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Involved in the oil and gas industry, active investor and realistic about the market. Avid follower of oil, natural gas, gold, and silver. I don't exactly always follow others' ideas and firmly believe you should be able to make your own decisions, but if I can help you or if you have some solid... More
  • Credo Petroleum Third Bakken Discovery (Non Operator only Working Interest) 4 comments
    Jan 11, 2011 3:09 PM | about stocks: FOR, MRO, EOG, OAS, SSN, WMB
    Credo Petroleum Completes Third Consecutive High Rate Bakken Discovery

    New Well Yields 1,367 BOEPD from 24-Hour Test on Small Choke

    Five Total Bakken Wells Drilled to Date

    DENVER, Jan. 11, 2011 (GLOBE NEWSWIRE) -- Credo Petroleum Corporation (Nasdaq:CRED), an oil and gas exploration and production company with significant operations in the Rocky Mountain and Mid-Continent Regions, today updated its Bakken drilling activities in Dunn and Williams Counties, North Dakota.

    In North Dakota's Bakken oil resource play, the company has assembled approximately 8,000 gross (6,000 net) acres in the core of the play which are located primarily on the Fort Berthold Reservation, south and west of the Parshall Field. The acreage consists of approximately 50 initial well spacing units. The company expects that more than one well will be drilled on many spacing units. The project targets horizontal drilling for the Bakken and Sanish/Three Forks formations. Vertical well depths on the company's acreage are approximately 10,000 feet and the horizontal legs are generally expected to range between 5,000 and 10,000 feet.  The company's interests range from very small to 56% depending on the size of the spacing unit. 

    To date, five wells have been drilled on the company's acreage. Three of the wells are producing and two that are awaiting completion for production.

    The company's third high rate Bakken producer was recently completed. The Petro-Hunt 3-A well was drilled on a 1,280-acre spacing unit with an approximate 10,000-foot lateral, and was fracture stimulated in 25 stages. The well flowed at a restricted rate of 1,367 barrels of oil equivalent during a 24-hour test on a small (18/64") choke with flowing casing pressure of 3,050 psi. While the well was drilled last year, the completion phase was delayed until recently due to shortages of fracture stimulation equipment. The well is located in Dunn County on the Fort Berthold Reservation about four miles southeast of the company's Petro-Hunt 17-D well. Credo owns an 18.75% working interest in the new well.

    -My Take: Nice news but it only goes to show the incredible amount of reserves located on the Fort Berthold reservation in North Dakota. Credo Petroleum only owns 6,000 net mineral acres but a good majority is in locations that should produce with significant upside. If this was a Brigham well (BEXP) you would be reading about an IP rate of somewhere around 2,000 BOPD but because of the tight choke the numbers are more accurate instead of blown out of proportion as most public companies tend to want to do. As far as the stock goes after the 25% jump today I would expect a pullback. Maybe a $15 stock if oil prices hold up but there are better opportunites out there. MRO (Marathon), Williams (from Zenergy deal), and EOG also have larger amounts of acreage in the heart of the Fort Berthold play. Check out SSN when you have time (Niobrara), on a pullback you might be able to get a bargain. However, there are others with more promise. Look at my list of Bakken Stocks.


    Disclosure: I am long OAS, MRO.

    Additional disclosure: I am also long ANFC.pk, ESPH.OB.
    Stocks: FOR, MRO, EOG, OAS, SSN, WMB
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  • theomeo
    , contributor
    Comments (10) | Send Message
     
    First I own 100,000 shares of ESPH. I am a lawyer by training. I agree ESPH is a good buy based on the need for tech to protect the water supply. Hunter it is my understanding that a lot of natural gas reserves are near significant populations. Is this correct?
    12 Jan 2011, 05:05 AM Reply Like
  • User 663848
    , contributor
    Comments (6) | Send Message
     
    Author’s reply » The main reason ESPH will succeed as a company is because of new laws that will be forthcoming concerning the amount of fracking water used as well as the chemicals used (there has been talk of requiring all companies to publicly list all ingredients used in hydraulic fraccing). The target that seems most likely to need this technology in the future would be where salt water disposal wells are not an option which is very likely near New York and Pennsylvania area, or the shale better known as the Marcellus Shale. Already there is legislation under way to prevent hydraulic fraccing in those areas but, if the energy companies can display they are using a technology to clean and reuse the water it will greatly help their cause in the lobbying front. However, the populated areas are the key. In the Barnett shale they have succeeded without an absolute need for a water cleanser, but in a more densely populated area such as New York this may not be an option (just like salt water disposal wells may not be an option). If Ecosphere (seekingalpha.com/symbo...) can apply this technology on a cost scale that is more affordable than what we currently use then everyone will eventually need a water cleanser and there will be others. The key to ESPH is that if their technology works the costs associated with reusing the water from frac to frac would significantly lower the cost of drilling. Normally, you would have to truck the water out and bring the water back in which is a significant unrealized cost in drilling. The average individual does not realize how many thousands of gallons of fresh water it really takes to successfully do a horizontal frac of a just one well. ABHD is another cleanser, with a smaller market cap that may be a player in the water space. ESPH though has a seemingly very bright future and is a great long term hold.
    12 Jan 2011, 09:41 AM Reply Like
  • theomeo
    , contributor
    Comments (10) | Send Message
     
    Excellent Hunter.
    13 Jan 2011, 09:15 AM Reply Like
  • Michael Filloon
    , contributor
    Comments (4022) | Send Message
     
    The Bakken seems to have one large hit after another. Hope they can find more ways to get the oil out. Hope they can get the pipeline up and running soon.
    16 Jan 2011, 09:24 PM Reply Like
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