Fracturing the Bakken Triples Oil Reserves

With the BP gulf floor oil leak making the news – all bad even if they get it stopped, some good news is worthwhile.  Especially when the Obama tribe has frozen the major U.S. controlled North American resources of oil development for political appeasement to ‘do something.”  Meanwhile the Bakken formation in the north of the U.S. and southern Canada is growing production and growing in importance.  Crescent Point Energy of Canada has tested their Bakken wells with fracturing and water floods tripling the recovery making the estimate move up to recovering 30% of the oil in place.

It’s worthy news.  This writer hasn’t addressed the BP gulf floor leak – you’ve noticed, and maybe won’t at all.  It’s simply a media frenzy and political positioning structure while the people and environment take the hit.  Blaming and leveling responsibility takes precedence over imparting resources, something the big oil industry has to do alone while coping with the public relations cost of stupid media and useless political power.  Enough for now – but that’s an idea of why the post hasn’t been written.

Scott Saxberg, chief executive of Crescent Point Energy Corp. told the company’s annual general meeting the application of water flooding, along with infill drilling, could allow the company to more than double reserves within five years.

Water Flooding Oil Reservior – A Simple Example. Click image for the largest view.

In an interview, Saxberg said two years of tests at an initial pilot project in the Bakken – and more recent results from a second test – show that injecting water into formations being tapped by nearby horizontal wells with multiple fracture stimulations can help boost recovery from about 10 per cent to 30 per cent of oil in place.

For Crescent that would mean, “These mainly untapped resource pools provide Crescent Point with over 5,000 drilling locations and the potential to add over 500 million barrels of reserves, which could potentially double our current net asset value,” Saxberg said.

Saxberg explains, “We’ve seen very strong results. What it’s done in the pilot over the past two years is give us flat production. Without it, it’s 10 per cent, and with infill drilling you might get to 20 per cent. And then with water flood it’s 30 per cent. That’s huge.”

It’s because normally, after an initial “flush” of production in the first year, Bakken oil output drops off by about 70 per cent.

But Analyst Kyle Preston of Canaccord Adams cautioned that Crescent Point’s water flood strategy is promising, but not necessarily proven in all areas of the Bakken saying, “This water flood technology is not really new. What’s new here is applying the water flood to a tight rock reservoir which, to my understanding, hasn’t been done very successfully in the past.”  Preston points out PetroBakken, the second-largest player in the Bakken, doesn’t believe in water flooding.

Here’s a look at how Canada treats new resource development.   Trent Stangl, Crescent Point’s vice-president of investor relations, explained the company’s strategy is to let a central well produce for about a year to take advantage of Saskatchewan’s royalty holiday on new horizontal wells before converting it into an injector well. Then forcing water into the well builds pressure underground to push more oil out of surrounding wells, a technique commonly used in conventional oil fields.

Saxberg adds, the company is also experimenting with cemented liners on the horizontal part of the wells instead of steel pipe, allowing adjustments in the number of fractures as the well ages. He added the company is pleased to hear about the Alberta government’s new royalty incentive plans, including lower royalties for deep wells and horizontal wells, but he has no immediate plans to spend money in Alberta.

We’ll see how long that lasts in Alberta.  One nation’s dumb move can be another’s windfall.  As the U.S. administration plays media politics and undermines the national economy the neighbors, bless ‘em, can make good use of the capital.  And why not?  Our Canadian neighbors can use the capital, jobs and economic growth as well or better than anyone else.

The only concern then is, can the Canadian effort stay profitable at lower oil prices?  With the Athabasca oil sands under political assault the Alberta and Saskatchewan provinces need a fall back.  The irresponsible and capricious political neighbor brings risks, as the U.S. economic recovery isn’t driving lots of oil consumption.

Crescent Point plans four more pilot projects throughout the Bakken field over the next year.  With U.S. offshore drilling at a standstill, the capital going inert, worker layoffs imminent, and a sure increase impact on the world price of oil, the BP leak looks to grow far beyond a single company’s disaster and ecological calamity.

Irresponsible and capricious political conduct might be media savy – but the impact will be long and costly for consumers the world over.  But hey, only about 75% of American’s are catching on – throwing in with BP to get the oil escaping contained, stopped and the ecology and economy protected, sustained and supported could have been the job.  But leftism doesn’t even think to cooperate with business. Leftism needs commercial disasters to participate in the economy.  Commercial disaster gone far enough is an ‘opportunity’ to bail something out and take over making the capital, jobs and eventually, the management their own.

The Bakken oil field and the Canadian firms leading the technology are refreshing in the current U.S. situation.  Thanks neighbors, we wish you well.  Thanks to the Calgary Herald for kicking up the story. Americans need a little good oil news about now.


Here is the original post: New Energy and Fuel

Comments are closed.