Hess reported Bakken production of 65,000 boe/d in the first quarter of 2013. That represents 55% growth from the first quarter of 2012 and sets the company up well to meet its 2013 guidance of 64,000-70,000 boe/d.
Production will remain relatively flat in the second quarter as the company completes its transition to pad drilling.
A total of 30 wells were completed in the first quarter, but that number will grow throughout the year as the company plans to complete 175 wells by year-end. Approximately two-thirds will be completed in the Bakken and one-third will be completed in the Three Forks.
Hess completed 10 of the 25 best Bakken wells in North Dakota in 2012. Production growth and well completions will be weighted to the second half of the year. Hess is well on its way to its target of 120,000 boe/d by 2015.
The company also commented that down spacing test at 160-acres have been positive, but that it is very clear you will down space that far in some areas and not in others. Also, well results in the first quarter project EURs in the low 600,000 boe per well
Bakken Well Costs Coming Down For Hess
[ic-r]Well costs have also improved significantly from one year ago. Well costs averaged just $8.6 million in the first quarter, down 36% from $13.4 million in the first quarter 2012. Costs are expected to continue falling as pad drilling is implemented across a wider area the next two quarters.
The Tioga Rail Facility ran at capacity in the first quarter (53,000 b/d) and the Tioga Gas Plant expansion is on schedule to be completed by year-end.