That got the headline but there was much more to the story. The article validates very clearly that the Bakken* literally saved the US economy.
Perhaps I'll come back to that much bigger story some day, but the linked article pretty much says it all.
However, the argument that "well efficiency has topped out in the Bakken" is interesting. For argument's sake, let's agree to agree that the petroleum engineers and drillers have in four or five short years have learned all the secrets there are to learn about the Bakken and drilling to have maxed out well efficiency in western North Dakota. That's pretty impressive: another reminder how incredible US engineers and drillers really are. As recently as 2007, it seemed there were very few folks who believed in the Bakken. Even as recently as 2008 the USGS severely underestimated the potential of the Bakken.
So, agreeing to agree that well efficiency has topped out and all that's left is to drill more wells in the Bakken, where does that lead us? Do operators plan to drill more wells per section in the Bakken? Regular readers recall the most recent NDIC agenda for July in which Continental Resources will be looking to drill 56 wells in one 2560-acre spacing unit. To some, that might simply be "pie in the sky." Where's the meat?
Well, here's the meat. A reader was kind enough to send three screen shots of a recent case in which EOG is planning, very, very specifically, to place 64 wells in one 2560-acre spacing unit. This can get confusing, be careful. I may misunderstand it, but I'm pretty sure this statement is accurate: each well is its own entity, its own birthright, its own parameters. Each well is "assigned" to a specific spacing unit and that does not change. When you see the screen shot and see 64 wells in one 2560-acre spacing unit, note that not all wells are spaced for 2560 acres (at least as I understand it). I have not looked at the existing wells and do not know their spacing (I will do that later, but I am on my way out to spend some time with three granddaughters) but I assume they were drilled before the new 2560-acre spacing was approved. Be that as it may, in the screenshot, note that EOG is looking to have 64 wells in these four sections.
64 / 4 = 16 wells / section
Any mineral owner that owns even one mineral acre in any of those four sections will receive royalties from as many as 56 wells with 2560-acre spacing.
Another big "thank you" to the reader for sending me the screen shots.
*Regular readers know that my reference to the "Bakken" has at least three meanings:
- Bakken one: the small geographical footprint in western North Dakota
- Bakken two: the technology that was developed to unlock tight oil and now used worldwide
- Bakken three: hand-in-glove relationship among residents, regulators, and operators with a can-do attitude to make this work; a relatively unfettered industrial operation
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The Science Is Settled, Shut Up and Color
Belated congratulations on the birth of the new grand-daughter, Mr. Oksol. As always, I thank you for the time and effort that you continually put forth on this blog. It is most informative.
ReplyDeleteAs regards "Well efficiency topping out" in the Bakken ... the phrase alone should demonstrate the most profound ignorance of the writer. Along with your blog (and daily reads of Zero Hedge), I have become a keenly interested observer of the shale revolution on a world-wide, daily basis, and I can most emphatically state that the technological breakthroughs have barely begun.
Remember that 60 stage frac that Whiting disclosed a few weeks ago? The company that makes the BHA tool - NCS Energy Services - just announced a few days back that they did a 92 stage frac in the Eagle Ford. Both their website and Baker Hughes Optiport BHA videos show clearly and concisely how revolutionary this technique/hardware may prove to be ... especially in the multiple, economical re-fracs that this process will enable operators to perform in years to come.
The precision of the latest generation RSS hardware and software is allowing 4 mile TD wells to be drilled with one foot deviation in both vertical and horizontal planes.
The early research on EOR - particularly in regards to CO2 usage - shows potential recovery rates that are absolutely mind-blowing.
No, Mr. Okso. the technological onslaught has just begun, is self-feeding, and will continue for many years to come. Gerard
Gerard, thank you very much. I will post that up in the main section where it's easier to read/google.
DeleteI hope other readers noted my "sarcasm" in agreeing to agree that in less than four or five years, "we've" maxed out all the technology and science involved in drilling the Bakken. By any stretch of the imagination, that would be quite a feat. A huge "thanks" to Gerard for providing some updates.