ConocoPhillips Reveals Plan to Stay Flexible

April 9, 2015 Elizabeth Alford

ConocoPhillips announced yesterday the company's strategic plans through 2017 that are designed to increase flexibility and returns while reducing costs.

In what the ConocoPhillips calls their “disciplined approach for the new world” the company will shift capital allocations to unconventional shale plays because of the low supply costs and flexibility for growth. The long range plans set out in a recent company presentation include:

Spending 50% more over the next three years
Focusing on the Eagle Ford, Bakken and Permian basins
Capital spending will stay at $11.5B/year through 2017 but shift from long-term, expensive projects into relatively cheap and immediate shale wells
Boosting production by 6.3% to 1.7M bbl/day by 2017.
Cost reduction programs to source $1B of reductions in 2016 compared to 2014

“Ryan Lance, chairman and chief executive officer noted “The energy landscape has changed dramatically as a result of the recent decline in commodity prices, but we responded quickly to position the company as a core energy holding in a lower, more volatile price environment.”

ConocoPhillips’ strategy for the Bakken includes tapping into the highest value part of the play, increasing drilling and completion efficiencies and optimizing field development through pilot programs for the following:

Testing fluids, proppant loading and cluster spacing
2 pilots in execution testing Middle Three Forks well placement
5 pilots underway testing tighter spacing

Bakken Crude by Rail Under Attack

April 8, 2015 Elizabeth Alford

On Tuesday, the Swinomish Indian Tribal Community filed a lawsuit in federal court against BNSF Railway to restrict the movement of crude oil by rail through their reservation. They are seeking a permanent injunction that requires the company to live up to a 1991 agreement to limit the number of trains on its land to two per day.

The Tribal Community is located in Washington State, but the train tracks that run across its land bring crude from the Bakken region of North Dakota. Many believe that this oil is more dangerous.

Related: Is Bakken Oil More Flammable?

“Experiences across the country have now shown us all the dangers of Bakken Crude,” Swinomish Indian Tribal Community Chairman Brian Cladoosby said in a statement. “It’s unacceptable for BNSF to put our people and our way of life at risk without regard to the agreement we established in good faith,” he said.”

Recent reports have crude by rail transport up 1700% over the last five years and accidents at a near-tenfold rise since 2008. With oil production currently at all time highs many fear that the number of accidents will increase and add to recent incidents:

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

Related: Bakken Oil Safety

photo: © Kolyvanov | The Railway Tanks Photo

Halliburton to Merge With Baker Hughes

April 7, 2015 Elizabeth Alford

Shareholders from Halliburton and Baker Hughes recently gave overwhelming approval for a mega-merger that would combine the two companies in a deal estimated at $35 billion.

Once the merger is approved by antitrust regulators, the new entity will surpass Texas-based Schlumberger as the world’s largest oil drilling company. Officials announce that the deal that was initiated in November should close during the second half of 2015.

“We are extremely pleased Halliburton and Baker Hughes stockholders have shown overwhelming support by approving the pending transaction,” said Dave Lesar, chairman and chief executive officer of Halliburton. “We are more confident than ever that this combination will create a stronger, more diverse organization with an unsurpassed depth and breadth of services benefitting our stockholders, customers, employees and other key stakeholders of both companies.”

Combined, Halliburton and Baker Hughes employ almost 2000 workers in North Dakota, but have already begun strategic layoffs including a recent closure of a facility in Minot. State officials have predicted that 3,000 to 4,000 oilfield jobs will be cut due to low oil prices.

ALEC Doesn't Deny Climate Change

April 6, 2015 Elizabeth Alford

As the highly charged debate over climate change rages, one conservative group is fighting back with claims they are being unfairly misrepresented in the media.

In early March, The American Legislative Exchange Council (ALEC) sent a cease and desist letter to the environmental group, Common Cause, demanding the group retract its assertion that ALEC denies climate change. The letter cites numerous examples where Common Cause made such statements in articles and blogs on its website.

Related: Keystone Pipeline Set for Vote

In the letter to Common Cause, attorneys go on to clarify: “ALEC’s position is clear. ALEC does not deny climate change.”

ALEC has been involved in hotly contested political issues for a long time, but there is speculation that this action is because the group recently lost many high-profile corporate sponsors, who are distancing themselves from companies who are at odds with mainstream science.

Common Cause responded swiftly that it will not comply with any of ALEC’s requests.

“ALEC’s demands and legal threats are an effort to shut down debate about its policies and matters of national importance. They seek to chill our right to advocate for the public interest,” said Miles Rapoport, President of Common Cause. “It won’t work.”

Bakken Rig Count Drops to 91

April 3, 2015 Elizabeth Alford

The Bakken-Three Forks rig count dropped by six at 91 rigs running across our coverage area by midday Thursday.

In recent Bakken news, the Energy Information Administration (EIA) released the latest data for crude by rail (CBR) across the country that shows a significant increase over the last five years. Crude by rail continues to be highly controversial as people question the safety for individuals and the environment.

Bakken Oil & Gas Rigs

The number of oil rigs dropped to 91 rigs as of by midday Thursday. WTI oil prices decreased $.91 from the previous week, trading at $49.14/bbl on Friday afternoon. The WTI-Brent saw an increase of $2.75 by week’s end, landing at $54.95. There are currently no natural active gas rigs in the area and futures are trading at $2.71/mmbtu by midday.

McKenzie County continues to lead development but dropped to 40 running rigs this week. Williams (18) and Mountrail (17) counties are the next closest producers. View the full list below under the Bakken Drilling by County section.

Activity continues to be dominated by horizontal drilling:

91 rigs are drilling horizontal wells
0 rigs are drilling directional wells
0 rigs are drilling vertical wells

Bakken Drilling by County

Bakken Drilling by County Bakken Oil & Gas Rigs

Methane Emissions Drop

Oil Export Ban May Hurt Economy

Excellence Awards Honor Continental & Whiting

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.