Case Study: The "Bakken Phenomenon" -- November 4, 2018

I'm certainly watching a different movie than than picture show that he "peak oil" folks are watching. After spending an hour or so going through the comments over at a peak oil blog, it still appears that a) folks in general don't understand the Bakken; b) folks are still comparing conventional oil experience with tight oil experience; and, c) no one is talking about the "Bakken phenomenon" that I find so interesting.

I would love to opine on what this may mean for shale and for the Bakken operators specifically but I feel I may be getting too ahead of my headlights. We'll see.

By the way, in passing, it was recently noted -- perhaps in the "throw-away" Forbes article of a few weeks ago -- that conventional exploration and drilling is incredibly inefficient compared to shale exploration and drilling.

[By the way, a reader who comments regularly at this blog, also made a comment at the peak oil blog and gave me a "shout out" by name. Much, much appreciated. Thank you, coffeeguy.]

One individual in a comment over at a peak oil blog did notice the results of the "Bakken phenomenon" when he/she was doing an "annual survey" of Bakken production to try to prove a point. The individual noted that "for some strange reason there was a jump in production in wells that were drilled in 2008 which was not explained, so I threw out that year in my analysis."

Another case study. Let's take a look at #18105 in the screenshot below.

That's a busy, busy little corner of activity in the Bakken, isn't it?

The well of interest -- #18105 -- was drilled back in late 2009. By today's standards, it was a pretty mediocre well, and quickly plateaued to 2,000 bbls of oil per month. By "conventional standards" the production should continue to slowly decline, eventually peter out, maybe a work-over or two, but eventually be plugged and abandoned. When drilled back in 2009, the EUR was probably estimated to be 350,000 bbls at best with a primary production return of 3% at best.

The well:

• 18105, 860, Hess, BB-Federal A-151-95-0910H-1, Blue Buttes, t2/10; cum 399K 9/18;

At 400K cumulative bbls this well has already surpassed its EUR, and is only nine years old, and is expected to produce for another 25 years and will go through the typical Bakken life-cycle: drill, frack, re-work, mini-frack, re-frack.

This was an open hole frack with about 2 million lbs of sand, and about 800,000 lbs of ceramic; in other words, a small, fairly "archaic" frack.  Right, wrong, indifferent, I think of an open hole frack as a one stage frack. Today that well would haven been fracked with 10 million lbs of sand in 40 stages.

The wells being drilled in that area today are expected to have EURs of one million bbls from a primary production return of 12%.

With that as background, let's take a look at the recent production profile of #18105.

This is only from the past 24 months or so, #18105:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	9-2018	29	6686	6893	1690	0	0	0
BAKKEN	8-2018	28	4808	4893	1658	6830	6830	0
BAKKEN	7-2018	31	8239	8140	2360	11456	11456	0
BAKKEN	6-2018	29	6553	6315	1383	7656	7656	0
BAKKEN	5-2018	21	4519	4195	1284	5883	5883	0
BAKKEN	4-2018	0	0	0	0	0	0	0
BAKKEN	3-2018	0	0	0	0	0	0	0
BAKKEN	2-2018	0	0	0	0	0	0	0
BAKKEN	1-2018	20	1349	1589	257	4003	4003	0
BAKKEN	12-2017	31	2135	2169	273	3808	3808	0
BAKKEN	11-2017	22	1609	1360	188	3875	3875	0
BAKKEN	10-2017	31	2214	2331	297	5559	5559	0
BAKKEN	9-2017	25	2099	1861	67	2679	2679	0
BAKKEN	8-2017	26	1598	1855	225	2449	2449	0
BAKKEN	7-2017	31	2122	2325	295	3172	3172	0
BAKKEN	6-2017	30	2470	2239	334	3275	3275	0
BAKKEN	5-2017	31	2037	2257	392	3142	3142	0
BAKKEN	4-2017	30	2564	2290	797	3277	3277	0
BAKKEN	3-2017	31	3089	3254	396	3504	3504	0
BAKKEN	2-2017	19	2840	2762	496	2594	2594	0
BAKKEN	1-2017	5	588	453	0	530	530	0
BAKKEN	12-2016	15	720	916	81	838	838	0
BAKKEN	11-2016	27	2713	2734	182	3219	3219	0
BAKKEN	10-2016	7	341	465	56	622	622	0
BAKKEN	9-2016	30	1898	1853	314	2970	2970	0

There is no evidence this well was re-fracked and had it been re-fracked, the production would have been significantly higher than what we see above. No one, in my view, has satisfactorily explained the "Bakken phenomenon." But one an oil well begins its decline, it's not supposed to show a jump in production, something we see over and over in the Bakken.

This jump in production won't "move the needle" when there are a small number of wells (16,000) but there is no doubt in my mind that we will see that "production needle move" when there are 32,000 producing wells in the Bakken. I could add more but that's enough for now.

This is the production profile after the well was initially completed/fracked back in 2010:

BAKKEN	10-2010	31	6914	6945	293	9689	9689	0
BAKKEN	9-2010	29	8029	8032	303	14684	14684	0
BAKKEN	8-2010	25	8594	8628	119	15037	15037	0
BAKKEN	7-2010	31	8362	8319	2762	11920	11920	0
BAKKEN	6-2010	30	8864	8827	170	12892	10719	2173
BAKKEN	5-2010	31	10385	10403	185	13763	13763	0
BAKKEN	4-2010	30	10898	10977	559	14241	14241	0
BAKKEN	3-2010	31	16578	16739	725	23097	23097	0
BAKKEN	2-2010	28	22238	22139	3376	29762	29762	0
BAKKEN	1-2010	5	14285	14027	130	18454	18454	0