I am surprised at the paucity of information so far today.
It appears the fracking backlog has not improved; of three wells coming off the confidential list today, only one was completed. The other two have moved to the DRL list.
Again, Marathon Oil reported a very nice well:
- 19839, 1,311, MRO, Windy Boy USA 12-35H, Antelope, Bakken
Not all IPs are created equal. Frankly they do not make sense to me. Continental recently reported the Chase 1-19H with an IP of less than 300 BOPD. It produced 3 days in June and 29 in July. The July production was just over 14,000 barrels plus gas. The real interesting thing about the Chase well is that all around this well are a bunch of very poor producers some a couple years old.
ReplyDeleteThe Bice 2-29H had an IP of around 140 barrels, it has been on production for 1 1/2 years now, last month produced around 5,000 barrels. Continental is doing the opposite of hyping its wells it appears to me.
You are correct. I have blogged about this issue on several occasions, for example:
ReplyDeletehttp://milliondollarway.blogspot.com/2011/02/ips-and-what-they-mean-bakken-north.html
That references a CLR well with an IP of 15 that went on to produce 150,000 bbls in a relatively short time.
In addition, this subject (IPs) was a big deal about 12 - 18 months ago, but has since died down. Folks that have followed the Bakken for the past two years have gotten a feel for IPs.
Perhaps it's time for me to do another commmentary on IPs. At least one major producer in the Bakken (and probably two) tell us in their conference calls that the higher the IP, the better the EUR, and the sooner the well is paid for.
All things being equal, it costs more to get a higher IP, and the companies weigh cost against benefit. In addition, whether to frac, not frac, and/or to decide on how many stages, and whether to use sand and/or synthetic proppants alsl depend on the geologist's interpretation of the data. Some wells are naturally fracked (see Red Wing oil field) and no fracking by man is required.
IPs are simply one data point. Another data point I use is how soon the well reaches 100,000 bbls. Another data point: IP trends by within the same operator.
If I can find the links of recent corporate earnings calls that categorically state that higher IPs trend toward higher EURs and fasater paybacks, I will post them.
You may want to explore "monster wells" and their IPs: http://milliondollarway.blogspot.com/2009/11/monster-wells.html
I don't know how many posts I have done regarding IPs, but I have a label/tag at the bottom of the blog: IPs.
Thank you for taking time to comment; this might be worth another stand-alone post.
(Oh, one last thing: if IPs didn't mean anything, folks would not be looking at improving their fracking techniques, I suppose. They have moved from a singe stage fracture to an average of about 24 in the Bakken, and some are now doing 40 stages. Very costly. A 24-stage frack probably doubles the cost of the well.)
This entry not proofread; comments do not lend themselves to editing. I don't like writing long notes in the comment section; prefer to do stand-alone posts, but this for now.