American Oil and Gas Reporter - November 2019 - 78

ConventionCoverage: North Dakota Petroleum Council
differ between coastal and inland states,
arguing the 2014-16 contraction hurt the
Mid-Continent more than other regions.
If so, producers in North Dakota and
Texas may get more for crude than the
$20-$30 a barrel that economic models
foresee in a recession, he held. Despite
warnings of doom from many quarters
with differing projections for a recession's
duration, he told NDPC a bull market
eventually would emerge.

Colin Fenton, chairman of commodities
at Tudor, Pickering, Holt & Co., sees
future oil and gas usage pretty much in
line with today's rates. He offered his
predictions during the North Dakota Petroleum Council's annual convention,
held Sept. 17-19 in Watford City, N.D.

dian crude and refining it into products
exported to Mexico.
Global events such as the drone strike
on the Saudi petroleum complex or the
Hong Kong riots support his projection
that energy demand will increase because
governments typically deal with these
problems using energy-based solutions,
he described. Markets are imposing countermeasures in response to actions such
as the Trump administration's tariffs,
which Fenton predicted meant another
year or so of economic activity that sets
the stage for a longer bull market in oil
and gas. "Across all of these different dimensions, we are seeing monetary, trade
and geosecurity policies push oil and gas
into a better spot," he offered.
Economic models say there is a 45%
possibility of recession within the next
12 months, with some analysts putting
the likelihood closer to 75%, Fenton
said. He pointed to Aug. 14, when a one
basis point inversion in the U.S. yield
curve between the two-year and 10-year
markets caused an 800-point sell-off in
the Dow Jones average. Describing the
market response as a massive overreaction, he noted inversions did tend to
precede recessions, but by an average
of 500 days. Fenton calculated the target
date for the next recession was Dec. 26,
2020. "We have all those days in between
to see what happens with supply and
demand," he posed.
If a recession hits the United States,
Fenton observed that its impact might
78 THE AMERICAN OIL & GAS REPORTER

Drilling The Williston
Producers such as ConocoPhillips can
apply technology and improved cooperation as they work their Bakken Shale
acreage and continue the play's great
performance, observed Chris Malkin, the
company's Williston Basin asset manager.
To bolster his assessment, he pointed to
three examples.
Looking at intracompany cooperation,
Malkin described how ConocoPhillips
transferred its gas lift experiences in
the Eagle Ford Shale to the Bakken. He
noted that the company found success
in applying the old technology of compressing natural gas, and injecting it to
decrease the fluid density in the wellbore
and increase flow rates to unconventional
opportunities.
"There are a few things we like a lot
about gas lift," Malkin said. "First, and
the big one, we move well maintenance
from down hole to the surface. Compared
with rod pumps and electric submersible
pumps, gas lift has almost no moving
parts down hole. Second, we like the
scalability. Both rod pumps and ESPs
have quite a narrow operating range when
it comes to production, but gas lift has a
much broader operating range. Finally,
gas lift presents an opportunity for beneficial use of gas that otherwise may have
been flared."
Turning to intercompany cooperation,
Malkin emphasized the extensive work
drilling service providers had put into
automated well steering, with directional
drillers contributing to creating the underlying artificial intelligence's logic.
"These programs essentially automate
the day-to-day decisions and processes
that rational drillers would make. With
automation, the rig can react to new
measurements while drilling much more
quickly," he indicated.
Mechanical isolation refractures offer
another example of leveraging information
both across company lines and basins,
Malkin assessed. Bakken and Eagle Ford

Chris Malkin, ConocoPhillips' Williston
Basin asset manager, tells the North
Dakota Petroleum Council's annual meeting that cooperation among producers
and improving technology are crucial to
developing the Bakken Shale.

operators have shared their experiences
in both plays to refine stimulation operations, he said.
"There are more than 60 producing
and midstream companies in the Bakken,"
Malkin concluded. "Companies have
moved beyond the phase of establishing
positions. We are moving into the phase
of optimizing and improving our positions.
Understandably, we all have a competitive
advantage to maintain, but I think there
are thousands of areas where we can collaborate more effectively across lines,
including safety, water disposal, well interactions and workforce."
North Dakota's Goals
North Dakota continues to move toward
Governor Doug Burgum's goal of 2
million barrels a day of oil production,
noted Charles Gorecki, chief executive
officer at the University of North Dakota's
Energy & Environmental Research Center.
He said when that goal was announced
in 2016, oil sold for $50 a barrel and
North Dakota was producing less than
1.0 MMbbl/d.
"In spite of low energy prices, we
started to increase production, and the
state now is producing more than 1.4
MMbbl/d. At the same time, the price of
oil has not increased radically," Gorecki
observed. "The one reason why this is
happening is technology development.
Year-over-year, every well has higher average production. We have been working
very hard on this goal through the Bakken
production optimization program, and
American Oil and Gas Reporter - November 2019

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