Field Development: A Reader Notes The Progression Of Pad Activity / Drilling In Vern Whitten's Photographs -- September 23, 2014

Updates

Later, 6:58 p.m. CDT: a look at CLR's approach to full-field development using the Jersey mega-pad as an example; provided by a reader. 

Later, 6:21 p.m. CDT: this is starting to feel like a tennis or ping-pong match, and I'm the net. The earlier reader has come up with a good explanation for what Jane is seeing (see note below):

I believe one of the primary factors the operators consider in their development decisions is "cash flow."  Another is one I think Jane referred to -- gaining an understanding of the geology and reviewing results, before applying completion designs "whole hog."

The 12-well Hess pad in 26-154-94 was planned for 9 EN-Freda wells in the sections 26-35 standup spacing unit and 3 EN-Leo wells in the sections 23-24 lay down spacing unit immediately to the north. Neither of the spacing units had been drilled previously.

The first batch of 3 wells were 2 EN-Freda's and 1 EN-Leo.  One of the EN-Freda's was a Three Forks well, the other two wells Middle Bakken.

The second batch of wells was 2 EN-Leo's.  When Hess started these wells they only had a couple months of data from the EN-Leo H-1, an MB well.  For the EN-Leo H-2 Hess drilled a planned-exploratory bore a couple thousand feet into the Three Forks with whatever equipment they use, and then tripped back out and drilled a MB lateral.  The EN-Leo H-3 was subsequently  drilled in the TF.

I am really embarrassed. I should have known this. After reading all the file reports that I've read,  should have known this. The best, most recent example for me was the MRO-Tyler well. The geology report was a bit equivocal about whether the well might be economic/productive, and said the data would be studied by the "home office" before a decision would be made to complete the well. And in all cases it only seems common sense that the operator would study the geologist's report before completing the well. On top of that, these guys are so busy in the Bakken, it probably takes more time than expected, just to get to all the wells and through all the data.

Yes, this should have been an easy question to answer, and I missed it. Very embarrassed. A big "thank you" to the second reader for answering the question.

September 23, 2014: see comments below. Another reader has made observations regarding Hess -- with minor changes --

Comments about the different approach to field development is really interesting. I have been following Hess's rig movements and have observed how the spud rigs (Noble's) seem to dart all over -- they will be in McKenzie for 6-8 days spudding 2-3 wells in a section and then go to Dunn to do the same thing only to return to do some additional spudding.

I have been closely following the activity in Ellsworth and Cherry Creek. It is curious to see that last November, Hess got permission for 6+ wells on the land they lease in these two fields. In May/June Hess got permits in Ellsworth for 2 new wells in section 12; 3 in section 11; and, 4 in section 10. But they are drilling 2 wells in section 10 and 2 wells in section 15. It is curious that they don't drill out all the wells that they have permission for. One would think it would be more cost effective. However, another observation is that they are getting them drilled -- but not fracked very quickly -- particularly in Cherry Creek.

I have wondered if they are doing this because of the potential for increased production from periodically adding wells and stimulating production in the older wells. It may be that the increased cost of swirling between locations is offset by the potential increase in production.

Your observation about delaying fracking is very, very interesting. One wonders. In the most recent Director's Cut, it was noted that there are now more wells waiting to be fracked than the previous month, and summer should be the most active for fracking. One wonders if you might not be correct.

Publicly traded companies know that analysts focus on quarterly results. If an operator can delay the expense of fracking into the next quarter without significantly hurting production, their quarterly results will look better, all things being equal.

In addition, remember that new flaring rules take effect in October (?). It's very possible operators are purposely delaying completion of their wells until they get the natural gas collection and processing network in place.

A huge "thank you" to the reader for taking time to write. Each little bit of data helps to better understand the Bakken.

Bottom line: right now there are two new developments affecting completion/fracking of wells: a) new flaring rules; and, b) high cost of proppant. To some extent, operators may be studying new completion methods and putting previous plans on hold while they reconsider the completion method to be used. I don't yet think the price of WTI is significantly affecting fracking schedules in the Bakken.

Original Post

This is a long note from a reader who provides much more detail regarding some of the photos in Vern Whitten's most recent set of aerial photographs. It's the kind of thing I would like to do (write a more detailed review of the photographs) but I simply don't have the time. I really appreciate readers providing additional background to the photographs.

I don't have any secondary agenda in posting these notes, or or any secondary agenda talking about Vern Whitten's photos again. Based on the e-mail I get and the "hits" on the blog, it is obvious that a lot of folks like the photos.

Because of the nature of the e-mail thread, it may be a bit hard to follow at first; the specifics are not particularly important. The last paragraph in the long thread below is the "takeaway," but along the way, one gets an explanation of some of the photographs.

So, without further ado, here is part of a much longer note that a reader sent me:

A special aspect of this photo set is represented by slide 13 of Vern Whitten's "Never Ending Winter" set, which was taken February 14, is of the same pad and the same rig featured in "MillionDollarWay back on May 22 [the large rig on that pad was the Nabors B5, which was drilling the EN-Freda H-5 well when the photo was taken August 9]. The Nabors B5 rig was drilling the EN-Leo H-2 well at that time; the completed EN-Freda H-1 and H-2 wellheads can be seen in the lower left corner of the slide.  The completed EN-Leo H-1 wellhead is just out of the picture to the left.

Vern Whitten most appropriately titled his most recent August photo set, "Bakken Sights and Progress."

The comparison of these two "Winter" and "Summer" photos and their companion slides -- 12 and 14 in the "Winter" set and  16 and 17, which you note as "multiple pads along the Lake; stunning" in the "Summer" series -- vividly presents this progress.

The companion "Winter" slides 12 and 14 both show the Hess EN-Freda/EN-Leo pad and Continental's Vachal pad, which is just across the road to the west in NENE 27-154-94.  The recent "Summer" series companion slide 16 looks east and shows the Hess and Continental pads along with White Earth Bay in the distance, as well as four "new" Oasis pads strung further west.  These four Oasis pads are sited along the bottom of 22-154-94, and they are all drilling Helling Trust wells.

The second "Summer" series companion photo, slide 17, looks west from White Earth Bay and presents a closer view of Continental's Vachal pad in the lower left of the picture,  and the four Oasis Helling pads extending in a line to the west.  The current NDIC GIS Map Server, updated August 16, has a rig on each of these four Oasis pads.  Since then, the Active Drilling Rig List shows the Extreme 25 rig has moved off the SESE 22-154-94 Oasis pad, but that the three remaining Oasis pads currently have rigs drilling Helling wells.

This is why this is so interesting, and perhaps important, if one is trying to understand the Bakken:

While Vern Whitten's photography chronicles all types of progress in the Bakken, in this instance progress on a particular pad and increased activity in a specific area, it also provides some insight into the processes various E&P's use in developing their holdings.  Hess performs a "ballet" with their rigs, as they drill small batches of wells, move the rigs off, frack, bring the rigs back, drilling, moving off, fracking....  Oasis, on the other hand says, "we want 15 or 16 wells -- okay, I'll get four pads with 3 or 4 wells on each, and go at them all right now."  Then we have Continental's approach with their "full-field development." 

More to follow in another stand-alone post.