QEP's Bakken Production Down Due To Transition To Pad Drilling

QEP Resources Bakken Three Forks Acreage Map

QEP Resources produced approximately 17,000 boe/d from the Bakken and Three Forks in the first quarter. That's down from more than 18,000 boe/d in the fourth quarter of 2012.

QEP has moved to pad drilling across much of its acreage and that means longer lead times before wells are brought to production.

No alarms should be going off here. Single wells that would have come online a short time after being drilled now have to wait until three wells are drilled and ready for completion on the same pad. Expect to see similar results from other Bakken operators who are transitioning to pad drilling throughout 2013.

Bakken and Three Forks Development Plans

QEP plans to drill eight wells per unit from two four well pads at the company's South Antelope area. Four wells will target the Bakken and four will target the Three Forks. Pad drilling will be the primary means of development in the South Antelope area.

During the quarter, only one well was turned to sales in the South Antelope area and 11 were turned to sales in the Fort Berthold area. You can read more about the South Antelope acreage in the article - QEP and Helis Reach Bakken Deal For $1.3 Billion

The 11 wells at Fort Berthold include two five well pads that yielded almost 2,200 boe/d and 2,500 boe/d per well on each pad, respectively. QEP's water gathering system is also running at Fort Berthold and the company is saving $5 per barrel in transportation costs.

QEP expects all in well costs to hold below $11 million as the company transitions to pad drilling. Currently, three rigs are running at Fort Berthold and four rigs are running on the South Antelope properties. QEP has approximately 117,000 acres prospective for the Bakken Shale.

USGS - Bakken & Three Forks Oil Reserves Estimated at 7.38 Billion Bbls

USGS Bakken Reserves - Petroleum System Map

The USGS revised its oil and gas resource assessment for the Bakken and Three Forks formations for the first time since 2008.

Over 4,000 wells have been drilled and more than 450 million bbls of oil have been produced since the last update.

In 2008, the USGS estimated the Bakken could technically yield a mean estimate of 3.65 billion bbls. That didn't change in this estimate, but the Three Forks was added and is estimated to hold 3.73 billion bbls oil. That's a mean estimate of 7.38 billion barrels of technically recoverable oil from the Bakken and Three Forks.

“Since the 2008 USGS assessment, more than 4,000 wells have been drilled in the Williston Basin, providing updated subsurface geologic data. Previously, very little data existed on the Three Forks Formation and it was generally thought to be unproductive. However, new drilling resulted in a new understanding of the reservoir and its resource potential.”

The Bakken and Three Forks are also estimated to hold 6.7 Tcf of natural gas and 0.53 billion barrels of NGLs. That's up from just 1.8 Tcf and 0.15 billion barrels in 2008.

The USGS numbers quoted the most include a mean estimate. The USGS actually provides a range of probability. The organization estimates that technically recoverable reserves range from 5.2 Billion boe to 14.3 Billion boe. That means a best or high case could be double what you see quoted in most places.

Read the full press release at USGS.gov

Exxon's Bakken Production Up 75% - Running Ten Rigs

Exxon North America Play Map

ExxonMobil's Bakken production is up 75% from a year ago and the company is running ten rigs across the area.

Exxon's XTO subsidiary operates the more than 585,000 net acres prospective for the Bakken.

The company has also fully integrated the assets that were purchased from Denbury late last year. Read more about the deal in the article Denbury - Exxon Deal Includes Bakken Acreage and CO2 Assets

Hess Bakken Production Jumps & Well Costs Fall

Hess Bakken Map

Hess reported Bakken production of 65,000 boe/d in the first quarter of 2013. That represents 55% growth from the first quarter of 2012 and sets the company up well to meet its 2013 guidance of 64,000-70,000 boe/d.

Production will remain relatively flat in the second quarter as the company completes its transition to pad drilling.

A total of 30 wells were completed in the first quarter, but that number will grow throughout the year as the company plans to complete 175 wells by year-end. Approximately two-thirds will be completed in the Bakken and one-third will be completed in the Three Forks.

Hess completed 10 of the 25 best Bakken wells in North Dakota in 2012. Production growth and well completions will be weighted to the second half of the year. Hess is well on its way to its target of 120,000 boe/d by 2015.

The company also commented that down spacing test at 160-acres have been positive, but that it is very clear you will down space that far in some areas and not in others. Also, well results in the first quarter project EURs in the low 600,000 boe per well

Bakken Well Costs Coming Down For Hess

[ic-r]Well costs have also improved significantly from one year ago. Well costs averaged just $8.6 million in the first quarter, down 36% from $13.4 million in the first quarter 2012. Costs are expected to continue falling as pad drilling is implemented across a wider area the next two quarters.

The Tioga Rail Facility ran at capacity in the first quarter (53,000 b/d) and the Tioga Gas Plant expansion is on schedule to be completed by year-end.

Whiting Petroleum Hits Record Production Levels In Q1 2013

Whiting Bakken Map

Whiting Petroleum reported record company-wide production in the first quarter of 2013 of more than 8 million boe (over 89,000 boe/d).

That represents 4% growth over Q4 2012 and 10% growth over Q1 2012.

The growth was driven by the company's assets in the Western Williston, Southern Williston, and Sanish Field areas. Seismic work completed at the Starbuck prospect and positive results from the Niobrara Shale mean Whiting could have future growth not baked into its guidance of 12-16% in 2013.

“In the Williston Basin, drilling at our Sanish, Pronghorn, Hidden Bench and Tarpon fields continues to underpin our production increases. Recent well results at our Missouri Breaks prospect indicate that this area should also contribute significantly to future production growth.”

— Mr. Volker, CEO

Bakken Highlights

• Western Williston Basin production grew 27% from Q4 to 6,520 boe/d
• A well was brought online at almost 1,500 boe/d in the Missouri Breaks prospect
• South Williston production grew 52% from Q1 2012 to 13,800 boe/d
• Sanish production grew 16% from Q1 2012 to more than 33,000 boe/d
• Big Island Prospect yielded two vertical Red River wells that produced more than 200 boe/d
• Completed 3-D seismic on the Starbuck prospect.

Whiting also completed a successful well in the Niobrara in the Denver-Julesberg Basin. The Razor 26-3524H flowed over 861 boe/d intially. One rig is working the area an another will be added at mid-year.

The company operates a total 23 rigs and ~20 of those are active in the Williston Basin.

Read the full press release at whiting.com