Wednesday, September 24, 2014

Update On Density Pilot Projects In The Bakken, September 24, 2014

September, 2014
Slides 25 - 34

Six producing density pilots
CLR: 4
  • 1,320 feet: Hawkinson, Rollefstad, Tangsrud
  • 660 feet: Wahpeton
KOG: 2
  • 800 feet: Polar and Smokey
Seventeen (17) future pilots in progress/announced
  • CLR: Mack, Lawrence, Hartman 660's
  • COP: 6 density pilots
  • KOG: 1 density pilot
  • OAS: 2 density pilots
  • WLL: 5 density pilots
Testing: 4 - 8 wells per zone (formation, bench)

LTF: 15 of the 23 pilots include wells in the lower Three Forks

  • staggered, not stacked
  • industry's largest microseismic project
  • full DSU development validated (4 zones on 1320-foot spacing)
  • average well performance exceeds 603K boe model by 50%
  • project ror>100%
  • no lateral communication on 1320-foot spacing in middle Bakken and Three Forks
Slide 27 is incredible, for the Hawkinson:

Note the 250K EUR at 400 days (~ one year) for Three Forks vs 210K EUR for the middle Bakken; the area average is much higher for the middle Bakken than the Three Forks at the current time (3 wells MB vs ~ 8 TF wells which includes all 3 benches


  1. Mason Inman has some criticism and some real analysis here:

    He is a peaker, but one of the better ones. I do appreciate the work and effort put in. His post was done before the CLR investor day presentation. Not sure if he would change it based on any extra inputs from the day (and you actually have to listen to the talk, not just look at the ppt to get all the CLR insights).

    Also, Inman was pretty negative on the Marcellus (working to expose it as shale hype), but seems to have moved on without completing his investigation. [And good call too...the Marcellus just KEEPS blowing past the high side of even cornie predictions. It just won't turn. Linear rate of production increase.]

    But...still. Inman is really pretty good and interesting. And one of the fairest peakers.

    1. That is an old argument, and one I'm sure CLR and others are studying very, very hard.

      I can't get to the full article (one needs a password/subscription which I don't have, or maybe I'm missing something) but based on what little I see, the question comes down to this, which Inman seems to be asking:

      What is the optimum number of wells in a spacing unit?

      The answer: the number of wells in a particular drilling unit will vary depending on the location and geology of the spacing unit, something we've all known "forever" -- they are called "sweet spots."

      The answer: somewhere between one well per spacing unit and 56 wells per 1280-acre spacing unit in the Bakken, and possibly more in the Permian.

      Take a look at the graphic/slide at this link, the Hawkinson wells, and study it closely:

      You can click on the slides to make them much bigger for easier viewing. Really study those two slides. There is a lot of information packed into those two slides.

      I have a post ready to go (it's in draft form, being peer-reviewed) concerning these two slides.

      I could be wrong, but I think the question in the Inman article is not how much oil is left (the Peak Oil argument) but how many wells can one pack together in one drilling unit.

      If that's the question, it's a "so what" question. So what if a particular drilling unit only supports one well, and another drilling unit in a sweet spot in the Bakken supports 28 wells. The operators will sort that out.

      And, oh by the way, the "interference" argument is perhaps also somewhat irrelevant based on CLR suggesting that there is no communication between the wells they are studying; and the "halo" effect others have noted.

    2. Oh, just to be clear: I know that corporate presentations paint a much rosier picture than might be warranted. That's the nature of corporate presentations.

  2. If you go into the article via Mason Inman's twitter, it will be free then.

    There's definitely interference. Drilling Info showed this very clearly a year ago (and they ain't peakers). Inman's analysis shows this. Even the fact that you have to lock in the nearby wells shows this. You talk about halo effect but it's just a hypothesis with a few factoids supporting it. No statistics. Also, it's obvious that fracks move from one layer to the next because of the staggered well design.

    1. And again, I don't see the problem, but these guys are smarter than I am.

    2. This is the conclusion: "The worry is that if wells are too close together, there will be “interference”—that is, essentially, the rock being drained by one well will overlap with what’s being drained by a neighboring well, so each well will produce less than it would if it had no neighbors nearby."

    3. I got to Mason Inman's twitter account and the article. It appears that he and I both have our own world views. He's out raising money; I'm not.

    4. Well...he is a peaker. But (in tone of "smart for a Marine") he's one of the better ones.