Hundreds of North Dakota wells change hands

OREANDA-NEWS. April 20, 2016. More than 360 wells in North Dakota are in the process of changing owners and state officials expect more mergers and acquisitions amid low crude prices.

The deals include some large transactions, such as a sale by Whiting Petroleum of 103 wells to Foundation Energy Management and another of 63 wells from Fidelity Exploration & Production to Scout Energy Management.

In addition, Oasis Petroleum is selling 74 wells in two separate transactions to Sampson Oil and Gas, according to the latest data from the North Dakota Department of Mineral Resources.

The transactions come on the heels of a large sale announced last year by Occidental of its Bakken assets to Lime Rock Resources for \\$600mn to focus on its more profitable Permian acreage in Texas.

That deal has already closed and is not part of the current total of more than 360 wells included in ongoing transactions.

Whiting did not reply to requests for more information on the pending sale of 103 wells to Foundation Energy Management.

Whiting has cut 2016 capex by 80pc from last year to \\$500mn, the steepest reduction by a medium-to-large independent amid the sharp drop in crude prices.

The producer sold assets last year worth \\$512mn and has said it would continue to offer more non-core assets on the block.

Despite the low oil prices, North Dakota's crude output was nearly flat in February compared with the previous month, falling by just 0.4pc, a smaller-than expected decline, according to the most recent state data.

February crude output averaged 1.12mn b/d, down by about 4,100 b/d from January. The strong output came as struggling producers needed cash in the face of low oil prices, said North Dakota Department of Mineral Resources director Lynn Helms.

The state is seeing a lot of M&A activity in part because five companies have gone bankrupt and two or three more are "right on the edge," he said. "There appears to be lots of money out there sitting on the sidelines waiting for those opportunities."