Gaebe: ‘Sold out’

By MIKE ELLERDFor Petroleum News Bakken

A lthough the number of acres leasedin the North Dakota Department of

Trust Lands’ August auction was thefourth highest in five years, the averageprice per acre was the second lowest inthat the same period and was, in fact, thelowest since November 2008.

However, a vast majority of acresoffered in the oil and gas auction were along themargins or even beyond the traditional boundariesof the Bakken petroleum system in North Dakota.Attention is now focusing on these outlying areas asfewer and fewer Trust Lands leases are available in

the five Bakken core counties of Divide,Dunn, McKenzie, Mountrail andWilliams.

“Some of the interest in the outlyingareas may be fueled in part by the factthat the Land Board is essentially ‘soldout’ of acres in the heart of the Bakkenproduction area,” North Dakota StateLand Commission Lance Gaebe toldPetroleum News Bakken.

A similar trend was observed in Juneat the Montana Department of Natural Resourcesand Conservation’s quarterly lease auction wherethe focus shifted away from the more proven oil andgas production in eastern Montana and toward more

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page8

Oasis fine-tunes operations; setto drill second bench Three Forks

Cash Flow, west of Ross, N.D.

Pictured above is a Hess Corp. well pad about 6 miles west ofRoss, N.D. Ross is about halfway between Minot and Williston.

Gaebe: ‘Sold out’North Dakota Trust Lands auction results reflect shift to Bakken fringe

see AUCTION RESULTS page 18

LANCE D. GAEBE

A puzzle wrapped in railNo one talking about what’s happened to Bakken oil being moved by MM&A

By GARY PARK For Petroleum News Bakken

The question is: How much has the loss of railservice to the Irving Oil refinery in Eastern

Canada affected the marketing Bakken crude?The three common answers are: Not sure, can’t

say or won’t say.For most of those in-the-know, the refusal or

inability to offer numbers is understandable.They were best summarized by a spokesman for

Canadian National Railway.“For competitive and confidentiality reasons, CN

does not discuss publicly its commercial relation-ships with specific customers or shipments by spe-cific lane or geographic region,” he said in an email.

In filing for bankruptcy protection, Montreal,

Maine & Atlantic Railway disclosed it had increasedvolumes it was delivering from the Bakken to theIrving refinery at Saint John, New Brunswick, to500,000 barrels a month.

The ill-fated train that derailed, triggering deadlyexplosions in the Quebec town of Lac-Megantic andcosting an estimated 47 lives, was carrying 50,000

see RAIL PUZZLE page 17

… In its bankruptcy court filings, thecompany said that until the Lac-

Megantic disaster it had been hauling500,000 barrels per month through

Quebec and Maine to Irving’s 300,000bpd refinery.

ND oil production up 11,286 bpdOil production in North Dakota

increased for the fifth consecutivemonth in June to yet anotherrecord high of 821,415 barrels ofoil per day according to prelimi-nary data released on Aug. 15 bythe North Dakota Department ofMineral Resources Oil and Gas Division, an increase of11,286 bpd over the May production of 810,129 bpd.

The June output was near but didn’t quite make the July 1target of 830,000 bpd that the North Dakota legislature usedfor its 2013-15 revenue projections. Those projections alsoestimated output would increase to 850,000 bpd by January2014 and remain at that level through June 2015.

—MIKE ELLERD

Berthold gets favored treatmentEnerplus Corp. continues to place its

Fort Berthold, N.D., operations on its topshelf, devoting most of its capital invest-ment to the play and nudging productionover 15,000 barrels of oil equivalent perday in the second quarter.

It reported that C$78 million wasinvested in drilling 4.7 net long horizontalwells and bringing 6.1 wells onstream,most of them introduced to the productionflow late in the quarter.

The Calgary-based company said the region generated“strong economic returns,” helped by operating costs and gen-eral and administrative costs remaining within guidance, with

Lightstream finds ‘fantastic economics’ in Saskatchewan Bakken

Calgary-based LightstreamResources has pumped an extraC$25 million into its well opti-mization budget inSaskatchewan’s Bakken, whiledeferring some drilling activityin its Cardium business unit.

Chief Executive Officer JohnWright told a second-quarterconference call that the shifttowards the “very profitable” Bakken program will allowLightstream (formerly PetroBakken) to take advantage of“fantastic economics and the potential for application on an

IAN DUNDAS

see BERTHOLD FAVOR page 17

see LIGHTSTREAM PROGRAM page 10

The capital infusionwill see the companyspend up to C$725

million this year andresult in 111 net

wells, up 18 from theprevious target.

Lower TF ‘filled with oil’ Continental: lower benches of Three Forks appear commercial over broad area

By RAY TYSONPetroleum News Bakken

Williston Basin pio-neer Continental

Resources has completedenough exploratory work onthe lower benches of theThree Forks to conclude thatthe play is massive, full ofoil, and more.

“It is looking commercialover a very large geographic area, where we thinkthat at least one and in many cases two of thesedeeper benches will be commercially productive,”said Winston Frederick Bott, Continental’s presi-

dent and chief operatingofficer.

“We have confirmed theresource tank — the produc-tion capability of the reser-voirs. We’ve confirmed it’sfilled with oil. We’ve con-firmed it’s not filled withwater.”

The middle Bakken andunderlying first bench of the

Three Forks are today’s primary sources of oil inthe Bakken petroleum system. However, the lowerzones of the Three Forks — TF2, TF3 and TF4 —

see LOWER BENCHES page 11

WINSTON FREDERICKBOTT

HAROLD HAMM

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It was an increaseof 11,286 bpd overthe May production

of 810,129 bpd.

http://www.petroleumnewsbakken.com/

2 PETROLEUM NEWS BAKKEN • WEEK OF AUGUST 18, 2013

Petroleum News Bakkencontents

SIDEBAR, Page 13: Top 10 Bakken wells by IP rate

14 North Dakota oil permit activity, Aug. 6-12

15 North Dakota well operator transfers, July 6-Aug. 9

16 ND Pipeline Authority, Monthly update, Aug. 15

10 Montana DNRC, BLM release sale lists

12 Montana oil well permits, completions, Aug. 2-8

12 Statoil No. 1 five weeks running; Top 50 Bakkenproducers chart on hold

13 IPs for ND Bakken wells, Aug. 6-12

13 Looking for a rig report?

13 Bakken producers’ stock prices

BAKKEN STATS MOVING HYDROCARBONS

COMPANY UPDATE3 Crescent Point’s building blocks

6 Bakken oil production shapes WPX future

8 Oasis differentiating itself, exploring

7 Bakken oil to rock West Coast, Alaska

LAND & LEASING

PEOPLE TALK4 O&G, IT execs join MDU Resources board

MDU Resources chairman: Hellerstein, McCracken bring‘senior leadership experience’ to respective positions

5 Emerald building momentum

New Bakken operator ramps up production, managescosts and grows assets while on its way to meet 2013 guidance

ND oil production up 11,286 bpd

Berthold gets favored treatment

Lightstream finds ‘fantastic economics’ in Saskatchewan Bakken

ON THE COVERGaebe: ‘Sold out’

North Dakota Trust Lands auction results reflect shift to Bakken fringe

A puzzle wrapped in rail

No one talking about what’s happened to Bakken oil being moved by MM&A

Lower TF ‘filled with oil’

Continental: lower benches of Three Forks appear commercial over broad area

A semi-annual supplement

AKKEB NOIL & GAS DIRECTORYVol. 2, No. 1 Released May 2013

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By GARY PARKFor Petroleum News Bakken

C rescent Point Energy is continuingdevelopment of its core Bakken and

Shaunavon assets in Saskatchewan, whilepaying more attention to its emergingplays which include the North DakotaBakken, company Chief ExecutiveOfficer Scott Saxberg said Aug. 7.

He said the Saskatchewan propertieshave received an added prod from aSaskatchewan government approval ofthe first Lower Shaunavon unit which willuse development drilling waterflood tech-nology to increase pressure and improveoil recovery from lagging wells.

The technical approval will allow thecompany to move on the first of fourBakken waterflood units and is rated as asignificant milestone in the developmentof a waterflood program in the ViewfieldBakken resource play, Crescent Pointsaid.

“Our independent engineers havecompleted preliminary studies on existingwaterflood patterns within the Bakkenand have found ultimate long-term recov-ery factors upwards of 30 percent areachievable in those areas,” Saxberg toldanalysts. “These factors will be factoredin their year-end reserve estimates.”

The company said overall productionperformance from water injection pat-terns in the Viewfield Bakken continuesto surpass expectations, adding more than5,000 barrels of oil equivalent per day tothe Bakken production, which has result-ed in shallower declines and contributedto first half results.

100% success rateThe company reported that it partici-

pated in drilling 22 (16.2 net) oil wells insoutheast Saskatchewan and Manitobaduring the latest quarter, achieving a 100percent success rate.

Of the wells drilled, 18 (14.8 net) weredrilled in the Saskatchewan Bakken.

Crescent Point forecasts it will spendabout C$490 million in the play this year,including expenditures on land, seismicand facilities, as well as drilling up to 169net wells, 82 of which are scheduled for

the second half of the year.Crescent Point started work in the sec-

ond quarter on expanding its Viewfieldgas plant to 42 million cubic feet per dayfrom 30 million cubic feet per day toaccommodate continued increased pro-duction from its drilling success and tolevel off decline rates. The construction isexpected to finish in early 2014.

Waterflood approvalGovernment approval of the

Leitchville North Shaunavon VoluntaryUnit No. 1 waterflood is viewed by thecompany as a “major milestone” for itsLower Shaunavon development plans andwill allow implementation of waterfloodacross a larger area.

The company said it has three waterinjection wells operating in the unit andplans to convert a total of five wells towater injection this year and up to 10more wells in 2014.

It also said an application for approvalof a second unit should be submitted inthe final quarter.

Field wide, water is being injected into31 converted wells in both the Lower andUpper Shaunavon unconventional zones,with several offset producers showingpositive response through shallowingdeclines and increased production,Crescent Point said.

The company participated in drilling11 net oil wells in southwestSaskatchewan during the second quarter,posting 100 percent success rate, while 40wells of 95 planned for the Shaunavonarea in 2013 were successfully drilled.

It expects to spend C$315 million inthe area this year in the area on land, seis-mic and facilities.

Crescent Point also expanded its rail-loading facility, raising capacity to12,000 bpd from 8,000 bpd and startedwork on two oil storage tanks, with

120,000 barrels of total capacity, that arescheduled to come onstream in early2014.

North Dakota drillingOf its United States activities,

Crescent Point said it participated indrilling eight (1.7 net) oil wells in NorthDakota, targeting both Bakken and ThreeForks formations, which it lists among itsemerging plays.

It also expressed satisfaction withresults from the Uinta Basin, with currentproduction levels above 10,000 boe perday, up 28 percent from the productionacquired from Ute Energy.

Various new completion techniquesare being tested to further increase frac-ture stimulation efficiency and improveproduction rates and ultimate recoveries.

Crescent Point said it participated indrilling 41 (26.6 net) Uinta oil wells dur-


Crescent Point’s building blocks

PETROLEUM NEWS BAKKEN • WEEK OF AUGUST 18, 2013 3

One of thousands of projects using Polyguard RD-6 non-shielding coating. Our first was in 1988.

²

see CRESCENT POINT page 7

http://www.polyguardproducts.com/par


Kay Cashman PUBLISHER & EXECUTIVE EDITOR

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RIGMATS, CAMP MATS, CUSTOM FABRICATION

� P E O P L E T A L K

O&G, IT execs joinMDU Resources boardMDU Resources chairman: Hellerstein, McCracken bring‘senior leadership experience’ to respective positions

By ROSE RAGSDALEFor Petroleum News Bakken

Mark A. Hellerstein and William E.McCracken have been elected to

the board of directors of MDUResources Group Inc., effective Aug. 1.

MDU Resources is comprised ofboth regulated and non-regulated ener-gy, construction and transportationinfrastructure businesses with opera-tions in the Bakken, North Dakota andother areas, including FidelityExploration & Production Co.

Hellerstein is the retired president,chief executive and board chairman ofSt. Mary Land & Exploration Co. (nowSM Energy Co.). He led St. Mary’sgrowth from an $80 million privatecompany to a $2.5 billion public com-pany listed on the New York StockExchange. His 17-year career at thecompany also included positions asexecutive vice president and chieffinancial officer.

Prior to joining St. Mary,Hellerstein’s career included positionsas chief financial officer for CoCaMines Inc., American Golf Corp. andWorldwide Energy Corp. He is a formerboard member of Transocean Inc. Hisleadership has been recognized withinduction into the Rocky Mountain Oiland Gas Hall of Fame, and Ernst &Young has named Hellerstein bothnational and Rocky MountainEntrepreneur of the Year. Hellerstein hasa bachelor’s degree in accounting fromthe University of Colorado.

McCracken is the retired chief exec-utive and board chairman of CATechnologies, one of the world’s largestinformation technology managementsoftware companies. He currentlyserves as an executive advisor to thecompany. Prior to joining CATechnologies, McCracken had a 36-yearcareer with IBM Corp. He held a num-ber of executive positions includingmembership in the Chairman’sWorldwide Management Council, com-posed of the corporation’s top 30 senior

executives; general manager of IBM’sprinting division; president of IBM’sEMEA and Asia PC Co.; and generalmanager of marketing, sales and distri-bution for IBM PC Co. He is formerpresident of Executive ConsultingGroup LLC, and a former board mem-ber of IKON Office Solutions Inc. (nowpart of Ricoh Co.).

McCracken was named one of thetop 100 most influential people in theboardroom in 2009 by the NationalAssociation of Corporate Directors,NACD, and is a member of the NACDboard. He has a bachelor’s of sciencedegree in physics and mathematics fromShippensburg University.

Committee assignmentsIn addition to general board respon-

sibilities, Hellerstein will serve onMDU Resources’ Board AuditCommittee, and McCracken will serveon the board’s Nominating andGovernance Committee.

“Mark and Bill bring a tremendousdepth of senior leadership experience,both in the executive office and theboardroom, as well as expertise in keyareas that can help guide MDUResources’ continued growth,” saidMDU Resources Chairman Harry J.Pearce. “Mark has extensive experiencein oil and natural gas development,which is one of our growth centers, aswell as outstanding experience as a chieffinancial officer. Bill’s technology expe-rience will be invaluable in today’s busi-ness environment, and he also is a leaderon corporate governance issues.” �

MARK A. HELLERSTEIN WILLIAM E. McCRACKEN

People Talk

http://www.bcarch.org

http://www.mtrigmat.com/


After merging with Voyager Oil andGas and becoming a Williston Basin

operator in July 2012, Bakken-focusedEmerald Oil recapitalized and made somecritical acreage acquisitions in its LowRider core area in west-central McKenzieCounty, N.D., but it wasn’t able to actuallystart producing oil and gas in the basinuntil late in the first quarter of 2013.However, the company aggressively pur-sued the development of its WillistonBasin assets in the second quarter, and asof Aug. 6, Emerald Oil had four wells onproduction, was drilling the plugs out oftwo others it had just fracked, was drillingtwo more wells, had another permitted, andwas producing an average of 1,393 barrelsof oil equivalent per day.

“Our focus on the remainder of 2013 isramping up production and acquiring moreoperated drilling spacing units from theWilliston Basin, while keeping our balancesheet conservatively geared. Our gameplan is very simple, and financial impact istangible,” said Emerald’s Chief ExecutiveOfficer McAndrew Rudisill in an Aug. 7conference call.

Emerald Oil completed its first operat-ed well in March, and that well, the Pirate1-11-2H in the Foreman Butte field, camein with a 24-hour initial production, IP, of1,801 boepd and had a 30-day IP of 1,025boepd. The company’s second operatedwell, the Arsenal 1-17-20H in theCharbonneau field, went on production inJune with a 24-hour IP of 1,638 boepd andhad a 30-day IP of 761 boepd. Emerald’sthird operated well, the Caper 1-15-22Hwell in the Boxcar Butte field, also went onproduction in June with 24-hour and 30-day IPs of 2,063 and 994 boepd, respec-tively. Its latest well to go on production isthe Mongoose 1-8-5H well inCharbonneau field, which had a 24-hour IPrate of 1,523 boepd and a 30-day IP of 892boepd.

Drilling and fracking operationsIn mid-June, Emerald added a second

drill rig and is expecting to drill 12 netoperated wells in 2013. All four ofEmerald’s producing wells have targetedthe middle Bakken. The company says it’splanning to test the Three Forks formationand expects results to be available forrelease in early 2014. Emerald alsobelieves that its Low Rider acreage is wellsuited to increased well density, and hasstarted on that permitting process.

Emerald has been drilling its wells inless than 30 days at a cost of approximate-ly $10 million per well, which is consistentwith the company’s earlier estimates. With12 wells planned for the year, Emerald hasearmarked a total of $120.2 million for its2013 operated drilling program. The com-pany has earmarked an additional $7.4million for participating in 0.8 net non-operated wells.

While Emerald uses third-party drillingand fracking contractors, the company’sown groups manage its drilling and frack-ing operations as well as design its wellfracks. Rudisill said the fracking groupcontinued its efforts in the second quarterand is enhancing the fracture stimulationdesign of each new well with a specificfocus on fracture propagation along withplacement of higher proppant concentra-tion in each stage.

Acquisitions and interestsEmerald has been increasing its inter-

ests in the Williston Basin, and in the sec-ond quarter it entered into an agreementwith a third party to pick up approximate-ly 5,874 net undeveloped leasehold acresfor $6.5 million. That acreage is contigu-ous to and directly south of the company’soperated Low Rider prospect and addedsix new operated spacing units to theprospect.

In another acquisition which closed onAug. 2, Emerald picked up approximately3,500 partially developed net acres, alsocontiguous to its Low Rider prospect. Thatacquisition, worth a reported $10.5 mil-lion, adds eight more spacing units and iscurrently producing approximately 120boepd from the Bird Bear, Duperow and

Red River formations. With the recent acquisitions, Emerald

now has an approximately 67 percent aver-age working interest in its Low Rider oper-ated area. However, the company contin-ues in its efforts to increase its Low Riderworking interest to 75 percent.

In addition to acquisitions, Emerald isalso divesting some assets, and in Aprilsold interest in approximately 970 net non-operated Williston Basin acres for approx-imately $7.1 million. That sale, along withthe recent acquisitions, put the company’stotal pro forma Williston Basin acreage atapproximately 58,000 acres. Of thoseacres, approximately 25,750 acres areoperable and located in McKenzie, Dunnand Williams counties, N.D., and inRichland County, Mont. Emerald currentlyhas 23 spacing units in the Williston Basin.

The remaining approximately 32,250 acresare net non-operated acres in the WillistonBasin. Emerald reports those acres as hav-ing 166 net identified drill locations and0.8 net wells.

As of June 30, Emerald reported fourgross (2.84 net) operated Bakken andThree Forks wells and 189 gross (7.4 net)non-operated Bakken and Three Forkswells in North Dakota. In Montana, thecompany had 26 gross (2.18 net) non-oper-ated Bakken and Three Forks wells. All ofEmerald’s Williston Basin wells to datehave targeted the middle Bakken, but thecompany says it’s planning to test theThree Forks and expects results to be avail-able for release in early 2014.


Emerald building momentumNew Bakken operator ramps up production, manages costs and grows assets while on its way to meet 2013 guidance


Emerald’s Williston Basin Operations

Williston Basin Acreage MapWilliston Basin Overview

Williston Basin Acreage Summary

~58,000 net acres25,750 net operated acres32,250 net non operated acres

2012 Reserves and productionProved reserves: 5.4 MmboeNet wells producing: 9.8 net wells (all non operated)Production exit rate: 1,197 BOEPD

2013 Development programDrilling budget: ~$127.6 millionNet wells guidance: 12.8 net wells (12.0 net operated wells)Estimated 2013 exit rate: 2,850 BOEPD

* FY13 exit rate based on EOX internal forecast.

Net Acres by County: Op Non Op TotalMcKenzie County, ND (1) 14,750 7,050 21,800Richland County, MT (2) 5,000 10,500 15,500Dunn County, ND (3) (4) 4,000 3,800 7,800Williams County, ND 2,000 6,500 8,500Mountrail County, ND & other 4,400 4,400

Total Net Acres 25,750 32,250 58,000

% Operated 44%

Notes:(1) Operated: Avg. WI approximately 67%, approaching 75%(2) Operated: Avg. WI approximately 50%, range of 35% 65%(3) Operated: Avg. WI approximately 50%, range of 35% 75%(4) Approximately 2,800 net acres in south central Dunn

see EMERALD UPDATE page 7

http://www.NorthernOilServices.com/

By STEVE SUTHERLINFor Petroleum News Bakken

WPX Energy Inc. is undergoing amultifaceted transformation that

says allows it to take advantage of lowercosts and a surge in oil production fromits Williston Basin properties.

“We have high-performing assets andwe are continuing our track record ofoperations and exploration success,”Ralph A. Hill, WPX president and chiefexecutive officer said in the company’ssecond-quarter 2013 earnings report.

In remarks at the company’s Aug. 1conference call, Hill said a rise in produc-tion ratios of oil to gas might occur in2014, after new Bakken oil productioncomes online. He cautioned, however thatthe ratio would not change much in 2013.

“I think for the mix, at the end of theyear, I don’t think we will see a substan-tial change in the mix,” he said, addingthat 2013 levels would remain near thosequoted by the company earlier in the yearof about 78 percent gas.

“I would guess that mix would beabout the same, just because a lot of theBakken production out there will be com-ing on at the end of the year but notenough to change overall percentage forthe year,” he said.

While higher oil ratios would likelylead WPX to higher sales in a market-place soft on natural gas, executivesemphasized that the company has alsoenjoyed a dramatic positive impact ofrapid technological improvements within

its Bakken operations.

Simultaneous operations“In the Williston, we’re now doing

simultaneous operations like we’ve donein the Piceance, allowing us to both drilland complete wells concurrently on the

same pad, Hill said. “This is one waywe’re driving down drilling days andcosts in North Dakota, making it possibleto do more drilling and completions thisyear than originally planned withoutincreasing our rig count and all within ourcapital guidance range.”

Hill said operational improvements ledto seven more wells drilled and 11 addi-tional completions in 2013 — a total of46 spuds and 52 completions.

”We expect this to increase the year-end exit rate for our Williston oil produc-tion by more than 2,000 barrels per day— or 15 percent — to a new total of15,000 barrels of oil per day. For 2014this additional activity should increaseour Williston production by 8 percent.”

Hill said the oil production growth rateachieved by WPX in the Williston Basinhas been impressive — up 30 percent inthe second quarter compared with a yearago.

The company said production wouldhave been higher yet were it not for in-transit rail shipments awaiting delivery.The rail delays sliced deliveries by about500 barrels per day in second-quarter2013, to a level of 12,300 barrels per day.

Still, production grew, Hill said,adding that WPX put nine wells on firstsales in the second quarter — seven in theMiddle Bakken, and two in the ThreeForks.

“We spud 11 wells with the four rigs;our wells continue to perform at or aboveour expectations,” he said. “We have low-ered our well costs throughout thebasins.”

Honing company techniqueHill said a variety of operating effi-

ciencies were allowing WPX to makemore headway in the Bakken, in a shorterlength of time.

“We have now fully transitioned to paddrilling and we have implemented simul-taneous operations which allow us todrill, produce and complete at the sametime on the same pad,” he said. “Over thelast year, we reduced our drilling times by35 percent; our last two wells have aver-aged 22 and 24 days respectively in

drilling.“In addition to faster drilling times, we

are now drilling all our wells with brinewater, and two of our wells TD’d atdrilling rates exceeding 1,000 feet per day— or less than 20 days drilling.” he said.

Early in 2013, WPX completed its first“triple zipper frack,” completing threewells at once. Hill indicated that multiplezipper frack results were positive.

“Our zipper frack completions havebeen very successful, and we recentlycompleted our first triple zipper fracksuccessfully.” Hill said. “On a go-forwardbasis, we intend to use these dual andtriple-zipper fracks.”

Hill added that infrastructure to thecompany’s Williston operations isimproving. The company will electrify 51of its 55 Van Hook wells by the end of theyear which will slash its lifting costs, andit is building all of its winter pads in sum-mer to save money.

Target well cost eludesWhile efficiency improvements have

been many, WPX still finds its well costslooming above the company’s target cost.

“Our well costs are still in the $11 mil-lion range — that’s soup to nuts; thatincludes everything,” Hill said. “Our tar-get well costs are more like $10 million.We expect to be headed that way in thethird and fourth quarter.”

Given challenging 2013 weather con-ditions, Hill said, he felt fortunate thatWPX was able to make the strides it did.

“Obviously, in the first quarter, we hada severe winter. We had severe floodingthe second quarter,” he said. “You can seewe will still get a number of spuds off andcompletions done, so we did very wellthere.”

Some costs — notably ceramic prop-pants — are higher by design and judgedwell worth the cost.

WPX said it is using ceramic proppantin the Bakken rather than just sand.

“We’re currently using about a two-thirds to one-third ratio of ceramic tosand,” the company’s operations depart-


Bakken oil production shapes WPX futureCompany reports 30% oil increase, improving operating efficiencies; management hints at ‘14 shift in oil vs. gas production ratio

see WPX OUTPUT page 7


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ing the second quarter and plans to spendC$195 million in the area this year,including drilling up to 74 net wells.

It said rail operations in Utah haveallowed it to broaden the market for Uintacrude beyond the Salt Lake City refiningmarket.

The company said it expects to trans-fer its staff and equipment to its own per-manent site later in 2013, with initialcapacity of more than 10,000 bpd, com-pared with current rail volumes of 2,000bpd.

The Calgary-based company said itproduced 117,700 boe per day (91 per-cent liquids) in the latest quarter, up 21percent from a year earlier, and generatedrecord cash flow of C$502.5 million, upalmost C$121 million year-over-year.

Saxberg said the results led CrescentPoint to raise its guidance for the year to117,500 boe per day, with an exit rate of119,000 boe per day and capital spendingfor the year set at C$1.5 billion. �


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CRESCENT POINT

ment said. “Although that adds about$1 million to our costs, ceramic com-pletions are more predictable than sand,leading to better results.”

As for the future, Hill has yet to

throw out specific numbers but he doessay the future looks bright.

“We have not given out guidance for’14,” he said, “But obviously we expectvery impressive growth rates for theWilliston basin for 2014.” �

2013 outlookIn the Aug. 7 conference call, Rudisill

said Emerald expects output to increase toapproximately 2,050 boepd in the thirdquarter. He added that the company iscomfortable with its current guidance toexit the year with a daily output of 2,850boepd and finish the year with an averagedaily of production of 1,800 boepd.

Rudisill believes that the company’s

approach to operating in the WillistonBasin allows it to both increase produc-tion and reduce costs. “We’ve built strongoperating momentum, and are focused on

building Emerald’s production while driv-ing our capital costs down through moreefficient drilling techniques, carefullyengineered fracture stimulation designsand leveraging our growing field infra-structure,” Rudisill said in an Aug. 6 pressrelease. “We reaffirm both our 2013 aver-age and year end production guidance.” �


WPX OUTPUT


EMERALD UPDATE

MOVING HYDROCARBONSBakken oil to rock West Coast, Alaska

Tesoro’s planned train unloading and marine loading terminal at the Port ofVancouver, Wash., will enhance its refining profits while shaking up the West Coastmarket for crude, the company says.

Tesoro President and CEO Greg Goff told analysts in an Aug. 2 conference call thatBakken oil would have a price advantage at the firm’s West Coast refineries, while —due to its sweet, light nature — simultaneously delivering higher yields of profitablerefined products.

Oil shipped through Vancouver will have a dramatic impact on Alaska North Slopecrude markets, Goff said.

“It is our intent to make a tremendous focus on how we supply crude oil to the refin-ery and gain crude advantage there, so we are doing everything we can to be able to dothat,” he said, “The facility also was designed to supply the entire West Coast. … Wecan go from as far away as Alaska to Southern California, in those refineries, which weintend to do.”

The costs to transport crude from the Bakken to the Pacific Northwest — loadingfee, unloading fee and rail car costs — are in the $9 a barrel range, Goff said, addingthat the yield factor of Bakken crude relative to North Slope crude is “in the $3 to $5 abarrel range.”

“If you look at the cost there of around $9 or so and then the yield advantage, youcan kind of see where the spread needs to be between the Bakken crude and ANS,” hesaid. “The facility at the Port of Vancouver in Washington will have, actually, a lot offlexibility and capability to take different types of crudes, from heavy Canadian crudesto crudes from the mid-continent, so we’ll have that capability with the tankage andsegregation there,” Goff said.

“As we mentioned, initially, we’ve just targeted to come on with about 120,000 bar-rels a day. But we can ramp up very, very quickly to just short of 300,000 barrels a dayif the demand’s there, not only from Tesoro, but anyone else.”

A complete transcript of the conference call is available at www.SeekingAlpha.com. —STEVE SUTHERLIN

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While a transition to pad drillingand spring breakup left Oasis

Petroleum with a backlog of well comple-tions and kept the company’s productionflat at the end of second quarter, theDenver-based, Bakken-focused independ-ent is poised for anincrease in bothcompletions andproduction in thethird quarter as italso tests the secondThree Forks benchand experimentswith fracking varia-tions, optimizescompletions andtests densities.

According toChairman, ChiefExecutive Officerand PresidentThomas Nusz, 2013has been a “transi-tion” year for Oasisas it moved awayfrom developmentgroundwork andtoward full-scale development mode,most of which now involves pad drilling.“We’re beginning to realize the benefitsof the efficiencies and cost savings ofresource manufacturing as we improveour planning and processes and drill moremulti-well pads,” Nusz said in an Aug. 7conference call. “In the second quarter,

approximately 75 percent of the spudwells were on pads and we maintainedour drilling pace.”

At the same time, Nusz said, Oasismoderated its completion activity in sec-ond quarter to control costs during springbreakup. The result, he said, was anincrease in the number of wells awaiting

completion from 20 at the beginning ofthe quarter to 37 at the close. “So with therigs continuing to operate on pad loca-tions, we avoided many of the restrictionsassociated with operating during the wetseason and deferred completion activityto the summer months when it’s more costeffective to undertake frack operations,”Nusz said. “Even with May as one of thewettest months on record, we executedwell against our original plan.”

Oasis recently added two drill rigs toits fleet, bringing its Williston Basin rigcount to 11 as it plans to ramp up opera-tions in the second half of the year. In anAug. 6 press release, Nusz said comple-tion activity is expected to increase as thecompany works through its completionbacklog. He added that the company isplanning to complete between 40 and 45wells in the third quarter and put averagedaily production in the range of 31,500 to34,500 boepd, up from the 30,171 boepdoutput in second quarter.

“Oasis continues to differentiate itselfas one of the premier operations in theWilliston Basin,” Nusz said. “We’reproud of our culture, the accomplish-ments of our team and the direction we’regoing as a company. This has been an

exciting year as we work to further growour inventory and improve the economicsof our business.”

Exploring lower Three ForksOasis has numerous first bench Three

Forks wells in its inventory, and is nowplanning to drill two second bench testwells in the third quarter, one in IndianHills in the West Williston operations,and the other in North Cottonwood in theEast Nesson operations.

In second quarter, Oasis cored sixwells to assess potentials of the lowerbenches, and according to ChiefOperating Officer and Executive VicePresident Taylor Reid, those results were“encouraging,” and Oasis has starteddrilling the two exploratory wells. Reidsaid Oasis will finalize its lower benchassessment in the second half of 2012 andplans to incorporate additional lowerbench tests in its 2014 drill plans.

Other operators have drilled wells intothe lower Three Forks benches around theIndian Hills area and have provided Oasiswith additional data it used to evaluatesecond bench prospects. Reid said those


Oasis differentiating itself, exploring


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TFS highlightsSouth Cottonwood, Indian Hills, East Red Bank and aportion of North Cottonwood performance iscomparable to nearby Bakken wells

TFS wells planned in 201317 wells are planned outside of Indian Hills and SouthCottonwoodSix pilot wells – cores and high resolution logs acrossacreage to evaluate potential of lower TFS benchesLower bench test in Indian Hills and North Cottonwood

Additional TFS drilling in 2013~30 wells will be drilled on pads

LegendOperated producing TFS wells Other selected TFS 1 wells operated by others

2012 and 2013 TFS benches pilot wells Other selected TFS 2 or TFS 3 wells operated by others

Range of wells planned for 2013

Three Forks (TFS) Overview

DIVIDEBURKE

MOUNTRAIL

SHERIDAN

RICHLAND

ROOSEVELT

MCKENZIE

WILLIAMS

East NessonWest Williston

Sanish*Mondak

Hebron(0 2)

Target

Red Bank(6 10)

2

43

1213

11

SouthCottonwood

(13 17)

NorthCottonwood

(6 8)

14

15

Missouri

IndianHills

(20 24)6

(#)

7

5

8

1

9

16

St. Croix

TFS WellsOasis Selected Operated Other SelectedWells

West Williston East Nesson Other Operators TFS 1 wells

(1) Arlyss (8) Zdenek (12) Obert (CLR) 1st Bench

(2) Mercedes (9) Orion (13) State (Brigham) 1st Bench

(3) Moore (10) Caspian (14) Liffrig (Brigham) 1st Bench

(4) Wilson (11) Spratley (15) Krieger (XTO) 1st Bench

(5) Justice

(6) JO Anderson Other Operators TFS 2 or TFS 3 wells

(7) Birdhead (12) Stedman (CLR) 2nd and 3rd benches

(16) Charlotte (CLR) 2nd and 3rd benches

(17) Angus (CLR) 2nd bench

(18) Riverview (EOG) 2nd bench

(19) Barney (CLR) 2nd bench

(20) Omlid (Zenergy) 3rd bench

(21) Patsy (Zenergy) 2nd bench

17

*Sanish is a non operated position

10

18

19

20 21

see OASIS UPDATE page 9

http://www.petroleumconnection.com/cleanfracking

http://www.shelterlogic.com/

wells have shown favorable results, andalong with the cores have confirmed thecompany’s plans for a second bench test.

There are fewer existing lower ThreeForks wells around its North Cottonwoodoperations, so Oasis had less outside datato use in evaluating that bench. However,Reid says North Cottonwood coresshowed good enough porosity and oil sat-uration to warrant a second bench test.“And so this is our way of taking the nextstep and confirming that there is enoughrecoverable oil to make economic wells inthat area. And really, we’re optimisticabout the whole Cottonwood area.”

Fracking experimentsOasis has been experimenting with

slickwater fracking in a couple of wells,one of which went on production threedays before the Aug. 7 press conferenceand was flowing back. When available,Reid said, the results will be evaluated rel-ative to the company’s typical fracks inthe area.

The slickwater fracking is more expen-sive, so whether Oasis goes to more slick-water fracking will depend on the resultsof the two fracks.

“The slickwater fracks that we’redoing are more expensive, primarilybecause of the volume of water used inthose fracks,” Reid said. “So our typicalfrack is about 70,000 barrels of fluid. Theslickwater fracks we’re doing are closer to225,000 barrels of fluid — so a really sig-nificant increase in total fluid. As far asan incremental capital cost, it’s over $1million. It just depends on the area.”

Oasis has also been “tweaking” itsfracking operations in other ways. Thecompany’s standard frack was a 36-stageoperation, depending on the well location,and involved either all sand in shallowareas or a combination of sand andceramic proppant in deeper areas. NowOasis is experimenting with as few as 20stages, and is varying the amount of sandused in other fracks. The company is alsoexperimenting with sleeves.

The frack method used depends onwell location, Reid said.

Optimizing well costsOver the last year, Oasis has been

working to optimize well costs. Throughthe first half of 2012, the cost per operat-ed well averaged $10.4 million, but by theend of first quarter 2013, that average haddeclined to $8.4 million. In second quar-ter, the company brought the average wellcost down even further to $8.2 million,moving closer to its 2013 year-end targetof $8 million.

But that $8 million doesn’t includeadditional savings that Oasis is seeingfrom its wholly owned completion sub-sidiary, Oasis Well Services, or OWS.“With the progress we’ve made already todate, we can drive well cost to our year-end target of $8 million per well, if notbelow, and that’s excluding the impact ofOWS.”

As it continues to transition to paddrilling, Oasis added a number of newmulti-well pads in the quarter, includingfive four-well pads, and is currentlydrilling an eight-well pad. Reid said thecompany expects to have approximately60 to 70 percent of its wells on pads in2013, which should increase to approxi-mately 90 percent in 2014.

One advantage to pad drilling is frack-ing efficiency, and Reid said on a three-well pad in Montana, OWS was able topump 96 frack stages with 9.9 millionpounds of sand in nine days at an averagecost of $6.7 million per well. That, he

said, represented a cost reduction ofapproximately 10 percent relative to a sin-gle well frack using all sand in the samearea.

“Increased efficiency and reducedcycle times on these pads will drive costimprovements through 2013 and into nextyear,” Reid said. “Oasis Well Services hasalso delivered great results, saving thecompany approximately $400,000 per netwell completed, which puts us below anaverage well cost of $7.8 million acrossall of our operated wells.”

Oasis is also focusing attention onoptimizing well densities.

Reid said the company is comfortablewith four Bakken and four Three Forkswells per 1,280-acre spacing unit, but thatwell density will vary depending on reser-voir quality and thickness.

Oasis is still experimenting with densi-ties. He said five of the company’s 22planned 2013 spacing tests are now onearly production with the rest to go on byyear-end.

Company-owned infrastructure Oasis is currently gathering about 85

percent of its oil through its own system,which Reid said gives it easy access toboth pipelines and railheads. In June,Oasis exported approximately one-thirdof its oil through pipelines, whereas inJuly that volume went up to about two-thirds.

Oasis also has its own natural gas gath-ering system and does saltwater disposalthrough another subsidiary, OasisMidstream Services.

“In addition, we now have about 90percent of our wells connected to gasinfrastructure and Oasis Midstream cap-tures approximately 80 percent of ourproduced saltwater into our disposal wellswith over 65 percent traveling through ourgathering system,” Reid said.

Second quarter operations and production

In second quarter, Oasis completedand brought online 20 gross (14 net) oper-ated wells, bringing its gross number ofproducing Bakken/Three Forks wells to281 (227.6 net). Those wells are in theWest Williston (177 gross, 143.1 net), andEast Nesson (84 gross, 70.5 net) areas.

Oasis also had eight East Nesson gross(0.4 net) non-operated wells go on pro-duction in second quarter, bringing thecompany’s gross non-operated producingwells in the Williston Basin to 435 (34net).

Altogether the wells produced an aver-age of 30,171 boepd in second quarter, upa fraction from the 30,153 boepd pro-duced in first quarter, but up 48 percentfrom second quarter 2012. Second quarter2013 output was 90.6 percent oil. �

Editor’s note: Two additional OasisAugust presentation slides can be foundhere: http://bit.ly/15EXNcp


Renderings are for illustration purposes only and may change without prior notice.

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OASIS UPDATE

C O M P A N Y U P D A T E

A S S O C I A T I O N S

L A N D & L E A S I N G

Vol. 1, No. 21 • www.PetroleumNewsBakken.com A semi-monthly newspaper for industry and government February 17, 2013

Crude on rails in for long haul

VERN

WH

ITTE

N P

HO

TOG

RAPH

Y

Plains All American’s Manitou crude oil and NGL rail facility nearRoss, west of Stanley in Mountrail County, North Dakota. Phototaken this winter by Vern Whitten. See rail story below.

WLL gets bum rapJames. T. Brown: Whiting Petroleum is not running out of drilling inventory

By RAY TYSONPetroleum News Bakken

Denver-based E&P independentWhiting Petroleum Corp. is finding

it difficult convincing investors that thecompany is not running out of suitableplaces to drill.

“The knock against Whiting is that youguys don’t have any inventory and in threeyears you’re going to be done,” James T.Brown, Whiting’s president and chief operating offi-cer, told industry analysts Feb. 6 at the Credit Suisse2013 Energy Summit in Vail, Colo.

The lack-of-inventory perception seems to be par-

ticularly acute when it comes to findingnew targets in Whiting’s flagship Sanishfield in North Dakota’s Williston Basin,which accounts for around 30,000 barrelsper day, or nearly 40 percent of the compa-ny’s roughly 80,000 barrels per day of pro-duction.

By the end of 2012, a total of about 300production wells had been drilled in theSanish field, with at least another 200 to bedrilled and completed.

“It seems that when we get to the end of everyyear, we have two-and-half to three years of drilling

Riverbed draws top bidsQEP Energy high bidder on 22 Missouri River leases; shore zone included


A total of 27,370 acreswere leased in 306 tracts

in nine western North Dakotacounties in the Feb. 5 NorthDakota Department of TrustLands oil and gas lease auctionbringing in a total of$24,609,206 at an averageprice of $899 per acre. The auction was dominated bytracts between the former high water marks on thetwo banks of the Missouri River under LakeSakakawea in Dunn County.

Of the 27,370 acres leased, slightly less than one-

third or 9,900 acres were in106 Missouri riverbed tracts inDunn County and those tractsbrought in a total $21,227,455,a sum that accounted for morethan 86 percent of the grossauction proceeds.

The Dunn County leaseactivity was, in turn, dominat-ed by 22 Missouri riverbedtracts totaling 1,465 acres that

fetched a total of $16,536,197 at an average price of$11,291 per acre, all purchased by Denver-basedQEP Energy Co.

Galt: MPA ever vigilantMontana Petroleum Association chief keeps tabs on several bills during session

see WHITING INVENTORY page 18

LANCE GAEBE DREW COMBS

see ND LEASE AUCTION page 21


Numerous oil and gas-related billshave been introduced thus far in the

63rd session of the Montana legislaturecurrently in session in Helena, and whileMontana Petroleum Association ExecutiveDirector Dave Galt follows all of themclosely, he recently spoke with PetroleumNews Bakken and discussed those that hethinks are most important to his membership.

The key bills Galt identified fall into a variety ofcategories. Some deal with compensation forlandowner surface damage, eminent domain andforced pooling, all of which Galt lumps together intowhat he considers to be “property rights” legislation.Other bills that Galt considers key deal with taxation,

temporary leasing of water rights, financialrelief to oil and gas-impacted communities,and carbon sequestration and enhanced oilrecovery using carbon dioxide.

Property rights: surface damage compensation

House Bill 431, introduced by Rep.Austin Knudsen of Culbertson, is a surfacedamage compensation bill that would addto the existing oil and gas surface damage

and disruption compensation statue the definition of“lost land value” as “the value of the highest and bestreasonably available use, including the proposed use.”The bill would also require that the surface owner andthe oil and gas developer or operator attempt “in good

DAVE GALT

see ENERGY LEGISLATION page 22

Rail will survive pipeline additionsThe need for rail to move crude from

Midcontinent fields will likely persist,even if plans for expanding pipelinelinks from the Bakken to the Gulf Coastgo ahead, EOG Resources ChiefExecutive Officer Mark Papa told aColorado conference.

He said rail will still be used fiveyears from now to deliver Bakken crudeto all three Lower 48 coasts — the Gulf,East and West — but expects the cur-rent advantage of Louisiana Light Sweet, LLS, crude pricesin the Houston market will probably change within 18

Bakken threatens Alberta upgraderThe Bakken might be about to register a friendly-fire vic-

tim — a C$11.6 billion Suncor Energy upgrader to convert oilsands bitumen into synthetic crude for refining into fuels.

Suncor, with France’s Total as a 49 percent partner, expectsto decide no later than March 31 on the immediate fate of itsVoyageur project, which has been in a holding pattern for thelast four years, putting an end to its original startup date of2016.

Since taking control of the oil sands giant nine monthsago, Suncor Chief Executive Officer Steve Williams hasincreasingly hinted that economic challenges could be theundoing of Voyageur.

His explanation has been delivered in clear-cut terms.

Helms slams U.S. Fish & Wildlife Two new slides have appeared in

Lynn Helms’ presentation packet —slides with information that he thinksindicate an attempt bythe U.S. Fish & WildlifeService to take over oiland gas permitting inNorth Dakota.

One is a map backing up his agency’srecent analysis that shows 83 percent ofNorth Dakota’s oil and gas spacing unitshave some federal land ownership, surface and/or minerals.

Helms, director of the North Dakota IndustrialCommission’s Department of Minerals, Oil and Gas Division,told North Dakota lawmakers in January, “It was really sur-prising to me when we did this analysis to find out that 83

see RAIL SURVIVAL page 24

MARK PAPA

see ALBERTA UPGRADER page 24

see PERMITTING page 10

JAMES T. BROWN

LYNN HELMS

page6

Senate majority leader weighs in onNorth Dakota oil, gas legislation GET THE

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even broader scale in the years to come.”The capital infusion will see the com-

pany spend up to C$725 million this yearand result in 111 net wells, up 18 from theprevious target.

Lightstream said the spending changesinclude an increase in facilities spendingof about C$25 million as a result of costoverruns and scope changes, as well ashigher-than-anticipated drilling and com-pletion costs on exploration wells drilledin emerging play areas “where innovativetechniques are being applied to delineateand de-risk new plays.”

Wright said the adjusted capital guid-ance will “reflect some additional spend-ing on our facilities, some expensive testwells and new play concepts that we hopewill bear fruit into the future.”

Lightstream said it is holding its aver-age production guidance for 2013, butlowering its exit rate by about 4 percent to47,000-50,000 barrels of oil equivalentper day, reflecting the deferred wells, mostof which were scheduled to start produc-ing in the fourth quarter.

Chief Financial Officer Peter Scott saidthe net result from the capital budgetchanges and an improved outlook for netrealized pricing should increase the flowof funds from operations by C$40 millionto C$60 million to about C$720 million.

Lightstream reported that output for thesecond quarter rose to 46,046 boe per dayfrom 38,715 boe per day a year earlier,ahead of the company’s forecast becauseof its maturing production base.

With first half production at the higherend of the company’s guidance, it expectsa slight decline in the third quarter sincethe timing of summer drilling will meannew wells are brought onstream later in

the period, but production should resumeits growth curve in the final quarter.

Lightstream reported a second-quarternet loss of C$50.57 million comparedwith C$24.59 million a year earlier, whilethe first half loss increased to C$48.96million from C$9.73 million.

The company tied the increased losses

to a larger foreign exchange loss, higherdepletion and depreciation associated withhigher production and a lower unrealizedgain on risk management contracts.

During the second quarter the companydrilled seven wells and brought 20 on pro-duction, with another 14 wells waiting tobe completed or to start production.

The use of pad drilling within theCardium business unit allowedLightstream to continue completion activ-ities through the spring melt, resulting in13 wells being completed and 17 beingbrought on production.

Field activity in the Bakken unitresumed in late June after spring break-upand the company said it is expanding itsfield optimization program due to the suc-cess of its first-half investments.

The company said its enhanced oilrecovery plans continue to advance andnatural gas injection projects are expectedto grow in 2014.

—GARY PARK

See another slide from Lightstream’searly August presentation on page 12 ofthis issue. The slide is titled EARLY EORSUCCESS IN THE BAKKEN.



LIGHTSTREAM PROGRAM

The company said its enhanced oilrecovery plans continue to advanceand natural gas injection projects

are expected to grow in 2014.

LAND & LEASINGMontana DNRC, BLM release sale lists

On Aug. 9, the Montana Department of Natural Resources and Conservation’s TrustLands Management Division released its final list for its Sept. 4 oil and gas lease auc-tion. The auction will offer 5,254.00 acres in 12 tracts in these counties: Big Horn(3,840 acres in six tracts), Blaine (800 acres in two tracts), Richland (24 acres in onetract), Roosevelt (480 acres in one tract) and Yellowstone (110 acres in two tracts).

One of the Big Horn tracts is in Big Horn River riverbed. The Richland Yellowstonetracts are in Yellowstone River riverbed.

The Montana auction will be held in the Montana Department of Transportationauditorium in Helena beginning at 9 a.m. Mountain Daylight Time.

The last Montana DNRC lease auction of 2013 will be on Dec. 3 in the same audi-torium, at 9 a.m. MST. Nominations for that auction close at 5 p.m. MDT Sept. 17.

The Montana/Dakotas office of the Bureau of Land Management has also releasedits final list for its next lease auction, which is scheduled for Oct. 22. That auction willoffer BLM oil and gas leases in Montana and North Dakota as well as U.S. ForestService leases in South Dakota. A total of 21,645.46 acres will be offered in 87 tractsin the three states, although most is Forest Service acreage in South Dakota.

In Montana, 1,987.29 acres are offered in 11 tracts in the following counties: Fallon(120 acres in one tract), Pondera (800 acres in three tracts), Richland (40 acres in onetract), Valley (880.15 acres in four tracts) and Yellowstone (147.14 acres in two tracts).Only one tract, an 18.30-acre tract in McKenzie County, will be offered in NorthDakota.

Three of the four Yellowstone County tracts are Yellowstone River riverbed tracts.The fourth is in Clarks Fork River riverbed. All of the remaining tracts, 75 in all total-ing 19,639.87 acres, are U.S. Forest Service Region II leases and all are in Fall RiverCounty in the southwestern corner of South Dakota.

The Montana/Dakotas Oct. 22 lease auction will be held at BLM’s Montana officein Billings at 9 a.m. MDT.

—MIKE ELLERD

http://www.sandconference.com/

http://www.rigidbuilding.com/

have been largely a mystery.

Footprint is 3,800 square milesLower Three Forks test wells drilled

thus far by Continental and other opera-tors have delineated a “potential produc-tive footprint” encompassing 3,800square miles in the heart of the Bakkenpetroleum system, Continental disclosedin a recent conference call with industryanalysts.

“What we wanted to do, first, was todelineate the productive footprint or basi-cally determine the productivity of theselower zones, because before we startedthis, there really was no production fromthese lower benches,” said Harold Hamm,Continental’s chairman and chief execu-tive officer. “And so we’ve succeeded,really, in demonstrating that we’ve got aproductive footprint that covers at least,to this point, 3,800 square miles.”

Continental’s next step is to demon-strate that “the reserves we’re gettinghere in production are incremental to theplay,” or in addition to current reserves,Hamm said.

“That’s been a big question out there,”he added. “So we’re 65 percent throughdrilling all of these wells and are just pro-ceeding ahead as planned. And the resultswe’ve got at this point are very encourag-ing.”

Positive results from what amounts toa relatively few wells in such a large area“gives us a lot of confidence in the over-all extent and continuity of the play,”Hamm said.

14 test wells completedDuring 2013, Continental completed

14 test wells, with another four wells nowcompleting, one drilling and three wait-ing to be drilled. The completed wellsinclude one first bench (TF1) interfer-ence well, six TF2 wells, five TF3 wellsand two TF4 wells. The TF2 and TF3wells had average initial production, IP,rates of 1,200 barrels of oil equivalent perday and 970 boe per day, respectively.

“We’re on target to have all of thisyear’s 20 wells completed by year-end,bringing the total program to 22 wells,”Bott said, noting that operators completedan additional five lower Three Forkswells.

Bott said six areas have been tested forproductivity and production interference,with just one showing signs of well inter-ference, the Colter spacing unit in DunnCounty, N.D. And though the companyhas fewer than 120 days of productionhistory in the majority of the lower ThreeForks wells, Bott said, results indicatethese wells are producing in line withtypical TF1 producers in each of therespective areas.

Continental’s longest producing lowerThree Forks wells — the Charlotte 2-22Hand 3-22H — have produced 123,000 boeand 68,000 boe, respectively, since pro-duction began in late 2011 and late 2012.

Continental’s high-density programInvestors will have to wait on results

from Continental’s other Bakken explo-ration and appraisal program — fourpilot density projects to test 320-acre and160-acre well spacing in the middleBakken and first three benches of theThree Forks. The company plans to com-plete 47 gross wells to help determine theoptimum spacing and pattern to “maxi-mize the ultimate recovery” from multi-ple reservoirs.

Of the 47 wells across four pads —



LOWER BENCHES

NESSO

N AN

TICLINE

20 Miles

Bakken Structure-

LB

NSKU

MB

UB

TF1

TF2

TF4

TF3

LDGP

1 MILE

W E

Bench Charlotte IP Boepd (in order of completion) TF2 2-22H 1,396 TF3 3-22H 950 TF1 4-22H 1,365 (interference tests) TF2 6-22H 730

LB

NSKU

MB

UB

TF1

TF2

TF4

TF3

LDGP

1 MILE

W E

NESSO

N AN

TICLINE

20 Miles

Bakken Structure-

TF2 TF3

TF2

TF2

TF2

see LOWER BENCHES page 20


BAKKENStatsMontana oil wellpermits, completionsAugust 2-8, 2013

COMPILED BY DARRYL L. FLOWERSFor Petroleum News Bakken

New locations — horizontal wellsIn Richland County, Continental

Resources Inc. was approved to drill the

Cummings 1-24H. The Bakken formation

well has an SHL at SE SW 24-23N-52E

(300 FSL/1980 FWL) and a PBHL of

13,960 feet at NE NW 24-23N-52E (200

FNL/1980 FWL).

CompletionsIn Roosevelt County, Oasis Petroleum

North America LLC filed a completion

report for the Sage Brush 2758 43-9H.

The Bakken formation well has an SHL at

SW SE 9-27N-58E (190 FSL/2370 FEL)

and three laterals with BHL: 11,902 feet

at SW NE 16-27N-58E (1676 FNL/2751

FEL); 11,624 feet at SE NW 16-27N-58E

(1398 FNL/2758 FEL); and 20,305 feet at

SE SW 21-27N-58E (501 FSL/2679

FEL). The Sage Brush reported an IP of

1,431 BOPD, 727 MCFPD and 4,409

BWPD.

In Rosebud County, Fidelity

Exploration & Production Co. reported

the completion of the 71 Ranch 44-1H.

The well has an SHL at SE SE 1-10N-34E

(330 FSL/330 FEL) and a BHL of 9,900

feet at NW NE 1-10N-34E (378

FNL/2204 FEL). The Heath formation

well logged an IP of 87 BOPD, 14

MCFPD and 127 BWPD.

In Sheridan County, Samson

Resources Co. reported the completion of

the Riva Ridge 0607-2H. The well, which

Abbreviations & parametersWith a few exceptions, the Montana weekly oil activity report includes horizontal well activity in

the Bakken petroleum system in the eastern/northeastern part of the state within the Williston Basin. It

also includes the Heath play and what is referred to as the South Alberta Bakken fairway in northwest-

ern/west-central Montana, which is at least 175 miles long (north-south) and 50 miles wide (east-west),

extending from southern Alberta, where the formation is generally referred to as the Exshaw, south-

wards through Montana’s Glacier, Toole, Pondera, Teton and Lewis & Clark counties. The Southern

Alberta Bakken, under evaluation by several oil companies, is not part of the Williston Basin.

Following are the abbreviations used in the report and what they mean.

BHL: bottomhole location | BOPD: barrels of oil per day | BWPD: barrels of water per day

IP: initial production | MCFPD: thousand cubic feet per day | PBHL: probable bottomhole location

PD: proposed depth | SHL: surface hole location | TD: total depth

And public land survey system abbreviations:

FNL = from north line | FEL = from east line | FSL = from south line | FWL = from west line

BAKKEN STATS COMMENTARYStatoil No. 1 five weeks running; Top50 Bakken producers chart on hold

For the fifth week in a row Statoil has taken the No. 1 spot on the Top 10 IP

chart for North Dakota wells producing from the Bakken petroleum system (IP

stands for initial production, and is the rate at which a well produces during its

first 24 hours online).

In this case, the active oil wells contending for the position were filed Aug. 6

through Aug. 12 with the North Dakota Industrial Commission, or NDIC, as com-

pleted or released from confidential status.

The top well was Statoil’s Enderud 9-4 4TFH in the Banks field in McKenzie

County. Its IP rate was 3,042 barrels of oil.

The best historic IP rate in North Dakota’s Bakken system was another Statoil

well in the Banks field, the Beaux 18-19 4H , which came in at a hefty rate of

5,387 barrels.

Second, third and fourth place this week were all taken by Burlington

Resources, a subsidiary of ConocoPhillips. See Top 10 Bakken wells by IP rate

on page 13 of this issue.

Holding off on top producers chartsWe’re holding off on the top North Dakota (50) and the top Montana (5) pro-

ducers’ charts for the Bakken until we can convince the bulk of the companies to

give us their total Bakken system oil production in the most recent months report-

ed by each state, INCLUDING their output from confidential wells.

Hopefully, that chart will be back in this section by December.

Oasis completes tri-lateral in Roosevelt Some of the most interesting items this week are in the Montana permit and

completions chart that starts on this page.

Note the tri-lateral drilled by Oasis Petroleum in Roosevelt County, which

reported a combined IP of 1,431 barrels of oil.

In the Heath formation in Rosebud County, Fidelity Exploration & Production

reported the completion of a well with an IP of 87 barrels of oil.

And in Sheridan County, Samson Resources filed a completion report on a

Three Forks well with an IP of 111 barrels.

On page 15 in the North Dakota well operator transfer chart, Surge Energy

transferred 19 Spearfish/Madison wells in Bottineau County to Corinthian

Exploration. Most of the wells were in the Souris field.

—KAY CASHMAN

See Lightstream story on page 1. The slide above is part of the company’s second quarter earnings conference presentation.

see MT ACTIVITY page 14


Company Exchange Symbol Closing price Previous Wed.

Abraxas Petroleum Corp. NASDAQ AXAS $2.67 $2.49

American Eagle Energy Corp. AMZG OTC $1.76 $1.68

Arsenal Energy USA, Inc. TSE AEI $5.40 $0.53

Baytex Energy Corp. NYSE BTE $40.59 $39.86

Burlington Resources Co. (ConocoPhillips) NYSE COP $67.16 $66.52

Continental Resources, Inc. NYSE CLR $91.76 $96.55

Crescent Point Energy Corp. TSE CPG $39.02 $38.95

Enerplus Resources USA Corp. NYSE ERF $17.16 $16.20

EOG Resources, Inc. NYSE EOG $156.40 $156.22

Fidelity Exploration and Production (MDU) NYSE MDU $28.72 $29.09

HRC Operating (Halcon Resources Corp.) NYSE HK $5.30 $5.87

GMX Resources, Inc. PINK GMXRQ $0.29 $0.33

Hess Corp. NYSE HES $75.47 $73.56

Kodiak Oil and Gas (USA), Inc. NYSE KOG $9.41 $9.83

Legacy Reserves Operating LP NASDAQ LGCY $27.02 $27.13

Marathon Oil Co. NYSE MRO $34.60 $35.13

Newfield Production Co. NYSE NFX $23.54 $23.91

Oasis Petroleum, Inc. NYSE OAS $39.11 $42.50

Oxy USA (Occidental Petroleum Corp.) NYSE OXY $87.68 $87.88

QEP Energy Co. NYSE QEP $29.10 $29.84

Resolute (Resolute Energy Corp.) NYSE REN $8.53 $8.44

Samson Resources Co. (KKR & Co.) NYSE KKR $20.25 $20.20

SM Energy Co. NYSE SM $67.64 $68.44

Statoil Oil and Gas LP NYSE STO $21.91 $21.28

Sundance Energy, Inc. SEA ASX $1.03 $1.00

Triangle USA Petroleum Corp. NYSE TPLM $6.70 $7.13

Whiting Oil and Gas Corp. NYSE WLL $49.75 $51.13

WPX Energy, Inc. NYSE WPX $18.42 $19.07

XTO Energy, Inc. (ExxonMobil) NYSE XOM $88.42 $91.34

Bakken producers’ stock pricesClosing prices as of Aug. 14, along with those from previous Wednesday

Looking for a rig report?

PHOTO COURTESY CONTINENTAL RESOURCES

North DakotaThe best list for North Dakota is updated daily by the North Dakota Oil and Gas Division at www.dmr.nd.gov/oilgas/riglist.asp

SaskatchewanWeekly drilling activity report from the government of Saskatchewan: www.economy.gov.sk.ca/Daily-Well-Bulletin-Weekly-Drilling-Reports

ManitobaWeekly drilling activity report from the government of Manitoba: www.manitoba.ca/iem/petroleum/wwar/index.html

IPs for completed North Dakota wells

Abraxas Petroleum23622; Lillibridge 20-17-1H; Pershing; SWSE 20-150N-96W; 2SEC; McKenzie; Bakken; horizontal; 20,587; 7/24/2013;1,225 bbl

Burlington Resources Oil and Gas (ConocoPhillips)22968; CCU Burner 21-26TFH; Corral Creek; NENW 26-147N-95W; U; Dunn; Bakken; horizontal; 21,030; 7/3/2013;2,129 bbl24247; CCU Meriwether 14-19MBH; Corral Creek; LOT1 30-147N-95W; U; Dunn; Bakken; horizontal; 21,851;7/8/2013; 2,966 bbl24246; CCU Meriwether 14-19TFH; Corral Creek; LOT1 30-147N-95W; U; Dunn; Bakken; horizontal; 22,115; 7/2/2013;2,164 bbl23648; Copper Draw 24-22MBH 3SH; Johnson Corner; SESW 22-150N-96W; 4SEC; McKenzie; Bakken; horizontal;21,294; 7/17/2013; 2,725 bbl23647; Lillibridge 24-22TFH 3NH; Johnson Corner; SESW 22-150N-96W; 2SEC; McKenzie; Bakken; horizontal; 20,502;7/23/2013; 2,886 bbl

Enerplus Resources21274; Chord 148-93-18D-07-3H; McGregory Buttes; SWSE 18-148N-93W; 2SEC; Dunn; Bakken; horizontal; 20,755;7/5/2013; 1,389 bbl21275; Music 148-93-18D-07-4H TF; McGregory Buttes; SWSE 18-148N-93W; 2SEC; Dunn; Bakken; horizontal;20,540; 7/10/2013; 1,082 bbl

Hess24356; EN-Hermanson 154-93-0235H-2; Robinson Lake; SESE 2-154N-93W; 2SEC; Mountrail; Bakken; horizontal;20,275; 7/19/2013; 816 bbl24369; EN-Weyrauch A-154-93- 1720H-4; Robinson Lake; NENE 17-154N-93W; 2SEC; Mountrail; Bakken; horizontal;20,465; 7/25/2013; 1,240 bbl22804; LK-Dukart 145-97-0310H-4; Little Knife; SWSE 34-146N-97W; 2SEC; Dunn; Bakken; horizontal; 22,095;7/12/2013; 566 bbl22884; LK-Wing 146-97-2215H-2; Little Knife; NENE 22-146N-97W; 2SEC; Dunn; Bakken; horizontal; 15,504;7/12/2013; 335 bbl

Hunt Oil22570; Antelope 1-36-25H; Antelope Creek; LOT2 4-148N-101W; 2SEC; McKenzie; Bakken; horizontal; 21,488;7/25/2013; 418 bbl

HRC Operating (Halcon Resources)23123; Fort Berthold 148-94-19D-18-3H; Eagle Nest; SWSE 19-148N-94W; 2SEC; Dunn; Bakken; horizontal; 20,875;6/20/2013; 2,075 bbl

Marathon Oil24305; Helgeson 41-30H; Bailey; SWSE 19-145N-93W; 2SEC; Dunn; Bakken; horizontal; 20,785; 7/2/2013; 1,577 bbl

Petro-Hunt22738; Blikre 158-93-6A-7-1H; East Tioga; NENE 6-158N-93W; 2SEC; Mountrail; Bakken; horizontal; 19,439;11/27/2012; 207 bbl

Statoil Oil and Gas22939; Enderud 9-4 4TFH; Banks; SESE 9-152N-98W; 2SEC; McKenzie; Bakken; horizontal; 21,690; 7/1/2013;3,042 bbl23558; Jake 2-11 2TFH; Last Chance; LOT4 2-153N-100W; 2SEC; Williams; Bakken; horizontal; 20,985; 7/1/2013;2,320 bbl

WPX Energy22213; George Evans 14-23HD; Van Hook; SWSE 11-150N-92W; 2SEC; Mountrail; Bakken; horizontal; 20,188;7/26/2013; 1,732 bbl

This chart contains initial production rates, or IPs, for active wells that were filed as completed with the state of North Dakota from Aug. 6 to Aug. 12,2013 in the Bakken petroleum system, which includes formations such as the Bakken and Three Forks. The completed wells that did not have an avail-able IP rate (N/A) likely haven’t been tested or were awarded confidential (tight-hole) status by the North Dakota Industrial Commission’s Department ofMinerals. This chart also contains a section with active wells that were released from confidential status during the same period, Aug. 5 to Aug. 12.Again, some IP rates were not available (N/A). The information was assembled by Petroleum News Bakken from NDIC daily activity reports and othersources. The name of the well operator is as it appears in state records, with the loss of an occasional Inc., LLC or Corporation because of space limita-tions. Some of the companies, or their Bakken petroleum system assets, have been acquired by others. In some of those cases, the current owner’s nameis in parenthesis behind the owner of record, such as ExxonMobil in parenthesis behind XTO Energy. If the chart is missing current owners’ names,please contact Ashley Lindly at [email protected].

LEGENDThe well operator’s name is on the upper line, followed by individual wells withdata in this order: NDIC file number; well name; field; location; spacing; county;geologic target; wellbore type; total depth; IP test date; IP oil flow rate. (IP standsfor initial production; in this chart it’s the first 24 hours of oil production.)

IPs for ND Bakken wells August 6 — 12, 2013

Top 10 Bakken wells by IP rate

Statoil Oil and Gas22939; Enderud 9-4 4TFH; Banks; McKenzie; 3,042 bbl

Burlington Resources Oil and Gas (ConocoPhillips)24247; CCU Meriwether 14-19MBH; Corral Creek; Dunn; 2,966 bbl23647; Lillibridge 24-22TFH 3NH; Johnson Corner; McKenzie; 2,886 bbl23648; Copper Draw 24-22MBH 3SH; Johnson Corner; McKenzie; 2,725 bbl

Statoil Oil and Gas22797; Esther Hynek 10-11 2TFH; Alger; Mountrail; 2,574 bbl

Marathon Oil21466; William USA 31-2H; Reunion Bay; Mountrail; 2,448 bbl

HRC Operating (Halcon Resources)23383; Fort Berthold 148-94-36C-25-3H; McGregory Buttes; Dunn; 2,343 bbl

Burlington Resources Oil and Gas (ConocoPhillips)23646; Copper Draw 24-22TFH 2SH; Johnson Corner; McKenzie; 2,325 bbl

Statoil Oil and Gas23558; Jake 2-11 2TFH; Last Chance; Williams; 2,320 bbl

HRC Operating (Halcon Resources)23124; Fort Berthold 148-94-30A-31-3H; Eagle NestDunn; 2,265 bbl

Note: This chart contains initial production rates, or IPs, from the adjacent IP chart for active wells that were filed as completed withthe state of North Dakota from August 6 to Aug. 12, 2013 in the Bakken petroleum system, as well as active wells that werereleased from tight-hole (confidential) status during the same period. The well operator’s name is on the upper line, followed by indi-vidual wells; the NDIC file number; well name; field; county; IP oil flow rate in barrels of oil.

see ND IP page 14


IPs for ND wells released from confidential status

Burlington Resources Oil and Gas (ConocoPhillips)24626; Badlands 41-15MBH; Hawkeye; NENE 15-152N-95W; N/A;McKenzie; Bakken; horizontal; N/A; N/A; N/A23646; Copper Draw 24-22TFH 2SH; Johnson Corner; SESW 22-150N-96W; 4SEC; McKenzie; Bakken; horizontal; 21,236; 7/11/2013; 2,325 bbl

Continental Resources24803; Dragseth 1-4AH; Winner; SWSE 33-159N-100W; 2SEC; Williams;Bakken; horizontal; 19,985; 4/24/2013; 363 bbl24294; Langved 1-35H; Beaver Lodge; SESW 35-156N-95W; N/A;Williams; Bakken; horizontal; N/A; N/A; N/A

24660; Salo 4-26H; Hamlet; NWNW 26-160N-96W; 2SEC; Divide; Bakken;horizontal; 18,900; 5/11/2013; 511 bbl

Enerplus Resources22746; Bluestem 149-93-21C-22H TF; Mandaree; NWSW 21-149N-93W;2SEC; Dunn; Bakken; horizontal; 20,838; 6/20/2013; 1,028 bbl22745; Wormwood 149-93-21C-22H; Mandaree; NWSW 21-149N-93W;2SEC; Dunn; Bakken; horizontal; 20,617; 6/19/2013; 1,070 bbl

Fidelity Exploration and Production23713; Diamond J 41-20H; Sanish; NENE 20-154N-92W; SEC; Mountrail;Bakken; horizontal; 14,247; 2/14/2013; 319 bbl23396; Schmidt 11-2H; Dutch Henry Butte; SWSE 11-140N-97W; 2SEC;Stark; Bakken; horizontal; 21,170; 3/13/2013; 314 bbl

Hess23184; SC-Tom 153-98-1514H-1; Truax; NWSW 15-153N-98W; N/A;Williams; Bakken; horizontal; N/A; N/A; N/A23183; SC-Tom 153-98-1514H-2; Truax; NWSW 15-153N-98W; N/A;Williams; Bakken; horizontal; N/A; N/A; N/A23182; SC-Tom 153-98-1514H-3; Truax; NWSW 15-153N-98W; N/A;Williams; Bakken; horizontal; N/A; N/A; N/A

HRC Operating (Halcon Resources)23382; Fort Berthold 147-94-1B-12-3H; McGregory Buttes; NWNW 1-147N-94W; N/A; Dunn; Bakken; horizontal; N/A; N/A; N/A23124; Fort Berthold 148-94-30A-31-3H; Eagle Nest; SWSE 19-148N-94W; 2SEC; Dunn; Bakken; horizontal; 21,456; 6/19/2013; 2,265 bbl23383; Fort Berthold 148-94-36C-25-3H; McGregory Buttes; NWNW 1-147N-94W; 2SEC; Dunn; Bakken; horizontal; 20,845; 5/24/2013; 2,343 bbl20063; State 157-100-32C-29-1H; Marmon; SWSW 32-157N-100W; 2SEC;Williams; Bakken; horizontal; 20,014; 4/20/2013; 1,504 bbl

Hunt Oil23863; Frazier 1-3-10H; Frazier; LOT3 3-161N-97W; 2SEC; Divide; Bakken;horizontal; 18,268; 6/25/2013; 487 bbl24816; Hawkeye 1-34-27HTF; Bluffton; LOT3 3-161N-97W; 2SEC; Divide;Bakken; horizontal; 18,735; 7/4/2013; 74 bbl

Kodiak Oil and Gas23709; P Thomas 153-98-5-10-11-1H; Truax; SWNW 10-153N-98W; 2SEC;Williams; Bakken; horizontal; 20,950; 6/9/2013; 2,157 bbl23708; P Thomas 153-98-5-10-11-8H; Truax; SWNW 10-153N-98W; 2SEC;Williams; Bakken; horizontal; 20,780; 6/1/1998; 937 bbl22074; P Thomas 153-98-5-10-11-8H3; Truax; SWNW 10-153N-98W;2SEC; Williams; Bakken; horizontal; 20,885; 6/11/2013; 496 bbl24605; P Wood 154-98-4-27-37-13H3; Truax; NWNW 27-154N-98W; N/A;Williams; Bakken; horizontal; N/A; N/A;N/A24606; P Wood 154-98-4-27-34-13HA; Truax; NWNW 27-154N-98W; N/A;Williams; Bakken; horizontal; N/A; N/A; N/A

Marathon Oil21466; William USA 31-2H; Reunion Bay; LOT2 2-150N-93W; 2SEC;Mountrail; Bakken; horizontal; 20,353; 7/13/2013; 2,448 bbl

Oxy USA (Occidental Petroleum)23676; Charles Davis 1-4-9H-142-94; Murphy Creek; NWNE 4-142N-94W;2SEC; Dunn; Bakken; horizontal; 19,369; 2/1/2013; 134 bbl23845; Ridl 1-24-25H-142-96; Russian Creek; NENW 24-142N-96W; 2SEC;Dunn; Bakken; horizontal; 19,342; 2/11/2013; 488 bbl

22543; State 2-25-36H-144-97; Cabernet; NWNW 25-144N-97W; 2SEC;Dunn; Bakken; horizontal; 20,480; 2/8/2013; 1,038 bbl

QEP Energy24826; Hemi 1-27-34BH; Grail; SESE 34-150N-95W; 2SEC; McKenzie;Bakken; horizontal; 21,052; 6/8/2013; 1,936 bbl24827; Hemi 2-27-34BH; Grail; SESE 34-150N-95W; 2SEC; McKenzie;Bakken; horizontal; 20,910; 6/10/2013; 1,807 bbl

Samson Resources (KKR & Co)23830; Bakke 3229-6TFH; Ambrose; SESE 32-164N-99W; 4SEC; Divide;Bakken; horizontal; 13,600; 5/16/2013; 168 bbl23829; Thomte 0508-6TFH; Ambrose; SESE 32-164N-99W; 4SEC; Divide;Bakken; horizontal; 18,088; 5/10/2013; 266 bbl

Slawson Exploration24771; Serpent (Federal) 4-36 31TFH; Van Hook; SESE 35-151N-92W;2SEC; Mountrail; Bakken; horizontal; 20,328; 4/29/2013; 964 bbl

SM Energy24449; Lagaard 2-25HNA; Colgan; NWNE 25-163N-101W; N/A; Divide;Bakken; horizontal; N/A; N/A; N/A24448; Legaard 2-25HNB; Colgan; NWNE 25-163N-101W; 2SEC; Divide;Bakken; horizontal; 18,595; 7/18/2013; 709 bbl24176; Simonson 1-29HN; Colgan; NENE 29-163N-100W; 2SEC; Divide;Bakken; horizontal; 18,490; 4/7/2013; 798 bbl

Statoil Oil and Gas23285; Charlie Sorenson 17-8 3TFH; Alger; NWNE 20-155N-93W; N/A;Mountrail; Bakken; horizontal; N/A; N/A; N/A22797; Esther Hynek 10-11 2TFH; Alger; NWNW 10-155N-93W; 2SEC;Mountrail; Bakken; horizontal; 20,484; 7/2/2013; 2,574 bbl23978; Rose 12-13 6H; Avoca; NWNW 12-154N-100W; N/A; Williams;Bakken; horizontal; N/A;N/A; N/A

Whiting Oil and Gas23576; Havelka 11-15PH; Dickinson; NWNW 15-140N-97W; 2SEC; Stark;Bakken; horizontal; 20,130; 2/14/2013; 2,061 bbl23579; Havelka 14-10PH; Dutch Henry Butte; NWNW 15-140N-97W;2SEC; Stark; Bakken; horizontal; 21,895; 2/14/2013; 1,897 bbl23577; Havelka 21-15PH; Dickinson; NWNW 15-140N-97W; 2SEC; Stark;Bakken; horizontal; 20,909; 2/14/2013; 1,192 bbl23436; March 41-16PH; Dutch Henry Butte; SESE 9-140N-97W; 2SEC;Stark; Bakken; horizontal; 20,858; 6/21/2013; 597 bbl 23435; Marsh 44-9PH; Dutch Henry Butte; SESE 9-140N-97W; 2SEC;Stark; Bakken; horizontal; 21,335; 2/14/2013; 1,267 bbl

XTO Energy22698; Star 21X-14B; Grinnell; NENW 14-154N-97W; 2SEC; Williams;Bakken; horizontal; 20,308; 7/16/2013; 1,320 bbl24858; Star 21X-14F; Grinnell; NENW 14-154N-97W; N/A; Williams;Bakken; horizontal; N/A; N/A; N/A

Zenergy 24742; K2 Holdings 31-32H; Todd; LOT7 31-154N-101W; 2SEC; Williams;Bakken; horizontal; 20,355; 5/8/2013; 911 bbl

—Compiled by Ashley Lindly

taps the Three Forks formation, has an SHL at NW

NE 6-33N-56E (380 FNL/2306 FEL) and a BHL of

17,312 feet at SW SE 7-33N-56E (1279 FSL/1779

FEL). The IP was reported as 111 BOPD, 121

MCFPD and 563 BWPD.

Expired permitsIn Glacier County, three permits for wells operat-

ed by Anschutz Exploration Corp. expired: the SW

Browning 1-35H-32-11 at NW SW 35-32N-11W

(1599 FSL/670 FWL); the Heart Butte 1-32-30-10 at

NW SW 32-30N-10W (1872 FSL/856 FWL); and

the South Fork 1-29H-34-12 at SE SE 29-34N-12W

(785 FSL/785 FEL).

In Richland County, the permits for two wells

operated by Slawson Exploration Company Inc.

expired: the Bonsai 1-12H at NE NE 12-22N-56E

(699 FNL/300 FEL) and the Spear 1-26H at NE NE

26-22N-57E (750 FNL/450 FEL). Both wells were

permitted to the Bakken formation. �

Editor’s note: Darryl L. Flowers, a contributorto Petroleum News Bakken, is the publisher of the

Fairfield Sun Times in Fairfield, Mont., www.fairfieldsuntimes.com, and can be reached at [email protected]. The informationis derived from the online records of the MontanaBoard of Oil & Gas Conservation Commission.


MT ACTIVITY


ND IP

North Dakota oil permit activityAugust 6 — 12, 2013

Billings Co.Permits issuedContinental ResourcesPerch 1-30H1; NWNE 30-141N-99W; 295’FNL and 1,645’FEL; Park; N/A*;on confidential status; 2,652’ ground; 26128; 33-007-01800; 8/8/2013

Oxy USA (Occidental Petroleum)Walter Cooke 1-9-4H-143-98; NWNE 16-143N-98W; 341’FNL and2,343’FEL; Little Knife; Bakken; horizontal; 2,265’ ground; 26141; 33-007-01801; 8/9/2013

Bottineau Co.Permits issuedBallantyne OilCunningham 16-22; SESW 22-159N-83W; 760’FSL and 1,800’FWL;Coulee; Madison; vertical; 1,621’ ground; 26104; 33-009-02332; 8/6/2013

Corinthian ExplorationCorinthian Brenden 1-28 1-H; NENE 28-163N-77W; 730’FNL and750’FEL; Haram; N/A***; on confidential status; 1,543’ ground; 26150;33-009-02333; 8/12/2013Corinthian Siverston 16-16 1-H; SESE 16-163N-77W; 730’FSL and750’FEL; Wildcat; N/A; on confidential status; 1,557’ ground; 26162; 33-009-02334; 8/12/2013

Divide Co.Permits issuedMountain DivideCharlotte 1-12-1H; LOT1 1-162N-101W; 250’FNL and 450’FEL; Fortuna;N/A*; on confidential status; 2,225’ ground; 26142; 33-023-01091;8/9/2013

Dunn Co.Permits issuedHessLK-A QTR Cir- 147-96-0718H-2; LOT1 7-147N-96W; 344’FNL and237’FWL; Big Gulch; N/A*; on confidential status; 2,471’ ground; 26131;33-025-02230; 8/8/2013LK-A QTR Cir- 147-96-0718H-3; LOT1 7-147N-96W; 301’FNL and262’FWL; Big Gulch; N/A*; on confidential status; 2,471’ ground; 26132;33-025-02231; 8/8/2013

Kodiak Oil and GasSkunk Creek 1-8-17-16H; NENE 8-148N-93W; 825’FNL and 405’FEL;South Fork; N/A*; on confidential status; 1,994’ ground; 26122; 33-025-02229; 8/7/2013Skunk Creek 1-8-17-16H3; NENE 8-148N-93W; 825’FNL and 375’FEL;South Fork; N/A*; on confidential status; 1,992’ ground; 26121; 33-025-02228; 8/7/2013

Oxy USA (Occidental Petroleum)Evelyn Kary 3-22-15H-144-97; SESW 22-144N-97W; 252' FSL and 2455'FWL; Cabernet; Bakken; horizontal; 2,402’ ground; 26100; 33-025-02227;8/6/2013Evelyn Kary 4-22-15H-144-97; SESW 22-144N-97W; 252’FSL and2,495’FWL; Cabernet; Bakken; horizontal; 2,402’ ground; 26099; 33-025-02226; 8/6/2013State Jaeger B 7-27-34H-144-97; SESW 22-144N-97W; 252’FSL and2,535’FWL; Cabernet; Bakken; horizontal; 2,402’ ground; 26096; 33-025-02225; 8/6/2013

WPX EnergyAlfred Old Dog 19-18HB; NENW 30-150N-93W; 91’FNL and 2,337’FWL;Reunion Bay; N/A*; on confidential status; 2,171’ ground; 26145; 33-025-02232; 8/12/2013Alfred Old Dog 19-18HC; NENW 30-150N-93W; 95’FNL and 2,437’FWL;

Reunion Bay; N/A*; on confidential status; 2,167’ ground; 26147; 33-025-02234; 8/12/2013Alfred Old Dog 19-18HD; NENW 30-150N-93W; 106’FNL and 2,498’FEL;Reunion Bay; N/A*; on confidential status; 2,166’ ground; 26154; 33-025-02240; 8/12/2013Alfred Old Dog 19-18HY; NENW 30-150N-93W; 93’FNL and 2,387’FWL;Reunion Bay; N/A*; on confidential status; 2,169’ ground; 26146; 33-025-02233; 8/12/2013Alfred Old Dog 19-18HZ; NENW 30-150N-93W; 104’FNL and 2,548’FEL;Reunion Bay; N/A*; on confidential status; 2,167’ ground; 26153; 33-025-02239; 8/12/2013Alfred Old Dog 30-31 HC; NENW 30-150N-93W; 98’FNL and 2,537’FWL;Reunion Bay; N/A*; on confidential status; 2,165’ ground; 26149; 33-025-02236; 8/12/2013Alfred Old Dog 30-31 HD; NENW 30-150N-93W; 102’FNL and2,598’FEL; Reunion Bay; N/A*; on confidential status; 2,167’ ground;26152; 33-025-02238; 8/12/2013Alfred Old Dog 30-31 HY; NENW 30-150N-93W; 96’FNL and 2,487’FWL;Reunion Bay; N/A*; on confidential status; 2,165’ ground; 26148; 33-025-02235; 8/12/2013Alfred Old Dog 30-31 HZ; NENW 30-150N-93W; 100’FNL and2,587’FWL; Reunion Bay; N/A*; on confidential status; 2,166’ ground;26151; 33-025-02237; 8/12/2013

Permits renewedWPX EnergyMartin Fox 20-17HA; SESW 20-149N-93W; 554’FSL and 2,232’FWL;Mandaree; N/A*; on confidential status; 2,291’ ground; 23684; 33-025-01847; 8/12/2013Martin Fox 20-17HB; SESW 20-149N-93W; 518’FSL and 2,235’FWL;Mandaree; N/A*; on confidential status; 2,291’ ground; 23682; 33-025-01845; 8/12/2013Martin Fox 20-17HC; SESW 20-149N-93W; 482’FSL and 2,419’FWL;Mandaree; N/A*; on confidential status; 2,291’ ground; 23680; 33-025-01843; 8/12/2013Martin Fox 20-17HD; SESW 20-149N-93W; 446’FSL and 2,512’FWL;Mandaree; N/A*; on confidential status; 2,291’ ground; 23678; 33-025-01841; 8/12/2013Martin Fox 20-17HW; SESW 20-149N-93W; 536’FSL and 2,279’FWL;

LEGENDThe county name is on the upper line, the type of permitissued is on the second line, and company names are next, fol-lowed by individual wells with data in this order: well name;location; footages; field; geological target; well bore type;elevation; NDIC file number; API number; date permit showson NDIC website.

AbbreviationsFollowing are the abbreviations used in the report and what theymean:FNL = From North Line | FEL = From East LineFSL = From South Line | FWL = From West Line

see ND PERMIT page 13


August 8, 2013From: Surge Energy USA Inc. To: Corinthian Exploration (USA) Corp

#23488 - Scandia 1N NENE 34 02 NENW 35H; horizontal; Spearfish/Madison; Souris; 11/24/2012; 20 bbl; NENE34-164N-78W; Bottineau Co.#24893 - Haram 00 NWSE 31; vertical; Madison; Souris; N/A; N/A; NWSE 31-164N-77W; Bottineau Co.#23899 - Scandia 2S NWNW 35 02 SWNE 34H; horizontal; Spearfish/Madison; Souris; N/A; N/A; NWNW 35-164N-78W; Bottineau Co.#23898 - Scandia 1S NWNW 35 00 SWNE 34H; horizontal; Spearfish/Madison; Souris; N/A; N/A; NWNW 35-164N-78W; Bottineau Co.#23897 - Scandia 1N NWNW 35 02 NWNE 34H; horizontal; Spearfish/Madison; Souris; N/A; N/A; NWNW 35-164N-78W; Bottineau Co.

#23896 - Scandia 2N NWNW 35 00 NWNE 34H; horizontal; Spearfish/Madison; Souris; N/A; N/A; NWNW 35-164N-78W; Bottineau Co.#24876 - Haram 00 NWSE 20; vertical; Madison; Haram; N/A; N/A; NWSE 20-163N-77W; Bottineau Co.#18898 - Boundary 1-11H; horizontal; Spearfish; Wildcat; 6/30/2010; 88 bbl; NENE 11-163N-78W; Bottineau Co.#23489 - Scandia C SENE 34 00 SENW 35H; horizontal; Spearfish/Madison; Souris; 12/3/2012; 26 bbl; SENE 34-164N-78W; Bottineau Co.#24875 - Scandia 00 SESE 11; vertical; Madison; Wildcat; N/A; N/A; SESE 11-163N-78W; Bottineau Co.#23487 - Scandia 2N NENE 34 00 NENW 35H; horizontal; Spearfish/Madison; Souris; 11/25/2012; 26 bbl; NENE34-164N-78W; Bottineau Co.#19099 - Boundary 11-20H; horizontal; Spearfish/Madison; Roth; 8/9/2010; 31 bbl; SWNW 20-163N-78W;Bottineau Co.#18997 - Boundary 4-27H; horizontal; Spearfish; Boundary Creek; 8/10/2010; 30 bbl; NENE 27-163N-78W;Bottineau Co.#24950 - Haram 00 SENE 23; vertical; Madison; Wildcat; N/A; N/A; SENE 23-163N-77W; Bottineau Co.#18701 - Scandia 3-36H; horizontal; Spearfish/Madison; Souris; 3/20/2010; 304 bbl; NESE 36-164N-78W;Bottineau Co.#19051 - Eidsvold 1-10H; horizontal; Spearfish; Wildcat; N/A; N/A; SESE 10-162N-78W; Bottineau Co.#23491 - Scandia 2S SENE 34 03 SENW 35H; horizontal; Spearfish/Madison; Souris; 12/1/2012; 32 bbl; SENE 34-164N-78W; Bottineau Co.#18699 - Scandia 1-34H; horizontal; Spearfish/Madison; Souris; 3/19/2010; 261 bbl; NENE 34-164N-78W;Bottineau Co.#23490 - Scandia 1S SENE 34 02 SENW 35H; horizontal; Spearfish/Madison; Souris; 12/2/2012; 38 bbl; SENE 34-164N-78W; Bottineau Co.

North Dakota well operator transfers July 6 — August 9, 2013

LEGENDDate of well operator transfer

Well(s) transferred from

Well(s) transferred to

NDIC well file number — well name — well type — geological target — field —

IP (initial production) test date — IP oil rate in barrels — location — county

Mandaree; N/A*; on confidential status; 2,291’ ground; 23683; 33-025-01846; 8/12/2013Martin Fox 20-17HX; SESW 20-149N-93W; 500’FSL and 2,372’FWL;Mandaree; N/A*; on confidential status; 2,291’ ground; 23681; 33-02-01844; 8/12/2013Martin Fox 20-17HZ; SESW 20-149N-93W; 464’FSL and 2,465’FWL;Mandaree; N/A*; on confidential status; 2,291’ ground; 23679; 33-025-01842; 8/12/2013

McKenzie Co.Permits issuedBurlington Resources Oil and Gas (ConocoPhillips)Crater Lake 11-14MBH; NWNW 14-152N-95W; 244’FNL and 404’FWL;Hawkeye; N/A*; on confidential status; 2,266’ ground; 26143; 33-053-05182; 8/12/2013Craterlands 11-14TFH; NWNW 14-152N-95W; 244’FNL and 359’FWL;Hawkeye; N/A*; on confidential status; 2,266’ ground; 26144; 33-053-05183; 8/12/2013

Continental ResourcesMajor Federal 1-6H; SESW 6-146N-104W; 230’FSL and 1,665’FWL;Squaw Gap; N/A*; on confidential status; 2,342’ ground; 26111; 33-053-05170; 8/7/2013

Oasis PetroleumHysted 5200 14-30 #2B; NENE 30-152N-100W; 330’FNL and 320’FEL;Camp; Bakken; horizontal; 2,056’ ground; 26130; 33-053-05176; 8/8/2013Lefty 5200 14-30 #2T; NENE 30-152N-100W; 300’FNL and 940’FEL;Camp; Bakken; horizontal; 2,046’ ground; 26124; 33-053-05171; 8/8/2013Lefty 5200 14-30 #3B; NENE 30-152N-100W; 380’FNL and 320’FEL;Banks; Bakken; horizontal; 2,059’ ground; 26129; 33-053-05175; 8/8/2013

QEP EnergyTat 2-35-26TH; SESW 35-149N-95W; 330’FSL and 1,353’FWL; Grail;Bakken; horizontal; 2,443’ ground; 26138; 33-053-05179; 8/9/2013Tat 3-35-26BH; SESW 35-149N-95W; 340’FSL and 1,327’FWL; Grail;Bakken; horizontal; 2,443’ ground; 26139; 33-053-05180; 8/9/2013Tat 4-35-26BH; SWSW 35-149N-95W; 361’FSL and 1,275’FWL; Grail;Bakken; horizontal; 2,443’ ground; 26140; 33-053-05181; 8/9/2013

SM EnergyDoris 1X-13H; NENE 13-151N-100W; 285’FN and 410’FEL; Poe; N/A*; onconfidential status; 2,221’ ground; 26135; 33-053-05177; 8/9/2013Elery 1-13H; NENE 13-151N-100W; 285’FNL and 315’FEL; Poe; N/A*; onconfidential status; 2,224’ ground; 26136; 33-053-05178; 8/9/2013

Statoil Oil and GasJohnston 7-6 #3TFH; SESW 34-153N-98W; 328’FSL and 1,505’FWL;Banks; N/A*; on confidential status; 1,967’ ground; 26158; 33-053-05187;8/12/2013Johnston 7-6 #4H; SESW 34-153N-98W’ 312’FSL and 1,531’FWL; Banks;N/A*; on confidential status; 1,967’ ground; 26157; 33-053-05186;8/12/2013Johnston 7-6 #5TFH; SESW 34-153N-97W; 296’FSL and 1,556’FWL;Banks; N/A*; on confidential status; 1,967’ ground; 26156; 33-053-05185;8/12/2013Johnston 7-6 #6H; SESW 34-153N-98W; 279’FSL and 1,581’FWL; Banks;N/A*; on confidential status; 1,966’ ground; 26155; 33-053-05184;8/12/2013

True Oil Gravos 43-13 13-14TFH; NESE 13-148N-101W; 1,500’FSL and 300’FEL;Red Wing Creek; Bakken; horizontal; 2,195’ ground; 26106; 33-053-05169; 8/12/2013

XTO Energy (ExxonMobil)Loomer 24X-34E; SESW 34-151N-99W; 350’FSL and 1,323’FWL; TobaccoGarden; N/A*; on confidential status; 2,127’ ground; 26125; 33-053-05172; 8/8/2013Rita 24X-34A; SESW 34-151N-99W; 350’FSL and 1,413’FWL; TobaccoGarden; N/A*; on confidential status; 2,128’ ground; 26127; 33-053-05174; 8/8/2013Rita 24X-34E; SESW 34-151N-99W; 350’FSL and 1,353’FWL; Tobacco

Garden; N/A*; on confidential status; 2,127’ ground; 26126; 33-053-05173; 8/8/2013

ZavannaRaven 19-18 1TFH; SESW 19-151N-100W; 250’FSL and 1,620’FWL;Patent Gate; N/A*; on confidential status; 2,198’ ground; 26105; 33-053-05168; 8/6/2013

Permits renewedSlawson Exploration (KKR & Co.)Panzer 1-20H; NENW 20-151N-94W; 220’FNL and 1,345’FWL; Antelope;N/A***; on confidential status; 2,101’ ground; 21385; 33-053-03729;8/6/2013Panzer 2-20H; NWNW 20-151N-94W; 220’FNL and 1,295’FWL; Antelope;N/A***; on confidential status; 2,102’ ground; 21386; 33-053-03730;8/6/2013Panzer 4-20TFH; NENW 20-151N-94W; 220’FNL and 1,320’FWL;Antelope; Sanish; horizontal; 2,102’ ground; 21387; 33-053-03731;8/6/2013

Mountrail Co.Permits issuedHessEN-Chamley 156-93-0508H-2; NENW 5-156N-93W; 242’FNL and2,221’FWL; Baskin; N/A*; on confidential status; 2,315’ ground; 26112;33-061-02651; 8/7/2013EN-Chamley 156-93-0508H-3; NENW 5-156N-93W; 292’FNL and2,221’FWL; Baskin; N/A*; on confidential status; 2,314’ ground; 26113;33-061-02652; 8/7/2013EN-Chamley 156-93-0508H-4; NENW 5-156N-93W; 342’FNL and2,221’FWL; Baskin; N/A*; on confidential status; 2,314’ ground; 26114;33-061-02653; 8/7/2013EN-Chamley 156-93-0508H-5; NENW 5-156N-93W; 392’FNL and2,221’FWL; Baskin; N/A*; on confidential status; 2,313’ ground; 26115;33-061-02654; 8/7/2013

Slawson Exploration (KKR & Co)Goldenban 2-2-1TFH; SWSW 2-153N-91W; 1,320’FSL and 330’FWL;Sanish; N/A*; on confidential status; 2,301’ ground; 26103; 33-061-02648; 8/6/2013Peacemaker 2-8H; SWSW 5-152N-91W; 310’FSL and 270’FWL; Sanish;N/A*; on confidential status; 2,020’ ground; 26120; 33-061-02655;8/7/2013Rum Runner 1-16-9H; SWSW 16-158N-94W; 250’FSL and 1,320’FWL;East Tioga; N/A*; on confidential status; 2,305’ ground; 26107; 33-061-02649; 8/6/2013Rum Runner 2-16-9H; SWSW 16-158N-94W; 275’FSL and 1,320’FWL;East Tioga; N/A*; on confidential status; 2,300’ ground; 26108; 33-061-02650; 8/6/2013

Whiting Oil and GasMoore 14-7-2XH; SWSW 7-153N-91W; 683’FSL and 396’FWL; Sanish;Bakken; horizontal; 2,422’ ground; 26137; 33-061-02656; 8/9/2013Uran 12-24TFH; SWNW 24-153N-92W; 2,390’FNL and 475’FWL; Sanish;Bakken; horizontal; 2,316’ ground; 25936; 33-061-02636; 8/12/2013

WPX EnergyBrunsell 9-4HB; SESE 9-150N-92W; 554’FSL and 191’FEL; Van Hook;N/A*; on confidential status; 1,930’ ground; 26163; 33-061-02657;8/12/2013Brunsell 9-4HZ; SESE 9-150N-92W; 529’FSL and 234’FEL; Van Hook;N/A*; on confidential status; 1,933’ ground; 26164; 33-061-02658;8/12/2013

Permits cancelledHessRS-Nylander 60-84; NESE 36-156N-92W; 2,223’FSL and 250’FEL; Ross;N/A*; on confidential status; 2,273’ ground; 90163; 33-061-90163;8/7/2013

Stark Co.Permits issuedWhiting Oil and GasKadrmas Federal 14-11PH; SWSE 11-139N-99W; 300’FSL and2,025’FEL; Zenith; Bakken; horizontal; 2,595’ ground; 26159; 33-089-00800; 8/12/2013Kadrmas Federal 34-11PH; SWSE 11-139N-99W; 300’FSL and1,980’FEL; Zenith; Bakken; horizontal; 2,599’ ground; 26160; 33-089-

00801; 8/12/2013Kadrmas Federal 44-11PH; SWSE 11-139N-99W; 300’FSL and1,935’FEL; Zenith; Bakken; horizontal; 2,601’ ground; 26161; 33-089-00802; 8/12/2013

Permits renewedFidelity Exploration and Production (MDU)Herauf 2-11H; LOT4 2-139N-98W; 470’FNL and 1,221’FWL; Zenith;Bakken; horizontal; 2,518’ ground; 23695; 33-089-00733; 8/12/2013Norken 17-20H; NENW 17-139N-97W; 230’FNL and 1,807’FWL; HeartRiver; Bakken; horizontal; 2,475’ ground; 23880; 33-089-00742;8/12/2013

Williams Co.Permits issuedContinental ResourcesMorgan 1-29H1; NENW 29-159N-97W; 395’FNL and 2,640’FWL; Corinth;N/A*; on confidential status; 2,311’ ground; 26123; 33-105-03160;8/8/2013

HRC Operating (Halcon Resources)Grev 157-100-30-31-2H; LOT4 19-157N-100W; 250’FSL and 1,245’FWL;Marmon; N/A*; on confidential status; 1,981’ ground; 26118; 33-105-03158; 8/7/2013Grev 157-100-30-31-3H; SESW 19-157N-100W; 250’FSL and 1,305’FWL;Marmon; N/A*; on confidential status; 1,981’ ground; 26116; 33-105-03156; 8/7/2013Pasternak Trust 157-100-19-18-2H; LOT4 19-157N-100W; 250’FSL and1,215’FWL; Marmon; N/A*; on confidential status; 1,981’ ground; 26119;33-105-03159; 8/7/2013Pasternak Trust 157-100-19-18-3H; LOT4 19-157N-100W; 250’FSL and1,275’FWL; Marmon; N/A*; on confidential status; 1,981’ ground; 26117;33-105-03157; 8/7/2013

Oasis PetroleumEN-Chamley 156-93-0508H-3; NENW 5-156N-93W; 292’FNL and2,221’FWL; Baskin; N/A*; on confidential status; 2,314’ ground; 26113;33-061-02652; 8/8/2013Montague 5501 13-3 #2T; LOT2 3-155N-101W; 245’FNL and 1,860’FEL;Cow Creek; Bakken; horizontal; 2,062’ ground; 26110; 33-105-03155;8/7/2013Montague 5501 13-3 #3B; LOT2 3-155N-101W; 245’FNL and 1,910’FEL;Cow Creek; Bakken; horizontal; 2,064’ ground; 26109; 33-105-03154;8/7/2013

Petro-HuntBoss 154-99-17A-18-6H; NENE 17-154N-99W; 300’FNL and 250’FEL;Stockyard Creek; N/A*; on confidential status; 2,256’ ground; 26134; 33-105-03162; 8/9/2013Syverson 156-99-30B-31-4H; NWNW 30-156N-99W; 250’FNL and900’FWL; East Fork; N/A*; on confidential status; 2,256’ ground; 26098;33-105-03151; 8/6/2013Syverson 156-99-30B-31-5H; NWNW 30-156N-99W; 250’FNL and975’FWL; East Fork; N/A*; on confidential status; 2,254’ ground; 26097;33-105-03150; 8/6/2013Syverson 156-99-30B-31-6H; NENW 30-156N-99W; 250’FNL and2,175’FWL; East Fork; N/A*; on confidential status; 2,244’ ground; 26102;33-105-03153; 8/6/2013Syverson 156-99-30B-31-7H; NENW 30-156N-99W; 250’FNL and2,250’FWL; East Fork; N/A*; on confidential status; 2,244’ ground; 26101;33-105-03152; 8/6/2013

* Note: The geologic target for these wells was not listed in its well file because they are atight (confidential) hole, but the following fields produce from the Bakken pool; Banks,Baskin, Big Gulch, Corinth, East Fork, East Tioga, Fortuna, Hawkeye, Mandaree, Marmon,Park, Patent Gate, Poe, Reunion Bay, Ross, Sanish, South Fork, Squaw Gap, StockyardCreek, Tobacco Garden, and Van Hook.

** Note: The geologic target for these wells was not listed in its well file because they are atight (confidential) hole, but Antelope field produces from the Sanish pool.

*** Note: The geologic target for this well was not listed in its well file because it is a tight(confidential) hole, but Haram field produces from the Madison pool

—Compiled by Ashley Lindly


ND PERMIT


North Dakota Pipeline AuthorityMonthly update August 15, 2013

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PetroleumNewsBakken.com


541-447-0712

barrels.Bogged down in mounting legal actions

that could last for years and having lost itsmain line from Montreal to Saint John,MM&A has declined to say what crude vol-umes are affected.

Privately owned Irving seldom answersqueries from the news media; CN andCanadian Pacific Railway will not saywhether they are providing alternative railservice to Bakken producers; the NorthDakota Petroleum Council said it has noknowledge of any changes to private busi-ness contracts; and the North DakotaPipeline Authority said it had no firm infor-mation on whether alternative means werebeing used to get Bakken crude to refiner-ies.

Ed Burkhardt, chairman of both theUnited States and Canadian units ofMM&A, raised the issue early in Augustwhen he told the Montreal Gazette thatmoving crude was “more trouble than it’sworth” and that “we don’t plan to continuewith oil transportation.”

The larger question is whether MM&Awill ever be able to resume service, but thecompany is not ready to go public on thatissue.

However, in its bankruptcy court filings,the company said that until the Lac-Megantic disaster it had been hauling500,000 barrels per month through Quebecand Maine to Irving’s 300,000 bpd refinery.

“This business played an important partin MM&A System’s aggregate monthlygross revenues of approximately $3 mil-lion.”

One crude trader suggested the onlyalternative means of using rail from NorthDakota to New Brunswick would be CN’snetwork, although changing tracks wouldadd $2 to $3 per barrel to shipping costs.

He said that would make Canadian sweetcrudes more economic for Irving thanBakken crude.

Legal quagmireFor now MM&A is getting drawn ever

deeper into a legal quagmire that will beclosely followed by every party to crude-by-rail operations, with civil and criminalinvestigations gathering pace.

Quebec Superior Court Justice MartinCastonguay granted creditor protectionAug. 8 to MM&A, saying the events thathave claimed an estimated 47 lives were”extraordinary and required an extraordinaryremedy.”

He said MM&A’s “conduct has beentotally lamentable from the beginning” andhe was not impressed with the railroad’spresentation for bankruptcy protection.

But, given the circumstances, he saidthere was little choice other than grantingthe application.

Castonguay initially excluded directorsof MM&A Canada from the court’s protec-tion, saying they must have acted in “goodfaith” to earn that privilege.

He later changed his mind after an attor-

ney for MM&A said allowing lawsuits toproceed against the directors might drain thecompany’s C$25 million insurance policy.

Chapter 11 proceedingsMM&A has also started proceedings for

Chapter 11 bankruptcy protection in theUnited States.

“No way the U.S. courts are going to buythat (application),” said EdwardJazlowiecki, a Connecticut-based lawyer forseveral Lac-Megantic victims.

The victims’ lawsuit alleges negligenceby MM&A, parent company Rail Worldand nine other defendants includingBurkhardt, Miami-based fuel distributorWorld Fuel Services and marketer WesternPetroleum Co.

The filing in Canada seeks relief fromcreditors under the Companies CreditorsArrangement Act, which protects a compa-ny from claims by creditors while it seeksways to avoid bankruptcy.

MM&A estimates the cleanup costs atLac-Megantic will exceed C$200 million(US$194 million).

The Canadian subsidiary of MM&Asaid in its court documents filed in Canadathat it has less than C$18 million in assets.

In the U.S. court documents MM&Asaid it has between US$50 million andUS$100 million in assets and betweenUS$1 million and US$10 million in esti-mated liabilities.

Burkhardt said in a statement Aug. 7 “ithas become apparent that the obligations ofboth companies now exceed the value of

their assets, including prospective insurancerecoveries, as direct result of the tragicderailment at Lac-Megantic.”

He said creditor protections in bothcountries are the “best way to ensure fair-ness of treatment to all in these tragic cir-cumstances.”

The town of Lac-Megantic and theQuebec government have sent two legalnotices to MM&A asking it to pay C$8 mil-lion towards cleanup costs, but both indicatelittle hope that they will ever collect on theirclaim.

Despite all of the daunting odds, officialssay that MM&A could resume servicethrough Lac-Megantic when the trackreopens, although town residents and lead-ers are determined to ensure that never hap-pens.

M. Donald Gardner Jr., vice president offinance and administration for MM&A,said railroad debts were about US$3.5 mil-lion before the accident, a figure thatexcludes a multi-million dollar loan from aU.S. federal agency that oversees railroadsand a line of credit.

It owes US$27.5 million of a US$35 mil-lion loan it received from the U.S. FederalRail Administration in 2005, according toGardiner’s affidavit, plus a US$6 millionline of credit issued in mid-2006.

He said MM&A is seeking to “operate inChapter 11 until a sale of the system can beconsummated.” �

service and supply costs lower than originalexpectations by 10 percent for the year-to-date.

On the negative side, Enerplus said thereliance it and other producers place onmoving a portion of their production by railto the Gulf Coast has had a negative impacton overall netback.

“The amount of production that we shipby rail ... will vary over time due to trans-portation access constraints and changes inthe price differential between Cushing andthe Gulf Coast,” it said.

Enerplus said the price differential inNorth Dakota vs. West Texas Intermediatewidened again in the second quarter as thenarrowing of the price differential betweenCushing WTI and the Gulf Coast resulted in

lower rail netbacks.The company posted second-quarter pro-

duction of 90,037 barrels of oil equivalentper day (46 percent crude and natural gasliquids), up almost 8,000 boe per day from ayear earlier, while output for the first sixmonths climbed by a similar volume to88,618 boe per day.

The crude and liquids count included21,339 bpd in Canada and 20,224 bpd in theU.S., while natural gas production was 186.6million cubic feet per day in Canada and104.3 million cubic feet per day in the U.S.

Sale, JV plans suspendedFor the time being, Enerplus said it has

suspended plans to sell or seek joint venturesfor its Duvernay and Montney assets, two ofthe hottest plays in Canada, plus theMarcellus in Pennsylvania.

It set the ball rolling last year in its searchfor deals, but company executives said

improved performance since then haschanged the outlook, removing any urgencyto deal with the properties.

Chief Executive Officer Ian Dundas toldanalysts that Enerplus has “made suchprogress in changing the financial sustain-ability of the company that we’re now in aposition (to postpone the process).”

“We believe our results over the last fewquarters demonstrate consistent improve-ments in capital efficiency and execution ...and our dividend is sustainable at the currentlevel,” he said.

Dundas said delineation work plannedfor Duvernay and Montney over the balanceof 2013 will yield better knowledge of theassets and their potential, but he said nodecision on developing the assets has beenmade.

“Some of the underlying conditions thatcaused us to (plan for a joint venture or sale)are still in place,” he said.

“That hasn’t changed. So we still see anopportunity to partner or potentially sell, butif you go back a year ago to the things thatwe were going to do to improve our sustain-ability, we’ve done all of those.

“Will we revisit this again? For sure,”Dundas said. The assets earmarked for trans-actions included 70,000 net acres in theDuvernay in the Willesden Green area ofwest-central Alberta, 33,000 net acres in theMontney in the Cameron area and 65,000net acres in the Marcellus in the U.S.,although Dundas’ comments were confinedto Duvernay and Montney.

Net income for the second quarter wasC$52.62 million, down from C$100.3 mil-lion a year earlier while cash flow rose toC$204.7 million from C$146.5 million.

—GARY PARK


BERTHOLD FAVOR


RAIL PUZZLE

http://www.btlliners.com/

http://www.unico.com/oilandgas

speculative areas in central and westernMontana as fewer of the more attractiveeastern Montana tracts became available.As Petroleum News Bakken reported onJune 4, the average price per acre in thatlease auction was $18.11 per acre, wellbelow the five-year Montana average of$32.75 per acre and significantly downfrom the near record average of $80.28 per

acre received in the March Montana auc-tion.

Acreage breakdownA total of 54,482.68 acres in 689 tracts

were leased in the Aug. 6 auction held inMedora, bringing in a total of$4,824,969.47 for an average price per acreof $88.56, the lowest since the November2008 auction when 24,284.21 acres wereleased at an average of $83.99 per acre (seecharts). The average price per acre for all

Trust Lands auctions from February 2008through May 2013 was $1,088.91, but theresults of the August auction pulled thataverage down to $1,003.81. The highestaverage lease price per acre for all auctionsduring that period was the $3,525.62received in the November 2011 auction,which was also a standing record high aver-age price for all Trust Lands oil and gaslease auctions.

Approximately 85 percent of the54,482.68 acres leased in the August auc-

tion are in counties along the Bakken mar-gins, and well over half of the total leasedacres are in Slope (17,412.10) and McLean(13,767.14) counties. The remainingapproximately 15 percent of the leasedacres are in the traditional Bakken corecounties of Mountrail (5,186.79), Dunn(3,029.46) and McKenzie (16.00). No leas-es were up for auction in either Divide orWilliams counties.

Gaebe said that the record bids that


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AUCTION RESULTS


Legendary football coach to headline 2013 NDPC meetingThe North Dakota Petroleum Council announced that legendary

Notre Dame football coach Lou Holtz will provide a keynote addressduring the NDPC’s Annual Meeting to be held Sept. 18 at the AlerusCenter in Grand Forks, N.D. Holtz took his Notre Dame teams tonine straight New Year’s Day bowl games from 1987 through 1995and remains 11th on the NCAA all-time win list for Division I-Acoaches.

“The petroleum industry has had incredible success in helpingour economy and our country, and I am delighted to be joining theNorth Dakota Petroleum Council and its members in Grand Forks,”said Holtz. “There are a great deal of similarities between being acoach and one of the many industry leaders who have seized thistremendous opportunity to help move our state and nation forward. Just as on the athleticfield, the ability of leaders to adapt, find solutions for evolving challenges and issues, andcapitalize on opportunities makes for a winning proposition.”

Also joining Holtz as a featured speaker at the Annual Meeting will be Bill Maloney,Statoil’s general manager of North America; Burlington Northern Santa Fe’s CEO Matt

Rose; and North Dakota Gov. Jack Dalrymple. For a full schedule and agenda of speakers,visit https://annualmeeting.risprojects.org/agenda.aspx.

Bakken Oil Workers & Oil Service Expo Aug. 20-22The Bakken Oil Worker’s and Oil Service Expo may just be one of the biggest happen-

ings of the summer in North Dakota. Just three weeks after the North Dakota State Fair,the Expo, nicknamed the “Bakken Oil Expo” will be held Aug. 20-22 at that North DakotaState Fair Center in Minot, N.D. The event features networking opportunities, seminars andworkshops, privately hosted meals, a reception, job opportunities and the ability to set upone-on-one appointments in advance with current and prospective business clients andemployers. Along with these opportunities, the show has a huge indoor and outdoorexhibit show with companies and organizations coming from 36 states and Canada. Withmore than 400 booth spaces, this is this one of the largest oil industry events in the north-ern U.S.

Seminars will run concurrently in the mornings and afternoons all three days offeringattendees the opportunity to enhance their knowledge in training sessions and hands onclasses.

For more information on the event, or to register, visitwww.usasymposium.com/bakken.

LOU HOLTZ

http://www.abrasivesinc.com/

http://www.ofsfund.com/

Trust Lands has received in recent yearshave generally been targeted in McKenzie,Williams, Dunn and Mountrail counties,but he added that the production potentialoutside of these areas has been demonstrat-ed by “generous” bids offered in recentauctions, including the Aug. 6 auction.“While much of the acreage offered at therecent state lease auction are outside of the‘prime’ Bakken production area, manyareas of western North Dakota have a his-tory of producing oil and gas, so the con-tinued interest is not a surprise,” Gaebesaid. “There may be some speculation atplay, but many areas have potential for pro-duction as well.”

Successful biddersThe highest price paid for a lease in the

August auction was $19,100 that BandedRock LLC of Sherwood, N.D., paid for a4.85-acre Missouri River riverbed track inDunn County. The next highest price was$14,700 that TDB Resources LP of SaltLake City, Utah, paid for a 6.71-acreMissouri River riverbed tract, also in DunnCounty. The third highest bid was $5,100which was paid for two separate MissouriRiver riverbed tracts in Dunn County, one a0.07-acre tract acquired by NorwegianAmerican Oil of Minneapolis, and theother a 0.37-acre tract acquired by LeraasResources LLC, also of Minneapolis. Thelow price per acre was $1 paid for many thetracts scattered across various counties,including some tracts in far southeastMountrail County and some MissouriRiver riverbed tracts in Mercer County.

TDB Resources paid the highest per-acre price in the May Trust Lands leaseauction, paying $15,100 per acre for a 3.84Missouri River riverbed tract, also in Dunn

County. QEP Energy paid the highest priceof $13,000 per acre in the February auctionfor two separate Dunn County MissouriRiver riverbed tracts, one totaling 104 acresand the other 136.79 acres.

As Petroleum News Bakken reported inFebruary, Trust Lands commissioned a sur-vey in 2010 to accurately delineate riverbedtracts along the Yellowstone and Missouririvers, most of which lie under LakeSakakawea. The first of those recentlydelineated riverbed tracts were offered forlease in the February 2013 auction.

Overall, TDB Resources paid the high-est average price per acre in the Augustauction at $14,700 for a total 6.71 acres in

one tract in Dunn County. Banded Rockhas the second highest average with$4,639.75 for 22.76 acres in three DunnCounty tracts. Irish Oil and Gas Inc. ofBismarck was third in average price peracre for a total of $2,900 per acre for158.34 acres in a single tract in DunnCounty.

Empire Oil Co. of Williston came awayfrom the August auction with the largesttotal leased acreage picking up a total of23,075.28 acres in 220 separate tracts inBowman, Golden Valley and Renvillecounties. Most of the acres that Empirepicked up in the auction, some 16,530.54acres, are in Slope County (see charts).

Right behind Empire was ResolutionConsulting of San Antonio, Texas, whichwas the high bidder on 315 tracts totaling22,616.76 acres in Dunn, McLean,Mountrail and Stark counties. Over half ofResolution Consulting’s acres are inMcLean County (13,355.97 acres). Thethird largest total acreage went to HercoLLC of Billings, Mont., which successful-ly bid on 2,751.00 acres in 44 tracts inDunn, Golden Valley and Mountrail coun-ties.

Most of the bidding activity was fortracts in Dunn County, where the 3,029.46acres were divided among 15 of the 24 suc-


2013 North Dakota Petroleum Council Annual MeetingMembers Only Showcase and Community Day

Sept. 16-18, 2013Alerus Center, Grand Forks, ND

Registration is now open for the 2013 North Dakota Petroleum Council Annual Meeting, Members OnlyShowcase and Community Day!

Register today and enjoy:

· Technical talks at the Business Meeting;

· Networking with industry leaders;

· Exhibiting your goods and services at the Member’s Showcase;

· Visiting with community members about job and business opportunities during the Community Day;

Visit annualmeeting.risprojects.org for more information!

REGISTER TODAY!

N O R T H D A K O T A

C O U N C I LPETROLEUM



AUCTION RESULTS

http://www.annualmeeting.risprojects.org

cessful bidders in the auction. ResolutionConsulting picked up the most DunnCounty tracts with 28 totaling 1,944.20acres, but Irish Oil and Gas spent the mostmoney in Dunn County, paying$459,186.00 for a single 158.34-acre tract.

Overall, Empire Oil spent the mostmoney on leases in the August auction,paying $1,618,546.96 for the 23,075.28acres it leased in its 220 tracts. Secondbehind Empire Oil was Herco which spent$1,348,058 for 2,751 acres in 44 tracts. Thethird highest spender was ResolutionConsulting which paid $845,127.10 for the22,616.76 acres it acquired in the 315tracks it leased in the auction.

Analyzing the trendsOver the past five-plus years, there has

often been an inverse correlation betweenthe total number of acres leased at an auc-tion and the price per acre, resulting insome of the lowest acreage sales bringingin some of the highest average prices peracre (see graph). A good example was inFebruary 2011 when a total of only11,544.06 acres were leased but the aver-age price per acre was $2,089.65. Perhapsthe best example, however, was theNovember 2011 auction which only had5,020.80 acres, the lowest acreage in anysale back through 2008, but had the high-est price per acre over the history of TrustLands auctions of $3,525.62.

Conversely, some of the largestacreage sales have resulted in some of thelowest average prices, such as the May2011 sale when 61,041 acres were leasedat an average price of $777.55 per acre,and in February 2008 when 34,934.28acres were leased for an average price of$129.05 per acre. However, it was theAugust 2013 auction in which this trend

was most pronounced over the five-plusyear period when the 54,482.68 acresbrought in an average price of only$88.56.

While the historic auction results sug-gest that acreage in the five core Bakkencounties tends to bring higher leaseprices, that is not always the case. Forexample, in the record high November2011 auction, most of 5,020.80 acresleased were in Dunn County and broughtin an average $2,037.65 per acre, and669.32 acres in McKenzie County fetchedan average of $7,777.04 per acre, but the760 acres leased in Billings Countybrought in the high average for the sale of$8,710.53 per acre.

There are instances, however, whenthese correlations don’t occur. For exam-ple, the highest grossing lease auction

through February 2008 was in May 2010when 53,274.97 acres were leased for$158,099,211.75, resulting in a thenrecord average price per acre of $2,967.61per acre (see graph).

Next NDTL auctionThe last North Dakota Trust Lands

auction of the year will be on Nov. 5 andwill be held in the House chambers in thestate capital building in Bismarck begin-ning at 9 a.m. Central Standard Time.Nominations for that auction close at. 5p.m. Central Daylight Time on Sept. 20.

In order to be put up for auction, acresmust first be nominated for lease and thenthe tracts are vetted by various state agen-cies. Prior to closing the nomination peri-od, Gaebe said, it’s difficult for TrustLands to anticipate how many acres will

be nominated and where those acres willbe located. Most often, acreages are nom-inated that have not previously beenleased, although occasionally leased acresare re-nominated because there was noproduction on the lease during the pri-mary five-year lease term. In those cases,Gaebe said, the re-nominated acres couldbe in the more popular counties.

Regardless of the lease locations, all ofthe proceeds from the Trust Lands auc-tions go to fund public education in NorthDakota. Gaebe noted that the generosityof the bidders does not go unnoticed, andadded that “on behalf of the permanenteducation trusts, we appreciate the will-ingness of bidders to bid generously forthe opportunity to lease acres.” �


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AUCTION RESULTS

Hawkinson, Wahpeton, Tangsrud andRoffefstad — 23 wells have been drilledthus far and are waiting on completion.Once each pad has reached initial produc-tion, the wells will be announced togetheras part of the company’s quarterly results,the company said.

Completion efforts at the 320-acreHawkinson pilot — where all 11 wellshave been drilled — are being monitoredby a cutting-edge micro seismic program,which is providing additional data to helpthe company understand how well it isaccessing the reservoir.

“The micro seismic program has setmany firsts for our industry and is, so faras we can confirm, the largest monitoringprogram to date for unconventional reser-voirs worldwide,” Bott said, noting thatContinental also is in the process ofshooting 150 square miles of 3-D seismicover the Hawkinson site to further evalu-ate the project.

Moreover, other operators haveannounced seven density pilots of varyingwell spacing, “which will help all of usbetter understand the optimal spacing ineach area of the play,” he added.

One of those operators, Kodiak Oil andGas, said recently it was “very encour-aged” by initial production results fromits Polar down-spacing project, sayingthat Polar, along with another down-spac-ing pilot, Smokey, “will have a significantimpact on how we lay out our futuredevelopment programs.”

Q2 output averaged 135,700 boepdMeanwhile, Continental’s net produc-

tion totaled a record 12.3 million boe in the

second quarter 2013, or about 135,700 boeper day, a sequential increase of 12 percentfrom the first quarter and a 43 percentincrease compared to the same three-month period in 2012. Total net productionincluded about 96,000 barrels of oil perday, or 71 percent of production, and 238million cubic feet of natural gas per day.Current production is estimated at roughly140,000 boe per day.

Net production from the Bakken petro-leum system alone was about 88,000 boeper day in the second quarter, an increaseof 14 percent compared to the previousquarter and 65 percent above last year’ssecond quarter. The company projects thattotal production for 2013 will be 38-40percent above 2012 levels.

Continental’s mid-year estimate of 922million boe in proved reserves represents a17 percent increase over year-end 2012proved reserves of 785 million boe.

“In fact, our estimate of proved reserveshas more than doubled in the past 24months,” Hamm said.

Company rig count stands at 20Continental operated 20 drilling rigs

across its leasehold position of 1.2 millionnet acres in the Bakken.

“The company is able to operate fewerrigs while achieving the upper end of itsproduction guidance due to the realizationof meaningful drilling efficiency gains,”

the company said.The company participated in complet-

ing 73 net (180 gross) wells in the secondquarter, while the Bakken backlog of grossoperated wells drilled, but not yet complet-ed, is currently 75 wells. The company saidit plans to complete 245 net (790 gross)wells in the Bakken in 2013, includingboth operated and non-operated wells.

In North Dakota, all company-operatedwells completed during the second quarterhad average IP rates of 1,150 boe per day,of which 84 percent was oil. In Montana,wells had average IPs of 455 boe per day,of which 94 percent was oil. Results areconsistent with the company’s estimatedultimate recovery, EUR, models of603,000 boe for North Dakota wells and430,000 boe for Montana wells.

Driving down operating costsContinental also continued to drive

down operated drilling and completioncosts in the Bakken during the secondquarter. Compared to last year’s secondquarter, for example, drilling cycle time ofwell spud to total depth improved by about20 percent, a reduction of four days. Timespent drilling the lateral section of the wellimproved by nearly 30 percent, a reductionof more than 2.5 days. And time and costof rig moves is down substantially as com-pany activity on multiple well drilling padshas increased. Currently, 70 percent ofContinental’s drilling rig activity in theBakken is on multiple well pads.

The company said about 75 percent ofits Bakken oil is now shipped via railroad.

“We continue to cultivate new rail cus-tomers on the East, West and Gulf coasts tocapture the best price as their appetiteincreases for the premium Bakken barrel,”Bott said.

SCOOP’s excellent resultsIn other regions, Continental said it con-

tinues to experience “excellent repeatableresults” from drilling activity in itsOklahoma SCOOP play. The play, discov-ered by Continental and disclosed lastOctober, currently extends about 80 milesacross four counties and contains “an oil andcondensate-rich window.”

To date, more than 90 SCOOP wells have“de-risked” the productive footprint formore than 40 miles, Continental said, addingthat in the second quarter of 2013, produc-tion averaged about 17,550 boe per day, anincrease of 23 percent compared to the pre-vious quarter and 435 percent above thesame quarter last year.

Continental is the largest producer, mostactive operator and largest leaseholder in theSCOOP with 277,000 net acres in the play.

On the financial side, Continental report-ed net income of $323.2 million on total rev-enues of $1.1 billion in the second quarter of2013, compared to net income of $405.68million on revenues of $1 billion in the sec-ond quarter of 2012. Adjusted net incomewas $246 million for the second quarter of2013.

Continental’s long-term debt was $4.4billion at June 30, 2013, compared to $3.5billion at Dec. 31, 2012. �


LOWER BENCHESPositive results from what

amounts to a relatively few wellsin such a large area “gives us a lotof confidence in the overall extent

and continuity of the play.” —Harold Hamm, Continental’s

chairman and CEO

“The micro seismic program hasset many firsts for our industryand is, so far as we can confirm,

the largest monitoring program todate for unconventional reservoirsworldwide.” —Winston Frederick Bott,

Continental’s president and COO

Documents

Gaebe: ‘Sold out’