what does everyone think about the threeforks prospects in se divide
and ne williams co ? have not the yields been good enogh to continue
drilling those ? perhaps the state needs to renew less taxes on the
first 50,000 bbls to forestall another bust. there still is only a
small amount of over supply in the world ,so a modest cutback by a big
producer or a major disruption somewhere and oil would shoot upwards.
On Oct 19, 7:40 am, dkwilk <[EMAIL PROTECTED]> wrote:
> This artiicle appeared in todays Bismarck tribune. don
>
> Oct 19, 2008 - 04:05:15 CDT
> By BRIAN DUGGAN and LAUREN DONOVAN
> Bismarck Tribune
> A dramatic decline in the price of oil is good news for consumers, but
> it will likely chill the hot action across some areas in North
> Dakota's Bakken oil formation.
>
> With an estimated recoverable reserve of 4.3 billion barrels, the
> Bakken and associated oil layers have attracted dozens of drillers and
> 85 rigs into the state, the most since the last oil boom in the early
> '80s.
>
> Strong prices for oil, including this summer's all-time high of more
> than $160 a barrel, helped lubricate a play in which one well alone
> costs as much as $5 million.
>
> With oil now touching in at $70 a barrel, it's likely some producers
> will pull away from areas where they had been looking to expand.
>
> Lynn Helms, director of the state's Department of Natural Resources,
> said he doesn't expect changes in the main core of the Bakken - Dunn,
> McKenzie and Mountrail counties - but acknowledges the perimeter of
> the Bakken play could be affected.
>
> "This oil price is going to dampen expansion of the play but it's not
> going to lead to collapse of the Bakken play or the play going away,"
> Helms said. "The main areas are very solid."
>
> Helms said the expansion areas are in trouble. However, he said there
> is no single oil price floor that applies statewide.
>
> The old rule of thumb of $65 to $75 a barrel to support the Bakken is
> less true with drilling technology that increases well output from an
> average of 250 barrels two years ago to 650 barrels a day today in
> some places.
>
> "Mountrail is performing so well with the new technology that break-
> even prices for those kinds of wells is down around $20 a barrel,"
> Helms said. Those wells used to break even around $60.
>
> "Mountrail is the exception to the rule," Helms said.
>
> For Dunn and East McKenzie counties, where 32 rigs are in operation,
> the break-even price is about $40 a barrel.
>
> Trouble spots are in Burke County at an $80 break-even range and
> Divide at $55, along with Ward and McLean counties, he said.
>
> "The core areas where we've got 60 rigs running are very solid even at
> these oil prices. But for the outlaying areas - Divide, Burke and
> Williams - it's a very different picture," Helms said.
>
> Oil companies are reticent to talk about their positions, especially
> publicly traded companies that are vulnerable to rapid dynamics in the
> stock market.
>
> Two of those - Marathon Oil and Continental Resources, both actively
> drilling the Bakken in Dunn and McKenzie counties - are scheduled for
> quarterly conference calls with stockholders and market analysts and
> may comment on market conditions and drilling plans then.
>
> Continental's spokesman said the company will talk after its Nov. 6
> conference call, and Marathon's spokeswoman said her company hasn't
> announced any change in its Bakken plans, and projections will be
> included in its January budget.
>
> Rick Ross, vice president of operations for Whiting Oil, which is
> drilling in the Mountrail County portion of the Bakken, said his
> company has drilled "very prolific" wells there "and we can stand a
> lower price than in other places."
>
> Ross said each company has its own tolerance in the market.
>
> "It's not that we all fall off the table at once," he said. "There's a
> huge range."
>
> He said his company has not made a decision to slow down. "I don't see
> it changing for us," Ross said.
>
> Whiting has 22 completed wells and eight in various stages of drilling
> and completion. Half of its 190,000 leased acres are in the Sanish and
> Parshall fields on the Bakken.
>
> Ron Ness, head of the North Dakota Petroleum Council, said that while
> price tolerance varies from one oil company to the next, he is hearing
> concern, not only from drillers, but secondary businesses that support
> the industry.
>
> "I have heard a lot of nervousness," Ness said. "The threshold for
> each company will be different."
>
> The canary in the oil "coal mine," is generally leasing activity, he
> said. When mineral acreage leasing falls quiet, it's a sign
> something's amiss.
>
> McLean County recorder Dewey Oster said he has seen less foot traffic
> from landmen researching minerals acres, but he doesn't know whether
> it's due to available land all leased up, or less interest in that far
> range of the Bakken play.
>
> Brenda Cook, the recorder for Mercer County - an expansion zone where
> leasing had been fairly hot and one rig moved in last month - said
> she's seeing half the number of landmen in the past few weeks.
>
> She said she thinks oil prices are one aspect, but says, "They may
> have leased up the land they're looking for."
>
> Landmen tend to be tightlipped, she said.
>
> In Dunn County, recorder Chris Larsen said she's recording 20 leases
> day, down from a peak of 50.
>
> She thinks it's less a price issue than one of opportunity.
>
> "I think it's because everybody is pretty much leased up," she said.
>
> (Reach reporter Lauren Donovan at 888-303-5511 or [EMAIL PROTECTED])
--~--~---------~--~----~------------~-------~--~----~
You received this message because you are subscribed to the Google Groups
"Bakken Shale Discussion" group.
To post to this group, send email to [email protected]
To unsubscribe from this group, send email to [EMAIL PROTECTED]
For more options, visit this group at
http://groups.google.com/group/bakken-shale-discussion?hl=en
-~----------~----~----~----~------~----~------~--~---
