Alberta Bakken Results are Confidential But Promising

Alberta Bakken Results are Confidential But Promising

Thanks to bobsmith1 's posting on Stockhouse.com

Source:

http://www.greatfallstribune.com/article/20110807/NEWS01/108070302

Extract from the recent Aug 6 news article:

Grinnell Day Chief, the Blackfeet Tribe's director of oil and gas.

The tribe, he said, hopes the exploration will lead to recoverable oil. Production would lead to even more local jobs in the oil industry, and the possibility of millions of dollars in royalties.

Results from the exploration are confidential — but promising, he said.

"The success of some of these wells is going to be good," Day Chief said. "We will eventually have some production here."

Rosetta hits Bakken Oil

Rosetta hits Bakken Oil

Rosetta's Aug 8 financials caught my eye in mentions of the Alberta Bakken drilling.

http://ir.rosettaresources.com/releasedetail.cfm?ReleaseID=597464

Expanded Southern Alberta Basin horizontal drilling program — Rosetta initiated a three-well horizontal drilling program during the second quarter of 2011 that will continue to test the commerciality of the play. The first horizontal well was spud in the second quarter and drilling operations are now underway on the second and third wells. Rosetta plans to expand the horizontal program to include an additional four wells to be drilled by year end.

. . .

SOUTHERN ALBERTA BASIN

During the first half of 2011, Rosetta completed eight vertical delineation wells on its approximately 300,000 net-acre position in northwest Montana. In total, eleven delineation wells have now been tested. All have encountered oil from multiple reservoirs that produced varying quantities of oil and gas. The vertical delineation wells span a wide area and test results have varied. Based on this variability, some areas of the play will have a higher chance of commerciality than others. While not all vertical testing is complete, production from testing only the Bakken reservoir resulted in an average seven-day rate from all well tests of 22 BOPD and associated gas from these single stage vertical completions.  

So in summary, Rosetta is adding 4 new wells by end of 2011 in the Alberta Bakken.  Note that they hit oil in all their drilling, and gave an average of 22 BOPD for the whole lot.  The Goombarh's interpretation is that Rosetta is being careful and conservative in their choice of words, as these are delineation wells in their own words, and also as test of Bakken reservoir, and single stage,  these are not meant for production, but merely to find areas that they will go horizontal and fracture to complete.  I am inferring that the variability that they refer to is in how thick the Bakken is at the well and also in terms of the depth and the pressure encountered.  Note the rumours of a high pressure sweet spot.

To my understanding, the Bakken is not a good reservoir, as the oil is tight, in other words, the shale has to be broken to allow the oil to slowly leak out from the heat and pressure.  The Bakken is not a reservoir at all, but is a source rock for oil, for which it is among the best in the world, with their Total Organic Content (TOC) of up to 60% by weight.  Contrast this with other source rocks that are good for oil with a 5 to 10% TOC.  The main driver here is that the Bakken oil here has not been released and have not migrated elsewhere, but they are contained in the source rock, the Alberta Basin Bakken. 

The thought, is that this is very good news, Bakken is hit everywhere, with the pressure being much higher in certain sections of this play.

Alberta Bakken - Much Potential

Alberta Bakken - Much Potential

Found a March 2011 report on the region and the players in that area.  The report is good background, considering it is now 5 months later.  Still, very useful, and I would recommend that investors in the area, should carefully digest the contents.

Extract from this report:

Technical factors in favour of the play:

1. source rock;

2. extensive hydrocarbon saturation;

3. in the oil window;

4. overpressure;

5. fracture enhancement;

6. reservoir;

7. formation penetrations;
8. log, core, cutting, and drill stem test analyses;

9. historical production precedents;

10. recent perforation and test sample;

11. recent production data; and

12. regionalization.

Industry factors that support the play:

1. land acquisition activity;

2. multiple parties;

3. multiple drilling licenses; and

4. Bakken-experienced operators.

Here is the link to the Scotia report on the Alberta Bakken:

http://Goombarh.fileave.com/Scotia_Alberta_Bakken_2011-03-10.pdf 

This report only serves to support my own conviction on the potential in this area.  I have purchased more shares of juniors in the area.

PS:  Found another recent Alberta Bakken presentation at June Petro-Geo Conference, available here:

http://www.cseg.ca/conventions/abstracts/2011/137-The_Alberta_Bakken.pdf

HOT TIP - International Frontier Resources - TSX: IFR, OTC: IFRTF

Goombarh Flash 27,  July 27, 2011

International Frontier Resources - TSX:  IFR, OTC:  IFRTF

Good Morning,

May have found a good tip:

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_R/threadview?m=tm&bn=27692&tid=1152&mid=1219&tof=1&rt=2&frt=2&off=1

According to the Rocky Mountain Oil Journal, a confidential source who had access to Rosetta's field report states Rosetta's first vertical well, Tribal Gunsight #31-16H in Glacier County, "well tested at 1200 barrels per day".

Now, I don't normally pay any attention to tips, but I hold Primary Petroleum (TSX:PIE, OTC:PETEF), which is halted, since it was moving up without news earlier this week.  Still halted with no news whatsoever.  Primary holds large acreage just below Rosetta in Montana.  Rosetta is a $50 stock.

Sniffing around, I found Mountainview was halted previously as well.  They are right next to Primary.  And Petrohawk was bought out few weeks ago.  So all this speaks of frenzy in oil patch, perhaps under valued, and I know drillers are under valued. 

Enough digression, I decided to venture a bit of spec funds into International Frontier and have bought.  IFR holds royalties in the area, particularly where Rosetta is, see this:

http://media3.marketwire.com/docs/531ifr_drilling.pdf

and this Frontier presentation:

http://www.internationalfrontier.com/i/pdf/Presentation.pdf

I am not recommending you do the same, I am only passing information onwards.  It is up to you as what you do with your money.  Good Luck to you.

Until next time,

Marco G.

http://goombarhsedge.blogspot.com/

http://seekingalpha.com/author/marco-g/articles