Exploration & Production | General News | Top Story
Emerald Transitioning into Pure-Play Bakken Operator; Talks Plans
Email
Print 
Bookmark
Emerald Oil, Inc. has reported an update on its Bakken shale progress and objectives after selling its entire portfolio of non-operated Williston Basin assets.
In July, Emerald completed its fifth and sixth operated Bakken wells, the Talon 1-9-4H and the Slugger 1-16-21H. The wells were drilled from a single pad and each was completed with 34 frac stages. The Talon's initial peak 24 hour rate was 1,311 Boe. Over its first 30 days of production, it produced 24,730 Boe or an average of 818 Boe/d. Slugger had an initial peak 24 hour rate of 1,342 Boe and it produced 24,433 Boe in its first 30 days of production or an average of 782 Boe/d.
In August, the Hot Rod 1-27-26H and Excalibur 5-25-36H wells were drilled. Hot Rod is currently being fracked and Excalibur will be fracked immediately thereafter. Going forward, the Company expects to report well results in its quarterly earnings releases.
Production Guidance
Based on encouraging early results from the Company's operated Low Rider wells, Emerald has elected to increase its production guidance adjusted for the sale of the Company's non-operated production.
2013 Capital Budget and Acreage Position
Emerald recently acquired approximately 2,900 net undeveloped operated acres adjacent to the Company's Low Rider operations for approximately $1,000 per acre.
Given the non-operated property sale, Emerald's forecasted capital expenditure budget will be allocated entirely to the Company's operated drilling program.
The following tables summarize Emerald's Williston Basin acreage position, adjusted for the divestitures and its revised capital budget:
Emerald has now surpassed its previously stated year end operated acreage target. This was achieved by a combination of operated and non-operated acreage swaps and acquisition of operated acreage.
Liquidity
Based on the strong performance of the Company's recently drilled wells, Wells Fargo elected to maintain the Company's borrowing base at $75.0 million following the non-operated property sale. Given the substantial amount of cash received in the sales and its reconfirmed borrowing base, Emerald elected to redeem an additional $20 million of its Preferred Stock on August 30, 2013. The Company plans to redeem the balance of the Preferred Stock by year-end. After the sale and the Preferred Stock redemption, Emerald currently holds approximately $120 million of cash and has no debt outstanding under its credit facility.
McAndrew Rudisill, Emerald's Chief Executive Officer, said, "These divestitures complete Emerald's transition to a large scale, pure play Williston Basin operator. The Company is focused on continuing to deliver strong well results in our Low Rider area based on our reservoir engineering team's frac modeling and the application of our proprietary internal technology. Emerald is actively working on retaining the highest possible concentration of ceramic proppant per frac stage in the wellbore post drill-out; this increases the reserves and long term performance of the well. In order to achieve this goal, we plan to be more conservative about initial 24 hour flowback rates in order to achieve greater 30 and 90 day production volumes. Emerald continues to maintain a conservative and simple balance sheet while remaining entirely focused on growing our exploration and production business."
