Ted Cross
1.7K posts
Bert’s got the right idea: simonandschuster.com/books/The-War-…
HAVING SAID THAT: Tenet is the first movie I watched with a huge smile on my face for the entire runtime, since original Iron Man, and original Star Wars before that. Tenet is wholly underrated and everyone who disagrees is wrong. WRONG!
Have operators exhausted inventory in the Bakken? The play still produces ~1.8 million boe per day, though many are wondering what its future holds. We have put together our most detailed inventory study yet -- let's dive in. On the left, I am plotting the inventory "drawdown" going back to 2005, with ~35,000 total locations in our model (note we do not include Elm Coulee). We have broken out drilled and remaining locations into four equal Tiers based purely on rock quality (ignoring parent-child, unit size, etc.). Operators have drilled ~80% of Tier 1 locations and 60% of Tier 2; less than 2,000 Tier 4 locations have been drilled to date. Beyond that, we estimate >50% of remaining Tier 1 locations are encumbered by surface issues, such as rugged badlands topography, lake cover, or sitting in National Forest lands. Much of the remaining Tier 1 beyond that is infill. You can see the exhaustion of Tier 1 in the pattern of drilling over the years. During the 2010-2014 peak, when operators were delineating acreage and ensuring HBP, drilling was roughly equivalent between Tier 1, 2, and 3. From 2017-2020, drilling in Tier 1 dominated. However, in the most recent peak (2023), operators drilled a higher portion of Tier 2 for the first time, increasing oil production ~20%. We have covered this production ramp-up previously, but to summarize: operators increased lateral length, widened spacing, and focused on the more productive Middle Bakken to improve economics. While the Bakken is a meaningful play in its own right, we believe it offers an important analog to the Permian in questions of inventory exhaustion. By comparison, the Delaware and Midland have a much higher percentage of their Tier 1 and Tier 2 rock remaining, not to mention that "lower-Tier" Permian rock still offers globally-competitive half-cycle breakevens. The Permian, because of its immense resource and complexity, also has significant more potential for exploration than the Bakken-Three Forks, with emerging plays like the Barnett showing strong early results. That must also be taken into account when applying the analog model of the Bakken (a 10-year plateau from 2014 through today) to speculate about the future of the Permian, the Vaca Muerta, or other large-scale, complex plays. #eft #oott #com
