Wednesday, January 15, 2025


Can This Huge Oil Discovery Revive The Bakken Oil Boom?

WATCH FOR KEYSTONE PIPELINE REBIRTH

By Charles Kennedy - Jan 15, 2025,

Study: the Three Forks reservoir may hold some 250 million barrels of untapped crude.

Study: developing these reserves would require the drilling of 600 more wells in the Three Forks play.

U.S. shale can still surprise with undiscovered resources, even as more and more reports emerge suggesting that prime acreage in the shale patch is running out.




North Dakota’s claim to oil fame has long been the Bakken shale, one of the top shale plays in the country. The Bakken is considered a rather mature play, but now, studies by researchers with the state’s Department of Natural Resources have opened up the prospect of a second life for the Bakken.

It is called Three Forks—a reservoir that lies within the Bakken shale play and may contain as much as 250 million barrels of crude as of yet untapped. And that oil is not too deep in the ground either, the researchers determined.

“The Three Forks Formation is a prolific unconventional oil and gas reservoir within western North Dakota and has been the target of approximately 8,000 horizontal wells through ~mid-2023,” the North Dakota Department of Natural Resources reports in an info sheet on the deposit. It goes on to note that most of the wells already drilled in the Three Forks Formation were drilled in the upper strata of the formation. In the middle layer, some 340 wells have been drilled, and in the lower layer, there have been only 50 wells drilled so far.

The reason is simple enough. Since the discovery of the Parshall field in the Middle Bakken back in 2006, most drilling has been concentrated there. Then the upper Three Forks followed between 2008 and 2010. In the early 2010s, drillers moved on to the middle Three Forks, with some 360 horizontal wells drilled there to date, producing around 92 million barrels of oil and 238 billion cu ft of natural gas. That only represents a modest 2% of the overall drilling activity in the Bakken play and less than 2% of total output.

What the state’s researchers did was evaluate existing wells in the area. They found sufficient evidence of untapped oil in most of the wells they studied. All in all, developing these reserves would require the drilling of 600 more wells in the Three Forks play—and outside it because the reservoir extends beyond it, according to the data.

“There have been about 20 wells drilled in this middle Three Forks unit per year for the last six years, but it probably should be double to triple that,” one of the researchers involved in the study, Tim Nesheim, told Inforum.

Nesheim added that many drillers may have assumed that additional drilling in the area would only lead to faster production of oil and gas rather than higher production. That assumption, he said, was inaccurate. “After we (Nesheim and Starns) did our work, we believe that it's more than that, that when you drill middle Three Forks wells, you're getting more oil out of the ground long term,” the researcher said. “You're not just speeding up your recovery, but you're adding to your long-term recovery.”

“We’ve done some of the research, and our hope is that companies will take our work and build on it, kind of giving them enough of a head start to do more,” Nesheim also told the North Dakota publication.

The results of the study add to the growing body of evidence that U.S. shale can still surprise with undiscovered resources, even as more and more reports emerge suggesting that prime acreage in the shale patch is running out. Indeed, some resources are being exhausted, but the North Dakota news suggests that there is still plenty of crude to keep the U.S. producing at or around current levels for years.

The first stage of the shale industry's evolution is clearly over. That was the age of “Drill, baby, drill” when nothing mattered but trying to see just how much oil one could get out of the ground, expenses be damned. It was also the age of the massive debt piles, the cash-burning, and the increasingly grumpy shareholders.

Now, the industry has moved on to the age of fiscal discipline, with production growth a lot more moderate, not only because some reservoirs are maturing and beginning to get depleted but because of a change in priorities, from production at all costs to shareholder returns at all costs.

Even in this new environment, however, there have been surprises. Last year, supermajors reported record oil and natural gas output from the top shale basin, the Permian. They also spoke of their plans to raise that output even further. Meanwhile, independents were boosting their own guidance after seeing higher volumes and lower cycle times to bring wells online in the first half of 2024.

Most of those gains were the result of efficiency improvements, but these efficiency improvements cannot be sustained on a permanent basis. Sooner or later, drillers will run out of space for efficiency gains. The prospect of untapped resources getting discovered yet in the shale patch, on the other hand, means more oil and gas for longer.

By Charles Kennedy for Oilprice.com



Exxon and Oxy Dominate US Shale Rankings

By Tsvetana Paraskova - Jan 15, 2025,

Enverus compiled a list of the top 50 public oil and gas companies operating in the U.S. based on production.

Supermajor ExxonMobil leads the rankings for 2024, keeping its number-one spot from 2023.

Occidental Petroleum jumped to no.3 on the list.




The Permian in West Texas and southeastern New Mexico continues to be the most prolific oil and gas producing basin in the United States, accounting for most of the output at the biggest public onshore producers and representing the bulk of oil and gas production at the top 50 producers.

These well-known facts found confirmation in a list compiled by Enverus, of the most prolific 50 public oil and gas operators in the U.S. based on gross operated production in 2024.

The rankings were reshaped by the wave of mergers and acquisitions (M&A) in the shale patch in the past two years, but the Permian continues to be king, Enverus says.

Supermajor ExxonMobil leads the rankings for 2024, keeping its number-one spot from 2023. Occidental Petroleum, ranked fifth in 2023, climbed to the third place, while the biggest U.S. natural gas producer – Expand Energy – formed after the merger of Chesapeake Energy and Southwestern Energy, is a new entry at the top, taking the second spot on the Enverus list.




Source: Enverus

Due to mergers and acquisitions, the top 10 U.S. public onshore producers now account for 62% of production out of the Top 50 on a boe/d basis, up from 56% in 2023, Enverus CEO Manuj Nikhanj commented.

This was partly due to the $60-billion megadeal, which saw Exxon acquiring Pioneer Natural Resources in an all-stock transaction.

“It’s clear that the Permian is still the king, and the most active region operated by the Top 50 operators. Seven of the top 10 have the Permian as their most active region,” said Nikhanj.

The Permian also dominates the rankings in terms of production volumes – 81% of oil production and 40% of gas production from the Top 50 names comes from this one basin, according to Enverus data.

In the top three, Exxon’s onshore production was 1.96 million barrels of oil equivalent per day (boepd) last year, 53% of which oil and the Permian as the primary production region.

The new entry, second-placed Expand Energy, produced 1.69 million boepd last year, most of which is natural gas and most of this in the eastern U.S. gas shale plays in the Appalachia and Marcellus and Utica regions.

Oxy’s 1.22 million boepd with 58% oil and the Permian as its prime basin ranked it third on the Enverus list.

The rankings also showed that the U.S. shale patch has mastered the art of efficiency gains—fewer rigs in 2024 allowed for an increase in total oil and gas production in America.

The Top 50 public onshore producers were running a total of 298 rigs at the time of list compilation, Enverus’s Nikhanj said. This compares to 322 rigs at a similar point in time in the prior year.

“Notwithstanding the pull back, the approximately 10% increase in rig efficiency over this period is driving production growth, even at lower activity levels,” Nikhanj noted.

In the past couple of years, technological advancements and operational efficiency have allowed producers to maintain robust output even with fewer active rigs.

Going forward, the U.S. shale patch is unlikely to follow President-elect Donald Trump’s campaign highlight “drill, baby, drill” as the industry is far more consolidated and disciplined than when Trump was first president at the end of the 2010s.

After the Permian saw several large mergers and acquisitions (M&A) waves during President Biden’s term in office, the start of the second Trump presidency comes at a time when many of the private producers have already sold their operations to the large publicly traded companies.

These public firms have realigned their priorities after the 2020 crash in demand and prices, and now prefer higher earnings and shareholder returns to high growth rates in production.

As more drilling locations in the Permian are now in the hands of large listed firms, investor demands for high returns trump the high growth rates of oil production.

By Tsvetana Paraskova for Oilprice.com

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