PN Bakken: ‘Wake-up call’

Petroleum News ^ | Week of January 20, 2013 | Ray Tyson

[HiTech RedNeck]

Et tu, Brute? -- Shakespeare, Julius Caesar

Winter storm Brutus hits, the place temporarily loses its staffing (even hardy guys have a limit to how hardy they are) and output suffers, and oh heavens the sky must have fallen.

What's this meshugas??? (Craziness)

[wild74]

Going to have to get some major oil & gas pipelines up in that area, shipping the oil by rail will not be enough with the production increases.

[Don Corleone]

Another , “Unexpected?”

[cardinal4]

Bakken is not going anywhere. If anything, there is not enough infrastructure to keep up with production. The cold weather decrease means nothing in grand scheme of things..

[Owen]

They drill about 140 new wells per month. Each of those starts producing oil at about 1200 barrels per day.

But the MOST IMPORTANT parameter is not being advertised. That is that every single well they have drilled starts to decline its output as soon as it starts. There is talk of 30% decline rates/year. That means that 1200 bpd is down to 650 in just 2 years.

The reason that is the MOST IMPORTANT parameter is that there are 4000+ wells declining every single day and they add only 140 new ones per month. This is sprinting up a down escalator whose steps are moving downward at an increasing speed.

You can outdrill that acceleration . . . for a while. But it’s important to understand every such month that goes downward in production is several feet downward on the accelerating downward escalator that has to be made up by even faster sprinting.

This is not a good miracle to bet the nation’s life on.

[thackney]

” Underground pipelines to transport warm fracking water to drill sites, rather than by truck, would help alleviate the problem,

That sounds like nonsense to me.

Why would you build underground pipeline to a well site that needs hydraulic fractured ONE TIME, then not again for years or even more than a decade? Are they fractured at any real frequency in the Bakken?

[South Dakota]

Well said. The fact is the wind and snow made travelimg almost impossible.
My company shut us down.

Frac here then frac there. It takes them longer on the bakken sometimes. I don’t know why.

On the jonah natural gas fields slumber j would set up on one location and run tubing to frac many wells from the same locatiom

[marron]

Just shows the need for pipelines. There are several more pipelines underway. Meanwhile, a winter storm can affect the numbers. Its life in the oil patch.

[Cicero]

Cold weather in North Dakota in mid-winter. Who’d’ve thought it?

Seriously, if companies can work in Alaska, they can learn to work in North Dakota. It will just take a little experience and a little adjusting to conditions.

[Dusty Road]

Some of us are old enough to have seen this several times, different plays play out, nothing last forever but it’s amazing how some things last. I’ve got Wolfcamp wells on the south end of the ranch that are over 50 years old that still make a few barrels a day (enough to keep them running). I’ve got Canyon Sands Wells on the north end that come in with 300 to 400 barrels a day but drop of to 15 or 20 within a year. Our upper section Cline Wells north of town are comming in at 400 to 500 per day with some still holding over 100 after a year. The well we’re drilling now is for the lower level Cline and we’ll see what this one does. On the Cline wells we’re making good wet gas and allot of it.

[thackney]

Each of those starts producing oil at about 1200 barrels per day.

That sounds like a lot higher than the typical well. Or if they start anywhere near that point, they fall down fast. The average for the first 60~90 days is 234 barrels per day according to the North Dakota Industrial Commission, Department of Mineral Resources, Oil and Gas Division.

First 60 - 90 Day Average Bakken Pool Production by Well
https://www.dmr.nd.gov/ndgs/Publication_List/pdf/geoinv/GI-123.pdf

There is talk of 30% decline rates/year.

There is more than just talk. The initial data is even worse.

Source for Graph:
North Dakota Department of Mineral Resources
https://www.dmr.nd.gov/oilgas/presentations/WBPC2011Activity.pdf

[Owen]

Good data:

“I’ve got Canyon Sands Wells on the north end that come in with 300 to 400 barrels a day but drop of to 15 or 20 within a year.”

That’s maybe an average of 200 barrels a day for the year as it declines. That’s 73000 barrels at $80/barrel or $5.8 million coming out of a well that cost what, $15 million with infrastructure? These had better be rare.

[thackney]

BTW,

I do realize the first and second data sets do not match with each other. Both are from ND government. ???

[Owen]

Nod.

There’s oil there and jobs, but this is the most overhyped crap in the history of an industry built on overhyped crap.

That place is going to go into freefall production-wise and the day it is clear “tight oil” is not going to be anyone’s salvation, Brent will go to $200.

[E. Pluribus Unum]

The reason that is the MOST IMPORTANT parameter is that there are 4000+ wells declining every single day and they add only 140 new ones per month.

"Drainage! Drainage, Eli! Drained dry, you boy! If you have a milkshake and I have a milkshake and I have a straw and my straw reaches across the room and starts to drink your milkshake. I drink your milkshake! I drink it up!"

[Dusty Road]

No sir our wells are running us about 2.5 to 3 mil per, thats flowlines and battery’s. We’re not drilling horizontals. We ain’t up with the big dog’s just yet.

[Dusty Road]

Well I can’t drink your milkshake but I might get a little taste as long as it’s within my 40 acres. TRRC frowns on poaching.

[E. Pluribus Unum]

When I suck it up my straw on my 40 acres, capillary action sucks it from all the surrounding 40-acre parcels.

[43north]

“Seriously, if companies can work in Alaska, they can learn to work in North Dakota.”

I worked in the Alaska North Slope oil patch for 26 years. Bad weather is nothing new. Production goes up sometimes but it inevitably goes down. That’s just the way it is.

Oil wells typically produce large quantities of oil right after they are drilled, then gradually taper off. By that time all of the big expenses have (hopefully) been paid for. They do not get capped unless the operating expense exceeds the value of the oil being produced.