Americans haven’t talked about their country as the greatest oil country in the world, but they need to, Continental Oil’s Blu Hulsey told a crowd of oil and gas industry professionals, who gathered in Billings Wednesday, Aug. 28, for the annual Montana Petroleum Association Conference.
Hulsey, Continental Oil’s Sr. Vice President for Health, Safety and Environment, and Government and Regulatory Affairs, doubled down on the company's recent estimates that there are actually 30 billion to 40 billion barrels of recoverable oil in the Bakken.
That’s four to five times larger than the government’s most recent estimates.
“We think the total Bakken is a huge field as far as the world is concerned,” Hulsey said.
Meanwhile, he said recovery rates in shale plays continue to grow. They used to be around 3% but are now more like 20%.
“There’s still oil you’re leaving in the ground,” Hulsey said. “But your recovery factor is that much more.”
America’s shale revolution, in which the Bakken is a big player, is changing the whole dynamic of where the United States is as a country.
“We have this amazing resource, but we don’t talk about it,” he said. “We don’t talk about ourselves as the greatest oil country in the world, and we need to.”
Continental is continuing to run six rigs in the Bakken, and represents 14% of its overall production.
“We are consistent with those rigs, and we have about four to five stimulation crews,” Hulsey said. “That is where our sweet spot is.”
He showed graphs of type curves for well production that show how return on investment is both coming in sooner and getting larger.
“That gets us to a reasonable rate of return at lower costs,” he said.
That’s not thanks to 2015 technology, though, Hulsey added.
“If we were using 2015 technology, we wouldn’t be doing those (wells),” he said. “The stimulation has changed, the speed has changed.”
And technology is continuing to advance.
“We are still getting better with our units and development,” he added. “Three of our top 10 units came in 2019.”
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In the last three years, the company had more than 150 wells that hit the 100,000 barrel mark in the first 90 days of operation.
Hulsey said the company is also working out a new spacing unit for Richland County. That is still underway.
The new approach will minimize surface impacts and reduce the costs of necessary surface equipment, he said.
“We appreciate the Conservation Commission and everyone who worked with us on this, and I think that is what is going to continue the great things that are going on in Richland County,” Hulsey said.
The Long Creek unit in Williams County, meanwhile, will have almost $450 million invested in what will be a 10-section unit. The first production is expected from it in 2020.
“We’ll be piping our oil and gas — it is just north of the river — so it is an environmentally sensitive area that we are paying attention to,” he said. “It is an absolute oil machine out there, and it will be just fantastic to see that when it is fully developed.”
There’s been a lot of buzz in the oilfield world about the Permian, Hulsey said, but the Bakken has good talking points, too.
“You have to have something to tell your Texas friends,” he joked, “because they will not stop talking about Texas.”
Among the talking points he suggested is the large amount of water the Permian gets with its oil.
“We have a high oil cut and low water,” Hulsey said. “The Permian is pushing out a lot of water, and they’re having to figure out what to do with it. We don’t have that here, and it helps with the cost of production here.”
Another Bakken talking point, Hulsey suggested, is the sheer size of it.
Hulsey showed the Bakken is geographically as large as the Delaware and the Permian Basins side by side.
He expressed confidence that with the current administration, more infrastructure can quickly be laid that will help power up the future of the industry.
“We need to do it now,” he said. “We have an administration that is not stopping development in this country. We need to talk about long-term development and what we will be doing in these areas.”
The oil industry has faced some challenges in the marketplace. But the industry has responded by getting better.
“It is the American ingenuity in this room,” he said. “And it is truly making a difference with what has happened in America. We are just going to continue to get better.”