While both oil and gas production rates in the Bakken Shale set records in February, there's much more to come. With a large increase in multi-well pad operations, North Dakota's chief oil and natural gas regulator expects to see "a big surge in production" in the Bakken Shale starting in June.
Oil production overall was 21.8 million bbl in February, compared with 22.8 million bbl in January. Natural gas production for February was 23.8 Bcf, less than the 24.5 Bcf in January. While the latest totals appeared to be lower, factoring in three fewer days in February, means the production rates for both gas and oil were higher.
Drilling permit totals for March returned to more "normal" levels, hitting 218 for the month, equaling January and well above February levels when only 185 permits were issued, Department of Mineral Resources (DMR) chief Lynn Helms said during a webcast Tuesday.
The big story, however, is the rapid increase in multi-well pads, said Helms, who has to approve hundreds of requests for these types of drilling permits.
Last year, the state approved 530 multi-well pad orders, and Helms said he has heard another 334 cases. That is 864 requests for multi-well pads during the past 15 months.
The most popular number requested by operators is seven wells per pad. "When we run the numbers, those 864 cases amount to nearly 6,000 wells," which s more than the total number of wells now in the Bakken. "It really is becoming an enormous issue for us, but it is a positive trend because it decreases the footprint, increases production and allows us to recover more of the Bakken and Three Forks oil."
The fact that there are 6,000 multi-well-pad wells coming, and there are only 5,156 producing wells now emphasizes to Helms that this is an important development. Carrying out and completing all of these multi-well pads is about a three-year process, he said, so "just what we already have on the table will keep our current rig fleet busy for three years."
It took seven years to get to the current producing well total in the Bakken, but it will only take three years for the next 6,000 using the multi-well pads, he noted. Efficiency has kept getting better, shortening the time from drilling to hydraulic fracturing.
With this approach and 12 added rigs this summer, a "big surge in production" is expected for the five-month period of June through October this year. During the webcast, Helms said the storms last month and on Monday will keep road restrictions in effect across the state until early May. He doesn't expect North Dakota to return to full production until June.
Helms called the full development of the Bakken/Three Forks formations a "decades-long process." There are 8,000 identified spacing units overall in the formations, and DMR estimates an average of six wells will be developed for each unit, which equates to 48,000 wells, or nearly 10 times what is now under production, he noted.
Regarding associated gas flaring, which was measured as increasing by 1% in February to 30.4%, Helms said there is a glimmer of hope in the historic decline in the average days that a well is flaring.
"Since 2007, we have seen huge improvement in the average days a well was flared." Six years ago the typical well flared for 380 days. In 2011, the average was 172 days, and last year the average was 51 days. "So we're beginning to catch up with the gathering system, but we also have an enormous number of wells that are still flaring."
There are 165 wells from 2011 that are still flaring and not connected yet, and there is no short-term mitigation plan. DMR, said Helms, also is closely tracking a state legislative attempt to encourage operators to reduce flaring (HB 1134), which is in a conference committee.