Ward Williston Oil Co., a pioneer in North Dakota’s oil industry, has transferred operatorship of its Williston basin wells to Enduro Operating LLC, a Fort Worth, Texas-based independent new to the state.
The acquisition by Enduro appears to include 162 wells on approximately 30,000 net acres in the North Dakota counties of Renville, Bottineau and Burke — 97 wells in Renville, 39 in Bottineau and 26 in Burke.
One hundred twenty-five of those wells are producers. They yielded an average of 669 barrels of oil per day in May. (Ward Williston’s Chief Executive Office Tom Cunnington said in December 2009 that most of the company’s leasehold is held by production, which still appears to be true.)
In North Dakota Oil and Gas Division well operatorship records, the transfer occurred in early July.
But production records from the same agency show the wells were in Enduro’s name starting May 1.
Michigan-based Ward Williston, a privately held exploration and production company that drilled the second producing well in North Dakota more than 60 years ago, transferred 97 wells in Renville County, 26 wells in Burke, and 39 wells in Bottineau to Enduro.
In the same time period, Calgary-based Arsenal Energy transferred its operatorship of eight wells in Ward County, only two of which are oil producers, yielding 218 barrels in May, about 7.4 bpd.
Backed by Riverstone
Enduro, like most companies backed by Riverstone Holdings LLC, is privately owned and very closemouthed about its business activities.
In the cases Petroleum News — sister publication to Petroleum News Bakken — has studied, Riverstone appears to ask its companies, in this case Enduro Operating, not to make any public disclosures except those required by law.
Although Kimberly A. Weimer, chief financial officer of Enduro Operating and its Enduro affiliate firms, promptly returned a call from PN Bakken, she would only confirm (or not deny) what was already in the public record: Enduro, a two-year-old independent and operator of low-risk assets in the Permian basin, has entered the Williston basin of North Dakota as an operator.
Enduro does not appear to have a website. The Riverstone website has just this to say of Enduro Operating’s parent: Enduro Resource Partners … is a privately held upstream oil and gas partnership managed by Jon Brumley and John Arms. The partnership has an exploitation and production business plan with a focus on acquiring high quality long-lived domestic US onshore assets.”
Daniel Yergin, John Browne part of Riverstone
Riverstone, an $18 billion private equity firm whose team includes such notables as Lord John Browne and Daniel Yergin, has a reputation for aligning its capital with innovative and experienced energy executives.
In the case of the Enduro group of companies — Enduro Operating, Enduro Resource Partners, Enduro Sponsor, Enduro Royalty Trust, etc. — the leadership includes Brumley and John W. Arms, Encore’s top two executives.
Enduro’s top two execs
Prior to co-founding the Enduro group of companies, Brumley was CEO and president of Encore Energy Partners and Encore Acquisition Co., and was directly involved in the merger of Encore in early 2010 with Denbury Resources, a deal that netted Encore $4.5 billion.
Before Encore, Brumley was manager of commodity risk and commercial projects at Pioneer Natural Resources, after serving as director of business development of MESA, during which time MESA combined with Parker & Parsley in 1997 to form Pioneer.
Brumley holds a Bachelor of Business Administration in Marketing from the University of Texas.
Another Enduro co-founder, Arms previously served as senior vice president of acquisitions for Encore Acquisition and general partner of another Encore company, where initially he held various petroleum engineering positions.
He has more than 20 years of experience working in the energy industry, including acquisition analysis, reserve estimation, reservoir engineering and operations engineering.
Prior to joining Encore, he was senior reservoir engineer for Union Pacific Resources and an engineer at XTO Energy.
Arms has a Bachelor of Science in Petroleum Engineering from the Colorado School of Mines.
Lots of upside
When Ward Williston sold its Westhope, N.D., oilfield service division in mid-2011, its Chief Operating Officer Nathan Conway said Ward Williston would remain an active exploration and production company in North Dakota.
“This divestiture allows us to concentrate on increasing our proved reserves and production through acquisitions and field development,” he said in an August 2011 press release.
“The strategic plan for Ward Williston including various partnerships and joint ventures, incorporates an aggressive exploration and production plan for 2012,” the company statement said. “The seasoned management team, headquartered in Bloomfield Hills, Michigan, maintains a large inventory of low-risk, infield development drilling prospects with a potential for acquisitions as larger producers leave non-core areas.”
What is different about Ward Williston and most other operators in the Williston basin is that the Cunningtons have not been interested in tapping the prolific middle Bakken and upper Three Forks formations with the use of horizontal drilling.
Rather, the company has instead drilled vertical wells into what Ward Williston President Laurie Cunnington described as “the proven, but often bypassed Midale and other shallower pay zones. Although wells drilled in the Middle Mission Canyon intervals are smaller than horizontal Bakken wells, we can drill nearly 10 wells in the these prolific formations, mainly limestone, for the cost of drilling and completing one Bakken horizontal well. As a result, the Williston’s shallower pay zones offer companies like ours an attractive risk-and-reward profile offering long-term growth opportunities,” she told Oil & Gas Financial Journal in December 2009.
Holding leases with production, gave Ward Williston “a large platform for developing not only our current prospects, but also for realizing the potential that may develop in the future,” Tom Cunnington said in the same interview.
The Cunningtons think their acreage “is prospective for the Bakken/Three Forks. And the way the play is developing, it appears that the industry may be bringing it towards us. If this happens, we will need strong partners to help develop the potential resource under our leasehold,” Laurie Cunnington said.
At the time of the interview, Ward Williston was producing just a little less oil per day than it did in May — 600 bpd, but with 160 producing wells versus the 125 wells online this year.
Proved reserves at the end of 2009, the Cunningtons said, were about 2 million barrels of oil equivalent, which includes natural gas.
They also said that Ward Williston had 400 drillable locations on 30,000 net acres.
An ‘extraordinary’ system
One asset Ward Williston developed that might have been particularly attractive to Enduro, was what Laurie Cunnington described as “an extraordinary system and methodology for mapping subsurface formations and combining that with critical surface data,” in the December 2009 interview.
“We have information on every well in North Dakota in our database that incorporates formation tops, cultural items, wetlands locations, and other data that can be visually presented in one ‘mashed up’ map. We know where the anomalies are and how to capitalize on them,” an advantage that she said “helps our E&P group know where to drill and exploit upside.”
Since these statements in late 2009, Ward Williston appears to have had only one drilling rig operating at any one time, and many months without a rig. Its last rig, per state records, appears to have been the CanElson 43 rig in January, which drilled a vertical well in the Mouse River Park field.
