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Page added on July 16, 2014
North Dakota is poised for more growth in oil production
Crude supplies expected to rise 5 to 6 percent per month, but limits on flaring loom in 2015.
fect July 1, well operators are allowed to flare, or burn at the wellhead, no more than 23 percent of the natural gas, Helms said. The limit takes effect in October, and enforcement will begin in 2015, with the state poised to order well operators to curtail production in January if the target hasn’t been met. The rules aim to reduce flaring to no more than 10 percent in 2020.
In another sign that North Dakota’s oil boom is far from over, Whiting Petroleum announced Sunday that it will acquire Kodiak Oil & Gas to become the state’s top producer — with plans to boost its drilling in 2015.
The acquisition, an all-stock deal valued at $6 billion, will create a North Dakota petroleum powerhouse with 107,000 barrels per day of existing production — or about 10 percent of the state’s output — with 855,000 acres of leases and 3,460 future drilling locations.
“We plan to substantially accelerate the Kodiak drilling program by increasing the rig fleet from seven rigs to 12 rigs by the fourth quarter of 2015,” Jim Volker, CEO of Denver-based Whiting, said on a conference call Monday with analysts.
The acceleration, he said, is possible because the combined company will have greater access to lower-cost capital. Lynn Peterson, chief executive of the smaller Kodiak, said such a major expansion in North Dakota was “not something we felt comfortable doing on our own.”
Investors like the deal: Whiting’s stock rose 7.7 percent to $84.58 on Monday. Analyst Rudy Hokanson of Barrington Research set an end-of-2015 price target of $122 per share, a 45 percent increase.
“They have been doing a lot in terms of getting value out of the natural gas, not flaring it,” Hokanson said in an interview. “They have been building [natural gas] processing plants. The company has been pulling down and working on its debt level relative to its overall capitalization to very healthy position and it has plenty of prospects on its own.”
Kodiak, also based in Denver, has extensive oil leases in the Williston Basin that complement Whiting’s, Hokanson said. While adding drilling rigs to tap the Kodiak assets, Whiting also promises to lower the cost to $8.5 million per well, about $700,000 less than Kodiak’s cost, he added.
“There should be cost efficiencies,” Hokanson said. “The bottom line is the deal looks good.”
10 Comments on "North Dakota is poised for more growth in oil production"
Dredd on Wed, 16th Jul 2014 1:59 pm
North Dakota is “poised” …
poised: 1. (of a person) composed, dignified, and self-assured.
2. being in balance or equilibrium …
3. teetering or wavering …
4. hovering or suspended in or as in midair …
—————————-
Not sure that “poised” is a good thing in this context.
A more apt term for the global condition would be Under Suicide Watch wouldn’t it?
That got me banned from TOD.
Natch.
nemteck on Wed, 16th Jul 2014 2:44 pm
“Crude supplies expected to rise 5 to 6 percent per month….”. Wow, for 12 month that means a compounded 86% – 118.8% increase in production.
Nony on Wed, 16th Jul 2014 2:47 pm
Rune’s Red Queen posting is looking more and more flawed. He predicted 600-700,000 bpd as the peak. Before that, Piccolo had predicted 150-225,000 bpd peak. They were both serious postings on TOD and got attaboys from the peaker community (read the comments). Rune’s in particular got all kinds of MSM play. They were both dramatically wrong and the authors failed to make prominent update posts to clearly say “I was wrong and here’s why”.
Nony on Wed, 16th Jul 2014 2:50 pm
nemteck: they’ll probably do ~25% from JAN14 to JAN15. There is a big seasonal component to the numbers so you can’t expect every month to be like the fat summer months (and drops in the winter are normal).
Beery on Wed, 16th Jul 2014 2:56 pm
Might be easier to believe you, Nony, if you posted the URL. There are a good few “Red Queen” postings on Peakoil.com.
Also, you seem to be unaware that erroneous predictions tend to be rarer in the Peakist community than in the Cornucopian community, so there’s that.
MKohnen on Thu, 17th Jul 2014 12:26 am
Nony seems to be *completely* unaware of the vast amount of dramatically incorrect predictions on the side of the cornucopians! If he applied the same logic he does to supposedly missed peak-oil predictions (peak-oilers made incorrect predictions, ergo peak oil is a myth) to the IEA or EIA or USGS, he would be running around in a peak-oil panic right now!
Northwest Resident on Thu, 17th Jul 2014 12:52 am
Mkohnen – Great point. IEA and/or EIA predictions are always good for a laugh. They do have a dedicated following however, so they serve as excellent propaganda vehicles for the powers that use them to manipulate opinion.
Nony on Thu, 17th Jul 2014 9:43 am
Yergin has said he was wrong about Chinese demand. Read the Quest. I bought it. Have you? There’s more to life, to learning than Internet chitchat.
MKohnen on Thu, 17th Jul 2014 3:00 pm
So Yergin was wrong. Therefore, we can ignore all that Yergin says, which is the same methodology Nony uses for all peak oil proponents.
Nony on Thu, 17th Jul 2014 4:17 pm
He admitted it unlike the ninnies in Peak Oil. And I’ll take The Quest over some blog post any day. Night and day in terms of quality, of sources. You need to get out of your little conspiracy minded corner of the Internet. Don’t end up like Mike Ruppert.