Whiting Petroleum Sells Bakken Assets

Whiting Petroleum has announced its intention to sell its Bakken midstream assets to a subsidiary of Tesoro Logistics.

Related: Whiting Plans to Drop Bakken Rigs

The $375 million deal includes Whiting's 50% stake in the Robinson Lake natural gas–processing plant along with the associated natural gas–gathering system located in Mountrail County, North Dakota.

We expect this sale to further strengthen our balance sheet and provide us with additional financial flexibility to invest for growth in Whiting’s top tier producing assets in the Williston and DJ Basins. This sale aligns with our ongoing strategy to divest non-core midstream assets and focus capital in the company’s highly productive upstream business.
— James J. Volker: Chairman, President and CEO

2016 third quarter capex for Whiting was $85 million was under budget and relatively flat with the second quarter. Other quarterly highlights include:

  • Production totaled 11.0 million barrels of oil equivalent (MMBOE), an average of 119,890 barrels of oil equivalent per day (BOE/d)
  • Production was 85% crude oil/natural gas liquids (NGLs)
  • Lowered lease operating expenses averaged $7.98 per BOE

Read more at whiting.com

Helms Predicts Oil Will Stay 'Lower for Longer'

North Dakota's Department of Mineral Resources announced that the state's crude-oil production dropped in September to the lowest level in more than two years.

Related: Bakken Production Dips Below 1 Million Barrels a Day

Low crude prices are still wreaking havoc on the oil and  gas industry with North Dakota experiencing another drop in production, with volumes staying below the one-million-barrel-per-day mark for the second month in a row.

Crude production fell 1.1% on the month to 971,658 barrels a day in September, the lowest level since February 2014, when output was 952,055 barrels a day, and follows a 4.7% drop in August.

In a recent address to the North Dakota Association of Oil and Gas and Coal Producing Counties (NDAOGCPC), Director of Mineral Resources, Lynn Helms provided his forecast for future growth in western North Dakota. Helms estimates under that it is likely the price of West Texas Intermediate (WTI) will stay below $60 a barrel and rigs will continue to focus drilling in the four core counties of Dunn, McKenzie, Mountrail and Williams for the next ten years. Under his "lower for longer" scenario, well count reach a maximum of fifty-five thousand wells by 2050. 

Each year I look forward to providing this outlook to county leaders. Now that lower oil prices have held on for an extended period of time, I’ve included a “lower for longer” and a “price shock” forecast to give leaders an idea of how to plan for growth under suppressed drilling conditions as well as rapidly increased drilling activity.”
— Lynn Helms, Director of DMR

Read more at dmr.nd.gov

Total production in North Dakota was 29.2 million barrels of oil in September, down from 30.4 million barrels in August, the state said.

Natural-gas production in North Dakota fell 1.7% in September to 1.61 billion cubic feet a day, state figures showed. Energy producers burned off, or flared, 11.9% of gas output, up from 11.4% in August. Gas is a byproduct of oil production.

Most oil in North Dakota is extracted by hydraulic fracturing, or fracking, where a mixture of water, sand and chemicals is pumped into rock formations to push oil out. Such wells are first drilled and then put into production after being fracked, or completed.


Continental Resources Raises Expectations for remainder of 2016

Bakken Shale powerhouse, Continental Resources, is counting on continued momentum as it raises its expectations for North Dakota activity and production for the rest of the year.

Read more about Continental in the Bakken Shale Play

Oklahoma-based Continental announced third quarter results, saying it is betting on recovery from enhanced work at the Bakken shale oil reserve basin in North Dakota, and the SCOOP and STACK reservoirs in Oklahoma.

The company expects to end the year with production volumes that are about 5 percent more than it estimated in August. 

We brought on several excellent producers in the Bakken using enhanced completion designs, including two wells that generated CLR-record 30-day initial rates for the Bakken. This is an encouraging start as the Company begins working down its large backlog of Bakken uncompleted wells and capturing their value.
— Harold Hamm, Chairman and Chief Executive Officer

Third quarter highlights:

  • First STACK Density Test Flows at Combined Initial Peak Rate of 21,354 Boe per Day (70% oil) from Eight Meramec Wells; Seven New Wells Flow at Average Well IP of 2,653 Boe per Day
  • Company Initiates Development in STACK Over-Pressured Oil Window
  • Bakken Enhanced Completions Yield Company Record Initial 30-Day Production Rates
  • Company Begins Working Down Uncompleted Bakken Wells
  • Annual Production Guidance Raised and Production Expense Guidance Lowered; Capital Expenditure Guidance Raised on Increased Well Completions

Looking forward to the remainder of 2016, the Company plans to increase the total number of gross operated well completions by 32. They also expect to complete 119 gross operated wells with first production for the year, including 29 gross operated wells in the Bakken.

The Company plans to increase from two to four stimulation crews in North Dakota by year-end 2016. The Company now expects to end 2016 with approximately 175 gross operated uncompleted wells in the Bakken and approximately 45 gross operated uncompleted wells in Oklahoma. The projected year-end Bakken uncompleted well count of 175 excludes approximately 15 wells that will have been stimulated by year-end 2016, but not produced with first sales until 2017.
— Continental Press Release

"We have expanded the productive footprint of STACK, SCOOP and the Bakken core, and are increasing the value of these assets," Chairman and CEO Harold Hamm said in a statement.

State mineral resource officials in North Dakota said there's been a steady increase in exploration and production activity there since June, but operators still showed reluctance to move very aggressively so long as oil prices stayed below the $60 per barrel mark. Oil prices on Thursday were in the mid $40 range.

In Oklahoma, the state governor declared a day of prayer last month for the oil sector as the downturn for oil and gas sectors spilled over into other labor pools like manufacturing. Gross production taxes from the oil and gas sector are on pace for two straight years of contraction.

For the third quarter, Continental said its net production was about 5 percent lower than the second quarter and 9 percent lower year-on-year. Most of the decline came from North Dakota, though the company said it had curtailed production there in response to lower oil prices and was now picking up the pace.

Continental reported a net loss of $109.6 million, a loss that's 33 percent greater than the loss from third quarter 2015. In August, the company sold off some of its assets in and around the Bakken area for about $600 million in a move Hamm said helped reduce debt and strengthen the balance sheet.

Hess Corp Adds Bakken Rigs

The Hess Corporation announced its 2016 third quarter results, which included a drop in Bakken production.

Related: Hess in the Bakken

CEO John Hess told investors last week that the company remains optimistic despite a net loss of $339 million and falling production. Bakken production fell to 107,000 barrels of oil equivalent per day (boepd), down from 113,000 boepd over 2015. Hess attributes the decline to reduced drilling program due to the low oil-price environment.

Our Bakken team continues to offer excellent operating results and returns in the core of the play that are competitive with the Permian and Eagle Ford,” he said. “Our high-quality Bakken acreage, industry-leading drilling and completion costs, and advantaged infrastructure position our Bakken assets to be a major contributor to the company’s future production and cash flow growth.
— John Hess, CEO

During the quarter, the company operated an average of three rigs in the Bakken  and brought 22 gross operated wells on production. The company’s total production for the quarter was 314,000 boepd. Other highlights include:

  • Drilling and completion costs in the Bakken averaged $4.7 million per operated well—down 11%
  • Increased standard well design to a 50-stage completion from the previous 35-stage completion design
  • Net midstream income was $13 million in Q3 2016 compared to $16 million last year
  • Midstream capital expenditures were $88 million for the quarter—the same as Q3 2015
  • Reduced exploration and production capital and exploratory expenditures by 49% to $435 million, down from $849 million during the same period last year

Hess projects that E&P capital and exploratory expenditures for the full 2016 will be approximately $2 billion, down $100 million from our previous forecast and more than 50% below 2015.

Read more at hess.com

Oasis Petroleum Buys 55,000 Acres in the Bakken

Oasis Petroleum announces a huge acquisition of assets in the Bakken Shale Play.

Related: SM Energy Sells 54,000 Bakken Acres

On October 17th, Oasis signed an agreement to purchase the drilling rights to approximately 55,000 net acres in the Williston Basin from SM Energy Company.

The $785 million deal includes an estimated estimated 226 gross operated drilling location with a production of 50.2 MMBoe of proved reserves, 63% of which are considered proved developed producing and 77% of which are oil.  

This acquisition is a great opportunity to add acreage and inventory that is a natural fit with our existing core and extended core positions and will increase our gross operated drilling locations in our core acreage by approximately 25%.
— Thomas B. Nusz, Chairman and CEO

Oasis also announced third quarter 2016 Highlights that includes:

  • Average daily production of 48,509 barrels of oil equivalent per day and increased full-year 2016 guidance of 49,300 to 50,000 Boepd.
  • Completed and placed on production 17 gross (7.1 net) operated wells. As of September 30, 2016, the Company had 80 gross operated wells awaiting completion.
  • Estimated capital expenditures were between $76 million and $81 million.

Read more at oasispetroleum.com