Horizontal drilling, 3D seismic driving Williston resurgence

Richard Wheatley
Associate Managing Editor-News

Gas is flared from the oil battery/treating complex serving the Berkley et al. 4-2-7-11W2 discovery, the first significant Ordovician oil discovery in Canada, the company said. Photo courtesy Berkley Petroleum Corp.

Operators are pressing a fresh flurry of exploration and development projects in the Williston basin of the western U.S. and Canada.

They are capitalizing on the application of 3D seismic and horizontal drilling technology to find new pay zones and extend the productive limits of existing fields.

Industry's focus, once intense on Mississippian Lodgepole targets, is now shifting to Ordovician Red River B oil zones in North Dakota, where almost 600 wells have been permitted, more than 100 more are producing, and another 37 are in various stages of drilling/completing, according to Minerals Diversified Services Inc. (MDS), Bismarck, N.D.

Robust action can be found in the U.S. portion of the basin, which includes parts of Montana, South Dakota, and North Dakota and in the Canadian portion in parts of Saskatchewan and Manitoba (see related story, pp. 22-23).

The hottest single play currently is in southeastern Saskatchewan, led by Calgary's Berkley Petroleum Corp.

While drilling and development activity is expected to continue apace throughout the basin, more infrastructure may be ahead: A decision is near for a proposed North Dakota-Saskatchewan carbon dioxide pipeline that would provide CO2 for an enhanced oil recovery project slated in Saskatchewan's Weyburn oil pool by operator PanCanadian Petroleum Ltd., Calgary.

Basin resurgence

"The Lodgepole and the Red River B horizontal plays brought a lot of new companies into the southern Williston basin, and after looking at the 3D seismic shoots, they're showing interest in formations besides the Lodgepole and Red River," said MDS Pres. Mary E. Bluemle.

Other formations commanding attention include the Mississippian Mission Canyon and Rival sub-interval; Devonian Bakken, Nisku, and Duperow; Silurian Interlake; Ordovician Winnipeg; and Ordovician/Precambrian Deadwood.

According to the North Dakota Industrial Commission (NDIC) Oil and Gas Division, there has been a significant increase in drilling permits beginning about yearend 1995 and early in 1996. For all of 1995, 290 drilling permits were issued, of which 104 were in December 1995 alone.

"The bulk of that was attributed to the Red River B play in Bowman County," said Mark Bohrer, a division staff petroleum engineer.

For all of 1996, the division issued 566 drilling permits.

Bohrer said industry interest took off after the Cedar Hills field Red River B Pool 1 Peterson discovery (OGJ, Jan. 15, 1996, p. 21). The 1994 discovery was drilled by Meridian Oil Inc. (now combined into parent Burlington Resources Inc., Houston, and operating unit Burlington Resources Oil & Gas Inc.).

Heavy Red River drilling is keeping rigs busy. For 1996, average rigs working in North Dakota totaled 18, the highest since 1990, when the state averaged 20 rigs for the year.

The rig count was 13 as of the first of May compared with 13 for the same period a year ago, according to Baker Hughes Inc.'s tally.

At one point in March 1996, 24 rigs were running, and 22 rigs were running consistently for about a 3-month period in summer 1996.

North Dakota Land Department's May 6 sale generated more than $1.6 million from 1,079 tracts covering 84,000 acres with Burke, Ward, and McKenzie county acreage getting most bids, respectively.

Officials said it was the largest sale in terms of total tracts offered since November 1980.

Hottest single basin play

Operators are watching to see where the Ordovician/ Red River B play sparked by Calgary's Berkley Petroleum may migrate.

"The question is: Does it extend down from Midale to North Dakota?" asked Berkley Pres. Mike Rose. "Further exploration drilling will demonstrate whether it does or it doesn't."

In November 1995, Berkley drilled a strike below the massive Weyburn pool, the Berkley et al. 4-2-7-11w2 (see interval diagram, p. 24). The discovery, which set off a mini-boom, flowed almost 2,900 b/d.

Since then, the company and partners have leveraged their position, racking up almost two dozen consecutive successful wells during 1996-97 (see field inset, p. 21). "So far, we've drilled 20 successful wells, and we've turned one into a water injector," said Rose.

As part of Berkley's development, it has drilled successful secondary objective wells to the Midale, Frobisher, Bakken, Birdbear, and Duperow formations.

The company has a goal of reaching the 10,000 b/d production level by yearend. It's presently producing a combined constrained 3,000-4,000 b/d.

Berkley has production from three separate pools presently, and at least a portion of the productive area likely will be placed under waterflood longer term, Rose said.

Berkley has a 50% working interest in the discovery. Partners are Calgary's Paramount Resources Ltd. and Westminster Resources Ltd., each with a 25% working interest in the discovery and subsequent wells.

Crude is light and sweet, with 30-40° gravity. Output is sold via various terminals in southeastern Saskatch- ewan, realizing premium prices of $28-30/bbl (Canadian) based on quality, according to Rose.

Emphasis shifts

Although the Red River B play is getting most attention currently, the Lodgepole play-in about a 20-mile radius of Dickinson, N.D.-garnered a significant share of activity and interest in the last several years.

Lodgepole interest is now in a wait-and-see mode: The heart of the play area is virtually leased up, limiting opportunities for new entrants; and salt deposition, which can play havoc with 3D data interpretation, is now hindering efforts to extend the play outside the area (OGJ, Dec. 16, 1996, p. 47).

According to MDS, the Red River B play in Bowman and Slope counties, N.D., Harding County, S.D., and Fallon County, Mont., has had well completion rates of about 90%. "Producing wells have rates varying from 100 b/d to over 400 b/d, with most wells in the 250 b/d range," MDS said (see table, this page).

"The wells in the Cedar Hills field (covering Bowman and Slope counties) cost about $900,000 to drill and complete-and though payout can come as soon as 10 months for the best wells, some operators are using 18 months as a more likely waiting period for the good wells to pay for themselves."

Lodgepole hurdles

Conoco Inc.'s February 1993 deeper pool discovery, the 74 Dickinson State, rekindled operators' hopes that the Lodgepole was, indeed, a commercial reservoir. A subsequent discovery by Duncan Oil Inc., Denver, helped spur interest (OGJ, Aug. 14, 1995, p. 50).

Most recently, discoveries by TransTexas and partner Phoenix Energy Inc., Dallas, rekindled optimism (OGJ, Jan. 20, 1997, p. 34).

TransTexas' producing wells in-clude the 1-3 Dinsdale, 1 Heart River, and 2-4 Dinsdale. Constrained output is 1,000 b/d/well currently.

TransTexas said its Lodgepole wells in the Dickinson area pay out in about 20 days.

The Lodgepole is a subtle, difficult play, say operators. They cite salt dissolution and the number of linements as 3D interpretation problem areas.

In addition, the Bakken is extremely thick in the Dickinson area, "and you could associate Lodgepole mounds with Bakken amplitudes," said Brent L. Mejia, TransTexas new ventures exploration manager.

"The model that worked around the Dickinson area, Eland field, and the Conoco Lodgepole Unit we found later didn't apply outside of that area.

"I think the industry right now is trying to find that new model," said Mejia.

N. Dakota output rising

Through the end of February, North Dakota oil production stood at 93,330 b/d, and officials expect production to exceed 100,000 b/d this year.

A major share of the anticipated increase is expected to come from Eland field, biggest of the eight North Dakota Lodgepole fields (see map, p. 21).

Eland was recently unitized by NDIC and will now be able to yield higher rates of production via a planned secondary recovery program. The operator is Duncan Oil. Prior to unitization, production was restricted by the NDIC to levels as low as 20 b/d/well.

As of the end of February, 17 wells in the field were producing a combined constrained 7,765 b/d; as a result of unitization, targeted field output is 12,000 b/d.

Generally, Williston basin wells produce light-medium gravity oil and associated gas. Hydrogen sulfide sometimes may be present.

Gas output can be hooked up to pipelines, or operators can apply to NDIC for a flaring exemption from severance tax, if they can prove gas production would be uneconomic.

Oil is fetching about $16-17/bbl in North Dakota, and some operators are getting premiums based on demand and quality. But, said NDIC's Bohrer, "This cycle is currently driven more by technology than price."

Big Red River programs

Chesapeake Energy Corp., Oklahoma City, and Burlington have active Red River programs under way.

In mid-1996, Petroleum Information/Dwights reported Fort Worth's Union Pacific Resources Group Inc., Chesapeake, and Meridian (Burlington) had staked as many as 140 horizontal locations in Slope County, N.D., alone.

Chesapeake is shooting 3D seismic in that county now with an eye toward high-grading acreage in which it has interests. In Richland County, Mont., the company has drilled two vertical completions, both targeting Red River B and C zones. The wells are now on production, and Chesapeake estimates reserves of 250,000-300,000 bbl of reserves/well. The company owns about 100,000 acres in the area.

Elsewhere, it is looking for Red River B horizontal targets in southwestern North Dakota and in southeastern Montana, where it has interests in about 300,000 acres. Chesapeake plans 3D seismic programs in those areas, and it has 100 sq miles on tap to be shot this year.

Burlington is drilling Red River B objectives in the Fallon County, Mont.-Bowman County, N.D., area, as well as pursuing Rival pay in Burke County, N.D., which has fueled a land play in the county.

According to MDS, Burlington has completed two Rival horizontal discoveries in Burke County, 11-24 Durward, a Rival (Nesson) producer in Carter field, which produces from multiple Mission Canyon members; and the 13-12H Warner, a new field discovery.

In McKenzie County, MDS reports Burlington completed the 24-30H Storm-Federal, a Grassy Butte field horizontal well, which recently was flowing 140 b/d.

Burlington's 1997 plan calls for about $30 million to be spent for drilling/development activities in the basin, with about 50 horizontal wells planned. Work will include implementing a secondary recovery project in the Burlington-operated East Lookout Butte Unit in Fallon County, Mont.

Burlington's basin production is up significantly from 1995, when Burlington was making less than 400 b/d from its horizontal wells. Output at the time was primarily from East Lookout Butte.

Burlington's production in 1996 totaled about 7,600 b/d of oil from its Red River wells, with company production in the basin extending generally from Bowman County into Fallon County on the flank of the Cedar Creek anticline.

Continental's program grows

Using horizontal drilling and in situ combustion, Continental Resources Inc., Enid, Okla., continues to develop Red River acreage in North Dakota and South Dakota (OGJ, Jan. 15, 1996, p. 21).

It is producing from the Medicine Pole Hills Unit and Cedar Hills field Red River B Pool, in Bowman County, N.D.; and from three Buffalo field units-Buffalo, S. Buffalo, and W. Buffalo-in Harding County, S.D.

The Cedar Hills Pool is producing about 16,500 b/d gross from about 110 wells and has cumulative production of about 6 million bbl.

As of May 1, Continental had drilled about 78 operated wells in the Cedar Hills Red River B Pool and participated in about 95 wells. Pool production from Continental-operated wells totals about 7,500 b/d.

Continental has extended the limits of preexisting production and established an oil column of as much as 1,100 ft "from the crest of the Cedar Creek anticline fields to the most downdip position in Cedar Hills," said Jack Stark, exploration vice-president.

"Our plan at Cedar Hills is to continue to delineate the field. The boundaries essentially are not established, and drilling will continue in all directions until they are."

Continental has a net acreage position totaling about 350,000 acres and is running five rigs in the Bowman-Slope County area and in Harding County, S.D.

With South Dakota regulatory agency approval, Continental recently drilled a dual lateral that crossed unit boundaries, the 44-22 BRRU (Buffalo Red River Unit)/14-27 SBRRU (South Buffalo Red River Unit).

One lateral was drilled into the Buffalo Red River Unit and the other into the South Buffalo Red River Unit.

The well is flowing about 160 b/d with flowing tubing pressure of 800 psi. By contrast, most vertical Buffalo field wells average 30 b/d.

Continental is also pressing a fireflood EOR project in the Medicine Pole Hills Unit and in the Buffalo units.

Continental's production is about 2,200 b/d from the Buffalo units, which produce from the Red River B.

Medicine Pole Hills Unit, which has production from the Red River A, B, C, and D zones, is producing about 800 b/d gross.

Stark said the Red River B, with 10-15 md permeability, is not only an ideal reservoir for horizontal drilling but also for in situ combustion. Porosity is about 15-20%.

CO2 project plans

A spokesman for Dakota Gasification Co. (DGC), Bismarck, N.D., says a decision point is near on a proposal to lay a CO2 pipeline from North Dakota to Saskatchewan. Estimated project cost is more than $100 million.

The 200-mile pipeline, with a planned ultimate capacity of 200 MMcfd, would provide about 95 MMcfd of CO2 to the PanCanadian EOR project. The pipeline would begin at the DGC Great Plains coal gasification complex at Beulah, Mercer County, and extend west and north to Weyburn field. DGC would operate the pipeline.

The CO2 source would be the byproduct of DGC's lignite coal-to-natural gas conversion process at the plant, which has been in operation since 1984.

"There is potential to market CO2 for the oil fields in North Dakota and Montana as well," said Dewey Heggen, DGC spokesman.

On June 11, DGC's board is expected to make a decision on whether or not to proceed with the project, he said.

The Beulah plant was abandoned in 1985 after U.S. federal assistance for it under the National Synthetic Fuels program was abolished, Heggen said. Subsequently, the project was taken over by the U.S. Department of Energy. In 1988, the plant was purchased by a unit of Basin Electric Cooperative, Bismarck.

PanCanadian is expected to make a decision on its project late in June, a PanCanadian spokesman said.

PanCanadian is continuing discussions with the 37 other Weyburn pool interest owners, including partner Shell Canada Ltd. PanCanadian has a 44% interest in the unit, Shell Canada has 25%, and remaining small interests are divided among companies, individuals, pension funds, and others.

Weyburn, discovered in 1954, is under waterflood. The pool's production totals about 24,000 b/d currently, and about 25% of the 1.3 billion bbl original oil in place has been recovered.

Weyburn has 966 producing and injection wells, including 534 vertical wells, 115 horizontal wells, and 171 injectors. Another 146 are suspended or abandoned. Waterflood injection wells will be converted to CO2 service.

Montana action

Regina's Wascana Energy Ltd. is pressing development in unitized Flat Lake field in northeastern Montana.

It operates the field and has about a 50% interest. Flat Lake, which underlies parts of Montana and Sas- katchewan, is under waterflood.

Wascana has drilled five horizontal Flat Lake completions targeting Mississippian Ratcliffe on the Montana side of the basin, and it has cased two vertical deeper tests to Ordovician zones and Devonian Nisku, both tight.

Wascana drilled 37 basin wells as part of a total basin capital program of a little less than $50 million (Canadian) in 1996. Most wells were horizontal multilaterals, some with four laterals each.

It plans to drill 50-60 wells this year in a $70 million (Canadian) capital program.

Vastar Resources Inc., Houston, is reexamining 3D seismic data, a spokes- man said, after so far drilling one dry hole, 1-2 Black Dog-a northeastern Montana Lodgepole test-and participating in other basin drilling. Vastar is delaying a second well staked late in 1996, 1-34 Blue Moon, in southwestern Richland County.

Northeast of Glendive, in Wibaux County, Mont., Burlington drilled a significant 1996 Red River producer, 44-19 Beehive. Petroleum Information/ Dwights reported in January the well was flowing an average 112 b/d of oil.

Discovery Exploration Inc., Denver, operator for a group consisting of Navasota Resources Ltd., Silver Peak Resources Ltd., and Golden Arch Resources Ltd., all of Canada, is interpreting data after conducting a 50-sq mile 3D survey in Richland County, seeking to pinpoint Mississippian and Ordovician targets. Their Williston Joint Venture in 1996 acquired more than 35,000 acres in Richland County and planned one well in 1997.

Reservation programs

Alberta Energy Co. Ltd., Calgary, through its Alenco Oil & Gas (N.D.) Inc. unit, has a new project on as much as 495,000 acres of tribal and allotted individual tribal member lands on the Fort Berthold Indian Reservation in North Dakota, southwest of Minot.

Alenco expects to invest more than $10 million (U.S.) on seismic and drilling. The deal, involving the Mandan, Hidatsa, and Arikara-or Three Affiliated Tribes-covers 15 years.

Alenco plans to ultimately move oil output to market via the recently completed 785-mile Express Pipeline, a 50-50 joint venture of Alberta Energy and TransCanada PipeLines Ltd. (OGJ, Apr. 14, 1997, p. 33).

Gulf Canada Resources Ltd., Calgary, meanwhile, is advancing a program via an agreement with the Assiniboine and Sioux Indian tribes covering Fort Peck Indian Reservation lands in eastern Montana (OGJ, Jan. 20, 1997, p. 75).

Sam Wilson, Gulf Canada's North American exploration director, said the company plans to begin a 60-sq mile 3D shoot shortly.

Gulf Canada expects several wells to be drilled this year. Once drilling begins, said Wilson, "We'll go from top to bottom, (drilling) typical Williston basin stacked pays."

Panterra Partnership

Denver's St. Mary Land & Exploration Co. is active in both Montana and North Dakota through the Panterra Petroleum general partnership, Billings, Mont.

St. Mary has a 74% general partnership interest, and partner Nance Petroleum Corp., Billings, owns the remainder.

Panterra has interests in 360 producing wells, including 60 Panterra-operated wells in 60 fields in the basin's core producing area.

St. Mary's gross production from North Bainville field in Roosevelt County, Mont., totaled more than 2,000 b/d at yearend 1996 (OGJ, Jan. 6, 1997, p. 58). It completed four wells during the year, mostly to Red River pay, but the field produces from five different zones. In 1997, the company plans three wells in the field area.

St. Mary recently spudded the first well in its 1997 program after having to wait on a rig. The 7-1 Ibsen, a straight hole in Brush Lake field, is an 11,550-ft Red River C step-out.

Other work

Scores of large and small companies are also active in the basin.

Among them, Amerada Hess Corp. has had success drilling the Deadwood formation in North Dakota, and Eagle Operating Co., Kenmare, N.D., has successfully been reentering Deadwood wells south of the U.S.-Manitoba border in the Newporte field area of Renville County, N.D. (OGJ, July 22, 1996, p. 58).

Eagle, which discovered Norma field in Ward County-also seeing a hefty degree of leasing-reentered and completed 25-7 Canyon Jorgenson and the Eagle EM Leland. Both are Mission Canyon (Bluell) producers, Bismarck's MDS reported.

Calgary's Summit Resources Inc. has an active Red River B program in Harding County, S.D., in the Buffalo field area. PI/Dwights reported late in March the company had staked four new locations for the 4-11 Clanton-Federal, 2-21 Oja, 13-22 Oja, and 13-26 Price, all horizontal tests.

A new player, San Antonio's The Exploration Co., is expanding its basin program. It recently drilled its first successful well as an operator, 1-16 Sherry, in Bowman County, N.D.

The 1-16 Sherry was a vertical Red River C and D well. On drill stem test, the well had an indicated flow rate of 535 b/d of 32° gravity oil.

Based on its results, the company plans either to reenter the well after depletion and drill a horizontal test or drill a second well horizontally targeting the B zone.

"This confirms our belief that we will not only make horizontal wells in the Red River B, but we will also develop production from the C and D intervals," said Pres. Jim Sigmon.

The future

For the time being, activity in the U.S. and Canadian portions of the basin is expected to keep humming, provided operators can find new commercial production in proximity to producing areas.

"It's not price-independent, obviously," said one U.S. operator, "but it is an attractive play, provided oil prices stay in some kind of reasonable range."

Aided by horizontal drilling and 3D technology, operators say the Red River B should continue to fuel positive perception in the near term and continue to draw discretionary E&D capital into the basin.