Bakken Economics Full Slide Deck - ND Pipeline Authority · 24/01/2018 · Bakken Economics Full...
Transcript of Bakken Economics Full Slide Deck - ND Pipeline Authority · 24/01/2018 · Bakken Economics Full...
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Bakken Economics
Full Slide Deck
Jan 24, 2018
Justin J KringstadGeological Engineer
Director
North Dakota Pipeline Authority
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Objective
Define where the Bakken/Three Forks system may be economic in the
current oil price environment.
Method
Analyze past well performance across the region and estimate well
economics for various production levels.
Disclaimer
The goal of this work is not to imply individual company actions or
intentions. All view expressed are strictly that of Justin J. Kringstad.
Neither the State of North Dakota, nor any agency, officer, or employee
of the State of North Dakota warrants the accuracy or reliability of this
product and shall not be held responsible for any losses related to its
use.
JJ Kringstad - North Dakota Pipeline Authority 2
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Key Economic Assumptions
• $6-$8 Million Well Costs
• $59/BBL & $5.00/MCF Wellhead Pricing
• 1/6 Royalty
• Zero Flaring
• Assumed 10-20% IRR to drill (calculated after
production taxes and royalties)
• No Tax Incentives Included
• Production rate is 30-day average
• All Bakken/Three Forks wells drilled in 2008+
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© OpenStreetMap contributors
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Peak Month Minimum400 BOPD
$59 Wellhead
7,397 Wells
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© OpenStreetMap contributors
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Peak Month Minimum500 BOPD
5,691 Wells
$59 Wellhead
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© OpenStreetMap contributors
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Peak Month Minimum600 BOPD
4,148 Wells
$59 Wellhead
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© OpenStreetMap contributors
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Peak Month Minimum700 BOPD
2,837 Wells
$59 Wellhead
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© OpenStreetMap contributors
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Peak Month Minimum 800 BOPD
1,924 Wells
$59 Wellhead
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© OpenStreetMap contributors
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Peak Month Minimum 900 BOPD
1,257 Wells
$59 Wellhead
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© OpenStreetMap contributors
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Peak Month Minimum 1,000 BOPD
831 Wells
$59 Wellhead
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© OpenStreetMap contributors
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Peak Month Minimum1,250 BOPD
300 Wells
$59 Wellhead
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© OpenStreetMap contributors
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Peak Month Minimum1,500 BOPD
100 Wells
$59 Wellhead
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Summary of $59 Wellhead Oil
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Breakeven Summary
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Bakken Economics
Breakeven Analysis
January 24, 2018
Justin J KringstadGeological Engineer
Director
North Dakota Pipeline Authority
![Page 16: Bakken Economics Full Slide Deck - ND Pipeline Authority · 24/01/2018 · Bakken Economics Full Slide Deck Jan 24, 2018 ... OpenStreetMap contributors, and the GIS user community](https://reader030.fdocuments.in/reader030/viewer/2022021514/5b0dab257f8b9a6a6b8e4105/html5/thumbnails/16.jpg)
Objective
Define where the Bakken/Three Forks system may be economic in
various price scenarios.
Method
Analyze past well performance across the region and estimate well
economics for various production levels.
Disclaimer
The goal of this work is not to imply individual company actions or
intentions. All view expressed are strictly that of Justin J. Kringstad.
Neither the State of North Dakota, nor any agency, officer, or employee
of the State of North Dakota warrants the accuracy or reliability of this
product and shall not be held responsible for any losses related to its
use.
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Bakken Breakeven Analysis
Important Considerations
• Breakeven areas were determined by neighboring well performance and are expected to expand as new completion technology is applied in areas outside “the core.”
• Just because an area is considered “economic” does not mean that it is the most economic option for the industry participant(s). Competition for capital continues to exist inside and outside the region.
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Bakken Breakeven Price Range (20% ATIRR)
Bakken Breakeven Prices
$6 - $8 Million
Completed Wells Cost
Background Map: Esri, HERE, DeLorme, MapmyIndia, © OpenStreetMap contributors, and the GIS user community
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Bakken Breakeven Economics
County/Regional Analysis
Breakeven Range Included: $6mm, $7mm, $8mm Well Costs
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44% Economic Area Increase 2017 to 2018
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North Dakota Drilling Activity
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Drilling Locations* – January 22, 2018
Bakken Breakeven Prices
$6 - $8 Million
Background Map: Esri, HERE, DeLorme, MapmyIndia, © OpenStreetMap contributors, and the GIS user community
*Due to confidential status, the target production zone for many wells is unknown.
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Justin J. Kringstad, DirectorNorth Dakota Pipeline Authority
600 E. Boulevard Ave. Dept. 405Bismarck, ND 58505-0840
Phone: (701)220-6227Fax: (701)328-2820
E-mail: [email protected]
Websites: www.pipeline.nd.gov
www.northdakotapipelines.com
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Contact Information
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