Enverus Blog

Insights across the energy value chain

I came across an informative interview of Kirk Wilson from The Energy Reporter on seekingalpha.com.  Mr. Wilson discusses the Alberta Bakken Trend with a focus on valuation of the players more so than detailed geology.  The Alberta Bakken Trend is in Alberta and Saskatchewan, and bleeds into central Montana.

There are some insightful takeaways from the interview.  For instance, the royalty rates in Canada are much lower than in Montana.  Mr. Wilson cites a 30% royalty rate in Montana, while in Canada initial royalty rates are on the order of 5% and as low as 2.5%.  The impact these low rates have on economics is significant.

He brings up the point that the Alberta Bakken is light oil compared with the heavy oil of the Williston Basin Bakken.  He throws out 35-42 degree API gravity.  At 4,500′-6,000′, the depths are much shallower than the Williston.  This results in much lower drilling costs, $4MM vs $7MM in North Dakota.

The Alberta Bakken is new and emerging therefore data is at a premium.  I have a map of 2010 Montana permits below, histogrammed by operating company.  There are two main clusters, the cluster in East MT is associated with the Williston Basin, while the cluster in Toole and Glacier counties are Alberta Bakken.

Kirk Wilson Sheds Some Light On Alberta Bakken

The two main Montana players actively drilling that I have been hearing about are Rosetta and Newfield.  Newfield has 10 permits and Rosetta has 6.  There is no Bakken production data in these two counties as of yet in the Drillinginfo database.  Drillinginfo is actively entrenched in a Montana leasing project to include leases as well as lease polygons for these unconventional counties.

More on other players and some Canadian data later.

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