Bakken Production Sets Record - Surpasses 700,000 b/d

February 20, 2013 R.T. Dukes

Bakken oil production hit a new record in December of 2012, after declining in November for the first time in almost two years. Weather related delays kept operators from pushing through old records in November, but production surged to more than 700,000 b/d in December.

The state reported Bakken production of 21,835,148 barrels or 704,360 barrels per day in December. The region also eclipsed the 5,000 producing well mark during the month. 5,044 wells produced an average of almost 140 b/d.

Opportunities in the Bakken - Houston Event

February 18, 2013 R.T. Dukes

If you're located in Texas, there's a Bakken Event on February 21st at the Sheraton. Speakers will address the why, how, and the future of North Dakota. You'll learn why the state has the lowest unemployment rate in the US and hear more about business opportunities in the region.

The lineup of speakers includes reps from the several companies active in the Bakken.

EOG Resources' Bakken Core Acreage Could See 160-Acre Development

February 15, 2013 R.T. Dukes

EOG Resources reported improvement in wells after implementing new completion techniques in 2012. In the company's core acreage centered around the Parshall Field, 320-acre spacing success has been confirmed and the company is encouraged by early results at 160-acre spacing. Recent wells are indicating cumulative production over previously drilled wells has improved by a range of 30-70%.

In the North Dakota Bakken/Three Forks, positive results from downspaced drilling tests, together with significant modifications in drilling and completion techniques, further boosted EOG's crude oil production growth.

The first wells tested at 160-acre spacing in Parshall, the Wayzetta 022-1509H and Wayzetta 149-1509H, came online at max rates of 1,185 and 1,265 b/d, respectively.

Notable wells outside of Parshall include:

The Hawkeye 01-2501H and 102-2501H, Three Forks wells in McKenzie County, were turned to sales at 2,445 and 2,945 b/d, respectively.
The Garden Coulee 001-1410H, in Williams County, had an IP rate of 1,415 b/d with 1,260 mcfd of rich natural gas

In 2013, EOG expects to complete 46 net wells in the Parshall and Antelope areas. That's up from 28 net in 2012. If the company proves the potential of 160-acre spacing, an accelerated development program will ensue in 2014. Oil price realizations are also improving:

During the fourth quarter and currently our Eagle Ford crude is priced off an LLS index and essentially all of our Bakken and part of our Wolfcamp crude is being railed to our St. James terminal.

Notes From Winter NAPE 2013

February 12, 2013 R.T. Dukes

We spent Winter NAPE (February 6-8 in Houston) listening to the pros discussing their views on energy policy, fundamentals, and investments. The event is centered on North American, but international influence seems to grow each year. A few photos are included below the post. Highlights from the business conference include:

At one point in 2012, there were 12-13 federal agencies overseeing some point of the E&P business
Alaska is working to create incentives to fuel future exploration. (Only 500 exploration wells have ever been drilled in Alaska. More than 250,000 have been drilled in Texas)
Alaska is working to ensure the federal government can't block development the state is in favor of
Most of those that oppose "Fracking" oppose oil & gas development in general
The industry moving to address all stakeholders. (Not just mineral owners and shareholders)
Asia and the US are set to lead global growth in 2013
Payroll tax hike will reduce growth, but we should still grow
Chemical facilities are expanding for the first time in 50 years ($95 billion in investment planned)
Problems in the US are artificial (man made)
Brent is expected to trend into the low $80s, with WTI differentials shrinking
A Whiting executive believes the Bakken-Three Forks could hold 25-50 billion barrels of recoverable oil
Anadarko is 500 wells into the Eagle Ford and still sees upside (targeting a 4.2 day drilling time)
Schlumberger shared a study showing 30% of perf clusters don't contribute to production

In previous years, the floor of NAPE has had a general theme. One year it would be the Barnett, the next the Haynesville, then the Bakken. This year there wasn't a single area that seemed to dominate the booths. There were small deals across almost all of the shale plays. I saw several Bakken and Eagle Ford deals, as well as conventional projects around the country. From speaking with the attendees, it sounds like conventional drilling has become unconventional in today's market. The largest operators are investing in big, repeatable shale plays.

The North American Prospects Expo (NAPE) is one of the largest oil and gas gatherings in the wold. E&P companies from across the world come to Houston to showcase the next big oil deal.

Marathon's Bakken Production Grows Almost 50% in 2012

February 7, 2013 R.T. Dukes

Marathon Oil grew Bakken production from 24,000 boe/d in December 2011 to 35,000 boe/d in the fourth quarter of 2012. The company's production stream is approximately 90% oil, 5% natural gas, and 5% NGLs.

While 2012 was an impressive year, production is down slightly in January (33,000 boe/d) due to weather related issues and the company's completion schedule. I suspect the company will revert back to its expected growth trajectory in the coming weeks.

The company reached total depth (TD) on 18 gross wells and brought 18 gross wells to production during the fourth quarter. Drilling time also continued to improve as the company averaged a spud to spud time of just 27 days.

In 2013, Marathon plans to drill 65-70 net wells. In total, the company expects to participate in 190-220 gross wells, with 60-70 of those operated.