Mike Filloon On Bakken Well Completions -- September 6, 2017

Note: there is much more to this article than what first meets the eye (as they say). There are some interesting points that Mike mentions without further elaboration. It's been a long time since Mike has had an article specifically devoted to the North Dakota Bakken. Archived.

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An article from Mike Filloon that I've been anticipating, over at SeekingAlpha. Summary:

• lower oil prices might not be enough to stop production increases in the Bakken, which may be bearish for the USO
• increased use of proppant and fluids continues to improve production in concert with plug and perf with cement liners
• when enhanced completions are considered, the economics are much better than expected
• look for operators to move to newer designs exclusively in the Bakken and other U.S. plays

From the article:

The Bakken was one of the first plays to be developed in the US. It has been the focus of unconventional production, but has fallen out of favor. First the Eagle Ford then the Permian have both provided better economics. Newer plays like the STACK/SCOOP have emerged.

All have seen additional CAPEX, with dollars leaving the state of North Dakota. This has been seen by players like Continental. The Bakken is well suited for a well design analysis. It has seen more development than any other play, and this provides a longer term history.

The Bakken provides an excellent sample of well design. It shows why oil prices have not recovered, and why US production continues to increase at $50/bbl. 

North Dakota Bakken well completions:

• moving from ceramic to sand (I'm also seeing a move to smaller sand from bigger sand)
• using more sand overall
• using more slickwater
• the number of stages are increasing

The average location in this grouping has or will produce 208 KBO in the first 19 months of well life. We used a D&C of $6 million and $10/bbl in costs. The average well reaches payback within this time frame at $50 oil and $3 natural gas.

Now I'm waiting for Mike to discuss the peculiarities of the Bakken, i.e., the reversal of the dreaded decline rate.