Three More Glacier County Wells OK’d; Helium Producer To Drill Nisku Well In Roosevelt County

A crew prepares to “spud” a well in Lewis and Clark County, Montana. Sun Times photo by Darryl L. Flowers
Published: Monday, September 23, 2013 5:46 PM CDT

Compiled by Darryl L. Flowers

New Locations

In Glacier County, Synergy Offshore LLC was approved for three wells in the Cut Bank Field, all targeting the Ellis Formation at a proposed depth of 3,025 feet: the NECBSU T202, located at SE NW 2-34N-6W (1350 FNL/1280 FWL); the NECBSU T402 located at SE NW 2-34N-6W (1382 FNL/2621 FWL) and the NECBSU T603, located at NE 3-34N-6W (1378 FNL/865 FEL). The “NECBSU” in the well names translates to “Northeast Cut Bank Sand Unit”.

In Roosevelt County’s East Tule Field, Weil Oil, LLC has been approved to drill the Weil-Bridges 2, located at SE NE 15-30N-48E (1947 FNL/325 FEL). The well targets the Nisku Formation at a proposed depth of 7,600 feet. According to the Board of Oil and Gas Conservation database, this is the first oil well for the firm, which is based in Richmond, Virginia. Parent company Weil Group Resources, LLC, however, is no stranger to Montana. Subsidiary Weil Helium, LLC’s initial project is the production of helium from a 6,500 acre project near Rudyard, Montana. According to the company, the area has strong helium flows from a reservoir that exceeds 2,000,000,000 cubic feet. Helium is produced when natural gas is refined. In 2012, a press release posted on Senator Jon Tester’s website referred to Weil Helium’s Rudyard operation when announcing the Senator’s support for the extraction and sale of helium in the Treasure State.

In Rosebud County, Cardinal Oil, LLC was approved to drill the Galt 1-12-34, located at NE NW 12-9N-34E (990 FNL/2295 FWL). The Galt will target the Eagle Formation at a proposed depth of 2,500 feet.

New Locations – Horizontal Wells

In Roosevelt County, Oasis Petroleum North America LLC was approved to drill the Faye Federal 2759 43-19H, with a Surface Hole Location (SHL) at SW SE 19-27N-59E (510 FSL/1680 FEL) and a Probable Bottom Hole Location (PBHL) of 20,985 feet at SW SE 31-27N-59E (250 FSL/2100 FEL). The well targets the Bakken Formation.

Re-Issued Locations

In Fallon County’s Cedar Creek Field, Fidelity Exploration & Production Co. received re-issued permits for twelve wells, all targeting the Eagle Formation at a proposed depth of 2,000 feet. The wells are: the State 2857, located at NW SW 36-6N-60E (2624 FSL/1258 FWL); the Fee-BR 2838, located at SE SW 21-5N-61E (1305 FSL/2645 FWL); the Fee 2850, located at NE NW 30-5N-61E (116 FNL/1436 FWL); the Fee-BR 2875, located at NE SW 31-6N-61E (2572 FSL/1344 FWL); the Fee-BR 2876, located atNW SE 31-6N-61E (1381 FSL/2576 FEL); the Fee-CP 2225, located at SE NW 13-4N-61E (2624 FNL/1400 FWL); the Fee-CP 2241, located at NW SE 19-4N-62E (2600 FSL/1332 FEL); the Fee 2252, located at SE NW 8-5N-61E (1428 FNL/2588 FWL); the Fee-CP 2863, located at SE NW 11-6N-60E (1924 FNL/1927 FWL); the Fee-CP 2257, located at SW NE 33-7N-60E (1962 FNL/2026 FEL); the Fee-CP 4013, located at NW 7-7N-60E (686 FNL/122 FWL) and the State 4027, located at SW SW 36-8N-59E (675 FSL/670 FWL).

In Richland County, Continental Resources Inc. was permitted for three wells. The Custer 1-7H has an SHL at NE NW 18-27N-54E (508 FNL/2125 FWL) and a PBHL of 19,852 feet at NE NW 6-27N-54E (200 FNL/1980 FWL). The Washburn 1-18H has an SHL at NE NW 18-27N-54E (547 FNL/2096 FWL) and a PBHL of 18,947 feet at SE SW 19-27N-54E (200 FSL/1980 FWL). The Snow 1-13H has an SHL at NW NE 13-23N-54E (280 FNL/1980 FEL) and a PBHL of 19,864 feet at SW SE 24-23N-54E (200 FSL/1980 FEL). The three wells will target the Bakken Formation.

In Sheridan County, a permit was re-issued to Sinclair Oil & Gas Company for the Chisholm 1-31TFH, a Three Forks Formation well with an SHL at NW NW 3-32N-56E (250 FNL/1130 FWL) and a PBHL of 19,982 feet at N2 NE 30-33N-56E (200 FNL/1320 FEL).

Completions

In Fallon County’s Lookout Butte Field, Denbury Onshore, LLC filed a completion report for the Unit 12-15, located at SW NW 15-6N-60E (1800 FNL/690 FWL). The well reported an Initial Production (IP) of 44 Barrels of Oil Per Day (BOPD) and 384 Barrels of Water Per Day (BWPD). The well produces from the Red River Formation.

In Richland County, Continental Resources Inc. reported the completion of four Bakken Formation wells. The Hitchcock 1-9H, with an SHL at NE NW 9-26N-53E (200 FNL/1672 FWL) and a Bottom Hole Location (BHL) at SE SW 16-26N-53E (231 FSL/1977 FWL) reported an IP of 340 BOPD, 242 Thousand Cubic Feet of Gas Per Day (MCFPD) and 255 BWPD. The Revere 1-31H has an SHL at SE SW 31-27N-53E (250 FSL/1980 FWL) and two laterals with Bottom Hole Locations of 14,970 at NE SW 30-27N-53E (1341 FSL/2022 FWL) and 18,680 at NE NW 30-27N-53E (239 FNL/2026 FWL). The Revere reported an IP of 613 BOPD, 610 (MCFPD) and 402 BWPD. The Tower 1-4H, with an SHL at NE NW 9-26N-53E (200 FNL/1627 FWL) and two laterals with BHLs of 14,791 feet at SE SW 33-27N-53E (565 FSL/2378 FWL) and 19,277 feet at NE NW 33-27N-53E (236 FNL/2331 FWL) reported an IP of 508 BOPD, 325 MCFPD and 277 BWPD. The Pine 12-1 1H, with an SHL at SE SE 12-24N-51E (280 FSL/740 FEL) and two laterals with BHLs of 10,244 feet at NE SE 12-24N-51E (2057 FSL/763 FEL) and 14,744 feet at SE SE 1-24N-51E (1267 FSL/813 FEL) turned in an IP of 158 BOPD, 430 MCFPD and 173 BWPD.

Also in Richland County, Oasis Petroleum North America LLC reported the completion of the Stilt Federal 2658 42-22H, with an SHL at SE SW 22-26N-58E (200 FSL/1670 FWL) and a BHL of 20,730 feet at SW SW 34-26N-58E (357 FSL/1236 FWL). The Bakken Formation well turned in an IP of 970 BOPD, 846 MCFPD and 2,051 BWPD.

In Roosevelt County, Oasis Petroleum North America LLC filed a completion report for the Ma 2758 41-11B, a Bakken Formation well with an SHL at SW SW 11-27N-58E (390 FSL/600 FWL) and two laterals with BHLs of 10,475 feet at SW SW 11-27N-58E (351 FSL/602 FWL) and 20,475 feet at SW SW 23-27N-58E (334 FSL/609 FWL). The reported IP was 1,626 BOPD, 1,201 MCFPD and 8,470 BWPD.

In Sheridan County, Unit Petroleum Company reported the completion of the Abenroth 1-2H. The Bakken Formation well has an SHL at NE NW 2-36N-54E (300 FNL/1940 FWL) and a BHL of 11,959 feet at SE SW 2-36N-54E (665 FSL/1945 FWL). The IP was reported as 3 BOPD and 300 BWPD.

Abandoned Wells

In Blaine County, Devon Energy Production Co., LP was approved to abandon four wells: the Ross 6-11, located at NE SW 6-30N-18E (1645 FSL/1465 FWL); the F. Olson 18-9, located at NE SE 18-31N-18E (1980 FSL/660 FEL); the Sorensen 7-8, located at SE NE 7-31N-19E (1850 FNL/1272 FEL) and the Olson 18-2, located at NW NE 18-31N-18E (650 FNL/2100 FEL).

In Powder River County’s Bell Creek Field, Denbury Onshore, LLC was approved to abandon the USA 1-1, located at SE SE 1-9S-53E (520 FSL/710 FEL) and the Federal 8-16, located at SE SE 8-9S-54E (612 FSL/855 FEL).

In Toole County’s Devon South Field, Mountain Pacific General Inc. was approved to abandon the Grant 6-33, located at SE NW 33-31N-1E (1980 FNL/1980 FWL) and the Boland 14-28, located at SE SW 28-31N-1E (660 FSL/1980 FWL).

Darryl L. Flowers is the publisher of the Sun Times in Fairfield, Montana, www.fairfieldsuntimes.com, and can be reached at publisher@fairfieldsuntimes.com

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Western Group Defends Victory At Federal Appeals Court

Published: Tuesday, September 24, 2013 4:33 PM CDT

Energy outfits in Pennsylvania, after winning at the U.S. Court of Appeals for the Third Circuit in Philadelphia in September 2011, which upheld a December 2009 ruling by a Pennsylvania federal district court regarding their property rights, and then prevailing at the district court in September 2012, today defended their victories at the Third Circuit against three environmental groups.  The energy operators sued the U.S. Forest Service for settling the groups’ lawsuit.  In a 2009 ruling, the district court barred the agency from implementing its settlement agreement, prohibited it from doing studies on the use of privately owned oil, gas, and mineral rights beneath the Allegheny National Forest (ANF), and lifted the moratorium on oil and gas drilling in the ANF.  The district court converted its preliminary injunction into a final declaratory judgment in 2012.  Minard Run Oil Company and the Pennsylvania Independent Oil and Gas Association are represented by Mountain States Legal Foundation (MSLF), the District of Columbia law firm of Crowell & Moring, and the Wolford Law Firm of Erie.  MSLF Vice President Steven J. Lechner appeared for the oral arguments.

“As one of the three-judge panel said in arguments, the court’s earlier holding could not be ‘clearer’,” said William Perry Pendley, MSLF president.

The ANF, which covers 500,000 acres in Elk, Forest, McKean, and Warren Counties in northwestern Pennsylvania, comprises lands that were once privately owned and were purchased under the 1911 Weeks Act during the 1920s.  Because the United States bought only the surface estate, most of the mineral rights in the ANF are privately owned.  Thus, there is no contractual basis for any federal government regulatory authority over outstanding oil, gas, and mineral (OGM) rights in the ANF.

Although, under Pennsylvania law, owners of OGM estates have the right to go onto the surface to access their property and to use as much of the surface as necessary to remove it, the law provides for accommodation; therefore, OGM rights must be exercised with “due regard” for the interests of surface owners.  That the United States owns the surface does not change the law.  In accordance with the Forest Service Manual, the Forest Service has only limited rights as to the use of OGM rights within the ANF.  This was recognized by a Pennsylvania federal district court in a 1980 ruling.

For decades, the Forest Service adhered to the law and its policy and responded to an operator’s 60-day notice of its plans with consultations and a notice to proceed.  A notice to proceed, however, is not a decision to allow oil and gas development because the Forest Service has no regulatory power over OGM rights.  In 2007, the Forest Service began to reverse this policy.

Minard Run Oil Company v. United States Forest Service, No. 10-1265 (3rd Cir.)

“We’ve Got Hydrocarbons”

The moon breaks through the clouds late Saturday night as the drilling continues at the Milford Colony well in Lewis & Clark County. Sun Times photos by Darryl L. Flowers
By Darryl L. Flowers
Published: Monday, September 23, 2013 5:46 PM CDT

The first phase of drilling the Milford Colony  13-11 well in Lewis and Clark County ended Monday afternoon when the drillbit reached “TD,” or total depth. “I feel good about the well. It feels good to have something drilled.” said Glen Landry, a geologist and the President and CEO of Norstra Energy.

The drilling rig reached 850 feet, believed to be in the Two Medicine Formation. Landry examined the cuttings under a stereoscope and recorded the characteristics of the rock. Next to the stereoscope was a light box, used to check for fluorescence, a sign of oil. Landry, with a grin, reported “We’ve got hyrdocarbons.”

In a conversation with Joe Large, President of RPM Geologic, Landry explained that the driller had found several “oil shows.” “We had shows of oil at 309 to 367 feet, 428 feet and at 521 feet we found a red shale layer that produced blooming cut when put into a chemical.” Landry explained to the Sun Times that these oil shows are not an indicator of commercial quantities, “But the oil has to come from somewhere.” Landry thinks the oil may have migrated from the Cone Formation or the Bakken Formation. Both are found throughout the region.

The oil found in the cuttings was a heavy oil, degraded from a light crude over time by exposure to water.

The drilling got underway early Friday afternoon when Faith Drilling Rig #5, a small “single section” rig began boring a wide, shallow hole a few feet from the actual well location. The hole is known as a “rathole,” and is used to store the drillbit as drillpipe sections are being added or removed from the well. As the drillbit bores through the rock, going lower and lower, sections of steel pipe have to be added. The pipe is hollow, allowing drilling “mud” to circulate down the pipe and through holes on the drillbit. The mud cools and lubricates the bit. As the water is pushed down the pipe by powerful pumps, the cuttings-laden fluid exits out the hole by flowing up the outside of the pipe.

After the rathole was completed, the crew from Faith Drilling swapped to a small bit to drill a pilot hole. The pilot hole would serve as a guide for a huge 17 inch bit that drilled the conductor pipe, a large steel pipe that would guide the bit as it first bites into the rock.

Late Friday night Glen Landry sat in his truck watching the drill rig. He was impatient, but excited. The bit could not go fast enough, but he was glad to see a start to the South Sun River Project.

With cement trucks at the ready, the bit was pulled out and Faith Drilling owner Doug Bruner supervised the crew as the long conductor pipe was positioned to be driven into the hole. Landry was nervous.

“I hope the hole doesn’t collapse.” At the top of the well site, just like most of the area, there is a lot of glacial debris, rocks that were worn smooth form being ground under the enormous weight of the glaciers that carved though the region. If the rocks fall into the hole, the drill crew will have to run the bit back down, “reaming” the hole for another try.

The conductor pipe is hoisted above the rig floor and lowered smoothly into position. Now the trucks begin mixing the cement to seal the pipe. Once in place, the cement will cure overnight.

By Saturday afternoon, the drilling process has settled into a routine. A slow routine. The pipe sinks slowly into the Rocky Mountain Front, tiny bits of rock coming out of the shaker, a device that removes the cuttings from the drilling mud.

The crew preps a pipe section for insertion into the drill string. It’s going to be a while before the pipe is needed. The crew, though, stays busy. They check the mix of the drilling mud, making sure it has the right consistency. They check the many humming diesels that drive the rig, the pumps, the generators. There is always something to do.

Finally, as the last streams of sunset find cracks in the clouds, the drill has gone as deep as it can. It’s time to add another section. Rig hands head to the drilling floor and begin the process to lengthen the drillstring. There is a change in the sounds of the diesel engines as the bit slows down and comes to a stop.

A Kelly rig is old school drilling. A Kelly bushing, on the rig floor, turns the Kelly, a square pipe that connects to the pipe and the bit. Newer rigs, especially the larger ones, use a “top drive.”

“For drilling the surface casing, I like the Kelly rig,” says Landry. “They seem to drill a straighter hole.

Landry must be right. While in the “doghouse,” or rig office, a small building located a few steps form the drill floor, I watch as Doug Bruner’s crew uses a device to measure just how straight the hole is. The device is lowered into the hole and punches two tiny holes in a circle of paper smaller than a quarter. One hole is punched, then the device turns slightly. A second hole is punched. Bruner shows the paper through a special viewer. It’s easy to make out a center dot, then several concentric circles. The first circle has two barely noticeable punch holes. “You want to see both of those holes at an equal distance from the center point,” explains Bruner. “That means both the readings are equal, so you have an accurate measurement of the deviation of the hole.”

The two holes are on the innermost of the circles. When the measuring device hit the bottom it registered that there was 1 degree of deviation from a straight-down hole. “That’s just a little more than one foot variation from a perfect vertical,” says Joe Large.

The Milford well is located on property belonging to the Milford Hutterite Colony. Milford was the first colony in the state of Montana. Each day, there was a steady stream of Hutterites walking to the drill site, which was across Highway 287 form the colony.

“Do you think they will find oil?” the Hutterites ask when they see me on the site. On Saturday evening it seems that most of the colony has come out to check the well’s progress. The men gather in a group, the women in another. Teenagers and younger kids congregate in another area.

Two of the Hutterite men walk over as I shoot photos of the rig hand “tripping the bit.” As the men talk about the rig, some youngsters gather around, pointing to the rig and discussing the situation in German.

As I move closer to the rig to get some close-up photos of the rig hands, the Hutterite women walk over and talk about working on an oil rig. “Those are some hard workers,” one of the young ladies comments, nodding toward the raised floor where the crew are working. “It looks like a tough job.”

One of the Hutterite women asks, “Have you ever worked on an oil rig.”

“No,” I reply. “But it is tempting.”

Norstra Energy Signs Deal For Drilling of Surface Casing; Rig Is On Site

GOOD NUMBERS – The Krone 31-32 well, drilled in 1962, is of great interest to geologists who study the region. The well reports the Bakken Formation at a depth of 6,910 feet. The Krone was drilled by Shell. Sun Times photo by Darryl L. Flowers

By Darryl L. Flowers
Published: Wednesday, September 11, 2013 11:38 AM CDT
On the heels of the Sun Times publishing a photo online yesterday of a drilling rig on site at the Milford Colony 13-11 well, Norstra Energy has issued a press release stating that the company has executed a transaction with Faith Drilling to begin installation of the surface casing.

The well is located on the Milford Hutterite Colony, a few miles north of Bowman’s Corner in Lewis and Clark County.

The last time a well was drilled in the county was when the Sieben Ranch 14603-12, operated by Suncor Energy (Natural Gas) America Inc., “spudded” on March 11, 2005. The Sieben well is located near Lincoln. The last oil well drilled in the Augusta/Bowman’s Corner area was the Soap Creek 13-31, which spudded on May 30, 2001. Both wells were tests, seeking to map the formations along the overthrust belt that runs along the Eastern Slope of the Rockies. The belt is a prolific producer of energy to the north and south of the Treasure State.

A drilling report on the Soap Creek well, filed with the state, indicates oil “shows.” The report says that so much oil was coming out of the drill cuttings that it “made a mess.”

The Norstra release goes on to say the company has partially completed (pending receipt of the funds) a debenture financing for $250,000 which is convertible into common shares at a price of $0.50, which is a 67% premium to the market price at the close of trading on Monday, September 9th, 2013. These funds, which are in addition to previous funds raised, will be used for the further development of the 13-11 Milford Colony well.

In July, 2013, the Company first announced a potential joint venture with Directional Drilling LLC for the drilling of the Milford Colony project. To date the non-binding letter of intent between the Company and Directional Drilling has expired and no agreement has been reached. Directional has indicated that it will continue to evaluate the potential partnership but without committing to any timeline.

The Company release goes on to say Norstra “wishes to clarify prior disclosure made in relation to its obligations under the Farm-out and Option agreement with Summit West Oil, LLC regarding the South Sun River Bakken Prospect on which the Milford Colony project is situated. In order to earn a 100% working interest in the Sun River property pursuant to the Farm-out and Option Agreement, Norstra must make all lease renewal payment by December 20, 2013, and must complete an aggregate of three horizontal wells with an estimated cost of $5,000,000 each to be completed by June 30, 2014, December 31, 2014 and June 30, 2016, respectively. In the alternative, Norstra may purchase the Farm-out lands by issuing 10 million shares of its common stock to Summit West by December 31, 2013.”

The area of the Milford Colony well has a history dating back to the 1950s of test wells drilled by the majors. The first dated oil well was drilled in 1910. Several shallow wells were drilled in the area on the years that followed. The first of the deep wells was the Gelsinger 1, drilled in 1956 by Stanolind Oil and Gas to a depth of 9,332 feet.

The target of the Norstra well is the Bakken Formation. Other wells that have been drilled in the area that have encountered the Bakken, or Sappington, are: The A.B. Cobb, which found the Bakken at 9,224 feet, 10,199 feet and 11,880 feet (the multiple strikes are indicative of an overthrust); the Federal 3-10, which found the Bakken at 366 feet and at 12,408 feet; the J.B. Long, which drilled through the Bakken at 10,894 feet; the Simpson KTO 2-1, which bored through the Bakken at 4,196 feet; the State 8-15 found the Bakken at 7,665 feet. The Steinbach well recorded the Bakken at 10,124 feet and the Krone 31-32 shows the Bakken at 6,910 feet. Of all the wells drilled in the region, the Krone 31-32 attracts the most attention of geologists that have studied the region. Records from the Krone indicate readings that surpass what is typical of the Williston Basin wells currently being drilled.

While some media reports incorrectly report there is no oil in the region, based on the assumption that since the wells are listed as “dry holes,” there is no oil. They were not put into production for several reasons. At the time many of the wells were drilled, the technologies of hydro-fracking and horizontal drilling were not available, so a layer of “tight” oil would not have been considered productive. Other factors were the changing conditions of the oil market and the fact that many of the wells, drilled as tests, were never intended to be put into production.

Faith Drilling, based in Chinook, Montana, operates three drilling rigs and serves the Rocky Mountain region of Montana, North Dakota and Wyoming.