Picked this up from another board. The investor was not very impressed with the questions asked Lynn Peterson, CEO of Kodiak Oil, during last Fridays question and answer session on the conference call. He emailed some questions to IR and this is the response.
Gramps
IR responded to my email questions to Lynn within jsut a few MINIUTES...........here is their response (I'm impressed):
1) You mentioned a well with a collapsed casing your are going to redrill……….was the failure due to OCG tubing material failure………..or is their overpressure in the field?..............and do you expect this to be a continuing issue?
A: The problem was inferior quality casing which happens very infrequently in the industry. The well was drilled in 2007 and is not indicative of any problem. Since that time, the company has an all-new engineering team engineering team since those wells were drilled and we've got top notch people now.
2) During the call you or Len mentioned that Pad drilling completions only occur after all wells on the pad are drilled…Do you in fact do all completions on the pad at the same time?...............and on a comparative basis are completions time coming down?
A: When drilling off a pad, you cannot drill wells and complete them at the same time. For one thing it is dangerous, and also there simply is not enough area on the location to accommodate all of the many pieces of equipment that are needed for both sides of the job to run simultaneously. The jobs are ideally scheduled as closely apart as possible or even back to back so as to minimize mobilization costs, but sometimes the equipment is scheduled for another job which was what happened during our last wells. We completed the first well and then moved the completion equipment off the location and came back later. We of course tested the first well which we reported in our news of Feb. 16. Completion times remain about the same, but can vary by the amount of stages that we have in the design. Fewer stages take less time to complete.
3) Regarding the TFS,,,,,,,,what % of your Bakken leasehold acreage have TFS underlying………….and have you booked any TFS reserves as of March 12, 2010? When you do your TFS drilling will it be done from Pads…………and do you envision tapping both the Bakken (middle) and TFS from the same pad(s)?
A: We have not drilled a TFS well so cannot book reserves until we have production history. We believe, based on well control in the area, that the TFS is prospective across our leasehold in Dunn County, but will need a to drill and complete a well based on our completion designs to convey with certainty that we have TFS in economic quantities. Obviously this is a key data point for the 2010 drilling program. TFS and Bakken will be drilled from the same pads wherever possible due to the cost savings associated with pad drilling.
4) When you complete a well and have no immediate pipeline connection…………do you always truck the oil & flare the gas………..or do you ever put a well on standby until you can connect it up? If you always truck, is this because of cash flow or reserve claim reasons?
A: The greatest economic value of the wells is from oil production which is why we flare and truck for now. We like to capture flush production, especially at oil prices north of $80 WTI. The gas production in a typical well is about 8% to 10% gas to oil ratio. We certainly wish to capture the cash flow from the gas and NGLs, but these are oil wells and we need to produce to tanks and truck them off the well site. |
