Bakken Shale News

Bakken Rig Count – 183 – U.S. Senators Ask for Railway Safety Funding

Bakken Rig Count Stayed Flat at 183 Last Week
Crude Oil Train Passing Mountain

Crude Oil Train | Click to Enlarge

The Bakken-Three Forks rig count remained flat at 183 rigs running by the end of last week. The NDIC notes 190 rigs are active in North Dakota, but around 18 of those are in the process of moving in and rigging up.

In recent news, U.S. Senators appealed to the Senate Appropriations Committee last week for railway safety funding. The requests come on the heels of several incidences, including a December 2013 train collision and derailment in Casselton, ND, that spilled ~950 bbls of Bakken crude oil.

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U.S. Energy Corp. and Abraxas Petroleum Provide Bakken Operations Update

Abraxas Conducts First Middle Bakken Downspacing Test
U.S. Energy Corp. Rig

U.S. Energy Corp. Rig | Click to Enlarge

U.S. Energy Corp. and Abraxas Petroleum released operational updates this week in the Bakken. The two companies interests are not connected.

U.S. Energy Corp. and Abraxas Petroleum are also active in the Eagle Ford Shale play in South Texas.

 

 

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U.S. Senators Appeal to Senate Appropriations Committee for Railway Safety Funding

~950 bbls Oil Spilled in Casselton, ND Train Collision in Dec. 2013
Crude Oil Train Passing Mountain

Crude Oil Train | Click to Enlarge

Approximately 70% of the oil produced in North Dakota is transported by rail. Safety concerns mounted after an incident where two BNSF operated trains carrying Bakken crude collided and derailed near Casselton, ND, in late December 2013. The National Transportation Safety Board (NTSB) said about 400,000 gallons or ~950 bbls of oil were spilled. Now, Senators from across the country are appealing to the Senate Appropriations Committee for railway safety funding this month.

In early April of this year, North Dakota Republican Senator John Hoeven, who sits on the Senate Appropriations Committee, called on fellow members to support railway safety measures and a push for more rail inspectors. Specifically, Hoeven would like to see funding go to the Federal Railroad Administration (FRA) and the Pipeline and Hazardous Materials Safety Administration (PHMSA).

Read moreAre More Pipelines and Rail Safety Measures Needed in Bakken – Senator John Hoeven – Video

In January of this year, PHMSA issued a safety alert for Bakken crude due. The alert reinforced the need to test, characterize, classify, and where appropriate de-gassify the crude oil before transportation. PHMSA is also working on new regulations for double hulled tankers.

Read more: Department of Transportation’s PHMSA Issues Bakken Shale Oil Shipping Safety Alert

On a related note, several U.S. Senators appealed to the Senate Appropriations Committee in Washington D.C. for rail safety funding in a joint-letter on April 4th. The letter was signed by 16 U.S. Senators, and highlighted the “Safe Transportation of Energy Products Fund”.  

“A Safe Transportation and Energy Products Fund would provide U.S. Department of Transportation new flexibility to address emerging issues related to the transportation of Bakken crude and other energy products – including, but not limited to: more expeditious rulemakings, technical studies, increased rail and energy product inspections, safety mitigation and response planning, first responder training, and community outreach. Additionally, the Fund would provide needed additional resources to complete Operation Backpressure, a study of the qualities and characteristics of crude oil in the United States. Completion of this study is an important step because its results will inform future regulatory action.”

A Senate Appropriations Subcommittee hearing will take place this week, Wednesday, April 9th, to examine the level of federal resources that should be allotted for railway safety. North Dakota Democratic Senator Heidi Heitkamp will be in attendance at the hearing to ask questions of the scheduled witnesses.

“The derailment in Casselton and other recent rail crashes have rightly kept this issue on the minds of many in Washington and across the country. And I’m continuing to push for the issue of rail safety to remain front and center, said Heitkamp”

Read more at hoeven.senate.gov

Read more at heitkamp.senate.gov

Read more at franken.senate.gov

Bakken Rig Count – 183 – Wood Mackenzie Forecasts $15 Billion in Bakken Spending – 2014

The Bakken Rig Count Stayed Flat at 183 Rigs Running At the End of Last Week
Wood Mackenzie Bakken and Three Forks Map

Wood Mackenzie Bakken and Three Forks Map

The Bakken-Three Forks rig count remained flat at 183 rigs running at the end of last week. The NDIC notes 194 rigs are active in North Dakota, but around 15 of those are in the process of moving in and rigging up.

In recent news, the oil and gas research and consulting firm Wood Mackenzie expects $15 billion will be spent on drilling and completions in the Bakken in 2014, second only to the Eagle Ford Shale. This year, oil production is expected to reach the 1 million b/d mark, and grow markedly beyond that figure over the next 5 – 6 years.

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Wood Mackenzie Forecasts $15 Billion on Bakken Drilling and Completions – 2014

Estimated Production at 1.7 Million b/d of Oil in 2020
Wood Mackenzie Bakken and Three Forks Map

Wood Mackenzie Bakken and Three Forks Map

According to the oil and gas research and consulting firm Wood Mackenzie, $15 billion will be spent on drilling and completion in the Bakken in 2014, second only to the Eagle Ford Shale. This year, oil production is expected to reach the 1 million b/d mark, and grow markedly beyond that figure over the next 5 – 6 years.

Read more: Bakken Production Sets Another Record – More Than 10,000 ND Wells Producing

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Worthington Industries Acquires Tank Storage Division of Steffes Corporation in North Dakota

Steffes Corporation Generated 25 Million in Revenue in 2013
Bakken Oilfield StorageTanks

Bakken Oilfield Storage Tanks | Click to Enlarge

Worthington Industries expands its reach in the Bakken, purchasing the tank storage manufacturing division of Steffes Corporation for an undisclosed amount in late March 2014. Steffes Corporation manufactures oilfield and salt water storage tanks for clients in the Bakken Shale and Williston Basin, and generated $25-million in revenue in 2013. Worthington will acquire Steffes Corporation’s Dickinson, N.D. plant in the deal, which currently employs 35 people.

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Bakken Rig Count – 183 – Magnum Hunter’s 2014 Bakken Capital Budget – $52 Million

Bakken Rig Count Decreased by 1 to 183
Magnum Hunter 2014 Cap Ex Budget

Magnum Hunter 2014 Cap Ex Budget | Click to Enlarge

The Bakken-Three Forks rig count decreased by 1 to 183 rigs running over the past week. The NDIC notes around 194 rigs are active in North Dakota, but around 15 of those are in the process of moving in and rigging up.

In recent news, Magnum Hunter sold off its non-core Eagle Ford assets in 2013. In 2014, the company is focusing on its core Appalachia and Williston Basin areas. $52 million of the company’s $400 million capital budget will be spent in the Williston Basin in 2013. 65% of the budget will be spent on the company’s Appalachia assets.

Read moreMagnum Hunter Bakken 2014 Capital Budget – $52 Million

The U.S. rig count increased by six to 1809 rigs running over the past week. A total of 318 rigs are targeting natural gas (8 less than last week) and 1,487 are targeting oil in the U.S. (14 more than last week). The remainder are drilling service wells (e.g. disposal wells, injection wells, etc.).  185 rigs are running in the Williston Basin across MT, ND, and SD, decreasing by 1 rig from last week.

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 194 rigs are active in North Dakota. That is 9 more than Baker Hughes reports in the Bakken area. 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 15 rigs are in the process of moving in and rigging up.

Bakken Oil & Gas Rigs

The number of oil rigs decreased by 1 rig running over the past week. WTI oil prices stayed flat at  $101.55/bbl by the end of the week. Williston Basin Sweet crude traded at $88.44/bbl on March 29th. The WTI-Brent stayed the same from last week, settling at ~$7 by the end of the week.

The natural gas rig count in the region held flat at zero. Natural gas futures (Henry Hub) were trading$4.49/mmbtu by the end of the 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 62 rigs running. Dunn, Mountrail, and Williams counties are the only other counties with more than 24 rigs running each. View the full list below under the Bakken Drilling by County section.

Activity is dominated by horizontal drilling:

  • 168 rigs are drilling horizontal wells
  • 15 rigs are drilling directional wells
  • 0 rigs are drilling vertical wells.

Bakken Oil & Gas News

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Bakken Drilling by County


County Previous Week Current Week County Previous Week Current Week
MCKENZIE MT 63 62 DANIELS ND 0 0
MOUNTRAIL MT 35 36 DAWSON ND 0 0
WILLIAMS ND 30 31 FALLON ND 0 0
DUNN MT 25 24 SHERIDAN MT 0 0
DIVIDE ND 8 8 VALLEY ND 0 0
RICHLAND ND 5 4 WIBAUX ND 0 0
BURKE ND 4 4 GOLDEN VALLEY MT 1 0
STARK ND 3 4 MCLEAN MT 0 0
ROOSEVELT ND 2 3 MERCER MT 0 0
BOTTINEAU ND 4 3 WARD ND 0 0
BILLINGS MT 2 2 MCHENRY ND 0 0
RENVILLE ND 2 2

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.

MDU Resources’ Natural Gas “Dakota Pipeline” Update – March 2014

Open Season For Pipeline Ends May 30th
Bakken Natural Gas Pipeline to Minnesota - WBI Energy

Bakken Natural Gas Pipeline to Minnesota – WBI Energy | Click to Enlarge

The open season for MDU Resources’ natural gas “Dakota Pipeline” will end on May 30th, but the project may not have any legs. In a Reuters report, company officials indicated at a New Orleans energy conference in March that they are currently lacking enough binding commitments for the project. The company began it’s open season on January 30th for the $650 – $700 million project, which is intended to transport natural gas through North Dakota to interconnection points in Northwestern Minnesota.

Read more: WBI Energy’s Bakken Natural Gas Pipeline Enters Open Season

Dave Goodin, MDU’s CEO, told Reuters, “we’re encouraged by the reaction of the marketplace, but I’d be getting ahead of myself if I said we’re ready to build. We need some binding commitments.”

WBI Energy, a subsidiary of MDU Resources, revealed in a press release in January that construction on the proposed pipeline could begin in 2016, with a completion date of 2017. Despite the lack of current commitments, Goodin is encouraged about the pipeline, but admits in the Reuter’s report that the challenge is for the marketplace to see that far in advance. The natural gas rig count in the Bakken has held flat at -0- for some time, and the price of natural gas since the beginning of 2014 has hovered between $4 – $6/mmbtu.

The pipeline makes sense for the region from a flaring standpoint according to the North Dakota Industrial Commission (NDIC). Currently, ~30% of all natural gas produced in the state is flared, and without effective infrastructure in-place, no other economically viable choice exists for companies targeting the oil rich Bakken Shale.

Read more at Reuters.com

Marathon Accelerates Activity in The Bakken and Other US Domestic Plays

Marathon's Bakken and Three Forks Acreage Map

Marathon’s Bakken and Three Forks Acreage Map

Marathon is continuing to ramp up its presence in US domestic shale plays, with increased activity expected in the Bakken Shale through the end of 2014. In a company statement in late March 2014, officials revealed that Marathon hit its target of a 28-rig program across the Eagle Ford, Bakken and Oklahoma-Woodford Shale plays at the end of January.

 

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Magnum Hunter Bakken 2014 Capital Budget – $52 Million

Magnum Hunter drilled 15 gross (6.2. net) in the Bakken/Three Forks in Q4 2013
Magnum Hunter 2014 Cap Ex Budget

Magnum Hunter 2014 Cap Ex Budget | Click to Enlarge

Magnum Hunter sold off its non-core Eagle Ford assets in 2013. In 2014, the company is focusing on its core Appalachia and Williston Basin areas. $52 million of the company’s $400 million capital budget will be spent in the Williston Basin in 2013. 65% of the budget will be spent on the company’s Appalachia assets.

Read moreMagnum Hunter Signs Option to Sell Pearsall and Eagle Ford Assets

 

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