This Is Really Cool -- Conference On Horizontal Drilling Cost Reduction, February 18 - 19, 2014; Houston, TX

It was only yesterday that I posted a note that suggested "fracking/shale wasn't going to disappear" because of  the current slump in oil prices. Even if nothing changed, shale/fracking/the Bakken are not going to disappear.

However, things are going to change: the analyst who wrote that story -- and I now forget where I saw it -- said that horizontal drilling/fracking will get even more cost effective with new technology.

Wow, isn't that the truth -- especially if you've been paying attention to Whiting - NCS - coiled tube fracking.

There is a conference scheduled for February 18 - 19, 2014, in Houston, TX, on this very issue: "Technical Strategies for Driving Down the Cost of Horizontal Drilling."

Regular readers know that I don't particularly care for "break-even prices" in lifting oil to the surface, mostly because these numbers can be so easily massaged. If "one" thinks IPs are meaningless (and I do not), I can only imagine what "one" thinks about 'break-even prices."

Having said that, I do think "relative" break-even prices are very, very important. I think they are important, not necessarily from a dollar-point-of-view, but a human-nature point of view. Let me see if you can follow what I'm saying.

At the linked website above, there is a graph: "estimates of breakevens for key US shale plays." The graph is so small (I cannot read the source for the data) and it is hard to enlarge it (perhaps if you print the page it will be easier seen) but if you work at it, you can see the following:

• there are about 38 plays noted
• the graph includes reserves (billions of boe)
• breakeven (billions of dollars)
• ranked based on breakeven point

The ranking of some plays that interest me:

#1 (lowest breakeven point): Eagle Ford - Kearnes - Trough condensate
#2 Bakken - Parshall - Sanish
#3 Bakken - Nesson Anticline
#4 Utica condensate
#5 Bakken - Fort Berthold
#6 Eagle Ford - Edwards condensate
#7 Bakken - West Nesson
#8 Bone Spring - Pecos River Region
#9 Bakken - northern Mountrail
#10 Bakken - Williams - core
#11 Eagle Ford - Haynesville condensate
#12 Bakken - Bakken - Dunn County
#13 Wolfcamp
#14 Bakken - Elm Coulee
#15 Niobrara
#16 Niobrara
#17 Eagle Ford - Black Oil
#18 Bakken - McKenzie County
#19 Niobrara


#26 Bakken - Williams County Perimeter

#27 Bakken - North Williston (?)

#37 Bakken -- Southern Fringe

This is a nice graph because, to the best of my knowledge, this does not include the pure natural gas plays. This is a graph of oil plays and condensate plays. By the way, notice that no area of the Bakken was singled out as a condensate play:

• even though the Bakken is rich in condensates
• many of the plays that match the Bakken in breakeven are condensate plays and not oil plays (yes, I know the graph is corrected for "boe")

But look at the ranking again. It looks like the Bakken holds 8 of the top 10 "break-even" plays for oil.

[Later, a reader asked if there was a map available for these Bakken areas -- here's what I posted in response: http://themilliondollarway.blogspot.com/2014/12/breaking-down-bakken-based-on-break.html.]

Now, there's one last thing to look at: reserves.

Look at Wolfcamp Ozona -- that's just one play of many in the Permian, September 6, 2013.

Anyway, I got off the subject by quite a bit.

The point is this: the Bakken isn't going to go away. Except for one oil play in Texas, the oil plays in Texas are more expensive than almost all of the Bakken oil plays. I've read that before and it always surprises me.

And horizontal drilling /fracking are going to become more cost-effective.

And one can find where horizontal drilling / fracking is headed by attending the Houston conference on this very subject in mid-February (when the weather is really, really cold in the Bakken). See the first linked website near the top of this post.