Delaware City Refinery Taking More Bakken Crude

PBF Energy's Delaware City Refinery is taking more and more Bakken crude. The company announced earlier in the month the refinery's rail facilities have the ability to unload as much as 100,000 b/d, 30,000 b/d more than expected in February.

“Better lucky than smart,” PBF Chairman Thomas D. O`Malley said. “We were lucky when we bought the Delaware City Refinery. They came with a large quantity of cornfields, soybean fields - in essence a surplus of about four-and-a-half thousand acres of land, and most of it was level. So we were able to put this (rail terminal) in.”

The company is also adding capacity to take more heavy oil from Canada. Once complete, the facility will have the capacity to unload 100,000 b/d of Bakken crude and 80,000 b/d of Canadian crude oil.

The Delaware City Refinery is just one of several on the East and West Coasts that are bringing in Bakken crude by rail in favor of waterborne crude from other parts of the world.

As of May 23, Bakken crude was trading below $90/bbl, WTI was trading at ~$93/bbl, and Brent (international) crude was trading above $101/bbl.

Bakken Oil Production Nears 800,000 b/d in March

Bakken Oil Production Forecast

Bakken oil production was near 800,000 b/d in March.

Add ~60,000-70,000 b/d from Montana to the ~719,000 b/d from North Dakota and the Bakken produced more than 790,000 b/d of crude oil in March.

Add oil from formations other than the Bakken and Three Forks and the Williston Basin easily produced more than 850,000 b/d. If production comes back strong from the winter season and the spring break up, this might be the year the basin, and possibly North Dakota, cross the 1 Million b/d production mark.

As of last week the Bakken rig count sat at approximately 190 rigs. With a majority shifting to pad drilling, more wells might be drilled in 2013 with fewer rigs.

Kodiak Nearing Completion Of Two 12 Well Pads

Kodiak Oil & Gas Bakken Three Forks Well Placement

Kodiak Oil & Gas is nearing completion of two well pads that will test six wells in the Bakken and six wells in the Three Forks. If successful, you might see a lot of development across the area shift to this strategy.

The Bakken and Three Forks wells are spaced approximately 800-850 ft apart. The wells in the Bakken and Three Forks are not stacked, but offset from each other to minimize interference. Not all six wells in the Three Forks are being drilled in the same zone either. Three are targeting the Upper Three Forks and three are targeting the middle Three Forks.

On one pad in the Polar area, 10 of the planned 12 wells had been drilled and on the other pad in the Smokey area 8 of the 12 planned wells had been drilled as of the beginning of May. The Polar area pad is expected to be completed and producing by late July.

“Kodiak had a solid first quarter and we are making progress towards the milestones that we set out for the year.”

— James Catlin, EVP

Other highlights from the first quarter included:

• Kodiak dropped one completion crew in March & April, but plans to add them back in May
• Production Averaged 21,700 boe/d in the first quarter
• Spending 20 days from spud to total depth
• Oil & gas infrastructure and salt water disposal infrastructure near 12-well pads is nearly complete
• Running seven rigs currently with plans to drop one later in the month

Resolute Energy Bakken Operations Update - Planning Sale

Resolute Energy Operating Areas

Resolute Energy plans to sell its Bakken properties in 2013 to fund development of other assets, but the Bakken does account for 8% of the company's production. Production was down slightly in the first quarter, but is expected to rebound in the next few months.

The company cited weather related delays for lower production, but expects the Bakken will rebound to between 1,100-1,200 boe/d in the second quarter. Spring break up could delay production in the quarter, but four wells are clear and waiting on pumping units. There should be room for production to outperform expectations.

Read the company's full press release at resolutenaturalresources.com

Residential Apartment Rates Almost Triple In The Past Two Years

Apartments In Williston, ND

It's no secret rental rates have skyrocketed over the past two years in Western North Dakota.

In Williston, residents of a two bedroom apartment have seen their rent go from $850 per month to $2,000 per month.

Almost 500 new units have been permitted, so the hope is prices will come down. Currently, "Fair Market Rent" is considered $1,000 for a two bedroom apartment.

Expensive rent has also driven the low income status range for a single person to $36,000.