Bakken Well Production -- Historical Review -- November 17, 2019

From a study posted earlier this week:

This graphic is very, very interesting.

The "discovery" well that resulted in the Bakken boom was drilled in 2006. One can get a feeling for the "2006" wells at this post. From a 2010 post:

Then, in 2006, EOG opened the Bakken on the North Dakota side of the border with its discovery well in the Parshall oil field, the Parshall 1-36H, file number 16164. 

Around 2012, the Bakken was hitting its stride. Infrastructure/takeaway capacity barely able to keep up.

2014 - 2016: the Saudis opened their taps; flooded the world with crude oil; tried to "break" the US shale industry. 2015 was the midpoint of that debacle for the Saudis. "That which does not kill us, makes us stronger."

Increase in cumulative production between the "2006 wells" and the "2009 wells" was 105%. There were very few Bakken wells drilled in 2006. I have long forgotten, but by 2009, I think the EURs for Bakken wells was around 375,000 bbls.

Most striking was how little improvement there was between 2009 and 2012. I wonder if one goes back, one can correlate that with the price of oil? Were operators still rushing to drill at least one well in each drilling unit to hold leases by production?

The 38% increase in production of the "2015 wells" over the "2012 wells" was "normal" -- "normal" in that operators had learned a lot about the Bakken by now, both completion strategies and geology, and sweet spots. On the other hand, I think the 105% increase between 2006 and 2009 was simply an "anomaly."

From 2015 to 2017, all things being equal, I think one could argue that one would have seen some increase but certainly not an increase of 43%. The low price of WTI drove operators to improve production / well.

By the way, the periods covered were all three years (2009/2006; 2012/2009; and 2015/2012) with one exception. That 43% increase in production was done over a two-year period (2017/2015).

So, going forward, for wells completed (the "test date)" in 2019, the number to watch is 160,000 bbls of crude oil in 360 days. Below 160,000 bbls/year is below the 2017 curve; above 160,000 bbls of crude oil in one year is above the 2017 curve. Another metric to track.

The big question: how soon will operators run out of Tier 1 locations? How are Tier 1 locations defined? Perhaps by the "160,000 bbls" number?