WPX Energy Sets Its Bakken Capital Budget at $580-600 Million in 2014

WPX Energy Rockies Asset Map
WPX Energy Rockies Asset Map

WPX Energy will spend between $1.420-$1.523 billion in 2014, with $580-600 million directed to Bakken and Three Forks targets in the Williston Basin.

WPX is planning to add a rig to bring its operated total to five in 2014.

The company expects the added rig will allow the company to drill 62 gross operated wells, or 25% more than the ~50 wells the company drilled in 2013.

Also read:Halcon Lowers Its 2014 Capital Budget & Holds Production Guidance

Increased oil volumes, efficient development of our resource base and enhanced balance sheet flexibility will help drive increased cash flows and better overall results,” said Jim Bender, CEO.

The emphasis in liquids producing areas will drive production growth in 2014. WPX expects daily oil production from the Williston and San Juan to increase ~50% from 16,000 b/d in the first quarter to more than 24,000 b/d by year-end.

In total, 85% of the company's capital budget is split between liquids producing plays in the Piceance, San Juan, and Williston basins.

WPX's capital budget:

  • $580-600 million in the Williston Basin (oil)
  • $475-495 million in the Piceance Basin (gas & ngls)
  • $155-180 million in the San Juan Basin (oil)
  • $20-30 million in the Appalachia region
  • $10-15 million in legacy areas like the Powder River Basin
  • $100-115 million on land and exploration

Read the full press release at wpxenergy.com

Northern Oil Q4 Production Up by 28% with Total 2013 Production of 4.47 mmboe

Northern Oil Growth Chart
Northern Oil Growth Chart

Northern Oil saw production numbers increase in Q4 of 2013 by 28%, bringing estimated boe/d to ~13,900. Total production for the entire year was 4.47 mmboe.

The company estimates their realized price for a barrel of oil equivalent (boe) will be between $74.00 - $75.00.

Northern Bakken Production Growing and Costs Decreasing

Northern Oil continues to experience a growing trend in the Bakken, with its Q4 LOE (lease operating expense) down by ~7% from ~8.40 per boe in Q3.

The company's growth pattern is leveling off slightly in the Bakken from its excpetional rate in 2012, when the company grew production by 95%.

We experienced solid sequential production growth driven by strong activity levels during the fourth quarter,” said Northern’s CEO Michael Reger.

n 2013, Northern Oil added 531 gross (40 net) wells to production. At the end of the year, the total well count for the company stood at 1,758 gross (146.2 net) wells.

Growth Concurrent with Strategic Company Decisions

Growth in 2013 was also concurrent with major strategic decisions for Northern Oil. In Q3 of 2013, the company re-purchased more than two million shares of its common stock.

Read more: Northern Oil and Gas Repurchases Stock - Grows Bakken 20%

Weather Slowing Production at Beginning of 2014

Inclimate weather in the Bakken at the beginning of this year has had an impact on production, but Northern claims it's drilling operations are robust, with 190 active drilling rigs in North Dakota.

CEO Micheal Reger said, “completion activity has been slower given significant cold weather during the month.

Northern also saw slows in production in 2013 due to poor weather conditions in the first quarter of 2013.

Read more: Northern Oil and Gas Bakken Production Growth Slowed - Weather

Northern Highlights for 2013

  • Q4 2013 Bakken production up 28% to ~13,900 boe/d
  • Total production was 4.47 mmboe
  • 531 gross (40 net) wells added to production
  • Company total well count at 1,758 gross (146.2 net) by end of year
  • Q4 LOE (lease operating expense) down by ~7% from ~8.40 per boe in Q3
  • Q4 2013 realized price of boe estimated at ~74.00 - ~75.0

ConocoPhillips' Bakken Shale Production Up 80% in Q4 2013 to 43,000 boe/d

Bakken Rig
Bakken Rig

ConocoPhillips Bakken Shale production was 43,000 boe/d in the fourth-quarter of 2013, surpassing fourth quarter 2012 production of the formation by ~ 80%.

In the Lower 48 and Latin America, that accounted for about ~12% of the company's total production.

Read more: Conoco Phillips Increases Bakken Spending in its 2014 Budget

ConocoPhillips Production Growing Rapidly in the Bakken

In the fourth quarter of 2012, Conoco's Bakken production averaged 24,000 boe/d.

At the beginning of 2013, production was only expected to grow by 10%, but with the ~80% increase to 43,000 boe/d, Conoco is well within its 2013 target goal to produce an average of 40,000 boe/d over the next 4 - 5 years.

ConocoPhillips Capital Budget in Unconventional Drilling

In 2014, Conoco will spend ~$9 billion on its North American operations. Approximately $4.3 billion will be focused on the Bakken, Eagle Ford and Niobrara Shale. In 2013, Conoco's production in the Bakken, Eagle Ford and Permian grew 31% from ~167,000 boe/d in the fourth-quarter of 2012 to ~218,000 boe/d in 2013.

Bakken Contribution to Conoco's Reserves

The growth in unconventional drilling has contributed greatly to Conoco's reserves.

CEO Ryan Lance, said, “2013 was a significant year for the company and we achieved several important, strategic milestones... [the company] achieved conventional and unconventional exploration success... [and] our capital program yielded strong organic reserve replacement.

In 2013, Conoco added 470 million boe in Lower 48, primarily in liquids-rich shale plays, including the Bakken and Eagle Ford.

ConocoPhillips Production in 2013 and Plans Moving Forward at a Glance

  • ConocoPhillips Bakken Shale Q4 production up ~80% from 2012 to 43,000 boe/d
  • ~ 12% of ConocoPhillips Lower 48 Production is in Bakken
  • $4.3 billion will be focused on the Bakken, Eagle Ford and Niobrara Shale in 2014
  • 470 million boe in Lower 48 reserves added in 2013, primarily in liquids-rich shale plays, including the Bakken and Eagle Ford
  • 31% production growth in Bakken, Eagle Ford and Permian to ~218,000 boe/d in Q4 2013

Read more at ConocoPhillips.com

Bakken Production Sets Another Record - More Than 10,000 ND Wells Producing

Bakken Oil Production Forecast - NDPA
Bakken Oil Production Forecast - NDPA

The Bakken and Three Forks region are on the verge of joining an elite fraternity that only ten (10) other oilfields in the world have enjoyed - the 1-million b/d club.

Daily production in the Bakken and Three Forks region of North Dakota continues to grow at a rapid pace.

The month of November certainly indicated that the 1-million b/d target seems to be well within reach, with 908,384 b/d coming from the Bakken and Three Forks in North Dakota alone, and also accounting for 93% of state-wide production. Total state-wide production in November accounted for 973,045 b/d. For more on the most up-to-date statistics on the Bakken and Three Forks region, see the North Dakota Industrial Commission (NDIC) Director's Cut for January.

Read more:North Dakota Production will Exceed 1 Million b/d in Early 2014.

In-line with the state-wide increase in production, North Dakota set an all-time record high for the number of producing wells with 10,023. The state has 10,000 producing wells for the first time ever!

Williston Basin Sweet Crude prices are down over the past few months. The price quoted in the directors cut dropped from $85.16/barrel in October to $71.42 in November. Prices have remained relatively flat however since then.

Quick Glance:

  • Oil production up to 973,045 b/d in Nov from 945,182 b/d in Oct
  • Gas production estimated at 1.08 Bcf/d with 30% flared in November
  • Flaring was up 2% due to a Tioga Plant closure during the month
  • Permitting has held flat at ~230 per month in Nov and Dec
  • Williston crude prices are down Oct = $85.16/bbl, Nov = $71.42/bbl, Dec = $73.47/bbl
  • Natural gas prices delivered to the Northern Border Pipelin at Watford city are up to $3.86/mcf
  • 10,023 wells producing in the state
  • Average ND rig count up from 184 in Nov to 190 in Dec

Read more at dmr.nd.gov

ND Oil Production On Pace for More than 1 Million b/d by Year-end

EIA Bakken Oil Graph Oct 2013
EIA Bakken Oil Graph Oct 2013

North Dakota oil production is on pace to eclipse 1 million b/d by year-end. The state reported production of ~932,000 b/d in September and is expected to add between 20,000 and 30,000 b/d each month going forward.

ND natural gas production set a new record at 1.06 bcf/d.

The state should also eclipse 10,000 producing wells before year-end. The real risk to any of the above trends is snow and cold weather.

Other takeaways include:

  • 207 wells were completed in September - up from 153 in August
  • One well is getting completed for every 1.5 drilled
  • Time from spud to first production held at ~100 days
  • >95% of drilling targets the Bakken and Three Forks
  • Natural gas prices near Watford City are trading near $3/mcf

Read the full director's cut at dmr.nd.gov