[URTeC 2021 Paper] Machine Learning Methods in the Williston: A Case Study in Productivity Decay and the Implications for Inventory Exhaustion

What does remaining inventory look like in the Bakken?

This study examines how rock quality of remaining inventory varies around the basin, and what that means for future breakevens and supply forecasts.

 

Talk Details::

Wednesday, July 28th at 9:20 AM | Room 370 | Theme 12: Maximizing & Delivering Value

AUTHORS::

B. L. Myers1, B. Davis1, R. Duman1, T. Cross2 (1Wood Mackenzie; 2Novi Labs)

Oil EURs by geoSHAP quintile for the Middle Bakken in North Dakota. With Tier 1 being depleted, what does that mean for breakevens and future supply?

Abstract::

The Bakken rig count fell by nearly 80% in 2020, allowing Williston production to decline by over 200,000 b/d. After roughly a decade of development and a shift of resources to the Permian, a pressing question remains on everyone’s mind: is the Williston basin now in terminal decline, or will it one day return to growth?

A comprehensive understanding of remaining inventory quality and quantity across the play is imperative to determining the possibility of resuming growth. The supply potential feeds into competitiveness of infill wells, midstream volume risk, and long term financial health of operators and well participants.

We present a machine learning-based method to estimate subsurface quality and performance potential for remaining undeveloped acreage. The model predicts production at 30-day increments out to IP day 1080, using interpreted subsurface, completions, and well spacing as training variables. We leverage SHAP values (SHapley Additive exPlanations) to isolate the impact of subsurface, creating a total rock quality index that we term geoSHAP.

We binned the producing wells by geoSHAP, identifying core and non-core areas. Next, we used the model to assess the geoSHAP for each 640-acre section, sorting each by tier. This analysis shows over 90% of the play core has been drilled. And much of the remaining inventory inaccessible due to surface constraints. We then use the model to drill out the undrilled sections across the Bakken formation, comparing IP 90 and EUR as inter-well spacing decreases per section from 5,280 feet (one well) down to 1,056 feet (five wells per section). This process is then repeated for the Three Forks formation. This provides type curve productivity decay as a function of down-spacing for core and non-core acreage.

Finally, we assess half-cycle economics for drilled and undrilled locations across both core and non-core areas, using Wood Mackenzie’s proprietary D&C cost model and our Global Economic Model (GEM). Breakevens in the Bakken and Three Forks can be as low as $36.50/bbl in the core, which can compete for capital with select sub-plays in the Permian. Breakevens can conversely range up to $87.10/bbl in the play fringe. Understanding the depth of remaining inventory at each breakeven level is imperative to provide context for the future development in the Williston relative to past performance.

You can find an early version of this work on our blog here.

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