Petroleum News Bakken 111013: Petroleum News 082904
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page MDU advancing in Bakken and 3 Paradox with record 3Q production Vol. 2, No. 30 • www.PetroleumNewsBakken.com A weekly newspaper for industry and government Week of November 10, 2013 • $2.50 COMPANY UPDATE Continental in Banks ‘Subtle’ fracks Statoil maintains slower Bakken growth as part of long-term strategy By MIKE ELLERD VERN WHITTEN PHOTOGRAPHY “The key here is to frack as Petroleum News Bakken subtle as you can, reduce the espite routinely coming in with distances between the fracks and Dchart-topping 24-hour initial get the maximum out of your production rates in North Dakota, reservoir.” —Statoil CFO Torgrim Reitan Statoil’s Bakken production is holding steady as the Norwegian state-owned ASA STATOIL TROND ISAKSEN, 45,100 bpd average in the second quar- multinational continues to focus on ter, and the second quarter production sustainable long-term in the Williston Continental Resources well pads in the Banks field north of TORGRIM REITAN was an 8 percent increase over the first Watford City in north-central McKenzie County, North Dakota. Basin. quarter average production of 41,900 bpd. That Photo looking west. While many Bakken operators have and are slower growth, however, is part of Statoil’s seeing double digit month-over-month production Bakken strategy. increases, in the third quarter Statoil’s Bakken October ND Trust Lands lease When asked during an Oct. 30 third quarter production averaged 46,800 barrels of oil per day, auction average back near par an increase of just under 4 percent from the see STATOIL STRATEGY page 11 After seeing the second lowest average price per acre over the last six years in its August oil and gas lease auction, the COMPANY UPDATE Minerals Management Division of the North Dakota Department of Trust Lands saw the average price bounce back to near the six-year average in its November lease auc- ‘Ears back’ at Antelope tion. In the Nov. 5 auction, a total of 6,869.39 acres were leased in 74 tracks across eight western counties bringing in a total Continental accelerates full-field middle Bakken, 3-bench Three Forks development of $7,022.584.35 for an average of $1,022.30 per acre, just strating very strong initial production in below the six year average of $1.065.52. By KAY CASHMAN the Middle Bakken and the first three Those results are in sharp contrast to the August lease auc- Petroleum News Bakken benches of the Three Forks.” see LEASE AUCTION page 19 t’s “ears back” at Continental Antelope development will first IResources Antelope prospect says the occur at Hawkinson, as planned, but QEP’s Williston Basin output company’s founder, chairman and CEO since its results came in ahead of sched- Harold Hamm, comparing the North ule by 30 days and the infrastructure to boosts crude production growth Dakota prospect to a horse allowed to handle takeaway for both oil and gas is “almost” finished, Continental is pro- QEP Resources Inc. boosted its net run “full out.” ceeding with “ears back,” likely adding income to $37 million in third quarter In the case of the Antelope, a Bakken HAROLD HAMM to projected production, Hamm said in a 2013, up from a net loss of $3.1 million petroleum system play, it means the big third quarter earnings conference call Nov. 7. in the third quarter last year, the compa- Oklahoma-based E&P independent is accelerat- “Once again, Continental is pioneering the ny said in a Nov. 6 conference call. Its ing development of its Antelope prospect, where expansion and improved recoveries in the world- adjusted net income was $63.3 million Hamm announced in early November the suc- class Bakken oil play, demonstrating the produc- for the third quarter 2013, compared to cessful completion of Continental’s first well den- $35.4 million in the third quarter of sity test in the Hawkinson spacing unit, “demon- see ANTELOPE PROSPECT page 12 2012. The company said its net income CHUCK STANLEY MOVING HYDROCARBONS increase was due primarily to higher oil see QEP OUTPUT page 12 Canadian XL irritations New completion methods up frack Frustration continues to build as more Keystone twists and turns come to light sand demand; pricing responds significantly exacerbate the The use of silica sand as a proppant in horizontal wells By GARY PARK problem of carbon pollu- has boosted total sand output in the North America as the rig For Petroleum News Bakken tion.” count rises — unconventional drilling has exploded in the The confusion in Canada last decade. emperatures are again is compounded by word In 2008, overall U.S. sand production was 30.4 million Trising among Canadian seeping out of Washington tons and prices averaged $30.82 per ton, according to the political and business lead- that the State Department is U.S. Geological Survey. In 2012, production was 49.5 mil- ers as they try to figure out quietly gathering informa- lion tons and the average price was $44.78 per ton. what the Obama administra- tion really wants in tion on whether shipment by Future sand demand, however, may be driven by the vol- exchange for approving rail is a viable alternative to umes of sand used per well. ALISON REDFORD JIM PRENTICE TransCanada’s Keystone XL the pipeline from the Alberta Michael Filloon advances the volume demand case for pipeline. oil sands and North Dakota Bakken to Gulf Coast higher sand prices in a Seeking Alpha post — “Frack sand One of the central issues on the line is whether refineries. pricing could go parabolic as EOG Resources well design Washington wants environmental concessions Sources have said the State Department is revolutionizes unconventional oil production.” from Canada and what message President Barack extending the view it offered in March that halt- see FRACK SAND DEMAND page 17 Obama was conveying earlier this year when he said XL will get the go-ahead only if it “does not see XL IRRITATIONS page 18 2 PETROLEUM NEWS BAKKEN • WEEK OF NOVEMBER 10, 2013 contents Petroleum News Bakken ON THE COVER 4 Completions still paying off for Halcon ‘Subtle’ fracks 3Q Bakken output up 237% over 2012; downspacing Statoil maintains slower Bakken growth tests yielding positive results; drill times as part of long-term strategy down from 15 to 17 percent ‘Ears back’ at Antelope 7 Marathon running leaner Continental accelerates full-field middle Output flat with temp shutdowns, but drill Bakken, 3-bench Three Forks development times improve 20 percent and good success Canadian XL irritations seen in first bench Three Forks 9 Newfield’s Bakken output beats guidance, again Frustration continues to build as more Keystone twists and turns come to light 10 XTO Energy sets internal Bakken production record October ND Trust Lands lease GOVERNMENT auction average back near par 6 KLJ selected to conduct ND oil study QEP’s Williston Basin output Wardner says committee’s goal is to sustain oil boosts crude production growth activity in the state; wants to be sure N.D. New completion methods up is competitive in taxing industry frack sand demand; pricing responds MOVING HYDROCARBONS BAKKEN STATS 5 Enbridge gives Sandpiper a fresh start 13 Montana well permits and completions, Oct. 25-31 10 Rail safety can’t escape spotlight 13 North Dakota well operator transfers, Oct. 26-Nov. 1 PEOPLE TALK 14 Bakken producers’ stock prices 8 CenterPoint drafts COO for succession 15 North Dakota oil permit activity, Oct. 28-Nov. 4 16 IPs for ND Bakken wells, Oct. 29-Nov. 4 Marathon elects retired Baker Hughes exec Chad Deaton SIDEBAR, Page 16: Top 10 Bakken wells by IP rate to board; and Renegade nabs three directors, hires search firm for CEO COMPANY UPDATE 3 MDU advancing in Bakken, Paradox GET THE Third quarter production record set as growth hits 37 LATEST BAKKEN NEWS. percent; Bakken output up 41 percent; Three SUBSCRIBE TODAY! 522 9469 Forks results encouraging 907-522-9469 PETROLEUMNEWSBAKKEN.COM 4 ConocoPhillips sees Bakken growth PETROLEUMNEWSBAKKE OILFIELD COMMUNICATIONS Telecom Engineering Project Management Two-way Radio Systems Microwave & Satellite Systems Fiber Optics & Network Cabling FCC Licensing Tower Construction & Inspection PROUDLY EXCEEDING OVER 1 BILLION BTU OF HEATING CAPACITY Frac Tank Heating • Water Pit Heating • Heat On-The-Fly® 800-490-4693 www.nstinorthdakota.com THE LEADER IN FRAC FLUIDS HEATING® 1 888 WE HEAT 24/7 • McAdaFluidsHeating.com NSTI PETROLEUM NEWS BAKKEN • WEEK OF NOVEMBER 10, 2013 3 G COMPANY UPDATE MDU advancing in Bakken, Paradox Third quarter production record set as growth hits 37 percent; Bakken output up 41 percent; Three Forks results encouraging By STEVE SUTHERLIN ers allows it to excited to talk about the potential of the The company is also doing a route study For Petroleum News Bakken increase frack stages Paradox and it was largely just that, poten- of a proposed 400-mile natural gas pipeline and it is very similar tial; at that time it accounted for just 6 per- from the Bakken to western Minnesota at a DU Resources Group Inc. is project- philosophically to cent of our total oil production yet showed projected cost of $650 million to $700 mil- Ming a 30 percent to 35 percent what the rest of the plenty of promise with the 12-1 well having lion — by far the largest pipeline project the increase in oil production for 2013 with pro- industry is doing, but just come online,” Goodin said. “Now if we company has undertaken, Goodin said. jected production rising 10 percent or more with a twist or two. fast-forward a year the 12-1 well has pro- MDU said it is actively pursuing in the fourth quarter alone.