In first quarter 2013, Oasis Petroleum cored through the lower benches of the Three Forks formation in the Bakken petroleum system and conducted enhanced log analyses for six pilot test wells that the company is planning to drill into the lower benches.
Oasis Executive Vice President and Chief Operating Officer Taylor Reid said in a May 8 first-quarter earnings conference call that the Houston-based independent is currently analyzing those data, and based on what company officials have seen thus far, Oasis will likely drill its first lower bench well late this year or early in 2014.
According to Reid, Oasis is focusing on optimizing subsurface inter-well spacings — and the corresponding pad arrangement and operation on the surface — in order to most efficiently develop its Williston Basin resources.
“As we have stated previously, an early understanding of the reservoir will promote optimal well spacing and prevent over-capitalization by drilling too many wells in a spacing unit, or by leaving reserves behind by drilling too few,” Reid said. “Our work on this front will then lead to best practices for pad development by fitting the subsurface to the surface.”
To that end, Reid said Oasis is evaluating optimal spacing efficiencies through three methods: inter-well spacing pilot tests; extensional drilling in the first bench of the Three Forks formation in the Bakken petroleum system; and analysis of other benches of the Three Forks from coring and high-resolution logs.
Reid said that early results from a 2012 spacing test suggest that four wells per reservoir per pad appear to be economic with little interference between wells, and in 2013 the company will test the limits of infill density patterns. “As we drill wells closer together in 2013, we are seeking to achieve the ideal spacing that maximizes the returns per spacing unit.”
In 2013, Reid said, the company will have 22 infill pilot tests spread over its acreages and will be testing up to six wells in the Bakken formation and six wells in the first bench of the Three Forks formation, resulting in densities of up to 12 wells per pad.
In addition, Reid said that the company’s Three Forks extensional drilling program in which it drilled step-out wells in both North Dakota and Montana was “very successful,” with results similar to Bakken wells in those areas. Because of these positive results, Oasis is planning 15 extensional and step-out tests in 2013. “We think that there is a high probability that the Three Forks is economic across most of our acreage position, and we’ll have more well results to share as we approach year end.”
As the company continues testing spacing efficiencies, it is simultaneously moving to more and more pad drilling, Reid said. Oasis is currently drilling 60 to 70 percent of its wells on multi-well pads this year, and in 2014 the company’s development will be 80-plus percent on pads. Oasis improved its pad designs in 2012, and is now working on surface well configurations and battery designs expected to enhance the company’s pad operations moving into 2014.
Chairman and Chief Executive Officer Thomas Nusz said May 8 that Oasis has lowered its weighted average operated well costs from about $10.5 million in the first half of 2012 to $8.4 million in the first quarter of 2013.
Furthermore, he said, first quarter well costs do not include savings the company is realizing from subsidiary Oasis Well Services, which provided an additional $300,000 in savings per well.
The company’s average daily production in the first quarter, consisting of 91.5 percent oil, was 30,153 barrels of oil equivalent per day, an increase of 9 percent over the fourth quarter of 2012, and an increase of 71 percent over production in the first quarter of 2012.
Most of the company’s first quarter production, some 19,021 boepd, came from its West Williston area in Williams and McKenzie counties in North Dakota and Richland and Roosevelt counties in Montana.
