Case Study Suggesting New Flaring Rules Are The Long Pole In The Tent, Not The Price Of Oil -- April 13, 2015

Updates

June 20, 2021: there are currently 16 wells/drilling sites in this drilling unit. There is "room" for sixteen more though we probably won't see that for many, many years. 

June 6, 2021: updated graphic --

June 6, 2021: Hess is starting to report the newest EN-VP and R-wells  --

Hess is starting to report some new EN-VP and R-wells in Alkali Creek.

Four four-well pads = a 16-well pad:

NW:

• 33732, 2,078, Hess, EN-VP...H-12, Alkali Creek, t5/18; cum 433K 4/21;
• 33731, 1,631, Hess, EN-VP...H-11, Alkali Creek, t5/18; cum 134K 1/20; sporadic after 1/20;
• 33730, 2,056, Hess, EN-VP...H-10, Alkali Creek, t5/18; cum 328K 4/21;
• 33729, AB/1,506, Hess, EN-VP...H-9, Alkali Creek, t5/18; cum 148K 1/20;

NE:

• 28916, IA/1,230, Hess, EN-VP...H-4, Alkali Creek, t3/15; cum 231K 1/21; sporadic since then;
• 28915, 1,194, Hess, EN-VP...H-3, Alkali Creek, t3/15; cum 201K 4/21;
• 28914, 1,647, Hess, EN-VP...H-2, Alkali Creek, t3/15; cum 178K 3/21;
• 28913 1,711, Hess, EN-VP...H-1, Alkali Creek, t2/15; cum 298K 4/21;

SW (newest of the four pads):

• 36851, conf, Hess, EN-VP ..H-1, Alkali Creek, first production, 12/20; t--; cum 130K 4/21;

Date	Oil Runs	MCF Sold
4-2021	20184	30463
3-2021	21682	29879
2-2021	25177	32277
1-2021	38867	40812
12-2020	21755	6773

• 36850, conf, Hess, EN-VP ..H-15, Alkali Creek, first production, 12/20; t--; cum 130K 4/21;
  

Date	Oil Runs	MCF Sold
4-2021	16590	21739
3-2021	17112	22162
2-2021	23356	30779
1-2021	37449	38288
12-2020	31325	2022

• 36849, conf, Hess, EN-VP ..H-14, Alkali Creek, first production, 12/20; t--; cum 120K 4/21;
  

Date	Oil Runs	MCF Sold
4-2021	15950	30764
3-2021	16546	29356
2-2021	20116	31526
1-2021	31219	42746
12-2020	38475	29619

• 36848, conf, Hess, EN-VP ..H-13 Alkali Creek, first production, 12/20; t--; cum 105K 4/21;

Date	Oil Runs	MCF Sold
4-2021	15099	20188
3-2021	14858	17321
2-2021	16191	19305
1-2021	24093	29988
12-2020	29475	29324

SE:

• 31283, 1,421, Hess, EN-VP ..H-8 Alkali Creek, t11/16; cum 316K 4/21;
• 31282, 1,346, Hess, EN-VP ..H-7 Alkali Creek, t11/16; cum 244K 4/21;
• 31281, 746, Hess, EN-VP ..H-6 Alkali Creek, t11/16; cum 271K 4/21;
• 31280, 1,612, Hess, EN-VP ..H-5 Alkali Creek, t10/16; cum 273K 4/21;

July 4, 2018: the other EN-VP and R- wells not listed below (in addition, #28913 - #28916, inclusive with updated frack data):

• 33730: 2,056;  t4/18; middle Bakken; 9 days to TD; 60 stages; 8.3 million lbs, large, medium;  in first sixteen days: 26,686 bbls; cum 327K 1/21;
• 33729: IA/1,506, t5/18; Three Forks 2nd bench, 13 days to TD;  60 stages; 8 million lbs; large, medium; in first 19 days, 13,335 bbls; cum 148K 1/20;

• 28916, 1,230, t3/15; middle Bakken; 35 stages; 3.5 million lbs; large, small; drilling rig, October 20, 2014; cease drilling, December, 2014; bump in production; cum 231K 1/21;
• 28915, 1,194, t3/15; Three Forks NOS, 35 stages; 3.5 million lbs; large, small; drilling rig, November 17, 2014; cease drilling, December 18, 2018; cum 197K 1/21;
• 28914, 1,647, t3/15; middle Bakken; 35 stages; 3.5 million lbs; large, small; drilling rig, November 9, 2014; cease drilling, December 8, 2014; cum 178K 1/21;
• 28913, 1,711, t2/15; Three Forks NOS, 35 stages; 3.5 million lbs; large, small; drilling rig, November 17, 2014; cease drilling, December 1, 2014; cum 294K 1/21;

• 31283, 1,421, t11/16; middle Bakken; 53 stages; 3.7 million lbs; large, small; off-line as of 1/18; drilling rig, August 20, 2016; cease drilling, August 31, 2016; cum 312K 1/21;
• 31282, 1,346, t11/16; Three Forks NOS; off-line as of 3/18; 57 stages, 3.9 million lbs; large, small; drilling rig, August 1, 2016; cease drilling, August 16, 2016; cum 239K 1/21;
• 31281, 746, t11/16; middle Bakken; 57 stages; 4 million lbs; large, small; off-line as of 4/18; drilling rig, July 20, 2016; cease drilling, July 29, 2016; cum 263K 1/21;
• 31280, 1,612, t10/16; Three Forks NOS,  53 stages; 3.7 million lbs; large, medium; nice jump in production after off-line for less than one month (4/18); spud date, July 7, 2016; cease drilling, July 16, 2016; cum 266K 1/21;

July 3, 2018: DUCs reported as completed:

• 33731, 1,631, Hess, EN-VP and R-154-94-2536H-11, Alkali Creek, Three Forks 2nd bench, TVD = 10,903 feet; spud date, January 2, 2018; cease drilling, January 13, 2018,  API - 33-061-04084, fracked 4/13/18 - 4/18/18, 6.4 million lbs water; 86.7% water, 12.9% sand; and 4/18/18 - 4/23/18, 6.75 million gallons, 87.1% water; 12.49% sand;  t5/18; in first 13 days, 15,656 bbls; cum 134K 1/20; some erratic production since then;
• 33732, 2,078, EN-VP and R-154-94-2536H-12, middle Bakken, TVD = 10,727 feet, spud date, January 16, 2018; cease drilling, January 25, 2018, Alkali Creek; API 33-061-04085, fracked 4/9/19 - 4/13/18; 5.7 million gallons of water; 84.8% water; 14.9% sand, t5/18; in first 10 days, 14,137 bbls; cum 425K 10/20;
  

April 22, 2015: all four EN-VP and R wells have now come off the confidential list. 

• 28913, 1,711, Hess, EN-VP And R-154-94-2536H-1, Alkali Creek, t2/15; cum 294K 1/21; still flaring (8/15)
• 28914, 1,647, Hess, EN-VP and R-154-94-2536H-2, Alkali Creek, t3/15; cum 178K 1/21; still flaring (8/15)
• 28915, 1,194, Hess, EN-VP and R-154-94-2536H-3, a Three Forks well, Alkali Creek, 35 stages; 3.5 million lbs sand,  t3/15; cum 198K 1/21; small bump in production 5/18 after coming back on line; still flaring (8/15)
• 28916, 1,230 Hess, EN-VP and R-154-94-2536H-4, Alkali Creek, t3/15; cum 231K 1/21; small bump in production after coming back on line; still flaring (8/15)

 The reader noted a couple of things:

As an aside, the NDIC reports the EN-VP and R H-1 February oil production of 29,202 barrels in 27 days.  I believe this is in 19 days since the well was completed 2/12, not 2/1.

Original Post

A reader sent me this note (some editing):

The reader noted that the following well came off the confidential list today:

• 28915, 1,194 (updates above, Hess, EN-VP and R-154-94-2536H-3, a Three Forks well, Alkali Creek, 35 stages; 3.5 million lbs sand,  t3/15, 

The reader noted that the well file now contains a Gas Capture Plan, pages 113 - 119 for the H-3, that includes an affidavit to a third party gatherer; oil and gas production forecasts; layouts of proposed connections to gas gathering lines; and, technology information of flaring alternatives. 

A sister well, 28916, EN-VP and R H-4 came off the confidential list last Friday in DRL status; the reader suspects this well was completed and began production the latter part of March. 

Two other sister wells; 28913, EN-VP and R H-1 and 28914, EN-VP and R H-2; were reported on March activity reports as Confidential Wells Plugged Or Producing. The H-1 shows February oil production of 27,809 barrels for some unknown period and the H-2 11,843 barrels. The H-2 is coming off the confidential list tomorrow and the H-1 off the list on Thursday. 

The timing for these wells' initial production is pretty much in line with the H-3 well file's production forecasts, page 117. 

All this seems to suggest that the ability to handle gas output, which has been a key factor, may now be the critical path for the timing of well completion and production. 

As an aside, the pad layout on page 97 shows 20 proposed wells, and the Surface Use Agreement, page 111, lists 18 wells to be operated on the site. The pad is located in section 24 and the spacing unit is 1280-acres, sections 25 and 36.

My reply:

Very, very interesting -- I've mentioned the headwinds for completing wells:

• low prices  
• conditioning for CBR 
• flaring rules 

It appears low prices may move operators to the sweet spots, etc., etc., but once the wells are drilled, the question is which of the three headwinds is the long pole in the tent with regard to completing the well. I had not thought about that lately -- simply thinking that it was the low price. 

But I think you are correct. Low prices will determine who drills, where they drill, and how much they drill, but the critical path for completing a well may depend on natural gas gathering capabilities. Most recently the NDIC told five operators to "choke back" production because they were exceeding flaring standards; and, XTO has requested a waiver for some 140 wells.  It appears the operators have found a relatively low-cost way to "condition" Bakken oil for CBR, and even if they didn't, it seems there is more pipeline capacity. 

A minor comment: it's interesting to see all this talk about flaring. All this talk about flaring might confuse newbies, or cause old-timers like me to forget: the Bakken is an oil field. In general, 95% of Bakken well production is oil, compared with, I think, 70% - 80% in other two well-known oil plays, the Permian and the Eagle Ford.

A bit more on the amount of time for to drill this well:

• the surface spud, October 12, which I assume took a day or so
• the vertical hole with the big rig spud October 31, 2014
• total vertical depth reached November 3, 2014 (about 4 days to drill with the big rig to vertical depth)
• lateral was drilled in five days and 22 hours

The general area of the EN-VP and R wells:

Zooming in: