Industry Reps Explain The Bakken

By North American Shale magazine staff | September 11, 2017

The Bakken shale play’s rate of return is currently on par with returns from the Delaware Basin, says Robert Watson, CEO of an exploration and production company active in both plays. Watson delivered a special presentation to hundreds gathered in North Dakota earlier this summer to learn about the current opportunities and challenges of the Bakken and Three Forks plays. The 2017 Bakken Conference & Expo included attendees and exhibitors from across the country. When North Dakota Gov. Doug Burgum asked the crowd to raise their hands if they were from his state, only half revealed they called North Dakota home. The three-day event helped to reveal how the Bakken—and other shale plays—are and will evolve in the months ahead.

Drilling Costs
Abraxas Petroleum’s CEO Watson says Bakken wells cost $6 million to drill. The cost in the Delaware is higher—at or above $6.3 million. Geology is the reason. Harder rock requires more water during drilling and fracking.

Well Targeting
Mike Filloon, founder and analyst at Hartstreet LLC, said most Bakken wells are still focused on the core of the play with 8,000 to 12,000 foot laterals. Enhanced completion designs include more than 10 million pounds of proppant. Ceramics are falling out of favor, while slickwater fracks are becoming the norm.

Talk On World Oil Prices
Daniel Fine, associate director of the New Mexico Center for Energy Policy and long-tenured energy expert, explained how Saudi Arabia thinks about production- and price-planning. “The Saudi mind is not the Bakken,” he said. “The operators here [in the Bakken] go for very short-term results. Their balance sheet is quarter to quarter. Saudi Aramco and the OPEC producers are taught to think in five-year ranges.” According to Fine, the Saudi’s underestimated the American producers’ capacity to resist and function in a lower-oil price environment. Fine, who predicted correctly the low-oil-price-bottom in 2015, believes there will be little movement with prices in the remainder of the year.

The Governor’s Plea To Industry
Burgum issued a four-part call to industry during his energized opening statements. Oil production in North Dakota should rise to 2 million barrels of oil per day, oil spills should total zero, partnerships with the state’s coal industry to develop a carbon capture storage system capable of enhancing oil recovery needs to take place, and, natural gas production should be enhanced to produce more value-added products. “It looks like a big order, but you guys have done so much in the last 10 years that we know this industry is capable of doing more,” he said. “And, you’re going to have a partner in North Dakota that will be focused on innovation—not regulation—while you’re getting it done.”

Another Bakken Refinery 
At some point in 2018, another Bakken-infused refinery will be operating. William Prentice, CEO of Meridian Energy—the company working to build a 55,000 barrel-per-day refinery in Billings County, North Dakota—said the crude sourced from the Bakken is a “refiner’s dream,” due to its physical qualities and abundance.

Oil Producers and Environmentalists
During a three-person panel on the lessons learned by industry following the Dakota Access Pipeline protests, each panelist shared a similar sentiment to that of Troy Eid, attorney and Native American law specialist with Greenberg Trauig law firm in Denver. “We have to think differently about how we get projects built,” he said. “I don’t think DAPL was a one-time adventure. I think that’s probably the world that we live in and that the world is changing.”

Better Days Still Ahead?
Cindy Sanford, customer service office manager for the Williston Job Service office, told attendees her team is still amid a growing community. While Williston and other Bakken-central towns are not as busy as they were when drilling operations were running to hold acreage, Sanford says oil and gas activity is strong again. Infrastructure improvements to the region have helped retain workers and better living conditions are attracting more long-term residents.

Equal Opportunity Across Shale Plays
Diverters Plus, an exhibiting entity at the event, was mentioned multiple times by multiple entities speaking on new approaches to production in the Bakken and other plays. The company manufactures one of the hottest products in shale right now: diverters. According to multiple speakers at the event, diverter materials that help to isolate fractures during pressure pumping and flowback are one of the best innovations in the industry throughout the Bakken and beyond.