Wood Mackenzie: Bakken, Eagle Ford Not Past Prime
Bakken production will keep growing, albeit at a slower pace, and the Eagle Ford still has running room within high-return portions of the play, according to a recent analysis by Wood Mackenzie.
The Bakken and Eagle Ford together produce just over 2.5 million barrels per day of oil, or nearly two-thirds of U.S. tight oil production.
Higher oil prices in the 2013 to 2014 timeframe spurred operators to drill not only in the core of the Williston Basin, but in the fringe and speculative areas. This included areas along the Montana-North Dakota border, the northern most part of the play near the Canadian border, and the southern portion of the Williston Basin.
Operators have responded to the decline in global oil prices from over $100/bbl last year to around $60/bbl today by reducing rig counts and retrenching drilling activity to the core Bakken area, Jonathan Garrett, principal analyst for Wood Mackenzie’s Lower 48 Upstream group, told reporters at a media briefing in Houston last week. In the early third quarter of 2014, the rig count in the Bakken was 185 to 190 rigs. Today, 86 rigs are operating in the Bakken.
The rig count is down across U.S. Lower 48 plays, including the Bakken play. Early in last year’s third quarter, between 185 and 190 rigs were operating in the Bakken. As of May 15, that number had declined to 84. However, the decline in drilling rig counts has not occurred evenly across the Bakken.
In Divide County on the northern fringe of the Bakken – where the Bakken is thinner and pressure isn’t there versus deeper parts of the play – the rig count is down about 70 percent due to the play’s more challenging economics. But in McKenzie County in the play’s core – home to the more prospective subsplays, the West Nesson and the Nesson Anticline – the rig count has not dropped off as significantly as other areas, Garrett noted.
The biggest Bakken wells in terms of production lie in the eastern fringe of the Bakken in the Parshall-Sanish, Fort Berthold and Nesson Anticline subplays. Wood Mackenzie anticipates that estimated ultimate recovery (EUR) for these wells this year and in early 2016 will likely outperform EUR estimates due to the retrenchment to the core and operators attacking their best rocks first, Garrett said.
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