Are Mountrail’s Sweet Spots Past Their Prime?
This post is an update on total Light Tight Oil (LTO) extraction from Bakken in North Dakota based upon actual data as of October 2014 from North Dakota Industrial Commission (NDIC). It further presents a statistical analysis on developments of well productivity with a detailed look at developments in Parshall, Reunion Bay and Sanish.
- There were general improvements in LTO well productivity in Bakken during 2013.
- Present trends in LTO well productivity for Mountrail’s sweet spots (Alger, Parshall, Reunion Bay, Sanish and Van Hook) suggests these are past their prime.
- Figure 29 in this post show development in well productivity for Alger and Van Hook and figures 06, 08 and 10 for Parshall, Reunion Bay and Sanish. A common feature for Parshall, Reunion Bay, Sanish, and Van Hook is that these reached new highs in well productivity for wells started in 2013.
Alger has been in general decline since 2011.
- LTO extraction in recent years may be viewed as a source for global swing production for oil.
NOTE: Actual data used for this analysis are all from North Dakota Industrial Commission (NDIC). Data are incomplete for around 2% of the wells.
For wells on confidential list, data on runs were used as proxies for extraction.
Production data for Bakken, North Dakota: Monthly Production Report Index
Formation data from: Bakken Horizontal Wells By Producing Zone
The important messages from this analysis are the trends in well productivity.
This post is an update and expansion of my post “Will the Bakken “Red Queen” Have to Run Faster?” from the summer of 2013 and may be read as a continuation of my post “Will the Bakken Red Queen Outrun Growth in Water Cut?”.The chart shows the rapid decline in LTO extraction by vintage.
What is the month over month legacy decline in total LTO extraction?
The month over month total decline for LTO extraction wobbles around due to seasonal effects, differences in productivity of the wells started in any month, variations to when in the calendar month the wells were started and number of days of the month.
Measurements from actual data showed that the smoothed month over month legacy decline varied between 5 – 6%.
From figure 03 it may be observed that the legacy decline rate slows with time.
How many net producing wells needs to be added to sustain the LTO extraction level from October 2014?
In October 2014 total LTO extraction from the Middle Bakken and Three Forks formations in North Dakota was 1.12 Mb/d.
The “average” well, so far in 2014, had a first month flow of 486 b/d.
This works out to a need of net monthly additions of 115 – 135 producing wells to sustain the October 2014 extraction level.
LTO extraction from Bakken in North Dakota really took off in Mountrail, which as of Janaury 2010 had around 60% of total LTO extraction.
In Mountrail the growth in LTO extraction in the second half of 2013 coincided with the improvements in well productivities re also figures 06, 08 and 10.
The data show that the best wells came early, those started in 2008. Then follows 2013 (refer also figures 06, 08 and 10).
So far “average” 2014 wells in Mountrail have been poorer than those started in 2013.
The wells in Parshall are very good LTO producers.
Parshall covers an estimated area of 300 square miles (1 square mile = 640 acres) and had 340 reported flowing wells as of October 2014.
So far it appears the best wells in Sanish was brought to flow during the first half of 2010. In Sanish wells with less than 6 months reported flow have totals close to those with more than 6 months flow started in 2014. The well productivity appears to have flattened.
For Reunion Bay there was a gradual improvement in well productivity starting in the second half of 2010. As of recently this productivity has remained fairly stable.
The correlation analysis includes around 3,600 wells started in 2010, 2011 and 2012.
Distribution of LTO Wells by Vintage
Initial Production (IP), 30, 60 days flows is short term and early indicators that give away some information about a well’s productive potential, but shows poor correlations with long term well productivity developments.
The focus on short term performances should be considered with some reservations.
Our societies depend on long term predictable flows of oil and its affordability. Short term fluctuations may obscure worrisome underlying trends that easily become drowned out by noise, thus obscuring THE SIGNAL.
The distribution of wells productivity begs the question about how much this is influenced by the oil price, well design and geology. Improvements in well design have so far resulted in improvements in well productivity, but as demonstrated in this post water cut has increased, suggesting more recent LTO extraction comes from formations with lower oil saturation.
Correlation analysis, how the length of the time series improves accuracy
The correlation analysis includes around 3,600 wells started in 2010, 2011 and 2012 and that had 24 months or more of reported flow.
The linear fits show that wells started in 2012 were poorer than in previous years.
Figures 13, 14 and 15 shows that correlation improves with the length of the LTO extraction time series thus improving the predictability of the wells’ productivities.