abraxas to sell its bakken assets in north dakota · 2019-11-21 · abraxas looking to sell its...
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Abraxas to sell its Bakken assets in North Dakota
Executive Deal Summary | January 28, 2019
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o Abraxas has retained Petrie Partners to assist in a strategic alternative process for its Bakken assets
o The process may lead to an outright sale, a securitization, some other transaction, or further development of the asset and retention as a source of cash flow
o Net Production: 8 MBOE/d
o Covers ~4,000 net acres in McKenzie county in North Dakota
HIGHLIGHTS:
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Disclaimers
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Abraxas looking to sell its Bakken assets in North Dakota
Abraxas’ revised 2019 investment is targeted primarily for development, acreage acquisitions, and facilities in Delaware Basin
It’s capital expenditure of $171 million for 2018 was well above the budget. The company did not close its planned sale of Eagle Ford assets in 2018, proceeds of which were to be included as credit to the original budget of $140 million
A potential sale of Bakken properties would allow Abraxas to slash debt and fund acreage acquisitions and development in Delaware Basin
Remaining Acreage
Asset Highlights:-
o Located in McKenzie Co., ND and covers ~4,000 net acres
o Includes Lillibridge, Stenehjem, Ravin, Jore Federal and Yellowstone areas
o Net Production: 8 MBOE/d
o Holds operated working interest
o Targets Bakken/Three Forks formation
o Includes 63 wells, 59 completions and 4 DUCs
o Also includes 39 remaining locations and ~20 refrac candidates
o Offset operators: Continental Resources, ConocoPhillips, Newfield Exploration, Whiting Petroleum, Burlington Resources
Acreage on Market
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Historical Transactions and Assets on Market
Northern Oil & Gas acquired Williston basin acreage primarily in Williams and McKenzie counties from W Energy Partners for $288 million at ~$5,100/Acre
Recently in November 2018, Vantage agreed to acquire 102,800 net acres and ~46 MBOE/d of production in Williston basin from QEP for $1.65 billion
Other packages on the market include Williston basin assets sold by Oasis Petroleum and New Emerald as they are looking to exit the basin
Transactions with Deal Value >$100M announced after 1-Jan-2018
Abraxas; Jan-2019; $100M-$500M; ~4,000 Net Undev Acres; 8 MBOE/d
Historical Transactions
Whiting - Oasis; $130M; Jun-2018; 1,520 $/Acre; 36,147 $/Daily BOE
1
Northern O&G - W Energy; $288M; Jul-2018; 5,131 $/Acre; 34,650 $/Daily BOE
2
Riverbend - Oasis; $153M; Jun-2018; 3,991 $/Acre; 36,148 $/Daily BOE
3
Assets on Market
Oasis; Dec-2017; $100M-$500M; 1.736 MBOE/d (82% oil)
A
BDW Slate; Apr-2018; $100M-$500M; 2.104 MBOE/d
New Emerald; Oct-2018; $100M-$500M; 81,500 Net Undev Acres; 2.5 MBOE/d
C
Source: Drillinginfo M&A and Maps Database
Vantage - QEP; $1,650M; Nov-2018; 35,870 $/Daily BOE
4 DDale Operating; Aug-2018; $25M-$100M; 675 BOE/d
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1
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A
B
C
D
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The drilling activity has been slow in the year 2018 with IP30 reported for only 17 wells in the region
Continental’s Vardon wells targeting Bakken in the vicinity of the marketed acreage achieved an average IP30 of ~2,100 BOE/d (76% oil)
Earlier in January 2018, Abraxas reported an IP30 of ~1,370 BOE/d (80% oil) for its Yellowstone well targeting Three Forks
Initial Production (30-day Average)
Well Results reported in IR Decks post 1-Jan-2018
Monroe 7-2H; 21-Feb-18Continental; BakkenIP30: 2,055 BOE/d
Uhlman Federal 3-7H; 07-Aug-18Continental; BakkenIP30: 2,461 BOE/d
Vardon 4-14H; 02-May-18Continental; BakkenIP30: 2,085 BOE/d
Yellowstone 3H; 30-Jan-18Abraxas; Three ForksIP30: 1,371 BOE/d
Mountain Gap 8-10H1; 07-Aug-18Continental; BakkenIP30: 2,730 BOE/d
Horse Camp 104-11H; 02-Apr-18PetroShale; Three ForksIP30: 907 BOE/d
Horse Camp 4-11H; 02-Apr-18PetroShale; BakkenIP30: 981 BOE/d
Pittsburgh 3-7H; 07-Aug-18Continental; BakkenIP30: 2,387 BOE/d
Tarentaise Federal 5-19H; 21-Feb-18Continental; BakkenIP30: 2,034 BOE/d
Tarentaise Federal 3-19H; 21-Feb-18Continental; BakkenIP30: 2,074 BOE/d
Tarentaise Federal 1-19H; 21-Feb-18Continental; BakkenIP30: 2,126 BOE/d
Monroe 6-2H; 21-Feb-18Continental; BakkenIP30: 2,869 BOE/d
Lansing 6-25H; 02-May-18Continental; BakkenIP30: 2,644 BOE/d
Vardon 2-14H; 02-May-18Continental; BakkenIP30: 2,187 BOE/d
RimRockERF
OAS PetroShaleWPXXOM Nine Point
ECA
Hess
Bruin E&PCOP MRO
CLR
WLLSource: Drillinginfo IB Database and DocFinder
Forsman; 14-Feb-18Marathon; BakkenIP30: 3,005 Bbl/d
Mountain Gap 7-10H; 07-Aug-18Continental; BakkenIP30: 3,104 BOE/d
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Initial Production (24-hr)
Bb-Burk-151-95-1807H-7; 10-Sep-18Hess; BakkenIP24: 2,908 BOE/d (81% oil)Lateral length: 9,978 ft
Bb-Federal B-151-95-2122H-10;01-Oct-18; Hess; Three ForksIP24: 2,497 BOE/d (81% oil)Lateral length: 10,086 ft
Gunderson 15-22-#5H-R; 17-Sep-18Statoil; BakkenIP24: 3,632 BOE/d (77% oil)Lateral length: 10,180 ft
Bb-Federal B-151-95-2122H-10;01-Oct-18; Hess; Three ForksIP24: 2,497 BOE/d (81% oil)
Remington-Lovaas-4C UTFH-ULW;24-Nov-18; ConocoPhillips; BakkenIP24: 468 BOE/d (77% oil)
Remington-4A MTFH; 18-Nov-18ConocoPhillips; BakkenIP24: 681 BOE/d (83% oil)Lateral length: 9,918 ft
Merton-41-15TFH ULW; 04-Oct-18ConocoPhillips; Three ForksIP24: 483 BOE/d (72% oil)Lateral length: 10,356 ft
Lead Woman-23-14HUL; 14-Nov-18WPX; BakkenIP24: 4,409 BOE/d (82% oil)Lateral length: 9,986 ft
Gunderson 15-22-#7TFH; 12-Sep-18Statoil; Three ForksIP24: 2,802 BOE/d (76% oil)Lateral length: 10,129 ft
Grizzly-25-36HF; 18-Sep-18WPX; BakkenIP24: 3,939 BOE/d (86% oil)Lateral length: 9,809 ft
Bb-Burk-151-95-1807H-7; 10-Sep-18Hess; BakkenIP24: 2,908 BOE/d (81% oil)
Jerome-41-15MBH; 24-Sep-18ConocoPhillips; BakkenIP24: 625 BOE/d (75% oil)Lateral length: 10,240 ft
Lead Woman-23-14HA; 18-Nov-18WPX; BakkenIP24: 3,746 BOE/d (84% oil)Lateral length: 9,998 ft
Merton-41-15MBH; 27-Sep-18ConocoPhillips; BakkenIP24: 671 BOE/d (84% oil)Lateral length: 10,474 ft
Wells completed post 1-Sep-2018Source: Drillinginfo
Hess’ Bakken and Three Forks wells achieved high IP24 in the ranging between ~2,500 BOE/d to ~2,900 BOE/d
ConocoPhillips has been actively drilling Bakken and Three Forks wells in the basin with IP24 below 1,000 BOE/d from ~10,000 feet laterals
Statoil’s Gunderson well drilled to the north of the marketed acreage in McKenzie county achieved a high IP24 of ~3,600 BOE/d (77% oil)
RimRockERF
OAS PetroShaleWPXXOM Nine Point
ECA
Hess
Bruin E&PCOP MRO
CLR
WLL
ConocoPhillips Wells
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Potential Buyers
Select companies with significant presence near the transacted acreageSource: Drillinginfo PE Database and Maps Database
Continental Resources: Focused on three core areas: Bakken, SCOOP and STACK, with Bakken being allocated 52% of its 2018 capital expenditure budget. The company has acquired ~800,000 acres in the heart of Bakken as of Q1-2018. It currently has 9 rigs and 60+ active permits in the vicinity of the marketed acreage
Whiting Petroleum: Controls over 450,000 acres in Bakken/Three Forks resource play, with latest acquisition being from Oasis for $130 million in June 2018. The company currently has 5 rigs and ~80 permits near the marketed acreage
White Rock: Focused in Williston basin. It acquired ~79,000 acres in North Dakota and Montana from SM Energy for $172.5 million in Aug-2016, followed by two smaller acquisitions in 2017 from Oasis and Vanguard
ExxonMobil: Exxon has a contiguous position to the marketed acreage in McKenzie county. The company has one rig on the marketed acreage, along with 3 other rigs near the acreage in McKenzie and Dunn counties
Vantage Energy: Vantage is a $560 million Special Purpose Acquisition company formed by NGP in 2017. It acquired QEP’s Williston basin assets for $1.65 billion in November 2018, which was the largest Williston deal in 2018
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79
62 61
50
30
20 2013 13
8
0
20
40
60
80
Active Permits in the AOI
9
6 6
5
3 3 3 3
2 2
0
2
4
6
8
10
Rig Count in the AOI
Rigs and Permits
Continental Resources is the most active operator in the region with 9 active rigs and over 60 permits in the region
Exxon has 6 active rigs of which 4 rigs are drilling Bakken/Three Forks wells in the vicinity of the marketed acreage
Other significant operators in the basin include Hess, Whiting Petroleum, Enerplus and Oasis Petroleum
Permits approved in the region post 1-Jan-2018Source: Drillinginfo
Exxon operated Rigs
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0
200
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1,000
1,200
1,400
1,600
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
BO
E/d
Month
Type Curves in the vicinity of the marketed acreage
Abraxas; Middle Bakken; All, 845 MBOE EUR; Aug-18
Abraxas; Three Forks; All, 723 MBOE EUR; Aug-18
Continental Resources; Bakken; All, 1,200 MBOE EUR, for 9,800feet lateral length; Aug-18
Hess; Bakken; Oil, 2019-CY Type curve; Dec-18
Northern Oil; Bakken/Three Forks; All, 1,000 MBOE EUR; Feb-18
Type Curves
Continental with high IP30 rate of ~1,400 BOE/d reports an EUR of 1,200 MBOE for 9,800 feet lateral in Bakken, Williston basin
Abraxas reports an EUR of 723 MBOE and 845 MBOE from Three Forks and Middle Bakken formations on the marketed acreage
Source: Drillinginfo IB Database and DocFinder
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0
200
400
600
800
1,000
1,200
1,400
1 6 11 16 21 26 31 36 41 46
Oil
an
d G
as (
BO
E/d
6:1
)
Month
Comparative Type Curve
2013
2014
2015
2016
2017
2018
Vintage Type Curves
IP30 YOY Growth%
4%
16%
-2%
-5%
-6%
Source: Drillinginfo Type Curves are for wells in an approximate 70x70 miles square around the marketed acreage
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