There has been a tendency to present the emerging Spearfish play as an identical twin of the Bakken formation because they have a similar drilling history.
Not quite, as some experts have pointed out, claiming Spearfish is sour crude with a high sulfur content, compared with Bakken’s sweet crude.
What they do share is the prospect of thousands of wells and billions of barrels of unconventional resources drawn from the Williston Basin.
And those looking for a guide to the future of Spearfish, which covers the territory from Pierson, Manitoba, (where it’s known as the Waskada field) to Bottineau County, North Dakota, could do worse than track the fortunes of Legacy Oil + Gas which, by the way, says although Spearfish crude has a “slightly higher sulfur content and is marketed differently than Bakken crude, it is not designated as sour.”
The Calgary-based company is one of the front-runners, probing the fairway on both sides of the Canada-United States border, reporting earlier this month that its drilling, completion design and production practises have demonstrated “superior results” compared to the previous operator’s drilling.
Legacy said production from its wells at Pierson, where it has 28,233 net undeveloped acres and 210 net drilling locations, have averaged 96 bpd of oil from 16 wells over 30 days; 86 bpd from 12 wells over 60 days; and 95 bpd from 10 wells over 90 days.
The company said it has achieved those rates while constraining production to maximize ultimate recovery, estimating that initial productive capacity would be far in excess of the constrained rates.
Superior long-term performance
Legacy also reported that five wells with the longest producing history have averaged 101 bpd over 147 days, setting the stage for what it believes will be superior long-term performance, higher per-well reserve bookings and additional locations booked.
The company said it has had similar success on its Bottineau County lands, averaging 90 bpd from five wells over 30 days; 102 bpd from five wells over 60 days; 98 bpd from five wells over 90 days and, as with Pierson, production was constrained to maximize ultimate recovery.
Waterflood being evaluated
Legacy said it has identified 230 net drilling locations at eight wells per section on just the north portion of its Bottineau County lands, which cover 50,836 net acres.
It said the location count could increase by 50 percent through down-spacing,
In addition, the company said waterflood potential is being evaluated in the play and recovery factors of 14 percent are anticipated.
Modest start 60 years ago
Like so many beneficiaries of horizontal drilling and multi-stage fracturing, Spearfish had a modest commercial and exploration beginning 60 years ago, with drilling reaching its peak in the 1957-1959 period, then tapering off until a 1980 discovery spurred significant leasing activity in North Dakota.
The real breakthrough occurred in 2008 when EOG Resources revisited the Waskada play and applied the new drilling and fracturing methods, then moved across the border to the Waskada South field, which is estimated to have a very high rates of return.
Early reserve figures in the Manitoba portion are estimated at 25 million barrels and in North Dakota, where many wells require four days to complete at US$1 million per well, at 20 million barrels.
EOG, which is now concentrating more on the Eagle Ford in Texas, has estimated returns from reserves of 70 percent to 100 percent.
Cheaper to drill?
Spearfish oil is also at a shallower depth than Bakken oil, indicating it should be cheaper to drill.
Calgary-based Atikwa Resources, which is pushing ahead with its Spearfish operations, has talked about five billion barrels of oil in place in the Manitoba segment, which explains why Manitoba has suddenly found itself in Canada’s minor petroleum leagues.
The provincial well count rose last year to 531, up 13 percent from the previous year, and well licenses increased to 673 from 632, mostly concentrated in the Waskada region.
Total Manitoba production for 2011 was a record 37,500 bpd, up 2,500 bpd from 2010.
Tundra budgets for 200 wells
Dan MacLean, chief executive officer of privately-owned Tundra Oil & Gas Partnership, told Calgary investors last year he expects producers working Manitoba to have spent C$1 billion in 2011, more than a third coming from his own firm.
This year, Tundra has budgeted for more than 200 wells and a capital program of C$400 million.
“Technology drives our success and we consider it our key to the future,” MacLean said, forecasting Manitoba output of 40,000 bpd this year.
