As one of the few remaining administrations holding in-person oil and gas lease auctions (state regulations currently prohibit these sales from being conducted online), Montana is set to offer 83 tracts totaling 33,473.8 acres at an event scheduled for Dec. 3, 2019.
Commencing at 9:00 a.m. (Mountain time), the auction will take place at the offices of Montana’s Department of Natural Resources and Conservation in Helena. For a concise legal description of available parcels (in PDF format), go to http://dnrc.mt.gov/divisions/trust/docs/minerals-management/oil-and-gas/tract-list/webDec2019FinalwStips.pdf (accessed 11/13/19).
Located along the Sweetgrass Arch in northern Montana, Toole County has the most acreage listed at the upcoming sale. A total of 49 tracts comprising 15,749.3 acres will be offered in the overall area of 32n–34n, 1e–2w. This acreage is associated with the greater Kevin-Sunburst Field, a huge oil and gas reservoir discovered in 1922 that has since cumulated more than 85.7 mmbo from both the Cretaceous and Mississippian zones at depths less than 3,000’. More than half of Toole County’s available parcels come with stipulations that only certain geological formations will be offered for lease.
Following Toole County, Rosebud County will contribute the next largest number of tracts, some of which could draw interesting bids. A total of 6,391.6 acres encompassed by 11 leases will be up for bid in 10n–12n, 35e–36e. These parcels are located several townships northwest of a horizontal Heath wildcat currently being evaluated by Wyoming-based Alta Vista Oil.
The remaining provinces represented at the December sale are Musselshell, Petroleum, Richland, and Wibaux counties. In central Montana, between them Musselshell and Petroleum counties will be selling 12 parcels totaling 7,104.9 acres in 10n–12n, 27e–28e.
Jumping east/northeastward into the Williston Basin, Richland County will be selling two tracts comprising 156.0 acres in portions of sections 1 and 2, 27n-53e. Scaling less than 2 miles southwest of established horizontal Bakken production in Elm Coulee Field, it is probable these two parcels will receive some of the highest bids at the upcoming sale.
Since early development began at Elm Coulee Field in 2000, this huge complex, which is Montana’s largest producing Bakken reservoir, has surpassed 185 mmbo (millions of barrels of oil) in output.
Moving southward into Wibaux County, two tracts totaling 1,240.0 acres will be offered in 11n–12n, 57e–58e. These prospective minerals are located several miles northeast of the northern portion of the Cedar Creek Anticline, a massive upward fold that encompasses several oil fields. Producing mostly from the vertical and horizontal Silurian and Ordovician, this structure is estimated to contain up to 5 billion barrels of original-oil-in-place.
At the previous Montana state oil and gas lease auction held in September of 2019, 18 parcels comprising 5,514.2 acres were sold for a total of $241,534.50, or a per-acre average of $43.80.
Billings, Mont.–based Stewart Geological (Stewart) submitted an offer of $15.00 per acre for a 640-acre tract encompassing all of section 36, 31n-57e, Sheridan County. Located some 12 miles west of the North Dakota border and almost 42 miles northeast of Poplar, Mont., this unexplored section sits in a lightly drilled township abutting the Roosevelt county line.
The nearest well to Stewart’s winning bid is roughly a mile to the southwest at a dry hole drilled by Canadian firm American Hunter Exploration. The Ducklake #1, nw-ne 10-30n-57e, bottomed in the Winnipegosis at a vertical depth of 11,217’. Two DSTs were conducted in the wellbore, one in the Ratcliffe and the other in the Dawson Bay, before the attempt was plugged.
The closest established production to Stewart’s top per-acre purchase at Montana’s September 2019 sale is some 2 miles to the southwest at a horizontal Bakken well drilled in 2012 by G3 Operating. Part of Elm Coulee Northeast Field and now operated by Cardinal Oil, the Jacobsen Farms Inc #1-14-23H, ne-nw 14-30n-57e, was completed for an IPP of 135 bopd, 45 mcfgpd, and 406 bwpd from the Bakken interval at 10,544’–19,646’. Bottom hole for this venture landed in the se-sw 23-30n-57e.
Elm Coulee Northeast Field, a Bakken oil pool, has yielded more than 41.3 mmbo since its early development began in 2000.