Tuesday, September 6, 2016

A More Detailed Look At Mike Filloon's Most Recent Bakken Update -- September 6, 2016

Re-posted from an earlier post; this deserves a stand-alone post.

Filloon Bakken Update

Not long ago I mentioned that a surge in Filloon Bakken updates suggests the boom is back. Here's perhaps the fifth Filloon Bakken update in just the past few weeks.  Summary:
  • Enhanced completions continue to improve initial production rates in US unconventional plays.
  • Mega-fracs were only used sparingly in 2015, but still improved 270-day production year over year by 22%.
  • As oil prices improve, we will find that improvements in well design provide a much larger footprint of development in US plays.
  • If correct, production increases could be much more substantial at lower prices than analysts expect.
A few points from the article that caught my eye:

There are several graphics showing mega-fracks, including sliding sleeve vs cemented liner with plug & perf.

There is an EOG graphic comparing high-density vs old completion technology. EOG Resources shows over 700% more events (fractures) than back in 2010; more importantly, these events are closer to the well bore.

As I write this, a thought occurs. Saudi Arabia drills (mostly) conventional wells. There productivity is such not a lot of effort (R&D) is being spent on improving technology. For conventional wells in Saudi Arabia, the "low-hanging fruit" is not technology. If the "Bakken Revolution" did what it did with "old" technology in 2020, imagine what Bakken 2.0 is going to bring to the table. Saudi Arabia has to be painfully aware of this.

Continuing with the Filloon update:

Better well designs have produced positive results in fringe areas of US plays. Initial testing was seen mostly in the core.

Looking at the Bakken, there are two main targets. The first is the middle Bakken. This is what the Williston Basin is known for. As a general rule, the best wells will produce from this zone. The Three Forks has a series of up to 4 intervals. There has been little said about the fourth bench, and only a few wells have targeted the third. The upper Three Forks has seen the majority of activity, but in some areas there have been good 2nd bench completions. The middle Bakken core is located around the Nesson Anticline but also includes Parshall and Sanish fields.

There had been very few excellent results from areas outside of the core. Mega-fracs have changed this. We have seen a few wells that not only produce outside the normal ranges, but are producing new records. In NE McKenzie County the cutoff for good well results had been west of Banks field. Banks field does not produce as well as the fields on the border with Mountrail County, but still quite good. [I've always considered the Banks field a pretty good field.]

Using certain criteria, Filloon posted this table which can be compared to tables I have posted in the past:

Name Well Count CUM Gas  CUM Oil Oil/Well
BANKS 5 897,623 522,864 104,573
TRUAX 21 4,009,771 2,172,268 103,441
LONG CREEK 9 1,507,363 903,150 100,350
STOCKYARD CREEK 5 637,349 481,714 96,343
POE 3 313,662 237,987 79,329
TOBACCO GARDEN 6 624,795 471,247 78,541
SIVERSTON 3 379,367 221,575 73,858
BAKER 25 1,208,918 1,752,136 70,085
STONY CREEK 3 252,345 206,163 68,721
EAST FORK 27 1,917,323 1,814,027 67,186
ELK 4 240,459 253,430 63,358
BROOKLYN 9 848,503 559,909 62,212
CRAZY MAN CREEK 5 335,905 302,540 60,508
TODD 8 373,863 467,328 58,416
MOLINE 3 142,742 165,362 55,121
MONDAK 3 124,304 162,185 54,062
ARNEGARD 5 306,481 238,805 47,761
CAMP 10 541,181 433,661 43,366
COW CREEK 4 140,972 144,891 36,223
INDIAN HILL 6 223,793 192,786 32,131

Filloon notes a significant problem right now with comparing wells: shut-ins. He also does not mention wells that may not be shut in but may, in fact, be producing at less than maximum capaicyt for any number of reasons.

Filloon produces a table of the eleven (11) top producers. Here are the top six:

Name Well Count CUM Gas CUM Oil CUM Water
OASIS PETROLEUM 29 1,467,239 2,104,030 3,813,375
CONTINENTAL RESOURCES 26 2,030,618 1,499,468 1,214,252
Statoil Oil & Gas LP 25 1,803,522 1,495,686 2,436,510
WHITING OIL AND GAS 25 3,939,474 2,530,454 3,551,414
ZAVANNA, LLC 17 2,160,910 1,375,781 1,463,946
XTO ENERGY INC. 15 972,379 725,499 567,944

Whiting out produces all other operators. Oasis is second, and the other producer over 2 million BO. The difference in production of crude per well is quite large. Whiting's results point to a better well design or geology. It is possible this is a combination of both.

A relatively large production improvement was seen over the first 270 days' year over year. Over 16,000 more bbls of oil were produced. This represents an improvement of 22%.

Of the 181 wells, 30 produced over 100,000 BO within the first 9 months. This includes wells that produced for less time. 9-month average production increases to 143,510 BO. It provides some insight into where completions design is taking us. 

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