BTW, should make this clear…the “we” I mean below was me and my wife.
I apologize for all the stupid questions, but as you might guess…I know nothing about this business. In your opinion, would a sale indicate they found nothing? It seems to me (and I’m absolutely no expert) that they (meaning the oil “experts”) wouldn’t have invested so heavily in the Daniels county area if they were pretty sure of what they’d find. Isn’t that a decent assumption? And if that is a good assumption, why would they (Apache) abandon it now when they’ve just begun? Wish I knew more about this business but apparently it doesn’t work the way most business does.
One more thought…
If you look at all the maps that “supposedly” show the Bakken field, Daniels County lies well within it’s boundaries. If, as you surmise, they didn’t hit “much”, does that mean those maps are incorrect?
Bonnie, the maps are correct. Yet a productive rock formation does vary from one area to another. Assuming that formation contains hydrocarbons throughout (which it may, or may not), the oil within it might not be commercial everywhere. To use an analogy, the rock might be “overcooked” or “undercooked” depending upon the pressure and temperature it’s been subjected to in a given location. So Mountrail Co, ND and Daniels Co, MT would provide vastly different results although both have the same Bakken rock below.
So while Bakken formation rock is below Daniels County, the oil may not be ready to produce in that area. The formation sits at a shallower depth on the NW edge of the Williston Basin. Perhaps it hasn’t been subjected to the same degree of pressure to properly “cook” it. I’m not saying this is the case. However, it holds true that productive formations don’t always produce everywhere. They may yet produce the Bakken in Daniels Co. Though at the moment that doesn’t look as promising.
Apache selling its Daniels County stuff might not mean anything bad at all… it just might indicate that Apache only has resources for, say, 10 compelling projects… not the 13 compelling projects it owns… So what it could be doing is picking the ten best projects…
I think this is the way big businesses operate. Even with 10 billion for annual investments, they are limited… and so they need to pick the investment opportunities that fit best with their overall business. They probably also need a mix of projects that work in terms of timing… e.g., they might need some projects that work pretty quickly… and then they also need some projects that work more long term…
Also, though Daniels County might not be “good enough” for Apache given its other opportunities and its constraints, Daniels County might be way better than “good enough” for some other company because their business looks a little different. (Maybe, e.g., they’ve solved the logistical problems.)
Final and perhaps most important point: The part about selling the Daniels County stuff is pure speculation from someone who knows next to nothing about Daniels County (I’ve been there only two or three times in my life) and someone who knows very little about the oil and gas industry.
As I’ve noted before, my interest in all this is not financial but familial… both the paternal and maternal sides of my wife’s family arrived in Daniels County decades and decades ago…
Actually, one might get a little hint about what happened in Daniels County tomorrow… I think Apache’s 10-K gets posted tomorrow… and in past that document provides statistics about exploratory wells by region. E.g., last year APA drilled 17 exploratory wells in U.S. and “hit” on 12 of them… or something sort of like that.
I found this information about Danielsit County and found it interesting. Check it out! Comment if you wish. http://beforeitsnews.com/financial-markets/2013/02/magnolia-petrole…
BBJB, that 17 BOEPD was probably a less expensive than we are used to, verticle well in a zone that was not the primary zone. It’s just a little extra, before they plug back and produce in a richer zone. If you were getting 17 BOEPD as a bonus to the production you expect to get later, you might be more enthused. That could be the average thus far. I had a well that did 13k bbl in a year and then 14,800 bbl in 15 days of production. 17 BOEPD really doesn’t sound like much to me either but I am used to 640 and 1280 acre spacings. 17 BOEPD could actually be exciting news, there just isn’t enough back story to judge.
BBJB: that’s 17 BOPD x 1% if I’m reading that right.
Here’s link to Apache’s 10-K:
http://investor.apachecorp.com/secfiling.cfm?filingID=1193125-13-85…
On or about page 12, the report includes a table showing well statistics for 2012. I think the Daniels County activity fits into the “Net Exploratory United States” category.
So Apache drilled 13 such wells in U.S. in 2012… 9.5 resulted in productive wells… 3.5 were not productive.
Not sure how many Daniels County wells Apache’s statistics would even include. But the fractional values make me think that some wells are only “fractionally completed” during year and so only add fractionally to the statistics.
Note sure what these results mean obviously… I suppose it’s possible that every well Apache drilled in Daniels County was non-productive. But that would also mean I assume that 100% of Apache’s other exploratory U.S. drilling was productive… and that seems unlikely.
Also, of course, there’s question “how many Daniels County wells does Apache’s 10-K numbers include?” If it includes 5 DC wells and all the failures shown in the 10-K are in Daniels County (that seems a bit harsh) that means they must have “hit” on a couple of wells.
Man, oh man, a guy could go half crazy with the scenarios…
Here’s the only other bit related to Daniels County that a very quick read of the 10-K finds:
"Other Exploration
New Ventures
Apache’s global New Ventures team provides exposure to new growth opportunities by looking outside of the Company’s traditional core areas and targeting higher-risk, high-reward exploration opportunities located in frontier basins as well as new plays in more mature basins. The New Ventures group was established in 2010 with a worldwide program focused on deepwater exploration, where many of the world’s large oil discoveries have occurred over the last decade, unconventional resources in North America and elsewhere, and underexplored basins that can be developed through application of new technologies.
Apache’s 2012 activities included drilling in offshore Kenya; participating in the Suriname bid round and winning offshore block 53; establishing a presence in several known U.S. resource plays; and acquiring seismic and spudding our first well on our acreage in the Cook Inlet of Alaska. Apache’s first exploration well in Kenya, the Mbawa 1, was drilled in the third quarter of 2012, encountering approximately 170 feet of natural gas pay in three zones. We have a 50-percent interest in the block and continue to analyze the well data to determine future exploration activities. In Alaska, the New Ventures team has acquired approximately 700,000 net acres over the last two years in the Cook Inlet basin and has commenced a robust seismic study over the area to facilitate future drilling activity. Apache has also leased nearly 500,000 net acres in the Mississippian Lime play in Kansas and Nebraska and 300,000 net acres in
Montana’s Williston basin. We have commenced drilling activity in both of these plays.
During 2013, we plan to invest approximately $100 million to further these projects and continue pursuing additional exploration opportunities…"
I just came across this article and thought you all might find it interesting…
"Apache Said to Weigh Sale of Deep-Water Assets in Gulf"
Link:
http://www.bloomberg.com/news/2013-03-06/apache-said-to-weigh-sale-…
Here is a second-hand glimmer of hope rumour. I was told by a person that an apache rep asked a local motel if it was possible to book a number of roons for the second part of the year. Take it for what you wish. I have no reason to doubt the person’s credibility. the motel was not available for the booking.
Holy cow…let’s build them a motel!!!
Sorry guys. I haven’t been on here in awhile and found by readomg past posts that someone was asking about our 1099. We did not receive one yet but we were paid in January. It will probably come for next years taxes.
My husband said for the right price we’ll bring our fifth wheel out there and they can use it if they’ll just drill our lease area!!
Bonnie, that may just be the purpose for the rumour. I have also heard a rumour of a group soliciting bucks and trying to organize building a motel. (with other peoples capital, for sure).
Pulled this quote from the Billings Gazette article about the Heath Play in central Mt. Not sure where this dude gets his info as I have seen nothing about Apache selling aside from this.
"Apache Corp. is selling its recent play near Scobey, Hauptman said, and attempts to tap into Southern Alberta crude by Cut Bank have dried up."
Read more: http://billingsgazette.com/news/state-and-regional/montana/shale-fo…
Big Daddy, Having rumors all over the map is typical in a wildcat situation. While the play in Daniels Co was to chase the proven Bakken formation, the Bakken in Daniels has not been proven to be commercially producible. Until results are publicly announced all we (mineral owners) can do is observe what they are actually doing and speculate what that activity, or lack of activity, might mean.
Read the article in the Billings Gazette in the link from Billy Bob. The story is primarily about another prospective oil play, the Heath Shale. It is also about Montana oil production in general. Mr. Hauptman’s comments on Daniels Co were an aside, in which he was pointing out none of the new plays in MT had taken off yet. Later on some of these may take off, or not. Though so far none had.
I’m unsure about his suggestion Apache has the Daniels block for sale. Hauptman is well established in the business and he may know this as fact. Though it might also just be a rumor he’d heard. By this autumn we will all know a lot more about results to date, and the possibility of an Apache sale. As Mr. Kennedy points out a sale doesn’t mean there is no possibility of oil there. It could also mean Apache just wants to allocate their capital to other areas instead.
Mr Kennedy, Is this pretty much the normal thing where the news is all over the place with a new play? For Daniels county the news is good then bad and back to good again and keeps rotating. Or are people messing with us for a chance to lease up more acres on the cheap?
What is reliable?