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Bakken After DAPL Is in Operation: Still Hard to Compete
10/27/2017
North Dakota’s Bakken shale play will remain at certian disadvantage against Texas and Oklahoma even after the DAPL pipeline is in full service.
The break-even cost drilling cost for the basin is estimated to drop to $52 a barrel from $55 due to shift away from rail transportation to the DAPL. However, that compares with about $46 on average in Texas’s Permian play and $41 in Colorado’s DJ basin.
The 1,172-mile (1,886-kilometer) pipeline is designed to ship as much as 570,000 barrels of crude.
Bakken was named for Henry Bakken, a North Dakota farmer whose land hosted the first well in the region in the early 1950s,
It is expected to produce an average of 1.1 million barrels a day of oil this year and next, a figure lower than the 1.2 million barrels produced in 2015, according to the Energy Information Administration.
At the same time, Permian production is expected to reach 2.9 million barrels a day by the end of next year, the EIA said in July.
Bakken activities are easy to trace and examine with a complete and up-to date oil and gas information from well activity to processing and exporting on our Bakken Infrastructure Map.
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Fueling Up for Success: Harvest Midstream, Hilcorp's Affiliate, to Acquire Bakken and Eagle Ford Assets from Paradigm
Harvest Midstream, a Hilcorp affiliate, is set to acquire three midstream gathering systems that serve the Bakken, as well as system located in the Eagle Ford. Harvest, an affiliate of Hilcorp Energy Corp, has entered into an agreement to purchase three Bakken midstream gathering systems and one in the Eagle Ford from Paradigm. Paradigm is set to sell these midstream assets to Harvest in the near future.
Restructuration is in a full-speed: Comstock to sell Bakken for $154 million
Comstock Resources decided to go through with asset divestment, selling its Bakken Shale actives for $150M to Northern Oil and Gas. The proceeds from these sales will be reinvested by Comstock Resources Inc. into the Haynesville Shale, at which point the company may acquire additional leasehold and fund drilling activities starting in 2022. Meanwhile, Northern clearly gunning for the pack leading position in the Texas shale play, but whether they succeed or not is remains to be seen.
Kinetik Holdings recently announced a series of transactions in the energy sector. They struck a deal to buy Durango Permian infrastructure for $765 million. At the same time, they're selling their 16% share in the Gulf Coast Express Pipeline to ArcLight Capital Partners for $540 million. The total purchase cost includes $510 million in cash paid immediately and an additional $30 million that will be paid later, depending on whether they decide to expand further.
Recently, the Permian has seen significant acquisitions: Exxon Mobil purchased Pioneer Natural Resources for about $60 billion. Diamondback Energy's $26 billion deal to acquire Endeavor Energy Resources is currently on hold due to requests from the U.S. Federal Trade Commission. Occidental’s acquisition of CrownRock for $12 billion in the Midland.
EOG Resources is pushing boundaries in Ohio's Utica oil play and now drilling on the Sable pad, also located in Noble County. This site features the 3.7-mile lateral currently under construction. The company's first multi-well pads in the area Timberwolf and Xavier have each produced over 200,000 barrels of oil since their inception—Timberwolf in August and Xavier in October. A third site, the four-well White Rhino pad in Noble County, is also showing promising early results, according to Keith Trasko, EOG’s Senior Vice President of Exploration and Production, who noted the wells are performing as expected in their initial weeks.