Idle Chatter Regarding The Bakken -- May 14, 2018

I was traveling last week which put me behind in my blogging. Readers sent me a lot of links and a lot of comments. I'm almost caught up.

This was a comment sent be a reader that caught my attention. I'm sure many readers have similar thoughts:

General comment. How big a deal is re-fracking of existing wells going to be and what kind of long term impact on reserves will there be?

Looking at the GIS Map at NDIC you see lots of horizontal legs all over the place. How many of those wells are 10 years old or were drilled before the latest enhanced completion techniques applied?

I don't know how widespread the effort is among producers and I don't know how much effort CLR has put into this re-frac effort but I recently looked at the results of Bridger 44-14H and in my uneducated opinion was easily impressed.

During the month of March in 26 days the well produced 13,665 BBL of oil and 19,800 MCF of gas. When the well was first completed 10 years ago the most productive month May-08 of the new well was 7,422 BBL oil and 5,364 MCF gas.

In the last 217 days of production the well has produced 140,222 BBL oil and 162,209 MCF gas. In the first 2,655 days of production (9 1/4 calendar years) the well produced 138,952 BBL oil and 128,205 MCF gas.

I agree completely. I think you are right on track ....

For newbies.

How big a deal is re-fracking of existing wells going to be and what kind of long-term impact on reserves will there be?

I suppose the answer depends upon whom you ask. If you ask Art Berman, he will likely tell you that a) the Bakken is all  hype; b) the best days of shale are behind us; c) fracking is overblown; d) "shale" was not a "revolution; and, e) technology won't "save us." All of that comes directly from Art's webpage, or what I infer from his articles over the years.

For me, I am inappropriately bullish on the Bakken.

This is where I start from and am willing to back away from some of this if data shows I am wrong. There is nothing new here. This has all been posted before:

• the Bakken has the highest TOC by percentage of any oil play in the world; TOC is the most important of the four variables in an oil play
• CLR once said there was a trillion bbls of OOIP; subsequently backed off to 500 billion bbls
• Price said there was ~ 500 billion bbls OOIP in the Bakken
• the life history of a well is important, this is all primary production: 
• drilling to depth but not completed
• constrained
• first frack/completed
• workovers
• neighboring wells fracked
• re-fracked when neighboring wells fracked
• mini-fracks 
• major re-fracks
• repeat
• in the core Bakken: no less than 24 wells per 1280-acre; some areas many more wells
• at the beginning, during the boom, 2007 - 2010
• monthly IPs: 5,000
• EURs: 350,000
• now: 
• monthly IPs: 30,000
• EURs: 1.5 million bbls
• operators won't drill a well unless EUR of 1 million bbls
• 24 wells x 1 million bbls = 24 million bbls in 1280-acre drilling unit
• percent production: no one talks about this any more; not sure where we are
• at the beginning, during the boom, 2007 - 2010: 1 -3% OOIP would be produced by primary production
• my numbers suggested closed to 5 - 7% at that time; and, I posted that
• subsequently, Whiting suggest 7% OOIP was being produced by primary production; suggested we would see 12%
• some might suggest we are at 12% production of OOIP
• the question: what is the OOIP in the Bakken
• 50 billion bbls, at 12% = 6 billion bbls
• 100 billion bbls, at 12% =
• 150 billion bbls, at 12% = 
• 500 billion bbls, at 12% =
• 1,000 billion bbls, at 12% = 
• the Bakken is producing 365 million bbls/year
• no one disagrees that the Bakken will produce at least 365 million bbls/year for ten years
• = 3,650 million 
• so, at ten years = 4 billion bbls, and at 50 billion bbls, at 12% = 6 billion bbls
• repeat, at ten years, 12% primary production on 50 billion bbls OOIP = 6 billion bbls

• USGS: most recent USGS analysis was done with the middle Bakken at 75% where it is today; probably less than 10% where upper bench of Three Forks is today; did not even consider the lower benches of the Three Forks

Disclaimer: I am inappropriately bullish about the Bakken.

Disclaimer: my numbers are based on unfettered production; geopolitics and national politics can change everything; a Hillary-ban on fracking would obviously change everything

Disclaimer: I often make simple arithmetic errors

Disclaimer: this is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on anything you read here or think you may have read here.