Marathon Quickly Getting To The Bottom Of Things

Marathon has been flying under the radar somewhat lately either through choice or by neglect. However, they have a undeniably huge presence in this play, and their efforts shouldn't go unnoticed, plus it was good to see a true "major" come back to ND.

What I find interesting is their best drilling time of 21 days, which is about how long it took companies to drill a vertical well to 10K ft. in that area not too many years ago. No doubt their use of the new H&P flex rigs is contributing to that feat.

Also interesting is their projection of peak production of 20K bbls/day in 2012, which is about three times their projected daily production rate for this year. That may difficult to acheive though because at some point the new wells are merely making up for the older declining wells, and it gets pretty tough to post such gains, unless of course you are drilling a lot more wells per month then you had in the past.

USGS Bakken Study Slides

I don't know how long the slides have been available, but it sheds a little light into the methodology they used.

USGS Slides

Also, there is a very detailed examination of the Bakken play at the
The Oil Drum, which I confess I only have time to skim through right now.

Time For Some TV

Fox Business News spent some time in ND last week up in the Stanley area on a Whiting location and put together a number of segments, including interviews with some Whiting officials, Cody from the Rocky Mountain Oil Journal, and some area farmers.

3.65 Billion BBLs, That's How Much

The USGS has estimated mean recoverable reserves of 3.65 billion bbls, and the estimate does not cover the Canadian portion of the Bakken. The assessment was based on geological elements that include: "(1) source rock distribution, thickness, organic richness, maturation petroleum generation, and migration; (2) reservoir rock type (conventional or continuous), distribution and quality; and (3) character of types and time of formation with respect to petroleum generation and migration. Detailed framework studies in stratigraphy and structural and the modeling of petroleum geochemistry, combined with historical exploration and production analyses" were also used.

The most important elements used in their geologic model were "(1) the geographic extent of the Bakken Formation oil generation window; (2) the occurrence and distribution of vertical and horizontal fractures; and (3) the matrix porosity within the middle sandstone member." Thus, it appears that the area where the Bakken has generated oil was divided into five separate assessment areas based on what appears to be somewhat comparable geologic characteristics of mainly the middle Bakken member. That consideration appears to be based on the fracturing and porosity present in those areas.

After challenging someone to show where there were more than one billion of recoverables in ND for months and getting no response, I feel pretty foolish for throwing out a 20 billion bbl number last night for the entire Bakken.

From the Dickinson Press:

Mike Armstrong, president of Dickinson-based Armstrong Corp., an oil and gas prospecting firm, said he was excited to hear the news but gave a skeptical reaction to the report. “How about this: Don’t over react,” Armstrong said. “A study is just that, it’s a study. There’s no guarantees.” Armstrong, who’s been in the oil business since 1975, said he thinks the report’s figure is an over-estimate. “I think they’re stretching it – a lot,” Armstrong said.

USGS Press Release

USGS Fact Sheet

USGS Interview (Audio)

USGS Slides


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Dickinson Press Article

New York Times Article

So. . . How Much??

So, what is the imminent USGS Bakken study going to come up with? Supposedly, it pertains to projected recoverable oil from MT, ND and Canada (since when did the USGS start estimating what's in Canada?), and not to the amount of oil generated or in place.

There must be at least one savant out there that can predict this to within 10-15 million bbls, not? Unless someone wants to donate some mineral rights, I don't see there being any prize to the winner, except knowing that you probably should have instead picked some lottery numbers. (I don't see this contest going anywhere for some reason.)

I don't think we'll let Mr. Steece from SD play, as he isn't quite sure where the Bakken extends. (Hint: look at some logs of some wells in SD and see if you can find it -- you won't). The part that really cracks me up is the "not fully convinced" and "it would not be wise" parts.

From the 4/8 Sioux Falls Argus Leader:

Fred Steece, oil and gas supervisor for the state Department of Environment and Natural Resources, said its not clear how much of the formation reaches South Dakota and whether the parts that do contain recoverable oil reserves. “Geologically, were not fully convinced that the productive zone of the Bakken extends into South Dakota,” Steece said.

“Otherwise, Im sure there would be people in here. There would be leasing and test drilling.” Its possible South Dakota could benefit from a Bakken boom, Steece said, adding that it would not be wise to start planning on bountiful production estimates based on expansive reserves that could be difficult to extract.

The Complex Quagmirey Predicament In T145N, R96W, Dunn Co.

The chickens have come home to roost, oil and water don't mix, too many cooks spoil the broth, you can't unscramble an egg. Yeah okay. Anyway. . .

A complex quagmire has become apparent in T145-R96 after 1280 acre spacing and drilling units were created from different directions and fields. And what happens when you get to the middle and want to join everything up . . . . well, maybe a few orphaned sections that won't fit into the prevailing spacing pattern.

The NDIC says enough of this nonsense and has put a 90 day stop to the madness while everything (apparently) is sorted out.

Larry's March Scorecard for Mountrail County

At month end there were 24 drilling rigs on location in Mountrail County. EOG 8 rigs; Hess 5 rigs; Whiting 4 rigs; Fidelity 2 rigs; Behm, Brigham, Hunt, Murex, and Slawson 1 rig each.

During March 15 wells were spudded. EOG 4; Hess 5; Whiting 2; Fidelity 2; Behm 0; Brigham 0; Hunt 1; Murex 0; and Slawson 1.

During March NDIC issued 31 new permits to drill. EOG 13 permits in Wayzetta, Austin, Burke, Clearwater, and Ross Townships. Whiting 5 permits in Crane Creek, Osborn, and Knife River Townships. Hess 2 permits in Idaho and Ross Townships. Fidelity 0 permits. Slawson 2 permits in Parshall and Crane Creek Townships. Hunt 2 permits in Oakland and Austin Townships. Murex 1 permit in Sikes. Brigham 1 permit in Alger. Sinclair 2 permits in Burke Township. St Mary 3 permits in Lostwood and Powers Townships.