What Slickwater Means To the Bakken

There have been several Bakken buzzwords thus far in 2014, including: flaring, exports and rail. Thanks to undeniable individual well production increases (when compared to other wells using alternative completion designs), we can add the term slickwater to those that have characterized the Bakken this year.

To reveal why slickwater fracks have been championed by so many operators in the Bakken, we spoke with an operator, an energy services provider and a water-based engineering and infrastructure firm. Their collective understanding and dealings with slickwater frack designs can be summed up this way:

-Slickwater fracks can create a more complex fracture network

-Deploying a slickwater frack requires extra attention to water handling and logistics

-When performed correctly in the appropriate geologic setting, the production increases from slickwater fracks are undeniable, just look at production numbers from Whiting Petroleum, Oasis Petroleum, Triangle Petroleum, Liberty Resources and several other Bakken operators. (Lynn Helms has even reported an increase in water usage at the well for fracturing purposes).

To learn what Halcon Resources thinks about slickwater fracks, or, what AE2S Water Solutions believes needs to be done to handle the additional water, check out “The Slickwater Story

To understand how slickwater fracks work, the theory behind the method and how Sanjel Corp. has successfully used the method in the Williston Basin, read “The Secrets of Slickwater.

In addition to those two pieces on slickwater, we also covered the way water is used as a whole in North Dakota. Ever wonder how much water is available in the state, or, how much water is used per year on hydraulic fracturing efforts? Emily Aasand’s piece, “The State of Water,” has those answers and more.

Stories About Proving People Wrong

If there were a theme to this week’s newsletter, it would be about the continued ability of the Bakken to prove people wrong. NCS Energy Services reported that the Canadian-based company had recorded a 93-stage well in the Bakken using its amazing multistage frack sleeves, coiled-tubing and a unique bottom hole tool system. We covered thr news this week, along with a previous NCS Bakken record the company reported last year. A typical Bakken well will be completed with 25-35 fracture stages. Although many other energy service providers will surpass that mark, there has at times been a general consensus that a well completed in the 30-stage range is the best approach. The record by NCS is a clear example that constant innovation and record breaking is an everyday theme of the Bakken, and that what we believe to be true in the Bakken is always changing.

We’ll provide an in-depth look into the NCS record in a future print issue. A member of the team had already reached out to our team prior to this announcement regarding some significant achievements the company had reached in the Bakken. They weren’t lying apparently.

Although the story on a South Dakota Frack sand operation is far from complete, we also included a piece in this week’s newsletter on a company that is bucking the notion—based on a state report that said S.D. sand was not suitable as frack sand—that the Bakken can’t utilize frack sand from South Dakota. We talked to the company who has proposed the frack sand operation and the state geologist who spearheaded the sand report. You be the judge on how the story will end.

For all of the attention placed on Bakken oil production—more than 90 percent of new wells drilled in North Dakota are in the Bakken and Three Forks formations—Legacy Oil and Gas reminds us that the idea that the Bakken is the only play worth pursuing is wrong. The Calgary-based company has purchased an exploration and production company that had been operating in Bottineau County, N.D., targeting the Spearfish formation. Legacy purchased the assets of the company, in large part, to add to its own existing acreage in the Spearfish formation.

Next week we’ll discuss the stories in the July print issue, many of which were focused on the monthly theme of water. The stories include a look at North Dakota’s water supply, and, a term that will become a common term to anyone familiar with the Bakken: slickwater.

Bakken Stories To Know For The Fourth

Anyone reading this knows that tuning out the current happenings in the Bakken (or for me, even the word Bakken) is nearly impossible. Heading to the fourth of July holiday for those of us in the states, we’ll certainly try. But, when family members or others we encounter ask us about our jobs and the Bakken and we have no choice but to respond, these are the stories I believe we should all know and offer. Each story occurred within the past seven days.

Story 1: North Dakota, thanks to the Bakken, officially produces more than 1 million barrels of oil per day. To use a line I’ve heard Ron Ness, president of the North Dakota Petroleum Council, say to describe the state’s impressive production, “North Dakota produces more oil before the sun comes up than most countries in the world do.” The 1 million barrel per day mark is not something the state has let pass lightly. Last week at the 1 million barrel celebration in Tioga, N.D., the biggest names in the industry were there. The event included amazing food shipped from Louisiana, massive equipment pieces on display, aerial tours, bus tours and an airshow that almost made sick just watching. The acrobatic planes on display were as far from an amateur show as possible.

Story 2: Major exploration and production companies continue to invest in the future of the Bakken oil play. Following in the actions of Continental Resources a few years ago, Hess Corp. donated a significant amount of money to the University of North Dakota. The $5 million fund will be used to support the school’s College of Engineering & Mines’ Collaborative Energy Complex. The day after listening to Gov. Jack Dalrymple speak at the Tioga celebration, Emily Aasand and I were sitting behind him before he spoke at the UND-Hess press conference announcing the donation.

Story 3: Come October 1, the way North Dakota regulates flaring will drastically change. In a rare occurrence, the N.D. Department of Mineral Resources held a press conference this week to announce the changes. No matter what anyone believes to be the reason why the regulations have been put in place, the state will have the ability to inflict production curtailments on wells that do not capture roughly 76 percent of the flared gas produced along with oil. The magic number to achieve is basically 60 percent. If an operator is capturing less than 60 percent of the gas, the well will only be allowed to produce 200 barrels of oil per day. In May, Gov. Dalrymple said the state was getting serious about flaring. When you are talking with family or friends over the U.S. holiday break, you can tell them all that Dalrymple wasn’t kidding.

A Positive Bakken Miscalculation

If there is one thing exploration and production companies are good at, it is proving themselves wrong. Just look at the recent news from Enerplus Corp. The company announced that its outlook on its Bakken and Three Forks acreage had significantly improved from its previous estimates of recoverable oil in place. Greater operational performance combined with a technical assessment that included detailed well data on its wells has helped the company to see that its oil resources in the Williston Basin contain 136 MMboe, a 250 percent increase above its previous oil in place estimates of 39 MMboe. That had to make the Enerplus team perform a double take when the numbers indicated the massive increase presented themselves.

In Enerplus’ case, being wrong is a good thing. And, as a testament to the Bakken’s ability to prove estimators wrong, Enerplus is certainly not the first nor the last company to miscalculate just how big its resource is.

When people ask our team the simple question of just how big the Bakken is, we typically respond with lengthy stories that cite companies such as Enerplus as examples. It is more accurate to cite those examples than to put a hard number on just how big the resource is because the number seems to be in constant fluctuation, typically trending higher. The only thing we know for certain is that the Williston Basin is an incredible resource that will most likely provide a perfect example for the popular industry belief that big oilfields just keep getting bigger.

This week, as we mingle with the industry at the One Million Barrel Celebration in Tioga, N.D., the question of how big the Bakken can truly be will most certainly floated. It will be interesting to hear just how varied the answers are. I say that as a soft warning. The next time you start discussing how big the Bakken is or could be with our team, be prepared for a long story.

The Obvious Story

This week we officially learned something about the North Dakota Bakken we’ve known for the past few months: it’s a million barrel per day producer of oil. The news has made national headlines. The story of the North Dakota-based portion of the Bakken reaching the million barrel milestone is an obvious story for media outlets of all kinds to follow, and if you google anything related to the story you’ll see that it has been greatly followed.

To provide a bit more context to the story, I’m sharing a sneak peek at a piece from the June issue set to go live this week. The information provided below stems from another great piece that Tessa Sandstrom of the North Dakota Petroleum Council worked on specifically for our pub.

What does 1 million barrels of oil per day mean?

-North Dakota is now one of only 22 countries to have ever reached 1 mbpd.

-Only four U.S. states have ever produced 1 mbpd: Louisiana during the 1960s and 70s; Alaska from 1978 to 2004; California during the 1980s; Texas (still producing more than 1 mbpd). Oklahoma peaked at 750,000 bopd.

-If North Dakota were a country, it would rank 20th, tied with the United Kingdom and Columbia for oil production. And, 1 mbpd is more production than countries such as Oman, India and Indonesia. Also, it ranks above Libya because of the country’s internal conflict that has slowed production.

-The trek to 1 mbpd has created 56,000 new jobs since 2011, a number that ranks as the highest in the entire U.S. over that span.

Creating The Super System

Developing the super system, as Kevin Burdick calls it, is not just about adding more of the same. To build the super system, its makers must react to the ever-changing production attributes of the Williston Basin oil and gas system. New wells are producing at higher initial production rates than a few years ago. More wells are producing from a single pad. And, in some cases, the decline curves are not falling as fast. All of that impacts the build out of the super system. For instance, new facilities, such as gas compression stations, have to be built bigger than previous versions. Burdick, vice president of Oneok Partners natural gas gathering and processing unit, recently spoke about his team’s efforts to construct a massive gas gathering system in the Williston Basin.

According to Burdick, annual well connections recorded in 2014 are five times that of 2010. The sheer number of new wells in need of connection to gathering infrastructure isn’t the only challenge for Burdick’s team at Oneok. The constant fluctuation in associated gas pressure at the well site, technology advancements that are exceeding production expectations and a lack of real-time data on future production plans of its operator clients are also major challenges impeding the development of the so-called super system, or, to use a less-interesting description, a series of gathering pipelines, compressor stations and other necessary infrastructure capable of handling and treating the vast amount of Bakken gas produced today, tomorrow and for decades to come.

Operators have started to share data about future drilling plans. For Oneok, the data is crucial to the super system, he said, as it helps his team understand what the needs of the oil and gas production industry will be in the future and where to invest time and resources. Burdick’s team already has more than a billion dollars in backlogged projects.

Although Burdick coined the term, super system, his team is not the only one working to build it. This week, Summit Midstream Partners LP announced it has plans to invest roughly $300 million into four projects spread throughout Williams and Divide Counties. The projects range from creating new gas, water and crude gathering lines connected to well sites to rail transload expansions.

While many of us are always looking for a great story on oil production, an operator’s new innovative completion design or drilling strategy, it’s stories like that of the development of the super system that remind us that Burdick is right and that we need to pay attention to all facets of the Bakken to truly understand its impact and its future. In the Bakken circa 2014, development is not always just about adding more of the same.

Signs Of Pipeline Protection Progress

Rae Powers has more photos of the pipeline installation process than almost anybody. Powers works out of Tioga, N.D., as a quality assurance inspector. I spoke with her this morning regarding an event she is helping to organize. The event will unite others from the pipeline protection industry in an effort to form a line of communication between all involved in installing and protecting pipelines in the Bakken through the use of cathodic protection, an electrical-based system.

Although other parts of the country already have such groups that help to organize the pipeline installation and protection industry, either run through the National Association of Corrosion Engineers or state government, North Dakota is without such a group capable of helping pipeline installers and service providers communicate challenges and solutions to protection issues.

The work of Powers and the others to form the new pipeline protection committee is only one sign that underground infrastructure is showing positive advancement. Earlier this week, the gas capture plan process started, commencing a new era of flare reduction in North Dakota. Underground pipelines designed to move associated gas produced at the wellhead will undoubtedly be part of the plan to capture more gas. As more pipelines and other infrastructure is installed to capture gas or to move crude, it is great to know that the service providers responsible for making the physical movement of gas or oil are also taking the best approach to the tasks they get paid to perform.

On the topic of capture, we are excited to announce that we have added Emily Aasand to our team of writers to expand our magazine’s already robust content platform. She is a North Dakota native. Look for her work in the near-term future, and as always, if you have a noteworthy story that we haven’t contacted you about yet, send Emily or myself a note.

Q&A: 10 Questions on the Williston Basin Petroleum Conference

The following is from the May issue of the magazine. We put together a question and answer piece with the team from the North Dakota Petroleum Council on the eve of the Williston Basin Petroleum Conference to give everyone headed to Bismarck next week a bit more context on the show. See you there.

1. What is the history of the Williston Basin Petroleum Conference?

The Williston Basin Petroleum Conference was started in 1992 by the Government of Saskatchewan, North Dakota Department of Mineral Resources and the North Dakota Petroleum Council. The conference had the same goal that it has today: to provide an opportunity for local, national, and international industry to gather and exchange new ideas, concepts, and technology to better serve the energy demands of our citizens. The conference alternates locations each year between Saskatchewan and North Dakota.

The conference has grown substantially over the past 10 years as the Bakken and Three Forks located within the Williston Basin have become recognized as a world-class resource. When the conference was held in Bismarck in 2012, it went down in history as the largest event to be hosted in the Bismarck-Mandan region, with 4,100 registrants from 47 states, seven provinces and nine countries. This year, we anticipate the conference to be even bigger.

2. What does the WBPC mean to the broader oil and gas industry, and on a more localized level, North Dakota, Montana and Saskatchewan?

Technology is what has unlocked the Bakken and Three Forks formations, leading the way for an energy renaissance not only in North Dakota, but in tight oil plays throughout the United States. Since 2003, when the Bakken shale play initially began in eastern Montana and when the Bakken took off in North Dakota in 2006, all eyes have been on the Williston Basin to see how we are advancing technologies and efficiencies and handling impacts. North Dakota is the model of a modern, efficient, technology-driven oilfield that has changed the way we develop our energy resources in our nation. In this way, the WBPC helps highlight the Williston Basin, as well as North Dakota, Montana, Saskatchewan and Manitoba as national and world leaders in safe, secure and stable energy production.

3. How will the 2014 event differ from the previous year?

This year’s conference will be the biggest yet, featuring more than 500 exhibit booths in the Bismarck Civic Center’s newly expanded exhibition hall. We have a fantastic line-up of speakers, including renowned political commentator Sean Hannity and CEOs of five major companies active in the Bakken, including Harold Hamm of Continental Resources, Tommy Nusz of Oasis Petroleum, Matt Rose of BNSF Railways, Lee Tillman of Marathon Oil and Jim Volker of Whiting Petroleum. In addition, more than 70 other speakers will address the latest technologies, efficiencies and impacts in the Williston Basin.
New to this year will also be the Public Education Sessions. In 2012, members of the general public were very interested in the WBPC and learning more about the industry, so we decided to host two free educational session so they can learn more about oil and gas development, how it’s done in North Dakota, and how it impacts their daily lives. For the second time, we will also hold a seminar for area fourth graders. The program, Oil Can Power Kids’ Futures, will include interactive lessons about the oil and gas industry and a tour of the outdoor exhibits, which will include a pumping unit and a workover rig.

4. As the industry progresses, so do the topics and main discussions. During the 2014 WBPC, what will be the most important topics?

Only six to eight barrels of every 100 barrels of oil that are in the Bakken are being recovered using current technology, so a hot topic continues to be optimization and recovering more of the resource in the Bakken and Three Forks Formations. Pipeline and rail infrastructure also continue to be important topics, and the study on Bakken crude qualities will also be of great interest to many attendees.

And finally, many are interested in what the future has in store for the Bakken and will be paying close attention to our CEOs.

5. Why has the WBPC undergone such tremendous growth?

The Bakken has become known across the nation and around the world as a world-class resource. Many of those operating here are pioneers of a new era for oil and gas development, and other states and nations with potential for developing shale resources look to North Dakota as an example. The WBPC highlights much of what is happening in the Bakken, which makes it a great event for investors, entrepreneurs, government leaders and others who are looking to capitalize on the opportunities available here or in other plays throughout the world.

6. How does the WBPC help the North Dakota Petroleum Council achieve any of its goals?

The WBPC continues to be one of the premier conferences on oil and gas development for the Williston Basin, and more specifically, the Bakken. With more than 500 exhibit booths and a slate of well-known and knowledgeable speakers, the conference provides tremendous value to our members in terms of education and networking. The conference also helps the NDPC learn more about the industry and our members so we can continue to work with them and maintain a sound regulatory environment for the industry.

7. The event brings together an incredible range of exhibitors and attendees. What do you hope the exhibitors and the attendees take away from this year’s show?

We hope our exhibitors and attendees can walk away with a better understanding of the latest advancements in oil recovery in the Bakken and the challenges faced. Many of the attendees and exhibitors are entrepreneurs and businesses who are looking to capitalize on the many opportunities we have available, and we look forward to seeing them in two years presenting on or exhibiting their own technologies and solutions to make the Bakken even more efficient and sustainable in the future.

8. For the NDPC specifically, what will the 2014 message to the audience be?

The Williston Basin continues to be a huge economic engine for our state and nation. Never before has North Dakota played such an integral role in our nation’s energy security and energy recovery. The world’s eyes are on us, and we must continue to develop our energy resources responsibly while minimizing impacts to our lands and environment.

9. The 2014 WBPC agenda includes several big name speakers. What are the must-attend sessions and why? The event will also offer some impressive exhibits. What do we need to check out?

The WBPC is designed to have something for everyone, from the engineers and geologists to investors to government affairs representatives, so it’s difficult to single out any session; there truly is something for everyone. Sean Hannity will no doubt be a huge draw, and the fact that he is coming to the conference speaks to the importance of the Bakken in terms of domestic energy production, economic impacts and job creation, which has put the Williston Basin in the national and international spotlight.

The CEOs will also attract a large audience. They are, after all, the leaders who will help determine the future of energy development in North Dakota. Many are interested in gaining insight on what these leaders and their respective companies have in store in the coming years.

10. The 2014 WBPC will be the best ever in the history of the event. What will it take to make the next North Dakota event even better?

The conference will move to Regina, Saskatchewan, Canada, next year, and the Government of Saskatchewan Ministry of the Economy always does a fantastic job in organizing that conference. The NDPC will host the event again in 2016.

As the Bakken continues to mature, 2016 will bring new challenges and new ideas to the table. Although we have not yet selected the venue for 2016, we are confident the success of the WBPC has resulted in a creation of a “must not miss” event that will continue to draw large audiences as the intrigue and opportunities in the Williston Basin evolve. Thank you, Bismarck, for doing such a fantastic job of hosting the 2014 WBPC.

Now Available in the Bakken: LNG

Patrick Hughes is experienced in the transport of Bakken crude, freshwater and saltwater. He also understands workforce housing, wastewater treatment and oilfield waste handling. After a press conference held earlier today in Bismarck, the word is now officially out that he also understands how to make the use of liquefied natural gas created from Bakken gas a viable option for the oil and gas industry of North Dakota.

After more than 18 months of work, his team has announced that it is officially constructing a LNG production facility adjacent to Hess’ Tioga, N.D. facility that will produce 10,000 gallons per day of LNG. Hughes had adapted his experience related to the challenges in the Bakken (remember his experience in workforce housing and transportation?) into a solution for brining LNG to North Dakota. I spoke with Hughes today after that press conference about his quest to make LNG happen. One of the main aspects of his efforts, he said, was to provide an end-to-end solution for using LNG, not just a partial solution.

The solution, for any entity that wants to utilize the LNG product, will mean that Prairie Companies and the NDLNG team will work together to transport, store and set-up the LNG process for any party interesting in using it. To date, longtime Bakken operator Slawson Exploration has already signed on to use the LNG.

Look for more in the June print issue of the magazine about my talk with Hughes on bringing LNG to the Bakken.

Bakken Flare Hearing Takeaways

There is a lot to take away from the North Dakota Department of Mineral Resources flaring policy hearing held today. After listening to the live hearing all day, I would say the DMR has a tough decision to make on what changes, if any, it should make to recently adopted flaring goals and policies it has enacted.

Throughout the hearing, there was one question that seemed to loom in the minds of everyone there after it was brought up in the first half-hour of the hearing. If an operator does not meet the gas capture plan goals of flare reduction, should the DMR enforce a production curtailment on that operator? As one person put it, should there be some bite to the DMR’s proverbial bark?

The operator perspective is complex. All operators expressed incredible support of a plan to capture more gas, and, each said that they greatly value every energy molecule produced from the Williston Basin. But, should an operator ever fail to meet the goals of the gas capture plan, all of the operators at the hearing said they were very opposed to the DMR enforcing a production curtailment.

During the hearing, it was clear that the DMR officials were attempting to understand what operators might actually be capable of in meeting future flare reduction goals, and, how the flare reduction efforts could impact the ability of the operators to maintain their efforts to produce oil.

The range of gas capture approaches utilized by operators extracting crude from the Williston Basin is large. The most popular, economical approach is to construct gathering lines and operate a gas collection and compressor station of some sort. After that, the approaches, and their attractiveness, widely vary. Some operators, such as Statoil, have looked at converting associated gas created at the wellhead into power or compressed natural gas. Some choose to strip the natural gas liquids out of the stream and flare the remaining residue gas. Flare capture will increase as more gathering lines and midstream companies catch up with the gas supply, and, as operators provide more information on when and where new wells will be brought online to the midstream companies that need to plan and budget for new production.

Based on the amount of testimony, the wide range of perspective from operators and the incredibly high degree of importance and attention that flaring brings with it, I feel for the DMR. Flaring could be the most pressing issue the Bakken play has ever undergone. But, as many at the hearing stated, the new gas capture plan is a great example of how industries within the Williston Basin have learned to communicate to solve an issue. The issue may have not been resolved at today’s hearing, but the communication that happened had to be a major boon to improving how the state and industry deal with flaring.