Program seeks to make oil production more efficient, economical

DICKINSON, N.D. -- A public-private partnership is seeking to make the shift from oilfield exploration to development more efficient and economical.

The Energy and Environmental Research Center is leading the program in close coordination with Continental Resources, and with collaboration from industry partners including Marathon Oil, Whiting Petroleum, Hess and Nuverra Environmental Solutions.

Dubbed the “Bakken Production Optimization Program,” it aligns with the shift Bakken companies are seeing from exploration to development -- now that much of the land is leased and held by production, producers are going back to see how they can get the most oil.

“That’s when I’ve essentially got all of my acreage held by production, every spacing unit has a well in it, so then I can come back and fully develop that spacing unit,” said J. Warren Henry, vice president of investor relations for Continental.

The core of the program right now is Continental’s Hawkinson unit, with drilling at different depths. It “helps us understand in great detail a single location and then we can begin to extrapolate,” said John Harju, associate director for research at the EERC.

The first few years of Bakken development were characterized by a “real frenzy pace,” with 218 rigs running as companies raced to get a producing well on each lease to hold it, said Tessa Sandstrom, spokeswoman for the North Dakota Petroleum Council.

“So now that the leases are held, they can go back and put more than one well on each of those pads,” she said, “and that’s kind of the development phase that they’re in.”

Well-site optimization isn’t just beneficial for industry -- making operations more efficient, like with multi-well pads, has benefits for landowners and the environment by consolidating the footprint.

Hawkinson unit

In 2011, core samples surprised Continental when they showed oil saturation went all the way past the Bakken and through the Three Forks benches.

Then, a new challenge arose.

“OK, I’m not gonna just harvest the upper part of the Three Forks, I’ve got these lower benches. I’ve got a second bench -- in some places a third bench,” Henry said.

The question becomes that if it’s economical to drill in multiple benches, how many wells are needed and how far apart should they be at different depths.

“The whole thing is a layer cake and the Three Forks itself is a layer cake,” Henry said.

So with the Hawkinson unit, Continental showed that “full development mode,” with four wells per zone in four zones, or depths, “makes sense,” Henry said.

“The Hawkinson’s looking great,” he said.

In a January investors’ presentation, Continental labeled the Hawkinson density project a “milestone in maximizing economic oil recovery” and the industry’s first multi-interval lower bench development.

Henry said the density pilots in the Hawkinson wells are like a lab test for the future of full-field development -- what Continental learns from those will inform its methods down the road.

The EERC program launched last summer with $8 million from the North Dakota Industrial Commission's Oil and Gas Research Council and more than $100 million of in-kind resources from industry, according to the EERC.

It also is researching other ways to make the next phase of production more efficient, like with water recycling and flaring reduction technologies.

Henry said what companies learn from experiments like the Hawkinson program will inform their activities for the next 20 to 25 years.

“From the public’s point of view, you’re getting into -- in the Bakken -- sort of a cruise control phase when you get into this full development,” he said.

“Now it’s really a matter in the next five years … of continuing to refine the technology, continuing to refine the techniques and to further reduce surface disturbance.”