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



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



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

2

1

3

4

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



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



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



0

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1,200

1,400

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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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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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abraxas to sell its bakken assets in north dakota · 2019-11-21 · abraxas looking to sell its...

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