Bakken Shale Rig Count Increases by Five to 189

August 11, 2014 Kirk Eggleston

Magnum Hunter Resources Bakken Acreage Map

The Bakken-Three Forks rig count increased by five to 189 rigs running across our coverage area by the end of last week. The NDIC notes 193 rigs are active in North Dakota, but around 23 of those are in the process of moving in and rigging up.

In recent Bakken news, Magnum Hunter announced last week that the company will sell its Divide County, North Dakota operated/non-operated properties and reallocate resources to core operations in the Appalachian Basin. Baytex Energy, Continental Resources, or Samson Resources are all likely buyers for the acreage.

The U.S. rig count increased by 19 to 1,908 rigs running by the end of last week. A total of 316 rigs were targeting natural gas (three more than the previous week) and 1,588 were targeting oil in the U.S. (15 more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.). 191 rigs are running in the Williston Basin across MT, ND, and SD. 182 are in ND alone.

Not all rigs counted in our census are drilling for the Bakken, but it's close. The NDIC estimates 95% or more of activity in this region targets the Bakken and Three Forks formations.

Note: The NDIC reports 193 rigs are active in North Dakota. That is two more than Baker Hughes reports in the Bakken area, and 11 more than the company reports in North Dakota. The difference is likely accounted for in the number of rigs actually working, rigs that might not be serviced by Baker Hughes AND rigs in areas outside of the Bakken fairway. 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 around 23 rigs are in the process of moving in and rigging up.

Bakken Oil & Gas Rigs

The number of oil rigs increased by five to 189 rigs running by the end of the week . WTI oil prices stayed relatively flat from the previous week, trading at $97.57/bbl on Friday afternoon. Williston Basin Sweet crude traded at $84.19/bbl on Aug. 7th. The WTI-Brent stayed flat, settling at ~$7 by the end of last week.

The natural gas rig count in the region held flat at zero. Natural gas futures (Henry Hub) were trading at $3.97/mmbtu by the end of last week. A little more than 10% of the production stream from the Bakken and Three Forks is attributable to natural gas and roughly half of that is NGLs.

McKenzie County continues to lead development with 65 rigs running. Dunn, Mountrail, and Williams counties are the only other counties with more than 20 rigs running each. View the full list below under the Bakken Drilling by County section.

Activity is dominated by horizontal drilling:

174 rigs are drilling horizontal wells
14 rigs are drilling directional wells
1 rig is drilling a vertical well

Bakken Oil & Gas News

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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.

Magnum Hunter Decides to Exit North Dakota Bakken

August 8, 2014 Kirk Eggleston

In Magnum Hunter's second quarter report, the company announced its decision to sell its Divide County, North Dakota operated/non-operated properties and reallocate resources to core operations in the Appalachian Basin. Baytex Energy, Continental Resources, or Samson Resources are all likely buyers for the acreage.

Magnum Hunter currently holds 102,000 net acres in Divide County, with an additional 50,000 net acres in Canada. Across its Williston Basin assets (152,000 net acres), the company currently has 255 gross producing wells.

Magnum Hunter Bakken Operations Update

During the second quarter of 2014, Magnum Hunter participated in 13 gross (2.4 net) wells and the completion of six gross (1.3 net) wells in Divide County. Magnum Hunter's Q2 upstream capex in the Bakken amounted to $33.2-million.

At the end of June, operators of Magnum Hunter's non-operated properties in Divide County electrified ~113 gross wells and tied in approximately 183 gross wells into the Oneok, Inc. gas gathering system. Magnum Hunter officials say production and revenues from the gathering of associated gas from the tied-in wells are growing monthly.

Bakken Major Contributor to EOG's Production Growth in Q2

August 6, 2014 Kirk Eggleston

In its second quarter report, EOG Resources said the Bakken and Eagle Ford Shale plays were major contributors to EOG's overall production growth.

EOG's U.S. crude oil production grew 33% year-over-year and associated natural gas liquids NGLs grew 22% year-over-year.

See below for EOG's U.S. production volumes for the quarter:

Crude Oil and Condensate - 274,600 b/d
NGLs - 78,500 b/d
Natural Gas - 925 MMcfd

The company said most of its activity was focused on its core acreage in Mountrail County during the quarter. According to company officials, well productivity improved due to continued refinements in completion designs.

In EOG's first-quarter report, the company indicated its activity in the Bakken would nearly double. So far, the company is on track to hit their target goal.

EOG Bakken Second Quarter Operations Update

Three Core wells were completed during the second quarter in Mountrail County:

Wayzetta 43-0311H - 1,505 b/d
Wayzetta 44-0311H - 2,410 b/d
Wayzetta 45-0311H - 2,690 b/d

EOG says it plans to drill several Three Forks wells to test various benches of this play on both its core and Antelope extension acreage during the remainder of 2014. Currently, the company has a six rig program running in the Bakken, and 80 net wells planned for the full-year.

Whiting Bakken Production Hits Record Levels in Second Quarter

August 1, 2014 Kirk Eggleston

Whiting Petroleum reported record Bakken/Three Forks production of 80,195 boe/d in the second quarter of 2014. The data was released in the company's second quarter report, and represents a 33% increase in production year-over-year. Bakken/Three Forks production counted for 73% of the company's total production across its portfolio. Currently the company holds 1,059,957 gross (674,162 net) acres in the Williston Basin in North Dakota and Montana. Whiting Petroleum recently announced the acquisition of Kodiak Oil & Gas, in an all stock transaction, for $3.8 billion. The deal makes the combined company the largest Bakken/Three Forks producer, unseating Harold Hamm’s Continental Resources from the top spot.

“Whiting CEO James Volker said in a prepared statement, “we believe we have plenty of running room in theWilliston Basin, particularly in light of our new completion techniques and downspacing programs.”

Whiting Bakken Well Completions Benefiting from Cemented Liners

According to company officials, recent results using cemented liner completions in Whiting's Hidden Bench field have been particularly strong. The 11 wells completed in the second quarter using cemented liners had an average initial production (IP) rate of 2,872 boe/d, a 50% increase over the average of the company's Hidden Bench wells completed with sliding sleeve technology.

Whiting Bakken First Slickwater Frac Job

Whiting's first slickwater frac job, the Sundheim 21-27-1H well at the company's Missouri Breaks field in McKenzie County, North Dakota, was completed on August 24, 2013. It had a 120-day production rate of 374 boe/d, which was 44% greater than an offsetting well, which was completed using an uncemented liner and sliding sleeve technology. Currently the company has 11 slickwater fracs either underway or planned for the third quarter of 2014 at the Missouri Breaks, Sanish, Hidden Bench and Pronghorn fields.

SM Energy Grabs 61,000 Bakken Net Acres - $330 Million

July 30, 2014 Kirk Eggleston

In late July of 2014, SM Energy announced it will acquire approximately 61,000 net acres in Divide and Williams Counties for $330-million from Baytex Energy. The acreage is directly adjacent to the company's Gooseneck focus area. Upon closing, the company will have ~97,000 acres in the area.

Company officials say the acquisition is expected to add significant drilling inventory, and includes interests in 126 drilling spacing units, 81 of which will be operated by SM Energy. Net production from the acreage is ~3,200 boe/d (91% oil, 1,500 BTU rich gas). The properties are 90% operated and approximately 70% held by production. Working interest for operated spacing units is expected to range between 37.5% – 50.0%

Directly adjacent to the acquisition area, SM Energy noted improvements in its Three Forks program recently due to faster drilling times and improved completions. Current data reflects recent wells have higher sustained production rates than older wells.

The transaction has an effective date of July 1, 2014, is expected to close by the end of the third quarter of 2014, and is subject to customary closing conditions and adjustments. The Company expects to fund the acquisition with cash on hand and borrowings under its existing credit facility.