Continental Resources Raises Expectations for remainder of 2016

November 16, 2016 Elizabeth Alford

Bakken Shale powerhouse, Continental Resources, is counting on continued momentum as it raises its expectations for North Dakota activity and production for the rest of the year.

Oklahoma-based Continental announced third quarter results, saying it is betting on recovery from enhanced work at the Bakken shale oil reserve basin in North Dakota, and the SCOOP and STACK reservoirs in Oklahoma.

The company expects to end the year with production volumes that are about 5 percent more than it estimated in August.

“We brought on several excellent producers in the Bakken using enhanced completion designs, including two wells that generated CLR-record 30-day initial rates for the Bakken. This is an encouraging start as the Company begins working down its large backlog of Bakken uncompleted wells and capturing their value.”

— Harold Hamm, Chairman and Chief Executive Officer

Third quarter highlights:

First STACK Density Test Flows at Combined Initial Peak Rate of 21,354 Boe per Day (70% oil) from Eight Meramec Wells; Seven New Wells Flow at Average Well IP of 2,653 Boe per Day
Company Initiates Development in STACK Over-Pressured Oil Window
Bakken Enhanced Completions Yield Company Record Initial 30-Day Production Rates
Company Begins Working Down Uncompleted Bakken Wells
Annual Production Guidance Raised and Production Expense Guidance Lowered; Capital Expenditure Guidance Raised on Increased Well Completions

Looking forward to the remainder of 2016, the Company plans to increase the total number of gross operated well completions by 32. They also expect to complete 119 gross operated wells with first production for the year, including 29 gross operated wells in the Bakken.

“The Company plans to increase from two to four stimulation crews in North Dakota by year-end 2016. The Company now expects to end 2016 with approximately 175 gross operated uncompleted wells in the Bakken and approximately 45 gross operated uncompleted wells in Oklahoma. The projected year-end Bakken uncompleted well count of 175 excludes approximately 15 wells that will have been stimulated by year-end 2016, but not produced with first sales until 2017.”

— Continental Press Release

Hess Corp Adds Bakken Rigs

November 7, 2016 Elizabeth Alford

The Hess Corporation announced its 2016 third quarter results, which included a drop in Bakken production.

Related: Hess in the Bakken

CEO John Hess told investors last week that the company remains optimistic despite a net loss of $339 million and falling production. Bakken production fell to 107,000 barrels of oil equivalent per day (boepd), down from 113,000 boepd over 2015. Hess attributes the decline to reduced drilling program due to the low oil-price environment.

“Our Bakken team continues to offer excellent operating results and returns in the core of the play that are competitive with the Permian and Eagle Ford,” he said. “Our high-quality Bakken acreage, industry-leading drilling and completion costs, and advantaged infrastructure position our Bakken assets to be a major contributor to the company’s future production and cash flow growth.”

— John Hess, CEO

During the quarter, the company operated an average of three rigs in the Bakken and brought 22 gross operated wells on production. The company’s total production for the quarter was 314,000 boepd. Other highlights include:

Drilling and completion costs in the Bakken averaged $4.7 million per operated well—down 11%
Increased standard well design to a 50-stage completion from the previous 35-stage completion design
Net midstream income was $13 million in Q3 2016 compared to $16 million last year
Midstream capital expenditures were $88 million for the quarter—the same as Q3 2015
Reduced exploration and production capital and exploratory expenditures by 49% to $435 million, down from $849 million during the same period last year

Hess projects that E&P capital and exploratory expenditures for the full 2016 will be approximately $2 billion, down $100 million from our previous forecast and more than 50% below 2015.

Oasis Petroleum Buys 55,000 Acres in the Bakken

November 1, 2016 Elizabeth Alford

Oasis Petroleum announces a huge acquisition of assets in the Bakken Shale Play.

On October 17th, Oasis signed an agreement to purchase the drilling rights to approximately 55,000 net acres in the Williston Basin from SM Energy Company.

The $785 million deal includes an estimated estimated 226 gross operated drilling location with a production of 50.2 MMBoe of proved reserves, 63% of which are considered proved developed producing and 77% of which are oil.

“This acquisition is a great opportunity to add acreage and inventory that is a natural fit with our existing core and extended core positions and will increase our gross operated drilling locations in our core acreage by approximately 25%.”

— Thomas B. Nusz, Chairman and CEO

Oasis also announced third quarter 2016 Highlights that includes:

Average daily production of 48,509 barrels of oil equivalent per day and increased full-year 2016 guidance of 49,300 to 50,000 Boepd.
Completed and placed on production 17 gross (7.1 net) operated wells. As of September 30, 2016, the Company had 80 gross operated wells awaiting completion.
Estimated capital expenditures were between $76 million and $81 million.

Protests Over Pipeline Spread Across the Country

October 25, 2016 Elizabeth Alford

Protests continue to grow around the country over the 1,172 mile Dakota Access Pipeline.

Related: Violence Erupts over Pipeline

Construction on the Dakota Access Pipeline has been the focus of escalating protests since construction was halted over the Labor Day weekend after violence erupted.

Over the past three months, there have been three protests in Dallas, the home of the company behind the pipeline, Energy Transfer Partners. In September, dozens of people gathered in front of Energy Transfer's corporate headquarters and this past week, protesters yelled concerns at attendees at a fundraiser in Klyde Warren Park.

Other Protests

Yesterday, more than 800 people protested in Los Angeles' MacArthur Par. showed support for the pipeline activists. Among the crowd were celebrities including Susan Sarandon and Mark Ruffalo.
Over the weekend, protestors set up a camp in Cannonball ND, directly in the path of the project, according to Fox News. The groups erected tents and teepees on private land that the group contends rightfully belongs to native Americans.
In Morton County, ND, more than 127 people were arrested while Sheriff;s used pepper spray on the crowd.

“North Dakota sheriffs said protests were neither lawful nor peaceful. The Standing Rock Sioux tribe countered that law enforcement officials beat area demonstrators and using a militarized response to quell the protests.”

— UPI.com

Demonstrators are concerned about the environmental impact of the pipeline, including contamination of the Missouri River, which is the primary water source for the Standing Rock Sioux Tribe. Tribal leaders are also upset that the pipeline will disturb sacred burial grounds.

Bakken Shale Production Dips Below 1 Million Barrels per Day

October 18, 2016 Elizabeth Alford

Oil production for the Bakken Shale Play dipped below 1 million barrels a day for the first time since 2014.

The Department of Mineral Resources (DMR) for ND released August production data for the Bakken and North Dakota, revealing a significant drop in production. Bakken production was down 46,433 barrels per day to 930, 931. For North Dakota, the agency reports an average of 981,039 barrels of oil daily in August, down from 1.029 million barrels of oil daily in July.

The Director of DMR, Jesse Helms, expects the states oil production will continue to decrease over the coming months and will likely level off at 900,000 barrels per day.

““This is a day we had been anticipating but not looking forward to,” said Director Lynn Helms.”

— Lynn Helms, Director of ND Department of Mineral Resources

North Dakota also produced 1.64 billion cubic feet of natural gas per day in August, down from 1.69 billion cubic feet daily in July.

The state hit the 1,184,635 b/d mark for oil in September 2014, setting a new record. That's 50,000 more b/d than the previous month. At the same time, they also had record monthly gas production (1,403,448 mcf/d), and reported the highest number of producing wells to date (11,741).

As of last week, the Bakken-Three Forks rig count remains unmoved for the third straight week, with Baker Hughes reporting 30 rigs running across our coverage area by midday Friday.