Tuesday, May 5, 2015

Halo Effect Revisited -- May 5, 2015


May 6, 2015: after writing all of that below, there's always the possibility of mis-allocation if production was commingled; I'm not going to follow-up on this for now; just something to be aware of; [a reader reminded me of that some time ago in a different post: large production number could be due to 'mis-allocation' during early commingling; random update, March 20, 2015]. 

Original Post

This is why I love to blog about the Bakken.

I don't think I've blogged about this one before; if I have, I've forgotten.

This is really, really cool.

First, look at this production profile, only the last eleven months or so:

PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Notice anything unusual about it? Yup, in August, 2014, it was taken off-line and was put back on-line in October, 2014. When it went off-line it was producing 7K bbls/month and production was decreasing.  When it went back on-line in October, it produced 12K and then 15K the following month. Four things can explain the increase (and a pump is not one of them):
  • the well was re-worked
  • the well was re-fracked
  • the halo effect of a neighboring well being fracked
  • "build-up" which occurs when a well is taken off-line
The production profile above was from this well:
  • 20589, 4,815, Whiting, Tarpon Federal 21-4H, Twin Valley, middle Bakken, t10/11; cum 518K 3/15; 
This well was fracked back 10/10/11 (October, 2011). It was not re-fracked in September, 2014, to explain the jump in production.

There is nothing in the file report to suggest why the increase in production in October 2014. It was not a work-over rig and it was not re-fracked; I can say that with almost 100% certainty; I'll explain later.

One possibility is the "halo effect" of a neighboring well being fracked. So, let's check the nearest horizontal well (laterally, not vertically). That would be:
  • 27520, 6,002, Whiting, Flatland Federal 11-4TFH, t10/14; cum 311K 3/15;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

And, yes, indeed, it was fracked in the September, 2014, time frame which explains why # 20589 above was taken off-line.

The only problem: #27520 is a Three Forks well. It's hard to believe that fracking a Three Forks well would affect a middle Bakken well, at least according to some / many.

So, we move to the middle Bakken well that was fracked at the same time:
  • 27521, 5,002, Whiting, Flatland Federal 11-4HR, t10/14; cum 259K 3/15;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

By the way, what happened to another older well in this same area when these two new wells were fracked? Take a look at #22361; it was taken off-line at the same time as #20589, when #27520 and #27521 were fracked. When it came back on-line, production was significantly increased:
  • 22361, 4,971, Whiting, Tarpon Federal 21-4-3H, t12/12; cum 363K 3/15:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Pretty nice bump up in production, huh?

I think I read somewhere that when a well is taken off-line, its production jumps when it comes back on-line simply because of the "build-up" that occurs. That could explain everything.

It's hard to believe that the "build-up" could result in production by that amount - it seems to be a pretty healthy increase.

But then note this: the increase in production, for whatever reason, is very short-lived -- only two to three months.

In addition to the "explosion" what else is required for a successful frack? Proppant. The propannt is there to help maintain the pores or the channels. A neighboriing frack does not put additional proppant into the neighboring well.

Whether the jump in production is due directly to a neighboring frack or is due simply to a "build-up" while the index well is off-line, the fact is that we see a jump in prodution.

Now, think about that.

During the slump in the price of crude oil (since October, 2014), Bakken operators are circling the wagons, putting their wells in the best spots from Williston to Watford City to the Parshall area. In other words, the wells that have been drilled in the past few months and likely to be drilled in the next twelve months are concentrated where older Bakken wells already exist.

In addition to "circling the wagons" (concentrating the wells to a more limited area), the operators are delaying completion (fracking) of these wells. There may be upwards of 1,000 wells waiting to be fracked (well above the expected 250 wells).

Obviously these 1,000 wells won't be fracked all at once, but we're going to see a lot of new wells fracked with newer techniques (including much more pressure and proppant) in an area already congested with producing wells sometime in the next twelve months.

Even if the production increase per well lasts only two to three months, there could be a significant increase in production overall in older Bakken wells simply because:
  • there are so many wells already there, and
  • these wells are in some great areas
Part of the reason some of these areas are so good is because of natural fractures; if so, the "halo effect" should be even more evident.

To complete the narrative, earlier I said: the increase in production was not a work-over rig and it was not re-fracked; I can say that with almost 100% certainty.

They don't do work-overs on wells near a well that is being fracked; in fact, they take those wells off-line completely (as they did above) for safety reasons. Also, there has been minimal interest in re-fracking in the past few months with the slump in prices; these wells were not coincidentally re-fracked. 

My narrative may be completely off base; that's fine. But the numbers don't lie.

Total vertical depth of three of the wells:
  • 27520: 10,678 feet (Three Forks)
  • 20589: 10,579 feet (Middle Bakken)
  • 22361: 10,560 feet (Middle Bakken)
A graphic of the wells under discussion:

The distance between #27521 and #22361 is 0.68 miles, about 3,600 feet. That distance certainly speaks against a "halo effect" but if there is already a lot of natural fracturing in this area ...

... don't get hung up on whether this is due to the "halo effect" of fracking. The bigger point is the potential for a significant jump in production from older wells as the backlog of unfracked wells start getting fracked, regardless of the reason.

Note: I think I have the laterals identified correctly, but I do make mistakes more often than not. If I find I've made a mistake, I will update the graphic.

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