Williston Basin exploration pioneer Continental Resources is targeting the upper Bakken shale in far southeastern McKenzie County. The company submitted an application to the North Dakota Industrial Commission asking for permission to drill, complete and produce up to four wells in each existing 1,280-acre spacing unit in the Charlie Bob-Bakken pool.
In its application, Continental put ultimate recoveries for the proposed upper Bakken shale wells at 246,000 barrels of oil and 323 million cubic feet of gas, with an estimated initial production, or IP, rate of 420 barrels of oil per day, and a gas-to-oil ratio of 1,300 cubic feet of gas per barrel of oil.
Continental set drilling costs for the upper Bakken wells at $5.6 million each.
NDIC records indicate there are 26 640-acre sections in the Charlie Bob-Bakken field that make up a total of 13 1,280-acre units, 11 of which are standups and the other two are laydowns (In a standup’s sections are one above the other, whereas in a laydown the sections are side by side. NDIC prefers standups, the most common configuration in North Dakota, because they make for better east-west energy corridors.)
The hearings on Continental’s application are scheduled for June 26 and 27.
The company currently has a dual-lateral well in the middle Bakken dolomitic sandstone member that was drilled in 2007. The well is in a 1,280-acre spacing unit in the Charlie Bob field. It had a 24-hour initial production rate of only 38 barrels of oil and was granted stripper well status. Through April 2013 it had produced 23,902 barrels of oil.
Almost all oil is in Bakken play is currently produced from the middle Bakken member. It is sandwiched between the Bakken shale that generated the oil, some of which escaped into the Middle Bakken, Three Forks and other low-permeability and variable-porosity reservoirs in the Bakken system. To date, just a few companies have been able to successfully produce from the actual Bakken shale source rock, with Slawson Exploration in the lead.
Continental’s application appears to be the first mention in public or company financial records of Continental’s targeting the upper Bakken shale member.
However, it fits with the high pressure theory espoused by Continental — that the various layers making up the Bakken petroleum system are encased and under “very, very similar” high pressure, meaning a lot more oil than currently estimated by the company may ultimately be recovered from the massive system.
As previously reported in Petroleum News Bakken, the physics behind the pressure theory may help explain why the Oklahoma-based E&P independent is so bullish on the Bakken. In October it announced a highly ambitious goal of tripling production and reserves by year-end 2017, with the Bakken play taking the lead role in the effort.
In addition to oil saturation, “high pressure greatly increases the odds that I’m going to have producible reserves,” Warren Henry, Continental’s vice president of investor relations, said in a May 6, 2012 interview with Petroleum News Bakken.
It could take until the end of 2013 before Continental has done enough drilling and testing to determine by how much it’s going to raise its current recovery estimate of 24 billion barrels of oil equivalent, an amount that already vastly exceeds the federal government’s estimate by nearly seven fold.
But Continental has analyzed enough core samples and drilled enough wells under its current 20-well exploration program to conclude that the Bakken petroleum system and its seven layers have a lot more in common than not.
The company views the Bakken as an integrated, high-pressured petroleum system, top to bottom, compared to the former theory that the deeper Three Forks “was sort of a halo of oil” pushed down into that interval based on the pressure in the middle Bakken, Winston Frederick Bott, Continental’s president and chief operating officer, said in a Feb. 28 conference call with industry analysts.
“We now feel it’s all one cell and it’s all very, very similar pressure,” he added. “And therefore, the recovery factors are going to be much more an important factor for us to determine.”
From top to bottom, the cell actually extends from the Lodgepole just above the upper Bakken shale member downward through the middle Bakken dolomite unit and lower Bakken shale to the “Nisku” just below the fourth bench of the Three Forks, Henry said.
Per well costs of $5.6 million
In its application to NDIC to drill, complete and produce up to four wells in each existing 1,280-acre spacing unit in the Charlie Bob-Bakken pool, Continental references a type log from a vertical well at the southern end of the same 1,280-acre spacing unit that was drilled in 1983 by Patrick Petroleum Co. into the Duperow pool. Although that well ended up being classified as a dry hole, the type log shows the upper Bakken shale in the area is approximately 10 feet thick with the top of the shale at a depth of approximately 11,120 feet.
There have only been a few wells drilled in the Charlie Bob-Bakken field. In addition to Continental’s Jost 1-20H well, GMX Resources has a well on confidential status that is in a neighboring spacing unit, and W.H Hunt drilled a vertical Duperow well in the field in May 1981, produced very little, and was plugged and abandoned in August 1982.
Oneok has a gathering line that runs through the spacing unit specified in the application, and wells in that spacing unit are expected to be connected to gas sales when they go on production.
Willow Creek infill drilling
Continental is also seeking permission to infill drill in the Willow Creek-Bakken pool in Williams and McKenzie counties. The upper portion of the stacked 1,280-acre unit is on the north side of Lake Sakakawea in Williams County and extends south under the lake into McKenzie County.
Continental currently has one Middle Bakken well in that spacing unit and wants to drill three additional Middle Bakken wells and three Three Forks wells. Continental reports Middle Bakken/Three Forks estimated ultimate recoveries of 578,000 barrels of oil and 724 million cubic feet of gas for the Willow Creek wells. The company also reports an initial production rate of 925 bopd, and a gas-to-oil ratio of 1,000 cubic feet of natural gas per barrel of oil. Estimated costs for the Willow Creek wells is $8.7 million per well.
The Willow Creek field is adjacent to a Hiland gas gathering line, and like the Upper Bakken shale wells in the Charlie Bob field, the wells in the Willow Creek field are expected to be connected to gas sales when they go on production.
Other Continental infill applications
In other applications, Continental is seeking permission to increase the allowable number of wells in an existing 640-acre spacing unit in the Antelope-Sanish pool in northwest McKenzie County to a maximum of 17.
The company did not include well economics for the 640-acre spacing unit in the Antelope field, but NDIC records indicate Continental currently has seven wells in the 640-acre unit, which is at the northern end of the Antelope field. Two of these seven wells are still on tight hole status, but production data available from NDIC on the other five wells indicate that one of the Three Forks wells went on production in March 2009 with an IP of 380 bopd and has produced a cumulative total of 139,579 barrels through April 2013. The other two Three Forks wells went on production in October 2011 and November 2012 with IPs of 901 and 446 bopd, respectively, and through April 2013 have produced cumulative totals of 97,060 and 51,449 barrels, respectively.
The two Middle Bakken wells went on production in November 2012 and October 2012 with IPs of 609 and 571 bopd, respectively. Those two wells have produced cumulative totals of 114,041 and 73,901 barrels, respectively.
Continental is also seeking permission to drill up to three additional wells in an existing 1,280-acre spacing unit in the central region of the Antelope field. NDIC records indicate that seven vertical wells have previously been drilled in the spacing unit, five of which are Continental wells. Two of the Continental wells, which are in the upper section of the stacked unit, are still on confidential status, and the other three are in the lower section and all three are active vertical wells dating back to 1989 and 1990. Those three wells had IPs ranging from 192 to 357 bopd, and cumulative total production from the three wells through April 2013 ranged from 107,069 to 271,943 barrels.
Dakota-3 LLC is the operator of the sixth well in the unit, which is also in the upper section and went on production in December 1966 with an IP of 51 bopd. Through April 2013 well has produced a cumulative total of 161,173 barrels. The seventh well in the unit was a well drilled by Gulf Oil and produced a total of 60,887 barrels from July of 1959 through September 1977 before being plugged and abandoned in November 1979.
