HOUSTON — Continental Resources President Rick Bott on Tuesday pushed back against arguments that the U.S shale oil revolution will be short-lived, insisting that there are decades of life remaining just in North Dakota’s Bakken formation.
The hydraulically fractured Bakken wells are marked by outsize production in their first year with steep drop-offs. But Bott said critics scrutinizing “the decline rate” are focusing on “the wrong story.”
“There is a steep decline,” he acknowledged, “but then there is a very, very long tail. You get flush production, but it’s the tail you really count on.”
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During a panel discussion at the IHS CERAWeek energy summit in Houston, Bott highlighted the industry’s ever-growing understanding of the geology in the region and the features of the dense rock formations from which they are pulling crude. As the industry’s body of knowledge develops, oil production in the Bakken and Three Forks formation becomes more like a “manufacturing process,” he stressed.
Oil is now beckoning from deeper intervals below the Bakken formation, with the promise of ever-greater crude yields, Bott said.
That has helped boost estimates of the oil locked in the formation, from about 570 million barrels in 2010 to nearly 900 billion barrels today. At the same time, the industry is boosting drilling efficiency and improving its methods for completing wells, offering the promise of moving beyond current estimates that about 3.5 percent of the oil can be recovered.
With nearly 900 billion barrel potential, even at the current 3.5 percent recovery rate, the industry can extract some 32 billion barrels of oil, Bott said. “The potential is huge in terms of how much resource is there,” Bott said.
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For Oklahoma City-based Continental, that translates into “at least three decades’ worth of growth,” Bott said, with the steepness of that curve largely dependent on pricing.
“It can be a growth or a long plateau based on the price signal,” he said. “It’s only a question of the technology we can apply.”
Bott stressed that drilling and well completion technology continues to advance. Continental is now doing pilot operations designed to help it understand the most efficient number and spacing of wells to drill in the Bakken, even as it revisits old wells to employ new completion designs and stimulation techniques.
“We’re seeing some great results going back into areas we drilled as little as two years ago and being able to almost double production with new completion designs,” Bott said. “It’s still early innings in that. There’s a lot of that to be had.”
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