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Now, back to the linked article. Summary:
- Continental Resources doubles its estimate for oil recovery from North Dakota's Bakken shale, claiming 30B-40B barrels of the 250B barrels of oil in place will be recovered instead of the 20B barrels it estimated in 2011
- "With today's completion technology we are recovering 15% and potentially 20% of the oil in place on a primary basis," CLR President Jack Stark said during today's earnings conference call, "substantially higher than the recoveries that we thought possible back in 2011."
- "There's a lot more oil to come out of the Bakken," said Chairman and CEO Harold Hamm.
- Using a North Dakota industry estimate that ~50K potential wells remain to be drilled in the Bakken, Stark said each well would have to produce 570K barrels to reach CLR's new estimates for recoverable oil - "clearly a reasonable expectation for Bakken wells on average," according to Stark.
- North Dakota oil production averaged a record 1.29M bbl/day in August, and CLR says its output accounted for 12% of that production.
- Earlier: Continental Resources +2.5% as Bakken production reaches quarterly record (October 29, 2018)
OOIP: CLR is apparently sticking with 250 billions of original oil in place (OOIP) in the Bakken; that's a far cry from a trillion-bbl reservoir suggested at one time; but, I'm sticking with the Bakken being a 500-bbl OOIP reservoir, and wouldn't bet against a trillion bbls, but I'm inappropriate exuberant about the Bakken.
Primary production, defintion: in the early days of the Bakken, the consensus -- tight oil was called "tight" for a reason; drillers would only be able to recover 1 - 3% of OOIP in primary production. Primary production is all that production before enhanced recovery is required, such as water flooding and/or CO2 injection. Oil recovered after work-overs; re-fracks; etc, is still considered primary produciton. Primary production can go on for decades.
Primary production, Whiting, the early days: in the early days of the Bakken, the consensus was that drillers would get only 1 -3% of the OOIP by primary production. This blog was the first, as far as I am aware, that suggested drillers were getting as much as 4 - 6% even when pundits were still talking about 1 - 3%. Then Whiting, either intentionally or by mistake, mentioned in one of their conference calls that they were either already getting upwards of 12% or expected to reach that threshold before it was all over. That was a long, long time ago, and my memory may be faulty, but I vaguely recall something along that line.
Primary production, CLR, now: CLR says that "we are now recovering 15% of the OOIP and Harold Hamm thinks they could eventually get to 20%. Let's do the math:
- a EUR-type curve of 1 million bbls
- 15% of what = 1 million bbls
- OOIP: 6.7 million bbls [check the math: 0.15 x 6.7 = 1 million bbls]
- so, let's go with 6.7 million bbls OOIP for any given well
- 20% of 6.7 million bbls OOIP takes us to 1.34 million bbls -- CLR is already reporting EUR-type curves of over 1.2 million bbls
Years of production: just for grins, let's assume the OOIP is actually 500 billion bbls -- again, I'm inappropriately exuberant with regard to the Bakken -- and let's assume that for whatever reason, North Dakota maxes out at 2 million bopd production. Let's do the math:
- 15% primary recovery
- 15% of 500 billion bbls = 75 billion bbls
- 75 billion bbls / 2 million bopd / 365 = 100 years of production
- Now if each well has a EUR of, let's say 1.5 million bbls, how many wells would that require?
- 75 billion bbls by primary recovery / 1.5 million bbls / well = 50,000 wells
- 50,000 wells -- interesting. We're back to the same number suggested above -- another 50,000 wells to drill out the Bakken