A Good News Story -- January 16, 2016; Case Study For The Bakken -- A Learning Case

In addition to all the other disclaimers, this has turned into a very long post; there are likely to be typographical and factual errors. I will correct them as I find them. This is for my benefit only. Feel free to read it but do not quote me on anything. I have not proofread this post.

It took awhile but finally there is some good news. A long, long time ago a reader asked when "they" would start drilling in a certain location. The following is a "cut and paste" from another post, as is, with the question, the original follow-up, and the update all together:

Well file #17077; when will they start drilling more wells in this section? October 24, 2013; they are doing a lot of drilling in Alkali Creek, but no other drilling in this section where 17077 is sited -- May 10, 2014. Still no new drilling in this section -- 5/8-154-94 -- as of October 24, 2014. [Update, January 16, 2016: I noted that there are four wells in this area -- these are 4-section spacing -- section 4/5/8/9 - 154-94:

• 27680, 1,110, Hess, EN-Pederson-LW-154-94-0408H-1, Alkali Creek, t12/14; cum 109K 11/15;
• 27681, 892, Hess, EN-Pederson-LW-154-94-0408H-2, Alkali Creek, t1/15; cum 89K 11/15;
• 27682, 1,183, Hess, EN-Pederson-LW-154-94-0408H-3, Alkali Creek, t1/15; cum 108K 11/15;
• 27683, 762, Hess, EN-Pederson-LW-154-94-0408H-4, Alkali Creek, t1/15; cum 75K 11/15;

In addition there are four more wells on/near the same pad, all still confidential:

• 32029, 1,258, Hess, EN-Pederson-LW-154-94-0408H-5, Alkali Creek, 4-section spacing; sections 4,5,8, and 9; t1/16; Three Forks, 50 stages, 3.5 million lbs; cum 79K 4/16; API: 33-061-03842;
• 32030, 917, Hess, EN-Pederson-LW-154-94-0408H-6, Alkali Creek, 4-section spacing; sections 4,5,8, and 9, a middle Bakken well; 35 stages, 2.5 million lbs; t2/16; cum 38K 4/16;
• 32031, 1,275, Hess, EN-Pederson-LW-154-94-0408H-7, Alkali Creek, 4-section spacing; sections 4,5,8, and 9, Three Forks, 50 stages, 3.5 million lbs; t2/16; cum 63K 4/16;
• 32032, SI/NC, Hess, EN-Pederson-LW-154-94-0408H-8, Alkali Creek, 4-section spacing; sections 4,5,8, and 9;

See first comment below: it looks like there are four more wells that will also be drilling into these sections but in a slightly different 2560-acre (4-section) spacing unit. These wells are still on confidential list but based on their name, all of them are sited in section 07. Three of the horizontals will "end" in section 5, and one horizontal will "end" in section 6. When I look at the NDIC GIS map server it looks like the overlapping 2560-acre spacing unit for these four wells will be sections 5/6/7/8-154-94, and thus "draining" the same 1280-acre unit that has the "index" well, #17077, which started this whole conversation. Again, these four wells are all confidential but my hunch is they are 2560-acre wells, in overlapping 5/6/7/8-154-94:

• 30259, conf, Hess, EN-Madisyn-LE-154-94-0706H-1, Alkali Creek, 4-section spacing; sections 5/6/7/8-154-94,
• 30260, conf, Hess, EN-Madisyn-LE-154-94-0705H-2, Alkali Creek, 4-section spacing; sections 5/6/7/8-154-94,
• 30261, conf, Hess, EN-Madisyn-LE-154-94-0705H-3, Alkali Creek, 4-section spacing; sections 5/6/7/8-154-94,
• 30262, conf, Hess, EN-Madisyn-LE-154-94-0705H-4, Alkali Creek, 4-section spacing; sections 5/6/7/8-154-94,

Again, I type this stuff quickly and there may be typographical and factual errors. If this is important to you, go to the source.

A big "thank you" to the reader for noting the additional wells that impact this area. This has turned into a great "learning case" for me. See below.

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Learning Case

This is a nice "learning case" for me. Most of what follows is a "guess." Do not assume this is all accurate. There's a lot of "stuff" here but it helps me to understand the Bakken.

The first graphic is of the general area that we are talking about. This area is just north of the river and east of Williston. The well with file #17077, which I call the "index well" for this post, started this entire discussion.

The second graphic is of the 4-well pad just to the east (and slightly north of the index well. In addition, there is a 4-well pad that has been completed. Although one can't see it in this graphic, the horizontals from the completed 4-well pad run to the south-southwest, which one will see in a graphic below. The "green arrow" is a guess: I think, based on the legal names of these wells still on the confidential list, that this is the direction the horizontals will take from this pad:

The third graphic is really, really busy. Start with the index well, #17077, at the top center. This well is on 1280-acre spacing. Immediately to the right, to the east is the 4-well completed pad and the 4-well pad still on the confidential list, seen in the second graphic above. The general direction of the four horizontals, shown in green, will likely be in this direction. Again, I could be wrong.

This graphic has a lot of "purple" in it. That's because I highlighted overlapping 2560-acre spacing units. If you look closely, you will also see "2560" at the intersection of four sections -- which are the four sections that make up the particular 2560-acre spacing unit.

Then, in the lower left-hand corner is another 4-well pad, all wells still confidential, that a reader pointed out to me, that I had missed. Again, but this time in red, I've shown the likely direction the horizontals from these wells will take.

If you look closely you can see the dotted line to the far left: this is the county line -- Williams County to the west, Mountrail County to the east. The area under discussion appears to be in Mountrail County.

Finally, the last graphic, and the one that I think makes this a great "learning case" for me. This is where I could be really wrong. But it looks like the two overlapping 2560-acre spacing units are as noted: spacing unit A and spacing unit B. One spacing unit is outlined in black; the other spacing  unit in red. From this, one can see why overlapping spacing units are so incredibly important.

About six years ago, after having following the Bakken for two years, I told folks if "they had one well," they were definitely going to have four wells, probably eight wells, and possibly 16 wells. That has come true. But it's likely folks who have one well will eventually have 32 wells or more.

Again, so much of the above could be wrong. If this is important to you, go to the source. Do not use this post or any of the blog to make financial, investment, or travel decisions.