There has been little said about how Brigham (STO) has faired since being purchased by Statoil. This company has led the way in the Bakken/Three Forks for some time, and because of this is very important in determining how changes in completions could benefit investors. I was very high on Brigham's outlook, and believed the stock was a buy until its purchase. I would like to take credit, but must admit I was guided to the stock by individuals much smarter than myself. That said, it seems now may be a good time to check any changes Brigham has been making in an attempt to improve its current well design.
I have recently covered several Bakken players in a hope to show what it may or may not be doing well. Marathon (MRO) may have shown the most improvement, but in my opinion had much farther to go than other companies working the play harder. XTO Energy (XOM) is also very solid in its completion approach, as it understands money needs to be spent to get a good return. There are several similarities in its design with partner Kodiak (KOG), which lends me to believe XTO has helped Kodiak along. It is obvious this was important as Kodiak has had some of the best wells in the Bakken. EOG Resources (EOG) has utilized mostly short laterals in Parshall Field, and still maintained itself as one of the best operators.
Those who follow Brigham know that the company has had its best success in Alger Field. This may sound confusing as this company listed much of this in its Ross Prospect, although the two fields are very close to one another. In the table below, I will cover wells completed in 2011 by Brigham in Alger Field.
|Name||Date||Choke||Stages||Water||Proppant||60Day IP||120Day IP|
|Cvancara 20-17 1H||3/11||167/64||36||85435||4021580||1005||770|
|Sorenson 29-32 2H||3/11||181/64||38||83024||4106600||1164||832|
|Hospital 31-36 1H||3/11||96/64||33||76096||3442160||521||352|
|Brown 30-19 1H||4/11||118/64||37||76162||3671960||746||612|
|Vachal 3-34 1H||5/11||179/64||38||85135||3854880||824||639|
|SCHA 38-34 1H||6/11||160/64||30||68975||3641760||595||539|
|Holm 9-4 1H||8/11||179/64||32||74356||3843760||713||524|
|Holm 9-4 2H||8/11||179/64||32||89075||3631860||495||367|
|Alger State 16-21 1H||8/11||179/64||34||78047||4019380||883||737|
|Brown 30-19 2H||10/11||163/64||37||78129||3937040||865||643|
Above shows that Brigham not only uses a large number of stages, but also water and proppant. This coupled with a wide open choke has produced some very good 60- and 120-day IP rates. The interesting fact about these wells is production is maintained over a very long period of time, challenging the premise that choking back production to keep well pressures up is a better method. It is also interesting that Brigham really sticks with its completion methods, not altering too much to make a good comparison. In the table below are results from the same field by Brigham in 2012.
|Clifford Bakke 26-35 2H||1/12||128/64||38||75090||3745260||60Day=1150|
|Clifford Bakke 26-35 3H||1/12||179/64||39||70735||3919540||60Day=927|
|Clifford Bakke 26-35 4H||2/12||179/64||38||80278||3815140||60Day=842|
Note: IP rates are in barrels of oil per dayWater volumes are listed in barrels. Proppant is listed in pounds
The 2012 results show consistency of stages in the upper 30s. I would guess this will continue along with water and proppant volumes. The three wells in 2012 are all on the Clifford Bakke acreage, and it should be remembered that this is a sweet spot in the area so these results may be a little better due to geology. All said, Brigham is spending money to keep well production at the high end of the spectrum. These higher well costs may have been what pushed the sale of Brigham to Statoil, as we saw Newfield (NFX) have some significant problems causing it to push its Uinta program over the Bakken. It's hard not to like these results, and it will be interesting to see what Brigham does going forward.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.