Bakken Oil and Gas Producers Have Choices Beyond Curtailing Well Production to Hit New Flaring Limits Planning

Author: Matt Harriman

By January 2015 petroleum producers operating in the Bakken and Three Forks formations have a new limit for flaring of 23% of all gas produced. The North Dakota Industrial Commission has reduced the flaring limit to 10% of gas produced by 2020, and potentially 5% beyond that.

For producers facing these changes, it’s a short-sighted response to focus only on constraining production at the well to stay within flaring limits.  New flaring limits allow specific wells, or even entire fields of wells to exceed gas-flaring goals as long as companies are compliant with flaring limits across production county-wide or state-wide.

The county-wide, state-wide flaring allowance offers flexibility to producers – but how do companies get a complete picture of production capability, facility capacity and bottlenecks across their entire asset base? Infrastructure bottlenecks are not always easy to identify within complicated flow networks like those we see in the Bakken. 

One company came to 3esi-Enersight without a clear understanding of where the choke point resided within their asset, but they knew they were constrained. When we gathered and loaded all facility information, pipeline details, development plans and production data into 3esi-Enersight, the complete picture of their assets and operations quickly identified the limiting factor – a gas plant downstream of their compression facilities.

Visualizing underutilization of available compression capacity due to downstream plant limitations.

Gaining visibility into the interdependencies of capacity constraints and flaring limitations is only a starting point for Bakken producers. They next need to rapidly evaluate different development options to find the most economically viable approach to form a realizable plan that optimally uses capital for maximum profitable production.

Back to the case where the company’s gas plant capacity was the bottleneck, we used 3esi-Enersight to do side-by-side comparisons of several different development scenarios. In a matter of hours, we generated models of different options from facility expansion to well curtailments to fit within capacity constraints and flare restrictions. For each scenario, we generated realizable production, capital and cash flow forecasts to provide the company with the ability to choose the most viable and advantageous development plan to then execute.  

Modelling facility expansion vs. well curtailment to gauge impact on net cash flow

New 2015 flaring limits for Bakken and Three Forks producers is the latest industry change that necessitates holistic development plans for oil and gas companies to mitigate risks and make the best decisions. Some companies may settle with applying constraints at the well to comply with flaring limits. Those E&P companies wanting to outperform their peers will seek out a complete and financially sound model of their entire operations to ensure their profitable and sustainable future.

Find out more: 3esi-Enersight cloud-based petroleum planning solution.

About the author

About Matt Harriman – Matt is the US Consulting Manager for 3esi-Enersight Corporation and he helps energy and petroleum companies use 3esi-Enersight to make informed decisions to achieve capital efficient production and operations. As an advisor and trainer, Matt assists with development modelling, overhauling company-wide planning workflows for great accuracy and efficiency, and coaching users to be proficient with 3esi-Enersight. Matt applies first-hand experience with shale project development modelling working on some of the most active plays in the US including: Anadarko, Bakken, Barnett, Eagle Ford, Haynesville, Marcellus, Permian, Utica and Woodford plays. Matt has a Masters of Science in Applied Mathematics from the University of Central Oklahoma and a Bachelor of Science in Mathematics. His education and career share a focus in mathematical modelling, operations research, and statistics.