Marathon Oil Drilling Under Lake Sakakawea-McKenzie County North Dakota
Marathon Oil has spud in their second horizontal Bakken test in McKenzie County North Dakota. The company has moved in Helmrich & Payne rig #256 and is making hole at the Myrmidon #1-2H ne-ne 2-151n-94w. Bottom hole location for this test will be the sw-sw 11-151n-94w. Of interest, this will be the first North Dakota horizontal Bakken test that will attempt to establish production beneath Lake Sakakawea, the third largest man-made lake in the United States, after Lake Mead and Lake Powell. This reservoir has a length of about 178 miles and contains roughly 1,320 miles of shoreline.
Originally the Myrmidon #1-2H prospect was generated by Black Rock Resources (BRR), a consortium of several companies including Savant Oil and Gas, Castle Rock Resources, Kirkwood Oil and Gas, and several individuals. The acreage that Marathon is drilling on is part of a 100,000 acre lease block that BRR sold to Marathon Oil for a reported $43 million. Prior to this sale, BRR had asked and received permission to create a 1,280 acre spacing drilling unit that included all of section 2 and 11 of 151n-94w. In supporting the request for the creation of this horizontal Bakken drilling unit before the Industrial Commission, the following reservoir and economic data was presented at the hearing:
Bakken Reservoir and Recovery Data
Reservoir Type Middle Bakken Silty Dolomite
Spacing 1280 acres
Stimulation Type Gelled Water/Sand Frac
Reservoir Thickness 38 ft
Water Saturation 25%
Oil Gravity 42 degrees API
GOR 800 scf/stb
Oil Formation Volume Factor 1.5 Res. BBL/STBO
OOIP 16,981,000 bbls
EUR 800,000 BBLS
Recovery Factor 5.5%
Capital Cost $6,000,000
Expected IP: 650 BOPD
Ultimate Recovery 800,000 BBLS Oil
960,000 Mcf Gas
Royalty Burden 20%
Operating Cost $6,000 per month
Prices $60/bbl Constant Oil Price
$6.50/MMbtu Constant Gas Price
Future Net Revenue $4,590,000
Operating Costs $2,041,000
Production Taxes $5,048,000
Rate of Return >100%
Undiscounted Return on Investment 6.5
Bear in mind, that when BBR presented this data to the Industrial Commission, the company used a constant oil price of $60 per barrel. Current Williston Basin sweet is now selling for $112.75 per barrel.
Nearest Bakken penetration to the Myrmidon #1-2H is about a mile to the northwest at a field well within Antelope Field, a multi-pay oil pool. Originally drilled by Comdisco Operating and now controlled by Chesapeake Operating, the Gudbranson #1 nw-se 34-152n-34w was completed pumping 192 bopd and 96 mcfgpd from the vertical Sanish section 10,650’-10,660’. Since first being put on production in the latter part of 1990, this well has cumulated over 91,349 bo, 88.5 mcfg and 3,467 bw. Antelope Field itself is a southeast plunging anticline and was discovered in 1953. Producing from the Devonian, Madison, Red River, Sanish, Silurian and Winnipeg/Deadwood, this field has produced over 41.3 mmbo, 61.6 bcfg and 46.4 mmbw.
As mentioned, the Myrmidon #1-2H is the second Bakken test drilled by Marathon Oil in McKenzie County. The first sideways test drilled by the company scales about 36 miles southwest at the Dolezal #24-24H se-sw 24-146n-99w. Completed in November of 2006, this single lateral Bakken producer was given an IP of 82 bopd, 68 mcfgpd and 103 bwpd. Incorporated into Ranch Creek Field, the Dolezal #24-24H has produced over 29.3 k bo and 33 mmcfg. Ranch Creek Field is a Bakken oil pool discovered by PDC Corporation at the Carmona #31-1H ne-nw 1-146n-99w. Marathon Oil has now assumed operatorship of this discovery well.
Content courtesy of The Rocky Mountain Oil Journal