Whiting Oil and Gas Corp., part of Whiting Petroleum, led the way as nine Bakken operators filed applications to the North Dakota Industrial Commission for hearings March 26 and 27, seeking creation of 67 overlapping 2,560-acre spacing units, all Bakken pool units.
Whiting filed for 27 separate overlapping 2,560s.
Whiting plans one or more horizontal wells on or near the common spacing unit boundaries in each of the new overlapping units. The 27 spacing units are in the Bell, Zenith, Fryberg and Park fields, all adjacent fields in east-central Billings and northwest Stark counties.
In 2014, Whiting will continue to exploit its Williston Basin acreage in a big way.
Whiting will invest $2.4 billion of its $2.7 billion 2014 capital budget in exploration and development, a level of capital spending it forecasts will push production growth of 17 percent to 19 percent, James J. Volker, Whiting chairman and CEO, said in a Feb. 27 conference call.
“At the current drilling pace, we estimate we have 22 years of drilling inventory in the Williston Basin,” he said.
In 2013, Whiting increased its production 21 percent and its proved reserves increased 31 percent.
“We grew our gross and net potential drilling locations by 47 percent and 66 percent, respectively,” Volker said.
Whiting sold $917 million of non-core assets and picked up new potential resource plays in 2013.
“As a result of these actions, we have an exceptionally strong balance sheet, which we’ve used to increase our position in the Williston Basin, accelerate development at our Redtail field and acquire over 500,000 net acres in three new potential oil resource plays,” Volker said, adding that Whiting now controls approximately 715,000 net acres in six primary fields in the basin.
Completion design instituted
Whiting has instituted an improved completion design in the Williston Basin using cemented liners to enhance well results, along with a plug and perf method of completion.
“This achieves a better breakup of the near wellbore reservoir,” Volker said, adding that Whiting has achieved improved results at its Missouri Breaks, Pronghorn and Hidden Bench areas using its new completion design - seeing productivity increases greater than 50 percent across the three areas.
Whiting’s production topped 100,000 barrels of oil equivalent per day in the fourth quarter of 2013.
“Our reserves increased to 438.5 million boe,” Volker said. “Our reserve mix is 79 percent black crude and 89 percent liquids, and our (reserves-to-production) ratio is a healthy 13 years.”
Whiting is seeing positive results from its higher-density pilots, having recently completed the Uran higher-density wells at its Sanish Field, Volker said.
“These two infill wells posted an average production rate of 1,352 boe per day versus the original two wells that had an average IP of 789 boe per day,” Volker said. “Both infill wells were completed with our new completion design.”
Whiting has also been experimenting with proppant in its Williston Basin fracks. During its Oct. 24 conference call, Whiting President and Chief Operating Officer James Brown said the company has used proppant masses as high as 8 million pounds but has found a “sweet spot” in the 4 million to 5 million pound range.
A good bit faster
Whiting has made a switch to more robust drill bits, which have essentially slashed the company’s drilling time in half.
Volker told CNBC’s Jim Cramer on Oct. 25 that through improved technology, Whiting has been able to cut the time required to drill a Bakken well to total depth, i.e., 10,000 feet vertically then 10,000 feet horizontally, from approximately 30 days to between 11 and 15 days.
Volker said Whiting’s use of strong drill bits to drill its laterals often allows the company to drill the entire 10,000-foot horizontal wellbore with just one bit. “So we don’t stop to have to come out of the hole to replace the drill bit. That has really been the major improvement in cutting down our drilling time.”
A little dry powder
Mark R. Williams, Whiting senior vice president of exploration and development, said Whiting’s reserve estimates had a bit of potential upside from the reported numbers, as the company waits for data on its new wells to calculate their contribution to the company’s reserves.
“When we prepared our year end engineering database, we really didn’t have enough performance data to move the majority of the results from either the cemented liners or the high-density infills into our reserve base,” he said.
At issue, he said, was that in the case of its cemented liner completions and high density wells. Whiting needs to see 120 days worth of production data before it can add those into the reserves.
“So in the well count, yes, some of those are added in, but in the reserve database, they’re not; it’s a matter of timing,” he said. “We’re just waiting for performance data to get comfortable with the reserves. ... Selectively, we’ve started to include those as we’ve gotten comfortable with the results of our cemented liner completions and our high-density pilots.”
Viscosity variations
Whiting is adjusting the viscosity, “if you will, of all our fracks,” Williams said.
“What we’re trying to find is that right mix; so going purely to slickwater, I think we’ve really only done a couple that are pure slickwater right now, a lot more of them are linear gels or somewhere between a cross-link and a slickwater,” he said, adding that Whiting is also modifying viscosity of fracks between the early part of the stage and the last part of the stage.
“It’s way too early to say that we’ll go entirely slickwater, but we’re trying to find a happy medium in there,” Williams said.
Whiting is cued up to do another pure slickwater job, which it will compare to its cemented liner plug and perf method “to see if are we are getting the uptick from the slick liner or from the slickwater,” said Brown. “Can we get to the same point with a cemented liner plug and perf and generate the same end result?”
Three Forks vs. Bakken
Which is better, a Three Forks well, or a Bakken well? It depends on where the well is located.
For years now there’s been a controversy around the value of a Three Forks well, as compared to a Bakken well, said Michael J. Stevens, Whiting vice president and CFO.
“In some areas, the Three Forks will be as good and in some areas better than the Bakken,” Stevens said. “You probably have to look at it regionally; broadly, maybe across the whole basin.”
Williams said Whiting will place an increasing focus on the Three Forks, especially the lower Three Forks, which is less well known.
“The upper bench of the Three Forks has been firmly established over the vast majority of the basin,” he said. “We’ve got upper Three Forks just about all of our acreage.”
The second and third bench of the Three Forks may have more concentrated sweet spots.
Industry consensus is converging on the central part of the basin as the most prospective area for the second bench of the Three Forks, Williams said, adding, “That would include our Hidden Bench, our Tarpon fields, a portion of our Cassandra field, and then going east over into at least part of Sanish.”
“So the central part of the basin is going to have good second bench potential; that’s a lot of what we’ve added in this year,” Williams said. “As far as the extremities of the basin, it will be less prospective as you get towards the margins.”
Whiting sees upside potential in the Three Forks second bench at its Sanish/Parshall area on the east side of the basin in Mountrail County, where it holds 174,666 (82,410 net) acres and is targeting the Middle Bakken and the Three Forks.
In the Pronghorn area of the southern Williston, Whiting is targeting the Pronghorn sand; it holds 194,217 (126,866 net) acres there. The Three Forks is the target at the Lewis and Clark area, where the company has 198,266 (136,510 net) acres.
The Middle Bakken and the Three Forks are the targets across Whiting’s holdings in the western Williston, where the company holds 66,805 (37,418 net) acres in the Hidden Bench area, 98,601 (64,277 net) acres in the Missouri Breaks area, 29,987 (13,949 net) in the Cassandra area, and 8,805 (6,265 net) acres in the Tarpon area.
In the 66,858 (49,662 net) acre Starbuck area, northwest of the Missouri Breaks area of the western Williston, the company is targeting the Middle Bakken, Three Forks and Red River formations.
The Big Island area lies just to the southwest of the Lewis and Clark area of the southern Williston. Whiting is targeting the Red River formation at Big Island, and it holds 185,527 (142,816 net) acres there.
Whiting has an additional 123,793 (54,862 net) acres scattered about North Dakota and Montana, bringing its total Bakken holdings to 1,147,525 (715,035 net) acres.
