Multiple Reasons for Fracking Backlog -- The Bakken, North Dakota, USA

YES!!!

Back on October 16, 2011, I posted the following:

From three different sources -- actually four different sources if you throw in the Red Wing, Minnesota/La Crosse, Wisconsin, angle -- , I am now getting the feeling there may be reasons other than lack of frack teams that may explain the fracking backlog.

Since early this year, the companies have said they would catch up with the fracking backlog by November, but in fact, right now, in October, one out of four wells that come off the confidential list are not completed.

The recent sand/ceramic mix used at the Lucy Hanson well suggests there may be more to this fracking backlog than simply lack of teams.

I will throw this out there, leave it at this, for now, mostly for a time/date stamp if something comes of this.

But I think there's more to the story than lack of fracking teams.

At the time, in the post above, I provided the hints, but I did not come right out and say it (for a couple of reasons), but my conjecture was right: the fracking backlog is due to a number of factors, and lack of fracking sand is one of them.

This from the 3Q11 Whiting conference call:

2011 Budget Increase by Category (in millions)
Non-Operated drilling (40 gross, 5 net wells)			$	41
Operated Drilling (4 gross, 4 net, 1 re-entry well)(1)				20
Land				17
Facilities				5
Q3 Temporary use of ceramic proppant (2)				17
Total			$	100
(1) Consists of 1 Big Tex well, 1 Big Island well, and 2 Exploration wells
(2) Consists of 20 net wells where ceramic proppant was used due to atemporary sand shortage at a cost of $850K per well.

When this was conjectured, a friend wrote to four oil companies operating in the Bakken and asked if a shortage of sand was contributing to the fracking backlog. One company did not answer. The other three all provided a non-answer: "there are always shortages of various materials in the Bakken, but we are always able to source what we need."

I remember seeing some wells in which absolutely no sand was being used, only ceramics. I thought the company (or companies) wanted to see how good a well could be by using only ceramics. Wrong; they were short of sand. It also explains why some wells were using very, very little sand.

So, trucks, sand, manpower -- all contributing to a fracking backlog.

By the way, if the second biggest Bakken operator is having trouble sourcing sand, can you imagine how difficult it is for smaller players with much less pricing clout and fewer long term commitments to get the sand they need. I can only assume CLR, WLL, BEXP, and a few others are at the head of the line when waiting for material in short supply.