Thursday, October 3, 2019

Idle Rambling On The Bakken, My Second Favorite Subject -- October 3, 2019

I'm going through every well that was permitted / drilled / completed back in the 2008 time period, by permit, the 16XXX series. I do this periodically, from time to time, take a specific series of permits and go through them. For example, I am doing the 16XXX series this week; maybe next week I will do the 17XXX series. And so on.

I literally go through every well -- it will take several days. But it is really amazing. Sure, there are a lot of wells that have not done particularly well, but they are still in production. But in general, I find it amazing how many wells show a jump in production, again for any number of reasons.

As I go through the list -- remember, these are the 16XXX wells -- one thousand of them -- 99% of them Bakken --and "we" have just begun the 37XXX series wells (October, 2019) -- that's (37000 - 16000 = 21,000 Bakken wells). I was saying: as I go through the list, the 16XXX wells drilled back in 2008 or thereabouts, all I see are scores (or hundreds) of wells that need to be re-fracked. It is absolutely amazing.

The problem for the operators is not whether to drill or not, whether to re-frack or not, the problem is what to prioritize? The operators are simply limited by resources: money, people, time, etc. I'm convinced Harold Hamm thinks about this 24/7.

I don't think anyone has any idea how much work needs to be done in the Bakken, just with the wells that are already drilled. It is simply amazing.

Here's another one.

Jack Pennington,  #16778.

16778, 354, MRO, Jack Pennington 21-28H, Reunion Bay, t8/08; cum 567K 10/19; off line 10/19; remains off line 4/20;

Test date: back on August 14, 2008. An IP of 354 in Reunion Bay. Ridiculous. Piss-poor as they say. Today, one would expect the IP in a Reunion Bay well to be 2,000 to 3,000. Maybe more.

This well's initial production in 2008 was pretty unremarkable, maybe even lousy: see the first six months of production below. If this well cost $10 million to drill / complete at the time, and at $50/bbl, this well produced 25,000 bbls x $50 = $1.25 million in the first six months. Not very good. In fact, lousy. A lot of folks would have called it "uneconomic."

Ten million dollars to drill/complete and only a million dollars to show for it after six months. (These days, these same wells might pay for themselves in the first six months). First six months production for this wells back in late 2008. The best it ever did at that time, a lousy 6,000 bbls/month.

BAKKEN1-20093028333355395124201242
BAKKEN12-20082826532391465116301163
BAKKEN11-20082548375073910211802118
BAKKEN10-20083147344304840207302073
BAKKEN9-20082441974072993183801838
BAKKEN8-200827609258282573266802668

By 2014, six years later, this well had declined to 1,400 bbls/month -- the dreaded Bakken decline rate:

BAKKEN5-201431142514212401460891231
BAKKEN4-201430137614522211349858164
BAKKEN3-201431129112542181165479363

If a conventional well, it was likely ready to be abandoned, at worse; or, at best, sold as a stripper well. A stripper well: 10 - 15 bbls/day.

But then look what happened in August, 2014:

BAKKEN4-20153096119607311814239115491491
BAKKEN3-201531106111075133931702015273429
BAKKEN2-2015281053410609323415049114512306
BAKKEN1-201530128781280940031369678044340
BAKKEN12-201431148371486046291948717085630
BAKKEN11-2014301735317242584221687184701182
BAKKEN10-201431220822207386131905978628653
BAKKEN9-20142319564197341027517440424010975
BAKKEN8-201419129941295843901151134646519

Just like that, magic! In those nine months: 130,464 bbls of oil produced. At $50/bbl, $6.5 million in less than a year. And that doesn't include natural gas, etc.

Then, by August, 2016, it was back down to 5,000 bbls/month -- very, very respectable, and no one was complaining, but then look what happened in May, 2017. Another jump. More magic:

BAKKEN12-20173193969366537310480924535
BAKKEN11-2017308946893352471085480221686
BAKKEN10-201731109461090069011346288083288
BAKKEN9-2017301091110854752311766104090
BAKKEN8-2017311152011549856212537111090
BAKKEN7-2017311110511259988812136107530
BAKKEN6-201730101079974105371254696001676
BAKKEN5-2017311045510416145831303886753049
BAKKEN4-20170000000
BAKKEN3-20170000000
BAKKEN2-20170000000
BAKKEN1-20170000000
BAKKEN12-20162844864532136661495040467

Another 83,000 bbls in eight months, between May, 2017, and the end of the year (2017).

The well is still producing a very, very respectable 4,000 bbls/month, and my hunch is that we will see another jump in production in the next couple of years.

And I can find example after example after example of these wells. Absolutely amazing. Something I don't think we see in conventional wells and something no one seems to be talking about even when it's staring them in the face here in the Bakken.

Remember: Hubbert's theory applies to individual wells as well as fields and basins. 

Disclaimer: I am inappropriately exuberant about the Bakken. I may see things that don't exist. I will make typographical and factual errors. If this is important to you, go to the source.

********************************
Another One

These are not hard wells to find. They simply keep popping up

I could have used MRO's Bill Connolly 21-25H well as an example also, but I think I've discussed it a couple of times already.

But it's another great example.

Completed back in early 2008; a pretty average well for that time period:
BAKKEN7-200823272426811477126512650
BAKKEN6-20083030282898699134413440
BAKKEN5-20083133113457725152115210
BAKKEN4-20083037323639844185818580
BAKKEN3-200831475346561045197719770
BAKKEN2-200829574658111239213221320
BAKKEN1-2008268262792221433133130

Then:
BAKKEN7-2014313262336211732149761853
BAKKEN6-20143036713909144125301333624
BAKKEN5-20143038813921181830351864586
BAKKEN4-20142826792571143520051090460
BAKKEN3-2014262192185516751382697294
BAKKEN2-201426001603
BAKKEN1-201443000400
BAKKEN12-2013313201203017
BAKKEN11-20133015446249270189

Then:
BAKKEN7-20193118771188782207923061171024143
BAKKEN6-20193022893228083117620766140154676
BAKKEN5-20193124374245254640319440102486967
BAKKEN4-20192629475295359024520752534412964
BAKKEN3-20195450237552027831545572030
BAKKEN2-20190000000
BAKKEN1-20190000000
BAKKEN12-20180000000
BAKKEN11-201812344031969
BAKKEN10-20183184468024378642012

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