Northern Oil & Gas Repuchases Stock - Grows Bakken Production 20%

December 4, 2013 R.T. Dukes

Northern Oil & Gas bought back more than two million shares of its common stock in the third quarter and grew production 20% over the second quarter to 13,049 boe/d.

The company participated in bringing 147 gross (12.1 net) wells to production in the third quarter and has participated in 358 gross (27.3 net) wells year-to-date. Approximately 260 gross (18.8 net) wells are in some stage of drilling or completion.

Read more from earlier in the year: Northern's Bakken Production Growth Slowed by Bad Weather

At the end of September, the company spent an average (AFE) of $9 million on each well.

“October activity was also very encouraging and we are in a great position to continue to execute our business plan into 2014 and beyond.”

— Michael Reger, CEO

Northern Continues Leasing Bakken Acreage

Northern Oil & Gas acquired leases on 7,357 net mineral acres during the third quarter at a cost of $10.8 million ($1,462/acre) and now controls ~187,000 net acres prospective for the Bakken and Three Forks. The company has spent a total of $22.6 million on acreage in the first nine months of the year.

Approximately 61% of the company's acreage position is held-by-production.

Oasis Petroleum Nearing Half a Million Acres in the Bakken

December 3, 2013 R.T. Dukes

Oasis Petroleum Bakken Acreage Map - Acquisition Included

Oasis Petroleum added acreage in the third quarter is nearing half a million acres prospective for the Bakken and Three Forks.

In September, the company announced several deals that added over 160,000 acres to the company's position.

The deals were just one highlight of many from the company's third quarter earnings release:

Oasis now has an inventory of almost 3,000 potential drilling locations
Added two rigs through the acquisitions. 14 running across its position now
Expanding Oasis Well Services
Decreased well costs to $7.5 million
Successful results from the Three Forks 2nd and 3rd benches
Production grew 10% quarter over quarter to ~33,000 boe/d

“Including production from our recent acquisitions, we expect production to range between 42,000 boe/d to 46,000 boe/d in the fourth quarter of 2013.”

— Mr. Nusz, CEO

At year-end, watch for additional announcements related to results from downspacing tests and wells in the lower portion of the Three Forks.

The company currently expects to drill 4-6 wells in the Middle Bakken and 1st bench of the Three Forks in the best areas of the the basin. Drilling in 2014 will be split relatively evenly between the Bakken and Three Forks. If wells in the lower portion of the Three Forks prove successful, the mix of drilling could be weighted toward the Three Forks more than currently planned.

Oil & Gas Industry Focused on Innovation - Deloitte Oil & Gas Conference

November 29, 2013 R.T. Dukes

Deloitte - Technically Recoverable Tight Oil

Several key leaders from across the industry shared their optimism at the annual Deloitte Oil & Gas Conference on November 16th.

The conference agenda covers the global oil & gas industry, but US shale plays dominated the conference. Many of the speakers reiterated that we're no longer in a "shale revolution", but a renaissance that will last for years to come.

The industry is focused on innovation. New technologies are needed to address challenges presented in shale development. Whether it is lowering operating costs or utilizing currently flared gas through a gas-to-liquids (GTL) process, the industry sees room for growth.

A few key points and statistics we noted while at the conference:

Oil production has grown to 1980s levels
15% of technically recoverable shale gas and 17% of technically recoverable shale oil resources globally are located in the US
The US will pass Russia as leading O&G producer this year; will pass Saudi Arabia next year
Shale has increased our current trade balance by $200 million/yr and is predicted to give us oil independence by 2020
US has increasing geopolitical influence in critical regions due to growing oil & gas production
The oil export ban needs reform. Otherwise, refinery changes are needed and we will consume more expensive crude.
Operators are focused on cutting costs to increase valuations
According to Maynard Holt, "we may be in the 8th inning of the shale game, but we're in the 3rd inning of the completion/cocktail game"
Since 2008, foreign firms have invested over $100 billion in US unconventional assets
Over that period, Chinese companies have spent $44 billion to acquire N. America based energy firms and assets
Gas-to-liquids technology is becoming more and more attractive with current oil and gas prices
Skip Horvath, Natural Gas Supply Association predicts that natural gas will hit $6.00 by 2020, "assuming Washington leaves us alone over the next few years."

"This boom isn't just for a few years. We believe the shale revolution really has staying power" -Ryan Lance, ConocoPhillips CEO

About the Deloitte Oil & Gas Conference

The Deloitte Oil & Gas Conference is an annual conference for oil and gas executives and leading industry experts to share their views on important issues facing the global oil and gas industry. The objective of this conference is to provide a forum for executives and managers from companies in all sectors of the oil and gas industry, commercial and investment bankers, industry analysts, service providers to the oil and gas industry, representatives of government agencies, trade groups and policy planners, to understand emerging issues.

Bakken Regional Rig Count 176 - Oneok Annouces More Investments - Nov 22, 2013

November 25, 2013 R.T. Dukes

The Bakken rig count increased by two rigs to 176 running last week.

News was highlighted by an announcement from Oneok that the company willspend an additional ~$650-780 million expanding midstream infrastructure in the region. Oneok plans to expand its' Bakken NGL Pipeline, add gathering and compression, and build a seventh NGL processing plant (its largest to date). Read more in the article: Oneok Investing More In Bakken Midstream Infrastructure

The U.S. rig count decreased 1 rig from 1,762 to 1,761 running over the past week. A total of 369 rigs are targeting natural gas (1 less than last week) and 1,387 (2 more than last week) are targeting oil in the U.S. The remainder are drilling service wells (e.g. disposal wells, injection wells, etc.). 179 (up 2 from last week) rigs are running in the Williston Basin across MT, ND, and SD.

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

Note: The NDIC reports 187 rigs are active in North Dakota. That is 21 more than Baker Hughes reports in the Bakken area. The difference is likely accounted for in the number of rigs actually working, rigs that might not be serviced by Baker Hughes AND areas outside of the Bakken fairway. 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 increased by two to 176. WTI oil prices were trading near $95/bbl to end the week. Williston Basin Sweet crude traded at $76.44/bbl as of Nov 22nd. The WTI-Brent spread continues to widen, widening to over $15 as of Nov 18, which should continue to spur the growth of crude by rail.

The natural gas rig count in the region held flat at zero. Natural gas futures (Henry Hub) were trading near $3.75/mmbtu on Friday. Natural gas delivered to the Northern Border pipeline in Watford City is trading near $3.00/mmbtu. A little more than 10% of the production stream from the Bakken and Three Forks is attributable to natural gas

McKenzie County continues to lead development with 60 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: 155 rigs are drilling horizontal wells, 15 rigs are drilling directional wells, and 6 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.

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

November 18, 2013 R.T. Dukes

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