Whiting Might Have Another IP Record In The Bakken -- July 30, 2014

Supposedly reporting today (some have already reported):

• Halcon (HK) -- see below
• Hess (HES) -- results posted
• Murphy Oil (MUR) - after market close
• Phillips 66 (PSX) -- results posted
• Questar (STR) -- beats by 1 cent; beats on revenue;
• Southern Company (SO) -- beats by 2 cents; beats on revenues
• Sprint (S) -- topped estimates
• Tenaris (TEN.MI)
• Valero (VLO) -- beats by 2 cents; revenues in-line
• Whiting (WLL) -- see below
• Williams Cos (WMB)-- see below

Whiting:

• Record production reaches 109,760 boepd in 2Q14, up 9.7% over 1Q14, exceeds high end of guidance 
• Record Bakken/Three Forks production of 80,195 boepd inn 2Q14, up 33% over 2Q13
• Redtail Niobrara production of 7,235 boepd in 2Q14, up 59% over 1Q14
• Tarpon well completed in 2nd bench of Three Forks flowing 6,071 boepd
• Raising mid-point of 2014 production guidance to 20% over 2013 
• 2Q14 net income available to common shareholders of $151.4 million or $1.26 per diluted share and adjusted net income of $167.9 million or $1.40 per diluted share [Consensus was $1.17]
•  2Q14 discretionary cash flow totals a record $556.2 million 

Whiting, from Reuters:

Whiting Petroleum Corp posted a better-than-expected quarterly profit on Wednesday as oil and natural gas production jumped across the company's wells in North Dakota and Colorado's shale formations.

Whiting, which is about to become the largest oil producer in North Dakota's Bakken shale with the buyout of a smaller rival, boosted its capital budget by $100 million to $2.8 billion and said 2014 production should beat 2013 levels by 20 percent, citing in part better-than-expected well results.

"We believe we have plenty of running room in the Williston Basin" of North Dakota, Whiting Chief Executive James Volker said in a statement.

Halcon:

Company delivers 44% year-over-year production growth

Full year 2014 production guidance raised

HOUSTON, July 30, 2014  -- Halcon Resources Corporation today announced its second quarter 2014 results.

Revenues for the three months ended June 30, 2014 totaled $327.1 million, an increase of 53% compared to the three months ended June 30, 2013. Production for the quarter came in above guidance and increased 44% year-over-year to an average of 42,055 boepd. Second quarter 2014 production was 85% oil, 7% natural gas liquids (NGLs) and 8% natural gas.

Total operating costs per unit (including lease operating expense, workover and other expense, taxes other than income, gathering and other expense, and general and administrative expense) decreased by 21% to $24.45 per boe in the second quarter of 2014, compared to the second quarter of 2013.

After adjusting for selected items primarily related to the non-cash impact of derivatives, net income was $32.5 million, or $0.07 per diluted share, for the three months ended June 30, 2014. Halcon reported a net loss available to common stockholders of $73.3 million, or $0.18 per diluted share for the quarter. [Consensus was four cents.]

WMB:

• Expected 2Q14 cash distributions from Williams Partners and Access Midstream Partners totals $509 Million, up 29% vs. 2Q13
• Adjusted segment profit + DD&A is $742 Million, up 15% vs. 2Q13
• Adjusted income is $158 million or $0.23 per share, up 22% vs. 2Q13 [Consensus: 23 cents]
• 2Q 2014 Net Income Is $103 Million or $0.15 per Share 
• Updating financial guidance primarily to reflect acquisition of additional interests in Access Midstream Partners 
• Affirming planned dividend guidance: 3Q14 up 32% to $0.56, or $2.24 on an annualized basis; $2.46 in 2015, with follow-on annual dividend growth of approximately 15% through 2017 
• Williams Partners and Access Midstream Partners evaluating merger as proposed by Williams 

PSX:

• Phillips 66's Q2 EPS rose 0.7% to $1.51, falling short of views by 19 cents. Revenue climbed 7.2% to $46.3 billion, under estimates for $47.5 billion.

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Two New Human Interest Articles On The Bakken

Sent in by two readers, thank you

First, the Huffington Post:

BELFIELD, N.D. -- Byron Richard's pickup bounces up and down over the washboard gravel road. He clutches the wheel with one hand and points with the other as he passes dozens of oil wells on land where once crops grew and cattle grazed.

A few of the wells are decades old; most are new or under construction. Oil field vehicles of assorted shapes and sizes clog the road in places and kick up thick clouds of dust.
Richard's way of life is changing. He knows that. He accepts that.

But the Belfield, N.D., farmer and rancher says too many of the changes favor the oil industry at the expense of him and other agriculturalists.

"We're not anti-oil. We can co-exist with oil," he says. "But there needs to be more focus on surface rights owners." 

My reply to the reader who sent me this:

Another great article. Thank you. Again, these articles make it sound like the entire state of North Dakota is being take over the oil and gas industry. We're talking about the western third, maybe western fourth of the state, and even so, very little of four or five counties. Cattle are hardly affected. Most ranchers in oil country now have the cash to actually keep farming/ranching. You notice that Willie Nelson is not doing any Farm Aid concerts in North Dakota any more. It's a nice human interest story but that's about it. 

The second article, also from the Huffinton Post:

North Dakota’s Heritage Center makes for a jarring sight in this Midwestern prairie capital. The newly-expanded museum consists of four interlocking cubes of stone, steel and glass, a gleaming architectural statement poking out of the otherwise drab Capitol grounds. Each cube features a gallery devoted to an era of North Dakota’s history, but the state’s present is everywhere.

The legislature approved the dramatic $52 million expansion in 2009, but required the museum to come up with $12 million of that to supplement state money, and more than half has come from energy companies — including a $1.8 million gift from Continental Resources Inc. that put its name on one of the galleries. The gifts have “given us a chance to do some things that we’ve never really had a chance to do,” said Merl Paaverud, director of the State Historical Society.

Oil development has transformed this state to the point where it’s hard to find a place or person that hasn’t been touched by the boom. Energy companies have drilled more than 8,000 wells into western North Dakota’s rugged prairie since the beginning of 2010, quadrupling the state’s oil production. From July 2011 through June 2013, the state collected $4 billion in oil taxes, and is expecting a $1 billion surplus for the current biennium, not including an oil-funded sovereign wealth fund that will approach a balance of $3 billion. North Dakota is in the uncommon position of facing a labor shortage, spurring a state-run campaign to attract workers, paid for in part by Hess Corp.

My reply to the reader who sent me this:

Got it,thanks. These articles make it sound like the entire state of ND is being taken over (geographically) by the oil and gas industry. As you know, it is pretty much confined to three, maybe four counties. The counties along the Canadian border and the counties in the southwestern part of the state have activity but I drive those areas every year, and not much as changed in Stark County or Belfield.

Williams, parts of McKenzie (Watford City area), and parts of Mountrail are really affected but in the big scheme of things that's about it.