2018 DUG Rockies Conference Highlights

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Whiting Petroleum Corp.’s president and CEO, Brad Holly, kicked off Hart Energy’s DUG Rockies Conference & Exhibition April 25 with a discussion of the E&P’s game-changing strategies in the Williston Basin.

But an additional narrative hook came during the post-presentation Q&A, when Holly said Whiting’s 100,000-acre holdings in the northeastern D-J Basin—its Redtail assets—are in the data room. The regulatory environment in Colorado is “challenging,” he said, though the recent uplift in oil prices helps.

Still, “differentiating results come from Tier 1 rock and Tier 1 operations. We feel like we’ve got that Tier 1 position in the Bakken, and we’re really going to go to work on focusing all of our attention on the Bakken in North Dakota at this time, as a Bakken pure play.” With WTI oil prices at some $68 per barrel (bbl) the day the conference kicked off, Bakken returns were looking good.

Since he joined Whiting in mid-2017, Holly said, the Williston Basin’s activity and economics have been rebounding; now, oil and gas companies must focus equally on how to recapture the investment community’s interest. Holly said there are compelling reasons to back the Bakken. Operators’ enhanced completions there have driven performance to nearly a 100% improvement in EURs and IPs, he said. EURs have risen from 500 to 600 Mboe to more than 1 MMboe since 2013. “The Bakken core has some of the best wells in the U.S. It generates strong free cash flow,” he said. He referenced public data showing that since 2008, wells that have at least a 700-bbl IP for 30 days, drilled for $6 million to $8 million per well, have generated a 50% to 60% rate of return. This is in the four-county Bakken core. Further, it’s a “true oil play,” he said. Just as important, the play no longer has to sing the differential blues. The days when it was penalized by its remote location and insufficient pipeline takeaway are no more. “With Dakota Access pipeline and other pipes out of the Bakken, its now very competitive with the rest of the sources in the U.S. It’s changed the game for the Bakken.”

 

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Brad Holly of Whiting Petroleum Corp. describes their use of customized completions to maximize well productivity and capital efficiency

The future looks bright for the shale plays in the Rocky Mountain region, according to a panel of analysts at Hart Energy’s recent DUG Rockies conference and exhibition.

During an economics panel at the conference, analysts Trisha Curtis, president and co-founder of PetroNerds LLC, and Stephen Beck, senior director of North American shale for Stratas Advisors, both forecast stable to growing activity in the Bakken, Denver-Julesburg (D-J) Basin and Powder River Basin.

“Higher prices have really helped the Rockies,” Curtis said to a packed house.

Curtis and Beck
Trisha Curtis and Stephen Beck 

Another big player, Hess Corp. is taking an “if you want it done right, do it yourself” approach to midstream infrastructure. Barry Biggs, vice president of onshore at Hess, said his firm is “focused on the future” because its “midstream business is positioned to support increased activity. “Midstream is a big part of our business plan and it also offers the opportunity to serve third parties,” creating an additional revenue stream. “Midstream has a lot of growth potential for us to support our drilling,” he added. In-house midstream infrastructure forms part of the company’s emphasis on “lean practices,” which employ advanced technology to pinpoint problems early and provide appropriate responses.

Barry Biggs
Barry Biggs, vice president of onshore, Hess Corp.