By John Kemp
LONDON Nov 6 Some analysts still question the
transformative impact of hydraulic fracturing and horizontal
drilling on the oil industry. Doubters should pay a visit to
Mountrail County, North Dakota.
Running little more than 40 miles from East to West, and 50
miles from North to South, with a population of 7,673, according
to the North Dakota Association of Counties, Mountrail is at the
epicenter of the largest drilling boom in the world. Mountrail
has done more than any other place to remake the oil industry in
the last decade.
Mountrail's story shows just how much oil can be wrung from
a tiny scrap of earth with new technology. In August 2012, the
county's 1,342 active oil wells produced more than 6 million
barrels of crude, 195,000 barrels per day (bpd), up from just
734 bpd a decade ago, according to North Dakota's Department of
Output has grown more than a third in the last 12 months,
from 144,000 bpd in August 2011. The number of producing wells
is up by nearly 40 percent, from 964. Twenty-seven drilling rigs
active in the country, punching yet more holes into the earth,
according to state filings, on behalf of exploration and
production companies as diverse as Hess, Whiting Oil and Gas and
North Dakota's output has overtaken Ecuador, causing some
observers to suggest that the state should be admitted as the
newest member of OPEC. Oil wells have been sunk into the Bakken
formation across the western third of the state (as well as
eastern Montana). But Mountrail accounts for more than 1 in
every 4 barrels of crude produced in North Dakota.
Together with equally modest neighboring counties of
McKenzie (population 6,360; area 2,861 square miles), Williams
(population 22,398; 2,148 square miles) and Dunn (population
3,536, 2,082 square miles) these four counties, covering an area
of roughly 100 miles by 100 miles, accounted for over 80 percent
of state oil production, almost 600,000 bpd.
North Dakota counties:
Mountrail oil production:
Bakken oil output study:
PERMEABILITY IS EVERYTHING
Wells drilled into the Bakken are tremendously variable:
"The Elm Coulee Field in Montana and the Parshall and Sanish
Fields of Mountrail County, North Dakota, being the most
prolific examples of Bakken success; however, many Bakken wells
have yielded disappointing results," according to the Energy and
Environmental Research Center (EERC) of the University of North
"Although variable productivity within a play is nothing
unusual to the petroleum industry, the Bakken play is noteworthy
because of the wide variety of approaches and technologies that
have been applied with apparently inconsistent and all-too-often
under achieving results," EERC wrote in a study for the U.S.
Department of Energy ("Evaluation of key factors affecting
successful oil production in the Bakken formation" May 2010).
"Inconsistency is not unusual ... (but) the deep and tight
nature of the Bakken formation makes it a very expensive target
for exploration and production." Mistakes are costly.
Even within Mountrail, there have been enormous variations
in well productivity. Average cumulative production during the
first six months for new wells sunk in Dunn county, West
Mountrail and East Mountrail was 25,000 barrels, 74,000 barrels
and 90,000 barrels respectively. The average difference between
the highest-producing and lowest-producing wells in prolific
East Mountrail was 135,000 barrels over six months.
EERC analyzed a variety of factors affecting well output.
But among the most important was the thickness of the shale
formation and its total organic content (TOC), which not only
mean there are more hydrocarbons in place but appear to
contribute to greater underground pressure and natural
pressure-related fracturing in the rock.
"Permeability is the most important geological
characteristic of a formation with respect to hydrocarbon
production," EERC explained. "Simply put, without adequate
permeability, any oil in place, regardless of how vast the
resource is, cannot flow to the well. The primary permeability
(or matrix permeability) is typically very low, so the presence
of natural fracturing in the Bakken is a factor that is critical
to oil production."
Large amounts of organic content seem to have contributed to
a significant build up of pressure as the hydrocarbons thermally
matured (cooked) underground, creating a natural network of
cracks in the formation even before the hydrofracking teams
"Strata associated with thick, mature shales typically have
more fractures than reservoir rocks associated with thin mature
shales," EERC found.
In addition, production is much higher near natural breaks
in the underground formations. All the most productive wells in
Dunn county have been drilled close to the Heart River Fault. In
Mountrail, all the most productive wells have been located east
of the Nesson Anticline.
"Identifying naturally fractured areas within the Bakken has
proved to be very important because permeability as a result of
natural fracturing is a factor critical in successful oil
production," according to the EERC report.
"The Bakken shale... is a highly technical play that
requires an understanding of geology, completion engineering and
practices that can unlock tightly held hydrocarbons within the
"Successful development of hydrocarbon production from shale
is highly site-specific."
Careful selection of drilling targets is essential because
depth and high pressure put the cost of drilling and completing
a well into the Bakken at more than $8 million, according to
Understanding the local geology appears to have been the
single most important determinant of productivity and well
Geological factors account for more production variability
than how long the horizontal section of the well is, how many
horizontal stages are drilled from the same hole, whether they
are fracked once or in multiple stages, and how many fracturing
stages are done in total.
Little wonder that oilfield services company Schlumberger
has touted its technology, including seismic surveying
and visualization, to call for a more intelligent approach to
fracking, criticizing the old brute force drill-and-hope
approach, with its over-use of pressure, too many unproductive
well stages being fracked and wells being drilled in marginal
The technology to extract oil from shale formations is still
in its infancy, as my colleague Robert Campbell explained in a
recent column ("Shale is dumb but booming. What if it gets
smart?" Oct 26).
Skeptics argue the conditions which have made fracking so
successful in the United States cannot be replicated elsewhere;
the technology will have only a modest impact on global oil
production in the decade ahead.
Mountrail illustrates just how much oil can be unlocked from
shale formations. They may not be as productive as Saudi
Arabia's legendary super-giant field Ghawar, but the production
potential is nonetheless enormous.
Mountrail and the three counties to the south and east
occupy a tiny land area but now produce as much oil as a small
OPEC country. By definition there must be many other plays with
similar potential around the world given the wide distribution
of shale resources.
Mountrail shows how much further the technology could be
pushed in the coming years to improve well yields, while cutting
the amount of poorly targeted drilling and cutting the impact on
local communities and the environment.
Too many analysts still dismiss shale as a high cost form of
oil, with only a marginal future, assuming the cost structure is
fixed. But as the uneven exploitation of shale across Mountrail
and the rest of North Dakota shows, the technology's full
transformative impact is only just beginning.