Weekly Oil Report

Compiled by Darryl L. Flowers

New Locations

Primary Petroleum Company USA won approval for two new locations in Teton County last week, both wells are drilling for the Duperow Formation at a Proposed Depth of 5,000 feet. The wells are the Rockport 14-19-27-6 (SE SW 19-27N-6W) and the Spring Hill 13-34-27-6 (SW SW 34-27N-6W).

Two locations were given the go-ahead in Toole County. In Toole County’s Kevin-Sunburst Field, Somont Oil Company was approved for the Breaupre 2X (SW NW 8-35N-2W).  The well will target the Madison Formation with a Proposed Depth of 1,800 feet. Balko, Inc. has received a permit for the Gold Butte Federal 11-7 (NE SW 7-35N-3E). The well will aim for the Dakota Formation at a Proposed Depth of 2,000 feet.

New Locations – Horizontal Wells

In Richland County, Fidelity Exploration & Production will be drilling the Linda 25-36H (NW NW 25-22N-57E). The Three Forks Formation well has a Probable Bottom Hole Location (PBHL) at 20,389 feet.

In Sheridan County, Whiting Oil and Gas was granted a permit for the Gronlie Farms 31-25TFH (NW NE 25-31N-55E). The well, with a PBHL of 18,901 feet will also target the Three Forks Formation.

Re-Issued Locations

In Fallon County, a permit was approved for Continental Resources for the Merritt 12-27NH (SW NW 27-7N-61E). The well, located in the Cedar Hills West Unit Field, will have a PBHL at 12,640 feet aiming for the Red River B formation.

In Phillips County’s Bowdoin Field, Fidelity Exploration & Production was approved for the Federal 1288 (NE NW 17-32N-32E). The Belle Fourche Shale will be the target at a Proposed Depth of 1,800 feet. In the county’s Loring, East Field, Omimex Canada will be punching for the Phillips Formation with the State 1862-4 (NW SW 18-36N-32E). The well has a Proposed Depth of 1,747 feet.

Continental Resources won approval for two wells in Richland County; the June BR 1-8HSU (NE SE 8-24N-53E) has a PBHL at 13,539 feet, the BR Carda 1-29HSU (NE NE 29-25N-53E) has a PBHL at 19,070 feet. Both wells are aiming for the Bakken Formation. Also in Richland, Slawson Exploration was greenlighted for the Sentinel 1-22H (NE NE 22-24N-52E). The Bakken formation well has a PBHL at 13,008 feet.

In Sheridan County, Stephens Energy Company will be drilling for the Red River Formation at the Thuesen 7-9 (SW NE 9-32N-56E), with a Proposed Depth of 11,300.

Permit Modifications / Corrections

In Glacier County, Anschutz Exploration Corporation was granted a Modification / Correction to their permit for the Mallard 2-14-33-12 (SW NW 14-33N-12W). The target is the Cretaceous Undifferentiated Layer at 8,220 feet.

In Sheridan County, Marathon Oil Company received a Permit Modification / Correction for the Rodney Sveet 21-28H (SE SW 21-31N-59E). The Bakken Formation well has a PBHL at 19,735 feet.

Completions

In Blaine County Montana Land & Exploration reported the completion of the White Bear 31N-24E 12B-26 (NW SW 26-31N-24E). The Bowdoin Formation well has a Total Depth of 4,718 feet.

There were two completions reported in Roosevelt County; EOG Resources reported as finished the Stateline 5-1003H (SE SE 10-28N-59E). The well, which taps into the Bakken Formation, reported an Initial Potential of 650 Barrels of Oil Per Day (BOPD); 229 Thousand Cubic Feet of Gas Per Day (MCFPD) and 2,686 Barrels of Water Per Day (BWPD). Brigham Oil & Gas LP wrapped up the Charley 10-15 1-H (NE NW 10-28N-57E). The Bakken well, with a Total Depth of 19,523 feet reports an Initial Potential of 917 BOPD, 911 MCFPD and 2,344 BWPD.

Abandoned Wells

In Roosevelt County, Nautilus Poplar received a permit to abandon the EPU 107 (NE SE 19-29N-51E). The well is located in the Poplar, East field.

Converted to Injection

Tomahawk Oil Company was issued a permit to convert the Stensvad 31 (SW SE 9-11N-31E).

Darryl Flowers is the Publisher of the Sun Times in Fairfield, Montana. www.fairfieldsuntimes.com Darryl can be reached at suntimes@3rivers.net.

ExxonMobil and Employees Donate $40 Million to U.S. Colleges and Universities

• 900 educational institutions are receiving funds from a program that matches employee donations

•  More than $477 million donated since program began in 1962

•  Recipient organizations encouraged to support math and science initiatives

IRVING, Texas — ExxonMobil and its employees are donating $40 million to higher education institutions across the country as part of the ExxonMobil Foundation’s 2011 Educational Matching Gift Program.

“We are proud to build upon the generous support of ExxonMobil employees who are committed to investing in the future of young Americans.”

ExxonMobil employees, retirees, directors and surviving spouses contributed $12 million, which was matched with $28 million in unrestricted grants from the ExxonMobil Foundation.

The program matches donor pledges 3:1 up to $7,500 to qualified colleges and universities in the United States, along with the American Indian College Fund, Hispanic Scholarship Fund and the United Negro College Fund. Since the Educational Matching Gift Program began in 1962, more than $477 million has been donated to American institutions of higher learning.

“The ExxonMobil Foundation has a long history of supporting a range of efforts to improve the quality of education in the United States,” said Suzanne McCarron, president of the ExxonMobil Foundation. “We are proud to build upon the generous support of ExxonMobil employees who are committed to investing in the future of young Americans.”

In 2011, more than 4,900 employees and retirees made individual donations through the initiative. Although grants are unrestricted, colleges and universities are encouraged to designate a portion to math and science programs supporting student engagement.

In addition to the Educational Matching Gift Program, ExxonMobil and the ExxonMobil Foundation support and develop programs that encourage students, particularly women and minorities, toward careers in math and science fields, as well as teacher training initiatives.

About ExxonMobil Foundation

ExxonMobil Foundation is the primary philanthropic arm of the Exxon Mobil Corporation in the United States. The Foundation and the Corporation engage in a range of philanthropic activities that advance education, health and science in the communities where ExxonMobil has significant operations. In the United States, ExxonMobil supports initiatives to improve math and science education at the K-12 and higher education levels.

Choteau Oil and Gas Tax Presentation Details How Monies Are Distributed

Dan Lindseth, with Montana Overthrust Management opens the meeting. Sun Times photos by Darryl L. Flowers

“2,000 New Wells in Four to Five Years”

By Darryl L. Flowers
A crowd of about 35 came out to hear officials with the Montana Legislative Fiscal Division explain the nuts and bolts of how funds are collected in the state and then distributed to the various agencies, counties and cities.

The meeting was put together by Montana Overthrust Management (MOM), a Choteau company that has been involved in the development of oil and gas along the eastern slope of the Rockies.

Dan Lindseth, one of MOM’s partners, opened the meeting by thanking Rep. Christy Clark, R-Choteau and Rep. Bob Mehlhoff, D-Great Falls, for bringing staff from the state legislature’s Fiscal Division to Choteau.  The rules require that a bipartisan request be made for the fiscal division to engage in such a presentation.

The first to wade into the details of Montana’s complicated tax policy was Terry W. Johnson, Principal Fiscal Analyst. Johnson began by showing how oil production had changed since 2003. Using a graph he explained that production from both horizontal and vertical wells had peaked in 2005. Since then, horizontal wells have been in steady decline while vertical wells have shown an incease, starting the the third quarter of 2010.

The trend in oil production in the state was not reflected in the numbers showing production statistics, though.  According to Johnson, in the period form 2003 through 2011, production (gross value, in dollars) peaked at over $900 million in 2008. That peak reflected the price of oil at the time, which was about $120.  The value plummeted to about $250 million in the first quarter of 2009 and ended 2011 at half a billion dollars.

Johnson noted that, since 2006, oil and gas production in Montana were in a steady decline until the last three quarters” We expect that trend to change, to increase, possibly as soon as the next quarter.”

As he wrapped up his portion of the presentation, Johnson revealed that on a recent visit to communities in eastern Montana, he had heard from a couple of oil exploration companies about what they expect to see in that region of the state in the next four to five years. One company expects 1,000 new wells in eastern Montana while another put the estimate at 2,000 new wells. “And that does not include the development in this region.”

Next, Jim Standaert detailed the flow of revenue to the schools.  The Senior Fiscal Analyst began by telling the crowd that Rosebud County had the lowest “mills” of any of the state’s counties due to the tax receipts from the Colstrip generating facility. One of those in attendance asked about the Otter Creek Coal proceeds.

According to Standaert, when the Otter Creek money, over $80,000,000, came into the state, the schools had already been funded for the year. The money was put into the “ending balance” and returned to the general fund as the new fiscal year began.

Standaert next detailed some of the problems in addressing school funding needs, explain that schools count the students in October and again in February. “In the other months, you may have students come into the school for a brief period before moving on. The schools never get reimbursed for those additional students.”

During a question and answer session after Standaert’s presentation, the question came up as to why counties were seeing oil and gas money while cities and towns were not reaping the benefits.

According to Rep. Lew Jones, R-Conrad, during the “Big Bill” of 2003, most of the cities chose to take money from gaming while the counties hedged their bets on oil and gas. “We did not become Las Vegas, we became and oil and gas producer” remarked Jones.

As the meeting came to a close, Cathy Duncan described a visit the group had made to Watford City, North Dakota. She explained how, despite the bad news coming out of the oil patch painted a distressing picture of what was happening to our east, Watford City was not seeing the bad effects of the oil and gas exploration.

According to Duncan, the city had engaged in planning in advance of the boom, and had targeted the 20% of oil workers who become permanent residents. As a result, Duncan said, the community had seen a 30% increase in students in local schools, “according to Bloomberg, Watford City was recently rated as the best place to raise your kids in the U.S.”

“FrackNation” Takes On “Gasland”

Ann McElhinney at the April 12, Glendive, MT sneak preview of “FrackNation.” Photos Courtesy Bob van der Valk
By Bob van der Valk

TERRY, MONTANA – The word “passionate” is the one word comes to mind immediately upon first meeting documentary filmmaker Ann McElhinney.   She shared her current passion explaining hydraulic fracturing or shale oil and gas by showing a sneak peak of her film “FrackNation” to a crowd of over 50 people.

The event was held Thursday night, April 12th  at the MidRivers community meeting room in Glendive, MT, which was hosted by “The Eastern Montana Patriots Organization” (TEMPO) and sponsored by the “Montana Policy Institute” (MPI).

Carl Graham, who is the CEO of MPI and made the introduction of Ann McElhinney, said she was asked to speak to the mostly Eastern Montana audience in attendance to raise awareness about hydraulic fracturing and its consequences.

“Competing documentaries are made from different viewpoints,” is how Ann McElhinney describes the film she and her husband are in the middle of making. “FrackNation”will be about the oil industry’s safe practices of hydraulic fracturing known as fracking.

It will also respond to “Gasland,” a film made by Josh Fox, which raised concerns about the safety of hydraulic fracturing.  It shows the purported affects in areas of our country where methane is released along with the drinking water with hydraulic fracking.  This affect of nature has been occurring in the area of the Marcellus Shale formation in Pennsylvania for the last 400 years.

The Glendive presentation was her only stop in Montana after she toured the area around the Bakken and Three Forks oil shale developments.  She has already given presentations in Minot and Bismarck, ND before heading home for Hollywood and back with her husband Phelim Mcaleer, who is the co-producer of their latest documentary.

“Towns like Glendive, Baker, Circle and Terry are going to have their growing pains, but I don’t think anyone wants the oil production to go away”.  Most of the people she met on her tour have given her great encouragement to go through with her project in order to straighten out the misinformation being published by the environmentalist groups who are against any kind of fossil fuel production.

McElhinney pointed out major discrepancies featured in “Gasland”.  She told her very attentive Glendive crowd how the water in Dimock, PA has been flammable for hundreds of years.  Controversy has been brewing between the eleven families suing the oil companies and the other 1500 families not willing to join the class action lawsuit and the negative publicity brought on by all the media attention from the GasLand film.

McElhinney also commented about the United States Environmental Protection Agency (EPA) ruling frequently against hydraulic fracturing and just reversed its decisions in Pavillion, WY, Fort Worth, TX, and Dimock, PA.  The anti-fracking ruling and threat or huge potential fines are costing the oil and gas exploration millions of dollars in legal costs.

McElhinney and her husband produced several other documentaries debunking environmentalists’ cases against different issues, such as mining in Romania.

She sought out the Sierra Club, GreenPeace and the National Wildlife Association for special skepticism in their well funded attempts to halt all oil drilling anywhere to make the US no longer dependent on fossil fuels.  Her question to them is: “If not fossil fuels, then what do we use for our daily energy consumption?”

The premiere of the movie “The China Syndrome” coincided with the Three Mile Island nuclear power plant disaster.  It doomed nuclear energy as one of the alternative energy sources for the immediate future and not one new nuclear power plant has been built since March 1972.

“Environmentalists are terrifying average people with well made movies and making documentaries presenting untrue facts, which are easily debunked with the truth.”

Ann McElhinney saved her real harsh words about Environmental Protection Agency (EPA) current dealings with sustainability.  Sustainability has emerged as a result of significant concerns about the unintended social, environmental, and economic consequences of rapid population growth, economic growth and consumption of our natural resources.

In its early years, EPA acted primarily as the nation’s environmental watchdog, striving to ensure that industries met legal requirements to control pollution. In subsequent years, EPA began to develop theory, tools, and practices that enabled it to move from controlling pollution to preventing it.

Today EPA aims to make sustainability the next level of environmental protection by drawing on advances in science and technology to protect human health and the environment, and promoting innovative green business practices.

Greg Cross, owner of Cross Petroleum in Glendive, MT, attended this sneak preview.  He commented after the presentation: “The movie is not yet set for release but the promo was excellent. The lessons learned are simple; the anti-fossil fuels crowd is winning the propaganda battle as most of the pro- side is busy making a living and most important we can win IF we can maximize our involvement in social networking, i.e. Twitter and FaceBook to make our opinions known we can make a difference.”

He further said:  “My thoughts are that we should have a break-out session during our convention to set up and teach us how to take advantage of this opportunity. Frack Nation tweeted and FaceBooked to raise almost $250,000 in a very short time to finance their documentary on Kickstarter.com.  We first need someone to teach us in layman’s terms how to Tweet and FaceBook on a computer or smart phone.”

Matt Damon, the actor, and Gus Van Sant, a prominent director, are making an anti-fossil propaganda film this summer which will likely become another Oscar nominee like Al Gore’s “An Inconvenient Truth”.  The latter created fear in people about climate change having an immediate affect on our lives if we continue to depend on fossil fuels as our mainstay.   Ann McElhinney and Phelim Mcaleer may also be nominated for an Oscar and perhaps even the Nobel Peace Prize for being so passionate about such a controversial subject as the telling of the real story behind hydraulic fracking.

Donations for the making of this documentary are still being accepted but the producers want to maintain full transparency and keep their film free from special interests.  Monies to fund this project are not being accepted from oil companies or any of their senior executives.   FrackNation is an independent film, wants to remain independent of the oil and gas production industry.

You can follow the progress made towards funding on FrackNation.com as well as KickStarter.com.

Bob van der Valk lives in Terry, Montana and is a Petroleum Industry Analyst.  He reports on fuel-related trends and events. You can reach him by e-mail:   tridemoil@aol.com or at:  www.4vqp.com

Samson Oil and Gas Reports Roosevelt County Well Stimulation Successful

Published: Tuesday, April 17, 2012 2:33 PM CDT
Roosevelt Project, Roosevelt County, Montana

Gretel II 12KA 3 #1-30H, (SSN 100%, subject to a 33.34% backin right)

As previously reported, the Gretel II fracture stimulation of the Bakken Formation was successfully completed, however a frac plug was set in the vertical part of the well. This plug and an attached perforating gun will be recovered when the work-over rig arrives later this week after having completed the Australia II work-over.

During the intervening period the well has been flowed back and has recovered 12,000 barrels of water. The stimulation operation injected a total of 43,000 barrels. The go forward plan is to recover the fish, drill out the frac valves and run the production string and continue the flow back.

Australia II 12KA 6, #1-29H, (SSN 100%, subject to a 33.34% back-in right)

The work-over rig successfully retrieved the stuck perforation gun from the Australia II well and has drilled out the remaining frac plugs. This operation took longer than expected due to several breakdowns of the rig and associated equipment. The rig is currently running the production tubing after which the well will be flowed back. As noted, this rig is expected to mobilize to the Gretel II location later this week.

Abercrombie 1-10H (SSN 0.75%)

The Abercrombie well has been successfully stimulated, placing 2.8 million pounds of proppant in 30 stages.

Hawk Springs Project, Goshen County, Wyoming

Defender US33 #2-29H, (SSN 37.5% working interest)

The problems experienced in the past with the rod pump in Defender have continued and as a result the well is being worked over this afternoon. The operation will pull the tubing and the pump and a decision will be taken to either run another rod pump or if possible run the down hole equipment associated with a jet pump that has been sourced. The provider of this equipment has yet to advise a firm delivery date, but it is expected to be in the short term. The continuing difficulty associated with the rod pump arises from the amount of gas that is being produced from the reservoir, resulting in the partial closure of the down hole valves, which in turn means that the volume capacity of the pump is impaired. Because the jet pump operates on a venturi system, the current thinking is that the jet pump configuration will not suffer the same problem as the rod pumps.

Given the pump problems that have been experienced in Defender, Samson and its farminee have agreed to delay the decision on the second farmin well until April 30th. This should allow an informed decision to be made after an indicative reservoir rate has been established. The Defender well has produced 5,084 barrels of oil to date, and the oil cut has approached 70% prior to the pump replacement.

Spirit of America US34 #2-29, (SSN up to 100% working interest)

The Frontier Rig 11 is currently due to arrive on approximately April 20th to commence operations on the re-drill of the Spirit of America US34 #1-29.well. This well will test two conventional targets in the Permian and Pennsylvanian aged rocks to a depth of approximately 11,000 feet.

Life in Phat City, Montana: Wind River Energy Updates Drilling Schedule

Wind River Energy Corp announced today an update to the expected drilling schedule at the Company’s 56,785 acre Phat City oil project in Montana. The expected drill date for the second well has been delayed until approximately May 5, 2012 by the drilling contractor in order to accommodate their customers that preceded Wind River on their operations schedule.

Wind River has now received a permit for drilling and is building the drilling pad for the second well this week, in case the rig becomes available earlier.

The well is designed to individually test two benches of the Nisku formation and will also be configured to test the Bakken/Three Forks formation at a later date. This drilling location was selected with the benefit of seismic data acquired earlier this year. “We expect this well to help us optimize the drilling and completion strategies to be utilized to develop a multi-pay oil field,” said Alan O’Hare, CEO, Wind River Energy Corp.

Wind River is an oil and gas acquisition, exploration and development company with a focus on domestic energy projects within the United States. Wind River has two gas projects in Wyoming and three oil projects located in Colorado/New Mexico, Kansas and Montana. In total, Wind River holds 67,745 gross acres of leased oil and gas properties, giving the company ownership of resources in the Bakken / Three Folks, Nisku, Niobrara, Greenhorn, Mississippian and other formations.

Huber Corp. Abandons Well: Weekly Oil Report

Compiled by Darryl L. Flowers

New Locations – Horizontal Wells

Three locations were approved in Richland County last week. Continental Resources will be Bakken-bound with the Cara 1-21H (SE SW 21-26N-55E). The well has a Probable Bottom Hole Location (PBHL) of 19,921 feet.

Also heading for the Bakken is the Carl Federal 2658 43-23H (SW SE 23-26N-58E), operated by Oasis Petroleum North America, with a PBHL at 20,396 feet.

Rounding out the Richland County permits is XTO Energy’s Headington 43X-23B (NE SE 23-26N-52E) with a PBHL of 18,327 feet hitting the Bakken Formation.

In Roosevelt County, Oasis Petroleum won approval of the Dash Federal 2759 11-13H (NW NW 13-27N-59E). The Bakken well has a PBHL at 20,075 feet.

Re-Entry of Plugged Wells

In Richland County’s Vaux, Field Slawson Exploration received a permit to re-enter the Haffner 1-12 SWD (SW SE 12-22N-58E). The Swift Formation well has a Proposed Depth of 5,675 feet.

Re-Issued Locations

There were two Re-Issued Locations approved last week. In Phillips County, Fidelity Exploration & Production was given the go-ahead on the  Federal 1416 (SW SE 14-32N-32E). With a Proposed Depth of 1,800 feet, the well will be tapping into the Mowry Shale.

In Roosevelt County, Oasis Petroleum was greenlighted for the Beta 2758 43-19H (SW SE 19-27N-58E). The Bakken Formation well has a PBHL of 20,097 feet.

New Laterals or Extensions, Existing Horizontal Wells

In Blaine County, Citation Oil & Gas received a permit for the BSU H311H (SE NE 11-31N-19E).

Permit Modifications / Corrections

Continental Resources won approval for a Permit Modification / Correction to the Butterfield 1-26H (NW NW 26-26N-53E), aiming for the Bakken Formation with a PBHL at 19,302 feet.

Completions

The rigs have been busy in Roosevelt County, with four completions reported last week. EOG Resources brought in the Stateline 10-1211H (S2 12-28N-59E). The well reported an Initial Potential (IP) of 346 Barrels of Oil Per Day (BOPD); 246,000 Cubic Feet of Gas Per Day (MCFPD) and 2,546 Barrels of Water Per Day (BWPD).

Whiting Oil and Gas put the finishing touches on the French 21-30TFH (NE NW 30-29N-56E), with an IP of 404   BOPD, 450 MCFPD, and 880 BWPD.

Oasis Petroleum wrapped up the Marilyn 2758 42-11H (SE SW 11-27N-58E), with an IP of 557 BOPD, 559 MCFPD and 1,646 BWPD. The company also wrapped up the Copper 2959 42-20H (SE SW 20-29N-59E), which reported an IP of 1,300 BOPD; 1,078 MCFPD, 5,065 BWPD. All four wells tap into the Bakken Formation.

Expired Permits

There were two expired permits. In Blaine County, the US-DIR 19-9A (SE NE 19-27N-20E) operated by Devon Energy Production expired; while in Rosebud County, the CSTSU C215Y (SE NE 15-11N-32E), operated by Bayswater Exploration and Production expired.

Abandoned Wells

Anyone who spent time in a newspaper pressroom years ago will recognize the name of the operator of the lone abandoned well filed last week. J.M. Huber Corporation was approved to abandon the MT State 8-43-16-16K (SE SE 16-8S-43E). Huber, for many years, was one of the leading producers of ink for the newspaper industry.

Released as Water Well

In Big Horn County, Fidelity Exploration & Production was approved for the Visborg 2390 13C (NW SW 23-9S-40E).