Hamm won’t be dissuaded. He says no other company has studied the geology as carefully as Continental. It knows where the oil is, he says, so it’s simply a challenge of figuring how much it can get out, as quickly as possible, at the lowest cost.
The technology that may determine how long and strong the recovery can get is being tested on a 2-square-mile plot in the Bakken that Continental calls the Hawkinson unit. Here Continental is experimenting with a “full field” technique–densely packing wells so that each rig (Hamm has 20 in North Dakota) can do considerably more than the current average of 10 wells per year. On the Hawkinson unit it has already drilled 14 wells, out of a planned 32. The wells go down roughly 3 miles, then curve horizontally for another mile to intersect one of at least four layers of oil-filled dolomite rock sandwiched in between impermeable layers of shale.
The drillers use explosives to pop small “perforations” in the sides of those horizontal pipes, then blast down millions of gallons of water mixed with sand to pulverize the rock and open up fractures, enabling the oil to escape. The trick is to position the “laterals” directly into the middle of those rock layers, but just far enough away from each other that the fractures don’t overlap. If this density works, there will ultimately be room for at least 100,000 total wells in the Bakken. (Fewer than 7,000 have been drilled so far.) The implication: If you assume a conservative average of just 300,000 total barrels per well, the ultimate recovery from the Bakken could be 30 billion barrels. The U.S. uses 7.5 billion barrels per year. “Suddenly, you see the enormity of what we’re talking about here,” says Hamm.
The risk, of course, is that if these wells can’t churn out that kind of output,
source: Forbes May 3rd
If you assume a conservative average of just 300,000 total barrels per well, the ultimate recovery from the Bakken could be 30 billion barrels. The U.S. uses 7.5 billion barrels per year. “Suddenly, you see the enormity of what we’re talking about here,” says Hamm.
The risk, of course, is that if these wells can’t churn out that kind of output,
...............
I believe Hamm can do what he says he can do. That the numbers are what he says they are. There for the risk imho is that the price of oil will collapse. I don’t think that will happen in the next couple years because demand around the world is so strong, many oil fields around the world are old and in decline, fracking is difficult so the technology and infrastructure won’t jump to other countries for a couple years. So american frackers will have a free hand to increase US oil production for another 4-5 years. but somewhere +-2020—overseas oil producers will get the hang of fracking oil and volumes will go up worldwide—plus natural gas houses trains trucks and buses plus electric cars will finally clip demand enough to force down prices. Then for the next two decades there will be a steady crushing pressure on the price of oil. Luckily the first frackers to be taken out will be the overseas frackers who won’t be nearly as good as the likes of continental eog devon apache et al.
The EIA says that US oil production will peak out in 2015 about 9.3 million barrels @ day. I’ve long thought they were off. But not because I thought the Baakken or the Eagle Ford would peak out in 2015. I’ve believed that that was true. Rather I thought that the Permian Basin production rate increases would go parabolic starting sometime next year —because companies like EOG and others would transfer the skills they learned in the Baaken and eagle ford to the permian to ratchet up oil production.
But this article shows that the Baaken has a ways to go. If this is true for the Baaken its also true for Eagle ford and a host of others.