The explorer that’s done the most work figuring out the production characteristics of the Bakken petroleum system’s deepest zones said that while more testing of these lower benches will be required, the company “proved some big things” during the first full year of testing including the most important thing — the ability to generate profits.
“We’ve proved that it’s good quality rock. We’ve proved that there is oil in there. We’ve proved that we can produce at a commercial rate,” Rick Bott, president and chief operations officer of Oklahoma-based Continental Resources, declared Feb. 12 at the Credit Suisse Global Energy Summit in Vail, Colo.
Continental’s bullishness on the Bakken is well established, having publicly announced increases in its estimated in-place oil on several occasions and each time well above the federal government’s official projections, to a current 903 billion barrels of oil equivalent.
But not since 2010 has Continental altered the amount of oil it believes can be recovered or produced from the Bakken, which remains at 24 billion boe. But that’s likely to change.
Confidence is running high
“We’re confident that the total now is larger,” J. Warren Henry, Continental’s vice present of investor relations, told Petroleum News Bakken in a Feb. 21 email. “But we don’t have a formal estimate of it yet.”
Nor does Continental have any immediate plans to disclose a change in its recoverable estimates for the Bakken system, Henry said. However, if the company were to announce, it likely would wait until results are in hand from additional well-density pilots this year that again include the lower sections, or more specifically, the second, third and fourth benches of the Three Forks.
The prolific nature of the Middle Bakken and first bench of the underlying Three Forks formation has been known and exploited by industry for years, with Continental again taking the early lead in exploring both zones and establishing their commerciality.
“On an area by area basis, we don’t necessarily see a tremendous difference between the Middle Bakken and first bench,” Bott told analysts. “In fact, in some areas, the first bench can be better than the Middle Bakken.”
The stakes are high as Continental goes about testing the productivity of the lower benches. For example, by Continental’s estimates, a modest 3.5 percent recovery rate on 903 billion boe of in-place resource would increase its current 24 billion boe recovery rate to 32 billion boe, while 4 percent would yield 36 billion boe, and 5 percent could generate 45 billion boe.
Few have tested lower Three Forks
Only a handful of other operators have done one or two tests each and most of them only the second bench, Bott noted, adding that a few companies are now just beginning to delve into the third and fourth benches.
“So as we explore this basin, we’ll get more understanding and more ideas about how good this is or not across the basin,” he said.
Last year Continental’s successful Hawkinson well density project became industry’s first drilling program in the Williston Basin to include multiple lower benches of the Three Forks. Eleven wells were completed and put on line. Additionally, 20 of 22 lower Three Forks wells were tested for productivity. In total, some 3,800 square miles of lower bench productivity have been conducted to date, the company said.
“We are quite excited that we’ve come out of 2013 really having moved the needle in terms of the size of the pie,” Bott said.
Pressure theory validated
Hawkinson did more than just prove the commercial capability of the lower benches of the Three Forks; it further validates Continental’s reservoir pressure theory, which explains the company’s rationale behind dramatically increasing its in-place oil estimate for the petroleum system to 903 billion boe from 577 billion boe, a 57 percent hike.
Continental once viewed the Middle Bakken and Three Forks formations as separate and isolated, until a few years ago when the company drew numerous top-to-bottom core samples across a vast area of the play and found consistent oil saturation and pressure throughout the system. Tight limestone at the top and bottom bind the petroleum system, preventing the oil from migrating out of the cell.
“And that’s what causes the over pressuring and makes it such a great reservoir,” Bott said, noting that the upper and lower shales are the main source rock for the oil.
However, Continental learned from testing that because over pressuring tends to force the oil downward, production rates aren’t necessarily consistent below the first bench and can vary by geographical location.
Zone productivity can vary
Though production rates from the first bench are roughly the same as from the Middle Bakken, the second bench could be slightly less productive than the first bench, the third bench could be slightly less productive than the second, and the fourth bench could be a lot less productive than the third bench. With a slight change in the rock type as the oil is pushed downward, there can be less permeability and porosity, so less oil storage and higher amounts of water.
For example, the 11 new wells completed at Hawkinson in 2013 produced a combined 13,400 boepd. The average rate per well of the four wells drilled into the first bench was 1,480 boepd, while the average rate per well of seven wells drilled into the second and third benches was 1,070 boepd. Referred to as a “milestone in maximizing economic oil recovery,” wells in the same zone were spaced 1,320 feet apart, while wells in adjacent zones were spaced 660 feet apart.
“What that means is you might produce more water out of the third bench, but it still may be a very, very commercial well, if you get your well costs right and you handle your water properly,” Bott said.
More bench testing to come
Drilling results from three other 2013 density pilots — Tangsrud, Rollefstad and Wahpeton — are expected during the first half of 2014 and should shed even more light on the production capabilities of the deep zones, along with three additional density pilots — Hartman, Mack and Lawrence — scheduled for this year. Moreover, 26 lower Three Forks exploratory wells are planned for 2014.
“Then it becomes a portfolio management issue about when you drill the right wells and maximize your rate of return,” Bott said. “And that’s a balance between operations efficiencies, infrastructure capabilities and takeaway, the surface typography and how you drill that, and the overall logistics of managing an operation. So there’s a lot of news yet to come on that.”
