Increased Drilling In The Parshall Oil Field

This is really quite dramatic. I wish I had kept screen shots of the Parshall and Sanish oil fields over the past two years.

I have often noted that there have been about seven rigs operating in the Sanish oil field, day in, day out, over the past two years, while there have been periods of no rigs in the Parhsall oil field, immediately east to the Sanish; and even when there was activity in the Parshall these past two years, there was only one rig.

A reader noted that he/she is seeing more drilling "south of Parshall."

Wow, talk about increased drilling.

First of all, the Sanish, Whiting's cash cow: it appears there are about five rigs operating in the Sanish, down from the usual six or seven I am used to seeing.

On the other hand, the Parshall, owned by EOG, has a whopping eight (8) rigs in the field. I have never seen this many rigs in this field in the entire six years that I have been blogging about the Bakken. This is quite incredible.

In addition, all eight rigs are operated by EOG.

In the last earnings conference call, EOG said it was going to ramp up in the Bakken, now that EOG is reporting 100% payout on Bakken wells in one year or less. EOG said they perfected their completion techniques in the Eagle Ford and is bringing those lessons learned back to the Bakken.

In addition, I think I posted a note on EOG in the last couple of days regarding the impact a new CEO will have on EOG's activity in the Bakken.

From a very recent EOG presentation:

In the Bakken/Three Forks we have just recently increased our inventory due to the success of downspacing from 7 years to 12 years. We are very focused right now on the core area where we have 90,000 acres. We're in there drilling our downspace wells basically four wells per unit and we're using the new completion technology. We brought the technology that we've learned from these other shale plays from the Bakken, from the Eagle Ford and from the other places and we're doing a lot better job at completing these new wells, a lot more sand, a lot more stages, a lot better distribution in the frac along the laterals and the IPs of the wells are excellent and more importantly the decline rates on these newer wells are much shallower. So we're now generating 100% rates of return on our Bakken drilling.

We're having really good success in our Antelope area and the Three Forks really. We've had a really good second bench and a lot of first bench wells there. And this is an example in the Core and Antelope area of just the improvements we've had on completion technology, went from 58% improvement just due to completion. This is normalized on 9200 foot lateral, so not a longer lateral, it's just really completion improvement and the 30 day IPs are up 50%, so tremendous improvements technically in the wells.

This is an independent analysis of the top 10 Bakken horizontal wells. EOG has seven of those and I think that will grow as we continue to use this new completion technology. This is an independent analysis of the average 30 day IPs from the top 20 operators. EOG is about 50% better than the average operator on the Bakken well.