Conference Review: Inside Innovation
Patrick Montalban brought the wisdom he has accrued during his 30-plus years in the oil industry and shared it with attendees at the first Bakken/Three Forks Shale Oil Innovation Conference & Expo, which was held in Grand Forks, N.D., in February. The second-generation owner and president of Mountainview Energy Ltd., a small exploration and production company, provided candid insight about being an operator in the Williston Basin, offering upfront opinions about the operational costs, concerns and challenges faced by independent oil and gas producers working in the Bakken.
Joining Montalban on the stage for a comprehensive discussion on the state of the industry were two other industry players: Terry Palisch, global engineering advisor for Carbo, and Trent Howard, director of oilfield services at KLJ Inc. engineering. Palish spoke about the constant work he and his team do to inform the oil industry about the various types, sizes and uses for frack sand and ceramic-based proppant. Howard provided insight on staffing an energy services division that serves the Bakken, and the elements of the industry that KLJ follows to understand the current and future state of the industry. Before the roundtable discussion, all participants were given a list of questions including, but not limited to: How would you describe the 2013 oil and gas industry in the Williston Basin, and what has made your company so successful in the Bakken?
Bruce Hicks, assistant director for the North Dakota Department of Mineral Resources Oil and Gas Division, in a keynote address spoke about the success the DMR has had with developing spacing units and energy corridors in North Dakota.
To frame his presentation, Hicks sbegan with an explanation of how development in the Bakken, and now the Three Forks formation, has changed both above and below ground in the past eight years. Randomly sized spacing units were once commonplace in the play, but through an image of what today’s spacing unit network looks like—equally spaced rectangles in a grid pattern—Hicks provided a picture of how the DMR’s efforts have made a more uniform and organized play. Uniform spacing has drastically increased and benefited the orderly development of the surface and subsurface regions within the oil-producing areas of the state, he said.
In addition to 1,280-acre spacing units—a practice that may someday evolve to 2,560-acre units or even mega-units in the 25,000-acre range—Hicks described the impact that multiwell pad drilling has had. “We are getting more wells drilled with less rigs,” he said. The practice has helped to establish energy corridors. The corridors offer an effective way to reduce surface impacts by integrating infrastructure and truck traffic into specific roads, or corridors. The Grail-Bakken Unit, a 25,000 acre unit shows what a megaunit and energy corridor could look like, Hicks said. But, although the unit was recently approved by Hicks and his team, Gov. Jack Dalrymple has yet to sign off on the unit. The merits of larger spacing units are directly linked to greater oil recovery and future enhanced oil recovery methods, according to Hicks. And, since the event took place in February, QEP Resources Inc., the operator planning the megaunit, has since withdrawn its attempts to make the unit possible.
As for future drilling, Hicks estimates the rig count may have leveled off at its current levels of roughly 185 to 190 rigs. Nearly every well in the Bakken is productive, and, other formations are showing promise including the Tyler formation and others. Wells in the Bakken are 99 percent productive, he said, “and the other 1 percent is due to mechanical failure.”
If the future of the Bakken revolves around larger spacing units or the development of energy corridors, then Tyler Farley, project engineer for Halker Consulting, knows how to make it happen. Farley delivered a presentation that explained how onshore oil and gas operators could, or should, mimic the efforts of offshore operators. Doing so, she said, will help operators in the Bakken improve efficiencies and safety through multiwell facilities. Offshore operators are forced to make a single facility handle the needs for multiple oil producing wells. “Multiwell facilities make sense, but there are some challenges,” she said. The onshore challenges include difficulty handling greater amounts of crude or water, unitizing safety standards, creating an acceptable engineering plan and working with underdeveloped infrastructure.
“In the Bakken and Eagle Ford, producers are still looking at ways to optimize well production. New techniques are always being tried,” she said. Because new techniques and retrieval infrastructure are still being tested and tweaked, when creating a multiwell facility, it’s essential to have an engineered approach, even if it takes longer to construct and bring online. The benefits of designing a multiwell facility can be tremendous, however. The key is to understand how well location and well testing protocols work in unison to create cost savings spread over multiple wells. Farley showed a 12-well facility that had two stages of separation per well. In total, the 12-well facility had 63 permanent pieces of major process equipment on the location. After the operator learned the benefits of engineering a multiwell facility, a facility was put together that had 26 wells but only 55 major equipment pieces in comparison to the 12-well facility. By combining well pressure data and equipment specs, the operator was able to design a larger facility that utilized less equipment.
Will Gosnold, a professor at the University of North Dakota’s Harold Hamm School of Geology and Geological Engineering, isn’t opposed to adding a few extra equipment pieces to a well site or a multiwell facility. Gosnold presented on the merits and possibility of generating electricity from oil field fluids such as crude oil or produced water. Gosnold has partnered with Continental Resources, Slope Electric Cooperative and Access Energy on a project that will demonstrate electrical power production from oil field fluids. The idea is based on a geothermal system. “We take hot water or oil and run it through a heat exchanger,” Gosnold explained. The exchanger then heats an organic liquid that is turned into a gas, and, to create power, the gas is run through a power turbine that in turn powers a generator. “It is very easy to run this and the infrastructure already exists. You simply piggyback off of the existing infrastructure,” he said. “If we use the amount of oil and water that is coming out before separation, we can generate a significant amount of electricity.”
The partnership will bring a geothermal power plant online in May in Bowman County, N.D. The power plant will consist of two high-efficiency organic Rankin cycle engines manufactured by Access Energy that will convert heat from a Continental Resources water production well all to generate 250 kW of electricity. The electricity will be used on site to power producing oil wells and water injection wells. According to Gosnold, North Dakota has the power potential of roughly 4 GW from oil field fluids.
The topic of water was a major portion of the event. Grant Slick, principal engineer for AE2S Water Solutions, joined representatives from GE Power and Water and Halliburton, to discuss efforts each was working on to handle, transfer, treat or recycle water in the Bakken. Slick explained the engineering firm’s efforts with operators to develop pipeline systems for transferring fresh and produced water to and from several wells in a single operator’s fields.
One of the main factors that Slick and his team deal with today is the operator practice of flushing wells. In areas around Williston, N.D., and Watford City, N.D., operators use freshwater injected in continuous or batch solutions to flush out a well bore in an effort to maintain production levels. The practice has greatly impacted the way operators look at water, he said. A typical long-term produced water cycle curve has changed from 20 barrels to 30 barrels per day, to possibly quadruple that on a daily basis.
AE2S is now working with operators who own large lease tracts to develop pipeline systems that provide fresh water and remove produced water to a recycling facility setup with water crystallization technology. Slick provided pipeline economics estimates that showed as more water is used on a well site, the overall cost of the water goes down even when initial investment costs are calculated in.
Jim Sorenson, senior research manager for the Energy & Environmental Research Center provided some intriguing calculations of his own. Sorenson presented on the potential of CO2 as a vehicle for enhanced oil recovery. Based on preliminary research, Sorenson said that CO2 can effectively extract additional hydrocarbons from both the Middle (over 90 percent) and Lower Bakken (over 60 percent) rock matrix.
To fully apply enhanced oil recovery (EOR) in the Bakken, roughly 2 billion to 3.2 billion tons of CO2 would be needed, an amount that would yield roughly 4 billion to 7 billion barrels of oil, he said. The EERC is already working with Continental Resources, Marathon Oil, the U.S. DOE and others on its CO2 EOR research. By this spring, all of the project partners will be finalized. With partner-supplied data, Sorenson and his team will be able to apply in-house modeling with key Bakken and Three Forks lithofacies to understand potential injection methods and production schemes.
During the two-day event, attendees from 41 U.S. states and five Canadian provinces listened to presentations from Slick and others. Local media outlets featured newscasts, printed news or radio segments on the show during the week of the show. Next year’s event will follow the same structure and theme of innovation, adding more topics and industry experts, researchers and operator-affiliated speakers to talk about the innovative technologies or strategies responsible for making the Bakken and Three Forks formations global hotspots for shale oil development.
Author: Luke Geiver
Managing Editor, The Bakken magazine
BUSINESS EVENT ---------------------------------------------------
The Bakken Business World
This could be the golden age for economic development offices in North Dakota. Jerry Chavez, president of the Minot Area Development Corp. has information that he commonly shares that illustrates why development in the state may have never been better. In a four year time frame, the Bakken-based community has seen 14 years’ worth of growth. Chavez joined a group of economic developers, business leaders and decision makers during a one-day event, titled, "Building Business in the Bakken."
Although Minot has seen tremendous growth in the past four years, Chavez is helping to lead several efforts that will bring additional growth to the city. After successfully bringing an energy park online, the city is now in the process of building and attracting businesses to a second energy park. The Great Plains Energy Park is designed for the petroleum industry, and comes equipped with water, sewer, electricity and a gas supply. The Port of North Dakota, the largest rail distribution hub between Seattle and Chicago, will offer crude oil, condensate, frack sand and other distribution capabilities.
Keith Lund, vice president of the Grand Forks Region Economic Development Corp., another economic developer in tune with creating Bakken-based business, provided a keynote address at the event. His presentation, “Beyond the Bakken,” offered examples of successful companies, such as, Steffes Corp. that have expanded business opportunities in the Bakken by relocating parts of its business outside of the region.
Joe Rothschiller, president of the Dickinson-based manufacturing company, spoke on his vision for building the company’s capabilities. For Rothschiller, the business model focuses on providing solutions has been a boon to the company. “We design, build and market sustainable, high-value added, innovative manufactured solutions for the energy, construction and other industries,” he said. The company has already designed several well pad products, including a proven flare handling product. In 2014, the company is focused on bringing more products to market, including tank-to-tank piping and UL listed oilfield control panels.
Tom Rolfstad, executive director for the Williston Economic Development Corp., spoke to the question all developers have: How long will this last? His opening, safe harbor provision (delievered in a joking manner) was his answer. “Everyone in the Bakken is struggling to keep up with things, so in the interest of time, please use this presentation as a means of learning what is happening. Please use your own judgment in evaluating what it means to you. This is the way I see the world at present time. Change is constant here, so I can assure you that how I see the world will change again in 30 days,” he said. “It will just get bigger.”
Icon Architectural Group’s Todd Mitzel spoke about his company’s efforts to deal with the enormity of the Bakken. The group, which has designed several schools and corporate offices for Neset Consulting Inc., Hess Corp. and Whiting Petroleum Corp., tries to stay focused on its core competencies, and, “not chase the crazy stuff,” Mitzel said. Although Mitzel’s team is not oblivious to the staffing constraints on all businesses in the play, Icon has found success by attracting those that want to work and live outside the region. And, to maintain its success, the company puts a heavy emphasis on the quality of its works. The industry is heavily committed to referrals, he said, a commitment that can be good or bad for some.
In total, the one-day event featured more than 15 speakers, including a luncheon video presentation delivered by U.S. Sen. John Hoeven, R-N.D. “Thank you for the opportunity to speak today about the important work happening today in North Dakota and the Bakken,” he said. “We are producing more energy here at home in large part because of American entrepreneurship and technologies like hydraulic fracturing, directional drilling and the innovative work happening in the Bakken and Three Forks shale.”
Author: Luke Geiver
Managing Editor, The Bakken magazine