Continental Resources, the first Williston Basin operator to vigorously test the potential of the Three Forks and its lower benches, now has so-called “enhanced” completion techniques that could dramatically boost production returns from the Bakken petroleum system.
The method, recently tested at the company’s Rollefstad unit in McKenzie County, North Dakota, also moves Continental a step closer to formulating an optimal design for multiple zone or “full-field development” on its 1.2 million acre Williston leasehold.
Well results from the company’s second high-density or down-spacing pilot project (Rollefstad), released just prior to a May 8 conference call with analysts, “had very impressive early initial rates,” disclosed Harold G. Hamm, Continental’s chairman and chief executive officer.
With the help of an obviously potent enhanced completion design utilizing large amounts of proppant, Rollefstad even seems to have bested results from the Williston’s first high-density, multi-zone test conducted last year by Continental on the Hawkinson unit, located in an entirely different portion of the Bakken play.
Validating the vision
So impressive was the previous Hawkinson pilot that Rick Bott, Continental’s president and chief operating officer, declared in February: “This first test validates our vision for full-field development of the Bakken and the vast resource potential across our acreage position.”
Hawkinson, completed last November, and Rollefstad have the same general configuration: wells were drilled 1,320 feet apart and tested four zones - middle Bakken and lower three benches of the Three Forks. However, enhanced completion techniques tested at Rollefstad greatly boosted flow rates, the company noted in its latest report.
“The Rollefstad results are very exciting as the enhanced completions have the opportunity to dramatically change the overall return profile of the play,” Bott said.
Located in the Antelope project area of McKenzie County, Rollefstad was completed in April and included in the company’s first quarter 2014 operational report. This pilot involves eight new wells (two in each of the middle Bakken, TF1, TF2 and TF3) and three legacy wells (two middle Bakken and one TF1). The eight new wells had a combined maximum initial production rate, IP, of 22,460 barrels of oil equivalent per day, or 2,810 boepd per well.
Double the proppant
Seven of the new completions at the Rollefstad unit were conducted using twice the proppant, 200,000 pounds per stage, compared to the company’s standard completion design and had an average IP of 2,675 boepd. One well was completed at three times the proppant and had an IP of 3,720 boepd.
Continental said that because of the larger enhanced completion techniques and the temporary limitation of the infrastructure at the unit, a larger test vessel was necessary to help measure “these significant initial rates.” Moreover, because seven of the eight new wells continue to flow naturally, the company said it’s too early in the life of the wells to determine the estimated ultimate recovery, EUR, per well.
Continental said it plans to continue enhanced completions on about 20 percent (60 gross wells) of its Bakken activity in 2014 to determine the optimal completion design. During the fourth quarter of 2013 and first quarter of 2014, the company operated and completed about 40 gross wells using various completion methods, including several different test elements such as fluid type, shorter stage length and increased proppant.
“It is important to evaluate more production history as well as build a statistical database of results before firm conclusions can be drawn,” the company added.
Hawkinson remains ‘very strong’
Performance of the Hawkinson wells during their initial 150 producing days “continues to be very strong,” with 13 of 14 pilot wells producing on average 50 percent above the company’s 603,000 boe EUR model, the company said.
“The continued success of our Hawkinson downspacing pilot gives us the confidence we can take our full-field development plans across a large portion of the play,” Bott said.
However, production test results from Continental’s Tangsrud unit in Divide County, also released just prior to the May 8 call, were disappointing for the deeper benches of the Three Forks, but are helping to define the northern boundary for these lower zones on the company’s leasehold, Continental said.
This pilot also tested 1,320-foot spacing across the same four zones as Hawkinson and Rollefstad. The project includes two existing wells and 12 new wells, completed in the first quarter of 2014. They had a combined maximum IP of only 5,340 boepd, or just 445 boepd per well.
The five newly completed Tangsrud wells in the middle Bakken and TF1 had an average IP of 670 boepd, while the seven newly completed TF2 and TF3 initially produced at about 285 boepd. Unlike Rollefstad, Tangsrud wells were completed with a standard 30 stages and 100,000 pounds of proppant per stage.
“While Tangsrud wasn’t as big as we had hoped, the project was designed as a step-out to the north to further test the lower Three Forks, as well as 1,320-foot spacing,” Hamm said.
Four projects to go
In all, Continental has initiated seven density pilot projects, and all are designed to develop the middle Bakken, TF1, TF2 and TF3. The remaining pilots are testing 660-foot spacing and are in various states of drilling. These include the Wahpeton, Mack, Lawrence and Hartman units.
Meanwhile, Continental is telling investors to expect a production surge during the second half of 2014, largely the result of all the well density and completion projects. The company is expecting an overall 26-32 percent increase in 2014 from 2013.
With harsh winter weather and rail delays largely out of the way, Continental experienced solid production growth in the 2014 first quarter. Bakken output alone jumped to 97,500 boepd, a 27 percent increases compared to the same period last year.
“We’ve battled the weather since the beginning of the year, but we’re getting past that,” Bott said, noting that there were about 100 wells that were drilled but not yet producing, “down from February but still higher than our normal inventory.”
Continental said it completed 67 net (177 gross) wells in the Bakken during the first quarter of 2014.
Production totals 152,000 boepd
Overall, Continental’s first quarter 2014 net production totaled 13.7 million boe, or 152,500 boepd, a 6 percent increase over the previous quarter and a 25 percent increase over the first quarter of 2013. The breakdown included 106,400 bpd of oil and about 276 million cubic feet of natural gas per day.
However, first-quarter sales volumes totaled 13.4 million boe, or 148,400 boepd, which was about 363,000 barrels below the amount actually produced for the quarter. This increased level of oil inventory is attributed to recent line fill requirements, logistical management of volumes during winter and initial tank fill at oil storage facilities.
As part of the company’s 2013-2014 facilities capital budget, Continental said it is in the process of adding incremental oil storage facilities with a maximum working capacity of 240,000 barrels. The company said it anticipates additional significant line fill during the summer months as new pipelines are put into service.
On the financial front, Continental reported 2014 first quarter net income of $226 million, compared with net income of $133 million for the previous quarter. Excluding special items, adjusted net income for the first quarter was $272 million versus adjusted net income of $228 million for the previous quarter, the company said.
