WPX Energy Inc. has rocketed to top gun status amongst middle Bakken long lateral producers where top cumulative production is concerned.
“We had excellent results in the Williston Basin in 2013 with oil production up 39 percent year over year,” James J. Bender, WPX president and CEO said in a Feb. 27 conference call. “In fact, over recent one and two year periods, WPX has been the number one cumulative middle Bakken long lateral producer in the basin.”
The company reported an average 365-day cumulative production of 136,800 barrels of oil per well based on North Dakota Industrial Commission production data, which WPX says is 52 percent higher than the average of its peers in the basin. And on 730-day basis, the company reports average production of 240,800 barrels per well, 66 percent above peers.
“We do look really good in this analysis versus the peer group,” said Bryan Guderian, WPX senior vice president of operations. “I think it’s indicative of the quality of the reservoir that we have, the quality of our well construction and in particular the effectiveness of our completion design.”
Early on, WPX took criticism for costs when it made an early move to cement liners and more traditional plug-and-perf completion designs, Guderian said, “but this has proved to be a best practice in the basin, and our well results reflect the quality of how we’re drilling and completing these wells.”
WPX is reluctant to change its completion design due to the success of its wells, however it is experimenting with promising new completion designs prompted by well reservoir characterization studies in its pilot program and it expects to have production results later in the year.
WPX conducted either dual or triple fracks on 17 pads in 2013, cutting its cycle times, Guderian said.
Ceramic proppant, in high concentrations, is a key contributor to the high performance of WPX wells.
“We’re currently using about a two-thirds to one-third ratio of ceramic to sand,” the company’s operations department said. “Although that adds about $1 million to our costs, ceramic completions are more predictable than sand, leading to better results.”
WPX had a strong reserve booking at the end of the year, Guderian said, calling both middle Bakken and Three Forks well performance outstanding.
“We increased our average middle Bakken reserves by about 6 percent and also increased our average well reserves for Three Forks by some 17 percent,” he said. “So what we see in our reservoir is continued strong performance and, at least during 2013, performance that exceeded our expectations.”
3-D seismic guides geosteering
Advanced processing of Bakken 3-D seismic data has yielded improved geosteering performance on WPX wells - another driver of lower wells costs in the Williston Basin.
“Geosteering errors in the basin were reduced by 90 percent from mid 2012 to early 2013,” Angie Southcott, WPX geology team lead told AAPG Explorer for its January 2014 issue.
Southcott said advanced high frequency extender processing of 3-D seismic data proved a breakthrough for resolving the Bakken interval, and accurately converting seismic surfaces to depth.
“It’s almost like we gained a whole other octave level in frequency content of the data,” Southcott said.
“With that, we were able to image and map the Upper and Lower Bakken shales.”
The Bakken presents unusual issues for geosteering, she said.
“Everyone says it’s just flat and not changing often or suddenly, but we can see dramatic thinning across the course of a lateral,” she said. “Ten to 15 feet of Bakken mid-section can suddenly be gone.
“The fault may not be huge, but it could fault enough feet so you’re confused,” Southcott said. “If you see the fault on the seismic - and you do - your correlation is exact.”
Scientific eye
For WPX, drilling density is an ongoing science project.
“We’ve been discussing over the past year or so what we called a science project; a lot of deep analysis under way to help us confirm well density across our acreage position,” said Guderian. “Through evaluating cores, logs and various pressure information, along with actual well performance, we’ve come to some initial conclusions, and we’ve begun the process … of setting up our pads for tighter well spacing and infill development.”
WPX is adding one additional middle Bakken well to a three well pad north of the Van Hook area on the Fort Berthold Indian reservation, Guderian said, adding that results look favorable, but the company will not be ready to make a conclusion on increased density in the Three Forks formation until the second quarter.
South of Lake Sakakawea in the Mandaree area, WPX has had a longer production history from the Three Forks and its Middle Bakken wells are performing well, Guderian said. WPX is increasing middle Bakken laterals from four wells to six wells per pad and Three Forks laterals from three wells to five wells per pad. The new pattern will boost the total lateral count to 11, versus the company’s prior plan of seven wells.
“We’ll be completing some of these wells late first quarter and should have some results in the second quarter,” he said.
In 2013, the company spud 49 total wells with four rigs and made great strides in cycle times and costs, Guderian said.
“Fifteen wells were turned to first sales in the fourth quarter,” he said, adding that the company shrugged off challenges of the wicked winter weather.
“Certainly, I think we probably could have done even better if the weather had been mild,” he said. “However, due to winterization efforts that we’ve undertaken over the last couple of years and great focus by our field operations personnel, we kept our wells on stream and made our year, our quarter and our exit targets.”
In the next few WPX will add a fifth drilling rig in the Bakken, Guderian said. “We expect to drill 62 total wells in 2014, and that activity should generate 30 percent to 35 percent production growth for the year.”
In recent filings with the North Dakota Industrial Commission WPX sought authorization to drill up to 28 Bakken pool wells on an existing 2,560-acre unit in Squaw Creek field in far eastern McKenzie County. WPX also asked the commission to establish a new overlapping 3,840-acre unit in the neighboring Spotted Horn field on which it wants to drill up to 42 Bakken pool wells.
Guderian said WPX expects to see some production lag in early 2014, but said it is all part of the plan.
“As you move to pad developments, we’ll be drilling three wells in succession and then completing three wells sequentially; that activity can take 90 to 100 days or so,” he said. “There will be some production lag in the beginning, and we would expect that in Q1, but it is planned and to be expected.”
The company anticipates it will see strong results by the end of the first quarter of the year.
“Current well costs are about $5.5 million, and we’re confident - we’ve only drilled 16 wells; I think we’re confident we can drive them lower,” Guderian said. “Our completion activity at our first three well pads is under way this week, and we expect those wells to deliver in early March.”
Acquired 2010
WPX, a wholly owned subsidiary of Williams until late 2011, entered the Williston Basin at the end of 2010 with the $949 million acquisition of Dakota-3 E&P Co.
The company has offices in Minot and New Town, N.D. It has an interest in more than 100 local wells on a gross basis, and holds 84,000 net acres in the Williston Basin on the Fort Berthold Indian Reservation.
WPX is planning to invest $580 million to $600 million for drilling in North Dakota in 2014.
The company also operates in Colorado’s Piceance Basin, Pennsylvania’s Marcellus Shale, New Mexico’s San Juan Basin, and Wyoming’s Powder River Basin.
