ExxonMobil subsidiary XTO Energy quietly employs 58 people at its Williston, Alexander and Killdeer, N.D., offices to manage operations across the 531,000 gross acres it controls in the state.
With ExxonMobil behind it, XTO doesn’t need to make a lot of noise to raise debt or equity financing. Unlike a number of other operators in the Williston Basin, XTO doesn’t release much information about its operations there.
XTO reported North Dakota oil production of 44,516 barrels per day for February 2014, with an associated 46,000 cubic feet per day of natural gas.
Those numbers lifted XTO to sixth place among the top 50 oil producers in North Dakota, up from 12th position in 2012, with 18,989 bpd for operated non-confidential wells.
In 2013, XTO set a company production record with its third quarter Bakken production coming in at 65,000 barrels of oil equivalent per day. That output, according to David Rosenthal, ExxonMobil’s vice president for investor relations, was an 81 percent increase over third quarter 2012 production.
In an Oct. 31 conference call, Rosenthal attributed the increase in Bakken production to several factors, including a record 85 wells going on production since the first of the year, as well as production from the Danbury Resources Bakken assets that ExxonMobil acquired in 2012.
The record number of wells that came on line in 2013 were better wells.
Well pad drilling
“This volume increase reflects the benefits of well pad development drilling and optimized well completions across our core Bakken acreage,” Rosenthal said.
In early 2014, Rosenthal said ExxonMobil was pleased with the progress XTO has made, and that the companies were working well together.
“Certainly we have continued to make good progress in terms of productivity, well rates, down spacing, optimizing our completions and drilling,” Rosenthal told analysts on Jan. 30. “So we have been able to make the progress we always thought we would when we acquired XTO and combined their folks with our folks and looking at some of these things. So that continues to improve.”
Rosenthal also credited XTO for its expertise in analyzing prospective areas within its various oil plays, so ExxonMobil doesn’t “waste a lot of money drilling wells.” He said most of ExxonMobil’s rigs are focused on liquids-rich areas, with production up 33,000 barrels per day from the fourth quarter of 2012.
“The biggest places for us - the Bakken, the Permian and the Woodford Ardmore - most all of our rigs are running in those areas,” Rosenthal said. “Thus you have seen that significant increase in production. We are bringing a lot of wells onto sales every quarter and continue to ramp that up.”
In 2013, XTO had about 40 drill rigs running in the U.S., most them drilling in its three core areas.
“If you think about our three core areas,” Rosenthal said, “the Bakken, and the Ardmore and the Permian, those are where the wells we are drilling are; that’s what we are seeing, not only the increase in production, but very pleased with the progress we are making on operating expense reduction, productivity of the wells, capex, efficiency and all of that as you know helps on unit profitability in the portfolio as well as cash flow generation.”
Unit filings
XTO filed applications to the North Dakota Industrial Commission for its hearings on March 26 and 27 seeking creation of 17 new spacing units: 12 overlapping 2,560-acre and five 1,280-acre units in Dunn and Williams counties. Eleven of the 2,560s are in the Heart Butte field in far northeast Dunn County. The other 2,560 is in the Lindahl field in far northeast Williams County. Three of the 1,280s are in the Heart Butte field in far northeast Dunn County. On all 12 of the 2,560s and the three 1,280s, XTO wants to drill one horizontal Bakken pool well on or near the section lines of the smaller component spacing units. The other two 1,280s are in the Bear Creek field in northwest Dunn County, and on those XTO wants to drill multiple wells.
During hearings Jan. 15 and 16 in Bismarck, the commission considered an XTO application to drill a total of seven wells on an existing 640-acre unit in the Heart Butte field in far northeast Dunn County, and a total of four wells on existing 640-acre unit in the Charlson field in northeastern McKenzie County. XTO also asked permission to drill four wells on each of two existing 320-acre units in the Squaw Creek field in far eastern McKenzie County.
XTO submitted applications with the commission in October seeking 33 separate overlapping 2,560-acre spacing units in two fields in McKenzie and Williams counties. That is the highest number of new spacing unit requests by any single operator that the commission heard that month.
In the Siverston field in north-central McKenzie County, XTO asked the commission to create 23 separate 2,560-acre units, and another 2,560-acre unit which will span the Siverston and the neighboring North Fork field. In the Grinnell field, which runs from northeast McKenzie County north under Lake Sakakawea into Williams County, XTO is asking the commission to create nine 2,560-acre spacing units.
XTO sought authority to drill one horizontal well on or near the section lines of 640-acre and/or 1,280-acre spacing units that comprise the new overlapping 2,560s.
In August hearings, at the Siverston field in north-central McKenzie County, XTO Energy asked to drill up to 10 Bakken pool wells on an existing 640-acre spacing unit. XTO had one well on that spacing unit, the Lundin 11-4SH, which went on production in July 2012 with a 24-hour IP of 878 bpd. Through June the well produced 39,777 barrels over 333 days for an average of 119.45 bpd,
Although XTO focuses primarily on the prolific middle Bakken member and the first bench of the Three Forks, it has acreage it considers prospective for second bench wells and is working to incorporate the zone into its long-term plan for optimization of its Bakken petroleum system assets in the Williston Basin.
Top U.S. gas producer
ExxonMobil established its presence in the Williston Basin when it acquired Fort Worth-based XTO Energy in 2010.
XTO operates in eight North Dakota counties, primarily in McKenzie, Williams and Dunn counties. It also has wells in Golden Valley, Billings, Mountrail, and along the border of Divide and Burke counties.
XTO operates in 16 states across the U.S. and recently established a division in Calgary.
XTO has operations across the Gulf Coast, Appalachia, Mid-Continent and the Great Plains. Its western operations, reaching from the San Juan and Raton, to the Piceance and Uinta, to offshore Cook Inlet in Alaska, and to the Bakken, are managed by its office in Denver.
“Together, we are the nation’s largest holder of natural gas reserves and are the nation’s top gas producer, about 20 percent larger than our nearest competitor. We are also among the leaders as a liquids producer, Randy J. Cleveland, XTO president said at the Rocky Mountain Energy Summit in Denver, Colo., on Aug. 6, 2013. “All told, we own interests in about 50,000 wells producing oil and natural gas across the country.
“At ExxonMobil, we saw in XTO a tremendous opportunity.” Cleveland said. “Success in unconventional development requires a unique approach; it demands a business model with characteristics of being nimble, flexible, and fast learners.”
