Powder River Basin Activity Highlights: November 2017

Digital Oil Field Intro

Digital technologies create a billion-dollar opportunity for the oil patch, according to analysis by McKinsey & Co.

Overall, the New York-based consultancy firm said in a March 2016 report that digital technologies in the oil and gas sector could reduce capex by up to 20% as well as cut operating costs in upstream by 3%-5% and 1.5%-2.5% in downstream.

“Making better use of existing technology can deliver serious returns—up to $1 billion in cost savings or production increases,” the firm said.

Equipment sensors, including drones, are already revolutionizing monitoring and maintenance and the potential impact could decrease costs by up to 13%.

VIDEO - Halliburton CEO’s Outlook On The Digital Oil Field

Though, further integration of digital applications can help companies decrease capex for reservoirs by using 4-D seismic imaging with a time-lapse dimension to measure and predict fluid changes in reservoirs. It can also increase recovery rates, which increases upstream revenue.

By using digital sensors and programs, workers could perform maintenance on equipment before it breaks down. This predictive maintenance ultimately will lower a company’s maintenance costs, which for one company could account for 25% of operating expenses, according to McKensey’s report.

“This effort reduced costs by up to 27% while increasing reliability and uptime. Advanced analytics for energy and yield also has the potential to increase energy efficiency by as much as 10%,” the firm said.

Additionally, well-maintained equipment also ensures safe operation for company personnel and people living in communities near drilling, pipelines and operations and refineries.

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Powder River Basin Activity Highlights

1. SM Energy: 11/9/17

Denver-based SM Energy Co. (NYSE: SM) has scheduled five extended-reach horizontal exploratory tests—four in Frontier and one in Shannon—on a common drillpad in the southwestern flank of the Powder River Basin.

The drillpad will be in Section 14-38n-76w in Converse County, Wyo., according to IHS Markit. Exploratory tests include:

• The #3876-14-23-2FH One Nineteen-Federal will be drilled in Frontier south-southwestward to 22,978 ft at a bottomhole location in Section 23-38n-76w;
• The #3876-11-2-1FH Raider-Federal will be drilled in Frontier northward to 22,785 ft at a bottomhole location in Section 2-38n-76w;
• The #3876-14-23-1FH General Scott-Federal will be drilled in Frontier southward to 22,633 ft at a bottomhole location in Section 23-38n-76w;
• The #3876-14-23-1SH Holiday-Federal will be drilled in Shannon southward to 20,686 ft at a bottomhole location in Section 23-38n-76w; and
• The #3876-11-2-2FH Jupiter-Federal will be drilled in Frontier north-northwestward to 22,855 ft at a bottomhole location in Section 2-38n-76w.

Nearby production is from an SM Energy extended-reach horizontal Frontier producer–#3876-1-12-1FH Cannon-Federal Section 1-38n-76w. The well initially flowed 1,245 barrels (bbl) of 40-degree-gravity oil, 1.515 million cubic feet (MMcf) of gas and 2,180 bbl of water per day. Production is from a horizontal lateral in Frontier extending from 12,735 ft southward to 22,424 ft at a bottomhole location in Section 12-38n-76w. The true vertical depth is 12,470 ft. It was tested on a 40/64-in. choke following 21-stage fracture stimulation between 12,770 ft and 22,232 ft.

2. Ballard Petroleum: 11/8/17

Ballard Petroleum Holdings LLC, headquartered in Billings, Mont., has scheduled two horizontal wells targeting Parkman Sand.

The planned wildcats are on the western flank of the Powder River Basin in Campbell County, Wyo. The drillpad is about two miles east-northeast of the Barber Creek Field.

Located in Section 14-50n-76w, the #31-14-23 PH Kinney Divide-Federal will be drilled to the south to 16,535 ft, 6,964 ft true vertical, with a bottomhole location in Section 23-50n-76w. The #34-11-2 PH Kinney Divide-Federal will be drilled to the north to 17,000 ft, 6,912 ft true vertical, with a bottomhole location in Section 2-50n-76w.

3. Chesapeake Energy: 10/25/17

A Niobrara discovery by a subsidiary of Oklahoma City-based Chesapeake Energy Corp. (NYSE: CHK) in the Powder River Basin was tested flowing 1,185 bbl of oil, 4.048 MMcf of gas and 925 bbl of water per day.

Chesapeake Operating Inc.’s #6H Fetter NW 15-33-71 A is within the Northwest Fetter (Deep) Unit in Section 15-33n-71w in Converse. It was drilled to 17,746 ft, 11,200 ft true vertical, and production is from a Niobrara interval at 11,513 ft to 17,607 ft. The lateral extends from 8,946 ft to the southeast and bottomed in Section 22-33n-71w. The well was tested on a 32/64-in. choke after 48-stage fracturing.

4. Peak Powder River Resources: 10/24/17

Durango, Colo.-based Peak Powder River Resources LLC has completed a horizontal Turner producer and a Parkman producer from a common drillpad on the southern flank of the Powder River Basin in Section 28-42n-71w in Campbell.

According to IHS Markit, #1-28TH Bridle Bit flowed 341 bbl of oil, 7.7 MMcf of gas and 975 bbl of water per day. Production is from a horizontal lateral in Turner extending from 9,994 ft to the northwest to 14,090 ft (9,620 ft true vertical). It was tested on a 32/64-in. choke following 28-stage fracturing between 10,066 ft and 13,888 ft.

The #1-28PH Bridle Bit initially pumped 277 bbl of oil with 80,000 cubic feet of gas and 1,547 bbl of water per day, IHS Markit said. The well was tested following 14-stage fracturing in a horizontal Parkman interval at 7,327 ft and 10,991 ft. The Parkman lateral extends north-northwestward to 11,115 ft with a true vertical depth of 6,844 ft.

5. EOG Resources: 10/23/17

Houston-based EOG Resources Inc. (NYSE: EOG) reported results from a horizontal Turner producer in the Powder River Basin in Campbell.

The #31-06H Bolt was tested flowing 1,050 bbl of 46-degree-gravity oil, 1.531 MMcf of gas and 634 bbl of water per day. The discovery is in Section 6-42n-72w and production is from a horizontal lateral in Turner extending from 8,995 ft northward to 14,753 ft. The true vertical depth is 10,276 ft and was tested following 20-stage fracturing between 10,498 ft and 14,374 ft.

6. True Oil: 10/19/17

A Powder River Basin horizontal Turner completion was announced by Casper, Wyo.-based True Oil LLC.

The #44-23-23T2H Skyline-Federal is in Section 23-43n-73w of Campbell. It produced an average of 526 bbl of oil, 486,600 cubic feet of gas and 428 bbl of water per day. The well was drilled to the northeast to 15,098 ft, 10,319 ft true vertical. True completed the well after 20-stage fracturing. Additional details are not yet available.

7. SM Energy: 10/18/17

SM Energy completed two, two-section horizontal Frontier producers from a drillpad on the southwestern flank of the Powder River Basin. The discoveries are located in Section 10-39n-76w in Converse, according to IHS Markit.

The #3976-15-22-2FH Biscuit-State is producing 2,158 bbl of oil, 3.418 MMcf of gas and 584 bbl of oil per day from a horizontal lateral. The 22,950-ft well has a lateral extending from 13,070 ft to the southwest. It bottomed in Section 22-39n-76w at a true vertical depth of 12,414 ft. It was tested on a 30/64-in. choke following 36-stage fracturing between 13,090 ft and 22,730 ft.

The #3976-15-22-1FH Buttermilk-State initially flowed 1,737 bbl of oil, 2.557 MMcf of gas and 820 bbl of water per day. The well was tested on a 28/64-in. choke following 36-stage fracturing between 13,181 ft and 22,380 ft in lateral, which extends from 13,161 ft southward to 22,574 ft. It bottomed in Section 22-39n-76w and the true vertical depth is 12,471 ft.

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