The Rising Influence of Rising Affluence

[DewDiligence]

HES 2Q11 addendum re Bakken: HES expects to make up some of the 2Q11 lost Bakken production due to the severe flooding in North Dakota by stepping up production during the second half of the year, thanks in part to a new “38 stage” fracking plan. The 38 frack stages in the Bakken consist of 22 sliding sleeve stages and 16 plug & perf stages. (I don’t know enough about fracking to understand why this level of detail is important.)

With the Bakken step-up during 2H11, HES expects Bakken production to average 30-35K boe/d for the full year, which implies a year-end run rate >40K boe/d. HES’ old guidance for 2015 Bakken production of 80K boe/d is now clearly too low, according to today’s CC. HES will give updated 2015 Bakken guidance in late 2011 or early 2012.

HES’ overall production guidance for the 2011 year is now 375-385K boe/d (down from the prior guidance of 385-395K boe/d). The reduction comes almost entirely from the weather-related shortfall in the Bakken during 2Q11. (The Libya shut-in was already baked into the old 2011 forecast.)