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October 13, 2009

Horizontal Drilling Technology And Bakken Oil in Canada Update

Multi-frac horizontals are a "game changer" for oil and gas drilling because of their potential to increase recoveries from established plays. The technology is unlocking tens of thousands of barrels of oil per day in Canada and hundreds of thousands of barrels of oil in the USA and hundreds of trillions of cubic feet of natural gas reserves.

Previous overview of multi stage fracturing of horizontal wells

























Pennwest use of horizontal multi stage drilling



The number of formations where multi-frac horizontals are being tried continues to grow. You basically look for low recovery factors and large oil (or gas) in place numbers. The trick is to get three to five times as much initial production and ultimate reserve recovery from the multi-frac horizontals as from vertical wells, which may cost half as much.

What are the limits of multi-frac horizontal technology? As producers expand its geographic and geological boundaries, Packers Plus continues to push the technical envelope. In August, the company said it successfully ran a 20-stage Bakken frac for Petrobank. Announced less than two months ago, that milestone is already history. Packers Plus is already doing up to 32-stage fracs for Bakken clients in the U.S., and even that astonishing record will soon bite the dust, said Themig. "We're very close to release of a second-generation HD system that potentially will give us over 60 fracs."

After British Columbia, Canada Montney and Horn River natural gas successes, the technology's biggest Canadian achievement has been the Bakken tight oil play in southeastern Saskatchewan. From negligible production at mid-decade, Bakken output soared to a record 58,000 bbls a day early this year before slipping below 50,000 bbls a day by mid-year. (At 50,000 bbls a day from about 1,150 wells, Bakken production averages about 44 bbls of oil per well. The best wells exceed 200 bbls a day.) The drop in Bakken production had nothing to do with reservoir deliverability. Shrinking corporate cash flow and reduced access to financing constrained drilling after the September 2008 global financial crash. So output fell as new wells failed to keep up with natural declines.




The Saskatchewan government official believes Bakken light oil would still be economic even if world oil prices fell below $40 (US) a bbl. Thermal oilsands projects -- which use capital-intensive surface facilities and huge volumes of gas to produce bitumen, which has to be upgraded -- are considered economic at $60 (US) a bbl.

The biggest potential prize is locked in the Cardium formation. Spread over several fields, the Cardium's initial oil in-place oil is almost a quarter of the total in the Western Canada Sedimentary Basin, according to the Alberta Geological Survey’s geological atlas of the WCSB.

Operators are taking either of two approaches. Some are using multi-frac horizontals on the edges of the field in virgin reservoir that was too thin or too tight to produce from vertical wells.

Others, like TriAxon, are drilling in the main part of the field where there's been depletion and waterflooding, but where some of the units have very low recovery factors. There are typically sandstone reservoirs. Doing multi-frac horizontals in the main part of the field are typically targeting the sandstone where there's more oil left.



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