Kodiak Sets 2014 Capital Budget at $940 Million - Expects 45% Growth

Kodiak Oil & Gas Williston Basin Map
Kodiak Oil & Gas Williston Basin Map

Kodiak Oil & Gas' 2014 capital budget has been set at $940 million. That's down from approximately $1 billion in 2013.

Kodiak expects to spend $890 million drilling and completing ~100 net wells to production 45%.

$50 million is budgeted for infrastructure build-out and acreage acquisitions.

Kodiak has budgeted for seven operated rigs and a dedicated frack crew in 2014. An additional completion crew will be on standby and utilized on an as needed basis.

Production in 2013 is on pace to average 29,000 boe/d and the company believes 2014 production will average 42,000-44,000 boe/d. Kodiak currently has over 26,000 b/d locked in with hedges at $93.29/bbl in 2014.

Polar & Smokey Downspacing Results Look Promising

[ic-r]Two 12-well downspacing tests have yielded promising results. The 12 wells completed in the Polar area have averaged 618 boe/d over the first 120 days and the 12 wells in the Smokey area have averaged 627 boe/d over the first 60 days.

Kodiak estimates the Polar area downspacing unit is on pace to pay out in as little as 18 months.

Continental's Bakken & Three Forks Density Test Yields Almost 15,000 boe/d

Continental Resources Hawkinson Bakken Three Forks Density Test
Continental Resources Hawkinson Bakken Three Forks Density Test

Continental set a record with third quarter production of 141,900 boe/d. Bakken production grew 7% and accounted for 94,500 boe/d of the total.

Continental operated 20 rigs in the Bakken region during the quarter and grew gross production to almost 120,000 boe/d (94,500 boe/d net). That's 51% higher than the third quarter of 2012 and even more impressively, Montana production grew 17% over the second quarter.

Continental participated in the drilling of 203 gross (75 net) Bakken-Three Forks wells and the number of drilled, but not completed wells grew to 85. The company expects to participate in a total of 761 gross (282 net) Bakken & Three Forks wells in 2013.

The company also reached its year-end target of $8.0 million well costs during the quarter.

....In addition, we completed our first density test in the Hawkinson spacing unit, demonstrating very strong initial production in the Middle Bakken and the first three benches of the Three Forks. Once again, Continental is pioneering the expansion and improved recoveries in the world-class Bakken oil play, demonstrating the productive potential of four to five stacked zones with multiple wells in each.
— Harold G. Hamm, Continental's CEO

Continental Completes Hawkinson Unit & Plans Full Field Development in the Antelope Area

W. F. "Rick" Bott, COO, commented, "The Hawkinson project is a milestone event for CLR and further validates our vision for full field development of the Bakken -Three Forks reservoirs in this world class oil field."

Continental Resources Bakken - Antelope Area Map
Continental Resources Bakken - Antelope Area Map

The Hawkinson density project tested 14 wells in a single unit. Three wells were existing and another 11 were drilled to complete the test. Four Middle Bakken, three Three Forks 1, four Three Forks 2, and three Three Forks 3 wells were drilled and completed at 1,320 ft spacing and 660 ft spacing in adjacent zones. The 11 new wells yielded 13,400 boe/d in addition to the 1,450 boe/d being produced from the existing three wells. That's almost 15,000 boe/d from a single pad.

The company also announced full-field development plans in the Antelope area. This will include drilling 350 wells from pads with 20-30 wells each over the next four to five years. The area will be the first to see full field development in the deeper benches of the Three Forks.

Read the full release at clr.com

SM Energy Grew Bakken Production 9% in the Third Quarter

SM Energy Bakken Map
SM Energy Bakken Map

SM Energy grew Bakken production volumes from 13,700 boe/d in the second quarter to 14,900 boe/d in the third quarter.

The company completed 13 gross wells and is producing 35% more than it did at this time last year.

SM has three rigs running, with a focus in the Gooseneck, and Raven/Bear Den areas. SM Energy has 162,000 net acres prospective for the Bakken and Three Forks, but is focused on development of 81,000 net acres.

The company made two comments related to testing in the play:

  • Downspacing results will be considered in planning at year-end
  • Evaluating alternate completion designs being used in the play - Current design utilizes a 26-stage sliding sleeve completion and 80,000 barrels of fluid.

Read the company's full third quarter press release at sm-energy.com

Kodiak Oil & Gas Grows Bakken Production More Than 50% in Q3

Kodiak Oil & Gas Williston Basin Map
Kodiak Oil & Gas Williston Basin Map

Kodiak Oil & Gas grew production more than 50% to 35,400 boe/d in the third quarter. That compares to a little more than 23,000 boe/d in the second quarter and almost 16,000 boe/d in the third quarter of 2012.

Kodiak completed 29 gross (24.5 net) operated wells and participated in 37 gross (6.6 net) non-operated completions during the quarter.

The company plans to continue utilizing seven rigs and has two dedicated completion crews running through the end of the year. Production at the end of the year is expected to grow to ~42,000 boe/d.

We believe the third quarter of 2013 was a transformational quarter for Kodiak. In addition to accelerated growth in production and reserves, we successfully brought our two down-spacing pilot programs onto full production.
— Kodiak's CEO, Lynn A. Peterson

Downspacing Test In McKenzie County Proves Successful

Kodiak also released results from the company's first high density downspacing test in McKenzie County. The company drilled six wells targeting the Bakken, three wells targeting the Middle Three Forks, and three wells targeting the Upper Three Forks. The wells are approximately 800 ftt apart and target an approximate 210 acre drainage area.

The wells came online at almost 2,000 boe/d in the first 24 hours and averaged just under 800 boe/d over the first 30 days. The best well produced almost 1,100 boe/d from the Bakken and the worst well produced a little less than 400 boe/d from the Middle Three Forks in the first 30 days.

Oasis Petroleum Is Testing Bakken & Three Forks Well Spacing

Bakken & Three Forks Well Spacing Tests
Bakken & Three Forks Well Spacing Tests

Oasis Petroleum believes the company can drill four Middle Bakken and four Three Forks wells on each 1,280-acre unit, but the future might be more dense drilling than they currently suggest.

Oasis is testing up to seven wells per formation in the Bakken and the first bench of the Three Forks (TFS 1).

The company also notes that other operators are testing as many as eight wells per formation in the Middle Bakken and Three Forks 1st, 2nd, and 3rd benches.

Watch for results over the next few months to determine how many wells can be drilled in the Bakken and the Three Forks' first bench. It will probably be late next year before we know how many wells can be drilled targeting the lower Three Forks intervals.

Oasis and Continetnal Resources have the most downspacing pilots being tested, but we'll see results from Kodiak and Whiting as well.