One-Sixth Of The Bakken/Three Forks Have Been Drilled -- NDIC, August 15, 2015

Updates

August 16, 2015: I lose track of things in the Bakken. I vaguely remember blogging about a staggering number of wells that would be necessary to drill out the Bakken. When I wrote the original post (below) and then the update yesterday, I thought I was missing something. I knew I was one of the first to suggest 48,000 wells would be needed, but I also knew that I had posted a much bigger number, but just couldn't find it yesterday.

At the height of the boom, 2010 - 2014, things were moving so fast in the Bakken, it was hard to keep track of everything, but I knew I had blogged a number much bigger than 48,000 and a number much bigger than 60,000 -- the number of wells necessary to drill out the Bakken.

I stumbled across one such post (but there are others, and if I find those posts I will post them. Anyway, back on April 11, 2014, it was suggested that as many as 120,000 wells might be necessary to drill out the Bakken before it's all over.

August 15, 2015: the Bakken boom began in 2007. It's taken almost eight years to get to 10,000 wells, one-sixth of what is projected to drill out the Bakken. The early years did not see as many wells as in the 5th and 6th and 7th years, but now with the price of oil, the number of wells being drilled will also decrease. So, let's say it takes about five (5) years to drill 10,000 wells (2,000 wells/year -- which is about right). One-sixth of all wells takes five (5) years; that means about 25 more years of drilling, taking us out to 2040 of active drilling the Bakken / Three Forks. My hunch is that it will take a lot more than 60,000 wells and a lot longer than 25 years of drilling.
 

Original Post

 

If I ever run across my early posts suggesting that it would take upwards of 48,000 wells to drill out the Bakken I will link them again for archival purposes. I can't recall if I ever suggested more than 48,000 wells, but this was at a time when they were looking at significantly fewer, maybe 20,000 wells (which looking back is incredibly hard to believe).

Today there is an article in The Dickinson Press suggesting it will take 60,000 wells to drill out the Bakken/Three Forks and to date, 1/6th have been drilled.

I wrote Don:

I have a PowerPoint presentation from April, 2013, by Rollefstad (Williston's economic director at the time). If I remember correctly, this was one he posted and then quickly took down (I think there were some "borrowed" slides from corporate presentations he realized he could not use), but fortunately I saved it.

This was back in 2013, his projection, based on 4 middle Bakken wells in each 1280-acre unit; and, four TF wells in each 1280-acre unit, it would take 50,000 wells total.

This was before they even talked about a) lower TF benches; b) mega-fracks.
At the right price, most of the Bakken, even the outlying areas will have 4/4 (MB/TF) wells in each 1280 and in the sweet spots, way, way more.

This will be another good article for the archives.

At $15 oil, they've probably drilled every well they will drill in the Bakken.

At $150 oil, my hunch is they will drill a few more than 60,000 before it's all over.

At the linked article:

Oil companies have drilled one-sixth of the potential Bakken and Three Forks wells in North Dakota, exceeding 10,000 wells in the shale formations for the first time in June.
The state’s oil production rose slightly in June to more than 1.2 million barrels per day, the second-highest production month behind only last December, the Department of Mineral Resources said Friday. 

The nearly 1 percent increase in oil production was driven by companies that were aggressive in fracking and completing oil wells in June, Director Lynn Helms said.
Helms said the current number of active drilling rigs - 74 on Friday - and the inventory of wells that needs to be completed is sufficient to maintain production of 1.2 million barrels per day for 24 months. 

“We think that we’re in a period of sustained low prices. It could last two years,” Helms said. “The capacity is there to maintain North Dakota production for a full two years even at these sustained low prices. It’s going to be a long, difficult period.”In June and July, the department saw a surge in drilling permit applications with operators optimistic about oil prices, Helms said.

But "everyone" (I assume) expects things to get worse before they get better.

Everything else in the article can be found at the Director's Cut.

However, there is one huge data point in this month's Director's Cut (June, 2015 data) from previous data points.

Previously, Mr Helms said it would take 110 - 120 completions each month to maintain production near 1.2 million bopd. This month he did not say the number of completions required, but instead said that "the current rig count [around 72] plus NC [DUCs] well inventory is sufficient to maintain 1.2 million bopd for 24 months.

Samson Resources Seeks Bankruptcy Protection; Saturday, August 15, 2015

Unless there's some kind of miracle, it looks like Tiger Woods will miss the cut at the PGA Championship.

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Bakken

A reader reminds me about the "webinaires" posted by NDIC. In the July video, the reader notes:

• Bakken production can maintain for a couple years using inventory of DUCs;
• there is about a 1% drop in liquid oil volume is estimate from the new stabilization rules. Also, this is part of the reason why gas has grown. (Moving light ends out of the crude and into the gas plants.); and, 
• a few other things like the Lake Sakakawea pipeline, etc.

A big "thank you" to the reader for reminding me. 

Samson Resources files for bankruptcy protection. The Wall Street Journal is reporting:

KKR & Co.’s Samson Resources Corp. plans to file for chapter 11 bankruptcy protection by mid-September after finalizing a restructuring plan with key lenders Friday.
The filing would represent the biggest corporate casualty yet of a slump in oil and gas prices and another black mark in energy for the private-equity pioneer.

The Tulsa, Okla.-based oil and gas producer agreed to hand ownership to a group of its lenders in bankruptcy, the company said in a statement Friday, confirming an earlier Wall Street Journal report. The move would wipe out the roughly $4.1 billion in cash KKR and its partners invested in the company. The private-equity firm led a $7.2 billion leveraged buyout of Samson in 2011, the biggest-ever such deal for an oil and gas producer.

Samson’s board approved the restructuring agreement Friday afternoon, according to a person familiar with the deal.

The energy producer intends to skip a bond payment due Monday and use a 30-day grace period to seek broader creditor support for its plan, the company’s statement said. Chapter 11 of the bankruptcy code allows companies to restructure debt and take other steps to improve their finances.

Back in April, 2015, FuelFix reported this was likely to occur.

Meanwhile, Back In Iraq -- August 13, 2015

Reuters/Rigzone is reporting:

Islamic State militants attacked the outskirts of Iraq's northern oil refinery town of Baiji overnight with car bombs and clashed with the army and Shi'ite militias in the town's western districts, the local mayor and security sources said on Friday. The town of Baiji and its refinery - Iraq's largest - have been a battlefront for more than a year. 

The hardline Islamists seized the town in June 2014 as they swept through much of northern Iraq towards the capital Baghdad. Control of Baiji neighbourhoods has changed hands many times during the conflict. Authorities said last month they had recaptured most of the town, but the radical jihadist group attacked central neighbourhoods days later, forcing pro-government forces to pull back.

At least three militia fighters were killed on Friday when Islamic State launched car bomb attacks against a makeshift headquarters in al-Rayash, about 18 km (5 miles) south of Baiji, a militia leader and a source in the Salahuddin Operations Command said.

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A Note to the Granddaughters

I remember my mom talking about one of her favorite cousins when I was growing up. That particular cousin had married a car salesman and had moved to Kansas City. There was something about Kansas City that attracted my mother; I have no idea what it was. But it was an important city for her.

While reading Stephen Fried's Appetite for America I may have stumbled on to a bit of background that might explain some of the attraction.

By 1905, Kansas City, the former "City of Kansas," was starting to fulfill its dreams of being thenext Chicago -- the second city's second city....Kansas City was now one of the twenty-five largest cities in America. It had a population of over 165,000, and it was growing rapidly.

That was back in 1905. My mother wasn't born until until twenty years later, but I'm sure Kansas City continued to grow during that time -- in fact, it became the major transit city for soldiers during WWI -- more on that later -- and by the time she was a teenager, she probably heard her folks talk often of Kansas City.

But now it makes even more sense. When the US entered WWI, all US railroads were taken over -- "federalized" -- by the government, under an executive order by President Wilson.

The Kansas City Union Station became the primary crossroad for troops, who spent their layovers getting assistance from the famous Red Cross station in the main concourse, and enjoying discounted meals at the Harvey lunchroom across the way.

My grandfather -- your great grandfather Ekke ("Ike") was sent to France in WWI. He was sent "too late" to see any fighting, and I can't recall if he came down with the 1917 pandemic flu, but I believe he did (I will check on that later). Regardless, it is most likely he, too, transited through Kansas City and that's probably the nostalgic connection my mom -- your grandmother -- had with Kansas City.

With her memory loss she probably does not remember, and years ago when she would have remembered, she was too private a person to talk about anything in her past. So, we'll never know.

Week 32: August 9, 2015 -- August 15, 2015

The Director's Cut came out today. Unexpectedly, daily production increased month-over-month, hitting second highest monthly production ever. Mike Filloon had a piece on why Bakken production remains high despite the low price of oil.

Unfortunately, the price for Bakken oil has hit an all-time low since the boom began.

If one wants to, one can take one's mind off the plummeting price in oil by following the Katie Ledecky story. 

Operations
Random look at a huge CLR well in Alkali Creek 
Whiting with three more big Tarpon Federal wells; HRC with a big well 
Three new Whiting Pronghorn Federal wells in Park oil field 
EOG's Riverview wells in Clarks Creek
Mike Filloon on EOG's super-long, super-productive wells

Photographs
Vern Whitten's "Summer in Western North Dakota"

Bakken 101
BR's Upper, Middle, and Lower Three Forks
Core and Sample Library of North Dakota
Meandering on the Bakken

Conference calls
Oasis 
EOG 
CLR

Miscellaneous
CLR's STACK in Oklahoma 

No New Permits (?) In North Dakota -- August 14, 2015

Updates

August 15, 2015 (Saturday): isn't this interesting? Yesterday's NDIC daily activity report clearly stated there were no new permits issued.  However, a sharp-eyed, and no doubt, a very curious reader took a look and noted that, in fact, thirteen (13) new permits have been added to the list since Thursday, so either they were added Friday, or they were added early this morning (on a Saturday):

• Operators: CLR (8), XTO (4), QEP
• Fields: Sanish (Mountrail), Lindahl, McGregor, Grail
• Comments: CLR's eight (8) permits are all Corsican Federal permits in the Sanish 

For more on these new permits, see this post.

Original Post

 

This is a first for North Dakota since the boom began in 2007. I'm sure it's happened before but I'm not going to look for an example.

There were no new permits for oil and gas wells issued today.

There were no producing wells completed.

Other than the previously announced wells that came off the confidential list, there was nothing additional except a couple of permit renewals, and a couple of well name changes.

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Holy, Huron, Batman!

Great Lakes Rising!

Link here.

Maybe this is why Al Gore is considering a presidential run, according to the climate change theorists the water levels of the great lakes are supposed to be going down, but they are going up much to the chagrin of the global warming freaks.

"Faster than ever before.” That’s how one headline from the Weather Channel described current changes in Great Lakes water levels (see video below). But the article itself acknowledged that Lakes Huron and Michigan, which come together in the Straits of Mackinac and so are considered one lake by hydrologists, actually rose faster 65 years ago. So why did the headline writer call the current rise “faster than ever before?"

Those who believe in the climate change hypothesis have been blaming below-average Great Lakes water levels on warming. "Although the period from 1999 to 2013 set fewer records than previous low-water spells, it was repeatedly portrayed by environmentalists and their media allies as clear evidence of climate change."

But in the second half of 2013 their claims started to get all wet as the water began to rise but as they usually do instead of recognizing the truth--that their claims were nonsense, the climate change freaks now said the increase was evidence of an “extreme weather phenomenon” caused (of course) by global warming.

The warmists can explain anything on global warming.

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Los Angeles Times Can't Comprehend The Dollars Involved
Our Next President?

My hunch is that the Los Angeles Times did not catch this error. This was probably caught be a reader. According to wiki: The overall median income for all 155 million persons over the age of 15 who worked with earnings in 2005 was $28,567. This source suggests the mean (average) American income is slightly below $70,000. Times 5 = $350,000. Business Insider reports that Hillary Clinton, after leaving the State Departmetnt:

During that time, she made nearly $12 million by charging fees that topped $335,000 for dozens of speeches.

$12 million in speeches / $70,0000 = 170 times the average annual American income ($70,000). And that's just speaking fees.