Montana: On Pace To Set Record For Oil Permits; Natural Gas Drilling At Standstill

Full story at Rigzone.com.

The Bakken Never Fails To Surprise --

Updates

July 29, 2012: in addition to notes in the original post from the conference call, this exchange was recorded from the conference call and posted at another site:

Steve, you did mention some bolt-on acreage acquisitions in the Williston, can you just talk about where your position is now? I know, you dropped some rigs, and I think, you’ve been less enthusiastic but where are you acreage-wise now in the Williston?

Stephen I. Chazen – President and CEO: I think we’re north of 300,000 acres.

If OXY does indeed have more than 300,000 acres in the Bakken, that is significant. Early in 2011, they had 200,000 acres; at end of 2011 they had 277,000 net acres in the Bakken. So, going from 200,000 to 300,000 net acres in the Bakken this past year is noteworthy. [OXY entered the Bakken by purchasing Anschutz 188,000 net acres in 2010.]

Original Post

For quite some time I have questioned the "poor" initial production (IPs) numbers recorded by OXY USA.

Occidental, itself, is on record as saying that the Bakken is expensive, it has better prospects, and, although it won't be leaving the Bakken, it will be cutting back in the Bakken.

And, then yesterday, or today, I forget, I posted a stand-alone suggesting that OXY's IPs are improving.

Then this, tonight, it is being reported that the OXY chairmen, Steve Chazen is quoted as saying:

".... much of the company's increase in production, which was at a record level in the second quarter, came from the Bakken Shale."

Wow, who would have guessed? As noted, the Bakken never fails to surprise.

I find it impressive that he even mentioned the Bakken. In the last conference call, I don't think it was even mentioned, until the Bakken came up in Q&A, and then it was pretty much avoided. It certainly sounded like the Bakken was the poor stepdaughter for this company.

OXY is a $70 billion (market cap), international company.  If "much of the company's increase in production, which was at a record level in the second quarter, came from the Bakken Shale" what does that say about the Bakken-centric companies like CLR (market cap: $12 billion) and WLL ($5 billion). OXY has about 200,000 net acres in the Bakken; CLR, almost a million; and, Whiting, around 700,000 net acres.  The numbers are changing, but in 2011, Whiting and OXY each had about 15 active rigs; CLR, 24 active rigs, in North Dakota.

So, I was pretty much blown away by OXY's CEO saying that much of OXY's record production can be attributed to the Bakken.

The source of the comment is at Rigzone.com. Other data points:

• the company will decrease total number of rigs from 75 to about 70
• pace of drilling will not slow down; they will drill as much as they have with fewer rigs
• they plan to increase CAPEX for 2012 more than planned
• CAPEX will increase about a billion dollars, from $8.3 to $9.2; a little more than half of the increase will go toward the Al Hosn Shah gas project
• don't expect any M&A activity; they have time to wait; in no hurry

The Al Hosn Shah gas project is a $10 billion project shared by Abu Dhabi and Occidental, announced last year.

The Bakken Never Fails to Surprise: Which Company CEO Said ...

"... much of the company's increase in production, which was at a record level in the second quarter, came from the Bakken Shale."

Answer at end of an earlier post.

Proposed Pipeline Regulations Move Very, Very Slowly

From the Dickinson Press/InsideClimate News.com: it reads more like an op-ed piece than a news story.

Efforts to beef up oversight of the nation's oil pipelines are progressing so slowly that it's unlikely any additional safeguards will be in place before construction begins on thousands of miles of new pipelines, including the proposed Keystone XL. 

Reporter listed as: Guest Writers.

The Keystone XL 1.0 pipeline is dead. 

Now we don't even know who writes these articles, unless of course that's his/her real name, which is possible.

Flurry of Permit Activity Continues in Heart Butte; New Permits Announced for Today; Wells Coming Off Confidential List Tomorrow

The flurry of activity continues in Heart Butte with another three (3) permits for wells in that field, this time for XTO, as noted at the daily activity report for July 26, 2012. Regular readers of the blog probably have an idea why this flurry of activity.

For tomorrow, the following wells come off the confidential list:
20796, conf, Whiting, Ridl 34-12TFH, Zenith,
22154, conf, CLR, Pittsburg 2-19H, Banks,
22219, conf, Ballantye Oil, Wiborg 3-5, Southwest Landa,