Encore/Kerr McKee Finds Good Well, Dunn Co.

Encore Operating, which recently purchased the Anadarko/Kerr McGee Williston Basin holdings, has completed a good Bakken well in Murphy Creek Field SW of Killdeer in Dunn Co. The Kulish 24-2H, sec. 2, T144, R96, was completed flowing just shy of 500 bbls/day on a 7/32 choke. The well has produced almost 10K bbls after two months of production. This well is a north offset to the company's other Kulish well in the section to the south (see map from 3/20/07 below). The company has also recently drilled a SW offset in sec. 11 and is currently finishing drilling another offset to the west in sec. 3. Marathon has three wells staked in the six sections to the west of these wells.

Kerr McGee has been using a dual lateral configuration on 640 acre spacing in the area, which is different from the usual configuration of one two mile long lateral extending over two sections. Encore may be considering switching to single lateral wells as the company stated that it has identified ways to reduce well costs, and single laterals may be the result, although nobody can argue based on the results of the latest Kulish well that their current configuration doesn't work.

This area is interesting geologically in that it is near the Heart River Fault, which is one of the major structural features in the basin. This same fault is thought to be the trap for the prolific Winnipeg gas wells discovered by Gulf in the Richardton and Taylor area in the 80's. Regarding the Bakken, major faults are considered very beneficial for fracture development since it is thought that they serve as a conduit for fluids to migrate and dissolve the salts and possibly some carbonates underlying the Bakken. This would then have led to overlying formations, including the Bakken, to have settled and created fractures. Where some settling occurred before or during the period when the Bakken was deposited, the Bakken formation would be thicker in such an area, since there would be a "low spot" that accumulated more sediment. It appears that an area like this is the adjoining township to the west in T144, R97, where geologists have mapped an anomalously thick middle Bakken section. As of yet, no Bakken wells have been permitted in that township.

An indication of the productive ability of the fracturing in the area occurred in 1981 when Adobe drilled the Federal-Killdeer in sec 4, T144, R96. When drilling through the lower Lodgepole, the formation immediately above the Bakken, the bit hit an apparent fracture and a gas kick almost caused a blowout. The well was brought under control and the hole was cased, but production tests proved negligible and the well was abandoned.