It's been a long time since I've looked at the Sanish oil field, one of the two best fields in the Bakken (the other being the Parshall oil field) and so I thought I would take some time and look at it today.
There are still nine (9) active rigs in the Sanish today, just as there were back in November, 2010.
The number of long laterals in the Sanish is astounding. As an example, Whiting has a string of ten producing wells and five permits in block of six sections (5, 6, 7, 8, 17, 18) in T153N-R91W. These fifteen pads run in a north-south line (technically there are two more, but their laterals run in the opposite direction, away from these six sections).
This is the status of these 15 wells / permits (updated June 10, 2012):
- 18804, 1,561, TTT Ranch 4-6TFH, cum 134 4/12;
- 17603, 2,825, TTT Ranch 11-6H, cum 335K 4/12;
- 20374, 980, Troy TTT 12-6TFH, t8/1; cum 31K 4/12;
- 18297, 2,762, TTT Ranch 12-6H, t3/10, cum 282K 4/12;
- 18876, 3,023, Rohde 14-6XH, t8/10, cum 226K 4/12;
- 17133, 2,195, Smith 11-7H, t8/09, cum 254K 4/12;
- 20041, conf, Merilyn Smith 12-7TFH;
- 18392, 2,530, Smith 12-7H, t3/10; cum 222K 4/12;
- 18853, 1,485, Moore 14-7XH, t7/10; cum 162K 4/12;
- 16852, 1,765, Abbott 11-18H, t6/08, cum 332K 4/12;
- 19992, 1,181, Marmon 11-18TFH, t8/11; cum 36K 4/12;
- 18500, 1,073, Marmon 12-18TFH; t8/10, cum 24K 4/12;
- 17443, 1,663, Fladeland 12-18H, cum 308K 4/12;
- 20293, 425, Fladeland 13-18TFH, t7/11; cum 14K 4/12;
- 20227, 1,060, Fladeland 14-18WH, t7/11; cum 88K 4/12;
Back-of-the-envelope calculations:
- If one multiples 3 x 1280 = 3840 acres
- 3840 acres/15 = 256 acre spacing (another way of looking at it)
The story of the Bakken seems to be new techniques in the area. Some of the competitors have started offset drilling with 160 acre spacing, and are getting decent results. Kodiak claims these changes are making decent production increases in the area.If one divides 3840 acres by 160 acres/well, one gets 24 wells. Obviously WLL has not mentioned any plans to go to 160-acre spacing in this area, but WLL has talked about as many as 8 wells in a 1280-acre spacing unit.
3 x 8 = 24.
So, using two different methods, one can arrive at the possibility of 24 wells where there are now 15 Whiting wells/permits.
I think it's very likely.
Bruce,
ReplyDeleteWhiting lays out their Sanish Field Development Plan on slide 33 of thier corporate presentation.
http://www.whiting.com/media/general_corporate_information.pdf
WLL is showing (3) long laterals for the middle bakken and (3) long laterals for the Three Forks per 1280 acre unit.
I have read a few times about 160 acre spacing vs 320 acre spacing, but do not know what those terms mean. Would you explain those terms?
This is my understanding of the terms.
ReplyDeleteOne comment before starting: there's a difference between the spacing units the state defines and the spacing of wells, if I understand it correctly.
Until recently, the standard spacing unit in North Dakota was 640 acres; in 2010/2009 (I forget exactly which year), NDIC set the norm at 1280-acre spacing units.
That means when a well is placed in a 1280-acre unit, any mineral owner in that 1280-acres shares in the oil royalties produced by that well.
However, with permission from the NDIC, a producer can put one, two, three or more wells on that 1280-acre unit. The producer has to convince the state (NDIC) that the well will be financially viable. (They don't want a lot of wells for no reason; of course, the producers want to minimize expenses also). If the NDIC gives a producer permits for two wells on that 1280-acre unit, then one can say the two wells are spaced at 640 acres (1280/2). The wells could be sitting on the same pad, right next to each other, but there are still two wells on that 1280-acre unit, and thus, they are spaced at 640 acres. Mineral owners inside the 1280 acres would get royalties from both wells. The wells themselves may have partners with different working interests.
For example, EOG could operate both wells, but to share the risk and the cost, they may share one well 60/40 with Slawson and the other well 80/20 with NOG.
If the production is really good, the producer who has the first well, or the second well on the 1280-acre unit, could request a third well and fourth well to be put there. If four wells are on that 1280-acre unit, then the spacing would be 1280/4 = 320 acres.
Obviously one is not going to see many instances of 160-acre spaced wells on a 1280-acre unit (1280/8 = 160). That would require 8 wells on that one unit (WLL is approaching that in the Sanish.)
However, in the old days, where the norm was 640-acre units (common in the Parshall), if there ends up being four wells there, one has 160-acre spacing. In a very prolific field like the Parshall we may see some 160-acre spacing (four wells in one section).
That's how I understand it. I could be wrong. But it makes sense. I don't know if I explained it so others can understand.
To repeat: for the mineral owners inside a 1280-acre unit, the mineral owners will share royalties from however many wells are placed in that unit.
For the operators of the wells in that unit, they will recover their costs per well based on the percent they have in that well.
WLL's Sanish Field Development Plan (SPDF) will have additional wrinkles for mineral owners because some of those laterals extend slightly past section lines.
In the WLL SFDP note that Whiting will put in seven (4 Bakken and 3 TF) in some 1280-acre units.
Because they are different formations, it's possible the Bakken wells will be said to be spaced at 320 acres, and the TF will be said to be spaced at 425 acres. That I don't know; but if the formations are separate formations and don't communicate, I would think that it could affect "unitization" or enhanced oil recovery if that is shown to work in the Bakken/TF.
One last comment: this was very, very confusing to me a couple years ago. I knew all about 640- and 1280-acre spacing, and I thought that meant just one well on each unit. So when I heard that over time, we would see wells spaced at 160 acres it made no sense to me. But now I understand what they are saying. If you visit the old oil fields in Texas, it is not uncommon to see many wells right next to each other (also common in California), and although they may be on 640-acre units, they may be 160-acre spaced wells (even though the four of them sit right next to each other).
Thanks Bruce!
ReplyDeleteI was surprised I got so little criticism (none) from anyone on how I explained it. I am not using the correct language but I don't think I'm too far off the mark how I see it playing out.
ReplyDeleteWatch for the phrase "infill wells with a 160-acre offset." Unitization won't be far behind (at least trials to see if enhanced oil recovery -- waterflooding, CO2 injection -- will work.