I recently completed the article, Bakken Update: Brigham's 2012 Well Results. It focused on Brigham's (NYSE:STO) changes to completions. Brigham allows initial production with minimum choke restrictions. This produces better IP rates, with little effect on longer term production. There are other variables in its completion process that also aid in higher IP rates such as:
- Higher volumes of water
- Larger amounts of proppant
- More stages
- Higher maximum treatment rates
- Higher treatment pressure
The differences allow for greater stimulation with an increased ability to prop open fractures. Brigham has done a better job in its completions, and this has pushed its results.
Brigham's 4Q of 2011 results give a better idea of EURs, based on a larger sample of production compared to 2012 results. Here is a list of those 4Q results:
|Well Name||IP Rate Bo/d||90-day IP Rate Bo/d||Stages||Water Volume Bbls||Proppant lbs.||Choke||Treatment Rate Bbls/Min|
|ENDERUD 9-4 1-H||2879||820||39||79611||4101106||80/64||43.3|
|WILLIAM 25-36 #1-H||3082||620||39||85760||4002620||162/64||59|
|MARVIN 27-34 #1-H||2983||493||37||86084||4605669||166/64||43.5|
|HILLY 22-15 #1-H||3295||625||39||78576||3957380||96/64||43.1|
|TOPAZ 20-17 #1H||2575||525|
|BRODERSON 30-31 1H||1430||32||78889||3424820||58/64||43.8|
|ROSE 12-13 #1H||2943||648||36||74977||3781980||192/64||40.6|
|WILLISTON AIRPORT 2-11 1-H||2671||673||38||77073||3733560||192/64||40.3|
|FIELD 18-19 3H||2173||360||38||82993||3809749||192/64||39|
|HAWKEYE 16-21 #1-H||2708||567||32||56322||2429967||162/64||47.2|
|ERICKSON 8-17 2H||2003||392||33||73021||4012520||234/64||39.9|
|CHARLIE SORENSON 17-8 1-H||3742||837||38||78582||3857420||179/64||41.1|
|CHARLIE SORENSON 17-8 2H||3431||641||35||79124||3857420||128/64||43.7|
BURES 20-29 1H
|BURES 20-29 2H||2232||614||32||65867||3857420||179/64||56.9|
|BARSTAD 23-14 #1-H||1430||500||39||75517||3694459||58/64||40.3|
|BARSTAD 23-14 #2TFH||1454||36||77992||3776980||163/64||38.3|
|BROWN 30-19 #2H||2691||658||37||78129||3937040||163/64||40.2|
|ENNS 28-21 1-H||773||348||33||72770||3792460||166/64||41.8|
The 4Q of 2011 results are a much better indicator of current initial production rates. The recent 2012 results I reported, were not as consistent and more importantly it didn't report a large number of 90-day IP rates to use as a sample. 2012 completions have not been on line long enough for to achieve a proper result.
Brigham continues to use a large number of stages, proppant, and water. It also does not choke back production as it believes in not restricting production. It did however, complete a couple of wells with a choke that would restrict initial production more. Its Barstad wells seemed to only be slightly affected by using a 58/63 on the middle Bakken and 163/64 on the upper Three Forks. Both wells experienced a lower IP rate, which were almost identical to one another.
These results are interesting when compared to Kodiak's (NYSE:KOG) Koala wells. Given its success, I use Brigham to gauge success of other Bakken producers. Of Kodiak's Koala wells, five have been in production for at least 90 days:
1. KOALA 9-5-6-5H: 725 Bo/d
2. KOALA 9-5-6-12H3: 645 Bo/d
3. KOALA 3-2-11-14H: 845 Bo/d
4. KOALA 3-2-11-13H: 708 Bo/d
5. KOALA 2-25-36-16H3: 557 Bo/d
The 90-day IP rate average for the five wells above are 696 Bo/d. This is 67 barrels of oil per day more than Brigham's 4Q of 2011 completions. Not only did Kodiak have better 90-day IP rates, but was able to do this with an average of 27 stages/well, compared to 38 for Brigham. As a general rule, well production increases with additional stages. Kodiak was able to accomplish this using a 36/64 choke, which makes these initial production results even better. There are a few possible reasons for Kodiak's better production with less stages. This could be from proficiency in directional drilling. If the operator manages to stay on target, it will have contact with greater surface area of the pay zone. Kodiak is doing a better job stimulating each stage. Kodiak seems to have found the way to increase the number and depth of fractures. This is promoting increased production while maintaining the number of stages. I would guess Kodiak will increase its number of stages in the future and this will also increase production.
Disclosure: I am long KOG.
Additional disclosure: This is not a buy recommendation.