Kodiak Sets 2014 Capital Budget at $940 Million - Expects 45% Growth

December 19, 2013 R.T. Dukes

Kodiak Oil & Gas' 2014 capital budget has been set at $940 million. That's down from approximately $1 billion in 2013.

Kodiak expects to spend $890 million drilling and completing ~100 net wells to production 45%.

$50 million is budgeted for infrastructure build-out and acreage acquisitions.

Kodiak has budgeted for seven operated rigs and a dedicated frack crew in 2014. An additional completion crew will be on standby and utilized on an as needed basis.

Production in 2013 is on pace to average 29,000 boe/d and the company believes 2014 production will average 42,000-44,000 boe/d. Kodiak currently has over 26,000 b/d locked in with hedges at $93.29/bbl in 2014.

Polar & Smokey Downspacing Results Look Promising

[ic-r]Two 12-well downspacing tests have yielded promising results. The 12 wells completed in the Polar area have averaged 618 boe/d over the first 120 days and the 12 wells in the Smokey area have averaged 627 boe/d over the first 60 days.

Kodiak estimates the Polar area downspacing unit is on pace to pay out in as little as 18 months.

Marathon Oil Plans To Spend $1 Billion in the Bakken in 2014

December 18, 2013 R.T. Dukes

Marathon Oil Bakken Initial Production Improvement

Marathon Oil plans to spend $1 billion of its $3.6 billion budget in North America in the Bakken in 2014.

As a result, the company's production is expected to grow from a little less than 40,000 boe/d in 2013 to a little less than 50,000 boe/d in 2014.

Marathon will run six rigs in 2014, with one rig dedicated to recompleting Bakken wells that were stimulated with open hole completions.

The company has transitioned from open hole completions to 20-stage completions then to 30-stage completions today. Over the first 1,000 days of a wells life, Marathon's current 30-stage completions are producing 122% more than open hole completions were a short time ago.

“We believe this standard of performance, coupled with continued resource growth, fully supports an accelerated investment in our three high-quality resource plays — the Eagle Ford, Bakken and Oklahoma Woodford.”

— Lee Tillman, CEO,

Marathon Oil's 2014 Expectations and Highlights

Targeted spud to total depth of 15 days
Well costs target of $7.0-7.8 million
Testing 4 Middle Bakken and 4 Three Forks (1st bench) wells per 1,280-acre unit
Planning 6 Three Forks (2nd bench) well tests
Potential to recomplete 100 wells that were stimulated with a open hole completion (increasing reserves 280,000 boe per well)
Inventory of ~2,300 gross wells over 370,000 net acres in the Bakken and Three Forks
Probable resources of 630 million barrels
Expecting production to grow to ~70,000 boe/d by 2017

Read the company's full capital budget press release at marathonoil.com

North Dakota Production Will Surpass 1 Million b/d Early in 2014

December 17, 2013 R.T. Dukes

North Dakota oil production grew a little less than 10,000 b/d from September to October to set another record with 941,637 b/d.

With current weather conditions, it will take an exceptional November and December for the state to surpass 1 million b/d before year-end. The Bakken has surprised us before, but it looks like it will be some point in the first quarter before North Dakota joins the million barrel a day club.

The state also set a record in October for natural gas production with 1.07 bcf/d and for the number of producing wells with 9,900. With ~200 wells coming online per month, the state will easily surpass 10,000 wells before the end of 2013. Pretty amazing for a state that had just ~3,600 producing wells at the beginning of 2008.

Other highlights from the monthly director's cut include:

5,939 wells producing from the Bakken and Three Forks
October sweet crude prices fell to $85.16/bbl and further to $71.42/bbl in November
202 well completions in October
McKenzie County roads were close 3-4 days due to rain in October
Operators have indicated plans to add 10-15 rigs by mid-year 2014
Days from spud to initial production increased to 114 days from 100 days in October
More than 95% of drilling targets the Bakken and Three Forks
~460 wells were awaiting completion at the end of October

Read the full director's cut at dmr.nd.gov

Whiting Expands Bakken Position & Tests New Completion Designs in the Third Quarter

December 10, 2013 R.T. Dukes

Whiting Petroleum Bakken Acquisition Acreage Map - August 2013

Whiting Petroleum acquired additional Bakken acreage in North Dakota and Montana, and tested new completion designs in the third quarter.

Whiting is using cemented liners and higher sand volumes in the Missouri Breaks area. One well completed in August using this method and a slick water frack came online at rates approximately 75% better than an offset well.

The method was used again in the Hidden Bench area and yielded results almost 1,000 boe/d better than an offset plug and perf completion.

Watch for Whiting to test cemented liners across much of its acreage. If initial results are any indication, future wells could perform as much as 50% better than previously thought.

“This is an exciting time for Whiting and our shareholders. During the third quarter, we added 17,282 net acres to our Hidden Bench and Missouri Breaks prospect areas and 32,419 net acres to our Redtail Niobrara prospect. Our new completion design using cemented liners and plug and perf technology is working throughout the Williston Basin. Initial results from our higher density drilling program at our Pronghorn prospect are very encouraging, and we expect results from our Sanish field and Hidden Bench prospect higher density drilling programs in the fourth quarter.”

— James J. Volker, CEO

Also, downspacing results in the Sanish Field are expected in the fourth quarter. If the wells prove commercial, Whiting could add an additional ~190 gross drilling locations.

Whiting produced a total of 92,750 boe/d in the third quarter with 87% attributable to crude oil and NGLs. Approximately 81% of Whiting's production is attributable to the company's Rockies Region, where the Bakken and Three Forks drive growth.

Read the company's third quarter earnings release at whiting.com

ConocoPhillips Increases Bakken Spending in Its 2014 Budget

December 9, 2013 R.T. Dukes

ConocoPhillips Bakken Leashold and Mineral Acreage Map

ConocoPhillips' 2014 budget includes spending $16.7 billion, with 55% of the total allocated to North America.

Within North America, Conoco expects continued growth from the Eagle Ford, Bakken, and Permian plays.

Approximately $4.3 billion will be spent on development drilling in the Lower 48 states. The budget includes increased investment in the drilling programs in the Eagle Ford, Bakken and Permian.

“2014 is an important year for ConocoPhillips,” said Ryan Lance, chairman and chief executive officer. “Since becoming an independent E&P company, we have set out to deliver a unique value proposition of 3 to 5 percent volume and margin growth with a compelling dividend.”

Conoco has a five-year plan to spend $5 billion in the Bakken to grow production to more than 50,000 boe/d by 2017. The company has over 626,000 acres prospective for the Bakken and estimates a drilling inventory of more than 1,400 wells.