In the April, 2011, NDIC hearing docket, case 14561:
Application of Corinthian Exploration (USA) Corp. for an order amending the field rules for the North Souris-Spearfish Pool to create and establish the following 320-acre spacing units comprised of the following narrow sections: Sections 25; 26; 27; 28; and 29; and in addition, the N/2 of Section 32; the S/2 of Section 32; the N/2 of Section 33; the S/2 of Section 33; the N/2 of Section 34; the S/2 of Section 34; the N/2 of Section 35; and the S/2 of Section 35, T.164N., R.77W.; and the N/2 of Section 2; the S/2 of Section 2; the N/2 of Section 3; the S/2 of Section 3; the N/2 of Section 4; the S/2 of Section 4; the N/2 of Section 5; and the S/2 of Section 5, T.163N., R.77W., Bottineau County, ND, authorizing the drilling of a total of not more than 12 wells on each spacing unit, eliminating any tool error requirements and such other relief as is appropriate.It is hard to count, but I believe that is 20 320-acre units. With up to 12 wells on each spacing unit, that is a total of 240 wells. [Correction: see comment below. Sections 25 - 29 have only 160 acres because they butt up against the Canadian border; they will "only" have six wells. It appears I would have to subtract 6 sections x 6 wells --> 36, for a new grand total for a total of 204 wells.]
Twelve (12) wells per 320-acre spacing unit is fifty percent more than what EOG Canada was putting in north of the border:
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.The hearing dockets for April are incredible. Take a look at the number of Bakken wells they will drill in one section.
Another note from the comment below: EOG said it would need a (an?) EUR of 25,000 to make these wells "break even." 25,000 bbls x $75 --> $1.875 million.
Eager to see how this all works out.
Yes, looks like the spearfish needs very high density drilling.
ReplyDeleteEog is "on hold" for it's acreage just to the west of cornthian's planned projects.
If you look at the map of the Spearfish wells in Canada just to the north, that is exactly what we are seeing. NDIC said it could be 2,000 to 5,000 wells, if I remember correctly.
ReplyDeleteCost containment will be interesting. In Canada, they were coming in around $1 million each well; someone wrote to say that EOG was finding that it was costing up to $2 million/well.
Also, problem with wiring electricity to these remote areas. That looks like less of a problem when you have such high density wells.
I'm not convinced this will pay off, but it will be interesting to follow.
And again, we've been spoiled by the Bakken; stripper wells over time do just fine for many operators.
Eog testified at one of their spacing hearings in march that eur of 25000 which was their estimate after initial drilling was "break-even ".
ReplyDeleteAlso FYI sections 25-29 contain only 160 acres (4 x 40) because of int border.
Corinthian calls them narrow sections so each would have 6 wells.
Will be interesting to see how these wells compare with the results eog experienced as plan sounds almost identical at least on spacing.
Hi Bruce, I think you misunderstood the eog testimony on eur. EOG said 25,000 per well(not 250,000) would break even. At 24 wells per section, this is would work out to 600,000 bbl recoverable per section (24 wells).
ReplyDeleteAt the initial hearing (before more drilling) the estimate was 75,000 per well or 1,800,000 bbl per section.
The point being (obviously) that 75K eur per well works much better than 25K. EOG also testified that each actual well appeared to be "draining" around 20 (surface) acres. That would seem to imply that even an even higher drilling density would be needed to get oil out in major amounts of what is in place.
We'll see. Looks like legacy is the best chance for development of this area at this time. EOG seems to have too many other more desirable plays on its plate and spearfish is the least promising for eog's time/resoures at this time. EOG may be still looking seriously at spearfish but signs are not indicating that. I think eog strategy at this point is to get out with the best deal that they can as time is running on the leases and eog is not drilling and there is no indication that eog is looking at adjustments to its completion approaches (fracking). So if Legacy has a better receipe or just better acerage or both than eog for the spearfish, then we should know in the next few months.
Thank you, that makes a lot more sense. It made no sense to me. I should have looked more closely. "Anonymous clearly wrote "25000" without the comma. I simply missed it. I will correct the post.
ReplyDeleteWow, that was really a dumb error on my part. Thank you for catching it and providing more detail.
And, yes, I am quite eager to see how Legacy, Corinthian, EOG do with these wells.
And I agree: EOG has a lot better prospects to be working than the Spearfish.
ReplyDelete