| PetroBakken: Advanced Drilling |
| Featured Spotlights | |||
| Written by Adam Swift | |||
| Wednesday, 31 March 2010 | |||
 This Calgary-based light oil producer uses the latest technology to get the most oil out of a large Southeastern Saskatchewan region.
The Bakken Formation is a widespread, prolific source rock for oil covering parts of Montana, North Dakota, and Saskatchewan. PetroBakken combines significant, high growth, long life Bakken reserves and production with existing conventional light oil assets. Although technically a new company, it exists on the strength of the relationships and advances made by Petrobank and Tristar. The company has a strong position in Bakken, and is also helped by its low operation costs, according to Gregg Smith, president and COO.  Gregg Smith, president and COO Unlocking the potential The Bakken formation is found in the Williston Basin, underlying much of North Dakota, eastern Montana, and extending up into Southeastern Saskatchewan. Unlike the conventional Mississippian oil resources in this area of Saskatchewan, which accumulate in distinct reservoirs, the Bakken is an extensive regional resource play with the oil contained mostly in siltstones and thin sandstone reservoirs with low porosity and permeability. The Mississippian-aged Bakken formation, found between two tight horizons, is capable of high production rates and yields sweet, light oil and liquids-rich gas. The resource is significant with approximately 4.5 million barrels of original oil-in-place per section of land in the greater play area. Advances in horizontal well techniques were the key to unlocking the potential in the Bakken, particularly the application of new horizontal fracturing and completion technologies. The drilling of long horizontal wells allows maximum exposure to the reservoir, and new completion techniques allow fracturing of the siltstone along the extent of the well bore. Until the introduction and validation of those technologies, the Bakken was generally not considered economically viable. The Bakken play is relatively new in Canada, but has been successful in the US portion of the basin where, since 2000, drilling activity has increased dramatically and geologists with the US Geological Survey have a mean estimate of 413 billion barrels of original oil-in-place in the Bakken. In Canada, Bakken activity has been more limited, starting only in 2004. Different players in Canada are using slightly different drilling and completion techniques, which have yielded widely different results. However, PetroBakken’s technology has greatly assisted its position in the Bakken. It is the premier Bakken player in Canada with greater production coming from the area than any other material producer. The company’s technical team is leveraging its extensive land base and regional expertise and building a significant inventory of drilling locations in existing and evolving new core areas. According to Smith, most of the oil fields in the region have been discovered, but the advances in technology open up hard access areas. He said this creates a huge potential for the area. Areas of new growth Although the Bakken is the company’s main focus, PetroBakken continues to expand its exploration prospect base in areas where it has internal technical strengths and a strong land position. The company’s large undeveloped land position provides significant opportunities for growth. Exploration in Northwest Alberta has been part of Petrobank’s portfolio for several years due to its high impact potential for both light sweet oil and natural gas in stacked horizons. PetroBakken’s extensive undeveloped land position also includes non-expiring fee-title lands in Saskatchewan and Manitoba. These lands allow the company to monitor industry results and generate a significant amount of royalty income in Southeast Saskatchewan and Manitoba. Fee-title lands provided the platform for growth of its Bakken light oil play where it significantly expanded its presence through land sales. The company is also strongly positioned in the complementary conventional oil plays in the Midale, Frobisher, Alida, and Tilston formations of Southeast Saskatchewan. Production of approximately 10,000 barrels of oil equivalent per day (boepd) from these reservoirs provides a stable platform of low decline production and strong cash flows while offering future growth through infill drilling. A typical conventional Southeast Saskatchewan well has initial production rates in the range of 75 to 200 boepd. In addition to these low risk development opportunities, PetroBakken has 510,000 net undeveloped acres of land providing the opportunity for seismically driven step-out and exploration drilling. Additional investments in natural gasAdditional long-term growth will come from PetroBakken’s large land position in the Montney and Horn River natural gas resource plays located in Northeast British Columbia. The company has 17 sections of land in the Monias area with Montney potential of upwards of 30 to 50 billion cubic feet (bcf) of original gas in place (OGIP) per section, providing a total resource potential of 510 to 850 bcf of OGIP with recoveries expected to range between 25% and 35%. In addition, the company will have a further 97 sections north of Fort Nelson in the Horn River Basin. Various industry sources estimate that the prospective zones within the Horn River Basin may contain between 30 and 300 bcf of OGIP per section. PetroBakken’s technical team has successfully drilled over 450 horizontal wells with multi-stage fracture stimulations, more than any other operator in the Western Canadian sedimentary basin. This experience positions PetroBakken to be a leader in the development of these massive unconventional resource plays, according to Smith. |
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