Bakken Rush- Northern Oil

Discussion in 'Stocks' started by stonedinvestor, Apr 14, 2008.

  1. Folks a top is in on oil. For the past two years I have sat back and watched oil go up and staunchly refused to buy any oil and gas stocks... I don't know why I just decided after the Iraq war that speculators at hedge funds were controlling the market and there was $10 a barrel of fluff there. Eventually as oil soars even in the face of global economic slowdown or at least earnings slowdown and companies you would think using a lot less less oil... it just keeps going up. Now after all this time I buy an oil stock it just boggles the mind.

    Anyway recently a new federal study estimates the Bakken Formation in Montana and North Dakota contains from 3 billion to 4.3 billion barrels of recoverable oil, a figure 25 times greater than the 151 million barrels originally estimated in 1999.

    The original estimate was based on traditional drilling techniques, but a new technique used by Billings wildcatter Dick Findley in 2000 has changed that. He drilled horizontally — fracturing the porous dolomite rock that holds the oil — to make the Elm Coulee field in northeastern Montana the biggest discovery in the continental United States and Canada.

    The Bakken Formation encompasses some 25,000 square miles in North Dakota, Montana, Saskatchewan and Manitoba. The U.S. Geological Survey calls it the largest continuous oil accumulation it has ever assessed.

    "For the second year in a row, Montana had the largest annual oil production increase of any state (6 million barrels, a 20 percent increase) owing to continued development of the Bakken Formation Elm Coulee field," the U.S. Department of Energy stated in a report last year. "This relatively new and important oil field is difficult to produce and requires cutting-edge technology for economic production."

    About two-thirds of the Bakken Formation's acreage is in western North Dakota, where the oil is trapped in a thin layer of porous dolomite rock wedged between two layers of hard shale nearly two miles beneath the surface. The dolomite ranges between 8 and 14 feet thick throughout most of northeastern Montana. Oil companies drill down to this thin layer, then drill horizontal legs several thousand feet long to recover oil from the porous rock. They also use pressurized fluid and sand to break pores in the rock and hold them open while the oil is recovered.

    The report released Thursday by the USGS was completed over the past 18 months at the request of Sen. Byron Dorgan, D-N.D.

    "This is great news," Dorgan said. "This is 25 times the amount of the previous assessment."

    The study released last Thursday does not estimate how much oil may be in the Bakken — only what the agency believes can be recovered using current technology.

    Jim Ehrets, a Denver-based geologist with Headington Oil Co. of Dallas, said it costs about $5 million to drill a well tapping the middle of the Bakken, meaning companies need crude prices of at least $50 a barrel to make it economical. Even with crude prices double that, as they are now, "there still is a ton of risk," he said.

    Headington has about 150 wells producing in the Bakken Formation — two-thirds of them in Montana — and plans to drill at least 100 more, Ehrets said.

    Ron Ness, president of the North Dakota Petroleum Council, said the number of wells in the North Dakota portion of the Bakken Formation increased from about 300 in 2006 to 457 at the end of last year.

    Continental Resources Inc., which has 126 wells producing in the Bakken Formation of Richland County, is now concentrating on developing properties in North Dakota, said Russ Atkins, area supervisor for the company.

    "We have three (drilling) rigs in Richland County," he said. "We're adding another two, and we should have five more by June. They're all going to North Dakota, which will give us three in Montana and seven in North Dakota."

    Nobody mentioned Northern! Well they have 5 successful wells going, small fries- the really annoying thing is someone released an insider buy report that had the chairman buying a ton at $9.00 if not for that we would have had the stock today at $9.02 instead it's $9.80 and away we go..... oil at $120 or whatever and finally stoney is in the oil game! Companies with Bakken exposure seem primed here. Another one not mentioned with a big move on volume is Bringham BEXP...
  2. here we go folks the insider buy I tipped you off about early has hit the tape 22 hours ago

    Recent quotes | Portfolios
    Name Name Price Change Mkt Cap
    NOG NOG 10.34 +0.44 (4.44%)

    And now away we go.... it's partner in crime is flying too BEXP I'm a little more afraid of that one because they have scedualed a hypie press conference on rather short notice to capitalize on the fever of these new estimates- still they must have a story to tell up 100% in 4 weeks!!!!

    NOG is a bit slow to the party but perhaps we play catchup here.....yet another great find, if i do say so myself. ~ stoney
    You just know management is going to go on and on about how much land they have accumulated
    in the Bakken region... it's just the stock is up so much already..... here's an old pr-

    BEXP Brigham Exploration Announces Fourth Bakken Discovery, Significant Acreage Growth in Mountrail County, North Dakota and Extensional Areas, and Provides an Operational Update
    via COMTEX

    March 3, 2008

    AUSTIN, Texas, March 3, 2008 /PRNewswire-FirstCall via COMTEX News Network/ --

    Brigham Exploration Company (Nasdaq: BEXP) announced its fourth Mountrail County horizontal Bakken discovery and the commencement of its fifth well. Brigham also announced growth in its acreage in the Williston Basin to over 240,000 net acres. Most of the recent growth has occurred in Mountrail County and extensional areas where Brigham now controls over 88,000 net acres.


    Resource Plays Objective WI% NRI Status / Comments
    Hallingstad 27 Bakken 48 % 36 % Completing Mountrail Co. well
    #1H flowing after frac @ early rate of
    ~ 450 Boepd up 4.5" casing

    Bakke 23 #1H Bakken 93 % 76 % Producing ~ 310 Boepd on rod pump

    Hynek 2 #1H Bakken 97 % 78 % Producing ~ 142 Boepd on rod pump

    Bergstrom Bakken 56 % 43 % Producing ~ 119 Boepd on rod pump
    Family Trust
    26 #1H

    Manitou State Bakken 100 % 81 % Drilling Mountrail Co. Bakken well
    36 #1H ~1 mile northeast of Hynek 2 #1H in
    vertical @ depth of ~9,000'

    Headington Bakken 14 % 12 % Completing Mountrail Co. Consortium
    Nesson State Bakken well
    41 X 36H

    Headington Bakken 14 % 12 % Drilling Mountrail Co. Consortium
    Nesson State Bakken monitoring well in lateral @
    42 X 36H ~12,365'

    Headington Bakken 14 % 12 % Planned April spud of Mountrail Co.
    Nesson State third Consortium Bakken well
    44 X 36H

    Johnson 33 #1H Bakken 38 % 30 % Planned April spud of North Stanley
    extensional area horizontal Bakken

    Bakke Offset Bakken 67 % 55 % Planned May spud of western offset
    to Bakke 23 #1H

    Mrachek 15-22 Bakken 100 % 79 % Horizontal sidetrack of McKenzie
    1H Co., ND well being remediated after
    apparent casing leak

    Krejci Fed. Mowry 50 % 40 % Successfully drilled and swell
    #1-32H packers installed, fracing
    Mid-March, results early April

    Conventional Wells Objective WI% NRI Status / Comments
    Richardson 25 #1 Red River 90 % 68 % Discovery currently producing
    279 Boepd

    Red River Test Red River 75 % 60 % Planned April Red River
    exploration well, est. total
    depth of 11,200', results
    expected in June

    Cary Sr. Estate #1 Oligocene 40 % 29 % Completing after encountering
    approx. 26' of pay @~12,300'
    true vertical depth, results
    in late March

    SL 18826 #1 Miocene 50 % 38 % Planned April spud of 1st of 5
    planned 2008 JV wells to test
    amplitude related prospects,
    total depth ~7,900'

    BLM 013045 #1 Miocene 50 % 38 % Planned May spud of 2nd of 5
    planned JV wells to test
    amplitude related prospects

    Cotten Land #5 Miocene 39 % 27 % Planned July spud of
    acceleration well
    developing behind pipe pay in
    Cotten Land #3 producer

    Sullivan C-38 Vicksburg 100 % 76 % Drilling development well in
    prolific Floyd Field @ depth
    of 10,610', est. total depth
    of 14,000', results in April

    Sullivan C-39 Vicksburg 100 % 76 % Planned late March spud of
    Triple Crown Field
    development well, results
    expected in June

    Sullivan F-35 Vicksburg 100 % 76 % Planned May spud of Dawson
    Sand development well in
    Triple Crown Field, results
    expected in July

    Williston Basin

    Acreage Growth to over 240,000 Net Acres with over 88,000 Net Acres in Mountrail County & Extensional Areas -- Brigham has grown its acreage position in the Williston Basin to over 240,000 net acres. Most of the recent growth has occurred east of the Nesson Anticline in Mountrail County and extensional areas where Brigham now controls over 88,000 net acres, approximately 40,300 net acres of which are located in Mountrail County. Approximately 7,000 net acres are generally proximal to the Parshall Field and EOG's Austin discoveries, while roughly 26,000 net acres are located in the Ross area, generally between the Parshall Field area and the Nesson Anticline. An additional 7,300 net acres are located in Mountrail County in the North Stanley area, which is approximately 15 miles northwest of the EOG Austin wells, and approximately 12 miles north of the Brigham operated Bakke 23 #1H. Approximately 48,000 net acres are located in undisclosed extensional areas to the east of the Nesson Anticline.

    To the west of the Nesson Anticline in McKenzie and Williams Counties, North Dakota, Brigham controls Bakken rights on approximately 51,000 net acres. In eastern Montana, where Brigham drilled its recent Red River discovery, Brigham controls all rights on roughly 100,000 net acres in Sheridan and Roosevelt Counties.

    Mountrail County Bakken Drilling and Completion Activity -- Brigham successfully drilled and completed its fourth operated Mountrail County horizontal Bakken well, the Hallingstad 27 #1H. Subsequent to fracture stimulation the Hallingstad 27 #1H produced at an early rate of approximately 450 Boe per day up 4.5" casing. Northern Oil and Gas Inc. (OTC: NOGS) participated in the Hallingstad 27 #1H with a 8.4% working interest, which increases to a 20% working interest after payout. The Hallingstad 27 #1H is located approximately one mile west of the Bergstrom Family Trust 26 #1H well and approximately four miles northeast of the Parshall Field.

    Subsequent to drilling the Hallingstad 27 #1H, Brigham commenced the Manitou State 36 #1H, which is currently drilling at a depth of approximately 9,000 feet. The Manitou State 36 #1H is located approximately one mile northeast of the Brigham operated Hynek 2 #1H and approximately five miles northwest of the Brigham operated Bakke 23 #1H. Following the Manitou State 36 #1H, Brigham plans to commence the Johnson 33 #1H in the North Stanley area, where Brigham controls approximately 7,300 net acres. Brigham currently plans to keep this operated rig running continuously to drill horizontal Bakken wells in North Dakota.

    Brigham has installed 2 7/8" production tubing and pumping units on its first three Mountrail County horizontal Bakken completions. The Bakke 23 #1H is currently producing approximately 310 Boe per day, the Hynek 2 #1H is producing approximately 142 Boe per day, and the Bergstrom Family Trust 26 #1H is producing approximately 119 Boe per day.

    Bud Brigham, the Chairman, President and CEO stated, "We're encouraged by the early results of the Hallingstad 27 #1H, which appears to be a strong producer. Approximately five miles to the west of the Hallingstad 27 #1H, EOG has completed the Austin 26 #1H in section 2 of 154N-90W, which they reported to have produced at an early rate of approximately 3,060 barrels per day. We have a meaningful acreage position within a few miles of the Austin 26 #1H, including interests in two sections directly offsetting the discovery. Our larger working interest directly offsets the Austin 26 #1 to the South where we own a 25% interest and is reportedly planned to be drilled this year. As shown on our Mountrail area map in our corporate presentation, we control approximately 7,000 net acres in the Parshall Field area, including acreage offsetting EOG's three previously announced high rate Austin discoveries in sections 2, 4 and 9 of T154N-R90W. Provided the area is developed on 640 acre spacing roughly 11 net wells would be drilled, double that if 320 acre spacing is validated, which we believe to be likely. Given the accelerating drilling pace announced by several of the operators, we expect drilling in this area to meaningfully impact our production and reserves in 2008 and subsequent years."

    Bud Brigham continued, "Subsequent to drilling the Manitou State 36 #1H, we'll commence the Johnson 33 #1H in our North Stanley area. We believe this area has many attributes in common with the Parshall/Austin area, and it is about 17 miles northwest and generally on trend with those producers. In total, the 88,000 net acres we've accumulated in the play east of the Nesson Anticline, including approximately 40,300 of which is in Mountrail County, provides us with the potential to drill 137 to 275 net wells, depending on spacing. Given our size, we believe we've accumulated the most impactful acreage position in the Bakken play. This year, we expect to drill or participate in the drilling of at least seventeen gross, or six net wells in the play in at least four different areas."

    It sounds good doesn't it? ~ stoney
  4. You know what is really interesting? Is how do you maintain property rights when the drilling is sideways.... I could see EOG getting pissed if BEXP's pipes reached over and sucked up their oil! Boy this feels like the old days a mini mania brewing, anyone remember Comstock Resources! ~si
  5. Well I have no idea what this means or whether this is good or bad for Northern- ~ si

    (NOG) Northern Oil & Gas announced that it has entered into a land bank arrangement with Deephaven MCF Acquisition, an affiliate of Deephaven Capital Management, pursuant to which Northern Oil may acquire leases having an aggregate value of up to $8.1 mln. Under the arrangement, Deephaven will acquire certain qualifying leases in the Bakken Shale play in Mountrail County, North Dakota, which leases can then be acquired by Northern Oil at any time during the initial year that Deephaven owns such leases.
  6. Pekelo


    Explanation of the Bakken shale:

    "The next step is to estimate how much oil could be recovered (produced). For a reservoir such as this, the range of recovery can very widely. Good reservoirs with "water drive" can have recoveries of more than 30% of oil in place. As reservoir quality decreases, so does recovery factor. In very tight reservoirs, recovery would probably be in the range of less than 1% to around 10%, depending on many factors like porosity, permeability, presence of fractures, well spacing, etc.

    In the good areas of the Bakken, with higher porosity and lots of fracture permeability, the recovery might range as high as 5% to possibly 15%. Typically only a few areas, or "sweet spots," will have recovery this high. Outside the sweet spots, recoveries are likely to be much lower; the reservoir quality will deteriorate, with lower porosity, lower permeability, and fewer fractures, and/or thinner beds of reservoir rock. In these areas, recovery will probably be less than 5% of the oil in place, and in some areas less than 1%. Estimating recovery factor in shale reservoirs is more an art than a science;only after several years of production, and with very good data, can a reliable range of recovery be estimated.

    In the less favorable and thinner areas of the reservoir, even though it might be technically possible to recover 1% or 2% of the oil in place, the risk may be too high to for an operator to be willing to spend $3 to $5 million or more, with no assurance that the well will pay out. In this case the "technically recoverable" reserves might be 1% of oil in place, but the economically recoverable reserves are 0% if an operator is not persuaded to risk capital to drill a well."
  7. Yes Pekelo it is very exciting! Folks you probably know how hard it is to pass a 3 week coil, well Northern is going through that same process... let's hope she's about to squirt out as it looks quite promising. One trick I do is go to my account get mad and hit sell and get up to the last command and then back away... I'm letting this position know it's time to put up now!~ stoney
  8. Well it's time to make a move here. You can just kind of feel it. Oil is $120 and there is ten years worth of drilling to be done in the Bakken region... I'm watching BEXP today and hoping finally for the break out in NOG... There are many other names to consider but I did not want to overload this thread; using my charts I settled on NOG for better or worse now it's time for that stock to reward me and you. ~ stoney
  9. And as if on orders by the big guy in the sky.... off she goes into nether land all time HIGHS baby.
    Another smoking good pick from the man who really wants to buy BEXP too but is aware that they have earnings tonight and last time they missed... so the risk is play it for whatever hype management puts out in regards to Bakken potential vs they might miss again.... on the fence here... ~ stoney
  10. Folks it's rare when a stoney pick gets out of the gate this slow allowing you all many chances to get on board... NOG at $10.90 will cut her tethers to this fine earth and float freely past $13... This is all time HIGH territory both for NOG and myself. ~stoney
    #10     May 9, 2008