Differences in IP Reporting -- Déjà Vu All Over Again -- Bakken, North Dakota, USA

When I first started this blog a couple of years ago, there was a big discussion on the relevancy, reproducibility, and accuracy of initial production (IP) numbers.

Some companies were said to "maximize" IPs using various methods of calculations. Other companies were generally recognized to be very conservative in reporting their IPs. CLR has been one of the companies that provides the most transparency; CLR announced some time ago it was changing its method of calculating IPs to be more in line with others in the state.

But still, the IPs are all over the map. I continue to opine that the only important numbers are the total production figures at least three years out. However, I continue to post the IPs because that is about the only information we have regarding production potential of the well when the well is first released from confidential status.

But here's a good example of how IPs are still all over the map. The first IP below is that reported in official documents supplied to NDIC. In parenthesis I have included what the producer is stating in the press release. In some cases, the differences are astonishing.  Total production/months producing is in black bold.

CLR reported these wells as "notable company-operated wells completed during 4Q10 (with initial test period gross production results)":

• 18984, 1,219, CLR, Olson 2-8H, Edge, Bakken (CLR reported 1,613) 29K in 1.5 months
• 19107, 488, CLR, Tangsrud 2-1H, Dolphin, Bakken (CLR reported 1,023) 17K in 2 months
• 19279, 688, CLR, Hendrickson 2-36H, Elm Tree, Bakken (CLR reported 1,323) 13K in 22 days
• 19201, 595, CLR, Evenson 1-19H, Hamlet, Bakken (CLR reported 1,426) 19K in 49 days
• 19156, 282, CLR, Brandvik 2-25H, Corral Creek, Bakken (CLR reported 1,630) 47K in 3 months
• 18834, 1,140, CLR, Jerol 1-27H, Lindahl, Bakken (CLR reported 1,663) 41K in 3 months
• 18983, 494, CLR, Rolfsrud 1-11H, Elidah, Bakken (CLR reported 1,713) 40K in 3 months

It should be noted that the most recent month being reported was December, 2010, a month that was severely impacted with winter weather. In addition, CLR has stated that much of their production is restricted due to efforts to minimize flaring.