Record Q2 For E&Ps

By The Bakken magazine staff | September 22, 2014

Oil production numbers and second quarter earnings totals have been released by most Bakken operators, with nearly all reporting production increases. 

Oasis Petroleum had another record-breaking quarter, producing 43,668 barrels of oil equivalent per day, a 45 percent increase over Q2 2013. MDU Resources announced its strongest first half since 2008 for its construction division, with its oil exploration and production sector, Fidelity Exploration & Production, reporting a 14 percent oil production growth. Whiting Petroleum Corp. increased its overall 2014 production guidance after releasing its Q2 results, showing a record 109,760 barrels of oil equivalent per day, from a combination of all its plays, led by production in the Williston Basin, however.

For several operators, who reported increases in oil production in Q2, tweaks to completion designs were typically cited. QEP’s second-quarter net income loss, however, also shows that strong production doesn’t necessarily correlate to reported net income.

Oasis Petroleum
Like most exploration and production companies in Western North Dakota, Oasis saw a successful second quarter, recording 43,668 barrels of oil equivalent per day, a 6 percent increase over the first quarter of 2014. The increased production is a result of completion tweaks that Oasis implemented, tested, and proved in time for its Q2 production updates.

“Early production results from our first Three Forks slickwater well in Red Band and a slickwater Bakken well in Montana are expanding the completion technique’s applicability across more of our inventory,” said Thomas Nusz, chairman and CEO of Oasis. “Both of these Oasis wells are producing 35 percent or more over comparable wells completed with our base completion design.”

Oasis had 16 rigs running during the Q2 and as of the end of June, had 35 wells west of Williston, N.D., and 32 in East Nesson awaiting completion services. The company found success with increasing frack spreads from three to six, making frack jobs planned for their overall production more effective.

“We have increased both frack spreads and cleanout crews, which will support the additional work we are doing in the second half of the year,” said Nusz.

Nusz added that some completions for the second quarter were pushed back, which resulted in Oasis completing six fewer wells than planned, causing third-quarter oil production projections to range between 47,000  and 49,000 barrels of oil equivalent per day.

WPX Energy
Well-density testing and analysis efforts have paid off for WPX Energy. The company has increased its well inventory in Western North Dakota by roughly 200 locations and announced it would start developing multiwell pads with an 11-well design.

WPX Energy has 83 11-well pads that will target the Middle Bakken with another 198 seven-well patterns targeting the same formation. In the Three Forks, the company has planned for 116 11-well pads in the first bench and another 203 seven-well pads in the same formation.

In its Q2 earnings report, WPX Energy disclosed its plans to increase proppant use in the Middle Bakken and Three Forks.
“A completion using 6 million pounds of sand on the Ruby multiwell pad was finished at the end of July,” the company reported. “This is twice the size of WPX’s historical Williston completions and is expected to become its new standard in the basin.”

EOG Resources
EOG Resources reported a year-over-year 33 percent U.S. oil growth increase and saw a company income of $706.4 million in the second quarter, compared to a $659.7 million for the same time last year in both its on- and off-shore plays. In the first half of the year, EOG shifted to multi-pad drilling in the Bakken.

EOG 75 reported production results for three wells brought online in Q2. The total initial production rate  from the three wells equaled 6,605 bopd.

According to Billy Helms, EOG’s executive vice president of exploration and production, the wells were completed with larger fracks that took longer to flow back. But, due to the extended flowback period, results from the wells were not yet ready.

“EOG’s assets in the Eagle Ford and Bakken continue to meet or, in most cases, exceed our high expectations,” said Bill Thomas, CEO of EOG. “Although we’ve been in the Bakken since 2006, we are steadily improving individual well results through continuing advancements in completion designs.”

In the Q2 earnings report, EOG disclosed its plans to test various benches of the Three Forks wells on both its core and Antelope Extension acreage during the remainder of the year.
 
QEP Resources
QEP Resources’ Williston Basin’s daily total oil production reached 35,600 barrels of oil equivalent during the second quarter, a 75 percent increase over the second quarter of 2013. The Denver-based company specifically highlighted its new record drilling time of 14.9 days from the start of drilling to total depth in the Williston Basin during its Q2 update.

Although QEP Resources saw an increase in oil production, it reported a net loss of $92.3 million in Q2 compared to the net income of $178.4 million in Q2 2013. Net income includes non-cash gains and losses associated with the change in the fair value of derivative instruments, gains and losses from asset sales, costs associated with the early extinguishment of debt and non-cash price-related impairment charges.

“We are pursuing multiple avenues to achieve the midstream separation, ranging from an outright sale of the business to a straight spin-off of the business to QEP shareholders,” said Chuck Stanley, chairman, president and CEO of QEP Resources. “Our ultimate objective is the maximization of shareholder value and the continuation of profitable midstream operations as part of a viable, competitive midstream entity.”

The company produced 31 gross operated wells, including 25 wells in South Antelope field and four wells in the Fort Berthold Reservations. The company reported a 15 percent increase in oil production in the Williston Basin over 2014 Q1.

Emerald Oil
Emerald Oil posted the strongest quarter in the company’s history with revenues from sales of oil and natural gas of $31.3 million compared to $10.6 million for the same period last year. The company’s acquisition of additional holdings in the Williston Basin makes it one of the play’s largest operators.

Emerald and Liberty Resources II LLC announced, in August, the signing of a definitive agreement to exchange a portion of Liberty’s holdings in the Williston Basin for additional Emerald acreage in the basin and $78.4 million in cash.

“The transaction with Liberty Resources II further solidifies our strategic position in both our Low Rider and Lewis & Clark focus areas, bringing our net acreage position in this core operating area to more than 108,000 net acres,” said McAndrew Rudisill, Emerald CEO.
The company reported second-quarter production of 340,320 boe—an average of approximately 3,781 boepd—an increase of 51 percent over Q1 2014 and 168 percent increase over Q2 2013.

Marathon Oil
During the second quarter of 2014, Marathon Oil saw its three high-quality U.S. resource plays average a net production of 170,000 barrels of oil equivalent per day. Marathon’s Bakken wells-to-sales are up 73 percent quarter-on-quarter, with 19 gross operated wells-to-sales.

The company reached total depth on 19-gross company-operated wells and brought 19-gross operated wells to sales during the second quarter. Marathon plans on shifting its focus to more aggressive completion designs in the Bakken.

“In the Bakken, there are two things going on: downspacing and enhanced completion designs,” said Lee Tillman, president and CEO of Marathon Oil. “Results continue to be very positive in the Bakken.”

Marathon plans to move from four-by-four well pads to six-by-six well pads in the Middle Bakken and Three Forks first during the second half of 2014. The company spud its first 12-well spacing pilot in July.