Bakken Update: Q4 IP Rates In Dunn County Part 2

by: Michael Filloon

In Bakken Update: Q4 IP Rates In Dunn County Part 1, I covered some of the oil producers in Dunn County, North Dakota. This Bakken area is often overlooked, as much of the attention is to the north in Sanish and Parshall fields. These fields have been good producers, but not as good as the Koala Prospect in McKenzie County. The point is, most of the positive news has been elsewhere, but I believe there are areas of Dunn County that are just as good if not better. In the first part of this series, there were some very good results, but the most appealing were the FBIR wells operated by XTO (XOM). Kodiak (KOG) has a large working interest (pdf) in these wells as a non-operator. I will continue to cover companies operating in this area, for the purpose of identifying the best acreage, and hopefully show which companies are getting the most from its acreage.

Hess (HES) is a big company, with a large Bakken footprint. Hess, like Continental (CLR), is another oil producer keeping well pressures up, which hurts short-term production. We are seeing a lower depletion rate in Hess wells, which could pay off in the long term. I still am unsure how to compare this practice with companies like Brigham (NYSE:STO), which allow oil to flow more freely. Only time will tell. Hess' fourth-quarter completions in Dunn County are:

  1. Regeth 22-1H: IP rate of 534 Bo/d. 19190 barrels of oil have been produced in 38 days for an average of 505 Bo/d.
  2. MC-Schollmeyer-144-94-2116H-1: IP rate of 499 Bo/d. 24468 barrels of oil in 77 days for an average of 318 Bo/d.
  3. Hovden 15-1H: IP rate of 869 Bo/d. 13162 barrels of oil in 10 days for an average of 1316 Bo/d.
  4. Bonnie Divide 16-1H: IP rate of 640 Bo/d. 33859 barrels of oil in 79 days for an average of 429 Bo/d.

QEP Resources (QEP) has some of the best acreas in the Bakken. It currently has 89000 net acres (pdf). QEP is using a 9000 foot long lateral with EURs of 750 MBoe.

  1. MHA 1-04-03H-149-91: IP rate of 606 Bo/d. 32415 barrels of oil in 57 days for an average of 569 Bo/d.
  2. MHA 3-04-03H-149-91: IP rate of 1571 Bo/d. 43207 barrels of oil in 59 days for an average of 732 Bo/d.
  3. MHA 3-32-29-150-91: IP rate of 933 Bo/d. 8330 barrels of oil in 30 days for an average of 278 Bo/d.
  4. MHA 1-32-29H-150-91: IP rate of 2609 Bo/d. 64030 barrels of oil in 61 days for an average of 1050 Bo/d.

The fourth well on this list is excellent but I am unsure why there has been inconsistency in results. QEP has shown it is a capable Bakken player, and has great acreage in Dunn County.

Continental has fourth-quarter completions in Dunn County. When compared with past quarters we continue to see better numbers:

  1. Grande 1-18H: IP rate of 814 Bo/d. 26763 barrels of oil in 83 days for an average of 322 Bo/d.
  2. Catron 1-26H: IP rate of 753 Bo/d. 17968 barrels of oil in 59 days for an average of 305 Bo/d.
  3. Dvirnak 2-7H: IP rate of 744 Bo/d. 17115 barrels of oil in 26 days for an average of 658 Bo/d.
  4. Dvirnak 3-7H: IP rate of 831 Bo/d. 19142 barrels of oil in 26 days for an average of 736 Bo/d.
  5. Pletan 3-18H: IP rate of 1106 Bo/d. 16019 barrels of oil in 21 days for an average of 763 Bo/d.
  6. Pletan 4-18H: IP rate of 1294 Bo/d. 14485 barrels of oil in 26 days for an average of 557 Bo/d.

Burlington Resources (NYSE:COP) is active in Dunn County. All of its fourth-quarter well completions are still on confidential status, but looking back to the third quarter we see very good IP rates:

  1. Intervale 11-35H: IP rate of 1202 Bo/d. Murphy Creek
  2. Lincoln Hill 24-19H: IP rate of 1920 Bo/d. Killdeer

These fourth-quarter results are difficult to judge long term, given the very short duration of production. Because of this, a company like Continental may not show as well, but it does show well completions continue to improve quarter over quarter and year over year. It also reinforces the premise northeast Dunn is as good as Mountrail acreage across the river. There is not doubt Enerplus, Kodiak and XTO have the best acreage here, and we should continue to see IP rates in the 2000 barrel of oil range. It is my opinion this area will continue to produce Koala-like numbers. I do have worries about Kodiak's Charging Eagle acreage, as initial numbers were bad, and much worse than anyone would have expected. Kodiak asserts these numbers were poor based on sliding sleeve issues, so look for better numbers in coming quarters. Also, Marathon (NYSE:MPC) has been able to prove Dunn can produce good numbers further to the southeast. Keep watching this area, as I am impressed by recent results.

Disclosure: I am long KOG.

Disclaimer: This is the second and last part on IP rates in Dunn County. It is only an article and not a buy recommendation.