North Dakota refinery delays start-up date
Dakota Prairie Refining LLC, a joint venture of MDU Resources Group Inc., Bismarck, ND, and its 50-50 partner, Calumet Specialty Produces Partners LP, Indianapolis, delayed commercial production at its 20,000-b/d diesel refinery in North Dakota until the second quarter (OGJ Online, Feb. 7, 2013).
Dakota Prairie Refining had expected production to begin by Dec. 31, 2014, but it experienced delays from severe winter weather and late revisions to electrical systems and controls.
The plant's cost, initially pegged at $300 million, has been revised to more than $400 million, according to MDU Resources (OGJ Online, Mar. 27, 2013).
David Goodin, president and chief executive of MDU Resources, said the company also is evaluating the development of a second plant near Minot, ND.
The Dakota Prairie plant, to be the state's second refinery, will sit on 318 acres west of Dickinson, Stark County, in southwestern North Dakota, and will process Bakken crude oil.
American Eagle suspends Bakken drilling for now
American Eagle Energy Corp. of Denver suspended its 2015 drilling budget and does not anticipate resuming drilling operations until crude oil prices improve. American Eagle operates in the Bakken and Three Forks formations in North Dakota.
"The company continues to be focused on capital discipline and maintaining liquidity," a Dec. 31 news release said. After drilling the Huffman 15-34S well in November 2014, American Eagle released the drilling rig.
American Eagle expects to conduct completion operations in the first quarter on two gross (1.9 net) wells (Byron 4-4 and Shelley Lynn 4-4N) drilled during the 2014 fourth quarter. The company estimated that its average production for fourth-quarter 2014 was 2,600-2,700 boe/d.
Firefighters put out fire to storage tanks
Firefighters extinguished a fire to eight storage tanks at a truck unloading station in Alexander, ND, on Jan. 2 that resulted in no injuries, an Enbridge spokesman said.
The fire involved eight out of 12 crude oil storage tanks at the truck station. Cause of the fire was under investigation. There was no oil spill and no damage to pipelines although one pipeline was shut briefly as a precaution.
The Emergency Management Services for McKenzie County, ND, responded to the fire. The truck unloading station, 9 miles north of Alexander, belongs to Tidal Energy Marketing LLC, Michael Barnes, a spokesman for Calgary-based Enbridge, told UOGR by phone.
Tidal Energy is an oil marketing company that is an affiliate of Enbridge. Alexander station is used by North Dakota Pipeline Co., an Enbridge subsidiary. North Dakota Pipeline operates an 82- mile system from Plentywood, Mont. to Clearbrook, Minn., Enbridge's web site said.
Whiting boosts reserves with Kodiak acquisition
Whiting Petroleum Corp. completed its acquisition of Kodiak Oil & Gas Corp. and boosted its proved reserve estimate, effective Dec. 31, 2014, to 780 million boe, of which 83% was oil.
After replacing 2014 production, that represented a 29% increase over the 2013 combined total for Whiting and Kodiak, the company said, citing an independent estimate from by Cawley, Gillespie & Associates Inc.
James J. Volker, Whiting's chairman, president, and chief executive officer, said he wanted flexibility for the 2015 budget, adding he was "pursuing monetization" of certain assets to help create up to $1 billion in additional liquidity.
"We intend to tailor our 2015 plans to maintain strong liquidity, keep a responsible debt...and deliver moderate year-over-year production growth," Volker said.
"Given volatile oil prices, we intend to issue final 2015 guidance on our fourth-quarter 2014 [earnings] results call in February 2015," he said.
Whiting closed on the Kodiak acquisition after the Supreme Court of British Columbia approved the deal on Dec. 5, 2014. The merger of the two Denver-based companies created the largest Bakken-Three Forks producer (OGJ Online, July 14, 2014).
"Uniting our complementary acreage positions and substantial inventory of high-return drilling locations provides Whiting with an expanded platform for growth," Volker said, adding he expects to see improved operational efficiencies.
Lightstream marketing Saskatchewan assets
Lightstream Resources Ltd. put its Bakken formation assets in Saskatchewan up for sale in an effort to cut debt as crude oil prices plummeted in late 2014 although the company said it was in no hurry.
John Wright, Lightstream chief executive officer, said he would allow 2 years to close any potential transactions, adding Lightstream could ride out lower oil prices for at least 1 year.
"We wouldn't look to sell this on a fire-sale basis," Wright said. "We've certainly had lots of offers in the door at different times over the last couple of years." He expected up to 20 potential buyers.
Kyle Preston, National Bank Financial in Calgary, wrote in a research note that he believes Lightstream's Saskatchewan Bakken assets could sell for more than $1 billion (Can.) depending on oil prices.
Enterprise shelves idea for ND-Cushing pipeline
Enterprise Products Partners of Houston has shelved plans for a proposed crude oil pipeline that would have transported crude oil from North Dakota 1,200 miles to Oklahoma.
A publicly traded partnership that provides oil and gas infrastructure financing, EPP issued a statement saying investors had "decided not to move forward with development of its proposed Bakken-to-Cushing crude oil pipeline."
Commitments from potential partners "were not sufficient to support the project," EPP added.
The decision followed an extension to an open season last year for the proposed 340,000 b/d pipeline. Railroads create competition for pipelines to move Bakken crude oil, a consultant noted.
"What this open season suggests is that the producers still see some value in having at least some production on rail," said Skip York of Wood Mackenzie Ltd.