oil & gas activity update...2013/05/03 · oklahoma city, ok – may 3, 2013 annual meeting oil...
TRANSCRIPT
![Page 1: OIL & GAS ACTIVITY UPDATE...2013/05/03 · Oklahoma City, OK – May 3, 2013 ANNUAL MEETING OIL & GAS ACTIVITY UPDATE 600 East Boulevard Ave. - Dept 405 Bismarck, ND 58505-0840 (701)](https://reader033.vdocument.in/reader033/viewer/2022042403/5f1767bbde7e0776dd30d113/html5/thumbnails/1.jpg)
American Legislative Exchange Council Spring Task Force SummitOklahoma City, OK – May 3, 2013
ANNUAL MEETING
OIL & GAS ACTIVITY UPDATE
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600 East Boulevard Ave. - Dept 405Bismarck, ND 58505-0840
(701) 328-8020 (701) 328-8000
North Dakota Department of Mineral Resources
https://www.dmr.nd.gov/ndgs/https://www.dmr.nd.gov/oilgas/
NDGSResearch Arm
OGDRegulatory
Arm
![Page 3: OIL & GAS ACTIVITY UPDATE...2013/05/03 · Oklahoma City, OK – May 3, 2013 ANNUAL MEETING OIL & GAS ACTIVITY UPDATE 600 East Boulevard Ave. - Dept 405 Bismarck, ND 58505-0840 (701)](https://reader033.vdocument.in/reader033/viewer/2022042403/5f1767bbde7e0776dd30d113/html5/thumbnails/3.jpg)
North Dakota Development
• Regulation• Resource Play• Uniform Spacing—orderly development• Multi-well locations—small footprint• Corridors—industry and residents• Water Needs—surface waters• Bakken Results Bruce E. Hicks
Assistant DirectorNDIC-DMR-OGD
Bismarck, ND
![Page 4: OIL & GAS ACTIVITY UPDATE...2013/05/03 · Oklahoma City, OK – May 3, 2013 ANNUAL MEETING OIL & GAS ACTIVITY UPDATE 600 East Boulevard Ave. - Dept 405 Bismarck, ND 58505-0840 (701)](https://reader033.vdocument.in/reader033/viewer/2022042403/5f1767bbde7e0776dd30d113/html5/thumbnails/4.jpg)
![Page 5: OIL & GAS ACTIVITY UPDATE...2013/05/03 · Oklahoma City, OK – May 3, 2013 ANNUAL MEETING OIL & GAS ACTIVITY UPDATE 600 East Boulevard Ave. - Dept 405 Bismarck, ND 58505-0840 (701)](https://reader033.vdocument.in/reader033/viewer/2022042403/5f1767bbde7e0776dd30d113/html5/thumbnails/5.jpg)
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North Dakota Development
• Regulation• Resource Play• Uniform Spacing—orderly development• Multi-well locations—small footprint• Corridors—industry and residents• Water Needs—surface waters• Bakken Results
![Page 7: OIL & GAS ACTIVITY UPDATE...2013/05/03 · Oklahoma City, OK – May 3, 2013 ANNUAL MEETING OIL & GAS ACTIVITY UPDATE 600 East Boulevard Ave. - Dept 405 Bismarck, ND 58505-0840 (701)](https://reader033.vdocument.in/reader033/viewer/2022042403/5f1767bbde7e0776dd30d113/html5/thumbnails/7.jpg)
4 ½” Frac String
Upper Bakken Shale
Lower Bakken Shale
Middle Bakken
Potable Waters
• Drill with fresh water• Total depth below lowest potable water• Run in hole with surface casing• Cement casing back to surface of ground• 1st layer of surface water protection
TYPICAL HORIZONTAL OIL WELL
9-5/8” @ 2500’
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7” Casing
Upper Bakken Shale
Lower Bakken Shale
Middle Bakken
Potable Waters
TYPICAL HORIZONTAL OIL WELL
9-5/8” @ 2500’
Cement
KOP @10500’ • Drill vertically to kick-off point
• Run in hole with bent assembly• Downhole mud motor
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7” Casing
Upper Bakken Shale
Lower Bakken Shale
Middle Bakken
Potable Waters
• Drill 8-3/4” hole to pay• Run in hole with 7” casing• Cement 7” casing• 2nd layer of protection
TYPICAL HORIZONTAL OIL WELL
9-5/8” in 13.5” Hole
Cement
Kick-offPoint
BuildSection
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7” Casing
Upper Bakken Shale
Lower Bakken Shale
Middle Bakken
Potable Waters
• Drill lateral in pay• Run in hole with 7” casing• Cement 7” casing• 2nd layer of protection
TYPICAL HORIZONTAL OIL WELL
9-5/8” in 13.5” Hole
Cement
Kick-offPoint
Horizontal lateral
BuildSection
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4.5”FracString
Upper Bakken Shale
Lower Bakken Shale
Middle Bakken
Potable Waters
TYPICAL HORIZONTAL OIL WELL
Cement
Packer
Run in hole with:• 4.5” liner• 30-40 swell packers• sliding sleeves / P&P• 3rd layer of protection
4.5” liner
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4.5”FracString
Upper Bakken Shale
Lower Bakken Shale
Middle Bakken
Potable Waters
TYPICAL HORIZONTAL OIL WELL
Cement
Packer
Run in hole with:• 4.5” liner• 30-40 swell packers
• sliding sleeves
4.5” liner
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Thousands of fractures are created
• pumping water at 6,000-9,000 psi
• millions of pounds of sand and ceramic beads are pumped with the water to hold the fractures open.
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Stage Fracturing
• up to 40 stages
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Purposes of frac fluid
• crack the reservoir
• gel strength to carry sand
Frac fluid is produced back as flowback
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Sea Level
Oil & GasBakken/Three Forks
PrecambrianBasement
Base of fresh water
9000’
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Performing hydraulic fracture stimulation south of Tioga• all Bakken wells must be hydraulically fractured to produce• > 2 million gallons of water• > 3 million pounds of sand• cost: $2-3 million
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WHY FRAC THE ROCK?
• already developed easy oil• oil flows easily without fracking
• Unconventional Reserves• reservoirs are tight • look at sample• uneconomic to produce w/o fracing • must create a path for oil to flow
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Industrial Commission Regulation
• Hydraulic fracturing regulation• NDAC Section 43-02-03-27.1
• https://www.dmr.nd.gov/oilgas/• sur csg open + diversion line to pit/vessel• relief valve on treating lines w/ck valves• remote operated frac valve on treat lines• if sur csg press > 350 psi notify NDIC• 60 days post FracFocus chem registry
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• Frac down 4-1/2” frac string• sting into liner or set pkr below Kd• press and monitor 4-1/2” X 7” ann• press relief valve on treating lines
• set </= 85% of yield press• press relief valve on 4-1/2” X 7” ann
• set </= 85% of weakest 7” yield• diversion line run to pit or vessel
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• Frac down 7” csg string• max treating press 85% of csg rating• csg eval tool to verify wall thickness• inspect + photo of top 7” csg jt
• reduce treating press if warranted• cmt eval tool to confirm cmt
• run frac string if defective cmt• press test 7” and wellhead• if wellhead press rating < frac design
• use wellhead protection system
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States have been regulating the full life cycle of hydraulic
fracturing for decades
• Water Appropriation Regulation• Oil & Gas Regulation• Health Department Regulation• Geologic setting in each basin different
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Hydraulic Fracturing Stimulation is Safe
• IOGCC survey—no contamination• GWPC study verifies State’s regs• GWPC National Registry f/chemicals
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Industrial Commission Regulation
• Water flowback after frac• Storage in open pits prohibited• Disposal wells permitted through Underground Injection Program• Disposal zone is 2,500 feet below potable waters
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Salt-Water Disposal Dakota Fm.
Sea Level
336 disposal wells
720,000 barrels per day
Bakken Fm.
Base of fresh water
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Rules and Legislation
• prohibit reserve pits• allow cuttings pit only• implement strong HF rules
• 63rd Legislative Session—ends today • HB 1333—GIS pipelines• HB 1234—reduce O&G taxes—failed?
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North Dakota Development
• Regulation• Resource Play• Uniform Spacing—orderly development• Multi-well locations—small footprint• Corridors—industry and residents• Water Needs—surface waters• Bakken Results
![Page 29: OIL & GAS ACTIVITY UPDATE...2013/05/03 · Oklahoma City, OK – May 3, 2013 ANNUAL MEETING OIL & GAS ACTIVITY UPDATE 600 East Boulevard Ave. - Dept 405 Bismarck, ND 58505-0840 (701)](https://reader033.vdocument.in/reader033/viewer/2022042403/5f1767bbde7e0776dd30d113/html5/thumbnails/29.jpg)
BAKKEN FORMATION
mature area
ESTIMATED MATURE AREA OF THE BAKKEN FORMATION
(Nordeng, 2010)
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NORTH DAKOTA – 190 DRILLING RIGS – Jan 2013
Current drilling activity is focused
in Mountrail, Dunn, McKenzie, and Williams Counties.
Current drilling activity is focused
in Mountrail, Dunn, McKenzie, and Williams Counties.
NORTH DAKOTA – 187 DRILLING RIGS – May 2013
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North Dakota Development
• Regulation• Resource Play• Uniform Spacing—orderly development• Multi-well locations—small footprint• Corridors—industry and residents• Water Needs—surface waters• Bakken Results
![Page 33: OIL & GAS ACTIVITY UPDATE...2013/05/03 · Oklahoma City, OK – May 3, 2013 ANNUAL MEETING OIL & GAS ACTIVITY UPDATE 600 East Boulevard Ave. - Dept 405 Bismarck, ND 58505-0840 (701)](https://reader033.vdocument.in/reader033/viewer/2022042403/5f1767bbde7e0776dd30d113/html5/thumbnails/33.jpg)
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North Dakota Development
• Regulation• Resource Play• Uniform Spacing—orderly development• Multi-well locations—small footprint• Corridors—industry and residents• Water Needs—surface waters• Bakken Results
![Page 37: OIL & GAS ACTIVITY UPDATE...2013/05/03 · Oklahoma City, OK – May 3, 2013 ANNUAL MEETING OIL & GAS ACTIVITY UPDATE 600 East Boulevard Ave. - Dept 405 Bismarck, ND 58505-0840 (701)](https://reader033.vdocument.in/reader033/viewer/2022042403/5f1767bbde7e0776dd30d113/html5/thumbnails/37.jpg)
NORTH DAKOTA – 171 DRILLING RIGS – June 2011
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Six Wells on a Single Pad
Vern Whitten Photography
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North Dakota Development
• Regulation• Resource Play• Uniform Spacing—orderly development• Multi-well locations—small footprint• Corridors—industry and residents• Water Needs—surface waters• Bakken Results
![Page 40: OIL & GAS ACTIVITY UPDATE...2013/05/03 · Oklahoma City, OK – May 3, 2013 ANNUAL MEETING OIL & GAS ACTIVITY UPDATE 600 East Boulevard Ave. - Dept 405 Bismarck, ND 58505-0840 (701)](https://reader033.vdocument.in/reader033/viewer/2022042403/5f1767bbde7e0776dd30d113/html5/thumbnails/40.jpg)
Small Footprint• Developed 13,000 acres• 14 wells• rough topography• LMR Confluence
Vern Whitten Photography
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North Dakota Development
• Regulation• Resource Play• Uniform Spacing—orderly development• Multi-well locations—small footprint• Corridors—industry and residents• Water Needs—surface waters• Bakken Results
![Page 44: OIL & GAS ACTIVITY UPDATE...2013/05/03 · Oklahoma City, OK – May 3, 2013 ANNUAL MEETING OIL & GAS ACTIVITY UPDATE 600 East Boulevard Ave. - Dept 405 Bismarck, ND 58505-0840 (701)](https://reader033.vdocument.in/reader033/viewer/2022042403/5f1767bbde7e0776dd30d113/html5/thumbnails/44.jpg)
Thirsty Horizontal Wells
• 2,000 wells / year• 15-25 years duration• 20 million gallons water / day
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Commission supports surface water use
• Lake Sakakawea best water resource • one inch contains 10 billion gal water
• 5000 wells @ 2mil gal wtr/well• 2-year supply
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North Dakota Development
• Regulation• Resource Play• Uniform Spacing—orderly development• Multi-well locations—small footprint• Corridors—industry and residents• Water Needs—surface waters• Bakken Results
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Typical Bakken Well Production
0
200
400
600
800
1000
1200
0 5 10 15 20 25 30 35 40
Year
Bar
rels
of O
il pe
r Day
Steep declines
65%-1st yr
35%-2nd yr
15%-3rd yr
10% thereafter
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Production 780,000 bopd (appr 716,971 from Bakken—92%)
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5,200 Bakken and Three Forks wells drilled and completed35,000 - 40,000 more new wells possible in thermal mature area
Proven
765,000 BOPD 60 rigs
Possible 225-250 rigs
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Typical 2012 Bakken well• 45-year well life• 615,000 barrels of oil• $9 million to drill and complete• $20 million net profit• $4 million in taxes• $7 million in royalties• $2 million in wages• $2 million in operating expenses
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File No. 15092Armstrong #1-5 HansonSec 5-T155N-R102WWilliams County, ND
Reclaimed Location