Flashback!

This was taken from a report in 1996:

Billings and McKenzie counties were the dominant counties for horizontal drilling.

Through mid-1995, horizontal wells produced about 11 million barrels of oil (the first horizontal wells were completed in 1987).

As early as 1991, production began to fall, due to sharp production declines seen in horizontal/fracked wells.

The average initial production for a typical horizontal well in North Dakota was 4,300 bbls/month.

The average horizontal well's estimated ultimate recovery (EUR) of 97,000 bbl was less than the average vertical well of 104,000 bbl (projected).

The report concludes that "poor overall economics have slowed the use of horizontal drilling in the Bakken Shale of North Dakota."

This report was developed and published in 1996 by Gary S. Swindell and Associates. 

So, where are we now? The predominant county for horizontal drilling is Mountrail County, but McKenzie, Williams, and Dunn are all very, very active.

EURs in the Parshall oil field are estimated to be 700,000 bbls, and with dual laterals, CLR suggests an additional 400,000 bbls over the lifetime of the well could be recovered -- a far cry from 100,000 bbls EUR noted in 1996. Then: 4,300 bbls/month. Today: some wells are producing that much oil in less than a week.

The report above stated that "through mid-1995, horizontal wells have produced 11,336,000 barrels." That's cumulative: 11 million barrels cumulative from 1987 through 1995 (eight years). North Dakota is now producing in excess of 250,000 bopd, which is more than 91 million barrels/year. Projections are that ND will soon reach 400,000 bopd or almost 150 million barrels/year by sometime next year. I think it will be sooner than later.

[But it is not all "roses." There is some concerning data about horizontal wells and fracturing -- the decline rates, and the longevity of the wells. It seems the "science" paints a less optimistic picture than what the proponents of horizontal drilling and fracturing are telling us. Click here for an interesting technical study -- that isn't all that old. It raises some questions and puts a damper on my irrational exuberance.]

What Have They Found in The Alger?

This post is just noting a couple of data points. Make of it what you want.

1. The Alger oil field seems to be getting a lot of attention lately. See the February 24 - 26, 2010, docket.

2. Someone just paid the equivalent of $4.7 million for 640 acres of mineral rights in the Alger oil field. Someone was willing to pay $7,300/acre for 120 acres in the Alger oil field.

3. Despite a huge backlog of permits that were granted in 2009, BEXP seems it couldn't get to its permit in Alger field, # 18654, Sorenson 29-32 1-H, fast enough. This permit was granted just a few days ago: January 26, 2010. BEXP had a rig on site on February 4, 2010 (just 9 days later), and started drilling almost immediately.

4. Hess added two cases to the February docket; one case could have waited but it seems the second case was URGENT. This case is a request by Hess to have the aforementioned BEXP Sorenson 29-32 1-H permit revoked.

5. The Alger wells are mediocre based on IPs, but there are a lot of wells in the Alger that remain on the confidential list. One can easily ask: what have these confidential wells produced, and/or what have the seismologists noted about the Alger? It seems there is just too much "weirdness" going on in the Alger right now. Or maybe I've been listening to too many conspiracy theories. With more than 1,000 wells/permits backlogged, and of the 137 permits granted so far in 2010, why was BEXP so eager to drill this well and Hess so eager to block it?

Spearfish: Another Formation Suitable for Horizontal Drilling?

For reports on Spearfish/Scandia wells, click here.

The geology and potential. 

NEWS

August 26, 2013: update of Spearfish activity in North Dakota.

August 12, 2013: is Corinthian Exploration hitting its stride at just the right time? This is quite incredible.

September 18, 2012: Spearfish update.

April 2, 2012: Legacy Oil & Gas, Spearfish update.

May 23, 2011: Legacy hits a gusher. This was a huge error. The IP of 3,000 was absolutely incorrect.

April 9, 2011: Surge Energy will present at conference, Monday, April 11, 2011. Corporate presentation dated April 8, 2011, now available.

April 9, 2010: EOG is drilling these wells into the Spearfish in 3.5 days and at a cost of $1 million.

"Here we go."  North of the border (in Canada), the field is known as the Waskada. EOG estimates 25 million barrels in this field north of this border and 20 million barrels on the south side of the border. These are relatively small fields, but the investment rate of return is 70 to 100 percent. More of the same.

April 3: 2011: More stories on the Bottineau Spearfish wells.

• Corinthian Surge: 204 Wells for the Bottineau Spearfish
• The Canadian Invasion: Corinthian Bought By Surge Energy in 2010

March 26, 2011: Activity picks up. Several recent posts.

• Surge Energy / Corinthian Energy (Calgary) acquires Ritchie's Bottineau Spearfish wells
• Spearfish oil: Sweet or Sour -- Still Confusing
• Long vs Short Laterals: Implications for the Bottineau Spearfish wells

March 22, 2011: Surge Energy 2011 Update

In North Dakota, Surge participated in two (0.4 net) non-operated wells during the fourth quarter of 2011.  The Company expects to participate in an additional six to eight gross non-operated wells during 2012 and plans to commence drilling its 100 percent operated wells during the third quarter. During the first quarter of 2012 Surge is also participating in a North Dakota 14.2 square mile 3D seismic program, which will aid in the execution of the 2012 Spearfish horizontal well drilling program.

March 16, 2011: Legacy Oil and Gas update in the Bottineau Spearfish

February 6, 2011: Hey, not so fast. 

Officials say work is still going on in the Spearfish in Bottineau. It's sour oil and Enbridge won't put sour oil in its system; Spearfish oil needs to be trucked to Canada. Spokesman: the Spearfish is about where the Bakken was back in 2005.  Some say EOG has re-deployed its assets to the Wyoming Niobrara and the Texas Eagle Ford -- which makes lots of sense. EOG got shellacked in 3Q10 earnings.  Need to get their act together.

January 24, 2011: EOG cancels a permit in the Souris targeting the Spearfish; evidence that EOG is throwing in the towel in the Souris/Spearfish?

January 3, 2010: a DRY well that targeted the Spearfish. This well was just a few miles south of all the other miserable Spearfish wells just across the border from Canada. Why were "they" successful in the Canadian Spearfish but couldn't do it in North Dakota?

December 25, 2010: EOG not hitting on all cylinders.

December 14, 2010: Update on a couple of Spearfish wells.

November 19, 2010: More insight into the Spearfish wells; they are really very shallow.

October 31, 2010: No news coming out of the Souris.

August 31, 2010: Commentary on first two Spearfish formation wells in the  Souris.

August 12, 2010: Article with map, graphics. Spearfish wells in southwest Manitoba.

August 11, 2010: Same story; just re-printed as a new news story. Several thousand wells possible.

July 16, 2010: Update on Scandia wells. Fast and furious.

April 9, 2010: EOG is drilling these wells into the Spearfish in 3.5 days and at a cost of $1 million.

"Here we go."  North of the border (in Canada), the field is known as the Waskada. EOG estimates 25 million barrels in this field north of this border and 20 million barrels on the south side of the border. These are relatively small fields, but the investment rate of return is 70 to 100 percent. More of the same.

March 20, 2010: Although this is a press release, it provides some interesting information on the Spearfish formation in Manitoba, just across the border from Bottineau County in North Dakota which is seeing increased activity.

The press release is from an Australian company, Molopo, which acquired Spearfish and Bakken assets in southwestern Manitoba. The press release notes that EOG uses technology known within the industry as CobraFrac and StackFrac from service companies such as Halliburton and PackersPlus, respectively.

March 15, 2010: The Spearfish experience in Canada.

This article says the wells cost $1.5 million in Manitoba; that did not make sense to me. However two days after linking that article I came across an article in Oilweek that says due to shallower formations, wells in Canada are costing $1.5 to $1.6 million compared to $4 million to $6 million in North Dakota Bakken. March 15, 2010.

Original Post

First mention of Spearfish for horizontal drilling, February 10, 2010. This thread mentions that "EOG Canada" has put in as many as eight (8) horizontal wells in one half-section (320 acres) targeting the Spearfish.

You can locate the Spearfish formation on this "stratigraphic map."  When you get to this site, you can zoom in. Go to "Williston Basin" and scroll down. The Spearfish is "above" the Bakken.

The Spearfish is in the Triassic period; the Bakken and Three Forks Sanish are in the Devonian.

The stratographic view.


She Bop, Cyndi Lauper

137,000 barrels in 91 days

File number, 18209.
Thomas Patrick 1-12H, NENE 1-154-91
Operator: Murex
Long lateral
89,000 bbls/first 91 days

At $60/bbl = $5.34 million at the wellhead
At $70/bbl = $6.23 million at the wellhead
At $80/bbl = $7.12 million at the wellhead

Some producers hedged oil contracts for 2010 at $80 back in 2009.

This well is paid for in 91 days. At least one producer calculates expected ultimate recovery over twenty years, out to 2029.

Yeah, I'm still irrationally exuberant.

And after I wrote the above, I find out that there is another well on the same spacing unit that has produced 144,000 bbls of oil in its first 7 months

At $60/bbl = $8.64 million at the wellhead
At $70/bbl = $10.08 million at the wellhead
At $80/bbl = $11.52 million at the wellhead

Clifford Gene 1-12H, Lot 4 1-154-91
File number, 17841.
Operator: Murex
Long lateral
48,000 barrels in first 92 days

Together these two wells, again, on one spacing unit: produced a combined 137,000 barrels of oil in the first 90 days of combined production. At $80/bbl, this is almost $11 million from these two wells. They are now paid for, and one producer has opined that expected ultimate recovery from the Bakken may last through 2029.

Yes, I am very aware of the decline rates, and 20 years from now, if these wells are even operational, they will probably be "stripper" wells -- but who is to say what the technology will be then?

Reminder: I own no mineral rights. I am not a broker. I have no ties to the oil industry. I make no investment recommendations. I simply enjoy watching my home town news. And I'm inappropriately exuberant.