Recoverable Oil In The Bakken, Estimates -- September 26, 2019

The USGS survey, 2013, recoverable oil:

• top line: 11.4 billion bbls
• mean: 7.4 billion bbls 

CLR, August 28, 2019, recoverable oil:

• 30 to 40 billion bbls
• "4 to 5 times the official USGS estimate"

At 2 million bopd:

• 7.4 million bbls: 3,700 days or 10+ years
• 40 billion bbls: 20,000 days or 55 years

Sunday, October 29, 2017 -- CLR's Holstein Federal Wells Have Been Updated; Note The Dreaded Bakken Decline

Active rigs:

$54.19	10/29/2017	10/29/2016	10/29/2015	10/29/2014	10/29/2013
Active Rigs	53	34	69	190	182

CLR's Holstein wells have been updated: they are tracked here. Incredible wells; most have just come off SI/NC. But the production of some of the older wells is what impressed me.

Saudi: take note of this "dreaded Bakken decline" in this "old CLR Holstein well (2.5 years old and this well will produce oil for 30 years -- and many re-fracks); see Filloon graphic at bottom of this post:

• 27564, 1,235, CLR, Holstein Federal 2-25H, Elm Tree, 40 stages, 4 million lbs, t2/15; cum 577K 8/17; 

Monthly Production Data:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	8-2017	31	19619	19587	18637	29671	27873	1784
BAKKEN	7-2017	31	23208	23223	25517	36000	35891	93
BAKKEN	6-2017	30	24947	25262	30006	37210	34335	2860
BAKKEN	5-2017	29	24830	24445	43125	34239	31094	3131
BAKKEN	4-2017	0	0	0	0	0	0	0
BAKKEN	3-2017	0	0	0	0	0	0	0
BAKKEN	2-2017	0	0	0	0	0	0	0
BAKKEN	1-2017	27	13692	13664	13110	18084	16335	1511
BAKKEN	12-2016	31	18256	18038	18636	25422	25165	93
BAKKEN	11-2016	7	793	1156	65	1361	1234	21
BAKKEN	10-2016	31	19316	19219	3496	25013	24439	93
BAKKEN	9-2016	30	17681	17671	2572	22481	22331	90
BAKKEN	8-2016	31	20476	20555	3519	26261	22488	3413
BAKKEN	7-2016	31	21432	21423	3827	28337	27779	93
BAKKEN	6-2016	30	21949	21884	4022	28284	26484	1350
BAKKEN	5-2016	31	22812	22850	4275	28826	28268	93
BAKKEN	4-2016	15	14135	13868	1407	16335	16075	42
BAKKEN	3-2016	22	17231	17485	3322	23166	22785	66
BAKKEN	2-2016	28	22512	22684	4118	28960	28876	84
BAKKEN	1-2016	31	27816	27566	5316	34135	31939	2196
BAKKEN	12-2015	31	24215	24351	4395	28640	28415	225
BAKKEN	11-2015	30	21356	21233	3387	21841	21751	90
BAKKEN	10-2015	31	21277	21327	3317	24907	24814	93
BAKKEN	9-2015	30	22198	22368	4018	27596	26392	1204
BAKKEN	8-2015	31	19512	19459	2524	19752	12130	7622
BAKKEN	7-2015	31	30482	30535	6024	37990	36782	1208
BAKKEN	6-2015	30	32301	32443	6513	43892	43622	270
BAKKEN	5-2015	31	24112	23865	3988	27484	27243	241
BAKKEN	4-2015	30	12868	12830	1280	13628	11772	1856
BAKKEN	3-2015	31	11716	12034	1347	10170	9468	702
BAKKEN	2-2015	28	21621	21284	3738	21643	14527	7116
BAKKEN	1-2015	7	4896	4536	0	6972	0	6972

I Wish I Had Said That! Hey, I Did! -- Re-Fracks In The Bakken -- June 12, 2017

From The Bismarck Tribune, nothing new for regular readers of the blog: new technology could recover more oil from early Bakken wells. Data points:

• re-fracks
• targeting wells drilled between 2008 and 2010
• industry says currently recovery 5 to 15% of OOIP
• 140 wells in the Bakken have already been re-fracked
• generally, to be economical, re-fracking needs to produce an additional 200K to 250K of crude oil
• not all areas amenable to re-fracking

Comments:

• about 2,500 wells drilled per year back in 2008 - 2010
• economical at what price? $25/bbl? $50/bbl? $100/bbl?  
• when we first started blogging, the "word on the street" was that Bakken operators were recovering 1 - 3%; then Whiting made headlines when they suggested as much as 8%, and said they were targeting a much higher rate of recover
• I've never seen a figure as high as a 15% recovery rate in the Bakken
• Lynn Helms has said, in the past, what each 1% increase in recovery means in the Bakken
• if primary recovery rate goes from 3% to 6% -- that is a doubling of production

A Recovery Rate Of 25%? -- Oilprice.com -- April 15, 2017

This is a pretty good update (consider the source). The most interesting data point in the linked article has to do with the recovery rate from unconventional plays. I have two tags that haven't been used in years: recovery rate and recoverable.

When I first started blogging about the Bakken, I believe it was said that 1 - 3% of original oil in place was recoverable (with primary production). I believe it was Whiting who first suggested that operators were recovering significantly more than 3% of OOIP in the Bakken, and that was years ago. Now in the linked oilprice.com article:

But now the recovery rate, from 5 percent to 12 percent, may reach 25 percent in coming years.

It is not a matter of if but when this technological revolution extends across all oil-producing regions outside the Middle East. There is strong evidence of the aforesaid rising oil production as well, with the EIA forecasting a U.S. daily crude output of 9.2 million barrels this year. It is expected to reach 9.7mpd in 2018 (sic).

The rise in oil prices and U.S. production are directly proportional. This is one of the reasons that, as prices have recovered over past few months, we have witnessed a historic build in inventories.

In fact, the EIA is now forecasting that the US will produce 9.9 million bopd sometime in 2018. 

But back to the recovery rate. For newbies, look at this, posted almost two years ago:

• And just two months ago, June 23, 2015, the estimate had moved to a staggering 15 - 18%.
• But for those paying attention, two years earlier, Whiting suggested that they could get 20% (that was back in 2013).

Also note that oilprice.com is also calling this "fracking 2.0". We started calling it Bakken 2.0 quite some time ago.

Back of the envelope:

• Bakken: 500 billion-bbl OOIP
• 25% recovery = 125 billion bbls
• Bakken/Three Forks: 400 million bbls produced / year (2015
• 125 billion / 400 million = 312 years of production
• 125 billion / 800 million = 156 years of production
• we're into year ten in the North Dakota Bakken

If that sounds outrageous, a couple of reminders:

• from the April, 2017, hearing dockets: Slawson, Clarks Creek-Bakken, 24 wells on an existing 640-acre unit; McKenzie; as many as 30 wells on one 640-acre drilling unit;
• from the July, 2016, hearing dockets: CLR case for 28 wells on one 2560-acre drilling unit
• from the July, 2015, hearing dockets: QEP, Grail-Bakken, 24 wells on each of two 1280-acre units, McKenzie
• see comment(s) for other examples

And these are just a few of many, many examples.

And conservatively, it was suggested some years ago, the Bakken would be producing oil until 2100.

Disclaimer: I am inappropriately exuberant about the Bakken. 

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

Putting Things Into Perspective

High Tech vs Low Tech

America drops the MOAB the other day. First reports: 16 members of ISIS killed. That has been updated to suggest that 94 members of ISIS were killed; no non-combatants killed.

Meanwhile, today it is being reported that a car bomb in Syria has killed 100 non-combatants. 

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

Putting Things Into Perspective
Champions

The Spurs have been in the NBA for 40 years. They have been in the play-offs 37 of those years. The next closes: Los Angeles Lakers, 35 years; and, then the Portland Trailblazers, 32 years. 

And the best part: their home court is the ATT Center. What an incredible investment made by ATT some years ago when the corporation was headquartered in San Antonio.

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

Putting Things Into Perspective

These 138JC Penney Stores Needed To Be Closed

The store closures will represent 13% to 14% of J.C. Penney's current store base and less than 5% of annual sales.

Getting Ahead Of Our Headlights, Part II -- June 23, 2015

For newbies, this is an incredibly important post, that takes us back to the early days of the Bakken. It gets us back into the discussion of primary, secondary, and tertiary recovery. The following all has to do with primary recovery.

In the beginning, the general consensus was the the amount of oil recoverable through primary production was estimated to be 3%, perhaps less. Some estimated as much as 5%. However, when I started running the numbers, and looking at the press releases, I was convinced that 8% recoverable through primary production was more likely than 3%, and there were reports back as early as 2012 suggesting rates of recovery could be much, much higher.

Even a one percent increase in recovery through primary production means as much as an extra 5 billion bbls (500 billion bbls original oil in place [OOIP] x 0.01 = 5 billion bbls.

3% through primary recovery: 15 billion bbls

6%: 30 billion bbls

9%: 45 billion bbls (and I think that's the current conservative general consensus)

But could it be more?

Earlier posts of interest:

• Getting ahead of one's headlight, June 11, 2013
• Recovery rate in the Bakken, July 28, 2013
• EOG on the recovery rates in the Bakken, September 9, 2012
• USGS Survey, April 30, 2013
• Whiting: how about 20% recovery rate in the Bakken? March 6, 2013
• Bakken OOIP Estimates, July 18, 2014

From Mark Perry, Carpe Diem, via an "insider" in the Bakken, June 23, 2015:

One more fact that I’ll remind you of, just to blow your mind a little bit more. Six or eight years ago we were estimating a recovery factor of just 3.5% in the Bakken shale reservoirs from our horizontal wells. With additional work, micro-seismic study, well production history, big data analytics, etc., we’re now estimating that we’re recovering 15-18% of the oil in place.

We further estimate, with our current technology, that the technically recoverable oil in the Bakken is 65 to 90 billion barrels.

Let’s pick the midpoint at 78 billion barrels of recoverable oil and assume a recovery factor of 16.5%. That implies we have about 470 billion barrels in place, of which 78 billion barrels can be recovered.

Now let’s assume that over the next decade that the drilling and extraction technologies continue to improve and we are able to harvest another 5% of the oil in place — again, we now know exactly where it is and we know the exact profile of the geology/geophysics of the shale rock.

That’s another almost 24 billion barrels of crude oil (470 billion x .05), which would be equivalent to discovering another Prudhoe Bay size oil field in the Bakken area! All it takes is more experience and technology gain to get the oil we know is there.

The article also takes us back to OOIP. It's hard to say exactly what the "insider" was suggesting when he wrote:

 ... we’re now estimating that we’re recovering 15-18% of the oil in place.

We further estimate, with our current technology, that the technically recoverable oil in the Bakken is 65 to 90 billion barrels. 

I can only assume the "insider" was "equating" the two. So working backwards:

15 to 18% of what = 65 to 90 billion bbls

15% of what = 65 billion bbls OR 18% of what = 90 billion bbls.

"of what" = 65 / 0.15 --> 433 billion bbls of OOIP.

"of what" = 90/0.18 --> 500 billion bbls of OOIP.

At the time 500 billion bbls OOIP was first being bandied about (before 2013), only the middle Bakken and the upper Three Forks (which we now call the upper bench or the first bench of the Three Forks) were being targeted (and then, mostly the middle Bakken; very few wells were actually targeting the upper Three Forks prior to 2013).

These discussions help explain the price operators were willing to pay for mineral acres back in the early days and why the Bakken remains so exciting.

So, now, to collect the Mark Perry Carpe Diem three recent posts on the Bakken:

• Part I
• Part II
• "Part III"

Comparing the Bakken and the Permian.

• September 22, 2014
• USGS slide, May 2, 2013
• Mike Filloon on the Permian, February 13, 2013 
• Production per well, the Bakken vs the Permian, July 6, 2014
• Production per well, the Bakken vs the Permian, December 14, 2014
• The Bakken-Permian Pond, July 21, 2011

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

A Personal First

I was the first one to review a new book on Amazon. My review here. The book here. I also just posted my review of Oliver Sacks' autobiography. The book here. Generally speaking, I find there are more than enough reviews, and more than enough words for each review, that my reviews can be short and sweet.

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

Coming Into Work A Bit Later

I called my dad to wish him a Happy Father's Day and to ask him how his day was going.

He was in a great mood as usual.

I called him at the office. He mentioned that he was just getting in. I had called about 10:45 a.m. He says he was now coming in a bit later than usual. Instead of coming in at 9:30, he now comes in about 10:30 every morning.

He says there is not a lot for him to do, so he can come in a bit later. I guess he's sort of on auto-pilot at age 93 years. His biggest problem is making sure his broker understands his "orders." He remains excited about his portfolio, particularly Apple. He got in relatively early; I missed that one. He thought Apple was a grocer or supermarket of some sort years ago. He knows that the company is having some problems now with the music end, but doesn't know the particulars.

I didn't ask, but he probably won't buy the Apple Watch. 

Recovery Rate Of Original Oil In Place Through Primary Production In The Bakken, A Poll -- September 20, 2014

I'm going to do a longer post on this subject in a few days. Hopefully my patience will hold. Before posting the "story," I am curious what readers think.

So here's the poll, based on your knowledge of the Bakken, what do you think is the recovery rate of original oil in place through primary production from the Bakken?

• 1%
• 3%
• 5%
• 8%
• 10%
• 15%
• 20%

US Government Agency Announces "Another Bakken" Discovered In North Dakota! USGS Doubles Estimate of the Bakken: 7.4 Billion Bbls Of Recoverable Oil; And That's The Mean; Top Line Is 11.4 Billion Bbls; Both Numbers Considered Conservative By Some

The Official USGS Survey
The USGS Report on the Bakken 
(PowerPoint Presentation) 

Observations

Observation 1: TOC
Observation 2: The Four Benches of the Three Forks  
Observation 3: The relative size of the Bakken compared to the two Texas basins
Observation 4: The Pronghorn Member
Observation 5: The "F95" for the Bakken Formation actually decreased slightly
Observation 6: Where is UND / UND-EERC?

Other Sources

Unofficial: a trillion-bbl reservoir?

Updates

September 26, 2019: estimates, updated.

June 16, 2018: the next USGS survey of the Bakken/Three Forks was scheduled for 2020. North Dakota congressional representatives successfully lobbied the USGS to begin the survey sooner. That was announced on December 11, 2017. This suggests to me that the USGS should begin the new survey not later than by the end of 2018. Let's hope.

May 10, 2013: back-of-the-envelope calculations. The four counties with the most activity: Dunn, McKenzie, Mountrail, Williams, around 10,000 square miles. One section is a square mile. It's pretty much agreed there will be four wells in each section in this part of the Bakken: 40,000 wells. EURs/well of 500,000 are certainly likely. 40 x 500 = 20,000 x 1,000 x 1,000 = 20 billion bbls of oil in these four counties.

Now, let's say someone suggests 4 wells/section throughout the entire 4-county area is a little optimist, then we have one-half of Burke County (500 sq miles); Divide County (1,000 sq miles); Stark County (1,000 sq miles -- where Whiting's Pronghorn Prospect is): 2,500 sq miles = 2,500 sections. Let's say just two wells per section at 300,000 bbls EUR. 2 wells/section x 2,500 sections = 5,000 wells x 300,000 bbls = 5 x 300 = 1,500 x 1,000 x 1,000 = another 1.5 billion bbls, which is extremely conservative.

So, very, very conservative, 20 billion bbls. USGS says 7.3 billion, and Lynn Helms says the 5% probability figure of 11 billion bbls is a reasonable target. And I do believe that folks like Harold Hamm were looking at 20 billion bbls recoverable from the middle Bakken alone, even before considering the Three Forks. 

May 10, 2013: I just noticed that Lynn Helms, Director, NDIC, released a press release on the USGS 2013 survey of the Bakken. He said he was happy with the survey, stating clearly that the figure of 11 billion barrels of recoverable oil was an appropriate target. The mean of 7.38 billion bbls was not mentioned, suggesting that Lynn Helms feels strongly that 11 billion bbls is the more likely figure.

May 6, 2013: Minneapolis StarTrib article on assessment.

Later, 5:27 pm: Carpe Diem's take on the new assessment.

“These world-class formations contain even more energy resource potential than previously understood, which is important information as we continue to reduce our nation’s dependence on foreign sources of oil,” said Secretary of the Interior Sally Jewell. “We must develop our domestic energy resources armed with the best available science, and this unbiased, objective information will help private, nonprofit and government decision makers at all levels make informed decisions about the responsible development of these resources.”

Does this mean SecInterior Sally Jewell will support fracking?

Later, 2:59 pm: The Oil & Gas Journal is reporting: 

The Bakken and Three Forks formations in North Dakota, South Dakota, and Montana hold an estimated mean of 7.38 billion bbl of undiscovered, technically recoverable crude oil, the US Geological Survey announced.

The updated assessment represents a two-fold increase from the 2008 estimate of 3.65 billion bbl in the Bakken, it noted.

The update includes the Three Forks for the first time.

USGS’s latest assessment found that the Bakken has a 3.65 billion bbl estimated mean resource—unchanged from 5 years ago—and Three Forks has an estimated mean 3.73 billion bbl. The formations’ combined estimate ranges from 4.42 million bbl, with a 95% chance of production, to 11.43 billion bbl, with a 5% chance.

Other data points:

• 6.7 Tcf of associated / dissolved natural gas
• 0.53 billion bbls of natural gas liquids 

The narrative continues:

Gas estimates ranged from 3.43 Tcf (with a 95% chance of production) to 11.25 Tcf (with a 5% chance) and 0.23 billion bbl (95%) to 0.95 billion bbl (5%) of NGLs. These estimates represent a nearly three-fold increase in mean gas and NGL resource estimates from the 2008 assessment, due primarily to the inclusion of Three Forks Formation, USGS said.

Later, 12:17 pm: Tweets keep coming. Bits and pieces starting to flow re: USGS estimate: Hoeven: 7.4 billion is a mean number. Top line is 11.4 billion barrels.  Hoeven says both numbers likely conservative. Just between you and me, there is a huge difference between 7.4 billion and 11.4 billion. Using a calculator, I get a difference of 4 billion. The four-billion-delta exceeds the 3.6 billion bbl USGS estimate in 2008. In other words, the USGS has just announced "another Bakken" has been discovered in the United States. It is located, coincidentally enough, in western North Dakota.

Original Post

The Grand Forks Herald is reporting:

The U.S. Geological Survey said today there is nearly twice as much recoverable oil in the Williston Basin than its estimate of five years ago.

The USGS has determined that there are approximately 7.4 billion barrels of oil that could be pumped from western North Dakota and eastern Montana.

The last USGS study, released in April 2008, identified 3.65 billion recoverable barrels of oil in the Bakken formation. The new estimate includes oil that could come from the Three Forks formation in addition to the Bakken formation.

Some have already noted: 3.65 x 2 = 7.3. The new estimate is 7.4. So I don't quite understand the GFH's reporter saying that the "7.4 is nearly twice as much." The fact is: 7.4 is more than twice as much. And then we find out that 7.4 is the "mean" number; in fact, the top line was significantly higher. [Later: now that I see more data, as provided by The Oil & Gas Journal, it makes sense why the GFH reporter said "nearly twice as much."]

We'll have to wait to see the report for the full details.

If the recovery rate is 5%, then we're talking 148 billion bbls of original oil in place.

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

Later, 11:57 am:

Platts is now tweeting:

USGS estimates about 7.4 billion barrels of undiscovered/technically recoverable oil lies in the Bakken and Three Forks tight oil formations.

I wonder where that "undiscovered" Bakken/Three Forks oil is? I assume much of it is under Harold Hamm's oil rigs, and much of it is under the multi-well pads going in. As my daughter would text: LOL.

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

A reader sent me a very lengthy comment regarding the USGS 2013 Survey of the Bakken/Three Forks. I am including it here for archival purposes. It will be interesting to come back in five years and re-visit this analysis:

Some thoughts regarding the recent USGS assessment of the undiscovered oil and gas in the Bakken/Three Forks.

It seems to me, based on current development, the estimate is conservative, but 7.4 billion barrels is a lot of oil! It would take average production of over 600,000 barrel of oil per day in North Dakota to produce this amount in 30 years.  We know it is likely total production for the Bakken zones will continue beyond 30 years but it seems obvious there will need to be very high production in the next 10 years or so to get a 600,000 barrel average over the long term.

It also appears, USGS did not re-visit their 2008 Bakken only numbers even though new fracking and completion techniques have revolutionized development in the past five years.  They added the 3.7 billion barrel estimate for the Three Forks with very little direction as to “sweet spots” or the role of the various “benches” in this zone.  The only conclusion has to be the Three Forks contains a little more producible oil than the Middle Bakken alone. 

I have difficulty matching the USGS study will current production results and actual drilling/permitting programs. For example, the Nesson-Little Knife Assessment Unit is an area almost 150 miles north to south and from 25 to 40 miles wide.  Since the south 20 miles of this unit has not shown much promise in the Middle Bakken, I only included the 130 miles (N-S) and 30 miles average east to west.  This results in 3900 square miles or 1950 1280 acre production units.  The USGS Middle Bakken study shows 1.149 billion bbls of recoverable oil in this unit.

Divide 1950 units into this estimate and it results in a little less than 600,000 barrels per 1280 acre unit.  The USGS also referred to something less than 300,000 barrels ultimate recovery for a well draining 400 acres in “sweet spots.”  Is the USGS assuming two 300,000 barrel wells per unit or three 200,000 barrel EUR wells per unit?  Scanning the area from north of Dickinson to the north end of the Nesson Anticline and reviewing current production results, drilling and permitting, 2 or 3 Mid Bakken wells per unit with a total EUR for the entire 1280 acre unit of less than 600,000 barrels doesn’t seem to match with reality.  Many units approach or exceed this total in their first two or three years of production. 

I did a similar study of the Central Basin Assessment Unit.  This unit may make sense from the geological perspective but actual drilling and production results vary greatly.   A large portion of the this AU in North Dakota is in the “sweet spot."

The Montana segment has had less drilling and less impressive production results so far.   In North Dakota this AU has about 1,625 1280 acre drilling units.  If you allocate 90% of the undiscovered oil in Central Basin Unit to the North Dakota units, you again get about 600,000  barrels of recoverable Middle Bakken oil from each 1280-acre unit.  From an economic unit perspective this would be about two Middle Bakken wells per unit.

Continental Resources would be through drilling with one per unit with their 603,000-barrel-per-well estimate. (I think this is very optimistic, but 350,000 to 450,000 bbls of oil per well in “sweeter spots” seems more reasonable). 

I will concede that the 2013 USGS numbers might be “spot on.”  Time will tell.  For me, I will pay attention to what current operators in the Bakken are doing.  These operators most certainly have their own set of numbers for the acreage they control.  The actual pay-out of these wells will determine future development. Theory and analysis are important but cannot replace actual results. 

Perhaps clarification from USGS concerning recovery by 1280-acre unit will help in understanding their methodology. 

Finally, I’ll say it again:  “7.4 billion barrels is a lot of oil!"

It sure is. 

How About 20% Recovery in the Bakken? -- Array Fracking

Updates

Later, 12:49 pm: I finally got a chance to see the linked article in the original post. This is a really nice article, putting everything together in one spot. It is of interest that all of this has been posted in bits and pieces earlier on the Million Dollar Way, some of it quite awhile ago, some of it very recently: a) the CLR graphic on 14 wells on one 1280-acre spacing unit; b) a trillion-bbl Bakken reservoir (903 billion bbls OOIP); c) the lower benches of the Three Forks; d) closer spacing of horizontal laterals; e) KOG's Smokey and Polar pilot projects; and, f) Whiting's six or seven downspacing pilot projects. 

Whiting, by the way, provided an interesting data point in their most recent earnings conference call, regarding spacing of horizontals in various locations around the Bakken.

The comments, as usual, are very interesting. XOM has said that their production will actually decrease this year and then increase 2 to 3 percent in the out years; compare that with the production increases expected for the Bakken-centric operators. Today, at Yahoo, the forward P/E for XOM: 11; OAS, 11; KOG, 10; CLR, 13; WLL, 11; CVX, 10, COP, 10.

Disclaimer: this is not an investment. Do not make any investment decisions based on what you read at this site.

In addition, the article did not address cost savings Bakken operators will start seeing this year due to myriad of factors. Having said all that, the linked article in the original post will bring folks up to speed. The author, Richard Zeits, says an article on KOG is forthcoming.

Original Post

A reader sent this in as a comment. It's important enough to re-post as a stand-alone post. Lots of detail, explanations. So many story lines. A huge "thank you" to the reader for alerting me to the article:

The March 5, 2013 Seeking Alpha article by contributor R Zeits entitled, “The Birth Of 'Array Fracking' in the Bakken” Below are a couple of short excerpts from this very long and informative post that indicate why IMHO this is a must read for any Bakken investor.

Bakken: The Downspacing Bounty And Birth Of 'ARRAY Fracking' - Mar 5 2013, 14:41, includes: CLR, COP, EOG, ERF, HES, KOG, MRO, NFX, NOG, OAS, QEP, STO, TPLM, WLL, WPX, XOM

What is the motivation behind the effort to downspace? According to Whiting Petroleum's CEO Jim Volker:

And so the idea here is to drill a series of pilots - and we're going to be doing that in both Hidden Bench, Pronghorn, Sanish, possibly Missouri Breaks as well - to go in and drill on higher densities, essentially doubling the density in the better reservoirs in there, TO DEMONSTRATE OUR ABILITY TO INCREASE THAT RECOVERY EFFICIENCY, get it up from 10% or 11% UP TO SOMEWHERE AROUND 20%.

And what that means is breaking up more rock.

And we don't believe that with the current spacing that we are on, that we are getting all of the oil that's out there. So that's really what this is all about.

The majors, Exxon Mobil (XOM) and Statoil (STO), and super-independents, ConocoPhillips (COP), Marathon Oil (MRO) and Hess Corporation (HES), as well as privately held operators - the companies that account for a large portion of drilling activity in the Bakken - rarely share sufficient details of their operation in the play. However there are multiple indications that the downspacing evaluation and deeper Three Forks testing by this group of companies is also ongoing.

See http://seekingalpha.com/article/1248431-bakken-the-downspacing-bounty-and-birth-of-array-fracking for the full article.

There are many, many story lines here. I can't even begin to think of all the posts that could come from this article. It looks like I will have a long, long weekend.

But to just get started: remember in the early days of the Bakken boom, folks were talking about 1 - 3% recovery? Among the amateur sites, MDW was one of the first to note that recovery looked a lot closer to 8% based on corporate presentations. Whiting confirms that in this conversation, suggesting they are already at 10%, and looking to 20%.

That would be doubling their recoverable reserves. 

Estimates of Bakken Recoverable Oil

I think the official USGS estimate for recoverable oil in the Bakken is about 3 billion barrels, based on an old study; I think the last study was done in 2008, but I've lost track of a lot of this stuff. Hardly matters any more, does it?

Continental Resources is pushing the envelope, estimating as much as 24 billion bbls recoverable oil in a trillion-barrel original-oil-in-place shale reservoir.

According to Fox Business, NDIC puts the number at 6.5 billion bbls recoverable oil. To date, slightly less than one-fourth billion bbls have been recovered. So when four times the current total produced has been shipped, the Bakken will still be less than a billion bbls recovered. Then, only 5.5 billion more bbls to go ... and that's the NDIC estimate. As noted above, Harold Hamm suggests 24 billion. 

900 vs 300

Three data points below the breaks:

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

1. 2008: The State of North Dakota estimated in 2008 that the Bakken Formation contains 149.2 billion barrels of oil in-place (OOIP) within the borders of North Dakota. (Don't you just love that "point.two"? It makes the number look much more believable than if it were 150 billion bbls, but I digress.) [Update: that link is broken, but it helps me date this presentation. This NDIC presentation must have been in 2008 because slide 30 shows 149.2 billion bbls of oil OOIP in the middle Bakken. I don't want to lose presentation, so I have archived it.]

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

2. I vaguely recall that early on in the Bakken boom "they" said one could expect about 3 - 4 percent recovery of OOIP.  Four percent of 150 billion --> 6 billion.  In fact, from various conference calls, it appears "they" are recovering eight percent (eight percent of 150 billion --> 12 billion). Harold Hamm has said for quite some time that 24 billion is likely to be recovered. Eight percent of "what" --> 24 billion?  300 billion. So, I've always thought Bakken OOIP was around 300 billion barrels.

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

3. From an earlier post this year (February 23, 2012:

From wiki:

A research paper by USGS geochemist Leigh Price in 1999 estimated the total amount of oil contained in the Bakken shale ranged from 271 billion to 503 billion barrels, with a mean of 413 billion barrels  -- original oil in place (OOIP).  (200,000 square miles) 

With the deeper benches in the Three Forks formation, CLR says there could be 900 billion barrels of OOIP in the Bakken Pool.

Simply incredible.

Also from wiki:

Ghawar is an oil field located in Al-Ahsa Governorate, Saudi Arabia. Measuring 280 by 30 km (170 by 19 mi), it is by far the largest conventional oil field in the world. When appraised in the 1970s, the field was assessed to have 170 billion barrels of original oil in place (OOIP). (3,230 square miles)

********************  

So, those are the data points. A lot of folks have said Leigh Price's estimate of 270 to 500 billion bbls of original oil in place in the North Dakota Bakken was on the high side.

Harold Hamm consistently opines that he thinks there is 24 billion bbls of recoverable oil from the Bakken. Eight percent recovery is certainly on the high side but there is more and more evidence that we are seeing at least eight percent recovery by the better Bakken drillers. Again 8% of what = 24? 300 billion barrels.

So: 300 billion bbls OOIP seems to be "the number."

But note: CLR above suggested that with the deeper benches of Three Forks, the OOIP might be as much as 900 billion barrels of oil (or three times as much as 300 billion barrels).

A SeekingAlpha.com article today reminds us that CLR thinks the new number is 900 billion bbls. That was in the 4Q11 conference call.

So, is CLR putting its money where its mouth is? From the linked article:

When asked about where they will spend their $550 million CapEx increase, Hume responded "it's all entirely going to the Bakken." (They produce in the Niobrara/DJ Basin, the Anadarko Woodford and the Bakken.) He added, "we're obviously participating in all the acreage sales in our key plays, mainly the Bakken. Right now, we're very concentrated, very focused on consolidating acreage in the Bakken."