Tight oil better than heavy oil?

In southern Alberta, Saskatchewan, North Dakota and in Montana, tight oil production (from the Bakken Formation) is now approaching 1 million barrels per day. That is about 1% of world demand: not bad. Bakken production now challenges McMurray bitumen production, which is on the order of 2 million barrels per day and rising.

The Bakken Formation has garnered less environmental attention than the McMurray deposits, and is an attractive resource from that point of view. However, it is a play that requires fracing and locally comes under scrutiny ( http://video.cnbc.com/gallery/?video=3000041249 ). The McMurray, on the other hand is a whopping huge deposit that promises steady cash flow and stability, but is either mined (see attached) or steamed ( http://www.conocophillips.ca/EN/tech/sagd/Pages/index.aspx ).

As usual, excellent choices! What do you think of these options?

2 thoughts on “Tight oil better than heavy oil?”

  1. Chesapeake is in trouble. Keep in mind they were a gas coampny trying to drill oil…..with poor success in ND.It was spun as a great success by Mark and many others who kept pointing to the production but ignored the capital destruction and debt problems. There is no evidence that the companies being hyped today are any better and I have never been big on faith based projections.Many of these wells have IP’s of 1,000-4,000 bopd. Do the math. It’s huge.I do believe that the numbers tell us a different story. I read somewhere that only around 20 Bakken wells produced more than 900 bpd and the average that Mark was showing not that long ago came out to be less than 100 bpd. The IP is quite meaningless because you are looking at less than half that level in a few days and a very small fraction within a month. I suggest that you dig out Mark’s previous links to the EIA. For some reason he stopped reproducing them after it was shown just how little the wells were producing. My back of the envelope calculation shows less than 90 bpd from 6,636 wells that produced 576,000 bpd last month. Many of these wells are paying themselves off within years.Not many are. That is the problem. The only wells that do very well are those in the core areas of the best formation. The problem lies in the leasing. The companies have to get ONE well down in their spacing units to retain the lease. Otherwise, when the lease term expires, usually 3-5 years, another coampny can come in and snatch the lease.Yes, that is a huge problem. That is one of my points.Many Bakken wells are producing in one year what past legacy (vertical) wells produced in 40-60 years.I don’t know about that. First of all, when you talk about legacy wells you are talking about shallow wells that were cheap to drill and easy to justify economically. Because they were drilled in the core areas the well payoff was quick. After a while the wells produced a few barrels per day of product that was mostly pure profit. The new wells cost millions to drill and wind up producing less than 100 bpd within a year or two. Most of them cannot generate enough revenues to justify the cost of drilling.

    1. Thank you! Superb to have an informed reply. This hilights the dangers of depending entirely on media articles .

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