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Monday, March 14, 2011

Bakken Underappreciated -- Bakken, North Dakota, USA

This story was published earlier, but appears now in the Oil and Gas Journal.com, dated February 16, 2011.

Some data points from the CLR presentation:
  • CLR feels the "Bakken" is underappreciated
  • Overall "Bakken" play with ultimate recovery of 24 billion barrels
  • Might be the world's largest oil discovery in 30 - 40 years
  • Close to 2 billion of the 24 billion will come from the underlying Three Forks formation
  • Production now exceeds 400,000 bopd including North Dakota and Montana
  • The Bakken is "continuous" under 15,000 square miles
  • Industry has complete 2,750 wells since 2000
  • Drilling 20,000 feet; 9,000 feet down and 9,500 foot laterals
  • Frac stages generally 18-30, with diminishing returns after 18-24 stages
Other produces and/or government agencies may or may not agree with CLR's observations.

The last data point is still open to the jury. BEXP is routinely accomplishing 30 - 34 frac stages, and a 40-stage frac recently set a new industry record.

It has been said that Three Forks formation wells should have EURs a bit less than Bakken formation wells. If accurate, then there must be a lot fewer Three Forks formation wells if the TF will only account for 2 billion of the total 24 billion barrels.

With regard to the CLR statement that there is a feeling that the Bakken is underestimated, this could very well be due to the conservative, circumspect, and reserved nature of the Scandinavians and Germans who populate the area. Even rock stars and celebrities have been noted to complain about the reserved reception they get at the Minot Hostfest, a Scandinavian folk festival held every autumn.

2 comments:

  1. I am not sure where you are getting your 2 billion for the Three Forks from. I have watched the last couple of CLR presentations and the following assumptions were used by CLR to come up with their 24 billion barrel estimate

    1) core area only - see dark grey area on page 8 of March 8th presentation (link below)
    2) 4 long wells for the bakken and 4 wells for the three forks on 1280 spacing units
    3) total number of three forks wells about 70% of the total number of bakken wells
    4) each well to have an EUR of 400,000 barrels (CLR is being conservative here as they believe 518,000 is the best number for ND bakken wells)

    These assumptions sound conservative to me!

    http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDE2OTc1fENoaWxkSUQ9NDI5NDU1fFR5cGU9MQ==&t=1

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  2. I have the same question you have, and I have made the same observation. But I try to link all my facts. If you go to the link, you will see the exact quote:

    "Close to 2 billion bbl of the 24 billion will come from the underlying Three Forks, which Continental helped prove to be a separate reservoir, Stark noted (OGJ Online, July 10, 2008)."

    I have seen this statement before, I believe, by Harold Hamm himself. So, unless this has become a meme, this is at least the second time I have seen the quote that the TFS will account for about 2 billion of the 24 billion. Remember, the 24 billion is the "CLR" estimate, much higher than other analysts.

    But as noted, the "2 billion" comes from the link and a direct quote. (Unless I misread it, which is possible.)

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