Saturday, May 15, 2021

Update On Enerplus Acquisition In The Bakken -- May 15, 2021

Much of this has been previously posted.

From The Williston Herald, the lede: 

A mere three weeks-worth of production from newly acquired Bruin assets was among factors pushing production stats 6 percent higher than expected in first-quarter earnings reports for Calgary-based Enerplus.

Then:

Discussion during the call was dominated by what the addition of 230,000 net acres purchased from Bruin and more recently from Hess, will mean for the company. These acquisitions have quadrupled Enerplus’ size in the Bakken, adding at least 340 economic drilling locations. Even more top tier drilling locations may yet unfold as the company examines the upside potential of the Three Forks in Dunn County locations.

And:

“We estimate we will be at or below 1.3 times by the end of this year, based on a $55 WTI price,” he said. “If today’s ($64) prices hold, we will be ahead of that estimate.”

The company’s free cash flow for the first quarter, meanwhile, was $60 million, Dundas said. That’s going to get higher going forward, with the new acquisition. Projections show $1.2 to $1.8 billion in free cash flow through 2025 in a $50 to $55 oil price world, while delivering growth rates of 3 to 5 percent.

As a result these metrics, Enerplus announced a 10 percent increase to their dividend, effective beginning in June.

“The second and third quarters will be our most active this year,” Senior Vice President and Chief Operating Officer Wade D. Hutchings said. “We expect to bring 32 gross, 26 net operated wells online over this period. Our execution has been solid with completions performance on both paths having averaged approximately 13 stages per day, representing an improvement of over 30 percent compared to our 2020 average performance.”

Drilling locations:

The company has identified at least 100 net drilling locations in the eastern third of its newly acquired Williams County acreage, Hutchings added.

“Over time we will look at testing the western Williams acreage, but our near and medium term plans will be focused on FBIR and Eastern Williams,” he said.

Meanwhile, there are 110 net drilling locations considered Tier 1 in the newly acquired Dunn County acres, as well as 120 more believed economic at current prices.

Those locations are all in the middle Bakken, and do not account for anything in the Three Forks layer.

Spending on these new areas will be integrated and optimized over time with existing Enerplus assets, Hutchings said.

“There are several specific areas we are actually quite keen to test,” he added. “The first one I would note is starting with the Bruin acquisition in Williams County.”

Enerplus

 ERF (Enerplus)

  • May 15, 2021

  • May 15, 2021: update; added 230,000 net acres with purchase from Bruin and from Hess; 
    • these acquisitions quadrupled the Enerplus footprint in the Bakken;
    • will add at least 340 economic drilling locations
    • if they drill twelve wells / year, that's almost 30 years of more drilling;
    • 2Q21 and 3Q21: most active period this year
      • will bring 32 gross, 26 net operated wells online over this period
      • will concentrate on FBIR and "eastern Williams"
    • completions: averaging 13 stages per day
      • a 60-stage frack = 7 days?
      • a 30 percent improvement over 2020
  • January, 25, 2021: Enerplus agrees to acquire Bruin for $3,000 / acre; Bruin said to have 151,000 net acres;
  • December 13, 2016, press release: to sell 5,800 net acres; $292 million; 8% non-operated interest; now with 65,500 net acres in North Dakota; averages 23,700 boe (90% liquids) in 3Q16 in North Dakota
  • July 3, 2015: a reader writes -- ERF also added  a 2nd drilling rig today. They have never had more than 2 rigs running. 
  • 215,000 + net acres in the Bakken (ND, Montana, and Saskatchewan)
  • BEXP presentation says ERF has 230,000 net acres
  • Saskatchewan: Daly, Taylorton, Oungre, Neptune, Freda Lake
  • Montana: Sleeping Giant (mature asset; possibly EOR; west of Williston; small amount in ND)
  • North Dakota: Fort Berthold

Saturn Oil & Gas Inc -- The Oxbow Acquisition North Of Williston -- May 15, 2021

See this note. Within that note, see links to the Torquay.  

Now, this news:  

Saturn Oil & Gas Inc announces transformational asset acquisition of 6,700 boepd to become one of the leading producers and land holders in southeast Saskatchewan (north of Williston).
Saturn Oil & Gas Inc. is pleased to announce that it has entered into an arms-length definitive agreement to acquire assets in the Oxbow area of Southeast Saskatchewan for approximately $93 million, funding for which is outlined below. 
Pursuant to the Acquisition, Saturn will acquire approximately 6,700 boe/d (~95% light oil and liquids)with over 450 net sections of land, largely positioned across one of the most economic oil plays in North America. 
  • Saturn expects to be debt-free in 24 months based on production forecasts, capital budget, hedging levels and current forward pricing
  • Mission is to continue to be an acquirer of accretive assets in Western Canada
  • Acquisition builds on Saturn's existing environmental, social and governance performance, while supplying responsibly-produced ethical Canadian crude oil to service global market demand

Back-of-the-envelope:

  • $93 million / 450 net sections = you can do the math
  • 6,700 boepd x $50 = $335,000 / day

Assuming each section = 640 acres = 288,000 net acres. 

Later, a reader did the math. He caught my error. LOL.

******************************
Apache, Eli, And Marilyn Monroe

From The Misfits

Canadian Heavy Oil -- Strong Demand -- May 15, 2021

Link here.


Read the social comments at that link and the dots start to connect. 

Hint: KSC. Suitor ups offer. TMX = Transmountain Pipeline.

"Vaccine Hesitancy" -- Saturday, May 15, 2021

The CDC data is tracked here

Continuing the theme, the numbers are down again but the point is pretty well made; the data won't be posted tonight.

Bakken Gas Quality Constraints To Impact Ethane Pricing -- Source -- May 15, 2021

This article was published February 11, 2020, over at BTU Analytics

A reader sent it to me overnight.

This article led me down a rabbit hole that kept me up most of the night. If I didn't have family commitments I would post the links that helped me understand this article. I will do that later, and, as usual, with comments. 

By the way, two things:

  • I do not understand natural gas; and,
  • this whole subject has been discussed numerous times and in depth on the blog.

Most of the really good stuff has come from RBN Energy.

Links that will be addressed later:


"US" - 2, Darkside -1 In Overtime -- May 15, 2021

ZeroHedge can be "hit or miss." 

But in the past twenty-four hours, some really good posts. 

This is perhaps the most interesting story: Darkside disbands. Normally I would "question" the source, the story, but in this case, the story links to an article in The WSJ which I have not read yet, and probably won't. Based on that snippet of information, the dots connect.

Saturday, May 15, 2021

Reminder: there may be very little blogging during the day for the next few weeks. This week, multiple graduations and visitors from out-of-town. Then next week, I am traveling. [Later, first of many graduation ceremonies and activities early today.]

Many, many to choose from today, but perhaps my favorite:

Washington, DC: 80% of stations still out of fuel after week of panic buying. Google led me to this link, the first "hit": https://www.foxbusiness.com/lifestyle/washington-d-c-gas-shortage-80-of-stations-still-out-of-fuel-as-supply-chain-gets-back-online.

  • Virginia: 37% of stations empty;
  • Maryland: 35% of stations empty;
  • Texas: 0% of stations empty