Tuesday, April 1, 2008

The Complex Quagmirey Predicament In T145N, R96W, Dunn Co.

The chickens have come home to roost, oil and water don't mix, too many cooks spoil the broth, you can't unscramble an egg. Yeah okay. Anyway. . .

A complex quagmire has become apparent in T145-R96 after 1280 acre spacing and drilling units were created from different directions and fields. And what happens when you get to the middle and want to join everything up . . . . well, maybe a few orphaned sections that won't fit into the prevailing spacing pattern.

The NDIC says enough of this nonsense and has put a 90 day stop to the madness while everything (apparently) is sorted out.

16 comments:

Anonymous said...

Teegue what do you think happens, would anybody drill the left out 640's

david said...

LOL

If there is oil under it, or likely oil under it, someone will drill it.

Anonymous said...

Does anyone know what is happening with the hess enget lake project? They drilled and shut a 640 a nwnw on section 11 in t158n 93w and moved the rig to section 3 t158 93w and are drilling a 640 sese on it.

I'm interested because their project is just east of 10 drilling permits issued to St. Mary and Fidelity (8) in the in the last 2 weeks.

Teegue said...

Anon 2:09. . . I don't know what will happen. The most important thing which I suppose the IC will do is determine who owns the leasehold in the orphaned sections and see what their plans are, i.e., whether 640s are acceptable. If they don't want 640s then something will have to give somewhere. Seems to me the Continental is going to do some 640s up north on the Nesson somewhere as a test and then may use them elsewhere.

Anonymous said...

I know for example that in section 19, Continental has quite a few of the mineral rights leased all ready.

Anonymous said...

An interesting article on fracturing a well in shale

http://biz.yahoo.com/ibd/080402/newamer.html?.v=1

Anonymous said...

Something I came across today.

In the next 30 days the USGS (U.S. Geological Survey) will release a new report giving an accurate resource assessment of the Bakken Oil Formation that covers North Dakota and portions of South Dakota and Montana. With new horizontal drilling technology it is believed that from 175 to 500 billion barrels of recoverable oil are held in this 200,000 square mile reserve that was initially discovered in 1951. The USGS did an initial study back in 1999 that estimated 400 billion recoverable barrels were present but with prices bottoming out at $10 a barrel back then the report was dismissed because of the higher cost of horizontal drilling techniques that would be needed, estimated at $20-$40 a barrel.

It was not until 2007, when EOG Resources of Texas started a frenzy when they drilled a single well in Parshal N.D. that is expected to yield 700,000 barrels of oil that real excitement and money started to flow in North Dakota. Marathon Oil is investing $1.5 billion and drilling 300 new wells in what is expected to be one of the greatest booms in Oil discovery since Oil was discovered in Saudi Arabia in 1938.

If true, this is huge, but there's an old saying about things that seem too good to be true. So, I did a little digging in Georef, the standard Earth sciences database. There's quite a bit of information on the Bakken formation, which holds the oil in question. This excerpt from the North Dakota Department of Mineral Resources Newsletter caught my eye:

Probable (P2) oil reserves are defined as technically and economically recoverable oil volumes with a probability of recovery greater than fifty percent (50%). Typically P2 reserves require significant capital investment for recompletions, stimulations, drilling,or enhanced oil recovery (EOR) operations such as water-flood improvements, carbon dioxide (CO2) flooding, or other tertiary recovery methods.

The total P2 reserves estimated within North Dakota are over 660 million barrels. These reserve estimates are useful for economic forecasting, infrastructure planning, as well as estimating North Dakota's possible (P6) reserves.

While 660,000,000 barrels is a fraction of that cited in the first report, bear in mind two things: first, the newsletter item only talks about North Dakota. The Bakken formation extends into South Dakota, Montana, and Saskatchewan, as well. Second, the P2 designation represents a conservative estimate of what is recoverable with then-current technology and then-current oil prices. With oil breaching $100 per barrel and this new horizontal drilling technology making extraction easier, the recoverable oil may be far greater than the DMR article estimated.

While remaining cautious, there's no doubt the potential economic and geopolitical implications are enormous.

Anonymous said...

Leigh Price Paper: "Origins and Characteristics of the Basin-Centered Continuous Reservoir Unconventional Oil-Resource Base of the Bakken Source System, Williston Basin"

http://www.undeerc.org/Price/

Anonymous said...

Do you think if a person put up for sale 100 mineral acres leased to EOG in SE Mountrail they could get say $20000.00 per acre?
Anan

Anonymous said...

That would be dumb you would make more keeping them.

Anonymous said...

Not sure you could it seems
EOG owns whats under the ground,
as far as oil and gas,
as long as its being produced.

Anonymous said...

A lease doesn't transfer "ownership" of the oil and gas estate in a legal sense because the estate reverts back to the mineral owner after the lease is no longer in effect. The mineral owner can sell the mineral rights to whomever he or she wants while a lease is in effect, but of course the value of the mineral owner's oil and gas estate during that time is only the percentage of the total amount as expressed by the royalty amount in the lease. And of course, other minerals may have independent value (coal, uranium, etc.).

Larry said...

Anan asks a fair question:

"Do you think if a person put up for sale 100 mineral acres leased to EOG in SE Mountrail they could get say $20000.00 per acre?
Anan"

Does anyone know if there have been any recent sales of mineral acres in Mountrail County?

The oil companies effectively do this all the time when they buy and sell oil producing properties. One way to determine the sales value of mineral rights would be to research what an oil company paid another company for their leases or for producing wells.

For example, when Whiting apparently bought out HPC's interest in the Erickson 22-2 well in Plaza Township, how much did they pay for it.

Current Operator: WHITING OIL AND GAS CORPORATION
Original Operator: HPC, INC.
Current Well Name: ERICKSON 22-2
Original Well Name: ERICKSON FEE #22-2

Anonymous said...

Heard something about uranium being the next big thing back there ???

Anonymous said...

Companys sending letters now are offering $600.00 per Acre for outright ownership in Mountrail.
Hopefully no one signs this Crap.

Anonymous said...

The USGS assessments do not factor economics into their equations, unlike oil and gas companies. Thus their recoverable volumes will always be an overly optimistic assessment of what will actually be pulled out of the ground.