Halcon Completes Company Record Bakken Well At Fort Berthold

Halcon Resources Bakken Acreage Map
Halcon Resources Bakken Acreage Map

Halcon Resources ran seven rigs and spud 16 wells in the Bakken during the second quarter. A total of ten wells were brought online and new completion methods are proving successful. The average well completed in the Fort Berthold area had an average initial production (IP) rate of more than 2,000 boe/d. Completion rates improved by more than 50% across the area in the quarter.

The two most recent completions came online at more than 3,000 boe/d and a company record was set with an IP of 3,317 boe/d.

Halcon has 150,000 net acres in the Williston and plans to run six rigs through the remainder of the year. The company has 149 Bakken & Three Forks wells producing, 18 wells being completed, and seven wells being drilled.

Halcon expects downspacing tests to provide more details related to effective drainage of the Bakken and Three Forks. The company is also testing the application of slick water fracks across areas of its holdings. Tests are ongoing through 2013.

The company also published higher than expected operating costs due to weather and associated delays in North Dakota during the quarter.

You can read the company's full press release at halconresources.com

SM Energy's Bakken Production Up - Utilizing Walking Rigs

SM Energy Bakken Map
SM Energy Bakken Map

SM Energy's Bakken production was up 12% from the first quarter to average 13,700 boe/d in the second quarter of 2013.

During the quarter, the company released two traditional rigs and contracted a walking rig. SM plans to run three rigs through 2013. Almost all activity is infill drilling at this point. SM is has largely completed its exploration efforts and its efforts to hold leases with production.

Pad drilling has driven costs down 8% on the company's Gooseneck acreage to an average of $6.5 million.

SM completed 12 gross Bakken wells in the second quarter and expects to complete 40 gross wells in 2013.

Watch for results from a downspacing pilot and a lower Three Forks test in the Raven area. Other operators have also had success in the Bakken interval in the Gooseneck area. Positive results from any of those could add to the company's resource potential.

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

Schlumberger Says It's Too Early To Predict The Bakken Boom

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

Schlumberger released quarterly results and provided a little commentary on the oil boom in North Dakota and the rest of the U.S.

Paal Kibsgaard, CEO, was asked his view in regard to U.S. production growth. He responded with several comments. Many of which point to it being too early to determine the volume that will come from many shale plays.

  • Overall production increases have been very impressive
  • It's too early to extrapolate production trends
  • It's too early even in the Bakken
  • Production data over a longer period of time is needed
  • Initial rates outside of the core or fairways of plays need to be studied in more detail

His response can be summed up with "it's too early to know". Activity levels are high and that is really what matters to Schlumberger. The provide oilfield services and volumes of production only have an indirect impact on their business.

Bakken Flaring In The News - Report Cites Billions In Lost Revenue

Bakken Natural Gas Flaring
Bakken Natural Gas Flaring

Bakken flaring is in the news again. A sustainability group published a report touting the billions in lost revenue from natural gas flaring. It's a contentious topic that isn't going to disappear until flaring is reduced.

The study estimated that as much as $1 billion in revenue was lost in 2012. The report assumed a natural gas value of $13.50/mcf (this includes the value of NGLs). While the natural gas produced from the Bakken has a high btu content, it does not have a local market like other areas of the U.S. We'd put $13.50 on the very generous side.

If one billion or more in revenue had been lost in a single year, operators and midstream companies would be closer to making the financial commitments necessary to eliminate flaring.

Instead, midstream companies are waiting for commitments from operators and more assurance that production will be here for the long haul. Money isn't made building pipelines for peak production.

WBI Energy, a subsidiary of MDU Resources, is preparing for a open season for commitments on a pipeline that will move natural gas to Minnesota. If the pipeline goes forward, it will be in service some time in 2016 and will have capacity to move more natural gas than what is currently flared.

Revenue Lost Was Likely Much Lower

In actuality, I believe the amount of revenue lost was closer to 25-50% of the estimates provided in the report. When you only get a fraction of the $250-500 million in revenue lost, it makes building multi-billion dollar infrastructure a much more difficult decision.