Pages

January 28, 2008

Further Bakken Formation news

The Bakken Formation is being hailed as the most significant find since the Pembina Cardium play discovered in Alberta in 1957.

For those in need of a history lesson, Pembina's reserves were estimated to contain 7.8 billion barrels of oil, of which 1.6 billion were recoverable. To date, more than 1.2 billion barrels have been produced and it's still going strong. Big oil, say the engineering types, gets bigger.

What they mean is simply that when companies start to develop these big pools of reserves, they tend to find more.

By extension, then, the current estimate of the Bakken play containing three billion barrels is likely on the low side because the limits of the formation have yet to be determined. [Three billion barrels is also only the current conservative estimate of the Canadian portion which is 25% of the total land area and an unknown amount of the oil]


Crescent Point Energy Trust -- which earlier this week announced a $370-million deal to increase its stake in the play by buying privately held Landex Petroleum -- said its netbacks were $62.71 per barrel on the Bakken oil it produced in the third quarter. In addition to Crescent Point -- which made two acquisitions in 2007 to expand its asset base -- Petrobank Resources and TriStar Oil and Gas have also been busy shoring up positions in the area through a series of deals. Petrobank bought Peerless Energy in late 2007 for its Bakken assets and TriStar bought Bulldog Resources for the same reason.

Unlike the Pembina formation, which has been developed using standard vertical wells, the Bakken play requires the use of horizontal wells.

These tend to cost about twice as much as a conventional well.



In the past 12 months, a Calgary-based company called Packers Plus has cracked the nut on how to get at these more challenging formations using horizontal drilling techniques.

More specifically, it used to be that the exploitation of these tight reservoirs -- whether gas or oil -- were dependent on where the natural fracturing in the reservoir occurred. Packers Plus has developed a technology that allows for companies to control where the fracturing takes place, avoid water and access multiple zones through the well bore.

"The technology has increased recovery rates by 50 per cent," said Tristone Capital's Chris Theal.


Petrobank Energy and Resources Ltd. (TSX:PBG) says its Canadian unit will be the most active player in southeast Saskatchewan‘s Bakken trend in 2008, with drilling in 135 locations.

Petrobank said early Tuesday its Canadian unit is currently producing more than than 11,000 barrels of oil equivalent output a day and drilled or participated in 100 wells in the Bakken light oil play in Saskatchewan last year.

For 2008, the company will drill 135 Bakken wells, making the company the most active player in the area. In addition to these wells, Petrobank expects to take part in a further 38 Bakken wells with partners this year.

In late November, Petrobank struck a deal to acquire Peerless Energy Inc., in a move that will boost Petrobank‘s current conventional Canadian production to about 16,600 oil equivalent barrels a day.


A new USGS study of Bakken is expected to be released April, 2008.

FURTHER READING
Maraothon fact sheet on Bakken Sept 2006
NY times on Bakken in North Dakota
North Dakota news from the state government on Bakken

Peakoil message board on Bakken

World Oil reserves on wikipedia


Country Reserves Production Reserve life 3
(10**9bbl) (10**6 bpd) (years)
Saudi Arabia 260 8.8 81
Canada 179 2.7 182
Iran 136 3.7 101
Iraq 115 2.2 143
Kuwait 99 2.5 108
United Arab Emirates 97 2.5 107
Venezuela 80 2.4 91
Russia 60 9.5 17
Libya 41.5 1.8 63
Nigeria 36.2 2.3 43
United States 21 4.9 12
Mexico 12 3.2 10

Notes:
1. Estimated reserves in billions (10**9) of barrels. (Source: Oil & Gas Journal, January, 2007)
2. Production rate in millions (10**6) of barrels per day (Source: US Energy Information Authority, September, 2007)
3. Reserve life in years, calculated as reserves / annual production. (from above

0 comments: