Friday, June 29, 2007

Another New Player Plans Remote Wildcats, Dunn Co.

Tracker Resource Development of Denver has requested that two 1280 acre drilling units be created in secs. 1 and 12, T.144, R.94, and secs. 12 and 13, T.143, R.94, Dunn Co. This area of interest is in two sparsely drilled townships, neither of which have producing wells. Closest Bakken activity to the area in 144-94 is about twelve miles to the west at Murphy Creek Field and about six miles to the north at Bailey Field. The other drilling unit request in 143-94 is about seven miles due south of the first area.

This activity is about six miles north/northeast of the recent wildcat activity planned by Penn Virginia in 142-94 and 95 (see 6/04 post). Penn Virginia has since staked these wells and plans to drill the well in secs. 10 and 15, 142-95, first. The company also plans to core the Bakken section in this well and the one planned in McKenzie Co, and stated that it will not hold back spending money to study and hopefully make the Bakken work in these areas.

If any of these wells prove to be commercial, it will likely instigate large scale development of this previously unproductive area of the Williston Basin.

Marathon Brings Its Rig Count Up To Four

Apparently making good on its earlier statement that it would bring five new-build rigs into the Bakken play, Marathon has added its third in Dunn Co. with the addition of Helmrich & Payne 257. This rig has spudded the Carlson 21-29H, sec 29, T.146, R.94 in Bailey Field. The two other Helmrich & Payne rigs are making hole within a few miles of this well. Marathon's fourth rig is drilling the Nelson well in Mountrail Co.

Tuesday, June 26, 2007

Tax Break On Bakken Wells Means Christmas In July

Starting on July 1st, all Bakken wells drilled after that date for the next year will get a reduction in the current 11.5% ND state production and extraction tax to 7% on the first 75K bbls produced in those wells. This should be good news for both producers and royalty owners. Insiders claim some operators have postponed the spud dates of some projects and the tax holiday may bring in an additional ten rigs to the state.

Encore Plans Major Development In Murphy Creek Field, Dunn Co.

Encore has made public its intentions in the near term for about 40 Bakken wells primarily in the Murphy Creek area in T144, R95 and 96,south and southwest of Killdeer and about 6 miles east of the eastern flank of the Little Knife anticline. The company also has several wells planned in the Whitetail Field area of Billings County in T143, R99, where the company has drilled a test well several months ago in sec. 8 of that township, but no info has been released yet regarding its status. Encore has also identified cost savings and claims well costs have been reduced to $4.5M per well and expects a 30% rate of return.

Whether these 40 wells will ever be drilled is another story, but the company has had one rig running constantly for the past several months. It is currently in the Tree Top Field area of central Billings County testing their lease block in that area. It seems likely it will move back to the Killdeer area in the next few weeks after that hole is finished (and apparently may stay there awhile).

(On the map, the yellow is Encore's leasehold and the gray dots with the circles around them are planned Bakken wells).

Thursday, June 21, 2007

Burlington Plans (Lots) More Drilling Too; Marathon Plans Rank Wildcats In Mountrail Co., Hunt Offsets Exceptional Well In Charlson Field

Burlington Res. (subsidiary of Conoco/Phillips) indicates that they will bring in a fourth rig in its ongoing Bakken development program mainly occurring in Dunn Co. The company recently permitted two new wildcats in Dunn Co., north and northwest of its current activity in the Oakdale area of the county: the State Jorgenson 14-5H, sec. 5,148N-97W, and the Schettler 34-5H, sec. 5,147N-96W.

Marathon is kicking things in high gear with a number of new permits recently, two of which are in a virtually undrilled township in Mountrail County: the Shobe 24-20H, sec. 20,151N-93W, and the Bottleson 34-22H, sec. 22,151N-93W.

Petro-Hunt is drilling at the
USA 11B-2-2H in sec. 11, 153N, 95W in McKenzie Co. This is a south offset to the company's consistent 700 bbl/day well drilled late last year in Charlson Field to the north in sec. 2 that is the best Bakken producing well in the state. In about six months we should know whether its prolific Sanish Sand well in sec. 2 is a fluke, or an find that deserves a lot of attention.

Wednesday, June 13, 2007

Hess Continues Aggressive Drilling Program; Helis Joins Play; Encore Steps Out In Murphy Creek Field

Hess continues to be the most active Bakken operator in the state with its five rig Bakken Drilling program in Williams and McKenzie counties on the Nesson Anticline. Part of the company's appeal here has to be that most of its wells are being drilled on sixty-year-old held by production leases with 1/8 royalty clauses. For those who may be unaware, Amerada Hess was the company who discovered oil in ND in 1951 on the Nesson Anticline.

New player Helis Oil & Gas from New Orleans has spudded a Bakken test just south of Blue Buttes Field on the Nesson Anticline in McKenzie County. The company is utilizing Nabors rig 558 at the Levang 3-22H in sec. 22, T.150, R.95.

Encore Operating has permitted its first Bakken well (it has been drilling on permits issued to its predecessor, Kerr-McGee) as a stepout to Murphy Creek Field in Dunn Co. just SW of Killdeer. The company received a permit for the Truchan 11X-33H, sec. 33, T.145, R.95. This planned test is in the adjoining section to the NE of the company's second Kulish well that was completed for almost 500 bbls/day (see 5/21 post).

Monday, June 11, 2007

EOG Plans (Lots) More Drilling, Mountrail Co.

According to a presentation given by EOG, the company plans to drill 22 Bakken wells this year, but with three rigs busy drilling single lateral wells on 640 acre spacing, that figure may have to revised upward. On one of the company's leasehold maps, it indicates an area of "Bakken Oil Saturation" (which not surprisingly seems to correspond with their leasehold interests). The problem with this representation is that the entire area where the Bakken is mature (deep enough so the pressure and heat creates petroleum from the shales, i.e., in most of the central portion of the Williston Basin) has oil saturation in the Bakken. It actually would make more sense if the company had stated that the area has better than average porosity or fracturing in the mid-Bakken, if that is in fact the case (which it certainly seems to be, at least in Parshall Field anyway).

Some Top Producers For April

Petro Hunt had the best Bakken well in April when its USA 2D-3-1H well in Charlston field in McKenzie Co. produced 23.3K bbls with a cumulative total of 151K bbls since October of last year. This phenomenal well continues to produce over 700 bbls/day and almost 1MM cfg/day (see 3/21/07 post below). Marathon's Stohler well in Bailey Field in Dunn Co. produced 12.7K bbls for the month. In Parshall Field, EOG's Bartelson well made about 12K bbls and the Warberg well produced 10.5K bbls in April.

Monday, June 4, 2007

New Player Plans Rank Wildcats, Dunn Co.

A new company is planning to enter the Bakken Play in ND with two wildcats planned in central Dunn Co and one in McKenzie Co. Penn Virginia Oil & Gas has applied for 1280 acre drilling units in secs 10 and 15, T142, R95 and in secs. 15 and 22, T142, R94, Dunn Co. The area of interest in 142-95 is about three miles southeast of Manning Field, a four well Madison field operated by Encore Operating, and the other area is about another six miles further east in a non-producing township. Conoco drilled an unsuccessful Lodgepole test in that eastern area in sec 15, 142-94 in 1997. Penn Virginia's planned activity is near the Heart River Fault, which may be one reason the company chose this area. This fault runs northwest to the Murphy Creek Field area where Encore and Marathon are actively pursing the Bakken. Closest Bakken activity is being conducted by Ansbro Pet. about six miles to the southwest where the company is actively exploiting the Bakken in Russian Creek Field. Ansbro also has a mid-Bakken test planned about six miles to the northwest in Fayette Field.

In McKenzie Co, Penn Virginia has applied for a 1280 drilling unit in secs. 30 and 31, T149, R98, which is a virtually undrilled township. These two sections abut U.S. Highway 85 about seven miles south of Watford City and is three miles southwest of Cherry Creek Field.

On the company's website it stated: "During 2005, we also began evaluating several new potential development plays. In the Williston Basin, we drilled an exploratory well as part of our agreement with Bill Barrett Corporation for a 50 percent working interest in a 20,000 net acre Bakken Dolomite horizontal oil well prospect. If the test well results are encouraging, we expect to move forward with a development drilling program based on 640 acre spacing."

Friday, June 1, 2007

Burlington/Continental Res. Join List Of Companies Finding Excellent Wells, Dunn Co.

In its First Quarter Report, Continental indicated that its State-Weydahl 44-36H well sec. 36, T147, R96 north of Killdeer in Dunn Co. (see map 3/21 Oakdale area post below) flowed at initial rates as high as 1,000 bbls/day and continued flowing at 560 bbls/day after ten days of production. The company either got a very good frac job on the well or encountered some excellent natural fracturing or porosity in the area. Continental also reported that its Filkowski well in central Billings Co. in the Fairfield area was completed for approximately 300 bbls/day. Burlington Res.and Continental apparently have some joint working agreement involving their Bakken acreage. They join the growing list of companies with impressive Bakken completions recently.