Newfield Completes Record Bakken Wells

Newfield Bakken Acreage Map

Newfield reported first quarter earnings and along with financial results the company reported company record wells in the Bakken.

Wells completed in the Bakken produced more than 3,100 boe/d and wells completed in the Three Forks yielded more than 2,400 boe/d. The impressive production rates drove Bakken production growth estimates from 15% to 25% in 2013.

“Our production in the first quarter of 2013 exceeded our beginning of the year expectations and we are ‘on target’ to deliver on our expected 39% growth in domestic liquids volumes for the year (adjusted for asset sales in 2012),” said Lee K. Boothby, Newfield CEO. “We kicked off the year with better than expected first quarter volumes in our Cana Woodford, Williston and Uinta Basin operating regions and posted quarter-over-quarter production growth in our domestic operating regions.”

Newfield posted cost improvements and production growth across many of its core areas of development. Costs are down in the Eagle Ford and record drilling times were achieved in the Uinta Basin in Utah.

Read more at newfield.com

Slower Bakken Production Growth in 2013 - Core Labs

Bakken Well Pad

Core Labs' CEO, David Demshur, expressed a belief that the Bakken will grow slower in 2013 on a conference call this past week. He noted the rig count has been down five consecutive months and that production growth has slowed compared to earlier in 2012.

At the peak of growth last year, production was growing by more than 20,000 b/d each month. That has since slowed to just 53,000 b/d of growth over the past five months (almost 50% less).

Mr. Demshur commented, "so the moderation in the rig count probably is going to lead to lower production or gross production gain within the Bakken. Keep in mind that the decline rate first year block in production is about 40%, second year about 25%."

While I believe Mr. Demshur's comments are largely correct, there are a few reasons we can not rely on them solely.

1. Companies ramped up development this past year as crude-by-rail facilities allowed them to realize better prices than ever before. That gave incentive to push the production barrier more than one might in a constrained pipeline environment. Essentially, production grew fast than what should be considered "normal"
2. Operators are moving to pad drilling, so production will come online in a less consistent, more choppy manner. Multiple wells will come on at once versus just one at a time previously.
3. Production growth always slows in the winter. It gets cold in North Dakota and operations are more difficult. Read more in the post Bakken Production Down, But Not Out in November

“He also stated “We’ve gone on record saying we’ll take the under on 1.5 million b/d production projections in 2014.”

Read the company's quarterly call transcript at seekingalpha.com

Northern Oil & Gas' Bakken Production Growth Slowed - Weather

Northern Oil & Gas Bakken Operators

Northern Oil & Gas saw its Bakken production growth rate slow in the first quarter of 2013. Weather related issues kept the company from completing as many wells as it had hoped.

Production in the first quarter of 2013 averaged 11,100 boe/d or 30% more than Q1 2012 and 2% more than Q4 2012. The company added 128 gross (9.6 net) wells during the quarter. Northern has now participated in 1,355 gross (115.8 net) wells and an additional 152 gross (12.2 net) are drilling or waiting to be completed.

“Despite adverse weather conditions in the first quarter, which negatively impacted production and lowered the number of well completions, we were able to increase our average daily production and add nearly ten net wells to producing status.”

— Northern`s CEO Michael Reger

Averaged realized oil prices are expected to average $82-83 per barrel and lease operating expenses (LOE) are expected to average $8.50-9 per barrel.

Kodiak Doubles Bakken Production Over Q1 2012

Kodiak Bakken Acreage Map

Kodiak Oil & Gas provided a first quarter operations update and production is continuing a strong growth trajectory. Production grew to 21,700 boe/d in the first three months of the year. That's 105% more than first quarter 2012 volumes of 10,578 boe/d and 19% more than fourth quarter production of 18,228 boe/d.

During the quarter Kodiak completed 20 gross (14.6 net) operated wells and 13 gross (3.4 net) non-operated wells. The company also employed a full-time completion crew as of March 2013 and expects to add a second crew in May. Multi-well pads will push operated development to 27 gross (23 net) operated wells in the second quarter.

Kodiak's CEO Lynn Peterson said: "We are pleased with the progress that we achieved during the first quarter and believe that we are on course to deliver sustained production growth during the remaining quarters."

Kodiak has seven operated rigs running, with four in Williams County, two in McKenzie County, and one in Dunn County.

12 Well Bakken Unit Being Tested

Kodiak is also drilling 12 wells in a single unit to test well spacing. Core from the wells is being evaluated and well completion and microseismic will kick off in May.

In efforts to continue driving down costs, the company has also drilled three water disposal wells in the area. Oil, gas, and water pipelines should be largely installed in the Polar Area by the end of the second quarter.

Samson Oil & Gas Adds Bakken Acreage in Williams County

Bakken Three Forks Well Spacing and Drilling

Samson Oil & Gas has agreed to acquire 1,225 net acres across two 1,280-acre drilling units in the company's Rainbow Project area in Williams County, ND.The deal includes the exchange of acreage and drilling carries, but the details won't be released until the deal closes.

Samson believe the acreage acquired has potential for 16 wells, eight in the middle Bakken and eight in the first bench of the Three Forks. Samson will have a 52% interest in one unit and a 23% interest in the other.

Hess, Halcon, and Continental Resources also own interests in the Rainbow Project.