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.

Bakken Housing Challenges Continue

No Vacancy Sign

Finding adequate housing in the Bakken has been an issue for several years. Now, there are more options, but the question is affordability. Highly paid oilfield workers can afford $2,000 per month, but the average resident not employed in the oilfield can not. A Wall St Journal article published a little earlier in the day dives into the details. Follow the link at the bottom to read the full article. Highlights from the article include:

• Working population up 70% in the past three years
• Average home listed for $253,000 in 2012
• One bedroom apartments as much as $2,000/month
• Considering increase in ND's housing incentive fund to $50 million from just $15 million
• State needs 7,300 affordable housing units constructed over the next two years
• Wages have risen to fast for subsidies to reflect needs

Read more at wsj.com

Douglas Rail Terminal Planned by Enserco in Wyoming

Oil Rail Car Image

Enserco Midstream plans a new crude oil trans-loading facility in Douglas, WY. The Douglas Rail Terminal will have loading capacity of 60,000 b/d, initially, with the potential to expand to 120,000 b/d. With a great location in the heart of Wyoming's growing crude oil plays, I suspect a lot of the crude moved will be local. The facility will have the ability to take and move crude delivered from Canada and the Bakken. If rail can provide better netbacks than local pipelines, you can bet Montana and North Dakota production will make the jump onto the railway.

With its prime location on the main line of the BNSF Railway, the Douglas Rail Terminal provides access to storage and refining markets across the United States," said Griff Jones, president and CEO if Twin Eagle Resource Management

Operations are expected to begin in June 2013, with full unit train operations available in March 2014.

"Our Douglas Rail Terminal will be one of the first to provide rail export to companies in this growing producing region of the country. It expands our ability to provide our customers with cost-effective transportation of excess production," said Tim Kirwin, Enserco VP.

Enserco Midstream, LLC, is a wholly owned subsidiary of Twin Eagle Resource Management, LLC.