About That Dreaded Bakken Decline -- March 4, 2020

This page will not be updated. The Oasis Kellogg Federal wells are tracked here.

The well:

• 35118, 1,089, middle Bakken section line well, t7/19; cum 150K 1/20; 32K month; no decline yet after seven months; 40 stages; 6 million lbs; first month production of 16,269 bbls over 18 days extrapolates to 27,115 bbls of crude oil; note also, that the operator has sold all oil ("runs") that has been produced ("BBLS Oil").

 Full production profile to date:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2020	31	32322	32322	16907	108615	98911	8712
BAKKEN	12-2019	31	29432	29432	14196	87648	81895	4761
BAKKEN	11-2019	30	28450	28450	15065	76964	75199	805
BAKKEN	10-2019	31	30423	30423	16600	77495	74638	1865
BAKKEN	9-2019	4	4092	4092	1436	10923	9882	81
BAKKEN	8-2019	10	8996	8996	8871	20701	19786	595
BAKKEN	7-2019	18	16269	16269	18149	39886	36835	2475

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Do Not Leave Me

Ne Me Quitte Pas, Nina Simone

The Dreaded Bakken Decline -- September 20, 2018

Disclaimer: I am inappropriately exuberant about the Bakken.
Disclaimer: the "dreaded decline rate" in the Bakken has never bothered me.

Even though the "dreaded decline rate" never bothered me, I was always of the mind that the oil companies would "figure it out." The "production type curves" have borne that out. The decline rates have become less steep; they seem to plateau at higher levels; and once they reach their plateau they tend to stay there "forever." But this is what is unusual about Bakken tight, horizontal, unconventional wells compared to conventional, vertical wells: the former often see a jump in production for any number of reasons, and it appears one should anticipate a jump in production every five to seven years under optimum conditions.

A reader brought this well to my attention. I was initially concerned there may be a typo, and I would want to check this well again in six months to make sure these numbers are accurate. The best way right now to confirm the numbers are accurate would be to hear from a mineral owner who confirms the pay stub correlates with the data in this table.

Having said that, looking at the "bbls water" and "MCF prod" it appears the "bbls oil" is not a typo. I could imagine a typographical error in one cell or one column, but not typographical errors across the entire row.

I have not seen this before -- at least not to this extent -- this is simply incredible.

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	7-2018	31	80239	79817	59403	166978	161560	5232
BAKKEN	6-2018	30	35021	34992	20965	63199	34891	28128
BAKKEN	5-2018	31	29348	29348	20751	64418	47707	16525
BAKKEN	4-2018	30	32546	32546	23430	64199	64019	0
BAKKEN	3-2018	31	37721	37739	27337	76684	76498	0
BAKKEN	2-2018	28	28114	28096	24407	54883	33763	20952
BAKKEN	1-2018	25	19815	19836	29310	23272	17167	5955
BAKKEN	12-2017	31	19133	19112	37519	28094	18592	9316

Total production in July, 2018: 166,978,000 / 6001 = 27,825 boe + 80,239 bbls crude oil = 108,064 boe -- and this is in the eighth month of production. Unprecedented as far as I know. 

This well:

• 33039, A, Oasis, Patsy 5198 12-17 8B, Siverston, 50 stages; 10 million lbs, t--; cum 282K 7/18;

Another Patsy well:

• 33041, 606, Oasis, Patsy 5198 12-17 10B, Siverston, t1/18; cum 197K 7/18; again, note the amount of natural gas produced in July: 199,349,000 / 6001 = 33,219 boe + 56,235 = 89,454 boe -- again, in the seventh month, and well above what it was producing in any of the previous six months. I think I know why but won't talk about it now. By the way, note the IP of "606."
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	7-2018	31	56235	55939	77531	199349	193931	5232
BAKKEN	6-2018	30	24611	24590	27437	77490	77310	0
BAKKEN	5-2018	31	32023	32023	32201	75564	75378	0
BAKKEN	4-2018	30	27088	27088	32816	59173	58993	0
BAKKEN	3-2018	31	31098	31110	34130	59675	59489	0
BAKKEN	2-2018	28	17673	17661	27460	34539	16920	17451
BAKKEN	1-2018	13	8644	8644	29643	32664	8653	23933

 
The Oasis Patsy wells are tracked here.

Right now, three operators are really impressing me: MRO, Oasis, and Bruin.

I've not talked about Bruin but they have a number of surprisingly good "MHA" wells in Eagle Nest and McGregory Buttes, I believe. I haven't highlighted Bruin because there are simply so many better-than-average wells, but not as big as these MRO and Oasis wells. But Bruin either has found a great, great location or has some really good completion strategies. My hunch: a little of both.

Bakken Reality Check -- 2015 -- March 18, 2018

Note: I'm not sure if this is ready for prime time. I will post it anyway. Don't quote me on any of this. I'm still working through it. The reason for doing this was the developing meme that North Dakota has to add 157 net new wells month-over-month to maintain production at 1.2 million bopd.  It was my impression that North Dakota has not come close to 157 wells/month (1,884 per year) and yet the state has increased production year-over-year in the past eight months.

Note: the spreadsheet below was created very, very quickly. There are likely to be typographical errors. The data was taken from the NDIC statistics site. I do not know why daily production data and number of producing wells at the NDIC statistics site varies slightly from the daily activity reports.

I was curious about comparing the change in the number of producing wells (third column), the annual change in the overall number of producing wells, and the change in production.

I was curious to see if comments/projections at "Bakken Reality Check" produced back in 2015 held true. Compare this table with the screenshot of Figure 5 from that linked "Bakken Reality Check" below the spreadsheet.

Month	# # of producing wells	Producing wells	Crude oil production (bopd)	Crude oil production (bopd)	Producing wells	Crude oil production (bopd)
		Change From Previous Month	BOPD	Change From Previous Month	Change from one year ago	Change from one year earlier
Jan 18	14,002	-7	1,175,638	-5,681	1,014	141,470
Dec 17	14,009	-14	1,181,319	-15,657	990	238,997
Nov 17	14,023	52	1,196,976	13,166	815	162,492
Oct 17	13,971	78	1,183,810	76,465	817	140,117
Sept 17	13,893	130	1,107,345	18,027	834	135,600
Aug 17	13,763	102	1,089,318	41,219	783	106,873
Jul 17	13,661	53	1,048,099	15,226	702	18,255
Jun 17	13,608	47	1,032,873	-8,122	678	5,507
May 17	13,561	118	1,040,995	-9,481	705	-6,153
Apr 17	13,443	129	1,050,476	-154	703	8,438
Mar 17	13,314	115	1,050,630	16,382	566	-61,157
Feb 17	13,199	211	1,034,248	80	484	-85,389
Jan 17	12,988	-31	1,034,168	91,846	162	-87,460
Dec 16	13,019	-189	942,322	-92,162	269	-209,598
Nov 16	13,208	54	1,034,484	-9,209	436	-147,540
Oct 16	13,154	95	1,043,693	71,948	330	-129,327
Sep 16	13,059	79	971,745	-10,700	459	-189,998
Aug 16	12,980	21	982,445	-47,399	324	-205,437
Jul 16	12,959	29	1,029,844	2,478	371	-178,085
Jun 16	12,930	74	1,027,366	-19,782	454	-184,628
May 16	12,856	116	1,047,148	5,110	588	-157,166
Apr 16	12,740	-8	1,042,038	-69,749
Mar 16	12,748	33	1,111,787	-7,850
Feb 16	12,715	-111	1,119,637	-1,991
Jan 16	12,826	76	1,121,628	-30,292
Dec 15	12,750	-22	1,151,920	-30,104
Nov 15	12,772	-52	1,182,024	9,004
Oct 15	12,824	224	1,173,020	11,277
Sept 15	12,600	-56	1,161,743	-26,139
Aug 15	12,656	68	1,187,882	-20,047
Jul 15	12,588	112	1,207,929	-4,065
Jun 15	12,476	208	1,211,994	7,680
May 15	12,268	143	1,204,314	32,498
Apr 15	12,125		1,171,816

The screenshot from the "Bakken Reality Check" linked above:

"Bakken Reality Check" suggests that operators need to add 157 wells each month (1,884 per year) to maintain peak production at 1.2 million.

Between the autumn of 2015, when the Bakken Reality Check was published, and January, 2018, the most recent month for which data has been released:

• due to the Saudi Surge (January 2015 - January 2017) and the severe decline in the price of WTI, North Dakota crude oil production dropped from 1,151,920 bopd (December, 2015) to a low of 942,322 bopd one year later (December, 2016)
• however, after things "started to return to normal," North Dakota crude oil production actually rose to 1,196,976 bopd by November, 2017
• from November, 2015, to November, 2016, there was an increase of 436 producing wells -- well below the 1,884 new wells / year that "Bakken Reality Check" suggested would be needed to "maintain" -- and one could argue, ND came close to "maintaining" production
• from November, 2016, to November, 2017, there were only 815 additional producing wells, again, well below the 1,884 threshhold suggested by "Bakken Reality Check"
• November, 2016 to November, 2017: production increased by 16% with number of additional producing wells well below the 1,884 threshhold
  

Again, I did this very quickly, and there are likely to be errors in my numbers, and my methodology, but I wanted to take a quick look at the "Bakken Reality Check" projections back in 2015 to what has happened since.

This is very much in line with an increasing number of analysts noting that there seems to be a "negative decline rate" developing in shale plays.

See the article by oilprice.com editor Nick Cunningham: "Can the oil industry continue to lower decline rates at mature fields?"

And this post from earlier this month:

“I cannot remember ever in my career having seen a negative decline rate,” the British oil-giant’s chief executive officer said in an interview on the sidelines of the CERAWeek by IHS Markit energy conference in Houston.