Denver-based PetroShale (US) Inc. recently said that it, along with its operating partners, continues to drill and evaluate the Upper Bakken source rock in the Mondak play in eastern Montana, and is hoping to begin drilling in the North Dakota segment of Mondak in second quarter. Most of the oil produced in the Williston Basin’s Bakken petroleum system comes from the Middle Bakken member, a dolomite reservoir, which is thought to contain oil from the Upper Bakken shale.
In a March 28 interview with Petroleum News Bakken, PetroShale President John Fair says the company, a subsidiary of Calgary-based PetroShale Inc., will remain active in acquisitions and development in the Williston Basin in the coming year.
Per a prepared statement, the company will “continue to implement our strategy of exploiting the assets in our inventory with a focus of adding strategic acquisitions resulting in a very active 2013. The relationship with Slawson Exploration is also providing the company with unique opportunities for acquisitions in the Williston Bakken, which it intends to exploit as financial market conditions permit.”
Slawson, the operator of almost all of PetroShale’s assets in the Williston Basin, is a privately held family company and the tenth largest producer of crude in North Dakota in January. Slawson executives seldom comment on company operations, but instead allow their partners, such as PetroShale and Northern Oil and Gas, to do so.
In September, PetroShale said Slawson had successfully tested four stimulated wells in the Upper Bakken shale in the Mondak play. Two of those wells had 24-hour initial production rates, IPs, of 476 and 296 barrels of oil per day flowing. The two others had on-pump IP rates of 312 and 316 bopd.
As reported in October by Petroleum News Bakken, production from those Upper Bakken wells was 98 percent oil.
Then in early March, PetroShale announced results of two additional Upper Bakken Mondak wells, one which Slawson operates and the other operated by Fidelity Exploration and Production.
The Slawson well came in with a 24-hour IP rate of 299 bopd, while the Fidelity-operated well had a 24-hour IP rate of 498 bopd. The latter is the highest IP rate that PetroShale has seen thus far in its Upper Bakken wells.
In addition, PetroShale and Slawson have another well that was completed in January and is currently in flowback testing. The partnership also has two additional Mondak wells, one of which is waiting on completion and the other is being fracked.
Estimated ultimate recoveries for these wells are expected to be available by summer.
Fair said that because the wells are in the shale, they have a decline curve different from typical Middle Bakken wells. He said more time is needed to understand them because the curves drop some, but then “they go pretty flat.”
More natural fracturing on North Dakota side
The Mondak play extends across the border from Montana into McKenzie County, N.D., where approximately 75 percent of PetroShale and Slawson’s area of mutual interest is in Montana. The remaining 25 percent is in North Dakota.
Fair said it was on that North Dakota side that Slawson drilled what he calls very prolific, un-stimulated wells between 1994 and 2007. Fair believes there is more natural fracturing on the North Dakota side of the Mondak and said “we’re very anxious to get going in North Dakota,” adding “we’re just waiting to get some permits.”
He said he hopes to be drilling on that side of the Mondak in the second quarter.
Upper Bakken wells fracked with fewer stages
All of PetroShale’s spacing units in the Mondak are 640 acres. The wells are typically drilled to a depth of approximately 10,500 feet with laterals ranging from approximately 4,000 to 4,500 feet.
Fair said the Upper Bakken wells generally have fewer frack stages than is typical for Middle Bakken wells. Specifically, Upper Bakken wells are fracked with fewer stages using smaller frack volumes and less proppant because the formation is thinner, typically only four to six feet, and the “pay zone” is only approximately 30 feet, he said. “The bigger fracks don’t seem to do any better.”
Looking to the rest of 2013, Fair said the key in the Mondak will be experimenting with some two-mile laterals, but he added that two-mile laterals are “tricky” to drill in the shale because bits can get stuck in the shale beyond one mile. Instead, he said, PetroShale and Slawson are looking to drill dual one-mile laterals from a single vertical borehole and then frack the laterals individually. He said Slawson has been experimenting with dual laterals, and that the costs are “very encouraging,” averaging in the range of $7 million to $8 million for a dual one-mile lateral, which amounts to $3 million to $4 million per lateral.
One rig this year
PetroShale and Slawson will operate only one rig this year, Fair said, and that rig will probably be shared with other companies throughout the year.
“We’re going slow right now until we get this figured out. We’ve got a few wells that are pretty good and a few wells that aren’t, and we’re still tweaking it.”
He said “it’s a prolifically oily basin, and with new technology and creative ideas, I think we’re going to just keep seeing more interesting plays like Mondak, like the upper shale.”
Mondak Red River prospect
PetroShale is not only exploring the Upper Bakken in the Mondak play but is also looking at the Red River prospect in that play.
Fair said the company has just finished a 3-D seismic shoot in that formation, and while the data processing is not finished, he said he will be surprised if the results don’t indicate some good opportunities.
He added that PetroShale and Slawson are tentatively planning to start drilling that prospect this summer.
Other North Dakota interests
In October PetroShale purchased working interest in additional acreage in North Dakota; specifically in 48 producing wells in Mountrail County, most of which are operated by Slawson.
The wells have proved reserves of 172,527 barrels of oil equivalent, the company said, with production approximately 91 percent oil.
