Oneok — Bakken Shale News — Bakken Shale Play

Mangnum Hunter Resources participated in bringing on 19 gross (5.5 net) Bakken wells in the second quarter of 2013. At the end of the quarter 20.4 gross (11.4 net) wells were in some stage of drilling or being completed.

Magnum Hunter also noted midstream delays brought on by wet weather. A Oneok gathering system expected to be online in April did not accept gas until the last week of June. The gas gathering system is being built in an effort to conserve natural gas production in the area. In total, the project will connect ~300 wells in the area over the next year.

Bakken & Three Forks Well Highlights

Border Farms 3130-5TFH - (28.3% interest) Drilled to a measured depth of 14,300 ft (lateral length of 6,075 ft), fraced with 26 stages. The 24-hour flowing initial production (IP) rate was 626 boe/d
Montclair 0112-2TFH - (16.7% interest) Drilled to a measured depth of 17,710 ft (lateral length of 9,572 ft), fraced with 40 stages and placed. The 24-hour flowing IP rate was 683 boe/d
J. Olson 22-15-162-98H 2DM - (36.25% interest) Drilled to a measured depth of 18,215 ft (lateral length of 9,455 ft), fraced with 36 stages. The 24-hour flowing IP rate was 872 boe/d
J. Olson 27-34-162-98H 2XM - (35.7% interest) Drilled to a measured depth of 18,842 ft (length of 10,096 ft), fraced with 36 stages. The 24-hour flowing IP rate was 820 boe/d
Baja 2215-2H - (30.4% interest) Drilled to a measured depth of 18,155 ft (lateral length of 9,568 ft), fraced with 25 stages. The 24-hour flowing IP rate was 813 boe/d
Baja 2215-3H - (30.4% interest) Drilled to a measured depth of 18,280 ft (lateral length of 9,820 ft), fraced with 25 stages. The 24-hour flowing IP rate was 1,076 boe/d
Baja 2215-1H - (30.4% interest) Drilled to a measured depth of 17,977 ft (lateral length of 9,545 ft), fraced with 25 stages. The 24-hour flowing IP rate was 913 boe/d

Magnum Hunter controls 190,000 net acres in the Williston Basin. 140,000 acres are located in North Dakota and ~50,000 acres are located in Canada.

Bakken natural gas flaring has risen over the past few years as drilling expanded across North Dakota and Eastern Montana. Flaring hit a peak at the end of 2008, declined through 2009, and has been increasing since that point. Currently, 30-35% of natural gas produced in North Dakota is flared.

Operators are focused on producing oil and have largely defaulted to waiting for infrastructure when it comes to natural gas. Oil accounts for approximately 90% of the production stream in a Bakken well and can be transported by truck or rail, in addition to pipelines. Natural gas, on the other hand, needs a pipe and in North Dakota it needs processing plants. Natural gas produced from the Bakken yields 8-13 gallons of NGLs per mcf (gpm).

Rich gas and a positive production outlook are why Oneok plans to add the Garden Creek III processing plant. When the plant is completed in 2015, the company will have almost 600 mmcfd of processing in the basin.