Can the Bakken Production Rate Double?

Jim Brown
 
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Recent advances in drilling technology have cut the drilling time in half in the Bakken and drilling activity is exploding.

The Bakken has been the over hyped and mostly ignored play in North Dakota for the last couple decades. Contrary to some email hype circulated on the Internet the Bakken is not a new discovery. The new part of the equation is horizontal drilling. When they began to apply shale gas techniques to the oil layers in the Bakken it was the key that unlocked the basin and finally allowed it to get the attention it deserved.

Last week government and industry officials said they now believe the North Dakota portion of the Bakken, actually called the Williston Basin, could double production by 2020. Gas drillers are flocking to the Bakken in droves in hopes of producing oil at $90 rather than gas at $4 given the same amount of effort in drilling the well.

North Dakota Dept of Mineral Resources director, Lynn Helms, said the picture for North Dakota is very rosy. The state currently produces about 350,000 barrels of crude per day. That equates to 110 million barrels in 2010 and up from 79.7 million in 2009. Helms said they are hoping for 700,000 bpd in the next 4-7 years. North Dakota now supplies 6% of U.S. crude, up from 1% just three years ago.

Record rig activity has been increasing rapidly thanks to high oil prices and the technology improvements in drilling. Currently it takes only 25 days to drill a well compared to 65 days in 2008.

Federal and state estimates had previously said North Dakota's portion of the Bakken and underlying the Three Forks-Sanish formation could contain five billion barrels of recoverable oil when using horizontal drilling. Helms feel that estimate has more than doubled based on drilling success and current production rates. We are starting to see indications we could get 11 billion barrels.

North Dakota has about 5,300 producing oil wells. About 2,000 of those have been drilled in the last three years. The drilling rate has increased so quickly they are expecting 2,000 to be drilled in 2011 alone. They expect 200 rigs to be active in 2011.

About 95% of the rigs in ND are aiming for the Bakken and the Three Forks formations. Recent success rates have been about 99% with 90% profitable.

Wells in the Bakken are not big producers. Vertical wells historically produced about 125 barrels per day. Horizontal wells using new technology could pump up to 1,000 per day on a good well and a few have seen initial production as high as 3,000. Unfortunately depletion rates of up to 60% have been reported. Overall, having a string of wells that level out at 300-350 bpd is not a bad payday.

Jim Brown

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