In my most recent article covering an increasing number of stages being used in the Bakken/Three Forks, I tried to show Continental (NYSE:CLR) is currently converting completions to what looks to be a 30 stage method. I chose this company specifically, as it has been slower to adopt this higher number and has historically used 24 stages throughout 2010 and 2011. Covering Whiting (NYSE:WLL) seemed to be one of the logical companies to cover as it not only has a large inventory of wells in the Williston Basin, but it has one of the more developed fields.
The Sanish Field is not to be confused with what was called the Sanish sands and is now called the Pronghorn sands. Sanish, along with Parshall Field, were the first two major fields to be developed in North Dakota. It was once thought these two fields were the best, but since then we are finding there are several with much better production. It is difficult to know if the newer fields, like Poe, are better given the marked improvements in drilling and completion technologies. Results have also continued to improve based on producers getting comfortable with the geology as well. Since many of the variables are difficult to control or moreover impossible to measure, I am limited but can still show general improvement.
It was not that long ago that three areas were the focus in North Dakota. The first was Ross operated by Brigham (NYSE:STO). The second was EOG Resources (NYSE:EOG) in Parshall Field and Whiting in the Sanish. Whiting's results have been quite good, as seen in the table below.
|Name||Date||Choke||Stages||Water||Proppant||60-Day IP(Bo/d)||120-Day IP|
|Lilly Peterson 13-4TFH||9/11||40/64||30||26323||1815100||420||377|
|Lacey 12-10 TFH||8/11||40/64||25||23994||1574500||149||185|
The results above show why Whiting has been able to do such a good job of keeping well costs down. Proppant is very expensive and at 70 cents/barrel in North Dakota, water costs add up quickly. In Bakken Update: Increased Stages Have Shown Marked IP Rate Improvements Year Over Year, we noted Continental has been using around 60000 Bbls. of water and 3 million pounds of proppant per well. This is significantly more than Whiting has used consistently. One well I think deserves some attention is the Barlow 14-6XH. This well had by far the largest number of stages, water and proppant. It had a very poor showing considering the time and money spent on it. In the table below I will cover Whiting's Sanish Field results for 2012.
|Name||Date||Choke||Stages||Water||Proppant||IP Rate (Bo/d)|
|S-Bar 14-7XH||5/12||48/64||30||31207||2285400||15 Day= 587|
|S-Bar 14-7TFH||5/12||24/64||25||22143||1604360||8 Day= 450|
|Jones 34-4H||3/12||48/64||26||27286||2055720||78 Day= 619|
|Jorgensen11-27H||2/12||64/64||26||27187||1866840||120 Day= 267|
|Ramona TTT 12-25TFH||5/12||40/64||30||25816||1759440||6 Day= 211|
Although Continental has seen a very nice improvement in IP rates from increasing the number of stages, Whiting's results have not been as noticeable. The biggest reason for this is not increasing the amount of water and proppant in conjunction. Many of Whiting's 2012 Sanish Field results are still on confidential status, so we may not have a real good idea of these results for a few months. It would seem Whiting has to make a decision as to increasing well costs or EURs. Given the results of other oil and gas producers in the Williston Basin, Whiting may have to start spending to increase production at some point.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.