Comments On Wells Coming Off The Confidential List This Next Week -- September 23, 2018

The list is here.

*********************************

Newfield

I must be missing something (I usually am). Earlier this year, April 18, 2018, Mike Filloon suggested Newfield just might be the best operator in the Bakken.  Most of the article is behind a paywall, but I have it archived. From the linked post:

Improving well design has continued to increase oil production per well. This has occurred targeting lesser geology, and on pads with producers already completed. These two variables should decrease oil and natural gas production significantly.

Better well design places more resource in contact with the wellbore. The idea is simple. More frac's close to the well bore breaks up more rock. This releases more oil. Operators use to think more production would occur from existing fractures, but production improvements have been accomplished through tighter stage and perf clusters.

So turn the rock close to the wellbore to rubble, and pack with sand. Although this is a general way to look at completion design, it provides and idea as to why operators are more successful at lower oil prices. Newfield is an operator that continues to outperform on a production per foot basis. This is true in all of its plays. While there may be more interest in its SCOOP/STACK leasehold, its Bakken acreage has shown a significant improvement in oil production YOY. This has been accomplished in the face of dwindling core locations, and less productive geology. We expect NFX to continue to outperform going forward, as it's well design may be the best in the Bakken.

Maybe, I don't know. Having said that, Newfield has some incredible wells in South Tobacco Garden. STB is a rectangular 20-section oil field unchanged in size or shape since the very beginning of the boom. It is located in the heart of the Bakken. Any operator who can't report huge wells in this area shouldn't be allowed to drill in North Dakota. LOL. But the free market system will take care of that and wells can always be re-drilled, re-fracked.

It appears Newfield will report four great Orvis State wells. It appears that the Obenour wells sited in this section run south; the Orvis State wells sited in this section run north. Neighboring, older wells to watch:

• 20347, Obenour, running south, off-line;
• 19597, Obenour, running south, off-line;
• 18086, Sergeant Major, running north; just coming back on-line;
• 23207, Orvis State, running north, still off-line;

****************************

Bakken Development

It's fascinating to observe how the Bakken developed. There really was no one operator that "monopolized" the play. Certainly there were a handful of big players, but even those have changed. For example, Oasis did not even exist early in the boom; now, apparently it's the fourth largest producer in the Bakken.

And it certainly wasn't only publicly traded companies. A handful of private companies have been real standouts. I'm thinking of Slawson.

It makes sense how it happened, but it is still quite remarkable. It seems, for the most part, each Bakken oil field is "owned" by one or two "operators" with several others filling in.

********************************

Brooklyn Oil Field

CLR keeps "manufacturing." The 5-second Brooklyn oil field elevator speech: Brooklyn: a small, non-descript field NE of Williston; "owned" by CLR; excellent example of how an operator systematically drilled one entire field with one rig; holding the entire field by production within a year or so; has received the most comments of any field (that was early on). The Brooklyn is tracked here.

It looks like two more Brooklyn wells will come off confidential list this week. It will be interesting to compare new wells with old wells and to see if "over-drilling" in a field is causing problems.

See the "Bakken Factory" below.

***********************************

Pad Drilling

For newbies. Oliver oil field is tracked here. Another non-descript oil field north of Williston in an area not expected to be all that productive. But Kraken Operating seems to have done well. Production may seem unremarkable compared to some areas in the Bakken but one must compare these recent results to other Tier 2 and Tier 3 plays in the Bakken, and more importantly, compare these numbers with the production numbers we saw in the best Bakken six years ago. Even Tier 2 and Tier 3 wells are providing some excitement. And look how pad drilling has changed everything: instead of wells coming off the confidential list in drips and drabs, we have the results of a host of wells all at one time.

****************************

Miscellaneous

Oasis has some nice wells in Willow Creek.

Two companies in the Bakken probably know more about the Bakken geology and completion strategies than all the others: NOG (a non-operator) and CLR (an operator, and its CEO, Harold Hamm, the face of the Bakken). NOG participates in wells drilled by operators throughout the Bakken; CLR seems to have wells in every area of the Bakken.

This next week, CLR will be reporting wells from the following fields: Brooklyn, Pershing, Sanish, and Rattlesnake Point.

In addition to drilling throughout the Bakken, CLR is taking the lead on targeting the 2nd and 3rd benches of the Three Forks. For newbies: the middle Bakken is pretty much fully mapped in North Dakota. "They" were just starting to map the first bench of the Three Forks when the Saudi Surge (2014 - 2016) stopped everything in its tracks. A lot of things changed during that time frame. I think we are still seeing a change in "attitude" in the Bakken. Operators remain much more conservative. It appears newer operators are building cash positions -- pad drilling where they know they should do well. But the more established operators, like CLR and Whiting, are starting to drill more wells targeting the second and third benches of the Three Forks. Most interesting, it appears that "we" still have a long way to go to completely mapping the Three Forks upper bench before we even get started talking about the lower benches.

It is my understanding that the Three Forks will have a smaller footprint than the middle Bakken, maybe half as much as the middle Bakken. But well vs well, it's possible the Three Forks upper bench (T1, or H1) will be better wells than middle Bakken wells.

**************************

The Bakken Factory

Re-posting.

Fracking: oil giants use size to overcome fracking challenges; Chevron employs "factory model" to manage shale-drilling operations in remote Canadian region. Williston's own Rollefstad used the phrase "manufacturing phase" years ago, anticipating this. I don't think there is anything of consequence in this article. The Bakken is way ahead of this. CLR led the way in pad drilling and Harold Hamm put a copyright/trademark on "Eco-Pad."

Chevron Corp. is laying the groundwork here for what it calls a “factory model” for shale drilling, master planning an entire region of small shale wells by locking up labor, building infrastructure and securing sand and other needed materials, all at once.
Shale drilling, once the province of small, scrappy operators, has run into growing pains in places such as the Permian Basin in Texas and New Mexico, as producers struggle with pipeline bottlenecks and rising labor and material costs.

Big oil companies seeking to re-create the U.S. shale boom in countries such as Canada and Argentina are trying to avoid these problems by managing shale sites in concert to prevent logistical hurdles and streamline operations, similar to the way they run traditional oil megaprojects.

Already in Texas, there is evidence that larger companies such as Chevron and Exxon Mobil Corp. are weathering the bottlenecks and rising costs there better than smaller rivals—and continuing to ramp up production—because they have the economies of scale and wherewithal to develop their own solutions to these problems.

***********************************

Notes To The Granddaughters

Arianna is with her parents in Houston for a state water polo tournament.

My wife is with our other two granddaughters.

Olivia is reading the comics.

Sophia is using her new "window" crayons to draw on the window. If parents haven't seen these "window" crayons, they are very, very clever. Sophia loves them.

I will have Sophia all afternoon while Olivia works on her crafts and other projects. I will watch a bit of the golf tournament. No NFL.