Monday, April 13, 2015

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

Updates

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 286K 10/19;
  • 33729: 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 144K 10/19;

  • 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 226K 10/19;
  • 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 180K 10/19;
  • 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 172K 10/19;
  • 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 276K 10/19;

  • 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 290K 10/19;
  • 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 210K 10/19;
  • 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 223K 10/19;
  • 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 231K 10/19;

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 130K 10/19;
  • 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 361K 10/19;

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 257K 11/18; still flaring (8/15)
  • 28914, 1,647, Hess, EN-VP and R-154-94-2536H-2, Alkali Creek, t3/15; cum 169K 11/18; 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 164K 11/8; 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 221K 11/18; 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:

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