Anadarko E&P Onshore Re-permits Two Bakken Wells in Toole County

By Darryl L. Flowers | Posted: Tuesday, January 27, 2015 1:00 pm

1/12/2015 To 1/23/2015

New Locations – Horizontal Wells

In Richland County, Whiting Oil and Gas Corporation permitted a Bakken Formation well, the Hay Creek Federal 24-31-4H. The Hay Creek has a surface hole location (SHL) at SE SW 31-25N-58E (300 FSL/1740 FWL) and a probable bottom hole location (PBHL) of 21,803 feet at NE NE 30-25N-58E (240 FNL/660 FEL).

Re-Issued Locations

In Richland County, three re-issued permits were approved for wells that will be operated by Whiting Oil and Gas Corporation: the State 43-16-2H, with an SHL at NE SE 16-24N-59E (2330 FSL/300 FEL) and a PBHL of 20,234 feet at SW NW 17-24N-59E (2460 FNL/240 FWL); the State 43-16-3H, which has an SHL at NE SE 16-24N-59E (2285 FSL/300 FEL) and a PBHL of 20,157 feet at NW SW 17-24N-59E (1740 FSL/240 FWL) and the State 43-16-4H, with an SHL at NE SE 16-24N-59E (2240 FSL/300 FEL) and a PBHL of 20,680 feet at SW SW 17-24N-59E (660 FSL/240 FWL).

In Toole County, two re-issued permits were approved for wells to be operated by Anadarko E&P Onshore, LLC: the Simmes Ranch 3603-01-41H has an SHL at NW NW 1-36N-3W (450 FNL/245 FWL) and a PBHL of 7,492 feet at NE NE 1-36N-3W (400 FNL/330 FEL); the Simmes Ranch 3603-02-11H has an SHL at NE NE 2-36N-3W (400 FNL/880 FEL) and a PBHL of 6,875 feet at NW NW 2-36N-3W (400 FNL/330 FWL). Both wells will target the Bakken Formation.

Completions

In Blaine County’s Bowes Field, Citation Oil & Gas Corp. reported the completion of the Bowes Sawtooth Unit B208H. The Sawtooth Formation horizontal well has an SHL at NW NW 8-31N-20E (750 FNL/760 FWL) and a bottom hole location (BHL) of 6,217 feet at NE SE 6-31N-20E (1407 FSL/1310 FEL). The reported initial production was 15 barrels of oil per day (BOPD) and 400 barrels of water per day (BWPD).

In Carbon County, Energy Corporation of America reported the completion of the Hunt Creek 1-H, located at SW SW 7-8S-23E (741 FSL/805 FWL). No initial production numbers were reported.

In Dawson County’s Deer Creek Field, Legacy Reserves Operating LP reported the completion of the Deer Creek 8-22, located at SE NE 22-17N-53E (2050 FNL/660 FEL). The Red River vertical well reported an initial production of 321 BOPD, 5,000 cubic feet of gas per day and 1,215 BWPD.

Three Bakken Formation wells were reported as completed in Richland County.

Whiting Oil and Gas Corporation reported the completion of two of the wells. The Sundheim 21-27-3H, with an SHL at NE NW 27-25N-58E (440 FNL/1980 FWL) and a BHL of 20,478 feet at SW SE 34-25N-58E (245 FSL/1907 FEL). The Sundheim 21-27-3H recorded an initial production of 1,293 BOPD, 658 thousand cubic feet of gas per day (MCFPD), and 2,807 BWPD. The Sundheim 21-27-4H has an SHL at NE NW 27-25N-58E (395 FNL/1980 FWL) and a BHL of 21,497 feet at SE SE 34-25N-58E (241 FSL/572 FEL). No initial production rates were reported.

Wrapping up the three Richland County completions is the Babka 3-12H, operated by Continental Resources Inc. The Babka has an SHL at SW SW 12-24N-52E (325 FSL/735 FWL) and a BHL of 15,594 at 1-24N-52E (237 FNL/690 FWL). The Babka reported an initial production of 595 BOPD, 125 MCFPD and 281 BWPD.

Abandoned Wells

In Sheridan County, final abandonment procedures were approved for the Ostby 11-35, located at NW NE 35-31N-58E (825 FNL/1517 FEL). Omimex Canada, Ltd. was the operator of record.

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

The Fraser Institute: Texas Most Attractive Jurisdiction in the World for Global Oil and Gas Investment

Posted: Thursday, November 20, 2014 11:45 am

CALGARY, ALBERTA – On the strength of its petroleum reserves, Texas remains the most attractive jurisdiction for oil and gas investment in the world, finds the Fraser Institute’s annual Global Petroleum Survey.

Based on responses from petroleum executives and managers, this year’s survey ranks 156 jurisdictions worldwide on their relative attractiveness for investment. Barriers to investment include high taxes, costly regulatory obligations and uncertainty over environmental regulations.

“Texas’ wealth of petroleum reserves continue to attract investment, which fuels the Texas economy and creates jobs and widespread prosperity,” said Kenneth Green, senior director of the Fraser Institute’s Centre for Natural Resources.

The survey considers both the input from respondents and the oil and gas reserves (or lack thereof) of each jurisdiction to determine a ranking. Of the 27 jurisdictions with large petroleum reserves, Texas tops the list followed by Alberta, Norway-North Sea, the United Arab Emirates and Qatar. Conversely, Venezuela, Iran, four Russian regions, Iraq and Egypt are least attractive to investment.

Of the 44 jurisdictions with medium-sized reserves, Oklahoma is number one followed by Arkansas, North Dakota, Wyoming and Utah.

Of the remaining 69 jurisdictions, which have relatively small proven oil and gas reserves, Mississippi tops the list followed by Saskatchewan, Manitoba, Alabama and Kansas.

“Unlike many places around the world, North American jurisdictions typically provide safe environments for people and their assets, and have a transparent legal system that’s attractive to oil and gas investment,” Green said.

Additionally, the survey features an alternate ranking format, which ignores proven oil and gas reserves and focuses solely on survey responses. In this format, Oklahoma ranks first followed by Mississippi, Saskatchewan, Arkansas and Manitoba.

Meanwhile, Venezuela, Bolivia, Ecuador, Iran and Russia-Eastern Siberia are least attractive to investment.

“In Venezuela, flagrant abuse of the decision-making processes and delinquency in payment for delivered crude were among the factors deterring petroleum investment in the country,” Green said.

The Global Petroleum Survey is administered each year to petroleum industry executives to help measure and rank the barriers to investment of oil- and gas-producing regions. A total of 710 respondents representing 563 companies completed the survey questionnaire this year, providing sufficient data to evaluate 156 jurisdictions.

The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute’s independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org.

The Fraser Institute: Alberta Most Attractive Canadian Jurisdiction for Global Oil and Gas Investment

Posted: Thursday, November 20, 2014 11:40 am

CALGARY, ALBERTA — On the strength of its petroleum reserves, Alberta remains the most attractive province for oil and gas investment in Canada, finds the Fraser Institute’s annual Global Petroleum Survey.

Based on responses from petroleum executives and managers, this year’s survey ranks 156 jurisdictions worldwide on their relative attractiveness for investment. Barriers to investment include high taxes, costly regulatory obligations and uncertainty over environmental regulations.

“Alberta’s wealth of petroleum reserves continue to attract investment, which creates jobs for scores of Canadians,” said Kenneth Green, senior director of the Fraser Institute’s Centre for Natural Resources.

The survey considers both the input from respondents and the oil and gas reserves (or lack thereof) of each jurisdiction to determine a ranking. Of the 27 jurisdictions with large petroleum reserves, Texas tops the list, followed by Alberta, Norway-North Sea, the United Arab Emirates and Qatar.

Of the 44 jurisdictions with medium-sized reserves, Oklahoma is number one while Newfoundland & Labrador ranks 15th and British Columbia ranks 19th.

The remaining 69 jurisdictions, which have relatively small proven oil and gas reserves, include the other seven ranked Canadian jurisdictions. Mississippi tops the list followed by Saskatchewan and Manitoba.

Additionally, the survey features an alternate ranking format, which ignores proven oil and gas reserves and focuses solely on survey responses. In this format, Saskatchewan ranks first in Canada (and third out of 156 jurisdictions worldwide). Manitoba ranks second in Canada (and fifth globally), followed by Alberta (16th globally).

On the other end of the spectrum, Quebec presents the greatest barriers to oil and gas investment in Canada.

Although Quebec’s overall rank improved slightly from 141st (of 157) in 2013 to 133rd (of 156) in 2014, it’s still clearly regarded as unattractive. Survey respondents point to Quebec’s foot-dragging during authorization and permit processes.

“Quebec continues to sour petroleum investment by delaying authorization for development, to the detriment of many Quebecers who could be working in the resource industries,” Green said.

British Columbia, meanwhile, dropped from 47th (of 157) in 2013 to 62nd (of 156) this year. Survey respondents expressed concern over B.C. tax policies, environmental regulations, and uncertainty around regulatory enforcement.

“Once again, taxes and regulatory uncertainty drive British Columbia’s relatively poor standing in the eyes of oil and gas investors,” Green said.

Finally, Nova Scotia dropped furthest in the rankings, falling 31 spots from 30th (of 157) in 2013 to 61st (of 156) in 2014. Contributing factors in this decline include disputed land claims, and regulatory duplication and inconsistencies.

Globally, among jurisdictions with the largest proven reserves, Venezuela, Iran, four Russian regions, Iraq and Egypt are the least attractive to investment. Taking reserves out of the equation, the least attractive jurisdictions for investment in the world (starting with the worst) are Venezuela, Bolivia, Ecuador, Iran and Russia-Eastern Siberia.

“In Venezuela, flagrant abuse of the decision-making processes and delinquency in payment for delivered crude were among the factors deterring petroleum investment in the country,” Green said.

The Global Petroleum Survey is administered each year to petroleum industry executives to help measure and rank the barriers to investment of oil- and gas-producing regions. A total of 710 respondents representing 563 companies completed the survey questionnaire this year, providing sufficient data to evaluate 156 jurisdictions.

-Marketwired

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

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.”

Teton County: First in State To Produce Oil, Natural Gas

Cable tool drilling rig on display at the Oil Field Museum in Cut Bank. Sun Times photo by Darryl L. Flowers

Region is now in Glacier County

By Darryl L. Flowers
Published: Monday, August 5, 2013 10:31 PM CDT

Last year, as news of oil companies and their landmen scouring the area for minerals was making the headlines, several attempts to report the history of early oil exploration in Montana appeared.

As the public hubbub has subsided and most of the work in the region has fallen below the radar, the Sun Times has continued to dig into the fascinating hydrocarbon history of the Treasure State.

Early this year we came across one of the best papers on the subject, written by  geologist William Boberg. It is still the best work for those who want to focus only on the Flathead / Alberta and British Columbia regions. Boberg’s work was published in the 1984 Montana Geological Society Northwestern Field Conference.

The Sun Times research showed that the earliest mention of oil in Montana dated to the 1860s, when oil was found at a “seep” near a river and was used by wagon trains to lubricate the axles.

But we were not able to pin down the details, so rather than publish an  incomplete history, we held the story.

But we kept digging, searching.

In late July, we were looking for details reported when the Krone, Steinbach and J.B. Long wells were being drilled in Lewis and Clark County, as well as the famous Morning Gun Well that was drilled in Glacier County. The search led us to the Oil Field Museum, part of the Glacier County Museum in Cut Bank.

While the Oil Field Museum certainly has the best display of old drilling tools… including a real “Cable Tool” drilling rig, for instance… it also has an impressive collection of old oil industry journals and company records.

While looking through old issues of the Montana Oil Journal, we came across the crown jewel of Montana’s early oil history.

The in depth report was published in the July 20, 1963 edition of the Montana Oil Journal, which was based in Great Falls at the time.

The article was titled “Outline History of the Development of Oil and Gas in Montana,” and was written by well respected United States Geological Survey geologist Dr. C.E. Erdmann.

According to an Editor’s Note preceding the report, the work was done at the request of Senator Lee Metcalf, Montana Democrat. The note reads, in part, “Included in this report was an authoritative and entertaining report on the history of oil and gas development in the state, by Dr. Charles E. Erdmann of the U.S.G.S., whose headquarters are in Great Falls. Of particular interest to many will be his account near the start of the article, covering the fruitless effort in the state, from 1889 to 1910, to develop production near oil-gas seeps.”

The report is detailed, a little too detailed for the non-geologist. The Sun Times has edited Dr. Erdmann’s report, removing some of the technical details, such as the geological ages of the formations. We have also added some clarifications of the terms Dr. Erdmann used. Otherwise, the report is original.

Outline History Of Oil And Gas Development in Montana

By Charles E. Erdmann, PhD

Introduction

The classical pattern of petroleum exploration in virgin territory is for the first tests to be made in the vicinity of natural surface indications (seeps) of oil and gas, if any have been found. Unusual combinations of geologic conditions are required for the development of these surface features, and their occurrence is transient and infrequent. Their value, however, is that they provide tangible evidence of the local presence of hydrocarbons, thereby raising hopes that commercial accumulations may be found underground. The analogy with surface discovery of inorganic minerals is obvious: both require bold and enterprising spirits if the usually costly and difficult adventure of development is to be undertaken. Because they are few in number, they are soon exploited, and this first stage of exploration is of short duration; but the often amateurish effort frequently clothes it with many colorful and dramatic incidents. If no significant discoveries result, and they seldom do, drilling on easily recognized geologic features such as anticlines and domes may follow with more or less delay. If drilling depths are shallow, as they are in some of the older fields in Montana, this second stage may mark the heyday of the small independent operator.

By the time the obvious surface structures have been recognized and evaluated, a more mature third stage has appeared in which the search for subsurface structures and porous beds and stratigraphic traps is carried on by the sophisticated techniques of geophysical prospecting and study of formation samples or subsurface stratigraphy. Other later stages may involve deeper drilling, secondary recovery techniques and, finally, abandonment. Initially, each stage may appear in order. No firm line between them exists, however, for if the petroleum industry is to prosper, new discoveries must succeed abandonments. Review of the history of oil and gas development in Montana indicates close adherence to this pattern, which will be the outline for this chapter.

Explorations On Surface Indications, 1889-1910

The exact number of oil and gas seepages in Montana is not known with certainty, but probably there are not more than 15 or 20, and some of them have become inactive since they were discovered. Several of them have been known for many years, and were responsible for the pioneer oil excitement. The first of record was noticed August 10, 1864, by members of an immigrant train crossing the northeast flank of the Pryor Mountains on the Bozeman Trail, as a scum of heavy oil on a stagnant pool of water. In this instance the immediate practical application was for axle grease for the wagons. No drilling development followed, and even the report was not made for many years. Furthermore, no rediscovery seems to have been reported. The exact location, therefore, is not known, other than it was northwest of Beauvais Creek toward the East Fork of Pryor Creek Divide. A likely possibility, however, is that it was on some intermittent upper tributary of Woody Creek in T. 4 S., R. 28 E., Big Horn County, near where that drainage was crossed by the Bozeman Trail.

Roscoe seep. The first oil seep to be drilled in Montana was the occurrence of heavy black oil or asphalt near the southeast corner NE1/4SE1/4 sec. 32, T. 6 S., R. 18 E., Carbon County, about 5.5 miles south of the old Roscoe post office. Date of discovery and name of the original locator are not known. In the late 1880’s, however, the area was acquired by Thomas Cruse, who had found the famous Drumlummon lode near Marysville in 1876. The location of the first test, Thomas Cruse well No. 1, was about 650 feet northwest of the seep, and was completed and abandoned in 1889 as a dry hole in the Judith River formation at a, total depth of 1,100 feet. Insofar as known, this was the first organized attempt to discover oil by drilling in Montana. Undeterred by failure, Cruse continued operations in the vicinity of the seep during 1890 and drilled eight more dry holes that ranged in depth from 600 to 800 feet before giving up; and even then he retained ownership of the tract. Others continued to be intrigued by the possibilities, and additional tests were made in 1909, 1931, and even as late as 1947, but without success.

Kintla Lake area. Impressive amounts of pale-yellow, high-gravity (44° API) oil issue from surface deposits at the Sage Creek seeps in southeastern British Columbia, about 8 miles north of the international boundary at the northwest corner of Glacier National Park. The controlling structural feature appears to be a normal fault of great magnitude that can be projected into Montana where it is called the Roosevelt Fault. In 1892 active seepages of oil and gas were discovered in Montana near the northeast end of Lower Kintla Lake, not far east of where the lake crosses the trace of the fault. An organization called the Butte Oil Co. posted a location notice on August 10, 1900. Drilling began late in October 1901, the well location being NW1/4NW1/4NW1/4 sec. 18, T. 37 N., R. 20 W., Flathead County. Late in 1902 work was suspended temporarily, with the hole at a depth of 1,450 feet in very hard “black limestone and iron.” A significant incident was the discovery of gas at a depth of 720 feet, which is said to have burned with a 4-foot flame. As will appear later however this was not the first discovery of gas in Montana by drilling.

In late June 1902 the Kintla Lake Oil Co. of Kalispell commenced operations at their No. 1 well, approximately in the center of NE1/4 sec. 12, T. 36 N., R. 22 W.; and in 1903 a second test is said to have been located toward the center of the section. Both are situated on Tertiary “lake beds” on the left bank of the North Fork of Flathead River. The No. 1 well was drilled to 1,290 feet at least, and the No. 2 to about 1,000 feet. Traces of oil and gas were reported from each, but both were abandoned as dry holes. The circumstances that led to these tests are not known, but they may have been drilled on seeps in the “lake beds” that emerged along faults.

Another old venture, for which there is good authority but no log or operational information, is the Southwest Kootenai Land Oil Co. test on Kintla Creek about 3 miles above Upper Kintla Lake. This locality is approximately in the north center of sec. 8, T. 37 N., R. 19 W., Flathead County, in a deep glaciated valley about 1.5 miles west of the Continental Divide. Drilling is reported to have commenced March 8, 1906, and continued to a depth of at least 600 feet.  In all probability the location was made on the basis of seeps or iridescent films of oil whose origin is more or less identical with those on Cameron Brook at Oil City, Alberta, a short distance northeast across the divide, where petroleum exploration had been going on since 1901.

Swiftcurrent Creek. Sustained efforts to develop oil by drilling on or near obscure surface indications of petroleum and natural gas in Swiftcurrent Creek Valley throughout the nine year period before the district became incorporated into Glacier National Park in 1910 resulted in seven tests that give it the nominal distinction of being the first oil and gas field in Montana and the only locality in the State where drilling on seepages proved successful. Credit for the recognition of these showings appears to be divided between two men: Frank M. Stevenson identified certain exposures of Upper Cretaceous marine shale as “oil shale” in the summer of 1901; and Samuel D. Somes prospecting near where Sherburne Dam is located, observed small pools of oil in irregularities on freshly broken shale and limestone on the floor of his adit in late February or early March 1902.

Within a short time, 52 oil claims were located under the placer mining law. Companies were organized and consolidated as claims were exchanged for shares, the ultimate operator being the Swift Current Oil, Land & Power Co. The first derrick was erected in November 1902, approximately at the center of SW1/4 NE1/4 sec. 4, T. 36 N., R. 15 W., unsurveyed, on the Lakeside placer claim which had been located by Stevenson. Drilling began in 1903, when the hole was taken to a depth of 430 feet, with a showing of oil; but was abandoned because of inability to shut off water. The rig was then skidded 30 feet west, and work begun on location 1-A, which was completed as an oil well at a total depth of about 550 feet during the summer of 1905. Oil from this well was displayed at the State fair at Helena in the fall of 1905, where the company was awarded a diploma for “the first producing oil well in the State of Montana.” Operations were terminated through lack of finances in 1907, and the properties turned over to Stevenson. In the meantime, however, one other oil well, with an initial capacity of about 20 barrels per day, by bailing, and 2 dry holes had been completed.

M. D. Cassidy, locator of a neighboring claim to the east, became aroused by this activity and organized the Cassidy-Swiftcurrent Oil Co., date of incorporation being July 15, 1905. Approximate location of the first test by this company, which may have been near a gas seep recognized by Cassidy, was in the extreme northeast corner of NW1/4 NW1/4 NE1/4 sec. 3, T. 35 N., R. 15 W., unsurveyed, near the center of St. Louis Placer No. 1. Drilling began in 1907, and continued at intervals into 1909 to a total depth of about 2,800 feet, where the tools were lost. Natural gas was reported from depths of 430, 1,900, and 2,800 feet, the initial shut-in pressure being about 250 p.s.i.

No measurement of volume seems to have been taken, but, upon being ignited, the gas flow from a I-inch pipe is said to have burned to a height between 15 and 20 feet. Cassidy piped the gas into his house, where it was used for heating and lighting until 1914 when the flow ceased, due to caving in the hole. The Cassidy-Swiftcurrent well No. 1, therefore, has the distinction of being the first producing gas well in Montana, even though it had only one customer.

Boulder Creek. Following Somes’ discovery of oil in his adit on Swiftcurrent Creek in 1902, other prospects in the Marias River formation were examined for traces of oil. Favorable indications were reported in an abandoned working on Boulder Creek, probably somewhere near the center NW1/4 sec. 27, T. 35 N., R. 15 W., unsurveyed, Glacier (formerly Teton) County. Recognition of this seep may have contributed to the organization of the Swift Current-Boulder Oil Co., which soon acquired substantial acreage south of Swiftcurrent Creek. Drilling commenced in July 1904, the approximate site being south of the center SE1/4 SE1/4, sec. 11, T. 35 N., R. 15 W., on the left bank of Boulder Creek. A show of gas was reported in shale at a depth of about 1,750 feet, and a show of oil “of a superior quality” was found in the top of a sandstone at a depth of 2,010 feet on July 8, 1905. Operations were abandoned at this depth in the spring of 1906.

This persistent run of failure naturally resulted in loss of interest, and by the close of 1907 such random drilling had come to an end. The Congress passed the act establishing Glacier National Park on May 11, 1910, thereby precluding new ventures. In the meantime, the Lakeside and New Era placer claims in the Swiftcurrent District had been patented, and the patent for the St. Louis No. 1 was pending but held in abeyance as Sherburne Lake project of the Bureau of Reclamation approached realization. More or less ineffectual efforts to recondition the two small oil wells and the gas well persisted for several years, but terminated in the summer of 1919 when the locations were flooded by water rising behind the Sherburne Lake Dam.

No other drilling on surface indications (seeps) has been recorded in Montana.

Exploration Of Surface Structures, 1890-1950

Many anticlines and domes are expressed in rocks at the surface on the Montana Plains. The precise number is unknown, but more than 475 areas, fields, and structures have been named. Approximately 185 fields and structures have been named on the latest edition of the “Structure Contour Map of the Montana Plains” (U.S. Geological Survey, 1955); but only about 100 areas have been proved to contain oil or gas in commercial quantities, and not all are anticlines. The producing fields are shown on figure 7, and their names are keyed by number to the list (available at http://www.mbmg.mtech.edu/sp28/table1.htm).  This chart, it should be noted, is not a complete list of Montana oilfields, nor does it include the major gas fields.

The surface structures exhibit wide variation in size, shape, and amount of structural relief. Bowdoin dome in Phillips and Valley Counties, and Kevin-Sunburst dome in northern Toole County occupy hundreds of square miles, and are so broad And have such comparatively low relief that the domical structures cannot be visualized on the ground. The Cedar Creek anticline in the southeastern part of the State is more than 100 miles in length, but the narrow Pierre shale inlier along the crest is only a few miles in width. Flat Coulee dome north of the Sweet Grass Hills, on the other hand, is contained within a single square mile. Elk Basin anticline, which straddles the Montana-Wyoming boundary, or Milk River anticline in the Disturbed Belt on the Blackfeet Indian Reservation, are nearly perfect folds in which both flanks can be observed from a single viewpoint.

Not too many years had elapsed since the pronouncement of the anticlinal theory of oil and gas accumulation and, in the absence of an oil seep, a sharp or closely folded anticline seemed the next best feature on which to drill. Recognition of a completely exposed fold in rock requires so little imagination or interpretative skill that when they were observed they were reported, often by sheepherders, and the more evident small folds were described as “sheepherder structures.” Insofar us known, the first test in Montana to be located on an anticline, presumably in accordance with the anticlinal or structural theory, was the R. O. Morse well No. 1, NE1/4 sec. 4, T. 6 S., R. 18 E., Carbon County, on the northeast flank of Roscoe dome, a “sheepherder structure” toward the west end of the Nye-Bowler lineament. It may be, however, that Morse had been attracted to the area by Cruse’s exploration around the Roscoe seep a few miles south, which was then in progress. Drilling equipment in 1890 was very inadequate for a complete test of the structure and the operation was abandoned as a dry hole in the upper part of the Colorado Group at a total depth of 1,100 feet. Subsequent drilling has proved the structure to be dry into the upper part of the Cambrian series at a total depth of 5,928 feet. Chance plays an important part in exploration for oil and gas, and the first discovery of natural gas by drilling on the Montana Plains came unexpectedly in 1893 a few miles southwest of Havre at Fort Assiniboine in a water well in the upper sandstone unit of the Eagle sandstone. Although not of commercial volume, the find directed attention to the possibility of gas development out on the plains, but this did not follow for nearly 20 years.

The first commercial show of natural gas in eastern Montana was found in Gas City dome at the north end of the Cedar Creek anticline in 1913. Drilling was initiated by the Mid-West Oil Co., in November 1912, at their No. 1 well, W 1/2 NE 1/4 NE 1/4 sec. 20, T. 14 N., R. 55 E., Dawson County; but with change of ownership the hole was completed by the Eastern Montana Oil & Gas Co., which developed the field. Drilling continued to a total depth of 2,710 feet, which was reached in April 1914. In the meantime a flow of 500,000 cubic feet of gas per day with a shut-in pressure of 220 pounds per square inch, and some water had been found between depths of 730 and 745 feet in a sand assigned arbitrarily to the Judith River formation. Beginning in 1915 gas for domestic use was supplied to the city of Glendive 10 miles north on Yellowstone River. Peak of production was reached in the fall of 1917, when the combined flow of eight wells amounted to about 10,600,000 cubic feet of gas per month. The field was abandoned in 1925; but other gas production followed along the anticline to the south.

The year 1915 also was notable for the discovery of oil in the Elk Basin anticline in Carbon County, Montana, and Park County, Wyoming, a structure which had first been noticed some 10 years previously by the U.S. Geological Survey. The discovery well, which produced from the Torchlight sand in the Frontier formation at depths of 1,335 to 1,402 feet, was in Wyoming; and about 87 percent of the productive acreage fell in that State. The remaining northern portion of about 120 acres became Montana’s first producing oilfield. The beginning, therefore, was rather small. Four oil wells were drilled in 1915, but were not brought into production until shipping facilities became available the following summer. Two more oil wells and one dry hole were drilled in 1916, and production for the last 6 months of the year totaled 44,917 barrels, with a value of $44,019.

Excellent examples of the possible rewards of deeper drilling are furnished by the development of the Elk Basin field. Natural gas was found in the Cloverly formation, about 1,150 feet below the Torchlight, in 1922, but is now largely exhausted. The major discovery, however, did not come until December 1943 when oil was found in the Tensleep sandstone at a depth of about 4,500 feet. This reservoir proved to have about 215 feet of saturation, the thickest producing section of any field in the State. About 1,375 acres, or 27.5 percent, of this Tensleep pool are in Montana. Finally, in 1946 oil was found in the underlying Madison limestone of Mississippian age.

The immediate effect of the original Elk Basin discovery was to direct attention to the Montana extension of the Bighorn Basin and the country to the north where interest still centered on sharp-dip structures; but prospecting resulted only in dry holes. One of the more prophetic of these efforts was the first test on the large, Woman’s Pocket anticline, which was spudded May 6, 1916, by the Foster Oil Co., in C SW1/4 NE1/4 sec. 15, T. 8 N., R. 20 E., Golden Valley County, and completed in June 1918 by the Tri City Oil Co., at a total depth of 2,215 feet. The trace of oil from 1,550 to 1,565 feet, and two other minor shows at greater depth, were the first evidence in Montana of the occurrence of petroleum in the Kootenai formation, and provided the incentive for further exploration of that unit. Although still far short of commercial production, more tangible encouragement soon came from the Devil’s Basin anticline to the northeast where the Van Duzen Oil Co. well No. 1 spudded in the Kootenai formation in NE1/4 SW1/4 NW1/4 sec. 24, T. 11 N., R. 24 E., Musselshell County, on August 10, 1919. Drilling continued to a total depth of 2,031 feet on November 6, 1919. In the meantime, 10 or 12 barrels of oil had been found in a 6-foot limestone at a depth of 1,167 feet in what was then called the Quadrant formation later it was shown the producing horizon was the Heath Formation. The trend of exploration continued toward the northeast, and the next structure to be drilled was Mosby dome on the elongate Cat Creek anticline. Here the Franz Oil Corp. well No. 1 (now Continental Oil Co., Charles 1-A) was started December 18, 1919, and was completed at a total depth of 1,014 feet as a 30-barrel oil well on February 20, 1920. Production was obtained from the second Cat Creek sand of the Kootenai formation between the depths of 998 to 1,014 feet. This famous discovery well, which in itself never produced more than 700 barrels of oil, resulted in the development of the Cat Creek field, the first important field in the State and, for its size, still one of the most productive and most profitable that has been found. Exploitation was rapid. A peak production of 2,080,826 barrels per year was reached at the close of 1923; and cumulative production to the close of 1961 has amounted to nearly 20 million barrels of oil.

The discovery of the Cat Creek field definitely carried the struggling Montana petroleum industry beyond the nascent stage; but national significance was not achieved until the oil discovery on the Kevin-Sunburst dome in Toole County 2 years later. Actually, there were two oil discoveries; and the short interval between them compounded the excitement they raised. Oil was found first on April 14, 1922, when the Gordon Campbell, Kevin Syndicate-A. Goeddertz well No. 1, NE1/4 NE1/4 NE1/4 sec. 16, T. 35 N., R. 3 W., was completed as a 20-barrel producer between depths of 1,770 to 1,790 feet in the basal sandstone unit of the Sawtooth formation and the eroded, weathered upper surface of the Mission Canyon formation of the Madison group. In the second, oil was found June 5, 1922, when the Ohio-Sunburst Oil Company’s R. Davey well No. 1, SE1/4 SE1/4 SW1/4 sec. 24, T. 36 N., R. 2 W., was completed as a 150-barrel producer between depths of 1,535 to 1,564 feet in a sand at the base of the Kootenai formation, which later was named the Sunburst sand. These discoveries, together with the great size of the dome, first production from rocks of Paleozoic age in the Rocky Mountain region, shallow drilling, and demonstrated production from a low-dip structure, attracted immediate attention from major oil companies and numerous small operators. The result was remarkable and, by the close of 1922, out of a total of 42 completed tests the field could show 22 producing oil wells, 4 wells producing both oil and gas, 3 Sunburst sand gas wells, 3 dry holes with shows of oil and gas, and 8 dry holes, with 11 tests drilling. Peak oil production of 6,457,217 barrels of oil was reached rapidly in 1926, since when it has been declining; and cumulative production to the close of 1961 has amounted to 66,189,439 barrels, which is not far from its estimated ultimate production of 70 million barrels of oil. Peak production of natural gas of 4,950 million cubic feet was reached in 1928, with cumulative production of about 78 billion cubic feet through 1961. With the development of the Kevin-Sunburst field the petroleum industry became firmly established.