Mike Filloon: Part III -- Bakken Update, 2013

Bakken update, 2013, part III: Mike Filloon, SeekingAlpha.com.

Part I, January 13, 2013
Part II, January 22, 2013

Comment at earlier post.

A couple data points from most recent post:

Kodiak is growing production quickly, and proved itself as a top notch operator. Well costs will have a significant impact in 2013. Proppant costs are down 40%. Water costs have also pulled back to 50 cents/bbl from 75 cents in 2012. Service costs are down and infrastructure is being built.

All of this has contributed to lower well costs. More importantly it has allowed Kodiak to expand its well design. Specifically, it has increased proppant and water. In the deepest parts of the Basin, Kodiak is using 100% ceramic proppant. The increased use of water and proppant produces much better IP rates. It leads to a decreased depletion, and higher EURs. Kodiak's uses the best of everything when drilling and completing wells. This is why its numbers continue to be some of the best in the Bakken. The well results below will show an improvement in Kodiak well design, which is better than in 2012. It is also better than most of its competitors.

And this:

Burlington Resources second well is a great completion. This well used more water than any other in this article. This includes wells with laterals 4000 feet longer. Water amounts are just as important as the type and amount of proppant, but it is the mix that optimizes recoveries. Some companies utilize HiWay fracs, which use less water and proppant. There has been some success, but in general the more water and proppant the better the EURs. Conoco has done a nice job with its well design over the past year. Well refinement should continue to lead to better returns. Denbury continues to lag other operators in the basin, but its specialty is EOR.