Weekly Roundup – USGS reevaluating Bakken formation estimates

Posted by bakken

It has been a busy week with oil volatility settling down, but clear direction is still evading us.   WTI crude is approaching $100 again after almost hitting $95 earlier in the week.    OPEC is making headlines lately with reports indicating that Iranian President Mahmoud Ahmadinejad, now the temporary overseer of the Iranian oil ministry, will join and chair the next OPEC meeting,  in Vienna, Austria.   If this does occur, then the impact of Ahmadinejad’s influence may churn oil markets and reignite the volatility of previous weeks.    In the Bakken region,  we saw the following events transpire in the last week.

• The US Geological Survey will update its 2008 assessment of undiscovered, technically recoverable oil and gas in the US portion of the Bakken formation in North Dakota and Montana, Interior Sec. Ken Salazar announced. The update will begin in October and take 2 years to complete, depending on funding.  There is speculation that updated geological information may lead to an estimate above 8 billion bbl of technically recoverable oil which  almost a 100% increase on the previous estimate.
• American Eagle Energy Inc. (OTCBB: AMZG)  announced on 5/19  that it has spud its first horizontal Bakken development well in the Hardy Field (Bakken Formation) of Southeast Saskatchewan.  Proposed merger partner Eternal Energy Corp., as well as Passport Energy Ltd., are working interest partners in the well.  The Hardy S 1A4-16-4B4-9-04-21W2 is the initial earning well for the farm-out agreement among the companies.
• Samson Oil & Gas Limited (SSN: 1.53 +0.33%)  reported its Everett #1-15H well has landed in the middle member of the Mississippian Bakken Formation at a total vertical depth of 11,147 feet. While drilling into the middle member, significant levels of oil and gas shows were recorded. Production casing will now be run in the hole and cemented in preparation to drill the 5,500 foot horizontal lateral.
• The need for rail in the Bakken region is heating up.  By the end of 2011, over  1,500 new wells — each requiring 23 carloads of rail-delivered materials during construction — are projected to join the thousands already operating in the Bakken. Production is currently 325,000 barrels per day, outstripping available transportation capacity.     Oil companies are expediting plans to build or expand terminals that can load or transload 100+ car unit trains, which can transport up to 70,000 barrels per trip.

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Tags: AMZG iran OPEC Samson SSN USGS VOG Voyager wti