I see someone arrived at this site after googling: "How much will a 20% owner make on a 10,000 barrel a day well."
That isn't gonna happen.
The good Bakken wells produce 100,000 bbls in two to three years. The very good Bakken wells produce 100,000 bbls in one to two years. The outstanding Bakken wells hit 100,000 bbls in the first year. The wells are expected to produce for 30 years.
The average Bakken well is expected to produce 400,000 to 900,000 bbls over the lifetime of the well. Harold Hamm, CLR/CEO, recently opined that the average Bakken well will produce 603,000 bbls of oil over its 30-year lifetime. I can see 600,000 or 500,000, but I have no idea how he came up with 603,000 bbls.
Total Rigs: 196
ReplyDeleteYou beat me to it, again!
ReplyDeleteWill update. Thanks.
So Bruce,
ReplyDeleteIs it better for a Mineral Intrest owner to have a working intrest, be a non-partisipation owner or have a 18.5% lease on a bakken oil wel?
That would be a good question for the folks over on the Bakken Shale Discussion Group.
ReplyDeleteI don't own any mineral rights. In the old days, when there were lots of dry wells for every good well, having a working interest put a lot of money at risk, and staying with the lease was probably safer.
With almost no dry holes in the Bakken, if I had the cash, I would prefer a working interest. But the cash is significant, and I assume if there were problems with the well, there could be never-ending cash infusions.
I don't know the details of non-participation owner.
It sounds like a good "rule of thumb" is that a good Bakken well could produce 1,000 barrels per week.
ReplyDeleteIf the operator has huge AFEs (well costs) and gets crappy results, then you dont want to be a WI. For example if they are spending 80 mil up front for a super-ultra pad, and getting horrible wells, take an override.
ReplyDeleteThat can also be a strategy on the operators part. Getting people to give up WI because they cant hang financially.
That is probably true for the first six months and then the drop off rate is horrendous. Over a year that would average out about 1,000 bbls/week (52,000 bbls/year) but as noted, the better wells even higher.
ReplyDeleteBut again, for newbies, the decline rate is horrendous for Bakken wells.
You are exactly correct. If thinking about a working interest, I would check out the company, the location, the fracking company, etc. Lots of money at risk with working interest, but if one hits a good well, it will turn out to be a great investment.
ReplyDelete