Oasis Conference Call -- 2Q12

Updates

August 15, 2012: the company's August presentation (a PDF file):

• pad drilling; 35% of 2012 wells scheduled for pad drilling; moving to 100% in 2013
• days to frack wells: down 50% to ~ 5 days
• upgrading rig fleet; running 9 - 10 operated rigs
• pressure pumping: 2 - 3 dedicated external frack crews; own in-house fracking 24-hr ops
• cost to complete wells: moving from $10.5 to $8.8/well (remember, these are long laterals)
• well design: significant lower well costs in Hebron (eastern Montana) and Red Bank (north of Williston)
• north Cottonwood: all-sand fracs; saves money
• TFS; Spratley produced over 1,300 boed in first 60 days; TFS wells look similar (if not better) than nearby Bakken wells
• interference tests suggest Bakken and TFS produce independently of each other; confirms CLR's findings
• in-fill test program: 4 Bakken well test; 3 Bakken, 3 TFS test in Indian Hills
• slide 26: average EUR for middle Bakken now at 600K; was 350 - 450 when company went public 

Original Post

Data points from the Oasis 2Q12 conference call below. I didn't see a whole lot new. Like others, Oasis will focus on cutting costs (pad drilling, better use of ceramics; optimize fracking; in-house frack team). Bringing in more work-over rigs, something Whiting also said. 

2011: a transition year; consolidated acreage position; coring up large blocks

2012: focused in four areas - a) holding of all our drill blocks by production (successful); b) continue extensional testing in both the middle Bakken and the Three Forks; c) optimizing services, including start-up of Oasis well services (in-house fracking); and, d) infrastructure development.

Looking to knock off ~ 10% of drilling costs by end of year (every operator is saying this)

Moving to pad drilling -- again, the trend

Added leases around the company's core areas; now 320,000 net acres

Has brought in additional work-over rigs (also mentioned by Whiting; Whiting's ratio is 1.5 work-over rigs for every drilling rig)

Like CLR, Oasis increased full-year guidance to 22,500 to 22,50 boepd; 3Q12 will range between 22,000 and 24,000 boepd

Like CLR, Oasis increased its 2012 CAPEX as of July from $900 million to $1.1 billion; partly due to increased pace of drilling -- when the going gets tough, the tough get going

Current well cost: $9.8 million; hoping to reduce that to $8.8 million by end of year

Oasis Well Services: commenced 24-hour ops, two-week-on/one-week off rotation in June; 30% of Oasis frack work on a 10-rig schedule; will increase about 50% when OWS goes to full 24-hour operations

Guar not an issue;  nor is sand

In the north Cottonwood, where the Bakken is thick, but higher water concentrations, 36-stage completions, but reduced size of individual stages

EURs have increased significantly; now up to about 500,000 bbls on these (Cottonwood?) wells

Hebron prospect in Montana: similar approach; less proppant per stage; the Bakken is thinner; EURs there also about 500,000, but at lower cost in stimulations previously used in that area

In the Indian Hills (sic) and south Cottonwood, Three Forks are as good or better than the middle Bakken

Optimize proppant mix: Indian Hills (sic) and South Cottonwood, 60 to 65 percent ceramic; north Cottonwood is all sand to this point; Red Bank, beginning to use less ceramic;

Takeaway: 50/50 rail/pipeline

Looking at going from six wells to eight wells per 1280-acre spacing unit

OASIS: stimulation is "our biggest ticket item with respect to our total well cost" 

Important data points:

In a recent interference test, the JO Anderson Three Forks well was drilled about 800 feet from a Bakken well, which had already produced about 140,000 barrels. So far, the JO Anderson well has produced at a higher rate and other nearby Three Forks wells. We think that this is indicative of unique Three Forks reserves, even at close-Bakken/Three Forks well spacing.