BEXP Will Double Rigs in Less Than 18 Months -- Bakken, North Dakota, USA

Operated Rigs

I think it was as recent as mid-2010 when BEXP still had just six operated Williston Basin rigs, with plans to go to eight rigs by 1Q11.

Today BEXP announced it is going to 12 rigs in 2011. So in less than 18 months, BEXP has gone from 6 rigs to 12 rigs.

That's huge.

BEXP expects to bring its eighth and ninth operated rigs into the Williston Basin in May and September, 2011, respectively. 

Dedicated Fracking

By mid-April, BEXP expects to add additional fracture stimulation capacity with two fully dedicated frack crews. At that time, BEXP  estimates that a minimum of eight wells per month will be fracture stimulated and brought on line to production due to the efficiencies gained by simultaneous stimulations. 

Commentary

I have been concerned that the infrastructure won't support 175 active drilling rigs, but it appears I am wrong. BEXP would not be doing this if it didn't feel the infrastructure could support it. Something tells me we will start seeing stories of more fracking crews in the Williston Basin.

They say the "permitorium" in the Gulf does not result in any displacement of workers from the Gulf to the Bakken, but one has to wonder. Perhaps that was true initially, when most folks thought the moratorium would be short lived, but as folks see the deep sea drilling rigs leaving, it's pretty obvious the "permitorium" is not temporary.

Even with all that is going on in the Mideast, there has been no announcement from Washington about re-looking at the "permitorium." And I think some oil service companies are going to move assets from the Gulf to the Bakken.

There will be some competition from the Niobrara in Colorado-Wyoming, but that development will come along more slowly. There will also be some competition from the Eagle Ford in south Texas, but again, that development will come along more slowly.

But for BEXP to double its rigs in less than 18 months, that's quite a story. One has to remember that about two years a lot of folks were wondering if BEXP could survive a cash crunch. BEXP partnered with USEG and came out looking very, very good.

BEXP is moving into the big leagues, along with CLR, WLL, and EOG, in the Bakken.