Confidential well status changes
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Franz
Jan 26, 2018, 7:52:26 PM1/26/18
to The Bakken Shale Discussion Group
Hi Bruce,
I was wondering if you might know why or have some insight as to why an oil well would be drilled but not be placed on confidential status until after it has been completed and purchase orders are signed off on. I noticed that well 30168 had been drilled and appears to have been fracked and it was not listed as a confidential well until this month almost 3 years after being spud. Just curious.
Bruce Oksol
Jan 26, 2018, 8:05:33 PM1/26/18
to The Bakken Shale Discussion Group
Yes, this well was fracked 9/26 - 10/11 (2017) according to FracFocus.
With questions regarding "confidential status" there are at least two issues.
1. The rules: when a well can be put on confidential status. The rules have not changed, as far as I am aware, but with operators now allowed up to two years to complete a well after initial spud, the timing of when wells are placed on "confidential" status can be quite confusing. I'm glad you didn't ask that question.
2. However, why an operator chooses to place a well on confidential status is easier to answer if one is looking for an opinion. This well is completed, fracked and producing. Now that it is on confidential status we have no idea how good this well is. The operator has very good reasons for keeping that confidential. If it's a lousy well, the value of the drilling unit has gone way down (all things being equal); whereas if the well is a great well, the value of the drilling unit has gone way up. The operator has good reason to keep that confidential. The operator may want to sell/lease his mineral rights -- if the buyer knew the outcome of this well, the buyer would have an advantage, he/she would not otherwise have.
Having said that, even if the well is on confidential status, if the operator sells any production from that well, the amount of oil sold must be reported and is in the public domain. Regardless of whether any oil is sold or not, the well will come off confidential list six months after the well was granted confidential status.
Disclaimer: in a long note like this there will be typographical and factual errors. This is an opinion; I have no mineral rights myself and no personal experience with this issue. My answer is based on what I've learned from others over the years and by following the Bakken for many years.
With questions regarding "confidential status" there are at least two issues.
1. The rules: when a well can be put on confidential status. The rules have not changed, as far as I am aware, but with operators now allowed up to two years to complete a well after initial spud, the timing of when wells are placed on "confidential" status can be quite confusing. I'm glad you didn't ask that question.
2. However, why an operator chooses to place a well on confidential status is easier to answer if one is looking for an opinion. This well is completed, fracked and producing. Now that it is on confidential status we have no idea how good this well is. The operator has very good reasons for keeping that confidential. If it's a lousy well, the value of the drilling unit has gone way down (all things being equal); whereas if the well is a great well, the value of the drilling unit has gone way up. The operator has good reason to keep that confidential. The operator may want to sell/lease his mineral rights -- if the buyer knew the outcome of this well, the buyer would have an advantage, he/she would not otherwise have.
Having said that, even if the well is on confidential status, if the operator sells any production from that well, the amount of oil sold must be reported and is in the public domain. Regardless of whether any oil is sold or not, the well will come off confidential list six months after the well was granted confidential status.
Disclaimer: in a long note like this there will be typographical and factual errors. This is an opinion; I have no mineral rights myself and no personal experience with this issue. My answer is based on what I've learned from others over the years and by following the Bakken for many years.
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