Post Tagged with: "Bakken Shale"

2016 Budget Cuts Underway as Oil & Gas Majors Slash Billions in Capex

2016 Budget Cuts Underway as Oil & Gas Majors Slash Billions in Capex

CLR, HES, NBL, and WMB Slash Nearly $6.6 Billion in 2016 Plans Lower year-over-year spending in 2016 was a foregone conclusion for many in the exploration and production space, but the amount of expenditure cuts is noteworthy, no matter how you slice it. Plans for 2016 are trickling out ahead of Q4’15 earnings season, and some of the biggest names in the business continue to pull back on operational activity. Hess Corp. (ticker: HES, www.hess.com) announced its 2016 budget of $2.4 billion is 40% below its 2015 spending levels and 20% below its initial 2016 plans. The announcement comes one day after Williams (ticker: WMB, www.williams.com), in association with Williams Partners (ticker: WPZ), dropped its year-over-year spending levels in 2016 to $2 billion – a 32% reduction amounting to about $1 billion. It’s worth noting that both Hess and Williams actually outlined the extent of their spending cuts in the[Read More…]

Samson Oil & Gas to Secure 50,000 Williston Basin Acres in Transformative Acquisition

Samson Oil & Gas to Secure 50,000 Williston Basin Acres in Transformative Acquisition

Samson Oil & Gas (ticker: SSN) has nearly doubled its output overnight, announcing a $16.5 million acquisition on January 6, 2016. The properties currently produce 720 BOPD from 41 net producing wells and contain proved reserves of 8.5 MMBO as of October 1, according to estimates from Netherland, Sewell & Associates. On a cash comparison, SSN is paying $22,916 for each producing barrel and just $1.93 for each proved barrel. Nearly 6.4 MMBO, or 75% of the reserves, are classified as proved undeveloped. The properties span 51,305 net acres, equating to approximately $320 per net acre. It is important to note that Samson acquired the drilling rights down to the top of the Bakken formation, meaning deeper formations like the Pronghorn and Three Forks are exempt from the company’s drilling plans. According to the release, Samson did acquire “the rights to the deeper geologic section below the Bakken pool” for[Read More…]

Flaring Innovation: An Interview with Brian Cebull, CEO of GTUIT

Flaring Innovation: An Interview with Brian Cebull, CEO of GTUIT

The Bakken Shale and the state of North Dakota are symbols of the hydraulic fracturing revolution, and innovations on hydrocarbon extraction continue to improve the process with each passing day. The technological advances vary across all lines of production, spanning from operations at the wellhead to lab research at the company headquarters. Among the innovators is GTUIT®, LLC, a privately held firm specializing in mobile well-site flare gas capture. 2015 has been a banner year for the Montana-based company; it secured an equity investment from Caterpillar Oil & Gas in April and was presented an award of excellence from the World Bank Global Gas Flaring Reduction Partnership in September. The company currently operates 28 mobile units, and 15 are currently running at seven well site locations for Hess Corporation (ticker: HES) in North Dakota. The combined project is currently processing 10 MMcf/d of associated gas, along with recovering and selling[Read More…]

October 22, 2015 - 1:31 pm Oil and Gas 360 Articles, Oilfield Services
Industrial Natural Gas Consumption Up 24% Since 2009

Industrial Natural Gas Consumption Up 24% Since 2009

Natural gas expected to continue growth after more than a decade of decline Industrial use of natural gas is up 24% from 2009 levels of consumption after more than a decade of steady declines. Industrial facilities, including methanol plants and ammonia- or urea-based plants, consumed an average of 21.0 Bcf/d of natural gas in 2014. Several more major projects are expected to come online through 2018, continuing to push industrial use of natural gas even higher, according to the Energy Information Administration (EIA). Low natural gas prices have made it a more attractive feedstock for the production of bulk chemicals. By the end of this year, industrial natural gas consumption is expected to reach an annual average of 21.7 Bcf/d, 3.4% higher than levels in 2014. Consumption by the end of 2016 is expected to be 3.9% higher about that, reaching 22.5 Bcf/d. New fertilizer plants for the Gulf Coast,[Read More…]

July 29, 2015 - 1:26 pm Oil and Gas 360 Articles
Hess Midstream Partners LP One Step Closer to Reality

Hess Midstream Partners LP One Step Closer to Reality

Next Up: IPO Hess Corporation (ticker: HES) has announced plans for a 50/50 joint venture (JV) consisting of its midstream assets in the Bakken Shale. The company will receive cash consideration of $2.675 billion from its partner, Global Infrastructure Partners (GIP), as part of the agreement. The full value of the deal is $5.35 billion. GIP is a private equity company with offices in three different continents and interests in projects around the world. The equity investor holds a business relationship with Williams Partners LP (ticker: WPZ) and owns a 25% stake in the Freeport LNG project, which is scheduled to be commissioned in 2018 and export a maximum of 1.8 Bcf/d. Hess and its Midstream Dream The joint venture will operate under the name Hess Infrastructure Partners, and the company will pursue an initial public offering (IPO) for Hess Midstream Partners LP once the transaction closes in early Q3’15.[Read More…]

Whiting Petroleum Armed with Improving Costs, Reliable Funding to Weather Downturn

Whiting Petroleum Armed with Improving Costs, Reliable Funding to Weather Downturn

Reports Top IP Rates from Two Williston Wells Whiting Petroleum (ticker: WLL), the largest producer and acreage holder in the Williston Basin, reported decreasing well costs and increasing production volumes in its Q1’15 earnings release issued on April 29, 2015. Total quarterly production averaged 166.9 MBOEPD (88% liquids), a sequential increase of 3% as compared to Q4’14, pro forma the acquisition of Kodiak Oil & Gas effective December 2014. Management conveyed that completed well costs in WLL’s Bakken and Niobrara core plays have dropped by 20% to 25% on a year-over-year basis, and productivity continues to rise from increased knowledge, experience and operational efficiencies gained in those plays. “We think WLL’s operational update is the more important aspect of the release,” wrote Global Hunter Securities in a note to clients. “WLL posted its strongest Bakken results ever this quarter and projects a meaningful drop in well costs, which, in our[Read More…]

Will the Drilling Slowdown Allow Williston Infrastructure to Catch Up?

Will the Drilling Slowdown Allow Williston Infrastructure to Catch Up?

North Dakota has been the poster child of the United States shale boom, boasting skyrocketing production, high economic growth rates and miniscule unemployment numbers. The discovery and exploitation of the Williston Basin has increased crude output in the state by more than six times from 2008 to 2014, ending the most recent year with average volumes of 1,087 MBOPD. North Dakota’s climb accounted for 25% of all oil production growth in the United States, as the shale revolution changed the world’s hydrocarbon landscape. North Dakota’s Breakneck Pace Almost overnight, North Dakota transformed from a state counting for just three of the 538 electoral votes to the nation’s leader in economic growth every year since 2010. Harold Hamm, Chairman and Chief Executive Officer of Continental Resources, said in May 2014 that production could eventually top 2 MMBOPD, just months before volumes topped the 1 MMBOPD milestone. Employment rates in 2013 were[Read More…]

Whiting Petroleum Announces Increase in Reserves, Credit Commitments

Whiting Petroleum Announces Increase in Reserves, Credit Commitments

Whiting Petroleum (ticker: WLL), the largest producer of the Bakken/Three Forks shale play, announced estimated reserves of 780 MMBOE (83% oil) in a news release on December 22, 2014. The report was independently commissioned by a third party and represents a year-over-year increase of 29%, including the assets of Kodiak Oil & Gas. Whiting completed its $6 billion, all-stock acquisition of Kodiak earlier this month. More Reserves = More Credit In conjunction with the reserves increase, WLL’s bank syndicate increased its credit commitment to $4.5 billion. WLL management believes the company will have $1.4 billion drawn by year-end 2014, leaving a total of $3.1 billion of liquidity. James Volker, President, Chairman and Chief Executive Officer of Whiting, said the company is “pursuing monetization of select assets that would reduce debt and create up to $1 billion in additional liquidity.” Its assets besides the Bakken include the Redtail Niobrara of Colorado and the[Read More…]

Whiting Petroleum Completes $6 Billion All-Stock Acquisition of Kodiak Oil & Gas

Whiting Petroleum Completes $6 Billion All-Stock Acquisition of Kodiak Oil & Gas

Whiting Petroleum (ticker: WLL) is officially the largest producer of the Bakken/Three Forks shale play, following its $6.0 billion purchase of Kodiak Oil & Gas on December 8, 2014. The transaction was first announced on July 13, 2014, and involves the $2.2 billion assumption of Kodiak net debt. Kodiak shareholders now hold approximately 29% of WLL. Whiting arranged $3.5 billion in bank commitments to finance the transaction and has sold roughly $1.1 billion in properties since the beginning of Q3’13. Its debt to market cap ratio is currently 62%. By comparison, the average of 86 peer companies in EnerCom’s E&P database has a median debt to market cap ratio of 86%. Whiting currently has only $100 million drawn on its credit facility. Its estimated borrowing base is expected to be roughly $4.5 billion. The New Whiting As of year-end 2013, the combined company has more than 600 MMBOE of proved reserves[Read More…]

Emerald Oil “Well Positioned” to Withstand Current Oil Price Environment

Emerald Oil “Well Positioned” to Withstand Current Oil Price Environment

EOX Says Breakeven Price in the Bakken is $55/BOE Emerald Oil is a pure play Williston Basin E&P with operations targeting the Bakken, Pronghorn and Three Forks shale oil formations. The company averaged production of 3,855 BOEPD in its Q3’14 results, along with net income of $13.7 million ($0.21 per share). The results represent respective increases of 3% and 80% and on a quarter-over-quarter basis. “Emerald is well positioned to weather the current oil price environment,” said McAndrew Rudisill, Chief Executive Officer of Emerald Oil, in a company release. Click here for a list of results of completed EOX wells. Borrowing Base Update On December 1, 2014, Emerald Oil’s borrowing base increased to $250 million from $200 million. The increase is in line with company expectations and may grow even more in the next redetermination, which is scheduled for March 2015. In a conference call following its Q3’14 results, Ryan[Read More…]

North Dakota is Proposed Site for a $4 Billion Polyethylene Plant

North Dakota is Proposed Site for a $4 Billion Polyethylene Plant

Plant will use Ethane from Natural Gas to Make Consumer and Industrial Plastics The cutback on flaring the Bakken’s natural gas took another positive step yesterday. A planned plastics manufacturing facility, announced at a press conference in Bismarck, will produce 1.5 million metric tons of polyethylene (3.3 billion pounds annually) from ethane produced in North Dakota. The plant will employ 500 people. Speaking at the Oct. 13 press conference, North Dakota Agriculture Commissioner Doug Goehring said, “When completed, this project by itself has the potential to reduce most of the flaring of natural gas in our state.” The project promoter, Badlands NGL, LLC, said it will take at least three years for full development and will require an investment of $4 billion. The facility will convert ethane gas to both low and high density plastics. Badlands intends to market the majority of the polyethylene products domestically, with additional sales to[Read More…]

October 14, 2014 - 6:37 pm Canada, Oil and Gas 360 Articles
American Eagle Energy: Developing a Sweet Spot in Divide County, ND

American Eagle Energy: Developing a Sweet Spot in Divide County, ND

Bakken/Three Forks Producer Exceeds Production Guidance for Q3 by 40% American Eagle Energy (ticker: AMZG) found a way to navigate around some backwash from last spring/early summer’s closed county roads in Divide County, North Dakota. At that time the company was forced to shut in producing wells because trucks weren’t allowed to collect crude on site due to county-wide road closures, impacting the company’s production. Management initially estimated net production would come in between 2,100 to 2,200 BOEPD for Q3’14 because of the addition of a new 4-well pad approximately a month into the quarter. Instead, the pad took production past 3,000 BOEPD by the end of September, putting production at the high end of the estimated 2014 exit rate a full quarter early. “We learned some things last winter,” Marty Beskow, VP capital markets and strategy for American Eagle, told Oil & Gas 360® in an exclusive interview Monday.[Read More…]

October 6, 2014 - 7:03 pm Midstream, Oil and Gas 360 Articles
A rig site in North Dakota

Another Record for North Dakota: 1.1 Million Barrels of Crude per Day

Flaring decreases to 26% The State of North Dakota has chalked up another record. July production numbers are in—the state produced 1,110,642 barrels of oil per day in July. The numbers broke down as follows: Bakken/Three Forks Shale:  1,047,034 BOPD (94%), conventional oil: 63,608 BOPD (6%). Seventy percent of July production was from 7,862 unconventional Bakken/Three forks wells, and 30% came from 3,425 legacy conventional wells. Also setting a record was North Dakota’s July gas production figure at 1,291,467 MCF/day. The state reported that North Dakota drillers continue to outpace completion crews. The number of well completions increased to 197 in July from 188 in June. At the end of July there were about 630 wells waiting on completion services. Crude oil take away capacity is expected to remain adequate as long as rail deliveries to coastal refineries keep growing, the report said. Rig count in the Williston Basin is[Read More…]

September 12, 2014 - 6:33 pm Fracing, Oil and Gas 360 Articles, Oilfield Services, Regulatory

Rail Deliveries of U.S. Oil Reach Highest Mark Since July 1986

Approximately 2/3 of Bakken crude moves by rail The amount of crude oil and refined petroleum products moved by U.S. railroads increased 9% during the first seven months of this year compared with the same period in 2013, the EIA said in a report today. “In July, monthly average carloadings of oil and petroleum products were near 16,000 carloads per week, according to the Association of American Railroads. The increase in oil volumes transported by rail reflects rising U.S. crude oil production, which reached an estimated 8.5 million barrels per day in June for the first time since July 1986,” the EIA report said. More than half of the nearly 460,000 carloads of petroleum and petroleum products tracked by the AAR between January and July consisted of crude oil, up from around 3% in 2009. “With the average rail tank car holding around 700 barrels of crude oil, about 759,000[Read More…]

August 28, 2014 - 4:17 pm Midstream, Oil and Gas 360 Articles, Oilfield Services
There’s a Bottleneck in the Eagle Ford and Bakken, and It’s Burning Before our Eyes

There’s a Bottleneck in the Eagle Ford and Bakken, and It’s Burning Before our Eyes

OAG360 covered the dropping Permian oil prices in a feature article yesterday, as Midland oil spot prices are trading at a $10 discount to West Texas Intermediate. As it turns out, there’s also a bottleneck in two other prominent shales. In the Bakken and Eagle Ford, operators elect to burn its gas rather than stockpile. The exponential increase in drilling activity has outpaced infrastructure in regions. The Bakken and the Eagle Ford, in particular, are two shales who have struggled to build out its takeaway and processing capabilities. Bakken operators were flaring off so much gas that the North Dakota Industrial Commission stepped in, warning crude production will be capped if producers don’t slash flaring by 43% by Q1’15. “In an American boom, the pace is fast,” said Diana Hinton, oil field historian and professor at the University of Texas of the Permian Basin.”If you don’t move fast, someone is[Read More…]

August 26, 2014 - 6:26 pm Midstream, Oil and Gas 360 Articles, Oilfield Services
Bakken Crude Poses Lower Risk than other Flammable Liquids: Study

Bakken Crude Poses Lower Risk than other Flammable Liquids: Study

A number of oil train derailments and resulting fires over the past year in the U.S. and Canada spurred questions about the volatility risk of U.S. Bakken crude oil being shipped by rail from North Dakota to refineries throughout North America. The U.S. Department of Transportation has proposed new rules for tank car design and introduced revisions to train speed and braking practices for rail cars carrying crude oil and ethanol. In response to the questions as to whether Bakken crude oil is more volatile or not, the North Dakota Petroleum Council’s Bakken Crude Characterization Task Force commissioned Turner Mason & Company, Dallas-based consulting engineers, to conduct a study of Bakken crude oil properties. The study includes a comprehensive sampling and testing program to answer questions regarding the chemical and physical composition of Bakken crude oil, issues regarding proper classification and [to] establish a Bakken quality baseline. This program collected[Read More…]

Whiting Petroleum's Production is Growing, Even without Pending Assets from Kodiak Oil & Gas

Whiting Petroleum's Production is Growing, Even without Pending Assets from Kodiak Oil & Gas

Whiting Petroleum (ticker: WLL) is set to become the largest E&P in the Williston Formation once its $6 billion acquisition of Kodiak Oil & Gas (ticker: KOG) is finalized before the end of fiscal 2014. Management teams on both sides limited comments on the acquisition in their respective Q2’14 conference calls, considering the transaction is not yet complete. KOG spent just six minutes to provide an update and did not take any questions. Whiting was more receptive but still monitored its comments. The most extensive comment was made by Jim Volker, President and Chief Executive Officer of Whiting Petroleum, in the call on July 30, 2014. Volker said: “Kodiak has done a terrific job of establishing a Tier 1 acreage footprint in the core of the Williston Basin, which like Whiting’s acreage, sees some of the best economics anywhere in the play, or for that matter, anywhere in the U.S.[Read More…]

August 1, 2014 - 5:39 pm Finance, Oil and Gas 360 Articles, Oilfield Services
Completion Techniques, Reservoir Enhancement on the Minds of Bakken Operators

Completion Techniques, Reservoir Enhancement on the Minds of Bakken Operators

The Shale Revolution has transformed the Bakken Shale from an area with production below 200 MBOEPD to the nation’s third largest producing oil field. Its transformation has been a staple of growth in North Dakota – a state growing at five times the rate of any of its competitors. Production in August 2014 is forecasted to surpass 1,100 MBOEPD, trailing only the Permian and the Eagle Ford, and the majority is attributable to hydraulic fracturing and horizontal drilling. The United States Geological Survey estimates the Bakken, along with the Three Forks formation, holds 7.3 billion barrels of technically recoverable resources. The number is double the estimate from 2008 and represents more than half of the recoverable resources in the United States. Even though productivity is at all time highs, E&Ps and service companies continue to evaluate ways to improve recovery. The Energy Information Administration says efficiencies and infrastructure improvements have[Read More…]

Bakken Update: The Top Five Producers in One of America’s Greatest Oil Fields

Bakken Update: The Top Five Producers in One of America’s Greatest Oil Fields

The Bakken Shale, the third largest regional oil producer in the United States, achieved the 1 MMBOPD milestone in June 2014. The announcement came just months after IHS announced the field had produced a total of 1 billion barrels in an April 2014 report. The Bakken is showing no signs of slowing down. At an Energy Information Administration conference in July, Eric Slifka, Chief Executive Officer of Global Partners LP (ticker: GLP), said he expects Bakken oil production to exceed 2 MMBOPD at some point in its lifetime. Production is also expected to rise in the short term by 5% to 6% in the summer season, according to a director from the North Dakota Department of Mineral Resources. Upon shareholder approval and closing of its announced acquisition of Kodiak Oil & Gas (ticker: KOG), Whiting Petroleum (ticker: WLL) will become the Bakken region’s top producer. Oil & Gas 360® looked[Read More…]

July 15, 2014 - 5:37 pm Midstream, Oil and Gas 360 Articles
An E&P Powerhouse Takes Command of the Bakken

An E&P Powerhouse Takes Command of the Bakken

Whiting Petroleum (ticker: WLL) has announced the acquisition of Kodiak Oil & Gas (ticker: KOG), making the company the largest producer in the prolific Bakken/Three Forks area in the Williston Basin. COMBINED COMPANY 107,000 BOEPD (Q1 2014) Production 370 MMBOE Reserves 855,000 Net Bakken Acres (strongest acreage position in the Bakken) 3,460 Future Drilling Locations 21 Active Williston Rigs 1,200+ Employees Economies of Scale: $700,000 Expected Cost Savings per Completed Well Liquidity ($400 million cash) Access to Capital ($4.5 billion revolving credit facility) “All Oil, All the Time” – James Volker, Whiting Petroleum CEO Whiting Petroleum announced the $6.0 billion acquisition of Kodiak Oil & Gas on July 13, 2014. The purchase price includes the assumption of KOG’s $2.2 billion in net debt and will commence as an all-stock transaction. The transaction is expected to close in  Q4’14. Pro forma for the acquisition, Whiting Petroleum is now the largest producer[Read More…]

July 14, 2014 - 4:54 pm Earnings, Finance, Oil and Gas 360 Articles
$500 Million Retail/Entertainment/Residential Complex Aims to Please Families Flocking to the Bakken

$500 Million Retail/Entertainment/Residential Complex Aims to Please Families Flocking to the Bakken

Swiss real estate developer Stropiq has locked up 430,000 sq. ft. of anchor tenants for its planned 1 million-square-foot, 200+ acre, mixed use complex in the heart of North Dakota’s Bakken oil country. The development, called Williston Crossing, is scheduled to break ground in March 2015 in Williston, North Dakota. The project is targeting completion/opening in 2017. The project is the brainchild of Terry Olin, co-founder of Switzerland-based Stropiq LLP. Stropiq is a North Dakota State University alumnus. Since September 2013 Stropiq has invested $20 million in Williston projects. “Just imagine that your significant other brought you [to the Bakken] and you have to drive two hours to a shopping center. As projects like this take place, more families will move in. We’re not building for the population that’s there today, we’re building for the population that’s going to be there three years from now,” Olin said in an interview with[Read More…]

July 10, 2014 - 12:34 pm Oil and Gas 360 Articles
Liberty’s Slickwater Completions in the Bakken Yield 120% to 200% Production Gains, 2X EURs

Liberty’s Slickwater Completions in the Bakken Yield 120% to 200% Production Gains, 2X EURs

Wells Fargo Equity Research hosted a conference call July 2 with management from privately held Liberty Resources to discuss the slickwater completion technique it has used in the Bakken. In its follow-up research note, Wells Fargo’s E&P team summarized the call as follows: “Liberty’s philosophy is ‘reservoir stimulation, not proppant disposal’. To enhance contact area and conductivity, Liberty generally uses plug’n perf, ceramic proppant, and slickwater in its completions. “Management provided data showing this combination can improve cumulative oil production by 120-200% over 180 days compared to other techniques, while improving EURs nearly two-fold. Compared to the Bakken as a whole, Liberty’s 365 day cumulative oil number is 56% higher than the basin’s average. “Investors on the call had questions whether slickwater only enhances economics in the lower-quality portions of the Bakken; management provided data showing the exact opposite; i.e., it sees more of an uplift in higher-quality areas. Further,[Read More…]

July 3, 2014 - 3:37 pm Earnings, Fracing, Oil and Gas 360 Articles
Emerald Oil Beats Guidance Rates, Adds Acreage to Core Williston Assets

Emerald Oil Beats Guidance Rates, Adds Acreage to Core Williston Assets

Emerald Oil (ticker: EOX) is an independent exploration and production operator that is focused on acquiring acreage and developing wells in the Williston Basin of North Dakota and Montana, targeting the Bakken and Three Forks shale oil formations. Emerald Oil exited 2013 producing approximately 2,630 BOEPD, according to an operations update on January 23, 2014. The company averaged approximately 2,430 BOEPD in Q4’13 – respective increases of 30% compared to Q3’13 and 103% compared to Q4’12. Both rates exceed initial guidance numbers predicting a 2013 exit rate of 2,400 BOEPD with an average Q4’13 rate of 2,300 BOEPD.   Rig Program Close to Expanding EOX is currently running two rigs in its Low Rider project area and completed 3.9 net wells since reporting its Q3’13 results in November 2013. The company has an additional 6.9 net wells drilling, completing or waiting on completion. A third rig is expected to be[Read More…]

January 24, 2014 - 6:03 pm Oil and Gas 360 Articles