July 21, 2012: my hunch is that before this Bakken boom is all over, we will see a lot more activity in the oldest oil field in North Dakota, the Beaver Lodge oil field. This was an extremely productive oil field in the early years but relatively quiet in this boom.
- 22513, conf, Hess, BL-Amelia 156-95-1415H-1,
- 23191, conf, Hess, BL-Myrtrice 156-96-2536H-2,
- 23192, conf, Hess, BL-Myrtrice 156-96-2536H-1,
- 20820, 569, Murex, Jack David 8-5H, t11/11; cum 38K 5/12;
- 21140, 862, Hess, BL-Iverson B-155-95-0708H-1, t2/12; cum 41K;
- 21399, 55 (no typo), Hess, BL-Davidson 156-96-3526H-2, t1/12; cum 12K;
- 21400, 823, Hess, BL-Davidson 156-96-3526H-3, t6/12; cum 12K;
- 21411, 598, Hess, BL-Herfindahl 156-95-3031H-1; t5/12; cum 18K 5/12;
- 21412, 885, Hess, BL-Herfindahl 156-96-3031H-2, t5/12; cum 32K 5/12;
- 21818, DRY, Hess, BL-Iverson 155-96-1213H-2, s12/11; this was designed to test Bakken potential; problems with drilling at the kick-off point; abandoned;
- 21855, conf Hess, BL-S Ramberg 155-95-0601H-2,
- 21856, conf, Hess, BL-S Ramberg 155-95-0601H-3,
- 21944, conf, Hess, BL-Frisinger 156-95-2833H-1,
- How fast the well will pay for itself (to some extent, a function of the IP)
- The estimated ultimate recover rate (EUR)
- The likelihood that a given well will be dry
- If the well pays for itself quickly, it can offset a lower EUR.
- If the well produces more slowly, a higher EUR may make the well worthwhile
- And if there are "no" dry wells, that offsets either of the first two
I don't have the resources to sort out the math regarding how fast the early wells paid for themselves, or what the overall rate of return was, but given the current trend in the price of oil, one can look back at these "old" wells and compare them to what is going on in the Bakken.
Recently Murex reported three nice wells in the Beaver Lodge oil field in the Williston Basin. This is the oldest field in the Williston Basin.
Going to the GIS map server, one is struck by the number of wells drilled in that field and how very few dry wells there were.
Just out of curiosity, I took one of the sections in the Beaver Lodge oil field, and looked at total recovery to date.
I went to section 17 of T156N-R95W and looked at all the wells (I may have missed one or two).
Most of the wells are now permanently abandoned, although a few are still active. What was most interesting was that many wells were abandoned even though they were still producing at levels they had sustained for several years, suggesting the price of oil had bottomed out and the wells were no longer economic. I believe a lot of this occurred when really "cheap" oil was first being produced in Saudi Arabia, but I could be wrong.
Be that as it may, here are the file numbers, the formation, total oil produced, year spudded, and current status (PNA: permanently abandoned; or still on active and on pump):
- 88, Madison, 208,654, spudded 1952, PNA
- 122, Madison, 128,559, spudded 1952, PNA
- 152, Madison, 291,133, spudded 1952, PNA
- 182, Madison, 268,577, spudded 1953, PNA
- 204, Madison, 282,654, spudded 1952, PNA
- 296, Madison, 733,580, spudded 1953, PNA
- 325, Madison, 97,653, spudded 1953, PNA
- 388, Madison, 189,207, spudded 1953, PNA
- 1636, Devonian, 700,520, spudded 1957, pump
- 2092, Devonian/Silurian, DRY, spudded 1958
- 3901, Madison, 555,303, spudded 1965, PNA
- 4382, Madison, 121,055, spudded 1968, PNA
- 14915, Madison, 317,348, spudded 1999, pump
- 16786, Madison, 45,100 spudded 2007, pump
- 2462, 340/564, Hess, Beaver Lodge-Devonian Unit C-3051, Silurian/Devonian, t11/59; cum 706K/2.74 million bbls --> total, over 3.4 million bbls; was producing 4,000 bbls/month in 1997 when it was taken off-line; produced for almost 40 years;
These were, for the most part, all vertical wells, and relatively (compared to current Bakken wells) inexpensive to drill.
If the price of oil remains at the current level, I can only assume companies will go back into some of these legacy formations in the older fields. But they can't do it yet. They have too many Bakken wells to drill before losing leases.
Unless something incredible occurs/changes, it is very clear that the drilling in North Dakota will go on for some time, and will be very, very profitable.