In any professional field, at any time, the limits of technology and exploration are pushed as far as the economics of the time allow. And then there are the companies and individuals who go even farther, risking everything for a belief, an inkling, the chance to prove a theory possible.
Some fly, like Apple computers with ipods (iBooks). Others are forced to sell out, to file for Chapter 11 bankruptcy, to plead cases with investors.
The petroleum industry lived high on the mountain top of economic possibilities last year with all time high oil prices more than $140. And then, like the many skeptics in the shadows had jeered would come, the prices dropped. Week after week. With them, rig after rig came down.
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Except that hasn’t happened. The petroleum industry is not without its innovators. The entrepreneurial spirit of the early 20th century wildcatter, getting enough money to drill one well where there just might be black gold, that spirit survives. Despite what the spectators might think are economically impossible to take any chances, a few oil companies are taking chances. In the Williston Basin, some of these chances are beginning to pay off.
The area they are pushing the limits in – hydraulic fracturing.
“One of the real pioneers in hydraulic fracture stimulation in the Williston Basin is Brigham,” says Jeff Hume, chief of operations for Continental Resources, another very active oil company in the Williston Basin.
According to Brigham Exploration, their well Anderson 28-33 well had produced 2,154 barrels of oil equivalent in its first 24 hours of operation. The lateral leg of the well was fracced in 24 different places, 24 frac stages. This is the first successful 24 stage fracture stimulation completion in the Williston Basin.
“Multi stage fraccing has been used for 10-15 years,” explains Chris Tucker, a spokesman for Washington-based energy coalition Energy in Depth. Tucker says hydraulic fracturing itself was first used in 1949 down in Texas. It was horizontal drilling technology becoming more efficient that made hydraulic fracturing a very resourceful tool for oilmen. The companies most active in shale reservoirs utilized the combination.
In the Bakken, a decade ago, it started quite simply. A combination of horizontal drilling and hydraulic fracturing mixed with a nice oil play, such as Elm Coulee, equaled a profitable production.
“When it came into basin, what was happening was primarily in Elm Coulee, the first Middle Bakken play, and it was just one large uncontrolled frac job,” said executive vice president for Brigham Exploration operation Lance Langford.
Brigham became active in the Middle Bakken in 2006. According to Langford, the company started by duplicating the technology already in use in Elm Coulee, i.e. long laterals up to 10,000 feet running perforated liners down the well bore and doing only one large uncontrolled frac job. “We were trying to stimulate the entire lateral at one time,” Langford said.
Then, by 2007, EOG Resources started using swell packer technology in Mountrail and Parshall counties of North Dakota.
“EOG went back to what they were doing in the Barnett shale in Texas,” Langford says. Short laterals, 5,000 feet, divided into stages using swell packers.
Brigham Exploration along with many other active Bakken companies took their cue from EOG and did likewise.
“Swell packers are made of several different rubber compounds that swells when fresh oil makes contact,” Hume explains. “They are like a dry sponge. They get big when oil touches and seals against the wall of the hole.” This allows companies to divide the lateral into stages by placing the swell packers at different increments along the lateral
“Five to seven stages were the limits of the technology,” Langford says. “Overtime, in late 2008, we completed a 12 stage frac job in short laterals.”
Earlier this year, Brigham combined multi-stage fracture stimulation with long lateral technology.
“Brigham was the first one in the Williston Basin to complete a 20 stage frac job,” Langford said.
It’s more than just technology, though. The science of the equipment and the sub-surface geology are only a part.
“Hydraulic fracturing is more art than technology,” Hume says. “In the art of fracturing, you start with a theory and go from there.”
A theory, for example, could be that using a certain swell packer, putting a specific gelling agent in the fracing water, pumping down at a certain pressure, will allow a company to fracture stimulate in 24 stages and this will optimize the amount of oil recovered by a well.
Now, the company has successfully completed the first 24 stage frac job in the basin. The company, says Langford, is continues to reduce the distance in between fracture stimulations. “I think we are going to continue to push the limits,” Langford said. “We will probably increase the number of stages.”
The goal is the same as it always has been for oil and/or businessmen: optimize your output at a low or feasible cost. Fracture stimulations are not a cheap investment.
“One of the wells can cost around $6 million,” said Langford. He doesn’t view this as money merely chanced on hitting a sweet spot. “It’s a lot of money to risk for failure.”
Brigham Exploration has invested $130 million into what they consider research. It was invested in developing the technology the company is using today.
Right now, it looks like economics for the oil field are starting to improve. Oil prices are hovering at $70 per barrel. The cost of services has dropped.
“The economics are improving,” Langford said. “And reserves are improving per well…Our expectations have been met by the results.”
Langford expects that by this time in 2010, a 24 stage frac job won’t be uncommon. With results of more than 2,000 barrels of oil equivalent in a well’s first day, it’s hard to imagine companies not taking Brigham’s lead.
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