North Dakota Department of Mineral Resources Director Lynn Helms gave a broad overview of the state of oil and gas a week or so ago during the North Dakota Petroleum Conference Annual Meeting in Watford City. Today, in Williston, however, he’ll get into the nitty gritty with a county-by-county production outlook at the annual meeting for Western Dakota Energy Association.
Helms’ presentation will be among key highlights for the annual event, set to begin at 11 a.m. Wednesday, Oct. 13 at the Williston ARC and continue through Thursday, Oct. 14. Topics include the hydrogen economy, WISE roads, TENORM and much more. Several dignitaries are scheduled to speak including Sens. Rich Wardner, Dale Patten, and Brad Bekkedahl, along with Mayor Howard Klug and others.
For details on the WDEA conference, visit online at https://www.ndenergy.org/Events/WDEA-Annual-Meeting.
Helms, during his Williston Basin Petroleum Conference offered a few tantalizing tidbits on what Bakken companies have been doing to continue advancing production and well economics in the Bakken. Among these efforts are several projects that are centered right here in Williams County, as well as neighboring McKenzie County.
One oil company, for example, who Helms described as “aggressive” and “innovative,” is taking a field that they acquired with 2-mile laterals on 1280 spacing and converting to three-mile laterals on 1920 spacing.
The capital expense is 20 percent greater up front, but it is bumping estimated ultimate recoveries up 50 percent and rates of return 40 percent.
Similarly, in Mckenzie County in the Forman Butte area, another company is taking a similar approach. their capex calculations show a 13 percent bump for upfront costs with a 60 percent Estimated Ultimate Recovery bump. The internal rate of return wasn’t available, but Helms said he was told the wells are expected to pay out in half the usual time.
These techniques are making a large number of new and economic wells, Helms said, and pointed out on a map how striking it is to see the innovative way the new wells are being woven into the 1280 spacing units, with overlapping spacing units, to make this new approach work.
Another technique that Helms expects to really pump up well economics and boost capital investment in North Dakota is enhanced oil recovery.
This year Denbury Resources is expected to begin receiving carbon dioxide via pipeline from Wyoming. Next year, it will begin injections for what Helms said will be the world’s first and only carbon dioxide horizontal flood. This innovation is happening right here in North Dakota in Bowman County, Helms added, and it’s a game-changer.
“We are so excited about this and our partners that we’re working with at Denbury Resources see the Cedar Creek anticline as a game changer for their company,” Helms said. “It’s going to more than double the value of their company.”
In the Forman Butte field in McKenzie County, meanwhile, a water flood pilot is part of an effort to develop a statewide model for bringing conventional reservoirs back to life with water flooding and through carbon dioxide enhanced recovery.
These conventional reservoirs are the main resource Gov. Doug Burgum is referring to when he talks about carbon sequestration, so finding ways to revitalize these conventional wells is vital to ensuring the state has an economic way to sequester carbon dioxide.
Another advanced technique the state is looking at is a huff and puff project with Liberty Resources. The company is injecting rich gas and water simultaneously with a proprietary surfactant, with the goal of pushing much more rapid recoveries without breakthrough into offset wells.
In Williams County, meanwhile, a project that will work on an underdeveloped area in Williams County in what is considered Tier 2/Tier 3 is on the horizon. This, too, is a rich gas huff and puff type of injection. If successful, it will create 29 to 30 new spacing units in that under-developed area.
“So we are extremely, extremely excited about the enhanced oil recovery potential for North Dakota resources,” Helms said.
These innovative techniques can advance rig economics for the Bakken, Helms said, which are already among the most attractive in the nation.
Based on a comparison of rig economics basin by basin, Helms said a Bakken oil rig today, even without these new innovations, is already yielding an average 2,378 barrels of oil per day. That compares very favorably to the Permian, Helms added, whose rigs are yielding just 1,228 barrels of oil per day on average.
“It’s kind of a head scratcher, because a Bakken oil rig is 2 times the oil and 1.5 times the gas yield,” Helms added. “Capital should be flowing to North Dakota.”
Helms believes the uncertainty of federal leasing policies is driving some of the Permian activity, as companies to lock up federal leases with production now, with known rules, rather than later, with unknowns.
North Dakota, meanwhile, is continuing its lawsuit trying to force BLM to meaningfully restart lease sales. The federal moratorium on new oil and gas leases is costing private and state mineral owners millions of dollars, Helms said, and he believes it is also chasing at least some capital investments away.