Pending USGS Survey Of The Bakken / Three Forks -- June 16, 2018

Updates

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.

June 16, 2018: "baseline." IP30 data and well metrics update -- economics of the average well -- from SeekingAlpha. 

Summary:

• IP30 trends (oil) are shown for 17 Bakken producers
• additional well metrics and info is provided for major producers
• early 2017 data are discussed
• required WTI prices for certain IRR and cash flow levels are specified.

IP30: average daily oil production of a well in its peak production month. It's usually express in bopd. Oil includes condensate. The IP30 month follow the completion month with a lag of one to severl months -- so, the correlation between both numbers isn't perfect.

The official NDIC (North Dakota Industrial Commission) database lists 71 operators having drilled horizontal wells in North Dakota's Bakken. The table below shows average IP30 values and the associated number of wells for all active companies which had at least 40 IP30 wells since the beginning of 2014 and 10 wells with IP30 in 2016. They represent 97% of all horizontal wells.

Data for seventeen producers:

Oil & Gas Lease Results -- North Dakota -- May, 2018

Link here for May, 2018 (on-line).

Billings

• two tracts, 80 mineral acres each
• bonus: $2.00 / acre
• yes, you have have bought 160 mineral acres in the Bakken for $320

Burke

• twelve tracts, from very small 0.03 acres to 160 acres
• very small bonuses; largest $151/mineral acre

Dunn:

• one tract, 80 acres; $26 / mineral acre

Golden Valley

• fourteen tracts; several 160-acre tracts; average around $20 / mineral acre
• many winning Northern Energy Corporation bids

McKenzie

• ten tracts, most of them 160-acre tracts
• from $9 / mineral acre to $218 / mineral acre
• many winning Northern Energy Corporation bids

Mountrail

• ten tracts
• various sizes; many 80-acre- and 160-acre tracts
• from $2.00 / mineral acre to $1,001 / mineral acre (I imagine that individual that bid $1,00 / mineral acre is really, really upset)
• many winning Northern Energy Corporation bids

Stark

• five tracts, all except one, 80 acres; the fifth, 75.41 acres
• $12 / mineral acre to $21 / mineral acre
• many winning Northern Energy Corporation bids

Is The Bakken Upside Capped? Another Look, Six Months Later -- June 16, 2018

Re-posting:

From The Bismarck Tribune:

North Dakota oil production jumped 5.4 percent in April to more than 1.2 million barrels per day, coming in just shy of the state’s record.

Director of Mineral Resources Lynn Helms called it a big surprise to see production levels within 2,500 barrels of the all-time high of nearly 1.23 million barrels per day.

“We were not expecting that kind of a surge until late May, early June,” Helms said Friday while discussing the preliminary figures.

Natural gas production increased 7.4 percent in April, setting another record at more than 2.24 billion cubic feet per day.

Do you remember this absurd BTU Analytics article? I'm not sure I ever posted the link; the article was simply too absurd. Or maybe I did post the link before but I can't find it now. Whatever. From the linked absurdity:

The recent announcement of Oasis Petroleum’s Delaware Basin acquisition marks another major Bakken producer re-positioning to focus its growth capital outside the Williston Basin.

What do these shifts signal about the future of the Williston Basin?

By choosing to look for growth elsewhere, Oasis answered two related questions: how it plans to increase its inventory of ‘premium’ well locations as well as where the company views its best opportunity for low-cost production growth.

Because one of the largest Bakken pure plays chose this route, does it mean that Bakken upside is capped?

One concern mentioned by Bakken naysayers is that ‘premium’ inventory is running low, particularly compared to the opportunity set in other basins. BTU developed a new, well inventory model using the actual location of previously drilled wells, along with spacing, lateral and drainage assumptions to calculate remaining locations in each major shale basin, as featured in the most recent E&P Positioning Report.

The chart below shows the remaining locations in the Bakken by breakeven band compared to BTU’s forecast for well completions in the basin. In addition to having less than 250 remaining locations that breakeven below $30/bbl wellhead, more than 70% of locations that breakeven below $50 will be exhausted over the next five years.

Screenshots from the article:

The DAPL May Have Saved The Bakken -- June 16, 2018

If one considers what happened between 2014 and 2016, both nationally and internationally, one can make a case that the DAPL may have saved the Bakken, no thanks to Standing Rock.

Link here.

Almost without notice, an important anniversary came and passed recently.

On Friday, June 1, the Dakota Access Pipeline marked one year since the pipeline successfully began transporting Bakken crude from near Stanley, North Dakota to Patoka, Illinois.

How could we miss the anniversary for a pipeline that sparked intense protests and the world’s attention for nearly an entire year prior to operation?

The answer is relatively simple. Pipelines, despite the propaganda against them, offer relatively uneventful daily operations. They quietly move materials like crude, natural gas, water, CO2 and refined products across the United States with only rare  significant issues. In fact, 99.999 percent of petroleum products get to their destination without incident and the pipeline industry has proven its commitment to making that number even better with a decline in incidents of over 50 percent since 1999.

Re-posting:

From The Bismarck Tribune:

North Dakota oil production jumped 5.4 percent in April to more than 1.2 million barrels per day, coming in just shy of the state’s record.

Director of Mineral Resources Lynn Helms called it a big surprise to see production levels within 2,500 barrels of the all-time high of nearly 1.23 million barrels per day.

“We were not expecting that kind of a surge until late May, early June,” Helms said Friday while discussing the preliminary figures.

Natural gas production increased 7.4 percent in April, setting another record at more than 2.24 billion cubic feet per day.

And then this, link here:

 For more on the Legacy Fund, click on the "Legacy Fund" tag at the bottom of the blog.

Bakken Well Vs Permian Well: Almost 3X More Crude Oil Per Well -- June 16, 2018

Link here.

The numbers speak for themselves. No comments necessary. For both oil and natural gas, the Bakken is beating the Permian.

Oil: 3x

Natural gas: close but about 1.5:1.