Bakken Update -- Filloon -- December 17, 2016

Over at SeekingAlpha:

• Continental is well placed in 2017 with a large core footprint in the STACK/SCOOP
• well design improvements have been significant as 2015 Bakken payback times are down to 18 months at $58/bbl using a 71 well sample
• the DAPL is very important to CLR differentials, as it could decrease differentials by $4/bbl

Frack jobs have gotten bigger. This has occurred through a change from sliding sleeves to plug and perf (shown above). Sliding sleeves are much faster and cheaper, but have limited access points. More perforation clusters are used with plug and perf.

The closer these access points are, the greater number of fracks. Operators are finding that cheaper isn't always better. Going back to plug and perf is the continued theme. Most are doing this.

Recent North Dakota completions are better than its 900MBOE target. The four wells above provide a ceiling to results. We can assume these are some of its best Bakken wells. Although this is very good data, we are more interested in the average of all its results over a given timeframe. The focus has been on CLR's flagship play. The STACK/SCOOP produces well at low prices. The Bakken may be more important.

Determining the oil price needed for North Dakota to be economic, provides insight into its development. 860,000 net acres is a significant investment.

CLR completed 71 wells from April 1 st of 2015 to September 1 st of 2015 in North Dakota. During this time, it was moving from sliding sleeves to plug and perf.

And then this:

Most believe the Permian and STACK/SCOOP have the best economics. The Eagle Ford and Bakken have breakevens $5 to $10/bbl higher. OPEC has stated it wants to cap oil prices at $60/bbl. This seems to target marginal production unconventional acreage.

$60 oil doesn't do much for Saudi Arabia.

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