Rig efficiency, spacing, DUCs
Oil industry changes in relatively short time
When the Bakken, the newest oil boom in North Dakota named for the lucrative oil formation called the Bakken, began depends on who you ask, said Alison Ritter, public information officer for the North Dakota Department of Mineral Resources in Bismarck.
Ritter laid out a timeline of the Bakken:
“In 2006, hydraulic fracturing and horizontal drilling were paired together to make accessing the Bakken more realistic. But it wasn’t until 2009 that companies really started perfecting that practice by using multiple stage fracks,” Ritter said.
She said in early 2010 the North Dakota Industrial Commission signed an order creating North-South 1,280-acre spacing.
“And from there things took off,” Ritter said.
The North Dakota Legislature created the Industrial Commission of North Dakota (the “Commission”) in 1919 to conduct and manage, on behalf of the state, certain utilities, industries, enterprises and business projects established by state law, according to its website.
Current members of the commission are Gov. Doug Burgum, Attorney General Wayne Sanstead and Agriculture Commissioner Doug Goehring.
The governor is the chairman, and a quorum for the transaction of business consists of the governor and one additional member. The attorney general serves as general counsel.
Burgum has been elected to office for a term expiring Dec. 14, 2020. Stenehjem has been elected to office for a term expiring Dec. 31, 2018. Goehring has been elected to office for a term expiring Dec. 31, 2018.
The oil industry in North Dakota has changed in relatively just a few years. Ritter highlighted some of the other changes.
“The first big change to point to would be rig efficiency,” Ritter said. “In 2010, rigs were taking more than one month to drill one well. Today, rigs can drill anywhere from one to two wells a month. Companies are also more focused on the four core counties of Dunn, Mountrail, McKenzie and Williams. These areas generate wells that produce more oil and gas.”
Drilled, uncompleted wells
Because of the increased rig efficiency and the decline in prices a new paradigm entered the oil discussion – drilled, uncompleted wells, or DUCs, Ritter said.
“While the concept of having uncompleted wells was nothing new to industry, the levels at which the DUC inventory rose to, was. The DUC count reached a high in September 2015 at 1,091. There are approximately 800 wells waiting on completion today. As price improves into the $55 WTI (West Texas Intermediate) range, the number of wells that get completed will grown,” Ritter said.
Other changes in the oil industry have also occurred.
“Completion methods have changed too,” Ritter said. “Companies are now using more water – 10 million gallons a well and 8 million pounds of proppant per well during completions. In 2012 the numbers were 2-4 million gallons and 3-5 pounds.”
“Lastly, and probably the most significant is that flaring has come down from the high of 36 percent in September 2011 to 12 percent today,” Ritter said. She said it even dipped to below 10 percent in 2016, but colder weather has made gas gathering difficult.