Tuesday, August 28, 2007
Let's Test That Seismic Anomaly, Shall We? Mountrail Co.
Robert Griffon and his partners are currently re-entering a dry hole to drill a lateral that transverses a "bright spot" or an area that 3D seismic indicates has an anomaly in the fracturing properties of the Bakken. This well, being developed on a 320 acre drilling unit in the southeast quarter of sec 23 and northeast quarter of sec.26, T.151, R.89, is about six or seven miles southeast of EOG's current development in Parshall Field. Griffon thinks that the brighter areas as depicted on the seismic data indicate a higher level of fracturing or porosity than the darker areas. We shall see how well this interpretation works out for them.
Sunday, August 26, 2007
That Nagging Well Density Problem
This will be a long post folks, so if you don’t like reading dry material, it’s best to skip this one.
This past week the issue of well density came to a head in a hearing of the Industrial Comm. when Marathon sought to create a few 1280 acre drilling units in Dunn Co. As background, the state regs allow a horizontal well to be drilled upon a unit only as large as 640 acres. Therefore, if a company plans a H well on a 640 acre unit, it only has to apply for a drilling permit, but a hearing is required to create a unit larger than 640 acres. Now until this hearing, there has been little opposition to any application for a 1280 acre unit that I can recall (outside of Murphy Creek field that will be discussed later). What caused the contention during this case was that in some of the proposed drilling units, Hunt owned a substantial, but less than majority interest. In one unit, however, Hunt owned 50% as it controlled the interest in one section, and Marathon controlled the other section.
Hunt objected to the 1280 acre unit(s) where it had an interest, and maintained that it wanted to develop its acreage on 640 acre units and cited that it expected to transfer its success with its completion techniques in the Parshall area to other areas in the play. Now it should be mentioned that the proper spacing for Bailey Field was also considered at this hearing. Marathon, the most active company in the field, maintains that it wanted flexibility in the field rules to allow for the possibility of a second and perhaps a third lateral in each 1280 acre unit. It proposed that it be allowed to place the initial lateral no closer than 1320 ft. from the east or west unit boundary (these are all standup units and the field rules required that the lateral more or less transverse the center of the two sections).
By placing its lateral close to one side of the unit, Marathon could then drill a second lateral on the other side of the unit, if it was shown that a second lateral was economic. The company said it may also drill a third lateral in some units and it has identified at least one unit where that would be economic. Marathon stated that it needed a number of months to evaluate the productive trend of a well to determine the permeability, and hence, whether a second lateral would be utilized. Marathon’s engineer originally didn’t place a precise length of time this evaluation would take, but after questioning by the commission, stated that a minimum of three months would be needed (if I recall correctly). Marathon presented a number of exhibits indicating how big an areal extend it believed a lateral was effectively draining.
The commission then questioned Marathon’s engineer regarding it’s prior application to drill two separate grassroot vertical wells, each with a lateral, by skidding the rig a few feet after drilling the first well. (See 7/16 post). After steadfastly maintaining that it needed time to evaluate whether a second lateral would be drilled, the commission finally got the Marathon engineer to admit that it would in fact skid the rig and drill some second wells immediately after finishing the first and would not require a evaluation phase in that case. The commission then asked the million dollar question that if you drill the initial lateral close to the west line of the 1280 acre unit, for example, and then decide not to drill a second lateral on the east half, how does that protect the correlative rights of the owners in either half of the unit, when it appears that all the production is coming from the west 640 acres in the unit.
The Marathon engineer then gave some rather unpersuasive testimony, in my opinion, that he believed that the east half would in fact have “some” contribution to the well’s production. (However, if the permeability was good enough for the east half to contribute “some” oil way over to the wellbore on the west half, wouldn’t that justify a second lateral on the east half?) Meanwhile, Marathon’s “area of mutual interest” partner, PDC, had developed a portion of the field on 640 acre units, but didn’t have an objection to Marathon’s proposed plan of development. Marathon stated that the wells on PDC’s 640 acre units were demonstrating half or less of the performance of Marathon’s wells on 1280 acre units. When questioned why they couldn’t wait with the units that involved Hunt and let Hunt develop its own lands and use its own drilling and completion methods on 640 acre units, which Hunt thought superior to Marathon’s, Marathon stated that they had five rigs active and a drilling schedule to follow.
In an area not far from the Marathon/Hunt issue, when Kerr-McGee (properties now operated by Encore) originally applied for drilling units in Murhpy Creek field, it asked for 1280 acre units with a dual co-planar placed on one side of the unit. The company stated, much like Marathon, that this initial well placement would allow a second well on the unit, if justified. There was some mineral owner opposition on one unit and the company then began developing the field by utilizing dual laterals from a single vertical well on 640 acre units. Encore has since switched to utilizing a single lateral diagonally across a 640 acre unit. Marathon made an application last month to expand the boundaries of the Murphy Creek field to create eighteen new 1280 acre spacing units, which was heard at the hearing last week. (See 7/30 post). In the meanwhile, before the hearing, Encore received about a half dozen drilling permits in the Murphy Creek area for wells on 640 acre spacing on lands that were contained in Marathon’s application. During the hearing, Marathon stated it had reached agreement with Encore, and Encore would develop a number of sections on 640 acre units, which Marathon dropped from its application, and Marathon would request that the remaining units be made into 1280 acre drilling units, instead of spacing units.
Now my personal opinion on some of these matters, for whatever it's worth. I don’t believe that a lateral run down the center of a unit drains the entire unit, absent some extensive natural fracturing. I’m not buying this proprietary completion techniques story that some companies are touting. There are some commonly know conditions that are believed to have “busted up” the Bakken in certain areas, which some companies have exploited. In my opinion, geology is the primary driver of the success of these wells. EOG has been telling Wall Street that it believes some (most?) of its success in Parshall Field is attributable to its completion techniques, but then admits that up until now its success has been confined to one small area, where it seems apparent that there is excellent natural fracturing. Hunt also makes somewhat similar claims. When Hunt comes down to the Bailey Field area and brings in wells like those in Parshall Field, I will amend my opinion.
For example, Ansbro has an excellent well on its Kadrmas lease that blew out and caught fire. The well has produced about 60k bbls from one 2,500 ft lateral that I believe was not initially fraced. Meanwhile, the company’s dual co-planar wells with about 9k ft of lateral open, on 1280 acre units immediately to the south and east, have produced a fraction of what the Kadrmas well has. Marathon’s Stohler well in Bailey field has been one of the best Bakken performers in the state outside of Parshall field, and Marathon presumably did not use completion techniques on this well any differently than its other wells, and it is surrounded by less than stellar wells. Without information that is available only to these companies, I believe what makes these two wells “flukes” appears to be some isolated favorable formation quality, rather than completion techniques.
I also think 640 acre units, with their shorter laterals, are more favorable in terms of getting a better frac job. Marathon stated that it doesn’t use “stage fracing,” on its nearly two mile long laterals, whereby individual sections of the lateral are isolated and fraced separately. Marathon said the risk and expense of the procedure were prohibitive. The company claimed that its review of data indicates it is getting a fairly uniform frac over the entire length of the lateral without the use of stage fracing (which I find hard to believe), but didn’t know how far the fracs extended in the formation.
Perhaps when the performance and economics of the Encore and Marathon wells in Murphy Creek field, on different sized units, are compared, some of these questions can be answered. I remember attending the multi-day hearing in ‘90 or ‘91 on spacing regarding the wells in the upper Bakken shale play, which everyone believed back then as being the new Prudoe Bay. There was differing ideas then regarding whether well density should be 320 acres or 640 acres, and for the life of me I can’t remember what came of it, because the play died out a few months after the hearing. Spacing generally must have been left at 320 acres because until only recently, that was the largest unit allowed by the regs for horizontal wells. Bottom line here is that I generally agree with a comment made on a previous post that 1280s will be used to tie up leases and 640s will be used to actually produce.
If anyone has any information as to details of Hunt’s testimony (or correct my recollection in general), feel free to elaborate as I missed most of it.
This past week the issue of well density came to a head in a hearing of the Industrial Comm. when Marathon sought to create a few 1280 acre drilling units in Dunn Co. As background, the state regs allow a horizontal well to be drilled upon a unit only as large as 640 acres. Therefore, if a company plans a H well on a 640 acre unit, it only has to apply for a drilling permit, but a hearing is required to create a unit larger than 640 acres. Now until this hearing, there has been little opposition to any application for a 1280 acre unit that I can recall (outside of Murphy Creek field that will be discussed later). What caused the contention during this case was that in some of the proposed drilling units, Hunt owned a substantial, but less than majority interest. In one unit, however, Hunt owned 50% as it controlled the interest in one section, and Marathon controlled the other section.
Hunt objected to the 1280 acre unit(s) where it had an interest, and maintained that it wanted to develop its acreage on 640 acre units and cited that it expected to transfer its success with its completion techniques in the Parshall area to other areas in the play. Now it should be mentioned that the proper spacing for Bailey Field was also considered at this hearing. Marathon, the most active company in the field, maintains that it wanted flexibility in the field rules to allow for the possibility of a second and perhaps a third lateral in each 1280 acre unit. It proposed that it be allowed to place the initial lateral no closer than 1320 ft. from the east or west unit boundary (these are all standup units and the field rules required that the lateral more or less transverse the center of the two sections).
By placing its lateral close to one side of the unit, Marathon could then drill a second lateral on the other side of the unit, if it was shown that a second lateral was economic. The company said it may also drill a third lateral in some units and it has identified at least one unit where that would be economic. Marathon stated that it needed a number of months to evaluate the productive trend of a well to determine the permeability, and hence, whether a second lateral would be utilized. Marathon’s engineer originally didn’t place a precise length of time this evaluation would take, but after questioning by the commission, stated that a minimum of three months would be needed (if I recall correctly). Marathon presented a number of exhibits indicating how big an areal extend it believed a lateral was effectively draining.
The commission then questioned Marathon’s engineer regarding it’s prior application to drill two separate grassroot vertical wells, each with a lateral, by skidding the rig a few feet after drilling the first well. (See 7/16 post). After steadfastly maintaining that it needed time to evaluate whether a second lateral would be drilled, the commission finally got the Marathon engineer to admit that it would in fact skid the rig and drill some second wells immediately after finishing the first and would not require a evaluation phase in that case. The commission then asked the million dollar question that if you drill the initial lateral close to the west line of the 1280 acre unit, for example, and then decide not to drill a second lateral on the east half, how does that protect the correlative rights of the owners in either half of the unit, when it appears that all the production is coming from the west 640 acres in the unit.
The Marathon engineer then gave some rather unpersuasive testimony, in my opinion, that he believed that the east half would in fact have “some” contribution to the well’s production. (However, if the permeability was good enough for the east half to contribute “some” oil way over to the wellbore on the west half, wouldn’t that justify a second lateral on the east half?) Meanwhile, Marathon’s “area of mutual interest” partner, PDC, had developed a portion of the field on 640 acre units, but didn’t have an objection to Marathon’s proposed plan of development. Marathon stated that the wells on PDC’s 640 acre units were demonstrating half or less of the performance of Marathon’s wells on 1280 acre units. When questioned why they couldn’t wait with the units that involved Hunt and let Hunt develop its own lands and use its own drilling and completion methods on 640 acre units, which Hunt thought superior to Marathon’s, Marathon stated that they had five rigs active and a drilling schedule to follow.
In an area not far from the Marathon/Hunt issue, when Kerr-McGee (properties now operated by Encore) originally applied for drilling units in Murhpy Creek field, it asked for 1280 acre units with a dual co-planar placed on one side of the unit. The company stated, much like Marathon, that this initial well placement would allow a second well on the unit, if justified. There was some mineral owner opposition on one unit and the company then began developing the field by utilizing dual laterals from a single vertical well on 640 acre units. Encore has since switched to utilizing a single lateral diagonally across a 640 acre unit. Marathon made an application last month to expand the boundaries of the Murphy Creek field to create eighteen new 1280 acre spacing units, which was heard at the hearing last week. (See 7/30 post). In the meanwhile, before the hearing, Encore received about a half dozen drilling permits in the Murphy Creek area for wells on 640 acre spacing on lands that were contained in Marathon’s application. During the hearing, Marathon stated it had reached agreement with Encore, and Encore would develop a number of sections on 640 acre units, which Marathon dropped from its application, and Marathon would request that the remaining units be made into 1280 acre drilling units, instead of spacing units.
Now my personal opinion on some of these matters, for whatever it's worth. I don’t believe that a lateral run down the center of a unit drains the entire unit, absent some extensive natural fracturing. I’m not buying this proprietary completion techniques story that some companies are touting. There are some commonly know conditions that are believed to have “busted up” the Bakken in certain areas, which some companies have exploited. In my opinion, geology is the primary driver of the success of these wells. EOG has been telling Wall Street that it believes some (most?) of its success in Parshall Field is attributable to its completion techniques, but then admits that up until now its success has been confined to one small area, where it seems apparent that there is excellent natural fracturing. Hunt also makes somewhat similar claims. When Hunt comes down to the Bailey Field area and brings in wells like those in Parshall Field, I will amend my opinion.
For example, Ansbro has an excellent well on its Kadrmas lease that blew out and caught fire. The well has produced about 60k bbls from one 2,500 ft lateral that I believe was not initially fraced. Meanwhile, the company’s dual co-planar wells with about 9k ft of lateral open, on 1280 acre units immediately to the south and east, have produced a fraction of what the Kadrmas well has. Marathon’s Stohler well in Bailey field has been one of the best Bakken performers in the state outside of Parshall field, and Marathon presumably did not use completion techniques on this well any differently than its other wells, and it is surrounded by less than stellar wells. Without information that is available only to these companies, I believe what makes these two wells “flukes” appears to be some isolated favorable formation quality, rather than completion techniques.
I also think 640 acre units, with their shorter laterals, are more favorable in terms of getting a better frac job. Marathon stated that it doesn’t use “stage fracing,” on its nearly two mile long laterals, whereby individual sections of the lateral are isolated and fraced separately. Marathon said the risk and expense of the procedure were prohibitive. The company claimed that its review of data indicates it is getting a fairly uniform frac over the entire length of the lateral without the use of stage fracing (which I find hard to believe), but didn’t know how far the fracs extended in the formation.
Perhaps when the performance and economics of the Encore and Marathon wells in Murphy Creek field, on different sized units, are compared, some of these questions can be answered. I remember attending the multi-day hearing in ‘90 or ‘91 on spacing regarding the wells in the upper Bakken shale play, which everyone believed back then as being the new Prudoe Bay. There was differing ideas then regarding whether well density should be 320 acres or 640 acres, and for the life of me I can’t remember what came of it, because the play died out a few months after the hearing. Spacing generally must have been left at 320 acres because until only recently, that was the largest unit allowed by the regs for horizontal wells. Bottom line here is that I generally agree with a comment made on a previous post that 1280s will be used to tie up leases and 640s will be used to actually produce.
If anyone has any information as to details of Hunt’s testimony (or correct my recollection in general), feel free to elaborate as I missed most of it.
Friday, August 24, 2007
Permits By The Dozen In Dunn Co.
During the past week or so, over a dozen drilling permits were issued to primarily Marathon and Encore, and one to Tracker Res., and most within a few miles of the town of Killdeer in central Dunn Co. Just southwest of Killdeer in Murph
y Creek Field, Encore and Marathon have reached some sort of agreement whereby Encore is going to develop an number of sections on 640 acre spacing and Marathon will develop its portion of the field on 1280 spacing.
It appears that the time may have to come pretty soon for the state to set some sort of uniform spacing for these Bakken wells instead of leaving it up to the individual companies, which often leads to a hodge-podge of different sized units in the same field. Some companies like Marathon are beginning to place their lateral to one side of the unit which would allow another lateral on the other side of the unit, in the event a second lateral will be economic to drill. Meanwhile, other companies are drilling a lateral through the center of a 640 or 1280 acre unit, which does not allow for infill drilling within that unit. Me thinks its time for some uniform spacing rules.
Then there is this puzzle with the apparent shortage of drilling rigs, why the two rigs that Ansbro had been utilizing in its drilling program (both Nabors rigs, I believe) have been stacked out in Willmen Field since May or June. It appears that Ansbro has temporarily suspended or permanently canceled its drilling program, but that doesn't explain why these rigs aren't being used by another company. If anybody out there knows, let me know. Some rumors are going around that Ansbro and Continental may be joining forces in some manner regarding the development of the hundreds of thousands of acres that Ansbro has under lease primarily in southwestern Dunn Co. In certain areas, Continental is actively leasing whatever acreage Ansbro for whatever reason didn't get.
y Creek Field, Encore and Marathon have reached some sort of agreement whereby Encore is going to develop an number of sections on 640 acre spacing and Marathon will develop its portion of the field on 1280 spacing. It appears that the time may have to come pretty soon for the state to set some sort of uniform spacing for these Bakken wells instead of leaving it up to the individual companies, which often leads to a hodge-podge of different sized units in the same field. Some companies like Marathon are beginning to place their lateral to one side of the unit which would allow another lateral on the other side of the unit, in the event a second lateral will be economic to drill. Meanwhile, other companies are drilling a lateral through the center of a 640 or 1280 acre unit, which does not allow for infill drilling within that unit. Me thinks its time for some uniform spacing rules.
Then there is this puzzle with the apparent shortage of drilling rigs, why the two rigs that Ansbro had been utilizing in its drilling program (both Nabors rigs, I believe) have been stacked out in Willmen Field since May or June. It appears that Ansbro has temporarily suspended or permanently canceled its drilling program, but that doesn't explain why these rigs aren't being used by another company. If anybody out there knows, let me know. Some rumors are going around that Ansbro and Continental may be joining forces in some manner regarding the development of the hundreds of thousands of acres that Ansbro has under lease primarily in southwestern Dunn Co. In certain areas, Continental is actively leasing whatever acreage Ansbro for whatever reason didn't get.
Wednesday, August 8, 2007
Burlington Hits The Magic 1K/Day Initial Rate, Dunn Co.
Burlington Res., aka Conoco/Phillips, along with its partner in the area, Continental Res., has completed its
State-Weydhal 44-36H well on 1280 acres in secs. 36, T147, R97 and 1, T146, R96, Dunn Co. for 1082 bbls/day. The well is located about nine miles NW of Killdeer on the west side of Highway 22. It has produced almost 28k bbls in three months ending in June. This area is one of the more active areas in the state with five combined rigs drilling in the Oakdale area and to the east in Baily Field.
Continental announced that they may add an additional rig to the play next month. The company also announced completion rates of the other wells in the area, the Veeder and Brown well at 344 and 519 bbls/day, respectively.
State-Weydhal 44-36H well on 1280 acres in secs. 36, T147, R97 and 1, T146, R96, Dunn Co. for 1082 bbls/day. The well is located about nine miles NW of Killdeer on the west side of Highway 22. It has produced almost 28k bbls in three months ending in June. This area is one of the more active areas in the state with five combined rigs drilling in the Oakdale area and to the east in Baily Field.Continental announced that they may add an additional rig to the play next month. The company also announced completion rates of the other wells in the area, the Veeder and Brown well at 344 and 519 bbls/day, respectively.
Friday, August 3, 2007
Prudhoe Bay, ND??
There seems to be no stopping the phenomenal success at Parshall Field in Mountrail Co. EOG statements regarding its 2nd Quarter results indicate more astonishing production rates from its wells -- 1,700 to over 2k bbls/day initial rates. Their calculation of 600k bbls recoverable per well may be overly optimistic, but there isn't enough production history yet to rule out the possibility. The company plans to add a fifth rig by years end and possibly have eight running by this time next year.
The importance of this find can't be overstated -- not only are there areas in ND as economic as those in MT, but there are areas that are exceedingly economic. How is the infrastructure in ND going to handle all this oil? More importantly, does anyone have any open minerals for lease in the area? haha
Whiting O&G has also announced a major discovery west of Parshall Field and has big development plans for that area.
The importance of this find can't be overstated -- not only are there areas in ND as economic as those in MT, but there are areas that are exceedingly economic. How is the infrastructure in ND going to handle all this oil? More importantly, does anyone have any open minerals for lease in the area? haha
Whiting O&G has also announced a major discovery west of Parshall Field and has big development plans for that area.
Monday, July 30, 2007
Marathon Shifts Into High Gear, Dunn Co.
Marathon has requested an that an astonishing 56 sections be divided into 28 separate 1280 drilling units in Dunn Co. Marathon has asked that Murphy Creek Field southwest of Killdeer be expanded to include 18 of those drilling units encompassing 36 additional sections, centered mainly in T.144, R.96, about six miles east of the Little Knife anticline. The attached map has those drilling units shaded in blue, 
although there are several sections shaded that are already subject to approved drilling units or spacing units within the field. Marathon recently became active in the area by spudding on the Hecker lease in secs. 5 and 8, T.144, R.96., and has two more locations staked immediately to the east and the northwest of this active well. One helpful aspect of this area is the availability of the Little Knife gas processing plant about ten miles to the west.
This is also the area that Encore Operating recently reported development plans (see 6/26 post), and it's possible the two companies may have entered in an operating agreement, or that Marathon has a working interest in all of these proposed units. Encore has switched to utilizing single lateral wells on 640 acre units instead using dual laterals. The company is currently drilling on the Truchan lease in sec. 33, T.145, R.95. Most of the leases in this area are set to expire in about two years.
Marathon has also requested that ten 1280 acre drilling units be established in scattered areas of T.146, R.93, T.145, R.93 & 94,and T.144, R.93. This area of interest is generally east, south and southeast of the current configuration of Bailey Field.
Word is that Marathon has one and possibly two more of its new-build Helmrich & Payne rigs arriving in August. It may be probable that the company may well meet its goal of drilling 300 Bakken wells in the next few years.
7/31 UPDATE:
Encore announced today that it may add a second and possibly a third rig to its Bakken development program by next year.
although there are several sections shaded that are already subject to approved drilling units or spacing units within the field. Marathon recently became active in the area by spudding on the Hecker lease in secs. 5 and 8, T.144, R.96., and has two more locations staked immediately to the east and the northwest of this active well. One helpful aspect of this area is the availability of the Little Knife gas processing plant about ten miles to the west. This is also the area that Encore Operating recently reported development plans (see 6/26 post), and it's possible the two companies may have entered in an operating agreement, or that Marathon has a working interest in all of these proposed units. Encore has switched to utilizing single lateral wells on 640 acre units instead using dual laterals. The company is currently drilling on the Truchan lease in sec. 33, T.145, R.95. Most of the leases in this area are set to expire in about two years.
Marathon has also requested that ten 1280 acre drilling units be established in scattered areas of T.146, R.93, T.145, R.93 & 94,and T.144, R.93. This area of interest is generally east, south and southeast of the current configuration of Bailey Field.
Word is that Marathon has one and possibly two more of its new-build Helmrich & Payne rigs arriving in August. It may be probable that the company may well meet its goal of drilling 300 Bakken wells in the next few years.
7/31 UPDATE:
Encore announced today that it may add a second and possibly a third rig to its Bakken development program by next year.
Tuesday, July 24, 2007
EOG Keeps Filling The Tanks, Parshall Field, Mountrail Co.
EOG has completed the Patten 1-02H well, sec. 2, T.152, R.90, in Parshall Field as another impressive producer at 1487 bbls/day. This well is a slight southeast stepout to the other producers in the field that are off confidential status and it has produced 42k bbls in the three months up to and including May. In May, the Bartelson well produced about 11k bbls, and the Warberg well made about 10k bbls. Some of the newer wells still on confidential status are reportedly producing in excess of a steady 1k bbls day, including a Whiting O. & G. well about ten miles to the west.
The best Bakken well in the state with reportable production, the Petro-Hunt USA 2B-3-1H well in Charlson Field, made just over 24k bbls for the month of May.
In the context of significance for the state oil industry, this find at Parshall Field appears to be on the scale not seen since the Lodgepole play in the Dickinson area in the early 90s, which had the industry in the entire country abuzz with the incredible production figures and reserves of those wells. Whether the geologic conditions involved in Parshall field include or extend beyond a township or two is the million dollar question, literally. Another area with some very impressive production figures still on confidential status is in the north Oakdale area of Dunn Co. Unfortunately, many of the Bakken wells outside of a few currently proven areas in other parts of the Bakken play appear to be marginally economic at best. I'm sure a few papers will be written about the Parshall field in the coming years that should shed some light on the interesting background information regarding its discovery and development.
The best Bakken well in the state with reportable production, the Petro-Hunt USA 2B-3-1H well in Charlson Field, made just over 24k bbls for the month of May.
In the context of significance for the state oil industry, this find at Parshall Field appears to be on the scale not seen since the Lodgepole play in the Dickinson area in the early 90s, which had the industry in the entire country abuzz with the incredible production figures and reserves of those wells. Whether the geologic conditions involved in Parshall field include or extend beyond a township or two is the million dollar question, literally. Another area with some very impressive production figures still on confidential status is in the north Oakdale area of Dunn Co. Unfortunately, many of the Bakken wells outside of a few currently proven areas in other parts of the Bakken play appear to be marginally economic at best. I'm sure a few papers will be written about the Parshall field in the coming years that should shed some light on the interesting background information regarding its discovery and development.
Monday, July 16, 2007
Marathon Tries New Drilling Approach, Dunn Co.
Marathon has received permission to drill two separate horizontal wells on the Beck lease in secs. 5 and 8, T.146, R.94 in Bailey Field, Dunn Co. The field rules currently allow only one horizontal well per1280 acr
e unit. Marathon doesn't know if two wells are necessary to effectively drain a 1280 unit, but it thinks the plan will probably be economic, and the company plans to drill the first well and then skid the rig the few feet to the other surface location. The most important aspect of this strategy is that it will also allow the company to better utilize currently available completion and stimulation procedures then if dual laterals were drilled from a single vertical wellbore.
Marathon also has an application pending for a two well per drilling unit project just to the southw
est in secs. 18 and 19. Marathon also received permission for five 1280 acre drilling units to the east of Bailey Field in the eastern part of T.146, R.93 and the extreme northwestern part of T.145, R93. The company also has an application pending for an additional four 1280 acre drilling units scattered in T.144, R94, T145, R.92, and T.145, R.94.
Marathon currently has three rigs drilling in the area. It's fourth rig that is drilling in Mountrail Co. is expected to move to a two mile west stepout to Murphy Creek Field and drill in secs. 5 and 8 of T.144, R.96, in the near future (see map, 3/20 post).
e unit. Marathon doesn't know if two wells are necessary to effectively drain a 1280 unit, but it thinks the plan will probably be economic, and the company plans to drill the first well and then skid the rig the few feet to the other surface location. The most important aspect of this strategy is that it will also allow the company to better utilize currently available completion and stimulation procedures then if dual laterals were drilled from a single vertical wellbore.Marathon also has an application pending for a two well per drilling unit project just to the southw
est in secs. 18 and 19. Marathon also received permission for five 1280 acre drilling units to the east of Bailey Field in the eastern part of T.146, R.93 and the extreme northwestern part of T.145, R93. The company also has an application pending for an additional four 1280 acre drilling units scattered in T.144, R94, T145, R.92, and T.145, R.94.Marathon currently has three rigs drilling in the area. It's fourth rig that is drilling in Mountrail Co. is expected to move to a two mile west stepout to Murphy Creek Field and drill in secs. 5 and 8 of T.144, R.96, in the near future (see map, 3/20 post).
Wednesday, July 11, 2007
Burlington/Continental Res. Expand Aggressive Development Program, Dunn Co.
Continental and Burlington have requested that sixteen additional sections be divided into 1280 acre drilling units for Bakken development. The new area of interest is primarily under the Killdeer Mountains in the west half of T. 146, R.96, and several sections in the extreme northern tier of T.145, R.96 and the extreme nothwestern sections in T.145, R. 95.
If these new wells are drilled, almost three entire townships will have been drilled or spaced for wells in the area encompassing T.146, R.94 through 96 and areas immediately north and south of these townships. Currently Continental/Burlington and Marathon have six rigs running in this area, and it is without question one of the hottest Bakken areas in the state.
If these new wells are drilled, almost three entire townships will have been drilled or spaced for wells in the area encompassing T.146, R.94 through 96 and areas immediately north and south of these townships. Currently Continental/Burlington and Marathon have six rigs running in this area, and it is without question one of the hottest Bakken areas in the state.
Ansbro To Reenter Last Year's Blowout/Fire Hole
Ansbro plans to reenter the Kadrmas 41-1H, sec 1, T143, R98, Billings Co., in the next few days or week to retrieve some lost junk that was left in the hole. They also plan to finish drilling the second half of the southwest lateral that was aborted after getting about halfway to its planned terminus when it became unsafe to continue drilling because of the pressure and flow of oil and gas encountered during trips. The well was drilled last summer and caught fire after taking a kick that couldn't be controlled while drilling the curve for the first lateral and a replacement rig had to be brought in. Thus, this will be the third rig to set up on this location.
The southeast lateral was drilled to its maximum length but has never been opened because the junk pre
vented the removal of the whipstock and bridge plug that a workover rig attempted to remove after the pressure subsided some this past winter. This is Ansbro's best Bakken well and has produced almost 55k bbls as of this April, which is quite impressive considering all that production came from only 2,600 ft of lateral. Ansbro has since switched to single lateral holes that transverse two sections.
The southeast lateral was drilled to its maximum length but has never been opened because the junk pre
vented the removal of the whipstock and bridge plug that a workover rig attempted to remove after the pressure subsided some this past winter. This is Ansbro's best Bakken well and has produced almost 55k bbls as of this April, which is quite impressive considering all that production came from only 2,600 ft of lateral. Ansbro has since switched to single lateral holes that transverse two sections.Friday, June 29, 2007
Another New Player Plans Remote Wildcats, Dunn Co.
Tracker Resource Development of Denver has requested that two 1280 acre drilling units be created in secs. 1 and 12, T.144, R.94, and secs. 12 and 13, T.143, R.94, Dunn Co. This area of interest is in two sparsely drilled townships, neither of which have producing wells. Closest Bakken activity to the area in 144-94 is about twelve miles to the west at Murphy Creek Field and about six miles to the north at Bailey Field. The other drilling unit request in 143-94 is about seven miles due south of the first area.
This activity is about six miles north/northeast of the recent wildcat activity planned by Penn Virginia in 142-94 and 95 (see 6/04 post). Penn Virginia has since staked these wells and plans to drill the well in secs. 10 and 15, 142-95, first. The company also plans to core the Bakken section in this well and the one planned in McKenzie Co, and stated that it will not hold back spending money to study and hopefully make the Bakken work in these areas.
If any of these wells prove to be commercial, it will likely instigate large scale development of this previously unproductive area of the Williston Basin.
This activity is about six miles north/northeast of the recent wildcat activity planned by Penn Virginia in 142-94 and 95 (see 6/04 post). Penn Virginia has since staked these wells and plans to drill the well in secs. 10 and 15, 142-95, first. The company also plans to core the Bakken section in this well and the one planned in McKenzie Co, and stated that it will not hold back spending money to study and hopefully make the Bakken work in these areas.
If any of these wells prove to be commercial, it will likely instigate large scale development of this previously unproductive area of the Williston Basin.
Marathon Brings Its Rig Count Up To Four
Apparently making good on its earlier statement that it would bring five new-build rigs into the Bakken play, Marathon has added its third in Dunn Co. with the addition of Helmrich & Payne 257. This rig has spudded the Carlson 21-29H, sec 29, T.146, R.94 in Bailey Field. The two other Helmrich & Payne rigs are making hole within a few miles of this well. Marathon's fourth rig is drilling the Nelson well in Mountrail Co.
Tuesday, June 26, 2007
Tax Break On Bakken Wells Means Christmas In July
Starting on July 1st, all Bakken wells drilled after that date for the next year will get a reduction in the current 11.5% ND state production and extraction tax to 7% on the first 75K bbls produced in those wells. This should be good news for both producers and royalty owners. Insiders claim some operators have postponed the spud dates of some projects and the tax holiday may bring in an additional ten rigs to the state.
www.bismarcktribune.com/articles/2007/06/25/news/state/135283.txt
www.bismarcktribune.com/articles/2007/06/25/news/state/135283.txt
Encore Plans Major Development In Murphy Creek Field, Dunn Co.
Encore has made public its intentions in the near term for about 40 Bakken wells primarily in the Murphy Creek area in T144, R95 and 96,south and southwest of Killdeer and about 6 miles east of the eastern flank of the Little Knife anticline. The company also has several wells planned in the Whitetail Field area of Billings County in T143, R99, where the company has drilled a test well several months ago in sec. 8 of that township, but no info has been released yet regarding its status. Encore has also identified cost savings and claims well costs have been reduced to $4.5M per well and expects a 30% rate of return.
Whether these 40 wells will ever be drilled is another story, but the company has had one rig running constantly for the past several months. It is currently in the Tree Top Field area of central Billings County testing their lease block in that area. It seems likely it will move back to the Killdeer area in the next few weeks after that hole is finished (and apparently may stay there awhile).
(On the map, the yellow is Encore's leasehold and the gray dots with the circles around them are planned Bakken wells).
Whether these 40 wells will ever be drilled is another story, but the company has had one rig running constantly for the past several months. It is currently in the Tree Top Field area of central Billings County testing their lease block in that area. It seems likely it will move back to the Killdeer area in the next few weeks after that hole is finished (and apparently may stay there awhile).
(On the map, the yellow is Encore's leasehold and the gray dots with the circles around them are planned Bakken wells).
Thursday, June 21, 2007
Burlington Plans (Lots) More Drilling Too; Marathon Plans Rank Wildcats In Mountrail Co., Hunt Offsets Exceptional Well In Charlson Field
Burlington Res. (subsidiary of Conoco/Phillips) indicates that they will bring in a fourth rig in its ongoing Bakken development program mainly occurring in Dunn Co. The company recently permitted two new wildcats in Dunn Co., north and northwest of its current activity in the Oakdale area of the county: the State Jorgenson 14-5H, sec. 5,148N-97W, and the Schettler 34-5H, sec. 5,147N-96W.
www.bismarcktribune.com/articles/2007/06/21/news/state/135075.txt
Marathon is kicking things in high gear with a number of new permits recently, two of which are in a virtually undrilled township in Mountrail County: the Shobe 24-20H, sec. 20,151N-93W, and the Bottleson 34-22H, sec. 22,151N-93W.
Petro-Hunt is drilling at the USA 11B-2-2H in sec. 11, 153N, 95W in McKenzie Co. This is a south offset to the company's consistent 700 bbl/day well drilled late last year in Charlson Field to the north in sec. 2 that is the best Bakken producing well in the state. In about six months we should know whether its prolific Sanish Sand well in sec. 2 is a fluke, or an find that deserves a lot of attention.
www.bismarcktribune.com/articles/2007/06/21/news/state/135075.txt
Marathon is kicking things in high gear with a number of new permits recently, two of which are in a virtually undrilled township in Mountrail County: the Shobe 24-20H, sec. 20,151N-93W, and the Bottleson 34-22H, sec. 22,151N-93W.
Petro-Hunt is drilling at the USA 11B-2-2H in sec. 11, 153N, 95W in McKenzie Co. This is a south offset to the company's consistent 700 bbl/day well drilled late last year in Charlson Field to the north in sec. 2 that is the best Bakken producing well in the state. In about six months we should know whether its prolific Sanish Sand well in sec. 2 is a fluke, or an find that deserves a lot of attention.
Wednesday, June 13, 2007
Hess Continues Aggressive Drilling Program; Helis Joins Play; Encore Steps Out In Murphy Creek Field
Hess continues to be the most active Bakken operator in the state with its five rig Bakken Drilling program in Williams and McKenzie counties on the Nesson Anticline. Part of the company's appeal here has to be that most of its wells are being drilled on sixty-year-old held by production leases with 1/8 royalty clauses. For those who may be unaware, Amerada Hess was the company who discovered oil in ND in 1951 on the Nesson Anticline.
New player Helis Oil & Gas from New Orleans has spudded a Bakken test just south of Blue Buttes Field on the Nesson Anticline in McKenzie County. The company is utilizing Nabors rig 558 at the Levang 3-22H in sec. 22, T.150, R.95.
Encore Operating has permitted its first Bakken well (it has been drilling on permits issued to its predecessor, Kerr-McGee) as a stepout to Murphy Creek Field in Dunn Co. just SW of Killdeer. The company received a permit for the Truchan 11X-33H, sec. 33, T.145, R.95. This planned test is in the adjoining section to the NE of the company's second Kulish well that was completed for almost 500 bbls/day (see 5/21 post).
New player Helis Oil & Gas from New Orleans has spudded a Bakken test just south of Blue Buttes Field on the Nesson Anticline in McKenzie County. The company is utilizing Nabors rig 558 at the Levang 3-22H in sec. 22, T.150, R.95.
Encore Operating has permitted its first Bakken well (it has been drilling on permits issued to its predecessor, Kerr-McGee) as a stepout to Murphy Creek Field in Dunn Co. just SW of Killdeer. The company received a permit for the Truchan 11X-33H, sec. 33, T.145, R.95. This planned test is in the adjoining section to the NE of the company's second Kulish well that was completed for almost 500 bbls/day (see 5/21 post).
Monday, June 11, 2007
EOG Plans (Lots) More Drilling, Mountrail Co.
According to a presentation given by EOG, the company plans to drill 22 Bakken wells this year, but with three rigs busy drilling single lateral wells on 640 acre spacing, that figure may have to revised upward. On one of the company's leasehold maps, it indicates an area of "Bakken Oil Saturation" (which not surprisingly seems to correspond with their leasehold interests). The problem with this representation is that the entire area where the Bakken is mature (deep enough so the pressure and heat creates petroleum from the shales, i.e., in most of the central portion of the Williston Basin) has oil saturation in the Bakken. It actually would make more sense if the company had stated that the area has better than average porosity or fracturing in the mid-Bakken, if that is in fact the case (which it certainly seems to be, at least in Parshall Field anyway).
Some Top Producers For April
Petro Hunt had the best Bakken well in April when its USA 2D-3-1H well in Charlston field in McKenzie Co. produced 23.3K bbls with a cumulative total of 151K bbls since October of last year. This phenomenal well continues to produce over 700 bbls/day and almost 1MM cfg/day (see 3/21/07 post below). Marathon's Stohler well in Bailey Field in Dunn Co. produced 12.7K bbls for the month. In Parshall Field, EOG's Bartelson well made about 12K bbls and the Warberg well produced 10.5K bbls in April.
Monday, June 4, 2007
New Player Plans Rank Wildcats, Dunn Co.
A new company is planning to enter the Bakken Play in ND with two wildcats planned in central Dunn Co and one in McKenzie Co. Penn Virginia Oil & Gas has applied for 1280 acre drilling units in secs 10 and 15, T142, R95 and in secs. 15 and 22, T142, R94, Dunn Co. The area of interest in 142-95 is about three miles southeast of Manning Field, a four well Madison field operated by Encore Operating, and the other area is about another six miles further east in a non-producing township. Conoco drilled an unsuccessful Lodgepole test in that eastern area in sec 15, 142-94 in 1997. Penn Virginia's planned activity is near the Heart River Fault, which may be one reason the company chose this area. This fault runs northwest to the Murphy Creek Field area where Encore and Marathon are actively pursing the Bakken. Closest Bakken activity is being conducted by Ansbro Pet. about six miles to the southwest where the company is actively exploiting the Bakken in Russian Creek Field. Ansbro also has a mid-Bakken test planned about six miles to the northwest in Fayette Field.
In McKenzie Co, Penn Virginia has applied for a 1280 drilling unit in secs. 30 and 31, T149, R98, which is a virtually undrilled township. These two sections abut U.S. Highway 85 about seven miles south of Watford City and is three miles southwest of Cherry Creek Field.
On the company's website it stated: "During 2005, we also began evaluating several new potential development plays. In the Williston Basin, we drilled an exploratory well as part of our agreement with Bill Barrett Corporation for a 50 percent working interest in a 20,000 net acre Bakken Dolomite horizontal oil well prospect. If the test well results are encouraging, we expect to move forward with a development drilling program based on 640 acre spacing."
http://www.pennvirginia.com
In McKenzie Co, Penn Virginia has applied for a 1280 drilling unit in secs. 30 and 31, T149, R98, which is a virtually undrilled township. These two sections abut U.S. Highway 85 about seven miles south of Watford City and is three miles southwest of Cherry Creek Field.
On the company's website it stated: "During 2005, we also began evaluating several new potential development plays. In the Williston Basin, we drilled an exploratory well as part of our agreement with Bill Barrett Corporation for a 50 percent working interest in a 20,000 net acre Bakken Dolomite horizontal oil well prospect. If the test well results are encouraging, we expect to move forward with a development drilling program based on 640 acre spacing."
http://www.pennvirginia.com
Friday, June 1, 2007
Burlington/Continental Res. Join List Of Companies Finding Excellent Wells, Dunn Co.
In its First Quarter Report, Continental indicated that its State-Weydahl 44-36H well sec. 36, T147, R96 north of Killdeer in Dunn Co. (see map 3/21 Oakdale area post below) flowed at initial rates as high as 1,000 bbls/day and continued fl
owing at 560 bbls/day after ten days of production. The company either got a very good frac job on the well or encountered some excellent natural fracturing or porosity in the area. Continental also reported that its Filkowski well in central Billings Co. in the Fairfield area was completed for approximately 300 bbls/day. Burlington Res.and Continental apparently have some joint working agreement involving their Bakken acreage. They join the growing list of companies with impressive Bakken completions recently.
owing at 560 bbls/day after ten days of production. The company either got a very good frac job on the well or encountered some excellent natural fracturing or porosity in the area. Continental also reported that its Filkowski well in central Billings Co. in the Fairfield area was completed for approximately 300 bbls/day. Burlington Res.and Continental apparently have some joint working agreement involving their Bakken acreage. They join the growing list of companies with impressive Bakken completions recently.
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