Magellan Petroleum Planning CO2 EOR Pilot Test At Poplar Dome

Magelan Petroleum Poplar CO2 EOR Project MT
Magelan Petroleum Poplar CO2 EOR Project MT

Magellan Petroleum is planning a five well CO2 pilot test at its Poplar Field in northern Montana. The price tag for the test is estimated at $20 milllion.

Evaluation of the project is expected to take any where from one to two years. From there, Magellan hopes to take the field into full development.

Five wells will be used during the test - one injection well and four producing wells.

Magellan hopes full scale development could yield as much as 50 million barrels of oil. The field is unitized and consists of 22,000 acres.

“We believe that bringing this field to full-scale EOR development could result in the addition of 50 million barrels of reserves to our books and could have a significant multiplier effect on our valuation.”
— Magellan's CEO

Enerplus Sets New Bakken Production Record In Q1

Enerplus Bakken Acreage Map
Enerplus Bakken Acreage Map

Enerplus set a new company record in the first quarter with 14,500 boe/d of Bakken production from the company's Fort Berthold assets. In total, Enerplus produced just under 20,000 boe/d from the U.S. in the first quarter.

The company plans to drill 20-25 net wells in 2013, with two-thirds targeting the Bakken and one-third targeting the Three Forks formation.

Enerplus spent approximately 45% of the $173 million it invested in the first quarter in the Bakken. A similar trend is expected the rest of the year.

The Fort Berthold region continues to be our most active development area within our portfolio.

A total of three operated and one non-operated well were drilled in the quarter. In addition, five long lateral wells, two short laterals, and one non-operated well were completed during the quarter.

Enerplus also saw costs savings of almost 10% during the quarter due to lower services and supply costs. The company initially budgeted $12.9 million for drilling, completion, and tie-in of wells in the area. By year-end, total costs should be much lower.

Read the full press release at enerplus.com

Delaware City Refinery Taking More Bakken Crude

PBF Energy's Delaware City Refinery is taking more and more Bakken crude. The company announced earlier in the month the refinery's rail facilities have the ability to unload as much as 100,000 b/d, 30,000 b/d more than expected in February.

“Better lucky than smart,” PBF Chairman Thomas D. O`Malley said. “We were lucky when we bought the Delaware City Refinery. They came with a large quantity of cornfields, soybean fields - in essence a surplus of about four-and-a-half thousand acres of land, and most of it was level. So we were able to put this (rail terminal) in.”

The company is also adding capacity to take more heavy oil from Canada. Once complete, the facility will have the capacity to unload 100,000 b/d of Bakken crude and 80,000 b/d of Canadian crude oil.

The Delaware City Refinery is just one of several on the East and West Coasts that are bringing in Bakken crude by rail in favor of waterborne crude from other parts of the world.

As of May 23, Bakken crude was trading below $90/bbl, WTI was trading at ~$93/bbl, and Brent (international) crude was trading above $101/bbl.

Bakken Oil Production Nears 800,000 b/d in March

Bakken Oil Production Forecast
Bakken Oil Production Forecast

Bakken oil production was near 800,000 b/d in March.

Add ~60,000-70,000 b/d from Montana to the ~719,000 b/d from North Dakota and the Bakken produced more than 790,000 b/d of crude oil in March.

Add oil from formations other than the Bakken and Three Forks and the Williston Basin easily produced more than 850,000 b/d. If production comes back strong from the winter season and the spring break up, this might be the year the basin, and possibly North Dakota, cross the 1 Million b/d production mark.

As of last week the Bakken rig count sat at approximately 190 rigs. With a majority shifting to pad drilling, more wells might be drilled in 2013 with fewer rigs.