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Case Study Of Another Bakken Shale Oil Well
1. The Whiting Fed 14-24H is a BIRDBEAR well, not Bakken. More specifically, the Middle Bakken (what most people mean when they say Bakken) isn’t even present where that well is drilled. The Middle Bakken has sub-cropped out. It does not exist. The Birdbear is below the Three Forks and interesting for many other reasons that don’t matter right now. Basically, for your ‘Case Study of another Bakken Shale oil well’ you picked a well drilled outside of the entire play.
2. Your production data is off, the NDIC states slightly different numbers, but your table is close enough. Your numbers have the same shape but are slightly higher so whatever.
3. Pertaining to this paragraph - “This well is the kind of best performing shale wells that the industry would love to pitch to investors. When it started, it was one of the highest producing well at the time. The well decline was also one of the slowest. First year production decline was only 55%. Compare that to the 80%-85% first year decline in the latest Bakken wells!”
3A This well isn’t even a Bakken Shale well, see above.
3B This well was not one of the highest producing at the time.
3C The well decline is slower initially because it is drilled in a totally different reservoir with different characteristics.
4. The breakthrough in bakken drilling techknology happened around the beginning of 2010. There are other areas that were profitable before then (Parshall), but that isn’t what everyone is excited about right now. Any well you use that is drilled prior to 2010 is not representative to what is happening in the play right now.
5. The reason Bakken Wells and all tight oil/gas wells have a hyperbolic shape is due to the low permeability of the reservoir. No one uses the classic Arps formula to forecast these wells. There are several ways to ‘modify’ the Arps formula to describe what is happening in low permeability horizontal wells. Basically you have a combination of artificial fracture contribution and whatever the natural rock gives you. Wells will always end up with a terminal decline, 6%-8% in the Bakken usually right now.
6. The phenomenon you see happening in ‘resource plays’ is no different than what has happened with any play since the dawn of the petroleum industry. Austin chalk, Spraberry, North Slope, Every offshore well…. for every amazing field or well drilled before the buzzword ‘resource play’ was ever spoken, there are probably 4 times as many dry holes. The industry is capital intensive and there are winners/losers; sweet spots/crap areas; good operators/bad operators; companies that work on cash flow (rare)/companies that borrow and spend. This constant cycle of risk, investment, success or failure is what keeps gas in our tanks and the modern age sustainable. Arthur Burman and you don’t know something that everyone else doesn’t.
I suggest you subscribe to the NDIC website. It is cheap and will blow your mind. Good luck.
Feb 5, 2013. 02:48 PM
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