Older Bakken horizontal wells did not have the production potential of newer wells. As you point out newer wells are longer and have more frac stages. Additionally I think it’s safe to assume they have improved the frac quality itself. So a new horizontal well should have a much better production profile than an older well.
Which is why it’s so freaking important for folks to look at Rune’s chart above so closely. It shows the productivity of the Bakken wells in discrete time frames. If I’m reading the chart correctly the new better improved (and more expensive) Bakken horizontal wells are not producing like wells drilled some years ago: they are not as good as the older wells. For example Bakken wells drilling during the summer of 2010 recovered about 110,000 bo during their first 12 months of life. Wells drilled December 2011 produced 90,000 bo their first 12 months. And wells drilled during July 2011 produced closer to 80,000 bo their first 12 months.
So as knowledge of the trend increased and companies drilled longer, more heavily frac’d and much more expensive wells the quality of the production decreased. Above I said the potential of new wells is greater…not the actual production. The simple explanation IMHO is that the better areas of the trend have been drilled and now operators are moving into less productive areas. And even though they are drilling wells that should produce better results than the early wells they are actually producing poorer results.
And this the path that every trend in the history of the oil patch has followed: the better acreage is drilled first. And even as the technology improves, the rocks don’t. We have to spend more money to produce less hydrocarbons. What shocks me a tad is to see how quickly it has shown up in the Bakken. About 30 years ago I was typically drilling 12,000’ wells to test potential conventional NG reservoirs that might cover 1,500 acres. In the last 3 years I‘ve been drilling 16,000’+ wells (that can cost 2X what a 12,000’ well costs) for potential NG reservoirs that cover 120 acres. But that transition happened over a 30 year period. The Bakken transition, if it continues to decline at the current rate, will be the most dramatic transition I’ve seen in my career.
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