Thursday, July 26, 2012

Hess Improves Production And Technique In Completing Bakken Oil Wells

For those interested in some of the finer details of operations in producing oil from the Bakken Formation, horizontal drilling, completions, and hydraulic fracturing, the following article is interesting and valuable.  Here is a link to the original article:

The author, Mr. Filloon does his research and seems very knowledgeable about the oil and gas industry.  I'm quite certain he obtains his information from publicly available sources.  He provides his analysis as a service to the investment community.

<>2011 Hess Southern Williams County Results

Name Date Choke Stages Water Proppant 60Day IP 120Day IP
En-Weyrauch 154-93-1918H-3 10/11 30/64 N/A N/A N/A 488 369
En-Frandson 154-93-2116H-3 8/11 28/64 38 84203 3986800 939 780
En-Weyrauch 154-93-1918H-2 6/11 22/64 22 48161 1931448 501 367
En-Weyrauch 154-93-1918H-1 4/11 22/64 22 40421 1097939 504 435
En-Weyrauch 154-93-2932H-1 12/11 38/64 N/A N/A N/A 1101 825
En-Weyrauch A-154-93-2017H-1 11/11 42/64 38 61305 3995800 653 479
En-Weyrauch 154-93-3031H-2 12/11 34/64 38 71049 3991720 1003 787
En-Weyrauch 154-93-3031H-1 12/11 30/64 38 41472 1741722 1148 837
Hess Corporation (HES) is a very large and well-run oil producer. In 1957, it discovered oil in North Dakota and has become one of its biggest players. I had previously discussed Hess and its very conservative completion methods early in 2011. At this time, Hess was using 20 to 22 stage fracs with lower amounts of water and proppant. This was also consistent with Continental Resources, Inc.'s (CLR) well design, which I covered in this article.
The table to the top of this article shows a change from these lower number of stages to 38. This is consistent with Brigham (STO), which I covered in this article. Not only was this a big move, it has improved results significantly, and in some cases doubled old IP rates. One issue I had in researching Hess' results, was its lack of documentation with respect to well design. For those specific wells, I place N/A in the appropriate space.
In the second half of 2011, it used varying amounts of water and proppant. This variance has not always produced better results with increased water and proppant, which I found somewhat puzzling. Well orientation and lateral length are different for each well, sometimes by 1,000 feet. Another finding is Hess' move to a more moderate choke, which is consistent with Newfield Exploration Co.'s (NFX) well design, which I covered here. This has also been consistent with other Bakken operators.
In the table below, we see even more changes to design as Hess has used more than 100,000 barrels of water. It has also moved to above 3.2 million pounds of proppant. This move is consistent of Brigham, Kodiak Oil & Gas Corp (KOG) and Exxon Mobil Corporation (XOM).
<>2012 Hess Southern Williams County Results
Name Date Choke Stages Water Proppant IP Rate
En-Weyrauch C-154-93-2932H-2 3/12 22/64 38 34396 1995429 60Day=911
En-Madisyn 154-94-0607H-1 5/12 27/64 38 93122 3137554 41Day=892
En-Thompson Trust 154-94-1930H-1 4/12 36/64 N/A N/A N/A 54Day=1548
En-Weyrauch A154-93-2017H-2 1/12 33/64 N/A N/A N/A 60Day=801
Ca-Halvorson 154-95-0409H-1 5/12 34/64 38 101929 3203698 32Day=1610
In summary, Hess is moving forward at a quick pace to increase IP rates and EURs. It is not surprising as many operators are spending more per well in the hopes of increasing profits in the short and long term. The surprise isn't the change, but the amount of change. Hess' move has been much quicker than others in the Williston Basin, so it is my guess that Hess believes it is important enough to make a bigger move. These results could be different in other areas such as Mountrail or McKenzie counties, but this will take more research.
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 oil per day. Water volumes are measured in barrels. Proppant amounts are measured in pounds. N/A is used on any well without sufficient information. This is not a buy recommendation.

No comments:

Post a Comment