Continental president outlines past, present, future of Bakken

By Luke Geiver | September 28, 2016

The Bakken has become the template for developing tight oil plays, according to Jack Stark, president and COO of Continental Resources, and although the Oklahoma-based exploration and production company is finding success in other plays, the company will be in the Bakken for years to come. According to Stark, roughly two-thirds of Continental’s total production comes from the Williston Basin. During the recent North Dakota Petroleum Council Annual Meeting, Stark provided a luncheon keynote on Continental’s perspective on the past, present and future of the Bakken.

The Bakken’s Past

The broadly-held beliefs and understandings of the greater oil and gas industry towards the Bakken has greatly increased, Stark said. With a better understanding of which zones produce best using certain techniques, the Bakken is better than ever, he added.

Continental has learned where the Three Forks formation produces the best and where the best reservoir performance is in the basin. According to Stark, the company’s drilling strategies and completion approaches have improved as well.

Since 2008, the company’s drilling times have decreased by roughly 70 percent. Recently, the company drilled three three-mile laterals with a single drill bit and a single motor. “I couldn’t have ever thought of doing that back in 2008,” he said.

In 2005, each well was completed with roughly 10 stages and was expected to produce roughly 279 barrels of oil equivalent upon initial production. In 2016, wells are now completed with 40 stages and produce 900 mboe/d.

Between 100 and 200 pounds of proppant per foot were used in 2004. Today, nearly 1,500 lbs/ft of proppant are used to stimulate each well.

The increased productivity brought on by new technology, strategies and a commitment to the use of greater material volumes has helped as oil prices have declined. Although a well drilled and completed in 2011 required an oil price of $70/b to create a 40 percent initial rate of return, the same well drilled and completed today could attain the same 40 percent IRR at $50/b oil, Stark said.

Presently In The Bakken

Today, one-third of a well’s total costs are related to drilling with the remaining two-thirds connected to fracking and completing the well, according to Stark.

The company is currently running four rigs in North Dakota with double-digit rigs running in Oklahoma. For the past year, Stark believes the best (most economical) play in the country has been the STACK play of Oklahoma. Several other operators have moved into the play, he said, and it looks to be similar to that of an early Bakken.

While Continental has long-term plans for North Dakota and Montana, Stark did say it is hard to say exactly what the company’s plans are for the Bakken due to volatile oil prices. There is currently a completion for E&P dollars that didn’t exist as much when oil prices were higher. Along with North Dakota, operators are looking only to Texas and Oklahoma. Texas has 50 percent of all rigs in the U.S. and the second best tax climate for oil and gas production trailing only Oklahoma. While Texas and Oklahoma are each in the 7 percent range, North Dakota’s production tax on producers is 10 percent.

The Future Of The Bakken, Oil Activity

Although the global supply and demand curve will stay in balance longer than Stark believed it would earlier this year, he believes by the middle of 2017, supply will not be able to meet demand. The International Energy Agency consistently underestimates actual demand, he added.

Stark, a geologist by trade, also touched on the future reserve potential of the Bakken. Near 2011, many in the industry believed the Williston Basin system held roughly 20 billion barrels of retrievable oil. To date, 2 billion barrels have been recovered. “I could see the field having twice the reserves we have,” Stark said in explaining the long-term potential of the Bakken system based on his understanding of geologic logs and other related information generated by industry in combination with new technology capabilities. “I can say that as a geologist.