XOM: Could Double Shale Production With New Technology, Completion Strategies -- June 6, 2023

Locator: 44850B.

From a reader:

Funny they bring up fracking & refracs in this Exxon article (see below).

We haven’t seen any refrac activity on any of our mineral tracts in any of about nine counties since 2919. That’s not how good operators run wells that have been  & still are above great rocks with more OIP/oil in place.

Thing is it’s good for oil & gas interest asset owners & operators to leverage wells that have fallen to slower production. I agree with Exxon that a lot of oil is being left in the rocks & frac technology can be leveraged on new & existing wells, a win/win for ND & all involved in my honest opinion.

Good topic to review possibly on your blog. I may have missed some articles, not certain. I can’t be the only owner not seeing refracs since Covid struck? 🧐😉

ExxonMobil: New Fracking Technology Can Double Oil Output

https://oilprice.com/Energy/Energy-General/ExxonMobil-New-Fracking-Technology-Can-Double-Oil-Output.html

I had a note on this subject in draft for several days before getting the note above from that reader yesterday.

Here's my reply:

Poorly written but I want to get this subject off my desktop. I think folks will understand what I'm trying to say, though poorly written. It was written quickly in an "In 'N Out" hamburger restaurant in Richardton, TX, yesterday, while waiting to interview a cybersecurity expert. 

Here's the note, unedited, not proofread, and not ready-for-prime-time:

XOM talk about doubling production from shale oil with new technology / new completion strategies.

This is the “Disney conundrum.” To get investors excited about potential of shale holdings and to "talk their book" to investors, XOM can post stories about “doubling” production from existing properties with new technology and new completion strategies.

But by doing so, they make surrounding acreage that much more valuable/costly/expensive, which means that if XOM wants to buy neighboring minerals, they will pay a higher premium.

My hunch, XOM knew about “doubling” production with new technology / new completion strategies many years ago, but now that most folks are aware of that, XOM felt safe to start talking about it.

Everything that follows is anecdotal based on following the Bakken for over a decade now.

All older Bakken wells, certainly those with file numbers below 25XXX need to be re-fracked (or re-drilled). The first Bakken wells began with five numbers around 165XX. Older Bakken wells were fracked with old completion strategies.


Some/many/most of those older wells will not be re-fracked or re-drilled. Operators will simply plug and abandon them and start over in the same location with a minimum of four to six wells on a paid ini the same location.

They’re probably able to drill and complete two wells these days for the price of one well at the time of the original Bakken boom (2000 in Montana, 2007 in North Dakota through 2010, or thereabouts).

And at the end of the day, instead of one parent well ini a given location, any given operator will have four to eight wells in that same location (on the same, but much larger pad). In addition, the infrastructure for getting out to the site (a road) and the pad will already be in place. Infrastructure of gathering oil production and getting it into regional pipelines will also already be in place, saving money, time, and minimizing further environmental impact.

So there’s that.

Now, with regard to re-fracking, I’m not aware of much re-fracking per se. Which suggests to me that Mike Papa (EOG) may have been correct, suggesting it will simply be more feasible to simply re-drilling wells rather than re-fracking existing wells.

The impact of fracking new wells on production of neighboring old wells is interesting, exciting and very rewarding for mom-and-pop mineral owners where one or two or four new wells definitely impact their “mailbox money.” However, for big operators, it’s unlikely that this effect, which I refer to as a “halo” effect has much impact for a big operator.

To specifically answer the question: why are we seeing so few re-fracks in the Bakken. 

Answer: operators are managing their assets. I'll talk more about this later. We've addressed it before. Operators are generally "E&P" companies, focused on "E" as much as on "P."