Down To 91 Active Rigs In North Dakota -- April 8, 2015

Active rigs:

	4/8/2015	04/08/2014	04/08/2013	04/08/2012	04/08/2011
Active Rigs	91	191	185	208	173

Three (3) new permits --

• Operator: Hess
• Field: Robinson Lake (Mountrail)
• Comments:

Wells coming off the confidential list Thursday:

• 26387, drl, BR, CCU North Coast 31-25MBH, Corral Creek, no production data,
• 26934, drl, CLR, Kuhn 6-13H1, Camp, no production data,
• 28949, 653, Samson Resources, Ness 3229-6H, Blooming Prairie, t2/15; cum 3K 2/15;
• 29032, 557, Samson Resources, Odyssey 0508-6H, Blooming Prairie, t2/15; cum 3K 2/15;
• 29154, drl, XTO, Hanson 11X-12B, Murphy Creek, no production data,
• 29280, drl, MBI, Bahley 31-1, Wildcat, no production data,
• 29440, SI/IA, Murex, Johan Stephen 13-24H, Temple, no production data,
• 29488, drl, Statoil, Charlie Sorenson 17-8 7TFH, Alger, no production data,

Three (3) Slawson permits canceled: permits for three Slawson Phalanx Federal wells in McKenzie County were canceled.

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Alive And Well?

With only 91 active rigs in North Dakota, one might wonder about the credibility of the analyst. Bakken.com is reporting that the Bakken and the Niobrara are both alive and well:

The Bakken and Niobrara Shale formations are alive and well, for the most part. At last week’s DUG Bakken and Niobrara conference, analysts were present to talk with industry leaders.

Market analysts at the conference agree that operators are remaining optimistic about shifting focus to the formations’ core acreage and break-even costs remain on the upper end of $40 per barrel price range.

On the flip side, they found less optimism surrounding the formations’ natural gas market. After speaking with midstream companies and consultants, it became apparent that the market demand for natural gas has declined due to project permitting delays in the Gulf Coast region, especially for petrochemical projects.

Permitting delays affecting projects in the Gulf Coast have become a major roadblock for projects that could increase the demand for natural gas. Midstream representatives told the analysts that without these various projects moving forward, the demand growth for 2016 will likely be impacted. Additionally, approval for new Gulf Coast storage facilities can take as long as 18 months compared to the three-week permitting process found in North Dakota.

Another key takeaway from the conference was the break-even prices for both the Williston and Denver-Julesberg Basins. After speaking with management teams from four oil and gas companies, [the analysts] found that companies were operating with full-cycle costs that would break even with barrel of oil equivalent prices between $44 and $53. In both shale plays, the two found that many operators were drilling across larger areas of their acreage.

As operators continue to shift focus onto the play’s core acreage, though, many have seen a 10 to 20 percent reduction in break-even costs. For the coming year, many companies are moving away from the more costly, less productive areas to focus on their most promising acreage.

The core areas of the Bakken and Niobrara formations also have existing midstream and water transport infrastructure installed, further reducing the costs for companies to focus on these pay zones. By shifting focus to these core areas, companies will be able to further reduce the year-end finding and development costs while also reducing the break-even costs. By utilizing infrastructure already in place, operators could potentially lower their operating expenses by $2 to $3 per barrel of oil equivalent for the upcoming year.

There is more at the linked article.