Friday, August 11, 2017

For The Archives -- The Beginning Of The End For The Bakken -- Art Berman -- August 11, 2017

For the archives.

I recall seeing this article when it was first posted some time ago, but elected not to post it. A reader recently referenced it so I thought it best to post the link for archival purposes.

This is Art Berman suggesting that data in December, 2016, suggested that we were seeing the "beginning of the end" for the Bakken. The article begins:
It’s the beginning of the end for the Bakken Shale play.

The decline in Bakken oil production that started in January 2015 is probably not reversible. New well performance has deteriorated, gas-oil ratios have increased and water cuts are rising. Much of the reservoir energy from gas expansion is depleted and decline rates should accelerate. More drilling may increase daily output for awhile but won’t resolve the underlying problem of poorer well performance and declining per-well reserves.

December 2016 production fell 92,000 barrels per day (b/d)–a whopping 9% single-month drop. Over the past two years, output has fallen 285,000 b/d (23%). This was despite an increase in the number of producing wells that reached an all-time high of 13,520 in November. That number fell by 183 wells in December.
Perhaps he mentioned it, but if so, I missed it:
  • an emphasis that this was December data (winters can be tough in North Dakota); and,
  • the Saudi surge had resulted in huge drop in price of WTI
I think the article or variations of the article have appeared elsewhere.

Art Berman is a proponent of peak oil.

The NDIC Director's Cut is scheduled to come out today. It will be interesting to see where the Bakken is today. [Update: June data released in the Director's Cut today.]

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Echo Beach

Such a depressing story (the Art Berman story above). Time for some music. Art Berman caught in his own echo chamber?

Echo Beach, Martha and the Muffins


Why the Muffins, you ask? Probably because all the animal and insect names had been taken. 

2 comments:

  1. Don't know if you listened to Continental's conference call Wednesday, but if one wants to look at proven demonstrated performance, as opposed to Berman's fact-free nonsense and goofball predictions, this is it:

    "Consequently, we have elevated our 2017 production growth guidance raising the expected range for exit rate to 24% to 31% above fourth quarter 2016 production. And even more significant we expect to accomplish this within the same capital expenditure budget or less....

    Continental has reset it's priorities and recalibrated its growth strategy to pluck the new era of U.S. energy technology. Having ownership of Tier-1 quality rock assets and multi-decades of highest quality drilling inventory, we're now capable of growing production at the industry leading and much lower level of capital investment compared with any time in our 50-year history....

    In the face of low oil prices we have recently released three grown rigs and four completion crews. This is 20% reduction in rigs and cruise while increasing our production outlook....

    The second key factors are optimized completions which are improving performance in all of our assets. In the Bakken, our optimized completions are bringing on company record wells over a broad cross-section of a play. Rates of return for typical Bakken wells have been doubled to 82% generating over $2 million of added revenue during the first six months. We also increased the type curves for Bakken wells by 12% to 1.1 million Boe for 9,800 foot lateral well....

    It's a challenge to estimate what those EURs are going forward. But again, when we’re talking about an extra $2 million per well in revenue in the first six months, so that's big. You’re tackling, accomplishing, increasing the economics up front in these wells and so the economics will actually prove quicker than EUR in time....

    And so, I mean we're talking about getting this outcome over a broad area and it's…and we're not done. I mean we're continuing to push the extent of where this is for replying optimized completions. So, there's a lot of questions about the inventory and how much of the 1.1. will ride now. The footprint continues to grow and we couldn’t be more pleased with what we’re seeing here. I mean here we’ve been in this play really we started out in 2003 and I remember having some conference calls with you just to talk about the Bakken way back when we first got into it....

    It's amazing and so this is where technology has taken us....

    [A]nd as far as the infill wells again this this particular this type curve is based on all wells. HPP, wells as well as those wells that we develop out from grass roots and that's 90% of what we have left to develop. There are not very many units we have out there at this point that still need development with pure infill wells."

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    1. Thank you. I will add this to the recent post on CLR's investor update:

      https://themilliondollarway.blogspot.com/2017/08/highlights-from-clrs-investor-update.html

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