Oil Companies Develop New Technologies to Drive Production Costs Down in the Bakken
Located primarily in North Dakota, the Bakken shale is near the top of oil field production in the United States. Even though it was discovered decades ago, the oil did not become economically accessible until the development of hydraulic fracturing (fracking) and horizontal drilling. Estimates on oil yields for the shale play range from a relatively conservative 4.3 billion barrels all the way up to as much as 40 billion barrels. The remaining value of the region is projected at close to $118 billion.
Recent technologies and developments have significantly decreased the costs to drill and complete a well. Before 2011, the average well cost more than $10 million, which has dropped to between $7 to 8 million per well. Many companies are engaged in development and testing of new technologies and techniques in order to reduce costs and increase production even further.
Continental Resources, Inc.
As the top operator in the Bakken, Continental has done research and productivity testing that make their estimates for their five year plan seem modest. The company holds over 1.2 million acres with expectation that the position has vast resource potential. Plans for 2014 in the Bakken include 26 exploration wells in the Three Forks oil fields, as well as operation of around 22 rigs and completion of 287 net wells. Of the 287 completions, the company intends to test new design techniques to reduce costs on about 20 percent .
WPX Energy Inc.
Although WPX Energy has smaller acreage positions, the positions are more valuable on a per-acre basis. In the middle Bakken, WPX takes the lead in top cumulative production among the long lateral producers. The company’s oil production in the Williston Basin last year was up 39 percent over the year before. The average annual daily production for WPX was 136,800 barrels of oil from each well, 52 percent above the leading competitor’s average. The company credits the quality of the reservoir, and the construction and completion of the well designs.
Kodiak Oil & Gas Corp.
Most of Kodiak’s operations are centered on the Williston Basin of the Bakken, which caused a slip in overall fourth quarter production due to the weather. For the entire year, though, the focus on the Bakken resulted in a doubling of oil and gas sales to $904 million, with oil bringing in 95 percent of the revenue.
ConocoPhillips
As the largest independent United States exploration and production company, the company had impressive oil production, rising 60 percent for the year and hitting 30,000 barrels per day. Conoco continues to invest in the Bakken, believing that production may rise as far as 60,000 barrels per day in the next few years.
This is far from a complete list of the exploration and production companies investing successfully in the Bakken shale play. Other companies include Halcon Resources, Oasis, Marathon Oil and many more. Wood Mackenzie, the industry analyst, has made the 2014 forecast that the Bakken will see more than $15 billion invested on drilling and completions. In the Lower 48 states, only the Eagle Ford shale has a higher investment projection. Analysts expect an average oil production of 1.1 million barrels per day in 2014.
Joseph Barone
President
ShaleDirectories.com
610.764.1232
www.shaledirectories.com