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Vol. 18, No. 1 Week of January 06, 2013
Providing coverage of Bakken oil and gas

Continental asks NDIC for 14 wells on 1,280-acre pad; Hunt files for 18-1,280-acre standups

Among the applications from oil and gas operators received by the North Dakota Industrial Commission in November and December was a request from Continental Resources for the installation of 14 horizontal wells on a 1,280-acre spacing unit in Divide County and a filing by Hunt Oil to establish 18 new 1,280-acre standup well spacings, also in Divide County.

Continentalís request was made in December for a spacing unit in the Hayland-Bakken pool. The company currently has two wells in this spacing unit, the Tangsrud 2-1H that produces from the middle Bakken and the Tangsrud 1-1H in the first bench of the Three Forks.

The company wants to drill the additional 14 wells to further target not only the middle Bakken formation member, where most Bakken oil production occurs (90 percent-plus of North Dakotaís oil production), but also the first, second and third benches of the Three Forks formation.

Three of the proposed 14 wells will target the middle Bakken, two will target the first bench of the Three Forks, four the second bench and the remaining three the third bench.

The company estimates ultimate recoveries of 370,000 barrels of oil per well.

Rather than drill all 14 wells back to back, Continental will begin by drilling four wells in early 2013, one of which will test the middle Bakken, one the second Three Forks bench and two the third Three Forks bench.

The company will look at drilling the remaining wells following testing of the first four.

All of the new wells will connect to the Highland gas gathering system.

With the efficiency of pad drilling, Continental said it estimates each of the new wells will cost $8.5 million.

The company also asked the commission to expand the field boundary of the Cedar Creek-Ordovician Pool in Bowman County and establish one 640-area spacing unit in the expanded pool. Continental wants to drill up to two horizontal wells on that spacing.

Hunt seeks 18 new 1,280-acre standup spacing units

Hunt asked the commission in a December application to extend the field boundaries for the West Ambrose, Musta and/or the Smokey Butte-Bakken pools in southern Divide County and establish and include in the new boundaries 18 new 1,280-acre standup spacing units, allowing it to drill one horizontal well in each unit.

The company plans to target both the middle Bakken and the first bench of the Three Forks. Hunt said if the company opts to pursue other Three Forks benches it will come back before the commission at a later time.

Hunt estimates the wells will cost $7.9 million each.

The company told the commission that it is talking to several companies about getting gas connections, but presently there is no nearby gas gathering infrastructure. Hunt is actually running gas engines on its pumping units in the area.

However, Hunt said its intent is to get all wells connected as soon as infrastructure is available.

The company estimates recoverable oil at 400,000 barrels from each of the 18 wells.

Hess asks for overlapping 2,560-acre units

Hess also filed applications in December requesting the commission establish several new overlapping 2,560-acre spacing units in Mountrail and Williams counties.

The company requested the establishment of one overlapping 2,560-acre unit from two existing standup 1,260-acre units in the Beaver Lodge-Bakken pool in Williams County. Hess wants to drill one or more horizontal wells across existing 1,280-acre standup units in order to recover oil that would not otherwise be recovered in the setbacks. Wells in this spacing unit would be limited to the Bakken formation.

In Mountrail County, Hess asked the commission to establish one overlapping 2,560-acre unit from two existing 1,280-acre standups, and two overlapping 2,560-acre units from two existing 2,560-acre units where a center 1,280-acre standup would be common to both of the new 2,560-acre units. Wells in these spacing units would target both the middle Bakken and Three Forks formations.

Hess estimates recovery factors for these wells in the 2.4 to 2.5 percent range, with ultimate recoveries of 536,000 barrels each.

Wells are estimated to cost $10.5 million each.

Commission approves reserve pits for Enduro

Enduro Operating requested authorization from the commission in November to construct and use reserve pits for drilling wells in the Mouse River-Madison pool in Renville County, and in mid-December the commission approved the request.

The company argued that the depth of the Madison formation in the area is less than 5,000 feet and the use of reserve pits would lower drilling costs by 10 percent in the shallow, conventional play where marginal recoveries and economics result in additional costs.

In its approval, the commission specified that the reserve pit must be lined and that it is not to be used until a commission inspector has given approval following an onsite inspection.

The reserve pit is to be reclaimed within 90 days of well completion.

Enduro said the reserve pits would lower drilling costs by 10 percent.

Kodiak to amend Bakken stratigraphic definition

In November, Kodiak Oil and Gas applied for authorization to drill up to 12 horizontal wells on two 1,280-acre units, one in Williams County and the other in McKenzie. Kodiak also asked the commission to amend the stratigraphic definition of the Bakken pool to include 50 feet above the top of the upper Bakken shale member to the top of the Birdbear formation for these new wells.

These requests have since been approved by the commission.

The company estimates Bakken recovery factors of 3.9 percent in McKenzie County and 4.7 percent in Williams County, and ultimate recoveries of 570,000 and 630,000 barrels of oil in the two counties, respectively.

For the upper Three Forks, Kodiakís recovery factors are estimates at 8.5 percent in McKenzie County and 12 percent in Williams County. Estimated ultimate recoveries for the Three Forks are 455,000 barrels in both counties.

Wells will cost approximately $10 million each, the company said.

Kodiak also requested in November the establishment of two new 1,280-acre spacing units in Dunn County and permission to drill up to two horizontal wells on each.

Continental prevails over landowner re. Truax-Bakken pool

In November, Continental Resources applied to the commission for an order amending field rules to alter the definition of the stratigraphic limits of Truax-Bakken pool in McKenzie and Williams counties in order to more fully develop the oil resources in the pool. The stratigraphic limits of Truax-Bakken pool were defined as the interval from 50 feet above the top of the Bakken formation to 100 feet below the top of the Three Forks formation.

Continental argued that oil in the lower portion of the Three Forks is part of the Bakken petroleum system and requested the limits of the Traux-Bakken pool be redefined as the interval from 50 feet above the top of the Bakken formation to above the top of the Birdbear formation in order to access more of the Three Forks in the pool.

The application had been protested by the mineral owner who is opposed to vertical expansion of the lower Bakken pool limit to include the Three Forks, but the commission found that the mineral owner did not effectively demonstrate that Continentalís request should be denied.

On Dec. 13 the commission approved the application.

Burlington applies for nine 2,560 spacing units

Burlington Resources, part of ConocoPhillips, filed applications in November for the establishment of eight new overlapping 2,560-acre spacing units in McKenzie County and one new 2,560-acre unit in Dunn County in order to drill inline wells in areas that would not otherwise be accessed because of the setbacks between existing 1,280-acre units.

All of the new wells will be in the middle Bakken formation, which is what most wells target when the application says Bakken since its tight sands currently produce more than 99.9 percent of Bakken formation oil.

Burlington estimates recovery factors between 1.6 and 2.7 percent, and primary oil recoveries of 325,000 and 500,000 barrels of oil.

Wells are estimated to cost approximately $10 million each.

Burlington is planning to have gas gathering infrastructure in place before the wells go into production.

Cornerstone requests Woburn field expansion

In November, Cornerstone Natural Resources requested an expansion of the Woburn field in Burke County along with two temporary 1,280-acre spacings in order to develop a pool recently discovered by three of its horizontal wells targeting the Bakken and Three Forks formations.

The three wells are the companyís Ingerson #2-12-1H, Ingerson #7-13-24H and Mertes #6-22-15H.

The company estimates original oil in place at approximately 7.1 million barrels in the Bakken formation and 2.6 million barrels in the Three Forks, and found primary recovery factors of 0.8 and 6.7 percent from the two Ingerson wells targeting the Bakken and Three Forks, respectively, with recoverable oil estimates are 59,965 barrels from the Bakken and 174,910 from the Three Forks.

Wells are estimated to cost approximately $6.5 million.

Cornerstone also asked the wells be allowed to produce unrestricted for 90 days until they can be connected to gas gathering systems.

Whiting gets one approval

Whiting Oil and Gas Corp. requested amendments in November allowing the company to drill up to five horizontal wells each on two adjacent 1,280-acre spacing units, and to establish an overlapping 2,560-acre spacing unit so that one or more wells can be drilled between the 1,280-acre units. The request is for two separate 2,560-acre units in McKenzie County, one of which has since been approved by the commission.

The company estimates recoveries of 10 and 12 percent from the Bakken and Three Forks formations, respectively, resulting in estimated ultimate recoveries of just over 1 million barrels and approximately 759,000 barrels from the two formations, respectively.

Wells are estimated to cost approximately $8 million.

Whiting said there is gas infrastructure in place and the company plans to immediately begin selling produced gas.

American Eagle files for two 800-acre standups

American Eagle Energy asked that field rules be amended so that two 800-acre standup spacing units could be established in the Colgon-Bakken pool in Divide County. American Eagle also requested that up to four horizontal wells be allowed on each spacing unit.

The company estimates original oil in place at slightly over 4 million barrels and a single-well recovery factor of 8 percent, which would result in estimated single-well reserves of 321,000 barrels and four-well recovery reserves of 1,284,000 barrels.

The shorter lateral wells are estimated to cost approximately $5.9 million each, and American Eagle is planning to target both the Bakken and Three Forks formations from multi-well pads. The company anticipates a gas gathering system will be in place within six months.

Zenergy wants laydown configurations

Zenergy Inc. asked the commission in November to approve two laydown 1,280-acre spacing units and one overlapping 2,560-acre spacing unit, all in McKenzie County.

The reason for the laydown configurations as opposed to the standard North Dakota standup configurations is because of controlling interests the company has in adjacent lateral acreages. Zenergy said that as far as the geology is concerned the company has no preference for north-south or east-west drilling. Zenergy indicated there would be no problem in connecting the proposed well to a gas gathering system.

The 2,560-acre spacing unit was requested so the company could drill longer diagonal laterals across it.

The company is targeting both the Bakken and Three Forks formations.

Zenergy estimates Bakken recovery factors between 3 and 7 percent, and ultimate recoveries of 500,000 barrels. The Three Forks recovery factor is estimated at 2 percent and ultimate recovery of 500,000 barrels.

Wells are estimated to cost $9.3 million each.

Marathon submits apps for 1,280-acre units

In December, Marathon Oil applied for the establishment of a 1,280-acre spacing unit and drilling up to four wells on that unit and four wells on three existing 1,280-acre units in Dunn County, all of which will target the middle member of the Bakken formation.

In November, Marathon applied for an amendment allowing up to seven horizontal wells on 1,280-acre spacing, also in Dunn County.

Marathon estimates middle Bakken recovery between 3.2 and 3.8 percent, and ultimate middle Bakken recovery at 330,000 barrels of oil per well.

Several requests for increasing well densities

Baytex Energy USA, GMX Resources, Liberty Resources, Newfield Production, PetroGulf Corp., Samson Oil and Gas USA, XTO Energy and Triangle USA Petroleum all submitted applications to the commission in November and December for orders authorizing the drilling, completion and producing of additional wells on existing spacing units.

XTO filed for up to eight wells on each of 45 existing 1,280-acre spacing units in Burke, Dunn, Williams and Billings counties, for a total maximum of 360 wells.

Baytex is requesting up to seven wells on each of 27 existing 1,280-acre spacing units in Divide County, for a total maximum of 189 wells.

Liberty applied for up to eight wells on each of 19 existing 1,280-acre spacing units in McKenzie and Williams counties for a total maximum of 189 wells.

GMX filed for up to four wells on each of four existing 1,280-acre spacing units in Billings and McKenzie counties.

Newfield requested up to seven wells on an existing 1,280-acre spacing unit in the Sand Creek-Bakken pool in McKenzie County.

PetroGulf applied for authorization to drill up to eight wells on an existing 1,280-acre spacing unit in McKenzie County.

Samson asked for authorization to drill up to seven wells on each of two overlapping 1,280-acre spacings in Williams County.

Triangle asked to drill up to four wells on two existing 1,280-acre spacing units in McKenzie County.

óMIKE ELLERD



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