What We'll Be Talking About This Summer (2013) In The Bakken

This summer this is what we will be talking about:

• The "Helms Surge"
• A trillion-barrel reservoir
• The 2013 USGS assessment of the Bakken
• A miserable spring: spring will be delayed: sloppy, muddy roads; road restrictions prolonged
• Rig count going over 200 
• 24 wells on 2560-acre spacing units; 12-well pads; walking rigs
• the Keystone XL

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Prelude

It's impossible for me to put the trillion-barrel reservoir into perspective, comparing it to other oil plays around the world. There are too many variables: basins vs fields; light oil vs heavy oil; liquid vs gas, variable total organic content (TOC). For me, the Bakken is what it is. I no longer need to compare it to other plays. I will continue to post updates about other plays because it helps me understand the Bakken and put the Bakken into perspective.

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Commentary

It goes without saying that I have a huge amount of respect for the relationship among the citizens of North Dakota, the elected state officials, and the NDIC.  [In the political arena, I have one hero: Byron Dorgan.] The citizens and state leaders allowed a significant portion of western North Dakota to be a laboratory for unconventional/tight oil exploration and production. A lot of decisions were probably made on the fly based on best available understanding of the geology. Understanding the geology continues to evolve.

Constrained predominantly by workforce, it now becomes apparent how incredibly fast the infrastructure went in to accelerate development. That last comment is based on fact. To the best of my knowledge, in 2009, there were no CBR terminals in North Dakota, and no one outside the industry was talking about CBR terminals anywhere in the states as a matter of daily conversation. Today, there are at least twenty CBR terminals in North Dakota, and CBR terminals from Canada to Mexico are a daily news item. We now find out this doesn't just happen. Bakken operators are now talking about railing oil to the Port of Vancouver, Oregon, and then carrying the oil by ship down the coast to California.

It would be faster, less expensive, and more convenient to rail directly to California but the permitting process for new CBR terminals in California is too onerous to consider. [My hunch is that the oil companies would be willing to go through the onerous permitting procedure but do not want to make this issue just one more issue for activists to lobby against. They saw what happened to the Keystone XL.]

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The Trillion-Barrel Reservoir

CLR is testing lower benches of the Three Forks. This has been covered in multiple postings starting back in August of 2012.

It is difficult to find all those postings, so I'm bringing them forward, with some updates.

First, back in August, 2012, it was noted that CLR, in a corporate presentation, was suggesting a 903-billion-barrel-original-oil-in-place-Bakken-source-rock reservoir. This was based on new estimates of the oil reservoirs in the lower benches of the Three Forks. New estimates of the oil reservoirs in the Three Forks increased the total estimate to 903 billion barrels. Rounding, of course, takes us to 900 billion bbls, but that's close enough to one trillion for me. I assume this estimate is controversial. Even Leigh Price had the estimate in the 500-billion range.

Following that corporate presentation, CLR announced its intentions to test the lower benches of the Three Forks with the Charlotte wells in the Banks oil field, one of the sweet spots in the center of the Bakken.

In January, 2013, I posted a CLR graphic and updated the Charlotte wells with information known up to that point.

This was the graphic:



By the way: not mentioned before, but at least one Charlotte well is on 4-section spacing, on a stand-up 2560-acre spacing unit; sections 15, 22, 27, and 34.

The narrative has been updated (one can compare this with the original at the link):

 The "Charlotte" wells are sited in either section 22 or 27-152-99, Banks, but all probably drilling 22/15-152-99:

• 19918, 496, Charlotte 1-22H, middle Bakken, SWSE 22-152-99; Banks, 30 stages; 2.5 million lbs; t6/11; cum 150K 10/12; total depth: 21,090 feet;
• 23664, 657, Charlotte 3-22H, Banks, TF3, SESE 22-152N-99W, t11/12; cum 30K 2/13; 30 stages; 2.9 million lbs; 55% sand; [Update: see press release, December 3, 2012]
• 21128, 692, Charlotte 2-22H, Banks, TF2, SWSW 22-152-99; 30 stages; 2.3 million lbs; t10/11; cum 87K 2/13; total depth: 21,358 feet; 2-section spacing; 30 stages; 2.28 million lbs; "sand frac"; the target was the "Lower Three Forks" without more specificity.
• 23612, A-->DRL, Charlotte 4-22H, TF1, Banks; according to the file report, the target was 19 - 33' under the top of the Middle Bakken; drilling report: the target landing point was 52' below the top of the TF; 4-section spacing;
• 23608, loc --> conf, Charlotte 5-22H, Banks, ?TF4

From the geological summary section of the well file for #23664:

The objective of the Continental Resources Charlotte 3-22H was to successfully drill a horizontal production well into the Devonian age Three Forks "Third Bench" siltstone/dolomite in an effort to investigate the targeted stratum as an oil-bearing, gas producing zone of the Three Forks formation.

The well was placed at a surface location 200' FSL and 990 FEL, Section 22, T152N R99W.

Drilling was successfully completed on the Charlotte on October 4, 2012, at a bottom-hole location of 229' FNL and 1280' FEL, Section 15, T152N R99W, in McKenzie County, North Dakota.

Total depth: 21,325'.

From the geological conclusions section of the well file for #23664:

The conclusions section was quite long and I will paraphrase: a) from a drilling standpoint, the objectives were met, but drilling was very, very difficult, particularly near the bottom of the third bench stratum; b) from a geological standpoint, it appears the jury is still out how good the well will be. At least that's how I interpreted the long narrative.

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What does this all mean?

What does this all mean? At this point, we know this: CLR has successfully drilled into the deepest formation in the Bakken-rock-sourced-pool, the lower Three Forks, specifically the "Third Bench."

KXNet is reporting:

"This is one of those signposts in the Bakken Petroleum System, one of those significant wells that everybody will look back to and say that was a major event in terms of figuring out the Bakken Petroleum System," says North Dakota Oil and Gas Director Lynn Helms.

The well Helms is talking about is a Continental Well like the one you see here. It's called the Charlotte 2-22 (sic, and I believe that's an error; should be the Charlotte 3-22, but I could be wrong) and it's in McKenzie County just northwest of Watford City.

It's the first well to have success drilling down to what's called the third bench. It's the deepest anyone has drilled and recovered significant oil in the Bakken.

"If this covers a significant aerial extent, then were not just talking about billions of more recoverable barrels in the USGS assessment or in our assessment, we're also talking about extending the development phase of this Bakken/Three Forks development which now sits at about eighteen years of development drilling, it could be extended by decades if there are additional benches that have to be drilled," says Helms.

Caveats:

• very, very difficult to drill in the TF3 based on this first well
• nice initial production, but EUR yet to be determined (i.e., profitability)
• does not prove the three benches are payzones throughout the Bakken

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USGS Survey later this summer

By the way, in the KXNet linked article, Lynn Helms provided another important data point.  I had completely forgotten this:

• New USGS Survey requested, April 5, 2011
• USGS to reassess the Bakken, March, 2012

The new USGS survey was scheduled to be released by the end of 2013. Lynn Helms suggested that the survey could be released early, in mid-2013. 

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Disclaimer

Disclaimer: some of the information above is opinion and may be completely wrong. There is plenty of source material to review to cross-check. I did update the information on this page from an earlier post.