Updates
February 21, 2011: Drilling up to seven (7) wells in one section, one 640-acre unit spacing.
Original Post
It's a slow day for me; I did not get called in to teach today. When I have time on my hands, I tend to ramble. Rational individuals may do well to skip this post.
This goes back to Harold Hamm's position that there is/are 24 billion barrels of recoverable oil in the Bakken and Three Forks formation.
A comment just sent to me from a reader spurred this post. In addition, here's another comment from another who has first-hand experience with CLR's performance (when you get to that link, scroll down to "57seeker," posting January 28, 2011, 2:00 a.m.)
For those interested, this is the link to Dr Leigh Price's original paper that "predicted" the Bakken:
http://www.undeerc.org/price/TextVersion.pdf or click here. (Same links.)
Go to page 238 of that text: it is there that you will find that Dr Price stated that he estimated 413 billion barrels of original oil in place in the Bakken. (Dr Price provides an excellent argument for this number earlier in the text. In fact, for investors, on a "down day" in the market, I recommend you re-read the Price article; it will cheer you up.)
At the time of the 2008 USGS assessment of the Bakken, it was generally agreed that technology (then) could result in recovering two to three percent of the original oil in place (OOIP). I noted early on that it appeared, using different figures, but publicly accepted figures, that companies like CLR might already be recovering six to eight percent of OOIP.
The anonymous reader suggested taking the 24 billion barrels of recoverable oil that Harold Hamm opines and dividing that by Dr Price's estimate of OOIP, 413 billion barrels. Result: 6 percent.
How interesting. Six percent. Exactly what some companies argue they are currently recovering from the Bakken, and not out of line. At the time of the 2008 survey, the two to three percent was estimated well before current technology. Correct me if I'm wrong, but back in 2008, the norm was short laterals with single-stage fracture stimulation. The norm is now long laterals with multiple-stage fracture stimulation, and probably with better mix of proppants.
Just for the fun of it (again this is a slow day for me which gives me a lot of time to play around with the figures), what does 24 billion barrels of oil mean?
Let's say North Dakota maxes out with a production rate of 750,000 bopd. How long would it take to exhaust 24 billion barrels, producing at 750,000 bopd? 32,000 days, or 88 years. That would guarantee life time employment for Harold Hamm's grandchildren.
How many years do the analysts now say that it will take to fully exhaust the Bakken? It is now generally accepted by academic analysts that active drilling will continue until about 2030 and production will peak sometime after than and then decline until about 2100. How many years is it until 2100? 90 years.
Hmmm. Harold Hamm's 24 billion barrels at 750,000 bopd and 88 years is almost identical to the academic analysts' 90 year estimate.
I started this commentary, as I do with most commentaries, not knowing where I will end up. If the commentary ends up being too insane, I delete it, no matter how much time I spent on it. For the life of me I did not expect to see two estimates (88 years vs 90 years) come out so close together.
Check my math. It's too coincidental.
Idle rambling.
