It’s “ears back” at Continental Resources Antelope prospect says the company’s founder, chairman and CEO Harold Hamm, comparing the North Dakota prospect to a horse allowed to run “full out.”
In the case of the Antelope, a Bakken petroleum system play, it means the big Oklahoma-based E&P independent is accelerating development of its Antelope prospect, where Hamm announced in early November the successful completion of Continental’s first well density test in the Hawkinson spacing unit, “demonstrating very strong initial production in the Middle Bakken and the first three benches of the Three Forks.”
Antelope development will first occur at Hawkinson, as planned, but since its results came in ahead of schedule by 30 days and the infrastructure to handle takeaway for both oil and gas is “almost” finished, Continental is proceeding with “ears back,” likely adding to projected production, Hamm said in a third quarter earnings conference call Nov. 7.
“Once again, Continental is pioneering the expansion and improved recoveries in the world-class Bakken oil play, demonstrating the productive potential of four to five stacked zones with multiple wells in each,” he was quoted as saying in a Nov. 6 press release.
In October the Hawkinson unit initially tested at a combined rate of 14,850 barrels of oil equivalent per day from 14 wells, Continental said.
This included 13,400 boe per day from 11 new wells drilled this year and combined current rates of 1,450 boe per day from three existing wells in the unit, which to date have cumulative production of 1.3 million boe since 2010.
No flaring, standard choke size
When asked how the Hawkinson EUR’s compare to middle Bakken upper-bench Three Forks wells, W.F. “Rick” Bott, Continental’s president and chief operating officer, said it was really too early to talk about firm EURs, but noted Continental is not flaring the wells and uses a standard choke size.
“We have a range in the lower benches; we’re seeing some scattering, 390-440 range, some also approaching 900,000 boe such as our Angus well,” he said. “We just don’t have a lot of tests right now. The Hawkinson is a week from testing and just basically getting back online.”
Continental has 40 gross wells in the Antelope prospect, which lies in McKenzie and Williams counties.
The Hawkinson density project includes four middle Bakken, three Three Forks first bench, four Three Forks second bench and three Three Forks third bench wells, “which all were spaced 1,320 feet apart in the same zone and offset 660 feet in the adjacent zones,” the company said.
It is the industry’s first density drilling program in the basin to include three of the lower benches (bench four was also tested) — and the first to call for up to 30 wells on a pad.
‘Milestone event’ for company
“The Hawkinson project is a milestone event for CLR and further validates our vision for full field development of the Bakken-Three Forks reservoirs in this world class oil field,” Bott said. “Clearly there is more oil to be recovered than previously perceived and projects like the Hawkinson are leading the way to defining the optimum drilling density and pattern to maximize oil recovery. The news in the Bakken just keeps getting better.”
In addition to Hawkinson, Continental has three other density pilot tests under way in North Dakota, with results expected in the first half of 2014.
The Tangsrud project in Divide County involves 12 new wells and the Rollefstad project in McKenzie County involves 11 new wells drilled with 1,320-foot same zone inter-well spacing, similar to the Hawkinson.
The Wahpeton project in McKenzie has 13 new wells configured in four zones at tighter spacing, which is 660-foot same zone inter-well spacing.
During 2014, Continental said it plans to conduct three additional density pilots to test 660-foot inter-well spacing, further defining the density spacing across a very large portion of its acreage in the Bakken.
The company plans to complete approximately 282 net (761 gross) wells in the Bakken in 2013, including both operated and non-operated wells. It estimates its operated rig activity will average 20 rigs throughout the balance of 2013, down from 22 rigs as expected earlier “due to realized efficiencies.”
Continental plans to drill an additional 350 wells over the course of the next four to five years focusing on drilling pads with 20 to 30 wells per location.
Continental’s Ears Back project at Antelope will dedicate four rigs in 2014 for field development drilling.
In March, Continental said it planned to eradicate natural gas flaring from its operated well sites, or at the least get “as close to zero percent flaring as possible” The company already has reduced flaring to less than 10 percent in the Bakken, well below the 28-29 percent average cited by the North Dakota Industrial Commission.
In its Nov. 6 release, Continental said its oil and natural gas production grew almost 38 percent to nearly 142,000 boe a day in the third quarter, almost 71 percent of that being oil. But second to third quarter output was up just 7 percent, with the biggest percentage increase coming from the company’s Montana wells.
Its production from the Bakken system in North Dakota and Montana increased 51 percent to 94,500 boe per day from the third quarter of 2012.
The company reported a profit of $167 million, or 91 cents per share, up from $44 million or 24 cents per share in the year-ago quarter. Adjusted for one-time expenses, Continental’s earnings were almost $297 million, or $1.61 per share, up from $159 million or 87 cents a share a year ago.
SCOOP continues to grow
Continental said it “continues to deliver excellent, repeatable results” from drilling activity in its Oklahoma SCOOP play.
Discovered by Continental and announced in October 2012, the play extends approximately 3,300 square miles across several counties in Oklahoma and contains defined oil and condensate-rich fairways as delineated by more than 290 gross wells in the area.
Continental has approximately 320,000 net acres of leasehold in the play, although as in the Bakken, it continues to pick up new leases in the region.
In the third quarter, SCOOP’s net production averaged approximately 20,100 boe per day, an increase of 14 percent sequentially and 293 percent above third quarter 2012.
“The recent growth was driven by the addition of 11 net (22 gross) operated and non-operated wells in the play during the third quarter 2013,” per Continental’s capital plan.
The company currently operates 12 rigs in the play with plans to increase to 15 by year-end and plans to complete a total of approximately 41 net (77 gross) wells in the SCOOP play this year, including both operated and non-operated wells.
“These wells will focus on expanding the proved productive extent of the play and de-risking the company’s leasehold. Expected net and gross well count activity has been adjusted to account for recent increased cross-unit activity,” Continental said in its Nov. 6 release.
