page Oasis deals avg $9,400 an acre;
5 Zenergy, Magnum Hunter sellers
Vol. 2, No. 22 • www.PetroleumNewsBakken.com
A weekly newspaper for industry and government
●
VERN WHITTEN
Development drilling in ND
COMPANY UPDATE
Fueling Hess
Bakken #1: will continue to control operation of area midstream assets
BY MIKE ELLERD
For Petroleum News Bakken
I
Baytex focus on Three Forks in
Divide Co., ND and Saskatchewan
James Bowzer, president and chief
executive officer of Calgary-based Baytex
Energy, told an audience at the Peters and
Co. 2013 energy conference in Toronto on
Sept. 10 that the company’s Bakken
development in Divide County, N.D. and
southern Saskatchewan is focused almost
entirely on production from the Three
Forks formation. “Nearly all of our development is targeted at the Three Forks at
JAMES BOWZER
this point with the middle Bakken presee BAYTEX page 13
Petroleum News Bakken names
Mike Ellerd new editor-in-chief
Mike Ellerd, a freelance writer for
Petroleum News Bakken, has been
appointed the weekly newspaper’s new
editor-in-chief.
Petroleum News Bakken is the newspaper of record for the oil and gas
industry in the Williston Basin of North
Dakota, Montana, Saskatchewan and
Manitoba. The print and online newspaper reports on the exploration, developMIKE ELLERD
ment and production of the Bakken
petroleum system, which includes such formations as the
Bakken, Three Forks, Sanish and Pronghorn.
“Mike’s organizational strengths and 20-year background
in technical writing and environmental consulting for the oil
see ELLERD page 16
‘Under-promise, over-deliver,’
Triangle exceeds expectations
With its Williston Basin production exceeding guidance,
Denver-based independent Triangle Petroleum has revised
its mean fiscal year 2014 exit production guidance upward
by 43 percent, consistent with what President and Chief
Executive Officer Jonathan Samuels says has always been
Triangle’s mantra: “under promise, over deliver.”
The Bakken-focused independent said Sept. 10 that its
current production in the Williston Basin stands at 6,500 barrels of oil equivalent per day based on a 21-day average.
Previously the company projected that its second quarter
production for fiscal year 2014 which ended on July 31
would be between 3,900 and 4,100 boepd, and that its fiscal
year 2014 exit production would be between 5,000 and 5,500
see TRIANGLE page 12
Week of September 15, 2013 • $2.50
n his opening remarks at the
Barclays CEO Energy-Power
Conference in New York on Sept.
11, Hess Corp. Chief Executive
Officer John Hess said his board and management
team have made significant progress since 2010
in transforming the company from an integrated
oil company to a pure-play exploration and production company.
Hess said his company has built a highergrowth and lower-risk portfolio providing visible
production growth of 5 to 8 percent over five
years. That growth, he noted, is “underpinned” by
several of the company’s key plays, including its
●
“leadership position in the
Bakken in North Dakota where
we and our board were last week,
and we continue to make great
progress there.”
Among Hess Corp.’s key
plays, its Bakken assets stand out
in terms of growth, according to Hess.
“First and foremost is our world-class position
in the Bakken shale in North Dakota,” he said.
“It’s really the single largest contributor to 20132017 production growth, currently producing
about 72,000 barrels a day of oil equivalent, and
we are on track to meet guidance for the year of
64,000 to 70,000 barrels a day.”
see HESS page 12
COMPANY UPDATE
Bakken +1, Scoop +8 rigs
Continental’s lower bench Three Forks development to start in ‘big way’ in ‘15
BY KAY CASHMAN
wells (886 gross) in the Bakken petroleum system, finalize four well density pilots involving 47
Petroleum News Bakken
wells, and start three more density projects based
n 2014 Continental Resources expects to on the results from the first four. By the end of
that year, Continental expects to be proincrease drilling rigs in the Bakken
ducing 200,000 barrels of oil equivalent
from 20 to 21, but in its other major
per day, about two-thirds of which will
operating area, the South Central
come from the Bakken in North Dakota
Oklahoma Oil Province, or Scoop, it
and Montana’s Williston Basin.
plans to bump up the number of rigs
By the end of 2013, the companyfrom 10 to 18.
wide exit rate is going to be close to
Still, the Williston Basin’s Bakken
150,000 boe per day, according to
play will get the bulk of the company’s
Jeffery B. Hume, vice chairman of
2014 capital expenditure budget,
strategic growth initiatives.
Continental officials said Sept. 11 in a
Continental’s projected capital budget
2014 operating and financial guidance HAROLD HAMM
for next year will be $4.05 billion, the
conference call.
In 2014 Continental plans to complete 300 net
see CONTINENTAL page 15
I
●
COMPANY UPDATE
Atikwa has tale to tell
Not enough to spend time, capital on Spearfish; investors want ‘guaranteed yield’
BY GARY PARK
For the last year, Atikwa has been bogged
down in its efforts to pursue strategic alternatives
to enhance shareholder value, despite contacting
more than 300 industry and
The dissidents said Atikwa financial partners who showed
has not made progress over potential interest in the company’s claim of a multi-billion
the last three years in
barrel prospect in the Spearfish
developing its tight oil
properties, driving down the formation.
The conclusion, according to
share value from 17.5 cents Sean Kehoe, departing presiin February 2010 to 1 cent. dent and chief executive officer,
is that the “junior oil and gas
market has fundamentally
and launch law- changed.”
For Petroleum News Bakken
A
tikwa Resources, a microcap in the Spearfish and
Bakken plays of Manitoba and
Saskatchewan, has delivered a
tough message to its peers: The
world has changed and is capable of turning messy, if not
downright ugly.
So messy and ugly that
impatient shareholders and
one-time partners can bring
about the ouster of management
suits.
see ATIKWA page 14
2
PETROLEUM NEWS BAKKEN
contents
•
WEEK OF SEPTEMBER 15, 2013
Petroleum News Bakken
ON THE COVER
MOVING HYDROCARBONS
Fueling Hess
3
PM seeking deal for Keystone XL
Harper pitches US-Canada effort to lower
greenhouse gases to meet Obama
conditions; environmentalists scoff at
‘last-ditch’ strategy
Bakken #1: will continue to control
operation of area midstream assets
Bakken +1, Scoop +8 rigs
Continental's lower bench Three Forks
development to start in 'big way' in 2015
MERGERS & ACQUISITIONS
Atikwa has tale to tell
4
Not enough to spend time, capital on Spearfish;
investors want ‘guaranteed yield’
COMPANY UPDATE
Baytex focus on Three Forks in Divide Co.,
ND and Saskatchewan
5
Petroleum News Bakken names
Mike Ellerd new editor-in-chief
‘Under-promise, over-deliver,’
Triangle exceeds expectations
Oasis deals average $9,400 per acre
Zenergy, Magnum Hunter among sellers in Oasis’s
161,000 net acre acquisition; bumps output 9,300 boe
per day to 43,000 boepd
GOVERNMENT
7
BAKKEN STATS
8
9
9
11
China resumes Canadian shopping
CLR gets OK on Chimney Butte infilling
NDIC also gives green light to Continental’s McKenzie Co.
downspacing; Hess, ConocoPhillips and Whiting also get
infill nod
North Dakota oil permit activity, Sept. 3-9
Montana well permits and completions, Aug. 3-Sept. 5
Statoil well takes top IP position again
NATURAL GAS
IPs for ND Bakken wells Sept. 3-9
3
SIDEBAR, Page 11: Top 10 Bakken wells by IP rate
11 Bakken producers’ stock prices
Straddle plant to feed off Bakken
PETROLEUM NEWS BAKKEN
●
N A T U R A L
•
3
WEEK OF SEPTEMBER 15, 2013
G A S
Straddle plant to feed off Bakken
BY GARY PARK
For Petroleum News Bakken
A
unit of the Saskatchewan government natural gas distribution utility
plans to start construction next year on a
C$72.5 million facility to extract gas liquids from the Bakken formation just
north of the North Dakota border.
SaskEnergy subsidiary Bayhurst
Energy Services is joining Calgary-based
Mistral Midstream to build the straddle
plant with initial capacity of 50 million
cubic feet per day.
Mistral is currently wrapping up work
on a 40,000 barrels per day Vantage
ethane pipeline to transport liquids ethane
from Hess Corp.’s gas processing plant
near Tioga, N.D., to interconnect with the
●
M O V I N G
cial and industrial customers.
Once the liquids have been extracted,
the gas will be compressed and reinjected
into the transmission pipeline.
SaskEnergy subsidiary Bayhurst
Energy Services is joining Calgarybased Mistral Midstream to build
the straddle plant with initial
capacity of 50 million cubic feet
per day.
Pipeline first
Alberta Ethane gathering System near
Empress, Alberta, for shipment to the
Nova Chemicals plant in central Alberta.
The straddle plant, expected to be in
service by early 2015, will be built near
Viewfield in southeastern Saskatchewan,
adjacent to SaskEnergy’s natural gas
pipeline system.
It will recover ethane and other gas
liquids that will be marketed to commer-
Mistral Vice President Bob Pritchard
said his company has been working for
some time with TransGas on the idea of
recovering ethane in Saskatchewan, but
he said a pipeline is essential before “you
can even start considering a straddle gas
processing strategy.”
He said that although the plant is on
the small side, it makes economic sense
because the hydrocarbons are coming
from the Bakken play, which has an
unusually high gas liquids component
that offsets the small volumes of gas,
making it a “reasonable investment.”
Mistral’s Chief Executive Officer
Terry Killackey said the venture with
Bayhurst “will be an important element
of the hydrocarbon value chain being
established in Saskatchewan.”
He said Bayhurst’s initial investment
will enhance provincial infrastructure that
supports the supply of natural gas from
southeastern
Saskatchewan
to
SaskEnergy’s growing base, currently at
about 365,000 customers.
Mistral said supporting infrastructure
will continue to evolve in response to
Bakken production growth and emerging
market opportunities. ●
H Y D R O C A R B O N S
Prime Minister seeking deal for Keystone XL
Harper pitches US-Canada effort to lower greenhouse gases to meet Obama conditions; environmentalists scoff at ‘last-ditch’ strategy
BY GARY PARK
thetical letter” and echoed word from officials in Harper’s office who said the
For Petroleum News Bakken
Canadian government “does not comment
anadian government officials have on correspondence between (national) leaddone everything but confirm that ers.”
In exasperation, one reporter said he had
Prime Minister Stephen Harper is playing a
no
choice but to speculate, to which Oliver
trump card in an effort to get President
replied:
“You probably will anyway.”
Barack
Obama’s
approval
for
Oliver would only confirm
TransCanada’s Keystone XL
that
Canada was anxious to “colpipeline.
laborate
at a higher level” with
Natural Resources Minister Joe
the
U.S.
on
research and knowlOliver spent an hour bobbing and
edge
sharing
on efforts to reduce
weaving with reporters in
greenhouse
gas
emissions and
Washington Sept. 9 when he was
that
Canada
wanted
to engage
grilled on whether Harper had —
with
the
U.S.
on
a
wide
range of
as many news reports claim —
issues,
including
ways
to
reduce
sent a late-August letter to the
carbon
emissions
from
the
White House proposing joint
STEPHEN
HARPER
development
of
unconventional
Canada-U.S. action “to reduce
resources.
greenhouse gas emissions in the
oil and gas sector,” indicating he was open
to discussing any targets Obama wanted to Final push?
suggest.
Left unanswered was whether Harper is
Oliver, who was making his fifth making a final push to get Obama’s support
Keystone-related trip to Washington, for Keystone XL by offering concessions in
referred to a “purported letter” and a “hypo- return for a presidential permit for the US$7
C
“A key question is whether or not
Harper would be amendable to
greenhouse gas reductions that
would be directly linked to tar
sands.” —Daniel Weiss, director
of climate strategy, Center for
American Progress
billion pipeline.
Oliver, who met earlier in the day with
U.S. Energy Secretary Ernest Moniz, said
the U.S. should regard Canada as a “secure
and responsible producer” of energy, arguing that Alberta’s heavy crude from the oil
sands is far cleaner than the coal used to fire
U.S. power plants.
Harper and Obama held a brief meeting
during the G-20 summit in St. Petersburg,
Russia, in early September without indicating whether XL was discussed.
In a June speech, Obama declared the
pipeline would not get his backing unless
there was clear proof that it would not “significantly exacerbate” carbon pollution.
Although Harper has been slow to intro-
duce carbon-reduction measures, he has
been emphatic that his government will not
support a carbon tax.
Pressure from environmentalists
Obama is under intense pressure from
environmentalists to reject the XL project
and, in the process, limit the expansion of
the Alberta oil sands, which would fill
about 730,000 barrels per day of space on
the 830,000 bpd XL pipeline, with the
remaining 100,000 bpd coming from the
Bakken in North Dakota.
“A key question is whether or not Harper
would be amendable to greenhouse gas
reductions that would be directly linked to
tar sands,” said Daniel Weiss, director of
climate strategy at the Center for American
Progress, a Washington-based think-tank
with close ties to the Obama administration.
Daniel Kessler, a spokesman for
350.org, a group which is leading the fight
against XL, said the pipeline is “an expansion project for the tar sands. There is no
deal that would be palatable to us.
see KEYSTONE page 13
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4
PETROLEUM NEWS BAKKEN
●
M E R G E R S
&
•
WEEK OF SEPTEMBER 15, 2013
A C Q U I S I T I O N S
China resumes Canadian shopping
Drawn by stable, low-risk environment, Yanchang Petroleum bids for Novus, with sights on ‘aggressive’ drilling, further expansion
BY GARY PARK
formation by an acquisitive-minded stateowned Chinese corporation is drawing a
lukewarm response from junior Viking
players, with Neil Roszell, chief executive officer of Raging River Exploration,
predicting that within two years “one or
two” large companies will lock up the
majority of the play.
David Tuer, chief executive officer of
privately owned Teine Energy, which
holds up to 2,500 drilling locations, said
that “any time you introduce a new competitor you have to be aware of the fact
that somebody else is at the table.”
He said there is now added pressure on
companies to act quickly to seize buying
opportunities.
For Petroleum News Bakken
T
ight oil plays in Saskatchewan and
Alberta have enticed a revival of
Chinese interest in Canadian assets, with
a unit of China’s fourth largest producer
making a C$320 million bid for Calgarybased Novus Energy.
If completed, the deal will see the
Canadian debut of Yanchang Petroleum
International, whose controlling shareholder is Shaanxi Yanchang Petroleum,
which reportedly has plans for an
“aggressive” drilling program and acquisition plan.
Novus, which is currently producing
4,050 barrels of oil equivalent per day
(3,452 boe per day in the second quarter,
up 20 percent year-over-year), 80 percent
of it light crude. It is heavily concentrated in the Viking tight oil play in the
Viking Dodsland reservoir of west-central Saskatchewan plus a stake in the
Cardium resource play of northwestern
Alberta.
It has 140,000 net acres of drilling
leases in the Viking play, which accounts
for about 90 percent of its production.
No blocking
But so far there is no evidence of anything blocking the path for Yanchang.
The dollar value of the deal is C$10 million short of the threshold that triggers an
automatic review by Canada’s foreign
investment regulators and does not clash
with the federal government’s prohibition
on foreign state-controlled companies
acquiring oil sands producers.
Novus Chief Executive Officer High
Ross said “we don’t foresee any issues”
with the government intervening in the
deal.
Lukewarm response from juniors
But the looming entry into the Viking
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Merger and acquisition activity has
slowed to a crawl in Canada this year,
plunging 77 percent in dollar value during the first half to C$4.4 billion from
C$19.3 billion over the same period of
2012 and trailing far behind the peak of
C$31.1 billion in 2009.
The number of transactions fell to 45
from 71 during the same period of 2012,
with only one of 45 large deals valued at
over C$1 billion.
Ross said in a statement Sept. 4 that
Yanchang wanted to get into a “stable,
low political risk jurisdiction” and, to that
end, has chosen Canada.
40% premium
Novus said the Yanchang offer —
which includes the assumption of C$100
million in net debt — represents a 40 percent premium over its closing price on
Aug. 27, the last trading day before the
offer, and a 44 percent premium over the
one-month volume weighted average
trading price.
Novus announced 10 months ago it
had hired Cormack Securities and
FirstEnergy Capital as advisers to explore
strategic options, including a sale.
Ross said Yanchang first approached
Novus several months after the review
was started.
Closure, scheduled for later this year,
depends on approval of two-thirds of
Novus shareholders and ratification by
Beijing’s State-owned Assets Supervision
and Administration Commission, along
with other Chinese government
approvals.
Shaanxi
Yanchang
Petroleum,
Yanchang’s largest shareholder, will
finalize financing arrangements through a
convertible bond issue of about C$217
million, Novus said.
During the second quarter Novus
drilled eight net horizontal wells in the
Dodsland area, raising its first half total to
25 wells.
It estimated second and third quarter
on-stream costs will be less than
C$875,000 per well.
Analyst: Valuation low?
Juan Jarrah, an analyst with TD
Securities, said the transaction appears to
value assets at lower prices than other
recent Viking sales.
“The transaction implies C$79,000
boe per day on current production and
C$14 per boe on 2012 (proved plus prob-
able) reserves, about a 35 percent discount on the average of the last seven
transactions in the Dodsland Viking over
the last 1.5 years,” he said in a note.
Jarrah said the heart of the play in the
greater Dodsland area remains fragmented.
FirstEnergy has noted that the Viking
play has lived in the shadow of other popular light oil trends such as the Cardium,
Montney, Bakken and Beaverhill Lake
plays because of its more modest initial
production rates, even though it has about
21 operators, led by Husky Energy, Penn
West Petroleum and Crescent Point
Energy.
That will change radically if Yanchang
joins the fold, with C$25 billion in annual revenue to out-compete its peers for
access to capital, although Raging River
Exploration’s Roszell suggested the
Chinese company may also be slowed
down by the need to gain approvals from
its parent company and will also face language barriers.
FirstEnergy said the results “appear to
be more predictable than most others ...
and the resource footprint is already
solidly delineated.”
The firm said Viking also offers cost
advantages of “relatively” cheap drilling
in shallow depths compared with other
geological formations where horizontal
wells with multi-stage fractures are needed to suck up the oil, opening the door for
companies large and small.
Roszell: Costs recovered quickly
Roszell said the average Viking well
drilled this year will recover all costs and
start delivering profits in less than a year.
Raging River recently raised its capital
budget to C$145 million from C$20 million and expects to drill 140 wells, with
average production for 2013 targeted at
5,150 boe per day and the exit rate at
6,300 boe per day (95 percent oil).
Calgary-based investment dealer
Peters & Co. rated the Viking as the most
popular non-oil sands reservoir in Canada
this year, with producers taking out permits for 877 wells and increasing drilling
this year by about 57 percent from 2012.
Andrew McCreath, chief executive
officer at Forge First Asset Management,
said there is a “lot of appetite for Viking
assets generally and especially in
Saskatchewan. It’s light oil and the netbacks tend to be pretty darn high.”
see SHOPPING page 6
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PETROLEUM NEWS BAKKEN
●
C O M P A N Y
•
5
WEEK OF SEPTEMBER 15, 2013
U P D A T E
Oasis deals average $9,400 per acre
Zenergy, Magnum Hunter among sellers in Oasis’s 161,000 net acre acquisition; bumps output 9,300 boe per day to 43,000 boepd
BY MIKE ELLERD
For Petroleum News Bakken
OverviewofPotentialAssetPosition
O
asis Petroleum says it is acquiring
approximately 161,000 net acres in
the Williston Basin in four separate and
unrelated transactions totaling $1.515 billion, for an average of approximately
$9,400 per acre.
The acquisitions increase the Houstonbased Bakken-focused independent’s
total acreage in the
basin to approximately 492,000 net
acres, a pro forma
increase of nearly 49
percent. The deals
also boost Oasis’ pro
forma reserves by 50
percent from 143.3
million barrels of oil
equivalent to 215.6 THOMAS NUSZ
million boe.
“These acquisitions … which will add
a total of 161,000 net acres to our existing
position, clearly make Oasis one of the
top operators in the Williston Basin, and
clearly the top pure play in the Bakken,”
Chairman and Chief Executive Officer
Thomas Nusz said in a Sept. 5 press conference.
The largest of the four acquisitions is
the 136,000 net acres that Oasis is picking
up in its West Williston focus area in
McKenzie and Williams counties, N.D.,
and Richland County, Mont. In that area,
Oasis is picking up a total of 136,000 net
acres from the Tulsa-based Williston
Basin operator Zenergy Inc., Zeneco Inc.
and RoDa Drilling LP, for a total of
approximately $1.45 billion, nearly 97
percent of the total that Oasis is paying
for all four acquisitions.
Another of the acquisitions involves
14,500 net acres in Burke County which
Oasis is buying from Magnum Hunter
subsidiary Williston Hunter for $32.5
million. That acreage is part of a total of
approximately 25,000 net acres that Oasis
is acquiring in the North Cottonwood
portion of the company’s East Nesson
focus area.
Sellers of the remaining 10,500 net
acres in the East Nesson area have not
been identified.
Building large blocks
The proximity of the new acreages relative to Oasis Petroleum’s existing
acreage is in keeping with the strategy it
has been discussing since its initial public
offering in 2010. “We’ve always said we
want to build large contiguous blocks
where we can drive operations at efficiencies of scale. We look for assets like our
own with high working interest and operatorship,” Nusz said. “These four acquisitions fall in line with our strategy, and we
now have an incredible opportunity to
drive value across a premier position in
the basin.”
Nusz said Oasis’ business development team spent most its time over the
last year working to “capture packages,”
but with this new, large acquisition package, he said the team will now turn its
near-term attention to figuring out how to
best optimize the roughly half a million
net Williston Basin acres the company
will hold when the four deals close in
October.
New project area boundaries
Oasis has outlined new project areas to
ProjectAreas
NetAcres(000s)
WestWilliston
IndianHills
RedBank
PaintedWoods
ForemanButte
Montana
Other
Oasis
WestWilliston
StandͲAlone Acquisition ProForma
23
28
51
64
10
74
8
42
50
8
55
63
90
1
91
17
0
17
210
136
346
Oasis
EastNesson
StandͲAlone
NorthCottonwood
61
SouthCottonwood
52
Sanish
8
121
Total
OasisstandͲaloneacreage
331
EastNesson
Acquisitions ProForma
25
86
0
52
0
8
25
146
161
492
*Sanish isanonͲoperatedposition
Oasisacquiredacreage
4
account for the new acreages. The West
Williston area now has five distinct project areas, and the East Nesson focus area
has three project areas (see slide). The
West Williston areas and their pro forma
acreages are Indian Hills, 51,000 acres;
Red Bank, 74,000 acres; Painted Woods,
50,000 acres; Foreman Butte, 63,000
acres; and Montana, 91,000 acres. The
East Nesson project areas are North
Cottonwood, 86,000 acres; South
Cottonwood, 52,000 acres; and Sanish,
8,000 acres. Oasis has an additional
17,000 acres in the West Williston focus
area not identified as part of a specific
project area.
The largest addition to any project area
was the 55,000 acres that were added to
the Foreman Butte area, followed by
42,000 acres added to the Painted Woods
www.oasispetroleum.com
area and 28,000 acres added to Indian
Hills. All of the 25,000 new acres in the
East Nesson focus area are in the North
Cottonwood project area.
The acquisitions add approximately
116,000 net acres that are prospective for
the Bakken and all benches of the Three
Forks. The deals include an additional
33,000 acres with rights to all depths
except in the middle Bakken and the first
bench of the Three Forks, and another
12,000 acres with shallow rights only in
West Williston.
9,300 boe per day added
The new acreages add 9,300 boe per
day to the company’s existing production
of 33,700 boepd, bringing its average pro
forma production to 43,000 boepd, an
increase of 28 percent. The acquisitions
also increase the company’s portfolio
controlled drill spacing units from 280 to
399, and gross operated drill locations
from 2,020 to 2,874, representing
increases of 43 and 42 percent, respectively. With the acquisition, the company’s current rig count jumps from 11 to
13. Oasis plans to increase the rig count
to 15 to 16 in 2014.
The company’s pro forma acreage is
now 91 percent operated, exactly even
with its pre-transaction stand-alone
assets. The pro forma acreage is 86 percent held by production, only slightly
lower than the stand-alone held by production level of 87 percent. The company’s pro forma working interest of 68 percent is also just slightly lower than its
see OASIS page 6
6
PETROLEUM NEWS BAKKEN
•
WEEK OF SEPTEMBER 15, 2013
LargeOperatedBlocks
NetacresͲalldepths(000s)
(1)
(1)
NetacresͲtotal (000s)
Recentproductionestimate(Boepd)
ControlledDSUsͲoperated
Grossoperatedlocations
(2)
(2)
OasisStandͲAlone
Combined
Acquisitions
331
116
331
33,700
161
9,300
280
ProForma
ProFormaIncrease
447
35%
492
43,000
49%
28%
119
399
43%
2,020
854
2,874
42%
91%
91%
91%
69%
65%
68%
87%
85%
86%
11
2
13
15Ͳ16
(2)
%Operated
(2)
WorkingInterest
(2)
%HBP
RigsͲcurrent
ExpectedrigsͲexit2014
(3)
(1)Asof6/30/13
(2)Asof12/31/12forOasisStandͲAloneandrepresentscurrentestimatesforCombinedAcquisitions
(3)Includesapproximately116,000netacresofalldepths,33,000netacreswithrightstothe2ndbenchoftheTFSandbelow,andan
additional12,000netacreswithshallowrightsonly
AsaleadingoperatorintheWillistonBasin,Oasiscandriveefficiencieswithhighlevelofcontrol
(91%operated),highimpactofoperations(68%WI)andflexibilityofdevelopment(86%HBP)
6
www.oasispetroleum.com
continued from page 5
OASIS
stand-alone working interest of 69 percent. “Additionally, the bulk of the
acreage is already held by production, so
we have a lot of flexibility in how we
develop the combined positions,” Nusz
said.
In the Sept. 5 press conference, Oasis
Executive Vice President and Chief
Operating Officer Taylor Reid said the
pro forma metrics leave Oasis at a similar
operational level with similar working
interests compared to the company’s
stand-alone metrics. “In a nutshell, these
assets look a lot like ours, and we are
adding to our operated position in a
meaningful way.”
Downspacing
Reid also said Oasis is looking to
increase its well inventory and is con-
ducting spacing tests in 22 spacing units
this year on up to seven wells per formation in the Bakken and first bench of the
Three Forks. He said thus far the results
have been encouraging but noted the
company is still in the early stages of testing.
Oasis is also
exploring the lower
benches of the Three
Forks, and Reid said
the company has
cored through the
fourth bench and is
currently drilling
two second bench
wells with plans to TAYLOR REID
drill
additional
lower bench wells, including concurrently drilling multiple benches in order to
test interference. “Our confidence is
increasing that the reservoirs will produce
economic wells and will add to our inventory.”
In addition, Reid said two lower bench
YOUR SHELTER SOLUTION
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Portable and Expandable • Natural Daytime Lighting
well tests had been conducted by the former operator (Zenergy) in the West
Williston acreage, one in the second
bench and the other in the third. He said
those wells have produced “in line” with
other first bench Three Forks wells in the
area.
Well costs and economics
As with all operators in the Williston
Basin, Oasis continues to drive down well
costs through efficiencies. With its wholly owned completion subsidiary Oasis
Well Service, OWS, Reid said the company expects to get its well completion costs
down and has set a target of $7.8 million
by the end of 2013. Oasis, he said, is
looking for a further reduction to $7.3
million by the end of 2014.
Reid said Oasis has accumulated a
large portfolio of inventory with different
characteristics but equally compelling
economics. Estimated ultimate recoveries, EURs, range from 450,000 barrels of
oil equivalent to 750,000 boe across the
company’s Williston Basin acreages.
Likewise, Reid said well costs vary by
project area depending on depth and rock
quality, and he said the company tailors
completion style accordingly in order to
enhance EURs. Oasis achieves essentially
the same economics for a well with an
EUR of 525,000 boe as it does for a
675,000 boe well through cost control and
completion optimization. “By comparing
wells across the spectrum of our portfolio,
we’re encouraged by the fact that we have
made lower EUR well returns comparable
to high EUR well returns.” ●
Editor’s note: Petroleum News Bakken
ran a brief in last week’s edition with
basic information on the Oasis acquisitions, but the announcement came out
only hours before we went to press, so we
were not able to provide details until this
week.
continued from page 4
SHOPPING
FirstEnergy said those best positioned to capture shareholder value
from the Viking formation are
Crescent Point Energy, Whitecap
Resources and Raging River.
The analysts said that in addition to
Novus, potential acquisitors could be
interested in Renegade Petroleum,
WestFire Energy and Charger Energy. ●
Contact Gary Park through
[email protected]
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STATE SITING
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ST. PAUL, MN
DICKINSON, ND
PETROLEUM NEWS BAKKEN
●
•
7
WEEK OF SEPTEMBER 15, 2013
G O V E R N M E N T
CLR gets OK on Chimney Butte infilling
NDIC also gives green light to Continental’s McKenzie Co. downspacing; Hess, ConocoPhillips and Whiting also get infill nod
BY MIKE ELLERD
For Petroleum News Bakken
T
he North Dakota Industrial
Commission issued an order on
Sept. 4 authorizing Continental
Resources to drill up to 14 wells on an
existing standup 1,280-acre spacing unit
in the Chimney Butte-Bakken pool in
west-central Dunn County, and a second
order authorizing Continental to drill up
to 14 wells on each of three overlapping,
stacked 2,560-acre spacing units in the
same field.
In addition, the commission approved
a request by Continental to redefine the
limits of the Chimney Butte-Bakken pool
to include the entire Three Forks formation. Previously the Chimney ButteBakken pool was defined as the interval
from 50 feet above the top of the Bakken
formation and 50 feet below the top of
the Three Forks. The new definition
extends the lower limit of the Chimney
Butte-Bakken pool down through the
entire Three Forks formation to the top of
the Birdbear formation.
Continental has two middle Bakken
wells and two first bench Three Forks
wells on the 1,280-acre unit. Two of
these wells are along the west boundary
of the standup unit and the other two are
in the east half of the unit. Continental is
planning to drill two additional middle
Bakken wells and a total of eight Three
Forks wells, two in the first bench, three
in the second bench and three in the third
bench. All of the new wells will be
drilled from a single pad in the southwest
corner of the unit with the laterals running north in a stacked cluster along the
west side of the standup unit.
The company reports a combined estimated ultimate recovery, EUR, for the
wells in the middle Bakken and the first
three benches of the Three Forks at
411,000 barrels of oil and 531 million
cubic feet, mmcf, of natural gas. The
wells will be within a quarter mile of a
Oneok gathering system, and the gas will
be processed at Oneok’s Grasslands plant
located along the Montana-North Dakota
border east of Sidney, Mont.
Wells on the 2,560s
Continental currently has several
existing middle Bakken and Three Forks
wells in the upper and lower 1,280-acre
components of the three overlapping
stacked 2,560-acre units. All together,
Continental will drill 19 upper Three
Forks wells and 11 middle Bakken wells
on the three spacing units. The company
reports
a
combined
middle
Bakken/Three Forks EUR for the wells
of 453,000 barrels and 580 mmcf of natural gas.
As with wells on the 1,280s in the
Chimney Butte field, the wells in the
three 2,560s will be near Oneok’s gathering system and natural gas from those
wells will also be processed at Oneok’s
Grasslands plant.
Approval for McKenzie County wells
In late August, the commission gave
Continental the green light to drill up to
17 wells on an existing 640-acre unit,
and up to 10 wells on an existing standup
1,280 spacing unit, both in the AntelopeSanish pool in northwest McKenzie
County.
Continental has four existing upper
Three Forks wells and three middle
Bakken wells on the 640-acre unit, and in
the approved plan, the company will drill
two additional middle Bakken wells, one
additional first bench Three Forks well,
three second bench and three third bench
wells. Continental reports a combined
EUR for the middle Bakken and the three
Three Forks benches of 329,000 barrels
of oil and 426 mmcf of gas.
There currently are no wells on the
1,280-acre standup Antelope unit; however, Continental is planning to drill five
middle Bakken and five upper Three
Forks wells there. The wells will be
drilled on pads at the north end of the
unit with the laterals extending south.
The combined middle Bakken/Three
Forks EUR for these wells is 497,000
barrels of oil and 620 mmcf of gas.
Wells on the 640-acre unit will be
within a quarter mile of Oneok’s gathering system and wells on the 1,280-acre
unit will be within half a mile. The gas
from all wells will be processed at
Oneok’s Garden Creek plant near
Watford City.
applications, one for Hess Corp. and the
other for ConocoPhillips filing as
Burlington Resources.
Hess received approval to drill up to
10 wells on each of 17 existing 1,280acre spacing units in the Blue ButtesBakken pool in northeast McKenzie
County for a total of 170 new wells. Ten
of the 1,280s are laydowns and the other
seven are standups. Five of the wells on
each unit will be Bakken wells and the
other five will target the Three Forks formation. Hess reports typical 30-day initial production rates for typical Blue
Buttes wells at 1,342 barrels per day, and
an EUR of 511,000 barrels.
ConocoPhillips received authorization
to drill up to a combined total of seven
middle Bakken and upper Three Forks
wells on an existing 1,280-acre laydown,
also in the Blue Buttes field. For the middle Bakken wells, ConocoPhillips
reports an EUR of 400,000 barrels of oil
and an EUR of 350,000 barrels of oil for
upper Three Forks wells.
The commission issued an order Sept.
9 authorizing Whiting Oil and Gas to
drill up to four Sanish/Three Forks horizontal wells on each of three existing
1,280-acre standup spacing units in the
Morgan Draw-Bakken pool in northwest
Billings County. Whiting reports a single-well EUR for a Sanish/Three Forks
well of 250,000 barrels of oil. ●
Other downspacing approvals
The commission issued two other
orders on Sept. 4 approving downspacing
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8
PETROLEUM NEWS BAKKEN
•
WEEK OF SEPTEMBER 15, 2013
BAKKENStats
North Dakota oil permit activity
September 3—9, 2013
Permits renewed
LEGEND
The county name is on the upper line, the type of permit
issued is on the second line, and company names are next, followed by individual wells with data in this order: well name;
location; footages; field; geological target; well bore type;
elevation; NDIC file number; API number; date permit shows
on NDIC website.
North Plains Energy
Amundson 160-100-22-15-13B-1H; SWSW 22-160N-100W; 270’FSL and
815’FWL; Smoky Butte; Bakken; horizontal; 2,074’ ground; 23707; 33-02300892; 9/4/2013
Stewart 160-100-28-33-3B-1H; NENW 28-160N-100W; 300’FNL and
1,350’FWL; Smoky Butte; Bakken; horizontal; 2,082’ ground; 24465; 33023-00955; 9/4/2013
Dunn Co.
Abbreviations
Following are the abbreviations used in the report and what they
mean:
FNL = From North Line | FEL = From East Line
FSL = From South Line | FWL = From West Line
Billings Co.
Permits issued
Continental Resources
Palahniuk 1-1H; NWNE 1-143N-99W; 245’FNL and 1,980’FEL; Whitetail;
N/A*; on confidential status; 2,535’ ground; 26369; 33-007-01806;
9/4/2013
Whiting Oil and Gas
Demores Federal 21-11PH; NENW 11-141N-102W; 325’FNL and
1,843’FWL; Demores; Bakken; horizontal; 2,280’ ground; 26348; 33-00701805; 9/3/2013
Bottineau Co.
Permits issued
Corinthian Exploration
Corinthian Starleaf 12-32 1-H; NWSW 32-164N-78W; 1,810’FSL and
850’FWL; Northeast Landa; N/A**; on confidential status; 1,521’ ground;
26349; 33-009-02339; 9/3/2013
Burke Co.
Permits issued
Burlington Resources Oil and Gas (ConocoPhillips)
CCU Corral Creek 11-28MBH; NENW 28-147N-95W; 281’FNL and
1,878’FWL; Corral Creek; N/A*; on confidential status; 2,408’ ground;
26409; 33-025-02285; 9/9/2013
CCU Corral Creek 21-28TFH; NENW 28-147N-95W; 281’FNL and
1,923’FWL; Corral Creek; N/A*; on confidential status; 2,408’ ground;
26408; 33-025-02284; 9/9/2013
CCU Four Aces 24-21MBH; NENW 28-147N-95W; 281’FNL and
2,013’FWL; Corral Creek; N/A*; on confidential status; 2,409’ ground;
26406; 33-025-02282; 9/9/2013
CCU Four Aces 24-21TFH; NENW 28-147N-95W; 281’FNL and
1,968’FWL; Corral Creek; N/A*; on confidential status; 2,408’ ground;
26407; 33-025-02283; 9/9/2013
CCU North Coast 21-25MBH; NENE 25-147N-95W; 488’FNL and
892’FEL; Corral Creek; N/A*; on confidential status; 2,247’ ground; 26389;
33-025-02278; 9/6/2013
CCU North Coast 21-25TFH; NENE 25-147N-95W; 498’FNL and 936’FEL;
Corral Creek; N/A*; on confidential status; 2,238’ ground; 26390; 33-02502279; 9/6/2013
CCU North Coast 31-25MBH; NENE 25-147N-95W; 469’FNL and
804’FEL; Corral Creek; N/A*; on confidential status; 2,250’ ground; 26387;
33-025-02276; 9/6/2013
CCU North Coast 31-25TFH; NENE 25-147N-95W; 479’FNL and 848’FEL;
Corral Creek; N/A*: on confidential status; 2,252’ ground; 26388; 33-02502277; 9/6/2013
Permits issued
Oasis Petroleum
Delia 5992 14-30H; NENE 30-159N-92W; 255’FNL and 1,050’FEL;
Cottonwood; Bakken; horizontal; 2,363’ ground; 26383; 33-013-01737;
9/6/2013
Petro-Hunt
MM Wold 159-94-6D-31-5H; SESE 6-159N-94W; 1,300’FSL and 215’FEL;
North Tioga; N/A*; on confidential status; 2,333’ ground; 26379; 33-01301736; 9/5/2013
Mountain Divide
Reistad 23-14-1H; SESE 23-162N-101W; 225’FSL and 975’FEL; Fortuna;
N/A*; on confidential status; 2,218’ ground; 26401; 33-023-01103;
9/9/2013
Murex Petroleum
Legaard SWD 1; LOT2 4-162N-101W; 350’FNL and 1,900’FEL; Fortuna;
Dakota; vertical; 2,224’ ground; 90298; 33-023-90298; 9/3/2013
XTO Energy (ExxonMobil)
FBIR Headlessturtle 44X-32D; SESE 32-149N-91W; 253’FSL and
518’FEL; Heart Butte; N/A*; on confidential status; 1,978’ ground; 26399;
33-025-02280; 9/9/2013
FBIR Headlessturtle 44X-32H; SESE 32-149N-91W; 253’FSL and
548’FEL; Heart Butte; N/A*; on confidential status; 1,978’ ground; 26400;
33-025-02281; 9/9/2013
Permits renewed
Oxy USA (Occidental Petroleum)
Willis Downs 1-8-5H-142-94; SWSE 8-142N-94W; 411’FSL and
1,983’FEL; Murphy Creek; Bakken; horizontal; 2,282’ ground; 23687; 33025-01849; 9/4/2013
Golden Valley Co.
Permits issued
Whiting Oil and Gas
Lechler 42-35; SENE 35-141N-105W; 1,320’FNL and 1,120’FEL; Delhi;
Red River; vertical; 2,731’ ground; 26351; 33-033-00342; 9/3/2013
McKenzie Co.
Oxy USA (Occidental Petroleum)
Dakota Meyer 1-19-18H-143-97; SWSE 19-143N-97W; 350’FSL and
1,980’FEL; Crooked Creek; Bakken; horizontal; 2,536’ ground; 26357; 33025-02269; 9/3/2013
Keary Kadrmas 2-32-29H-142-96W; SESW 32-142N-96W; 360’FSL and
2,029’FWL; Russian Creek; Bakken; horizontal; 2,581’ ground; 26366; 33025-02274; 9/3/2013
Leroy Petry 1-20-17H-143-97W; SESW 20-143N-97W; 350’FSL and
1,980’FWL; Crooked Creek; Bakken; horizontal; 2,546’ ground; 26370; 33025-02275; 9/4/2013
Permits issued
QEP Energy
MHA 1-28-29H-148-92; NENE 28-148N-92W; 1,030’FNL and 813’FEL;
Heart Butte; N/A*; on confidential status; 1,985’ ground; 26353; 33-02502266; 9/3/2013
MHA 2-28-29H-148-92; NESE 28-148N-92W; 1,919’FSL and 401’FEL;
Heart Butte; Bakken; horizontal; 1,681’ ground; 26364; 33-025-02272;
9/3/2013
MHA 3-28-29H-148-92; NENE 28-148N-92W; 1,012’FNL and 834’FEL;
Heart Butte; N/A*; on confidential status; 1,989’ ground; 26352; 33-02502265; 9/3/2013
SM Energy
Loraine 1X-20H; NENE 20-153N-95W; 829’FNL and 632’FEL; Charlson;
N/A*; on confidential status; 2,344’ ground; 26374; 33-053-05256;
9/5/2013
Divide Co.
Permits issued
MHA 4-28-29H-148-92; NESE 28-148N-92W; 1,947’FSL and 401’FEL;
Heart Butte; N/A*; on confidential status; 1,953’ ground; 26365; 33-02502273; 9/3/2013
MHA 5-28-29H-148-92; NENE 28-148N-92W; 1,065’FNL and 770’FEL;
Heart Butte; N/A*; on confidential status; 1,981’ ground; 26355; 33-02502268; 9/3/2013
MHA 6-28-29H-148-92; NESE 28-148N-92W; 1,863’FSL and 401’FEL;
Heart Butte; N/A*; on confidential status; 1,951’ ground; 26362; 33-02502270; 9/3/2013
MHA 7-28-29H-148-92; NENE 28-148N-92W; 1,047’FNL and 791’FEL;
Heart Butte; N/A*; on confidential status; 1,983’ ground; 26354; 33-02502267; 9/3/2013
MHA 8-28-29H-148-92; NESE 28-148N-92W; 1,891’FSL and 401’FEL;
Heart Butte; N/A*; on confidential status; 1,951’ ground; 26363; 33-02502271; 9/3/2013
Hess
HA-Chapin- 2560-152-95-3229-3328H-1; SWSE 32-152N-95W; 495’FSL
and 2,096’FEL; Hawkeye; N/A*; on confidential status; 2,474’ ground;
26380; 33-053-05257; 9/5/2013
Hunt Oil
Bowline 1-3-10H; LOT2 3-148N-102W; 530’FNL and 1,470’FEL; Boxcar
Butte; N/A*; on confidential status; 2,335’ ground; 26356; 33-053-05251;
9/3/2013
XTO Energy (ExxonMobil)
Rink 13X-4A; NWSW 4-151N-98W; 1,640’FSL and 280’FWL; Garden;
N/A*; on confidential status; 2,036’ ground; 26359; 33-053-05253;
9/3/2013
see ND PERMIT page 10
lead them to safety
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PETROLEUM NEWS BAKKEN
•
9
WEEK OF SEPTEMBER 15, 2013
Montana well permits
and completions
August 3—September 5, 2013
Abbreviations & parameters
With a few exceptions, the Montana weekly oil activity report includes horizontal well activity in
the Bakken petroleum system in the eastern/northeastern part of the state within the Williston Basin. It
also includes the Heath play and what is referred to as the South Alberta Bakken fairway in northwestern/west-central Montana, which is at least 175 miles long (north-south) and 50 miles wide (east-west),
extending from southern Alberta, where the formation is generally referred to as the Exshaw, southwards through Montana’s Glacier, Toole, Pondera, Teton and Lewis & Clark counties. The Southern
Alberta Bakken, under evaluation by several oil companies, is not part of the Williston Basin.
Following are the abbreviations used in the report and what they mean.
BHL: bottomhole location | BOPD: barrels of oil per day | BWPD: barrels of water per day
IP: initial production | MCFPD: thousand cubic feet per day | PBHL: probable bottomhole location
PD: proposed depth | SHL: surface hole location | TD: total depth
And public land survey system abbreviations:
FNL = from north line | FEL = from east line | FSL = from south line | FWL = from west line
COMPILED BY DARRYL L. FLOWERS
For Petroleum News Bakken
FWL).
Completions
BAKKEN STATS COMMENTARY
Statoil well takes top IP position again
Statoil again occupies the No. 1 spot on the Top 10 IP chart for North Dakota
wells producing from the Bakken petroleum system (see page 11 of this issue), as
well as the No. 2 spot.
IP stands for initial production, and is the rate at which a well produces during
its first 24 hours online.
In this case, the active oil wells contending for the position were filed Sept. 3
through Sept. 9 with the North Dakota Industrial Commission, or NDIC, as completed or released from confidential status.
The top well was Statoil’s State 36-1 4TFH in the Stony Creek field in
Williams County. Its IP rate was 3,249 barrels of oil.
The No. 2 well was Statoil’s Rose 12-13 2TFH in the Avoca field, also in
Williams County. It recorded an IP rate of 2,995 bbl.
Third and fourth place this week were taken by QEP Energy wells, both in the
Grail field in McKenzie County.
QEP’s G. Levang 3-32-29BH well came in with an IP of 2,994 bbl and the G.
Levang 4-32-29BH with 2,740 bbl.
Top ND, MT Bakken producers back
The next issue of Petroleum News Bakken will once again carry the top North
Dakota (50) and the top Montana (5) oil producers’ charts, as well as a complete
production breakdown in both states of Bakken output by operating company —
even those producing a few barrels of oil a day.
—KAY CASHMAN
In
Dawson
County,
Interstate
Explorations LLC was approved to drill the
Star Bar Ranch 3-1 at NE NW 27-19N-56E
(330 FNL/1710 FWL). The Star Bar will
tap the Red River formation at a PD of
12,000 feet.
In Richland County two completions
were reported. Whiting Oil and Gas Corp.
filed a completion report for the
Christiansen 34-11-1H. The Bakken formation well has an SHL at SW SE 11-25N-58E
(225 FSL/1880 FEL) and two laterals, with
BHLs of 16,547 feet at SW SW 2-25N-58E
New locations — horizontal wells
(494 FSL/1284 FWL) and 21,120 feet at
In Richland County, Continental NW NW 2-25N-58E (239 FNL/644 FWL).
Resources Inc. was approved to drill two The IP was reported as 389 BOPD, 149
Bakken formation wells. The Sisler State 1- MCFPD and 911 BWPD.
16H has an SHL at NW NE 16-22N-57E
Continental Resources Inc. reported the
(225 FNL/1980 FEL)
completion of the
and a PBHL of Two Bakken formation wells were Charlie 1-5H. The
14,920 feet at SW SE reported as completed in Roosevelt Charlie has an SHL
16-22N-57E
(200
at SW SW 5-25NCounty. Oasis Petroleum North
FSL/1980 FEL. The
54E (725 FSL/200
America LLC reported the
Hamilton 1-32H has
FWL) and a BHL of
completion of the B & RT 2958
an SHL at SE SW 3219,475 feet at SE SE
23N-54E
(260 13-25H, with … three laterals. … 4-25N-54E
(650
FSL/2060 FWL) and The well turned in an IP report of FSL/238 FEL). The
a PBHL of 19,605
reported IP was 283
1,014 BOPD, 818 MCFPD and
feet at NE NW 29BOPD, 238 MCFPD
2,387 BWPD.
23N-54E
(200
and 191 BWPD. The
FNL/1980 FWL).
Charlie taps into the
Bakken formation.
Re-entry of plugged wells
Two Bakken formation wells were
reported
as completed in Roosevelt County.
In Sheridan County, Omimex Canada
Oasis
Petroleum
North America LLC
Ltd. was approved to re-enter the Ostby 6reported
the
completion
of the B & RT 2958
35A, a Three Forks formation well with an
13-25H,
with
an
SHL
at
NW NE 25-29NSHL at SW NE 35-31N-58E (2040
58E
(250
FNL/2100
FEL)
and three laterals
FNL/2344 FEL) and a PBHL of 10,125 feet
with
BHLs
of
18,460
feet
at SW NE 13at NW SE 35-31N-58E (1825 FSL/2409
29N-58E
(2727
FSL/2437
FEL); 18,141
FEL).
feet at NW SE 13-29N-58E (2408
Re-issued locations
FSL/2446 FEL); and 20,715 feet at NW NE
In Richland County, two re-issued per- 13-29N-58E (305 FNL/2515 FEL). The
mits went to Slawson Exploration well turned in an IP report of 1,014 BOPD,
Company Inc. The Rascal 1-18H, has an 818 MCFPD and 2,387 BWPD.
EOG Resources Inc. filed a completion
SHL at SE SE 18-23N-53E (350 FSL/650
report
for the Highline 3-0508H, which has
FEL) and two laterals with PBHLs of
an
SHL
at NE NW 5-29N-59E (230
13,708 feet at NW NE 18-23N-53E (700
FNL/1800
FWL) and a BHL of 20,328 feet
FNL/2200 FEL) and 13,553 feet at SW SW
at
SE
SW
8-29N-59E (252 FSL/1859
18-23N-53E (750 FSL/250 FWL). The
FWL).
The
Highline
reported an IP of 598
Rover 1-20H has an SHL at NW NW 20BOPD,
331
MCFPD
and
1,868 BWPD.
23N-53E (300 FNL/660 FWL) and two laterals, with PBHLs of 13,493 feet at SW SW
20-23N-53E (700 FSL/700 FWL) and
13,812 feet at NE NE 20-23N-53E (750
FNL/250 FEL). Both wells will target the
Bakken formation.
Two other Bakken formation wells were
approved for re-issued permits.
Enerplus Resources USA Corp. was
approved for the Porky-Harold 9-13-HSU,
with an SHL at SW SW 9-24N-54E (275
FSL/400 FWL) and a PBHL of 15,925 feet
at NE 5-24N-54E (671 FNL/1001 FEL).
Continental Resources Inc. was
approved for the Rognas-Barbara HSU,
with an SHL at SE SE 28-25N-55E (260
FSL/440 FEL) and a PBHL of 20,105 feet
at NW NW 22-25N-55E (200 FNL/200
Expired permits
In Glacier County, the permit for the
Whitecalf 1-4-30-11 expired. The well,
operated by Anschutz Exploration Corp., is
at NW NE 4-30N-11W (940 FNL/1853
FEL). The well was permitted to the
Kootenai formation. ●
Editor’s note: Darryl L. Flowers, a
contributor to Petroleum News Bakken,
is the publisher of the Fairfield Sun
Times in Fairfield, Mont., www.fairfieldsuntimes.com, and can be reached at
[email protected]. The
information is derived from the online
records of the Montana Board of Oil &
Gas Conservation Commission.
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PETROLEUM NEWS BAKKEN
continued from page 8
ND PERMIT
Rink 13X-4B; NWSW 4-151N-98W; 1,700’FSL and 280’FWL; Garden;
N/A*; on confidential status; 2,036’ ground; 26361; 33-053-05255;
9/3/2013
Rink 13X-4E; NWSW 4-151N-98W; 1,610’FSL and 280’FWL; Garden;
N/A*; on confidential status; 2,039’ ground; 26358; 33-053-05252;
9/3/2013
Rink 13X-4F; NWSW 4-151N-98W; 1,670’FSL and 280’FWL; Garden;
N/A*; on confidential status; 2,038’ ground; 26360; 33-053-05254;
9/3/2013
Zenergy
Prairie USA 1-12H; SWSE 36-151N-103W; 260’FSL and 1,871’FEL;
Foreman Butte; N/A*; on confidential status; 2,070’ ground; 26410; 33053-05258; 9/9/2013
Permits renewed
Newfield Production
Pittsburgh Federal 153-96-3-2H; NWNE 3-153N-96W; 225’FNL and
1,985’FEL; Sand Creek; N/A*; on confidential status; 2,148’ ground;
21529; 33-053-03780; 9/4/2013
Pittsburgh Federal 153-96-3-3H; NWNE 3-153N-96W; 225’FNL and
2,075’FEL; Sand Creek; N/A*; on confidential status; 2,148’ ground;
21530; 33-053-03781; 9/4/2013
Pittsburgh Federal 153-96-3-11H; NWNE 3-153N-96W; 225’FNL and
2,030’FEL; Sand Creek; N/A*; on confidential status; 2,148’ ground;
24221; 33-053-04528; 9/4/2013
Statoil Oil and Gas
Hovde 33-4 3TFH; NWNW 33-151N-100W; 230’FNL and 735’FWL;
Sandrocks; N/A*; on confidential status; 2,252’ ground; 23862; 33-05304417; 9/6/2013
Hovde 33-4 4H; NWNW 33-151N-100W; 230’FNL and 765’FWL;
Sandrocks; N/A*; on confidential status; 2,255’ ground; 23861; 33-05304416; 9/6/2013
Triangle Petroleum
Skedsvold Trust 151-101-32-29-2H; SWSE 32-151N-101W; 200’FSL and
2,335’FEL; Ragged Butte; N/A*; on confidential status; 2,277’ ground;
23776; 33-053-04385; 9/4/2013
Skedsvold Trust 151-101-32-29-4H; SWSE 32-151N-101W; 200’FSL and
2,235’FEL; Ragged Butte; N/A*; on confidential status; 2,282’ ground;
23774; 33-053-04383; 9/4/2013
Mountrail Co.
Permits issued
Continental Resources
Limousin 1-3H; LOT3 3-152N-93W; 1,657’FNL and 1,720’FWL; Sanish;
N/A*; on confidential status; 1,901’ ground; 26391; 33-061-02698;
9/6/2013
Limousin 2-3H1; LOT3 3-152N-93W; 1,617’FNL and 1,700’FWL; Sanish;
N/A*; on confidential status; 1,903’ ground; 26392; 33-061-02699;
9/6/2013
Limousin 3-3H; LOT3 3-152N-93W; 1,577’FNL and 1,679’FWL; Sanish;
N/A*; on confidential status; 1,904’ ground; 26393; 33-061-02700;
9/6/2013
Limousin 4-3H1; LOT3 3-152N-93W; 1,537’FNL and 1,658’FWL; Sanish;
N/A*; on confidential status; 1,905’ ground; 26394; 33-061-02701;
9/6/2013
Limousin 5-3H; LOT3 3-152N-93W; 1,497’FNL and 1,637’FWL; Sanish;
N/A*; on confidential status; 1,906’ ground; 26395; 33-061-02702;
9/6/2013
Limousin 6-3H1; LOT3 3-152N-93W; 1,452’FNL and 1,637’FWL; Sanish;
N/A*; on confidential status; 1,907’ ground; 26396; 33-061-02703;
9/6/2013
Limousin 7-3H; LOT3 3-152N-93W; 1,407’FNL and 1,637’FWL; Sanish;
N/A*; on confidential status; 1,908’ ground; 26397; 33-061-02704;
9/6/2013
Limousin 8-3H1; LOT3 3-152N-93W; 1,362’FNL and 1,637’FWL; Sanish;
N/A*; on confidential status; 1,908’ ground; 26398; 33-061-02705;
9/6/2013
Oasis Petroleum
Hardy 5892 43-9H; SWSE 9-158N-92W; 215’FSL and 1,890’FEL;
Cottonwood; Bakken; horizontal; 2,279’ ground; 26386; 33-061-02697;
9/6/2013
Mallard 5692 21-20 #10B; SWNW 20-156N-92W; 1,535’FNL and
245’FWL; Alger; Bakken; horizontal; 2,289’ ground; 26381; 33-061-02694;
9/6/2013
Mallard 5692 21-20 #9T2; SWNW 20-156N-92W; 1,585’FNL and
245’FWL; Alger; Bakken; horizontal; 2,289’ ground; 26382; 33-061-02695;
9/6/2013
Mallard 5692 21-20 #10B; SWNW 20-156N-92W; 1,535’FNL and
245’FWL; Alger; Bakken; horizontal; 2,289’ ground; 26381; 33-061-02694;
9/9/2013
Polly 5892 43-9H; SWSE 9-158N-92W; 215’FSL and 1,940’FEL;
Cottonwood; Bakken; horizontal; 2,278’ ground; 26385; 33-061-02696;
9/6/2013
Slawson Exploration
Armada Federal 2-14-13H; NENE 15-151N-92W; 365’FNL and 675’FEL;
Van Hook; N/A*; on confidential status; 1,884’ ground; 26368; 33-06102693; 9/4/2013
Armada Federal 3-14-13H; NENE 15-151N-92W; 465’FNL and 675’FEL;
Van Hook; N/A*; on confidential status; 1,884’ ground; 26367; 33-06102692; 9/4/2013
Whiting Oil and Gas
Hansen 21-3H; LOT3 3-152N-93W; 912’FNL and 2,224’FWL; Sanish;
Bakken; horizontal; 1,908’ ground; 26412; 33-061-02707; 9/9/2013
Ness 21-3TFH; LOT3 3-152N-93W; 912’FNL and 2,314’FWL; Sanish;
Bakken; horizontal; 1,908’ ground; 26411; 33-061-02706; 9/9/2013
Peery State 22-25H; SENW 25-153N-92W; 1,880’FNL and 1,627’FWL;
Sanish; Bakken; horizontal; 2,272’ ground; 26347; 33-061-02691;
9/3/2013
•
WEEK OF SEPTEMBER 15, 2013
Permits renewed
Slawson Exploration
MacCougar 2-30-19H; SWSE 30-152N-92W; 220’FSL and 1,810’FEL; Big
Bend; N/A*; on confidential status; 1,941’ ground; 23890; 33-061-02266;
9/6/2013
MacCougar 4-30-19TFH; SWSE 30-152N-92W; 220’FSL and 1,785’FEL;
Big Bend; N/A*; on confidential status; 1,940’ ground; 23891; 33-06102267; 9/6/2013
MacCougar 5-30-19TFH; SWSE 30-152N-92W; 220’FSL and 1,835’FEL;
Big Bend; N/A*; on confidential status; 1,942’ ground; 23889; 33-06102265; 9/6/2013
Pike Federal 2-3-2H; SWNW 3-151N-92W; 1,330’FNL and 230’FWL; Van
Hook; N/A*; on confidential status; 1,913’ ground; 23910; 33-061-02270;
9/6/2013
Silencer 2-29H; NWNW 29-151N-92W; 235’FNL and 600’FWL; Big Bend;
N/A*; on confidential status; 1,902’ ground; 23917; 33-061-02273;
9/6/2013
Stark Co.
Permits issued
Whiting Oil and Gas
Kubas 44-7PH; SWSE 7-140N-98W; 300’FSL and 1,880’FEL; North Creek;
Bakken; horizontal; 2,586’ ground; 26413; 33-089-00810; 9/9/2013
Williams Co.
Permits issued
Continental Resources
Annapolis 2-29H1; NESW 20-155N-97W; 1,600’FSL and 1,425’FWL;
Dollar Joe; N/A*; on confidential status; 2,390’ ground; 26405; 33-10503203; 9/9/2013
Annapolis 3-29H; NESW 20-155N-97W; 1,600’FSL and 1,380’FWL; Dollar
Joe; N/A*; on confidential status; 2,389’ ground; 26404; 33-105-03202;
9/9/2013
Gronfur SWD #1; NENW 28-155N-98W; 1,132’FNL and 1,570’FWL;
Brooklyn; N/A*; on confidential status; 2,240’ ground; 90299; 33-10590299; 9/9/2013
Paca 1-34H; SESW 34-159N-100W; 235’FSL and 2,390’FWL; Blue Ridge;
N/A*; on confidential status; 2,015’ ground; 26384; 33-105-03199;
9/6/2013
Raleigh 2-20H1; NWSW 20-155N-97W; 1,600’FSL and 1,180’FWL; Dollar
Joe; N/A*; on confidential status; 2,380’ ground; 26403; 33-105-03201;
9/9/2013
Raleigh 3-20H; NWSW 20-155N-97W; 1,600’FSLand 1,135’FWL; Dollar
Joe; N/A*; on confidential status; 2,379’ ground; 26402; 33-105-03200;
9/9/2013
Hess
SC-Berner- 157-99-1918H-1; NWNE 30-157N-99W; 274’FNL and
2,400’FEL; Lone Tree Lake; N/A*; on confidential status; 2,066’ ground;
26350; 33-105-03191; 9/3/2013
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related plays of the Williston Basin. Contact us for details on how your
company can qualify for inclusion in this full color, glossy magazine that
will be available in both print and electronic formats.
Contact for details:
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PETROLEUMNEWSBAKKEN.COM
PETROLEUM NEWS BAKKEN
•
11
WEEK OF SEPTEMBER 15, 2013
IPs for ND Bakken wells
September 3—9, 2013
This chart contains initial production rates, or IPs, for active wells that were filed as completed with the state of North Dakota from Sept. 3 to Sept. 9,
2013 in the Bakken petroleum system, which includes formations such as the Bakken and Three Forks. The completed wells that did not have an available IP rate (N/A) likely haven’t been tested or were awarded confidential (tight-hole) status by the North Dakota Industrial Commission’s Department of
Minerals. This chart also contains a section with active wells that were released from confidential status during the same period, Sept. 3 to Sept. 9.
Again, some IP rates were not available (N/A). The information was assembled by Petroleum News Bakken from NDIC daily activity reports and other
sources. The name of the well operator is as it appears in state records, with the loss of an occasional Inc., LLC or Corporation because of space limitations. Some of the companies, or their Bakken petroleum system assets, have been acquired by others. In some of those cases, the current owner’s name
is in parenthesis behind the owner of record, such as ExxonMobil in parenthesis behind XTO Energy. If the chart is missing current owners’ names,
please contact Ashley Lindly at [email protected].
Top 10 Bakken wells by IP rate
Statoil Oil and Gas
23972; State 36-1 4TFH; Stony Creek; Williams;
3,249 bbl
23973; Rose 12-13 2TFH; Avoca; Williams; 2,995
bbl
QEP Energy
24685; G. Levang 3-32-29BH; Grail; McKenzie;
2,994 bbl
24687; G. Levang 4-32-29BH; Grail; McKenzie;
2,740 bbl
Kodiak Oil and Gas
24605; P Wood 154-98-4-27-34-13H3; Truax;
Williams; 2,556 bbl
Burlington Resources Oil and Gas
(ConocoPhillips)
24127; Lloyd 14-24MBH; Blue Buttes; McKenzie;
2,487 bbl
Zenergy
22414; Tufto 13-24H; Cow Creek; Williams; 2,448
bbl
Kodiak Oil and Gas
23950; Charging Eagle 15-21-16-2H3; Twin Buttes;
Dunn; 2,411 bbl
EOG Resources
23764; Van Hook 20-0107H; Parshall; Mountrail;
2,342 bbl
Kodiak Oil and Gas
23949; Charging Eagle 15-21-16-2H; Twin Buttes;
Dunn; 2,298 bbl
Note: This chart contains initial production rates, or IPs, from
the adjacent IP chart for active wells that were filed as completed with the state of North Dakota from Sept. 3 to Sept. 9,
2013 in the Bakken petroleum system, as well as active wells
that were released from tight-hole (confidential) status during
the same period. The well operator’s name is on the upper line,
followed by individual wells; the NDIC file number; well name;
field; county; IP oil flow rate in barrels of oil.
IPs for completed North Dakota wells
Hess
24561; EN-Hermanson-154-93- 0235H-4; Robinson
Lake; SESE 2-154N-93W; 2SEC; Mountrail; Bakken;
horizontal; 23,139; 8/25/2013; 533 bbl
23499; BB-Burk-151-95- 0718H-2; Blue Buttes; NWNE
7-151N-95W; 2SEC; McKenzie; Bakken; horizontal;
20,340; 8/13/2013; 694 bbl
24503; BB-State 151-96-3625H-2; Blue Buttes; SESE
36-151N-96W; 2SEC; McKenzie; Bakken; horizontal;
19,660; 8/4/2013; 733 bbl
24504; BB-State 151-96-3625H-3; Blue Buttes; SESE
36-151N-96W; 2SEC; McKenzie; Bakken; horizontal;
19,480; 8/22/2013; 827 bbl
24861; BW-Sharon 150-100-2536H-3; Timber Creek;
SESW 24-150N-100W; 2SEC; McKenzie; Bakken; horizontal; 20,723; 8/4/2013; 595 bbl
24371; EN-Weyrauch A-154-93- 1720H-6; Robinson
Lake; NENE 17-154N-93W; 2SEC; Mountrail; Bakken;
horizontal; 20,810; 8/3/2013; 842 bbl
22799; LK-Dukart 145-97-0310H-2; Little Knife; SWSE
34-146N-97W; 2SEC; Dunn; Bakken; horizontal;
21,760; 8/10/2013; 574 bbl
22800; LK-Obrigewitch 146-97-3427H-3; Little Knife;
SWSE 34-146N-97W; 2SECl Dunn; Bakken; horizontal;
20,862; 8/7/2013; 746 bbl
Kodiak Oil and Gas
24605; P Wood 154-98-4-27-34-13H3; Truax; NWNW
27-154N-98W; 2SEC; Williams; Bakken; horizontal;
20,885; 7/29/2013; 2,556 bbl
24604; P Wood 154-98-4-27-34-13HB; Truax; NWNW
27-154N-98W; 2SEC; Williams; Bakken; horizontal;
20,800; 7/31/2013; 2,272 bbl
24790; Smokey 16-7-19-16H; Pembroke; SESE 7-149N98W; 2SEC; McKenzie; Bakken; horizontal; 21,625;
8/6/2013; 1,859 bbl
Liberty Resources
24457; Erickson 152-103-26-35-1H; Glass Bluff;
NWNE 26-152N-103W; 2SEC; McKenzie; Bakken; horizontal; 19,910; 8/2/2013; 1,662 bbl
25032; Erickson 154-103-26-35-2H; Glass Bluff;
NWNE 26-152N-103W; 2SEC; McKenzie; Bakken; horizontal; 19,703; 8/1/2013; 2,244 bbl
LEGEND
The well operator’s name is on the upper line, followed by individual wells with
data in this order: NDIC file number; well name; field; location; spacing; county;
geologic target; wellbore type; total depth; IP test date; IP oil flow rate. (IP stands
for initial production; in this chart it’s the first 24 hours of oil production.)
Marathon Oil
24972; Nelson 11-25H; Bailey, NENW 25-145N-94W;
2SEC; Dunn; Bakken; horizontal; 20,147; 8/6/2013;
1,867 bbl
Oxy USA (Occidental Petroleum)
25076; Charles Tompkins 1-31-30H-144-97; Little
Knife; LOT3 6-143N-97W; N/A; Dunn; N/A; on confidential status; N/A; N/A; N/A
Note: The geologic target for the above Charles Tompkins well was
not listed in its well file because it is a tight (confidential) hole, but
the Little Knife field produces from the Bakken pool.
Petro-Hunt
24438; Sorenson 152-96-24D-13-5H; Union Center;
SESE 24-152N-96W; 2SEC; McKenzie; Bakken; horizontal; 20,570; 8/22/2013; 527 bbl
QEP Energy
24685; G. Levang 3-32-29BH; Grail; SWSW 32-150N95W; 2SEC; McKenzie; Bakken; horizontal; 20,903;
8/24/2013; 2,994 bbl
24687; G. Levang 4-32-29BH; Grail; SWSW 32-150N95W; 2SEC; McKenzie; Bakken; horizontal; 20,900;
8/28/2013; 2,740 bbl
24686; G. Levang 13-32/29H; Grail; SWSW 32-150N95W; 2SEC; McKenzie; Bakken; horizontal; 21,083;
8/26/2013; 2,207 bbl
Statoil Oil and Gas
23887; Eveland 30-19 1H; Briar Creek; LOT4 30-152N104W; 2SEC; McKenzie; Bakken; horizontal; 20,110;
7/15/2013; 2,064 bbl
23973; Rose 12-13 2TFH; Avoca; NENE 12-154N100W; 2SEC; Williams; Bakken; horizontal; 20,575;
8/4/2013; 2,995 bbl
23972; State 36-1 4TFH; Stony Creek; NENE 12-154N-
100W; 2SEC; Williams; Bakken; horizontal; 21,336;
8/6/2013; 3,249 bbl
23302; Timber Creek 13-24 1TFH; Alexander; NENW
13-151N-101W; 2SEC; McKenzie; Bakken; horizontal;
21,107; 7/25/2013; 1,602 bbl
Whiting Oil and Gas
25350; Carl Kannianen 24-33H; Sanish; SESW 33154N-91W; 2SEC; Mountrail; Bakken; horizontal;
17,352; 8/16/2013; 1,501 bbl
25342; Curt Braaflat 11-11H; Sanish; NWNW 11153N-91W; 2SEC; Mountrail; Bakken; horizontal;
19,364; 7/27/2013; 370 bbl
25515; Rigel State 11-16XH; Sanish; NWNW 16-153N91W; ICO; Mountrail; Bakken; horizontal; 19,437;
8/24/2013; 303 bbl
XTO Energy (ExxonMobil)
24851; Rolfson 11X-16A; Siverston; NWNW 16-150N98W; 2SEC; McKenzie; Bakken; horizontal; 20,520;
6/15/2013; 1,965 bbl
24852; Rolfson 11X-16E; Siverston; NWNW 16-150N98W; 2SEC; McKenzie; Bakken; horizontal; 20,629;
6/7/2013; 1,434 bbl
IPs for ND wells released from
confidential status
Burlington Resources Oil and Gas
(ConocoPhillips)
24127; Lloyd 14-24MBH; Blue Buttes; SWSW 24151N-96W; 2SEC; McKenzie; Bakken; horizontal;
21,827; 5/30/2013; 2,487 bbl
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Bakken producers’ stock prices
Closing prices as of Sept 11, along with those from previous Wednesday
Company
Abraxas Petroleum Corp.
American Eagle Energy Corp.
Arsenal Energy USA, Inc.
Baytex Energy Corp.
Burlington Resources Co. (ConocoPhillips)
Continental Resources, Inc.
Crescent Point Energy Corp.
Enerplus Resources USA Corp.
EOG Resources, Inc.
Fidelity Exploration and Production (MDU)
HRC Operating (Halcon Resources Corp.)
GMX Resources, Inc.
Hess Corp.
Kodiak Oil and Gas (USA), Inc.
Legacy Reserves Operating LP
Marathon Oil Co.
Newfield Production Co.
Oasis Petroleum, Inc.
Oxy USA (Occidental Petroleum Corp.)
QEP Energy Co.
Resolute (Resolute Energy Corp.)
Samson Resources Co. (KKR & Co.)
SM Energy Co.
Statoil Oil and Gas LP
Sundance Energy, Inc.
Triangle USA Petroleum Corp.
Whiting Oil and Gas Corp.
WPX Energy, Inc.
XTO Energy, Inc. (ExxonMobil)
Exchange
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Closing price
$2.60
$2.25
$4.90
$40.44
$69.16
$101.66
$37.89
$17.47
$167.15
$26.63
$4.93
$0.27
$78.10
$11.26
$26.99
$36.49
$26.07
$43.95
$90.82
$28.33
$8.32
$20.00
$74.80
$22.67
$1.08
$8.89
$54.29
$19.47
$88.84
Previous Wed.
$2.52
$2.39
$4.95
$39.87
$67.66
$95.18
$38.25
$17.25
$160.53
$26.60
$4.72
$0.28
$76.15
$10.18
$27.07
$35.50
$23.70
$39.60
$89.77
$27.99
$7.97
$19.33
$69.52
$22.30
$1.08
$7.12
$50.96
$18.85
$87.76
2013 North Dakota Petroleum Council Annual Meeting
Members Only Showcase and Community Day
Sept. 16-18, 2013
Alerus Center, Grand Forks, ND
Registration is now open for the 2013 North Dakota Petroleum Council Annual Meeting, Members Only
Showcase and Community Day!
Register today and enjoy:
· Technical talks at the Business Meeting;
· Networking with industry leaders;
· Exhibiting your goods and services at the Member’s Showcase;
· Visiting with community members about job and business opportunities during the Community Day;
Visit annualmeeting.risprojects.org for more information!
N O R T H
D A K O TA
PETROLEUM
C O U N C I L
12
PETROLEUM NEWS BAKKEN
ASSET MAP
Concentrated acreage in core area of Williston Basin
ƒ
~45,000 net acres in McKenzie and Williams
Counties(1)
Williston Basin in the early stages of 20+ year
development program
ƒ
Increased density drilling and discovery of
additional geologic zones may further increase
Core Operating Area
ƒ
Provides Triangle with acquisition opportunities
to increase scale
Implementing the latest technologies including pad
drilling and zipper-›ŠŒȂ’—ȱ ‘’Œ‘ȱ’ncrease
KEY ACQUISITION HIGHLIGHTS
PRO FORMA ASSET MAP
Total consideration: ~$103.4 million cash + 582 non-
op net acres traded + 325,000 shares
ƒ
~9,350 net acres in McKenzie County, ND
ƒ
~1,150 Boepd of current production
Contiguous to current core producing properties,
with access to Caliber infrastructure
Substantially increased scale and operated acreage
Nesson Anticline
the horizon of full development
ACQUISITION OF PROPERTIES FROM THE AGGREGATE ACQUISITIONS
ƒ
Acreage, production and reserves increased by
ƒ
Operated acreage increases from 56% to 64%
27%, 26% and 42%, respectively
Primary Acq.
Operated DSUs
Bolt-on Acq.
Operated DSUs
TRANSACTION HIGHLIGHTS
KEY HIGHLIGHTS
BUSINESS OVERVIEW
OIL-FOCUSED SINGLE BASIN OPERATOR
• WEEK OF SEPTEMBER 15, 2013
TPLM Op.
DSU
TPLM Acreage
efficiencies while controlling costs
Net
Details
DETAILS
NET ACREAGE
PERCENT OPERATED (%)(2)
OPERATED DSUS(2)
TOTAL OPERATED DRILLING LOCATIONS(3)
7
TPLM CORE AREA(1)
~45,000
64%
Primary Acquisition
TPLM Acreage
Three Forks Wells
Bakken Wells
TPLM Operated DSU
Core Area
Aggregate Acquisitions
Pro Forma
Increase Over Standalone
Acreage
35,210
9,354
44,564
;ϮͿ
27%
Percent
Operated
Operated
DSUs(1)
56%
86%
64%
33
7-9
40 - 42
Gross Operated Locations
Base Case
;ϯͿ
Upside Case
Est. Current
Proved
Production (Boepd)
;ϰͿ
Reserves
;ϲͿ
264
56 - 72
320 - 336
396
84 - 108
480 - 504
4,500
; Ϳ
1,150;ϱͿ
5,650
16,050
; Ϳ
6,815 ;ϳͿ
22,865
21% - 27%
21% - 27%
26%
42%
% Proved
%
Developed
Oil
48%
37%
45%
86%
89%
87%
40 - 42
320 - 504
County
Source: Triangle Petroleum Corporation, Montana Board of Oil and Gas, and North Dakota Industrial Commission, 2013.
(1) Pro forma for the Aggregate Acquisitions.
(2) ›’Š—•ŽȂœȱ˜™Ž›Š˜›œ‘’™ȱ’—ȱ˜›‘ȱŠ”˜Šȱ‘Šœȱ‹ŽŽ—ȱŒ˜—’›–Žȱ‘›˜ž‘ȱ’•Žǯȱ—ȱŽŠœŽ›—ȱ˜—Š—Šǰȱ˜™Ž›ŠŽȱŠœœž–ŽœȱřŖƖȱ˜›ȱ›ŽŠŽ› working interest.
(3) Base Case based upon 4 Bakken shale and 4 Three Forks wells per DSU; Upside Case based upon 8 Bakken shale and 4 Three Forks wells per DSU,
supported by a recent 12-well density test in southern Williams County.
continued from page 1
TRIANGLE
boepd. With current production exceeding both of those projections, Triangle has
revised its fiscal year 2014 exit production. That guidance is now at 7,000 to
8,000 boepd. Triangle has 34 gross operated wells on production with six more
awaiting completion.
Triangle announced in August the
acquisition of approximately 9,350 net
acres in McKenzie County, increasing the
company’s total Williston Basin acreage
to approximately 95,000 net acres. That
recently acquired acreage has a current production of approximately 1,150 boepd and
is contiguous with Triangle’s current core
producing acreage in north-central
McKenzie and south-central Williams
counties. The new acreage also increases
Triangle’s proved reserves to approximately
22.9 million boe, which is 87 percent oil
and 45 percent proved developed.
Enhancing efficiencies
At the same time the company is ramping up production, Triangle is also enhancing well efficiencies and lowering costs.
Triangle has shortened spud-to-spud times
by six to eight days below the previous
average of 28 to 29 days.
Triangle is saving on completion costs
through its oil field service subsidiary, Rock
continued from page 1
HESS
Most of Hess Corp.’s acreage is concentrated in central and eastern McKenzie
County, central and eastern Williams
County, and northwestern Mountrail
County. The company also has acreage
extending from Billings and Stark counties north all the way to the Canadian border in western North Dakota.
North Dakota operations
Hess said his company has drilled
approximately 600 wells in the Bakken
and has participated in another 600 competitor wells, bringing the firm’s total
inventory to some 1,200 wells.
Hess Corp., he said, has built a position of approximately 640,000 acres in
the Williston Basin with an overall working interest of about 70 percent. The company, he said, has a material upside
through downspacing, not only in the
middle Bakken member but also in the
Three Forks formation.
Hess Corp. reported a reduction in
spud-to-spud time from 45 days in the
first quarter of 2011 to 27 days in the second quarter of 2013. Drilling and completion costs have also declined, falling from
$13.4 million in the second quarter of
Pile Energy Services. In the second quarter,
Rock Pile completed eight Triangle wells
and 10 third party wells in the quarter, with
14 more on backlog.
The company is also experimenting with
completion techniques, one of which is a
46-stage hybrid sliding sleeve/ plug-andperf frack. Samuels said there are limited
production data at this point, but thus far the
results are encouraging. “It looks like it’s
resulting in a better frack.”
In addition, Triangle is seeing additional
efficiencies through Caliber Midstream, a
joint venture with First Reserve Energy,
which has been delivering fresh water to
Triangle wells for frack operations via
pipeline. Samuels said providing frack
water through pipe lowers truck costs, eases
congestion on well pads, improves safety,
and mitigates weather constraints. In addition, the Caliber system is gathering crude
and natural gas from five of the company’s
producing wells, and construction on additional gathering infrastructure is ongoing.
Downspacing tests
Downspacing is another area where
Triangle is experimenting. Samuels said the
company is focused on downspacing testing
of the middle Bakken formation where it
has been drilling bores at intervals of 600
feet and is not seeing any communication.
Triangle is in the early stages of its
downspacing testing, and while data are still
limited, Samuels said thus far those results
10
(1)
(2)
(3)
(4)
(5)
(6)
(7)
›’Š—•ŽȂœȱ˜™Ž›Š˜›œ‘’™ȱ’—ȱ˜›‘ȱŠ”˜Šȱ‘Šœȱ‹ŽŽ—ȱŒ˜—’›–Žȱ‘›˜ž‘ȱ’•Žǯȱ
Pro forma for acreage traded in connection with the Aggregate Acquisitions.
Base Case based upon 4 Bakken and 4 Three Forks wells per DSU; Upside Case based upon 8 Bakken and 4 Three Forks wells per DSU.
Estimate based on a 21 day exit rate as of July 31, 2013.
Represents produced volumes for June 2013.
Triangle internal reserves estimates as of April 30, 2013.
The Aggregate Acquisitions reserves based on internal estimates utilizing SEC price deck as of July 1, 2013.
are also encouraging. The tests do indicate
the potential for eight to 12 locations per
spacing unit. “We don’t have a ton of production history, which is why we don’t really go out and pound the table, but everything we see thus far is very positive.”
Lower Bakken dolomite
Triangle is doing some testing of the
Three Forks, but Samuels said there is an
unconformity approximately 25 feet thick
that is unique to Triangle’s core area which
he calls the “lower Bakken dolomite,” but
said others may call it an upper Three Forks
bench. Regardless, Samuels said it is a
unique zone in Triangle’s core area, and it is
“just chock full of oil.” He said there have
been some acquisitions in Triangle’s “zip
code” and he believes that the “lower
Bakken dolomite” is the attraction along
with the middle Bakken in the area.
Triangle, however, is not exploring that
interval yet. Samuels said the company is
taking a conservative approach at this point,
and believes other operators may drill it, so
Triangle doesn’t want to risk capital right
now. Instead, Samuels said Triangle will
remain focused on the middle Bakken.
“What we know for sure is our middle
Bakken on a 600-foot spacing works. That
means we have years and years and years of
drilling inventory,” Samuels said. “So why
risk a ton of capital in the Three Forks if you
don’t have to is kind of our initial read on
it.”
2012 to $8.4 million in this year’s second forward here,” Hess told the Barclays
quarter.
audience. “We are currently in the process
Hess said the company’s 2013 30-day of doing an updated depletion plan for our
initial production, IP, rates are running future growth and we think there is a
between 750 and 850 boepd, and he put strong opportunity that we can down
2013 estimated ultimate recoveries at space more potentially to 180-acre spac600,000 to 650,000 barrels.
ing for the Bakken and about 210-acre
Based on North Dakota Industrial spacing for the Three Forks. And thereCommission data, Hess said the company fore, there is upside above and beyond the
has 18 of the top 50 wells in the state in billion barrels of oil equivalent here, and
terms of 30-day IP rates. It also leads its potential to increase our growth projecpeers in the liquid content of reserves at tions beyond our 120,000 barrels a day.”
79 percent and in liquids percentage of
Transportation and
production, which for
infrastructure
2013 is estimated at
“We are currently in the
Hess Corp. has also
76 percent on a pro
process of doing an updated
invested heavily in
forma basis.
depletion plan for our future infrastructure in North
Hess Corp. is curgrowth
and we think there is a Dakota, an effort
rently running a 14 rig
drilling program, and strong opportunity that we can which Hess believes
has identified more down space more potentially to gives the company an
180-acre spacing for the
advantage. “We also
than 2,500 operated
have a competitive
drilling
locations.
Bakken and about 210-acre
Assuming
five spacing for the Three Forks.” advantage in our
he
Bakken and perhaps —Hess Corp. CEO John Hess infrastructure,”
said. “We have investfour Three Forks wells
ed in the infrastructure
per 250-acre spacing,
Hess said the company has estimated for the long-term to provide competitive
recoverable resources of over 1 billion advantage to get the highest value for our
barrels, and added that the company has products.”
Hess Corp.’s Bakken rail exports are
only booked about 300 million barrels to
approximately 85 percent Brent-based,
date.
“So there is a lot more upside to go which Hess said is driven by the compa-
Montana acreage
In addition to its core area in western
North Dakota, Triangle also holds acreage
across the border in Montana, and next year
is planning to proceed with some limited
exploration with vertical wells. Samuels
said there are formations in the area that
have been “prolific producers,” and he said
the company is looking at perhaps a three to
four well program to log and core the
Bakken and Three Forks formations in the
area.
“We want to pick up some locations,”
Samuels said. “Well three will probably be
contingent on the successes of wells one
and two, but there is a lot of potential out
there.”
Bakken focus
All of Triangle’s achievements in the
second quarter are in keeping with the
vision that Samuels has for the company he
leads. “We are 100 percent focused on the
Bakken. Our objective is to be the low-cost
producer in the Williston Basin,” Samuels
said. “We want to make money for our
shareholders regardless of oil prices. We
want to be sustainable and profitable over
the long term. We feel strongly that our vertically integrated model allows us to execute our strategy.”
—MIKE ELLERD
“First and foremost is our worldclass position in the Bakken shale
in North Dakota.” —Hess Corp.
CEO John Hess
ny’s Tioga rail facility which provides
with access to all three U.S. coasts instead
of selling oil at the well head.
The Tioga rail terminal, which has
been in operation since April 2012, currently has 54,000 barrels per day capacity
and the potential to expand to 120,000
barrels per day. That facility, said Hess,
cost the company $200 million, almost all
of which it has already captured.
Hess said the company also has
pipeline access to Tesoro’s Mandan refinery and access for 30,000 to 40,000 barrels per day on the Enbridge pipeline system. But rail has given Hess Corp. an
opportunity to take advantage of the
Brent/West Texas Intermediation price
spread. In August, he said, it was advantageous to move all the company’s crude
to Gulf Coast refineries, but now the
Louisiana light sweet market has “pretty
much collapsed” in recent weeks and
Hess Corp. is selling its crude to East and
West Coast refineries. “So we’re able to
arbitrage the best markets creating a lot of
see HESS page 13
PETROLEUM NEWS BAKKEN
•
13
WEEK OF SEPTEMBER 15, 2013
continued from page 1
BAYTEX
senting itself as a future potential target,”
Bowzer said at the conference.
Three Forks is one of the formations
within the Bakken petroleum system, with
most of its oil production coming from the
upper bench.
Baytex holds approximately 80,000 net
acres in the Williston Basin with proven
plus probable, 2P, reserves estimated at
year-end 2012 of 34 million barrels. The
company is currently producing approximately 3,100 barrels per day from its Three
Forks-focused Williston Basin production.
“We’ve got a pretty nice contiguous land
position here, totaling approximately 126
net sections of land,” Bowzer said.
In the first half of 2011, Baytex averaged
continued from page 3
KEYSTONE
“This is a last-ditch bait-and-switch
by the Canadian government and it’s
going to fail. Keystone XL and expanded tar sands production are climate disasters, period.”
Keith Stewart, Greenpeace’s climate
and energy campaign coordinator,
doubted that “given Canada’s track
record of broken climate commitments,
I don’t think these new desperate
attempts by the Harper government
will have much sway with the Obama
administration.”
“Tackling Canada’s skyrocketing
carbon emissions means putting a
moratorium on tar sands development
and reducing overall emissions and
Harper has proved time and time again
that he is not willing to do that.”
Gillian McEachern, campaign director, Environmental Defense Canada,
said Canada is unable to “credibly tackle climate change if it sticks with plans
to triple tar sands production. Until we
have action to limit how big and how
fast the industry grows, emissions will
keep on going up and our international
reputation will keep being dragged
down.”
34.8 days from spud to rig release, but in the
first half of 2013 that spud-to-release time
declined to 19.5 days, a 56 percent decline
over two years. Baytex puts its current average completed Williston Basin well cost at
$7 million with development costs at
$16.30 per barrel.
The company reports 30-day initial production rates for its Williston Basin wells at
420 barrels of oil equivalent per day, and
estimated ultimate recoveries at 420,000
boe. Baytex also reports a total of 90 net
drill locations.
Bowzer said Baytex has set a capital
expenditure for its Bakken/Three Forks
development at approximately $75 million.
The company plans to drill a total of nine
net wells in the basin in 2013.
Baytex is drilling on 1,280-acre spacing
units with 2-mile laterals completed with 30
to 36 multistage fracturing, according to
Bowzer. Initially the company’s wells were
completed with only six frack stages, but
that increased to 20 stages in 2011 and to
more than 30 stages in 2012.
Heavy oil plays
Baytex has two other key plays, both
heavy oil plays in Canada. Heavy oil constitutes approximately 75 percent of the
company’s production, with light oil representing only 14 percent and natural gas production making up the remaining 11 percent.
One of the heavy oil plays is Baytex’s
Peace River oil sands project in north-central Alberta where the company holds leases on approximately 196,000 net acres with
year-end total 2012 2P reserves estimated at
110 million barrels. In the second quarter,
Baytex produced an average of 22,600 barrels per day through primary oil sands
development and 400 bpd through thermal
development from the Peace River project.
Baytex’s other key heavy oil play is the
Lloydminster heavy oil project in eastern
Alberta and western Saskatchewan. In that
play, Baytex holds approximately 467,000
net acres with year-end 2012 2P reserves
estimated at 116 million barrels. The company’s second quarter production from the
Lloydminster project averaged 19,500 bpd.
Overall, Baytex Energy’s 2012 production averaged 53,986 barrels of oil equivalent per day. For 2013 Baytex puts production guidance at 57,000 to 58,000 boepd,
with 57 percent coming from Alberta, 36
percent from Saskatchewan, 6 percent from
the U.S. and 3 percent from British
Columbia.
Exporting Canadian crude
Bowzer said the price differential
between Western Canadian Select, WCS,
and Maya crude from Mexico was historically relatively narrow, but he said that
changed with the transportation bottlenecks
that began in 2011. At that point, he said, it
was difficult to get WCS to the Gulf Coast
and the demand for Maya went up as did its
price causing the WCS/Maya spread to
widen.
Rail expansion, however, altered that
dynamic and the WCS/Maya spread has
again narrowed as WCS is finding its way
to the Gulf Coast on rail cars. Bowzer noted
that there has been much talk of rail changing the transportation bottleneck, and said
“it’s more than talk,” adding that there has
been significant expansion in rail capacity
for all types of crude oil north of Cushing,
Okla.
With rail expansion, Bowzer said, the
transportation network is now much more
robust and WCS is getting into the Gulf
Coast and bringing down the price of Maya
with it, and currently, the two crudes are
trading nearly on par. Bowzer expects that
trend to continue.
—MIKE ELLERD
Capitulation?
Thomas Pyle, president of the
Institute for Energy Research, said
Harper’s offer to Obama “is in reality a
capitulation to the White House political machine that has unnecessarily
delayed (XL) for five years.”
“The environmentalist left is
opposed to any pipeline that brings
affordable energy to U.S. markets and
they will not be satisfied with any compromise brokered with Canada that
allows construction of the Keystone
pipeline,” he said.
Pyle said Harper is about to learn the
same lesson as many U.S. lawmakers.
“The present administration will
constantly move the goal posts in every
negotiation, misrepresent the negotiations for political advantage and mischaracterize their counterparts in the
negotiations.
“Relations between the U.S. and
Canada are at an all-time low. Barack
Obama does not care about the construction of the pipeline, nor does he
care about affordable energy for
American consumers.
“At the end of the day, White House
officials are more concerned about cutting a deal with environmental extremists than they are with the Canadian
prime minister,” Pyle said. ●
continued from page 12
HESS
value here.”
The company is also expanding capacity at its Tioga gas plant
from 110 million cubic feet, mmcf, of gas per day to 250 million, which should be completed by year’s end. Hess said that
will increase the company’s competitive advantage on netbacks
from a gas perspective as more liquids are stripped out of the
natural gas stream.
He said that will also give the company an advantage in terms
of flaring as flaring becomes more of a political issue in North
Dakota, noting Hess Corp. wants to stay ahead of flaring and a
reduction program is part of the company’s future capital spend.
Monetize, but control, Bakken midstream
In its transition to a pure-play E&P company, Hess Corp. has
divested a significant portion of its assets, raising some $5.2 billion. Those divestitures include assets in Azerbaijan, Russia,
Beryl in the North Sea and domestic assets in the Eagle Ford as
well as downstream energy marketing assets. Other divestitures
currently in progress include retail, energy trading, terminal network along with foreign assets in Thailand and Indonesia.
In addition to those divestitures, Hess Corp. is planning to
monetize its Bakken midstream assets, including the Tioga gas
plant, by 2015. However, the company will continue to control
those assets. “It’s important to note, however, that we certainly
intend to maintain operating control of these assets,” Hess
noted.
Global operations
Hess Corp.’s other key plays are its Deepwater project in the
Gulf of Mexico, the offshore Valhalla/South Arne project in
Denmark, Equatorial Guinea offshore, and its JDA offshore
project in the Gulf of Thailand. The company has identified four
other new growth areas, which are the Utica in Ohio, Tubular
Bells in the Gulf of Mexico, North Malay Basin in the Gulf of
Thailand and Ghana.
Hess Corp.’s overall 2012 production averaged approximately 289,000 boepd. The company’s global pro forma 2013 production is estimated at between 290,000 and 305,000 boepd. ●
14
PETROLEUM NEWS BAKKEN
continued from page 1
ATIKWA
“The old model used to be to go out and discover a
new resource, drill a few good test wells, and then sell
the infill drilling locations based on a discount to the projected return that a producer could receive over and
above its cost of capital to bring those wells on production,” he said in a letter to shareholders.
These days, Kehoe said, the “talk is all about guaranteed yield, with the acquiring parties now saying ‘you
put the capital into drilling the wells, when they are on
production, we will buy that production and pay a significant premium to what you might have received under
the old model. But you have to drill the wells.’”
He said Atikwa has done all of the heavy lifting,
spending time and capital to learn how to complete the
wells.
“We can now say definitively we own a very significant light oil resource property with drilling locations
and reserves that represent a significant amount of oil in
place,” Kehoe said, pointing in particular to properties in
Saskatchewan and Manitoba, where he claimed Atikwa
•
WEEK OF SEPTEMBER 15, 2013
developed completion techniques for horizontal wells
“that are now common throughout the area.”
In a voice of despair, he said the company has been in
a holding pattern for the past year, hoping someone will
pay a reasonable price for the assets. But there is “no one
on the buy side,” he conceded.
Small acreage position
The result is an uncertain new beginning for Atikwa,
particularly as it tries to make a success out of a mere
see ATIKWA page 15
Business Spotlight
LTE’s Jeff Citrone attends work safe conference
LTE employee Jeff Citrone, P.G., director of Health and Safety Compliance, attended the
recent press conference promoting the State of Colorado Proclamation to launch the
WorkSafe Colorado initiative. WorkSafe Colorado is statewide campaign and outreach program focusing on improving workplace safety in Colorado with an executive board made
up of representatives from industry, state and federal government, academia, community
and professional organizations. Citrone is a member of the WorkSafe Colorado executive
board.
As representatives from the Colorado Chapter of American Society of Safety Engineers,
Past Chapter President Jeff Citrone, Chapter President-Elect Rick Zellen, and Chapter
President Lane McKnight attended the press conference to represent their professional
organization and answer questions from the public and media.
Bakken Players
ADVERTISER
PAGE AD APPEARS
Abrasives .................................................................14
Alaska Textiles
Alliance Pipeline........................................................7
Allstate Peterbilt Group
American Association of Railroads (AAR)
Anvil Corporation
Arctic Catering
Arrow Truck Sales
Bakken Solids Control Services
Beaver Creek Archaeology .......................................7
BTL Liners...................................................................8
Cancade Company Limited
CESI Chemical..........................................................15
City of Grand Forks, ND
ClearSpan Fabric Structures
Cruz Energy Services LLC (A CIRI Co.)......................2
CST Storage
Dakota Landing.........................................................9
DAWA Solutions Group
Deep Casing Tools
E3 Energy and Environmental Experts.....................6
Ebeltoft Sickler
ADVERTISER
PAGE AD APPEARS
Elite Tank
Four Seasons Equipment
Futaris
Gray Wireline
Guard-All
Halcon Resources
HMG Automation, Inc.
Investors First Capital
Iseman Homes
Kilo Technologies Ltd.
Larson Electronics LLC
Lister Industries
LT Environmental
Lynden......................................................................16
M SPACE.....................................................................4
Marmit Plastics
Midwest Industrial Supply
Miller Insulation Co.
MT Rigmat LLC ..........................................................4
Muth Pump LLC
Netzsch Pumps North America
North Dakota Petroleum Council...........................11
ADVERTISER
PAGE AD APPEARS
North Slope Telecom (NSTI)
Northern Oilfield Services, Inc..................................5
OFS Energy Fund.....................................................14
Petroleum News Bakken
Pierce Leasing
Plainsman Mfg. Inc.
Polyguard Products ...................................................3
Premier Community Homes Ltd.
Quality Mat
Reef Oil & Gas
Rigid Global Buildings
Ritchie Bros. Auctioneers
ShelterLogic...............................................................6
Spartan Engineering
TenCate
Tremcar Inc.
Trinity Health Occupational Medicine
Umiaq
Unconventional Resources Technology
UNICO Inc.
Unit Drilling Company
Wanzek Construction
PETROLEUM NEWS BAKKEN
•
15
WEEK OF SEPTEMBER 15, 2013
continued from page 1
CONTINENTAL
see CONTINENTAL page 16
continued from page 14
ATIKWA
1,900 net acres in the Spearfish formation
(which extends from southwestern
Manitoba to north-central North Dakota).
That’s a tough slog for the second
smallest of 10 producers in the Manitoba
segment of the Spearfish, overshadowed
by Suncor Energy with 98,000 acres,
Legacy Oil & Gas 78,000 acres, Penn
West Energy 75,000 acres and Hess Corp.
35,000 acres,
All are attracted by the prospect of
horizontal drilling and multi-stage fracturing bringing life back to play where oil
was originally discovered in the 1950s
and has recently seen initial well production rates of more than 300 barrels per
day.
The revival prompted Kehoe to deliver
his version of a rallying cry. “Stop looking for oil,” he said. “Go to where you
know there is oil and concentrate on
improving recovery.”
At the peak of its optimism, Atikwa
estimated it had 5 billion barrels of original oil in place. Estimated capital costs
per well ranged from C$1.3 million to
C$1.7 million, with the estimated ultimate recovery at 70,000 to 115,000 barrels of oil per well.
But Atikwa did not have the size to
attract capital, or the production to sustain
its operations program.
In late July it entered into an amalgamation and reorganization with privately
owned Hansar Energy — whose primary
focus is on the Three Forks Bakken zones
in Manitoba, under a team that sold
Manitoba assets for C$100 million in
2012 — a deal which it said met the criteria of a fundamental acquisition.
As part of the reorganization, Atikwa
said it planned to work with financial and
industry partners to put the company in a
better position to raise additional capital
to concentrate on drilling and building its
production of light oil assets, while
expanding “through acquisitions of
undercapitalized companies owning complementary assets.”
New president, CEO
The first move in the new direction
occurred on Aug. 30 when four directors
nominated by Hansar where elected at
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bulk of which will go to its Williston
Basin Bakken assets.
The rig count next year will be split
between North Dakota and Montana, with
17 rigs in North Dakota and four in
Montana.
Benefiting from recent reductions in
well costs, Continental said its 2014
budget reflects 400 net well completions
(1,090 gross) company-wide, with 94 percent in its two key operating areas, the
Bakken and Scoop.
Another dozen wells will be in
Continental’s Red River units in the
Williston Basin; plus some “other
exploratory drilling (that) … we’re not
talking about right now,” Hume said.
The 2014 well count represents a 22
percent increase over current budgeted
completions of 329 net wells in total for
2013, Continental said in a press release
accompanying the 2014 guidance call.
Exploration drilling accounts for
approximately $500 million of 2014 capital expenditures, a 16 percent increase
over 2013’s exploratory drilling budget.
Exploration will focus “primarily on con-
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Atikwa’s annual general meeting, with
Andrew Watts named as future president
and chief executive officer.
But the meeting turning heated when
several attendees were evicted amid
charges of an improperly constituted
meeting, followed by an allegation of
possible irregularities.
Kehoe said a Vancouver-based group
of dissident shareholders argued their
votes should be counted despite the
announced cut-off dates for proxies and
voting.
He said that was akin to insisting
touchdowns that were scored after the
final whistle in a football game should
count.
The concerned shareholders refused to
comment after the meeting, but Kehoe
said the amalgamation with Hansar offers
Atikwa its best hope of surviving.
“In these times where junior oil and
gas companies are having a lot of problems raising capital ... we have to be able
to find new ways to move forward.
Growing, getting strong — it’s through
amalgamation.”
Atikwa said in a news release that
Hansar plans a 12-well drilling program
for the Atikwa properties.
C$2.5 million plus interest and costs for
damages allegedly resulting from wrongdoing on the part of Atikwa as operator,
including a failure to carry on all operations lawfully, diligently and in a good
workmanlike manner in accordance with
good oilfield practices, failing to pay all
accounts related to operations as they
became due and payable and incurring
expenses and issuing invoices for
amounts that were improper, excessive,
unreasonable and otherwise not permitted
under the farm-out agreement.
The group also claimed that some contractors have filed claims against the
company over non-payment of accounts.
It said in a news release seven leases
expired on the Porcupine Hills property
representing 3,754 net acres and one lease
expired on its Windfall property representing 1,728 net acres with no compensation, reducing the net worth of the company.
The lands were categorized as exploration and evaluation assets and the writedown impairment was estimated at
C$7.31 million on Porcupine Hills and
C$273,349 on Windfall properties. ●
LAND AUCTION
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September 30, 2013
Dickinson & Williston, ND
Dissidents unhappy
Before the annual meeting, John
Chodzicki, one of the dissident group,
said there was unhappiness with the way
Atikwa was performing.
“That’s the problem with the small-cap
business in Calgary,” he said. “A few
years ago investors were putting their
money into small-cap stocks, penny
stocks, and the stocks turned out to be
one-fifth of the investment value.”
The dissidents said Atikwa has not
made progress over the last three years in
developing its tight oil properties, driving
down the share value from 17.5 cents in
February 2010 to 1 cent.
They said the company has failed to
generate any new production since 2011,
but has maintained high overhead with
general and administrative costs of
C$1.44 million in the year ending Feb.
28, 2013, including C$715,534 in salaries
and consulting fees.
Claim by JV partner
Atikwa’s joint venture partner has
filed a claim against the company for
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16
continued from page 15
CONTINENTAL
tinued density drilling tests in the Bakken,
further testing of the lower Three Forks
formation in the Bakken, and further
appraisal and a density spacing test in
Scoop.”
Drilling and completions account for
$3.5 billion of the 2014 capex,
Continental said.
Scoop gets 8 more rigs
The company has allocated 71 percent
of its 2014 drilling budget to the Bakken
play and 25 percent to its Scoop operations. Continental is planning to have an
average of 18 operated rigs in the Scoop
play in 2014, compared with a current
count of 10 rigs.
The company reaffirmed its 2013 production growth rate of 38-40 percent and
capex guidance of $3.6 billion.
Analysts from Global Hunter
Resources were quoted in Continental’s
press release as saying, “In order to
reflect significant Bakken downspacing
activity in 2014, we reduced our average
well spacing assumption for CLR to 400
acres from 480 acres while simultaneous-
PETROLEUM NEWS BAKKEN
ly reducing our net EUR profile per well
to 532 Mboe from 540 Mboe.”
In the conference call, Continental’s
President and Chief Operating Officer
W.F. “Rick” Bott said that in the company’s second quarter earnings conference,
“we discussed the three density pilot projects on a 320-acre spacing and the 160acre density pilot that we are currently
drilling. We hope to have initial results
from the first 320-acre test, the
Hawkinson, … later this year and IPs
from the others, the other three pilots, in
early 2014.”
Drilling results, production history and
the micro-seismic data from these density
pilots “will be critical to the formation of
our full-field development plan for the
Bakken. … We are excited about what we
are seeing thus far,” Bott said.
In 2014, the company plans to “experiment further with well completion
designs in the Bakken to optimize longterm recoveries in the play,” he said.
“We’re still very early in the game. So
we’re eager to maximize the effectiveness
and economics of our well completion
methods.”
Companion to Continental’s effort to
improve efficiencies in drilling and completion, “will be further efforts at produc-
tion optimization, including experimentation with different downhole pump configurations, innovations with water gathering and disposal, new efficiency measures to reduce lease operating costs, and
innovations in emissions control and capture,” Bott said.
In the question and answer session,
Chief Executive Officer Harold Hamm
responded to a question about
Continental’s expectation of a 3-5 percent
annual reduction in well costs in the
Bakken, and what would that mean for
well costs by the end of the year.
“We’re operating on the assumption
that we’re going to achieve our year-end
target of $8 million by year end (2013),”
Hamm said. “So that will be an incremental 3 percent to 5 percent over and above
that by year end 2014.”
From science to development
Subash Chandra of Jefferies LLC’s
research division asked about the transition from Three Forks lower bench science to development; specifically did
Continental “see all of 2014 as sort of a
science and appraisal process? Or do you
think sometime in 2014, you will be
launching an actual development of those
new locations?”
•
WEEK OF SEPTEMBER 15, 2013
Bott replied, “We think what we’ve
done now is de-risk about 3,800 square
miles. And … over the whole de-risk area
that we have in the play … the middle
Bakken and the Three Forks’ first bench
are prospective. But in those 3,800 square
miles, we think we will add at least one
… probably two of the deeper benches
and possibly even three of those deeper
benches might work in some of those
areas. … It’s a question of really identifying sweet spots within that.”
Hamm said the company’s goal was to
be in development mode on all of the
benches that prove prospective, taking 12
more months to get there: “I think by
mid-year next year we’re going to be well
into seeing these developments. That’s
why we’re doing the early work, that’s
why we begin doing the early exercises to
prove these out and see what our productive limits are. We’ve been pleased with
what we’ve seen and we expect to see this
going forward on a very developmental
specific project basis before next year is
out.”
Lower bench Three Forks development would for sure start by late 2014,
“but certainly in a big way in 2015,” Bott
said, and Hamm agreed. ●
continued from page 1
ELLERD
and gas industry in upstream permitting
and compliance and downstream remediation made him a good fit for Petroleum
News Bakken,” said publisher and executive editor Kay Cashman, who chose
him for the position.
“He made the transition from technical writing to journalism in a matter of
months, embracing our publishing
group’s legacy of accurate, comprehensive and fair reporting,” she said.
“Add that to Mike’s enthusiasm for
the newspaper, interest in the oil and gas
industry and a natural nose for news and
we had Petroleum News Bakken’s new
leader.”
Cashman has been serving as editorin-chief since the inception of the newspaper, which is a sister publication to
Petroleum News in Anchorage Alaska.
Long-time editor and reporter Ray
Tyson was initially asked to serve as editor-in-chief but because of health issues
was not able to fill that position.
Tyson, however, from the start in April
2012, has been a freelance writer and
adviser for the newspaper.
“Ray, a former Platts editor and writer,
will continue to write for Petroleum
News Bakken and has offered to help
guide Mike in his transition to editor-inchief,” Cashman said.
“Mike will lead a gradual expansion
of news coverage in the newspaper,
bringing in new reporters and expanding
the Bakken Stats section,” she said.
A native of Bozeman, Mont., Ellerd
was raised in the livestock business, and
worked his way through college at the
undergraduate level as a livestock auctioneer. He also spent a couple of years
between undergraduate and graduate
school as a long-haul trucker.
He has a Bachelor of Science degree
in chemistry from Montana State
University, with an emphasis in organic
chemistry, and a masters’ degree in environmental science from the University of
Washington, where his focus was on subsurface contaminant transport and fate.
—PETROLEUM NEWS BAKKEN