The 3 Best Oil Fields In The Bakken And The Stocks That Are Capitalizing, Part 1

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 |  Includes: EOG, HES, MDU, OAS, STO
by: Michael Filloon

Three fields located in Mountrail County, have been the best producers in the Bakken/Three Forks. These three fields have seen the majority of company capital expenditures due to this very good production. Ross, Sanish and Parshall fields in Mountrail County not only have the best initial production numbers, but also the largest estimated ultimate recovery. This is why these fields are being developed at a faster rate than anywhere else in the Williston Basin.

What Brigham (BEXP) calls its Ross acreage (pdf) isn't in Ross Field but in Alger. Although Brigham has had some very nice locations in the Roughrider, Alger Field is by far its best. It has 35200 net acres (pdf) in its Ross development area. This area is dominated by Brigham with 52 total wells either completed or in process. This includes one salt water disposal well and 18 wells still in confidential status.

I have formulated a list of 14 Brigham wells. These wells all were completed after June first of 2010. After the well name, I listed days in production followed by the total barrels of oil produced. This information will be compared with other players in the field for the purpose of comparing Brigham's results to other oil producers in Alger Field. This will give a much better idea of longer term production rates for these Mountrail County wells:

  1. Roger Sorenson 8-5 1H: 264 days, 108084 barrels of oil
  2. Holm 9-4 1-H: 11 days, 13339 BO
  3. Arvid Anderson 14-11 1-H: 247 days, 126400 BO
  4. Sorenson 29-32 2-H: 152 days, 110556 BO
  5. Cvancara 20-17 1-H: 139 days, 99672 BO
  6. Clifford Bakke 26-35 1-H: 317 days, 233701 BO
  7. Domaskin 30-31 1-H: 314 days, 173481 BO
  8. Vachal 3-34 1-H: 110 days, 72824 BO
  9. Wright 4-33 1-H: 358 days, 131748 BO
  10. Esther Hynek 10-11 1-H: 126 days, 52869 BO
  11. Ross-Alger 6-7 1-H: 407 days, 185829 BO
  12. Hospital 31-36 1-H: 127 days, 43043 BO
  13. SCHA 33-34 1-H: 59 days, 35670 BO
  14. Brown 30-19 1-H: 119 days, 73102 BO

Brigham has some very important wells in Alger, and none are more important than the Barstad 23-14. This density drilling pilot already has a completion of its R. Barstad 23-14, and is in process of three middle Bakken and three Three Forks wells. This seems to be in a very good spot to test. Wells surrounding (pdf) Barstad 23-14 are:

  • Clifford Bakke 26-35: IP rate of 5061 Boe/d (4th highest reported)
  • Sorenson 29-32 1-H: IP rate of 5133 Boe/d (3rd highest reported)
  • Sorenson 29-32 2-H: IP rate of 5330 Boe/d (Highest reported)
  • Jack Cvancara 19-18: IP rate of 5035 Boe/d (5th highest reported)

These are some of the best wells in the Williston Basin, and a very good place to do the pilot. I have no doubt the middle Bakken wells will be good, but the Three Forks wells will help to give an idea of its viability in this play. Density drilling results will also give an idea of cost reductions with respect to drilling and pressure pumping time frames. Other Three Forks wells to be aware of are Brigham's Bures 20-29 and Holm 9-4 2-H.

EOG Resources (NYSE:EOG) is also a big player (pdf) in Alger Field. It has 25 well locations including one salt water disposal well. Four of these wells are still confidential. The days in production and cumulative oil production of EOG wells are:

  1. Ross 33-0434H: 121 days, 45399 BO
  2. Ross 22-07H: 231 days, 49692 BO
  3. Ross 31-0806H: 70 days, 36898 BO
  4. Ross 18-10H: 404 days, 56442 BO
  5. Ross 13-15H: 405 days, 61747 BO
  6. Ross 20-16H: 344 days, 50497 BO
  7. Ross 29-1716H: 174 days, 42879 BO
  8. Ross 27-2728H: 122 days, 46980 BO
  9. Ross 11-27H: 387 days, 58914 BO
  10. Ross 15-28H: 395 days, 92722 BO

Hess (NYSE:HES) discovered oil in North Dakota in 1951, and has a presence in Alger Field. It has 26 well locations. Nine wells are currently confidential. Hess' current wells with days in production and cumulative oil production are:

  1. EN-VACHAL-155-93-0532H-1: 17 days, 811 BO
  2. EN-REHAK-155-93-0718H-1: 331 days, 76043 BO
  3. EN-ABRAHAMSON-155-93-3019H-2: 143 days, 44634 BO
  4. EN-ABRAHAMSON-155-93-3019H-3: 200 days, 63324 BO
  5. EN-ABRAHAMSON-155-93-3019H-1: 307 days, 59698 BO

Oasis (NYSE:OAS) has acreage in Alger, connected to its Sanish play. It currently has a total of ten locations in this field. Wells in production from June of 2010 are:

  1. Oasis Meiers 5692-11-19H: 27 days, 2174 BO
  2. Merritt 5693 11-24H: 300 days, 158649 BO
  3. Evans 5693 42-27H: 294 days, 98724 BO

Fidelity Exploration (NYSE:MDU) has acreage in Alger Field. It is part of WBI Holdings, which is an indirect wholly owned subsidiary of Montana Dakota Utilities (MDU). Until a few years ago Fidelity was mainly a natural gas producer. As prices pulled back it began to acquire liquids plays. With its headquarters in Bismarck, North Dakota, it was able to locate very good acreage in the Williston Basin. It has a total of three locations in Alger Field, one well spud in 2008 and one still on the confidential list. In 258 days Anderson 11-13H has produced 62685 BO.

It is obvious that Brigham is working Alger Field the hardest and getting the best results. I have written a lot on the Bakken, and have used the 24-hour IP rate as a guide to estimated ultimate recovery. It is impossible to know production through the life of these wells. In all honesty these wells could dry up in ten years or produce for fifty. I have seen estimates from 35 to 40 years. The key to unconventional resource isn't how long, but how much. The majority of production in a horizontal oil well will be produced in the first six years or so. This time frame varies by estimate, but it seems an investment that produced over half of its revenue in six years is not that bad considering one well is estimated to produce an $8.7 million NPV (pdf).

By breaking down Alger Field, I hope to show whether Brigham's very high initial production numbers are better over the course of months. This is not a perfect way to show this, but these wells are in close proximity, and several competitors can be identified. I am aware that geology can change somewhat from one 1280 acre unit to another, but this should at least produce estimates.

Brigham's SCHA well produced 35670 BO in 59 days while EOG's Ross 31-0806H produced 36898 BO in 70 days. Brigham's well produced 604 BO/d while EOG's produced 527 BO/d. It seems these two wells were very close from a production standpoint.

In a second comparison Brigham, Hess and EOG all have wells with in this time frame:

  1. BEXP: Brown 30-19 1-H: 119 days, 73102 BO (614 BO/d)
  2. EOG: Ross 27-2728H: 122 days, 46980 BO (385 BO/d)
  3. HES: EN-ABRAHAMSON-155-93-3019H-2: 143 days, 44634 BO (312 BO/d)

The third comparison:

  1. BEXP: Clifford Bakke 26-35 1-H: 317 days, 233701 BO (737 BO/d)
  2. EOG: Ross 20-16H: 344 days, 50497 BO (146 BO/d)
  3. HES: EN-REHAK-155-93-0718H-1: 331 days, 76043 BO (229 BO/d)
  4. OAS: Merritt 5693 11-24H: 300 days, 158649 BO (528 BO/d)
  5. MDU: Anderson 11-13H: 258 days, 62685 BO (242 BO/d)

The Clifford Bakke is one of the best wells in the entire Williston Basin, so this is no surprise. Since June of 2010, Brigham has seven wells with total oil production of 100000 barrels of oil or greater. All the oil producers on this list other than Brigham had a well over the same time frame produce over 100000 barrels of oil. That said, Brigham's high IP (initial production) rates seem to translate to significantly better oil production in periods of 100 days or greater. This is the first part of a three part series, and Alger Field was the focus of part one. My next article will focus on Sanish Field, with the third on Parshall Field. My hope is to get an idea of operators in certain fields, compare the results to get an idea of the cause of higher or lower IP rates in the short and long term.

Disclosure: I am long BEXP..

Continue to Part 2 >>