Feb. 22 (UPI) -- More than $1 billion in spending will go to developing U.S. shale basins where production is on pace to increase this year, Whiting Petroleum said.
"In 2017, we are focused on increasing production, reserves and net asset value through a capital efficient plan that further enhances our balance sheet metrics through growth," CEO, Chairman and President James J. Volker said in a statement.
For the three-month period ending in December, Whiting reported total operating revenue of $343 million, an 18 percent decline year-on-year. Crude oil prices are still far lower than three years ago and spending on exploration and production is just starting to recover. Oil-rich states like North Dakota, a focal point for Whiting, are still under pressure.
Whiting's revenue decline was offset somewhat by the $375 million generated from the sale of its pipeline assets in North Dakota last year.
"Whiting delivered another strong quarter," Volker said. "Production grew sequentially when adjusted for asset sales and exceeded the high end of our forecast."
In North Dakota, the company said it plans to deploy five drilling rigs and spend $580 million on developing parts of Bakken shale formation. The rest of its $1.06 billion is designated for the Niobrara shale in and around Colorado.
Bakken oil production in particular was one of the bright spots for North American production at its peak. Total production from North Dakota in December, the last full month for which the state published data, was 942,455 barrels per day, off the December 2014 peak by more than a quarter-million bpd.
Based on its budget for the year, Whiting said it expected production for 2017 would range between 123,000 to 126,000 barrels of oil equivalent per day.
"Production is forecast to increase to a fourth quarter average rate of 140,000 boe per day," the company's statement read. "This equates to a 23 percent projected increase from first quarter to fourth quarter 2017."
For total U.S. production, the latest federal estimate show oil production will likely increase through 2017 so long as crude oil prices hold above $50 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was trading around $54 per barrel early Wednesday.