Could be attributable to triple stacking. I think a great deal of it is because of the investment in infrastructure and their early mover advantage in the acreage (hence the thanks PB?). It always surprises me how much capital has to go into things other than the D&C of a well and subsequently the influence this has on LOE and over Full Cycle costs.
I'm not real good at the geological interpretation per se and given the existence of both conventional and unconventional reservoirs while it adds lots of additional Resource it may also add lots more complications (not the least of which is different pressures and API quality). Not certain here but I doubt whether you could produce both together (even in EFS its UEFS or LEFS and it Bakken its MB or LB or TFS). Both Bakken and EFS have conventionals too (as does Permian) but I've only seen wells as one or the other. Have also seen recompletion strategy where the well bore is reused as they move to a different reservoir.
Be highly beneficial (to 88E) I think if multiple reservoirs can be produced (with separate wells) where the is no communication between the wells (should be right as different reservoirs).
I'm noting the API concern only because wide discrepancy in grade could be a problem. While high API 40+ receives a premium, its not so great if the pipeline rejects it. Just to be clear I am not downramping this. Alaska North Slope (ANS) oil which is what TAPS transport is a certain blend of oil and is transported to West Coast for refining - and they are not geared for 40+ API. That gets complicated and a big part of the problem in L48 with them being flooded in LTO from Bakken and EFS. Some operators have been exporting EFS Condensate as a "refined product" to get around the crude oil export ban until that was lifted. Again options exist were it a problem. Haven't done my full homework on that.
Regards & GFTA
88E Price at posting:
4.1¢ Sentiment: None Disclosure: Not Held
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