High-frack intensity, multilateral drilling could help Bakken

By Patrick C. Miller | May 18, 2016

Calgary-based Packers Plus Energy Services Inc. recently closed its facility in Estevan, but company CEO Dan Themig is optimistic that technological developments on the horizon will change the economics of oil and gas production in the Williston Basin of western North Dakota

“North Dakota is a long-term basin with lots of reserves,” said Themig, who’s also Packers Plus co-founder and chief technology officer. “Although it’s rather painful there right now, we think that in the long term the Williston Basin has a great future. There’s still a lot of running room in the Bakken.”

Packers Plus last month announced that it successfully completed multiple wells in North Dakota’s Bakken formation using its advanced high-frack intensity systems. Themig believes that this technology—in combination with multilateral wells and zonal isolations—have the potential to significantly change the economics for Bakken producers.

The 50-stage wells are the first step in the process. Themig said the second step will be wells with 60 to 70 stages—uninterrupted with no intervention. The third level will go to 100-stage jobs with two- to three-mile laterals.

“One of the things you’re starting to see from our company and is economic high-stage count and economic high-frack intensity,” Themig said. “We don’t think it’s plug and perf. We believe the open hole has some distinct advantages in this play. We have the curves to prove it in almost every basin.”

Themig is so confident that he predicts there will eventually be a sustained level of drilling in the Williston Basin that’s less dependent on the oil price structure.

“We think there are other technologies people should be using and will be using in North Dakota,” he explained. “I have some studies in the Williston Basin with four or five years of data that show just by getting effective isolation, you can change the ultimate recoveries in a field by roughly 50 percent, and that alone changes the economics of the Bakken.”

Although the price of oil will continue to play a role in the level of oil and gas activity in the Willison Basin, technological innovation—which Themig said has driven the industry for the past 10 years—will have a significant impact. He said the company’s technology would provide immediate benefits in the core of the Bakken and benefit wells in the play’s second-tier areas at $40 to $45 a barrel.

“In the third-tier areas of the Bakken, we think we can deliver economics at $60 or $65 oil, which is a realistic target probably in the next 12 to 24 months,” Themig said. “But without the technology, I don’t see a huge uptake in drilling activity using the methodologies people are trying right now, which are both slow and costly.”

Themig referenced an article published last March in the Houston Chronicle in which David Lawler, chief executive of BP's U.S. lower 48 onshore business, was quoted as saying that drilling multilateral wells in Colorado and New Mexico are providing the company with new opportunities in U.S. shale plays. The process involves drilling one vertical section of a well followed by mutliple laterals out of the sinlge vertical well bore. 

Themig told The Bakken that Packers Plus has completed more multilateral wells than anyone in the industry.

“We just finished a multilateral project in Oklahoma, in addition to the thousand wells we’ve done that a lot of people don’t know about using multilateral completion techniques,” he said.

Packers Plus will work on another 50 wells in Oklahoma this year, according to Themig, who said the company expects to remains busy, despite the current low-oil-price environment. Progress in the Bakken has been slower because of operator reluctance to try new technology and to switch to newer, less costly drilling and completion equipment.

He noted that multilateral wells are not only more economical for drilling and well construction, but also for production, facilities and pumps, enabling operators to continue to share economies of scale throughout the entire producing life of the well.

“It’s very exciting; it’s going to be one of the key drivers,” Themig said. “It’s a real step-change to the industry when they look at what we’re doing. The true value of technology isn’t in the things that everybody knows. It’s in the things that people are working on that not a lot know about.”


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