Idle Ramblling On The Bakken -- June 6, 2020

I've received a bit of e-mail from readers regarding the Bakken. It gives me an opportunity for some observations and comments.

Reminder: I'm inappropriately exuberant about the Bakken.

One item from a reader: can I assume that new wells for the future in Williams county will be non-existent?

My reply: it all depends on prices. But you are correct, it does look bleak for Williams County right now. But if one looks at the permits issued so far this calendar year, it looks like a fairly even distribution across the four major Bakken counties. Data points:

• of the 326 permits issued so far this calendar year in North Dakota,  
• Williams County: 65
• Mountrail County: 67
• McKenzie County: 101
• Dunn County: 75
• Of the Williams County permits issued this calendar year:
• Kraken, Oliver oil field: 12
• Zavanna, Stockyard Creek: 5
• Zavanna, Long Creek: 1
• Kraken, Lone Tree Lake: 2
• KODA, Bar Butte: 2 
• Crescent Point Energy, Dublin: 8
• Whiting, Dollar Joe: 5
• Liberty Resources, Northwest McGregor: 1
• CLR, Long Creek: 1
• CLR, East Fork: 9
• CLR, Beaver Lodge: 10
• XTO, Grinnell: 7
• XTO, Hofflund: 1
• Bruin, Strandahl: 1
• The most recent Williams County permits were issued on May 26, 2020, fairly recently.

Second issue: with regard to the Williams County wells, the reader said, I'll always wonder what the Anna wells would have produced if drilled today. The Anna wells to which the reader refers are tracked here.

Reply: I've talked about that frequently on the blog.

• at the moment I divide the Bakken wells into five groups:
• those wells drilled in North Dakota between 2007 and 2010, inclusive
• those wells drilled between 2011 and 2014, inclusive,
• those wells drilled between 2015 and 2016, inclusive,
• those wells drilled between 2017 and 2019, inclusive
• those wells drilled in 2020
• the dates can be changed a bit but generally that's about right
• there are many, many variables affecting the five groups
• almost every well drilled before 2016 needs to be re-drilled and/or re-fracked
• that's also true for wells drilled after 2016, but of lower priority than the pre-2016 wells
• there have been three periods when "lessons learned" in the Bakken accelerated
• 2007 - 2010, inclusive
• 2014 - 2016, inclusive
• the current period, beginning in March, 2020

With regard to the Anna wells:

• the original Anna wells will all be re-fracked some day; maybe ten years from now; but they will all be re-fracked if the world is still using oil ten years from now; and,
• there will be four times as many Anna wells as there are now at some point in the distant future; again, assuming the world is still using oil in ten years;

A third observation: a reader noted the issue of water some time ago, maybe a year ago.

My thoughts: I am beginning to wonder if we are seeing a "novel" definition of water-flooding in the Bakken. More on that later. I alluded to it in an earlier post today (June 6, 2020).

A fourth observation: a reader noted the use of "slick water" in the Bakken, maybe a year or two ago; I mentioned it some time ago and follow it when I can; it's difficult because much of the information is proprietary.

A fifth observation: the old meme, the more proppant, the better the well. To a great extent that's true, but there's much more to it that that.

A sixth observation: the first time the Saudis tried to kill the US shale industry lasted two years. The US shale industry survived. How well it came out of that two-year debacle is a story for another day, by someone else. Not me. My views are too jaundiced. This time, the tea leaves suggest the Saudi attempt will be much shorter than two years. 

A seventh observation: from the very beginning of the boom there were questions about communication between wells due to fracking. It turns out that issue is still being debated and studied, most recently by XTO and the Mariner wells. After all this time, we are still learning about shale. Well, technically, it's dolomite and sandstone between seams of shale.

An eighth observation/comment: as soon as I start reading an article regarding CAPEX, I lose interest and move on. Sometimes I will mention it on the blog, but mostly for archival purposes. 

Perhaps more to follow.