Sunday, November 15, 2009

Bakken: HES

Hess Corporate Presentation 
2014 annual shareholders presentation, May 2014

Miscellaneous



News

January 26, 2016: Hess slashes E&P capital, exploratory budget by 20% from October guidance
The company is maintaining its October forecast of an average of between 330,000 and 350,000 barrels of oil per day in 2016, it said in a Tuesday release. Bakken net production is still forecast between 95,000 and 105,000 barrels of oil per day.

December 13, 2015: this is a cut and paste sent in by a reader:
Along these lines, in the adjoining Hess properties to the north (see this post), which we have discussed over the last couple years, Hess obtained six EN-Freda permit November 30 as you chronicled last week. Hess also holds four EN-VP and R permits they obtained in May, and four permits for additional EN-Leo wells which were issued in June. Incidentally, the six additional EN-Freda wells are on the same pad with ten producing wells, the EN-Freda 1-7 and EN-Leo 1-3.

August 23, 2015: Hess now deducts a transportation charge from royalty checks

July 22, 2015: random update; rigs down from 17 to 8; spud to release from 45 days to 15 days. 

January 27, 2015: due to slump in oil prices, Hess will cut CAPEX 16%; concentrate spending in the Bakken

January 12, 2015: EOG, DVN, HES, COP -- all out-perform. -- Barrons.

January 29, 2014: 645,000 acres in the Bakken; to ramp up in the Bakken. CAPEX will stay flat at $2.2 billion in 2014 (same as 2013) but will drill 225 operated wells vs 168; 17 rigs (2014) vs 14 rigs (2013). Will focus on unconventional shale. 4Q13: average well cost, $8 million vs $11 million (2012); forecasts 80K to 90K boepd in 2014; 9 wells for typical 1280-acre unit; will test tighter well spacing; Tioga Plant expansion to be complete 1Q14; forecast 150K boepd (2018) -- represents an increase from guidance of 120,000 boepd (2016).

January 1, 2014: because comments are not google-searchable, I will "copy" the entire contents of a recent comment here:
Hess Bakken Investments II: founded in 2009
http://companies.findthecompany.com/l/32584653/Hess-Bakken-Investments-Ii-Llc-in-Houston-TX
I do not know if the "Ii" is a typo or if this is a different company. Hess Bakken Investments II is the listed operator at the NDIC site.
In November, 2010, Hess acquires 167,000 acres from privately held TRZ (Tracker).
http://themilliondollarway.blogspot.com/2013/10/another-wall-street-recommendation-in.html
News report here:
http://www.b2i.us/profiles/investor/ResLibraryView.asp?ResLibraryID=42013&BzID=1977&to=rl&Nav=1&LangID=1&s=0&Category=1758
At the next site you will see that the name was changed from TRZ to Hess Bakken Investments II (at the site, scroll down to Tracker):
http://www.blm.gov/wy/st/en/resources/public_room/corporate_list/t.print.html
  • TRZ Energy, LLC, to Hess Bakken Investments II, LLC, eff 4/913 (North Dakota)
  • TRZ Energy, LLC, to Hess Bakken Investments II, LLC, eff 8/27/13 (Wyoming)
It's my impression that a number of large oil and gas corporations with multiple divisions or units, will establish "operating companies" under the corporate umbrella to actually perform specific tasks. In this case, it appears Hess Bakken Investments II, LLC, was established as the E&P operator for the Tracker acreage, and perhaps the Rocky Mountain acreage in general.

This seems to be confirmed at this site:

http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=907455
where it is noted that Hess Bakken Investments II, LLC:
... controls approximately 76,000 net acres in the Goliath Project located in the Williston Basin, North Dakota; approximately 131,000 net acres in the Bigfoot Project situated in the U.S. Rocky Mountain region; and approximately 97,000 net acres in Fetter and Krejci Projects located in the southern Powder River Basin, Wyoming. Hess Bakken Investments I Corporation, through its subsidiary, Tower American Corporation, also involves in oil and gas exploration and production operations in Colorado.
October 6, 2013: Merrill Lynch strongly recommends Hess

March 18, 2013: Hess to sell some Eagle Ford assets to Sanchez.
January 9, 2013: Hess sets global CAPEX -- $6.8 billion

August 14, 2012:   Shawn alerted me to fact that Hess was now in the Monterey shale, California. Here's a nice link, note the reference to the Bakken, again:
Hess Corp., a $17 billion oil company with offices on six continents, recently set up shop in Bakersfield and already it's buying up property in California.

New York-based Hess doesn't have any operations on the West Coast, but its extensive work in North Dakota's Bakken formation could give the company valuable experience with which to tap the Monterey Shale, a potentially massive reservoir under development here and in other parts of Central California.
July 16, 2012: Hess changing its completion design -- more water, 38 stages. 

June 10, 2012: Hess and ZaZa part ways in the Eagle Ford and in the Paris (France) Basin. Agreements increase net Eagle Ford core land holding six-fold to 72,000 acres and ZaZa to be paid $85 million.
 
December 16, 2011: according to a correspondent, during 2011 Hess transitioned from 18-22 stage to 38 stage fracking.

December 12, 2011: Hess is reporting some nice wells in its East Nesson prospect.

July 26, 2011: archives on investing stories about HES up to this date.

July 23, 2011: Archived -- American Oil and Energy Stories; AEZ Acquired by Hess.

March 22, 2011: Follow the discussion regarding significant Hess activity.

March 1, 2011: Hess has five permits for vertical wells monitoring a long horizontal in Big Butte

February 22, 2011: Rig count -- Hess, 7; American Oil and Gas, 9; and Tracker, 4. They are all part of Hess now with Hess acquiring Tracker and AEZ (assuming Tracker = TRZ).

January 18, 2011: Great AEZ well; now it's a Hess well.

November 24, 2010: Another six well multi-pad, the TI-Blesrud and the TI-Hillfren series

November 22, 2010: Hess acquires TRZ LLC, to include 167,000 net acres in the North Dakota Bakken

November 15, 2010: six permits today for one pad, Manitou oil field, NWNE 13-155N-94W, the EN-Ruland and EN-Dubrovolny series;

October 7, 2010: six permits today for one pad, Tioga oil field, SESW 8-157N-94W; the EN-Lokken and the EN-Charles Wood series

August 26, 2010: at least the third time that Hess has permits to drill six (6) wells originating in same section.

August 26, 2010: Hess announcement -- intention to buy AEZ for about $7/share

August 6, 2010: Yet another low-IP Hess well in the Clear Water field.

July 30, 2010: I have noted before that Hess has had less-than-stellar wells; there may be an explanation. Deep in this thread is a long posting by Suzanna Shatto that sheds some light on this.

May 28, 2010: Hess was granted six permits today (19074 - 19079, inclusive) for six wells on one pad, 2560-acre spacing, in Robinson Lake oil field, Mountrail County.

April 23, 2010: Hess was granted three permits today (18850, 18951, 18952) for three wells on one pad. 
They will be the EN-Heinle-156-94-2536H-1, the EN-Heinle-156-94-2536H-2, and the EN-Heinle-156-94-2536H-3.
They are all on the same pad even though the legal description of the first two puts them in the NENE subquadrant whereas the third well will be in the NWNE quadrant. If this is not a typographical error on the daily activity report, it simply means that the pad straddles these two subquadrants.
Big Butte is right next to the very interesting Alger oil field and these particular wells are in the far south of the field where production has been better in the surrounding area. 
January 27, 2010: Dual laterals: Hess confirms that 1 million bbls EUR for dual laterals is a "good number."

January 12, 2010: Two 2560-acre spacing requests and first permits for same.
This is interesting. In the daily activity report dated January 12, 2010, there were six (6) new permits granted. All six permits went to Hess and they were all "development" wells in the Ross oil field. This is an average size oil field in the middle of the Bakken. These six permits are all in one section: section 27. All six are offset from the west line by 542 feet, and they are offset from the south line, respectively: 2201 feet, 2151 feet, 2101 feet, 2051 feet, 2001 feet, and 1951 feet. They will be going to the following total depths, again respectively, 19,603 feet; 19,251 feet; 18,976 feet; 18,231 feet; 19,089 feet; and 18,491 feet.  This would make them all long laterals (1280-acre; two sections). See also NDIC Docket for Wednesday, January 13, 2010, case number 11991: Application of Hess Corp. for an order amending the applicable orders for the Ross-Bakken Pool to establish two 2560-acre spacing units (each unit consisting of 4 sections). January 12, 2010.
From the 3rd quarter, 2009, analyst's call via Bakken Shale Discussion Group, November 13:
Hess will double number of rigs in "the Bakken," from 3 (2009) to 6 or 7 (2010). On March 14, 2010, Hess had five (5) active rigs.

Hess will move toward $1 billion/yr in cap-ex in the Bakken next 4 - 5 years.
But the discussion group noted something much more interesting: lackluster wells.
We have all noted that some producers seem to have lackluster wells compared to others. One of the folks noted that Hess is one of those with less-than-stellar results in North Dakota. But an exception: Hess reported an IP of 1,998 boepd for the RS-Feldman. This was reported in NOG's recent update; NOG also noted that Hess used a 14-stage completion on the RS-Feldman well. That may be Hess's best well to date in the Bakken. (The RS-Feldman well is file # 17696, about 3.75 miles northwest of Stanley.)

Comment: some weeks ago I opined on the Bakken Shale Discussion Group that "in the old days [two months ago]," no one was doing multi-stage fracturing, but now it was becoming the norm. Someone responded, taking me to task, saying that multi-stage fracturing had been around for at least two years. [In fact, multi-stage fracturing has been around for at least two decades.]

I was mis-read. I was using hyperbole; of course I was aware that multi-stage fracuring was being used in the Bakken. The point I was making was that it was my opinion that not all producers were using multi-stage fracturing. It appears I may have been correct.

People who follow the industry much closer than I do were surprised to see Hess using a 14-stage fracture stimulation. Hess has had lackluster results in the Bakken according to some; with the multi-stage fracture stimulation they may have a good well.

The thread also states: Hess drilled a Bakken/TFS stacked lateral (EN-Uran-154-93-1213H-1 / file number 18228). It comes off the confidential list on February 3, 2010. I've added it to my "wells to watch" page.
Fidelity (MDU): same problem?
On another note, I have also been struck by the uniformly poor Fidelity (MDU) wells in the Bakken. My hunch is that they have also been using one-stage fracture stimulation.

Original Post

See: Dakota Candles and Orion Belts. These are really, really cool. In a Hess "Orion Belt," Hess is placing six wells on one site. Three wells will go in one direction, and three wells will go in the opposite direction. For example, the Dolan/Fisher wells will run north-south. The Dolans will run south, and the Fishers will run north. Because there are three wells going in each direction, one can assume the three formations being targeted are the Middle Bakken (MB) and the Upper and Lower TFS.  A Hess "Dakota Candle" is the Shuhart/Nelson group. These are very similar to CLR's Eco-Pads. It would be interesting to learn who first thought of this concept; it does appear that CLR/CEO Harold Hamm was the first to talk about publicly about multiple-well concepts.

Nomenclature: one can identify the general area where Hess wells in North Dakota are located based on their names. The names of their wells are preceded by a two-letter acronym. This is what the letters stand for (check out slide 10 on corporate presentation):
  • EN: East Nesson (Sanish, west of Tioga)
  • RS: Red Sky (Parshall)
  • ST: Stampede (south of Parshall and east of the river)
  • IM: Impact (Cottonwood and north-north-west of the Red Sky)
  • BL: Beaver Lodge (dead center in the Nesson Anticline; northwest of Parshall, southwest of Tioga)
  • GO: Goliath; the new prospect for Hess; the American Oil and Gas acquisition west of Ray
  • Other prospects for which I have not yet seen the two-letter designation: Avalanche [north of East Nesson]; Impact [north of Red Sky]; Passport [east of Red Sky]; AEZ [west of the Nesson Anticline].
*****

8 comments:

  1. How do I find out info on a well EN-BELIK-156-93- 0607H, I would like to know the arcerage the well covers so i can calculate my decimal percentage. Also what determines if a well producing gas when the gas is sold.

    ReplyDelete
  2. I'm away from my database at the moment but will try to get the answer this evening (December 11, 2009).

    The Bakken Shale discussion group (linked on the sidebar on the upper right) can be very helpful and might be able to provide the answer more quickly.

    ReplyDelete
  3. You are in luck: you can see details at: http://groups.google.com/group/bakken-shale-discussion/browse_thread/thread/704481a466afed0f. The EN-BELIK-156-93-0607H is a "long" lateral -- two sections. Each section is 640 acres, so this well should be 1280-acre spacing. The permit/file number is 17956. It just came off the confidential list, early December, 2009. It looks like a pretty decent well with initial production at 511 barrels of oil equivalent per day; most recently it has been producing about 8,000 barrels/month.

    ReplyDelete
  4. With regard to your question about natural gas. It has flared some natural gas but has not sold any natural gas. This is not unusual.

    ReplyDelete
  5. Any ideas on why most the Hess wells changed operator name to Hess Bakken Investments II?

    ReplyDelete
    Replies
    1. Hess Bakken Investments II: founded in 2009
      http://companies.findthecompany.com/l/32584653/Hess-Bakken-Investments-Ii-Llc-in-Houston-TX

      I do not know if the "Ii" is a typo or if this is a different company. Hess Bakken Investments II is the listed operator at the NDIC site.

      In November, 2010, Hess acquires 167,000 acres from privately held TRZ (Tracker).
      http://themilliondollarway.blogspot.com/2013/10/another-wall-street-recommendation-in.html

      News report here:
      http://www.b2i.us/profiles/investor/ResLibraryView.asp?ResLibraryID=42013&BzID=1977&to=rl&Nav=1&LangID=1&s=0&Category=1758

      At the next site you will see that the name was changed from:
      TRZ Energy, LLC, to Hess Bakken Investments II, LLC, eff 4/913 (North Dakota)
      TRZ Energy, LLC, to Hess Bakken Investments II, LLC, eff 8/27/13 (Wyoming)

      It's my impression that a number of large oil and gas corporations with multiple divisions or units, will establish "operating companies" under the corporate umbrella to actually perform specific tasks. In this case, it appears Hess Bakken Investments II, LLC, was established as the E&P operator for the Tracker acreage, and perhaps the Rocky Mountain acreage in general.

      This seems to be confirmed at this site:
      http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=907455
      where it is noted that Hess Bakken Investments II, LLC, where it is stated:
      It controls approximately 76,000 net acres in the Goliath Project located in the Williston Basin, North Dakota; approximately 131,000 net acres in the Bigfoot Project situated in the U.S. Rocky Mountain region; and approximately 97,000 net acres in Fetter and Krejci Projects located in the southern Powder River Basin, Wyoming. Hess Bakken Investments I Corporation, through its subsidiary, Tower American Corporation, also involves in oil and gas exploration and production operations in Colorado.

      Delete
    2. Thanks Bruce. I've heard rumors Hess was looking to sell some Bakken assets, which would surprise me. Happy New Year!

      Delete
    3. Hess is selling non-core assets. I doubt this includes anything significant in the Bakken.

      http://online.wsj.com/news/articles/SB10001424052702304202204579256481237606934

      Delete