Emerald Oil Announces Huge 2014 Production

Emerald Acreage Map
Emerald Acreage Map

Emerald Oil announced its 2014 fourth quarter and year end financial results on Tuesday including huge increases for production and sales.

Fourth quarter production increased 7% over Q3 to average 4,101 BOEPD, with increases of 71% from the same time period in 2013. Throughout 2014, production increased 110% compared to 2013.

Related: Emerald Oil May Scale Back Bakken Drilling Program in Q1 2015

Emerald leadership attributes their strong position to the swift spending cuts made during the oil price freefall of the fourth quarter. Theses cuts and more streamlining will help them ride out a continued low price environment.

McAndrew Rudisill, Emerald’s Chief Executive Officer, stated, “2014 was a year of tremendous reserve and production growth at Emerald Oil. We have made great strides in streamlining the efficiency of our entire Bakken production base through the diligent efforts of our operations team. We feel comfortable managing the current oil price environment for a prolonged period with our low cost balance sheet and substantial liquidity.

Revenues from sales of oil and natural gas for the fourth quarter were $22.1 million compared to $17.9 million in 2013. As of December 31, 2014, Emerald had total proved reserves of approximately 26.3 MMBoe, all of which were located in the Williston Basin.

Emerald’s operations primarily targets the Middle Bakken and Three Forks formations for its development drilling. The company holds approximately 125,000 net acres in the Williston Basin in North Dakota and Montana.

Related: Emerald Oil Acquires Bakken Acreage in the Williston Basin

Read more at emeraldoil.com

Emerald Oil Increases Bakken Production by 80% in 2013

Emerald Acreage Map
Emerald Acreage Map

Emerald's total production increased by 80% in 2013 over 2012 from ~935 boe/d to ~1690 boe/d. The production increase was attributable to the addition of 10.58 net operated Bakken and Three Forks wells in 2013.

Since the beginning of 2013, the company has acquired ~67,700 net acres. The most recent Bakken acreage acquisition took place in January, and cost Emerald $74.6 million.

Read more: Emerald Acquires Acreage in the Williston Basin for $74.6 Million

Emerald's Bakken Fourth-Quarter Production and 2013 Reserves

Emerald had a strong fourth-quarter in the Bakken, with average daily production of 2,430 boe/d.

McAndrew Rudisill, Emerald’s CEO, stated, “2013 was a transformational year for Emerald. We successfully drilled and completed multiple Middle Bakken and Three Forks wells, tripled our operated acreage position and monetized the majority of our non-operated assets.

t the end of 2013, Emerald had total proved reserves of ~13.2 mmboe, all of which were located in the Williston Basin. Emerald's proved reserves increased approximately 147% during 2013 primarily as a result of our successful operated well program.

Emerald's Bakken 2014 Drilling and Production Strategy

In 2014, Emerald has plans to add another rig to it's drilling program. The company expects to achieve an exit rate of 4,250 boe/d, with an average production rate of 3,550 boe/d.

In a company statement, Rudisill, said, “in 2014, our production will continue to grow as we add a third rig to our drilling program. The third rig is currently moving to location in our Easy Rider focus area and will soon begin drilling, earlier than originally anticipated. Due to the strong performance of our Low Rider Middle Bakken wells and positive indications from our Low Rider Three Forks wells, we are actively reviewing increased downspacing assumptions and raising our stated Low Rider type curve. We are very focused in 2014 on lowering operating expenses and driving greater drilling and completion cost efficiencies.

Emerald plans to add an additional 18.2 net operated wells by the end of 2014.

Read more at emeraldoil.com

Emerald Acquires Bakken Acreage in the Wiliston Basin for $74.6 Million

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Click to Enlarge

Emerald Oil acquired 20,800 net acres in the Williston Basin for $74.6 million in two separate deals in early January.

The company now controls 85,000 net acres in the area.

With the closing of this deal, Emerald is now the operator for 75% of its acreage. The company's purchase includes Bakken and Three Forks producing properties and an undeveloped leasehold in McKenzie and Williams counties in North Dakota. Without valuing production of 350 boe/d, the company paid a little more than $3,500/acre.

McAndrew Rudisill, CEO, said, “This additional acreage expands Emerald’s presence in our Low Rider and Lewis & Clark focus areas of McKenzie County, ND where we have seen strong production growth as a result of our successful operated well program.

Roughly 19,500 of the net acres are adjacent to the company's Low Rider operating area, with 17 of the 19 drilling spacing units acquired being in this area.

Approximately 62% of the acreage acquired is already held by production, with ~350 boe/d of current net production.

Emerald Bakken Acquisition Highlights:

  • Emerald acquired 20,800 net acres for $74.6 million in the Williston Basin
  • 62% of acquired acreage is held by production at 350 boe/d
  • Emerald's assets now include 85,000 net acres in the basin

Hot Area for Acquisitions

Emerald is not the only company expanding it's acreage in the Bakken. In August of last year, Whiting Petroleum announced the acquisition of 39,310 gross (17,282 net) acres targeting the Bakken in North Dakota and Montana for $260 million.

Whiting's acreage is located in McKenzie and Williams counties in North Dakota, and Roosevelt and Richland counties in Montana.

In total, Whiting has 714,541 net acres in the region at a cost of $643 million or less than $900/acre.

Read more: Whiting Petroleum Acquires Bakken Acreage In MT & ND - $260 Million