Thursday, November 17, 2016

Another Look Comparing The Gold Standard (The Bakken) With The Permian -- November 17, 2016

Updates

November 18, 2016: note the first comment --
For those doing the math, the total of the Core and Non-core townships included equals 270 (36 square miles in each) which totals just under 10,000 square miles.
The ND Oil and Gas Division has often cited about 15,000 square miles as having "Bakken production potential". If this proves true, there are several thousand additional square miles which could add to the 19 Billion Bakken/TF EUR in North Dakota. 
Original Post
 
For a bit of background, go to this post: https://themilliondollarway.blogspot.com/2016/11/back-to-permian-november-17-2016.html

From a reader:
I’ve been reading the impressive USGS numbers for expected production from the Wolfcamp, Permian Basin.

I do question some of the comments that 20 billion barrels of oil in the Permian makes it three times (3x) larger than the Bakken. (I know you have commented this statement, too.)

I recently updated my Bakken EUR estimate which is based on sworn testimony before the ND Oil and Gas Division, NDIC. The basis includes expected EURs and well density for various areas and zones of the Bakken/Three Forks as provided by the major operators in the Williston Basin.

This testimony clearly indicates that a majority of the total oil and gas production will come from wells in the core area which includes approximately 120 townships in eastern McKenzie, northern Dunn, western Mountrail and southern Williams Counties. These core townships are likely to have a ultimate average of 14 wells per 1280 acre unit. These 14 wells will primarily produce from the Middle Bakken and the first two benches of the Three Forks. The “core of core” has already shown that the third bench of the Three Forks has good potential. Some of these central core wells might have 18 wells per unit when drilling is finally completed.

Let’s do the math: 18-1280 acre units in 120 townships (2160 units) with an average of 14 wells per unit = 30,240 wells. If these wells have an average ultimate recovery of 500,000 barrels per well, the core area alone will produce some over 15 billion barrels of oil.
(The 500 K EUR is fairly modest with several operators now testifying to 700K, 900K EURs with new fracking techniques. Oasis’ latest presentation shows Bakken EUR’s of 1.55 million BOE and 1.2 million BOE for Three Forks one. These are based on results of the high intensity slickwater fracks in Siverston field north of Watford City. Keep in mind, Oasis estimates are barrels of oil equivalent. Since these well have very high Gas-Oil-Ratios, the crude oil EUR will likely be closer to 1.1 million and 900 barrels.)

In addition to the core area of the Bakken/TF, there are at least 150 townships that provide additional production. Again, I used 18 drilling units per township, resulting in 2,700 units. If an average of 6 wells are developed in each of these non-core units, there would be 16,200 wells. Using an ultimate recovery of 250,000 barrels for each of these wells would provide another 4 billion barrels of oil. 15 plus 4 puts the Bakken/Three Forks at 19 billion barrels of oil from about 48,000 wells. Lynn Helms, Director of the ND Oil and Gas Division, has used 50,000 plus wells in his ultimate projections.

Keep in mind, the non-core area will range of 10 to 12 wells per unit in areas joining the core to 1 or 2 wells per unit in the outer reaches. No matter how you figure this, the Bakken and Three Forks contain a lot of oil and gas. It will likely be 45 to 60 years before anyone knows the answer to the “how much” question.
That's an incredible piece of work.

This is what amazes me: the Wolfcamp covers half the state of Texas, and is up to a mile thick. The Bakken/Three Forks covers a few counties in western North Dakota and is no more than 60 feet thick. It's all about TOC. Total organic content. And oil-to-gas ratio.

Know what else amazes me? A reader would take the time to write such a long note as a comment. Much appreciated. Other readers really appreciate this. Again, I am humbled when I get notes like this. I have no training/background in the oil and gas industry; I assume my readers who send me notes like this one are much more knowledgeable. For them to take time to send me a note means much to me. Thank you. 

2 comments:

  1. For those doing the math, the total of the Core and Non-core townships included equals 270 (36 square miles in each) which totals just under 10,000 sqaure miles. The ND Oil and Gas Division has often cited about 15,000 square miles as having "Bakken production potential". If this proves true, there are several thousand additional square miles which could add to the 19 Billion Bakken/TF EUR in North Dakota.

    ReplyDelete
    Replies
    1. Thank you. That's interesting. 15,000 square miles is significantly bigger than 10,000 square miles.

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