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Vol. 17, No. 41 Week of October 07, 2012
Providing coverage of Bakken oil and gas

Chesapeake dumps Williston; Seven drill 65% of Bakken wells

Up until late August or early September, the operations page on Chesapeake Energy’s website listed the Williston Basin as a major liquids-rich play for the big independent. We know because Petroleum News Bakken writer, Mike Ellerd, and editor, Kay Cashman, were using the site to research Chesapeake’s current activities in the basin.

Several calls and emails over the last few weeks to Chesapeake’s media relations folks about the status of the company’s Williston Basin, yielded a single response: “We are not operating any drilling rigs in the Bakken.”

What we do know is this:

• Although the company has been aggressively selling assets elsewhere, there has been no announcement about it putting its Williston Basin 400,000 to 500,000 net acres up for sale. (The numbers come from 2012 presentations made by Aubrey K. McClendon, Chesapeake’s chief executive officer.)

• On July 29, 2011, McClendon said the company would likely seek a joint venture partner for the Williston Basin, but Chesapeake had two other areas, the Mississippian and the Utica — that were “more urgent” and “more important” to bring in a partner because the company had paid a lot more for its acreage there: “Maybe a year from now or so, we’ll be working on a Williston solution. … Our acreage was acquired at a very attractive price up there (North Dakota). So we really don’t have an overwhelming need to de-risk it like when we go into the Utica and spend a $1.5 billion to $2 billion. That’s a significant risk for shareholders. … In a play like the Williston, we just haven’t spent that much money yet.”

• In an investor earnings conference call in May, McClendon said of its Williston leases, which are/were on the fringe of the Bakken petroleum system, “We’re still working our Williston acreage. It doesn’t look like it’s going to work for the Bakken or the Three Forks, but we’ve got some other ideas there. So I haven’t given up. … We’re getting ready to complete a well in another formation.”

• In a December article, Reuters reported that Crystal Lake Resources emerged in North Dakota and began buying leases in Hettinger County for Chesapeake. Hettinger County Clerk Sylvia Gion told PN Bakken in a recent interview that Crystal Lake started leasing in that county last fall and was there about six months but suddenly pulled out in late January or early February. Gion said some of the landowners were paid but others were not. She has not heard anything of Crystal Lake since they left the county last year. These were the lease rejections that the Bismarck Tribune reported on in a Feb. 7 article by Lauren Donovan, “Chesapeake Energy pulling back, won’t honor lease agreements,” that suggests Chesapeake might not have a lot of leases to sell.

• Chesapeake has also pulled the Williston Basin from its investor presentations.

Adjacent to this article is a chart of the six wells Chesapeake has drilled in the basin as of Oct. 4, and their status. Note, only one produced any oil to date and that’s Stark County well ZENT 30-138-95 A 1H, which has yielded less than 3,000 total barrels of oil since its December start-up.

The company drilled a number of vertical wells in the 1990s.

Seven companies drilling 65% of Bakken wells

Seven E&P companies will account for about 65 percent of Bakken drilling in North Dakota this year, Lynn Helms told attendees of the annual meeting of the North Dakota Petroleum Council Sept. 20. Helms is the director of North Dakota’s Department of Mineral Resources and Oil and Gas Division.

In order from largest to smallest producer, the seven companies are Continental Resources, Hess, Whiting Petroleum, Statoil/Brigham, Oasis Petroleum, Marathon and EOG Resources.



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