Periodically I see comments made by folks about non-economical wells in the Bakken without any substantiating data.
One observation: I see very, very few abandoned, shut-in, or plugged Bakken wells that have been drilled since 2006. I understand that it is time-consuming and an added expense to plug a well, and with manpower at a premium, it's probably even a bigger deal. Folks have suggested that is the reason we do not see more abandoned holes.
EXCEPT FOR ONE THING: as long as a well is producing, it holds the lease by production.
But, with pad drilling, things are different. Once a well is hooked up to a pipeline, operating expenses for a producing well are very, very low. In the old days, it would be hard to justify putting a pipeline into a remote well that was not producing much oil; but the trucking costs would have been a challenge. With pad drilling, if subsequent wells are better (which they most likely will be -- for a number of reasons), the operator might as well leave the original "pilot" well alone, even if production is small. A pipeline will be brought to the multi-well pad and the marginally-producing well will simply be hooked into that well. In addition, assuming the price of oil increases over time, that marginally-producing well may actually look better over time.
But I would think if a particular well was uneconomical, operators wouldn't be quick to drill another well in that location, unless they felt they could do better. The MRO Vorwerk well recently drilled seems to be a so-so well. It was stimulated with 2.4 million lbs in 30 stages, not an inexpensive proposition.
- 21286, 246, MRO, Vorwerk USA 14-34H, t1/12; cum 17K 8/12; 30 stages, 2.4 million lbs
- 24078, loc, MRO, Vorwerk USA 24-34H,
The monthly production for the first Vorwerk well above suggests more work (possibly) to be done. These are not impressive early month production numbers for a Bakken well, but as noted above, the jury is still out. Lots of rambling to suggest this: I'm not sure what the definition of a "non-economical Bakken" well is.
Monthly Production Data
| Pool | Date | Days | BBLS Oil | Runs | BBLS Water | MCF Prod | MCF Sold | Vent/Flare |
|---|---|---|---|---|---|---|---|---|
| BAKKEN | 8-2012 | 7 | 785 | 920 | 202 | 414 | 0 | 378 |
| BAKKEN | 7-2012 | 15 | 1263 | 1331 | 392 | 691 | 0 | 609 |
| BAKKEN | 6-2012 | 10 | 1535 | 1410 | 574 | 771 | 0 | 732 |
| BAKKEN | 5-2012 | 14 | 2293 | 2442 | 1117 | 402 | 0 | 328 |
| BAKKEN | 4-2012 | 26 | 2747 | 2870 | 1476 | 1473 | 0 | 1325 |
| BAKKEN | 3-2012 | 29 | 3936 | 4091 | 3368 | 2012 | 0 | 1869 |
| BAKKEN | 2-2012 | 26 | 3655 | 3502 | 3912 | 3155 | 0 | 3008 |
| BAKKEN | 1-2012 | 9 | 1088 | 593 | 80 | 1157 | 0 | 1103 |
Having said all that, one company in the Bakken I am not able to sort out: Baytex. This is not an atypical well for Baytex, though some recent Baytex wells have improved significantly:
- 20587, 97, Baytex, Colby 23-14-160-99H-1PB, long lateral; Three Forks well, Burg oil field, t8/11; cum 27K 8/12; 20 stages; 1.93 million lbs;
Hi Bruce, ol' roughneck again. in the old days, we worked on a lot of stripper wells (20 bbls or less) that were old old wells. they had paid for themselves many times over i'm sure (guessing) and as long as they were relatively trouble-free and didn't need work too often, we'd get them back on-line again. if they got to be too much trouble, then we'd eventually end up pulling rods,tubing, bring in Wisco (casing company at the time), shoot the casing off and plug. every once in awhile your posts get me thinking about the days in the patch so i thought i'd pass it along. actually miss those days except when it's 20 below or worse !
ReplyDeleteol' roughneck
Wow, thank you for taking time to comment. You mentioned WISCO. I've never been in the oil field business, but I have very fond memories of WISCO for several reasons.
DeleteThis gives me an opportunity to to link readers to WISCO again:
http://www.milliondollarwayblog.com/2011/06/williston-basin-oil-patch-lost-great.html
I see that in the state of Texas according to the RR commission there are 161,402 wells producing an average of only 7 barrels per day for 2011. Do the math and that is 1.13 million barrels per day.
ReplyDeleteThis well is capable of a lot more than that at this time. They have already paid the cost of drilling and completing. I would think as long as they can pay the cost of operating the well and have a little left over they will continue to do so.
One thing I noted is all gas is flared. Maybe they are waiting for a gas connection to put it on full production?
I agree completely.
DeleteYes, flaring on all wells eventually ends. It will end naturally or it will end when a pipeline is connected.
And, yes, if they don't get a pipeline connected and it continues to flare, they will need a waiver / permission from the state to produce at a maximum rate if they continue to flare. I forget the time period, six months or a year, before they need a waiver (it's on the blog somewhere). You see the requests in the monthly dockets.
When I first started blogging I was naive about flaring. It appeared that "every" well in the Bakken released natural gas resulting in flaring. I never understood why they didn't just put in the natural gas pipeline before they drilled the well; after all, one could be guaranteed there would be a release of natural gas.
This is the reason as I understand it: not all oil wells will produce much natural gas in the long run. Initially there will be natural gas flared, but over time, it will end. If it "runs out" quickly, it won't cover the cost of the natural gas pipeline. I could be wrong on that, but that's what it seems I've read while posting/linking stories.
Regardless, as the infrastructure continues to be built out, it will cost less and less to hook up each individual well (on a "per well" basis) to a natural gas pipeline.