Bakken Update: Exxon's Completion Design And How It Relates To EURs

| About: Exxon Mobil (XOM)

There is much said about completion design and how it equates to EURs. Everyone's model is a little different, and given the recent changes, it is difficult to know what variable will influence this number the most. Since most companies tend to increase the number of stages, volumes of water and amount of proppant in concert, it is hard to know what is the most effective. Continental Resources, Inc. (NYSE:CLR) has made a big move in all three and has seen much better initial production results, which I covered in this article. Whiting Petroleum Corporation (NYSE:WLL) has increased the number of stages used, but has kept its water volumes and proppant usage at lower levels, which I had addressed in this article. EOG Resources, Inc. (NYSE:EOG) continues to use short laterals and is also starting a waterflood program in Parshall Field.

One company gets very little attention in the Williston Basin. Given its size and other projects the Bakken is not generally associated with Exxon Mobil Corporation (NYSE:XOM). When Exxon purchased XTO in late 2009, it was buying a predominantly natural gas producer. This purchase also provided for some very good acreage in Dunn and other counties. Working as XTO in the area, it also became the operator of acreage shared with Kodiak Oil & Gas Corp (NYSE:KOG). Kodiak's well design is much like Exxon's and may be where it learned much of its know-how, but that is just an assumption on my part.

Exxon's acreage in Heart Butte Field has recently seen some increased activity. It is located in north Dunn County, just south of Mandaree, North Dakota. Given the recent activity and good geology, I used this as an area to focus on Exxon's results. In the table below, I have listed 2011 well results.

2011 XTO Heart Butte Field Results

Name Date Choke Stages Water Proppant 60-Day IP 120-Day IP
FBIR 21X-10 12/11 20/64 24 62653 3227266 314 345
FBIR Darcie 34X-14 12/11 24/64 24 56949 3286788 239 157
FBIR Stephen 31X-19 8/11 24/64 24 58385 2851560 470 419
FBIR Bird 31X-19 8/11 24/64 24 61513 2659611 588 508
FBIR Smith 11X-10 10/11 18/64 30 65920 3244148 661 594
FBIR Baker 34X-25 7/11 32/64 18 51115 2521911 216 248
FBIR Walker 34X-25 7/11 24/64 18 53724 2545880 295 339
Click to enlarge

In the table above, there are some pretty good results. There were a few wells that Exxon had some difficulties with, which limited 30-day IP rates but were then brought back on line and have been producing quite well. The wells that have higher 120-day IP rates than 60-day are those wells and should be focused on from a longer time frame given those issues. Its best well not only had the largest number of stages at 30, but also the highest water volumes and the tightest choke. In the table below are its 2012 completions in the same field.

2012 XTO Heart Butte Field Results

Name Date Choke Stages Water Proppant 60-Day IP 120-Day IP
FBIR Yellowwolf 21X-10 1/12 20/64 24 58529 3271243 391 389
FBIR Walterpackswolf 31X-12 2/12 32/64 24 62414 3033093 405
FBIR Huntsmedicine 24X-8 4/12 20/64 24 64388 3306501 605
FBIR Guyblackhawk 24X-27 2/12 24/64 24 62007 3128171 739
Click to enlarge

Exxon is staying consistent with respect to its completion design, and has had very good success. Some of the numbers are skewed, given problems with production for the first month of the well, but later this is rectified in all cases in this field. At this point, Exxon continues to favor fewer number of stages and larger water volumes, which I think could be as important, if not more, as the number of stages itself.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.