North Dakota Crude Oil Production Continues to Rise

North Dakota's oil production averaged 660 thousand barrels per day (bbl/d) in June 2012, up 3% from the previous month and 71% over June 2011 volumes. Driving production gains is output from the Bakken formation in the Williston Basin, which averaged 594 thousand bbl/d in June 2012, an increase of 85% over the June 2011 average. The Bakken now accounts for 90% of North Dakota's total oil production.

Production gains in the Bakken formation are the result of accelerated development activity, primarily horizontal drilling combined with hydraulic fracturing. According to the North Dakota Department of Mineral Resources, there were a total of 4,141 producing wells in the North Dakota Bakken in June 2012, up 4% from May 2012 and up 68% from the number of producing wells in June 2011.



Increasing oil rig counts underscore the quickening pace of drilling in the region. Data from Baker Hughes show that in the Williston Basin, the average weekly count of actively drilling horizontal rigs totaled 209 in June 2012, essentially unchanged from the May 2012 average but 26% above the June 2011 average (see below). Most of these rigs are positioned in the Bakken.



The transportation system oil pipelines, truck deliveries, and rail to move crude oil out of the area is being affected by constraints due to growth in crude oil production from the Bakken formation. As a result of these bottlenecks, the difference between spot prices for Bakken crude oil and West Texas Intermediate (WTI) crude oil expanded through much of the first quarter of 2012. The spread has generally narrowed in recent weeks, however, reflecting the addition of rail transport facilities and increased refinery capacity in the Bakken area.



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Halliburton Announces Second Quarter 2012 Earnings [HAL]

Halliburton (NYSE:HAL) announced today that income from continuing operations for the second quarter of 2012 was $745 million, or $0.80 per diluted share. This compares to income from continuing operations for the first quarter of 2012 of $635 million, or $0.69 per diluted share. First quarter reported results included $300 million ($191 million, after tax, or $0.20 per diluted share) for an estimated loss contingency related to the Macondo well incident.

Halliburton’s consolidated revenue in the second quarter of 2012 was $7.2 billion, compared to $6.9 billion in the first quarter of 2012. Consolidated operating income was $1.2 billion in the second quarter of 2012, compared to $1.0 billion in the first quarter of 2012. All international regions experienced double digit percentage revenue and operating income growth from the first quarter of 2012. North America margins were negatively impacted, however, by rising costs and pricing pressure in production enhancement services.

“I am pleased with our second quarter results, which set a new revenue record for the total company and all three of our international regions,” commented Dave Lesar, chairman, president and chief executive officer.

"We continue to be successful in executing our strategy of market share growth while maintaining a focus on industry leading returns. From a global perspective, we achieved record revenues in eight of our product service lines, with four of them. Cementing, Completion Tools, Multi Chem, and Testing and Subsea, generating record operating income as well.

“Consolidated revenue for the second quarter was up over 5% sequentially. The international rig count was up 3% during the quarter, compared to a 15% increase for our international revenues. North America rig count decreased 17%, while our North America revenues were essentially flat compared to the first quarter. Key strategic market share gains in international operations, continued capacity additions, and strong utilization contributed to this outperformance.

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EIA: Eagle Ford Oil and Natural Gas Well Starts Rose Sharply in First Quarter 2012

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New well starts in the Eagle Ford region in Texas increased 110% from January through March 2012 compared to the same period in 2011, according to reporting and analysis by BENTEK Energy LLC (Bentek).



Other key findings include:

Operators started drilling (spudded) 856 new wells in January through March 2012 compared to 407 in January through March 2011.

In early April 2012, the Eagle Ford active rig count set a new high of 217 units.

Increased drilling and rig deployment translated into higher crude oil and condensate production, which is projected to average over 500 thousand barrels per day (bbl/d) in April, up from 182 thousand bbl/d in April 2011.

Current Eagle Ford area natural gas production is about two billion cubic feet per day.

Horizontal wells accounted for nearly all of the new well starts so far in 2012.

Much of the drilling activity in the Eagle Ford is targeting both crude oil and wet natural gas resources.

Bentek estimates that in March 2012, Eagle Ford crude oil and lease condensate production was approaching crude oil production in the North Dakota part of the Bakken formation.

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Baker Hughes: U.S. Rig Count Continues to Climb

Baker Hughes reported that the international rig count for March 2010 was 1,074, up 6 from the 1,068 counted in February 2010, and up 62 from the 1,012 counted in March 2009. The international offshore rig count for March 2010 was 295, down 6 from the 301 counted in February 2010 and up 14 from the 281 counted in March 2009.

The U.S. rig count for March 2010 was 1,419, up 69 from the 1,350 counted in February 2010 and up 314 from the 1,105 counted in March 2009. The Canadian rig count for March 2010 was 386, down 178 from the 564 counted in February 2010 and up 190 from the 196 counted in March 2009.

The worldwide rig count for March 2010 was 2,879, down 103 from the 2,982 counted in February 2010 and up 566 from the 2,313 counted in March 2009.


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