- Category: Saskatchewan
- Created on 27 May 2013
While the initial boom in the Saskatchewan Bakken has subsided, it is still a lucrative formation and one that oil and gas experts expect will continue to be productive for many more years—in part due to secondary recovery techniques.
"This is one of the better, or among the best, plays in western Canada," said Don Rawson, managing director of institutional equity research with AltaCorp Capital Inc.
Producers are several years into developing the play, he said, and while the rate of growth has slowed, there is still a lot of oil in-place that will provide opportunities for many years to come as technological improvements continue to expand the geographical area where it is profitable.
The primary region of development has been largely defined, although the edges of the play have grown over time, as improving technology helps make it economic in some of the areas on the fringe, said Rawson.
According to Daily Oil Bulletin data, in 2012 operators completed 341 wells in the Saskatchewan Bakken, including 232 in the Viewfield area in the southeasternmost portion of the province.
In 2012, Crescent Point Energy Corp.—the largest producer working the formation—completed 137 wells in the play, while PetroBakken Energy Ltd. completed 94.
Other companies producing in the Saskatchewan Bakken include Legacy Oil + Gas Inc., Painted Pony Petroleum Ltd., Cenovus Energy Inc. and Husky Energy Inc. The Bakken is also home to a multitude of smaller producers, each with a handful of wells each.
Across the entire Saskatchewan Bakken, 356 wells were completed in 2011, 517 wells in 2010, 432 wells in 2009, 728 wells completed in 2008 and 300 wells completed in 2007.
Crescent Point has been interested in the Saskatchewan Bakken since 2005, with the company's first major move into the formation coming with the acquisition of Mission Oil & Gas Inc. in early 2007.
Since that time, the Bakken has proven extremely profitable for Crescent Point as the company has grown its interests in the region, C. Neil Smith, chief operating officer, said.
With 4.6 billion barrels, the Saskatchewan Bakken is the second largest oil in-place pool ever discovered in western Canada, he said. However, it is still very much in its "early days" of productivity, with less than four per cent of oil recovered so far.
"It's a much bigger play than we had anticipated. We knew we were on to something extremely good and it exceeded everybody's expectations," said Smith. "When we were getting into the pool we were thinking about 800 million barrels in-place."
Crescent Point has delineated the play and is using enhanced horizontal fracture stimulation techniques to get more oil out of the rock and increase its area of productivity.
This year, the company plans capital expenditures of approximately $450 million in the play, in line with capital investments over the past three or four years, although spending was as high as $600 million in 2010.
"We're booking over 200 million barrels of proven plus probable reserves, our working interest of the pool," Smith said. Of the total, Crescent Point has added 175 million barrels of new reserves since buying those interests, thanks largely to more drilling, infill drilling and improved technologies. "So that's pretty significant."
As the formation has matured, Smith said, Crescent Point has bought out a lot of smaller companies. While some larger companies such as PetroBakken, along with a few smaller companies, are still in the formation, consolidations in the area have resulted in fewer, larger companies.
Rawson said future economics in the Saskatchewan Bakken would reflect the growth of secondary recovery methods in the formation, something companies are already starting to explore.
"There's a lot of work on waterflood pilots going on right now in Viewfield, led by Crescent Point," he said. "Separately, PetroBakken is testing gas injection as an alternative way to flood it and increase recoveries. Those developments are being very closely watched."
Smith said Crescent Point is working with the Saskatchewan government on unitization of four separate units side-by-side, which he is optimistic will occur in 2013.
"Once we're unitized we can implement a waterflood."
According to Smith, at eight wells a section, the company's current Bakken recovery is about 19 per cent, primary. However, waterflooding will increase recovery to over 30 per cent.
"In the near-term you're probably going to see 1.5 to two billion barrels under flood in the core area; it's in that order of magnitude and we have a ways to go."
To date, Crescent Point has converted 45-46 wells to injection, and the company is looking to convert another 20 in 2013. Smith said Bakken play is tight rock, which traditionally has not been considered economically floodable, but Crescent Point pioneered using fractured horizontal oil wells as the injectors.
"We've proved that it works, we've proved that it's repeatable economically across the play, and now with unitization, we're planning to go commercial across the field."