Had some spare time yesterday so did some more analysis of the performance data from the producing wells in the Township-Ranges surrounding Samson's Fort Peck acreage, available on the Montana oil & gas commission website. Some interesting insights are there:
The wells are all the bakken wells listed as producing within the following region:
Townships 25N to 29N Ranges 52E to 59E
Samson's Fort Peck acreage is within the smaller block:
Townships 27N to 29N Ranges 53E to 55E
1. Number of producing wells
There are currently (as of March 2012 monthly report, which is the latest data available) 43 wells listed as producers within this region.
2. Age of wells
The wells 1st started producing as follows:
2004: 1 well 2005: 1 well 2006: 3 wells 2007: 8 wells 2008: 2 wells 2009: 0 wells 2010: 11 wells 2011: 13 wells 2012: 4 wells so far
3. Best producing month
The data doesnt provide IP rates. What I've done to obtain a proxy for IP rates is list the best month listed for each well, calculated by taking the oil output (bbls) in each month divided by the number of days producing in each month, to obtain an average BOPD rate for each month listed. This means the rate could represent the average rate for anything from 1 day or production for the month, to 31 days (and its quite variable). The best month isnt always the 1st month of production. I've put the data in a table showing the well name and location, the production start-up date (month), and the month which recorded the best av BOPD rate, and sorted the table from highest best av BOPD rate to lowest:
The table shows a couple of things:
The best av BOPD rate is as high as 1235 BOPD, but the vast majority (35 wells) are between 100-500 BOPD. Remember this is the best monthly rate for each well. So the IP rate is probably higher in each case, but the best rate over a 30 day period (not necessarily producing every day) is mostly in the 100-500 BOPD range.
For me that sets the expectation for Samson's Fort Peck wells in terms of production rates. Given there are only 4 wells out of 43 (10%) in the list that are higher than 500 BOPD, its only a 10% shot that any one of our wells will produce a best monthly rate above 500 BOPD, and a 80% chance that their best monthly rate will be in this range.
As I said above many of the wells dont have their best month in the 1st month of production. THIS INDICATES TO ME THAT MANY OF THE WELLS HAVE PRODUCTION START-UP PROBLEMS - SOUND FAMILIAR?
4. Total oil produced
I also sorted the table in terms of total oil produced (see below). Obviously the older wells will have had in general time to produce more oil than the younger wells. But there are exceptions. To aid in seeing which wells are older I coloured the data for all 2004-2008 wells in black, and all 2010-2012 wells in red.
The table shows the following:
A couple of recent (2010-2011) wells have already produced close to 100,000 bbls of oil.
Of the 15 wells 2008 or older, 8 (50%) have already produced approx 100,000 bbls or more. Most of these are from the period 2005-2007, so its taken 5-7 years to produce these levels of oil. Most of these wells are still producing an average of around 40-50 BOPD.
Out of the (28) newer wells, 11 (40%) have produced approx 50,000-100,000 bbls or more already, in up to 2 years. I could be wrong but it does look like the newer wells are getting to 100,000 bbls quicker than the older wells.
5. Other comments
The other takeaways I got from the data, not shown in the above tables, are:
Water production - most of the wells produce as much water or more than oil. This indicates to me we should not expect to see IP rates quoted with a 100% oil cut, because they never get there. In fact the data indicates most wells have a 50% oil cut at best during their producing life.
Production days per month - if 80% of 30 days is 24 days then I would say that most wells do have an uptime that is above 80% judging by the number of production days reported each month.
The oldest well is 8 years, and only 1 well has produced over 200,000 bbls. If you assume expected well life is 20 years, then it looks like half of the wells will get to 100,000 bbls within 5-7 years, but the jury's out as to how many will end up producing 200,000 bbls - it looks like it will easily take well over 10 years for them to do that.
Cheers, Sharks.
SSN Price at posting:
7.8¢ Sentiment: LT Buy Disclosure: Held
