In a state known for its Badlands—the “land God forgot”—the oil finds in North Dakota’s Bakken and Three Forks formation have been heavenly.

In 2012 the state saw record production of 770,000 barrels per day, rocketing North Dakota past Alaska by 32 million barrels of oil. While state output has spiked 155% to 219.3 million barrels from 2012 to 2010, some operators are forecasting an even better 2013. Production growth estimates range as high as 30% to 40%, and state officials say operators will be producing 830,000 barrels a day by July.

Yet even more potential appears to be waiting for operators. Successful wells drilled in the third bench of the Three Forks formation have turned heads throughout the play. By summer, further exploration could yield good news, when a well is expected to be drilled in the fourth bench of Three Forks.

Lynn Helms, director of the Department of Mineral Resources for the North Dakota Industrial Commission, says the possibilities of the Three Forks benches have companies anxious to appraise their potential.

Producers are also busily working to maximize the amount of oil they draw up, by squeezing more wells into each 1,280-acre unit. Applications to downspace drilling units have inundated the North Dakota commission.

Oasis Petroleum Inc. chief operating officer Taylor Reid says the Houston-based company and others are shifting from exploration and delineation of the Bakken to development. That will include higher-density drilling on leaseholds.

Bench marks

A dozen years ago, North Dakota was living off its legacy production despite knowledge of the huge reservoir of oil and gas trapped within the shales and silty dolomites of the Bakken formation.

While horizontal drilling was feasible, it wasn’t then economical. The technologies to stimulate the laterals in the tight rocks had not yet been invented. The way forward would require a breakthrough, a North Dakota state geologist wrote in 2001. Years later, technology caught up and went beyond what the Bakken required.

Today, the Three Forks benches hold similar promise for more crude. Continental Resources Inc., Oasis, Whiting Petroleum Corp. and others are scrutinizing the Three Forks benches. So far, the results are good, analysts say.

In December 2012, Continental tried its hand at a third bench well. The Charlotte 3-22H flowed 953 barrels of oil equivalent per day in its initial one-day test period. Located in McKenzie County, North Dakota, it was drilled to a total depth of 21,324 feet, including a 9,701-foot lateral section, and completed with a 30-stage fracture-stimulation design.

Continental said additional oil found in the second, third and fourth Three Forks benches could raise the volume of original oil in place in the petroleum system to 903 billion barrels, a 57% increase over its earlier estimates. That means its estimates of recoverable oil will likewise rise.

Oasis is intrigued by the Three Forks as well. “We’re very interested,” Reid says, noting that some of Continental’s lower bench wells are close to Oasis’ position. “We’ve got a program going this year where we are coring and doing high-resolution logs on six wells.”

Helms says Continental’s third bench discoveries have captured attention, but there’s still more to do. “Nobody has tested the fourth bench yet. But that’s coming yet this summer,” he says.

Spaced out

Companies such as Whiting and Oasis are now working on a drilling squeeze play that positions them for oil recovery without jeopardizing other wells’ performance.

Many Bakken producers appear set on the idea. Helms said a summer 2013 test will pack in 24 wells per 1,280 acres.

For 2013, Continental has initiated a well productivity testing program in the Three Forks. Overall, the company is spending $267 million on exploration in the Bakken this year.

Until more drilling is done, the company won’t have an estimate of how much oil is technically recoverable. “It’s bigger than the 24 billion barrels of oil equivalent, but we don’t know if it’s 20% bigger or double,” Henry says.

Helms says Continental’s third bench discoveries have captured attention, but there’s still more to do. “Nobody has tested the fourth bench yet. But that’s coming yet this summer,” he says.

Read the full story in the May 2013 issue of Oil and Gas Investor.

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