- Bakken completions show significant boost in stages and proppant per stage.
- Well stimulation prices are rising as capacity tightens.
- 2017 capex implies further reduction in DUC inventory.
Canadian geese have started south, pheasant hunting season opened to mixed reviews and drilled but uncompleted wells (DUCs) are clearly in the crosshairs of E&P companies in North Dakota.
At long last the Bakken Shale shows signs of awakening as multiple Bakken E&P companies are moving forward with DUC reduction programs, with further expansion scheduled in early 2017, including one effort on behalf of a publicly held mid-cap to complete 60 inventoried wells.
Officially, the North Dakota Industrial Commission reported E&P companies completed 71 wells in September 2016, while the number of wells waiting on completion dropped by 27 to 861 to close out third-quarter 2016. Service providers report an average 7% decline in DUC inventory heading into the final month of 2016.
All good news. And it doesn’t stop there. Well stimulation firms are reporting an increase in per-stage pricing, making the Bakken the third tight formation play to report price increases for well stimulation. As elsewhere, the price increase relates to greater proppant consumption as E&P companies boost stage count on tighter spacing and add increased proppant loading per stage. Pricing edged above $42,000 per stage, on track with increases reported during fourth-quarter 2016 in the Eagle Ford and Marcellus shales.
Outside of increased consumables, some well stimulation firms implemented a 10% increase for services based on a tightening market and longer waits for crews and equipment, while multiple Williston Basin well stimulation firms are actively signaling a post-Jan. 1 price increase across the board for pressure pumping services. Indeed, while the pace of well completion remains six stages daily on a 24-hr schedule, the actual number of days to complete a lateral increased to 12 as E&P companies face a shortage of readily available crews, with some well stimulation work remaining on extended daylight hours.
Like the airline industry, announcements of price increase and actual traction in the market are two separate events. Outside the Bakken well stimulation providers continue adding incremental crews nationwide in anticipation of increased demand in 2017 even as pressure pumping fleets rotate through regional markets in search of steady employment.
True to form, regional well stimulation capacity is rising in the Bakken. One E&P company added two well stimulation fleets in fourth-quarter 2016 focusing specifically on its DUC backlog, while a third fleet has entered the play, boosting the regional fleet count to 12. Regional hydraulic horsepower rose to 272,000. The amount of hydraulic horsepower applied per well rose to 27,000 hhp on the basis of modestly longer laterals, an increase in stage count per well and a large jump in the volume of proppant loading, which rose to 15 million pounds per lateral, up from 10.2 million pounds in third-quarter 2016, according to well stimulation firms. Proppant per stage rose 18% to 300,000 lb.
Service providers expect the DUC blowdown will lead to rising demand across all service lines in 2017, including drilling and workover. Well stimulation activity held steady despite the early November retrenchment in oil prices. Every rally in demand for oil service providers in 2016 has been cut short when commodity prices retreated, hence the importance of the OPEC meeting. That said, E&P companies appear committed to higher 2017 capital spending, which will benefit well stimulation early and the drilling sector later.
There were two changes in downhole trends in fourth-quarter 2016, including a jump in average stage count to 50 on an 11% decrease in stage spacing, while average proppant loading, as noted earlier, increased to 15 million pounds per lateral.
2023-09-15 - Eversource Energy announced on Sept. 15 a regular quarterly dividend of $0.675 per share.
2023-10-09 - The Phillips 66 dividend will be payable on Dec. 1 to shareholders on record as of Nov. 17.
2023-11-17 - Granite Ridge’s dividend is payable on Dec. 15 to shareholders of record by Dec. 1.
2023-10-06 - Murphy Oil’s cash dividend will be payable on Dec. 1 to stockholders on record as of Nov. 13.
2023-11-15 - The dividend will be payable Jan. 15 to shareholders of record Dec. 6.