Bracing for the Bakken Backlash

Posted by bakken

About a year ago I warned that O&G companies should start preparing for backlash against hydraulic fracking and the potential for public perception that it is directly correlated to groundwater contamination.     In recent weeks,  the EPA issued a report that supposedly found a possible link between groundwater pollution and hydraulic fracturing beneath Pavillion, Wyo. The EPA found chemical compounds likely associated with fracking in the groundwater beneath the small community where residents complain their well water reeks of chemicals. Health officials last year advised residents not to drink their well water after the EPA found low levels of hydrocarbons.   The impact could be quite severe if there is suspected contamination in the North Dakota Bakken region.

Lynn Helms,  Director of the North Dakota Department of Mineral Resources has said he believes there will be a moratorium on fracking because of the history of many-months moratoriums in Alabama, when the EPA, because of an environmental lawsuit, revoked Alabama’s underground injection program until the state wrote new rules specific to fracking under Class II well standards.   Helms recently stated:

“I believe it will be stopped cold for 12 to 24 months. The best case is 15 months and that’s only if we red-lighted everything else and got nothing else done,”

The EPA has since denied a moratorium is imminent, but there is a push underway for drillers to disclose exactly which chemicals they use in fracking.   If that comes to fruition,  and news of chemicals that are harmful to humans reaches local mainstream media in the regions,  the backlash and pressure put on the EPA could be severe.   In a worst case scenario,  if drilling is stopped for even 6-12 months,  “Pure Play” O&G companies in the region could see significant pressure on their stock prices with 50% drops not out of the question.     For investors looking to hedge their risk,  buying protective puts against stock positions may provide defense against a “doomsday” scenario in the region.

We will continue to keep our eyes out for this as news develops…..Stay tuned.

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Active Drilling Rigs – June 4th 2010

Posted by bakkenexpert

There has been quite a bit of activity since our last review of the active drilling rig report 4 months ago. The number of rigs is up to 121 which represents a 20% increase since March. Continental Resources (CLR: 79.28 -0.11%) has really stepped up their drilling activity and now has 17 drilling rigs versus the 11 they had in March. EOG (EOG: 109.09 +2.45%)  has kept the number of rigs it has in operation constant at 13 and Whiting Petroleum [WLL] has increased from 9 to 11.   With the well publicized PR issue offshore drilling now has due to the BP Gulf fiasco,  the Bakken region may actually be viewed as a flight to quality and potentially less risky as offshore counterparts.  The market is down over 200 points due to poor employment data that was released this morning.  Oil stocks have suffered with most Bakken plays being down 3-5%.

. Rig Operator Well Name and Number Start Date ** Next Location . ENSIGN 24 AMERICAN OIL & GAS INC BERGSTROM 15-23H 4/21/2010 Undetermined . NABORS 486 AMERICAN OIL & GAS INC JOHNSON 15-35H 5/12/2010 Undetermined . UNIT 234 ANSCHUTZ EXPL CORP SADOWSKY 34-12H 5/3/2010 Undetermined . BRONCO 16 ANSCHUTZ EXPL CORP BREW 1-13-12H-143-96 4/28/2010 Undetermined . WHITE MT. 272 ANSCHUTZ EXPL CORP JAEGER STATE 1-34-27H-144-97 5/30/2010 Undetermined . NABORS 413 ANSCHUTZ EXPL CORP RAPHAEL STROH 1-13-24H-143-97 4/25/2010 18424 . H & P 255 ANSCHUTZ EXPL CORP STATE 1-36-25H-143-97 5/11/2010 Undetermined . ENSIGN 67 BAYTEX ENERGY USA LTD HALL 3-161-98H 5/20/2010 Undetermined . NABORS 52 BRIGHAM OIL & GAS LP WRIGHT 4-33 1-H 5/19/2010 Undetermined . NABORS 49 BRIGHAM OIL & GAS LP ABE OWAN 21-16 1-H 5/23/2010 Undetermined . NABORS 266 BRIGHAM OIL & GAS LP LARSEN 3-10 1-H * MIRU Undetermined . NABORS 182 BRIGHAM OIL & GAS LP MICHAEL OWAN 26-35 1-H 5/16/2010 Undetermined . NABORS 350 BRIGHAM OIL & GAS LP WEISZ 11-14 1-H 5/18/2010 Undetermined . SST 68 BTA OIL PRODUCERS LLC 20711 PAULSON 49 1-H 4/15/2010 Undetermined . STONEHAM 17 BURLINGTON RES O&G CO TETON 21-3H 6/1/2010 Undetermined . NABORS 59 BURLINGTON RES O&G CO HAYMAKER 21-15H 5/26/2010 Undetermined . PRECISION 825 BURLINGTON RES O&G CO HARLEY 31-2H 6/2/2010 Undetermined . CYCLONE 18 CONTINENTAL RESOURCES MPHU 44-9 5/6/2010 MPHU 24-19H . CYCLONE 9 CONTINENTAL RESOURCES MONTE 12-19NH 5/17/2010 Undetermined

. CYCLONE 1 CONTINENTAL RESOURCES DUAINE 31-4SH 4/24/2010 Duaine 31-4NH . CYCLONE 23 CONTINENTAL RESOURCES UXBRIDGE 1-9H 5/14/2010 Undetermined . PRECISION 832 CONTINENTAL RESOURCES LONG 2-5H * MIRU Undetermined . CYCLONE 31 CONTINENTAL RESOURCES SHONNA 2-15H 4/30/2010 Div: SE SE 19-161-95 – Raymo-Glasoe ecopad. . CYCLONE 20 CONTINENTAL RESOURCES LANCE 1-36H * MIRU Undetermined . PATTERSON 490 CONTINENTAL RESOURCES HOWARD 1-5H 5/26/2010 Undetermined . CYCLONE 22 CONTINENTAL RESOURCES MEDICINE HOLE 2-27T 5/14/2010 Undetermined . CYCLONE 28 CONTINENTAL RESOURCES ARTHUR 2-12H 5/23/2010 Undetermined . PATTERSON 183 CONTINENTAL RESOURCES BONNEY 2-3M 5/20/2010 Undetermined . CYCLONE 14 CONTINENTAL RESOURCES MILES 2-6T 6/1/2010 Undetermined . PATTERSON 180 CONTINENTAL RESOURCES BOHMBACH 2-35H 5/5/2010 Undetermined . CYCLONE 21 CONTINENTAL RESOURCES OLSON 2-8H 5/31/2010 Undetermined . CYCLONE 10 CONTINENTAL RESOURCES KARI 1-19H 5/21/2010 Undetermined . CYCLONE 25 CONTINENTAL RESOURCES RICKY 1-18H 4/21/2010 Undetermined . CYCLONE 19 CONTINENTAL RESOURCES LEE 1-20H 4/26/2010 Undetermined . TRINIDAD 36 CONTINENTAL RESOURCES BJELLA 1-24H 5/19/2010 Undetermined . PIONEER 42 CORNERSTONE NAT RES LLC JORGENSEN 4 – 4H 5/14/2010 Undetermined . RED HAWK 357 CORNERSTONE NAT RES LLC SCHWARTZ 4-11H * MIRU Undetermined . PATTERSON 305 ENCORE OPERATING LP FRANCHUK 44-20SWH 5/21/2010 Undetermined . PRECISION 289 ENCORE OPERATING LP KLAMM 34-9NWH 4/25/2010 Undetermined

. RED HAWK 351 EOG RESOURCES INC BOUNDARY 1-11H 5/18/2010 Undetermined . TRUE 32 EOG RESOURCES INC MANDAREE 2-09H 5/31/2010 Undetermined . DHS 10 EOG RESOURCES INC ROSS 20-16H 5/22/2010 Undetermined . NABORS 148 EOG RESOURCES INC LIBERTY 4-13H 5/24/2010 Undetermined . BRONCO 28 EOG RESOURCES INC ROSS 11-27H 5/28/2010 Undetermined . TRUE 33 EOG RESOURCES INC FERTILE 17-21H 5/9/2010 Van Hook 8-36′ . MAJOR 43 EOG RESOURCES INC SIDONIA 10-2128H 6/1/2010 Undetermined . TRUE 28 EOG RESOURCES INC SIDONIA 16-12H 4/16/2010 Mandaree . DHS 12 EOG RESOURCES INC CLEARWATER 14-31H 5/12/2010 Undetermined . NABORS 527 EOG RESOURCES INC WAYZETTA 129-08H 5/12/2010 Burke 32-05 . NABORS 161 EOG RESOURCES INC LIBERTY 23-12H 5/16/2010 Undetermined . BRONCO 23 EOG RESOURCES INC AUSTIN 125-30H 5/31/2010 Undetermined . NABORS 254 EOG RESOURCES INC MONT 1-28H 5/21/2010 Undetermined . NABORS 108 FIDELITY EXPL & PROD CO HARSTAD 44-9H 5/15/2010 Undetermined . PRECISION 604 HELIS OIL & GAS CO. LLC ANDRECOVICH 5-17/16H 4/17/2010 Undetermined . H & P 179 HESS CORPORATION AV-HANSEN-163-94- 1918H-1 5/13/2010 DIV: SW SE 11-162-95 – AV-Kimball-162-95 #1102 H-1 . NABORS 460 HESS CORPORATION HA-STATE-152-95- 1621H-1 4/8/2010 Undetermined . H & P 293 HESS CORPORATION EN-WILL TRUST A-157-94- 2734H-1 5/6/2010 Undetermined . NABORS 1 HESS CORPORATION RS-SHUHART-156-90- 2726H-1 6/2/2010 Undetermined . H & P 241 HESS CORPORATION EN-REHAK-155-93- 0718H-1 4/17/2010 Abrahamson

. NABORS 2 HESS CORPORATION BLOU 13 4/26/2010 Undetermined . H & P 317 HUNT OIL COMPANY PALERMO MCNIC 1-22-23H 5/4/2010 Undetermined . BRONCO 20 HUNT OIL COMPANY PALERMO 1-13-12H 1 5/27/2010 Undetermined . UNIT 117 KODIAK OIL & GAS (USA) INC TWO SHIELDS BUTTE 14-21-4H 5/20/2010 Undetermined . H & P 257 MARATHON OIL CO BERNHARDT 14-7H 5/15/2010 Undetermined . H & P 259 MARATHON OIL CO SCOTT GAUGLER 14-24H 5/27/2010 Undetermined . H & P 386 MARATHON OIL CO TESCHER 11-27H 5/17/2010 Undetermined . H & P 258 MARATHON OIL CO ARVID BANGEN USA 31-18H 5/29/2010 Undetermined . H & P 256 MARATHON OIL CO JASPER L USA 34-5H 4/30/2010 Undetermined . KEY NRG 257 MUREX PETROLEUM CORP MEGAN BROOKE 15-22H 5/31/2010 Undetermined . PRECISION 602 MUREX PETROLEUM CORP CLAIRE ALEXIS 33-4H 5/21/2010 Undetermined . NABORS 419 NADEL AND GUSSMAN ROCKIES ANDERSON 2-18 5/23/2010 Undetermined . WHITE MT. 750 NEWFIELD PROD CO MUKWA 1-17H 5/31/2010 Undetermined . NABORS 277 NEWFIELD PROD CO HAROLD 1-31H 5/2/2010 Undetermined . NABORS 272 NEWFIELD PROD CO WAHUS 1-12H 5/28/2010 Undetermined . H & P 286 NEWFIELD PROD CO DAHL 1-5H 4/29/2010 Undetermined . ENSIGN 89 NORTH PLAINS ENERGY LLC SCANLAN 3-5H * MIRU Undetermined . NABORS 165 OASIS PETRO NO AMER ERNST 6092 42-31H 5/11/2010 Manhattan 5792 11-2H . STONEHAM 18 OASIS PETRO NO AMER MISSOURI 5302 44-35H * MIRU Undetermined . NABORS 149 OASIS PETRO NO AMER BERRY 5493 11-6H 5/8/2010 Undetermined

. NABORS 177 OASIS PETRO NO AMER CONTRERAS 5502 42-7H * MIRU Undetermined . UNIT 328 PEAK GRASSLANDS LLC WISNESS 21-34H 5/14/2010 Baker well pad in Heart Butte . ENSIGN 93 PETRO HUNT LLC FORT BERTHOLD 148-94-9D-04-1H 4/29/2010 Undetermined . BRONCO 22 PETRO HUNT LLC FORT BERTHOLD 147-94-3A-10-1H 5/25/2010 Undetermined . ENSIGN 46 PETRO HUNT LLC USA 153-96-24D-13-1H 4/14/2010 Undetermined . BRONCO 8 PETRO HUNT LLC USA 10B-2-4H 4/10/2010 Undetermined . UNIT 329 QUESTAR E & P CO MHA 2-06-01H-149-92 4/20/2010 Undetermined . KEY NRG 370 SAGEBRUSH RESOURCES LLC ERICKSON ET AL 1B 5/21/2010 Undetermined . NABORS 455 SAMSON RESOURCES CO ANTONSON 01-12-163-95H 6/2/2010 Undetermined . PRECISION 512 SIMRAY GP LLC HENRY BAD GUN 8D-5-1H 4/27/2010 Undetermined . PATTERSON 136 SINCLAIR OIL & GAS CO ANDERSON 1-6H 5/21/2010 Undetermined . NABORS 687 SLAWSON EXPLORATION ALAMO 1-19-18H 5/28/2010 Undetermined . RED HAWK 558 SLAWSON EXPLORATION DIAMONDBACK 1-21H 5/27/2010 Undetermined . CYCLONE 27 SLAWSON EXPLORATION OSPREY FEDERAL 1-26-25-30H 4/29/2010 Undetermined . PATTERSON 167 SLAWSON EXPLORATION NEPTUNE 1-15H 5/15/2010 Undetermined . UNIT 106 SLAWSON EXPLORATION PHOENIX 1-18H 5/15/2010 Undetermined . PRECISION 645 SLAWSON EXPLORATION PIKE FEDERAL 1-3-2H * MIRU Undetermined . NABORS 152 ST MARY LAND & EXPLORATION CO GULBRANSON 4-26H 5/30/2010 Undetermined . NABORS 476 ST MARY LAND & EXPLORATION CO NORBY 16-20H 5/23/2010 Undetermined . PRECISION 618 TRACKER RES DEVMNT CRYING TREE 8-1H * MIRU Undetermined

. PRECISION 620 TRACKER RES DEVMNT DIRKACH 34-1H * MIRU Undetermined . NABORS 44 TRACKER RES DEVMNT WING 9-1H 5/27/2010 Undetermined . PIONEER 44 WHITING OIL AND GAS CORP ELLISON CREEK 11-1TFH 5/13/2010 Undetermined . PIONEER 57 WHITING OIL AND GAS CORP OPPEBOEN 12-5H 4/28/2010 Undetermined . NABORS 99 WHITING OIL AND GAS CORP KANNIANEN 43-31H 4/16/2010 Miller 43-10H . PRECISION 520 WHITING OIL AND GAS CORP CARKUFF 12-24H 5/16/2010 Undetermined . PIONEER 67 WHITING OIL AND GAS CORP LITTLEFIELD 21-12H * MIRU Undetermined . PRECISION 106 WHITING OIL AND GAS CORP FLADELAND 12-10H 5/15/2010 Undetermined . BRONCO 59 WHITING OIL AND GAS CORP FLADELAND 43-9H 5/27/2010 Undetermined . PIONEER 66 WHITING OIL AND GAS CORP TTT RANCH 4-6TFH 5/22/2010 Undetermined . PIONEER 56 WHITING OIL AND GAS CORP PETERSON 13-4H 5/17/2010 Undetermined . PRECISION 51 WHITING OIL AND GAS CORP DISHMAN 13-19H 5/26/2010 Undetermined . PIONEER 3 WHITING OIL AND GAS CORP FROEHLICH 44-9TFH 5/29/2010 Undetermined . NABORS 686 WHITING OIL AND GAS CORP KUBAS 11-13TFH 5/1/2010 Undetermined . NABORS 265 XTO ENERGY INC MARLENE 42X-20 5/19/2010 Undetermined . PATTERSON 191 XTO ENERGY INC BRONSON 31X-14 5/20/2010 Undetermined . NABORS 681 XTO ENERGY INC NELSON 34X-19 5/13/2010 Undetermined . NABORS 742 XTO ENERGY INC BOE STATE 31X-16 5/16/2010 Undetermined . NABORS 688 ZAVANNA LLC GARY 1-24H 5/24/2010 Undetermined . BRONCO 27 ZENERGY INC STEPANEK 8-5H 5/18/2010 Undetermined

. PRECISION 96 ZENERGY OPERATING CO LLC DAKOTA-3 HIGH HAWK 4-9H 5/28/2010 Undetermined . PRECISION 517 ZENERGY OPERATING CO LLC DAKOTA-3 OLSON 1-12H 4/24/2010 Mason 2-11

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