American Oil and Gas Reporter - November 2016 - 95

ConventionCoverage: North Dakota Petroleum Council

Future For Bakken
Remains Bright
By Del Torkelson
MINOT, N.D.-One of North Dakota's
top oil producers still has big plans for
the state, Continental Resources Inc. President and Chief Operating Officer Jack
Stark assured the North Dakota Petroleum
Council at its 2016 annual convention,
Sept. 19-21 at the Holiday Inn Riverside
in Minot.
"We have decades of inventory to drill
here," he related during his keynote remarks on the convention's second day.
"There is a lot left."
Stark's talk considered the evolution
of Continental's Bakken Shale activity
and cited some of the company's efficiency
gains during the past several years. Earlier
that day, North Dakota Pipeline Authority
Director Justin Kringstad offered NDPC
an industrywide perspective on those
gains and considered well economics according to various commodity price scenarios.
Also during the conference, NDPC
Vice President Kari Cutting moderated a
regulatory and safety panel composed
of:
* Joel Noyes, senior manager for
government and external affairs at Hess
Corp;
* Dave Glatt, chief of environmental
health for the North Dakota Department
of Health;
* Dustin Anderson, environmental
coordinator for Oasis Petroleum;
* Jeff Hume, vice chairman of strategic growth initiatives at Continental; and
* NDPC Chairman Eric' Dillé, director of governmental relations at EOG
Resources.
Other presenters included Charles
Ohlson of Whiting Petroleum Corp. discussing his company's refracturing program, and Wayne King of Tecvalco presenting a new way to heat crude oil that
he said was safer and more cost-effective.
Better All The Time
Kringstad told NDPC that the state's
count of active drilling rigs stood at 32
on Sept. 20, with all of them working in

the Bakken's core area. He cited the average number of spuds per rig as one example of the industry's efficiency strides.
Not long ago, the rule of thumb was that
a rig could spud one well a month, he
said, whereas in 2016, it was between
1.5 and 1.7.
Other examples Stark offered included
the 46 days that Continental required to
drill a Bakken Shale well in 2008 falling
to 13 in 2016. He credited the transition
to pad drilling as a major component of
that improvement, and said the company's
quest for efficiencies continued. "We
have drilled three, three-mile wells with
one bit and one motor in five days," he
marveled.
Another metric Kringstad cited was
the rate at which new wells came on line.
"On average, it is around 200 days for a
North Dakota well from spud to initial
production," he reported. "That number
is important for trying to figure out how
quickly production can ramp up."
However, he allowed, that contrasts
with the state's sizable inventory of drilled,
uncompleted wells. "These are well positioned to come on line within a fairly
quick time frame as soon as prices begin
to recover to a level operators find attractive," Kringstad opined. "Many of
those wells are in the core area, so I
don't think it is going to take a real significant uptick in prices before we see
more wells completed."
Stark indicated it cost Continental
about $6.2 million to drill and complete
a Bakken well in 2008. That rose to as
high as $9.5 million on average for a few
years amid stiff industrywide competition
for services, he noted, but by 2016 had
declined to approximately $6.0 million.
During this time, drilling costs dropped
from $3.4 million to $2.2 million while
completion costs increased from $2.8
million to $3.8 million as the size of
stimulations grew. "We realized we were
leaving some oil behind and needed to
step up our stimulations," Stark reflected.
Turning to estimated ultimate recoveries
for Continental's Bakken wells, Stark
said from 2003 to 2016, EURs had grown
from around 300,000 barrels of oil equiv-

alent to 900,000 boe. He added that the
company's Bakken completions had expanded from 10 stages to upward of 40.
"EURs have gone up substantially because of the increasing size of the stimulations," he related. "In the last three
years, we have moved more toward slickwater and some hybrid types. The key
really is the proppant volume we are able
to place. We were at 100-200 pounds a
foot and now we are at 700-1,500 pounds
a foot."
Even so, Stark acknowledged geology
was a significant factor. "We have moved
back into the core during the past two
years," he observed. "The core is where
we see 800,000-plus boe EURs."
Prices And Profits
Ultimately, the bottom line is the bottom line, Stark said, and Continental's

From 2003 to 2016, estimated ultimate
recoveries on Continental Resources'
Bakken wells grew from 300,000 barrels
of oil equivalent to 900,000 boe, Continental President and Chief Operating
Officer Jack Stark tells the North Dakota
Petroleum Council during its 2016 annual
convention, Sept. 19-21 at the Holiday
Inn Riverside in Minot. During the same
period, he said, the company's Bakken
completions expanded from 10 stages
to upward of 40.

NOVEMBER 2016 95



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