A century of oil production expected for the Williston Basin

Here come more eye-popping figures out of the Williston Basin, that 143,000-square-mile swath of oil and gas potential that appears well on its way to upending US energy markets. 
 
In a study commissioned by the North Dakota Pipeline Authority and North Dakota Industrial Commission, Platts unit Bentek Energy said oil production from the basin could more than quadruple from 2011 levels to 2.18 million b/d by 2025. North Dakota’s share alone could reach 2 million b/d, the study said.
 
The predicted surge in output — which would hit 1.777 million b/d by 2017 — relies on researchers’ assumption that companies would drill at a constant annual rate of 2,350 wells in North Dakota and 250 wells in Montana through 2021. 
 
“By 2022, Bentek believes the best Williston acreage will be developed and that the number of new wells will decline by approximately 10% annually due to a reduction in well site inventory,” the study said.
 
At those production levels, the planned infrastructure expansions would be almost sufficient through 2020, but only if Enbridge builds its proposed Sandpiper Pipeline, which would carry 325,000 b/d from Beaver Lodge, North Dakota, to Superior, Wisconsin. If Enbridge does not build the line, the region would need more pipeline capacity in 2017.

Bentek’s low-case scenario sees output nearly tripling from 2011 levels to 1.077 million b/d in 2017, then holding steady through 2025. That prediction assumes $50/b oil prices, 20% fewer active rigs and 1,400 wells drilled per year in North Dakota.
 
The study’s high-case scenario propels Williston oil production to 2.151 million b/d in 2017 and 2.750 million b/d in 2025. But those rates would severely test the region’s infrastructure limits, overwhelming pipelines by the end of 2016, even with Enbridge’s Sandpiper system starting in 2015.
 
For all the big numbers, perhaps the study’s most surprising statistic is small: only 15% of the Williston Basin has been drilled, or about 5,300 wells in North Dakota and 1,500 in Montana. 
 
“The North Dakota Oil & Gas Division expects drilling and infrastructure development could continue in the Bakken region for the next 15 to 20 years, with another 10,000 wells drilled during that period,” Bentek said. “Then, oil production may continue for another 50 to 100 years.”
 
The study said drillers will keep finding ways to save time and money, with the biggest gains likely coming from boring multiple horizontal wells per pad, rather than just one. 
 
Bentek looked at a Continental Resources project to drill four wells from one pad in 48 days, amounting to about 12 days per well. Considering more results, Continental averages 19 days/well, the study said. That shaves off at least 11 days from the average of 30 days per Williston well, Bentek found.
 
North Dakota first hit the 200,000 b/d mark in October 2008. The state has seen month-over-month increases in oil output for 35 of the 43 months since then, according to EIA data.
 
The state’s production grew 4.8% in May to 639,000 b/d, according to EIA data released Monday. That would be a huge jump for most states, but it was a relatively modest month for the holder of the prolific Bakken formation.
 
The biggest monthly spikes for North Dakota oil output came in February 2010, when it increased 11% to 261,000 b/d, and in July 2011, when it increased 10% to 425,000 b/d.
 
To put the study’s 2 million b/d projection in context, mega-producer Texas hasn’t reached that kind of output since 1988. Still the undisputed top oil-producing state, Texas pumped 1.834 million b/d of crude out of the ground in May, according to EIA data released Monday.
 
The graph below shows EIA monthly output from the Williston Basin, with North Dakota in blue and Montana in brown:
 
williston640.jpg
 
 


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