January 6, 2010

Oil companies anticipate more drilling in 2010

By Tina Foreman
Farmer Staff Writer

After an interesting year in oil production, 2009 ended up being one for the record books with many people anticipating the same for 2010, but without so many ups and downs.
“We began anticipating a good year for 2010 back in July of 2009 when companies started meeting with us to discuss their plans for 2010,” says Lynn Helms, North Dakota Department of Mineral Resources director. “The number one driver increasing activity is oil price, which has come up substantially since July. The recent increase in Three Forks exploration and excitement is the second factor in increased activity.”
Continental Resources, an Oklahoma-based company, is one of the companies which is excited about the outlook for 2010. The company currently has one active drilling rig working in McKenzie County with plans of increasing the number of rigs to 12 by May.
Continental has been busy trying to prove that the Three Forks Sanish Formation is separate from the Bakken Formation, as well as implementing new drilling technology that will help them and other companies save money while making their ecological footprint much smaller.
Continental’s new concept, the Eco-Pad allows four wells to be drilled on one pad or location. Prior to this concept, Continental Resources needed one pad for each well it planned to drill.
“The concept works by setting the rig up to drill the first hole into the Bakken Formation. Once that hole is done the rig scoots 30 to 40 feet and drills a Three Forks well,” says Jeff Hume, Continental Resources chief operating officer. “We had hoped to drill the first Eco-Pad wells in 2009, but permitting delays held things up and we should begin those wells within the next week.”
Continental’s first Eco-Pad location will be in McKenzie County with plans of six more locations to come during the first half of 2010.
“We decided to drill the first wells in McKenzie County because the opportunity presented itself,” says Hume. “The Bakken and Three Forks wells we’ve drilled there have been successful and the topography was right.”
The Eco-Pad Concept is something that can’t be used everywhere because of topography. But Hume says the company plans to use it for six of the 12 locations they currently have staked out in McKenzie County.
“One of the great things about the Eco-Pad is that it allows us to drill into both the Bakken and Three Forks formations on the same location,” says Hume. “While we don’t have any proof, it is our belief that the Bakken and Three Forks formations are two separate pools of oil and we plan to continue researching this theory as we monitor our work in 2010.”
According to Hume, while the Three Forks theory is exciting, it isn’t the driving force behind the company’s increase in drilling activity.
“The biggest force behind our increased activity is the price of oil,” states Hume. “Like many companies, we work to keep our spending in line with our cash flow. Now that oil has rebounded to stay around $70 per barrel heading into the $80 range, it is more economical for us to increase our drilling activity in the Bakken and Three Forks formations.”
As the price of oil continues to climb, so does the number of active drilling rigs in the county and the state. As of Jan. 4, 2010, there were 11 active rigs in McKenzie County and 75 in the state.
“The future looks bright for North Dakota and McKenzie County,” says Ness.
North Dakota’s oil production weathered many ups and downs in 2009 and as the excitement around the Bakken and Three Forks continues to rise with the increase in oil prices, many companies are excited that things will be better in 2010.