What's It All About, Alfie? Taking Another Look at The Madison -- The Bakken, North Dakota, USA

Updates

July 23, 2015: see first comment below. In addition, a full update on the Kadrmas 11-25H is provided at this post.  I find it incredibly interesting. A big thank you to the reader who alerted me to this well.

Original Post

 

For a chronology of major oil industry events in North Dakota, click here and scroll to near the bottom of the page.

Oil is the most important hydrocarbon produced in the state, but oil was not discovered until 1951 when Amerada Hess Corporation completed the Clarence Iverson #1 on the Nesson anticline.

Since then, oil exploration has been nearly continuous in the state. The discovery well was completed in the Silurian Interlake Formation but subsequent development on the anticline focused on the Mississippian Madison Group.

The point is this: the oil industry has been producing oil from the Madison formation from almost the very beginning. 

While checking out the Russia Creek oil field as a reader's request, I happened upon a couple of gems.

Look at this "cut and paste" from the Russian Creek oil field update:

• 8403,160, Chaparral Energy, Buresh 1-32, vertical, Madison, Russian Creek, s5/81;t7/81; cum 119K 9/11; still producing 300 - 500 bbls/month, which it has been doing since the 1980s
• 15440, 170, Armstrong Operating, Sadowsky 44-3H, very short lateral, Madison, Russian Creek s6/03; t7/03; cum 76K 9/11; and still producing about 750 bbls/month which is about what it  has doing ever since it started producing in 2003
• 16255, 45, OXY USA, Kadrmas 11-25H, s5/07/t7/07; cum 21K 9/11 from the Bakken; the Madison is still producing from this well, and is producing up to 2,500 bbls/month compared to the Bakken at 400 bbls/month; cumulative from the Madison is only 49K, but 2,500 is a huge jump from 200 bbls/month early on; and for a long time it was not producing anything from the Madison

A couple of points:

• Unlike the Bakken, the Madison is not know to have a steep decline rate. A Madison well may come in at 1,000 bbls/first month and then drop to 500 - 750 bbls/month for many years.
• I am starting to notice a slight increase -- a very slight increase -- in the interest in the Madison formation -- new permits, NDIC hearing dockets, etc. (Petro Harvester and Madison seem to come up together more than others)
• Could we start seeing more wells like the Kadrmas 11-25H (16255) in which two pay zones are targeted?

The Kadrmas 11-25H is particularly interesting. It was spud in 2006 as a Bakken well and produced for 17 months; as a Bakken well, it was very unremarkable; I'm not sure it was even financially viable. Then, OXY USA re-entered and drilled into the Madison in 2008. These are the monthly production numbers for this Madison leg:

• 569 bbls/month  (October, 2008)
• 2,671
• 193
• Then no production for ten (10) months
• 408
• 131
• 1,452
• 2,348
• 2,161
• 2,233
• 2,240
• 1,673
• 1,513,
• 2,188
• 2,392,
• 2,658,
• 1,788
• 2,684
• 2,051
• 2,416
• 2,180
• 2,120
• 2,513
• 2,249
• 1,823
• 2,428 (September, 2011)
• Meanwhile the Bakken continues to be a lackluster 300 bbls/ month (and on occasion, significantly less). 

By the way, for mineral owners, the Madison is usually spaced much less than 1280; even at 320-acre spacing, a mineral owner might do a whole lot better with a Madison than with some Bakken wells with 1280-acre spacing (10 acres in 320 acre-spacing is a greater return than 10 acres in 1280-acre spacing).

Warning: irritating glitch/noise at the beginning of this clip; don't play it "loud" at beginning:

What's It All About, Alfie? Dionne Warwick