgan and Morgan Stanley that said prices will almost certainly be higher later this year. The investment banks said the recent 15 percent drop was only a brief pause in what will likely be a long-term rise to near-record levels.

Goldman Sachs expects WTI to hit $135 per barrel by the end of 2012. Morgan Stanley predicts Brent will average $120 per barrel in 2011 while J.P. Morgan said Brent should hit $130 per barrel in the third quarter.

I believe Bank of America is targeting $140 oil

Nine (9) New Permits -- Bakken, North Dakota, USA

Updates

March 12, 2012: the first well for Silver Oak reported an IP today --

• 20950, 55, Silver Oak Energy, Rankin 1-35H, Cedar Hills, Red River B (not a Bakken), s9/11; t2/12; cum 1,566 bbls 1/12

This is their only permit in North Dakota, at least under this operator's name.

Original Post

Daily activity report:

Drillers: EOG (2), Petro-Hunt (2), Hunt, SM Energy, CLR, BR, and Silver Oak, LLC.

Fields: Cedar Hills, Kittleson Slough, North Tioga, Ray, Haystack Butte, West Ambrose, and two wildcats.

Petro-Hunt has a wildcat permit in Williams County, and Hunt Oil has a wildcat permit in McKenzie County.

This is the first time I had heard of Silver Oak, LLC. It has a permit in Slope County. Armstrong Corporation picked up 640 acres in Slope County for $30/acre from the state in the most recent auction (May, 2011, ND lease auction). This is the very first permit ever for Silver Oak, LLC, in the state of North Dakota.

The only other interesting information on today's report was the Newfield Helsingborg well with an IP of 2,862 in McKenzie County (Sand Creek oil field, right next to the interesting Charlson field).

If I Were TransCanada, I Would Just Lock It Up With China

Updates

August 16, 2011: I think this is a dead issue, but to humor the TransCanada folks, I will link the story. The story is about TransCanada's plan to ensafety the pipeline.

August 15, 2011: long, long story in PennEnergy about the pressure on Obama to support the Keystone XL pipeline. Links to PennEnergy, others, usually occur early. This is a gut check for Obama. I can see it going either way and can argue either side.

August 8, 2011: well, this reassures me. Ms Hillary Clinton tells Canada not to worry; US wants Keystone XL. Yup. Sure. 

July 27, 2011: House passes bill requiring Obama administration to make Keystone XL decision by November 1, 2011. Needs to be passed by the Senate. Won't happen. Even if it does, Obama will ignore it.

July 26, 2011: Another casualty of the Keystone XL. Developers wanting to build the nation's first new refinery since 1976 want to delay construction by 18 months from the date a final permit is issued. The article does not say why the Texas company wants to delay construction but one can speculate it has to do with the XL. The refinery will process heavy oil from the Canadian oil sands.

July 20, 2011: Looks like just a matter of time before Keystone XL lost. It may end up being a win-win for all.

July 11, 2011: The recent XOM spill in the Yellowstone, as inconsequential as it will ultimately be environmentally, will be one more nail in the Keystone XL pipeline. Meanwhile, this shovel-ready job sits ready to go.

June 26, 2011: Looks like China is ready to take Canadian oil / Keystone XL if the US doesn't want it.

June 24, 201l: US House Committee on Energy and Commerce Committee passed a bill to place pressure on Obama administration to make decision regarding the Keystone XL pipeline. I'm not holding my breath. This is the same administration who denies any hostilities going on in Libya.

The US House Energy and Commerce Committee on June 23 passed legislation aimed at pressuring the Obama administration to reach a decision on the Keystone XL crude oil pipeline project’s cross-border permit application. The full committee passed HR 1238 by 33 to 13 votes after its Energy and Power Subcommittee approved the bill on June 15.

The measure would require the US Department of State to reach a decision on the proposal by Nov. 1. The project would expand shipments from Canada of oil produced from Alberta oil sands by 1.3 million b/d. “This project has been delayed long enough,” committee chairman Fred Upton (R-Mich.) said following the vote. “It’s time to make a decision, and this bipartisan bill will make it happen.”

June 16, 2011: Good news: Federal panel approves fast-track approval for Keystone XL. Bad news: this panel is so far down the food chain, this vote means nothing. This is a subcommittee of a larger committee in the US House. TransCanada needs someone to pass a law fast-tracking fast-track legislation. This bill won't see the light of day in my investing lifetime.

The US House Energy and Commerce Subcommittee on Energy and Power Wednesday approved a bill to help fast-track the construction of Transcanada's proposed Keystone XL Pipeline.

The North American-Made Energy Security Act (H.R. 1938) requires the Obama administration to issue a final order by Nov. 1, 2011, on whether the Keystone XL Pipeline can be built to transport oil from Western Canada to Texas. The bipartisan bill will now move to the full Energy and Commerce Committee for consideration.

Original Post

Link here.

A dispute over a plan to send oil from western Canada to the Texas Gulf Coast moved to Capitol Hill on Monday, where a House panel debated whether to speed a decision by the Obama administration.

Republicans on the House Energy and Commerce Committee are backing a bill that would set a Nov. 1 deadline for the State Department to decide on the $7 billion project. A Canadian company wants to build a 1,900-mile pipeline to carry crude oil extracted from tar sands in Alberta, Canada, to refineries in Texas.

Rep. Fred Upton, R-Mich., who chairs the energy panel, said it makes sense to pursue reliable and affordable energy in North America. The proposed Keystone XL pipeline would create thousands of jobs and help cut $4-a-gallon prices at the pump, Upton said.

"We need to act soon as China is very interested in pursuing the same resources," Upton said. "If we don't say yes soon, China will lock it up."

I personally don't understand TransCanada's reluctance to put in a pipeline to the west coast of Canada and ship their total production to China. I must be missing something.

Why an IP is Just One Data Point -- One Well With An IP of 33 --> 140,000 Bbls To Date

Permits/Wells

• 25133, loc, Whiting, Jurgens 41-13PH,
• 23165, loc, Whiting, Duletski 41-13PH,
• 22954, loc, Whiting, Dietz 11-18PH,
• 22120, A, Whiting, Duletski 41-18PH, cum 22K 1/13;
• 21975, 781, Whiting, Duletski 11-13PH, t3/12; cum 43K 1/13;
• 21259, 270, Whiting, Duletski 21-13TFH, t7/12; cum 29K 1/13;
• 20960, 476, Whiting, Kessel 41-17TFH, t1/12; cum 42K 1/13;
• 20912, 653, Whiting, Duletski 11-16TFH, t5/12; cum 29K 1/13;
• 20060, 258, Whiting, Binstock 21-30TFH, t7/11; cum 21K 1/13;
• 20028, 707, Whiting, Duletski 21-16TFH, t6/11; cum 72K 1/13;
• 19820, 843, Whiting, Dietz 21-17TFH, t3/11; cum 85K 1/13;
• 19816, 202, Whiting, Paluck 21-28TFH, t4/11; cum 30K 1/13;
• 19810, 741, Whiting, Dietz 21-18TFH, t7/11; cum 53K 1/13;
• 19809, 222, Whiting, Arthaud 21-29TFH, t5/11; cum 26K 1/13;

Original Post

A reader recently alerted me to a couple of new permits in the Gaylord oil field.  The Gaylord oil field is a small field, located next to the very interesting Bell and Zenith oil fields near Belfield, North Dakota, in the southwest part of that state.

As noted, Gaylord is very small, not even one whole township; it is perfectly square -- four sections by four sections for a total of 16 sections. For such a small field, it is currently quite active with two rigs on site, and a third well nearing completion.

Two wells were spud in the Gaylord oil field in 2001 and 2002, both Madison wells:

• 15134, 33, short lateral, Denbury Encore, Hanson 41-19, Madison formation, t8/01; cum 165K 1/13; still active, 1,000 bbls/month; and, 
• 15302, 67; short lateral, Whiting, Hanson 41-24H, Madison formation, 20K bbls; permanently abandoned; test date 8/2002.

Something tells me Whiting will eventually go back to that Hanson 41-24H well.