Preliminary Study Regarding The Middle And Lower Benches Of The Three Forks -- Geo News -- December 9, 2018

This was posted as an update to an earlier post but it is too important to be lost, so I am reposting it:

Don sent me a link to an article in the January, 2018, issue of Geo News. It should download as a pdf on your desktop:

https://www.dmr.nd.gov/ndgs/documents/newsletter/2018Winter/Examination_of_Middle_Three_Forks_Hydrocarbon_Charge_and_Production.pdf

From that article:

There is currently limited geological information available regarding the petroleum geology and economic importance of the middle to lower Three Forks.

Resource assessments of the Three Forks Formation have ranged from approximately 2 to 4 billion barrels of recoverable oil, but these assessments have been limited to the upper Three Forks (Nordeng and Helms, 2010; Gaswirth et al., 2013).

This article reports the preliminary findings of a recently initiated study on the origin and distribution of oil saturations within the middle Three Forks. It also reviews the present production footprint of 2nd bench horizontal oil wells and projects their potential future distribution.

In addition, I am examining oil saturations and hydrocarbon production in the lower Three Forks (3rd and 4th benches).

The author is Timothy O. Nesheim.

As noted, this article is a "work in progress." Unless I missed it, the author did not provide estimated reserves in the middle or lower benches of the Three Forks.

Don suggests it is likely that this paper is part of the ongoing USGS survey of the Bakken/Three Forks.

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

See How Many Faces You Recognize

Sun Records Medley

Putting The Bakken Into Perspective -- December 9, 2018

Updates

Later, 10:07 a.m. CT: Don sent me a link to an article in the January, 2018, issue of Geo News. It should download as a pdf on your desktop:

https://www.dmr.nd.gov/ndgs/documents/newsletter/2018Winter/Examination_of_Middle_Three_Forks_Hydrocarbon_Charge_and_Production.pdf

From that article:

There is currently limited geological information available regarding the petroleum geology and economic importance of the middle to lower Three Forks.

Resource assessments of the Three Forks Formation have ranged from approximately 2 to 4 billion barrels of recoverable oil, but these assessments have been limited to the upper Three Forks (Nordeng and Helms, 2010; Gaswirth et al., 2013).

This article reports the preliminary findings of a recently initiated study on the origin and distribution of oil saturations within the middle Three Forks. It also reviews the present production footprint of 2nd bench horizontal oil wells and projects their potential future distribution.

In addition, I am examining oil saturations and hydrocarbon production in the lower Three Forks (3rd and 4th benches).

The author is Timothy O. Nesheim.

As noted, this article is a "work in progress." Unless I missed it, the author did not provide estimated reserves in the middle or lower benches of the Three Forks.

Don suggests it is likely that this paper is part of the ongoing USGS survey of the Bakken/Three Forks.

Original Post

At one million bopd, the Bakken produces (365 million bbls x 3 years =) one billion bbls every three years. Unfettered, of course, the Bakken could produce more than 2 million bopd, or one billion bbls every year and a half.

So what?

At the sidebar at the right, there is a long list with "Other Formations." Here is the link to "Norway," for example.

And from that page, the most recent post:

December 8, 2018: from Equinor's website, this date -- Johan Sverdrup—the North Sea giant Johan Sverdrup is one of the five largest oil fields on the Norwegian continental shelf.

With expected resources of between 2.1—3.1 billion barrels of oil equivalents, it will also be one of the most important industrial projects in Norway in the next 50 years. The development and operation of this enormous field will generate revenue and provide jobs for coming generations.

My hunch is that the next USGS survey of the Bakken/Three Forks will be the equivalent of adding several such fields to the Williston Basin. It is unlikely the next survey will include Three Forks B2 and B3 because so few wells have been drilled into the lower Three Forks. 

Huge News! USGS To Reassess The Bakken -- December 11, 2017

Data points from The Bismarck Tribune:

• ND leaders pressed for reassessment
• that was the headline but a few "ifs" and "buts"
• last assessment was in 2013; at that time:
• the Three Forks crude oil formation was deemed recoverable, bringing future resources to be tapped in the Williston Basin up from 3.7 billion barrels to 7.4 billion barrels of oil
• possible natural gas production also rose from 1.9 trillion cubic feet to 6.7 trillion cubic feet
• the 2013 survey is linked at the sidebar at the right; here's the link:http://themilliondollarway.blogspot.com/2013/04/usgs-doubles-estimate-of-bakken-74.html

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

Electricity, Spot Prices Elsewhere

New England: spiking to $60/MWh
Australia:

• South Austrailia: will spike to $350/MWh
• Victoria: will spike to $290/MWh

Back To The Permian -- November 17, 2016

This morning on MSNBC Morning Joe it was mentioned that the USGS analysis of the Permian showed:

• 20 billion bbls
• largest continuous reservoir USGS has ever surveyed
• 3x the size of the Bakken

I took another look at the first note at the blog regarding this new survey. At the post, the Permian:

• an estimated and previously unaccounted for 20 billion bbls crude oil
• 16 trillion cubic feet of natural gas; and, 
• 1.6 billion bbls of natural gas 

Let's go back to some earlier posts on the size of the Bakken:

• a trillion-bbl reservoir?
• Bentek: 2.2 million bopd
• USGS 2013 Bakken-Three Forks: top line estimate: 11.4 billion bbls
• Bakken production through 2040

Comments derived from those links regarding the Bakken follow.

A trillion-bbl reservoir:

• the trillion-bbl reservoir first posited by CLR, was eventually pulled back to the Leigh Price number, 500 billion bbls
• a 3% primary recovery rate of 500 billion bbls = 15 billion bbls
• a 10% primary recovery rate of 500 billion bbls = 50 billion bbls

Bentek and EIA, Bakken production 2040:

• 1.5 million bopd average through 2030; 2016 - 2030 =  15 yrs x 365 days/yr x 1.5 million bopd = 8,200 million bbls = 8 billion bbls (sub-total)
• 2.0 million bopd average, 2031 - 2040) = 10 years x 365 days/yr x 2 million bopd = 7,300 million bopd = 7 billion bbls (sub-total)
• 1 million bopd average after 2040 through unknown number of years
• total estimate based on Bentek, EIA presentations in the past: 8 billion + 7 billion + x billion = at least 15 billion bbls
• everyone pretty much agrees 3% recovery rate is a very, very conservative recovery rate for the Bakken; Whiting has suggested as much as 8%

USGS Permian and Bakken surveys

• for the Bakken-Three Forks: top-line estimate -- 11.4 billion bbls
• I've not see USGS's top-line estimate for the Permian; the headline number is 20 billion bbls
• 20 billion bbls is not 3x the size of the Bakken
• but that's about right: USGS mid-range estimate for the Bakken: 7.4 billion bbls; for the Permian: 20 billion bbls

This graphic was posted by the EIA earlier this year, August 22, 2016:

Note the amount of dark blue (Bakken) vs the Wolfcamp (blue).

In light of the new USGS survey of the Permian the graph will have to be re-done (I would suppose).

ND State Senator Asks For Updated Study Of Fossil Fuel Reserves In Western North Dakota -- October 22, 2015

The Dickinson Press is reporting:

U.S. Sen.  John Hoeven, R-N.D., has asked the U.S. Geological Survey to update the agency’s study of recoverable reserves of oil and natural gas in the Williston Basin.

At Hoeven’s request, USGS released the study of recoverable oil reserves in April 2013 that found there are approximately 7.4 billion barrels of technically recoverable oil, more than twice the previous estimate in the Williston Basin. The report also estimates there is 6.7 trillion cubic feet of natural gas.

If you do the math, add the natural gas (boe) to the crude oil, and then divide that number into the natural gas (boe), the number suggests 13% of the crude oil / natural gas mix is natural gas.  

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

President Obama Vetoes Defense Appropriations Bill

Bill Had Unprecedented Bipartison Support

Extremely Rare For A President To Veto a Defense Appropriations Bill

Vetoed Over Two Minor Issues, All-Political 

The House of the Rising Sun, The Animals

OBSERVATION 6: Random Observations Regarding the USGS 2013 Assessment of the Bakken: UND-EERC

This may or may not be trivial with regard to the USGS 2013 Assessment of the Bakken.

Check out the USGS 2013 PowerPoint presentation [The USGS Report on the Bakken] regarding the assessment of the Bakken. Slide lists the "Non-USGS Cooperators." Notably absent is UND and/or UND-EERC. The only academic entity listed is the Colorado School of Mines. Perhaps UND and UND-EERC are closely aligned with the North Dakota Geological Survey and perhaps the UND folks had some input.

Maybe I'm just super-sensitive but it certainly seems UND/UND-EERC should have been part of the process.

OBSERVATION 5: Random Observations Regarding the USGS 2013 Assessment of the Bakken: The "F95" For The Bakken Actually Decreased

The very first slide (after the introductory stuff), the USGS asks the question: why assess the Bakken  ... again? Because the "Three Forks Formation was not assessed in 2008."

There were several additional reasons, but it seems from the report that the USGS did not actually consider any of those additional reasons, based on the results (substantial increase in number of wells, longer well prouction histories, new technology, increased cooperation from industry experts, etc).

The "new" 2013 number for the Bakken Formation: 2.81 to 4.61 (mean: 3.65 billion bbls).

The  "old" 2008 assessment for the Bakken Formation: 3.0 to 4.3 (mean: 3.65 billion bbls).

Although the mean remained the same, the "F95" for the Bakken actually appears to have decreased. (This is based on the narrative for 2008 and the slide presentation for 2013, but those are the numbers provided.)

That's the observation. It's hard to believe that five years of new data, new technology, more wells, increased fracking stages/well, the assessment did not result in any change in the mean, either up or down. There are four possibilities for the Bakken mean not to have changed over five years:

a) the Bakken Formation was not reassessed; only the Three Forks
b) the oil industry has not gotten any better at recovering oil from the Bakken Formation
c) the oil industry has gotten better but the USGS took that into consideration back in 2008, and thus no change in the assessment
d) the USGS is really, really good at making estimates, and five years later, their assessments have not changed for the Bakken Formation

OBSERVATION 4: Random Observations Regarding the USGS 2013 Assessment of the Bakken: The Pronghorn Member

From the report:

The Pronghorn Member of the Bakken Formation, although geologically and stratigraphically defined as part of the Bakken Formation (LeFever and others, 2011), is assessed with the Three Forks Formation.

Where present, the Pronghorn Member is in fluid communication with the underlying Three Forks reservoirs.

Two comments:

• this is an administration decision, to include the Pronghorn Member with the underlying Three Forks reservoirs (note the plurality of reservoirs when discussing the Three Forks Formation)
• noting that the Pronghorn Member is geologically and stratigraphically defined as part of the Bakken Formation (and has been so defined at least since 2011) provides scientific basis for the NDIC's decision to redefine stratigraphic limits as requested by the oil industry

And that's it. Nothing controversial. Simply an observation and a couple of comments.

But, I cannot resist: It would be interesting to read the 2011 Julie LeFever paper that explains why the Pronghorn Member, lying below a tight shale formation, and communicating with the Three Forks Formation, is geologically and stratigraphically defined as part of the Bakken Formation; and, then, of course, why oil from the Pronghorn Member will be considered Three Forks oil.

I assume the answer to the second part of that question/statement is based on precedence and commingling. It makes sense to assess Pronghorn Member oil with the Three Forks Formation oil,  going back to hydrocarbon "fingerprints."

But the 2011 Julie LeFever paper should make interesting reading:

LeFever, J.A., LeFever, R.D., and Nordeng, S.H., 2011, Revised nomenclature for the Bakken Formation (Mississippian-Devonian), North Dakota, in Robinson, J.W., LeFever, J.A., and Gaswirth, S. B., eds., The Bakken-Three Forks Petroleum System in the Williston Basin: Denver, Colo., Rocky Mountain Association of Geologists, p. 11 - 26.

The North Dakota Geological Survey, Geologic Investigation No. 165 (GI-165) provides a very nice graphic of the three members of the Bakken, as well as five (5) members of the Three Forks. This is a must-read document: it points out that "current industry terminology refers to the member 5, 4, 2, and 1 as benches (i.e., member 5 is referred to as the "First Bench").

.... It is interesting to compare the oil saturations against the water saturations. Oil saturations are consistent through the Bakken, but tend to taper off below member 5 ("First Bench"). Correlations become especially important in the Continental Resources, Inc. -- #1-3H Debrecen well where the highest oil saturations are in the Pronghorn Member of the upper Three Forks. In contrast to the cross-sections wells, the EOG Resources, Inc. -- #2-11H Liberty has oil saturations throughout the Three Forks section.

... An abundance of fractures appear to coincide with higher water saturations in the Three Forks. The opposite is reflected by fractures in the Bakken. ... The absence of significant amounts of clay suggests that the marker bed that denotes the top of member 4 ("Second Bench") may not confine a fracture stimulation treatment as previously thought. ... A preliminary examination of the Three Forks  Formation raises some interesting questions as to how extensive is the resources, what are the controlling factors, and what constitutes the reservoir. Additional examination of new cores may answer some of the questions.

OBSERVATION 3: USGS Needs To Improve on Style: Slide 17 Legend

A better graphic -- A huge thank you to a reader; see comments. Now, why couldn't the USGS have done this in the first place? The link: http://i.imgur.com/pdRjCZc.jpg

Updates

Original Post

This post refers to the USGS PowerPoint presentation for the 2013 Assessment of the Bakken/Three Forks.  

At slide 17, the USGS provides a graphic of the relative size of the various basins of continuous oil reservoirs, such as the Bakken, in the United States, to include Alaska. If one is trying to downplay the size of the Bakken, this is pretty successful.

Each basin/locality has a green "dot" varying in size based on the size of the reservoir. The USGS uses four dots to represent four "sizes":

• less than 0.1 billion bbls
• 0.1 to 0.5 billion bbls
• 0. 5 to 2.0 billion bbls
• greater than 2.0 billion bbls

That was fine when the largest continuous reservoir, the Bakken, was estimated to be 3.6 billion barrels back in 2008. But with the new estimate, the graphic needs to be updated.

Take a look at the graphic (slide 17 at the link). There is not a whole lot of difference in the size of the green "dots" for the Permian, the Western Gulf, and the Williston Basin. In fact, a newbie glancing quickly at this one slide would not be all that impressed with how much bigger the Williston Basin is compared to the Permian or the Western Gulf based on the graphic or the size of the dots.

But then look at the numbers:

• Permian Basin (Midland-Odessa): 0. 51 billion bbls
• Alaska North Slope (Prudhoe Bay): 0.94 billion bbls
• Western Gulf (Eagle Ford) Basin: 1.73 billion bbls
• Williston (Bakken/Three Forks) Basin: 7.38 billion bbls

The Williston Basin, at 7.38 is more than 4x greater than the Western Gulf (Eagle Ford). And then, get this: the Williston Basin's continuous oil reservoir is almost 15 times larger than the Permian Basin (Midland-Odessa).  The "green dot" overlying North Dakota should be twice as big as it is.

Having said all that: my hunch is that the estimate for the Western Gulf (Eagle Ford) continuous reservoir is significantly underestimated, and will be revised upward in the next assessment.

OBSERVATION 2: Random Observations Regarding the USGS 2013 Assessment of the Bakken: The Four Benches of the Three Forks

Widely released yesterday were two USGS products: a four-page glossy and a 20-slide Power Point presentation. Both of them are linked at the this post.

Slide 6 of the PowerPoint Presentation shows the three sub-formations of the Bakken formation: upper, middle, and lower.

That slide also shows the "Pronghorn Member/Sanish Sand."

Interestingly enough, the slide does not show the four benches of the Three Forks. In fact, it does not even show the "upper" and "lower" units, though these are mentioned in passing in the glossy: "The Three Forks Formation reaches a maximum thickness of 270 feet in the central portion of the basin and is divided stratigraphically into lower and upper units, with variable oil saturations."

USGS assessments are based on the results of completed wells, past and present. At the time of the assessment, I would assume 90% of the Three Forks wells targeted the upper unit, and none targeted the deeper unit that Continental Resources refers to as the third and fourth bench. Indeed, it was only in the past month or so that the first well was successfully drilled into the third bench (and it is producing oil).

OBSERVATION 1: Random Observations Regarding the USGS 2013 Assessment of the Bakken: TOC

Newbies should go back and read this post of November 1, 2011.

There are numerous factors affecting the quality of an oil basin. Total organic content (TOC) is one of the Big 5.

A bit more about TOC at this link. Now, how does the Bakken stack up against, let's say, Saudi Arabia?

There are five areas in the world where "world class" source rock exists:

• The Bakken
• Norwegian Sea (North) and North Sea
• Venezuela
• Saudi Arabia
• Norwegian Sea (South) and The Netherlands

For comparison, TOCs:

• Bakken: as high as 11%
• United Arab Emirates: 0.3 to 5.5%
• Saudi Arabia: 2 to 5%
• Trinidad: 2.2%
• North Sea: 5.6% 

When I first came across this information, I about fell off my chair: the Bakken has a TOC average of 11 percent, compared to Saudi with varying reports of 2 - 5 percent. Wow.

So, that was from the earlier post, back in 2011.

Did the USGS 2013 Survey of the Bakken-Three Forks have anything to say about the TOC of the Bakken? Yes, based on new information, and I quote from the first page:

"The upper and lower shale members are the primary source rocks for the Bakken TPS, with present-day total organic carbon (TOC) values from less than 1 weight percent to 35 weight percent (Lillis, 2013)."

A TOC of 35% is the highest I have ever seen reported for the Bakken. As noted above, the 30-second sound bite: the average TOC for the Bakken is 11 percent. Most sources quote TOC as high as 16 percent in the Bakken, and there is one source that quotes a TOC as high as 20%.

Again, more recent data suggests the TOC in the Bakken can be as high as 35%. That must be some kind of record.

The four-page USGS 2013 assessment does not provide more detail regarding TOC. It does not matter. But it does put the Bakken into perspective for some folks. Like me. [Ryder Scott, June-August 2011, Vol 14, No 2, states that "a total organic carbon (TOC) of 2 percent is considered a sufficient screening criterion for oil shale plays. However, both the Bakken and Arthur Creek ["Northern Territory, Australia] have been reported to contain much higher TOCs. Greater TOC and shale thicknesses are correlated to higher production." -- Ryder Scott. See comments below.]

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.