Bakken Update: Whiting's Sanish Well Models To 2 Million Barrels Of Oil

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 |  About: Whiting Petroleum Corporation (WLL), Includes: EOG
by: Michael Filloon

In my most recent article I stressed the value of historical production to model unconventional wells. It is not a perfect method as it does not account for all variables. Drilling and completion techniques are the most difficult to gauge. This is why it is important to compare a series of wells from one operator in the same general area. It provides a baseline. This allows focus to remain on other variables and how it affects production.

My article Bakken Update: EOG's Parshall Field EURs of 2 Million Barrels of Oil focused on consistent data points. I used EOG Resources (NYSE:EOG) for several reasons. It is a top producer with a good well design. In 2007, EOG completed a large number of wells in Parshall Field. This allowed for a comparison of wells in the same area, with the consistency of one operator. Results were consistent as IP rates improved when larger amounts of water and proppant were used. EOG continued to use short laterals throughout its development of Parshall Field. Only one well modeled below 500 MBo. Two of these wells were over 1000 MBo.

What EOG is to Parshall Field, Whiting (NYSE:WLL) is to Sanish. Whiting has been developing this area since 2006. I was unable to obtain enough on wells completed in 2007, so I expanded the chosen wells to July of 2008. This data will show Whiting has produced well results much like EOG's in Parshall. Whiting has used a wider choke which should produce higher 24-hour IP rates. Wider chokes can cause a more rapid depletion as well. EOG used only short laterals, while most other operators used long laterals. This should provide higher EURs for Whiting. This is misleading as EOG garners more resource per foot. EOG has historically used more water and proppant per foot, which should reduce depletion. Table 1 offers production rates from 10 Whiting wells completed in 2007 and through the first six months of 2008.

2007-2008 Whiting Sanish Field Well Depletion
Well IP Rate 360-Day IP 720-Day IP 1080-Day IP 1440-Day IP 1800-Day IP
16731 1323 404 365 309 269 252
16463 1081 372 301 246 214 191
16902 2192 411 307 248 216 202
17023 2669 715 533 460 389 364
16852 1765 385 323 285 *266

249

16871 1567 365 274 230 207 *194
16781 1923 469 367 308 265 248
16734 945 218 157 142 *133 124
17092 3027 965 805 685 591 553
16780 1519 814 571 443 363 339
Avg. 1801 512 400 336 314 294
71.6% 21.9% 16% 6.5% 6.5%
Click to enlarge

In Table 1, the wells marked with an * had some production problems. This was during the flooding of western North Dakota. I didn't see any production decreases after production was resumed, so I still used the data. The numbers in bold were estimated using the average depletion of the other wells. When depletion falls below 8% the majority of production from fractures has ceased. The 6.5% is a terminal decline and should remain constant throughout the life of the well. This is matrix production, which models differently from the first few years of well life.

EOG Well Depletion In Parshall Field In Bo/d

Table 2

Well IP Rate 360- Day IP 720-Day IP 1080-Day IP 1440-Day IP 1800-Day IP
16637 970 449 313 251 215 234
16461 1487 469 410 321 264 231
16543 1015 440 321 261 226 197
16532 1285 489 365 291 253 223
16467 783 333 240 198 171 150
16497 1675 502 364 292 246
16635 581 286 203 162 135 116
16484 1670 535 379 302 254 219
16457 922 481 339 275 232 202
16550 1329 421 307 253 217
16671 1198 466 340 282 242 212
16483 870 494 396 321 272 239
16370 1553 421 332 269 226 195
16469 1267 533 396 322 276 249
16578 817 489 358 291 253
16371 918 552 421 342 288 250
16713 781 740 494 389 322
16768 1441 793 535 424 350
16795 1519 814 561 438 360
Avg. 1162 511 372 299 253 209

Rate

56%

27.3%

19.6% 15.4% 17.4%
Click to enlarge

I added Table 2 from my EOG article as a comparison. Whiting's 360-day depletion of 71.6% was higher than the EOG well average of 56%. EOG's depletion is higher than Whiting's for years two, three and four. It is possible Whiting's increased initial depletion is from a larger choke, but I believe it has more to do with proppant. The data comparison seems to prove production curve flattens at some point. The only question is when. Keep in mind the best cumulative oil producer of the two groups was drilled and completed by Whiting. Well number 17092 has produced 872636 barrels of oil since its IP test on 6/20/08.

Whiting Sanish Field Well Design

Table 3

Well Lateral Choke Proppant
16731 7625 16/64 1900000
16463 8350 13/48
16902 9516 18/64 1840000
17023 9443 28/64 1625500
16852 9432 28/64 1244000
16871 9426 28/64 1629000
16781 9762 24/64 3104180
16734 8482 20/64 1963740
17092 9539 26/64 1705000
16780 7719 17/64 1959000
Avg. 8929 1885602
Click to enlarge

The Whiting wells in Table 3 used 211 pounds of proppant/foot. EOG's Parshall wells used 420 pounds/foot. EOG is able to prop the fractures open wider and longer by using more. This seems to lengthen the time the EOG wells produced from the fractures before converting to exponential decline (matrix production). The lower production and decreased depletion in Whiting's wells at the 1440-day IP seem to indicate these wells are already in exponential decline.

2007-2008 Whiting EURs In Sanish Field

Table 4

Well 1800-Day IP Oil Produced EUR
16731 252 453600 907200
16463 191 343800 687600
16902 202 363600 727200
17023 364 655200 1310400
16852 249 448200 896400
16871 194 349200 698400
16781 248 446400 892800
16734 124 223200 446400
17092 553 995400 1990800
16780 339 604800 1209600
Avg. 272 488340 976680
Click to enlarge

At first glance the Whiting wells look better than EOG's. This is not the case when taking lateral length into consideration. The average lateral length of the Whiting wells are twice that of EOG's. In reality, the Whiting wells produced half the resource per foot. Well number 17092 is a great well, modelling to almost 2 million barrels of oil. These wells do not include natural gas or natural gas liquids in EURs, which accounts for an estimated 8% of production in Mountrail County.

2008 Alger Field Cumulative Oil Production

Table 5

Well Operator Oil Produced
17572 (NYSE:HES) 161906
17378 HES 85546
17389 HES 109702
17477 (NYSE:OAS) 57829
17165 (NYSE:STO) 147781
16893 STO 78980
17359 STO 130287
17481 STO 159345
16898 STO 55476
17018 STO 69007
Avg. 105586
Click to enlarge

In Table 5, I listed all of the Alger Field wells completed in 2008. I chose this field due to Brigham's success in the area and its close proximity. It is thought of by some to be as good if not better than the Sanish and Parshall Fields. The best result in table 5 was lower than all of EOG and Whiting's results. The reason is not geology, but well design. As these operators are now producing excellent results in these areas.

In summary, the Sanish and Parshall Fields are considered to be some of the best areas in the Bakken. Using wider chokes produces high 24-hour IP rates, but increases the depletion curve. Using more proppant increases production over the first few years of production significantly. It also flattens the depletion curve and leads to exponential decline at a later time. EOG was the top operator in 2007, but Whiting also produced very good results. When compared to other operators in the area, both EOG and Whiting outperformed. Looking at the second half of 2012, we are seeing a change in well design. More water depots are being constructed as agricultural water is converted to commercial uses. Proppant from Russia and China has increased pushing costs down about 40% year over year. As these costs decrease, more will be used. This should continue to improve well results.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The models used in this article are estimates. These wells could end up producing significantly less or more oil over the next few decades. This is not a buy recommendation.All of the wells in this article are measured in barrels of oil. Natural gas and natural gas liquids were not included in estimates. If you would like to see more of my articles, go to shaleinsight.net