Random Look At Another MRO Bakken Phenomenon -- March 11, 2019

This is really for newbies to show them what the Bakken is all about.

The full note is at this post.

For newbies -- lots to look at regarding that post, that well. We have an index well (#16686) that was not fracked after it was first drilled, back in 2008. In 2014, it had a very, very small frack (1.8 million lbs); at that time showed a nice jump in production as one would expect. Then, there was another jump in production in December, 2018, and yet it was not re-fracked. The production was high enough suggesting the well was indeed fracked.

Well, it turns out that for all intents and purposes, it was re-fracked -- by four neighboring wells; two running in the same direction as #16686, and two running in the opposite direction.

1. Look at the jump in production in December, 2018, even though this well was not re-fracked; this is a classic MRO phenomenon;

2. Look at the incredible IPs for the new wells (at least one of them was a Three Forks well; these wells are in the Reunion Bay oil field and in MRO's hands, are incredible wells;

3. When looking at production numbers for any given month, if production seems low, look at the number of days of production;

The well:

• 16686, 379, MRO, Shobe 24-20H, API: 33-061-00547, Reunion Bay, t12/08; cum 461K 8/19;

• This well was fracked/tested:12/16/2008: 0 stages; 511,700 lbs; note production at initial completion; not fracked
• Re-fracked/tested: 7/9/14: 30 stages; 1.8 million lbs sand; note jump in production after this small frack
• Note jump in production, 12/18; not re-fracked: nice jump in production see below 

So, what caused the jump in production in 12/18? Let's look at the neighboring wells. There are four, all of them relatively far away -- certainly not sister wells; maybe not even parent/child wells by strict definition, but that's all in the eye of the beholder; I won't argue it one way or the other;

16686, production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	8-2019	31	5286	5330	3183	7367	6759	265
BAKKEN	7-2019	31	5920	5900	4696	6560	4325	1862
BAKKEN	6-2019	30	5283	5246	4187	5766	4946	497
BAKKEN	5-2019	31	6787	6830	4705	7392	6996	0
BAKKEN	4-2019	30	7462	7463	6756	6793	5762	598
BAKKEN	3-2019	31	8255	8216	9793	10536	8295	1751
BAKKEN	2-2019	26	7066	7069	8371	9934	4771	4754
BAKKEN	1-2019	31	11509	11536	14791	14162	6881	6621
BAKKEN	12-2018	30	13796	13667	28932	14844	8120	5927
BAKKEN	11-2018	1	302	300	761	115	29	69
BAKKEN	10-2018	0	0	0	0	0	0	0
BAKKEN	9-2018	0	0	0	0	0	0	0
BAKKEN	8-2018	2	0	370	185	251	0	250
BAKKEN	7-2018	27	2625	2582	568	3686	3315	65
BAKKEN	6-2018	30	3032	3166	656	4208	3823	33

*****************************

See this note also; similar phenomenon.

A long list of interesting wells are linked here.

For Newbies: The Bakken Oreo -- Market Realist

Another nice article by Market Realist. The link takes you to part 14 of a 14-part series.

One factor in the Bakken that has increased its value in the eyes of many producers is that oil can be produced from more than one “horizon”, or layer of rock. Originally, oil had been produced from only the “Bakken” layer which is where the play got its name. However, over the past few years many companies also began to produce oil from the Three Forks Sanish formation or “TFS”, which is located below the Bakken. More recently, companies have began to test lower layers of the TFS, also referred to as different “benches”, and these lower layers are referred to by number such as the “TFS 2″ and “TFS 3″, with higher numbers representing lower layers.

It Never Quits --

Additional "It Never Quits" Stories

August 13, 2012: America's revolution in energy -- led by the Bakken (oil) and the Marcellus (natural gas) could add 3.6 million jobs and 3% to GDP.

It's a harbinger of a nationwide investment boom spreading from the oil fields of North Dakota and the Marcellus gas shale in Pennsylvania to power plants in California and chemical refiners in Texas. A surge in U.S. natural gas development has spurred $226 billion in spending plans on pipelines, storage, processing facilities and power plants, most slated for the next five years, according to Industrial Info Resources, a market- intelligence provider in Sugar Land, Texas.

U.S. energy supplies have been transformed in less than a decade, driven by advances in technology, and the economic implications are only beginning to be understood. U.S. natural gas production will expand to a record this year and oil output swelled in July to its highest point since 1999. Citigroup Inc. (C) estimated in a March report that a "reindustrialization" of America could add as many as 3.6 million jobs by 2020 and increase the gross domestic product by as much as 3 percent.

Original Post

Here's another article talking about the revolution in the oil and gas industry ... and again, the Bakken is the "gold standard." I think we've seen this story before.

The lede:

Global oil supply capacity is growing at an unprecedented level, and could result in an overproduction glut and steep dip in oil prices, according to a June 2012 study from Harvard University's Kennedy School of Government.

Contrary to the idea among some that global oil supply is running out, additional production of 17.6 million barrels of oil per day (bopd) could come online by 2020, boosting global production capacity to 110.6 million bopd, even with depletion rates for currently producing oilfields and reserve growth.

Then, note this:

The United States has more than 20 big shale oil formations, in particular the Eagle Ford shale, which has a hydrocarbon endowment on par with the Bakken. Most U.S shale and tight oil plays are also profitable at a West Texas Intermediate price ranging from $50 to $65 per barrel, making them "sufficiently resilient" to a significant downturn in oil prices.

Repeat: a hydrocarbon endowment on par with the Bakken.

"The Bakken" may not be a household word east of Berthold or west of Bainville, but anyone who knows anything about the oil industry, knows about the Bakken.

Also, note this:

[The author of the study] estimates spare global oil capacity – the difference between the world's total oil production capacity that can be reached within 30 days and sustained for 90 days and the actual production – at about 4 million bopd, which seems capable of absorbing a major disruption from a big oil producer such as Iran.

That explains why loss of Libya's oil had no appreciable effect on world markets, and current Iranian embargo: effects? Nada. Zip. Zilch. A Richmond, California, refinery fire that was put out in minutes will have a greater effect on price of gasoline in California than geopolitical events to date in the Mideast. 

There is so much more at this linked article; enjoy. Check out the break-even price of oil in these unconventional plays at the linked article. It might surprise you.

By the way, speaking of the Iranian embargo, it looks like Asia isn't too concerned about President Obama's sanctions.  On the world stage, he's become pretty irrelevant, notwithstanding Arab Spring or what will eventually be known as the Muslim Brotherhood resurgence.

For a dear friend (not for me):
Hank Williams Tonight, Jerry Jeff Walker