EOG Resources Nearly Doubling Bakken Activity in 2014

February 25, 2014 Kirk Eggleston

EOG Resources sees the Bakken as a high rate of return growth play, and plans on drilling 80-net wells in 2014.

That's nearly double the number of net-wells drilled in 2013, which was 54. At that rate, the company has a drilling inventory in the Bakken of ~8 years.

EOG Resources Bakken Development in 2014

EOG Resource's focus area will be in its Bakken core acreage (~90,000 net acres) and the Antelope Extension area.

Based on successful drilling results in the Three Forks formation in the Antelope Extension in 2013, EOG plans on testing additional benches during 2014.

Completion and cost improvements in the play have resulted in EOG deciding to direct more of its capital budget to the Bakken.

“EOG is directing a larger percentage of its 2014 capital budget to the Eagle Ford and Bakken where we have tremendous drilling opportunity with excellent rates of return,” said CEO, William Thomas. “By increasing activity in these plays, we expect the momentum and operational efficiencies we’ve created to continue.”

In 2013, EOG ramped up its drilling plan from one to four wells per section, while increasing the average recoverable resource per well. More downspacing is expected in 2014.

EOG Resources Bakken Well Highlights

Wayzetta 30-3230H and 31-3230H (Mountrail County)

Initial production (IP) of 2,510 b/d and 2,540 b/d crude oil respectively

Wayzetta 35-1920H (Mountrail County)

Initial production (IP) of 2,240 b/d crude oil
Initial production (IP) of 1.2 mmcf/d natural gas

Hawkeye 2-2501H (McKenzie County)

Initial production (IP) of 2,075 b/d crude oil
Initial production (IP) of 3.8 mmcf/d natural gas

Enerplus Capital Budget in Bakken - $304 Million - 2014

February 24, 2014 Kirk Eggleston

Approximately 40% of Enerplus's $760 million capital budget for 2014 will be dedicated to the Bakken and Three Forks. That's about $304 million.

The company expects to grow production by more than 30% in North Dakota in 2014.

Enerplus 2013 Capital Expenditures in Bakken

~$308 million of capital spending was in North Dakota, with the majority invested at Fort Berthold. Approximately 70% of company spending in 2013 was directed to crude oil assets.

“VP of Operations Raymond Daniels said, “45% of our capital spending was in North Dakota where we are targeting both the Bakken and Three Forks. Our focus was on driving improvements in capital efficiencies through a reduction in drilling costs and improvement in productivity.”

Capital spending came in slightly lower in 2013 than the original forecast of $685 million, totaling $681 million.

Enerplus Bakken Reserves

25 mmboe of 2P reserves were added in 2013 from North Dakota properties. The cost of this addition was $19.74 per boe including future development capital.

Total 2P reserves increased by more than 17% year-over-year, driven by additions in the Marcellus and Bakken/Three Forks properties.

Enerplus Bakken Initial Production Rates and Total Production

“According to VP of Operations, Raymond Daniels, “our two most recent Bakken wells have been completed using about a thousand tonnes of sand per lateral foot with roughly 40 frac stages. In their first 30 days these wells have produced a record of roughly 4,000 to 8,000 barrels of oil each.”

Enerplus total production grew in the fourth-quarter to 94,167 boe/d, which is up 7% from the third-quarter. Production for 2013 was 89,800 boe/d. That's up 9%.

Enerplus Highlights

40% of Enerplus's $760 million capital budget for 2014 will be dedicated to the Bakken and Three Forks - ~340 million
Enerplus expects to grow production by more than 30% in North Dakota in 2014
~$308 million of capital spending was in North Dakota in 2013
25 mmboe of 2P reserves were added in 2013 from North Dakota properties
Enerplus total production grew in the fourth-quarter to 94,167 boe/d
Production for 2013 was 89,800 boe/d. That's up 9%

Williston, ND Rent Soars Past Highest Rent Areas of U.S. to Top Spot

February 20, 2014 Kirk Eggleston

A study done by Apartment Guide in February 2014 puts Williston, North Dakota in the top spot for highest average entry-level rent.

According to the publication, a 700-square-foot, one-bedroom, one-bath apartment in Williston, North Dakota can cost more than $2000 per month. For readers on this site, the explanation for this growth is crystal clear: the Bakken Shale!

Williston, ND is located in the heart of the shale play, and is generally considered to be the epicenter of the Bakken.

Read more:Bakken Lodging

A quick online search also indicates monthly rent is steep in Watford City, ND. That's not surprising considering Watford City is about an hour southeast of Williston.

Williston, ND Growing Pains

Since the oil boom began in North Dakota, the small town of Williston has seen many changes. From increased crime rates to housing shortages, the city has experienced significant growing pains over the past several years.

When apartments have been unavailable, oilfield workers have resorted to living in motorhomes. RV park sites, some fully sheltered to keep out cold North Dakota winters, can go as high as $1500 per month during peak season.

Impact on North Dakota Residents

North Dakota saw a 200% jump in homelessness in 2012. There are now 2,069 homeless people in the state of 699,628, according to the U.S. Department of Housing and Urban Development (HUD).

In July 2013, North Dakota received four awards from HUD for $7.5 million. North Dakota Senators John Hoeven, Heidi Heitkamp and Congressman Kevin Cramer commented jointly about the funding:

“The development of safe, affordable housing is absolutely necessary to relieve the strain and high-costs our residents face due to North Dakota’s severe flooding and housing shortages. These funds will help build stronger communities, provide shelter and housing for least fortunate among us and support North Dakota’s continued economic growth.”

In the 2010 census, 14,700 people called Williston, ND home. Since the boom began, the population has doubled to ~30,000 people.

Read more at ApartmentGuide.com and Heitkamp.Senate.gov

SM Energy Completed 42 Gross Bakken Wells in 2013

February 19, 2014 Kirk Eggleston

SM Energy completed 42 gross flowing completions in its operated Bakken/Three Forks program in 2013. Eight wells were completed in the fourth-quarter of 2013.

At the end of 2013, SM Energy had 103 net wells producing and 79 proved undeveloped net locations in the Bakken.

The company had 54 mmboe of total proved reserves in the Bakken at end of the year.

SM Energy Focusing on Infill Development in the Bakken

In 2014, the company's Bakken plans include testing completion design, spacing, and new intervals to maximize program economics and prove up additional inventory. SM Energy plans to run three rigs spending $275 million on operated activity and another $75 million on non-operated properties.

SM Energy is currently focusing its drilling on the Raven/Bear Den and Gooseneck prospects in North Dakota. Substantially all of the company's activity is now focused on infill development. Two of the three rigs the company is running in North Dakota are operating in the Raven/Bear Den prospect and the third in the Gooseneck prospect.

During 2013, the Company's drill and complete costs for its operated wells decreased by approximately 4% in both the Raven/Bear Den and Gooseneck prospects.

SM Energy Q4 Company-Wide Daily Production in 2013

Oil production company-wide was up 31% in the fourth quarter of 2013 to 40,800 b/d from 31,300 b/d in Q4 2012. Natural gas production was up 24% from 429.3 mmcf/d in the fourth-quarter of 2013 to 347.1 mmcf/d. NGL production was up 51% to 31,500 b/d from 20,800 b/d. Oil Equivalent production was 143,800 b/d. That's also up 31% from 109,900 b/d.

SM Energy Bakken Highlights

42 gross flowing completions of wells in 2013
103 net wells producing and 79 proved undeveloped net locations in Bakken in 2013
54 mmboe of total proved reserves in 2013
$275 million on operated activity and another $75 million on non-operated properties in 2014

SM Energy Company-Wide Production Highlights

2013 4Q company wide oil production up 31% - 40,800 b/d
2013 4Q company wide natural gas production up 24% - 429.3 mmcf/d
2013 4Q company wide ngl production up 51% to 31,500 b/d
2013 4Q company wide oil equivalent production up 31% to 143,800 b/d

WPX Energy Sets Its Bakken Capital Budget at $580-600 Million in 2014

February 18, 2014 R.T. Dukes

WPX Energy will spend between $1.420-$1.523 billion in 2014, with $580-600 million directed to Bakken and Three Forks targets in the Williston Basin.

WPX is planning to add a rig to bring its operated total to five in 2014.

The company expects the added rig will allow the company to drill 62 gross operated wells, or 25% more than the ~50 wells the company drilled in 2013.

Also read:Halcon Lowers Its 2014 Capital Budget & Holds Production Guidance

“Increased oil volumes, efficient development of our resource base and enhanced balance sheet flexibility will help drive increased cash flows and better overall results,” said Jim Bender, CEO.”

The emphasis in liquids producing areas will drive production growth in 2014. WPX expects daily oil production from the Williston and San Juan to increase ~50% from 16,000 b/d in the first quarter to more than 24,000 b/d by year-end.

In total, 85% of the company's capital budget is split between liquids producing plays in the Piceance, San Juan, and Williston basins.

WPX's capital budget:

$580-600 million in the Williston Basin (oil)
$475-495 million in the Piceance Basin (gas & ngls)
$155-180 million in the San Juan Basin (oil)
$20-30 million in the Appalachia region
$10-15 million in legacy areas like the Powder River Basin
$100-115 million on land and exploration

Read the full press release at wpxenergy.com