Two New Bakken Crude Oil Pipelines Online by 2016

October 30, 2014 Kirk Eggleston

Dallas, TX-based Energy Transfer Partners announced a joint venture with Houston-based Phillips 66 at the end of October, 2014, to build two pipelines that will move crude oil out of North Dakota's Bakken Shale field.

Energy Transfer Partners will have a 75% interest in the pipelines. Phillips 66 will have a 25% interest, and will pay a proportionate cost of the construction. Both the "Dakota Access Pipeline" and "Energy Transfer Crude Oil Pipeline" are scheduled to be completed by the end of 2016.

““We look forward to working with Phillips 66 to build this much-needed pipeline infrastructure to link rapidly growing supplies of domestically produced light crude oil in the Bakken and Three Forks play to refineries throughout the country,” said Energy Transfer Partners CEO Kelcy Warren.”

According to Energy Transfer Partners, the Dakota Access Pipeline is expected to deliver in excess of 450,000 b/d of crude oil from the Bakken and Three Forks to market centers in the Midwest, based on current contractual commitments. The Energy Transfer Crude Oil Pipeline will provide crude oil transportation service from the Midwest to the Sunoco Logistics Partners and Phillips 66 storage terminals located in Nederland, TX.

In September, Energy Transfer announced a binding expansion open season for the pipelines to evaluate additional interest.

Bakken Shale Rig Count Decreases By One to 191

October 27, 2014 Kirk Eggleston

The Bakken-Three Forks rig count decreased by one to 191 rigs running across our coverage area by the end of last week. The NDIC notes 194 rigs are active in North Dakota, but around 13 of those are in the process of moving in and rigging up.

In recent Bakken news, San Antonio, TX-based Tesoro Logistics LP agreed to buy Denver, CO-based QEP Resources Inc.’s natural gas pipeline and processing business, QEP Field Services, for 2.5-billion in late October of 2014. The deal also includes a 58% ownership in QEP Midstream Partners.

The acquired assets operate over 2,000 miles of natural gas and crude oil gathering and transmission pipeline, with locations in North Dakota’s Bakken Shale and the Rocky Mountain region. The assets have have a combined 2.9 billion cf/d of natural gas and 54,000 b/d of crude oil throughput capacity.

The U.S. rig count increased by 9 to 1,927 rigs running by the end of last week. A total of 332 rigs were targeting natural gas (four more than the previous week) and 1,595 were targeting oil in the U.S. (5 more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.). 192 rigs are running in the Williston Basin across MT, ND, and SD. 180 are in ND alone.

Not all rigs counted in our census are drilling for the Bakken, but it's close. The NDIC estimates 95% or more of activity in this region targets the Bakken and Three Forks formations.

Note: The NDIC reports 194 rigs are active in North Dakota. That is two more than Baker Hughes reports in the Bakken area, and 14 more than the company reports in North Dakota. On any given week, a certain number of rigs are in route to the next well location or idle waiting to drill the next well. The NDIC notes that around 13 rigs are in the process of moving in and rigging up.

Bakken Oil & Gas Rigs

The number of oil rigs decreased by one to 191 rigs running by the end of the week . WTI oil prices decreased by ~$2.00 from the previous week, trading at $81.08/bbl on Friday afternoon. Williston Basin Sweet crude traded at $63.94/bbl on Oct. 16th. The WTI-Brent closed up a bit, settling at just underr $5 by the end of last week.

The natural gas rig count in the region held flat at zero. Natural gas futures (Henry Hub) were trading at $3.61/mmbtu by the end of last week. A little more than 10% of the production stream from the Bakken and Three Forks is attributable to natural gas and roughly half of that is NGLs.

McKenzie County continues to lead development with 62 rigs running. Mountrail, Williams and Dunn counties are the only other counties with more than 25 rigs running each. View the full list below under the Bakken Drilling by County section.

Activity is dominated by horizontal drilling:

174 rigs are drilling horizontal wells
13 rigs are drilling directional wells
4 rigs are drilling vertical wells

Bakken Oil & Gas News

Be sure to visit our Bakken Job Listings to search openings and come back weekly for updates or sign up for alerts - Daily or Weekly Email Alerts

What is the Rig Count?

The Bakken Shale Rig Count is an index of the total number of oil & gas drilling rigs running across Montana and North Dakota. The rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Bakken formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count.

Tesoro Buys QEP's Bakken Pipeline Assets - $2.5 Billion

October 21, 2014 Kirk Eggleston

San Antonio, TX-based Tesoro Logistics LP agreed to buy Denver, CO-based QEP Resources Inc.'s natural gas pipeline and processing business, QEP Field Services, for 2.5-billion in late October of 2014. The deal also includes a 58% ownership in QEP Midstream Partners.

The acquired assets operate over 2,000 miles of natural gas and crude oil gathering and transmission pipeline, with locations in North Dakota's Bakken Shale and the Rocky Mountain region. The assets have have a combined 2.9 billion cf/d of natural gas and 54,000 b/d of crude oil throughput capacity.

The deal expands Tesoro's presence in North Dakota significantly, and company officials say the acquisition will allow Tesoro to offer more integrated crude oil and natural gas services to producers in the Bakken.

In June, QEP stated that it would be focusing more on exploration and production, rather than processing and transportation. QEP, which has significant interests in the Bakken and West Texas' Permian Basin, expects to increase production in these areas.

“The sale of our midstream business is a significant milestone in the strategic repositioning of our company, as we believe QEP will be better positioned to deliver continued growth in production and Adjusted EBITDA in 2015 and beyond.”

— Chuck Stanley, President and CEO of QEP Resources

The acquisition, which is subject to regulatory approval, is anticipated to close in the fourth quarter.

Bakken Shale Rig Count Stays Flat at 197

October 6, 2014 Kirk Eggleston

The Bakken-Three Forks rig count stayed flat at 197 rigs running across our coverage area by the end of last week. The NDIC notes 188 rigs are active in North Dakota, but around six of those are in the process of moving in and rigging up.

In recent Bakken news, permitting problems in Minnesota are delaying Calgary-based Enbridge Energy Partners LP from building a 612-mile pipeline from North Dakota’s Bakken Shale, according to the Wall Street Journal. The company disclosed the delay of the $2.6-billion Sandpiper pipeline in a filing with the U.S. Securities and Exchange Commission earlier this week.

The U.S. rig count decreased by nine to 1,922 rigs running by the end of last week. A total of 330 rigs were targeting natural gas (eight less than the previous week) and 1,591 were targeting oil in the U.S. (1 less than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.).198 rigs are running in the Williston Basin across MT, ND, and SD. 189 are in ND alone.

Not all rigs counted in our census are drilling for the Bakken, but it's close. The NDIC estimates 95% or more of activity in this region targets the Bakken and Three Forks formations.

Note: The NDIC reports 188 rigs are active in North Dakota. That is ten less than Baker Hughes reports in the Bakken area, and one less than the company reports in North Dakota. On any given week, a certain number of rigs are in route to the next well location or idle waiting to drill the next well. The NDIC notes that around six rigs are in the process of moving in and rigging up.

Bakken Oil & Gas Rigs

The number of oil rigs stayed flat at 197 rigs running by the end of the week . WTI oil prices decreased by nearly $3 from the previous week, trading at $90.15/bbl on Friday afternoon. Williston Basin Sweet crude traded at $72.69/bbl on Oct. 2nd. The WTI-Brent closed up a bit, settling at just over $2 by the end of last week.

The natural gas rig count in the region held flat at zero. Natural gas futures (Henry Hub) were trading at $4.02/mmbtu by the end of last week. A little more than 10% of the production stream from the Bakken and Three Forks is attributable to natural gas and roughly half of that is NGLs.

McKenzie County continues to lead development with 66 rigs running. Mountrail, and Williams counties are the only other counties with more than 30 rigs running each. View the full list below under the Bakken Drilling by County section.

Activity is dominated by horizontal drilling:

178 rigs are drilling horizontal wells
18 rigs are drilling directional wells
1 rigs are drilling vertical wells

Bakken Oil & Gas News

Be sure to visit our Bakken Job Listings to search openings and come back weekly for updates or sign up for alerts - Daily or Weekly Email Alerts

What is the Rig Count?

Enbridge's Sandpiper Pipeline Delayed

October 2, 2014 Kirk Eggleston

Permitting problems in Minnesota are delaying Calgary-based Enbridge Energy Partners LP from building a 612-mile pipeline from North Dakota's Bakken Shale, according to the Wall Street Journal. The company disclosed the delay of the $2.6-billion Sandpiper pipeline in a filing with the U.S. Securities and Exchange Commission earlier this week.

The Sandpiper pipeline is designed to move 225,000 b/d from North Dakota to Clearbrook, MN, and then transport up to 375,000 b/d from the Minnesota location to another oil hub in Superior, Wisconsin. At the end of last year, oil giant Marathon reached an agreement whereby Marathon will fund 37.5% of the Sandpiper pipeline and gain a 27% interest in Enbridge’s North Dakota System.

The delay comes after the Minnesota Public Utilities Commission requested an expanded study on the environmental impacts of six possible routes of pipeline. Opponents to the pipeline suggest the planned route crosses many environmentally-sensitive areas in northern Minnesota, including rivers, lakes and wetlands.

At the Enbridge Annual Investment Community Conference, SVP-Major Projects Byron Neiles, said, " even though we've secured all of the required approvals in North Dakota and close to 100% of the right-of-way, and close to 90% of the -- and over 90% of the lands required in Minnesota, the regulator there three weeks ago reversed a decision it took earlier this spring denying opponents' motions to extend the process as well as to bifurcate or decouple the route and need processes of the review. Moreover, it required that these processes be conducted one after the other rather than in parallel."

The Sandpiper Pipeline is expected to be in service some time in 2017. Estimates at the end of last year were for the first quarter of 2016.

Enbridge's current five-year forecast includes a record $44-billion in capital expenditures.