Providing coverage of Alaska and northern Canada's oil and gas industry
November 2013

Vol. 18, No. 46 Week of November 17, 2013

Emerald boosts production by 93 percent

34,000 acres added to Williston Basin assets; wells beating expectation; adding third horizontal-capable rig in 2014

Steve Sutherlin

For Petroleum News Bakken

Emerald Oil Inc. increased it third quarter production to 172,678 barrels of oil equivalent, an increase of 93 percent compared to the second quarter of 2013, and an increase of 35 percent over the third quarter of 2012, the company said in a Nov. 6 earnings call. The company recorded a net loss of $5.7 million for the quarter.

“Emerald’s operated wells are strong,” said McAndrew Rudisill, Emerald CEO. “We are on course to deliver accelerated production growth for the remainder of the year and into 2014.”

Emerald has increased its land position in the Williston Basin.

“Our land team recently completed a long-term leasing effort that added 34,000 net acres,” Rudisill said. “These newly leased acres further expanded Emerald’s core Low Rider area and added three new operated focus areas: Easy Rider in the West Nesson Area in Williams County, North Dakota, Emerald Pronghorn in Stark and Billings Counties, North Dakota and Emerald Lewis & Clark in McKenzie County, North Dakota, south of Low Rider.”

“Emerald’s average working interest in its Low Rider area is now approximately 68 percent, and the company continues to work toward increasing the average well working interest,” Rudisill said. “On a pro forma basis to reflect closed and pending acquisitions, the company has approximately 66,000 net acres in the Williston Basin, of which approximately 50,000 net acres are operable in McKenzie, Williams, Billings and Stark County, North Dakota, and 10,000 net acres are operable in Richland County, Montana.”

Rudisill said Emerald has budgeted approximately $25 million for 2014, to increase its operated acreage position in its core operated areas.

2014 budget rises

Rudisill said Emerald expects to acquire a third horizontal-capable rig in 2014. Emerald added a high specification drilling rig in June 2013 to accelerate development in the Williston Basin — a 1,200-horsepower top drive long-reach horizontal-capable rig with the potential to upgrade with a “walking package” for infill efficiency.

Emerald has spent $76.5 million through Sept. 30, out of a $127.2 million yearly budget to drill 12 net operated and 0.5 net non-operated wells in the Williston Basin, Rudisill said. In 2014, Emerald plans to spend $182 million to drill 18.2 net operated wells in the Williston Basin at an average cost per net well of approximately $10 million.

“Our drilling program continues to see efficiency gains from reduced drilling days and lower completion costs,” Rudisill said. “We are focused on fracking multiple newly drilled wells, optimizing existing well performance and improving associated field infrastructure in the fourth quarter for the upcoming winter.”

Emerald is meeting or beating expectations for its wells in 2013.

“The wells we drilled to date are performing at or above our type curve expectations,” Rudisill said. “The recent Excalibur 5-25-36H well is performing above our 550 MBOE EUR type curve guidance with an initial IP of 1,842 BOE per day which is the second strongest IP rate to-date in Emerald’s Low Rider area.”

The company is positive about its newly acquired acreage.

“Based on emerging positive Three Forks tests we are very encouraged about the Three Forks in our newly acquired Williston Kodiak acreage to the South and East of Low Rider,” Rudisill said. “The Middle Bakken shale is also present in most of our acreage.”

Rudisill said Emerald thinks the Red River formation is prospective in its leases,

“The Red River is an emerging play below the Three Forks that we believe will benefit from horizontal drilling and modern completion techniques,” Rudisill said, adding that Emerald does not have any Bakken or Red River wells specifically budgeted in its drilling plan for 2014.

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