Emerald Oil Announces Huge 2014 Production

March 11, 2015 Elizabeth Alford

Emerald Oil announced its 2014 fourth quarter and year end financial results on Tuesday including huge increases for production and sales.

Fourth quarter production increased 7% over Q3 to average 4,101 BOEPD, with increases of 71% from the same time period in 2013. Throughout 2014, production increased 110% compared to 2013.

Emerald leadership attributes their strong position to the swift spending cuts made during the oil price freefall of the fourth quarter. Theses cuts and more streamlining will help them ride out a continued low price environment.

“McAndrew Rudisill, Emerald’s Chief Executive Officer, stated, “2014 was a year of tremendous reserve and production growth at Emerald Oil. We have made great strides in streamlining the efficiency of our entire Bakken production base through the diligent efforts of our operations team. We feel comfortable managing the current oil price environment for a prolonged period with our low cost balance sheet and substantial liquidity.”

Revenues from sales of oil and natural gas for the fourth quarter were $22.1 million compared to $17.9 million in 2013. As of December 31, 2014, Emerald had total proved reserves of approximately 26.3 MMBoe, all of which were located in the Williston Basin.

Emerald’s operations primarily targets the Middle Bakken and Three Forks formations for its development drilling. The company holds approximately 125,000 net acres in the Williston Basin in North Dakota and Montana.

Abraxas Petroleum Releases Q4 Results

March 10, 2015 Elizabeth Alford

Abraxas Petroleum announced a record 2014 during its earnings call on March 4th and reported on their 2015 spending plan.

2014 Highlights include oil production that averaged 5,720 Boepd and $63.3 million in net income. Abraxas’ fourth quarter net income was $30.1 million, which is up over the same period in 2013 when they reported $27.0 million. The company’s adjusted net income for Q4 was $6.1 million, compared to $1.4 million in 2013.

Abraxas plans to cut its capital spending to $54 million for 2015, compared with $193 million in 2014. The company further expects a 26% growth in production to 7100 barrels a day as it completes the nine wells it drilled during 2014.

“Bob Watson, Abraxas’ President and CEO commented, “After a tremendous 2014 for Abraxas, we now enter a very tumultuous 2015 from a commodity price perspective. We remain focused on preserving our abundant liquidity and strong balance sheet, which we endeavor to use to our advantage in a distressed environment. We are also blessed with an attractive asset base that presents numerous opportunities to expand our capital program should commodity prices and service costs dictate. We look forward to updating the market on the results of some of these efforts in the near future.”

Abraxas’ operations in North Dakota spans has roughly 5,000 net acres in the Bakken, mostly in McKenzie County. The company announced that it recently drilled four wells to about 21,000 feet each on their Jore Federal West pad in record time and at a low cost. The company will defer completion on these wells as they wait for better weather and for production costs to decrease.

Find out more at abraxaspetroleum.com

Read the full call transcript at seekingalpha.com

Bakken Oil Safety

March 9, 2015 Elizabeth Alford

Train Derails in North Dakota — Bakken Oil Safety

Two separate accidents across the Williston region on Saturday have added to the growing concern about Bakken oil safety and is fueling the intense debate about the way oil is produced, contained and transported in the United States.

In a new series of posts, we will examine this issue and try to separate the facts from the hype and the science from the scare tactics.

Explosions Galore

An explosion erupted at 3:00am at an oil and gas waste disposal site north of Alexander, N.D. in McKenzie County. There were no injuries reported, but the massive fire spread to eight storage tanks and was so intense that emergency crews decided to let it burn itself out. The flames subsided by mid morning just as three oil tanks operated by Marathon went up in flames another 53 miles away, near the small town of Killdeer. These incidents were only a few weeks after eight tanks were destroyed in the same area as 1500 barrels of crude blazed across the street from an Enbridge facility.

Crude by Rail

A top concern when thinking about Bakken oil safety is the transport of crude by rail.

“According to one report, “there were 117 crude-by-rail spills in the United States during 2013, a near-tenfold rise since 2008 (...) and there were more such spills in 2014 than in any year since the federal government began collecting data on spill incidents in 1975.”

With oil production currently at all time highs, the amount of crude traveling the country will escalate and, many fear, so may the number of accidents.

Just in the last few weeks, there have been a number of news reports of these accidents:

3/8/15:Train carrying crude oil derails in northern Ontario more
3//7/15 Train carrying crude oil derails in Canada more
3/6/15: Oil train carrying Bakken crude explodes in Illinois more
2/14/15 Train carrying crude oil derails in Canada more
2/17/15: WV derailment carries Bakken crude in more

Next in the series: Is Bakken crude really more dangerous?

Oil Bust Brings Opportunities

March 5, 2015 Elizabeth Alford

With the free fall of oil prices in 2014, producers are scrambling to get their bearings and stabilize their plans while awaiting the recovery. Intuitively, a downturn doesn't feel like a positive thing, but for those willing to look a little closer, it's not all doom and gloom.

In other areas of life, times of struggle often produces important changes that strengthen a person or organization and solidify solutions for a healthier future. This is the posture being taken by many industry leaders during the current oil bust. Even though the decisions can be tough, many understand that a downtime can also hold opportunities.

Recently at the NAPE Business Conference in Houston, several speakers added to the optimistic refrain as they talked about these opportunities. Most prevalent was the opinion that the current squeeze forces companies and individuals to become more efficient. In the middle of a boom, things are going ninety miles an hour and things can be taken for granted. A downturn allows some time, space and energy to focus on fundamentals.

This is a wake up call, of sorts, for producers to take a hard look at their systems, processes, personnel, technology and strategies outside of the frenetic pace they were in a year ago. “When you’ve been chasing wells fast and hard, this downturn gives you a chance to develop”, said Gary Evans (Chairman/CEO, Magnum Hunter). Leaders anticipate that smart producers will develop new technological advances and become leaner and stronger over the coming months.

“Kurt McCaslin, (VP Operations, Anadarko) added, “All those people who were chasing rigs have been redeployed to chase costs and inefficiencies. There was an initial culture shock, but this has turned into mining the opportunity, not only for improving the company, but also for workers to strengthen their own skill base.”

Certainly there will be operators that succumb to the current oil bust and don’t make it. So, what will distinguish the winners from the losers? This panel’s consensus was that it’s all about relationships, reputation and execution.

During a recent analyst meeting, Rex Tillerson - Chairman and CEO of ExxonMobil led a discussion that included his company’s strategies as they face the current pricing instabilities.

“Tillerson commented that, “Yeah, it provides us a whole lot of different kinds of opportunities, not just in terms of accessing new resources through various means. But getting the cost structure back to where we believe it’s more appropriate. So, yeah this provides us a whole host of opportunities to strengthen our underlying fundamental business and be well positioned than for whatever happens in the future.”

photo credit: Gerd Altmann CC0

Oasis Petroleum Announces 35% Growth

March 4, 2015 Elizabeth Alford

Oasis Petroleum announced 2014 results and rolled out updated projections for the new year.

The company increased its net income by 122% from $228.0 million in 2013 to $506.9 million in 2014 and ended the the year with $45.8 million of cash and cash equivalents.

Other 2014 highlights include:

Increased average daily production 35% from 2013 to 45,656 Boepd
Q4 2014 average daily production of 50,143 Boepd
Completed and placed on production 195 gross operated wells during 2014
Increased total estimated net proved oil and natural gas reserves by 24%

Bakken Highlights

The following table describes the Company's producing Bakken and TFS wells by project area in the Williston Basin as of December 31, 2014.

“Thomas B. Nusz, Oasis’ Chairman and CEO commented, “Capitalizing on our premier position in the Williston Basin, we have grown volumes by over 35% in 2014, including production in the fourth quarter of 2014 of 50,143 Boepd. While we are excited about the strong growth and the potential of our significant inventory position, we have turned our attention to managing the business in light of the current challenging market environment.”

2015 Projections

Citing lower commodity prices, Oasis Petroleum announced it will be reducing its 2015 capital spending by 12% over 2014 and expects the total to reach $705 million. Additionally, the company expects to complete 79 gross (63.3 net) operated wells and 2.6 net non-operated wells in 2015.