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.

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Author: montanaoilreport

After my first job at a newspaper -- delivering papers for the Jackson (TN) Sun, ink was in my veins. Since the 1970's I've worked in every area of the Printing and Publishing industry, with most of that time spent in the pressroom. In 2008 I moved to Montana and purchased the Sun Times of Fairfield (fairfieldsuntimes.com). In 2011 I realized that most media outlets were either ignoring, or attacking, the growing oil and gas industry in Montana, so I started the Montana Oil Report as the source of information on this important industry.

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