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April 03, 2008

Bakken oil from USGS 1995 and decline rates


Here is a picture of the geological layers and formations in the Williston basin (where a potential very large oil resource called the Bakken formation is located).

I have previously discussed the great potential of the Bakken oil resource.

This information is from the 1995 US Geological Survey (USGS) of the area.

A new USGS report is expected to be released this month (April, 2008).

UNCONVENTIONAL PLAYS, Continuous Type By James W. Schmoker (pages 9-17 of the 1995 USGS report)

3110. BAKKEN FAIRWAY PLAY
3111. BAKKEN INTERMEDIATE PLAY (HYPOTHETICAL)
3112. BAKKEN OUTLYING PLAY (HYPOTHETICAL)

Available evidence indicates that the Bakken Formation of Montana and North Dakota has generated hundreds of billions of barrels of oil. The overall Bakken unconventional continuous-type oil play is bounded on the north by the Canadian border (a political rather than geologic boundary), on the east, northwest, and west by thermally controlled limits of oil generation, and on the southwest by the Bakken subcrop. Within this area, the Bakken Formation is considered to be oil saturated. However, drilling and production data indicate that this entire area cannot be characterized by a single play probability, success ratio, and estimated ultimate recovery probability distribution. Consequently, the overall Bakken play is partitioned into three smaller plays--the Bakken Fairway (along the southwest subcrop), Bakken Intermediate, and Bakken Outlying Plays (3110, 3111, and 3112, respectively).



The Bakken (Spanish Pool) wells in the Antelope field area have produced about 12 million barrels of oil. As of July, 1993, 161 vertical Bakken wells (excluding the Spanish Pool) have produced 10,320,000 barrels of oil, and 202 horizontal wells have produced 12,233,000 barrels of oil. The Bakken Play is far from exhausted. Potential additions to oil reserves are measured in the hundreds of millions of barrels, in contrast to the tens of millions of barrels produced to date. Full realization of these potential reserve additions will probably depend upon improvements in technology, economics, and geologic understanding.


FURTHER READING
In 2007, North Dakota produced about 5 million barrels of oil from the Bakken oil formation (about 13500 barrels of oil per day), Montana about 50,000-60,000 barrels of oil per day and Saskatchewan about 30,000 to 40,000 barrels of oil per day.

There is a lot of drilling activity, but large scaling up of production will require new pipelines to be built and new refineries, which will take about five years.

Bakkenshale blog has a couple of useful tables that analyze the decline in production for wells that are being drilled in the Bakken oil formation.

The initial production (IP) decline chart with cumulative production thru January 2008 shows the average production over a longer period is about 60% of what is produced in the first month.


There is a discussion group on Bakken oil.

You need 18 to 24 months of production to get a good feel for what a well is going to ultimately produce.

It appears that if you average the first 2 to 3 months of "flush production", the typical well might be producing 50% of this average amount in 10 months to a year. After 15 to 18 months in appears production has leveled off at a rate of about 25-30% of the first 3 month average (with little regard to the IP rate). Hopefully the decline from this point forward will hold at about 10%-15% per year.

The obvious exception to the scenario is the Petro-Hunt USA 2D in the Charlson area. It's reported IP was 700 barrels per day. It's 16 month total production is 378,536 barrels and the most recent month production was 1000 barrels per day.

Other cautions on every well: did they stay "in zone" while drilling; did the zone get damaged while drilling; did the direction of the lateral section optimize natural fracturing, did the frac job get into the intended zones, and on and on. We'll all be wiser in a few years as this data base grows and learning curve goes higher.

This is a play brought on by technology: horizontal drilling and fracing. Both of these will only get better and we've just scratched the surface of the Middle-Bakken potential. Who knows where the Three Forks will take us.


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