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Vol. 18, No. 32 Week of August 11, 2013
Providing coverage of Bakken oil and gas
Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA)©1999-2019 All rights reserved. The content of this article and website may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.

Bakken Explorers 2013: The ultimate explorer

Slawson Exploration approaching 40 years as a leader exploring new horizons using innovative technologies

Mike Ellerd

For Petroleum News Bakken

Talk to anyone who knows anything about exploration for oil in the Williston Basin and the name Slawson will invariably come up. Since drilling its first well in the Williston Basin in the 1970s, Slawson Exploration has become an industry leader in exploring new frontiers and has developed a reputation as an innovative and aggressive company not afraid to venture into new territory, both geologically and technologically, in its quest to develop oil.

In fact, in a recent conversation with Petroleum News Bakken, one North Dakota state official said that Slawson’s science projects seem to always make money while another referred to Slawson as the “ultimate explorer.”

In the Williston Basin, Slawson has pioneered exploration in the upper Bakken shale and the False Bakken along the outer fringes of the Bakken petroleum system.

Slawson has also been a leader in developing innovative drilling and completion techniques, as well as a frontrunner in using those new technologies to produce oil from various petroleum pools over its nearly 40-year history in the basin.

On its website, Slawson Exploration refers to itself as “an aggressive exploration firm” that “focuses on risk-reduction technological advantages in time-tested, prolific geologic provinces, delivering greater returns for investors.” Throughout its history, the company has employed a variety of advanced exploration techniques to drill more than 3,500 wells in 10 western states, including two-dimensional seismic/stratigraphic analysis in the early 1980s; resource horizontal drilling beginning in the late 1980s; large-scale, three-dimensional amplitude versus offset or AVO in gas basins in California in the 1990s; and more recently, record-setting staged hydraulic fracturing in oil plays throughout the Rocky Mountain region.

Slawson Exploration is a privately held, family-operated oil and gas exploration company founded in 1957 by geologist Donald C. Slawson. The company is based in Wichita, Kan., with regional offices in Denver, Oklahoma City, and Houston. Donald Slawson’s son Todd is the president and chief executive officer of Slawson Exploration and Todd’s brother Craig is the company’s vice president for exploration.

Early history

Donald Slawson, operating as Donald C. Slawson, Oil Producer, began drilling conventional wells into the Red River formation in Roosevelt County, Mont., in the mid 1970s. He continued exploring other conventional plays throughout the 1980s, including the Ratcliffe and Mission Canyon formations of the Madison Group in both Montana and North Dakota. In 1989, Donald C. Slawson, Oil Producer, formally became Slawson Exploration and continued conventional development in the Madison Group.

Slawson’s first venture in horizontal drilling in the Bakken dates as far back 1989 when the company drilled its Sidewinder 1-7 horizontal well into the Bakken formation in the Ash Coulee field in Billings County, N.D. That well, tested in early February of 1990, set a record at the time with an initial production rate, IP, of 1,362 barrels of oil per day.

However, it was not until directional drilling and hydraulic fracturing technologies advanced in the mid- to late 2000s that Slawson really picked up speed in the Williston Basin and has gone on to drill hundreds of horizontal Bakken wells in both North Dakota and Montana.

Upper Bakken shale innovator

Although not the first company to drill into the upper Bakken shale, Slawson was one of the first to successfully drill horizontally and produce oil from the upper shale. John Fair, president of PetroShale (US) Inc., one of Slawson’s non-operating partners in the Williston Basin upper shale prospects, told Petroleum News Bakken in October 2012 that Slawson first began drilling the upper shale in the late 1980s and early 1990s when it drilled a series of un-stimulated, short-lateral wells in the Ash Coulee-Billings Nose area in southwest North Dakota in an attempt to intercept large fractures. While the wells did have high IPs, production quickly fell, and the wells did not have large expected ultimate recoveries, or EURs.

Slawson then drilled a horizontal upper shale well in the Mondak area that straddles the two states south of Elm Coulee. That well initially produced in the range of 120 barrels per day, which was considered “ho hum,” Fair said. However, the well continued to produce, and Slawson noted that the production soon went hyperbolic and was producing with a very low decline. Once the well “hit curve,” according to Fair, it declined at an annual rate of only 1 percent. The production curve showed the well, which was un-stimulated and completed on a very short lateral, will ultimately produce about 750,000 barrels.

Between 1994 and 2007, Slawson continued to drill un-stimulated wells into the upper Bakken shale in the area. According to Fair, EURs for those wells averaged 730,000 barrels and did not behave like middle Bakken wells in that they had low IPs, went hyperbolic very quickly, and had very low declines.

North Dakota Industrial Commission, or NDIC, records indicate that in 2007 and 2008, Slawson drilled two wells in the upper shale in the Squaw Gap field in southwest McKenzie County near the Montana border with IPs of 479 and 216 bopd. Through April 2013 the two wells have cumulative productions of 175,349 and 92,725 barrels, respectively.

Farther west in the Squaw Gap field adjacent to the Montana border, Slawson drilled six additional wells which were on confidential status as of the end of June 2013.

Then in September 2012 PetroShale announced successful test results from four stimulated horizontal test wells that Slawson had drilled into the upper shale in the Elm Coulee field in Richland County, Mont., just across the border from the Squaw Gap field in North Dakota. This region approaches the outer fringes of the Bakken petroleum system, and according to Fair, is an area where the middle Bakken, from which most of the oil in the Williston Basin is produced, becomes very tight and begins to pinch out, where the lower Bakken has already pinched out, and where the Lodgepole and Three Forks are also very tight.

As a result, Fair said, the upper shale is “world class” source rock with no place for the oil to go. In the September 2012 announcement, PetroShale said that early type-curves on those wells resulted in EURs analogous to those 730,000 barrel EURs from un-stimulated wells that Slawson had drilled between 1994 and 2007.

Beating drilling pitfalls

Drilling horizontally into shales, the primary source rock for oil, presents a variety of challenges and can be risky, and not everyone is willing to run those risks. Slawson, however, is a notable exception.

In May 2012, Vice President Craig Slawson told Petroleum News Bakken that “Nobody in their right mind would target, would drill into, the upper or lower Bakken shale,” but added that “we aren’t right minded.”

Julie LeFever, director of the North Dakota Geological Survey’s core library, told Petroleum News Bakken in October 2012 that one of the problems with drilling the upper Bakken shale is that the shale is unstable and collapses. However, she added that Slawson proved that not only it is possible to successfully drill in the upper shale, but it can be done while keeping costs down.

Jim Halvorson, a petroleum geologist with the Montana Board of Oil and Gas Conservation says that it’s almost impossible to drill and frack a two-mile long lateral in the upper shale for the same reason LeFever gave. So there is an advantage, Halvorson says, to drilling shorter laterals and to drilling those shorter laterals from a single vertical borehole, which is what Slawson has been doing.

But fracking multilateral wells in the upper shale is another challenge, according to Halvorson, causing many operators to go back to single laterals. However, Slawson, true to form, appears to have also solved that problem. Fair says Slawson has been experimenting with one-mile, dual-lateral wells in the upper shale with costs in the range of $7 million to $8 million.

Board records indicate that Slawson recently drilled a dual-lateral well with one sidetrack in the upper shale in the Elm Coulee field. Since January 2013, that well has produced a total of 11,125 barrels over 69 days of production for an average of 284 barrels of oil per day.

Slawson, Northern Oil and Gas

PetroShale isn’t the only non-operator partnering with Slawson in the upper shale. Northern Oil and Gas has aligned with Slawson in development of the upper shale in Richland County in its Big Sky prospect, and in March 2013, Northern Oil announced that as a result of Slawson’s innovations, Northern Oil’s Big Sky prospect had become the company’s area of highest internal rate of return.

Northern’s Chief Executive Officer Michael Reger said at the time that Slawson was drilling short laterals of approximately 5,000 feet on 640-acre spacing units and completing the wells with 20-stage sliding sleeves and white sand. Reger said those wells have EURs in the range of 350,000 to 400,000 barrels, and a cost per well of approximately $5 million.

First in the False Bakken

Not only has Slawson been a pioneer in exploring the upper shale, but it is also believed to be the first to successfully drill and complete a producing well in the False Bakken. The False Bakken is an organic-rich limestone interval near the bottom of the Lodgepole formation along the southern flanks of the Bakken petroleum system that can appear very similar to the upper shale, hence the name “False” Bakken.

In June 2013, the Montana board approved a request by Slawson to make permanent a 640-acre spacing unit in Richland County for the production of oil and gas from a well the company had recently completed. While the well’s target formation is formally identified in records as the Lodgepole formation, Halvorson says the well is, in fact, a False Bakken well.

The well began producing in August of 2012 and through April 30 has yielded a total of 12,946 barrels over a total of 219 days of production for a daily average of 59 bopd. Halvorson says that, as far as he knows, it is the only well ever completed in, and producing from, the False Bakken.

Slawson’s other activities

While Slawson has been an innovator in vertical and lateral exploration of the Bakken petroleum system, much of the company’s Williston Basin operations are focused on the middle Bakken.

As of the end of June 2013, NDIC records show Slawson as having a total of 176 wells in the state on active status, 71 still on confidential status, eight listed as currently being drilled, and another seven with permitted drill locations. MBOGC records indicate that as of the end of June, Slawson had 65 producing wells in Montana, 11 of which are upper shale wells, and one is the False Bakken well.

Slawson ranked 12th among the top 50 oil producers in North Dakota as of April 2013, producing a total of 527,901 barrels during the month from wells it operates for a daily average of 17,597 barrels according to NDIC records. In Montana, Slawson was the fourth largest oil producer from wells it operates in April 2013 with a total of 81,041 barrels produced during the month for a daily average of 2,701.4 barrels.



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Copyright Petroleum Newspapers of Alaska, LLC (Petroleum News Bakken)©2013 All rights reserved. The content of this article and website may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.





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