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Mega oil well unit will see drilling until at least 2019

BISMARCK - The company developing a massive drilling unit in Dunn County said Wednesday it plans to keep drilling until at least 2019 to develop 60 more wells. Burlington Resources, a subsidiary of ConocoPhillips, said developing the Corral Creek...

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BISMARCK – The company developing a massive drilling unit in Dunn County said Wednesday it plans to keep drilling until at least 2019 to develop 60 more wells.

Burlington Resources, a subsidiary of ConocoPhillips, said developing the Corral Creek-Bakken Unit has taken longer than anticipated because the company added more wells and cut one drilling rig because of low oil prices.

The Department of Mineral Resources Oil and Gas Division held a hearing Wednesday to review the unit, approved by the North Dakota Industrial Commission four years ago. At the time, commissioners were told that developing the 30,000-acre unit that includes Little Missouri State Park would take 3½ years.

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Current plans call for drilling through mid-2019, but oil prices could affect the timing, Jonathan Luk, a representative for ConocoPhillips, said during the hearing in Bismarck.

The biggest change from four years ago is that the company anticipated drilling primarily in the Bakken formation, but has since added many wells in the upper Three Forks, Luk said.

The original plan called for 81 wells in addition to 12 wells that were already drilled in the unit. To date, the unit has 120 producing wells, 14 wells that are drilled or partially drilled and ConocoPhillips plans to add 60 more, Luk said.

“The increased well count is really driven by the commerciality of the upper Three Forks formation,” Luk said.

Original plans called for three drilling rigs to operate in the unit. In April 2015, that dropped to two rigs due to falling oil prices, Luk said.

More recently, the company has had just one rig in the unit due to unforeseen problems encountered while drilling four wells in the north part of the unit, Luk said. The company is still evaluating its options with that rig, but plans to bring it back this year, Luk said.

ConocoPhillips plans to have hydraulic fracturing crews complete wells in a timely manner, rather than delay well completions until oil prices recover, Luk said.

The North Dakota Industrial Commission has the option of removing undeveloped tracts within the unit. The Department of Mineral Resources will prepare an order for the full Industrial Commission to review, said spokeswoman Alison Ritter.

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Royalty owner David Schwalbe, who was among those who opposed developing the area as a large unit, was the only member of the public who spoke at the hearing.

“Why are there so few rigs working when the rigs are available? They’re stacked out all over,” Schwalbe asked.

Luk said the company can’t operate at the same pace it did when oil was $85 or $90 a barrel.

“We also have responsibility to the working interest owners to ensure we’re protecting their investment as well,” Luk said.

Stakeholders who opposed developing the area as a unit argued it would delay the development of their minerals and limit the rights of landowners.

Schwalbe has said he has questions about the fairness of the royalty distribution, but those questions were not allowed under the scope of Wednesday’s hearing. Schwalbe urged the commission to make the unit as fair as possible to everyone involved.

“The unit is here. It’s our unit. As a stakeholder, I have an interest in this. I want to see this thing developed the best way possible,” he said.

Developing the area as a unit allowed ConocoPhillips to minimize the impact to the land, including the state park, maximize how much oil will be recovered and limit truck traffic in the area, Luk said.

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The company said its well pads, access roads and other facilities take up 1.4 percent of the surface land within the unit.

Lynn Helms, director of the Department of Mineral Resources, questioned why some wells were changed from the original proposal to be located along Highway 22.

Luk said rugged terrain in the unit was the main factor that affected where wells were located, and the locations along the highway were safer places to drill.

Nearly all of the natural gas produced within the unit will be captured as additional natural gas processing plants are brought online in that region this year, Luk said. Currently, ConocoPhillips is flaring 9 percent of natural gas in the unit and 12.7 percent of gas produced statewide, he said.

Related Topics: DUNN COUNTY
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