Wednesday, July 31, 2019

EOG - Round Prairie

Located west of Williston, near the Montana state line, just north of US Highway 2. 

Updates

September 6, 2023: cash offer from Dakota Energy --

  • $4,489, 1.71 net acres
  • price per acre: $2,625
  • T154N-R103W-18: lots 3 (36.62, 4 (36.66), E2SW4, E2 less a 3.00 acrre tract in the NE4NE4 more fully described in Book 49, Page 340.
  • at the time of this offer, only one producing well in this spacing unit; and, no pending permits for this drilling unit.

Original Post


The wells:

  • 19927, 725, Short Prairie 8-1224H, Round Prairie, t11/12; cum 250K 5/19;
    • Deed associated with well according to EOG:
    • Sections 13 (all) / 14 (all) -T154N-R104W; 1280 acres
    • Decimal: 0.00002118
  • 19478, 1,458, EOG, Round Prairie 10-1819H, Round Prairie, t1/11; cum 209K 5/19
    • Deed associated with well according to EOG:
    • Sections 18 (all) / 19 (all)-T154N-R103W; 1253.60 acres 
    • Decimal: 0.00012782
Recent production for each of these wells:

19927:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-201931101892418718515989
BAKKEN4-20193010081108182187361815
BAKKEN3-201931898887181479147670
BAKKEN2-20192866767215545943700
BAKKEN1-201931624488172452825825
BAKKEN12-20182844963615533391150
BAKKEN11-20180000000
BAKKEN10-201818371219103735617537
BAKKEN9-20182658684115775473420
BAKKEN8-201831898703181579955015
BAKKEN7-2018318667491832831288295
BAKKEN6-2018308901154179182255626
BAKKEN5-201831851853188878248365
BAKKEN4-201830835721166773146431
BAKKEN3-20183182279916246604120
BAKKEN2-201828824901152766839252


19478:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-20193110251066155884858713
BAKKEN4-2019142150871160530
BAKKEN3-2019133264303653692650
BAKKEN2-2019287156468007695450
BAKKEN1-20193179486988489961338
BAKKEN12-2018317919129149036550
BAKKEN11-201830776677844809410159
BAKKEN10-201831742650890841428169
BAKKEN9-2018306846938847855450
BAKKEN8-20183171570890889660939
BAKKEN7-201831728682871832391196
BAKKEN6-20183071210158708566097
BAKKEN5-20183175388790089663810
BAKKEN4-20183075064999083157417
BAKKEN3-2018317005677878055570
BAKKEN2-20182861945879165541318

The graphic:


Sunday, July 28, 2019

Let's Do The Math -- An Example -- July 28, 2019

Updates

August 2, 2019: since the original post, three more Zavanna wells have been added that will include mineral acres in sections 16/21-155-100; see bottom of original post where #36544, #36543, and #36542 have been added.

Original Post

Disclaimer: I often make simple arithmetic errors and don't completely understand royalties.

Disclaimer: in a long note like this, there will be typographical and factual errors.

Facts:
  • reader has 16.67% base royalty in 1.0000 net mineral acre in the NW quadrant of section 16 in T155N-R100W
  • the reader is being offered $5,333.33 for that interest
  • this particular mineral unit is located in the "best Bakken"
Assumptions:
  • assume: almost all of the wells will be spaced at the current NDIC standard of1280-acre;
  • assume: there will be some section/line wells spaced at 2560-acre units but we will ignore those for now
Let's do the math.

First step:
  • the reader is being offered $5,333.33 for that 16.67% of that one net mineral acre
  • the reader has only one-sixth of that mineral acre (16.67%)
  • to acquire the entire one net mineral acre, the buyer must be assessing the value of that one acre at $32,000 (6 x $5,333.33)
  • again, to repeat: the buyer is valuing that one mineral acre at $32,000
Second step:
  • a standard drilling unit in the ND-Bakken is 1,280 acres
  • to buy the entire drilling unit, the buyer values the drilling unit at $40,320,000 ($32,000 x 1280 acres)
  • again, to repeat, the entire drilling unit (1280 acres) is being valued at $40 million (rounded)
Third step:
  • assume one nets $50/bbl of crude oil from each well drilled in this 1,280-acre drilling unit
  • how many bbls of $50-oil will yield $40 million? 800,000 bbls
  • let's check that: 800,000 bbls x $50 would yield $40 million
Fourth step:
  • how many wells will produce 800,000 bbls in the best Bakken?
  • right now, operators expect no less than 750,000 bbls / well in the best Bakken, and the current data suggest new wells now being drilled in the Bakken will eventually produce 1.5 million bbls of oil
  • therefore, the buyer is offering the equivalent of one well in this drilling unit
  • fact: Zavanna is currently drilling four new wells in this drilling unit (see graphic below)
  • fact: there is already one producing well in this drilling unit, on the same pad, and a very, very good well
  • assumption: there will eventually be eight wells in this drilling unit; perhaps as many as 12; possibly as many as 24, but certainly more than two
Bottom line for this section:
  • assuming I did the math correctly, the buyer is offering the reader the value of one well in this drilling unit
Important note: right now (July 28, 2019) there are four wells being drilled that apply to the reader's lease (see graphic below); a fifth well is already producing (it was drilled in 2012). It appears that three of the new wells are the standard 1280-acre spacing; the fourth well looks like it will be 2560-acre spacing which cuts one 's interest in this well by half compared to the standard 1280-acre well.

Pie in the sky, idle rambling, back of the envelope. Let's assume:
  • 1280-acre spacing
  • 12 wells -- very, very conservative by the way
  • EURs of 1.0 million -- somewhat conservative
  • 12 x 1 = 12 million bbls EUR for those 12 wells
  • $40/bbls = $480 million at the wellhead 
  • up above, I showed $32,000 / acre or times 1280 acres = $40 million for the drilling unit is what was being offered

***************************************
Decimal Units

One net mineral acre in a 1280-acre drilling unit = 0.00078125

A one-sixth (16.67%) base royalty of that interest = 0.000130208333

Example:
  • assumption: each new well will produce 150,000 bbls of crude oil in the first year
  • assumption: four new wells, therefore, will produce 600,000 bbls of crude oil in the first year 
  • although WTI is priced at $50, Bakken oil is selling for about $40/bbl
  • now, 600,000 x 0.000130208333 = 78 bbls
  • 78 bbls x $40 = $3,120 for those four new wells in the first year
  • if three wells are 1280-acre spacing and one well is 2560-acre spacing, then the amount should change to $2,730 / first year for the four new wells 
  • there is an existing producing well, #21226, which has not been factored into this 
Bottom line:
  • when the new wells finally go into production, the reader might see $3,000 in royalty payment the first year and then a decline after that. The decline will be slow the first year or so but then will decline quickly
  • the wells could be completed / fracked by the end of the year, though the company can wait as long as two years to complete the wells
  • even if things are "expedited," the reader should not expect to see any "new" money from these new wells for six to 12 months
***************************************
The Graphics






The wells:
  • 21226, 996, Zavanna, Panther 16-21H, Stony Creek, t4/12; cum 426K 5/19; off line as of 6/19; remains off line 10/19;
  • 36418, SI/NC, Zavanna, Panther 16-22 5TFH XE, API: 33-105-05170; Stony Creek, the name suggests this is a Three Forks well on 2560-acre spacing, which if accurate, would cut one's interest in half compared to the standard 1280-acre unit; not fracked as of 10/19;
    noted to be on SI/NC in late November, 2019;
  • 36419, SI/NC, Zavanna, Panther 16-21 4H, Stony Creek, the name suggests this is a middle Bakken well on 1280-acre spacing; not fracked as of 10/19; noted to be on SI/NC in late November, 2019;
  • 36421 SI/NC, Zavanna, Panther 16-21 2TFH, Stony Creek, noted to be on SI/NC in late September, 2019; not fracked as of 10/19; not fracked as of 10/19;
  • 36420, SI/NC, Zavanna, Panther 16-21 3TFH, Stony Creek, noted to be on SI/NC in late September, 2019; not fracked as of 10/19;
  • 36544, drl, Zavanna, Blue Heeler 20-16-4H, this one was added August 2, 2019, as a new permit; 1280-acre spacing according to the permit; sections 16/21; noted to be on drl status in late September, 2019;
  • 36543, 2 sections; drl, Zavanna, Blue Heeler 20-16 3TFH, added August 2, 2019; drl status noted December, 2019;
  • 36542, 4 sections; drl, Zavanna, Blue Heeler 20-17 2H XE, added August 2, 2019; drl status noted December, 2019;
Permit application for #36544:


Permit application for #36543:


Permit application for #36542:


Saturday, July 27, 2019

The Gilbertson Well In McKenzie County

This was originally posted elsewhere on September 15, 2015. Re-posted without any changes on July 27, 2019.

Updates

July 28, 2019: production data updated. No additional wells permitted or drilled since the original post. 


***************************************
Original Post

This may be all wrong, but I was told "a reader got a new well" in North Dakota. I was told it was a "Gilbertson well in McKenzie County."

I don't know any more than that.

In the Charlson oil field in the Bakken, about 25 miles northeast of Watford City, there are a group of Gilbertson wells. I don't have the file number of the "new" well but if the reader can provide me that number, I can confirm which well it is.

This is a screenshot of the oil map of North Dakota. The Gilbertson wells are in the Charlson oil field about 25 miles northeast of Watford City and very, very difficult to get to, simply because there are no major roads out there:



This is a zoomed-in view of the section in which the Gilbertson wells are located: section 26, T153N R95W. Note there are two Gilbertson well pads. I don't know which well is the "new" well. One pad is a four-well pad; the other pad is a three-well pad. These wells are all short laterals, and they are all spaced at 640 acres.



This is a zoomed-in view of the four-well pad:




This is a zoomed-in view of the three-well pad:





To be continued once I confirm that these are the correct Gilbertson wells.

The Gilbertson wells:
  • 28154, 1,361, XTO, Gilbertson 34X-26BXC, Charlson, t11/14; cum 184K 5/19;
  • 28155, 1,784, XTO, Gilbertson 34X-26G, Charlson, t11/14; cum 197K 5/19;
  • 19544, 830, XTO, Gilbertson 34-26NEH, Charlson, t6/11; cum 254K 5/19;
  • 18703, 888, XTO, Gilbertson 11-26H, Charlson, t6/10; cum 285K 5/19;
  • 27928, 1,543, XTO, Gilbertson 11X-26F, Charlson, t11/14; cum131K 5/19;
  • 27927, 1,060, XTO, Gilbertson 11X-26B, Charlson, t11/14; cum 116K 5/19;
  • 27926, 844, XTO, Gilbertson 11X-26FXG, Charlson, t11/14; cum 122K 5/19;

Monday, July 22, 2019

Citation Oil, Brakken 24-30, #10279, A Madison Well

Decimal unit: 0.00025327
  • for every 1,000 bbls: 0.25 bbls
The graphic:


The well:
  • 10279, 155, Citation Oil & Gas, Brakken 24-30, Catwalk, Madison formation, t9/83; cum 152K 5/19; recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
MADISON5-201931206211515116031
MADISON4-201930166252417110030
MADISON3-2019312642244972300150
MADISON2-2019241692064832300150
MADISON1-20192113203262300150
MADISON12-2018311832134362300150
MADISON11-2018301582403972300150
MADISON10-2018311862194632300150
MADISON9-2018301862024732300150

Saturday, July 20, 2019

Links Of Interest For Mineral Owners

Division Orders.
Mineral Owners:

Charlson Oil Field

Originally posted February 16, 2010.

Charlson Field

Geologists, operators and drillers talk about targeting a certain formation, such as the Bakken or the Three Forks Sanish. However, when completed, the NDIC reports which pool the wells targeted which is an administrative term, and not a geologic formation term.

The NDIC administratively places all Bakken and all TFS wells in the "Bakken Pool." When the daily activity report states the "Bakken Pool" you cannot know from that which geologic formation was targeted; that information comes from other sources including press releases from the oil company operating the rig.

The "Bakken" formation is divided geologically into three formations, the Upper, the Middle, and the Lower. The Upper Bakken was the target during the 1990's boom; the Middle Bakken is the target now.

The Three Forks Sanish is divided into the Upper and the Lower. I forget, but I believe I first read it from an EOG conference call (it could have been Hess), the drillers in the current boom are targeting the Upper and the Lower Three Forks Sanish.

One can see the cumulative oil and gas production from HORIZONTAL wells by formation at the NDIC site. Click here and use the drop down menu to find the formation you are interested in.

That was all background to explain why I was interested in the Charlson field.

The Charlson field

My introduction to the Charlson occurred when I first became interested in Denbury.

The Charlson field is unique among many of the fields I follow because it appears that the formation being targeted in the current boom in the Charlson is almost exclusively the Three Forks Sanish.

The Charlson is a very small field, but historically, very, very active. It is only 48 sections, not even two full townships in size, but yet when you go to the GIS map server, it is so full of old vertical wells, it's hard to see "new" activity.

The Charlson is directly west of the Sanish oil field, on the other side of the river. There are no towns or hamlets in this small field.

Currently  there are 20 producing horizontal wells (and lots of vertical wells, as well as many abandoned wells), 8 wells on the confidential list, and one well being drilled.

But this is an interesting bit of trivia:
The most successful well to date in North Dakota sits in the Charlson: file #16059, the USA 2D-3-1H, a Petro-Hunt, LLC, well that was spudded in October, 2006. To date, it has produced 915,000 barrels of oil. That well targeted the Three Forks Sanish. [At $60/barrel = almost $55 million in about 3 years]. UPDATE: USA 2D-3-1H hit a record this past June, 2010: one million bbls of oil cumulative. 

*************************************
The Charlson Oil Field
The Graphics








17799 -- Guadalupe 11-23H

This post relates to an earlier post. This well is in Charlson oil field.

The well:
  • 17799, 457, BR, Guadalupe 11-23H, Charlson, t3/09; cum 510K 5/19;
Explanation of that shorthand:
  • 17799: the file number / permit number for the well
  • 457: the initial production provided by the operator after the well well first drilled and completed
  • BR: the current operator -- Burlington Resources
  • Guadalupe 11-23H: the official name of this well
  • Charlson: the oil field inside the Bakken -- the Charlson-Bakken pool
  • t3/09: the test date -- March, 2009
  • cum 510K 5/19: cumulative (or total) production since the well was first drilled up to that date, May, 2019; I always round the number; in this case, the actual production, 510,465 bbls of crude oil have been produced from this well since March, 2009; the production data is delayed by two months -- so, today, July 19, 2019, the most recent data is as of May, 2019; in addition, this well has also produced 591,435,000 cubic feet of gas which is equivalent to about 100,000 "equivalent" bbls of oil -- but not all of it was sold; much of it would have been flared;
Notes on the production profile below:
  • start at the bottom and then scroll up
  • note that the well produced about 9,000 bbls in the early months of production; then declined rapidly to about 2,000 bbls / month; and then leveled out at about 1,0000 bbls / month
  • in July, 2018, this well had a huge jump in production; it produced as much as 30,000 bbls / month -- an incredible well and an incredible jump in production
  • there is no evidence that this well was re-fracked
  • if this well was not re-fracked, it had a huge jump in production because of the effect of fracking neighboring wells
  • the well started out as a good well at the time, but not a great well by current standards
  • however, at almost no additional cost to the operator, it has become a great well due to fracking neighboring wells
Production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN5-201923142441422913502485224066729
BAKKEN4-201930224062243019962349022854562
BAKKEN3-2019312967329576260025049249720
BAKKEN2-2019282805428231207727395273250
BAKKEN1-2019312992130008239029361292840
BAKKEN12-2018302956729553246227767276930
BAKKEN11-2018302892428924271526246261720
BAKKEN10-2018312694526520227127609275320
BAKKEN9-2018302508825570215526978269040
BAKKEN8-2018312881428578294732269321920
BAKKEN7-2018311622115949255217136170590
BAKKEN6-20180000000
BAKKEN5-20180000000
BAKKEN4-20183079711737310259510
BAKKEN3-20183113761157112198119040
BAKKEN2-20182812901186123174216720
BAKKEN1-20183114461641168152714500
BAKKEN12-20173115451410145211620390
BAKKEN11-201730202418211074243723630
BAKKEN10-201714513468466936580
BAKKEN9-20173010021179492167716030
BAKKEN8-20173116311660982258025030
BAKKEN7-20173014881364427265225780
BAKKEN6-20173015301568256187518010
BAKKEN5-20173117941999302243023530
BAKKEN4-20172815431558351239823280
BAKKEN3-20173119161605482226421870
BAKKEN2-20172719512329337265125840
BAKKEN1-20172220082101220227322180
BAKKEN12-2016259344701301330636634
BAKKEN11-20162311151379665301514811477
BAKKEN10-20163123242290606313330560
BAKKEN9-201630163715771119139013160
BAKKEN8-201631195519951313245523780
BAKKEN7-20163119332009967260225250
BAKKEN6-20163020461785752235322780
BAKKEN5-20162924382735562298829160
BAKKEN4-20162921561821287265725850
BAKKEN3-201631251326144493171306628
BAKKEN2-20162925362374466300429320
BAKKEN1-20163129963053757328832110
BAKKEN12-2015151809166076322031957209
BAKKEN11-20150000000
BAKKEN10-201519879928227166116140
BAKKEN9-20153013781620217205019760
BAKKEN8-2015311556158119498080994
BAKKEN7-2015311804178031824252225123
BAKKEN6-201520146311204041395641704
BAKKEN5-20150000000
BAKKEN4-20151975911722510209730
BAKKEN3-2015317224784759148727
BAKKEN2-20152810229464084276210
BAKKEN1-20153111321213608117340
BAKKEN12-20143176296067100784585
BAKKEN11-2014303311305318641173818224
BAKKEN10-20143113481674140153414570
BAKKEN9-201430145911541641459132263
BAKKEN8-201429119811464710419690
BAKKEN7-2014311131138268117811010
BAKKEN6-20143013531380761723809840
BAKKEN5-2014201263932566375870
BAKKEN4-2014241061116412393033
BAKKEN3-2014311051931892280151
BAKKEN2-20141712811388291248373833
BAKKEN1-2014301776168122533272532999
BAKKEN12-201331180820971207910714
BAKKEN11-201330899921421194279840
BAKKEN10-201331166116308124381792569
BAKKEN9-20133010019278415111029407
BAKKEN8-2013311771162351322218361309
BAKKEN7-201331904938391258763418
BAKKEN6-201330149413816123321627630
BAKKEN5-201330120616108017871420293
BAKKEN4-2013302164183315833842470839
BAKKEN3-201331159216827119601301753
BAKKEN2-20132115741622231421711297
BAKKEN1-2013291313996371079378629
BAKKEN12-2012317289374973511385
BAKKEN11-201230119810103217291204451
BAKKEN10-2012311221157018818521317458
BAKKEN9-2012271531131110924772127283
BAKKEN8-2012311897196324233332767489
BAKKEN7-20123121352309186398826241287
BAKKEN6-201230181117425630012073854
BAKKEN5-201230133113956521861439672
BAKKEN4-201228148213644319691231668
BAKKEN3-201231176619089429462281588
BAKKEN2-2012291799173110130412800169
BAKKEN1-2012302183187416838583674109
BAKKEN12-20111822952314184422324421736
BAKKEN11-2011302421257721641353868193
BAKKEN10-2011313050299029651754777321
BAKKEN9-20111424742606242483215283304
BAKKEN8-20110000000
BAKKEN7-201122110410779216451272373
BAKKEN6-2011302156222414531602227933
BAKKEN5-2011241884185510927401893847
BAKKEN4-2011302212230423330952299795
BAKKEN3-2011312308207616831142575539
BAKKEN2-2011282276279315029872471516
BAKKEN1-2011312507256719731572657500
BAKKEN12-20103125712225188403624841551
BAKKEN11-2010242339215812334392506933
BAKKEN10-2010312475252519832422822420
BAKKEN9-2010302594273221337443333411
BAKKEN8-2010312729274520732152378836
BAKKEN7-2010312815255322332492671578
BAKKEN6-2010272680289133327195902129
BAKKEN5-2010313394326932437583469288
BAKKEN4-2010303428342030640973848248
BAKKEN3-2010313855403832351654456708
BAKKEN2-2010283620350041051024134968
BAKKEN1-20103142024239984597044901480
BAKKEN12-200957916625301751867884
BAKKEN11-20091118891907209228602286
BAKKEN10-20093146574443279625806258
BAKKEN9-20092842894597256649449481546
BAKKEN8-20093154685305419866176091052
BAKKEN7-20093163836446579816458292335
BAKKEN6-20092359086000588773759631774
BAKKEN5-2009317296702856889798247732
BAKKEN4-20093085208716871957149694602
BAKKEN3-200929959491771774837608376