Thanks Lee. :-)
Lee Humbert said:
hey Steve, nice to read your wise council. Patience is a virtue. Best wishes
Lee
To All,
Nobody on this board has more to gain if Apache is successful than this writer.
So lets get that straight.
mmiller3 is correct. I never said that Shale was "renewing leases".
I would think by now it is apparent I have a great grasp of what has happened in Daniels county for the last 20 years.
I have been told that Shale is renewing some "options" to extend on leases that were signed in 2009 and 2010. These leases were sold to brokers and eventually ended up assigned to Shale. The aforementioned oil and gas leases pre-date the existense of Shale's activity in Daniels County.
I have never drilled a dry hole in Daniels County.
I am not a geologist.
I am not the "Matt Roberts" that was by posted on the link.
I applaud Shale for going into Scobey and leasing up 300,000 acres in the community and dropping millions of dollars into the surrounding area. Bravo. The county and folks need the boost.
And I think it is apparent that Shale had a high profile stance in the Scobey community with the office and the way they became involved with the citizenery. Shale made donations to schools and sponsored many events. Everybody in Scobey was aware of their presence. Great.
I do think this ginned up unreal expectations.
Shale leased this acreage but needed to find a buyer to develop the project. Obviously Shale found a buyer in Apache.
I do not think Apache spent millions on due diligence. If Apache was really serious about this play they would have shot miles/blocks of 3-D seismic.
Major independents like Apache are always hunting for projects of this size ready to go-- and they take flyers all the time. And most are unsuccessful. That is the oil business.
I calculate that after the four wells are drilled, Apache with acreage costs and drilling will be near 100 million dollars in expense. Apache had a 9.5 BILLION dollar drilling budget in 2012. I guess this project (after the four wells are finished) will amount to a little bit north of 1%-1.4% of Apache's 2012 budget. Nothing. They will move on rapidly if all is unsuccessful and not even look back.
As for the Apache's CEO's comments referenced above- this may illuminate the naivety I have seen in these discussions. The CEO's comments were incredibly vague. Good looking logs mean nothing and are not misleading at all if the project goes south. (Which it has)
I am in the business. I checked the June 14, 2012 public power point presentation that highlights the potential for 1 billion barrels of oil in Daniels County. What really caught my eye in that power point is Apache's claim of 2 billion barrels of oil in their Western Kansas Missisippian Lime Horizontal play. This pronouncement was even greater than the Bakken announcement. Now anybody who is plugged into the oil business and knowledgable knows that the play in Western Kansas is already a bust with major independents already holding the bag on lots of acreage. It happens all the time. In my opinion, the play is over, and this includes Apache's hopes. It just doesn't/did not work and many/most geologists scoffed at the foolhardiness of trying to make commercial horizontal wells in Western Kansas in the Missisippian Lime. Same can be said about Bakken potential in Daniels County. The vast majority of geolgists have said "No Chance". I think they are correct.
So, be thankful if you received your bonus checks. But when Apache eventually pulls the plug on the project (which will happen) ....just be grateful that so many people leased their lands and were given nice lease bonuses. I would assume that the area will be fallow for oil and gas for many years.
Just my clear-eyed opinion.
The audited Apache financial statements appear here:
http://www.apachecorp.com/Resources/Upload/file/investors/Apache_AR_2011.pdf
If someone is interested, they can doublecheck some of the facts mentioned in preceding post against the Apache's data. Page 34, for example, provides a table of Apache's success ratio in drilling wells. Page 59 in the report describes Apache's total capital budget (which includes more than just drilling) as 9.5B.
I won't post any more messages in this thread, but if someone is interested in learning a bit more about how careful public company execs need to be about their statements, Google on the phrase, "Reed Hastings Wells Notice"... you get to article that explains how an off the cuff remark by the NetFlix CEO triggered action by SEC.
By the way, who knows what will happen to the Netflix CEO due to his Wells Notice. But probably everybody here knows about another CEO who's troubles started with a Wells Notice... learn more by Googling "Martha Stewart wells notice."
Matt,
You have disclosed who you are not, but you have yet to say who you are. You appear to have close ties to Shale. I think you work for Augustus May Energy Inc. who was in Daniels County for a short time and shared the office in Scobey with Shale.
Matt Roberts said:
To All,
Nobody on this board has more to gain if Apache is successful than this writer.
So lets get that straight.
mmiller3 is correct. I never said that Shale was "renewing leases".
I would think by now it is apparent I have a great grasp of what has happened in Daniels county for the last 20 years.
I have been told that Shale is renewing some "options" to extend on leases that were signed in 2009 and 2010. These leases were sold to brokers and eventually ended up assigned to Shale. The aforementioned oil and gas leases pre-date the existense of Shale's activity in Daniels County.
I have never drilled a dry hole in Daniels County.
I am not a geologist.
I am not the "Matt Roberts" that was by posted on the link.
I applaud Shale for going into Scobey and leasing up 300,000 acres in the community and dropping millions of dollars into the surrounding area. Bravo. The county and folks need the boost.
And I think it is apparent that Shale had a high profile stance in the Scobey community with the office and the way they became involved with the citizenery. Shale made donations to schools and sponsored many events. Everybody in Scobey was aware of their presence. Great.
I do think this ginned up unreal expectations.
Shale leased this acreage but needed to find a buyer to develop the project. Obviously Shale found a buyer in Apache.
I do not think Apache spent millions on due diligence. If Apache was really serious about this play they would have shot miles/blocks of 3-D seismic.
Major independents like Apache are always hunting for projects of this size ready to go-- and they take flyers all the time. And most are unsuccessful. That is the oil business.
I calculate that after the four wells are drilled, Apache with acreage costs and drilling will be near 100 million dollars in expense. Apache had a 9.5 BILLION dollar drilling budget in 2012. I guess this project (after the four wells are finished) will amount to a little bit north of 1%-1.4% of Apache's 2012 budget. Nothing. They will move on rapidly if all is unsuccessful and not even look back.
As for the Apache's CEO's comments referenced above- this may illuminate the naivety I have seen in these discussions. The CEO's comments were incredibly vague. Good looking logs mean nothing and are not misleading at all if the project goes south. (Which it has)
I am in the business. I checked the June 14, 2012 public power point presentation that highlights the potential for 1 billion barrels of oil in Daniels County. What really caught my eye in that power point is Apache's claim of 2 billion barrels of oil in their Western Kansas Missisippian Lime Horizontal play. This pronouncement was even greater than the Bakken announcement. Now anybody who is plugged into the oil business and knowledgable knows that the play in Western Kansas is already a bust with major independents already holding the bag on lots of acreage. It happens all the time. In my opinion, the play is over, and this includes Apache's hopes. It just doesn't/did not work and many/most geologists scoffed at the foolhardiness of trying to make commercial horizontal wells in Western Kansas in the Missisippian Lime. Same can be said about Bakken potential in Daniels County. The vast majority of geolgists have said "No Chance". I think they are correct.
So, be thankful if you received your bonus checks. But when Apache eventually pulls the plug on the project (which will happen) ....just be grateful that so many people leased their lands and were given nice lease bonuses. I would assume that the area will be fallow for oil and gas for many years.
Just my clear-eyed opinion.
Oops. I said I wouldn't post again in this thread, but I can't edit an error in my previous post. Ugh.
The table of Apache well drilling statistics appears on page 15 of the pdf. (The incorrect page number I gave was from the Adobe Reader.)
BTW, if one is interested in Apache's historical drilling activity, this little table is a great reference. You learn for example what percentage of Apache's exploratory wells become producers... and what percentage of Apache's non-exploratory wells become producers. (The numbers are surprising.)
One can also probably gain a useful insight into how "significant" or "material" the Daniels County deal is to Apache.
And now I really will be quiet.
workover rig on the first well site. There were large cranes at the 3rd site where the rig is. i assume they are nearing the time to take the rig down there after completing their drilling. very cold and windy here yesterday. just cold this am ( -14 degrees) , would not care to be working outside
It will interesting to see if they move the rig, cranes, etc., to another site in Daniels county. Seems like a good sign if they do... maybe not so good if they don't. Of course, who knows.
BTW, in exactly one month, Apache will release their 10-K report to the SEC. It'll be available at their website and other places. One of the tables in the filing will show stats on the wells they've drilled in the US, those that have become producers, those that have turned out "dry,"... this won't necessarily give Daniels county specific data. But information might be suggestive. E.g., if all the US exploratory wells are dry, that means Daniels county wells have to be dry, too. If all the US exploratory wells are productive, that means opposite.
Last year, btw, I think they drilled 17 exploratory wells in the US or something like that... and 12 become producers and 5 were dry.
Lee Humbert said:
workover rig on the first well site. There were large cranes at the 3rd site where the rig is. i assume they are nearing the time to take the rig down there after completing their drilling. very cold and windy here yesterday. just cold this am ( -14 degrees) , would not care to be working outside
The workover rig may have been called in to plug the well.
If nobody can spot a flare on the first completed site this late in the game, it can be assumed the well is a stinker. {A few barrels of oil a day - hundreds of barrels of water a day}
(A commercial well would be flaring some associated gas)
Call in the cement truck!
It seems Apache has drilled all the available permits. I doubt that the drilling rig will be around after they finish the last Ratcliffe test.
Hope everybody received their bonus checks and extension payments.
Any updates on drilling activity in Daniels county? Did Apache pull out due to lack of activity?
We have land by Flaxville and Scobey MT. They have already put in the sand lot and a water tower very close to our land. We don't know what is going on because we do not live there. The one thing I do know is that in the 70s they drilled and hit two gushers - big. But they ran into the shale and had to shut it down. We are sitting on top of a tremendous amount of oil, but, of course, they need to do the fracking. It appears that they have what they need to proceed, but we can't find out what they are doing. The water tower was being built in Nov 2012. Why would they invest all that and not proceed when they already know how much oil is there. I just want to know who is doing what up there. If anyone can give me any info it would be greatly appreciated!!! We have no dealings with Shale or Apache.
looks like a work over rig at the lindley pad @6 miles nw of four buttes. pulling pipe? they still have tanks there. met 4 pic-ups from neibors(not sure of spelling) coming from the haworth pad on wednesday(10/2/13).
So that would mesh with their change in status to "intent to abandon" for both Lindley and Hayworth wells as noted in a post a few days ago.
A contractor is in the process of reclaiming the 4 Apache pads in Daniels county. 3 they drilled on and one they built and did not drill on.