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Vol. 18, No. 32 Week of August 11, 2013
Providing coverage of Bakken oil and gas

Bakken Explorers 2013: Ceramic proppant pays off big for Halcon

Modified completion techniques boost initial production rates on latest wells; efficiencies drive costs lower

Steve Sutherlin

For Petroleum News Bakken

Halcon Resources Corp. is finding success in the Williston Basin as the company carries out a drilling and completion modification program.

Halcon adopted the use of ceramic proppant in its Fort Berthold area wells, the company said in a June operational update, and the well results beat out any prior wells done in the area by Halcon or its predecessors.

Ceramic proppant costs more than sand, and Halcon is using high volumes of it. The company said it has increased proppant volume per lateral foot. For Halcon, it seems, the ceramics are earning their keep, juicing production at a rate that will justify the cost.

Halcon recently drilled and completed a ceramic-fracked Bakken well in Fort Berthold which produced 90 percent oil at an initial rate of 3,060 barrels of oil equivalent per day — the highest initial production rate of any Halcon-owned well in the Bakken formation.

Halcon said it also had increased stage density in its latest wells, employing simultaneous fracks or zipper fracks. It is utilizing plug and perf on completions.

Pricey materials aside, the company actually expects to lower its cost per well this year.

Halcon expects well costs in Fort Berthold to decrease by approximately 10 percent to $9 million by the end of the year, “through efficiencies related to pad drilling operations, implementation of centralized production facilities and continued optimization of completion techniques.”

Halcon is in transition to batch pad drilling. The record Fort Berthold well was the first well drilled on a two-well pad, the company said.

Bakken and Three Forks improved

Halcon’s three most recently completed Bakken wells in Fort Berthold had an average initial production rate of 2,648 boepd, a 38 percent gain over similar wells completed by the company in the first quarter of 2013 using the previous completion method.

Four second quarter Three Forks wells drilled in Fort Berthold had an average initial production rate of 2,094 boepd, 77 percent better than all other Three Forks wells completed by Halcon in the area during the first quarter of 2013.

Halcon is testing 660 foot spacing for Bakken wells in Fort Berthold. The testing will involve surface and downhole microseismic with results expected by the end of 2013.

In the Marmon area, the average initial production rate for the two most recently completed Bakken wells is 91 percent above the average initial production rate for previous company operated Bakken wells in the area. Halcon said it expects an average ultimate recovery from the wells of 462,000 barrels of oil equivalent, which is more than 40 percent higher than that of company owned Bakken wells drilled using the previous completion method in Marmon.

The company said it was operating eight rigs on its 135,000 net acre position in the Williston Basin, 75 percent of which is held by production, “which allows the company the flexibility to focus on operational improvements.”

Halcon set its 2013 drilling and completion budget at $475 million.

Aggressive acquisition

Halcon expects to close in July on an acquisition of 19,500 net operated acres in Williams County from Denver-based Resolute Energy for $75 million. Halcon is buying Resolute’s working interest. Current production from the acreage is approximately 900 to 950 boepd, Halcon said.

The transaction increases Halcon’s holdings in the Williston Basin to approximately 155,000 net acres.

In June Halcon transferred all active assets to HRC Operating LLC from G3 Operating LLC.

HRC Operating is an indirect, wholly owned subsidiary of Halcon Resources Corp.

G3 Operating was acquired by Halcon as part of Halcon’s acquisition of GeoResources in 2012. The transfers are part of an internal reorganization and simplification effort by Halcon to apply its brand to all of the company’s remaining subsidiaries, the company said.

All active assets formerly identified as G3 Operating are now identified as HRC Operating, both in North Dakota and Montana. The transition was done through a blanket name change.

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