Northern Oil & Gas Will Add Bakken Wells

Northern Oil and Gas will ramp up activity in the Bakken Shale in 2017.

Related: Continental Plans 26% Growth for Bakken

In a recent press release, Northern executives announced a 2017 capital budget of $102.2 million. The company will drill 12 new wells in the Bakken Shale during 2017 and expects total annual production to equal or exceed 2016.

Fourth Quarter and Full Year Highlights

  • Q4 Net loss was $12.3 million ($172.3 million in Q4 2015)
  • 2016 net loss of $293.5 million ($975.4 million in 2015)
  • Average 90-day initial production rate increased 47% in 2016
  • Completed $8.9 million property acquisition in the Q4 
  • 2016 capital expenditures totaled $75.6 million (41.3% decrease over 2015)
  • Q4 production totaled 1,259,274 barrels of oil equivalent ("Boe") 
  • End of year: $212.5 million of liquidity
We continue to see an increase in deal flow kind of coming in smaller package sizes like that, so we’ll continue to stay aggressively in the market doing that. With the liquidity, I think you’ll see us pretty much ramp up with respect to the activity, I guess, in the Bakken. When you take a look at our large acreage position of over 154,000 net acres, it’s a good acreage position located in great parts of the basin.
— Tom Stoelk, Interim CEO and Chief Financial Officer

Bakken Producers Announce 2017 Plans

  • ExxonMobil Corporation said it would shift its focus to U.S. shale drilling for the remainder of 2017
  • Continental 70% of Continental’s 2017 budget will be used to complete wells in the Bakken at a cost of $550 million
  • Hess Corp will add additional rigs in the Bakken and predicts the region's net production will average between 95,000 and 105,000 boepd.

ExxonMobil Bets on U.S. Shale

ExxonMobil Corporation plans to shift its focus to U.S. shale drilling for the remainder of 2017.

Related: Marathon Announces 2017 Plan for Bakken

ExxonMobil executives announced last week they anticipate their 2017 capital spending program to be around $22 billion, an increase of 16 percent from 2016. Of that amount, they will allocate $5.5 billion for drilling in Bakken Shale and Permian basin.

More than one quarter of the planned spending this year will be made in high-value, short-cycle opportunities, including in the Permian and Bakken basins. Short-cycle investments are those expected to generate positive cash flow in less than three years after initial investment.
— Darren Woods, Chairman and Chief Executive Officer

ExxonMobil's 2017 shale activity includes targeting annual output equivalent to 4 million to 4.4 million barrels of oil a day. The company is currently active with 5,500 wells in the Permian and the Bakken with total annual net production growth from these basins through 2025 could be as high as 750,000 oil-equivalent barrels per day.

2016 Performance Highlights

  • Increased its dividend for 34 consecutive years through 2016
  • The only major integrated oil company to significantly increase its dividend last year by 3.5 percent.
  • Recently completed its acquisition of InterOil to expand its acreage in Papua New Guinea and doubled its resource base in the Permian basin through another purchase.
  • Generated more than $26 billion of cash flow from operations and asset sales in 2016 including $4.3 billion from asset sales


 

Dakota Access Protest Camps Evacuated

Pipeline Controversy

Pipeline Controversy

Protests at the construction site of the Dakota Access Pipeline are coming to a close after almost a year of tension and confrontation.

Related: Violence Erupts at Pipeline Site

After Governor Burgum signed an emergency evacuation order for the Oceti Sakowin camp, the main site of protests, the property was cleared last week. The area is in a flood plain and the warmer temperatures have increased a risk of flooding.

Since the cleanup began, the U.S. Army Corps of Engineers reportedly hauled out over 240 dumpsters filled with trash, personal items and old building material with is likely another 240 loads to go.

CNN reported that at least 23 people holding out in the camp were arrested Thursday morning after they refused to leave but most left voluntarily.

Demonstrators have been protesting the 1,172 mile  Dakota Access Pipeline for nearly a year, with some estimates numbering the crowd in the thousands. While the main focus of the protests were in Cannonball, people from all over the world joined in solidarity including protests in Los Angeles, Seattle and Dallas, home of Energy Transfer Partners

Protests on the Dakota Access Pipeline escalated in September after Labor Day violence shut down construction. What had been peaceful protests in the small town of Cannonball Dakota turned ugly after the pipeline company allegedly used bulldozers to destroy sacred tribal sites. Things escalated with guards using pepper spray and dogs to curb the situation.

Construction on the pipeline was almost complete when new protests erupted in October. Demonstrators are concerned about the environmental impact of the pipeline, including contamination of the Missouri River, which is the primary water source for the Standing Rock Sioux Tribe. Tribal leaders are also upset that the pipeline will disturb sacred burial grounds.

Oil and gas operators are counting on the pipeline's capacity to ship 570,000 barrels a day in 2017.  This prolonged set-backs means they may be looking to alternatives and many will be forced to rely on rail to ship product.

Marathon Announces 2017 Plan for Bakken

Marathon Oil Corp. plans to increase its Bakken activity.

Related: Continental Plans 26% Growth for Bakken

Marathon announced their 2016 results last week including a fourth quarter 2016 net loss of $1,371 million. 

The company's Bakken production during the quarter averaged 52,000 net boed, down only slightly from the prior quarter's average of 54,000 net boed. Other full year results include:

  • 2016 capital program at $1.1 billion, $300 million below original budget
  • Total production averaged 393,000 net boed 
  • E&P production averaged 342,000 net boed
  • Ended the year with 12 rigs operating in the U.S. resource plays 
  • Decreased G&A expenses by 18% year over year
  • Non-core asset sales for approximately $1.3 billion, excluding closing adjustment
  • Year-end liquidity of $5.8 billion 

2017

We’re entering 2017 with a simplified portfolio more concentrated on our high-return, low-cost opportunities in the U.S. resource plays. Our $2.2 billion capital program accelerates sequential resource play production growth to the second quarter while providing exit rate momentum that positions us to deliver compound annual growth rates of 10-12 percent.
— President and CEO Lee Tillman

For the remainder of 2017,  Marathon expects to average approximately six drilling rigs and will focus on optimizing base production, while bringing 70 to 75 gross Company-operated wells to sales. 

North Dakota Bill Eliminates Oil Spill Reporting

North Dakota Passes 'Spill Bill'

North Dakota Passes 'Spill Bill'

North Dakota lawmakers are working to eliminate the reporting requirement on certain oil spills.

Related: Oil Spill Threatens Wetlands

Late last month, the North Dakota House legislators voted in favor of House Bill 1151, which eliminates a reporting requirement for oil spills under 10 barrels. The 82-11 vote was a clear victory for companies who say the measure will save them time and money. 

Removing reporting requirements for large spills will also ease the administrative burden of the state. One analyst estimates that 80 employees receive an email every time there is a spill. 

If the bill is passed, companies will no longer need to report large spills of natural gas, crude oil or the water water used in production. They define  are less than 10 barrels, or 420 gallons.

The commission may not require any person controlling or operating any well, or a
facility that handles fluids used in the production of gas or oil, to report to the
commission any spill or release of fluid confined to the oil well pad, production facility,
or a production - related handling facility if the spill or release of fluid contains ten or
fewer barrels of fluid.
— North Dakota House Bill 1151

The bill has received opposition from various groups including North Dakota Landowners Association, the North Dakota Farmers Union and the Dakota Resource Council.

Read the full bill at legis.nd.gov