page Statoil hits 14th top IP well 8 in 22 weeks

Vol. 2, No. 35 • www.PetroleumNewsBakken.com A weekly newspaper for industry and government Week of December 15, 2013 • $2.50

l NATURAL GAS Producing amid the windrows Finishing touches NDPC flaring task force to submit recommendations to NDIC in January

By MAXINE HERR “The nature of this business is that VERN WHITTEN PHOTOGRAPHY For Petroleum News Bakken drillers drill, operators operate, and they he North Dakota Petroleum Council, NDPC, sign a long-term contract with a gas Tflaring task force is putting finishing touch- processing company and they walk es on its recommendations to reduce flaring in the away.” —Department of Mineral Resources Director state. Lynn Helms In September, Gov. Jack Dalrymple requested the development of a task force to study the prob- Wells pumping on a Hess Corporation pad in the Traux field subcommittee has some recommendations that southeast of Williston in southern Williams County, N.D. lem and provide some solid solutions to the North needed further review. Dakota Industrial Commission. The task force “We want to give it a good review and make will present its findings at the Jan. 29 commission sure membership and everyone’s ready,” Dille ND operators increasing well meeting. said. “We want to get it as good as we can. As far Task force Chairman Eric Dille of EOG densities to even higher levels as recommendations on flaring, goals, and crite- Resources told Petroleum News Bakken that the ria, we have developed some targets we think we North Dakota operators continue to increase well densi- task force had hoped to present at the Dec. 19 ties on Bakken petroleum system spacing units. In applica- Industrial Commission meeting, but the technical see FLARING TASK FORCE page 15 tions that the North Dakota Industrial Commission will con- sider during hearings on Dec. 18 and 19, numerous operators l are seeking authority from the commission to drill up to 30 GOVERNMENT wells on existing 2,560-acre spacing units, up to 16 wells on existing 1,280-acre units, and up to four wells on existing 320-acre units. Those infill efforts will result in spacing unit Wardner on the interim densities of one well for every 85.3 acres in the 2,560s and an even higher spacing unit density of one well for every 80 A look at North Dakota O&G-related legislative issues midway between sessions acres in the 1,280- and 320-acre units. These are some of the highest spacing unit densities that the commission has ever By MIKE ELLERD all facets of energy in North Dakota. considered. Petroleum News Bakken Wardner recently shared with Petroleum News Bakken some of his see WELL DENSITIES page 14 ew people have a better understand- views on oil and gas-related issues the Fing of energy policy issues in North state is facing during the legislative TransCanada begins filling XL Dakota than Rich Wardner. In addition interim and what might be ahead in the southern leg as prep for startup to serving in the North Dakota House of next full legislative session. Representatives from 1991 to 1997 and TransCanada said its new Gulf Coast pipeline, designed in the Senate since 1999, he served as Petroleum News Bakken: First, do as the southern leg of Keystone XL, began line filling activ- Senate President Pro Tempore in the RICH WARDNER you think the oil and gas-related bills ities on Dec. 7 in preparation for commercial crude shipping 2011 session and as majority leader in passed during the 2013 legislative ses- from Cushing, Okla., to Port Arthur, Texas, scheduled to the 2012 session. Wardner is also a member of the sion are effectively addressing the issues they begin by mid- to late-January. state’s Emergency Commission and five interim were intended to address? The $2.3 billion Gulf Coast project will initially carry committees, including the Energy Development Wardner: It is too early to tell if the legislation 700,000 barrels per day of crude from U.S. and Canadian and Transmission Committee, which he chairs. to decrease flaring and the use of the Department fields, notably the Bakken, and is expandable to 830,000 That committee studies comprehensive policy for see WARDNER Q&A page 16 bpd. TransCanada spokesman Shawn Howard told Petroleum News that once line fill is completed “we will safely ramp up l MOVING HYDROCARBONS the flow rates” of crude moving through the pipeline to Gulf see XL SOUTHERN LEG page 13 Bullish CBR perspectives With a spotlight on flaring, Railroads confident about long-term crude-by-rail service to coastal markets operators request more exemptions By GARY PARK Most refiners and railroads say current The number of applications for flaring exemptions in For Petroleum News Bakken North Dakota is up two to three times what is typical for the quarter pricing differentials have month, according to Lynn Helms, director of the state gnore a spate of accidents, tighter regulations regained the norm of recent years, Department of Minerals Resources Oil and Gas Division. Iand competitive elements, the use of rail to supporting CBR from the Bakken to Most of the flaring-related applications that the North move crude is here for the long term, speakers price-disadvantaged refineries on both Dakota Industrial Commission will consider in hearings told the RailTrends 2013 conference in New York coasts. scheduled for Dec. 18 and 19 are for flaring natural gas from late in November. wells that are not yet connected to gathering infrastructure They offered their bullish outlook against a ic made the option more economic for some and the operators want to continue producing oil at maxi- backdrop of increasing rail shipments in the cur- refiners, especially those on the West and East mum rates beyond the 60 days of unrestricted production rent quarter after a flattening off in the previous coasts, to modify crude slates. allowed under state rules. That comes as no surprise to three months as several railroads and refiners Anthony Galio, a rail analyst with Wells Fargo, Helms since the commission has been issuing these types of noted in the quarterly reports that there has been said that “crude differentials will influence the exemptions for six months at a time and many are due to a rebound in crude pricing that underpins the degree to which CBR volume growth exceeds see FLARING EXEMPTIONS page 16 crude-by-rail, or CBR, sector. Refiners said a third-quarter change in dynam- see CBR PERSPECTIVES page 12 2 PETROLEUM NEWS BAKKEN • WEEK OF DECEMBER 15, 2013 contents Petroleum News Bakken

SIGNIFICANT OPERATED PRODUCTION AND RESERVES GROWTH ON THE COVER NET SOLD PRODUCTION VOLUMES (BOEPD)

10,000 FY2014 Avg. Daily Production Guidance(1) 10 4,750 5,350 Boepd Consensus estimated Finishing touches Ȯ average of ~6,600 Boepd(2) 8,500 8,000 8 Count RigOperated 6,804 Caliber generates first 6,000 revenues 6 7,500 NDPC flaring task force to submit Completed first RockPile completed 4,287 operated well May 2012 first well August 2012 4,000 2,714 4 recommendations to NDIC in January 2,098 696 1,120 1,389 2,000 2 616 Net Sales Volumes (Boepd) Volumes Net Sales Wardner on the interim 0 0 Q4 FY'12 Q1 FY'13 Q2 FY'13 Q3 FY'13 Q4 FY'13 Q1 FY'14 Q2 FY'14 Q3 FY'14 Q4 FY'14E Exit Revised (3) Actual Production Guidance Low Case Guidance High Case Avg. Rig Count

A look at North Dakota O&G-related PROVED RESERVES (MBOE) OPERATED VS. NON-OPERATED VOLUMES legislative issues midway between sessions 5 Taking one step back, two steps forward Bullish CBR perspectives Triangle petroleum focusing on both production Railroads confident about long-term crude-by-rail service to coastal markets and building infrastructure as output continues upward amid a North Dakota winter ND operators increasing well densities to even higher levels 6 Saskatchewan tops Crescent Point capex TransCanada begins filling Calgary-based independent sets 2014 spending XL southern leg as prep for startup at C$1.7 billion with C$781 earmarked for Viewfield Bakken and Flat Lake plays With a spotlight on flaring, 11 Conoco betting on unconventionals operators request more exemptions 13 Marathon to boost Bakken rig activity by 20% BAKKEN STATS DRILLING & COMPLETION 7 Commentary: Statoil hits 14th top IP well in 22 weeks 3 Continental leading spacing unit apps 7 Montana well permits and completions, Nov. 29-Dec. 5 December spacing unit applications extend 7 Bakken producers’ stock prices from the Canadian border down to the South 8 IPs for ND Bakken wells. Dec. 3-Dec. 9 Dakota border in western North Dakota SIDEBAR, Page 8: Top 10 Bakken wells by IP rate 8 North Dakota oil permit activity, Dec. 3-Dec. 9 EXPLORATION 13 ND gas exploration moving east 9 North Dakota well operator transfers, Nov. 9-Dec. 6 COMPANY UPDATE NATURAL GAS 4 Abraxas plans to redeploy Texas assets 11 Tribes seek own solutions to flaring Reservation forms task force to streamline permitting, $73M sale agreed for WyCross Eagle Ford interests; also seeking funds for bridge project proceeds earmarked for Bakken and other to transport gas across Lake Sakakawea Eagle Ford lease blocks

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l DRILLING & COMPLETION Continental leading spacing unit apps December spacing unit applications extend from the Canadian border down to the South Dakota border in western North Dakota

By MIKE ELLERD 1,280-acre units in five separate fields in which lies in northeast Dunn County but Divide County apps Dunn, McKenzie and Williams counties. a portion extends into McLean County Petroleum News Bakken To the north, Tulsa, Okla.-based Hess is also seeking authorization to drill under Lake Sakakawea. SHD wants to Samson Resources filed an application one or more horizontal wells on each drill up to 14 wells on that unit. ot only is the state’s largest oil pro- for the creation of two overlapping 2,560- spacing unit. In a separate application, SHD wants Nducer actively increasing well den- acre spacing units in the Ambrose field in sities on existing spacing units in North In the Cherry Creek field in Central one 1,280-acre unit and three 2,080-acre northern Divide County along the Dakota (see story on page 1), but McKenzie County, Hess asks that the units created in the Heart Butte field Canadian border. Samson is also seeking Continental Resources is also looking for commission create two 2,560-acre units and/or the Deep Water Creek field, which permission to drill one well on or near the numerous new spacing units for drilling in the Cherry Creek field in central borders the Heart Butte field to the east in section line between the 640-acre and even more Bakken petroleum system McKenzie County. Another of the 2,560- McLean County. SHD is also seeking 1,280-acre units that comprise each wells. Continental submitted applications acre units Hess is requesting is in the authorization to drill up to eight wells on requested 2,560. that the North Dakota Industrial Little Knife field, a large field that runs the 2,080s and on one of the 1,280s and SM Energy wants one overlapping Commission will consider during its along the western boundary of Dunn up to nine wells on the other 2,080. SHD 2,560-acre unit created in the Ambrose monthly hearings on Dec. 18 and 19 County with portions extending into also wants the commission to create a field in northern Divide County near the requesting the commission create one McKenzie and Billings counties. The 1,920-acre unit in the Deep Water Creek Canadian Border, and permission to drill new 1,280-acre spacing unit and 13 over- fourth 2,560 Hess is proposing traverses field and authorize multiple wells on the one well on that unit. lapping 2,560-acre units in McKenzie, the Little Knife and Big Gulch fields, the unit. Mountrail and Williams counties. latter lying in far northwest Dunn County. OXY USA filed applications asking Other Bakken pool apps The 1,280-acre unit Continental wants Hess wants to drill one or more horizon- for the creation of six 640-acre units and the commission to create would be in the tal wells on each of these units. one 160-acre unit. The 640s are in the Oasis Petroleum seeks the creation of Last Chance and/or Crazy Man fields in Also in Dunn County Hess wants a Cabernet, Murphy Creek and Willmen four overlapping 2,560-acre units, two in south-central Williams County. 1,280-acre unit created in the Bear Creek fields in western and central Dunn the Gros Ventre field in southwest Burke Continental is also seeking authorization and Cedar Coulee fields in the northwest County. OXY wants to drill up to three County, and two in the Baker field, most to drill up to 14 wells on that 1,280. region of the county where it wants to wells on the two Cabernet field units and of which lies in northwest McKenzie In one of the overlapping 2,560-acre drill one or more wells. Hess is also ask- two wells in each of the Murphy Creek county with a portion extending north units in the Sanish field just north of the ing that the commission create a 1,280- and Willmen units. The 160-acre unit is in under Lake Sakakawea into southern peninsula in southwest Mountrail, acre unit in the Tioga field in northwest the Cabernet field where OXY wants to Williams County. Oasis is also asking Continental wants to drill “multiple” Mountrail County and northeastern recomplete an inactive middle Bakken permission to drill one or more wells on wells from a single pad. On all of the 12 Williams County. In that unit, Hess wants well in the Madison formation. see SPACING APPS page 13 remaining 2,560-acre units, it wants authorization to drill up to three wells. authorization to drill one horizontal well on or near the section line on each unit. Other Dunn area activity 7KH0267UHTXHVWHGEODVWDEUDVLYHLQWKH%DNNHQ Six of those proposed 2,560s are in the In addition to Hess, a number of other Š Elm Tree field most of which lies in far operators are focusing on the Dunn %ODFN0DJLF  northeast McKenzie County, but a por- County area. WPX Energy filed applica- ³7KH728*+6WXII´&RDO6ODJ tion extends into Mountrail County under tions asking the commission to create a ‡‡‡ FRXUVHPHGLXP¿QHH[WUD¿QH Lake Sakakawea. Three other 2,560s are total of five overlapping 2,560-acre units in the Antelope field in northeast :HDOVRVXSSO\ in four neighboring fields in northeast 6WDUEODVW70‡6DQG‡*DUQHW‡6WHHO6KRW *ULW‡6SHFLDO2UGHUV McKenzie County; two are in the Alkali Dunn and southwest Mountrail counties. Creek field, most of which is in southwest WPX is also seeking authorization to drill Mountrail County with portions extend- up to five wells on or near the section ing into McKenzie and Williams coun- lines between the 1,280s that comprise :HDUHQRZ1RUWK'DNRWD¶VRI¿FLDOGLVWULEXWRURI ties; and one is in the Antelope and/or the new 2,560s. Two of the proposed Elm Tree fields. 2,560-acre units are in the Mandaree field, one is in the Reunion Bay field, one %ODVW(TXLSPHQW 3DUWV Hess Corp. apps is in the Squaw Creek field and one is in Continental isn’t the only North the Spotted Horn field. 25'(572'$<

Dakota operator looking for additional SHD Oil and Gas is asking the com- 7KH%DNNHQ spacing units. The state’s second largest mission create six separate spacing units oil producer, Hess Corp., submitted of varying size in Dunn and McLean applications seeking creation of four counties. SHD is asking for a 3,840-acre 3LAG"LASTING0RODUCTSs!N%MPLOYEE/WNED#OMPANY overlapping 2,560-acre units and two unit in the Heart Butte field, most of ) %XIT SOUTHMILESs'LEN5LLIN .$s  sWWWABRASIVESINCCOM 5' )DVWHVW&RDWLQJLQWKH

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One of thousands of projects using Polyguard RD-6 non-shielding coating. Our first was in 1988. 3KRQH   ZZZ3RO\JXDUG3URGXFWVFRP 4 PETROLEUM NEWS BAKKEN • WEEK OF DECEMBER 15, 2013

l COMPANY UPDATE Abraxas plans to redeploy Texas assets

$73M sale agreed for WyCross Eagle Ford interests; proceeds earmarked for Bakken and other Eagle Ford lease blocks

BY STEVE SUTHERLIN approximately 1,200 net acres, 3.7 mil- For Petroleum News Bakken lion barrels of proved reserves — 2.8 million barrels of oil, 3 billion cubic feet braxas Petroleum Corp. said it has of gas and 0.5 million barrels of natural Aexecuted a definitive agreement to gas liquids. sell its Eagle Ford interests at WyCross in WyCross produced 655 boepd — 597 McMullen County, Texas, for $73 mil- barrels of oil per day, 154 million cubic lion. The buyer is undisclosed. feet of gas per day and 32 barrels of Abraxas said it plans to use the pro- NGLs per day net to Abraxas during the ceeds to immediately pay down the com- month of September. pany’s bank line — ultimately to be rede- “Abraxas continues to focus the com- ployed into additional operated lease pany’s portfolio on high quality, operated blocks in the Eagle Ford and Bakken. assets with a high working interest,” Abraxas will net $99.5 million on Watson said. “Although the WyCross Eagle Ford divestment, including dissolu- properties were certainly of the highest tion of its Abraxas/Blue Eagle joint ven- quality, they carried a low working inter- ture for net proceeds of $7.7 million, net est and are now non-operated.” proceeds to Abraxas on its Nordheim The company intends to make acquisi- monetization of $18.8 million, and the tions in the Eagle Ford. WyCross monetization of $73 million. “We continue to identify additional “Upon the closing of WyCross, lease blocks available in our targeted Abraxas will have received approximate- regions of the Eagle Ford and expect to ly $99.5 million in asset sale and dissolu- be in a position to announce additional tion proceeds from the Eagle Ford since Eagle Ford acreage acquisitions in the originally contributing 8,333 net Eagle near future,” he said. Ford acres to the Blue Eagle Joint Venture “Specifically on Abraxas’ Atascosa in August 2010,” said Bob Watson, presi- County acreage, the company recently dent and CEO of Abraxas. “Furthermore, turned to sales an Eagle Ford test in the from that original Joint Venture the com- Blue Eyes 1H (100% working interest), pany still maintains a 100 percent work- which was completed with a 22 stage ing interest in 4,115 net acres and 50 bar- fracture stimulation,” he said. “Abraxas rels of oil per day at its Jourdanton continues to operate one rig in the Eagle Petroleum News Bakken looking for writers prospect in Atascosa County, a 100 per- Ford and recently spudded the Dutch 2H cent working interest in 1,908 net acres at (100% working interest) in McMullen Prefer experienced reporters, but oil industry knowledge also valued. its Yoakum prospect in Dewitt County County. Contact Kay Cashman at [email protected] or 907.561.7517 and the entirety of its original Edwards “Heading forward, it is the company’s production and reserves at both intention to more aggressively develop Nordheim and Yoakum. This clearly was a these assets and add additional opportu- tremendous deal for our shareholders.” nities while maintaining its financial dis- www.PetroleumNewsBakken.com “Abraxas currently has approximately cipline by staying in a long term targeted $95 million drawn on its $147 million debt/EBITDA range of 1.25-1.75,” he Kay Cashman PUBLISHER & EXECUTIVE EDITOR ADDRESS revolver,” he said. “With the downward said. “Abraxas looks forward to updating Mike Ellerd EDITOR-IN-CHIEF P.O. Box 231647 revision to the company’s borrowing base the market on its 2014 production growth Anchorage, AK 99523-1647 from the sale of WyCross expected to be and CAPEX plans post the closing of the Ray Tyson CONTRIBUTING WRITER minimal, upon closing the company will WyCross transaction.” Gary Park CONTRIBUTING WRITER (CANADA) be in a unique position of being substan- The sale is subject to customary clos- NEWS Eric Lidji CONTRIBUTING WRITER tially delivered and on the cusp of a sig- ing conditions and purchase price adjust- MIKE ELLERD Rose Ragsdale CONTRIBUTING WRITER nificant cash flow and production ramp ments and reflects an effective date of 406.551.0815 from the company’s Bakken and other Dec. 1, 2013, the company said. Closing Steve Sutherlin CONTRIBUTING WRITER [email protected] Eagle Ford assets.” is scheduled for December 2013. l Darryl Flowers CONTRIBUTING WRITER Maxine Herr CONTRIBUTING WRITER CIRCULATION Eagle Ford restructuring Janelle Steger Combs LEGAL COLUMNIST 907.522.9469 The assets to be sold consist of Mary Mack CEO & GENERAL MANAGER [email protected] Raylene Combs BAKKEN ADVERTISING EXECUTIVE Ashley Lindly RESEARCH ASSOCIATE ADVERTISING 907.522.9469 Mark Cashman RESEARCH ASSOCIATE What's the big attraction? [email protected] Susan Crane ADVERTISING DIRECTOR Bonnie Yonker AK / NATL ADVERTISING SPECIALIST FAX NUMBER Steven Merritt PRODUCTION DIRECTOR 907.522.9583 A. an industry institution

p Vol. 1, No. 25 • age Baytex prim www.Petro ary work in T SPECIAL PUBLICATIONS DIRECTOR leumNewsBa hree Marti Reeve kken.com 6 Fork s; des A w pite sale set record eekly newspape r for industry a C.P. a nd government waits SK’ M B. quality, accurate reporting s f arch 2 irst unit P R 4, 2013 in 20 yrs O D U C T I ON Tom Kearney ADVERTISING DESIGN MANAGER ND rig co Hit 188 unt up rigs March 15; oil output should C. attractive, readable design exceed 850,000 BY MIKE ELLERD bopd in 2015 For Petroleum News Bakken has been i ncreasing in h March. ile harsh win ter weather s The r BOOKKEEPER & CIRCULATION MANAGER WNorth Dakota macked ecord high r Heather Yates p in January, ca cou ig erce usin nt is nt drop in its g a 4.2 218 which was s daily oil pro numb the tate’s drilling duction, the er of rigs oper rig count has ating in upwards. As of been inching North Dakota o D. 93 percent market saturation March 15 n May 29, ing in th , 188 rigs were op 2012. e state. North erat- L Dakota’s top ynn Helms, sa oil official, In February, ys if the rig co the North that level, p unt stays arou Dakota O roduction shou nd il and Ga barrels ld exceed the 8 LYNN HELMS Divis s of oil per day 50,000 ion issued th projected by th dr 185 e biennium. e state for fro illing permi CIRCULATION SALES m the 218 that ts, down Renee Garbutt North Dak were issued in ota’s from Janua rig count in F the 154 that w ry but up 183, down two ebruary was ere issued in D from the 185 rig The recor ecember. ating in J s that were o d high number anuary and d per- issued by of drilling per opera own one from the division mits ting in Decemb the 184 was the 370 er. However, issued in the rig count M O VI N G H Y D R O se Several of the individuals CAR B O N e COUNT page 16 Shane Lasley IT CHIEF Rail ruffles Cresc ent Point Ene Sas rgy is eag pipeliner katchew erly aw TC exe an governme aiting a dec c: rail h in 20 yea nt to allow th ision by the as ‘very im listed above are rs, opening th e province’s f portant r singl e door for irst “unitiza ole’ in m e operating u multiple owner tion” oving oil, op nits, requirin s in pools t but dirtier erating costs g each to co o create BY GARY , more dan , while sharin ntribute to c PARK gerous Based on its g in the pro apital and Capital/S To advertise in Petroleum News Bakken initial s fits bas For Petr ocie mor uccess, the m ed on their s oleum News Ba te Genera e two-mile ho id-range prod takes. kken le that althou co rizontal wells ucer plans to fill a “very gh rail can mpleted, and this year, on drill six important role is confident top of the fo he incr ,” there cost of simila they can be ur already easing talk “pre are some r wells drilled drilled for ab that rail c tty simple fa RESEARCH ASSOCIATE across the bo out half the provide an cts” to cons rder in T a larg ider. independent contractors Nort er, “ Dee Cashman h D mo For akota. altern re durable every mile ative to pipe you move a barre lines for shipp of oil by rail, l crude shows s ing you emit three Crescent extend igns of rufflin greenhou times the feathers. g some se gases than s horizon usin you do by For Cre s Alex g a pipeline and scent Point Ene Pourbaix, pre you have an ord innov rgy, recognized a sident of ener of magnitude er ative players in as one of the nd oil pipeline gy higher risk o call Susan Crane at 907-770-5592, Bonnie B mo s f ha un akken-type pla st with TransCana some sort o ving locking the val ys, one of the told a New da, f incident, leak ue of its Canad keys to York conf “Fr or spill. combination ian resource a February erence in om that perspe of waterflood ssets lies in a he did not wa p ctive, I make the The m ing and unitizat “s nt to be seen a oint that if you id-range pro ion. lagging” rail, s ’re actually co s ducer is now e then proceed about the en ncerned ion by the agerly awaitin embark on ed to ALEX PO vironment, Saskatchewan g a deci- a short, sharp c URBAIX mov for long-haul province’s government servic ritique of the ement of oil, y first “unitizatio to allow tha e. ou very much for m n” in 20 yea t to see that oil want ultiple owners rs, opening the He told the e move by pipelin OWNER: Petroleum Newspapers of Alaska LLC (PNA) in pools to crea door vent sponsored Pourbaix noted th e.” requiring te single o by FirstE at the U each to contrib perating units, nergy .S. Department while s ute to capital and of haring in the operating G O V E R N M Yonker at 425-483-9705, or Renee Garbutt profits costs, E N T se Neil based on their e PIPELINER page Smith, chief stakes. 12 operating offic optimistic tha er, said Cresce t government a nt Point is next six m pproval will occ onths for the first ur within the Gas Petroleum News Bakken • Vol. 2, No. 35 • Week of December 15, 2013 unit and wi ll flaring be followed by stuck Krings at 29% s tad di ee CRESCENT page ssects causes 13 ; solutions are com Is pression, loops, pi Apache pull BY MIKE ELLERD gging, incentive ing Fo s at 907-522-9469. out o Bakken f r Petroleum New fringe? s Bakken Bakken larin Hunter In a Feb. 1 g of natural ga pads 4 press confere s in North D ali its fourth nce to discuss FJanuary held ste akota in gn with quarter earnin ady at 29 perce Oneok resu gs and productio it has been for nt, right where pipe lts, Apache Co n the last three In a move th rp. Chairman a news is that fl months. The go at would elimi Executive Of nd Chief aring isn’t go od its Divid nate flaring in ficer G. Steve neithe ing up; the bad e County oper Published weekly. Address: 5441 Old Seward, #3, Anchorage, AK 99518 Apache n Farris said r is it going dow news is Hunter ations, Bak is in n. L ken the process In LC is reconfigu approxim of identifying the March Dire ord ring well pa ately $2 billio ctor’s Cut press er to perfectly ds in iz n in “asset rat North Dakota P conference, align them with ations to be co ional- ipeline Autho new gas gath Oneok’s mpleted in 201 Kringstad rity Director Ju ering pipelines so would not e 3,” but he looked at root stin be connec the wells can laborate on whe 29 causes for the ted to gas sale are; ju re those asse percent of natu flaring of prod s before they st that Apache is ts ral gas produce uction. go into looking to se The press con d in the state. (Please mail ALL correspondence to: P.O. Box 231647 Anchorage, AK 99523-1647) Speculation h ll them this yea ference is held In Februa a r b ry s begun about . Industrial y the North Da , Bakken Hun the 300,000-p Commission, kota of Magn ter, a subsidiary Subscribe at: lus net acres Reso Department of um Hunter, su urces, Oil and Mineral to bmitted applic Gas Division and the North Dako ations s authority. the pipeline ta Industrial C ee INSIDER page requesting 13 ommission 12 new 640-acre and 10 spacing units new 1,280-sp acing units in Subscription prices in U.S. — $98.00 1 year, $176.00 2 years • Canada — $185.95 1 year, $334.95 2 years see FLARING p the age 14 se e HUNTER page 15 Overseas (sent air mail) — $220.00 1 year, $396.00 2 years www.PetroleumNewsBakken.com POSTMASTER: Send address changes to Petroleum News, P.O. Box 231647 Anchorage, AK 99523-1647. PETROLEUM NEWS BAKKEN • WEEK OF DECEMBER 15, 2013 5

l COMPANY UPDATE Taking one step back, two steps forward Triangle petroleum focusing on both production and building infrastructure as output continues upward amid a North Dakota winter

By MAXINE HERR For Petroleum News Bakken SIGNIFICANT OPERATED PRODUCTION AND RESERVES GROWTH NET SOLD PRODUCTION VOLUMES (BOEPD) enver-based independent Triangle 10,000 FY2014 Avg. Daily Production Guidance(1) 10 Petroleum continues to see produc- 4,750 5,350 Boepd Consensus estimated D Ȯ average of ~6,600 Boepd(2) 8,500 tion exceed expectations with third quarter 8,000 8 Count RigOperated results ending Oct. 31 of 7,400 barrels of 6,804 oil equivalent per day based on a 21-day Caliber generates first 6,000 revenues 6 average, up from 6,500 barrels last quarter. 7,500 The Bakken-focused company is on track Completed first RockPile completed 4,287 operated well May 2012 first well August 2012 to meet its revised production guidance 4,000 2,714 4 estimate of 7,500 to 8,500 boepd by their 2,098 696 1,120 1,389 2,000 2 fiscal year end on Jan. 31, 2014. They have 616 46 gross operated wells currently produc- (Boepd) Volumes Net Sales ing and five wells awaiting completion. 0 0 In a Dec. 10 conference call with ana- Q4 FY'12 Q1 FY'13 Q2 FY'13 Q3 FY'13 Q4 FY'13 Q1 FY'14 Q2 FY'14 Q3 FY'14 Q4 FY'14E Exit (3) lysts, Triangle Petroleum President and Revised CEO Jonathan Samuels said completion Actual Production Guidance Low Case Guidance High Case Avg. Rig Count techniques are improving causing an PROVED RESERVES (MBOE) OPERATED VS. NON-OPERATED VOLUMES increase in productivity per rig. 40,000 “Our wells are getting a lot better,” 32,529 100% Samuels said. “We reduced the gel pumped 35,000 (46% PDP) 22% 31% 30% 35% into our wells by 50 percent by utilizing 30,000 80% 45% 22,080 64% slick water flushes, which results in less gel 25,000 (45% PDP) 60% damage in the formation and a lower cost.” 20,000 16,050 14,637 (41% PDP) 100% (45% PDP) The company also increased pump rates 15,000 40% 78% 8,278 69% 70% 7,044 65% to 30 barrels per minute from the previous (38% PDP) 55% 10,000 (30% PDP) 20% 36% 24 barrels per minute, and is currently 5,000 1,477 2,000 (17% PDP) (39% PDP) working on two separate liner tests to 0 0% increase isolation between perforation clus- Q4 FY'12 Q1 FY'13 Q2 FY'13 Q3 FY'13 Q4 FY'13 Q1 FY'14 Q2 FY'14 Q3 FY'14 Q1 FY'13 Q2 FY'13 Q3 FY'13 Q4 FY'13 Q1 FY'14 Q2 FY'14 Q3 FY'14 ters within individual stages. PDP Reserves PUD Reserves Operated Volumes Non-Operated Volumes “One of the big things we’re trying right (1) Revised FY2014 production guidance issued on August 6, 2013. Previous guidance (FY2014 Daily Production Guidance 3,600 Ȯ 4,000 Boepd) issued on now is a cemented liner and we’re literally March 4, 2013. flowing back, and have been for seven days 8 (2) Average Bloomberg Consensus estimate as of December 6, 2013. (3) ŽŸ’œŽȱŚȱȂŗŚȱŽ¡’ȱ›ŠŽȱž’Š—ŒŽȱ’œœžŽȱ˜—ȱŽŒŽ–‹Ž›ȱşǰȱŘŖŗřǯȱ›ŽŸ’˜žœȱŚȱȂŗŚȱŽ¡’ȱ›ŠŽȱž’Š—ŒŽȱǻŝǰŖŖŖȱȮ 8,000 Boepd) issued on August 6. on that first test,” Samuels said. “Directionally, our well performance is get- ting much better than it was a year ago, and But that’s life in the Williston Basin.” we’re spending less. So I’m really attacking “If we were running this business Simultaneous operations that both sides.” for profitability of this quarter, it More wells to come allowed wells to remain online as would be a very different outcome. Simultaneous operations that allowed drilling and completion operations One step back, two steps forward But we’re building the wells to remain online as drilling and com- proceed have achieved incremental Triangle’s third quarter overhead costs infrastructure and the people to pletion operations proceed have achieved production of approximately 550 skewed profit numbers a bit, but Samuels where we think it’s going to be incremental production of approximately boepd in the third quarter. said the numbers hide what is a very posi- next year, which is double where it 550 boepd in the third quarter. tive trend in the business. Samuels contributes that production to a is now.” With the vast majority of the company’s “It’s going to be one step back, two steps tweak in design, another example of how 1,280-acre spacing units consisting of only forward, over and over again,” he said. “If —Jonathan Samuels, Triangle Petroleum the industry is continually learning about one or two wells, Samuels said it’s still we were running this business for prof- president and CEO well spacing but the company remains cau- early in the game. itability of this quarter, it would be a very tious. “I think we’re in the second or third different outcome. But we’re building the “As each month goes by, our inventory “The Williston Basin remains a top inning, if you compare it to a baseball infrastructure and the people to where we increases even though we’re drilling wells,” place to operate, but the temperature is game,” he said. “With the completion think it’s going to be next year, which is Samuels said. “We realized we have a lot something like negative 20 degrees right designs pioneered a couple years ago, double where it is now.” more wells than we thought a month ago or now,” Samuels said. “It’s tougher to do any- we’re really only three or four years into it. With a fourth quarter that falls during two months ago. So it continues to be on thing. It’s slower out there and we also want Our internal view is this is going to be North Dakota’s winter weather months, and trend with what you’re hearing from pretty people to be safe. You’ve got to slow down, much more over time, although there are a third fracturing spread to begin by March much everyone in the basin consistently drive slower, everything slows down. So I going to be bumps in the road.” l or April 2014, Samuels cautions that the don’t think that changes our financial guid- now, which is they’re going to get a lot of seasonality of the business may affect ance for the quarter or the year end, or gives wells in the 1,280 when you go out 10, 20 short-term future numbers. us any concern about hitting our exit rate. years.”

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Contact Donn Lentz: T: +1 701 223 6998 | M: +1 316 371 5211 [email protected] (800) 726-5300 PPAACIFICTORQUE.COM For a complete list of services, [email protected] visit environcorp.com DRIVEN TO PERFORM 6 PETROLEUM NEWS BAKKEN • WEEK OF DECEMBER 15, 2013 l COMPANY UPDATE Saskatchewan tops Crescent Point capex Calgary-based independent sets 2014 spending at C$1.7 billion with C$781 earmarked for Viewfield Bakken and Flat Lake plays

By GARY PARK For Petroleum News Bakken askatchewan’s Viewfield Bakken and %$..(16+$81$921 8,17$ SShaunavon resource plays will capture the bulk of Crescent Point Energy’s capital spending in 2014 as the company chases %$6,1&$3,7$/)2&86 an exit production rate for the year of 135,000 barrels of oil equivalent per day, up 8,500 boe per day from this year. &DSLWDO%XGJHW 1HW&DSLWDO 00  1HW:HOOV The company expects to spend C$1.7 'ULOOLQJFRPSOHWLRQVDQGSURGXFWLRQRSWLPL]DWLRQ billion overall, consistent with its five-year growth models, with 81 percent or C$1.42 9LHZILHOG%DNNHQ )ODW/DNH   billion allocated to drilling and comple- 6KDXQDYRQ   tions and the rest to infrastructure, unde- veloped land and seismic across core 8LQWD%DVLQ   areas. 2WKHU   “Through the development of our 7RWDOGULOOLQJFRPSOHWLRQVDQGSURGXFWLRQRSWLPL]DWLRQ   low-risk asset base, continued )DFLOLWLHVODQGDQGVHLVPLF   technology advancements and the 7RWDO   expansion of our waterflood programs, we expect to see strong ‡ &RQYHUWLQJ9LHZILHOG%DNNHQSURGXFLQJZHOOVWRZDWHULQMHFWLRQZHOOV organic growth in 2014.” —Crescent Point Energy CEO Scott Saxberg ‡ :DWHUIORRGFXUUHQWO\DIIHFWLQJDSSUR[LPDWHO\ERHGZLWKLQMHFWLRQZHOOV ‡ &RQYHUWLQJ6KDXQDYRQKRUL]RQWDOZHOOVWRZDWHULQMHFWLRQZHOOV Crescent Point said it expects to spend C$781 million on 215 net wells in the ‡ 0RUHWKDQGRXEOLQJWKHQXPEHURI6KDXQDYRQKRUL]RQWDOZDWHULQMHFWLRQZHOOV Viewfield Bakken and 48 net wells in the ‡ 8LQWD%DVLQZDWHUIORRGDSSURYDOUHFHLYHGLQ4 Flat Lake play of southeastern Saskatchewan. ‡ :DWHULQMHFWLRQDQWLFLSDWHGWRVWDUWLQHDUO\ The plans will see the conversion of 30 producing wells to water injection in the Viewfield Bakken, along with continued &5(6&(1732,17‡&25325$7(35(6(17$7,21‡'(&(0%(5  investment in infrastructure projects to accommodate sustained growth of its The company said it plans to invest in many as 59 net wells. over the past two years. Bakken production. substantial long-term infrastructure proj- The remaining C$245 million of capital “Through the development of our low- For the Shaunavon area of southwestern ects, including commissioning of two oil development spending will go to its other risk asset base, continued technology Saskatchewan, Crescent Point has ear- storage tanks with 120,000 barrels of com- properties in Alberta, Saskatchewan, advancements and the expansion of our marked C$422 million for a program that bined total storage and building a new, Manitoba and North Dakota. waterflood programs, we expect to see includes 142 net wells, targeting both the large battery in the first waterflood unit. Cash flow from operations is projected strong organic growth in 2014,” he said. Lower Shaunavon and Upper Shaunavon The Uinta Basin light oil resource play at C$2.1 billion based on forecast pricing One of the advancements is the applica- plays in northeast Utah is budgeted for C$172 of US$95 per West Texas Intermediate bar- tion of cemented liner completion tech- Following regulatory approval this year million, including about 53 net wells, and rel and C$3.25 per thousand cubic feet of niques which have resulted in production of the company’s first waterflood unit and plans for a waterflood program in the AECO natural gas. growth in the Viewfield Bakken and the expectation of approval for a second Randlett area of the basin. Chief Executive Officer Scott Saxberg Shaunavon, allowing Crescent Point to unit next year, Crescent Point plans to In the Swan Hills Beaverhill Lake and said the objective for 2014 is to continue reduce water consumption by 45 percent. l expand its waterflood activities in the Viking light oil resource plays of Alberta, testing and refining the technologies that Shaunavon area by converting 23 horizon- Crescent Point has allocated C$130 mil- have been developed since 2008 and that tal producing wells to water injection. lion of total spending, including drilling as have driven organic production growth

page Senate majority leader weighs in on 6 North Dakota oil, gas legislation

Vol. 1, No. 21 • www.PetroleumNewsBakken.com A semi-monthly newspaper for industry and government February 17, 2013

COMPANY UPDATE Crude on rails in for long haul WLL gets bum rap James. T. Brown: Whiting Petroleum is not running out of drilling inventory

ticularly acute when it comes to finding VERN WHITTEN PHOTOGRAPHY By RAY TYSON Petroleum News Bakken new targets in Whiting’s flagship Sanish field in North Dakota’s Williston Basin, enver-based E&P independent which accounts for around 30,000 barrels DWhiting Petroleum Corp. is finding per day, or nearly 40 percent of the compa- it difficult convincing investors that the ny’s roughly 80,000 barrels per day of pro- company is not running out of suitable duction. Plains All American’s Manitou crude oil and NGL rail facility near places to drill. By the end of 2012, a total of about 300 Ross, west of Stanley in Mountrail County, North Dakota. Photo taken this winter by Vern Whitten. See rail story below. “The knock against Whiting is that you production wells had been drilled in the guys don’t have any inventory and in three JAMES T. BROWN Sanish field, with at least another 200 to be years you’re going to be done,” James T. drilled and completed. Rail will survive pipeline additions Brown, Whiting’s president and chief operating offi- “It seems that when we get to the end of every The need for rail to move crude from cer, told industry analysts Feb. 6 at the Credit Suisse year, we have two-and-half to three years of drilling Midcontinent fields will likely persist, 2013 Energy Summit in Vail, Colo. even if plans for expanding pipeline The lack-of-inventory perception seems to be par- see WHITING INVENTORY page 18 links from the Bakken to the Gulf Coast go ahead, EOG Resources Chief LAND & LEASING Executive Officer Mark Papa told a Colorado conference. He said rail will still be used five years from now to deliver Bakken crude Riverbed draws top bids to all three Lower 48 coasts — the Gulf, MARK PAPA East and West — but expects the cur- QEP Energy high bidder on 22 Missouri River leases; shore zone included rent advantage of Louisiana Light Sweet, LLS, crude prices third or 9,900 acres were in in the Houston market will probably change within 18 By MIKE ELLERD For Petroleum News Bakken 106 Missouri riverbed tracts in see RAIL SURVIVAL page 24 Dunn County and those tracts total of 27,370 acres brought in a total $21,227,455, Bakken threatens Alberta upgrader A were leased in 306 tracts a sum that accounted for more in nine western North Dakota than 86 percent of the gross The Bakken might be about to register a friendly-fire vic- counties in the Feb. 5 North auction proceeds. tim — a C$11.6 billion Suncor Energy upgrader to convert oil Dakota Department of Trust The Dunn County lease sands bitumen into synthetic crude for refining into fuels. Lands oil and gas lease auction activity was, in turn, dominat- Suncor, with France’s Total as a 49 percent partner, expects bringing in a total of LANCE GAEBE DREW COMBS ed by 22 Missouri riverbed to decide no later than March 31 on the immediate fate of its $24,609,206 at an average tracts totaling 1,465 acres that Voyageur project, which has been in a holding pattern for the price of $899 per acre. The auction was dominated by fetched a total of $16,536,197 at an average price of last four years, putting an end to its original startup date of tracts between the former high water marks on the $11,291 per acre, all purchased by Denver-based 2016. two banks of the Missouri River under Lake QEP Energy Co. Since taking control of the oil sands giant nine months Sakakawea in Dunn County. ago, Suncor Chief Executive Officer Steve Williams has Of the 27,370 acres leased, slightly less than one- see ND LEASE AUCTION page 21 increasingly hinted that economic challenges could be the undoing of Voyageur. ASSOCIATIONS His explanation has been delivered in clear-cut terms. see ALBERTA UPGRADER page 24 Galt: MPA ever vigilant Helms slams U.S. Fish & Wildlife Montana Petroleum Association chief keeps tabs on several bills during session Two new slides have appeared in Lynn Helms’ presentation packet — By MIKE ELLERD temporary leasing of water rights, financial slides with information that he thinks For Petroleum News Bakken relief to oil and gas-impacted communities, indicate an attempt by and carbon sequestration and enhanced oil the U.S. Fish & Wildlife umerous oil and gas-related bills recovery using carbon dioxide. Service to take over oil Nhave been introduced thus far in the and gas permitting in 63rd session of the Montana legislature Property rights: surface North Dakota. currently in session in Helena, and while damage compensation One is a map backing up his agency’s Montana Petroleum Association Executive House Bill 431, introduced by Rep. recent analysis that shows 83 percent of Director Dave Galt follows all of them LYNN HELMS Austin Knudsen of Culbertson, is a surface North Dakota’s oil and gas spacing units closely, he recently spoke with Petroleum DAVE GALT damage compensation bill that would add have some federal land ownership, surface and/or minerals. News Bakken and discussed those that he to the existing oil and gas surface damage Helms, director of the North Dakota Industrial thinks are most important to his membership. and disruption compensation statue the definition of Commission’s Department of Minerals, Oil and Gas Division, The key bills Galt identified fall into a variety of “lost land value” as “the value of the highest and best told North Dakota lawmakers in January, “It was really sur- categories. Some deal with compensation for reasonably available use, including the proposed use.” prising to me when we did this analysis to find out that 83 landowner surface damage, eminent domain and The bill would also require that the surface owner and forced pooling, all of which Galt lumps together into the oil and gas developer or operator attempt “in good see PERMITTING page 10 what he considers to be “property rights” legislation. Other bills that Galt considers key deal with taxation, see ENERGY LEGISLATION page 22 GET PROUDLY EXCEEDING OVER THE LATEST 1 BILLION BTU OF HEATING CAPACITY BAKKEN NEWS Frac Tank Heating • Water Pit Heating • Heat On-The-Fly® SUBSCRIBE TODAY!

THE LEADER IN FRAC FLUIDS HEATING® 1 888 WE HEAT 24/7 • McAdaFluidsHeating.com 907-522-9469 PETROLEUMNEWSBAKKEN.COM PETROLEUM NEWS BAKKEN • WEEK OF DECEMBER 15, 2013 7 BAKKENStats Montana well permits and completions November 29—December 5, 2013 Abbreviations & parameters BAKKEN STATS COMMENTARY With a few exceptions, the Montana weekly oil activity report includes horizontal well activity in the Bakken petroleum system in the eastern/northeastern part of the state within the Williston Basin. It also includes the Heath play and what is referred to as the South Alberta Bakken fairway in northwest- Statoil hits 14th top IP well in 22 weeks ern/west-central Montana, which is at least 175 miles long (north-south) and 50 miles wide (east-west), extending from southern Alberta, where the formation is generally referred to as the Exshaw, south- For the 22nd time in 24 weeks, Statoil Oil and Gas has wells on the weekly Top wards through Montana’s Glacier, Toole, Pondera, Teton and Lewis & Clark counties. The Southern 10 IP list for North Dakota, and for the 14th time in that 24-week period Statoil Alberta Bakken, under evaluation by several oil companies, is not part of the Williston Basin. has topped the list. The company’s Jake 2-11 6H middle Bakken well in the Last Following are the abbreviations used in the report and what they mean. Chance field in far southern Williams County had a 24-hour initial production, IP, BHL: bottomhole location | BOPD: barrels of oil per day | BWPD: barrels of water per day rate of 3,315 barrels per day. Statoil’s neighboring Jake 2-11 5TFH Three Forks IP: initial production | MCFPD: thousand cubic feet per day | PBHL: probable bottomhole location well had the sixth highest 24-hour IP for the week at 2,430 bpd. PD: proposed depth | SHL: surface hole location | TD: total depth At number two, Oasis Petroleum made the Top 10 IP list for the third straight week with its State Wolf 16-21H middle Bakken well in the Foreman Butte field And public land survey system abbreviations: in west-central McKenzie County. That well, a former Zenergy well, had an IP of FNL = from north line | FEL = from east line | FSL = from south line | FWL = from west line 3,192 bpd. It was part of the 161,000 net-acre acquisition that Oasis announced in September. Oasis has made the Top 10 IP list in nine of the last 11 weeks, and has COMPILED BY DARRYL L. FLOWERS a completion report for the Haworth 17- topped the list in three of those weeks. ConocoPhillips subsidiary Burlington Resources Oil and Gas made the Top 10 For Petroleum News Bakken 8H-T, located at SE NE 18-36N-48E (2670 FSL/240 FEL). No IP numbers IP list for the 10th consecutive week with wells coming in third, fourth and fifth. were reported since the well is in the The company’s CCU Four Aces 44-21MBH well in the Corral Creek field in New locations process of being abandoned. The well north-central Dunn County had an IP of 2,992 bpd, and its Bryce 11-5MBH and In Sheridan County, TAQA North was permitted to the Three Forks forma- Bryce 34-8TFH wells in the Westberg field in northeast McKenzie County had USA Inc. has been approved to drill the tion. 24-hour IPs of 2,974 bpd and 2,895 bpd. CHC T34-R53 06-28, with an SHL at SE In Richland County, Continental Kodiak Oil and Gas has wells in the seventh and eighth spots on the list with NW 28-34N-53E (1820 FNL/1940 Resources Inc. filed completion reports its Smokey 2-17-5-2H middle Bakken and Smokey 2-17-5-2H3 Three Forks wells FWL). The well will target the Nisku for- for two Bakken formation wells. in the Pembroke field in east-central McKenzie County, which had IPs of 2,328 mation at a proposed depth of 8,566 feet. The Julie 3-3H has an SHL at SW SE bpd and 2,067 bpd. 3-23N-54E (180 FSL/2320 FEL) and The ninth and tenth highest IP wells for the week are Petro-Hunt’s Brenna 152- 96-14A-23-6H Three Forks and Wollan 152-96-27D-3H middle Bakken wells. Re-issued locations three laterals with BHLs of 14,886 feet at Those two wells, both in the Clear Creek field in northeast McKenzie, had IPs of In Richland County, a permit was re- NW NE 3-23N-54E (119 FNL/2283 1,895 bpd and 1,859 bpd. issued to Continental Resources Inc. for FEL); 15,457 feet at NW SE 34-24N-54E the Peck 1-30H, which has an SHL at NW (452 FSL/2291 FEL); and 20,045 feet at —MIKE ELLERD NE 30-27N-54E (180 FNL/1615 FEL) NW NE 34-24N-54E (240 FNL/2343 FEL). The reported IP was 257 BOPD, and a PBHL of 19,304 feet at SW SE 31- operated by Oasis Petroleum North Editor’s note: Darryl L. Flowers, a 123 MCFPD and 58 BWPD. 27N-54E (200 FSL/1980 FEL). The Peck America LLC, was located at SW SE 19- contributor to Petroleum News Bakken, is The Goss 3-35H has an SHL at SW SE targets the Bakken formation. 27N-58E (61 FSL/1632 FEL) and was the publisher of the Fairfield Sun Times In Wibaux County, a permit was re- 35-24N-54E (300 FSL/2500 FEL) and a permitted to the Bakken formation. The in Fairfield, Mont., www.fairfieldsun- issued to Petro-Hunt LLC for the Setera single lateral with a BHL of 19,930 feet at Nielson 31X-4, operated by XTO Energy times.com, and can be reached at pub- 12-59 13D-1-1. The Red River formation NW NE 26-24N-54E (216 FNL/2600 Inc., had an SHL at NW NE 4-29N-57E [email protected]. The infor- well has an SHL at NE SE 13-12N-59E FEL). The IP was 217 BOPD, 77 MCFPD (340 FNL/1710 FEL) and was permitted mation is derived from the online records (1810 FSL/800 FEL) and a proposed and 27 BWPD. to the Bakken formation. ● of the Montana Board of Oil & Gas depth of 10,800 feet. Conservation Commission. Expired permits Completions The permits for two wells in Roosevelt In Daniels County, Apache Corp. filed County expired. The Beta 2758 43-19H, Bakken producers’ stock prices Closing prices as of Dec. 11, along with those from previous Wednesday

Looking for a rig report? Company Exchange Symbol Closing price Previous Wed. Abraxas Petroleum Corporation NASDAQ AXAS $3.07 $3.71 North Dakota American Eagle Energy Corporation OTC AMZG $2.10 $2.46 The best list for North Dakota is updated daily by the North Dakota Oil and Gas Arsenal Energy USA, Inc. TSE AEI $5.28 $5.17 Division at www.dmr.nd.gov/oilgas/riglist.asp Baytex Energy USA Ltd NYSE BTE $39.37 $39.35 Burlington Resources Co., LP (ConocoPhillips) NYSE COP $69.11 $71.41 Continental Resources, Inc. NYSE CLR $101.45 $110.02 Saskatchewan Crescent Point Energy US Corporation TSE CPG $40.26 $40.36 Weekly drilling activity report from the government of Saskatchewan: Denbury Onshore, LLC NYSE DNR $16.04 $16.60 www.economy.gov.sk.ca/Daily-Well-Bulletin-Weekly-Drilling-Reports Emerald Oil, Inc. NYSEMKT EOX $6.61 $7.75 Enerplus Resources USA Corporation NYSE ERF $18.23 $18.54 Manitoba EOG Resources, Inc. NYSE EOG $156.26 $167.13 Weekly drilling activity report from the government of Manitoba: Fidelity Exploration & Production (MDU) NYSE MDU $28.55 $29.43 www.manitoba.ca/iem/petroleum/wwar/index.html GMX Resources, Inc. PINK GMXRQ $0.16 $0.12 Halcon Resources NYSE HK $3.85 $3.82 Hess Corporation NYSE HES $78.94 $82.21 Kodiak Oil and Gas (USA), Inc. NYSE KOG $10.55 $11.86 Legacy Reserves Operating LP NASDAQ LGCY $26.80 $27.28 Marathon Oil Company NYSE MRO $35.69 $36.74 Mountain Divide, LLC (Mountainview Energy) CVE MVW.V $0.46 $0.51 Newfield Production Company NYSE NFX $23.85 $28.39 Oasis Petroleum North America NYSE OAS $43.27 $45.90 Oxy USA, Inc. (Occidental Petroleum) NYSE OXY $91.54 $94.59 QEP Energy Company NYSE QEP $30.06 $32.17 Resolute Natural Resources Company, LLC NYSE REN $8.40 $8.63 Samson Resources Company (KKR & Co) NYSE KKR $24.20 $23.44 SM Energy Company NYSE SM $80.64 $91.49 Statoil Oil and Gas LP NYSE STO $22.76 $22.56 Triangle USA Petroleum Corporation NYSE TPLM $9.54 $10.92 Whiting Oil and Gas Corporation NYSE WILL $57.94 $61.23 WPX Energy Williston, LLC NYSE WPX $18.89 $18.52 XTO Energy, Inc. (ExxonMobil) NYSE XOM $94.26 $94.67 PHOTO COURTESY CONTINENTAL RESOURCES 8 PETROLEUM NEWS BAKKEN • WEEK OF DECEMBER 15, 2013 IPs for ND Bakken wells December 3—December 9, 2013

This chart contains initial production rates, or IPs, for active wells that were filed as completed with the state of North Dakota from Dec. 3-Dec. 9, 2013 in the Bakken petroleum system, which includes formations such as the Bakken and Three Forks. The completed wells that did not have an available IP LEGEND rate (N/A) likely haven’t been tested or were awarded confidential (tight-hole) status by the North Dakota Industrial Commission’s Department of The well operator’s name is on the upper line, followed by individual wells with Minerals. This chart also contains a section with active wells that were released from confidential status during the same period, Dec. 3-Dec. 9. Again, data in this order: NDIC file number; well name; field; location; spacing; county; some IP rates were not available (N/A). The information was assembled by Petroleum News Bakken from NDIC daily activity reports and other sources. geologic target; wellbore type; total depth; IP test date; IP oil flow rate. (IP stands The name of the well operator is as it appears in state records, with the loss of an occasional Inc., LLC or Corporation because of space limitations. for initial production; in this chart it’s the first 24 hours of oil production.) Some of the companies, or their Bakken petroleum system assets, have been acquired by others. In some of those cases, the current owner’s name is in parenthesis behind the owner of record, such as ExxonMobil in parenthesis behind XTO Energy. If the chart is missing current owner’s names, please contact Ashley Lindly at [email protected]

IPs for completed North Dakota wells 25511; P Evitt 154-98-13-12-1-3H3; Truax; SWSW 12-154N-98W; N/A; Top 10 Bakken wells by IP rate Williams; Bakken; horizontal; N/A; N/A; N/A Burlington Resources Oil and Gas (ConocoPhillips) 25563; P Evitt 154-98-13-12-24-14H3M; Truax; SWSW 12-154N-98W; 23735; Bryce 11-5MBH; Westberg; LOT4 5-152N-96W; 2SEC; McKenzie; Statoil Oil and Gas N/A; Williams; Bakken; horizontal; N/A; N/A; N/A Bakken; horizontal; 21,178; 11/19/2013; 2,974 bbl 24007; Jake 2-11 6H; Last Chance; Williams; 3,315 bbl 24900; Smokey 2-17-5-2H; Pembroke; NWNE 17-149N-98W; 2SEC; 23739; Bryce 34-8TFH; Westberg; SESW 8-152N-96W; 2SEC; McKenzie; McKenzie; Bakken; horizontal; 21,660; 9/30/2013; 2,328 bbl Bakken; horizontal; 21,525; 11/21/2013; 2,895 bbl Oasis Petroleum North America 24899; Smokey 2-17-5-2H3; Pembroke; NWNE 17-149N-98W; 2SEC; 24741; State Wolf 16-21H; Foreman Butte; McKenzie; 3,192 bbl McKenzie; Bakken; horizontal; 21,677; 10/1/2013; 2,067 bbl Hess 25352; BW-Spring Creek 149-99-1201H-3; Cherry Creek; NWNW 13- Burlington Resources Oil and Gas (ConocoPhillips) Marathon Oil 149N-99W; 2SEC; McKenzie; Bakken; horizontal; 21,442; 11/16/2013; 899 24982; CCU Four Aces 44-21MBH, Dunn; 2,992bbl 25487; Marland 41-14TFH; Reunion Bay; SESE 11-151N-93W; N/A; bbl 23735; Bryce 11-5MBH; Westberg; McKenzie; 2,974 bbl Mountrail; Bakken; horizontal; N/A; N/A; N/A 25028; EN-Sorenson A 154-94-0211H-6; Alkali Creek; SWSE 35-155N- 23739; Bryce 34-8TFH; Westberg; McKenzie; 2,895 bbl 94W; 2SE; Mountrail; Bakken; horizontal; 21,133; 11/21/2013 1,061 bbl Oasis Petroleum North America Statoil Oil and Gas 25465; Fairview Overlook 34-33HTF; Harding; LOT3 34-151N-104W; 2SEC; Oasis Petroleum 24008; Jake 2-11 5TFH; Last Chance; Williams; 2,430 bbl McKenzie; Bakken; horizontal; 19,461; 8/30/2013; 1,776 bbl 25340; Andrea 5502 44-7T; Squires; SESE 7-155N-102W; 2SEC; Williams; 24741; State Wolf 16-21H; Foreman Butte; SWSE 9-150N-102W; 2SEC; Bakken; horizontal; 20,397; 11/7/2013; 896 bbl Kodiak Oil and Gas McKenzie; Bakken; horizontal; 20,998; 10/13/2013; 3,192 bbl 26133; Burleson 5502 41-7B; Squires; LOT4 7-155N-102W; 2SEC; 24900; Smokey 2-17-5-2H; Pembroke; McKenzie; 2,328 bbl Williams; Bakken; horizontal; 20,425; 11/9/2013; 1,060 bbl 24899; Smokey 2-17-5-2H3; Pembroke; McKenzie; 2,067 bbl Petro-Hunt 24313; Brenna 152-96-14A-23-6H; Clear Creek; SESE 11-152N-96W; Statoil Oil and Gas Petro-Hunt 2SEC; McKenzie; Bakken; horizontal; 20,970; 10/24/2013; 1,895 bbl 24008; Jake 2-11 5TFH; Last Chance; LOT2 2-153N-100W; 2SEC; Williams; 24313; Brenna 152-96-14A-23-6H; Clear Creek; McKenzie; 1,895 bbl 22491; Jonsrud 151-96-3A-10-6H; Clear Creek; LOT2 3-151N-96W; 2SEC; Bakken; horizontal; 20,935;11/21/2013; 2,430 bbl 24531; Wollan 152-96-27D-3H; Clear Creek; McKenzie; 1,859 bbl McKenzie; Bakken; horizontal; 20,588; 10/2/2013; 1,687 bbl 24007; Jake 2-11 6H; Last Chance; LOT2 2-153N-100W; 2SEC; Williams; 21880; USA 150-104-24C-13-1H; Cartwright; LOT3 24-150N-104W; N/A; Bakken; horizontal; 21,015;11/17/2013; 3,315 bbl Note: This chart contains initial production rates, or IPs, from the adjacent IP chart McKenzie; Bakken; horizontal; N/A; N/A; N/A for active wells that were filed as completed with the state of North Dakota from 24531; Wollan 152-96-27D-3H; Clear Creek; SWSE 27-152N-96W; SEC; IPs for ND wells released from confidential status Dec. 3–Dec. 9, 2013 in the Bakken petroleum system, as well as active wells that McKenzie; Bakken; horizontal; 15,824; 9/15/2013; 1,859 bbl were released from tight- hole (confidential) status during the same period. The well Prima Exploration Abraxas Petroleum operator’s name is on the upper line, followed by individual wells; the NDIC file num- 19870; Gunnison 31-21H; Northeast Foothills; NENE 21-161N-91W; N/A; 25609; Lillibridge 20-17-8H; Pershing; SESW 20-150N-96W; N/A; ber; well name; field; county; IP oil flow rate in barrels of oil. Burke; Bakken; horizontal; N/A; N/A; N/A McKenzie; Bakken; horizontal; N/A; N/A;N/A Statoil Oil and Gas American Eagle Energy N/A; Williams; Bakken; horizontal; N/A; N/A; N/A 25091; Bill 14-23 3H; Alexander; NWNE 14-151N-101W; N/A; McKenzie; 25042; Roberta 1-3-163-101; Colgan; LOT1 3-163N-101W; N/A; Divide; 25419; CA-Halverson 154-95-0409H-5; Hofflund; NENW 4-154N-95W; Bakken; horizontal; N/A; N/A;N/A Bakken; horizontal; N/A; N/A; N/A N/A; Williams; Bakken; horizontal; N/A; N/A; N/A 25420; CA-Halverson 154-95-0409H-6; Hofflund; NENW 4-154N-95W; 25644; Bill 14-23 6H; Alexander; NWNE 14-151N-101W; N/A; McKenzie; Bakken; horizontal; N/A; N/A;N/A Burlington Resources Oil and Gas (ConocoPhillips) N/A; Williams; Bakken; horizontal; N/A; N/A; N/A 25645; Bill 14-23 4TFH; Alexander; NWNE 14-151N-101W; N/A; 24982; CCU Four Aces 44-21MBH; Corral Creek; Dunn; 2,992 bbl 25144; HA-Mogen-152-95- 0508H-4; Hawkeye; LOT3 5-152N-95W; N/A; McKenzie; Bakken; horizontal; N/A; N/A; N/A McKenzie; Bakken; horizontal; N/A; N/A;N/A 25088; Edna 11-2 4TFH; Camp; NWNE 14-151N-101W; N/A; McKenzie; Continental Resources 25145; HA-Mogen-152-95- 0508H-5; Hawkeye; LOT3 5-152N-95W; N/A; Bakken; horizontal; N/A; N/A;N/A 25565; Brogger 2-4H1; Crazy Man Creek; LOT2 4-153N-99W; 2SEC; McKenzie; Bakken; horizontal; N/A; N/A; N/A 25089; Edna 11-2 3H; Camp; NWNE 14-151N-101W; N/A; McKenzie; Williams; Bakken; horizontal; 21,116; 8/30/2013; 439 bbl 26786; HA-Nelson A-152-95-3427H-5PNC; Hawkeye; SWSW 34-152N- Bakken; horizontal; N/A; N/A; N/A 25566; Brogger 3-4H; Crazy Man Creek; LOT2 4-153N-99W; 2SEC; 95W; N/A; McKenzie; Bakken; horizontal; N/A; N/A; N/A 25090; Edna 11-2 5TFH; Camp; NWNE 14-151N-101W; N/A; McKenzie; Williams; Bakken; horizontal; 21,145; 9/4/2013; 432 bbl 24735; LK-Pohribnak 147-96-16H-5; Cedar Coulee; SESE 9-147N-96W; ICO; Dunn; Bakken; horizontal; 16,118; 10/6/2013; 981 bbl Bakken; horizontal; N/A; N/A; N/A Emerald Oil 24734; LK-Pohribnak 147-96-16H-6; Cedar Coulee; SESE 9-147N-96W; XTO Energy (ExxonMobil) 24922; Caper 1-15-22H; Boxcar; NWNE 15-149N-102W; N/A; McKenzie; ICO; Dunn; Bakken; horizontal; 16,265; 10/6/2013; 1,208 bbl 23693; FBIR Huntsmedicine 24X-8E; Heart Butte; SESW 8-149N-91W; N/A; Bakken; horizontal; N/A; N/A; N/A Hunt Oil Dunn; Bakken; horizontal; N/A;N/A; N/A 24944; Sorkness State 24X-36B; Sorkness; SESW 36-157N-93W; N/A; Hess 25516; Scorio 159-101-12-1H-1; Zahl; NENW 13-159N-101W; 2SEC; Mountrail; Bakken; horizontal; N/A; N/A; N/A 25268; BW-Roflson-151-98- 2116H-5; Siverston; SWSW 21-151N-98W; Williams; Bakken; horizontal; 18,959; 9/2/2013; 28 bbl 2SEC; McKenzie; Bakken; horizontal; 20,540; 11/14/2013; 311 bbl —Compiled by Ashley Lindly 25360; CA-Halverson 154-95-0409H-3; Hofflund; NENW 4-154N-95W; Kodiak Oil and Gas N/A; Williams; Bakken; horizontal; N/A; N/A; N/A 25514; P Evitt 154-98-15-12-2-2H; Truax; SWSE 12-154N-98W; N/A; 25418; CA-Halverson 154-95-0409H-4; Hofflund; NENW 4-154N-95W; Williams; Bakken; horizontal; N/A; N/A; N/A

North Dakota oil permit activity December 3—December 9, 2013

310’FNL and 1,980’FWL; St. Demetrius; Bakken; horizon- Permits renewed status; 2,345’ ground; 27201; 33-023-01141; 12/6/2013 LEGEND tal; 2,704’ ground; 24574; 33-007-01775; 12/6/2013 EOG Resources Watterud 160-95-14A-23-2H; NENE 14-160N-95W; The county name is on the upper line, the Kandiyohi 23-3526H; SWSW 35-159N-90W; 550’FSL 359'FNL and 850'FEL; Stoneview; N/A*; on confidential type of permit issued is on the second line, Bottineau Co. and 1,080’FWL; Clear Water; Bakken; horizontal; 2,325’ status; 2,349’ ground; 27200; 33-023-01140; 12/6/2013 and company names are next, followed by Permits issued ground; 20153; 33-013-01540; 12/4/2013 individual wells with data in this order: well Legacy Oil and Gas Dunn Co. name; location; footages; field; geological Legacy ET AL Berge 8-11 2H; SENE 11-163N-77W; Divide Co. Permits issued target; well bore type; elevation; NDIC file 2,003'FNL and 250'FEL; Red Rock; N/A**; on confiden- Permits issued Marathon Oil number; API number; date permit shows on tial status; 1,669’ ground; 27211; 33-009-02352; American Eagle Energy Lucille USA 14-10H; NWNE 16-146N-92W; 875'FNL NDIC website. 12/9/2013 Annie 15-32-164-101; SWSE 32-164N-101W; 250'FSL and 2,577'FEL; Wolf Bay; N/A*; on confidential status; Legacy ET AL Berge 16-36 2H; SESE 36-164N-77W; and 1,770'FEL; Colgan; N/A*; on confidential status; 2,277’ ground; 27155; 33-025-02377; 12/3/2013 Abbreviations 622'FNL and 283'FEL; Red Rock; N/A**; on confidential 2,231’ ground; 27184; 33-23-01137; 12/5/2013 Regina USA 14-10H; NWNE 16-146N-92W; 893'FNL Following are the abbreviations used in the status; 1,767’ ground; 27210; 33-009-02351; 12/9/2013 Ella 4-15-163-102; NWNW 15-163N-102W; 275'FNL and 2,623'FEL; Wolf Bay; N/A*; on confidential status; report and what they mean: Legacy ET AL Bernstein Barbot 13-8 2H; SWSW 8- and 1,150'FWL; Skjermo; N/A**; on confidential status; 2,277’ ground; 27156; 33-025-02378; 12/3/2013 FNL = From North Line | FEL = From East Line 163N-76W; 622'FNL and 350'FEL; Red Rock; N/A**; on 2,138’ ground; 27187; 33-023-01138; 12/5/2013 FSL = From South Line | FWL = From West Line confidential status; 1,757’ ground; 27212; 33-009- Leona 15-32-164-101; SWSE 32-164N-101W; 250'FSL QEP Energy 02353; 12/9/2013 and 1,870'FEL; Colgan; N/A*; on confidential status; MHA 1-26-23H-149-91; SWSW 26-149N-91W; 2,234’ ground; 27183; 33-023-01136; 11/5/2013 1,273'FSL and 940'FWL; Heart Butte; N/A*; on confiden- Billings Co. Burke Co. tial status; 2,014’ ground; 27173; 33-025-02387; Permits issued Permits issued Petro-Hunt 12/4/2013 Continental Resources Oasis Petroleum North America Watterud 160-95-11D-2-1H; NENE 14-160N-95W; MHA 1-26-24H-149-91; SWSW 26-149N-91W; Buresh 1-3H1; LOT3 3-141N-98Wl; 300'FNL and Delta 6093 24-15 4T2; SENE 15-160N-93W; 2,382’FNL 253'FNL and 955'FEL; Stoneview; N/A*; on confidential 1,059'FSL and 1,333'FWL; Heart Butte; N/A*; on confi- 2,015'FWL; Barta; N/A*; on confidential status; 2,618’ and 298'FEL; Gros Ventre; Bakken; horizontal; 2,422’ status; 2,343’ ground; 27202; 33-023-01142; 12/6/2013 dential status; 2,002’ ground; 27169; 33-025-02383; ground; 27150; 33-007-01815; 12/3/2013 ground; 27157; 33-013-01756; 12/4/2013 Watterud 160-95-11D-2-2H; NENE 14-160N-95W; 12/4/2013 Hannah 6093 12-33H; NENW 33-160N-93W; 190'FNL 412'FNL and 798'FEL; Stoneview; N/A*; on confidential MHA 1-26-25H-149-91; SWSW 26-149N-91W; 898'FSL Permits renewed and 2,285'FWL; Gros Ventre; Bakken; horizontal; 2,394’ status; 2,347’ ground; 27199; 33-023-01139; 12/6/2013 and 1,627'FWL; Heart Butte; N/A*; on confidential sta- Whiting Oil and Gas ground; 27149; 33-013-01755; 12/3/2013 Watterud 160-95-14A-23-1H; NENE 14-160N-95W; Wanner Federal 21-1TFH; LOT3 1-141N-100W; 306'FNL and 902'FEL; Stoneview; N/A*; on confidential see ND PERMIT page 8 PETROLEUM NEWS BAKKEN • WEEK OF DECEMBER 15, 2013 9

North Dakota well operator transfers November 9—December 6, 2013

Williams Co. #15588 - Robinson 1-17H; horizontal; Madison; Co. LEGEND #12730 - Davidson 1; vertical; Madison; Todd; Foreman Butte; 10/12/2004; 117 bbl; SESE 17-150N- #15676 - Ott 1-13H; horizontal; Madison; Foreman Date of well operator transfer 11/25/1989; 381 bbl; SESW 29-154N-101W; Williams 102W; McKenzie Co. Butte; 10/10/2006; 52 bbl; SESE 13-150N-103W; Co. #15595 - Maris 1-16H; horizontal; Madison; Foreman McKenzie Co. Well(s) transferred from #13085 - Owen 1; vertical; Madison; Todd; 2/27/1991; Butte; 9/14/2004; 445 bbl; NWNW 16-150N-102W; #15677 - Gehrig 1-24H; horizontal; Madison; Foreman Well(s) transferred to 67 bbl; NENW 30-154N-101W; Williams Co. McKenzie Co. Butte; 5/15/2005; 148 bbl; NENE 25-150N-103W; NDIC well file number — well name — #14614 - Berger 1-22H; horizontal; Madison; East #15596 - Timber Creek 1-34H; horizontal; Madison; McKenzie Co. well type — geological target — field — IP Fork; 5/12/1997; 168 bbl; SESW 22-156N-100W; Camp; 8/31/2004; 155 bbl; SESE 34-152N-101W; #15680 - Matthews 1-13H; horizontal; Madison; Williams Co. McKenzie Co. Foreman Butte; 9/14/2005; 73 bbl; NWNW 13-150N- (initial production) test date — #14659 - Sandberg 1-21H; horizontal; Madison; East #15599 - Sosa 1-15; horizontal; Madison; Foreman 102W; McKenzie Co. IP oil rate in barrels — location — county Fork; 8/23/1997; 154 bbl; SWSE 21-156N-100W; Butte; 10/21/2004; 689 bbl; SESE 15-150N-102W; #15695 - Lassey 1-15H; horizontal; Madison; Glass Williams Co. McKenzie Co. Bluff; 11/28/2005; 80 bbl; NWNW 15-151N-103W; #14707 - Tommy 1-20H; horizontal; Madison; East #15621 - Palmeiro 1-14H; horizontal; Madison; McKenzie Co. November 19, 2013 Fork; 9/6/1997; 63 bbl; SESE 20-156N-100W; Williams Foreman Butte; 10/9/2004; 279 bbl; SESE 14-150N- #15715 - Evans 1-10H; horizontal; Madison; Foreman From: Leland Properties, LLC Co. 102W; McKenzie Co. Butte; 2/17/2005; 33 bbl; NWNW 10-150N-102W; To: Pembroke Fields, LLC #14723 - Kermit 1-13H; horizontal re-entry; Madison; #15622 - Schmidt 1-25H; horizontal; Madison; McKenzie Co. #90293 - Leland SWD #1; on confidential status; N/A; Cow Creek; 10/15/1997; 279 bbl; SWSW 13-155N- Foreman Butte; 4/17/2005; 113 bbl; NWNW 25-150N- #15718 - Murphy 1-1H; horizontal; Madison; Foreman Pembroke; N/A; N/A; SWSW 34-149N-98W; McKenzie 101W; Williams Co. 102W; McKenzie Co. Butte; 3/28/2005; 275 bbl; NWNW 1-149N-102W; Co. #15511 - Ruth 1-23; horizontal; Madison; Foreman #15644 - Banks 1-18H; horizontal; Madison; Foreman McKenzie Co. Butte; 1/22/2004; 400 bbl; NWNW 23-150N-102W; Butte; N/A; N/A; NWNW 18-150N-102W; McKenzie Co. #15719 - Gibbins 1-11H; horizontal; Madison; Painted December 2, 2013 McKenzie Co. #15646 - Mays 1-20H; horizontal; Bakken; St. Woods; 5/5/2005; 68 bbl; NWNW 11-154N-103W; From: Murex Petroleum Corporation #15529 - Forthun 2-1; horizontal; Madison; Camp; Demetrius; 10/26/2004; 41 bbl; NWNW 28-150N- Williams Co. To: Nabors Completion & Production Services Co. 4/11/2004; 725 bbl; SESE 1-151N-101W; McKenzie Co. 102W; McKenzie Co. #15728 - Iva 1-6H; horizontal; Madison; Eightmile; #03614 - Alfred Brown SWD; vertical; Dakota; Camel #15541 - Aaron 1-22; horizontal; Madison; Foreman #15647 - Mcgwire 1-27H; horizontal; Madison; 3/20/2006; 178 bbl; NENE 1-152N-103W; Williams Co. Butte; 9/7/1964; 217 bbl; NENE 34-151N-96W; Butte; N/A; N/A; NWNW 22-150N-102W; McKenzie Co. Foreman Butte; 11/23/2004; 336 bbl; NWNW 27- #15743 - Snider 1-11H; horizontal; Madison; Foreman McKenzie Co. #15556 - Bonds 1-24H; horizontal; Madison; Foreman 150N-102W; McKenzie Co. Butte; 6/6/2005; 132 bbl; SESE 11-150N-102W; #06569 - Davidson SWD; vertical; Dakota; Pleasant Butte; 7/26/2004; 209 bbl; NWNW 24-150N-102W; #15649 - Williams 1-19H; horizontal; Madison; McKenzie Co. Valley; N/A; N/A; NWSE 11-156N-95W; Williams Co. McKenzie Co. Foreman Butte; N/A; N/A; SWSW 18-150N-102W; #15763 - Powell #1 SWD; horizontal; Madison; #15584 - Mantle 1-21H; horizontal; Madison; McKenzie Co. Foreman Butte; 7/26/2005; 159 bbl; SESE 2-149N- December 3, 2013 Foreman Butte; 7/30/2004; 426 bbl; SESE 21-150N- #15655 - Foxx 1-26H; horizontal; Madison; Foreman 102W; McKenzie Co. From: Zenergy, Inc. 102W; McKenzie Co. Butte; 1/25/2005; 425 bbl; NWNW 26-150N-102W; #15764 - Thomas 1-36H; horizontal; Madison; To: Oasis Petroleum North America LLC #15586 - Lyle 1-35H; horizontal; Madison; Camp; McKenzie Co. Foreman Butte; 9/26/2005; 55 bbl; NWNW 36-150N- #07405 - Brown 1-8; horizontal re-entry; Madison; 7/25/2004; 25 bbl; NWNW 35-152N-101W; McKenzie #15666 - Jackson 1-29H; horizontal; Madison; 102W; McKenzie Co. Epping; 4/3/1980; 47 bbl; SWNE 8-155N-99W; Co. Foreman Butte; 3/10/2005; 67 bbl; SWSW 28-150N- #15765 - Carter 1-9H; horizontal; Madison; Foreman Williams Co. #15587 - Killebrew 1-28H; horizontal; Madison; 102W; McKenzie Co. Butte; 6/15/2005; 249 bbl; SESE 9-150N-102W; #12030 - Foster 1-32; horizontal re-entry; Madison; Foreman Butte; 9/15/2004; 195 bbl; NWNW 28-150N- #15673 - Dwyer 1-33H; horizontal; Madison; Camp; Todd; 7/18/1989; 218 bbl; NWNW 32-154N-101W; 102W; McKenzie Co. 7/5/2005; 30 bbl; NWNW 33-152N-101W; McKenzie see ND TRANSFERS page 9 continued from page 7 27189; 33-061-02860; 12/5/2013 GN-Norman- 158-97-3427H-1; SESE 33-158N-97W; Oasis Petroleum North America Austin 86-36H; SESE 31-154N-90W; 350'FSL and 465'FSL and 380'FEL; New Home; N/A*; on confidential ND PERMIT Chalmers 5301 44-24 2T; SESE 24-153N-101W; 800'FEL; Parshall; Bakken; horizontal; 2,172’ ground; status; 2,265’ ground; 27164; 33-105-03348; 12/4/2013 893'FSL and 245'FEL; Baker; Bakken; horizontal; 1,964’ 27194; 33-061-02865; 12/5/2013 GN-Tom Jen- 157-97-0409H-1; SESE 33-158N- tus; 1,993’ ground; 27165; 33-025-02379; 12/4/2013 ground; 27215; 33-053-05543; 12/9/2013 Austin 87-36H; SESE 31-154N-90W; 350'FSL and 97W; 465'FSL and 413'FEL; Ray; N/A*; on confidential MHA 2-26-23H-149-91; SWSW 26-149N-91W; Chalmers 5301 44-24 3B; SESE 24-153N-101W; 850'FEL; Parshall; Bakken; horizontal; 2,174’ ground; status; 2,264’ ground; 27163; 33-105-03347; 12/4/2013 1,294'FSL and 888'FWL; Heart Butte; N/A*; on confiden- 860'FSL and 245'FEL; Baker; Bakken; horizontal; 1,956’ 27193; 33-061-02864; 12/5/2013 GN-Tom Jen- 157-97-0409H-2; SESE 33-158N-97W; tial status; 2,014’ ground; 27175; 33-025-02389; ground; 27214; 33-053-05542; 12/9/2013 Austin 90-01H; SESE 31-154N-90W; 500'FSL and 465'FSL and 479'FEL; Ray; N/A*; on confidential status; 12/4/2013 Chalmers 5301 44-24 4T2; SESE 24-153N-101W; 775'FEL; Parshall; Bakken; horizontal; 2,208’ ground; 2,263’ ground; 27161; 33-105-03345; 12/4/2013 MHA 2-26-24H-149-91; SWSW 26-149N-91W; 827'FSL and 245'FEL; Baker; Bakken; horizontal; 1,948’ 27179; 33-061-02857; 12/4/2013 1,080'FSL and 1,281'FWL; Heart Butte; N/A*; on confi- ground; 27213; 33-053-05541; 12/9/2013 Austin 91-01H; SESE 31-154N-90W; 500'FSL and HRC Operating (Halcon Resources) dential status; 2,002’ ground; 27171; 33-025-02385; 825'FEL; Parshall; Bakken; horizontal; 2,205’ ground; Pasternak Trust 157-100-19C-18-4H; SESW 19-157N- 12/4/2013 Petro-Hunt 27180; 33-061-02858; 12/4/2013 100W; 300'FSL and 1,335'FWL; Marmon; Bakken; hori- MHA 2-26-25H-149-91; SWSW 26-149N-91W; 953'FSL USA 153-95-4B-8-2HS; LOT4 4-153N-95W; 243'FNL Parshall 47-2226H; NWNE 22-152N-90W; 520'FNL and zontal; 1,980’ ground; 27198; 33-105-03353; 12/6/2013 and 1,641'FWL; Heart Butte; N/A*; on confidential sta- and 701'FWL; Charlson; N/A*; on confidential status; 2,050'FEL; Parshall; Bakken; horizontal; 1,980’ ground; tus; 1,994’ ground; 27167; 33-025-02381; 12/4/2013 2,005’ ground; 27208; 33-053-05539; 12/9/2013 27158; 33-061-02854; 12/4/2013 Hunt Oil MHA 3-26-23H-149-91; SWSW 26-149N-91W; USA 153-95-4B-9-1HS; LOT4 4-153N-95W; 278'FNL Parshall 48-2226H; NWNE 22-152N-90W; 520'FNL and Blue Ridge 159-100-6-7H-1; LOT2 6-159N-100W; 1,283'FSL and 914'FWL; Heart Butte; N/A*; on confiden- and 701'FWL; Charlson; N/A*; on confidential status; 2,100'FEL; Parshall; Bakken; horizontal; 1,980’ ground; 250'FNL and 2,030'FEL; Green Lake; N/A**; on confi- tial status; 2,014’ ground; 27174; 33-025-02388; 2,005’ ground; 27209; 33-053-05539; 12/9/2013 27160; 33-061-02856; 12/4/2013 dential status; 2,118’ ground; 27186; 33-105-03351; 12/4/2013 Parshall 49-2226H; NWNE 22-152N-90W; 520'FNL and 12/5/2013 MHA 3-26-24H-149-91; SWSW 26-149N-91W; Whiting Oil and Gas 2,150'FEL; Parshall; Bakken; horizontal; 1,980’ ground; Smokey Butte 160-100-31-30H-1; LOT2 6-159N- 1,069'FSL and 1,307'FWL; Heart Butte; N/A*; on confi- Asbeck 44-7HU; NENW 17-150N-104W; 345'FNL and 27159; 33-061-02855; 12/4/2013 100W; 250'FNL and 2,135'FEL; Smokey Butte; N/A*; on dential status; 2,002’ ground; 27170; 33-025-02384; 1,595’FWL; Harding; Bakken; horizontal; 1,889’ ground; Parshall 50-1114H; SWNW 11-152N-90W; 1,550'FNL confidential status; 2,119’ ground; 27185; 33-105- 12/4/2013 27197; 33-053-05536; 12/6/2013 and 500'FEL; Parshall; Bakken; horizontal; 2,080’ ground; 03350; 12/5/2013 MHA 3-26-25H-149-91; SWSW 26-149N-91W; 926'FSL Evy June 41-18HU; NENW 17-150N-104W; 375'FNL 27207; 33-061-02868; 12/9/2013 and 1,634'FWL; Heart Butte; N/A*; on confidential sta- and 1,595'FWL; Estes; N/A*; on confidential status; Parshall 51-1114H; SWNW 11-152N-90W; 1,600'FNL Oasis Petroleum North America tus; 1,994’ ground; 27166; 33-025-02380; 12/4/2013 1,889’ ground; 27196; 33-053-05535; 12/6/2013 and 500'FEL; Parshall; Bakken; horizontal; 2,079’ ground; Loren 5303 14-1 2T; LOT1 1-153N-103W; 310'FNL and MHA 4-26-23H-149-91; SWSW 26-149N-91W; 27206; 33-061-02867; 12/9/2013 1,215'FEL; Rosebud; Bakken; horizontal; 2,188’ ground; 1,304'FSL and 862'FWL; Heart Butte; N/A*; on confiden- XTO Energy (ExxonMobil) Parshall 52-1114H; SWNW 11-152N-90W; 1,650'FNL 27217; 33-105-03354; 12/9/2013 tial status; 2,013’ ground; 27176; 33-025-02390; Cherry Creek State 44X-36C; SESE 36-150N-98W; and 500'FEL; Parshall; Bakken; horizontal; 2,080’ ground; Loren 5303 14-1 3B; LOT1 1-153N-103W; 310'FNL and 12/4/2013 321'FSL and 1,090'FEL; Siverston; N/A*; on confidential 27205; 33-061-02866; 12/9/2013 1,015'FEL; Rosebud; Bakken; horizontal; 2,193’ ground; MHA 4-26-24H-149-91; SWSW 26-149N-91W; status; 1,997’ ground; 27177; 33-053-05533; 12/4/2013 27217; 33-105-03355; 12/9/2013 1,090'FSL and 1,255'FWL; Heart Butte; N/A*; on confi- Cherry Creek State 44X-36D; SESE 36-150N-98W; Fidelity Exploration and Production (MDU) Loren 5303 14-1 4T; LOT1 1-153N-103W; 310'FNL and dential status; 2,003’ ground; 27172; 33-025-02386; 293'FSL and 1,079'FEL; Siverston; N/A*; on confidential Bismarck State 34-27-28H; SESW 34-155N-91W; 980'FEL; Rosebud; Bakken; horizontal; 2,194’ ground; 12/4/2013 status; 1,997’ ground; 27178; 33-053-05534; 12/4/2013 326'FSL and 2,087'FWL; Stanley; Bakken; horizontal; 27218; 33-105-03356; 12/9/2013 MHA 4-26-25H-149-91; SWSW 26-149N-91W; 980'FSL McCoy 44X-36C; SESE 36-151N-98W; 334'FSL and 2,273’ ground; 27191; 33-061-02862; 12/5/2013 and 1,648'FWL; Heart Butte; N/A*; on confidential sta- 1,267'FEL; Siverston; N/A*; on confidential status; 2,084’ Gypsey 6 16-21H; NWNW 16-155N-91W; 863'FNL and XTO Energy (ExxonMobil) tus; 1,994’ ground; 27168; 33-025-02382; 12/4/2013 ground; 27204; 33-053-05538; 12/6/2013 836'FWL; Stanley; Bakken; horizontal; 2,261’ ground; Emil 24X-36B; SESW 36-158N-96W; 310'FSL and McCoy 44X-36D; SESE 36-151N-98W; 335'FSL and 27192; 33-061-02863; 12/5/2013 2,328'FWL; Wildcat; N/A; on confidential status; 2,406’ Permits cancelled 1,207'FEL; Siverston; N/A*; on confidential status; 2,084’ Minot State 34-33-28H; SESW 34-155N-91W; 326'FSL ground; 27195; 33-105-03352; 12/6/2013 Emerald Oil ground; 27203; 33-053-05537; 12/6/2013 and 2,037'FWL; Stanley; Bakken; horizontal; 2,272’ Jacqueline 11X-1B; LOT4 1-157N-96W; 310'FNL and Saxon 14-36-1H; SESW 36-145N-93W; 300’FSL and ground; 27190; 33-061-02861; 12/5/2013 1,095'FWL; Midway; N/A*; on confidential status; 2,430’ 1,980’FWL; Saxon; Bakken; horizontal; 2,207’ ground; Permits renewed ground; 27181; 33-105-03349; 12/4/2013 24937; 33-025-02060; 12/5/2013 Resolute Natural Resources Marathon Oil Diamond 11-12-1H; SWSW 2-147N-98W; 602’FSL and Cloon 14-32H; SWSW 32-151N-93W; 400'FSL and *Note - The geologic target for these wells was not listed in its well file Golden Valley Co. 311’FWL; Lone Butte; N/A*; on confidential status; 300'FWL; Reunion Bay; N/A*; on confidential status; because they are a tight (confidential) hole, but the following fields Permits issued 1,949’ ground; 24566; 33-053-04658; 12/6/2013 2,175’ ground; 27152; 33-061-02853; 12/3/2013 produce from the Bakken pool; Barta, Charlson, Colgan, Estes, Heart Whiting Oil and Gas Horovitz 10-09-1H; SWSW 2-147N-98W; 649’FSL and Glisar 14-32TFH; SWSW 32-151N-93W; 400'FSL and Butte, Lone Butte, Midway, New Home, Parshall, Ray, Reunion Bay, Hodges 32-23; SWNE 23-141N-105W; 1,970'FNL and 327’FWL; Lone Butte; N/A*; on confidential status; 350'FWL; Reunion Bay; N/A*; on confidential status; Siverston, Smokey Butte, Stoneview, Wolf Bay. 2,500'FEL; Hoot Owl; N/A**; on confidential status; 1,949’ ground; 24567; 33-053-04659; 12/6/2013 2,174’ ground; 27151; 33-061-02852; 12/3/2013 2,727’ ground; 27182; 33-033-00348; 12/5/2013 Yauch 03-04-1H; SWSW 2-147N-98W; 697’FSL and **Note – The geologic target for these wells was not listed in its well 344’FWL; Lone Butte; N/A*; on confidential status; Permits renewed file because they are a tight (confidential) hole, but the Green Lake McKenzie Co. 1,950’ ground; 24568; 33-053-04660; 12/6/2013 Hunt Oil field produces from the Madison pool, the Hoot Owl field produces Permits issued Severance 2-9-4H; SESW 9-153N-89W; 315’FSL and from the Red River pool, the Keene field produces from the Burlington Resources Oil and Gas Mountrail Co. 2,425’FWL; Parshall; N/A*; on confidential status; 2,069’ Bakken/Three Forks pool, the Red Rock field produces from Spearfish (ConocoPhillips) Permits issued ground; 22144; 33-061-01981; 12/6/2013 pool, and the Skjermo field produces from the Duperow and Red Arches 34-35MBH; SWSE 35-153N-96W; 375'FSL and EOG Resources River pools. 2,138'FEL; Keene; N/A**; on confidential status; 2,327’ Austin 81-3130H; SESE 31-154N-90W; 455'FSL and Williams Co. ground; 27153; 33-053-05531; 12/3/2013 300'FEL; Parshall; Bakken; horizontal; 2,245’ ground; Hess —Compiled by Ashley Lindly Arches 34-35TFH; SWSE 35-153N-96W; 368'FSL and 27188; 33-061-02859; 12/5/2013 GN-Justin- 158-97-3328H-1; SESE 33-158N-97W; 2,182'FEL; Keene; N/A**; on confidential status; 2,335’ Austin 82-31H; SESE 31-154N-90W; 305'FSL and 465'FSL and 446'FEL; New Home; N/A*; on confidential ground; 27154; 33-053-05532; 12/3/2013 300'FEL; Parshall; Bakken; horizontal; 2,245’ ground; status; 2,264’ ground; 27162; 33-105-03349; 12/4/2013 10 PETROLEUM NEWS BAKKEN • WEEK OF DECEMBER 15, 2013 continued from page 8 8/9/2010; 462 bbl; SESW 34-152N-98W; McKenzie Co. Co. #22991 - Reidle 18-7HTF; horizontal; Bakken; Nohly #18655 - Rolfsrud 7-6H; horizontal; Bakken; Banks; #20761 - Omlid 18-19HTF; horizontal; Bakken; Elidah; Lake; 5/11/2013; 1,056 bbl; NENE 19-151N-104W; ND TRANSFERS 7/4/2010; 635 bbl; SESW 7-152N-97W; McKenzie Co. 4/2/2013; 2,196 bbl; NENW 18-151N-97W; McKenzie McKenzie Co. #18756 - Pederson 10-3H; horizontal; Bakken; Banks; Co. #22992 - Helm 19-30HTF; horizontal; Bakken; Nohly McKenzie Co. 6/11/2010; 522 bbl; SWSE 10-152N-98W; McKenzie #20762 - Arnstad 3-10H; horizontal; Bakken; Painted Lake; 9/14/2012; 758 bbl; NENE 19-151N-104W; #15766 - Bagwell 1-35 SWD; horizontal; Madison; Co. Woods; 5/14/2012; 817 bbl; LOT2 3-154N-103W; McKenzie Co. Foreman Butte; 11/2/2005; 15 bbl; NWNW 35-150N- #18771 - Johnson 29-30H; horizontal; Bakken; Williams Co. #23150 - Peters Road 30-29H; horizontal; Bakken; 102W; McKenzie Co. Squires; 8/19/2010; 683 bbl; NESE 29-155N-102W; #20925 - Iverson 14-11H; horizontal; Bakken; Painted Todd; 9/28/2012; 1,089 bbl; LOT8 30-154N-101W; #15767 - Gonzalez 1-8H; horizontal; Madison; Williams Co. Woods; 10/21/2011; 1,029 bbl; SWSE 14-153N-104W; Williams Co. Foreman Butte; 9/27/2005; 486 bbl; SWSW 5-150N- #18980 - Berquist 33-28H; horizontal; Bakken; Banks; Williams Co. #23210 - Cayko 22-27H; horizontal; Bakken; Dore; 102W; McKenzie Co. 6/22/2011; 1,587 bbl; SWSE 33-152N-98W; McKenzie #20961 - Stepan 21-28H; horizontal; Bakken; Dore; 1/10/2013; 923 bbl; NENW 22-151N-104W; McKenzie #15771 - Miller 1-14H; horizontal; Madison; Lake Co. 12/19/2011; 741 bbl; SESW 16-151N-104W; McKenzie Co. Trenton; 9/8/2005; 75 bbl; SESE 14-153N-103W; #19001 - Stepanek 8-5H; horizontal; Bakken; Indian Co. #23947 - GNR 10-3H; horizontal; Bakken; Rosebud; Williams Co. Hill; 12/28/2010; 618 bbl; SWSE 8-152N-102W; #20979 - Mortenson 6-5H; horizontal; Bakken; 3/7/2031; 1,472 bbl; SWSE 10-153N-102W; Williams #15802 - Winfield 1-23H; horizontal; Madison; McKenzie Co. Rosebud; 6/2/2012; 1,027 bbl; LOT5 6-153N-102W; Co. Foreman Butte; 10/31/2006; 77 bbl; SESE 15-150N- #19061 - Payette 10-15H; horizontal; Bakken; Wildcat; Williams Co. #24165 - GNR Federal 15-22H; horizontal; Bakken; 103W; McKenzie Co. 2/23/2011; 1,215 bbl; NWNW 10-151N-104W; #20996 - Anderson 7-18H; horizontal; Bakken; Trenton; 2/26/2013; 1,193 bbl; SWSE 10-153N-102W; #15803 - Mcgriff 1-22H; horizontal; Madison; McKenzie Co. Painted Woods; 12/6/2011; 683 bbl; NWNE 7-154N- Williams Co. Foreman Butte; 2/23/2006; 139 bbl; NWNW 22-150N- #19105 - Aune 32-29H; horizontal; Bakken; Eightmile; 102W; Williams Co. #24188 - Kuykendall 25-36H; on confidential status; 103W; McKenzie Co. 11/11/2010; 558 bbl; SWSE 32-153N-102W; Williams #21011 - Owan 23-26H; horizontal; Bakken; Painted N/A; Foreman Butte; N/A; N/A; NENE 25-150N-103W; #15805 - Griffey Jr. 1-16H; horizontal; Madison; Co. Woods; 2/10/2013; 1,263 bbl; NENW 23-154N-102W; McKenzie Co. Foreman Butte; 9/3/2006; 52 bbl; SESE 16-150N- #19350 - Ceynar 29-32H; horizontal; Bakken; Banks; Williams Co. #24189 - Link 10-3H; horizontal; Bakken; Foreman 103W; McKenzie Co. 3/9/2011; 1,162 bbl; NWNE 29-152N-98W; McKenzie #21099 - Rella 17-20H; horizontal; Bakken; Lake Butte; 7/12/2013; 3,192 bbl; SESW 10-150N-102W; #15807 - Nettles 1-4H; horizontal; Madison; Foreman Co. Trenton; 7/16/2012; 825 bbl; NWNE 17-153N-103W; McKenzie Co. Butte; N/A; N/A; SESE 4-150N-102W; McKenzie Co. #19373 - Rella 18-19H; horizontal; Bakken; Ft. Buford; Williams Co. #24215 - Wolf 9-4H; on confidential status; N/A; #15825 - Thome 1-7H; horizontal; Madison; Foreman 6/28/2011; 605 bbl; NENW 18-153N-103W; Williams #21118 - Cliffside 12-11H; horizontal; Bakken; Foreman Butte; N/A; N/A; SWSE 9-150N-102W; Butte; 2/2/2006; 133 bbl; NWNW 7-149N-101W; Co. Assiniboine; 10/16/2011; 800 bbl; SWSE 12-151N- McKenzie Co. McKenzie Co. #19556 - Florence 11-2H; horizontal; Bakken; Painted 104W; McKenzie Co. #24295 - Bauste 1-12H; horizontal; Bakken; #15840 - Belle 1-12H; horizontal; Madison; Foreman Woods; 10/7/2011; 709 bbl; SESE 11-153N-103W; #21313 - Harp 13-24H; horizontal; Bakken; Ft. Buford; Eightmile; N/A; N/A; SESW 33-153N-102W; Williams Butte; 12/18/2005; 116 bbl; NWNW 12-149N-102W; Williams Co. 3/1/2012; 809 bbl; NWNE 13-153N-104W; Williams Co. McKenzie Co. #19741 - A. Johnson 12-1H; horizontal; Bakken; Co. #24296 - Lake Trenton 33-28H; on confidential status; #15841 - Kingman 1-12H; horizontal; Madison; Banks; 6/30/2011; 1,234 bbl; SESW 12-152N-98W; #21470 - Monson 2-11H; horizontal; Bakken; Elk; N/A; Eightmile; N/A; N/A; SESW 33-153N-102W; Foreman Butte; 12/18/2005; 116 bbl; NWNW 18- McKenzie Co. 10/25/2012; 949 bbl; LOT2 2-151N-102W; McKenzie Williams Co. 150N-102W; McKenzie Co. #19761 - Martell 36-25H; horizontal; Bakken; Glass Co. #24302 - USA FS 23-14H; on confidential status; N/A; #15877 - Burke 1-15 SWD; horizontal; Madison; Lake Bluff; 6/8/2011;1,074 bbl; SWSE 36-151N-103W; #21496 - Hanson 33-28H; horizontal; Bakken; Church; Foreman Butte; N/A; N/A; LOT3 23-150N-103W; Trenton; 5/22/2006; 10 bbl; SESE 15-153N-103W; McKenzie Co. 5/1/2013; 791 bbl; SWSE 33-158N-100W; Williams Co. McKenzie Co. Williams Co. #20026 - Nordeng 24-13H; horizontal; Bakken; Banks; #21594 - Paulson 13-14H; horizontal; Bakken; #24702 - Slagle 12-1HST; horizontal; Bakken; Camp; #15883 - Bench 1-5H; horizontal; Madison; Foreman 7/10/2011; 1,355 bbl; SWSE 24-152N-98W; McKenzie Assiniboine; 12/25/2011; 702 bbl; NESE 13-151N- 7/25/2013; 3,000 bbl; SESW 12-151N-101W; McKenzie Butte; 3/4/2006; 143 bbl; SESE 5-150N-102W; Co. 104W; McKenzie Co. Co. McKenzie Co. #20225 - Lazy Rockin R 24-13H; horizontal; Bakken; #21657 - Forland 28-33H; horizontal; Bakken; #24741 - State Wolf 16-21H; horizontal; Bakken; #15884 - R.E. Bearce 1-1H; horizontal; Madison; Lake Trenton; 7/28/2011; 602 bbl; SWSE 24-153N- Siverston; 3/15/2012; 1,844 bbl; NWNE 28-151N-98W; Foreman Butte; 10/13/2013; 3,192 bbl; SWSE 9-150N- Eightmile; 9/23/2006; 10 bbl; SESE 1-152N-103W; 103W; Williams Co. McKenzie Co. 102W; McKenzie Co. Williams Co. #20277 - Rolfsrud 18-19H; horizontal; Bakken; Banks; #21746 - Mary 3-10H; horizontal; Bakken; Wildcat; #24742 - K2 Holdings 31-32H; horizontal; Bakken; #15914 - Ripken Jr 1-7H; horizontal; Madison; 2/4/2012; 1,213; NENW 18-152N-97W; McKenzie Co. 1/24/2012; 653 bbl; LOT1 3-157N-100W; Williams Co. Todd; 5/8/2013; 911 bbl; LOT7 31-154N-101W; Foreman Butte; 3/20/2006; 175 bbl; SESE 7-150N- #20286 - Loren 1-12H; horizontal; Bakken; Rosebud; #21747 - Hanson 34-27H; horizontal; Bakken; Dublin; Williams Co. 102W; McKenzie Co. 8/18/2012; 833 bbl; LOT2 1-153N-103W; Williams Co. 12/13/2012; 685 bbl; LOT2 3-157N-100W; Williams Co. #25077 - Martell 36-25HTF2; on confidential status; #16052 - Fred 1-33H; horizontal; Madison; Rosebud; #20397 - Wold 34-27H; horizontal; Bakken; Sand #21748 - Mad Dublin 1-3H; horizontal; Madison; N/A; Glass Bluff; N/A; N/A; SWSE 36-151N-103W; 7/16/2006; 77 bbl; NWNW 33-154N-102W; Williams Creek; 10/9/2011; 1,001 bbl; SESW 34-153N-97W; Dublin; N/A; N/A; LOT1 3-157N-100W; Williams Co. McKenzie Co. Co. McKenzie Co. #21841 - Knels 17-8H; horizontal; Bakken; Dore; #25112 - Link 15-22H; horizontal; Bakken; Foreman #16070 - Sheffield 1-30H; horizontal; Madison; #20455 - Stepan 16-9H; horizontal; Bakken; Dore; 3/16/2013; 1,216 bbl; SWSE 17-151N-104W; McKenzie Butte; 7/10/2013; 2,400 bbl; SESW 10-150N-102W; Pronghorn; 4/9/2006; 38 bbl; NWNW 30-150N-101W; 11/5/2012; 1,309 bbl; SESW 16-151N-104W; McKenzie Co. McKenzie Co. McKenzie Co. Co. #21842 - Knels 20-29H; horizontal; Bakken; Dore; #25353 - Link 13-24HTF; on confidential status; N/A; #16084 - Kiner 1-36H; horizontal; Madison; Glass #20459 - Lawlar 23-14H; horizontal; Bakken; North 2/21/2012; 671 bbl; SWSE 17-151N-104W; McKenzie Foreman Butte; N/A; N/A; SESW 12-150N-102W; Bluff; 6/12/2006; 98 bbl; SESE 36-151N-103W; Tobacco Garden; 9/2/2011; 1,443 bbl; NWNE 26- Co. McKenzie Co. McKenzie Co. 151N-99W; McKenzie Co. #21991 - Schmitz 4-9H; horizontal; Bakken; Indian #25421 - Link 14-23H; on confidential status; N/A; #16132 - Musial 1-18H; horizontal; Madison; #20460 - Lawlar 26-35H; horizontal; Bakken; North Hill; 4/13/2013; 1,134 bbl; LOT3 4-152N-102W; Foreman Butte; N/A; N/A; NWNE 14-150N-102W; Pronghorn; 8/30/2006; 122 bbl; NWSW 18-150N- Tobacco Garden; 9/4/2011; 1,195 bbl; NWNE 26- McKenzie Co. McKenzie Co. 101W; McKenzie Co. 151N-99W; McKenzie Co. #22202 - Johnsrud 19-18H; horizontal; Bakken; #25465 - Fairview Overlook 34-33HTF; on confidential #16133 - Hodges 1-1H; horizontal; Madison; Foreman #20464 - Rolfson 29-32H; horizontal; Bakken; Siverston; 5/28/2012; 2,104 bbl; NWNE 30-151N-98W; status; N/A; Harding; N/A; N/A; LOT3 34-151N-104W; Butte; 6/4/2006; 280 bbl; SESE 1-150N-103W; Siverston; 12/15/2011; 1,202 bbl; NWNE 29-151N- McKenzie Co. McKenzie Co. McKenzie Co. 98W; McKenzie Co. #22242 - Martin 9-4H; horizontal; Bakken; Rosebud; #25660 - Safely USA 5-8H; on confidential status; #16134 - Bratton 1-21 SWD; horizontal; Madison; #20465 - Rolfson 20-17H; horizontal; Bakken; 5/24/2012; 2,072 bbl; SWSE 9-153N-102W; Williams N/A; Foreman Butte; N/A; N/A; SWSE 32-151N-102W; Dore; 10/30/2006; 15 bbl; NWNW 21-151N-104W; Siverston; 9/12/2011; 1,305 bbl; NWNE 29-151N-98W; Co. McKenzie Co. McKenzie Co. McKenzie Co. #22243 - Martin 16-21H; horizontal; Bakken; Trenton; #25998 - Kelter 7-12H3; on confidential status; N/A; #16190 - Davis 1-31H; horizontal; Madison; Glass #20519 - Link 12-1H; horizontal; Bakken; Foreman 5/19/2012; 1,313 bbl; SESW 9-153N-102W; Williams Eightmile; N/A; N/A; NWSE 7-152N-102W; McKenzie Bluff; 6/25/2006; 125 bbl; SWSW 32-151N-102W; Butte; 7/26/2011; 983 bbl; SESW 12-150N-102W; Co. Co. McKenzie Co. McKenzie Co. #22251 - Gary Russell 19-20H; horizontal; Bakken; #25999 - Kelter 7-1HTF3; on confidential status; N/A; #16196 - Pederson 1-10H; horizontal; Madison; #20554 - Nelson 11-2H; horizontal; Bakken; Banks; Rosebud; 6/9/2012; 1,150 bbl; SESE 24-153N-103W; Eightmile; N/A; N/A; NWSE 7-152N-102W; McKenzie Banks; 11/27/2006; 65 bbl; SESE 10-152N-98W; 4/25/2012; 1,802 bbl; SESW 11-152N-98W; McKenzie Williams Co. Co. McKenzie Co. Co. #22315 - Ledahl 28-21H; horizontal; Bakken; Painted #26000 - Kelter 7-1H2; on confidential status; N/A; #16262 - R. Field 1-22H; horizontal; Madison; Dore; #20555 - Nelson 14-23H; horizontal; Bakken; Banks; Woods; 6/22/2012; 856 bbl; SENW 28-154N-102W; Eightmile; N/A; N/A; NWSE 7-152N-102W; McKenzie 2/25/2007; 23 bbl; NWNW 22-151N-104W; McKenzie 8/12/2012; 1,765 bbl; SESW 11-152N-98W; McKenzie Williams Co. Co. Co. Co. #22316 - Ledahl 28-33H; horizontal; Bakken; #26001 - Kelter 7-6HTF2; on confidential status; N/A; #16270 - Martinez 1-32H; horizontal; Madison; Glass #20604 - Santa 23-14H; horizontal; Bakken; Marmon; Rosebud; 2/16/2013; 938 bbl; SENW 28-154N-102W; Eightmile; N/A; N/A; NWSE 7-152N-102W; McKenzie Bluff; 9/4/2006; 183 bbl; NENE 31-151N-102W; 11/6/2012; 649 bbl; SESW 23-157N-100W; Williams Williams Co. Co. McKenzie Co. Co. #22343 - Cliffside 25-26H; horizontal; Bakken; #26002 - Kelter 7-6HTF; on confidential status; N/A; #16272 - Theodore 1-9H; horizontal; Madison; #20626 - Kelter 7-6H; horizontal; Bakken; Eightmile; Assiniboine; 11/14/2012; 655 bbl; NENE 25-151N- Eightmile; N/A; N/A; NWSE 7-152N-102W; McKenzie Garden; 9/30/2006; 43 bbl; NWNW 9-151N-98W; 12/5/2011; 1,125 bbl; NESE 7-152N-102W; McKenzie 104W; McKenzie Co. Co. McKenzie Co. Co. #22358 - Helling 19-18H; horizontal; Bakken; #26410 - Prairie USA 1-12H; on confidential status; #16397 - Snuffy Stirnweiss 1-33H; horizontal; #20666 - Snowshoe 30-31H; horizontal; Bakken; Pronghorn; 12/25/2012; 976 bbl; SWSE 19-150N- N/A; Foreman Butte; N/A; N/A; SWSE 36-151N-103W; Madison; Foreman Butte; 2/7/2006; 118 bbl; NWNW Glass Bluff; 4/13/2013; 1,097 bbl; NWNE 30-151N- 101W; McKenzie Co. McKenzie Co. 33-151N-102W; McKenzie Co. 102W; McKenzie Co. #22359 - Helling 30-31H; horizontal; Bakken; #26451 - Ranger 28-34H2; on confidential status; #16437 - Colavito 1-27H; horizontal; Madison; #20686 - Irwin 14-23H; horizontal; Bakken; Lake Pronghorn; 1/2/2013; 1,147 bbl; SWSE 19-150N-101W; N/A; Foreman Butte; N/A; N/A; NWNW 28-150N- Foreman Butte; 5/6/2007; 149 bbl; SWSW 22-150N- Trenton; 9/17/2011; 714 bbl; NENE 14-153N-103W; McKenzie Co. 103W; McKenzie Co. 103W; McKenzie Co. Williams Co. #22392 - Wahlstrom 3-10H; horizontal; Bakken; Elk; #90107 - Wolf SWD 1; vertical; Dakota; Foreman #17472 - Mildred Nelson 4-25H; horizontal; Bakken; #20689 - Patsy 5-8HTF; horizontal; Bakken; Siverston; 8/30/2012; 1,382 bbl; LOT3 3-151N-102W; McKenzie Butte; N/A; N/A; NWNW 28-150N-102W; McKenzie Co. Elidah; 6/15/2009; 593 bbl; NWNW 25-152N-98W; 11/17/2012; 1,202 bbl; LOT2 5-151N-98W; McKenzie Co. #90112 - Safely 1 SWD; vertical; Dakota; Foreman McKenzie Co. Co. #22414 - Tufto 13-24H; horizontal; Bakken; Cow Butte; N/A; N/A; SWSW 5-150N-102W; McKenzie Co. #17986 - Aagvik 1-35H; horizontal; Bakken; Banks; #20708 - Nelson 24-13H; horizontal; Bakken; Creek; 5/27/2013; 2,448 bbl; NWNW 13-155N-101W; #90116 - Irwin 1 SWD; vertical; Dakota; Foreman 12/22/2009; 501 bbl; SESE 27-152N-98W; McKenzie Marmon; 8/1/2012; 1,352 bbl; SESW 24-157N-100W; Williams Co. Butte; N/A; N/A; NENE 25-150N-103W; McKenzie Co. Co. Williams Co. #22656 - Knute 24-23H; horizontal; Bakken; #18249 - Lundeen 4-26H; horizontal; Bakken; Banks; #20731 - Hagen 31-30H; horizontal; Bakken; Banks; Assiniboine; 1/29/2013; 872 bbl; NESE 24-151N-104W; —Compiled by Ashley Lindly 6/4/2010; 702 bbl; NWNW 26-152N-98W; McKenzie 11/9/2011; 1,598 bbl; SWSE 31-152N-98W; McKenzie McKenzie Co. Co. Co. #22892 - Dwyer 27-34H; horizontal; Bakken; Rawson; #18651 - Berquist 34-27H; horizontal; Bakken; Banks; #20732 - White 6-7H; horizontal; Bakken; Siverston; 9/26/2012; 1,552 bbl; NWNE 27-150N-101W; 11/7/2011; 1,718 bbl; SWSE 31-152N-98W; McKenzie McKenzie Co.

Subscribe at: PetroleumNewsBakken.com PETROLEUM NEWS BAKKEN • WEEK OF DECEMBER 15, 2013 11 l NATURAL GAS COMPANY UPDATE Tribes seek own Conoco betting on unconventionals ConocoPhillips is betting on unconventional liquids plays in its 2014 budget. The company plans to spend some $4.3 billion this coming year on “high-devel- opment drilling” in liquids-rich unconventional plays such as the Bakken, Eagle Ford solutions to flaring and Niobrara and in both the conventional and unconventional aspects of the Permian. The figures come from a $16.7 billion capital budget designed to increase compa- nywide production to 1.6 million barrels of oil equivalent per day from continuing Reservation forms task force to streamline permitting, also seeking operations. funds for bridge project to transport gas across Lake Sakakawea ConocoPhillips listed the Eagle Ford, Bakken and Permian as “key sources of growth.” The budget dedicates some 39 percent, or $6.5 billion, for these development old idea will bring new solutions. By MAXINE HERR drilling activities, of which two-thirds ($4.3 billion) would go to the Lower 48 and the “We’re proposing a bridge along For Petroleum News Bakken remaining third ($2.1 billion) would go to Alaska, Canada, Norway and western Charging Eagle Bay,” Mandan said. “It’s Australia. long been a proposal, authorized by s the North Dakota Petroleum The budget allocates some 35 percent, or $5.8 billion, for “major projects,” start- Congress in the 1970s. Now we’re pro- ACouncil’s Flaring Task Force wraps ing with the APLNG project in Australia and including the Surmont Phase 2 project posing to construct that bridge, and up their final report for the Industrial in Canada, the Eldfisk II project in the Norwegian North Sea, the Britannia Long-term pipeline can be built into the bridge. That Commission (see story on page 1), ques- Compression and Clair Ridge in the United Kingdom, as well as offshore develop- will get our gas off to the rails and pro- tions remain within a key area of the oil ments in Malaysia. vide another transportation route to the fields. The budget also includes some 13 percent, or $2.1 billion, for “maintenance of the oil fields from Bismarck and Dickinson The task force has stated the notable company’s high-quality legacy base portfolio, including 2014 planned turnarounds,” regions.” challenge of finding solutions within the and another 13 percent on exploration and appraisal work in the Gulf of Mexico, the The bridge would be built over Lake Fort Berthold Indian Reservation due to U.K. and Australia, as well as unconventional exploration in liquids-rich shale plays Sakakawea at the mouth of the Little its unique status as a sovereign nation. A across the Lower 48 and Canada, and unconventional exploration in Colombia, Poland Missouri River, providing access to rail- task force subcommittee was formed to and China. meet with tribal administration and deter- —ERIC LIDJI mine how to reduce flaring specifically see FLARING SOLUTIONS page 13 on the reservation. Currently 55 percent of the natural gas produced on the reservation is flared. Claryca Mandan, National Resources Administrator for the Three Affiliated Tribes, said the tribes have formed a task force of their own that mirrors the state group. “The lack of infrastructure is impeding development, but even with it in place, the initial phase of the flaring is trouble- some,” Mandan told Petroleum News Bakken. “We can probably reduce flaring long term overall, but we still need to find ways to deal with the large volume of the gas during the initial phase of the well.” A ‘one-stop shop’ speeds permits Mandan said the reservation’s task force is reviewing different technologies, but they are also considering some amendments to their flaring resolution to offer incentives similar to what the state provides. “We are probably farther behind than anyone with infrastructure development, and while companies are racing to get it done, there are long delays in permitting on right of ways, and then the additional layer of federal permits that are required impede construction,” Mandan said. But she added that several years of lobbying with federal agencies have final- ly provided one remedy. “We have achieved a one-stop shop to speed the permitting process,” Mandan said. “Instead of going to three federal agencies for permits, the process has been streamlined and the permits can be pro- vided on the reservation instead of the application being routed among federal agencies out of state.” The reservation is also attempting to obtain “utility corridors” in which tribes obtain the land through trade or exchange with private landowners to shorten con- struction time for pipelines. “The majority of work here needs sec- retarial approval from the Bureau of Indian Affairs and we have no control over that process,” Mandan said. “But we are working as hard as we can to bring flaring down. Our task force is identifying the barriers and impediments to reduction right now.” A vital connection Mandan noted the gas market is diffi- cult to reach due to reservation’s geogra- phy. Lake Sakakawea limits access to transportation lines, but the tribes hope an 12 PETROLEUM NEWS BAKKEN • WEEK OF DECEMBER 15, 2013

continued from page 1 bpd rail offloading facility at the Port of Vancouver, to ponder changes to the design of crude tank cars, Wash., is in the permitting phase and scheduled to be Norfolk Southern Chief Executive Officer Charles CBR PERSPECTIVES operational no later than early 2015. Moorman said he is confident the government will take sensible steps that do not negatively impact the CBR production growth.” Price differentials support CBR business, although the answers will not be known for Industry data showed that in the third quarter market Most refiners and railroads say current quarter pric- about two years. conditions that weighed on smaller railed volumes nar- ing differentials have regained the norm of recent years, Toby Kostad, a rail industry analyst, estimated the rowed the price spread between West Texas supporting CBR from the Bakken to price-disadvan- upgrades to existing tank cars would add about $2 per Intermediate and Brent to $1.59 per barrel, compared taged refineries on both coasts. barrel to transport costs, which Valero placed at $17 cur- with a $20 spread seen earlier this year. Credit Suisse analyst Jan Stuart said that in recent rently from the Bakken to the East Coast, where refiner- ies once paid premium prices for imported feedstocks. Shipments based on economics weeks imports of crude from West Africa have been spurned by East Coast refiners because of ample sup- However, he said the upgrade costs will be borne by PBF Energy Chief Executive Officer Tom Nimbley plies from the Bakken. those who lease the rail cars, which PBF said is now said the third-quarter economics for Bakken crude did But the CBR advocates are still faced with cost about $3,000 per car per month. not justify delivering greater quantities to the East uncertainties from anticipated new tank car safety regu- Coast, as a result of which his company adjusted its lations, swings in crude prices and on-going competi- $10 difference required slate to bring in additional volumes of water-borne tion from pipelines. Graham Brisben, chief executive officer of PLG crudes. However, Stuart Nance, vice president of Bill Consulting, told the RailTrends conference that WTI PBF, with two East Coast refineries, has strongly Barrett, a petroleum production company, said the CBR will need to be at least $10 per barrel less than Brent to endorsed CBR by enhancing and upgrading rail offload- “phenomena will continue as we go on with the renais- keep CBR competitive. ing facilities at its 190,000 barrels per day Delaware sance of crude production,” notably as the Bakken edges Nimbley told analysts during his third-quarter con- City, Del., refinery, with expectations that it will receive over the 1 million bpd mark and production of light ference call that there is a “very fast reaction” time by 125,000 bpd by rail by May 2014. sweet crude from the Eagle Ford in South Texas sur- rail to moving Bakken crude to eastern refineries. CSX, which ships crude to the East Coast, said it is passed Bakken volumes and the Permian Basin of New Brisben said that is supported by rail’s ability to able to deliver crude from Chicago to Philadelphia in Mexico and Texas continues to grow. respond faster than pipelines to crude pricing changes, two days, throwing a lifeline to East Coast refineries with PBF Executive Chairman Tom O’Malley estimat- which teetered on the brink of closing for economic rea- ing it takes only a week to move a unit train in response sons a few years ago. The Energy Information Administration is forecast- to positive price changes. Tesoro Chief Executive Officer Greg Goff said his ing that domestic output will add increments of 1 mil- PBF has rail service arrangements with Norfolk company delivered about 50,000 bpd of Bakken crude lion bpd a year to reach 8.5 million bpd in 2014, almost Southern and BNSF to deliver Bakken crude to its to its Anacortes, Wash., refinery in the third quarter, half the projected U.S. demand of 18.72 million bpd. Delaware and New Jersey refineries, allowing it to carry while rail bumped up delivery of Bakken crude to its The Rockies are expected to contribute 2.5 million 125,000 bpd by rail. l Martinez, Calif., refinery by 350,000 barrels per month. bpd over the next five years. Tesoro’s joint venture with Savage to build a 280,000 Despite a series of accidents that have forced the U.S.

Oil Patch Bits

Fortis Energy Services expands its operations in ND Fortis Energy Services Inc. announced that it has expand- ed its area of operations to include the Williston Basin of North Dakota. Fortis, a recog- nized leader in the Michigan basin as well as the Utica and Marcellus shale plays, will be providing the same well servic-

es to oil and gas producers in ENERGY SERVICES FORTIS COURTESY North Dakota including well completions, workovers, down- hole repairs, maintenance and plugging and abandonment. “We are proud that our culture of customer service and safety has opened this opportu- nity to expand our operations into the Williston basin of North Dakota,” said Fortis CEO Nathan Conway, a native of Westhope, N.D. “I grew up in the North Dakota oil fields work-

see OIL PATCH BITS page 13 Bakken Players

ADVERTISER PAGE AD APPEARS ADVERTISER PAGE AD APPEARS ADVERTISER PAGE AD APPEARS Abrasives ...... 3 Four Seasons Equipment ...... 16 OFS Energy Fund Alaska Textiles Futaris Oilfield Improvements Alliance Pipeline Gray Wireline Pacific Torque...... 5 American Association of Railroads (AAR)...... 15 Guard-All Petroleum News Bakken ...... 14 Anvil Corporation Halcon Resources Pierce Leasing Arctic Catering HMG Automation, Inc. Plainsman Mfg. Inc. Bakken Solids Control Services Investors First Capital Polyguard Products ...... 3 Beaver Creek Archaeology ...... 4 Iseman Homes Premier Community Homes Ltd. Border Steel Kilo Technologies Ltd. Quality Mat BTL Liners Lister Industries Reef Oil & Gas Cancade Company Limited LT Environmental Rigid Global Buildings CESI Chemical...... 16 Lynden Ritchie Bros. Auctioneers City of Grand Forks, ND M SPACE ShelterLogic ClearSpan Fabric Structures Marmit Plastics Cruz Energy Services LLC (A CIRI Co.) McAda Drilling Fluids Inc...... 6 Spartan Engineering ...... 11 CST Storage Midwest Industrial Supply TenCate Dakota Landing Miller Insulation Co. Tremcar Inc...... 2 DAWA Solutions Group MT Rigmat LLC Trinity Health Occupational Medicine Deep Casing Tools Muth Pump LLC Umiaq E3 Energy and Environmental Experts Netzsch Pumps North America UNICO Inc. Ebeltoft Sickler North Dakota Petroleum Council Unit Drilling Company Engineered Fire & Safety North Slope Telecom (NSTI) Vactor Manufacturing Environ Corp...... 5 Northern Electric Inc. Wanzek Construction Fortis Energy Services Northern Oilfield Services Inc. Willbros PETROLEUM NEWS BAKKEN • WEEK OF DECEMBER 15, 2013 13

COMPANY UPDATE EXPLORATION Marathon to boost Bakken rig activity by 20% ND gas exploration moving east Marathon Oil Corp. is accelerating its Bakken and Eagle Ford rig activity by 20 The North Dakota Department of Mineral Resources Oil and Gas Division has percent each, and it plans a 100 percent increase in rig activity for the Oklahoma issued wildcat drilling permits to Denver-based independent Strat-X Energy for Woodford, the company said in a Dec. 11 global operations report. four natural gas wells in Emmons and McIntosh counties, which are in south-cen- The three domestic plays will capture 60 percent of Marathon’s 2014 $5.9 billion tral North Dakota along the South Dakota border, far outside the Bakken petrole- capital, investment and exploration budget, said Lee Tillman, Marathon president and um system. CEO. The Oil and Gas Division issued a press release on Dec. 11 reporting the per- Marathon said it will market its North Sea assets to focus on unconventional mits had been issued, which is not something the division routinely does, but in resources in the United States, as part of its strategic plans for profitable growth and this case the division felt it was appropriate because of the locations of the wells. competitive returns for shareholders. “The division wanted to make this announcement because it is so rare to see Accelerating rig activity in three of the “highest-value domestic resource plays,” anything issued this far east of Highway 83,” Department of Mineral Resources marketing North Sea assets and increasing share repurchases reinforces Marathon’s Director Lynn Helms said in the press release. “These permits are a part of an “strategy of creating long-term shareholder value and a commitment to rigorous port- exploratory program known as ‘wildcatting.’” Highway 83 cuts through western folio management integrated with robust capital allocation,” Tillman said. and central North Dakota from the Canadian border north of Minot south through “In the past three years, we have closed or agreed upon nearly $3.5 billion in non- Bismarck and on through Emmons County into South Dakota. core asset divestitures, surpassing the upper end of our stated $1.5 billion to $3 bil- Two of the Strat-X wells are in Emmons County and two are in McIntosh lion target,” Tillman said. County. All four wells are currently on confidential status, which means that no Marathon plans to spend just over $1 billion in the Bakken, Tillman said, adding production data can be released until six months after the wells are spudded. that it plans to drill 80-90 net wells (200-220 gross, of which 75-85 are company The four wells are part of Strat-X Energy’s Sleeping Giant gas project. The operated) in the Bakken. The company also plans to re-complete 20-24 existing net company says it has sourced a driller for the wells, but mobilization has not yet wells (22-26 existing gross wells) in the Bakken. been scheduled. Marathon is allocating $2.3 billion of spending to the Eagle Ford and $236 mil- In addition to the North Dakota project, Strat-X currently has projects in lion to the Woodford. California, Illinois and Texas, and has a 100 percent equity position in Western The company projects a 2014 resource play production growth rate greater than Australia. 30 percent relative to 2013, and an overall production growth rate of approximately Helms noted that the well results will be evaluated and that Strat-X will deter- 4 percent, excluding Alaska, Angola and Libya. mine if the wells are economically viable for further resource development in the For the period of 2012-17, Marathon projects a resource play production com- area. pound annual growth rate greater than 25 percent, and a total production compound Previously, Staghorn Energy LLC drilled five gas wells in Emmons County annual growth rate of 5 percent to 7 percent. and one in neighboring Burleigh County between 2006 and 2008, but none were —STEVE SUTHERLIN economically productive. —MIKE ELLERD continued from page 12 Headquartered in Michigan, Fortis has operations throughout the Midwest and Northeastern states including: Michigan, OIL PATCH BITS continued from page 1 Pennsylvania, West Virginia, Ohio, New York, Existing system carries 400,000 bpd ing in both oilfield service as well as explo- Indiana, Illinois and now North Dakota. An XL SOUTHERN LEG The existing Seaway system owned ration and production. As a third generation aggressive growth plan includes expansion by Enterprise Products Partners and oilman in the N.D. oil and gas industry, it is targets in other major shale plays across the Coast refineries. Enbridge carries 400,000 bpd to great to be back home working with many of U.S., including the Eagle Ford, Permian and There was some initial confusion Houston from Cushing and is expected the same people I worked with years ago.” Niobrara shale plays. among crude traders over whether the to reach 850,000 bpd by mid-2014. Port Arthur link would start service on Carl Larry, president of Oil Jan. 3. Outlooks & Opinions, said that once continued from page 11 sibility and find funding sources to build Howard explained that in a filing Seaway and Gulf Coast are taking the bridge. with the U.S. Federal Energy Regulatory 500,000 bpd out of Cushing the FLARING SOLUTIONS “We can provide a substantial amount Commission on Dec. 2, TransCanada prospects for West Texas Intermediate of the funding, but we’re looking for sup- said it was submitting a tariff filing “in prices will be bullish. roads. port from the state and industry for it,” “This could hook us up to the rail line advance of the commencement of trans- WTI for January delivery on the Mandan said. “That is our primary area of portation service” to the new delivery New York Mercantile Exchange that runs through Dunn Center, Zap, our production. We’re at upwards of 800 Killdeer, Hazen, that whole rail spur point. increased by 2.4 percent to a one- wells now, and the number projected so “We remain focused on completing month high of $96.04 per barrel and there,” she said. “We could become a far is 3,000. With 3,000 wells on the reser- major transporter of gas out of the the construction, testing and commis- narrowed its discount to Brent to as low vation, we have significant initial produc- sioning” for project, he said. as $16.16 per barrel. Bakken. It would make a very significant tion flaring to come.” l impact.” “As we prepare for line fill, we are TransCanada has proposed uncom- To accelerate the process, the tribes continuing to provide (the Pipelines and mitted pipeline tariffs of $10.20 a bar- passed a resolution in October to establish Hazardous Materials Safety rel for light crude and $11.34 per barrel a transportation coordinator to study fea- Administration) with all the information for heavy crude from the U.S.-Canada they require to see that TransCanada has border near Haskett, Manitoba. followed through on the 57 special con- Uncommitted per barrel rates to continued from page 3 Mountrail County and to be allowed to ditions it voluntarily agreed to so that Cushing from the border are $6.82 for drill on horizontal well there. the public can see the advanced safety light and $7.28 for heavy. SPACING APPS standards that the Gulf Coast project Andy Lipow, president of Lipow Oil Non-Bakken pool apps will operate to — and that no other Associates, said Gulf Coast allows each of the four units. pipeline in operation today will feature,” refineries to move significant crude Just below the Canadian border in ExxonMobil subsidiary XTO Energy Howard said. volumes from the Midcontinent to the north-central Bottineau County, is asking for one 1,920-acre spacing unit He said the “primary driver” behind Gulf Coast, reinforcing the movement Corinthian Exploration (USA) is asking in the Tobacco Garden field in north-cen- the FERC filing was to “establish an of the “logistical movement” from the commission to create one 160-acre tral McKenzie County on which it wants effective date for the applicable rates, Cushing to the Gulf Coast. unit in the Souris field and one 120-acre to drill up to 14 wells. XTO also wants rules and regulations to implement the —GARY PARK unit in the North Souris field. Corinthian the commission to create a 640-acre unit transportation services.” is also seeking authorization to drill five in the Morgan Draw field that spans “We are required to provide at least 30 Spearfish/Madison pool wells on the 160 northeast Golden Valley and northwest days notice to FERC regarding the effec- and two Madison pool wells on the 120. Billings counties, although the spacing tive date of our tariffs and tolls,” he said. Armstrong Operating wants a 160- unit XTO is requesting is in Golden acre unit created in southeastern Dunn Valley County. County where the company wants to drill Zavanna LLC filed an application an exploratory well into the Fryburg zone seeking the creation of one 1,280-acre

in the Mission Canyon formation. page Senate majority leader weighs in on 6 North Dakota oil, gas legislation spacing unit in Patent Gate field in north- Vol. 1, No. 21 • www.PetroleumNewsBakken.com A semi-monthly newspaper for industry and government February 17, 2013 COMPANY UPDATE Far to the south, Sojourn Energy LLC Crude on rails in for long haul central McKenzie County where the WLL gets bum rap James. T. Brown: Whiting Petroleum is not running out of drilling inventory

ticularly acute when it comes to finding VERN WHITTEN PHOTOGRAPHY By RAY TYSON Petroleum News Bakken new targets in Whiting’s flagship Sanish wants the commission to vacate existing field in North Dakota’s Williston Basin, GET THE enver-based E&P independent which accounts for around 30,000 barrels DWhiting Petroleum Corp. is finding per day, or nearly 40 percent of the compa- company wants to drill a wildcat well. it difficult convincing investors that the ny’s roughly 80,000 barrels per day of pro- company is not running out of suitable duction. Plains All American’s Manitou crude oil and NGL rail facility near places to drill. By the end of 2012, a total of about 300 Ross, west of Stanley in Mountrail County, North Dakota. Photo taken this winter by Vern Whitten. See rail story below. “The knock against Whiting is that you production wells had been drilled in the guys don’t have any inventory and in three JAMES T. BROWN Sanish field, with at least another 200 to be Red River spacing units and then create a years you’re going to be done,” James T. drilled and completed. Rail will survive pipeline additions Brown, Whiting’s president and chief operating offi- “It seems that when we get to the end of every The need for rail to move crude from cer, told industry analysts Feb. 6 at the Credit Suisse year, we have two-and-half to three years of drilling The Patent Gate field has been defined Midcontinent fields will likely persist, 2013 Energy Summit in Vail, Colo. even if plans for expanding pipeline The lack-of-inventory perception seems to be par- see WHITING INVENTORY page 18 links from the Bakken to the Gulf Coast go ahead, EOG Resources Chief LAND & LEASING LATEST BAKKEN NEWS. Executive Officer Mark Papa told a new 320-acre spacing unit in the South Colorado conference. He said rail will still be used five years from now to deliver Bakken crude Riverbed draws top bids to all three Lower 48 coasts — the Gulf, MARK PAPA only for the Bakken formation, and East and West — but expects the cur- QEP Energy high bidder on 22 Missouri River leases; shore zone included rent advantage of Louisiana Light Sweet, LLS, crude prices in the Houston market will probably change within 18 By MIKE ELLERD third or 9,900 acres were in For Petroleum News Bakken 106 Missouri riverbed tracts in see RAIL SURVIVAL page 24 Dunn County and those tracts Horse Creek field in southern Bowman brought in a total $21,227,455, total of 27,370 acres Bakken threatens Alberta upgrader A were leased in 306 tracts a sum that accounted for more in nine western North Dakota than 86 percent of the gross Zavanna wants the new spacing unit The Bakken might be about to register a friendly-fire vic- counties in the Feb. 5 North auction proceeds. tim — a C$11.6 billion Suncor Energy upgrader to convert oil Dakota Department of Trust The Dunn County lease sands bitumen into synthetic crude for refining into fuels. Lands oil and gas lease auction activity was, in turn, dominat- Suncor, with France’s Total as a 49 percent partner, expects bringing in a total of ed by 22 Missouri riverbed SUBSCRIBE TODAY! l LANCE GAEBE DREW COMBS to decide no later than March 31 on the immediate fate of its $24,609,206 at an average tracts totaling 1,465 acres that County along the South Dakota border. Voyageur project, which has been in a holding pattern for the price of $899 per acre. The auction was dominated by fetched a total of $16,536,197 at an average price of last four years, putting an end to its original startup date of tracts between the former high water marks on the $11,291 per acre, all purchased by Denver-based 2016. two banks of the Missouri River under Lake QEP Energy Co. defined for the Three Forks for drilling a Since taking control of the oil sands giant nine months Sakakawea in Dunn County. ago, Suncor Chief Executive Officer Steve Williams has Of the 27,370 acres leased, slightly less than one- see ND LEASE AUCTION page 21 increasingly hinted that economic challenges could be the undoing of Voyageur. ASSOCIATIONS His explanation has been delivered in clear-cut terms. see ALBERTA UPGRADER page 24 Galt: MPA ever vigilant test well in that formation. Helms slams U.S. Fish & Wildlife Montana Petroleum Association chief keeps tabs on several bills during session Two new slides have appeared in Lynn Helms’ presentation packet — By MIKE ELLERD temporary leasing of water rights, financial slides with information that he thinks For Petroleum News Bakken relief to oil and gas-impacted communities, indicate an attempt by and carbon sequestration and enhanced oil the U.S. Fish & Wildlife umerous oil and gas-related bills recovery using carbon dioxide. Service to take over oil have been introduced thus far in the 907-522-9469 N and gas permitting in 63rd session of the Montana legislature Property rights: surface Sinclair Oil and Gas wants one 1,280- North Dakota. currently in session in Helena, and while damage compensation One is a map backing up his agency’s Montana Petroleum Association Executive House Bill 431, introduced by Rep. recent analysis that shows 83 percent of Director Dave Galt follows all of them LYNN HELMS Austin Knudsen of Culbertson, is a surface North Dakota’s oil and gas spacing units closely, he recently spoke with Petroleum DAVE GALT damage compensation bill that would add have some federal land ownership, surface and/or minerals. News Bakken and discussed those that he to the existing oil and gas surface damage Helms, director of the North Dakota Industrial thinks are most important to his membership. and disruption compensation statue the definition of Commission’s Department of Minerals, Oil and Gas Division, The key bills Galt identified fall into a variety of “lost land value” as “the value of the highest and best told North Dakota lawmakers in January, “It was really sur- categories. Some deal with compensation for reasonably available use, including the proposed use.” acre unit in the Parshall field in southern prising to me when we did this analysis to find out that 83 landowner surface damage, eminent domain and The bill would also require that the surface owner and forced pooling, all of which Galt lumps together into PETROLEUMNEWSBAKKEN.COM the oil and gas developer or operator attempt “in good see PERMITTING page 10 what he considers to be “property rights” legislation. Other bills that Galt considers key deal with taxation, see ENERGY LEGISLATION page 22 14 PETROLEUM NEWS BAKKEN • WEEK OF DECEMBER 15, 2013 continued from page 1 Right behind Kodiak and XTO are of various acreages in 80-plus drilling In the Little Knife field in western Slawson Exploration and Oasis zones in five western North Dakota coun- Dunn County, Continental wants to drill WELL DENSITIES Petroleum. Slawson filed an application ties with spacing unit densities ranging up to 14 wells on each existing 1,280-acre to drill a total of 15 wells on an existing from 85.3 to 137.1 acres per well. unit in eight zones and 28 wells on each “These spacing requests are very sig- 1,280-acre unit in the Big Bend field in In addition, Continental is seeking existing 2,560-acre unit in one zone. nificant, in the fact it is some of the high- the peninsula in southwest Mountrail authorization to drill up to 30 wells on an In addition, Continental wants to drill est we have ever seen,” Department of County, for a spacing unit density of one existing 2,560-acre spacing unit in the up to 14 wells on each existing 1,920-acre Mineral Resources Assistant Director well per 85.3 acres. Meanwhile, Oasis is Alkali Creek field, for a spacing unit den- unit in one zone in the Jim Creek and one Bruce Hicks told Petroleum News seeking authorization to drill up to 15 sity of one well per 85.3 acres. Most of zone in the Rattlesnake Point fields, for a Bakken in a written statement. “Should wells on “some or all” of the 1,280-acre that square spacing unit lies under Lake spacing unit density of 137.1 acres per the commission approve these cases, it spacing units in the Willow Creek field in Sakakawea in west-central Mountrail well. The company also wants to drill up should allow operators the ability to verti- southern Williams and northern County but a portion extends into north- to 28 wells on each existing 2,560-acre cally test the stratigraphic limits of the McKenzie counties. east McKenzie County. spacing unit in the Corral Creek (one Bakken and Three Forks Formations. It WPX Energy Williston wants to drill In the Robinson Lake field in west- zone), Jim Creek (two zones), Oakdale will give operators the chance to review up to 14 wells “on each existing” 1,280- central Mountrail County, Continental (two zones) and Rattlesnake Point (two scientific data as to what the best possible acre unit in the Mandaree, Squaw Creek, wants to drill up to 14 wells on each zones) fields. well densities should be for a particular Spotted Horn and Reunion Bay fields in 1,280-acre unit in each of six zones and area.” northern Dunn, far eastern McKenzie, 28 wells on existing 2,560-acre units in Other Continental infill apps Highest densities and southwest Mountrail counties. The each of two zones. In the Ellisville and adjacent Winner resulting spacing unit density would be fields in north-central Williams County, The operators seeking the highest well 91.4 acres per well. Continental’s Dunn Co. apps Continental wants to drill up to 14 wells densities are Kodiak Oil and Gas (USA) Continental is seeking permission to on each existing 1,280-acre unit in three and XTO Energy. Kodiak is seeking per- Continental leads infill apps drill up to 14 wells on each existing zones in the Ellisville field and in two mission to drill up to 16 wells on two While not among those operators seek- 1,280-acre spacing unit in various spacing zones in the neighboring Winner field in existing 1,280-acre units in the Traux ing the highest spacing unit densities, zones in the following fields in western north-central Williams County. In far field in southern Williams County. XTO Continental Resources is among those and northwestern Dunn County: Bear southwest Williams County, Continental wants to drill four wells on an existing seeking higher densities, and Continental Creek (two zones), Cabernet (two zones), wants authority to drill up to 14 wells on 320-acre unit in the Squaw Creek field in led in the number of infill wells being Corral Creek (three zones), Crooked each existing 1,280 in four zones in the far eastern McKenzie County. In both sought by operators in December. Creek (two zones), Jim Creek (six zones), Painted Woods field. cases the resulting density is one well for Continental filed applications to drill Oakdale (two zones) and Rattlesnake Continental is also asking permission every 80 acres in the spacing unit. additional wells on existing spacing units Point (three zones). to drill up to 14 wells on each 1,280 in one zone in the Customs field which lies along the Canadian border in far northern Burke County, and on two zones in the Viking field which borders the North Tioga field on the north in southwest Burke County. And in Divide County, Continental RESERVE AD wants to drill up to 14 wells on existing 1,280s in one zone in the Dolphin field and in three zones in the neighboring Upland field in southeaster area of the county. SPACE TODAY In the Stoneview field, which extends across portions of southeast Divide, west- The Bakken Explorers is coming in May 2014. ern Burke and northeast Williams coun- ties, Continental wants to drill up to 14 wells on existing 1,280s in six zones and 28 wells on 2,560s in five zones. Continental also has plans to drill up to 14 wells on existing 1,280s in six zones and Advertising sales close 3/29/14. 28 wells on 2,560s in two zones in the Call today to reserve space. neighboring North Tioga field in south- west Burke County. Farther to the south, Continental is To salute explorers in the Bakken — be seeking authority to drill up to four wells they evaluating the edges of the play, on each of three existing 1,280-acre units testing undeveloped formations within in the St. Demetrius, Barta and Ukrania it, or developing new technology to fields, all neighboring fields in east-cen- explore more oil — advertise in The tral Billings County. And in the Snow Bakken Explorers full color, annual field, also in eastern Billings County, magazine. Continental wants to drill up to 14 wells on each 1,280-acre unit in two separate Contact Petroleum News Bakken zones. advertising executives at the following email addresses or phone numbers: Other density increase apps In addition to the wells it wants to drill Raylene Combs in the Willow Creek field, Oasis is seek- 509-290-5903 ing authorization from the commission to [email protected] drill up to 12 wells on some or all of the 1,280-acre units in the Tyrone field in Susan Crane western Williams County. 907-770-5592 [email protected] And Slawson also wants to drill up to seven wells each on two existing 1,280- Renee Garbutt acre units, one in the Bully field and the 907-522-9469 other in the Trailside field in central [email protected] McKenzie County. Other operators looking to increase Bonnie Yonker well densities include Emerald Oil Inc., 425-483-9705 which wants authorization to drill a total [email protected] of seven wells on each of 10 separate 1,280-acre units and six wells each on three other 1,280s. Most of Emerald’s spacing units are in McKenzie County in the Little Tank (one), Boxcar Butte (one), MonDak (three), Pierre Creek (two), Poker Jim (one) and Flat Top Butte (one) PetroleumNewsBakken.com | 907-522-9469 fields in central and western regions of the county. One unit is in the Big Meadow field in northeast Williams County, anoth-

see WELL DENSITIES page 15 PETROLEUM NEWS BAKKEN • WEEK OF DECEMBER 15, 2013 15

continued from page 1 “What we’re really recommending is sibility of the state through the The task force has looked to the policy recommendations to the state to Department of Commerce or the Oil and University of North Dakota Energy and FLARING TASK FORCE help,” he said. “Some of it’s on industry Gas Research Council to attract substan- Environmental Research Center, EERC, shoulders and some of it is on the state’s.” tial capital investment in well site solu- throughout the process to review these can hit.” Helms had indicated at the task force’s tions. entrepreneurial remote capture technolo- Aiming for a 5 percent target inception that the state wanted industry’s “But how do we as a state, or the gies. Dille said all onsite capture vendors feedback on policy changes, so he said he industry through the task force, get a GE- have been submitted to EERC, and they The percentage of natural gas flaring isn’t surprised this is a big part of their sized company to put hundreds of mil- are evaluating the economic and technical has hovered around 30 percent in recent recommendations. lions of dollars into this and deploy a effectiveness of each. months with an historical high of 36 per- “I tried to show them the impact of the thousand well site units?” Helms asked. “We are going to propose that we go cent in September 2011. Lynn Helms, existing policies and get them thinking “That’s the guys we’re hunting for.” forward with pilot testing to see if the director of North Dakota’s Department of about what kind of policies industry could When asked if the task force had technology does what it says it does,” Mineral Resources Oil and Gas Division, live with that would accomplish the com- reached out to large companies, Dille Dille said. “That’s one of the things that told Petroleum News Bakken that the state mission’s goals,” Helms said. responded, “Those companies are out has to fall into place — that the technolo- would like to see that percentage down to But Helms said the state is also hopeful there and are aware of the situation. But gy works as advertised and we can imple- 5 percent, but if left to the market, he said, that the report includes something sub- there is the permitting and regulating ment it in a fashion that gets us to reduc- that wouldn’t happen before 2021. stantial to reduce flaring. When the task side, and the financial aspects, that are in tion.” “The targets will be stepped so we force briefed the Industrial Commission the state’s hands.” Whatever flaring solutions are eventu- achieve what Lynn Helms suggested,” on its progress in October, Dalrymple ally put into place, Helms said it will Dille said. “We’ll try to get there in that stated the importance of targeting large Entrepreneurs must prove themselves require a shift in the way industry con- fashion. We want to have some realistic companies that could come in and make a Helms said there are two or three ducts business. goals but try to get there as fast as we big impact on capturing the natural gas to major projects being reviewed by venture “The nature of this business is that can.” reduce flaring. capital companies for beneficial use of drillers drill, operators operate, and they “We were hoping the task force would sign a long-term contract with a gas pro- Compromise on policy change the gas. In addition, there are a lot of reach out to some of these larger compa- entrepreneurial systems for well site gas cessing company and they walk away,” The task force was charged with find- nies and possibly bring them into the task processing, but they are underfunded. Helms said. “It is going to be hard to ing ways to reduce flared volume, the force,” Helms said. “And I’m a little con- “When looking at an inventory of change that long-standing business number of wells being flared and the dura- cerned it won’t be there.” 1,000 wells flaring, and entrepreneurs are process that’s always been in place.” l tion of the flaring. Dille said most of the only able to deploy a few dozen machines, task force’s solutions will hinge on what Hunting for a giant-sized investor you don’t make much process,” Helms the state is willing to do with policy. Helms said it may become the respon- said. continued from page 14 WELL DENSITIES

er is in the St. Demetrius field in east- central Billings County, and the remain- ing two units are in the Green River and Heart River fields in western Stark County. Hess Corp. filed applications seeking AN INDUSTRY THAT authorization to drill up to six wells on four 1,280-acre units in the Little Knife field in far western Dunn County and on one 1,280-acre unit in the South Meadow field in northwest Williams County. Hess also wants to drill eight wells on two MOVES INDUSTRY. 1,280s and nine wells on another 1,280 in $ the Little Knife field. Privately owned freight railroads invest more than 20 BILLION annually on the rail network to ensure In the Ambrose, West Ambrose and that America’s energy sources are moved in the safest, most efficient and cost-effective way possible. Colgan fields along the Canadian border in far northern Divide County, SM Energy is seeking authorization to drill an additional middle Bakken well in each of five existing 2,560-acre units. Whiting Oil and Gas, wants to drill up to seven wells on a 1,280 in the Pleasant Hill field in central McKenzie County. Finally, and in addition to the four wells it wants to drill on the Squaw Creek field 320-acre unit, XTO wants permis- sion to drill up to seven wells on an exist- ing 640-acre unit in the Heart Butte field in northeast Dunn County. —MIKE ELLERD

page Senate majority leader weighs in on 6 North Dakota oil, gas legislation

Vol. 1, No. 21 • www.PetroleumNewsBakken.com A semi-monthly newspaper for industry and government February 17, 2013

COMPANY UPDATE GET Crude on rails in for long haul WLL gets bum rap James. T. Brown: Whiting Petroleum is not running out of drilling inventory

ticularly acute when it comes to finding VERN WHITTEN PHOTOGRAPHY By RAY TYSON Petroleum News Bakken new targets in Whiting’s flagship Sanish field in North Dakota’s Williston Basin, enver-based E&P independent which accounts for around 30,000 barrels DWhiting Petroleum Corp. is finding per day, or nearly 40 percent of the compa- it difficult convincing investors that the ny’s roughly 80,000 barrels per day of pro- company is not running out of suitable duction. Plains All American’s Manitou crude oil and NGL rail facility near places to drill. By the end of 2012, a total of about 300 Ross, west of Stanley in Mountrail County, North Dakota. Photo taken this winter by Vern Whitten. See rail story below. “The knock against Whiting is that you production wells had been drilled in the guys don’t have any inventory and in three JAMES T. BROWN Sanish field, with at least another 200 to be years you’re going to be done,” James T. drilled and completed. Rail will survive pipeline additions Brown, Whiting’s president and chief operating offi- “It seems that when we get to the end of every The need for rail to move crude from cer, told industry analysts Feb. 6 at the Credit Suisse year, we have two-and-half to three years of drilling Midcontinent fields will likely persist, 2013 Energy Summit in Vail, Colo. even if plans for expanding pipeline The lack-of-inventory perception seems to be par- see WHITING INVENTORY page 18 links from the Bakken to the Gulf Coast go ahead, EOG Resources Chief LAND & LEASING Executive Officer Mark Papa told a Colorado conference. He said rail will still be used five years from now to deliver Bakken crude Riverbed draws top bids to all three Lower 48 coasts — the Gulf, THE MARK PAPA East and West — but expects the cur- QEP Energy high bidder on 22 Missouri River leases; shore zone included rent advantage of Louisiana Light Sweet, LLS, crude prices third or 9,900 acres were in in the Houston market will probably change within 18 By MIKE ELLERD For Petroleum News Bakken 106 Missouri riverbed tracts in see RAIL SURVIVAL page 24 Dunn County and those tracts total of 27,370 acres brought in a total $21,227,455, Bakken threatens Alberta upgrader A were leased in 306 tracts a sum that accounted for more in nine western North Dakota than 86 percent of the gross The Bakken might be about to register a friendly-fire vic- counties in the Feb. 5 North auction proceeds. tim — a C$11.6 billion Suncor Energy upgrader to convert oil Dakota Department of Trust The Dunn County lease sands bitumen into synthetic crude for refining into fuels. Lands oil and gas lease auction activity was, in turn, dominat- Suncor, with France’s Total as a 49 percent partner, expects bringing in a total of LANCE GAEBE DREW COMBS ed by 22 Missouri riverbed to decide no later than March 31 on the immediate fate of its $24,609,206 at an average tracts totaling 1,465 acres that Voyageur project, which has been in a holding pattern for the price of $899 per acre. The auction was dominated by fetched a total of $16,536,197 at an average price of last four years, putting an end to its original startup date of tracts between the former high water marks on the $11,291 per acre, all purchased by Denver-based LATEST 2016. two banks of the Missouri River under Lake QEP Energy Co. Since taking control of the oil sands giant nine months Sakakawea in Dunn County. ago, Suncor Chief Executive Officer Steve Williams has Of the 27,370 acres leased, slightly less than one- see ND LEASE AUCTION page 21 increasingly hinted that economic challenges could be the undoing of Voyageur. ASSOCIATIONS His explanation has been delivered in clear-cut terms. see ALBERTA UPGRADER page 24 Galt: MPA ever vigilant Helms slams U.S. Fish & Wildlife Montana Petroleum Association chief keeps tabs on several bills during session Two new slides have appeared in Lynn Helms’ presentation packet — By MIKE ELLERD temporary leasing of water rights, financial slides with information that he thinks For Petroleum News Bakken relief to oil and gas-impacted communities, indicate an attempt by and carbon sequestration and enhanced oil BAKKEN the U.S. Fish & Wildlife umerous oil and gas-related bills recovery using carbon dioxide. Service to take over oil Nhave been introduced thus far in the and gas permitting in 63rd session of the Montana legislature Property rights: surface North Dakota. currently in session in Helena, and while damage compensation One is a map backing up his agency’s Montana Petroleum Association Executive House Bill 431, introduced by Rep. recent analysis that shows 83 percent of Director Dave Galt follows all of them LYNN HELMS Austin Knudsen of Culbertson, is a surface North Dakota’s oil and gas spacing units closely, he recently spoke with Petroleum DAVE GALT damage compensation bill that would add have some federal land ownership, surface and/or minerals. News Bakken and discussed those that he to the existing oil and gas surface damage Helms, director of the North Dakota Industrial thinks are most important to his membership. and disruption compensation statue the definition of Commission’s Department of Minerals, Oil and Gas Division, The key bills Galt identified fall into a variety of “lost land value” as “the value of the highest and best told North Dakota lawmakers in January, “It was really sur- categories. Some deal with compensation for reasonably available use, including the proposed use.” prising to me when we did this analysis to find out that 83 landowner surface damage, eminent domain and The bill would also require that the surface owner and forced pooling, all of which Galt lumps together into the oil and gas developer or operator attempt “in good see PERMITTING page 10 what he considers to be “property rights” legislation. NEWS Other bills that Galt considers key deal with taxation, see ENERGY LEGISLATION page 22 For more information visit: SUBSCRIBE TODAY! www.aar.org/crudebyrailfacts 907-522-9469 Designed to Move a Nation PETROLEUMNEWSBAKKEN.COM 16 PETROLEUM NEWS BAKKEN • WEEK OF DECEMBER 15, 2013 continued from page 1 structing a four lane bridge across the duction. The study will be completed at and gas producing counties. Flaring, mon- Little Missouri River will be challenges end of August of 2014 and the consulting itoring of pipelines and land owner issues WARDNER Q&A that have to be overcome. Currently the firm will report to the legislative commit- will also have several proposals in the leg- two lane highway is overwhelmed by the tee in early September of 2014. islative process. of Agriculture's mediation services for oil truck traffic. Public safety is the number and gas pipeline easements are effective, one concern on Highway 85. Petroleum News Bakken: There have Outside North Dakota however, the $620 million for state high- been some calls from within the oil and Petroleum News Bakken: You recently ways in oil country has made a positive Petroleum News Bakken: How should gas industry for North Dakota to lower its attended an energy conference in Alberta, impact on the road infrastructure. Also, it be funded, and how soon could work on oil and gas production and/or extraction followed by a side trip to the oil sands. the legislation that appropriated funding that project potentially begin? taxes in order to be more competitive with Can you provide some details about the back to political subdivisions is coming in Wardner: The state needs to set aside other western oil and gas producing conference and what your take-home was over estimates, which will aid in meeting funding dedicated to a four lane Highway states. What are your thoughts on tax from both the conference and your tour of the needs in oil impacted country. 85 until the project is completed. There reductions for the oil and gas industry? the oil sands? has been preliminary work done by the Wardner: The 5 percent oil and gas Wardner: Alberta's oil sands has an Petroleum News Bakken: What oil and North Dakota DOT, but the construction production tax would not be changed, estimated 169 billion barrels of oil and gas related issues do you see that were south of Watford City needs to start as because it is shared with the political sub- currently Alberta produces 1.8 million not addressed by legislation in the 2013 soon as funds are dedicated, which would divisions in oil and gas country as an in barrels per day. Their goal to develop new session that should have been? happen after the 2015 legislative session lieu of property tax. The 6.5 percent markets and increase production with a Wardner: The area of pipeline monitor- if approved. extraction along with the tax incentives new technology called steam assisted ing. Oil companies that have pipelines when oil drops below the trigger price of gravity drainage (SAG-D) that will give need to know when a pipeline leak occurs, Oil and gas taxes? approximately $53 per barrel for five con- Alberta the ability to triple production in a so that they can address the situation Petroleum News Bakken: The Energy secutive months needs to be studied to short period of time. quickly. Development and Transmission make sure industry and the State of North Mexico is inviting private oil compa- Widening U.S. 85 Committee recently commissioned a study Dakota are treated fairly. The state wants nies into their country to help them ramp by a private sector consulting firm to the oil companies to continue to invest in up production. Mexico has a nationalized Petroleum News Bakken: You have evaluate the future of North Dakota’s oil North Dakota; however the state has to oil company and they are not getting the been a vocal proponent of widening U.S. and gas industry for the legislature to use meet the needs from impacted areas. The results they had expected. The oil shale Highway 85 between Watford City and I- as guidance in determining how oil and study should give us some insights as to plays in other parts of the United States 94 at Belfield, some 60-plus miles. What gas tax revenues are collected and dis- the tax rate that will best serve the oil are increasing production and the talk was do you think the prospects are for getting tributed. Can you provide some detail industry and North Dakota into the future. that the North American continent will be that done? about the focus of the study and when is it self-sufficient by 2020. It tells me there Wardner: I believe it will be accom- expected to be completed? The next session? will be competition for the Bakken light plished. It may not happen as fast as many Wardner: The scope and focus of the Petroleum News Bakken: While the crude on the world market, therefore, we of us would like, however, it will happen. study is to determine the correct oil and 64th North Dakota legislative session is in North Dakota, need to get our infra- Over $300 million has been dedicated to gas tax rate to meet the needs of the polit- still a year away, we are now one year into structure needs in oil country taken care of Highway 85 between Watford City and ical subdivisions affected by the oil and the interim – at this point what do you see and study our state oil and gas tax policy Williston by the North Dakota DOT and gas production and impacts, as well as the as potential oil and gas-related issues that so that we can keep oil companies invest- construction of the four lane undivided State of North Dakota. The consulting the next legislature might face? ing in the North Dakota oil patch. l highway has begun. Environmental firm will not only study local trends in the Wardner: Increased funding to highly issues, four lanes past the north unit of the oil and gas industry, but also global trends impacted counties, cities, schools, emer- Teddy Roosevelt National Park and con- with respect to demand and future pro- gency services and law enforcement in oil continued from page 1 granted, but I would say it’s likely because increased number of applications. connect the well to a pipeline, generate the task force hasn’t finished their work, “All these things have raised the level electricity with the gas, or process it in a FLARING EXEMPTIONS filed their report, nor have we had a of awareness of operators for the need to beneficial way. get an exemption from the Industrial “That’s a pretty high bar they have to expire on Dec. 31. chance to respond to that with a change of Commission or pay taxes and royalties,” reach,” he said. “Typically only wells way “Many companies are applying for policy,” Helms told Petroleum News Helms said. “More than likely that’s why out on the edge, the very isolated ones, extensions. It doesn’t mean they’ll be Bakken in reference to the North Dakota Petroleum Council’s flaring task force we’re seeing them.” get that approved.” (see story on this page). While the production restriction On the flip side, Helms noted he hasn’t exemptions are granted about 95 percent seen any observable increase in activity to YOU DON’T GET A Other applications of the time, Helms said, the tax and royal- get wells connected. SECOND CHANCE Helms said 11 other applications are ty exemption requests are not. “So they either have to pay these taxes TO FRAC IT RIGHT for long term exemptions from paying “Those undergo a much more rigorous and royalties or file for an exemption,” he analysis,” he said. “They have to meet an said. “The responsibility is on them. It is THE FIRST TIME taxes and royalties on flared gas. He sus- pects the recent attention to the flaring economic test in order to get that long assumed in the statue that they will pay issue and the Petroleum Council’s task term the taxes and royalties.” force — along with the lawsuits filed by exemption.” —MAXINE HERR mineral owners against oil companies in Helms said operators must demon- North Dakota — have caused the strate that it will never be economical to

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