EOG Resources' Secrets To Success In The Bakken & Other Shale Plays

August 22, 2013 R.T. Dukes

EOG Resources opened North Dakota to the modern oil industry when the company discovered the Parshall Field in 2006. The company led the shift to horizontal drilling and hydraulic fracturing in oil plays like the Bakken and Eagle Ford. Forbes published an interesting article on the company in July.

EOG invested in areas that weren't common for oil companies just a few years ago.

EOG spent $100 million on a rail terminal in 2008
EOG invested $200 million in three sand mines and two processing facilities in Wisconsin

EOG increased the value of oil the company was producing by bypassing pipeline choke points.

Sand mines in Wisconsin save the company an average of $500,000 per well. Self-sourced sand saves the company as much as $300 million per year!

In addition, EOG is using microseismic sensors to understand the reach and effectiveness of the company's well completions. As a result, the company has shifted from focusing on reach in completions to utilizing shorter, but more energy intensive fracks. Shorter frack lengths allow the company to drill wells at closer acreage spacing.

Read the full article at forbes.com

Bakken On Auto-Pilot With 180 Rigs Running

August 20, 2013 R.T. Dukes

Rigs working in the Bakken have gotten much more efficient. The 180-190 rigs running in the region can drill as many wells as 200 plus in previous years. Better yet, there are enough completion crews to keep up. Development of the play is finally hitting its stride in what should be a normal level of development.

During a call discussing record production in June, Helms stated "The current condition of our Bakken plays is that we`ve reached our cruising altitude, so it is safe to get up and walk around."

Bakken production from North Dakota surpassed 750,000 b/d for the first time in June. Wells continue to improve and the deeper zones of the Three Forks look promising.

Oil prices falling substantially is one risk to development at this point, but there aren't many concerns at $100 per barrel. At the time this article was written, oil in the region was trading at a ~$5/bbl discount to WTI.

Read more about ND's record production month in the article Bakken Oil Production Sets New Record.

Enerplus's US Production Grows With Fort Berthold Bakken Production

August 19, 2013 R.T. Dukes

Enerplus grew U.S. oil production to more than 20,000 boe/d in the second quarter. Production from the Bakken was the primary driver, with volumes growing to 15,000 boe/d from the company's Fort Berthold assets.

Enerplus invested $78 million drilling 4.7 net wells and bringing 6.1 net wells to production during the second quarter. Service costs and well costs continue to fall. Enerplus has realized savings of 10% compared to its plan at the beginning of 2013.

The company's Fort Berthold assets are the primary focus of development. Enerplus has drilled 92 wells to date (74 Bakken & 18 Three Forks) and estimates its acreage holds:

6 year drilling inventory or 130 undrilled locations
Downspacing potential at 160 acres per well that could add another 150 undrilled locations
Potential in the second, third, and fourth benches of the Three Forks.

Read the full Q2 press release at enerplus.com

Bakken Oil Production Sets Record At More Than 750,000 b/d In ND - June 2013

August 15, 2013 R.T. Dukes

Bakken oil production grew a little more than 10,000 b/d from May to June to set a new record at just under 757,000 b/d. The play drove North Dakota to an all time oil production record of a little more than 821,000 b/d. Including Montana, it's likely Bakken and Three Forks production surpassed 800,000 b/d in June.

While impressive, the results are much less dramatic than those reported by Genscape earlier in the week. Genscape predicted the Largest Monthly Bakken Production Increase on record.

We haven't spoken to anyone at Genscape, but we have two thoughts as to why their estimate might have been inaccurate:

Weather delays in May mean oil produced during the month might have been stored and shipped in June. In that scenario, rail shipments of oil would have been much higher than actual production in June. Genscape uses data from rail terminal shipments and pipelines to estimate production.
Our other thought is that May production might not have been impacted as much as thought due to the weather and that delays impacted June more than May.

Both scenarios suggest we're in for a larger than normal production bump as operators catch up in the North Dakota oil patch.

Other notable items from the NDIC's director's cut include:

Natural gas production grew to 930 mmcfd
Number of producing wells set a record at 9,071
Well completions fell by 4 from May to 139 in June
Time from spud to total depth held at 22 days
Time from well spud to first production averaged 116 days
Backlog of wells waiting to be completed fell 10 to 490

Read the full directors cut at www.dmr.nd.gov/oilgas/

Bakken Oil Production Sees Largest Monthly Increase Ever In June - 50,000+ b/d

August 14, 2013 R.T. Dukes

Genscape is predicting that North Dakota's monthly Bakken production data will show an increase of 54,000 b/d June. The jump surpasses the record of 41,000 b/d set in February of this year and will drive North Dakota oil production above 860,000 b/d.

June will represent only the third time North Dakota production has increased more than 40,000 b/d in a single month (Jul 2011, Feb 2013, Jun 2013).

“Revised August 15, 2013: NDIC reports Bakken oil production grew a little more than 10,000 b/d from May to June.”

May Was A Record Month In The Bakken Too

Production climbed to a record of more than 810,000 barrels per day in May even though it was the wettest month on record in the Bakken. The delays caused by weather primed June to be a good month for production.

Genscape estimates 70% of production moved by rail during the month and that North Dakota production will grow another 68,000 b/d to more than 920,000 b/d by year-end 2013.