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North Dakota Industrial Commission October 24, 2017 Justin J Kringstad Geological Engineer Director North Dakota Pipeline Authority
North Dakota
Industrial Commission
October 24, 2017
Justin J KringstadGeological Engineer
Director
North Dakota Pipeline Authority
Presentation Outline
• Current oil transportation dynamics
• Understanding current and future oil production
– Pricing update
– Activity
– Oil forecasts
• North Dakota natural gas production
– Flaring and gas capture
– Natural gas liquids
• Pipeline construction update
• Refrac economics
JJ Kringstad - North Dakota Pipeline Authority 2
Estimated Williston Basin Oil Transportation
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August 2017
Estimated Williston Basin Oil Transportation
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Estimated ND Rail Export Volumes
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Rail Destinations Market Share (July 2017)
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Data for Rail Destination Market Share Provided by the US Energy Information Administration
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Presentation Outline
• Current oil transportation dynamics
• Understanding current and future oil production
– Pricing update
– Activity
– Oil forecasts
• North Dakota natural gas production
– Flaring and gas capture
– Natural gas Liquids
• Pipeline construction update
• Refrac economics
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North Dakota Oil Differential
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Based on EIA Data
North Dakota Impact of Smaller Discount• 2016 Weighted Average Discount: $7.71
• June/July/August 2017 Wt. Average Discount: $5.61
• $2.10/BBL Improvement Post DAPL Commercial In-Service
• 96,148,772 Taxable Barrels In June/July/August 2017
• Wt. Avg. Tax Rate in June/July/August 2017: 9.74%
Three Month Revenue Impact
9.74% x 96,148,772 x $2.10 =
$19,666,269 Additional State Revenue
When Compared to Avg. 2016 Discount
(~$6+ Million Per Month)
Does Not Include Royalty Owner
and Industry Revenue Impact
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North Dakota Drilling Activity
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Average BKN/TF Well Performance Statewide (Minimum 1 bopd)
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Statewide Oil Performance
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Statewide Gas Performance
Average BKN/TF Well Performance Statewide (Minimum 1 bopd)
North Dakota Oil Production Forecast
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North Dakota Oil Production Forecast
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North Dakota Forecast Activity Assumptions
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Williston Basin Oil Production & Export Capacity, BOPD
Production forecast is for visual demonstration purposes only and should
not be considered accurate for any near or long term planning.
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TransCanada: Energy East Canceled
Map: NEB – NDPA Upland Addition
• Proposed Upland Pipeline Connection to Williston Basin
• Successful Open Season During 2014
• Initial Capacity 220,000 BOPD (Expandable to 300,000 BOPD)
• Target In-service Date: 2020
• Energy East Project Capacity 1.1 MMBOPD
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Presentation Outline
• Current oil transportation dynamics
• Understanding current and future oil production
– Pricing update
– Activity
– Oil forecasts
• North Dakota natural gas production
– Flaring and gas capture
– Natural gas liquids
• Pipeline construction update
• Refrac economics
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NDPA ND Gas Production Forecast
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Simple Terms
Blue – Lack of pipelines
Orange – Challenges on existing
infrastructure
GREEN – % of gas captured and sold
Blue – % flared from zero sales wells
Orange – % flared from wells with at
least one mcf sold.
Aug 2017 Data – Non-Confidential WellsStatewide
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Solving the Flaring Challenge
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Solving the Flaring Challenge
Major Gas Pipeline and
Processing Infrastructure
WBI Transmission
Whiting
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North Dakota Captured* NGL’s
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*Non-flared NGL’s & Assumes 10 GPM
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Major NGL Pipeline and
Processing Infrastructure
Kinder
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NGL Takeaway Options Are Limited
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Presentation Outline
• Current oil transportation dynamics
• Understanding current and future oil production
– Pricing update
– Activity
– Oil forecasts
• North Dakota natural gas production
– Flaring and gas capture
– Natural gas liquids
• Pipeline construction update
• Refrac economics
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North Dakota Pipeline Construction
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Sources: NDIC & PHMSA
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North Dakota Pipeline Construction
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Sources: NDIC & PHMSA
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New Miles and Well Completions
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20086,262 mi2
20096,493 mi2
20109,866 mi2
201113,735 mi2
201216,267 mi2
201313,428 mi2
201412,053 mi2
20158,433 mi2
20164,206 mi2
2017 YTD3,578 mi2
Background Map: Esri, HERE, DeLorme, MapmyIndia, © OpenStreetMap contributors, and the GIS user community
2 Mile Buffer Around New
Wells By Year
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New Miles and Activity Footprint
*2017 Forecasted
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Predicting New Miles With Activity Footprint
Evolution of Oil Gathering in NDStatewide Totals
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Evolution of Oil Gathering in ND
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Gas Gathering & Processing
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Gas Gathering & Processing
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Solving the Flaring Challenge
Presentation Outline
• Current oil transportation dynamics
• Understanding current and future oil production
– Pricing update
– Activity
– Oil forecasts
• North Dakota natural gas production
– Flaring and gas capture
– Natural gas liquids
• Pipeline construction update
• Refrac economics
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Bakken Refracs
Updated From Previous Refrac Work
185 Wells, Up From 142
List Cleaned Up With DMR Assistance
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Refracs In the Bakken*
*While careful work was performed to discover as many non-confidential,
modern refracs as possible, this data set is likely not all inclusive.
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Refrac Completion Year*
*While careful work was performed to discover as many non-confidential,
modern refracs as possible, this data set is likely not all inclusive.
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Example: Pre/Post Refrac Oil
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Example: Pre/Post Refrac Oil
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Performance Pre/Post Refrac
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Performance Pre/Post Refrac
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Example: 257,000 BBLS of Incremental Production
Refrac Economics Methodology
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Incremental Production
Above Original Well Decline Profile
Assumes Refrac Decline Curve
Profile Matches Original Well
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Refrac Summary of $45 Wellhead Oil
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Refrac Breakeven Summary
Justin J. Kringstad, DirectorNorth Dakota Pipeline Authority
600 E. Boulevard Ave. Dept. 405Bismarck, ND 58505-0840
Phone: (701)220-6227Fax: (701)328-2820
E-mail: [email protected]
Websites: www.pipeline.nd.gov
www.northdakotapipelines.com
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Contact Information
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