Tuesday, May 21, 2013

Real Oil Prices and the Effect on Future ND Bakken Output

I often read The Oil Drum blog and pointed readers of the Drum Beat to my most recent post here.  Rune Likvern asked a question about how future oil prices will effect my scenarios.  This is an excellent question because it is often claimed that the recent surge in US oil output may lead to lower oil prices.  I expect there is a little too much optimism about future output from the Bakken/Three Forks and Eagle Ford plays, but let's consider two scenarios proposed by Mr. Likvern.

Scenario 1 considers a slower rise in real oil prices than I proposed in my previous post, real oil prices rise to $120/barrel (Jan 2013$) by Jan 2018.

Figure 1
Figure 1 requires some explanation.  Break even oil prices rise to the real market oil price by Sept 2016 at $115 per barrel and the wells added ramp down to zero by Dec 2017.  It is assumed that real oil prices continue to rise at 3.29 % per year and that the decrease in well productivity slows to zero as no new wells are drilled.  Eventually the real oil price rises above the break even price and it is assumed that when the real oil price is 110 % or more of the break even oil price that new wells are added and well productivity then continues to decrease.  This cycle repeats 3 times between 2018 and 2037 and explains the bumps in output in 2021-2, 2027-8, and 2033-4.

Thursday, May 16, 2013

Updated Well Profile for the North Dakota Bakken and the Effect on future scenarios

Note that all of the "Bakken" Scenarios I have presented, in this post and previous posts only cover the North Dakota portion of the Bakken/Three Forks play.

A recent post by Rune Likvern at the Oil Drum entitled, Is the Typical NDIC Bakken Tight Oil Well a Sales Pitch? has provided some new information which I will use to update my recent scenario for future Bakken output.

Another post by Mr. Likvern from which I gathered considerable knowledge is entitled Is Shale Oil Production from Bakken Headed for a Run with “The Red Queen”? . In addition a post by Heading Out at the Oil Drum had a number of helpful comments by both Mr Likvern and Webhubbletelescope, the entire thread has comments of interest. There are also a number of posts on the Bakken at The Oil conunDRUM  blog(written by Webhubbletelescope) from which I have learned much. I am indebted to both Webhubbletelescope and Mr Likvern for sharing their knowledge.