Staggering: All Four Top Bakken Counties Now In The Top Ten Oil Producing Counties In The US -- July 11, 2015

A huge "thank you" to a reader for sending me this.

I posted the May data which the reader sent me just a few days ago; today the reader sends me the June data. We assume the data was released based on the release of the Director's Cut as well as other sources, and sources from Texas.

Here it is, a dynamic link: http://diindex.drillinginfo.com/.

All four top North Dakota Bakken counties are now in the top ten of all oil-producing counties in the entire United States:

Note: McKenzie County slipped to #2 simply because operators voluntarily cut production; Williams dropped to #9 after being at #7, but look at this: Mountrail entered the list at #7. Wow.

This comes despite an all-out effort to dial-back production in Texas and North Dakota. In North Dakota, the number of active rigs hit a new post-boom low this past week; the majority of wells coming off the confidential list are not being completed and are being shut in (SI/NC); and, the wells that are still producing are being choked back.

The NDIC director alluded to one reason why  IPs (30-day, 60-day, 90-day production numbers) are improving:

• The number of well completions rose slightly from 102 (final) in April to 114 (preliminary) in May but initial production rates are increasing 10 - 20% per month as drilling and completions focus more and more on the best portion of the core Bakken and Three Forks area.

That's just one of the reasons. There are many, many more.

I think the most important reason is "attention to detail." With prices so low, oil company officers are watching with eagle eyes what is going on out in the field. I bet the field managers are noticing an increased amount of "micro-managing."

So, what do we mean by "attention to detail"?

The most important thing is the quality of the work force. With cutbacks, the best people are going to be kept on.

One key to a good well is keeping the lateral in the 40-foot middle Bakken seam or the 10-foot Three Forks seam. As the Bakken has matured, there is more and more information about the time/distance the horizontal stays in the seam. My gut feeling is that anything less than 98% gets the CEO's attention. To stay in the seam requires the best geologists and the best roughnecks, and I assume a bit of luck. But they say folks make they own luck.

The second thing: after seven years in the Bakken, operators are learning the best ways to complete a well. There are many solutions, most of which I don't understand, and I really don't track it.

However, two variables are easy to track: number of frack stages and the amount of proppant. And it is clear that operators are pushing toward well over 36 stages and 10 million lbs proppant for the best wells. There's still an argument regarding sand and ceramic; it appears most operators use a combination of sand and ceramic, but EOG uses sand only in the Bakken.

Another reason: North Dakota has the largest microseismic array in the world. Do microseimic arrays help? Yes -- see this post.

By the way, I have no idea but I would suspect that with a lot of geologists on contract but not needed in the field (only 73 active rigs vs 200 rigs) that guys like Harold Hamm has his geologists poring over coring samples at the University of North Dakota and poring over geologists' reports of producing wells -- finding the best of the best areas, and putting  together a list of wells just begging to be re-fracked.

With the decreased activity, my hunch is most operators can drill and complete a well the way they had planned, not having to settle for "second best." When a problem develops in the field, and there's a shortage of personnel or spare parts, sometimes, the only solution is to abandon the well or just press on with what one has, perhaps cutting corners and hoping for the best. With such decreased activity as we have now, I assume there is more than adequate support services ready to assist 24/7. Maybe a minor point, but if helps keep the bit in the seam 98% of the time vs 92% of the time, it will make a huge difference.

*********************************

Ah, The Joys Of Summer

May reminded us at 7:15 p.m. that 7-11 stores offered FREE Slurpees on July 11. We walked down to the 7-11 in our neighborhood only to find that the offer ended at 7:00 p.m. I bought Olivia a Slurpee for $1.73. The cashier threw in two bags of Doritos for free and one pair of really cool sunglasses, also for free, which Olivia forbade me to wear on the walk home. 

Definition of a California summer: sunglasses, Doritos, and a Slurpee.