Idle Chatter On The "Halo Effect" In The Bakken -- July 1, 2016

Updates

Later, 2:10 p.m. Central Time: see first comment. Think about that observation and the future of water boarding flooding in the Bakken.
 

Original Post

 

The other day, I posted a note about the jump in production of a particular well as seen in this production profile (the fourth column is produced bbls of oil; the sixth column in water:

BAKKEN	1-2014	31	5992	5823	1523	5253	5253	0
BAKKEN	12-2013	31	4904	4615	1465	4412	3187	1225
BAKKEN	11-2013	30	9118	9226	2140	8027	6207	1820
BAKKEN	10-2013	31	6773	6764	3033	6002	5692	310
BAKKEN	9-2013	30	17708	17902	2128	16480	16480	0
BAKKEN	8-2013	26	18007	17547	3392	14073	12373	1700
BAKKEN	7-2013	1	0	186	0	0	0	0
BAKKEN	6-2013	27	658	600	17	425	378	47
BAKKEN	5-2013	31	990	1166	30	683	653	30
BAKKEN	4-2013	30	970	775	22	598	598	0

I think it is due to the halo effect of fracking; see the linked post above. I could be wrong. Something else may account for this jump.

But assuming it is due to the halo effect of fracking, I often wonder why analysts don't talk about this more often. I seldom see any mention of it.

I think the reason has to do with the fact that the jump in production is relatively short-lived. It appears that these wells revert to their earlier production profiles. That may be.

But look at from this angle. This well was down to producing less than a thousand bbls of oil per month (for whatever reason). Then, over a period of 26 days, it produced 18,000 bbls, and then the next month, produced another 18,000 bbls. At the previous rate of 1,000 bbls/month, this equates to 36 months of production over a short two-month period.

Not only that, but even though production dropped quickly after that second month, these were the amounts per month that this well was still producing (remember, the base line was less than 1,000 bbls / month), numbers rounded:

• Third month: 7,000 bbls
• Fourth month: 9,000 bbls
• Fifth month: 5,000 bbls
• Sixth month: 5,000 bbls
• Seventh month: 2,000 bbls
• Eighth month: 2,000 bbls 

And now, two years later, monthly production still exceeds the 1,000-bbl baseline prior to the production jump.

But look at this, same well. Look at the months highlighted in red bold, especially that nearly 5,000 bbls of production in August, 2015:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	5-2016	31	1215	1111	555	741	207	534
BAKKEN	4-2016	30	1429	1591	565	1023	412	611
BAKKEN	3-2016	31	2184	2255	699	1757	742	1015
BAKKEN	2-2016	29	2281	2278	722	1088	0	1088
BAKKEN	1-2016	31	3332	3179	918	2685	0	2685
BAKKEN	12-2015	26	2022	2031	580	1460	0	1460
BAKKEN	11-2015	19	928	1108	477	616	0	616
BAKKEN	10-2015	3	525	226	0	118	0	118
BAKKEN	9-2015	12	1980	2450	267	1644	0	1644
BAKKEN	8-2015	31	4727	4466	1345	3800	0	3800
BAKKEN	7-2015	9	1427	1102	965	1043	0	1043
BAKKEN	6-2015	5	98	434	22	196	148	48
BAKKEN	5-2015	31	884	867	213	1371	1108	263
BAKKEN	4-2015	30	930	911	287	722	220	502
BAKKEN	3-2015	31	1206	1168	378	1437	1055	382
BAKKEN	2-2015	15	515	694	152	649	469	180
BAKKEN	1-2015	31	1932	2037	355	1802	1802	0
BAKKEN	12-2014	31	1371	1120	133	1318	1318	0
BAKKEN	11-2014	30	987	897	225	1182	1164	18
BAKKEN	10-2014	31	1658	1790	200	1674	1641	33
BAKKEN	9-2014	30	1242	1762	143	1942	1942	0

Which brings me to another point.

A lot of folks talk about Bakken wells that are not economic. They say the production is too low. From the beginning, it always seemed strange to me that folks were concerned about these wells not being economic, but yet operators were not permanently abandoning these wells. Although it may not cost much, it is a cost to keep a non-economic well on the books. Non-economic wells never bothered me, and that was before the "halo effect" observations.

A lot of "non-economic" wells were part of the learning process. And, wow, did the Bakken operators ever learn a lot. Some learned faster than others.

In addition, a lot of "non-economic" wells held leases by production, allowing operators time to go back and drill new wells later.

But now, we have the "halo effect." It may or may not exist. It may or may not exist everywhere. It may not amount to anything. I don't know. But when I see a well produce 36 months' of production over the course of two short months in a well that might have otherwise been "non-economic" it makes one wonder.

Another point. This is occurring in a drilling unit where there are very few wells, maybe four, five or six. Think what might happen when 28 wells (or more) are put into this drilling unit.

Most of the stuff regarding EURs, etc, is based on new wells and production profiles of the first few months. One wonders if some folks might not be going back to these older wells and revising
EURs for older wells based on other factors.

Finally, one wonders: if the halo effect is real, what does that mean for "water flooding" in the Bakken. I do think there's a difference between water flooding shale (think gumbo) and water flooding sandstone/limestone/dolomite (think sandy beach).

But even if the "halo effect" amounts to nothing, at least in this case, the mineral owners must have been pleasantly surprised to see a jump in their royalties back in August and September 2013. All things being equal, their royalty check should have jumped by a factor of 20?