Increasing Production Without the Drill

By The Bakken Magazine Staff | June 24, 2013

Increasing oil and gas production isn’t just about drilling more holes. Kodiak Oil & Gas Corp. recently added 5,700 barrels of oil per day to its net production totals without drilling a single well. The exploration and production firm purchased 42,000 net acres from Liberty Resources, a Denver-based oil and gas company, of which 90 percent of the purchased acres are held by production. Lynn Peterson, chairman and CEO, said the $660 million purchase will provide the company with a longer runway of sustainable growth. 

To fund the purchase, Peterson said KOG maxed out its revolving credit facility of $650 million and worked with its current banking syndicate along with other organizations to fund the extra $10 million needed for the transaction. The purchase increased KOG’s Williston Basin acres to 196,000. 

Texas-based research and production Halcon Resources Corp. has also improved its production numbers, not by purchasing new acreage, but by tweaking its production methods.  In the Fort Berthold, N.D., area, the company reports it has transitioned to batch pad drilling along with several modifications to completion protocols. The combination of the plug and perf completion technique that isolates portions of the well bore with ceramic plugs for discrete fracture stimulations in individual well bore sections, and the use of ceramic proppant material in place of sand-based proppant used to prop open the fractured shale rock following stimulation, have played a major role in production hikes for the company. And, Halcon has also increased the amount of proppant used per lateral foot along with the practice of simultaneous fractures known as zipper fracks, a process that helps to stimulate fractures in multiple wells.

The modified techniques have created a 38 percent improvement in initial production (IP) rates versus all Bakken wells drilled and completed by the company in the first quarter of this year. The most recent well completed by the company has helped to demonstrate that production increases in the Bakken aren't just about drilling more. For a well in the Fort Berthold area, the company reported an IP rate of 3,060 bopd (90 percent oil), the highest IP rate of any company-owned well in the Bakken formation to date, Halcon said.