Whiting Plans to Drop Bakken Rigs

August 4, 2015 Elizabeth Alford

EOG Releases 2015 Q1 Report — Whiting Petroleum: 2015 Q2

Whiting petroleum announced second quarter earnings this week that highlighted record production and plans to complete 40 to 50 wells in the Bakken.

Whiting posted a record quarter with total production at 170,000 BOEs per day. Company operations in the Bakken/Three Forks region represented 80% of total production at 136,000 BOEs a day.

“CEO James J. Volker said, “With the recent decline in commodity prices, we have elected to drop an additional three rigs in the second half of the year and run an eight-rig program. In 2016, at a $50 NYMEX oil price, our capital budget and cash flow should be equal, with a relatively flat production profile when compared to Q4 2015. Our budget is flexible. If oil prices are higher than anticipated later this year, we can ramp up and deliver even greater growth.”

Other Q2 Highlights

Adjusted Net Income of $9.2 Million or $0.04 per Diluted Share
Q2 2015 Discretionary Cash Flow Totals $380.7 Million, a 53% Increase Over Q1 2015
Enhanced Completions Deliver 40% to 50% Production Increases Across Multiple Williston Basin Areas
Redtail Niobrara Field Production of 17,065 BOE/d in Q2 2015, Up 31% Over Q1 2015
$185 Million Additional Q2 2015 Non-Core Property Sales; $300 Million of Total Asset Sales in 1H 2015
2015 Capital Budget Revised to $2.15 Billion for 6.5% Production Gro

Whiting Petroleum Corp.'s Stock Crashed 35% in July with analysts speculating that the company's profitability is very correlated to the price of crude.

New Regulations For Bakken Housing

July 28, 2015 Elizabeth Alford

Williams County commissioners adopted new regulations that will significantly limit the availability of temporary housing that serves in North Dakota’s oil fields.

Temporary housing has peppered the landscape since 2008, providing a crucial way to house the droves of workers who have migrated to the Bakken oil fields. When the influx of workers outstripped available housing, new crew camps, RV/trailer parks and modular homes quickly sprang up to meet the need.

Last week the commission voted to adopt the new guidelines that put restrictions on new or renewed applications for temporary housing. Commissioners stopped short of a full ban fearing that might increase apartment and permanent housing costs.

“Mike Sizemore, director of Development Services said “This was an effort to try and put something together to work. It’s hard to come up with a policy that was cut and dry because none of these are the same.”

Recently, the SEC has frozen the assets of North Dakota Developments, LLC (“NDD”) and its principles, claiming they defrauded over 980 investors from 66 different countries to build Bakken housing projects that were never finished.

Bakken Man Camps Center of Ponzi-Type Scheme

Bakken Train Derailment

July 21, 2015 Elizabeth Alford

Another Bakken train derailment leaves a mess in rural northeastern Montana

Related: Bakken Oil Train Derails

Last Friday, 22 train cars from a Burlington Northern Santa Fe Railway (BNSF) train derailed causing an evacuation of residents in nearby homes and in a Bakken man camp. Officials said the train was headed to Anacortes, Washington and derailed about 5 miles east of the small town of Culbertson, near the North Dakota border.

35,000 gallons of crude oil leaked from four of the derailed cars, but officials there was no immediate evidence that any crude reached a waterway.

The Department of Transportation issued an emergency order in May that requires certain crude by rail trains to slow down in high threat areas. But speed doesn’t seem to be a factor in the latest crash. After investigating Thursday’s crash, the U.S. Federal Railroad Administration revealed that the train was only traveling at 44 mph.

This was the sixth such train accident in the Bakken since the beginning of he year. Other crashes include:

2/17/15: WV derailment carries Bakken crude

2/14/15 Train carrying crude oil derails in Canada

3/6/15: Oil train carrying Bakken crude explodes in Illinois

3/7/15 Train carrying crude oil derails in Canada

3/8/15: Train carrying crude oil derails in northern Ontario

5/6/15: Train carrying Bakken crude derails near Heimdal, North Dakota

Savage Services Cuts Jobs in Bakken

July 14, 2015 Elizabeth Alford

Savage Services Corp, a North Dakota railcar and logistics facility, laid off 10% of its full time employees this week. Savage is one of the largest facilities of its kind in the region and employed 118 people before this layoff.

Company sources blame the layoffs on decreased demand for railcars to transport Bakken crude oil, saying that as pipeline construction has increased, the demand for railcars is the lowest it has been in three years. This is contrary to other data about the prevalence of transporting crude oil by rail. In May, the Energy Information Administration (EIA) released its latest data for crude by rail across the country that shows a 1700% increase over the last five years.

Related: Crude by Rail Up 1700%

It has been almost two years since Savage announced the expansion of the Bakken Petroleum Services Hub in Trenton, ND as a result of its acquisition of Ft. Worth Pipe. The new terminal added oil country tubular goods (OCTG) storage, transloading, trucking, threading, inspection and clean and drift services for oil and gas producers in the Williston Basin.

Since crude prices plunged last year, oil company executives are working to cut costs wherever they can, but tightening the belt doesn’t necessarily mean more layoffs. Over the next two years, the majority of the oil and gas executives (76%) expect to see their organizations’ ranks to increase or stay the same over the next two years. Read more here.

North Dakota Fights Fracking Rule

July 8, 2015 Elizabeth Alford

North Dakota Developments, LLC — North Dakota Fracking

Two days after North Dakota filed an injunction to delay new federal fracking rules, a district court grants a temporary reprieve.

U.S. District Court Judge Scott W. Skavdahl delayed the new ruling, which was to go into effect this week, saying that permitting of oil and gas wells on federal land will proceed under current regulations until July 22nd.

The case before Judge Skavdahl combined a challenge from North Dakoa, Wyoming and Colorado with one from industry groups who believed the Bureau of Land Management (BLM) did not follow federal rule-making law and exceeded their authority.

“Jessica Kershaw, a BLM spokeswoman said “While the matter is being resolved, the BLM will follow the court’s order and will continue to process applications for permit to drill and inspect well sites under its pre-existing regulations.”

In March, the BLM passed the new regulations after a four-year investigaiton that included over 1.5 million public comments. The new ruling requires:

A validation of well integrity in order to protect groundwater supplies
Companies to publicly disclose chemicals used in hydraulic fracturing through the website FracFocus, within 30 days of completing fracturing operations
Higher standards for interim storage of recovered waste fluids from hydraulic fracturing to mitigate risks to air, water and wildlife
Companies to submit more detailed information before fracking to reduce the risk of cross-well contamination

In the following video, North Dakota Attorney General, says that the state will go through the lengthy process of a filing a permanent injunction if necessary.