Bakken, Niobrara Activity Highlights: February 2017

The backlog of drilled but uncompleted wells (DUCs) coming out of the downturn will give select U.S. operators a boost in capital efficiency gains, though, don’t expect to see a huge surge in production as a result.

IHS Markit estimated about 2,750 net DUCs remain in the U.S. as of May 2016, 70% of which were in predominantly oil plays. Completing these wells, however, is expected to have a limited impact on overall U.S. production compared to growth derived from new drilling activities.

Production from the remaining DUCs is projected to reach more than 380,000 barrels per day (bbl/d) of oil by September 2017, or 16% of the 2.45 MMbbl/d of oil wedge volumes, IHS said. Gas production will peak at 3.5 billion cubic feet per day (Bcf/d) in October 2017, about 19% of the 18.58 Bcf/d of gas wedge volumes.

WATCH - Video: Halliburton Talks DUCs

The report also estimated that total spending to convert all existing DUCs to production is about $11.5 billion, which is an estimated 40% savings of the capital required to drill and complete a new well.

Many of these DUCs were drilled from single drilling pads, where several holes may be drilled—single drill-pads can reach multiple targets without multiple rig tear-down or set-up costs. It also benefits operators because they can get better contract rates for long-term use of one rig.

The delayed conversion of DUCs to producing wells in the last few years explains the “resiliency in U.S. production, and in part, accounts for its recent recognition as the world’s new ‘swing producer,’” said Stephen Beck, senior director of energy research for the North America Onshore Service at IHS Energy.

“The U.S. energy system doesn’t turn on a dime but it does turn faster than an oil tanker. It can respond to changes in price in less than a year, which is not the case for other resources elsewhere,” Beck said in the report.

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Some of the operators with the largest remaining inventories of DUC wells include EOG Resources Inc. (NYSE: EOG), Anadarko Petroleum Corp. (NYSE: APC) and Chesapeake Energy Inc. (NYSE: CHK), IHS said.

Bakken

1. Abraxas Petroleum: 2/8/17

Abraxas Petroleum Corp. (NASDAQ: AXAS) completed six horizontal Bakken/Three Forks producers on its North Fork prospect from a drill-pad in Section 22-150n-97w of McKenzie County, N.D.

The #10H-15H Stenehjem wells were drilled southward to total depths of about 21,300 ft and bottomed in Section 34-150n-97w and were fracture stimulated, according to IHS Markit. Each well averaged 1,131 barrels of oil equivalent per day (boe/d), or 861 bbl/d of oil and 1.619 MMcf/d of gas, over the first 15 days of production.

Abraxas, based in San Antonio, owns a working interest of about 78% in the #10H-15H Stenehjem producers. Additional details are not yet available.

2. Statoil: 2/7/17

Norway’s Statoil ASA (NYSE: STO) completed an extended-reach horizontal Bakken and a Three Forks producer from a common drill-pad in Section 8-152n-98w in McKenzie County, N.D.

The #1H Cheryl initially flowed 4,209 bbl/d of oil, 10.461 MMcf/d of gas and 3,189 bbl/d of water. Production is from a horizontal lateral in Middle Bakken extending from 11,558 ft southeastward to 21,590 ft. It bottomed in Section 21-152n-98w and the true vertical depth is 11,314 ft. It was tested a 44/64-in. choke following 39-stage fracturing.

The #6TFH Cheryl 17-20 was tested flowing 1,979 bbl/d of 46.1-degree-gravity oil, 4.743 MMcf/d of gas and 5,012 bbl/d of water from Three Forks. The 21,460-ft well has a true vertical depth of 11,286 ft and it is producing from 11,684 ft to 21,460 ft, after bottoming to the south in Section 20-152n-98w. It was tested on a 46/64-in. choke after a 38-stage fracturing.

3. Statoil: 12/28/16

In McKenzie County, N.D., Statoil completed an extended-reach horizontal Bakken producer that initially flowed 3,895 bbl/d of 45.6-degree-gravity oil, 9.651 MMcf/d of gas and 3,370 bbl/d of water.

Located in Section 8-152n-98w, #8-5-7H Richard is producing from a horizontal Middle Bakken lateral extending from 11,451 ft north-westward to 21,943 ft, 11,202 ft true vertical, and it bottomed in Section 5-152n-98w. Following 51-stage fracturing, the well was tested on a 46/64-in. choke.

The new producer was drilled from a common drill-pad on which Statoil has completed 12 other horizontal Bakken/Three Forks tests.

4. QEP Resources: 11/23/16

Denver-based QEP Resources Inc. (NYSE: QEP) completed two horizontal Bakken/Three Forks producers from a common drill-pad on the Fort Berthold Indian Reservation in Section 28-148n-92w of Dunn County, N.D.

The #8-28-29H-148-92 MHA initially flowed 1,260 bbl/d of 42-degree-gravity oil, 751,000 cubic feet per day of gas and 7,751 bbl/d of water. Production is from a horizontal Three Forks lateral extending from 10,446 ft westward to 20,477 ft. It bottomed in Section 29-148n-92w and the true vertical depth is 10,272 ft. Gauged on a 36/64-in. choke following 49-stage fracturing, the flowing casing pressure was 1,775 pounds per square inch (psi).

The #6-28-29H-148-92 MHA was tested flowing 1,215 bbl/d of 42-degree-gravity oil, 477,000 cubic feet per day of gas and 4,168 bbl/d of water. Production at the 20,517-ft well is from a horizontal Middle Bakken interval at 10,354 ft to 20,517 ft. The true vertical depth is 10,189 ft. Tested on a 30/64-in. choke after a 49-stage fracturing, the flowing casing pressure was 1,875 psi.

Niobrara

1. Whiting Petroleum: 2/8/17

Denver-based Whiting Petroleum Corp. (NYSE: WLL) scheduled 14 horizontal Niobrara tests on a common drill-pad in the Denver-Julesburg (D-J) Basin in Section 7-9n-57e in Weld County, Colo.

The wells will be on Whiting’s Cottonwood-Federal prospect. Seven of the wells will be drilled northward to measured depths between 16,148 ft and 16,441 ft (5,381 ft to 5,666 ft true vertical) at bottomhole locations in Section 6-9n-57w.

Another seven of the horizontal tests will be drilled southward to depths between 16,018 ft and 16,309 ft (5,381 ft to 5,666 ft true vertical) at bottomhole locations in Section 19-9n-57w.

2. Burlington Resources: 2/7/17

A horizontal Niobrara producer in the D-J Basin in Arapahoe County, Colo., was completed by Burlington Resources Oil & Gas Co. LP, a subsidiary of Houston-based ConocoPhillips (NYSE: COP).

The #9-10-1H Sky Ranch 4-65 is in Section 10-4s-65w and is was drilled to 17,305 ft with a true vertical depth of 7,958 ft. The discovery is flowing 1,613 bbl/d of 41-degree-gravity oil, 2.679 MMcf/d of gas and 536 bbl/d of water. Production is from a horizontal Niobrara lateral extending to the west. It bottomed in Section 9-4s-65w. Tested a 40/64-in. choke, the flowing tubing pressure was 690 psi following 48-stage fracturing between 8,456 ft and 17,173 ft.

3. EOG Resources: 2/3/17

Houston-based EOG Resources completed two horizontal Niobrara/Codell producers from a common drill-pad in Laramie County, Wyo. The D-J Basin producers are in Section 21-13n-65w.

The #516-2109H Jubilee is flowing 796/d bbl of 36.5-degree-gravity oil, 480,000 cubic feet per day of gas and 1,711 bbl/d of water from a horizontal Codell lateral extending from 9,017 ft northward to 18,536 ft. It bottomed in Section 9-13n-65w and was tested on a 26/64-in. choke following 45-stage fracturing between 9,216 ft and 18,452 ft. True vertical depth is 8,697 ft.

The #118-2109H Jubilee initially flowed 245 bbl/d of 36.5-degree-gravity oil, 120,000 cubic feet per day of gas and 655 bbl/d of water from Niobrara. The lateral extends from 8,962 ft northward to 18,525 ft at a bottomhole location in Section 9-13n-65w. The true vertical depth is 8,641 ft and was tested on a 32/64-in. choke after a 43-stage fracturing between 9,068 ft and 18,400 ft.

Larry Prado, activity editor, can be reached at lprado@hartenergy.com.