Dakota Access Protest Camps Evacuated

February 27, 2017 Elizabeth Alford

Protests at the construction site of the Dakota Access Pipeline are coming to a close after almost a year of tension and confrontation.

After Governor Burgum signed an emergency evacuation order for the Oceti Sakowin camp, the main site of protests, the property was cleared last week. The area is in a flood plain and the warmer temperatures have increased a risk of flooding.

Since the cleanup began, the U.S. Army Corps of Engineers reportedly hauled out over 240 dumpsters filled with trash, personal items and old building material with is likely another 240 loads to go.

CNN reported that at least 23 people holding out in the camp were arrested Thursday morning after they refused to leave but most left voluntarily.

Demonstrators have been protesting the 1,172 mile Dakota Access Pipeline for nearly a year, with some estimates numbering the crowd in the thousands. While the main focus of the protests were in Cannonball, people from all over the world joined in solidarity including protests in Los Angeles, Seattle and Dallas, home of Energy Transfer Partners

Protests on the Dakota Access Pipeline escalated in September after Labor Day violence shut down construction. What had been peaceful protests in the small town of Cannonball Dakota turned ugly after the pipeline company allegedly used bulldozers to destroy sacred tribal sites. Things escalated with guards using pepper spray and dogs to curb the situation.

Construction on the pipeline was almost complete when new protests erupted in October. 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.

Oil and gas operators are counting on the pipeline's capacity to ship 570,000 barrels a day in 2017. This prolonged set-backs means they may be looking to alternatives and many will be forced to rely on rail to ship product.

Marathon Announces 2017 Plan for Bakken

February 22, 2017 Elizabeth Alford

Marathon Oil Corp. plans to increase its Bakken activity.

Marathon announced their 2016 results last week including a fourth quarter 2016 net loss of $1,371 million.

The company's Bakken production during the quarter averaged 52,000 net boed, down only slightly from the prior quarter's average of 54,000 net boed. Other full year results include:

2016 capital program at $1.1 billion, $300 million below original budget
Total production averaged 393,000 net boed
E&P production averaged 342,000 net boed
Ended the year with 12 rigs operating in the U.S. resource plays
Decreased G&A expenses by 18% year over year
Non-core asset sales for approximately $1.3 billion, excluding closing adjustment
Year-end liquidity of $5.8 billion

2017

“We’re entering 2017 with a simplified portfolio more concentrated on our high-return, low-cost opportunities in the U.S. resource plays. Our $2.2 billion capital program accelerates sequential resource play production growth to the second quarter while providing exit rate momentum that positions us to deliver compound annual growth rates of 10-12 percent.”

— President and CEO Lee Tillman

For the remainder of 2017, Marathon expects to average approximately six drilling rigs and will focus on optimizing base production, while bringing 70 to 75 gross Company-operated wells to sales.

North Dakota Bill Eliminates Oil Spill Reporting

February 15, 2017 Elizabeth Alford

North Dakota lawmakers are working to eliminate the reporting requirement on certain oil spills.

Related: Oil Spill Threatens Wetlands

Late last month, the North Dakota House legislators voted in favor of House Bill 1151, which eliminates a reporting requirement for oil spills under 10 barrels. The 82-11 vote was a clear victory for companies who say the measure will save them time and money.

Removing reporting requirements for large spills will also ease the administrative burden of the state. One analyst estimates that 80 employees receive an email every time there is a spill.

If the bill is passed, companies will no longer need to report large spills of natural gas, crude oil or the water water used in production. They define are less than 10 barrels, or 420 gallons.

“The commission may not require any person controlling or operating any well, or a
facility that handles fluids used in the production of gas or oil, to report to the
commission any spill or release of fluid confined to the oil well pad, production facility,
or a production - related handling facility if the spill or release of fluid contains ten or
fewer barrels of fluid.”

— North Dakota House Bill 1151

The bill has received opposition from various groups including North Dakota Landowners Association, the North Dakota Farmers Union and the Dakota Resource Council.

Read the full bill at legis.nd.gov

Continental Plans 26% Growth for Bakken

February 9, 2017 Elizabeth Alford

Continental Resources plans to spend billions in 2017, much of which will be in the Bakken Shale Play.

Continental has released its 2017 budget, with capital expenditures projected to be $1.95 billion. 70% of Continental’s 2017 budget will be used to complete wells in the Bakken at a cost of $550 million. This will include competing 131 operated wells and 35 non-operated Bakken wells. Additionally, the company expects to grow Bakken production by approximately 26% in 2017. Other highlights for the year include:

Maintaining four operated drilling rigs throughout 2017
Drilling 101 gross (57 net) operated wells
17 wells will have an average budgeted well cost of approximately $7.0 million
Accelerated production growth in second half 2017 to an exit rate of 250,000 to 260,000 barrels of oil equivalent (Boe) per day.

“Our disciplined 2017 budget and growth plan will position the Company for multiple years of double-digit production growth. I’ve never been more excited by Continental’s opportunities to realize the value of our premier assets and to deliver exceptional shareholder value.”

— Harold Hamm, CEO

By year’s end, the company expects to increase its daily oil per barrel protection totals from the 210,000 boepd to roughly 260,000 boepd.

Hess Increases 2017 E&P Budget to $2.25 Billion

January 17, 2017 Elizabeth Alford

Hess Corporation has announced it will increase E&P spending for 2017, including adding more Bakken rigs.

Related: Hess Adds Bakken Rigs

For 2017, Hess plans to spend $2.25 billion for E&P activity, a hefty increase from the $1.9 billion spent in 2016. The company will allocate that money to the following:

$700 million for unconventional shale resources
$375 million for production
$825 million for developments
$350 million for exploration and appraisal activities
$425 million of its development budget will be used to drill two wells and complete three wells, install the tension leg platform and progress development of the Stampede Field in the deepwater Gulf of Mexico to achieve first oil in 2018.

“We’re excited about the year ahead. With oil prices starting to recover, we will ramp up our Bakken rig count from two currently to six by year end. We plan to resume drilling at the Valhall Field from the existing platform rig and we will continue to progress our two offshore developments to first production, which will add a combined 35,000 boepd once online.”

— President and COO Greg Hill

Hess will also add additional rigs in the Bakken and predicts the region's net production in 2017 will average between 95,000 and 105,000 boepd.

Fourth Quarter Highlights

Fourth quarter results include a noncash charge of $3.8 billion to “establish valuation allowances against net deferred tax assets as of December 31, 2016, as required under accounting standards following a three-year cumulative loss.”