Denbury (DNR) has been working the Bakken/Three Forks quite hard over the past couple of years. Even though its main business is EOR, it is increasing production quickly through unconventional methods in North Dakota. Early last year, Denbury was using 15 stage laterals, and in my opinion were behind other operators with respect to completion design. Recently Denbury has seen a big improvement in initial production which should translate to higher EURs.
Much of Denbury's Bakken acreage was acquired, and was operated by Encore in 2011. This includes Siverston Field in McKenzie County. This area is one of the better locations in the Williston Basin, and has produced very good wells for Newfield (NFX), Kodiak (KOG) and XTO Energy (XOM). These three links provide access to each companies' well design. In the table below, I have covered Encore's results in Siverston Field. Later in the article I will also cover Denbury's results for 2012.
| Name | Date | Choke | Stages | Water | Proppant | 60Day IP | 120Day IP |
| Satter 44-34SWH | 4/11 | 24/64 | 23 | 37289 | 2941200 | 496 | 450 |
| Hoffmann 149-98-1-12-1H | 4/11 | 28/64 | 24 | 37218 | 2991800 | 491 | 399 |
| Satter 44-34NWH | 5/11 | 18/64 | 20 | 45993 | 2945305 | 499 | 432 |
| Johnson 31-6SWH | 5/11 | 18/64 | 24 | 49705 | 2391309 | 400 | 354 |
| Koeser 41-15SWH | 6/11 | 24/64 | 24 | 54792 | 2887940 | 321 | 325 |
| Lundin 11-15SEH | 7/11 | 25/64 | 20 | 58460 | 3068687 | 516 | 424 |
| Lee 34-31NWH | 7/11 | 20/64 | 24 | 49788 | 2887940 | 577 | 441 |
| Sorenson 34-32NWH | 8/11 | 20/64 | 19 | 56822 | 2959860 | 430 | 377 |
| Johnson 11-5SEH | 8/11 | 12/64 | 24 | 59426 | 3170200 | 236 | 296 |
Encore's results were good considering its completion design. It used average amounts of water and a significant amount of proppant, but still used less than 30 stages in all the wells above. This led me to believe there is significant improvement to be had with some changes to these variables. In 2012, Denbury has seen a marked improvement to IP rates in Siverston Field. Here is its well design in that area.
| Name | Date | Choke | Stages | Water | Proppant | IP Rates |
| Serrahan 41-6SWH | 1/12 | 24/64 | 26 | 130357 | 3136003 | 60Day=453 |
| Satter 24-35NEH | 1/12 | 18/64 | 26 | 102495 | 3044784 | 60Day=531 |
| Satter 24-35SEH | 1/12 | 22/64 | 24 | 126621 | 2870626 | 60Day=617 |
| Johnson 24-31NEH | 3/12 | 30/64 | 26 | 64356 | 3091198 | 60Day=482 |
| Lundin 11-13SEH | 4/12 | 20/64 | 26 | 128590 | 3033622 | 53Day=585 |
Only five Denbury operated Siverston wells completed in 2012 are off confidential status. Of those five, Denbury has slightly increased proppant and made a very large increase to volumes of water used. As far as I know these water volumes are higher than any other operator in the Bakken. What I find most interesting, is Denbury uses over 130000 Bbls. of water on a 26 stage frac while Whiting (WLL) will use just over 20000 on a 25 stage. These highly variable water volumes does raise questions as to how much water can be used as a bare minimum? Also, there are questions as to how much water should be used per stage on a two mile lateral.
In summary, Denbury is making progress with respect to its completion design in Siverston Field. This progress includes a very large increase in water volumes. It also uses a better than average amount of proppant per well with a moderate number of stages and tight choke. Denbury is moving slower in adding stages as it determines the proper amount of water to use per stage first. This is important as other companies like Kodiak and Exxon are doing the same while companies like Whiting are increasing stages ahead of water increases.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Additional disclosure: IP rates are measured in barrels of oilWater volumes are measured in barrelsProppant is measured in poundsThis is not a buy recommendation.
