Wednesday, February 27, 2013

Whiting Petroleum Announces Q4 and FY2012 Earnings

Earnings press release


Bakken and Three Forks Development

In 2012, we experienced significant productivity increases as we moved into development drilling mode in new fields in the Southern and Western Williston Basin. As the following table illustrates, our average well drilled in the Bakken / Pronghorn / Three Forks hydrocarbon system posted higher 30, 60 and 90-day average rates year-over-year:
Average Rate All Whiting
Bakken, Pronghorn, Three Forks Wells
Southern Williston Basin
The Southern Williston Basin encompasses our Pronghorn and Lewis & Clark prospects, which encompass a total of 398,334 gross (262,974 net) acres. Fourth quarter 2012 production from this region averaged 13,430 BOE per day. This daily rate represents a 10% increase over the 12,190 BOE per day rate in the third quarter of 2012.
Pronghorn Prospect. We experienced exceptional drilling results in the fourth quarter at our Pronghorn prospect. As detailed in the following table, significant fourth quarter 2012 completions include eight wells with 24-hour initial production rates that exceeded 2,000 BOE per day:
Well Name
IP Date
3J TRUST 44-8PH11/24/201289%2,696
FROEHLICH 11-28PH11/27/201289%2,644
MARSH 34-18PH12/09/201265%2,340
FROEHLICH 21-28PH11/28/201289%2,301
OBRIGEWITCH 41-17PH11/24/201296%2,292
FROEHLICH 41-28PH11/27/201289%2,288
FRANK 14-7PH11/14/201290%2,165
OBRIGEWITCH 41-16PH11/27/201289%2,110
We intend to conduct a higher density pilot program at Pronghorn. Our plan is to drill six Pronghorn Sand wells per 1,280-acre spacing unit, which is up from our initial plan of three wells per spacing unit.
Western Williston Basin
The Western Williston Basin includes our Hidden Bench, Tarpon, MissouriBreaks and Cassandra prospects. These areas represent a total of 183,508 gross (114,732 net) acres. Production from the Western Williston Basin averaged 5,120 BOE per day in the fourth quarter of 2012, which represented a 47% increase over the 3,485 BOE per day average rate in the third quarter of 2012.
Tarpon Prospect. We drilled another prolific well at our Tarpon prospect in McKenzie County, North Dakota. The Tarpon Federal 21-4-3H was tested on December 28, 2012 flowing 4,971 barrels of oil and 11,450 Mcf of gas (6,879 BOE) per day from the Middle Bakken formation. This is the third best well drilled to date in the Williston Basin, the first being Whitings Tarpon Federal 21-4H with an initial production rate of 7,009 BOE per day. We hold a 56% working interest and a 45% net revenue interest in the Tarpon Federal 21-4-3H. We have implemented pad drilling at Tarpon with plans to drill three wells off of each pad.
Hidden Bench Prospect. Based on core analysis, we have identified an additional reservoir positioned between the Middle Bakken and Three Forks that has demonstrated high oil in place and may significantly increase reserves in this area. We plan to test this zone which we refer to as the "Middle Bakken Silt" by drilling 160 acre spaced wells above and below this target zone and stimulating these wells with large frac volumes. We believe that this higher density drilling could also improve our recovery efficiency in the Middle Bakken reservoir.
Missouri Breaks Prospect. We hold 95,928 gross (66,095 net) acres in the Missouri Breaks prospect, located in Richland County, Montana and McKenzie County, North Dakota. We continue to de-risk our acreage in the Missouri Breaks area. We have now drilled successful wells on the western, eastern and southern portions of our acreage. On October 27, 2012, we completed the Amber Elizabeth 9-4H in the Middle Bakken formation flowing 1,315 BOE per day. This was our first well drilled in the eastern portion of Missouri Breaks.
Sanish Field
Whitings net production from the Sanish field averaged 32,590 BOE per day in the fourth quarter of 2012, an increase of 4% over the third quarter 2012 average of 31,400 BOE per day. Net production from Sanish in 2012 totaled 11.4 MMBOE (an average of 31,081 BOE per day), representing a 40% increase over 2011. Whiting continues to generate strong results from the field. Highlighting recent results was the completion of the Fladeland 14-33H, which was completed in the Middle Bakken formation flowing 3,220 BOE per day. This wing wells 7,279-foot lateral was fraced in a total of 22 stages.
Also of note was the completion of the Lioneld Fladeland 12-12H, which was completed in the Middle Bakken formation flowing 2,747 BOE per day on December 15, 2012. This well was drilled on the western edge of the Sanish field and was fraced in 30 stages.
We plan to initiate a higher density pilot program in the Sanish field in the first half of 2013. If successful, this could add an additional three Middle Bakken locations per 1,280-acre spacing unit. We also plan to refrac several wells at Sanish in 2013.
Red River Plays
Big Island. We currently hold 172,464 gross (122,389 net) acres in theBig Island prospect, which is located in Golden Valley County, North Dakota and Wibaux County, Montana. We have identified more than 50 vertical Red River prospects at our Big Island play using 3-D seismic interpretation. We are currently shooting 3-D seismic on the northwest portion of Big Island with the intention of identifying additional prospect locations. Estimated ultimate recoveries for these wells range from 200,000 BOE to 300,000 BOE. The wells have an estimated completed well cost of $3.0 to $3.5 million.
Our most recent completion at Big Island, the Katherine 33-23, flowed 593 BOE per day from the Upper Red River D zone on December 17, 2012. Whiting holds a 99% working interest and a 79% net revenue interest in this vertical well. We currently plan to test the Lower Red River D zone with a horizontal well in mid-2013.
Starbuck Prospect. We are currently conducting a 283-square-mile 3-D seismic shoot at our Starbuck prospect in order to identify seismic anomalies in the Upper Red River D zone. This shoot was approximately 60% complete at the end of January 2013. We hold 104,508 gross (92,227 net) acres in the Starbuck prospect, which is located inRoosevelt County, Montana.
Midstream Assets
Robinson Lake Gas Plant. As of December 31, 2012, our gas plant atRobinson Lake was processing 67 MMcf of gas per day (gross). We added compression in September 2012 that brought the plants inlet capacity to 72 MMcf per day, and we have the ability to increase to 90 MMcf per day in the future. Whiting owns a 50% interest in the plant.
Belfield Gas Processing Plant. The Belfield plant was processing 18 MMcf of gas per day (gross) as of December 31, 2012. Currently, there is inlet compression in place to process 24 MMcf per day. Whiting owns 50% of the Belfield plant. We began connecting other operators wells to the plant in November 2012.

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