Calgary-based Crescent Point Energy, a trailblazer in the use of horizontal drilling and multistage fracturing to commercialize Saskatchewan’s tight-oil plays, is working on twin-pronged objectives — waterflooding and unitization — to increase recoverable reserves in its U.S. and Canada Williston Basin Bakken petroleum system assets.
Waterflooding, an enhanced oil recovery technique, functions best over an entire pool rather than on individual wells. But the owners must reach a unitization agreement before a major project can move forward — hence the dual objectives.
After a lapse of many years, the sudden surge of light oil drilling has revived the prospect of unitizations, driven by a Petroleum Technology Alliance Canada study estimating that improved water management could boost Western Canada’s oil reserves by 1 billion barrels.
Crescent Point, the largest Bakken producer in the Williston Basin in Canada, is eagerly awaiting a decision by the Saskatchewan government to allow the province’s first “unitization” in 20 years, opening the door for multiple owners in pools to create single operating units, requiring each to contribute to capital and operating costs, while sharing in the profits based on their stakes.
In late March, Neil Smith, Crescent Point’s chief operating officer, said company management was optimistic that government approval would occur sometime before the end of September for the first unit and be followed by three more over the next two years. (In late 2012, the government of Saskatchewan issued a permit approving Crescent Point’s application for a waterflood unit in the Lower Shaunavon resource play, a milestone in the company’s efforts.)
Waterflooding getting results
Crescent Point has been expanding its waterflood programs in the Bakken, Shaunavon and Viking plays of Western Canada and its trials are already yielding positive results.
By the end of March the company had converted five producing Viewfield Bakken wells in Saskatchewan to water injection, raising the total to 46 wells and reported that production results were surpassing its expectations.
Company President Scott Saxberg forecast that 40,000 barrels of oil per day of Crescent Point’s anticipated 100,000 barrels a day in 2013 will be affected by waterflooding.
“There is easily 25,000 barrels per day of long-term waterfloods that we have within our company already from legacy assets,” he told a conference call at the end of March. “On the Bakken side it is probably going to push close to 10,000 barrels per day and on the Shaunavon side probably 5,000 barrels per day.”
Increasing number of fracs
In the Saskatchewan Bakken, Crescent Point has also re-entered wells that were originally completed with eight-stage and 16-stage cemented liners and increased them to 25-stage and 30-stage completions.
The results have allowed the company to identify 90 wells in the play as candidates for the process.
Based on the initial success, Crescent Point plans to drill six more two-mile horizontal wells in 2013, on top of the four already completed, and is confident they can be drilled for about half the cost of similar wells drilled across the border in North Dakota.
100% drilling success
In the Bakken-dominated southeast Saskatchewan and southwest Manitoba region, Crescent Point participated in drilling 106 (87 net) wells and one net water source well in the first quarter 2013, reporting a 100 percent success rate.
Of the oil wells, 80 (72 net) were drilled in the Saskatchewan Bakken light oil resource play.
During the second quarter, the complete results from which were not available July 1, 2013, the company participated in drilling 26 (15 net) horizontal wells in conventional zones, several of which it said significantly exceeded initial production rate expectations.
Crescent Point announced a target for 2013 of 169 net wells in the Saskatchewan Bakken, with a budget set at C$490 million including expenditures on land, seismic and facilities.
U.S. wells
In the United States, 67 (30 net) wells were drilled by Crescent Point in the January-March period, 14 (3.2 net) in North Dakota targeting the middle Bakken and upper Three Forks members, and depending on commodity prices three times that number could be drilled in the final three quarters of the year.
Production growth
Crescent Point’s average daily production company-wide grew from about 275 barrels of oil equivalent in its first year of business in 2001 to exceed 117,000 barrels by the first quarter of 2013.
In addition to its Bakken petroleum system assets in the Williston Basin of Canada and the U.S., Crescent Point operates assets in Utah’s Unita Basin, Saskatchewan’s Shaunavon medium oil resource play, Alberta’s Beaverhill Lake emerging light oil resource play, Alberta’s Viking light oil resource play, and Alberta’s Bakken, where the company is conducting high-impact exploration for both conventional and unconventional oil.
The largest chunks of its 2013 capex budget of $1.5 billion are being directed at three premier plays: the Viewfield Bakken in Saskatchewan; the Bakken and Three Forks formations in North Dakota’s Bakken petroleum system; and the Unita Basin in Utah.
