Page 16 - NorthAmOil Week 37

NorthAmOil PERFORMANCE NorthAmOil

North Dakota’s oil output up in July

NORTH DAKOTA NORTH Dakota’s oil production rose above “We don’t see pre-COVID demand coming
1mn barrels per day (bpd) in July, according to back until late 2022, so we’re facing this for the
state data reported this week. This marked the next couple of years, this up and down,” Helms
first output increase in two months for the state, said.
which holds the most productive portion of the According to Helms, the current price of
Bakken play, but was still below its peak. Bakken crude is around $33 per barrel, still far
The North Dakota Department of Mineral short of the $60 per barrel levels it had been
Resources’ (DMR) director, Lynn Helms, said on reaching before the coronavirus (COVID-19)
September 15 that the state’s oil output rose about pandemic rocked the oil market. He warned that,
20% to 32.3mn barrels in total during the month given higher breakeven prices in the Bakken
of July, or about 1.04mn bpd. This was compared compared to other shale regions such as the
with total production of 26.8mn barrels in June, Permian, this was not enough to encourage new
with the increase coming as unconventional drilling in North Dakota.
drillers in North Dakota – and across the US – “Unless we have much better prices and we
were restoring output that had been curtailed start to see frack crews and drilling rigs, we’ll start
earlier in the year. to see a decline,” he said. Indeed, he described the
Helms said North Dakota’s figures for August current number of rigs in the state as a “modern
were also expected to show an increase, poten- day low”.
tially reaching 1.3mn bpd. He added, however, The latest Baker Hughes rig count shows that
that the trend could reverse as the summer driv- the number of active rigs in North Dakota has
ing season comes to an end and US benchmark fallen to 9 since the end of August. This is down
oil prices trend lower. from 55 rigs a year ago.™

PROJECTS & COMPANIES

Calfrac delays vote on recapitalisation

plan following takeover offer

CANADA CALGARY-BASED Calfrac Well Services said shareholders and a better debt profile, and that
this week that it was postponing a vote on a accepting that deal would mitigate the risk of
recapitalisation plan proposed by its manage- having to restart negotiations with debtholders.
ment from September 17 to September 29. The Also last week, Calfrac said in a statement
delay came after Texas-based Wilks Brothers that rival proxy adviser Glass Lewis & Co. sup-
launched an unsolicited takeover bid for the ported its reorganisation. However, Glass Lewis
company. subsequently switched its recommendation,
Wilks, which owns a nearly 20% interest in describing the CAD0.18 offer as “far superior” to
Calfrac and opposes the recapitalisation plan, the CAD0.03 ($0.02) per share common share-
formalised its takeover bid on September 10. holders would receive under the management’s
The company’s offer equates to CAD26.1mn plan.
($19.8mn), or CAD0.18 ($0.14) per share. Calfrac said on September 14 that its board
The bid comes after Calfrac’s market value of directors would review the takeover offer and
dropped this year owing to the collapse in crude make a formal recommendation to sharehold-
prices and drilling activity. The company has ers by September 24. However, the company has
urged shareholders not to take any actions with previously called Wilks a “wolf in sheep’s cloth-
respect to the Wilks offer, and has said that its ing” whose real goal is a corporate takeover.
recapitalisation proposal has the backing of 78% Wilks, for its part, maintains that its offer
of its senior unsecured note holders. presents a better way forward for the struggling
The reorganisation plan would require sup- oilfield services company.
port from two-thirds of Calfrac’s debtholders “The premium offer simply guarantees Cal-
and shareholders in separate votes in order to frac shareholders a superior recovery if Calfrac
proceed. However, proxy adviser Institutional continues to push ahead with its inferior and
Shareholder Services recommended sharehold- conflict-ridden transaction and fails to imple-
ers vote down the management plan last week. ment it,” Wilks said earlier this month, prior to
It added that Wilks was offering better terms for its offer being finalised.™

P16 www. NEWSBASE .com Week 37 17•September•2020