The comments below are better than the posting.
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Update (further comments) -- September 14, 2010: the discussion continues regarding the Hess IPs (see comments). It has been pointed out that the IPs that Hess reports are based on some methodology involving a "60-day average." So, repeating the above: Hess reported an IP (close to the 60-day average of 342 bopd).
From the September corporation presentation from Whiting. These are all of the wells that Whiting reported in the month of September, 2010, the IP, and the 60-day average:
- Lahti 24-22H: 2,058; 953
- Hansen 12-20H: 4,144; 982
- Iverson 21-14H: 2,551; 1,056
- Olson 11-14 TFH: 1,640; 601
- Littlefield 12.34H: 1,942, 1,139
- Lacey 12-1H: 3,445; 1,007
- Fladeland 21-12H: 2,690; 1,109
- Fladeland 44-9H: 2,301; 684
- Jorgenson 12-27H: 2,893; 1,276
Hess reports IPs severals weeks after production begins which closely approximates a 60 day average. By comparison, 60 day averages for the other two wells reported today are as follows:
ReplyDelete#18640 - IP 878 60day = 315
#18725 - IP 2178 60day = 685
60 day averages inform us more than first day IPs.
That's extremely helpful. Any insight on how the oil companies report, is very, very helpful.
ReplyDeleteI assume Hess has published their methodology for measuring/reporting IPs, but I have not run across it.
CLR provided a press release not along ago (which is linked on my site) that explains their methodology and their reason for changing it. There are pros and cons to all methods.
Regardless of CLR's real reason for changing their methodology, one of CLR's stated reasons makes a lot of sense. Once you get into reporting 60-day averages, there are so many variables. The biggest variability, of course, is takeaway capacity. If the pipeline is shut down, or if the pipeline company puts limits on how much oil it will take (which occurred two years ago for a long period), obviously the 60-day average will drop. If the price of oil suddenly spikes one way or the other, it would make sense for the oil company to voluntarily change the amount of oil coming out of the well, and thus change the 60-day average.
But you are correct. I am wrong to compare Hess with BEXP, CLR, NOG, etc., since the companies use different methodologies.
It would be better to relate the reports of a new Hess well with the historical average of Hess wells in the Bakken.
For permits granted in 2009, Hess has reported on 22 wells to date. The IPs of those 22 wells ranged from a low of 70 to a high of 1,230. The average IP of those 22 wells was 463, and thus the reported IP of the most recent well of 342 in a good field, the Alger field, is "average" or "lackluster." Average to me means it lacks luster. It's not a bad well, it's not a poor well, it just lacks luster.
Interestingly enough, I don't record who reports the IPs of these wells, and for the two Hess wells that had an IP of 1,230 and 1,130, it's possible they were reported by a partner who uses a different methodology. Throwing out the 1,230 and the 1,130 IPs, the average for 2009 permitted Hess wells is 392. The well reported above (IP=342) is still less than that.
In the future, I could eliminate adjectives when describing a well, but that would take a bit of fun out of the site.
For now, a well that averages 350 bbls/day over the first 60 days is, I suppose about average, in the Bakken core. 60*350 = 21,000 barrels. Compare that 60-day production with the 90 to 120-day production of the WLL wells just reported a couple days ago at this site.
I guess I am, like so many folks who have followed the Bakken closely since the beginning, becoming "spoiled." To say that "350 barrels is about average" does sound a bit insane when compared to wells in the 1980's or even wells at the beginning of the current boom.
Maybe I will have to stay away from adjectives. But that would spoil the fun.
Thank you very much for commenting; it's given me a whole new idea for another post.
Sometimes I miss the forest for the trees.
ReplyDeleteIn the original comment:
Hess reports IPs severals weeks after production begins which closely approximates a 60 day average. By comparison, 60 day averages for the other two wells reported today are as follows:
#18640 - IP 878 60day = 315
#18725 - IP 2178 60day = 685
18640 (XTO) and 18725 (AEZ).
The Hess well I referred to as lackluster (an IP of 342) is about average (lacks luster) compared to the XTO well, but is clearly in a different range than the AEZ well.
The Hess well is located in the Alger field, which historically is a pretty good field, right next to the Sanish -- along the Nesson anticline, I assume. The AEZ well (Summerfield) is in the Bear Creek oil field which, as a field, has not impressed me yet.
In fact, the Alger is a big part of the current boom. There has been almost no activity in Bear Creek in this boom (a Hunt well, file #16799, IP of 304 and a CLR well, file #17334, IP 811), so, for me, the AEZ well is very, very important.
I would not call the AEZ well a lackluster well: it's IP was 2,178, it's 60-day average is almost exactly double the Hess well in question, and AEZ did this in a field that is yet to impress.
AEZ has had some very good wells. Is AEZ lucky, or has it moved the needle in cracking the code on exploiting the Bakken?
I noticed these date offsets when comparing date of first production and date of IP. Hess IPs are usually offset two or more weeks. When I calculate 60 production day averages for Hess wells they are similar to reported IPS. Regarding these particular well comparisons, chosen simply because they were the 3 off confidential results for the day, the Hess is a dual lateral and the others are singles. Hess is probably in the 18 to 22 point frac neighborhood.
ReplyDeleteA dual lateral, and the others single. Comparing wells to wells becomes more and more difficult.
ReplyDeleteI guess I'm going to have to subscribe to NDIC "premium" services some day so I can cross-check production runs.
I appreciate the feedback.
Did you all see the 30-day production run on a recently reported EOG well in the Van Hook? 50K in 30 days.