Bakken Rig Count Unchanged - Williston Basin Flat at 182 Rigs - Sept 6, 2013

September 6, 2013 R.T. Dukes

Oasis Petroleum Bakken Acreage Map - Acquisition Included

The Bakken rig count held flat at 180 rigs running for the fifth week. In a similar fashion, the Williston Basin rig count has held flat at 182 rigs during the same period.

The U.S. rig count fell nine rigs to 1,767 and more rigs moved to drilling natural gas. A total of 394 rigs are targeting natural gas and 1,365 are targeting oil in the U.S. The remainder are drilling service wells (e.g. disposal wells, injection wells, etc.). 182 rigs are running in the Williston Basin.

News this week was highlighted by the announcement that Oasis Petroleum acquired 161,000 acres in four transaction for $1.515 billion. The deal increases the company's acreage position by almost 50%. Read more in the article Oasis Petroleum's Bakken Deal Grows Acreage Position 50%

Note: The NDIC reports 185 rigs are active in North Dakota. That is 15 more than Baker Hughes reports. The difference is likely accounted for in the number of rigs actually working and rigs that might not be serviced by Baker Hughes. On any given week, a certain number of rigs are in route to the next well location or idle waiting to drill the next well. The NDIC notes that more than 10 rigs are in the process of moving in and rigging up.

Bakken Oil & Gas Rigs

[ic-l]The number of oil rigs running held flat at 180 in the region. WTI oil prices were trading above $110/bbl and the benchmark has been above $100 for nine weeks running. Watch for operators to begin reacting to higher oil prices. It's common to see a 60-90 day lag before companies increase or decrease activity in response to commodity price changes. Williston Basin Sweet crude traded at $95.94/bbl on Sept 5th.

The natural gas rig count in the region held flat at zero. Natural gas futures (Henry Hub) were trading near $3.50/mmbtu on Friday. Natural gas delivered to the Northern Border pipeline in Watford City is trading below $3/mmbtu. A little more than 10% of the production stream from the Bakken and Three Forks is attributable to natural gas.

McKenzie County led development with 64 rigs running. Dunn, Mountrail, and Williams counties are the only other counties with more than 20 rigs running. View the full list below.

Activity is dominated by horizontal drilling: 157 rigs are drilling horizontal wells, 15 rigs are drilling directional wells, and five rigs are drilling vertical wells.

Bakken Oil & Gas News:

Be sure to visit our Bakken Job Listings to search openings and come back weekly for updates.

Bakken Drilling by County

What is the Rig Count?

The Bakken Shale Rig Count is an index of the total number of oil & gas drilling rigs running across Montana and North Dakota. The rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Bakken formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count and/or Smith Service Co's (Schlumberger) Smith Rig Count.

Oasis Petroleum's Bakken Deals Grow Acreage Position 50% - $1.5 Billion

September 6, 2013 R.T. Dukes

Oasis Petroleum has agreed to acquire 161,000 acres prospective for the Bakken in the Williston Basin for a total of $1.515 billion. In four separate deals, the company's position grows from 331,000 to 492,000 net acres.

The deals included production of 9,300 boe/d, so total volumes just grew from 33,700 boe/d to 43,000 boe/d.

Oasis currently operates 11 rigs in the region and the sellers operate two. Oasis expects to continue a similar level of activity (13 rigs) through the end of the year and will ramp up to running 15-16 rigs by the end of 2014.

"These acquisitions add high quality acreage in the heart of the Bakken and Three Forks play, providing incremental scale to our premier position in the Williston Basin," said Thomas B. Nusz, Oasis' CEO. "As we enter full development mode, our size and scale will continue to drive growth, efficiencies and shareholder value."

Other notable facts related to Oasis Petroleum's position include:

Operational control held flat at 91% of acreage with the acquisition
Operated working interest fell from 69% to 68%
Estimated number of spacing units grew from 280 to 399
Operated drilling inventory grew from 2,020 gross (1,532 net) to 2,847 (2,150 net) wells
Estimated proved reserves grew from 169.9 mmboe (89% oil) to 215.6 mmboe (87% oil)

Over 90% of the value of the deal is attributed to acreage in the western portion of the company's target area. Approximately $1.45 billion was spent acquiring 9,000 boe/d and 136,000 net acres west of the Nesson Anticline; the remainder was attributed to 300 boe/d from 25,000 net acres to the east.

Air Travel In The Bakken Gets Boost From ND Land Board

September 5, 2013 R.T. Dukes

The North Dakota Land Board has awarded more than $27 million in grants to airports throughout western North Dakota. The grants add to the $11 million awarded by the FAA. In total, more than $38 million has been awarded airports in the state.

The bulk of the funding will be allocated in areas impacted by Bakken oil and gas development. The largest grants include:

Minot - $22.2 million from the state
Bowman County - $4.6 million from the FAA and $1.9 million from the state
Bismark Airport - $2.3 million from the FAA
Dickinson Airport is getting $1.9 million from the FAA and $1.2 million from the state
Crosby - $1 million from the state

“Airports in western North Dakota are experiencing record increases in boardings and activity, requiring additional investment in new and expanded terminals, runways and other maintenance needs,” said Gov. Jack Dalrymple. “These state grants will help airports in our oil and gas counties address the impacts of rapid growth and enhance air travel opportunities for our citizens.”

No other airport is getting more than $500,000 in grant funding. The state set aside $60 million in Energy Impact Grants to fund airport projects. The $27 million awarded is the first round of distributions.

Read the full press release from the Governor's office at governor.nd.gov

Bakken Banks See "Exceptional" Performance Compared To Other Shale Areas

September 4, 2013 R.T. Dukes

Banks in Western North Dakota are doing better than their counterparts in other shale plays. That's the primary discovery in a report released by the Minneapolis Federal Reserve Bank.

Bakken institutions have seen growth in deposits, construction, land development loans, and commercial & industrial loans. The same can be said for banks in Arkansas, Oklahoma, Pennsylvania, and Texas, but the increases are not as large as those experienced in the Bakken.

A few takeaways from the report include:

Deposits at banks in the Bakken region grew 49% from 2010 to 2012. That compares growth in Louisiana of 39% from 2008-2010
Construction & land development loans secured by real estate have doubled in the past year compared to areas in Oklahoma and Pennsylvania that have seen 29% and 20% growth, respectively
Profitability has also been impacted. The return on average assets has increased to 1.46% compared to just 0.92% in the rest of the state

The only real problem with all the growth might be finding qualified employees. There such a high demand in the oilfield that banks have a hard time finding qualified people.

Read the full report at minneapolisfed.org

No Need For Keystone XL - Continental's CEO Harold Hamm

September 3, 2013 R.T. Dukes

Keystone XL might not be needed now that other alternatives are being used to move Bakken oil. That's the story from Amy Harder at the National Journal. She interviewed Continental Resources' CEO Harold Hamm and he says "It's not critical any longer."

Keystone XL has been delayed due to "environmental" concerns since 2008 when TransCanada first applied for the proper permits. It's really anyone's guess as to what will happen now.

Continental has committed to move 35,000 b/d on Keystone XL if the pipe is built, but Hamm isn't confident the pipeline will ever move Bakken oil. For one, the environmental lobby is against it and other companies are expanding in the region. Hamm's Hiland Partners is one of the companies with a proposed pipeline.

A few of the major projects of note include:

Read the full article at nationaljournal.com