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  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    Pablomike,

    I know you know this (but thought I would add for those that do not), but frac'ing has been around for a very long time. Because of this, there is a lot of data on it with respect to vertical completions. From what I have been told (by people much smarter than myself) is that those wells continue to produce and there is no reason to believe that horizontal wells would not produce as long. I would guess that liquids production will behave a little differently that gas dominant wells but production should last for a very long time. The one very important factor in decline rates of both vertical and horizontal completions are induced fracturing production versus matrix production. The induced fractures produce first at a very steep decline rate (what all the bears talk about). When those fractures created by the completions work stop producing in 3 to 6 years (I think this varies alot in geology and well design, so that time frame could possibly be wrong) matrix production begins and this has a very slow decline rate. The models I have done in the Bakken seems to suggest a rate of about 5%, but this could be a little high depending on well and where we are in the production life of the well. This slow and steady decline could continue for 30 to 40 years after. The problem with the argument of whether horizontal wells produce this long is we dont know. But, most geophysicists and petroleum engineers I talk to think it will. The research I have read seems to show that it is a good possibility, but I dont think anyone can say with all certainty that it will or will not occur. My guess is it will be a very long time frame that we will never get to. The main reason is refracs. Once all the core wells (pr before) are drilled we will probably see some significant refrac development programs to stimulate production from new induced fractures. The reason is simple, induced fractures produce significantly more oil in a very short period of time than waiting for matrix production to start. So operators will be motivated to see how many times a refrac can be done on each well to make it worth their while. So lots of production left on the table after the first completion is done. The big question is how many times we can refrac before it becomes unprofitable.
    Aug 12, 2015. 11:04 AM | 1 Like Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    scname,

    Of the results we have analyzed from different operators, depletion has been slower. This isn't because there is an immediate decline to production that is slower, but we are seeing several months to a year before we see any depletion at all. So the decline curve is pushed out a bit. Once the decline begins, we see what looks to be a consistent decline curve. We guess well pressures are kept higher, longer and this increases production in a big way. The chokes have been consistent, but I don't know if this is because the process is new and they haven't made changes to see its affect on production or if they aren't altering that part of the design on purpose.
    Aug 12, 2015. 01:10 AM | Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    Buck,
    I'm not sure when core acreage will be all drilled, but I'm pretty sure you don't know either. I appreciate the very broad estimates, but they mean little. What matters are well economics, because we invest in companies and their specific aspects. We could argue your peak oil theory all day long and really not get anywhere so my suggestion is to wait and see what happens with unconventional oil production. As for data, you don't have any. So you have little to back anything you are talking about. We have analyzed well results all over the US and analyzed those results based on all sorts of oil prices. How do you support your data that well completions make little difference in well results. We have seen huge increases in production from better well design especially comparing recent completions just to a couple years ago. These wells have been compared on the same section by identical and differing operators all over ND, Texas, etc.
    There are a few things you don't know with respect to the claims you have made. You don't know (anymore than I do) how long these wells will produce. It really doesn't matter if these wells produce for 40 years since half of the production will occur in under 4 years. You don't know how many times these wells can be refrac'ed, which will increase production from induced fracs, which is where the majority of production comes from anyway. Matrix production has a very slow decline, but this slower depletion occurs when production is much lower. There are vertically frac'ed wells that have produced for 100 years in the US, so 40 years isn't a major stretch of the imagination.
    Thank you for taking time to comment.
    Aug 12, 2015. 01:05 AM | 3 Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    buck000,

    I would agree with some of what you are saying, but many would disagree with well designs importance with respect to garnering more resource. If we compare some of the more archaic designs of the past we see much better results especially in core areas. Not only does well design improve recoveries significantly, this is magnified in the core leaseholds. The core may be limited in size but it is still a very large piece of real estate. We could add core areas outside the Bakken, like Eagle Ford, Permian, Niobara, etc. So there is still plenty of drilling to be done and deeper source rock to test. When these areas are all drilled up, production will dip and we will see oil prices recover making the marginal areas economic. There will be peaks and valleys along the way, but at today's prices the very good operators will do well, while the others go out of business.
    Aug 11, 2015. 03:57 PM | 1 Like Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    phaedrus,

    Thank you! That really makes the hard work worth it, but I have to hand it to Petro and Craig, these guys really know their stuff. Some of which I must admit, do not grasp. Over the years Craig has really helped me with alot of very difficult concepts, its great when people take the time to teach and provide knowledge for others with little asked in return.
    Aug 11, 2015. 01:16 PM | 3 Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    PEI,

    I remember when OXY thought the Dunn acreage was going to be a core play and really provide some production. Just too far south of the Anticline. I need a little education (and no need to go to in depth as I know you are very busy). How does OXY's Dunn acreage differ from that in Northeast McKenzie around Antelope Field. Does it have more to do with lower pressures, less natural fracturing, or both? Thanks ahead of time.
    Aug 11, 2015. 01:13 PM | Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    scname,

    As PEI said, this varies alot from one operator to the next, but one must consider not just the Bakken but also the Permian, Eagle Ford, Niobrara, Powder River, etc. So there are still a large number of wells to be drilled. I would say the E&P run will begin again in the future, but it will depend on when more than if.
    Aug 11, 2015. 01:11 PM | Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    Thanks Todd,

    We havent used the creaming curve yet, but have just started work on a project using it in our analysis. Thanks for the info, I think EOG just did one in Stanley and a while ago in west Williams. But we are just starting to get good data on areas outside of the Antelope and Parshall. I am real interested in the Riverview 102-32H, specifcally on how much mesh sand they used in that short lateral. Have a great day and thanks for commenting!
    Aug 11, 2015. 01:08 PM | Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    lol wut,

    Always great hearing from you. You never know, but I doubt that EOG is going to use 27 million pounds of sand outside its core areas. Even if they did its possible those areas would still have more production than 100MBo in the first year. I don't believe EOG has any producing wells this year, so far, that will not clear 100MBo in 12 months. We will have to see production out that far to know for sure.

    As for your doubts to whether EOG can sustain its success infill drilling, you don't know. You are just making an assumption about something you don't know instead of using data to back your assertion. Infill drilling can decrease recoveries per well, but completion designs will continue to improve and make up for these decreases just as they have in previous years.

    Lastly, you are missing the point of the article. In order to analyze why production remains high, one needs to focus on the wells that are being drilled recently. Operators are not drilling or completed marginal areas, so why would I include it in this article? Everyone knows there are bad wells out there. Every play has them. Even in Parshall Field there are bad wells if you go to far east. Geology changes and there is no consistency. Those areas need to be tested too, so play borders can be defined. So just because there are some poor results, doesn't mean it defines the play only shows where the marginal outer borders are. When operators return to marginal areas (when oil prices increase) we may have more to talk about. All there is now are operators drilling core acreage, unless the operator doesn't have any, but those aren't long for this market anyway.
    Aug 10, 2015. 10:15 PM | 3 Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    PEI and Craig,

    Excellent stuff guys, wish I got this type of commentary on all of my articles.
    Aug 10, 2015. 08:09 PM | 3 Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    rhiannion,

    Cushing is probably the largest area followed by separate locations along the Gulf Coast. As for security, im not sure.
    Aug 10, 2015. 03:42 PM | Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    Carl and Craig,

    Maybe he wants to hint that wells have the possibility of being much more tightly spaced because the induced fracs are better controled and dont reach as deep into the shale (that's kindof a question)? Although he probably knows natural fractures are bound to connect, maybe he thinks there could be interference by connecting the induced fracs, but not the natural fractures as much?
    Aug 10, 2015. 02:05 PM | 1 Like Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    Carl,

    You have a tendency to be very humble, which is good, but you have an excellent grasp of this subject matter. I really appreciate it when you take the time to help out! Have a great day buddy! We are lucky to have access to your knowledge!
    Aug 10, 2015. 02:02 PM | Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    Bearcatbrant,

    You are correct and most of those terminals sound like they are filling up from what we are hearing. If you dont mind doing some research, here is a link world oil terminals. If you are looking for data, at least this would give you a start as to where they are.

    http://bit.ly/1EjTi9S

    Hope this helps!
    Aug 10, 2015. 12:18 PM | Likes Like |Link to Comment
  • Bakken Update: Answers To Why U.S. Oil Production Remains High While Prices Tank [View article]
    Pablomike,

    There are a list of tankers here:

    http://bit.ly/1EjOgKH

    Hope that helps!
    Aug 10, 2015. 11:35 AM | Likes Like |Link to Comment
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