American Oil and Gas Reporter - November 2016 - 96

ConventionCoverage: North Dakota Petroleum Council
Bakken wells reap a 40 percent return on
investment at $50 oil. "In 2011, we would
have needed $70-$75 for the same return,"
he observed.
Kringstad shared some of his calculations for the broader industry, in which
he assumed drilling and completion costs
between $6 million and $8 million at
varying commodity prices. He noted that
more than 6,400 North Dakota wells produced at least 400 bbl/d during their peak
months, adding that wells at the bottom
of that output range fell far short of a 1020 percent rate of return if oil sold for
$40 a barrel. "You (need) upper $50s to
$70 a barrel to get a 20 percent rate of
return on a 400 bbl/d well," he figured.
"Not until 700 bbl/d do those wells start
getting a 10-20 percent after-tax rate of
return."
The price at which Bakken activity
will rise varies, he indicated. "It depends
on where the acreage is located and how
the company manages its drilling and
completion costs," Kringstad assessed.
"There are areas that still look attractive
at lower price points, and there are areas
that will not become attractive until we
start seeing higher wellhead pricing or
lower drilling and completion costs."
Stark noted that North Dakota's rig
count had dropped 85 percent since 2012
and that production had peaked and rolled
over. "What does the future hold?" he
posed. "I cannot really tell you how long
the rig count will stay this low, but I will
say that as supply and demand tighten,
prices will firm and you will see more
activity."
Pivotal Task Forces
During the regulatory and safety panel,
Cutting asked participants about their experiences working on or with some of
NDPC's key issue task forces, which included the Bakken upstream air, flaring,
brine, and crude by rail task forces.
According to Dillé, the flaring task
force's first job was defining the problem,
which proved a challenge for a team of
competitors. "Everyone had to come together and decide on the common goals,"
he recalled. "Fortunately, we had a fixed
deadline by which the governor wanted
a proposal. It was clear we needed some
technical experts to lead the task force;
that was important."
Collecting data and defining the situation also was the crude by rail task
force's starting point, Hume related, so it
found companies to volunteer their wells
96 THE AMERICAN OIL & GAS REPORTER

is about compliance," he held. "People
are very forthcoming if they know they
are not going to get hit with something
punitive, and that we actually are looking
for solutions."
He credited the task force with building
relationships and fostering communication
that should prove fruitful as the Bakken
play matures. "New challenges will arise,"
Glatt reasoned. "Keeping those lines of
communication open despite our differences is the benefit of these task forces.
As new challenges arise, we have phone
numbers we can call and people to bring
together to start addressing a problem."

There is no single oil price at which
Bakken activity will accelerate, holds
North Dakota Pipeline Authority Director
Justin Kringstad. According to Kringstad,
wells in the play's core area already
proﬁtable, but those on the play's periphery probably will not be economic
until oil prices climb.

and tasked an independent laboratory to
oversee crude testing. "None of us knew
where any sample came from, but we
recorded all the technical data from that
location, such as heater temperatures and
pressures, separator pressures, and production rates," he described. "At the same
time, we were trying to understand what
the regulatory agencies . . . were looking
at."
Eventually, he said, the task force
began finding people willing to tackle
certain parts of the matter. "You pull a
consensus together and it is amazing,"
Hume characterized. "I cannot say enough
about participation. When there is a task
force, step up and participate. Some smaller operators have great ideas and we need
to hear their solutions."
Anderson, who helped lead NDPC's
brine task force, emphasized the importance of trust among stakeholders and
fostering mutual understanding. "Once
that trust started to take root, communication was easier," he related. "That took
the greatest amount of time. We got somewhere once the communication evolved
to where we could say what we were
thinking. The main difference between
the beginning and endpoint was when
our understanding was on the same page."
As a state regulator, Glatt said his interactions with the Bakken upstream air
task force were encouraging. "It is always
about keeping an eye on the endgame; it

Bakken Refractures
In his discussion of Whiting's refracturing program, Ohlson indicated that
the four Mountrail County Sanish Field
wells the company refractured in 2014
all yielded greater production, but only
half improved enough to warrant the investment. He explained that all the wells
were chosen for refracturing primarily
because their initial completions had been
modest and their production lagged that
of nearby wells.
A couple of them initially demonstrated
post-refrac production higher than their
base-line declines, but merely accelerated
existing reserves rather than generating
new, he revealed. Since Whiting's refrac
campaign proved less successful than
hoped, he said the company set aside the
concept for a time. However, by 2016,
he said Whiting had implemented a refrac
steering committee with members who
specialized in a variety of disciplines, including a reservoir, completion and production engineer, as well as a fracturing
supervisor and a landman. That team
shouldered the task of sifting through all
1,400 of Whiting's Bakken wells to pick
the best candidates for recompletion.
Ohlson said the next step was choosing
the optimum design for each candidate.
The new stimulations will utilize both
new and existing perforations, he explained. "The initial part of the frac is
going to address existing completions
and any degradation," he described. "As
the refrac goes on and more volume is
pumped, through the use of particulate
diversion, eventually the refracs will generate new fractures and stimulate new
reservoir volume."
Whiting plans to use polylactic acid
(PLA) as its particulate diversion material,
Ohlson reported. "PLA is a synthetic organic polymer derived from things such
as cornstarch and tapioca root. It can be

American Oil and Gas Reporter - November 2016

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