Although Denver-based Triangle Petroleum has an acreage position in Montana that is on the northwestern flank of the Williston Basin, adjacent to the Elm Coulee field, the company is going to keep an eye on what larger companies are doing in the region before it initiates its own drilling program.
But Triangle does qualify as an explorer because of its focus on technology in the Bakken petroleum system.
Downspacing tests conducted by Triangle in the first quarter of 2013 indicate the potential for densities of up to six to eight middle Bakken and two to four upper Three Forks wells per 1,280-acre spacing unit in the company’s McKenzie County core area. That core area is in one of the deepest areas of the Williston Basin.
In a June 10 conference call, Jonathan Samuels, Triangle’s president and chief executive officer, said the company ran two separate chemical tracer tests in horizontal Bakken well bores with separations of 450 and 600 feet. Triangle saw no communication between the laterals.
Samuels said he believes production rates in the Williston Basin are going to increase over time, and the possible downspacing to eight to 12 wells per 1,280 acres is one element of that increase.
When the lower benches of the Three Forks are considered, the well density could increase even more, he said.
According to a Triangle press release issued on the same day, the eight to 12 wells per 1,280-acre unit does not include the potential for development of the second and third benches of the Three Forks “as a distinct reservoir.”
Samuels said the company is planning two incremental Three Forks tests in 2013.
Remote and hybrid fracking
Triangle is also exploring new ground with its hydraulic fracturing subsidiary Rock Pile Energy Services, which completed what the company calls the first-ever remote frack in which Rock Pile fracked a well by setting up the frack equipment on an adjacent pad and running a high-pressure line to the well that is being fracked. This method avoided the crowding issue of having both drilling and fracking equipment on the same pad and allowed the company to frack one well while the drill rig was drilling the next well on the pad. Triangle said this allowed its Dwyer 150-101-35-26-1H well in McKenzie County’s Rawson field to go on production 70 days sooner than would have otherwise been possible.
In addition, Rock Pile fracked 27 of 46 stages of the Rowe 150-101-1-12-3H well, also in the Rawson field, using sleeve-based methods, with the remaining stages fracked using standard plug-and-perf methods. Samuels said using this hybrid of two fracking methods enhances efficiency and production.
And in the deep portion of the basin where the company is drilling in McKenzie County, when a well is down approximately 10,500 feet and out laterally some 10,000 additional feet, “the end of that wellbore is really, really, really far away.”
He said that in those situations, using the plug-and-perf method is a long, difficult and expensive process, and if the plugs are not drilled out, restricted flow rigs have to be brought in. “So the hybrid is basically putting sleeves in the toe because there’s not a large number of sleeves relative to 100 percent sliding sleeve job. You avoid all the problems of the declining side, all of which can accidentally open up an early stage, and you could lose pieces of well, and there’s other issues.”
Samuels said there are tradeoffs associated with using the hybrid fracking method, but he added that Rock Pile has become very efficient at employing the method and it’s paying off. “I mean, there’s tradeoffs — you can spend money, more money and get more oil. The question is: are you getting enough to justify the return on capital. And so I think this is a step in that direction. It saves some time, saved some costs and you’re also going to save us time on the backside in terms of the drill outflow. I mean, the well is online for more days in its first 90 days and that means better production profiles that you see on the NDIC report.”
Light-weight, ceramic proppant
In addition to its innovative fracking methods, Triangle is also planning to experiment with higher-strength, lighter-weight proppants. Samuels said that, simply put, the pressures at the depths of its wells are higher than the crushing strength of white sand, so Triangle has been using what he described as the “Cadillac” of proppants, a lighter-weight ceramic proppant with a higher cross strength than the pressures the company is experiencing. He said that in an ideal world, “you want your proppant just strong enough to last as long as you need it to, but you don’t pay for any more than you need, and so it’s testing to find that line.”
Samuels said the company will continue looking at proppants to find the one that is best suited for its fracking needs in a continuing effort to enhance efficiency, and added that using light-weight proppant is just one tool available to access reserves at as low a cost as possible.
Production and cost savings
Triangle’s average daily production in May 2013 was 4,300 barrels of oil equivalent per day based on a 21-day average, a 23 percent increase over the 3,300 boepd the company was producing at the end of the fourth quarter of 2012. Triangle drilled and completed five gross operated wells in the first quarter using two drill rigs, and is currently operating three full-time drill rigs. A fourth rig is operating on a part-time basis.
The company has set a well cost target of between $10 million and $10.5 million for its McKenzie County wells, and that doesn’t account for cost saving associated with Rock Pile and Caliber. Triangle reduced the average number of days from spud to total depth to 27 days in the first quarter of 2013.
Montana acreage
While the northwestern flank of the Williston Basin is primarily undeveloped, permitting and drilling activity by industry continues to converge on Triangle’s acreage position.
Benefiting from protracted leasehold terms, the company does not plan on deploying capital to this area over the near term, preferring other operators de-risk the area.
In this part of northeast Montana, Triangle holds approximately 50,000 acres in its Station Prospect in Roosevelt and Sheridan counties.
In a Dec. 10, 2012, conference call, Samuels told analysts, “This is part of our portfolio that gets very little attention, very little value accredited to it. But we’re monitoring activity in the area as I’m sure a lot of you are as well and there are some big boys out there sniffing around. You’ve got Apache (west in Daniels County), Southwestern, Whiting, Samson Resources, all drilling wells, leasing acres and it’s going to be something to keep an eye on next year.”
