Bakken Update: Whiting's Tarpon Sweet Spot Has Produced The Best Bakken Wells Outside Parshall Field

Jul.31.13 | About: Whiting Petroleum (WLL)

Most investors following the Bakken have heard of Parshall and Sanish fields. This is no surprise as both have been well developed, and have a large number of the top cumulative oil producers in the middle Bakken. Parshall Field has been better than Sanish, but it is difficult to know how much is geology and/or operator. EOG Resources (NYSE:EOG) has developed almost all of Parshall Field, while the Sanish is mostly Whiting (NYSE:WLL). The best upper Three Forks field is Grail. Helis initially developed Grail, and it was purchased by QEP Resources (NYSE:QEP) in August of 2012. There is a new emerging area in northeast McKenzie County. It is not well known, but it holds some of the best middle Bakken wells outside of Mountrail County. Whiting saw something special in its Tarpon Prospect. It accumulated just 6258 net acres, but extensive natural fracturing makes this its best leasehold outside of Sanish Field. We already know this area is very good, and has produced some monster wells. The question seems to be how big this sweet spot is.

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Whiting's Twin Valley results produced IP rates of 4800+ barrels of oil and 11000+ Mcf in 2 of 3 wells drilled and completed. The poor result had production problems, and Whiting was only able to frac 10 stages on a 10000+ foot lateral. The table below highlights Whiting's Twin Valley development.

Whiting's Twin Valley Field Results

Well

Lateral Ft.

Stages

Water Bbls.

Proppant Lbs.

30-Day IP Bo/d

90-Day IP Bo/d

180-Day IP Bo/d

20589

9413

30

30816

1993832

1367

1260

1132

22360

10417

10

15165

895720

453

299

22361

11518

30

40919

2729068

1795

1289

Avg.

10449

23

28967

1872873

1205

949

1132

Click to enlarge

Conoco (NYSE:COP) is the only other operator with a completion in this field. This did not have a good result, as it lagged Whiting's.

Conoco's Twin Valley Field Result

Well

Lateral Ft.

Stages

Water Bbls.

Proppant Lbs.

30-Day IP Bo/d

90-Day IP Bo/d

180-Day IP Bo/d

20710

10668

30

54211

2856278

391

411

376

Click to enlarge

Conoco has another Twin Valley well in confidential status. This should give a better idea of production differences between these two operators. Conoco's results significantly lagged Whiting's wells and it is difficult to know the reason. More than likely, Conoco's frac did not connect the induced fracs with the natural fractures.

This story is not just about Twin Valley Field, but also Westberg. This field has been as productive as Twin Valley for Whiting with respect to crude over the first full day of production. The table below lists its most recent Westberg completions.

Well

Lateral Ft.

IP Oil

IP Mcf

22386

12979

4456

8524

22387

10932

4460

5528

22388

9977

4956

5103

Click to enlarge

The above wells have just come off confidential status so I do not have its current well design. As a general rule, I don't like to use 24-Hour IP rates to provide data points as it can be manipulated. Differing choke sizes can skew results, but Whiting generally uses around a 48/64 choke. I would guess it used roughly the same on the Westberg wells. The table below provides the same IP rates for Whiting's earlier Twin Valley wells.

Well

Lateral Ft.

IP Oil

IP Mcf

20589

9413

4815

13163

22360

10417

1394

3521

22361

11518

4971

11450

Click to enlarge

The table above is comparable to its Westberg wells. All of which had solid oil production in the range of 4400 to 5000 Bo/d. The Westberg wells all had a lower GOR. The Twin Valley wells should deplete faster given its higher gas content. Wells that produce a higher percentage of natural gas usually have higher initial rates. This is because the natural gas helps to push liquids up and out of the well at a fast pace. Since the Westberg wells were able to produce equivalent oil 24-Hour IP rates with a lower percentage of gas, these wells should have higher cumulative oil production. This is very bullish for the Westberg wells, especially when you consider the two top Twin Valley wells modeled EURs well over 1500+ MBoe. All three Westberg wells were drilled from the same pad. Production began early in June. We only have the earliest of production data, and I will need about three months to see how these wells perform longer term. Whiting's Twin Valley wells are only 2 miles away, so I would assume these wells will produce in roughly the same manner.

Newfield (NYSE:NFX) was one of the first operators in Westberg to have excellent results. At the time, there was much said about Newfield's well design, but more recent results seem to point to better geology. Newfield had to scale back its work in the Bakken a couple of years ago. Its well costs were around $12.5 million for a short lateral. It in turn, made the Uinta its flagship, which hasn't worked out as well as hoped. Below are all of its results in Westberg Field. The best results are in bold.

Newfield's Westberg Field Well Results

Well

Lateral Ft.

Stages

Water Bbls.

Proppant Lbs.

30-Day IP Bo/d

90-Day IP Bo/d

180-Day IP Bo/d

16946

5259

625014

177

113

83

16985

5296

6

716777

368

329

271

16942

5559

5

12099

738308

287

179

116

17345

4375

8

9917

610539

686

554

417

17687

3709

811045

690

548

419

17566

3709

5

8958

491125

268

194

143

18263

3929

14

18699

738485

314

196

141

18626

3981

1700680

1001

673

477

17807

4088

1491885

564

411

315

17858

4180

1671000

495

316

223

17925

4122

17

25370

1732400

488

338

257

17919

3869

1984700

433

272

422

17918

4608

17

28000

1734200

544

347

243

20595

10003

38

62409

3573946

1096

633

463

18691

5293

26

38560

2228638

1348

1000

737

22181

4641

24

36681

1947416

758

546

397

23022

4207

20

36110

1671704

528

362

261

22778

9353

32

53225

3689360

462

422

339

22779

9562

32

55907

3455160

551

401

309

Click to enlarge

The above results show Newfield had much better short than long lateral production. In these wells, it focused on very short stages, and significant volumes of water and proppant per foot. To show how good this geology is, I have provided data on well 17345. This well was completed with 8 stages and just over 610000 pounds of sand. It has produced 256279 barrels of oil to date, and is still producing over 2600 barrels per month. Newfield had similar results from well 17687 on close to the same well design. It has had a lower cumulative production, but the well is still producing over 2000 barrels of oil/month. Both wells were roughly five miles east of Twin Valley Field. Newfield's best well was 18691. This well is four miles east of Twin Valley Field. It used significantly more water and proppant than the first two wells I mentioned. The results were also significantly better.

Newfield has increased its Westberg activity in 2013. 10000 of its 96000 acres are located in here. Newfield reports several improving variables in the Bakken. These are why it has increased its operated rig count to four. Increases in the realized price for WTI are important, but Bakken Light differentials are a focal point. Newfield receives 92% of the current WTI realized price for its Bakken crude. Well costs continue to decrease. Newfield's average well cost in the first quarter was $9.8 million, but it drilled and completed a well for $8.3 million. Upside to the Three Forks continues to improve. The high end for middle Bakken EURs are 950 MBoe, and 800 MBoe in the Three Forks. The middle Bakken resource split is 69% oil, 13% NGLs, and 18% natural gas. The Three Forks is a little better with 75% oil, 11% NGLs and 14% natural gas. All of these wells are being drilled from pads, and we are just starting to see how the Three Forks performs. Two pad sites have results but only one has enough meaningful data. It has its largest pad in Westberg Field on confidential status. Newfield's Darlene Federal pad was completed early this year in Westberg Field. Those results are below.

Well

Lateral Ft.

Stages

Water Bbls.

Proppant Lbs.

30-Day IP Bo/d

90-Day IP Bo/d

180-Day IP Bo/d

23275

9657

32

60917

3382660

543

432

23276

8862

32

47051

2106640

474

340

23277

9450

31

53593

3046280

601

426

Click to enlarge

Of the three wells above, two are middle Bakken. Well 23276 is an upper Three Forks well. Both middle Bakken wells outperformed the Three Forks, but both had longer laterals and used more water and proppant. Again, it has drilled significantly more wells targeting the middle Bakken than the Three Forks. By knowing the geology better, it is better equipped to better stimulate each stage. The Darlene Federal wells are not that great considering the 90-Day IP rate. These wells are about 2.5 miles to the southeast of Twin Valley. It could be this sweet spot decreases to the south, but I will have to get more data to back this assertion.

Conoco currently has nine wells in confidential status in the Westberg Field. This is important, as it had only completed six wells prior to 2013. The table below highlights those wells.

Well

Lateral Ft.

Stages

Water Bbls.

Proppant Lbs.

30-Day IP Bo/d

90-Day IP Bo/d

180-Day IP Bo/d

18177

8906

20221

2232500

715

555

459

18336

9799

35227

2264977

777

732

631

19102

8869

20

23747

2092498

622

630

555

19750

9155

20

28923

2137366

639

688

543

19690

8989

19

57370

2932394

447

505

434

20687TF

9925

10

24604

1317810

600

568

501

Click to enlarge

The best well in the above table is 18336. This was a very good result and it is only 2.5 miles due east of Twin Valley. Average volumes of water and proppant were used. Even so, this was a good result.

The first five wells on the above list are all middle Bakken. Conoco has produced good and consistent results. The last well targeted the upper Three Forks and performed above expectations. This well used half the water and proppant per foot of the middle Bakken wells, and still performed within the average. The well design is sub par, but the results are still good.

In summary, Whiting now has five wells in and around Twin Valley Field, located in its Tarpon Prospect. It is very difficult to know how much of these results are from a sweet spot or well design. The most important variable to focus on is Whiting produced these results so other operators should be able to produce similar results. Looking at initial numbers, this sweet spot could be at least 7 miles wide beginning at the western border of Twin Valley Field. In reality, this sweet spot could be bigger, which I will address in future articles. Currently, Whiting's middle Bakken wells in Twin Valley Field are the most exciting producers outside of Parshall Field. These wells are modeling good enough to possibly be a top ten cumulative producer, but it will take significant time to know for sure. I would also like to point out that the best producing well in the history of the Bakken is not in Parshall Field. The well was drilled and completed by Petro-Hunt in October of 2006 in Charlson Field of northeast McKenzie County. It has already produced 1,358,289 barrels of crude and 1978700 Mcf of gas. This well is about 12 miles to the northeast of Twin Valley Field. This does not mean these wells share the same geology, as we can see a significant change in just one mile of leasehold. It just shows that we should automatically believe that the best areas have already drilled, as natural fracturing can significantly improve well results. Keep watching this area, as Whiting has changed its completion style to cemented liners, plug and perf, longer stages, and 3 perforations per stage. It will be interesting to see how much improvement these wells have with better source rock stimulation and significantly more sand down hole.

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