October 4, 2013: two things -- a reader sent me a note suggesting the Bakken numbers could be much, much bigger than what I posted below. I agree. I was concerned with even posting the numbers below, much less even bigger numbers. I am very serious about the Bakken posts (the non-Bakken posts are often hyperbole and venting). I don't need to exaggerate regarding the Bakken, so I tend to hold back on what I'm really thinking.
Another reader sent me the PDF link to Mr Rolfstad's newest presentation on the Bakken. Readers may want to note the number of wells that folks are now talking about.
While at the first glance the 40,000-acre position may appear modest in size, one should keep in mind that even under the conservative 40-acre development scenario, it would take over a decade to complete the drilling with a six-rig program, assuming current drilling pace of ~16 wells per rig-year. One would need to double the timeframe if the development proved to be feasible on 20-acre spacing.
Most importantly, Rosetta estimates that on its entire position in Reeves County, it has over 100 million barrels of oil equivalent in place per section (one square mile). The estimate is truly staggering. To put it in perspective, if only 10% of total oil and gas originally in place could be recovered, gross revenue from each square mile could exceed $600 million over the life of the property (using $90 per barrel oil price realization and $5/MMBtu "wet" gas price realization and assuming reserve mix of 67% oil and 33% gas). By comparison, in its current estimates, Rosetta assumes average recovery factor of approximately 3.8%.Don, who sent me the link, asks rhetorically: whatever happened to "peak oil"? Oh, yeah -- horizontal drilling and fracking.
In the best Bakken, 14 wells x 500,000 bbls EUR / 1280-acre units = 7 million bbls/1280-acre units or 3.5 million bbls/section. Of course, in the best Bakken, EOG is suggesting as many as 34 wells in one 1280-acre unit.
In the Permian, in the linked article above, 100 million bbls OOIP/section x 10% recovery = 10 million bbls/section.
So, some idea of the amount of oil that could be produced in these plays.