Idle Comment -- September 5, 2019

I look at every well that comes off the confidential list every day; I've been posting for a dozen years or so, and it is absolutely remarkable how good the wells are getting in the Bakken, and on top of that, the number of multi-well pads keeps growing, and the number of wells on a multi-well pad continues to grow.

Someone recently pointed out that the NDIC decision some years ago to make the standard drilling unit 1280 acres was absolutely a stoke of genius. On top of that, the NDIC seems to have a handle on managing conflicts over "who owns what" when deciding to whom a certain permit might be awarded.

This is not atypical. I just looked at the geography of the area immediately around a well that came off the confidential list today:

• to the north: eleven wells within one mile, all of them producing; eight of them relatively new;
• on the same pad as the new well coming off confidential list today: four wells; this was the first of the four wells to come off the confidential list
• to the south, about a half-mile away: a brand new permitted 6-well pad; none of these wells spudded yet;
• to the south, about a mile away: an older producing middle Bakken well
• Total: about 17 wells along a 2-mile stretch, and the area is clearly "under-developed"

I haven't heard anyone complain about the "decline rate" in the Bakken in a long, long time. For one thing, it turns out the "decline rate" does not follow Hubbert's theory.

At less than $60, operators are still focused on Tier 1 middle Bakken with some operators also targeting more upper bench Three Forks wells. But if WTI were to move higher, there would be more movement into Tier 2 areas. The upper bench Three Forks lags well behind where it could be and "we" haven't even started with the lower benches in Tier 1 to say nothing of Tier 2.

And every well fracked before 2012 will have to be re-fracked at some point.

I find it amazing what operators are doing with 40 - 60 active rigs (the actual number of active rigs, depends on the definition of active rigs).