Marathon Spuds Exploration Well Targeting the Tyler Formation

October 2, 2013 R.T. Dukes

Marathon Oil is drilling a horizontal well in the Tyler formation in Slope County this month.

The formation has produced from vertical wells for years and is comparable to the Bakken from a geology perspective. Both plays include a limestone formation sandwiched by shales.

Marathon has a four well development plan approved and believes the wells could yield an average of 400,000 boe each. That's comparable to Bakken production rates.

It's very early, but watch for additional announcements. It might be a while before we get well results, but Marathon and possibly others will expand their testing plans if the wells prove successful.

Lynn Helms Thinks Bakken Production Will Double By 2017

September 30, 2013 R.T. Dukes

In an address to local officials, the North Dakota Department of Mineral Resources Director, Lynn Helms, shared a belief that the state's oil production will grow to 1.6 million barrels per day by 2017.

That's almost double current production and would represent an annual increase of ~175,000 b/d per year. This is just the latest of several bullish comments from analyst and regulators related to Bakken production growth.

Helms also discussed the need for freshwater in well maintenance activity, water recycling, the need to address flaring, and exploration in the Tyler formation.

Bakken Rig Count Flat at 181 Running - Allete Plans Bakken Energy Corridor

September 27, 2013 R.T. Dukes

The Bakken rig count held flat at 181 rigs running over the past week. This marks the last full week of September and the rig count in the Bakken region has averaged a little more than 185 rigs running over the first nine months of the year.

Not all rigs counted in our census are drilling for the Bakken, but it's close. The NDIC estimates 95% of activity in this region targets the Bakken and Three Forks formations.

There were several notable comments related to production this week. Goldman Sachs visited North Dakota and believes production will grow by more than 130,000 b/d each year through 2016. Lynn Helms, the director of the ND Department of Mineral Resources, stated his belief that production will double by 2017. Production growth will only be possible if the proper transportation options are available. Earlier this week, Allete announced plans to use a power line right-of-way that stretches from Center, ND, to Duluth, MN, to establish an energy corridor. Read more in the article: Bakken Oil & Gas Might Follow Allete's Transmission Line Right-of-Way

The U.S. rig count increased 13 rigs from 1,761 to 1,774 running over the past week. A total of 376 rigs are targeting natural gas (10 less than last week) and 1,362 are targeting oil in the U.S. The remainder are drilling service wells (e.g. disposal wells, injection wells, etc.).183 rigs, or one less than last week, are running in the Williston Basin

Note: The NDIC reports 184 rigs are active in North Dakota. That is 14 more than Baker Hughes reports. The difference is likely accounted for in the number of rigs actually working and rigs that might not be serviced by Baker Hughes. On any given week, a certain number of rigs are in route to the next well location or idle waiting to drill the next well. The NDIC notes that more than 10 rigs are in the process of moving in and rigging up.

Bakken Oil & Gas Rigs

[ic-l]The number of oil rigs running held flat at 181 in the region. WTI oil prices fell further during the week and oil was trading near $103/bbl on Friday. The commodity has held above $100/bbl for 12 weeks now. Williston Basin Sweet crude traded at $90.69/bbl on Sept 26th.

The natural gas rig count in the region held flat at zero. Natural gas futures (Henry Hub) were trading near $3.50/mmbtu on Friday. Natural gas delivered to the Northern Border pipeline in Watford City is trading near $3/mmbtu. A little more than 10% of the production stream from the Bakken and Three Forks is attributable to natural gas.

McKenzie County led development with 63 rigs running. Dunn, Mountrail, and Williams counties are the only other counties with more than 20 rigs running. View the full list below.

Activity is dominated by horizontal drilling: 159 rigs are drilling horizontal wells, 16 rigs are drilling directional wells, and six rigs are drilling vertical wells.

Bakken Oil & Gas News:

Be sure to visit our Bakken Job Listings to search openings and come back weekly for updates.

Bakken Drilling by County

What is the Rig Count?

The Bakken Shale Rig Count is an index of the total number of oil & gas drilling rigs running across Montana and North Dakota. The rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Bakken formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count and/or Smith Service Co's (Schlumberger) Smith Rig Count.

Bakken Production Growth Will Surprise Many - Goldman Sachs

September 26, 2013 R.T. Dukes

Bakken production growth is expected to surprise investors. That's the main takeaway from a recent report by Goldman Sachs.

Analyst from the bank visited North Dakota believing production and completion activity in the Bakken and Three Forks will be greater than what Wall St. is accounting for.

The equity analyst believe downspacing in the Bakken and Three Forks, along with efficiency gains will drive production growth of more than 130,000 b/d per year through 2016. Based on production of ~850,000 b/d from the play, that pegs production at more than 1.2 million b/d in 2016.

Is Oasis Petroleum a Takeout Target?

September 24, 2013 R.T. Dukes

Oasis Petroleum Bakken Acreage Map - Acquisition Included

Location, location, location. It's a good time to have an interest in the Bakken and Three Forks.

A recent article by Bloomberg indicates Oasis Petroleum's recent Bakken acquisition makes the company even more attractive to buyers. Oasis acquired 161,000 acres through four separate transactions and now controls ~492,000 net acres prospective for Bakken drilling.

A few highlights from the article include:

European companies like Statoil and Repsol might be interested in expanding their shale footprint in the U.S.
Oasis offers "core acreage in very good areas."
The company's large Bakken position signals a "commitment to be a pure-play", which is attractive to buyers
Larger drilling inventory makes the company more attractive
Oasis is trading ~70% cheaper than other U.S. explorers based on EBITDA multiples

Read more in the article published at bloomberg.com