Do I Hear $20k An Acre?

Well, it seems that the money from $90 oil has to go somewhere and quite a bit of it, $5.28 million to be precise, went from Sinclair Oil to the federal government at the BLM lease sale today for a 320 acre tract in Mountrail Co. That's a $16,500/acre bonus. This kind of stuff isn't sustainable, if you ask me (and nobody has by the way).

Based on this, I suppose the company is offering private mineral owners, what, about $10K/acre? Actually, probably more a like a couple hundred dollars.

Be sure to see the comments left by Larry and roccojoco for some useful information.

(The article has confusing language so that it may seem like it is referring to a purchase of the mineral rights, but it was a lease and not a purchase).

KTVQ in Billings

and

Minot Daily News (changed from Grand Forks Herald as the link went dead).

What Goes Up . . . .

Findley predicts Montana's Bakken boom is "cooling down" (although I thought Elm Coulee Field production was already in decline for the past year or so).

KTVQ in Billings

Kodiak O&G Picking Up Leases, Dunn Co.

Kodiak O&G from Denver states that it is continuing to pick up leases in Dunn Co., and plans to spud its first well with an unnamed joint partner early next year.

Petro-Hunt's Unconventional Hidden Gem At Charlson

With all the bluster over the exceptional wells in the Parshall area, it's easy to overlook what appears to be the best long-term Bakken producer in the state, the Petro-Hunt LLC USA 2D-3-1H well in Charlson Field about 25 miles west of the Parshall area activity. This well has consistently flowed over 20K bbls/month (presumably still on a choke) since going on line in October of '06 from the fractured Sanish siltstone in the extreme upper portion of the Three Forks Formation just below the lower Bakken Shale. This past Sept. the well again produced 20,666 bbls, 26 mmcfg and only four bbls of water during 30 days of production. Total production since Oct. of '06 has been 270K bbls, 331 mmcfg and 143 bbls of water.

In late July, Petro-Hunt completed an extension in the section to the south, the USA 11B-2-2H, sec. 11, 153N-95W, which appears to be another excellent well. The well had an IP flowing rate of 700 bopd, 850 mcfgd, and no water. From late July through September it produced 44K bbls, 45 mmcfg, and 34 bbls water.

This summer, the company also redrilled a well in sec. 14 after a fish was left in the first hole that was drilled at the same location. During the drilling of the first well, the rig took a pretty good gas kick, but was brought under control. This well has not yet been officially completed. Petro-Hunt is currently drilling an east offset in sec. 12, and the company definitely has a nice little (or maybe big) sweet spot in this area.

Brigham And Whiting Updates, Mountrail Co.

Brigham Exploration has one well currently drilling and is planning to spud two more:










Whiting Pet. knows that the best way to impress investors is to use lots of pictures. Yes!! They are proud of their Perry-State well, and rightfully so.














And a picture from an American O&G well in Wyoming (note it's in WY, not ND) that I'm throwing in just because I like it.

State Lease Sale Results

I doubt if anyone thinks there were any surprises at the state auction today. The top bid, and only one over $1K/acre, went to Northern Oil for 80 acres in sec. 8, 152N, 91W, Mountrail Co., where they paid $2,150/acre. Three other tracts in the same general area went for $500-600, which were the only other tracts available in the county. The area is about six miles west/southwest of current activity in Parshall Field, and Slawson has several wells planned in the immediate area.

Other highlights include Ward Co. with bids generally ranging in the $200-300 range in the overall area of T.152-156, R.85-87. The high bid in the county was $380 and went to Cody Oil.

Acreage in McLean Co, in the overall area of T.148-150, R.87-90, went for about $150-500, with the high bid of $570.

Dunn Co had a number of tracts in the east central part of the county in the general area of T.144-145, R.91-92, that for the most part were in the $350 range. The high bids in the county were for some isolated Missouri River tracts in T.149, R.92, that went for $575/acre.

Boom In The News

The Grand Forks Herald has been running a huge series of articles about the "boom", including one about the mineral owners around Parshall ("A neighbor whose well came in earlier received a check for $570,000, his share after four months of production, Geving said.").
grandforkshearld.com

And the inevitable article about how many billions of bbls are in the ground.
grandforkshearld.com

These links may not work as you may need to register to read the articles, but it's worth it. Just look for a series called "Boom Times."