ConocoPhillips produced 24,000 barrels of oil equivalent per day from the Bakken play in the first quarter of the year, company executives said in an earnings call on April 23.
That’s up 50 percent from 18,000 barrels of oil equivalent per day in the fourth quarter.
ConocoPhillips — now an exclusively upstream outfit — lists the Bakken among its “near-term growth opportunities on high-margin projects” in North America, alongside the Eagle Ford shale and Permian basin of Texas, and the Canadian oil sands. Those plays contributed to 85,000 barrels of oil equivalent per day of growth, year over year.
The Bakken remains the smallest of those unconventional oil projects, currently.
The company is running some 13 rigs in the Bakken, up from about eight last year at this time, and plans to increase that to some 16 rigs over the remainder of the year.
ConocoPhillips holds more than net 200,000 acres in the “heart” of the Bakken. The company plans to spend some $500 million drilling 120 wells in the play this year.
The company expects Bakken production to approach 25,000 boe per day by the end of 2013 and 40,000 boe per day by 2016.
Eagle Ford still shines
ConocoPhillips produced 54,000 boe per day from the Eagle Ford in the first quarter, up from 50,000 boe per day at the end of 2011.
ConocoPhillips plans to drill some 180 wells using 16 rigs this year and expects production to hit 100,000 boe per day by the end of the year. The company currently has the capacity to handle around 60,000 boe per day, but said it hopes to avoid curtailments by staying ahead of condensate takeaway and by increasing natural gas takeaway capacity through new infrastructure projects.
ConocoPhillips’ Eagle Ford production is approximately 60 percent crude and condensate. By comparison, its Bakken production is about 90 percent crude and condensate.
Asked during a fourth-quarter earnings call in January whether the production disparity between the Bakken and the Eagle Ford reflected economics or infrastructure, Chief Finance Office Jeff Sheets said “both,” according to a ConocoPhillips transcript.
“The economics are better for us in the Eagle Ford than they are at the Bakken,” Sheets said. “So that will have priority as we think about where were allocating our capital.”
Because ConocoPhillips holds its Bakken-area leases on a long-term basis, Sheets said the company doesn’t need to drill wells to hold on to its acreage. “So we’re taking a very measured approach there. We don’t want to get ahead of infrastructure in the Bakken. So you will see us continue to ramp up our activities there,” Sheets said. “They’re good strong return projects but it’s not as strong as what we have in the Eagle Ford.”
At an investor update in April, interim CEO Ryan Lance said the company had 10 years of drilling opportunities in the Bakken. “We will be here for a long time,” he said.
ConocoPhillips averaged 51,000 boe per day in the first quarter in the Permian, where it is also running 13 rigs en route toward a target of 16 rigs this year.
