MOONCOR COMPLETES ACQUISTION OF 219,000 ACRES OF OIL AND GAS LEASES IN AREA

Posted: Thursday, January 29, 2015 3:51 pm

According to a press release issued by Mooncor Oil & Gas Corp. earlier today, the company has completed the purchase of 320 sections of oil and gas leases in Pondera and Teton Counties in Montana. While the release does not mention the name, it is believed that Mooncor has acquired the leases of Primary Petroleum, based on company filings and reports on financial websites.

The Mooncor release reads:

TORONTO, ONTARIO — Mooncor Oil & Gas Corp. (“Mooncor”) (MOO) announced today that its wholly owned subsidiary, Mooncor Energy Inc. (“MEI”), has completed the acquisition (indirectly through the acquisition of a Montana incorporated company) of oil and gas leases and related data over approximately 320 sections (net acres of 219,000) in the Pondera and Teton Counties in Northwestern Montana USA (the “Property”). Mooncor and the sole shareholder of the vendor of the shares of the Montana company acquired share a common director, however the acquisition is not a “related party transaction” as defined under Multilateral Instrument 61-101. The acquisition was previously disclosed on August 14, 2014 and October 16, 2014. MEI will pay the vendor a 1% gross overriding royalty and assume its working interest share of the reclamation costs relating to the previous drilled wells and the ongoing lease payments on the Property. Further details of the Property are disclosed in the August 14, 2014 news release.

In addition, Mooncor provides a further update on its February 16, 2012 news release on the closing of its previously announced disposition (the “Transaction”) by MEI of an interest in two oil leases spanning 80 acres located in Lloydminster, Alberta to Madeira Minerals Ltd. (“Madeira”) (nex: MDE. H). MEI and Madeira have entered into a letter of commitment and amended and restated purchase agreement to affirm the parties’ intentions regarding the Transaction, and to recognize improvements made on the property by MEI since the Transaction was first announced. A major work-over of Well 3-28 and minor work-over of Well 4-28 were completed in 2012, in addition to required environmental remediation work. Madeira is a capital pool company and the Transaction is intended to constitute Madeira’s “qualifying transaction” under Policy 2.4 of the TSX Venture Exchange (the “Exchange”). Completion of the Transaction still remains subject to approval of the Exchange, completion by Madeira of a concurrent private placement for aggregate gross proceeds of $1.2 million, and compliance by Madeira with the policies of the Exchange related to completion of a qualifying transaction.

Mooncor Oil & Gas Corp. is a junior oil and gas exploration company. Mooncor holds interests in lands in the Muskwa/Duvernay liquids rich shale gas area in Hamburg, Alberta, and in southwest Ontario where the focus has been on conventional oil and gas opportunities.

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OXY, USA Says No To Phase II

OXY will retain working interest; help assess options…

The Sun Times, on Friday evening, recevied a press release that had been issued by Primary Petroleum;

CALGARY, ALBERTA — Primary Petroleum Corporation  advises that its JV Partner has informed the Company that it does not intend to enter into the Phase II program under the Sales and JV Agreement dated October 17, 2011. The JV Partner will retain its earned working interest in the Pondera-Teton leasehold and continue to work with Primary to assess options to best realize future value in the prospect area.

Primary will continue to further evaluate the data generated by the Phase I program to better determine a go-forward exploration program that will continue to de-risk the multi-formation play.

Primary has currently engaged Image Interpretation Technologies (“IIT”) to acquire a high-resolution aeromagnetic and gravity survey across the northern half of the project area. The objectives of this survey are:

  1. To establish the tectonic framework over the northern half of our land position.
  2. Assess the potential influence of deep-seated structures on prospective formations.
  3. Create a series of templates over the known oil and gas fields in the area. Pondera Field, which is adjacent to Primary”s land holdings to the east, and Gypsy Basin Field, which our leases surround, have together produced over 30 million barrels of Sunburst and Madison oil.
  4. Integrate the data collected from the survey with existing 2D and proprietary 3D-seismic data.
  5. Pending results, a second aeromagnetic survey may be acquired over the southern half of our land position.

We anticipate that interpretation of the aeromagnetic survey will be completed by the end of April 2013 and will enable Primary to better assess its options with Industry to realize the future potential of this very large and contiguous land position in Pondera and Teton Counties in NW Montana (600 gross and 512 net sections) as the Phase I program assessed less than 20% of the JV Lands.

The Company is continuing with its ongoing assessment of the 3rd well from the Phase I horizontal completion program and will move forward with assessing the vertical Madison well that was initially tested earlier in the Phase I program.

As reported in our most recent quarterly financials ending November 30, 2012, Primary has a working capital surplus of approximately Cdn $16.5 million with no debt. Our Lands are secured well into the future and of the 384,000 gross and 328,000 net acres under the Joint Venture only 36,000 gross and 22,000 net acres require further assessment prior to 2017. These facts provides the Company with several options to create future shareholder value from our current assets and balance sheet.

OXY USA Inc. Is Primary Petroleum JV Partner

The Watson Flats well is drilled against the backdrop of the Eastern Slope of the Rockies. Sun Times photo by Darryl L. Flowers

Insiders, Stockholder bullish on Canadian Exploration Firm

By Darryl L. Flowers

It has been one of the worst kept secrets in the Oil Patch, and has led to all types of speculation on the world wide web, in both blogs as well as online reports by “respected” analysts within the industry.

For the first time, The Sun Times is able to report that the “JV” or “Joint Venture” partner that now owns 32.5 percent of Primary Petroleum Company is OXY USA Inc.

The Sun Times uncovered details of the transaction two weeks ago when researching documents related to oil and gas exploration in Teton County. Since the deal took place last year, the rumor mills have been rampant. For the most part, the speculation was close, but not on target.

When the agreement was made last year, The Sun Times was advised by reliable sources that Occidental Petroleum Corporation, based in Los Angeles, California was the new partner. However, the California headquarters refused to confirm the deal when contacted, so it was decided not to go with the story.

The documents recently discovered show that the JV partner is in fact OXY USA Inc., headquartered in Houston, Texas. When contacted by the Sun Times, a spokesperson at the Houston headquarters confirmed that OXY USA Inc. is a “wholly owned subsidiary” of Occidental Petroleum Corporation.

The parent company is one of the world’s largest oil firms, with 40,000 employees and contractors worldwide. Occidental was founded in 1920.

OXY USA is listed as the operator on three Teton County wells, all classified as “dry holes.” The wells were drilled in 1974 and are listed by the Montana Board of Oil and Gas Conservation as the Bannatyne 1; the Bannatyne B-1 and the Bannatyne 1-A. The wells are located in Section 12, Township 24 North and Range 2 West.

The document detailing the agreement between Primary and OXY was recorded as a Deed of Conveyance and Assignment and Bill of Sale. According to the agreement, which was recorded on November 16, 2012, OXY was assigned 32.5 percent of “the leasehold interests under the oil and gas leases and oil, gas and mineral leases set forth…” Further, the document assigns 32.5 percent of “all rights and interests in any pooled area…”; “all equipment, facilities, pipelines, pipeline laterals, gathering systems, platforms, tank batteries, improvements, fixtures and buildings, and inventory…”

The details of the deal are coming out after a Friday night press release issued by Primary earlier this month that seems to have put the Canadian oil exploration company’s stock in a dive. The release came out just as OXY begins consideration of a second phase of investments into Primary.

Absent from the Primary statement are any details of the results of the first drilling program, launched just over one year ago.

In fact, the Sun Times has learned, through confidential sources with detailed knowledge of Primary’s operations in the Southern Alberta Bakken, that they have indeed “struck oil.”

According to the sources, the Spring Hill 1 well, which is one of three wells that was “fracked” last fall, will be able to produce “200 barrels per day of deliverable oil.” One of the Rockport Colony wells is expected to produce approximately 150 barrels of oil per day. The Spring Hill well has been “on pump” for some time.

Some Primary watchers have been frustrated with the production problems at the well. However, the source, as well as others with expertise in the oil field, have told the Sun Times that this is perfectly normal. “You don’t just pull out the drilling rig and stick a pump on,” said one geologist who works on rigs all over the Western U.S. “It takes time to get the trash worked out of the hole. It’s a perfectly normal process.”

The “oil cut”, or the percentage of oil in the fluid coming out of the Spring Hill well is the real surprise. “It’s 99 percent oil, only one percent water,” the source reported to the Sun Times.

While the news may come as a disappointment to those unfamiliar with a developing play, those with experience in the field see no reason for pessimism. “Primary has almost 400,000 acres of leases in the play, and have only drilled a handful of holes,” said one Primary stockholder contacted by the Sun Times. “I don’t think the talking heads who are ready to abandon the play know anything about the geology or history of the region.”

Bill Hansen, one of the leading Geologists on both the Bakken Formation as well as the Montana Overthrust Belt, operates Jireh Consulting in Great Falls. “The testing has only begun in this area of the play. Primary is the first to test the play, and in an area of unknowns, the first wells are not going to be the best.”

Indeed, the nature of a developing play is a high risk venture. “That’s why they’re known as ‘Poke and Hopes’,” said Joe Large, President of RPM Geologic in Denver. Large, who operates out of Simms, Montana, said the small exploration firms “poke a hole and hope for oil.”

With the lackluster news in the Primary release, some have wondered if OXY will jump in for a second round of investing, and if OXY does not step up to the plate, what will the future hold for Primary?

“Primary is really in a good position,” the source, who requested anonymity, explained to the Sun Times. “They are a tight operation, they do not waste money. They are lean and that is something the big firms can’t compete with.”

By watching their bottom line, Primary is able to bring in a well much cheaper than is typical for Bakken wells in Eastern Montana and Western North Dakota. “Primary can probably do a well for about $4 million in this region, compared to $10 million for a well in the Williston area. Part of the savings derive from the fact that the oil bearing formations are about half as deep as in Eastern Montana and Western North Dakota. But part of the efficiency comes from a well-planned and executed drilling program.

When it comes to the bottom line, a well that is cheaper to drill means it can turn a quick profit, even with lower production numbers.

Another consideration requires looking at the whole picture as to what is coming out of the borehole.

While many get their hopes up thinking, like the Williston Basin, this region will see 2,000 or 3,000 barrel of oil per day wells, that is not likely.  But, if you read the details of all the wells being completed out East, you begin to see that a lot of lower production wells are coming online. “It’s not unusual for wells in the Bakken area to have Initial Production, or IP, rates of 200, 300… up to 600 barrels of oil per day,” said Large.

Many of the high IP wells appear to be better sources of seawater than hydrocarbons. A large percentage of the Bakken area wells produce much more water that oil. Recently, the Sun Times reported on a Bakken Formation well that reported an IP of approximately 1,900 barrels of oil per day. But, as they say, the devil is in the details, and the details showed that the well was also producing over 6,000 barrels of water per day. That’s 264,000 gallons.

The seawater was trapped in the formations as the land was thrust inland millions of years ago. Adding to the cost of operation for the wells, the water must be disposed of. “That’s a huge cost to the operator,” said Large. “In the Bakken, if you find a well that is only 50 percent water, you’ve got a great well.”

At 99 percent oil, the Spring Hill well would not be costly for disposal of the saltwater.

The compact size of Primary would also mean that the exploration firm could, if needed, pivot their operation and also become a production company. “It’s a fairly easy transition,” said one experienced industry insider. “Primary has the know how on the ground to make it happen.”

Adding to the pessimism is the lack of science behind the reporting. Most of the media, or commentators, are far removed from the Eastern Slope of the Rockies. “Few if any of those guys have put their shiny Wall Street ‘pimp pumps’ on the ground out there,” commented the Primary stockholder who is based in the Mid South.

The shareholder, who took it upon himself to do his own research when he noticed the reporting on the Southern Alberta Bakken play offered no details, told the Sun Times that he was struck by the volumes of data available from independent sources, such as universities, U.S. Geological Survey, Montana Geological Society and the American Association of Petroleum Geologists. Commenting on his research, the investor said, “The same formations that have yielded successful fields found in Alberta are equivalently located in Montana; there are plenty areas of interest yet to be explored in Montana.  And Primary has a few hundred thousand potentially promising acres… the investment analysts following all of this activity don’t know jack about geology,” the investor added. “Reading the article in the Sun Times [Reading The Rocks In The Hunt For Hyrdocarbons, August 2, 2012 issue] motivated me to dig deeper and research the play.”

He went on to say that from what he has found in his research, that Primary’s “Watson Flats” well might be the “sleeper” of the wells drilled by the company so far.

Of the wells drilled in the first round, the Watson Flats well is the only one that lies in the region known as the “Overthrust Belt.” The area is long known by geologists to be a region of subsurface thrusts and faults. While the belt may offer challenges to drillers, the reward may be worth it. Recently, the Sun Times consulted with Joe Large, the RPM Geologic President, on another Overthrust Belt well, the Steinbach 1 near Augusta.

According to Large, who examined data from the well, the Steinbach showed the potential to be a “Williston” class producer.

The Watson Flats well was recently plugged and abandoned by Primary. While that may sound ominous, the fact is that when a well is not being worked over a lengthy period of time, the State requires, for safety reasons, that the borehole be sealed.

According to multiple conversations with our sources, the well is a candidate for further work, including fracking. “We’re going back there,” stated the insider. Other sources explained that Primary encountered a fault in the well and lost pressure on the drillbit. The bore was sealed and the well completed without further incident. The company has the option of re-entering the hole, or they could move a short distance away and drill a new hole. Sometimes drilling the new location is the most economical method.

Historically, the region near Primary’s leases has some significant discoveries.

In 1958, according to a paper published by J.W. Halverson, a Geologist with the Montana Board of Oil and Gas Conservation, natural gas was discovered in Blackleaf Canyon, near Bynum.

Low gas prices and the lack of access to a market delayed commercial production until 1982. The first producing well, known as the #1-A Blackleaf Federal, was completed in the Madison Group and reported an Initial Potential of 6,293,000 cubic feet of gas per day. In 1959, the second discovery well in the Blackleaf Field was drilled, and showed a potential flow of 969,000 cubic feet of gas per day. The well only produced 104 barrels of water with the gas.

Production from the field began with the completion, in 1980, of the Blackleaf Federal #1-8. The #1-8 had an Initial Potential of 5,100,000 cubic feet of gas per day. In 1981, the Blackleaf Unit #1-5 well was completed, and showed a potential flow of 9,000,000 cubic feet of gas per day. The Blackleaf Federal #1-19 was also drilled in 1981 and turned in an Initial Potential of 4,074,000 cubic feet of gas per day.

To put the production numbers in a perspective that is easy to understand, the average household, according to a 2009 report by the American Gas Association, consumes 70,500 cubic feet of gas per year.

The Blackleaf Field, during the period from 1984 to 1990, contributed over $1,800,000.00 to Teton County in taxes.

The well was shut down later when the operator at the time, Startech Energy, proposed plans to use a six acre surface area (only one percent of the field area of 600 acres) to drill new wells. Senator Conrad Burns, R-Montana, introduced legislation to remove the Federal minerals from production in the area. Montana’s other Senator, Democrat Max Baucus, took up the bill after Burns’ defeat. “That move cost Burns his re-election,” said Choteau Councilman and gun shop owner Jim Anderson. “Support for Burns collapsed in the region when we lost a major source of revenue for our schools and roads in Teton County.”

Environmentalists and the media championed a letter writing campaign of 49,000 letters sent in support of closing the well established, producing field. What was not as well reported was that less than 1,500 of the letters were from residents within the state of Montana. At the same time, according to media reports, Senator Baucus voted to shut off funding for an environmental study that was being conducted at the time to determine if the Blackleaf improvements would have a detrimental effect on the area.

“The research that was underway in conducting that impact study would have set the gold standard for that type of work,” said Bill Hansen. “It was a shame it was never completed, but the belief at the time was that the study might come down in favor of continued gas production.”

Hansen points out that while the Blackleaf field does not directly correlate with the wells drilled by Primary, it does indicate the presence of commercially producible hydrocarbons in the area.

Documents in possession of the Sun Times indicate “Undiscovered Estimates” of the natural gas potential of the broader region may be as high as 12.6 Trillion Cubic Feet (TCF) of gas. The same set of documents claim the field could have held as much as 2.6 TCF and would have produced for as long as forty years. According to a 2003 report from the Department of Energy, 1 TCF would meet the needs of 15,000,000 homes for one year or would supply the gas demands of the entire state of Montana for three decades.

A few miles to the North of Primary’s wells, Anschutz Exploration continues its drilling program. A privately owned company, Anschutz does not reveal any results of their program, however, the Denver based firm continues to permit new wells in Glacier County.

Just over the border, in Canada, three fields may give some insight as to how the Southern Alberta Bakken play will develop. The Waterton Field, the Pincher Creek Field, and the Lookout Butte Field are all long-term producers of natural gas.

The Canadian well that was most likely responsible for the discovery of Waterton Field may well have been the driving force behind the very first attempt to find commercial oil in Montana.

In 1901, at Cameron Creek, Northwest Territory (now Alberta), the first commercial oil well was drilled in what would become Waterton Park.

According to the National Park Service, as the search was underway for oil in Cameron Creek, the fever caught on in Flathead County and in 1902 the Kintla 1 was drilled at Section 12, Township 36 North and Range 22 West. A year later, the Kintla 2 was completed. The wells never went into production; they were plagued with water intrusion and a fire that destroyed the drilling gear.

“The production at Cameron Creek within the boundaries of Waterton Park and probably partly responsible for the exploration that led to the discovery of Waterton Gas Field in the 1950s, just north of Waterton Park,” Bill Hansen told the Sun Times.

The field is a prolific producer of natural gas. A large “sweetening” plant was constructed in 1960 to remove hydrogen sulfide from the gas.

Back in Teton County, other companies have confidence there is oil and gas to be found in commercial quantities. In 2011, the Sun Times visited a rig drilling an exploratory well at the Theodore Roosevelt Memorial Ranch near Dupuyer. The newspaper was there as Honors Students from Fairfield School began a project with Fairways Exploration and Production to monitor the environment near the well site.

The well was completed, and in the fall of 2012, Fairways returned to do a Three Dimensional Seismic Survey of their leases. The Sun Times was on the ground as the seismic trucks profiled the formations deep below the ground near the site of their exploratory well. While Fairways is tightlipped about their plans, it is believed that the Texas Company is looking over the data from the seismic and developing plans for the future.

In the meantime, other companies picked up leases in Teton County in 2012. In addition to Primary and Fairways, Texas Wildcatter Jim Bass and his Lonesome Dove Resources picked up significant leases in the county, from just to the northwest of Choteau all the way to the southwest of Fairfield. Energy West picked up some leases, as did Mountain View Energy and Wexco.

Another player to enter the area in 2012 is Antares Exploration Fund, LP.

Primary Petroleum Well In Operation: Weekly Oil Report

On Sunday, a recently installed pumpjack was in operation at one of the Spring Hill wells on Halverson Road near Bynum. The well was drilled earlier this year by Primary Petroleum. Sun Times photo by Darryl L. Flowers

Compiled by Darryl L. Flowers

New Locations

Petro-Hunt, LLC took a permit for the Borntrager 2C-2-1 (NW SW 2-19N-54E). The well has a Proposed Depth of 11,270 feet and will tap into the Red River C Formation.

New Locations – Horizontal Wells

Apache Corporation was greenlighted for two wells in Daniels County; the Lindley 19-9H-B (NE SE 24-36N-46E), with a Probable Bottom Hole Location (PBHL) at 12,082 feet, and the Lindley 24-10H-T (NE SE 24-36N-46E), with a PBHL of 11,876. The wells will target the Bakken and Three Forks Formations, respectively.

In Richland County, Fidelity Exploration and Production Co. received permits for two wells; the Lisa 22-23H (NW SW 22-22N-57E), with a PBHL 19,999 feet, and the Klette 24-13H (SW SE 24-22N-56E), with a PBHL of 20,049 feet. Both wells are targeting the Bakken Formation. Slawson Exploration Company Inc. received a permit for the Highwayman 1-30H (SE SE 30-24N-52E), with a PBHL of 13,105 feet. The well will tap into the Bakken Formation.

Re-Issued Locations

In Fallon County, Fidelity Exploration & Production Co. took out eight permits for Re-Issued Locations.  All eight permits are in the Cedar Creek field and will hit the Eagle Formation at a depth of 2,000 feet.

The wells are: the Fee-BR 2813 (NE SE 25-5N-60E), the Fee-BR 2814 (SE SW 25-5N-60E), the Fee-BR 2839 (NW NE 27-5N-61E), the Fee-BR 2840 (NE SW 27-5N-61E), the Fee 2815 (NW NW 30-5N-61E), the Fee 2851 (SW NW 30-5N-61E), the Fee-BR 2852 (NE NW 31-5N-61E) and the Fee-BR 2853 (NW SE 31-5N-61E).

In Richland County, Continental Resources Inc. received a permit for the Egan 1-14H (NE NW 14-26N-53E), a Bakken Formation well with a PBHL of 19,291 feet.

Permit Modifications / Corrections

In Carbon County, a Permit Modification was issued to Energy Corporation of America for the ECA Foothills 2-H (NW SW 13-6S-17E). The well has a PBHL at 6,000 feet, aiming for the Greybull Formation.

In Richland County, Slawson Exploration received two Permit Modifications, for the Dart (Federal) 1-30H (NW NW 30-21N-59E), with a PBHL of 14,233 feet, and the Dragonfly 1-36H (NE NE 36-23N-54E), with a PBHL at 14,586 feet. Both are Bakken Formation wells.

Completions

In the Clark’s Fork, North Field in Carbon County, Baldwin Lynch Energy Corp. finished the State 1-16 (NW SE NE 16-9S-22E). The Lakota Formation well has a Total Depth of 8,829 feet.

In Richland County, two wells were reported as completed. Continental Resources Inc. wrapped up the Jane 1-4H (NW NE 4-25N-55E). The well had an Initial Production (IP) of 273 Barrels of Oil Per Day (BOPD), 234 Thousand Cubic Feet of Gas Per day (MCFPD) and 170 Barrels of Water Per Day (BWPD). The well has a Total Depth of 19,828 feet, draining the Bakken Layer. Fidelity Exploration & Production Co. completed the Bouchard 34-21H (SW SE 21-22N-57E. With a Total Depth of 14,667 feet, the well hits the Three Forks Formation. The well reported an IP of 57 BOPD and 273 BWPD.

In Sheridan County, TAQA North USA, Inc. reported the completion of Westgaard 5-5H (NW 5-37N-58E). The Bakken well has a Bottom Hole Location of 11,713 feet. Initial Production was reported as 162 Barrels of Oil Per Day (BOPD) and 275 Barrels of Water Per Day (BWPD).

In Toole County, Somont Oil Company, Inc. wrapped up the Breaupre 2 (SW NW 8-35N-2W). The well, located in the Kevin-Sunburst Field, has a Total Depth of 537 feet.

In Yellowstone County, Antelope Resources, Inc. brought in three wells, all three in the Mosser Dome Field, and all tapping into the Mosser Sand Formation. The wells are: the CH Mosser 18 (NW SW NE 26-3S-24E); the JC Mosser 19 (NW SW NE 26-3S-24E), and the Kelly 7 (NE SE NW 26-3S-24E). The wells have Total Depths of 996, 997, 999 feet, respectively.

Expired Permits

In Fallon County, the permit for the State 3017 (NE NE 16-8N-59E) expired. The well, in the Cedar Creek Field, was owned by Williston Basin Interstate Pipeline Company.

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

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.

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).