SM Energy Completed 42 Gross Bakken Wells in 2013

February 19, 2014 Kirk Eggleston

SM Energy completed 42 gross flowing completions in its operated Bakken/Three Forks program in 2013. Eight wells were completed in the fourth-quarter of 2013.

At the end of 2013, SM Energy had 103 net wells producing and 79 proved undeveloped net locations in the Bakken.

The company had 54 mmboe of total proved reserves in the Bakken at end of the year.

SM Energy Focusing on Infill Development in the Bakken

In 2014, the company's Bakken plans include testing completion design, spacing, and new intervals to maximize program economics and prove up additional inventory. SM Energy plans to run three rigs spending $275 million on operated activity and another $75 million on non-operated properties.

SM Energy is currently focusing its drilling on the Raven/Bear Den and Gooseneck prospects in North Dakota. Substantially all of the company's activity is now focused on infill development. Two of the three rigs the company is running in North Dakota are operating in the Raven/Bear Den prospect and the third in the Gooseneck prospect.

During 2013, the Company's drill and complete costs for its operated wells decreased by approximately 4% in both the Raven/Bear Den and Gooseneck prospects.

SM Energy Q4 Company-Wide Daily Production in 2013

Oil production company-wide was up 31% in the fourth quarter of 2013 to 40,800 b/d from 31,300 b/d in Q4 2012. Natural gas production was up 24% from 429.3 mmcf/d in the fourth-quarter of 2013 to 347.1 mmcf/d. NGL production was up 51% to 31,500 b/d from 20,800 b/d. Oil Equivalent production was 143,800 b/d. That's also up 31% from 109,900 b/d.

SM Energy Bakken Highlights

42 gross flowing completions of wells in 2013
103 net wells producing and 79 proved undeveloped net locations in Bakken in 2013
54 mmboe of total proved reserves in 2013
$275 million on operated activity and another $75 million on non-operated properties in 2014

SM Energy Company-Wide Production Highlights

2013 4Q company wide oil production up 31% - 40,800 b/d
2013 4Q company wide natural gas production up 24% - 429.3 mmcf/d
2013 4Q company wide ngl production up 51% to 31,500 b/d
2013 4Q company wide oil equivalent production up 31% to 143,800 b/d

WPX Energy Sets Its Bakken Capital Budget at $580-600 Million in 2014

February 18, 2014 R.T. Dukes

WPX Energy will spend between $1.420-$1.523 billion in 2014, with $580-600 million directed to Bakken and Three Forks targets in the Williston Basin.

WPX is planning to add a rig to bring its operated total to five in 2014.

The company expects the added rig will allow the company to drill 62 gross operated wells, or 25% more than the ~50 wells the company drilled in 2013.

Also read:Halcon Lowers Its 2014 Capital Budget & Holds Production Guidance

“Increased oil volumes, efficient development of our resource base and enhanced balance sheet flexibility will help drive increased cash flows and better overall results,” said Jim Bender, CEO.”

The emphasis in liquids producing areas will drive production growth in 2014. WPX expects daily oil production from the Williston and San Juan to increase ~50% from 16,000 b/d in the first quarter to more than 24,000 b/d by year-end.

In total, 85% of the company's capital budget is split between liquids producing plays in the Piceance, San Juan, and Williston basins.

WPX's capital budget:

$580-600 million in the Williston Basin (oil)
$475-495 million in the Piceance Basin (gas & ngls)
$155-180 million in the San Juan Basin (oil)
$20-30 million in the Appalachia region
$10-15 million in legacy areas like the Powder River Basin
$100-115 million on land and exploration

Read the full press release at wpxenergy.com

Bakken Resources Sells Bakken Acreage ~$7.9 Million

February 17, 2014 Kirk Eggleston

Bakken Resources Inc. sold 767 net acres in McKenzie County, ND to an undisclosed buyer in early February 2014.

Total purchase price for the acreage was $7,871,248. That comes out to $10,250 per net mineral acre.

Notable Bakken Acquisitions and Divestitures in January 2014

So far in 2014, there have been at least two other acreage deals in the Bakken.

Emerald Oil acquired 20,800 net acres in the Williston Basin for $74.6 million in two separate deals in early January.

Oasis had a $333 million sale in January of its’ non-operated Sanish properties and a few non-operated leases adjacent to the Sanish.

Bakken Resources Gains ~412% Return on Investment

With the closing of its' acreage deal, Bakken Resources gains a ~412% percent return on its original investment. In November of 2010, the company spent $1,535,000 for the 767 net acres in McKenzie County.

Bakken Resources will retain a 2% royalty interest in the sold assets.

“We are very pleased about this win-win transaction,” notes Val Holms, CEO. “Proceeds from this transaction will allow us to seriously explore several other opportunities we are currently evaluating. We continue to hold a 2% royalty interest in the assets we sold and also receive royalties on our remaining 1,600 +/- net mineral acres located in Bakken region.”

Bakken Resources is a non-operator, and prior to this deal, the company owned mineral rights to approximately 7,200 gross acres and 2,400 net mineral acres of land in North Dakota.

Bakken Resources Acreage Deal Highlights

767 net mineral acres sold in McKenzie County, ND
$10,250 per net mineral acre
Total price for deal is $7,871,248
~412% increase on original investment of $1,535,000 in Nov. 2010

Read the full release: Bakken Resources Inc. Acreage Deal

Continental's Proved Reserves in Bakken Valued at $14.5 Billion - 2013

February 13, 2014 Kirk Eggleston

Continental 2014 Production — Continental 2013 Production

Continental's proved reserves stretched to more than 1 Billion boe in 2013, with an estimated value of more than $20 billion. The Bakken accounted for 72% of the volume and it's estimated value.

Continental's Bakken and Three Forks position contributed 741 million boe to the company's proved reserves at an estimated value of $14.5 billion.

Within the proved reserve estimates, Continental had 2,330 gross (1,302 net) PUD (proved undeveloped) drilling locations at the end of 2013. According to the company, the Bakken accounted for about 84% or almost 1,100 PUD locations.

Continental Resources Company-Wide Production

Continental Resources had total production of 49.6 million boe or~136,000 boe/d in 2013. That's up 39% from a little less than 100,000 boe/d 2012. 71% of the 2014 total came from crude oil at 35 mmbbls and 29% came from natural gas at 87.7 bcf.

Average production during the fourth-quarter of 2013 was 144,250 boe/d. That's up ~2% from the third-quarter of 2013.

“Harold Hamm, CEO, said, “We accomplished our key 2013 goals across the board – to generate top-tier organic oil production growth; to improve efficiency while reducing drilling and completion costs; and to delineate the lower benches of the Bakken and southern portions of the South Central Oklahoma Oil Province, or SCOOP.”

Continental Resources Reserves

In 2013, Continental PDP (proved developed producing) reserves exceeded 400 million boe. At the end of the year, Continental had 2,330 gross acres (1,302 net) of PUD (proved undeveloped locations). Continental's year end 2013 proved reserves had an estimated net present value of $20.2 billion. That’s a 52% increase from 2012 estimates of proved reserves at $13.3 billion.

Continental Highlights

72% of net present value for proved reserves come from the Bakken - 741 mmboe at $14.5 billion
84% of Continental's PUD (proved undeveloped locations) are in the Bakken
Company-wide total production of 49.6 mmboe in 2013
Q4 company-wide production of 144,250 boe/d

Kodiak Oil & Gas 2013 Bakken Sales Volumes Up 103% in 2013 from 2012

February 12, 2014 Kirk Eggleston

Kodiak's average daily sales volume in the Bakken went up 98% to 36,100 boe/d in the fourth-quarter of 2013 from 18,200 boe/d in the fourth-quarter of 2012. Crude oil made up most of the company's sales volume at 89% in the fourth-quarter.

Average daily sales volumes increased 103% for the year to 29,200 boe/d in 2013 from 14,400 boe/d in 2012.

Kodiak Bakken Acquisitions and Drilling Operations in 2013

In 2013, Kodiak invested approximately $672 million on acquisitions net of divestitures in the Bakken. In June 2013, Kodiak Oil & Gas signed a purchase and sale agreement with Liberty Resources for 42,000 net acres in the Williston Basin for $660 million.

The acquisition included acreage prospective for the Bakken and Three Forks formations in McKenzie and Williams counties.

For the full year 2013, Kodiak invested ~ $1.0 billion in capital expenditures for drilling and completing new wells, including surface facilities and pipeline connections in the Bakken. In the fourth-quarter of 2013, the company completed 29 gross (21.9 net) operated wells and 40 gross (4.0 net) non-operated wells. Currently, Kodiak has 7 operated rigs in the Williston Basin.

Kodiak Bakken Reserves

Kodiak estimates the value of its proved total reserves increased from $1.9 billion in 2012 to $3.5 billion at the end of the year in 2013. That's an 81% increase.

The company's estimated proved reserves increased 77% to 167.3 million boe from 94.7 million boe in 2012. Total proved crude oil reserves are 138.2 million bbl crude oil and total natural gas reserves of 174 bcf natural gas.

“Lynn Peterson, Chairman and CEO said: “Last year was another exciting year for Kodiak and its shareholders. Our team did a tremendous job of delivering outstanding operating results and reserve growth while, at the same time, we materially expanded our future drilling inventory through downspacing work and an acquisition. In 2014, our focus continues to be on determining the optimum development blueprint for our leasehold while delivering operational excellence.”

Make-up of Kodiak's Proved Reserves at the end of year 2013:

138.2 million bbl crude oil (83%)
174 bcf natural gas (17%)
46% of 2013 proved reserves are developed and producing
54% of 2013 proved reserves are undeveloped

Of the 54% of proved reserves that are undeveloped, Kodiak estimates those properties are a 2.5 year drilling inventory.