Locator: 49373B.
I sent this in a separate e-mail earlier today to the reader who asked me the two questions, but then I got to thinking.
Other folks may benefit from this note. It explains a lot. Again, there may be content and typographical errors. but when it comes to content, it's how I understand the Bakken and I could be wrong in some places. Note: a reader noted that I had "inverted" sections 6 and 7 in my explanation. I correct those errors below. Hopefully I caught them all.
Note: a reader provided more information regarding the Catwalk (and probably other oil fields along the Missouri). Scroll down to see "update from a reader."
It's simply how I see things.
With regard to the CLR Brakken FIU wells, a reader asks two questions:
1. On the 'North Dakota Industrial Commission Permits Approved' listing of the four new Brakken FIU wells, why does the legal description show McKenzie County instead of Williams County?
2. And after each well, there is the wording "location outside of spacing unit". What does this mean?
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My reply follows. This was done quickly and has not been proofread. There will be typographical and content errors, but will be corrected when found.
The answers to the two questions:
The first question is easy to answer: like all Bakken shale wells, the Brakken FIU wells are horizontal laterals. The wells are sited in section 7 of T153N-R100W, just south of the river (a few miles east of Indian Hill) and thus sited in McKenzie County, and that's why their legal description is McKenzie County, not Williams County.
The wells are horizontal wells and the horizontal laterals run north (three sections long) and the bottom hole -- where the horizontal laterals end -- is in the CATWALK OIL FIELD, section 30 of T154N-R100W on the north side of the river, Williams County.
The NDIC considers them Catwalk wells because the the majority of oil comes from Williams County (two townships in Williams County and only one township in McKenzie County. Again, Catwalk Oil Field is in Williams County.
But the fact that the oil well pad where the wells are sited is in McKenzie County, their legal description is McKenzie County, not Williams County.
The spacing unit for these wells are three sections: section 6 of T153N-R100W and sections 30 and 31 of T154N-R100W. Anyone owning minerals in any of these sections will collect royalties from these wells.
Even though the well is sited in section 7, folks who own minerals in that section, section 6-153-100, will not receive royalties because the horizontals will not be collect oil from that section.
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The second question is also easy to answer but hard to put into writing. Bottom line is this: the well will be sited / will be drilled in section 7-153-100 but that section is "outside" of the spacing unit. The NDIC notes this because folks who read that this well is located in section 7-153-100, they might think they will get royalties from these wells. They won't because the well is located / sited outside the spacing unit.
The reason this works is because the operator drills the well to depth, about 9,000 feet, and then turns the vertical well into a horizontal well and turns the well north, in this case. Any part of the horizontal well in section 6 will not be perforated so the horizontal will not collect oil from section six.
The operator chose to drill the well outside the spacing unit, which is something operators could always do but now are doing it more often for geologic / economic reasons. In some cases, they have to drill outside the spacing unit because of surface conditions. That's why no wells are drilled in the Missouri River. They drill outside of the Missouri River and drill under the river, as they did here in the Brakken FIU wells.
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This map may help:
Update from a reader:
Regarding some of the units along this area of the Missouri River (Cat Walk, Last Chance, Willow Creek, Crazy Man and Long Creek) – many of the leases were federal leases involved in the high-water mark controversy.
The Catwalk Unit was particularly challenging because the lease had been acquired in 2013 with an existing well drilled by Brigham in 2010. [Leases should have] been HBP (held by production) but the successor operators (Statoil/Equinor) challenged the previous surveys. With a new cadastral survey, many leaseholder positions were changed.
Grayson acquired Equinor’s position a few years ago and we finally were able to square our ownership in the original Brakken well in Catwalk. What was interesting was that the cadastral survey changed the makeup of the mineral ownership of the 1280 unit. The shift went from Devon’s newly acquired ownership and current operator, to CLR as the new majority owners of the unit. So, the original Brakken well is still operated by Devon however, the new well drilled with in the same unit will be CLR.
Under NDIC hearing and orders, the original Brakken will mostly likely be P&A due to its angle in the previous 1280 unit.
