February 20, 2013

It’s a gusher

By Kate Ruggles
Farmer Staff Writer

During the North Dakota Industrial Commission’s monthly oil report, North Dakota Director of Mineral Resources Lynn Helms, while answering a routine question about flaring, revealed that a well recently drilled northwest of Watford City is making remarkable production records and could likely be the No. 2-producing well ever drilled in North Dakota.
“The geology northwest of Watford City has turned out to be really, really good geology,” states Helms. “It is the deepest, hottest part of the basin, so the Bakken is very mature there.”
Helms states that because of this fact, producers have started using higher hydraulic fracturing pressures and more fracturing stages for wells drilled in the area northwest of Watford City. And the results seem to be amazing.
“An initial production report for that well came in at almost 5,000 barrels of crude and 12 million cubic feet of natural gas a day, flowing at over 2,000 pounds tubing pressure,” states Helms. “It is a remarkable well. It is producing close to the record and I would say it is the No. 2 well ever drilled in the Bakken.”
This is even more incredible when, according to Helms, the average producing well in the Watford City area produces around 1,100 barrels of oil and 1.5 million cubic feet of natural gas a day.
Though the well’s location and owner are confidential, “Its runs will show up soon,” states Helms.
The remaining oil report revealed mixed news. According to Helms, oil production is still holding strong in North Dakota, but there are increasing factors that could work against production growth and are therefore causing producers to proceed with caution.
“December drilling continued to decline slightly and well completions were slightly lower than in the previous 12 months average,” states Helms. “Better weather and the completion of 123 new wells brought production back on track, and the oil production rate surged to a new record, up 4.6 percent over November.”
North Dakota finished out the year with a December average of 768,853 barrels of oil produced daily and 805,705 million cubic feet of natural gas produced daily. Of that, McKenzie County was the second highest oil-producing county and the highest natural gas producer.
However, though this is a new year and capital funds should be flowing, Helms states that operators are still feeling apprehensive about oil production because of what is going on in Washington, D.C.
“Generally, government regulations and the administration’s proposed tax policies have a negative impact on oil production in North Dakota,” states Helms. “Companies are also under a lot of pressure to decrease their completed well costs.”
Though there is uncertainty as to how these factors will play out, Helms is confident that North Dakota can maintain its current production rate.
“Operators are cautious, but they can’t ignore the oil prices,” states Helms. “They are a positive and they are offsetting the negatives.”
Finally, with good weather on the horizon, Helms is confident oil production rates will rise as the year progresses.