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In the first three parts of this series, I have attempted to show the article, "Is Shale Oil Production From Bakken Headed for a Run With the Red Queen?" is off base with some of its key points. Specific points I disagreed with were:

  1. Presently the estimated breakeven price for the "average" well in the Bakken formation in North Dakota is $80 - $90/Bbl In plain language this means that presently the commercial profitability for new wells is barely positive.
  2. The "average" well now yields around 85 000 Bbls during the first 12 months of production.
  3. There is a huge spread in well productivity, cumulative and decline rates amongst individual wells. I believe Mr. Likvern is mistaken that there are very few "big producers", and believe his study used companies that consistently underperform.

In Part 3 of this series, I focused on well results in 2011 around the Sanish Field in Mountrail County. I used this data to refute the assertion an average Bakken/Three Forks well yields around 85000 barrels of oil in its first 12 months of production. This number was found using Statoil (NYSE:STO), Whiting (NYSE:WLL) and Marathon (NYSE:MRO). Of these three operators both Whiting and Marathon have underperformed its competition. I believe this, coupled with 2010 well results produced a skewed representation of the Bakken/Three Forks. Since 2010, IP rates have improved significantly as companies have started to focus on vertical communication instead of well spacing.

Results from this article are focused in northeast McKenzie County. As with the last article, I will focus on 2011 well production, but only use wells that have at least 360 days of production. So no well will have an IP test date before January of 2011.

2011 Grail, Bear Den, Pembroke Field Well Results
WellOPDays120 Days360 DaysLateralStagesChokeWaterProppantCeramicSR
17722Helis5316980212901578652528/64301743926999651881864TF
19323Helis39713010725925994002826/64352277532856502597810TF
19104Helis461747711549169186 28/64
19273(NYSE:XOM)3823698973793104062424/6428955772622967SandMB
19049(NYSE:SM)5567337514782297782016/6426819101951589 TF
19110(NYSE:NFX)4607363612732895352936/6425802153460000 MB
20538XOM3783954011924996572410/6420579602347001640338MB
20096(NYSE:DNR)413354998276289772412/6425553193170200 MB
19890DNR457424229216894612418/6421373152391309 MB
19305DNR488479069705091022428/6416003742991800995500MB
20354(NYSE:CLR)418441269891497712412/6420656342365540674990MB
19326DNR453389799164590222424/64235604428879401725460MB
20097DNR3925341011222993932025/6425137803068687938939MB
19995DNR411516029922494312420/6421408652887940 MB
20012DNR382452269634193871920/6424433512959860 MB
19390SM51034149923495982130/6437937613179849 MB
19997SM5488104114516893202016/6430308433012225 MB
20862DNR3675217910445496702624/6425186392845230 MB
19433DNR4985184110180386362018/6419776992945305904362MB
19434DNR5025393910687099652324/6416034272941200 MB
19388CLR4555510110506999613020/6427438732850852782473TF
19897CLR3654223713948097493014/6423831462883075 MB
19586(NYSE:COP)5385767613394996962412/6421601912589423790004MB
19715CLR45260877103023965624 20756532335510652141MB
19712COP53549370902169597 12/64
19487COP4113842512691093682028/6413102961684170552220MB
18691NFX38310759218901453022636/6416580802228638 MB
19312(NYSE:HES)390660221167339342 24/64
19690COP3633966314489389891930/6424669102932394 MB
18012NFX4439828618183196263248/6424597292863959 MB
19889DNR4884972315060590461228/6421278982267142882000MB
19096NFX527559779433540541732/641156700179600 MB
19741Zenergy38364895113357100762822/6417499282358787 MB
20345 41179888142048944035181/64318857938574202297020MB
20026Zenergy400567409918194382622/6420764702119869 MB
19350Zenergy5135967011579995302530/6425948782347297 MB
18980Zenergy3829157816748494672648/6415691132244469 MB
19740CLR4025470713312596553012/6426161203013222 MB
19797CLR4356390113001794463018/6425071582798725820058MB
59511CLR4095951112930195603014/6425089212472897 MB
Totals 58791123640

The statistics from northeast McKenzie County were better than I expected. These results were better than wells in southwest Mountrail County. These results are independent of lateral length, and I would guess that if this was taken into consideration we would see Mountrail County's results improve significantly. The table above spans a very large area. From north to south there are 30 miles separating wells, and 19 miles east to west. All of these wells are on or west of the Nesson Anticline. All of these wells began producing in 2011. Below I listed other notable wells in northeast McKenzie County that did not fall within the guidelines used for the wells above.

Notable N.E. McKenzie County Wells
WellOPDays120 DaysTotal ProductionLateralStagesChokeWaterProppantCeramicSR
20589WLL31713897425145994133052/6413250881993820 MB
19680Helis3338786416703291442826/6433085062674660 TF
19898Helis31710900619851794562726/64338014433308263330826TF
21465Helis98 10889993502928/64339751635329913532991TF
22198NFX106 6795199363212/6426588193779287 MB

Northeast McKenzie County has areas every bit as good as Mountrail County. 20589 is one of the best wells here, if not the best well in the Basin. It is notable that Whiting produced this result while using lower amounts of water and proppant. The Helis results are some of the best Three Forks results, and more importantly better than the majority of middle Bakken results as well. Newfield continues to be one of the best operators in the Basin and has found ways to get the most from its wells. It has had problems keeping costs in check, but given the results this was warranted.

In summary, northeast McKenzie County has 2011 production close to that of Mountrail County. The data provided in this article used in concert with part 3 of this series shows a very large area with average first year production of over 120000 barrels of oil. This area runs from 12 miles north of Sanish Field southwest to Banks Field. These two fields are roughly 40 miles apart. This area stretches from Banks Field to the southeast ending another 40 miles to Bear Den Field. To the northeast of Bear Den Field there are 20 miles, and from Van Hook back to Alger Field another 20 miles. This is an area of significant size. Moreover, the almost the entire area has at the most one well per 640 acres. This is not the only very good area in the Bakken, but it does give an idea of the work yet to be done. For every 640 acres a conservative estimate (without including the Red River, and bottom 3 benches of the Three Forks) would be 4 middle Bakken and 4 upper Three Forks wells. If we presume one well has been completed in each and every 640 acres, 7 wells are yet to be drilled. Since the majority of wells drilled in this area have been from the middle Bakken, we will assume this is the case throughout. The average middle Bakken well in this area produced roughly 120000 barrels of oil in the first year. The average upper Three Forks well is 90000 barrels. The middle Bakken, per mile, would produce another 360000 barrels of oil and the upper Three Forks would produce 360000 as well. These 720000 barrels of oil at $80/barrel would produce revenues of $57600000. It is significant as middle Bakken wells are paying back in around one year using these parameters.

Source: Bakken Update: The Red Queen Is Just A Fairy Tale Part IV