Bakken: Encore / Denbury

Very minor news but just to note: Encore assumed operator status for eight (8) wells previously operated by Ranch Oil Company. These are "old" wells and probably don't add much to the bottom line, but it's eight more wells. Could they be candidates for re-work? Fracturing? See Daily Activity Report dated November 13, 2009.

Encore just announced plans for a 22-stage frac of a Three Forks Sanish well. It also announced plans to add another rig to the Williston Basin before the end of 2009. November 8, 2009. 

As other producers are doing, Encore is re-fracing their wells to increase production. The economics are significant: the average development cost is $5/net bbl of reserves.

I continue to opine that re-fracing is going to be the story of the decade in the Williston Oil Basin, and the $20 million Halliburton expansion east of Williston is just the beginning.

Charlson

This is an interesting observation. The Charlson 44-33H (Encore) came off the confidential list on 5 Nov 09 and reported an IP of 283 bopd.

However, during its second full month, the well produced 15,793 barrels of oil, which works out to 509 barrels per day on average.

My guess: the IP was calculated before frac'ing. It is one-section (640-acre) spacing. When a WLL well comes in at 1,000 bopd "everyone" is happy, but generally a WLL well is two-section spacing. By those standards, a one-section well with 500 bopd is pretty good.

Other comments: the Charlson seems to be a mediocre field but it is dotted with lots of activity. The Charlson is directly west of the Sanish/Parshall oil fields, on the other side of the river. The few wells for which I have information, all reported around 400 bopd on initial production. But those wells were among the first drilled in the current boom (2007-2008) and probably were not frac'd or only one-stage frac'ing.

A 500-bopd * $60/barrel *365 = $11 million in the first year vs $4 - $6 million cost of the well.