Thursday, September 20, 2018

The Dreaded Bakken Decline -- September 20, 2018

Disclaimer: I am inappropriately exuberant about the Bakken.
Disclaimer: the "dreaded decline rate" in the Bakken has never bothered me.

Even though the "dreaded decline rate" never bothered me, I was always of the mind that the oil companies would "figure it out." The "production type curves" have borne that out. The decline rates have become less steep; they seem to plateau at higher levels; and once they reach their plateau they tend to stay there "forever." But this is what is unusual about Bakken tight, horizontal, unconventional wells compared to conventional, vertical wells: the former often see a jump in production for any number of reasons, and it appears one should anticipate a jump in production every five to seven years under optimum conditions.

A reader brought this well to my attention. I was initially concerned there may be a typo, and I would want to check this well again in six months to make sure these numbers are accurate. The best way right now to confirm the numbers are accurate would be to hear from a mineral owner who confirms the pay stub correlates with the data in this table.

Having said that, looking at the "bbls water" and "MCF prod" it appears the "bbls oil" is not a typo. I could imagine a typographical error in one cell or one column, but not typographical errors across the entire row.

I have not seen this before -- at least not to this extent -- this is simply incredible.

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-2018318023979817594031669781615605232
BAKKEN6-201830350213499220965631993489128128
BAKKEN5-201831293482934820751644184770716525
BAKKEN4-20183032546325462343064199640190
BAKKEN3-20183137721377392733776684764980
BAKKEN2-201828281142809624407548833376320952
BAKKEN1-20182519815198362931023272171675955
BAKKEN12-20173119133191123751928094185929316

Total production in July, 2018: 166,978,000 / 6001 = 27,825 boe + 80,239 bbls crude oil = 108,064 boe -- and this is in the eighth month of production. Unprecedented as far as I know. 

This well:
  • 33039, A, Oasis, Patsy 5198 12-17 8B, Siverston, 50 stages; 10 million lbs, t--; cum 282K 7/18;
Another Patsy well:
  • 33041, 606, Oasis, Patsy 5198 12-17 10B, Siverston, t1/18; cum 197K 7/18; again, note the amount of natural gas produced in July: 199,349,000 / 6001 = 33,219 boe + 56,235 = 89,454 boe -- again, in the seventh month, and well above what it was producing in any of the previous six months. I think I know why but won't talk about it now. By the way, note the IP of "606."
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN7-2018315623555939775311993491939315232
BAKKEN6-20183024611245902743777490773100
BAKKEN5-20183132023320233220175564753780
BAKKEN4-20183027088270883281659173589930
BAKKEN3-20183131098311103413059675594890
BAKKEN2-201828176731766127460345391692017451
BAKKEN1-201813864486442964332664865323933
 
The Oasis Patsy wells are tracked here.

Right now, three operators are really impressing me: MRO, Oasis, and Bruin.

I've not talked about Bruin but they have a number of surprisingly good "MHA" wells in Eagle Nest and McGregory Buttes, I believe. I haven't highlighted Bruin because there are simply so many better-than-average wells, but not as big as these MRO and Oasis wells. But Bruin either has found a great, great location or has some really good completion strategies. My hunch: a little of both.


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