EOG Resources' Bakken Core Acreage Could See 160-Acre Development

EOG Resources Bakken Shale Map
EOG Resources Bakken Shale Map

EOG Resources reported improvement in wells after implementing new completion techniques in 2012. In the company's core acreage centered around the Parshall Field, 320-acre spacing success has been confirmed and the company is encouraged by early results at 160-acre spacing. Recent wells are indicating cumulative production over previously drilled wells has improved by a range of 30-70%.

In the North Dakota Bakken/Three Forks, positive results from downspaced drilling tests, together with significant modifications in drilling and completion techniques, further boosted EOG's crude oil production growth.

The first wells tested at 160-acre spacing in Parshall, the Wayzetta 022-1509H and Wayzetta 149-1509H, came online at max rates of 1,185 and 1,265 b/d, respectively.

Notable wells outside of Parshall include:

  • The Hawkeye 01-2501H and 102-2501H, Three Forks wells in McKenzie County, were turned to sales at 2,445 and 2,945 b/d, respectively.
  • The Garden Coulee 001-1410H, in Williams County, had an IP rate of 1,415 b/d with 1,260 mcfd of rich natural gas

In 2013, EOG expects to complete 46 net wells in the Parshall and Antelope areas. That's up from 28 net in 2012. If the company proves the potential of 160-acre spacing, an accelerated development program will ensue in 2014. Oil price realizations are also improving:

During the fourth quarter and currently our Eagle Ford crude is priced off an LLS index and essentially all of our Bakken and part of our Wolfcamp crude is being railed to our St. James terminal.

EOG Resources Planning 320 Acre Bakken Wells - Parshall Field

EOG Resources released a mixed bag of news for the Bakken in its year-end conference call. The company has successfully tested down-spacing to 320-acres in the Parshall Field of Mountrail County, but is also lowering its Bakken rig count to seven in 2012. EOG will drill 60 net wells in the Bakken and commence a secondary recovery pilot in its core area. The company reported 162 million boe of proved reserves in the Bakken/Three Forks at the end of 2011. It will be real interesting to see how secondary and even tertiary recovery will fair in the Bakken. Secondary recovery can as much as double the amount of hydrocarbon produced in traditional fields, but it could be much less in unconventional reservoirs like the Bakken.

During 2011, EOG continued infill drilling on its core acreage in the North Dakota Bakken Parshall Field, which it discovered in 2006. Although originally developed on 640-acre spacing, EOG has successfully tested 320-acre down-spacing in various areas and around the perimeters of the field. A recent well in Mountrail County, the Fertile 48-0905H, in which EOG has a 96 percent working interest, was completed at an initial rate of 1,324 Bopd. Also in Mountrail County, the Liberty 24-2531H and Liberty LR 20-26H were drilled on 320-acre spacing. The wells, in which EOG has 82 and 95 percent working interest, respectively, were turned to sales at initial crude oil rates of 1,507 and 1,165 Bopd, respectively. Over the course of 2012, EOG will continue its efforts to increase recovery of the oil-in-place on its Bakken acreage through further down-spacing tests and the initiation of a secondary recovery pilot project.

EOG simply hasn't been able to replicate the success of the Parshall Field in other areas of the play. Financial returns in other areas of the play might be great, but don't compare to wells in Mountrail County. In a year when e&p companies across the board have capital budgets that are pressured by low natural gas prices, the company has to focus on lease retention and the highest available returns across its portfolio.