Weekly Oil Report

Compiled by Darryl L. Flowers

New Locations – Horizontal Wells

Five new locations were approved for Richland County. Three of the wells are operated by Slawson Exploration Company: the Dag 1-8H (SW SW 8-21N-59E), with a Probable Bottom Hole Location (PBHL) at 14,522 feet; the Hornet 1-25H (NE NE 36-23N-54E), with a PBHL at 14,674 feet; and the Dragonfly 1-36H (NE NE 36-23N-54E) with a PBHL at 14,136 feet. Two permits went to Whiting Oil and Gas Corporation: the  Simmers 4 21-30-1H (NE NW 30-25N-57E), with a PBHL at 20,321 feet and the Kittleson Federal 34-23-1H (SW SE 23-26N-57E), with a PBHL at 21,623 feet. All five wells will tap into the Bakken Formation.

Two wells were approved for Roosevelt County. Vaalco Energy was greenlighted for the EPU 133H (NW NE 10-28N-51E), with a PBHL at 12,000 feet tapping into the Three Forks Formation while Oasis Petroleum North America won approval for the Dee 2759 43-19T (SW SE 19-27N-59E), with a PBHL at 20,135 feet, boring into the Bakken Formation.

In Sheridan County, TAQA North USA was approved for the McKinnon 17-8H (SE NE 17-37N-57E). The Bakken Formation well has a PBHL at 12,209 feet.

Re-Issued Locations

There were a full dozen Re-Issued permits issued. All went to Fidelity Exploration & Production Co. and are located in the Cedar Creek Field. The wells will target the Eagle Formation with a Proposed Depth of 2,000 feet. The wells are the State 2860 (SW SE 36-6N-60E), Fee 2881 (NE NW 12-7N-59E), Fee-CP 2903 (SW SE 3-4N-61E), Fee-CP 2972 (SW NW 7-4N-62E), Fee-CP 2970 (SE NW 17-4N-62E), Fee-CP 2971(NW SW 17-4N-62E), Fee-CP 2982 (SW SE 5-5N-61E), Fee 2983 (NW NW 8-5N-61E), Fee 2981 (SE SW 9-5N-61E), Fee-CP 2980 (NW SW 15-5N-61E), Fee-CP 4045 (NW 31-9N-59E), and the  Fee-CP 4050 (SE NW 31-9N-59E).

Permit Modifications / Corrections

Two modifications/corrections were issued for Primary Petroleum Company USA wells in Teton County. Both will target the Potlatch Anhydrite. The Rockport 16-19-27-6HZ (SE SE 19-27N-6W) will have a PBHL at 9,067 feet while the Spring Hill 14-34-27-6HZ (SE SW 34-27N-6W) will have a PBHL of 8,216 feet.

In Toole County, a permit was issued to Somont Oil Company for the Breaupre 2 (SW NW 8-35N-2W). The well, located in the Kevin-Sunburst Field, is aiming for the Madison Formation with a Proposed Depth of 1,800 feet.

Completions

In Roosevelt County, EOG Resources wrapped up the Stateline 9-0201H (NW SW 2-28N-59E). The Bakken Formation well has a Bottom Hole Location of 16,000 feet and reported an Initial Potential of 342 Barrels of Oil Per Day; 200 Thousand Cubic Feet of Gas Per day and 3,455 Barrels of Water Per Day.

Expired Permits

The Donoven 31-34-14E (NE NE 31-34N-14E) permit expired. The well had been permitted to J. Burns Brown Operating Company.

In Roosevelt County, the Stateline 12-3229H (SW SE 32-28N-59E), permitted to EOG Resources, expired.

Abandoned Wells

In Powder River County, the Unit 821 (C NW 8-9S-54E) received a permit. The well, registered to Denbury Onshore, LLC was in the Bell Creek Field.

Samson Updates MT, WY Operations Status

Over the weekend, Samson Oil and Gas, Ltd. offered an update on the operational status of the company’s projects in Montana and Wyoming.

Hawk Springs Project, Goshen County, Wyoming

Spirit of America US34 #2-29, (SSN 100% WI)

The Spirit of America #2 well has set intermediate seven inch casing at a depth of 9,130 feet, which completed a significant milestone in securing the Permian salt section behind pipe. This depth is 60 feet deeper than the point at which the first well was abandoned, which did not penetrate the two 3-D seismically defined targets. Drilling operations re-commenced and the shallowest primary target in the Permian section was intersected at 9,287 feet and an interval of unconsolidated sandstone was drilled between 9,304 and 9,320 feet. A significant amount of free oil was recovered from samples within this interval. A signification oil show was also recorded over the interval 9,393 and 9,430 feet in a shaly siltstone. The well at 0600 hours this morning was drilling ahead at 9,441 feet after completing a repair to the top drive. The forward plan is to drill ahead to evaluate a deeper target prior to a total depth of approximately 10,750 feet. A comprehensive geophysical logging suite will be run at total depth.

Roosevelt Project, Roosevelt County, Montana

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

The work-over rig has completed its work on the Australia II well and the well bore is ready for production. Surface facilities and the well hook up have been completed and the well began pumping Friday May 25th. The well-produced approximately 500 bbls of mostly completion fluid during the first 24 hours, and will be evaluated over the next few weeks and we will report the wells oil production potential when known.

Western Energy Alliance Answers Accusation Of Non-Producing Leases

The Administration is again rehashing tired rhetoric that industry is not developing on existing leases while failing to mention the huge obstacles it places in the way of oil and natural gas producers. Companies have proposed twenty major projects that could create 120,905 jobs, $8 billion in wages, and $27.5 billion in economic activity, yet little progress has been made because of federal government delays.

“The Administration continues to deflect blame for leases that are not producing onto the industry, yet their rhetoric displays a misrepresentation of how oil and natural gas development on federal lands works,” said Kathleen Sgamma, Vice President of Government and Public Affairs. “We estimate that about half the nonproducing acreage results from the Department of the Interior’s (DOI) own redundant regulations and bureaucratic delays.”

Currently, government delays of three to seven years are preventing fourteen significant projects from moving forward on federal leases. By developing just 1,631 wells per year, these projects could create 64,805 sustained jobs, $4.3 billion in wages, and $14.9 billion in economic impact annually. However, even once projects are finally approved after several years, companies then must wait 298 days on average for a permit, so the delays continue.

“Not all leased acreage is created equal: some simply does not have recoverable oil or natural gas resources,” continued Sgamma. “There will always be some percentage of leased acreage that will not be developed by the current leaseholder with today’s technology because exploratory work determines there is insufficient economically recoverable energy.

“If the Administration is really concerned about undeveloped leases and increasing domestic energy production, it would direct DOI to move forward with projects that companies have already proposed, and roll back some of the layers of bureaucratic red tape now imposed on western energy producers.

“The truth is that companies are doing all they can to develop federal energy resources, but a lease is not a green light to produce—it’s a definite maybe and the first step in a long, expensive process fraught with bureaucratic red tape,” concluded Sgamma.

To read Economic Impacts of Oil & Gas Development on Federal lands in the West please go to http://tinyurl.com/75b4s6p

Primary Petroleum Provides Update on its Southern Alberta Basin Prospect

On Tuesday, Primary Petroleum Corporation provided an update on its Pondera-Teton Prospect located in the Southern Alberta Basin Bakken Fairway in NW Montana.

Seismic Program
Primary has completed five 3D seismic programs covering approx. 95 sq. miles and one additional 37 sq. mile program is currently being permitted. Initial Six Vertical Stratigraphic Wells All six wells were drilled vertically into the upper Duperow formation, ranging in depth between 4500 -6500 ft. All wells were cored across various sections of the Bakken System (lower Lodgepole, Bakken, Three Forks and Big Valley/Upper Potlatch). Oil and gas shows were identified on logs in multiple reservoir zones in all wells. Free oil was observed in one or more of the cores.

Standard log suites were acquired in all wells and advanced log suites were acquired in five of the wells. Two wells were cased, perforated and swab tested in the Bakken System and/or secondary zones, with fluid samples currently being analyzed.

Routine core analysis has been completed on four of the six wells to-date. Porosity up to 10.4% and non-fractured permeability up to 0.3mD (millidarcy) have been reported. Geochemical analyses have been completed on select samples with additional analysis in progress. Sample analyses indicate a thermally mature Bakken System source rock in the oil window, with some zones where TOC (total organic content) reaches up to 17%.

Special core analysis for the horizontal drilling program has been completed on select samples, with additional analysis in progress.

Three Supplemental Vertical Wells
All wells drilled into the upper Duperow formation, with one well cored across the Nisku formation. One well was cased, perforated and is currently being swab tested in the secondary conventional reservoir zones and/or Bakken System with results pending further review and analysis.

Operatorship
Primary has requested and has been granted by its JV Partner continued Operatorship for the balance of the drilling and completion operations in the Phase I program.

Horizontal Program
Primary has commenced the horizontal drilling program and is anticipating at this time to drill three or four horizontal wells, each targeting a specific reservoir zone by the end of September 2012. The Company is also anticipating the conclusion of completion operations by the end of October. Production testing will continue through to the end of the year, followed by the JV Partner’s Phase II election to spend a further US$41 million and earn an additional 17.5% W.I. in 2013.

Primary Petroleum Aims For Nisku At Rockport: Weekly Oil Report

Compiled by Darryl L. Flowers

New Locations

In Carbon County, Energy Corporation of America won approval for the Foothills 6D well (SW NW 24-6S-17E). The well will target the Sundance Formation at a depth of 6,600 feet.

In Roosevelt County, Vaalco Energy (USA), Inc. has received approval for the EPU 125 (SW NW 2-28N-51E), with a Total Depth of 9,500 feet. The EPU 125 will aim for the Deadwood Formation.

New Locations – Horizontal Wells

In Glacier County, Rosetta Resources was greenlighted for the Little Rock Coulee 3507-18-13H (SW SW 18-35N-7W). The well has a Proposed Bottom Hole Location (PBHL) of 9,856 feet, tapping into the Bakken Formation.

In Richland County, Continental Resources was approved for two locations: the Butka 3-5H (S2 S2 5-23N-54E), with a PBHL of 19,766 feet and the Candee 3-18H (NE NE 18-24N-53E), with a PBHL of 19,300 feet. Both wells will bore into the Bakken.

Brigham Oil & Gas was OK’ed for two wells in Richland County: the Judith 10-3 1H (NW NE 15-25N-59E) with a PBHL of 20,819 and the Tim Federal 2658 21-10H (SW NW 10-26N-58E) with its PBHL at 20149 feet. Both are Bakken Formation wells.

In Sheridan County, Marathon Oil won approval for the Clark USA 31-14H (SW SE 11-31N-58E) with a PBHL at 19,943 feet and the Raymond Sveet 31-29H (NW NE 29-31N-59E) with a PBHL at 19,780 feet. Both are Bakken Formation wells.

Re-Issued Locations

In Judith Basin County, Petroshale Energy, LLC was approved for the Cobra 1A (SW SE 36-15N-14E). The well will target the Kibbey Formation with a Proposed Depth of 3,500 feet.

In Richland County, XTO Energy Inc. won approval for the Shaw 44X-13 (SE SE 13-22N-59E) with a Proposed Depth of 17,067 feet aiming for the Bakken Formation.

Summit Gas Resources, Inc. has been greenlighted for the Hosford 07-41 12-22 (NW SW 22-7S-41E) in Rosebud County’s Hosford Field. The well will target the Fort Union Formation with a Proposed Depth of 1,800 feet.

New Laterals or Extensions, Existing Horiz. Wells

In the Redstone Field in Sheridan County, Sagebrush Resources II, LLC won approval for the SBR 1-36H. With two “laterals”, the well targets the Winnipegosis Formation at a PBHL of 10,773 and the Bakken Formation with a PBHL at 13,124 feet.

Permit Modifications / Corrections

Summit West Oil, LLC was approved for five locations in Big Horn County. The locations are: Tribal 11122, Tribal 21122, Tribal 31122, Tribal 41122, and the Tribal 51122. All the wells are located at NE SW 22-5S-25E. The wells aim for the Amsden Formation at a Proposed Depth of 760 feet.

In Teton County, Primary Petroleum Company USA won approval for the Rockport 14-19-27-6HZ (SE SW 19-27N-6W). With a PBHL of 9,200 feet, the well will hit the Nisku layer.

Completions

Central Montana Resources wrapped up the Firefoot 1B (NW NE 1-13N-25E) in Petroleum County. The well has a Total Depth of 4,850 feet, hitting the Heath Formation. The well had an IP (Initial Potential) of 10 Barrels of Oil Per Day (BOPD) and 36 Barrels of Water Per Day (BWPD).

In Richland County, Brigham Oil & Gas completed two wells. The Storvik 7-6 1H (SE SE 7-26N-59E) has six laterals, ranging in depth from 13,380 feet to 18,960 feet into the Bakken Formation. The Storvik had an IP of 1,857 BOPD; 1,256 Thousand Cubic Feet of Gas Per Day (MCFPD) and 4,789 BWPD. Brigham’s Glenn 28-33 1-H (NE NE 28-25N-58E) has two Bakken laterals and an IP of 1,260 BOPD; 827 MCFPD and 3,963 BWPD. The Total Depth of the Glenn is 19,894 feet.

In Richland County, Continental Resources finished the Peterson 1-18H (NW NE 18-26N-55E). The Peterson has four Bakken laterals, varying in depth from 14,185 feet to 17,440 feet. Continental reported the well had an IP of 220 BOPD; 246 MCFPD and 285 BWPD.

Two wells were reported as completed in Roosevelt County. EOG Resources brought in the Stateline 7-2116H (SE SE 21-28N-59E). The Bakken well has a single lateral with a Bottom Hole Location of 19,706 feet. The well had an IP of 693 BOPD; 400 MCFPD and 2,489 BWPD. Brigham Oil & Gas reported the completion of the Beck 15-10 1-H (SW SE 15-29N-55E). With a single Bakken lateral, the Beck has a Bottom Hole Location at 19,095 feet. The Beck had an IP of 442 BOPD; 449 MCFPD and 1,253 BWPD.

In Toole County, Keesun Corporation completed the Ralph Botham 14C-13 (NE SW 13-34N-3W). The well, in the Kevin-Sunburst Field, has a Total Depth of 1,560 feet.

Expired Permits

In Blaine County, Citation Oil & Gas’ permit for the BSU D525H (NE SW 25-32N-19E) expired.

In Glacier County, 22 permits expired. All the locations were in the Red Creek Field and listed Mountain View Energy as the operator. The locations are: Red Creek 44 (NE SW 1-37N-5W), Red Creek 45 (SE SW 1-37N-5W), Red Creek 46 (NW SW 1-37N-5W),  Red Creek 47 (NE SW 1-37N-5W), Red Creek 48 (SE SW 1-37N-5W), Red Creek 49 (SE SW 1-37N-5W), Red Creek 50 (NE NW 12-37N-5W), Red Creek 51 (SE NW 12-37N-5W), Red Creek 52 (SW NW 12-37N-5W), Red Creek 53 (SW NW 12-37N-5W), Red Creek 54 (NW SW 12-37N-5W), Red Creek 57 (SE NW 12-37N-5W), Red Creek 61 (NW SE 1-37N-5W), Red Creek 62 (NW SE 1-37N-5W), Red Creek 63 (NW SE 1-37N-5W), Red Creek 64 (SW NE 1-37N-5W), Red Creek 65 (SW NE 1-37N-5W), Red Creek 55 (NW SW 12-37N-5W), Red Creek 56 (NE SW 12-37N-5W), Red Creek 58 (SW SW 12-37N-5W), Red Creek 59 (SE SW 12-37N-5W) and the Red Creek 60 (SW SW 12-37N-5W).

Two permits in Roosevelt County expired. Both permits were for Oasis Petroleum North America wells: the Faye Federal 2759 43-19H (SW SE 19-27N-59E) and the Dash Federal 2759 11-13H (NW NW 13-27N-59E).

Abandoned Wells

In Teton County’s Pondera Field, MCR LLC was approved to abandon the Rice 1 (NW SW NE 26-27N-5W).

Oilmen, Cowboys and Cowgirls Come Together Near Fairfield For Branding, “Texican” Dinner

Laurence Vincent, Diane Hausmann, Mark Orchowski and Gene Atkins hard at work during Sunday’s branding. Sun Times photos by Darryl L. Flowers
It was Montana meets Texas as the Lonesome Dove Resources crew came to Fairfield to lend a hand with the branding at the farm of Mark and Paula Orchowski on Sunday.

Other friends and neighbors showed up at the spread just south of Fairfield to lend a hand, and after a few busy hours the day’s work was done and everyone sat down to enjoy a real “Texican” feast, complete with ground pork enchiladas, home made refried beans, taco fixins and guacamole.

New Player: Cress Oil Makes Move Into Teton, Roosevelt Counties

X-Change Corporation announced recently through its subsidiary Cress Oil, Inc., an independent exploration and production company based in Houston, Texas its 65000 Bakken acreage play in Teton County Montana.

Neighboring players in the region include Rosetta Resources Inc., Newfield Exploration Co., Anschutz Exploration Co. and a dozen smaller U.S. independents and Canadian junior oils. The company is taking advantage of acreage positions across the state from the North Dakota-Montana Bakken play in the Williston Basin, all the way to the new Alberta Basin exploration. Teton County is seen as an analog to the existing Devonian shale oil production.

Play depths range from 4,000 to 7,500 feet in the most active exploration region, and estimates of the total resource in place vary from 10 to 15 million barrels of oil equivalent per square mile.

Like its eastern counterpart, the Alberta Basin Bakken has attractive shale oil features. It also offers multiple prospective zones, including the Nisku, Bakken-Three Forks and Lodgepole formations, as well as other secondary targets. There is good pipeline transportation in the area, due to in part the presence of the once prolific Cut Bank oil and gas field, in addition to Canadian production.

Cress Oil plans to drill the initial 6-9 Bakken wells during the next 24-36 months, which will represent the start of a continuous, multi-rig development program for the company.  In conjunction with a major oil company, Cress will develop the large acreage region over a period of the next 5 years.

Cress plans to evaluate the western Bakken play based on vertical test or pilot programs. No meaningful production picture will emerge until the wells have been horizontally drilled and fractured.

“We are going to execute on our assessment plans, test multiple formations and will not plan to discuss results until we have a better understanding of our acreage and its potential”, stated Earl Moore, board member and President of Drilling Services.

Cress also disclosed recently that it was purchasing 16,000 acres in Rossevelt County, located in NE Montana.

A U.S. Geological Survey reports have found that the Bakken Shale is one of the largest and richest continuous oil accumulations in the United States. Because the Bakken shale has moved up into Canada, specifically Alberta, Canada, Cress Oil intends to explore and develop deep into the southern Alberta basin of Montana as well. There is an estimated of 6-24 billion barrels of oil to be recovered in the Bakken formation.