The Bakken gets bigger - likely a LOT bigger

Oil Voice ^ | June 13, 2014 | Keith Schaefer

[george76]

Crescent Point’s Torquay Discovery Reignites Southeast Saskatchewan.

Just when you thought The Bakken couldn’t get any better—it does.

Oil producers are now “cracking the code” on the Torquay, or Three Forks formation below the Bakken, and coming up with incredible economics—these wells are paying back in only seven months.

This news has completely re-invigorated the Canadian side of the Bakken. And on the US side, the Three Forks is causing industry to leap-frog estimates of the amount of recoverable oil available–by about 57%!

It’s hard to imagine that the #1 oil play in all of North America could have such a huge increase in size—usually this happens in increments. This map from the Province of Manitoba shows how much potential theTorquay/Three Forks has—it ranges from 1.5 – 7 x as thick as the Bakken!

[ckilmer]

I think that continental started talking about their great results in the three forks strata only last fall sometime. continental is by reputation the most forward advanced company in the basin.
Therefor its reasonable to assess that foreword looking projections for production number increases for the baaken don’t include the three forks formation.

Since the three forks formation looks like its bigger than the bakken—and drilling is still in more of the exploratory phase—according to the article

—then high production rate growth in the bakken/three forks formation after 2016 becomes much more possible.

This may be as big a story over the next 12 months as the Permian.

We’ll see.

More data points please.

[thackney]

Williston Three Forks/Sanish interval tapped
http://www.ogj.com/articles/2008/07/williston-three-forks-sanish-interval-tapped.html

07/10/2008 Therefor its reasonable to assess that foreword looking projections for production number increases for the baaken don’t include the three forks formation.

Your assumption is not correct.

Bakken-Three Forks has been combined in discussions for years now. Here is a presentation by the North Dakota Industrial Commission, Department of Mineral Resources, Oil and Gas Division. They continue to lump these two together.

Since the three forks formation looks like its bigger than the bakken

Can you explain where you see that?

[thackney]

Assessment of Undiscovered Oil Resources in the Bakken and Three Forks Formations, Williston Basin Province, Montana, North Dakota, and South Dakota, 2013
http://pubs.usgs.gov/fs/2013/3013/fs2013-3013.pdf

[ckilmer]

Williston Three Forks/Sanish interval tapped http://www.ogj.com/articles/2008/07/williston-three-forks-sanish-interval-tapped.html

07/10/2008 Therefor its reasonable to assess that foreword looking projections for production number increases for the baaken don’t include the three forks formation.

Your assumption is not correct.

...................

That article is dated 2008. They only first tapped into the top layer of the three forks formation. They had no idea what was down there. The answer to your questions is on the second page of the article. The EIA has only included the top layer of the three forks formation is their estimates. Not the bottom layers which continental started talking about last fall. Here's the relevant quotes from the article.

Last year, the US Geological Service (USGC) updated its assessment to include the upper part of the Torquay, about 50 feet in thickness. For the two formations, the US Geological Service USGS estimates mean recoverable oil resources of 7.38 billion barrels. Estimates for the Torquay account for 3.7 billion bbl.

These estimates seem very conservative to Continental Resources; the largest acreage holder in the Bakken is more optimistic about the total amount of oil that could ultimately be recovered.

In its own assessment, Continental believes that including the deeper parts of the Three Forks increases the total amount of oil originally in place (OOIP) from 577 billion barrels of oil to 903 billion, and the amount that is technically recoverable from 20 billion barrels to as much as 32 billion, 36 billion or even 45 billion.



Only the upper layer (TF1) of the Torquay has been de-risked leaving the remaining 3 layers up for exploration. Continental has a pretty good reason to be optimistic. The company got impressive IP rates from drilling into thelower layers of the Torquay/Three Forks formation in McKenzie Country, North Dakota.

[thackney]

What has been known about the Three Forks, has been included in the assessment.

They have learned more since then and will continue to learn more.

But to say it was not included is not correct.

[ckilmer]

What has been known about the Three Forks, has been included in the assessment.

They have learned more since then and will continue to learn more.

But to say it was not included is not correct.
.............

Maybe the article is wrong. All I’m doing is repeating what the article says. Here,I’ll try again.

The Bakken formation is actually three layers of rock—Upper, Middle and Lower–and is situated above theTorquay/Three Forks. The underlying Torquay actually has four layers of tight rock identified as TF1 (upper layer), TF2, TF3 and TF4 (deepest layer).

Last year, the US Geological Service (USGC) updated its assessment to include the upper part of the Torquay, about 50 feet in thickness. For the two formations, the US Geological Service USGS estimates mean recoverable oil resources of 7.38 billion barrels. Estimates for the Torquay account for 3.7 billion bbl.

These estimates seem very conservative to Continental Resources; the largest acreage holder in the Bakken is more optimistic about the total amount of oil that could ultimately be recovered.

In its own assessment, Continental believes that including the deeper parts of the Three Forks increases the total amount of oil originally in place (OOIP) from 577 billion barrels of oil to 903 billion, and the amount that is technically recoverable from 20 billion barrels to as much as 32 billion, 36 billion or even 45 billion.

Only the upper layer (TF1) of the Torquay has been de-risked leaving the remaining 3 layers up for exploration. Continental has a pretty good reason to be optimistic. The company got impressive IP rates from drilling into thelower layers of the Torquay/Three Forks formation in McKenzie Country, North Dakota.
http://www.oilvoice.com/n/The_Bakken_gets_bigger_likely_a_LOT_bigger/bbfad5f6eac3.aspx?ovindex=2#gsc.tab=0

[thackney]

Therefor its reasonable to assess that foreword looking projections for production number increases for the baaken don’t include the three forks formation.

- - - - - -

Drilling and production in the Three Forks has been going on for several years. I don’t find you assumption reasonable at all.

[ckilmer]

We only started hearing about the lower three layers of the three forks formation from continental last fall. I think further some intimations of the implications of continentals exploratory wells into the lower three layers of the three forks formations were included in two separate reports: one by credit suisse and the other by...maybe morgan stanley or goldman sachs that came out a few months later.

These reports caused the first wave or revisions upward by 100k annually for the bakken/three forks production after then end of 2015 for the period 2016-2020. (which were posted and we talked about a couple weeks ago.)

[ckilmer]

Therefor its reasonable to assess that foreword looking projections for production number increases for the baaken don’t include the three forks formation.

- - - - - -

Drilling and production in the Three Forks has been going on for several years. I don’t find you assumption reasonable at all.
...............
Well, yes I do over state the point. But it looks like the drilling has all been in the upper layer of the three forks formation and not in the lower three layers of the three forks formation—which caused the shift upwards of estimates in the last 10 months or so.

[thackney]

Yes, the assessment will grow/shrink as they learn more. And they will likely lag 2~3 years in published public assessment to knowledge available.

Just like has always happened.

Some go up, some go down.

[Smokin' Joe]

The layers in the Three Forks are commonly denoted as 1st bench, 2nd bench, etc., at least locally.

Back in the bad old days of working vertical wells I noted shows in the first bench of the Three Forks almost routinely, but like the Middle Bakken, either testing the formation or the tight nature of the formation did not permit production from a vertical wellbore.

With horizontal drilling, you can open up miles (literally) of wellbore in a relatively tight or thin formation and render it productive, especially with a good frac.

We also noted shows of oil and gas in the Second bench in some places, and more rarely the third bench (roughly 100 feet below the base of the Lower Bakken Shale).

I doubt the Fourth bench will do much in most areas, but it isn't my job to bet against possible production.

The Bakken has changed the way people look at possibilities in the oil patch.

In terms of overall impact on reserves, I would say offhand that in northern Dunn County, McKenzie, Southeastern Williams County, and in Western Mountrail County, the second bench will likely produce best, but not as consistently as the first bench (other hotspots are definitely possible).

[thackney]

We only started hearing about the lower three layers of the three forks formation from continental last fall.

That would depend upon your source of information.

THREE FORKS FORMATION LOG TO CORE CORRELATION
https://www.dmr.nd.gov/ndgs/documents/Publication_List/pdf/geoinv/GI_75.pdf
2009

[Smokin' Joe]

The Bakken formation is actually three layers of rock—Upper, Middle and Lower–and is situated above theTorquay/Three Forks.

Also accurate. The Upper Bakken is an organic rich shale.

The Middle Bakken is a hodgepodge of interbedded/interlaminated dolomite, sandstone, siltstone, and fragmental limestone with an argillaceous component, which varies by locale.

The Lower Bakken is another organic rich shale.

Below that, you have the upper bench of the Three Forks.

(In some locales there is a 2-8 foot layer in between referred to as the Pronghorn, but that is not as extensive, and I only mention it because it is likely you will run across a reference to it somewhere. That is likely to produce as well, where developed.)

The Bakken Shales (upper and lower) are the source rock for the system, the tight reservoirs in the Middle Bakken and the benches of the Three Forks are the targets.

[ckilmer]

Yes, the assessment will grow/shrink as they learn more. And they will likely lag 2~3 years in published public assessment to knowledge available.
..............
So that makes two big stories: The Permian and Three Forks lower layers— whose end is as yet unknown—which if positive— will be publicly acknowledged by the EIA in the next year or three.

It may be 1-2 years for permian results to make their way into EIA estimates. And 2-3 years for Three Forks lower layers to make their way into EIA estimates.

Why will revised (upward/downward) EIA estimates for the Permian come out before the lower layers of the Three Forks formation.

Now remember Core Labs. They’re doing less work in the Bakken and more work in the Permian basin. I think you can roughly say that —when they say they’re a “reservoir optimization company” — the meaning of that word “optimize” is roughly congruent to the corporate speak word “derisking”.

The permian basin is currently being derisked/optimized—which means they are closer to high volume production—and the true dimensions of their commercially accessible oil will become known in the next 12 months or so..

The lower three layers of the three forks formation are not yet derisked/optimized — nor if you believe the implications of core labs numbers—have they yet been seriously engaged.

[bestintxas]

“I think that continental started talking about their great results in the three forks strata only last fall sometime. continental is by reputation the most forward advanced company in the basin.
Therefor its reasonable to assess that foreword looking projections for production number increases for the baaken don’t include the three forks formation.

Since the three forks formation looks like its bigger than the bakken—and drilling is still in more of the exploratory phase—according to the article

—then high production rate growth in the bakken/three forks formation after 2016 becomes much more possible.

This may be as big a story over the next 12 months as the Permian.

We’ll see.

More data points please.”

Not true, as Continental years ago was already seeing the Three Forks. See http://www.nd.gov/ndic/ogrp/info/g-018-039-df.pdf

As far as forward-thinking companies go, Continental has a lot of acreage spread over many different areas and has been testing and publishing different testings like in link.

EOG is the company which found the most prolific field which excited everyone in the Bakken and has the most innovations in its development in the Bakken. It just chooses not to publish its results and focuses on the Eagleford rather than the Bakken.

[bestintxas]

“The Bakken formation is actually three layers of rock—Upper, Middle and Lower–and is situated above theTorquay/Three Forks.
Also accurate. The Upper Bakken is an organic rich shale.

The Middle Bakken is a hodgepodge of interbedded/interlaminated dolomite, sandstone, siltstone, and fragmental limestone with an argillaceous component, which varies by locale.

The Lower Bakken is another organic rich shale.

Below that, you have the upper bench of the Three Forks.

(In some locales there is a 2-8 foot layer in between referred to as the Pronghorn, but that is not as extensive, and I only mention it because it is likely you will run across a reference to it somewhere. That is likely to produce as well, where developed.)

The Bakken Shales (upper and lower) are the source rock for the system, the tight reservoirs in the Middle Bakken and the benches of the Three Forks are the targets. “

The Pronghorn is a particularly attractive interval as proven by Whiting in the areas it exists, and exceeds most of the Three Forks in productivity per well. See Bakken Update: The Pronghorn Sand Could Be The Best Pay Zone In The Williston Basin http://seekingalpha.com/article/607291-bakken-update-the-pronghorn-sand-could-be-the-best-pay-zone-in-the-williston-basin

[bestintxas]

“Bakken petroleum system is noted for low primary recovery -rates of 3~5% of the original oil in place

How much additional oil can be extracted using secondary and tertiary techniques???

Technology will make the difference. There is a lot of oil left in the ground, but it ain’t going to be easy (or cheap) to get the rest out, and you will never come close to getting it all.”

Secondary and Tertiary have been tested, albeit gingerly, already. The Canadian Bakken has high enough permeability that waterflooding has been successful and gas injection has been tested with varying results.

South in US, Bakken has a lot less permeability and secondary/tertiary is a lot more difficult. Some testing has been done by EOG and others but results are not good.

Like other tite formations elsewhere, it is simply too difficult to inject fluids and have those fluids not follow fracture planes(natural or induced) rather than to sweep oil out of the rock itself. Best chance for recovery improvements lie with the drill bit and innovative ways to increasingly fracture the rock so as to increase effective permeability.

[Smokin' Joe]

I have seen it here and there, and it is great, but as a practical matter, steering a well in the Pronghorn and staying out of the Lower Bakken Shale is not the easiest of chores. Get into the Lower Shale, and you either sidetrack the well or risk getting stuck.

It is easier to run high in the first bench of the Three Forks.

It'll frac...

[ckilmer]

Not true, as Continental years ago was already seeing the Three Forks. See http://www.nd.gov/ndic/ogrp/info/g-018-039-df.pdf
..............
read the article. it dates from 2008-9 the work was all in the top layer of three forks— where there is currently drilling.

What has caused the added interest is that continental last fall got successful results from the bottom three layers of three forks.

[ckilmer]

This is a clearer explanation of what its about.
................
Testing new zones

Rick Bott, president and chief operating officer of Continental, said the company made strides in improving its understanding of the deeper benches of the Three Forks in 2013.

“We proved some big things,” Bott said in a February investor presentation. “We’ve proved there is good quality rock, we’ve proved that there’s oil in there, (and) we’ve proved that we can produce at commercial rates.”

The Bakken-Three Forks play, which stretches across portions of North Dakota and Montana, is stacked with different geologic layers, akin to a multilayer cake. The Upper, Middle, and Lower Bakken are closest to the surface, with the bulk of production coming from the Middle Bakken. Beneath the Lower Bakken are the first, second, third, and fourth benches of the Three Forks formation.

Commercial Three Forks production now comes from the first bench, but Continental in 2013 began pilot projects testing productivity of the lower three benches with encouraging results.

http://www.ogj.com/articles/uogr/print/volume-2/issue-2/bakken-leader-continental-resources-drills-deeper-into-three-forks-formation.html