Thursday, April 8, 2021

Idle Rambling In Response To A Reader's Question -- April 8, 2021

A reader asks: Is there any future development in Williams County or is it anticipated that there is little productive acreage left to drill especially near Williston?

Let the conversation begin. I will start. Remember, I am inappropriately exuberant about the Bakken.

Answer: yes, Williams County will see continued "development" going forward.


  • the pace of development depends almost entirely on the price of oil and relative "value" of the Bakken compared to other shale plays in the US;
    • the Powder River Basin appears to be the "new" Bakken
    • the Permian will be ... the Permian
  • operators are constantly looking for additional locations to drill; the Williston Basin's middle Bakken and Three Forks benches are pretty much mapped out; there is no longer any urgency to drill in the Bakken;
    • operators are "E&P" companies; they use their CAPEX for "E" and "P"
      • E: exploration: very little perceived need for further exploration in the Bakken
      • P: production: operators will manage their assets
        • "managing their assets": an incredibly important concept not often discussed; certainly not understood by many
  • things have changed (or so they say):
    • operators are focused on free cash flow, not focused on spending money looking for new locations;
    • for that reason, we won't see much activity above ground for the next couple of years, in terms of rigs
  • continued development:
    • fewer wells, but much, much better wells;
    • in Williams County, at $60-WTI, 30% of all middle Bakken wells that will eventually be drilled have been drilled; in other words, if WTI stays at $60 in today's dollars, for every 1,000 middle Bakken wells that will eventually be drilled, 700 new wells are yet to be drilled;
    • in Williams County, at $60-WTI, 10% of all Three Forks wells that will eventually be drilled have been drilled;
    • in Williams County, at $70-WTI, operators with few locations left (in the Bakken or elsewhere) will go back in and re-enter/re-frack wells completed before 2016; the re-entered / re-fracked wells will be much better than the original wells;
  • with regard to Williams County oil fields;
    • east and southeast of Williston: still much to be done but it will slow and measured;
    • CLR has a three-year development plan for the Long Creek Unit; upwards of 60 wells to be systematically drilled out over three years with just two rigs;

Analogy: farming

  • asking whether there will be any future "oil" development in Williams County is like asking whether there will be any future "farming" in Williams County;
  • Homestead Act of 1862
  • prior to Homestead Act, little farming activity west of the Mississippi (preceded by buffalo hunting, and then ranching; farming: difficult and margins slim; huge initial operating costs)
  • Homestead Act changed everything
    • burst of farming activity
    • infrastructure established (co-ops; railroads; grain elevators; processing plants)
  • by early 1900's farming "locations" tapped out
  • attention turned to:
    • managing assets: crop rotation; storage; 
    • better equipment (tractors; combines); better completion strategies (custom combining)
    • technology: improving yield per acre

Oil development in the Bakken:

  • how one sees the Bakken depends on where one stands;
  • this blog's primary audience: mom-and-pop mineral owners who inherited their minerals from their great-grandparents, grandparents, and parents -- those who receive mailbox money
  • the era of big, upfront lease money is over;
  • the era of huge, unexpected checks is over;
  • monthly checks will stabilize; will correlate to price of oil rather than new activity
  • farmers have good years; farmers have bad years; over the course of any decade, production from farming tends to improve, but in general, farmers probably have a pretty good idea of their annual income going forward based on decades of farming; if they don't, the banks do;
  • that's where we are with oil for mom-and-pop mineral owners.

Portrait Of A Young Artist At Work


  1. People are waiting to see what happens with DAPL. If it comes out that it is safe, activity will increase. Should be more rigs running given the current price strip. DAPL uncertainty is holding the Bakken back.

    1. You may be correct.

      As for me, the DAPL no longer concerns me. I will still talk about it, post updates, but it is no longer a "material" factor in my mind. It will affect some operators more than others.

      I used to get very "emotional" about the DAPL. No longer; it's simply "one of those things."

  2. the Counties of Hettinger, Adams, Bowman, and slope had little Homesteading early. The Milwaukee pacific rail road got to the City of Hettinger about 1905, and into the city of Bowman on 1907.. heading towards Miles city.. this is the period of great farming expansion in the 4 SW corner counties of ND. As far as Oil Exploration the Entire TYLER formation in this corner of State has had Little development . don

    1. Agree completely with regard to the Tyler. Lessons learned drilling the Bakken should transfer to drilling the Tyler.

      Red Trail Energy is drilling an Amsden (Tyler) well now: