The Bakken formation — straddling Saskatchewan, Manitoba, North Dakota, and Montana – endures as one of the most attractive light oil plays in North America. Recently, the discovery of another, even more prolific oil zone below the Bakken, could prove to be another multi-billion-barrel horizon for both the Canadian and American oil industries.
What continues to intrigue investors is the fact that several companies, led by Calgary’s Crescent Point Energy and Continental Resources (headquartered in Oklahoma City), have cracked the code on another prolific zone below the Bakken – called the Torquay or Three Forks, depending on which side of the border the well is being drilled.
It’s hard to imagine the largest, hottest play in North America could more than double in size – with the amount of recoverable oil now estimated to rise by 57 per cent as it is 1.5 to seven times thicker than the Bakken. The average Torquay net pay is 87 metres while the typical Bakken is about 46 metres thick.
Crescent Point reports its wells cost an average of $3.5 million and are low-decline give a high-rate-of-return, while paying out in less than seven months. According to analyst reports, Crescent Point is receiving operating netbacks of more than $73/barrel of oil-equivalent (boe) and an internal rate-of-return (IRR) that is larger than 300 per cent.The Bakken is located within the Williston Basin, encompassing 25,000 square miles. Unlocking this formation propelled North Dakota from the ninth largest oil producer in 2006 to the second, behind Texas, with close to one million barrels/day of production. Continental’s geologists think the original-oil-in-place is actually closer to 903 billion barrels and, of that, 20 to 45 billion barrels are recoverable, given today’s technology. The company completed its first seven Torquay wells using approximately 200 thousand pounds of proppant for each of its 30-stages and got initial production (IP) rates averaging 2,675 boe/day. On the next well, it upped the proppant by another 100,000 (to 300,000 pounds) for each of the 30-stages and was pleased with the higher IP rates of 3,720 boe/day.
The Williston Basin, containing the Bakken and Torquay formations, should continue as North America’s hottest oil play for the next decade. Production from both zones are predicting to keep producers and investors very happy.
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